CITIC Group Corporation Annual Report 2013 the Annual Report Is Printed on Environmentally Friendly Paper

CITIC Group Corporation Annual Report 2013 The Annual Report is printed on environmentally friendly paper. The Annual Report is printed on environmentally THE CITIC SPIRIT

Law-abiding Upright & Honest Practical & Realistic Innovative Modest & Prudent Working as a Team Industrious & Vigorous & Efficient Self-motivated in Implementation

Contents

02 FINANCIAL SUMMARY 46 INVESTOR RELATIONS

04 ORGANISATION CHART 48 CORPORATE GOVERNANCE

08 CHAIRMAN’S LETTER 52 RISK MANAGEMENT

12 BUSINESS HIGHLIGHTS 56 AUDITOR’S REPORT AND FINANCIAL STATEMENTS

14 MANAGEMENT REPORT 138 CONTACT US

28 CORPORATE SOCIAL RESPONSIBILITY

31 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED FINANCIAL SUMMARY

Distribution of Operating Income Changes of Operating income Growth in Operating Income （Millons of RMB） (Millions of RMB)

320,000 400,000 375,088 29 349,756 .4 269,203 % 6 259,353 4 2 % 280,000 318,976 5 6 . % .9 0 9 7 7 % .9 240,000 300,000 2 263,894 7 200,000 209,065 160,000 200,000 112,446 120,000 95,953

80,000 100,000 2012 40,000

2013 0 0 2012 2013 2009 2010 2011 2012 2013

Distribution of Operating Profit Changes in Operating Profit Growth in Operating Profit (Millions of RMB) (Millions of RMB)

1 70,000 800,000 9. 71,506 49 71,256 % % 1 18 60,000 57,871 5 .5 . % 3 0 7 % 8 57,243 .4 600,000 56,346 1 50,000 46.433 8

40,000 39,300 400,000 30,000

20,000 14,008 200,000 10.561 2012 10,000

2013 0 0 2012 2013 2009 2010 2011 2012 2013

Financial Services Non-financial Services

2013 2012

Results for the year (In millions of RMB) %Changes Operating Income 375,088 349,756 7.2% - of Financial Services 112,446 95,953 17.2% - of Non-Financial Services 269,203 259,353 3.8% - Real Estate and Infrastructure 31,034 16,851 84.2% - Engineering Contracting 18,473 16,453 12.3% - Resources and Energy 101,484 108,220 -6.2% - Manufacturing 56,693 55,762 1.7% - Others 57,250 58,438 -2.0% - Unallocated 4,269 3,629 17.6% - Elimination -6,560 -5,550 18.2% Operating Profit 71,256 56,346 26.5% - of Financial Services 57,871 46,433 24.6% - of Non-Financial Services 14,008 10,561 32.6% - Real Estate and Infrastructure 7,986 5,387 48.3% - Engineering Contracting 2,480 2,866 -13.5% - Resources and Energy -168 -175 3.4% - Manufacturing 2,149 1,313 63.6% - Others 1,992 1,714 16.2% - Unallocated -431 -544 20.9% - Elimination -623 -648 -3.8% Net Profit Attributable to Shareholders of the Company 37,839 30,155 25.5%

2 2013 2012

At the Balance sheet date (In millions of RMB) %Changes

Total Assets 4,299,678 3,565,572 20.6% - of Financial Services 3,691,575 2,996,499 23.2% - of Non-Financial Services 718,583 667,514 7.7% - Real Estate and Infrastructure 211,842 189,537 11.8% - Engineering Contracting 38,214 38,173 0.1% - Resources and Energy 168,482 161,915 4.1% - Manufacturing 85,602 82,908 3.2% - Others 85,839 72,104 19.0% - Unallocated 128,605 122,877 4.7% - Elimination -110,480 -98,441 12.2% Total Liabilities 3,871,701 3,185,084 21.6% Total Equity Attributable to Shareholders of the Company 271,910 235,412 15.5%

Financial Ratios % % +/(-)%

Net Profit Growth 25.48% -17.42% 42.90% Return on Total Assets1 0.96% 0.88% 0.08% Return on Equity2 14.92% 13.69% 1.23%

1 Calculated by dividing net profit by the average of total assets as at the beginning and the end of the year. 2 Calculated by dividing net profit attributable to shareholders of the company by the average of total equity attributable to shareholders of the company as at the beginning and end of the year.

Distribution of Total Assets Changes in Total Assets (Millions of RMB)

16 4,000,000 3,691,575 % .2 1 9% .7 1 3,600,000 3 8. 8 % 22 8 % 3,200,000 2,996,499 .7 1 8 2,800,000 2,400,000 2,000,000 1,600,000 1,200,000 718,583 800,000 667,514 2012 400,000 2013 0 2012 2013

Financial Services Non-financial Services

Growth in Total Assets Growth in Equity Attributable to Shareholders of the Company (Millions of RMB) (Millions of RMB)

5,000,000 300,000 271,910 4,500,000 4,299,678 250,000 235,412 4,000,000 3,565,572 205,108 3,500,000 3,277,053 200,000 173,556 3,000,000 2,538,266 2,500,000 2,151,727 150,000 137,436 2,000,000 100,000 1,500,000

1,000,000 50,000 500,000 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

3 ORGANISATION CHART

CITIC Group Corporation

99.9% CITIC Limited

100% Beijing CITIC Enterprise Management Co., Ltd. 0.1%

100% CITIC Guoan Group

100% CITIC Asset Management Corporation Ltd.

100% CITIC Networks Co., Ltd.

100% CITIC Machinery Manufacturing Inc., Ltd.

100% CITIC Bohai Aluminium Industries Holding Company Ltd.

100% CITIC Medical & Health Group Co., Ltd.

100% CITIC Ningbo Group

100% CITIC Heavy Machinery Co., Ltd.

100% CITIC International Cooperation Co., Ltd.

100% CITIC International Co., Ltd.

81.71% CITIC Mining Technology Development Co., Ltd.

4 5 ORGANISATION CHART

CITIC Limited

70.32% CITIC International Financial Holdings Limited 100% CITIC Holdings

100% CITIC Securities (Zhejiang) Co., Ltd. 66.95% China CITIC Bank Corporation Limited 100% CITIC Wantong Securities Co., Ltd.

20.88% CITIC Securities Co., Ltd. 100% CITIC Securities International Co., Ltd.

62.2% China Asset Management Co., Ltd. 100% CITIC Trust Co., Ltd. 100% CITIC Pacific Special Steel Holdings

50% CITIC-Prudential Life Insurance Co., Ltd. 100% CITIC Pacific Mining Management Pty Ltd.

100% CITIC Pacific China Holding Limited 100% CITIC Finance Company Limited 100% Sunburst Energy Development Co., Ltd.

57.51% CITIC Pacific Ltd. 100% CITIC Port Investment Co., Ltd.

80% CITIC Infrastructure Investment Co., Ltd. 88.37% CITIC Real Estate Co., Ltd. 100% CITIC Industrial Investment Ningbo Co., Ltd.

100% CITIC Heye Investment (Beijing) Co., Ltd. 100% CITIC International Contracting Co., Ltd.

Central and Southern China Municipal Engineering 100% Design & Research Institute Co., Ltd. 100% CITIC Land Co., Ltd.

CITIC General Institute of Architectural Design 100% and Research Co., Ltd. 100% CITIC Industrial Investment Group Corp., Ltd. 47.31% Joint Stock Company KARAZHANBASMUNAI

100% CITIC Construction Co., Ltd. 90% Tianshi Energy Co., Ltd.

100% CITIC Resources Australia Pty. Ltd. 100% CITIC Engineering Design & Construction Co., Ltd. 49.26% CITIC Dameng Mining Industries Ltd.

59.41% CITIC Resources Holdings Limited 82.82% CITIC Jinzhou Metal Co. Ltd.

52% China Platinum Company 100% CITIC United Asia Investment Ltd. 100% CITIC Metal Hong Kong Investment Limited

100% CITIC Metal Co., Ltd. 37.6% Tianjin Precious Metals Exchange Co., Ltd.

6 CITIC Limited

100% CITIC Australia Pty. Ltd.

100% CITIC Kazakhstan Limited Liability Partnership

71.04% CITIC Heavy Industries Co., Ltd.

100% CITIC Investment Holdings Ltd. 65.3% CITIC Dicastal Co., Ltd.

37.59% Asia Satellite Telecommunications Holding Co., Ltd.

41.42% CITIC Telecom International Holdings Limited 99% Companhia de Telecomunicações de Macau S.A.R.L

100% CITIC Press Group

100% CITIC Tianjin Investment Holding Co., Ltd.

51.03% CITIC Zhonghaizhi Corporation 42.18% China Offshore Helicopter Co., Ltd.

100% CITIC Tourism Group Co., Ltd.

100% CITIC Automobile Co., Ltd.

100% CITIC USA Holding Inc.

100% CITIC Capital Mansion Co., Ltd.

100% CITIC Building Management Co., Ltd.

100% China International Economic Consultants Co., Ltd.

100% Beijing Guoan Football Club Co., Ltd.

7 CHAIRMAN’S LETTER

8 CHAIRMAN’S LETTER

To our shareholders, partners and customers:

As the world economy came back softly in 2013, three concurrent processes were taking place in China: the growth gears were shifting; the economy was adapting to and weathering painful restructuring; the earlier policy stimuli were being assimilated. At CITIC Group, we tapped on our advantage of being both a financial and industrial player, and stayed committed to prudent operation and innovation. This has enabled us to achieve stable and quality growth. We also scored record highs in key business indicators, as operating income increased by 7.2% from prior year to RMB 375.1 billion, and net profit by 25% to RMB 37.8 billion. On the Fortune Global 500 rankings, we climbed 22 spots from last year’s to claim the 172nd place.

Reform and innovation continued to be the Group’s drivers for sustainable growth. Many of our businesses responded to changes in market dynamics and regulatory policies by re-crafting strategies to transform themselves, and by searching and re-charting new paths into the future. CITIC Bank focused on developing modern services, consumer finance and internet finance, and has since made good headway. Early signs of success are already showing. CITIC Securities buffered its lead in the traditional business, at the same time pursued innovative business ideas such as capital intermediary service to create new profit engines. CITIC Trust continued to surpass its industry peers as it introduced the country’s first land-transfer trust product and explored the potential of high-end wealth management services, including family trust.

For our non-financial businesses, CITIC Heavy Machinery leveraged its strengths in technological innovation to transform itself, switching from mere equipment manufacturing to providing high-end, green and integrated industrial solutions. CITIC Construction repackaged its services to provide a broader offering that ranged from financing, engineering, and resources to manufacturing, thereby linking the upstream and downstream supply segments. In doing so, it succeeded in reinventing itself, and has shifted from being a project contractor to an integrated-service provider. CITIC real estate reconstituted its business makeup and product mix, and made new inroads into markets such as integrated urban operations and real estate finance.

As a conglomerate, CITIC Group espouses the customer-first approach and works hard to build broader and deeper synergies. Through closer strategic cooperation with more Fortune Global 500 companies, central state-owned enterprises and industry leaders, we managed to win major projects and acquired important business opportunities. Much of our work was targeted at the subsidiary level. Among our financial subsidiaries, we continued to promote cross-selling and joint product-innovation. These initiatives have paid off in terms of stable growth in comprehensive financial services, and culmi-

9 CHAIRMAN’S LETTER

nated in 281 products jointly developed by our financial subsidiaries and RMB 140.7 billion in revenue. Non-financial subsidiaries were given guidance to align with the appropriate industrial chains, upgrade their technology capabilities, and transform their businesses. We also helped our subsidiaries team up to expand into overseas markets in a unified effort to develop new areas of growth. As the Group anchored its business on innovative models and unleashed the potential of synergised operations, it succeeded in achieving increased overall competitiveness and profitability.

We also drew on our resources in both the domestic and overseas markets to optimise the Group’s global resource allocation. The results were manifold: CITIC Securities acquired CLSA to become the first local securities enterprise with an extensive global network; CITIC Construction broadened its global presence by providing investment-cum-financing services to gain market advantage; CITIC Heavy Machinery expanded its global footprint by establishing in overseas markets relatively comprehensive research & development, sales and after-sales service operations; CITIC Telecom International completed its acquisition of CTM, hence successfully establishing itself in basic telecommunications services; CITIC Pacific’s iron ore project in Australia made substantial progress, as it commenced trial production on its first production line and began exporting iron ore concentrate.

Internally, the Group has also achieved notable progress in optimising its investment decision mechanism and in raising capital efficiency. Good headway is also made in terms of improving our internal control and risk management, in talent management and in fulfilling our corporate social responsibilities. None of this would have been possible without the diligence and dedication of our management and staff, to whom I owe a big “Thank You!”

2014 promises another mixed year of difficulties and opportunities, as the world economy continues to crawl its way to recovery. The 3rd Plenum of the 18th CPC Central Committee has set the tone for China to embark on an extensive reform agenda focusing on economic reform. The market will now play a decisive role in the economy; there will be greater efforts to develop a hybrid economy. We all know the principle—that we have to seed to germinate and prune to grow. The reformation that China has undertaken will shape the course of China’s socio-economic development in more ways than we know and for a long time to come.

Over the past three decades, CITIC Group has been a forerunner in China’s economic reform. Our courage to innovate makes us the spearhead in many uncharted territories; hence we are at where we are now—an international conglomerate big in both financial and non-financial sectors. As the new round of reform unfolds, CITIC Group will consolidate its vast resources, including its brand, customers, channels and businesses, with a view to forging a sustainable growth model.

10 As always, the Group has an abiding interest to do well and do better. In the financial sector, we will continue to strengthen our financial businesses, expedite overseas ventures, improve our profitability and risk resilience, and sharpen our edge in comprehensive financial services. In the industrial sector, we will support and expedite key investments, and improve our competitiveness through technological innovation. We will also branch into other growth areas, such as energy conservation, environmental protection, consumer products, health- and elder-care and other emerging industries to develop new strategic growth drivers.

In terms of management and control, we will upgrade our management control methods, and direct resources toward areas that promise the biggest potential for value creation and that best fit with the Group’s strategic direction. For our key subsidiaries, companies in priority industries, and financial investments, we will introduce a differentiated management control regime.

We are also working toward an earlier listing of the Group. To do that, we will capitalise on Hong Kong’s strengths as sound governance, robust legal infrastructure and extensive talent pool to improve our management and operations, and to boost endogenous and sustainable growth.

Indeed, a roc soars not with a lone scanty plume, and a steed bolts not with one sole mighty hoof. We have always behind us the unflagging support of our shareholders, customers, partners, staff and other stakeholders. With this bastion of strength, we at the CITIC Group will stay on top of the evolving market and persist in reform and innovation. As surely as we embark on our new journey, we will carve new frontiers and scale new heights.

Chang Zhenming Chairman CITIC Group Corporation

11 BUSINESS HIGHLIGHTS

February July CITIC Limited and CITIC Resources co-invested CITIC Securities completed acquisition of the AUD 470 million to acquire a 13.6% interest in remaining 80.1% stake in CLSA Asia-Pacific Mar- Australian company Alumina Limited, with CITIC kets, making CLSA its wholly owned subsidiary. Limited holding 5.22% interest and CITIC Resources 8.4%.

April & May July CITIC Pacific issued USD 500 million of medium- CITIC Group was ranked No. 172 on the 2013 For- term notes and in May 2013, USD 1 billion of per- tune Global 500 List and No. 16 in terms of profit- petual subordinated capital securities. ability among Chinese companies.

June July CITIC Group and CITIC Pacific completed the share CITIC Pacific Sino Iron Project in Australia saw the reorganisation of CITIC Telecom International, which commissioning of its Production Line No.1. The aver- acquired a 99% interest in Companhia de Teleco- age magnetite concentrate grade was 66% of iron by municaes de Macau S.A.R.L (CTM). weight. In December 2013, the first shipment of concentrate was shipped back to China.

12 12 August December The “China Zun” project started construction on The Chongqing Riverside Motorway project, in land parcel Z15, known as the centre of Beijing’s which CITIC Industrial Investment Group and CITIC CBD. When completed, China Zun will be the tallest Construction jointly invested RMB 8.6 billion, was building in Beijing. completed on schedule and open to traffic.

October December CITIC Group acquired from Banco Bilbao Vizcaya CITIC Limited concluded a 5-year offshore syndicat- Argentaria (BBVA), its stake of 5.1% CITIC Bank H- ed loan for USD 1 billion. The syndicated loan was shares to increase the Group’s holdings of CITIC oversubscribed by 60%. Bank to 66.95%.

October CITIC Trust launched China’s first trust product 2014 backed by collective rural land rights.

2013

2012

13 Banking Business [Page 15] Real Estate and Infrastructure P15 Securities Business [Page 17] P20 Businesses [Page 20] Financial Trust Business [Page 18] Non-financial Engineering Contracting Business Businesses Insurance Business [Page 18] Businesses [Page 22] Other Financial Businesses Energy and Resources [Page 23] [Page 19] Manufacturing [Page 25] Other businesses [Page 26]

Management Report

14 Net profit 37.8 billion Yuan CITIC Group (“the Group”) succeeded in overcoming rami- fications stemming from economic complexities to further reform and development, and to improve management and operations. Our key businesses have stayed on the growth track, and major projects have progressed well. Overall performance for 2013 was excellent, as key business indicators reached record highs. Total assets grew by 20.6% to RMB 4,299.7 billion, and net assets by 15.5% to RMB 271.9 billion. Operating income increased by 7.2% from prior year to RMB 375.1 billion, and net profit by 25.5% to RMB 37.8 billion. Our income and profit were derived from two sources: financial businesses, which include banking, securities and trust services; and non-financial businesses, which include real estate and infrastructure, engineering contracting, energy and resources, manufacturing, and information industry.

Financial Businesses

CITIC Group’s financial businesses include banking, securities, trust services, insurance, funds and asset management, all of which have maintained a steady growth momentum. Asset sizes have grown and profits increased steadily. As at end 2013, our financial businesses held RMB 3,691.6 billion in total assets, 23.2% more than the prior year. Operating income for the year increased by 17.2% to RMB 112.4 billion, and net profit by 24.6% to RMB 57.9 billion.

Banking Business

China CITIC Bank Corporation Limited (CITIC changes to its business makeup and customer Bank) has mapped out a new growth strategy to mix. It also aimed to remodel the Bank’s opera- spur strategic transformation, revamp its manage- tions structure, and to accelerate channel ex- ment control system, and effect more profound pansion and development of its information-

CITIC Bank: Key Business Indicators (RMB 100 million)

Year-on-year Indicator 2013 2012 growth/change (percentage points) Total assets 36,411.93 29,599.39 23.02 Net assets 2,256.01 1,983.56 13.74 Operating income 1,045.58 894.35 16.91 Net profit attributable to parent 391.75 310.32 26.24 CAR 11.24% 12.42% (1.18) Core CAR* 8.78% 9.29% (0.51) Tier 1 CAR* 8.78% 9.29% (0.51) NPL ratio 1.03% 0.74% 0.29 Provision coverage ratio 206.62% 288.25% (81.63)

Note: Calculated on the basis of Rules Governing Capital Management of Commercial Bank (Provisional) order of China Banking Regulatory Commission (No.1 2012)

15 MANAGEMENT REPORT

On 1 October 2013, CITIC Bank held the "Tennis Debit Card Global Launch" at the National Tennis Centre during the China Tennis Open.

technology infrastructure. CITIC Bank has since 26% higher. Non-performing loan (NPL) ratio was turned a new chapter. Key indicators for its finan- 1.03%, provision coverage 206.62%, and capital cial businesses ranked top among medium-sized adequacy ratio (CAR) 11.24%. As at end 2013, commercial banks, as the retail banking business the Bank had altogether 1,073 outlets, covering was brisk and budding with potential. For better 116 big and medium cities in China. product differentiation hence greater competitiveness, the Bank focused on developing niche busi- To capitalise on Hong Kong’s rapid growth in off- nesses, including modern service industry, internet shore Renminbi business, China CITIC Bank Inter- finance and mobile payment, and grooming non- national Limited (CNCBI) collaborated with parent core businesses into core businesses. The Bank CITIC Bank to launch a range of Renminbi products has also increasingly cooperated with other Group and services. This was an opportune initiative to pro- subsidiaries by using CITIC’s integrated financial vide customers with effective solutions to preserve service platform for sharing of customer informa- and increase the value of their investments, and to tion, cross-product development and cross-selling sustain the growth of our non-interest income and to gradually create its unique competitive advan- overall earnings. CNCBI’s operating income in 2013 tage. By end 2013, CITIC Bank’s total assets were grew by 27.8% from last year to HKD 4.75 billion, RMB 3,640 billion, having grown by 23% from and operating profit before provision by 39.4% to the prior year, and net profit RMB 39.2 billion, HKD 2.66 billion.

16 Securities Business

CITIC Securities Co., Ltd. (CITICS) acquired 100% its lead in the industry in terms of operating income stake in CITIC Wantong Securities and regained a and net profit. Its operating income for the period controlling stake in China Asset Management Co., increased by 37.8% to RMB 16.12 billion, and net Ltd. It also completed acquisition of the full stake profit by 23.8% to RMB 5.24 billion. in CLSA to become the first Chinese securities firm with extensive networks in major markets in The major subsidiaries of CITICS also came away with the world. CITICS capitalises on its combination of a sterling year. CITIC Securities (Zhejiang) Co., Ltd. re- strengths to buffer its lead in China’s securities in- ported RMB 1.77 billion in operating income and RMB dustry, and was ranked top, either based on market 620 million in net profit; CITIC Wantong Securities Co., indicators or within the industry, in the following as- Ltd., RMB 950 million in operating income and RMB pects: market share in brokerage business, amount 310 million in net profit; CITIC Securities International underwritten as lead underwriter, value of assets un- Co., Ltd., RMB 2.52 billion in operating income and der management, volume of inter-bank bond trans- RMB 350 million in net profit; China Asset Manage- action, QFII transaction volume and domestic mar- ment Co., Ltd., RMB 3.05 billion in operating income ket share in margin trading and securities lending. and RMB 970 million in net profit; and CITIC Futures CITICS actively sought to transform its business and Co., Ltd., RMB 650 million in operating income and increase its financial leverage, and has maintained RMB 230 million in net profit.

CITIC Securities: Key Business Indicators (RMB100 million)

Indicator 2013 2012 Year-on-year growth

Total assets 2,713.54 1,685.08 61.03 Net assets 876.88 864.65 1.42 Operating income 161.15 116.94 37.81 Total profit 68.46 54.87 24.76 Net profit attributable to parent 52.44 42.37 23.75

Celebration party in July 2013 for CITIC Securities' successful acquisition of CLSA

17 MANAGEMENT REPORT

Trust Business

As CITIC Trust Co., Ltd. continued to consolidate exchanges. As at end 2013, CITIC Trust had RMB its traditional businesses, it persisted in innovation- 729.7 billion in trust assets, the largest in the industry led growth and launched the first trust product in the for 7 consecutive years. Its operating income increased country backed by collective rural land rights. It ex- by 23% from prior year to RMB 5.49 billion, and net panded its business in credit asset securitisation, cash profit by 16% to RMB 3.14 billion. The company con- management trust and in small and medium enterpris- tinued to lead the industry based on performance indi- es trust. It has also obtained interests in precious metal cators and in terms of overall organisational strength.

CITIC Trust and Beijing High-end Manufacture Industrial Base signing Strategic Cooperation Agreement

CITIC Trust: Key Business Indicators (RMB 100 million)

Indicator 2013 2012 Year-on-year growth

Total assets 148.87 118.23 26%

Net assets 130.29 99.38 31%

Operating income 54.87 44.76 23%

Total profit 41.94 36.08 16%

Net profit attributable to parent 31.44 27.17 16%

Trust assets 7297 5913 23%

Insurance Business

CITIC-Prudential Life Insurance Co., Ltd. shifted its and more aggressive telemarketing. Compared to last business strategy and increased the number of service year, the company’s new annual premium equivalent outlets. By end 2013, the company’s business activities (APE) increased by 41.2%, profit from new policies by covered 55 cities. To expand sales, a multiple-channel 21.6%, and embedded value increased to RMB 5.67 strategy was employed, which included internet-sales billion. Its solvency margin ratio reached 181%.

18 Other Financial Businesses

CITIC Holdings Co., Ltd. continued to develop and 9 new funds in 2013, and had, by end 2013, a total of improve the structure and the applications of its 28 funds under management with a total size of RMB unified platform for financial information system, 18.45 billion. Operating income for the year was RMB and went on to launch CITIC Group’s e-commerce 298 million and net profit was RMB 59.55 million. platform “ecitic”. By end 2013, ecitic’s average daily page views had reached 1.19 million, and on- CITIC Kingview Capital Management Co., Ltd. had line transaction volume was RMB 28,280 billion for RMB 26.65 billion in assets under management (AUM), banking matters, and RMB 4,370 billion for securi- including 2 equity trust funds, 24 onshore limited ties trading. partnership private equity funds and 2 offshore funds. For 2013, the company reported RMB 140 million in CITIC Asset Management Co., Ltd. saw robust and operating income and RMB 70 million in net profit, and rapid growth in its micro-pawn, finance lease and fac- paid out to investors RMB 820 million in dividends and toring businesses, and worked on optimising its branch investment returns. network. The company’s operating income increased by 44.7% to RMB 1.11 billion, and net profit by 34.3% CITIC Capital Holdings Limited and the funds it man- to RMB 180 million. aged completed investment in several new projects, including S.F. Express, Focus Media and Asiainfo- CITIC Finance Company Limited has built a unified Linkage. The company had USD 4.4 billion in AUM as capital pool and settlement platform as part of the at end 2013. company’s efforts to establish a centralised capital management and control system for greater efficiency CITIC International Assets Management Limited ad- in the Group’s internal capital operations. opted a green investment strategy, and concluded major transactions in new energy applications and energy CITIC-Prudential Fund Management Co., Ltd. launched management to improve its investment portfolio.

CITIC-Prudential initiated the "Joy of Life-Aijia" project

19 MANAGEMENT REPORT

Non-financial Businesses

CITIC Group’s non-financial businesses encompass real estate and infrastructure, engineering contracting, energy and resources, manufacturing and information industry, all of which have maintained steady growth. During 2013, total non-financial business assets grew by 7.7% from prior year to RMB 718.6 billion. Operating income for the year was RMB 269.2 billion, up by 3.8% year on year, and operating profit RMB 14 billion, up by 32.6% year on year.

Real Estate and Infrastructure Businesses

In 2013, the total assets of our real estate and infrastructure businesses grew by 11.8% to RMB 211.8 billion. Operating income for the year was RMB 31 billion and operating profit RMB 8 billion.

Changchun

Beijing

Dalian

Yantai Tianjin Bohai Rim City Cluster Qingdao

Shanghai Suzhou Yangtze River Delta Dujiangyan Hangzhou City Cluster Jiujiang Chengdu Huangshan Chongqing Western China Changsha Nanchang City Cluster

Guangzhou Xining Foshan Huizhou Shenzhen Shantou Pan-Pearl River Delta Dongguan City Cluster Zhuhai Zhongshan Haikou Hainan International Boao Tourism Island Sanya South China Sea Islands Lingshui

CITIC Real Estate's distribution of real estate projects in China

1. Real estate business: CITIC Real Estate Co., in the country. Net profit rose by to RMB 1.18 bil- Ltd. succeeded in securing its competitive position lion. For the 4th year running, CITIC Real Estate was and in building brand franchise through improved named “Blue Chip Real Estate Company in China” project management and drastic inventory reduction. and ranked 10th among the awardees. As at end Sales (incl. pre-sales) in terms of value and gross 2013, the company had 20.91 million square metres floor area have both moved up 5 places from last in land reserves (based on gross floor area) located year’s ranking to assume the 14th and 17th places in 22 cities and 1 autonomous county in the country,

20 On 23 December 2013, the Riverside Motorway for Chongqing's Fuling District section was completed and open to traffic

65% of which being first- and second-tier cities, and 2. Infrastructure business: CITIC Group’s infrastruc- 91.7% of the land designated for residential devel- ture business comprises motorway, port and undersea opment and 8.3% commercial. tunnel projects.

CITIC Pacific Limited made a net profit of HKD 1.53 CITIC Industrial Investment Group Corp., Ltd. reported billion from its real estate business in China main- steady growth in its motorway and port businesses. land and Hong Kong. By end 2013, CITIC Pacific The company collaborated with CITIC Construction sold 223,000 square metres of residential property Co., Ltd.and invested RMB 8.6 billion in the Chongqing and was holding 3.14 million square metres in land Riverside Motorway project based on the “BOT+EPC” reserves in China mainland. The company invested model, adopted for the first time in China. The motor- in 220,000 square metres in real estate property, way was completed observing all safety and quality which, with an 88% occupancy rate, provided a standards and within budget, and was promptly open steady source of rental income. In Hong Kong, to traffic. For 2013, the company reported RMB 3.63 it proceeded with the Discovery Bay project and billion in operating income and RMB 2 billion in net started the redevelopment of Kadoorie Hill. Overall profit. occupancy rate was 97% for invested properties in Hong Kong. CITIC Pacific Limited’s Eastern Harbour Tunnel and Western Harbour Tunnel in Hong Kong carry an aver- CITIC Heye Investment (Beijing) Co., Ltd. has started age daily traffic of 134,000 vehicles. The company’s construction of the “China Zun” project in the CBD of tunnel business contributed HKD 610 million in net Beijing. profit, 9% higher than last year.

21 MANAGEMENT REPORT

Belarus

Uzbekistan Kazakhstan Turkmenistan Turkey China Algeria Burma

Venezuela

Indonesia Brazil Angola

South Africa Argentina Australia

CITIC Construction's worldwide business distribution

Engineering Contracting Business

As at end 2013, the engineering contracting business Municipal Engineering Design & Research Institute Co., owned total assets of RMB 38.2 billion, 0.1% more Ltd. have completed their strategic restructuring and than the year’s opening balance. Operating income for registered a new company called CITIC Engineering the year was RMB 18.47 billion and operating profit Design and Construction Co., Ltd. (“CITIC Engineer- RMB 2.48 billion. ing”). CITIC Engineering will harness the key strengths of the two institutes to establish itself in urban con- CITIC Construction Co., Ltd. has ensured vigorous struction, water and environmental protection and project management and steady advancement of in- new energy, and develop its business in the total value progress projects. The Kilamba Kiaxi Satellite City chain, with a focus on general contracting. The total project in Angola was completed and delivered, and value of new contracts for the year was RMB 2.27 bil- has commenced use; 3 EPC/turnkey cement plants lion, operating income RMB 1.5 billion and net profit of 4.5 million tons in annual production in Belarus RMB 280 million. were completed and production has begun. CITIC Construction has anchored its business key markets as Angola and Venezuela, and from which developed its regional business by exploring opportunities in other countries, such as Uganda, Columbia and Ukraine. The total value of new contracts for 2013 was USD 2.77 billion. CITIC Construction ranked 43rd among the “ENR World Top 225 International Engineering Contractors” in 2013, with an operating income of RMB 16.5 billion and net profit of RMB 1.59 billion.

CITIC General Institute of Architectural Design and Re- search Co., Ltd. and the Central and Southern China Cement production line project in Belarus

22 A tugboat and a barge in use for CITIC Pacific's Sino Iron project in Australia

Energy and Resources

CITIC Group’s energy and resources businesses span paid AUD 470 million to acquire a 13.6% interest in a wide range of sectors, including oil, coal mining, Australian company Alumina Limited, making it the electricity, iron ore, manganese minerals, electrolytic largest shareholder of Alumina. Due to cyclical mar- aluminium and iron alloy. By end 2013, total energy ket fluctuations, demand tumble and weak prices of and resources business assets amounted to RMB energy and commodities, CITIC Resources reported 168.5 billion, 4.1% more than the prior year; operating operating income for the year of HKD 39.3 billion income for the year was RMB 101.5 billion and operat- and net loss HKD 1.47 billion. ing loss was RMB 170 million. China Platinum Company, an affiliate of CITIC United CITIC Resources Holdings Limited’s (“CITIC Re- Asia Investments Limited, achieved record platinum sources”) Karazhanbas Oil Field in Kazakhstan sales of 44 tonnes. After implementing rigorous cost continued to see its output increase, with crude oil control measures, CITIC Jinzhou Metal Co., Ltd. production for the year reaching 6.85 million bar- managed to turn around with a modest profit. CITIC rels. In Liaoning Province, Platforms A and B of the Dameng Holdings Limited strengthened corporate Yuedong Oil Field have come on stream. Indonesia’s management and reduced energy consumption and Seram Oil Field maintained a stable production level. has succeeded in reducing losses substantially. Oper- CITIC Resources increased its stake in the Coppa- ating income of CITIC United Asia Investments Limited bella and Moorvale coal mines joint venture (“CMJV”) for the year was HKD 20.7 billion and net profit was to consolidate its position as the leading supplier of HKD 120 million. pulverised coal injection (or PCI) coal in China. CITIC Resources also joined hands with CITIC Limited and CITIC Metal Co., Ltd. maintained its market share in

23 MANAGEMENT REPORT

the niobium business of over 86%. Tianjin Precious Metals Exchange, which was acquired by CITIC Metal, reported strong performance. Operating income of CITIC Metal for the year was RMB 20.1 billion and net profit was RMB 450 million.

Commissioning of Production Line No.1 and Produc- tion Line No. 2 for the CITIC Pacific magnetite mine in Australia has commenced. The average magnetite concentrate grade was 66% of iron by weight, and the first shipment of concentrate powder has been shipped back to China. CITIC Pacific-owned power Yuedong Oil Field onshore treatment terminal plants increased total electricity and heat generation by a respective 10% and 24% from a year earlier. Also, benefitting from the marked decline in coal steady production by upgrading its technology, em- prices, electricity generation contributed RMB 1.4 ploying precision marketing, and by leveraging its po- billion to CITIC Pacific’s net profit, 101% more than tential and improving efficiency. the prior year. The Aktau Bitumen Plant, jointly invested by CITIC Baiyin Nonferrous Group Co., Ltd., in which CITIC Kazakhstan and Kazakhstan’s National Oil and Gas Guo’an Group has a stake, held out against the down- Company KazMunaiGaz and constructed by CITIC ward trend in the non-ferrous market and maintained Construction began operations at the end of 2013.

On 20 December 2013, the Aktao Bitumen Plant, the largest direct investment collaboration between China and Kazakhstan in non-resources sector, officially commenced production

24 Manufacturing

CITIC Group’s manufacturing business includes inverter, and has successfully crossed over to heavy equipment, special steel and auto parts. By the power and electronics industry. By pressing end 2013, total assets of the manufacturing busi- ahead with technological innovation, the com- ness had increased by 3.2% to RMB 85.6 billion. Its pany has successfully developed a 5m-diameter operating income for the year was RMB 56.7 billion open trackless hard rock tunnel boring machine. and operating profit was RMB 2.15 billion. Geographically, it has also further expanded its overseas presence to compete in the high-end Despite shrinking market demand and a difficult global market. The company has basically put operating environment, CITIC Heavy Industries in place its overseas sales and marketing, R&D Co., Ltd. developed a creative business model and service teams. CITIC Censa in Spain contin- and strived to develop the market for equipment ued to perform well. Operating income of CITIC systems. Order value for equipment systems Heavy Industries Co., Ltd. for the year was RMB was RMB 6.59 billion, accounting for 59.8% 5.1 billion; net profit was RMB500 million. of the company’s total order value. The company expedited incubation and development of CITIC Pacific Special Steel Holdings improved pro- strategic emerging industries, and orders for duction efficiency, optimised its product portfolio, energy-saving and green products and circu- and strengthened marketing for auto parts and the lar economy related products valued at RMB power sector, and has outperformed industry play- 2.18 billion. The company has also developed ers in steel & iron manufacturing and processing and high-end equipment for high-voltage frequency the larger steel industry. Steel output for the year

A coating line at CITIC Dicastal's Ningbo plant

25 MANAGEMENT REPORT

A 5m diameter open trackless hard rock tunnel boring machine developed by CITIC Heavy Industries successfully completed its test-run

was 7.24 million tonnes, contributing HKD1.3 billion US markets. In 2013, CITIC Dicastal sold a total of to the net profit of CITIC Pacific Limited. 30.75 million units of aluminium wheels, maintaining its world’s No. 1 position in terms of sales volume CITIC Dicastal Co., Ltd. continued to optimise its for the fifth consecutive year. product portfolio, accelerated upgrading of technology and processes, and strove to enhance added value. Production for the Ningbo plant was off to a smooth start. Construction for Production line 1 for Other businesses aluminium wheels was completed. Situated on land- scaped grounds, the plant is equipped with sophis- CITIC Group has other businesses in information ticated digital and automated production facilities, technology, such as cable TV, satellite transponder features low cost advantages, and has production leasing and information service, and in publishing, capacity for 2 million units a year. Construction of general aviation, logistics, tourism and health care. the KSM plants in Qinghuangdao and the US com- Within the year 2013, total business assets have menced. With advanced casting technologies and grown by 19% to close at RMB 85.8 billion. Total management expertise from KSM, CITIC Dicastal operating income was RMB 57.3 billion and operat- will further expand its presence in the Chinese and ing profit was RMB 1.99 billion.

26 CITIC Networks Co., Ltd. studied the new busi- China Offshore Helicopter Co., Ltd. continued to ness potentials in the telecommunication sector grow its offshore helicopter oil services. With a and conducted experimentation and trial operation market share at 60.8%, the company was well- on optimisation of internet traffic on “pentium.icoc. entrenched as the leading industry player. cc”, using the site’s existing resources. Henan Cable TV and Chongqing Cable TV have made CITIC Automobile Co., Ltd. growed its conven- steady progress in digital TV transition. Operating tional logistics business, and at the same time re- income of CITIC Networks for the year was RMB engineered its business model and expanded into 460 million. new areas as logistics financing, energy logistics and cold chain logistics. Operating income for the year CITIC Guoan Group has scaled up the upgrading was RMB 3.86 billion. process of cable TV network to handle two-way transmission for interactive data services, pressed CITIC Tourism Group Co., Ltd. stepped up direct ahead with optimisation of network systems, and sales for the outbound sector, and recorded a year- stepped up marketing efforts for its value-added on-year increase of 6.4% in operating income and services. Project returns grew steadily. The com- 10.8% in net profit. Total tourists received were pany was also extensively involved in network 770,000, 9.4% higher than the prior year. integration in different localities, and its business has continued to expand as a result. Its cable TV CITIC-Xiangya Reproductive & Genetic Hospital and subscribers grew 10% in the year, and by end Hangzhou Plastic Surgery Hospital, both of which 2013, CITIC Group had 38.95 million cable TV are subsidiaries of CITIC Medical & Health Group subscribers. Co., Ltd., recorded excellent performance.

Asia Satellite Telecommunications Holding Limit- Dah Chong Hong Holdings, in which CITIC Pacific ed, in which CITIC Group has a stake, continued Limited holds a 55.6% stake, was aggressively de- to provide premier broadcasting and telecom- veloping its motor & motor-related business, food munications services to the Asia Pacific region & consumer products business, and logistics busi- with its four satellites, consolidating its position ness. The company contributed HKD 490 million in as the market leader. Preparations for launch net profit to CITIC Pacific Limited. of AsiaSat 6 and AsiaSat 8 were underway. The company’s net profit for the year stood at HKD750 million. Overall, as complexities loom large, 2014 will remain a challenging year for both domestic CITIC Telecom International Holdings Limited ac- and global economies. CITIC Group will stay quired a 99% interest in Companhia de Telecomu- prudent as it progresses, transforms and nicações de Macau S.A.R.L (CTM) and became betters quality, and will steadfastly pursue a leading telecom service provider with a diverse business reform and consolidation, as well as range of product offerings. Its net profit for the year optimisation and development. We are com- was HKD1.07 billion. mitted to achieving robust growth for every single business and to obtaining the best During the year, CITIC Publishing Co., Ltd. changed returns for our ever trustful and supportive its name to CITIC Press Group. The company em- shareholders and customers. barked on an aggressive expansion of its digital publishing and education & training businesses. CITIC-published books and CITIC book stores have continued to gain popularity, and have significantly boosted recognition for the CITIC brand.

27 CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility

28 CITIC Group (“the Group”) has been an active corporate citizen performing its social responsibilities, while generat- ing social wealth. In 2013, the Group contributed nearly RMB 100 million to social causes such as providing assis- tance for Tibet, poverty alleviation and greening, and has created real social benefits.

Supporting socioeconomic development in Xainza Protecting the environment and promoting low- County of Tibet Autonomous Region carbon business

We funded a xiaokang demonstration village of 32 We proceeded smoothly with the Huangyangtan households in Xiongmei Town, Xainza County, Ti- sandstorm control and greening project, covering bet. Through the project, we improved the housing 20,000 mu (or 1333.33 hectares) of land in Xuan- and living conditions of local farmers and herders hua County, Hebei Province, and continued to pre- to one of modest standard (“xiaokang”), thereby serve the 30-mu (or 2-hectare) land in Changping contributed to the government’s policy of building District for greening and for sandstorm control and a new countryside and spurred economic growth. prevention. As a development strategy, we have We also helped alleviate the local employment also introduced various energy conservation mea- problem by providing 112 jobs for graduates of Ti- sures and implemented paperless office. CITIC betan tertiary institutions and Tibetan workers. Bank has adhered to the government’s policy to promote green credit and to restrict financing in- Alleviating poverty in Yuanyang County and Pingbi- dustries with overcapacity, and has incorporated an County in Honghe Prefecture, Yunnan Province the green credit concept in its business opera- We embarked upon poverty alleviation initiatives tions to reduce overcapacity. It ensured that loans in Yuanyang and Pingbian counties by relocating and financing options were offered to sectors that entire villages, providing safe housing and training meet technological upgrading requirements as well the villagers in livelihood skills. The locals were en- as carbon emission and green standards. These abled through our efforts, and were able to com- were part of our contributions to building a green, bat poverty and live a better life. Our initiatives circular and low-carbon economy. helped balance local socioeconomic development and environmental protection. To support local Creating jobs and enabling CITIC and CITIC Staff to grow together education, we have set up the CITIC financial aid and scholarship, which has benefited more than CITIC Group and its subsidiaries have provided 900 students and teachers in 2013. more than 300,000 jobs at home and abroad.

29 CORPORATE SOCIAL RESPONSIBILITY

To fulfil our larger goal, we have drawn up our CPC. The programme which targeted at primary medium- and long-term development plans, and and secondary schools in underdeveloped areas, improved upon our labour contract scheme and covered the Boyang Lake Eco-economic Zone and work environment. Our focus on employee living southern Jiangxi Province, and included activities and work conditions is part of the Group’s effort to as renovating school grounds, painting external share its achievements and profit with the staff to walls of school buildings, and donating libraries. sustain long-term and healthy development.

Sponsoring educational, cultural, technology, and Fulfilling social responsibilities overseas public health activities CITIC Construction financed 19 Angolan agri- CITIC Group continued to sponsor Beijing Music cultural technicians to attend a one-year training Festival. CITIC Bank contributed RMB 2 million to programme in modern agricultural technology at the Tsinghua University Education Foundation to Shihezi University in Xinjiang Uyghur Autonomous support indigent students. The “Smile Initiative” Region, and 10 Angolan planners for a one-month founded by Hangzhou Plastic Surgery Hospital, a exchange programme in Tsinghua University, the subsidiary of CITIC Medical and Health Group, has Urban Planning Society of China and the Chinese treated more than 160 people with cleft lip and Academy of Urban Planning & Design. As patron palate. of the programme “My Well-equipped Home” initiated by the Ministry of Housing and Habitat of Venezuela, CITIC Bank supported the Tiuna Social Helping the disadvantaged Housing Project by providing RMB 13 million for After the Ya’an earthquake in Sichuan Province purchase of furniture and appliances for the resi- on 20 April 2013, the Group’s companies and dents. CITIC Resources invested RMB 5 million to employees donated about RMB24 million to the support infrastructure projects in Kazakhstan. quake-stricken areas as disaster relief and recon- struction fund. CITIC Bank provided more than RMB 16 million, and worked with the China Foun- CITIC Group’s commitment to social responsi- dation for Poverty Alleviation to jointly kick-start bilities has been well-recognised by the relevant the “CITIC Bank -New Great Wall High School authorities and the public. The State Council’s Self-Strengthening (Ziqiang) Class” project to help Leading Group Office of Poverty Alleviation and 500 students of 12 ethnic groups from 21 counties Development has awarded CITIC Group with the complete high school. The bank also granted RMB title of “Model of Poverty Alleviation”. The interna- 1 million to the “Mountain Flower Tennis (Shan tional social responsibilities undertaken by CITIC Hua Wangqiu)” project to provide professional ten- Construction have been selected for inclusion in nis training for girls in ethnic minority areas. the Case Book of Outstanding Contributions by Chinese and Foreign Enterprises in Delivering In- “Colour, Way of Love (Wei’ai Shangse)” was an ternational Social Responsibilities by the China education aid programme which CITIC Real Estate Foundation for Poverty Alleviation. In fulfilling its co-sponsored with Nippon Paint China. The local corporate social responsibility, CITIC Group will organiser was the Work Committee for Depart- continue to give more, deliver more, and return ments under Jiangxi Provincial Committee of the more to society.

30 P32 P37 CITIC Group Corporation CITIC Limited

Board of Directors, Board of Supervisors and Senior Management of CITIC Group Corporation and CITIC Limited

31 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

CITIC Group Corporation

Nine Members on the Board of Directors

Mr CHANG Zhenming Chairman

Born in October 1956. Mr Chang has been the Chairman of CITIC Group Corporation’s Board of Directors since December 2011. He graduated from New York Insurance In- stitute with a master’s degree in business administration. He is a senior economist by profession.

Previous appointments: Vice President of CITIC Industrial Bank; Executive Director and Vice President of CITIC Group; Vice Chairman and President of China Construction Bank; Vice Chairman and President of CITIC Group; and Chairman of CITIC Group.

Mr WANG Jiong Vice Chairman and President

Born in March 1960. Mr Wang has been the Vice Chairman and President of CITIC Group Corporation since May 2013. He graduated from Shanghai University of Finance and Economics with a master’s degree in economics.

Previous appointments: Deputy General Manager of CITIC Shanghai Co., Ltd.; Gen- eral Manager and Chairman of CITIC Shanghai (Group) Co., Ltd.; General Manager and Chairman of CITIC East China (Group) Co., Ltd.; Assistant President of China Interna- tional Trust & Investment Corporation; Executive Director and Vice President of CITIC Group Corporation; and Vice President of CITIC Limited.

Mr DOU Jianzhong Executive Director

Born in February 1955. Mr Dou has been an Executive Director of CITIC Group Cor- poration since December 2011. He has a bachelor’s degree in English language and literature from the University of International Business and Economics and a master’s degree in economics from the College of International Economics at Liaoning Univer- sity. He is a senior economist by profession.

Previous appointments: Vice President, Executive Vice President and President of CITIC Industrial Bank; Assistant President of China International Trust & Investment Corporation; and Executive Director and Vice President of CITIC Group.

32 Mr ZHAO Jingwen Executive Director

Born in July 1954. Mr Zhao has been an Executive Director of CITIC Group Corpora- tion since September 2013. He graduated from China University of Political Science and Law with a master’s degree in economic law.

Previous appointments: Deputy Director-General of the Supervisory Office, Director- General of the Department of Supervision and Legal Department and Assistant Presi- dent of China International Trust & Investment Corporation; and Executive Director and Vice President of CITIC Group.

Mr YANG Jinming Non-executive Director

Born in October 1957. Mr Yang has been a Non-executive Director of CITIC Group Corporation since December 2011. He graduated from the Correspondence Institute of the Central Party School with a college diploma in international economics.

Previous appointments: Deputy Director of the General Office, China National Salt Industry Corporation Beijing Branch; Deputy Chief of the Payroll Division of General Planning Department, Ministry of Finance; Chief of Extra-budgetary Fund Management Division of Policy and Reform Department; and Chief of Government Procurement Divi- sion and Assistant Inspector of Treasury Department.

Mr YU Zhensheng Non-executive Director

Born in September 1956. Mr Yu has been a Non-executive Director of CITIC Group Corporation since December 2011. He graduated from Beijing International Studies University with a bachelor’s degree in Japanese language and literature. He also pursued advanced studies at the Nomura Research Institute from October 1983 to Febru- ary 1985.

Previous appointments: Officer of the Loan Office, State Import & Export Regula- tory Commission; Officer of the Loan Bureau and Foreign Capital Bureau, Ministry of Foreign Trade and Economic Cooperation; Deputy Chief of the Foreign Trade Division, Department of Foreign Trade and Economic Cooperation, Tibet Autonomous Region; Deputy Chief, Chief and Assistant Inspector of Division V, Department of Foreign Loans Management, Ministry of Foreign Trade and Economic Cooperation; Assistant Inspec- tor of the Government Bond Department, Ministry of Finance; and Deputy Director- General and Inspector of the Department of Finance, Ministry of Finance.

33 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

Ms QU Yonglan Non-executive Director

Born in September 1954. Ms Qu Yonglan has been a Non-executive Director of CITIC Limited since December 2011. She graduated from the Economics Department of Lia- oning University and the Graduate School of the Central Party School with a graduate diploma in economics and management.

Previous appointments: Senior Staff Member of the Publicity Division of the Party Committee, Inspector (Deputy Division Chief level and Division Chief level) of the Disci- pline Inspection Committee, and Chief of the Organisation Division of the Party Com- mittee, Ministry of Finance; Deputy Director-General of the Supervision Bureau, Ministry of Finance, appointed by the CPC Central Commission for Discipline Inspection and Ministry of Supervision; and Secretary of the Discipline Inspection Committee, and Ex- ecutive Deputy Secretary of the Party Committee, Ministry of Finance.

Ms CAO Pu Non-executive Director

Born in December 1952. Ms Cao Pu has been a Non-executive Director of CITIC Group since July 2012. She graduated from Wuhan University with a college diploma in insurance. She is a senior economist by profession.

Previous appointments: Deputy Director and Director of the Office of PICC Henan Branch; President of PICC Zhengzhou Sub-branch and Vice President of PICC Henan Branch; General Manager of Finance Department of China Reinsurance (Group) Cor- poration and its Assistant Manager; and Vice President of China Export & Credit Insur- ance Corporation.

Mr LIU Zhiqiang Staff-elected Director

Born in September 1956. Mr Liu has been the Staff-elected director of CITIC Group Corporation since December 2011 and the Chairman and President of CITIC Asset Management Corporation Ltd. since December 2004. He graduated from Zhongnan University of Economics and Law with a graduate diploma and a PhD in economics. He is a senior economist by profession.

Previous appointments: Deputy Chief and Chief of the Planning Department and Financial Survey and Statistics Department, People’s Bank of China; Director of the Fi- nancial Affairs Office for Hong Kong, Macau and Taiwan; Deputy Director-General of the

34 Department of Economics, Xinhua News Agency Hong Kong Branch; Deputy General Manager and Chief Financial Officer of Guangdong International Trust & Investment Cor- poration; President of Guangdong Development Bank; Vice President of CITIC Bank; Director and Vice President of CITIC Holdings Co., Ltd.; and Director of CITIC Group.

Five Members on the Board of Supervisors

Mr LIN Meifang Supervisor and Temporary Convenor of Board of Supervisors

Born in December 1955. Mr Lin has been a Non-employee Supervisor and Temporary Convenor of CITIC Group Corporation’s Board of Supervisors since December 2011. He graduated from Xiamen University with a college diploma in Finance and Account- ing, and is an accountant by profession. He also attended the Graduate Programme of Investment and Economics at Dongbei University of Finance and Economics.

Previous appointments: Deputy Division Chief and Division Chief of the Administrative Department, Ministry of Finance; Deputy Director-General of the Basic Construction Department, Ministry of Finance; Full-time Supervisor (Deputy Director-General level) and Deputy Director of the General Office, and Full-time Supervisor (Director-General level) and Director of the General Office, China Construction Bank; and Full-time Su- pervisor (Director-General level) of the Board of Supervisors and Director of the General Office of Agricultural Development Bank of China, the Export-Import Bank of China and CITIC Group.

Mr LI Zengyuan Supervisor

Born in July 1958. Mr Li has been a Non-employee Supervisor of CITIC Group Corpo- ration since December 2011. He graduated from Dongbei University of Finance and Economics with a college diploma in Public Finance.

Previous appointments: Senior Staff Member of the Budget Management Depart- ment, Ministry of Finance; Deputy Chief of the Provincial Affairs Department, Ministry of Finance; Researcher of the Special Fund Division and Central Government Spending Division II of the Budget Department, Ministry of Finance; Manager (Deputy Division Chief level) and Manager (Division Chief level) of the Finance Department, Ta Kung Pao (Hong Kong) Limited; and Officer (Deputy Director-General level) of Ministry of Finance.

35 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

Mr DOU Hongquan Non-employee Supervisor

Born in August 1968. Mr Dou has been a Non-employee Supervisor of CITIC Group Corporation since December 2011. He graduated from the Banking and Finance Re- search Institute of People’s Bank of China (PBOC) with a PhD in Finance. He is a senior economist by profession.

Previous appointments: Senior Staff Member of the Financial Market Division, Non- banking Financial Regulation Department, PBOC; and Deputy Chief, Researcher, and Full-time Supervisor (Division Chief level) of the Boards of Supervisors of China Ever- bright Group and CITIC Group.

Mr ZHANG Xiaoping Staff-elected Supervisor

Born in January 1953. Mr Zhang has been an Staff-elected supervisor of CITIC Group Corporation since December 2011. He graduated from the Graduate School of the Central Party School with a graduate diploma in World Economics. He is a senior political advisor by profession.

Previous appointments: Chief of the Publicity Division, CPC Party Committee of or- gans directly under the party committee of the China International Trust & Investment Corporation; Deputy Editor-in-Chief of Zhongxinren Newspaper; Assistant Director of the Organisation Department of the CPC Party Committee, Deputy General-Secretary of CPC Party Committee of Organisations directly under CITIC Group, Deputy Direc- tor of the Department of Party Affairs and Executive Vice Chairman of the Union, CITIC Group; and Executive Vice Chairman of the Union, CITIC Limited.

Ms ZHENG Yongqin Staff-elected Supervisor

Born in October 1955. Ms Zheng has been an Staff-elected supervisor of CITIC Group Corporation since December 2011. She graduated from the Industrial Management and Engineering Programme at the University of Science and Technology Beijing with a master’s degree in economics. She is a senior accountant by profession.

Previous appointments: Lecturer at the School of Economics and Management, the University of Science and Technology Beijing; Chief of the Finance Department, CITIC Trading Company; Deputy Chief, Chief and Assistant Director of the Finance Depart- ment, China International Trust & Investment Corporation; and Deputy Director of the Finance Department, CITIC Group.

36 CITIC Limited

Eight Members on the Board of Directors

Mr CHANG Zhenming Chairman

Born in October 1956. Mr Chang has been the Chairman of CITIC Limited’s Board of Directors since December 2011. He graduated from New York Insurance Institute with a master’s degree in business administration. He is a senior economist by profession.

Mr WANG Jiong Vice Chairman and President

Born in March 1960. Mr. Wang has been the Vice Chairman and President of CITIC Limited since May 2013. He graduated from Shanghai University of Finance and Eco- nomics with a master’s degree in Economics.

Mr DOU Jianzhong Executive Director and Vice President

Born in February 1955. Mr Dou has been an Executive Director of and Vice President of CITIC Limited since December 2011. He has a bachelor’s degree in English Language from the University of International Business and Economics and a master’s degree in Economics from the College of International Economics at Liaoning University. He is a senior economist by profession.

37 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

Mr ZHAO Jingwen Executive Director and Vice President

Born in July 1954. Mr Zhao has been an Executive Director of CITIC Limited since Sep- tember 2013 and Vice President of CITIC Limited since December 2011. He graduated from China University of Political Science and Law with a master’s degree in Economic Law.

Mr YANG Jinming Non-executive Director

Born in October 1957. Mr Yang has been a Non-executive Director of CITIC Limited since December 2011. He graduated from the Correspondence Institute of the Central Party School with a bachelor’s degree in International Economics.

Mr YU Zhensheng Non-executive Director

Born in September 1956. Mr Yu Zhensheng has been a Non-executive Director of CITIC Limited since December 2011. He graduated from Beijing International Studies University with a bachelor’s degree in Japanese language and literature. He also studied at the Nomura Research Institute from October 1983 to February 1985.

Previous appointments: Officer of the Loan Office, State Import & Export Regulatory Commission; Officer of the Loan Bureau and Foreign Capital Bureau, Ministry of For- eign Trade and Economic Cooperation; Deputy Chief of Foreign Trade Division, Depart- ment of Foreign Trade and Economic Cooperation, Tibet Autonomous Region; Deputy Chief, Chief and Assistant Inspector of Division V, Department of Foreign Loans Man- agement, Ministry of Foreign Trade and Economic Cooperation; Assistant Inspector of

38 Government Bond Department, Ministry of Finance; and Deputy Director-General and Inspector of Department of Finance, Ministry of Finance.

Ms QU Yonglan Non-executive Director

Ms CAO Pu Non-executive Director

Born in December 1952. Ms Cao Pu has been a Non-executive Director of CITIC Lim- ited since July 2012. She graduated from Wuhan University with a college diploma in insurance. She is a senior economist by profession.

Previous appointments: Deputy Director and Director of the Office of PICC Henan Branch; President of PICC Zhengzhou Sub-branch and Vice President of PICC Henan Branch; General Manager of the Finance Department of China Reinsurance (Group) Corporation and its Assistant Manager; and Vice President of China Export & Credit Insurance Corporation.

Four Members on the Board of Supervisors

Mr LIN Meifang Supervisor and Temporary Convenor of the Board of Supervisors

Born in December 1955. Mr Lin has been a Non-employee Supervisor and Temporary Convenor of CITIC Limited’s Board of Supervisors since December 2011. He graduated from Xiamen University in finance and accounting, and is an accountant by pro-

39 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

fession. He also attended the Graduate Programme of Investment and Economics at Dongbei University of Finance and Economics and has obtained a college diploma.

Previous appointments: Deputy Division Chief and Division Chief of the Administra- tive Department, Ministry of Finance; Deputy Director-General of the Basic Construc- tion Department, Ministry of Finance; Supervisor (Deputy Director-General level) and Deputy Director of the General Office, and Full-time Supervisor (Director-General level) and Director of the General Office, China Construction Bank; and Full-time Supervisor (Director-General level) of the Board of Supervisors and Director of the General Office of Agricultural Development Bank of China, the Export-Import Bank of China and CITIC Group.

Ms WANG Xuemei Supervisor

Born in February 1963. Ms Wang has been a Non-employee Supervisor of CITIC Lim- ited since December 2011. She majored in macroeconomics in the School of Manage- ment of Zhejiang University, and graduated with a master’s degree in economics.

Previous appointments: Deputy Division Chief and Researcher of the Policy Research Office, Zhejiang Provincial CPC Party Committee; Inspector of the General Office of the Board of Supervisors and Deputy Division Chief of the Banking Division of the General Office of the Board of Supervisors, CPC Central Financial Work Commission; Chief and Deputy Inspector of the Banking Division of the Board of Supervisors, China Banking Regulatory Commission; and Full-time Supervisor (Deputy Director-General level) of the Board of Supervisors of Key State-owned Financial Institutions.

Mr ZHENG Xuexue Staff-elected Supervisor

Born in February 1955. Mr Zheng has been an Staff-elected supervisor and Director of the Audit Department of CITIC Limited since December 2011. He graduated from the Accountancy Programme at the First Branch Campus of Renmin University of China with a bachelor’s degree in economics. He is a senior accountant by profession.

Previous appointments: Deputy Division Chief, Division Chief, Assistant Director and Deputy Director of the Audit Department of China International Trust & Investment Cor- poration; and Director of the Audit Department and Staff-elected supervisor of CITIC Group.

40 Mr LIU Hesheng Staff-elected Supervisor

Born in October 1953. Mr Liu has been an Staff-elected supervisor and Director of the Supervision Department of CITIC Limited since December 2011. He graduated from China University of Political Science and Law with a junior college diploma in economic law. He was a senior political counsellor.

Previous appointments: Deputy Division Chief and Division Chief of the Supervision Office, Assistant Director of the Legal Department, Deputy Director of the Supervision Department, and Part-time Supervisor of China International Trust & Investment Corpo- ration; and Director of the Supervision Department of CITIC Group.

Eleven Other Senior Executives

Mr ZHU Xiaohuang Vice President

Born in July 1956. Mr Zhu has been a Vice President of CITIC Limited since August 2012. He graduated from the Lingnan College of Sun Yat-Sen University with graduate diploma in world economics and a PhD in economics. He is a senior economist by profession.

Previous appointments: Deputy Director of the General Office, Deputy Director of Credit Division I, Deputy Director-General of the Credit Management Department of China Construction Bank; Deputy General Manager of China Construction Bank Lia- oning Branch; Director-General of the Business Department of China Construction Bank; General Manager of China Construction Bank Guangdong Branch; and Director- General of the Corporate Business Department, Chief Risk Officer, Vice President and Executive Director of China Construction Bank.

Mr JU Weimin Vice President, Chief Financial Officer and Board Secretary

Born in August 1963. Mr Ju has been a Vice President, Chief Financial Officer and Board Secretary of CITIC Limited since December 2011. He graduated from the Ac- countancy Programme at Renmin University of China with a master’s degree in economics.

41 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

Previous appointments: Deputy Director-General and Director-General of the Finance Department of China International Trust & Investment Corporation; Managing Direc- tor of Shortridge Limited; Chief Accountant of China International Trust & Investment Corporation; Chairman of CITIC Trust Co., Ltd.; Director, Chief Financial Officer and Director-General of the Finance Department of CITIC Group; and Executive Director and Vice President of CITIC Group.

Mr Zhang Jijing Vice President

Born in September 1955. Mr Zhang has been a Vice President of CITIC Limited since December 2011. He majored in vacuum technology and equipment in Hefei University of Technology and in quantitative economics in the Graduate School of the Chinese Academy of Social Sciences. He has a master’s degree in economics, and is a senior economist by profession.

Previous appointments: Deputy General Manager of CITIC Australia Pty. Ltd. and its General Manager; Director-General of the Strategy and Planning Department of China International Trust & Investment Corporation; Director, Assistant President, and Direc- tor-General of the Strategy and Planning Department of CITIC Group; Managing Direc- tor of CITIC Pacific Ltd; and Executive Director and Vice President of CITIC Group.

Mr FENG Guang Secretary of the Party Discipline Inspection Commission

Born in June 1957. Mr Feng has been the Secretary of the Party Discipline Inspection Commission of CITIC Limited since December 2011. He graduated from the Graduate School of the Central Party School with a master’s degree in jurisprudence.

Previous appointments: Deputy Division Chief, Division Chief and Deputy Director of Supervision Office II, and Deputy Director of Supervision Office VII of the CPC Central Commission for Discipline Inspection.

Ms LI Qingping Vice President

Born in October 1962. Ms Li has been a Vice President of CITIC Limited since Septem-

42 ber 2013. She graduated from the International Finance Programme at Nankai Univer- sity with a master’s degree in economics. She is a senior economist by profession.

Previous appointments: Deputy General Manager and General Manager of the In- ternational Department of Agricultural Bank of China; General Manager of Agricultural Bank of China Guangxi Branch; and Director of the Retail Business Department, Gen- eral Manager of the Personal Business Department, General Manager of the Personal Credit Business Department, and General Manager of the Personal Finance Depart- ment of Agricultural Bank of China.

Mr PU Jian Vice President

Born in October 1958. Mr Pu has been a Vice President of CITIC Limited since Novem- ber 2013. He graduated from Fordham University with a master’s degree in business administration. He is a senior economist by profession.

Previous appointments: Vice President of CITIC Securities Co., Ltd.; Vice Chairman of China Offshore Helicopter Co., Ltd.; President of CITIC Offshore Helicopter Co., Ltd.; Director of CITIC Group; and President and Chairman of CITIC Trust Co., Ltd..

Mr LUO Ning Assistant President

Born in March 1959. Mr Luo has been an Assistant President of CITIC Limited, Vice Chairman of CITIC Guoan Group, and Chairman and President of CITIC Networks Co., Ltd.since December 2011. He graduated from the Central Party School with a post- graduate diploma in modern history.

Previous appointments: Deputy General Manager of Beijing Guoan Electric Co., Ltd.; Deputy General Manager and General Manager of the First Branch Company of the China United Network Communications Group Co., Ltd.; Executive Deputy General Manager, General Manager and Chairman of CITIC Communications Project Manage- ment Co., Ltd.; Chairman and President of CITIC Network Management Co., Ltd.; As- sistant President of China International Trust & Investment Corporation; and Director and Assistant President of CITIC Group.

43 BOARD OF DIRECTORS, BOARD OF SUPERVISORS AND SENIOR MANAGEMENT OF CITIC GROUP CORPORATION AND CITIC LIMITED

Mr SUN Yalei Assistant President

Born in April 1968. Mr Sun has been an Assistant President of CITIC Limited, and Vice Chairman and General Manager of CITIC Guoan Group since December 2011. He graduated from the Industrial Economics and Management Programme at Renmin Uni- versity of China with a bachelor’s degree in economics.

Previous appointments: President and Vice Chairman of CITIC Guoan Information In- dustry Co., Ltd.; Vice Chairman and President of CITIC Guoan Group; and Director and Assistant President of CITIC Group.

Mr GUO Ketong Assistant President

Born in June 1954. Mr Guo has been an Assistant President of CITIC Limited since December 2011. He graduated from Renmin University of China with a junior college diploma in party and government administration. He is an economist by profession.

Previous appointments: Director and Assistant Director-General of the Human Re- sources Department, and Deputy Director-General and Director-General of the Human Resources and Education Department of China International Trust & Investment Corpo- ration; and Director and Assistant President of CITIC Group.

Mr REN Qinxin Assistant President

Born in November 1955. Mr Ren has been an Assistant President of CITIC Limited since September 2013, and Vice Chairman of CITIC Heavy Industries Co., Ltd.since December 2010. He graduated from Huazhong University of Science and Technology with a college diploma in business administration and a PhD in management. He is a senior engineer (professor level) by profession.

Previous appointments: Vice President, Executive Director and President of CITIC Heavy Industries Company; Director of CITIC Group; and Vice Chairman and President of CITIC Heavy Industries Co., Ltd..

44 Ms HONG Bo Assistant President

Born in November 1960. Ms Hong has been an Assistant President of CITIC Limited since December 2013, and Chairman of CITIC Construction Co., Ltd.since October 2009. She graduated from the MBA Programme at the University of International Busi- ness and Economics. She is a senior engineer by profession.

Previous appointments: Vice President, Acting President and President of CITIC In- ternational Contracting Co., Ltd.; Vice President and President of CITIC Construction Co., Ltd., and Chairman of CITIC International Contracting Co., Ltd.; Director of CITIC Group; and Vice Chairman of CITIC Construction Co., Ltd..

Note: 1. In April 2013, Mr Tian Guoli resigned as Vice Chairman and President of CITIC Group Corporation and of CITIC Limited 2. In April 2013, Mr Wang Dongming no longer serves as Assistant President of CITIC Limited 3. In May 2013, Mr Wang Jiong appointed as Vice Chairman and President of CITIC Group Corporation and of CITIC Limited 4. In September 2013, Ms Li Qingping appointed as Vice President of CITIC Limited 5. In September 2013, Mr Ren Qinxin appointed as Assistant President of CITIC Limited 6. In September 2013, Mr Zhao Jingwen appointed as Executive Chairman of CITIC Group Corporation 7. In October 2013, Mr Zhao Jingwen appointed as Executive Chairman of CITIC Limited 8. In December 2013, Mr Pu Jian appointed as Vice President of CITIC Limited 9. In December 2013, Ms Hong Bo appointed as Assistant President of CITIC Limited 10. In March 2014, Mr Zhu Xiaohuang appointed as Chairman of the Board of Supervisors of CITIC Group Corporation and of CITIC Limited (Listed in chronological order)

45 INVESTOR RELATIONS

Investor Relations

46 At CITIC Group, we take managing investor relations seriously, and have widened the communication channels and improved our corporate image.

We have always attached great importance to com- II. Honouring our disclosure duty municating with our stakeholders, in order that our shareholders, creditors and the public understand the We have promptly disclosed our financial statements Group’s operation and management, its business de- and important events on the CITIC Group official web- velopment and financial position comprehensively and site. In 2013, more than 30 announcements of major clearly. We have broadened the channels of effective business events were released on the official website. communication and improved transparency in our dis- CITIC Limited, being CITIC Group’s main platform for closure of financial information. RMB bond (including medium-term notes, corporate bonds and financial bonds) issuance, has been timely I. Enhancing communication with shareholders and in posting more than 20 bulletins, on “chinabond.com. regulators cn” and “chinamoney.com.cn”, informing the market of its financial condition and other material events. We We continued to improve our communication with have delivered our commitment to disclose information our shareholders, the relevant government authori- by endeavouring to keep our stakeholders updated ties and regulators. In 2013, the Group’s management with financial data and responding to their queries. participated in nearly 500 major conferences, forums, receptions and visits to financial and investment institu- CITIC Group has maintained good cooperation with tions. By making visits and presenting at conferences rating agencies, including Standard & Poor’s (S&P), and seminars, our functional departments provided the Moody’s, R&I and China Cheng Xin International Credit authorities and regulators with regular updates on the Rating (CCXI). We convened regularly to present our Group’s performance and financial status, the perfor- strategy, and our latest operations performance and mance of key subsidiaries and progress of our major financial position. The ratings and adjustments are as projects. follows:

Rating Rating Rating Category agency (31 December 2013) Adjustment CITIC Group Long-term Foreign Currency Issuer Credit Rating BBB+ Rating outlook adjusted from S&P Short-term Foreign Currency Issuer Credit Rating A-2 “stable” to Rating Outlook Negative “negative”. Long-term Senior Unsecured Debt (Foreign Baa2 Moody’s Currency) Rating - Rating Outlook Stable Foreign Currency Issuer Rating BBB+ R&I Long-term Issue Rating BBB+ - Rating Outlook Stable CITIC Limited Corporate Credit Rating AAA Rating Outlook Stable 2002/2003 CITIC Bond Rating AAA CCXI - 2005 Corporate Bond Rating AAA 2009/2010/2011/2012 AAA MTN Rating

47 CORPORATE GOVERNANCE

Corporate Governance

48 CITIC Group (“the Group”) continued to improve corporate governance, as it refined its governance framework and mechanisms and the respective rules according to the laws, regulations and as required by the regulatory authorities. Enhanced governance has enabled better risk prevention and optimised decision making.

(I) CITIC Group’s Governance Structure 4. The Management

1. Shareholders The Management decides on matters relating to management and operations within its mandate as set forth CITIC Group is a conglomerate approved for establish- under the Articles of Association. ment by the State Council, the People’s Republic of China, and funded by the Ministry of Finance on behalf (II) Key Measures to Improve Corporate Governance of the State Council. 1. The Group further enhanced its governance frame- 2. Board of Directors work in line with modern business operations, and improved coordination, support, and checks and bal- The Board of Directors comprises 9 members, including ances between the shareholders, Board of Directors, 1 chairman, 1 vice chairman and 1 employee director. Board of Supervisors and the Management as set forth under the Company Law and the Articles of Associa- The mandates of the Board of Directors include: devis- tion, hence, putting in place the institutions necessary ing corporate development strategy, business policies for greater operation efficiency. In 2013, the Board of and investment plans; adopting corporate business Directors convened 3 times and reviewed 10 propos- plans and investment proposals, and deciding on man- als; the Board of Supervisors convened once and re- agement setup and managers’ compensation; formu- viewed 3 proposals. lating basic corporate policies and bylaws; preparing annual corporate budget, final accounts, profit distri- 2. To strengthen strategic management, the Group bution and financial recuperation plans; developing established a Strategic and Investment Management plans for corporate merger, division, dissolution and/ Committee, Asset and Liability Management Com- or alteration of corporate form; planning amendments mittee, and the Internal Oversight and Management to the articles of association; reviewing and approving Committee. It also took steps to advance reform of the general manager’s work report; appointing and/or its review and approval system, strengthen portfolio removing general manager and/or other senior execu- management for better asset profitability, liquidity and tives, and hiring or dismissing external auditors. safety, and to improve oversight and management effectiveness. A pilot programme on performance ap- 3. Board of Supervisors praisal of the accountability system for asset operations was implemented, whereby the Group entered The Board of Supervisors comprises 5 members, into appraisal agreements with certain subsidiaries to including 3 internal supervisors and 2 staff-elected su- guide them in improving their ability to create value and pervisors. in delivering higher shareholder returns.

The mandates of the Board of Supervisors include: 3. The Group’s financing capability and fund usage effi- looking into the Group’s financial position; supervising ciency improved, as short-term fund operations report- directors’ and the management’s actions. ed stronger returns than prior year. Investment capital

49 CORPORATE GOVERNANCE

CITIC Group Corporation

Shareholder

Board of Directors Board of Supervisors

The Management

for projects in which the Group has invested heavily interim Management Guidelines for Joint Meetings of is isolated and managed separately. The Group also Regional Business Coordination of CITIC Group 33 launched a pilot programme using financial companies joint meetings on regional business synergies were as a platform to implement centralised capital manage- initiated and mechanisms improved for better cross- ment for its non-financial subsidiaries in Beijing. The border cooperation. Inter-subsidiary cooperation in preliminary results were encouraging. financial business was encouraged as the Group co- ordinated cross-selling and joint product development 4. The Group explored and improved its human re- among its subsidiaries; as a result, the spectrum of our source development strategy and manpower manage- financial services has continued to extend steadily. The ment model by building its leadership bench strength Group promoted cooperation between its financial and succession talent pool, encouraging secondment, and non-financial subsidiaries, helped align different transfers and staff exchanges, and improving the industrial chains and conducted publicity campaigns performance appraisal and compensation systems. on synergised cultures and success stories; we’ve also The Management Guidelines for Creating Functional facilitated information flow within our subsidiaries to Departments & Entities and for Hiring was formulated encourage more businesses synergy within the Group. and implemented, among others, and a Review Com- mittee for Senior Positions formed. As part of a pilot 6. The Group has focused more on lawful operations programme, three subsidiaries were selected for de- as it put in place mechanisms for managing legal centralisation of power. risks by managing and administering the rules and policies, major contracted projects, and litigation 5. The Group improved the mechanism for synergy to and arbitration cases, and by prudently administer- provide one-stop service to our clients. We initiated ing and protecting the CITIC trademark. The Rules and implemented The Interim Management Guide- for Legal Work and the Guidelines on Using Trade- lines for Co-Marketing and Joint-Service for Strategic marks were amended and adopted. These rules Corporate Clients of CITIC Group, collaborated with and guidelines have expressly laid out the general other large companies and local governments by requirements for compliance to further enhance pre- forging strategic alliances to win major projects and vention and control of legal risks. capture business opportunities and formulated The

50 CITIC Limited

General Meeting of Shareholders

Strategy Committee

Board of Board of Risk & Audit Supervisors Directors Management Committee

Nomination & Remuneration Committee Senior Management Office of Board of Directors General Office Strategy & Planning Department Finance Department Human Resource & Education Department Risk Management Department Business Coordination Department Supervision Department Legal Department Audit Department Information Management Department Retirement Administration Department Corporate Culture Department Inspection Office Labour Union

51 RISK MANAGEMENT

Risk Management

52 In 2013, CITIC Group (“the Group”) had to navigate complexities in both domestic and global markets and plan its risk mitigation strategy around its extensive and diversified business portfolio. It continued to improve its risk management and strengthen internal control, and has taken a rigorous approach to risk management, such that sound risk management was embedded into the day-to-day operations.

The Group is exposed to the following risk factors: as small- and medium-sized banks. Other measures include improvement and vitalisation of the multi-tier Strategic risks: As complexities persist, global eco- capital market, fine-tuning of the formation mechanism nomic recovery remains weighed down by uncertain- for a market-based Renminbi exchange rate, and ex- ties and destabilising factors. Shifts in macroeconomic pedited liberalisation of interest rates. As reform poli- policy in some countries will add to the uncertainties, cies gradually unfold, the Group may face increasing as emerging markets confront new problems and chal- policy risks as certain industries, business segments, lenges. Domestic economic factors and conditions business models and competitive landscapes may be originally conducive to growth are undergoing profound affected. changes, waging downward pressure across the economy. As the government pursues stable growth and Financial risks: Given the multitude of uncertainties reform and innovation, it is also pressing ahead with in the world economy, the prices of factors including restructuring the economy and remodelling growth. labour, land, energy and resources may trend up and add to the cost of in-progress projects. Interest rate For state-owned enterprise reform, the government liberalisation may make financing more expensive, and proposed that management of state-owned asset be the progress of projects and actual return on invest- improved by strengthening supervision of state assets ment may fall short of expectations. If liquidity tightens, through managing state capital. As a state-owned the Group’s investment and financing businesses will conglomerate involved in a wide range of sectors, the be constrained, therefore any business expansion may Group’s development objectives and strategic plans mean greater liquidity risks. All this bodes ill for the are subject to macroeconomic fluctuations both at Group’s financial position. home and abroad. And when exploring market-ori- ented solutions for state-owned enterprise reform and Credit risks: Amidst a complex and unpredictable development, it must also deal with fresh challenges. economic climate, and as reforms intensify, different markets are teeming with new entrants, new business Policy risks: The 3rd Plenum of the 18th CPC Con- models, new products and new practices. Increased gress and the Report on the Work of the Government counterparty diversity also means that credit risks will (2014) have charted the general direction for China in become increasingly multifarious and complex. The the new era for pushing through sweeping reforms, Group’s businesses may, therefore, face greater coun- opening China’s doors wider and pursuing innovation- terparty risk, which complicates the conglomerate’s driven growth. The government will vigorously develop management. a hybrid economy, reform the state-owned sector and revamp the fiscal and tax regime. It will also advance Market risks: The world economic landscape is un- the building of a modern market system and establish dergoing profound adjustments, and global competi- a receptive and open economic system. tion intensifying. Country monetary policies, trade and investment patterns, and commodity price volatility The financial sector will be further opened to both do- are uncertainties to contend with, as inflationary pres- mestic and foreign players, and qualified private capital sures mount and asset bubbles grow. At home, China will be allowed to set up financial institutions, such is implementing deeper and more extensive reforms:

53 RISK MANAGEMENT

it will establish and improve the market-based pricing The Group has taken the following measures to miti- regime; relax market access for investment and expe- gate the above risks: dite the building of free trade zones; pursue counter- cyclical regulations through taxation reform and pro- 1. Adjusted business portfolio, optimised control mote economic restructuring; liberalise interest rates, methods and modified management systems to en- and develop inclusive finance and internet finance; and hance preparedness and resilience against risks. persist in regulating the housing market. We foresee that the Group’s relevant business segments will be To give equal weight to developing financial services and confronted with greater complexities and a more com- industrial investment, the Group re-focused its business petitive landscape both at home and abroad. strategy to limited diversification, and evolved subsidiaries to achieve greater specialisation. It has also refined its de- Operational risks: The Group is developing fast, with velopment strategies and business models, consolidated a diversified portfolio. As new markets, new products, business segments and optimised its business mix. For new clients and new businesses emerge, operations better asset management, the Group increased asset op- become increasingly complex and challenging. Opera- erations accountability, and allocated resources based on tions and management involving people, institutions, the value creation potential of capital and in a way that is processes and information systems as such must keep consistent with its strategic direction. A new performance up with the rapid growth of our businesses, and will evaluation system and budget management system face new challenges. Similarly, potential natural disas- was introduced to improve upon the project review and ters may pose risks and must be closely scrutinised. approval system, so that subsidiaries develop toward greater synergism that benefits the Group as a whole, as Legal and compliance risks: Legal and compliance well as create better value, increase dividend pay-out and risks abound, as the Group’s financial businesses are improve risk management. regulated by the authorities, and non-financial businesses must observe the relevant government policies 2. Enhanced monitoring of key projects to ensure and industry codes. Overseas businesses are subject safety and higher returns. to local laws and regulations. This was a critical period of implementation for some of The Group aims for public listing at the right opportu- the Group’s key projects. As such, supervision of key nity, in which case it must observe external supervision projects has been strengthened, together with rigorous and market scrutiny whether at home or overseas, contract management, cost control and safety measures including fulfilling disclosure obligations. Given its vast to ensure prompt and full completion. We identified number of subsidiaries, the Group faces intricate in- problems that arose during project implementation and formation disclosure issues, whereby the disclosed addressed them promptly and appropriately, to ensure information for all listed subsidiaries must be aligned quality as well as expedite progress. and consistent. As such, the scope and content of disclosure become more complicated than other public 3. Continued to improve risk management, and en- companies. Any untimely, irregular or inconsistent infor- hanced the Group’s risk management capabilities. mation disclosed will jeopardise the Group’s reputation and may incur regulatory penalty or even legal action. The Group built upon its corporate governance structure to set up a four-tier risk management system comprising Country risks: The Group is engaged in engineering the Board of Directors, the Senior Management, the Risk contracting, resource development and trade in many Management Department and related functional units, countries and regions. Additionally, it is exporting more and its subsidiaries. Under the Senior Management, the machinery from its local factories. These businesses Strategy and Investment Management Committee, the are vulnerable to changes in the political, economic Asset and Liability Management Committee and the In- and social variables in the host countries. ternal Oversight Committee will review the Group’s risk profile from different perspectives based on their respec-

54 tive functions. This risk management framework has improved relevant work policies and raised the legal enabled better decision- making and enhanced oversight awareness of employees for a higher level of legal compli- and management effectiveness. ance in management and operations.

The Group also assisted business units at all levels in To meet the requirements for overseas listing, a Group- establishing and improving their organisational arrange- wide information disclosure system was established. We ments for managing risks to ensure that they fulfil their ensured that management and operations referred to the risk management responsibilities. Subsidiaries were re- standards for listed companies for continued improve- quired to carry out on-going risk assessments and risk ment, and that information disclosure were timely, accu- reporting, and risk-based inspections were performed in rate, complete and consistent. key subsidiaries to ensure that key risk assessments and monitoring for key projects and major businesses were in The CITIC trademark was strictly managed to maintain place for timely identification and mitigation of risks. We our good reputation and safeguard our lawful interests. also ensured strengthening of management of counter- The Group has complied with the government’s increas- party credit risk and large exposures. At both Group and ingly stringent requirements for production safety and subsidiary levels, we redoubled efforts to develop a more environmental protection to strengthen management of robust system of key risk indicators and early-warning safety and compliance risks in non-financial subsidiaries. mechanism for potential risks. 6. Strengthened internal auditing to leverage its su- 4. Maintained a prudent financial policy to ensure pervisory role. fund security and liquidity. The Group improved its audit system and compliance A top priority for the period was on liquidity management. levels by setting up a professional and efficient internal Financing channels were expanded and new investments audit system that is managed centrally and executed at and credit extension were strictly controlled to guarantee different levels using shared resources. Subsidiaries were sufficient funding for in-progress projects. We promptly required to establish a sound internal audit arrangement, adjusted the asset-liability ratio, and re-matched interest giving consideration to organisational structure, resource rates and terms to maturity according to changes in in- allocation, employee professionalism and IT infrastructure. ternational and domestic financial markets, so as to stave We ensured that audit was independent and unbiased, off market and currency risks. We have also improved and the professional capabilities of the audit team con- our capital and credit structures to reduce borrowing cost tinually improved, and audit programmes rigorous and and optimise resource allocation. To prevent and control strictly implemented with the help of information technol- financial risks, the Group has tightened monitoring and ogy for better compliance and consistency. management of liquidity at subsidiary level and implemented financial tracking and analysis of key subsidiaries 7. Improved human resource management to meet and major projects. The quality and efficiency of financial the Group’s manpower needs reporting and financial accounting were also improved to reduce the relevant risks. Human resource management was tailored to serve the Group’s business development requirements. The Group 5. Strengthened legal operations and information has developed innovative mechanisms and improved disclosure to control legal, compliance and reputa- management policies and procedures, and has further tion risks. expanded its talent pool and strengthened capacity building for its human resource regime. The Group also ad- Key businesses, major projects and important work have opted a scientific approach to work, protected the lawful continued to receive legal support and services. Key con- rights of the company and employees, and has therefore, tracts, in particular, were subject to rigorous legal review. created a reliable source of manpower for sustainable de- The CITIC group companies have augmented capacity- velopment. building and management of their legal units and teams,

55 Auditors’ Report [Page 57] P57 Consolidated Balance Sheet [Page 58] P72 Consolidated Income Statement [Page 60] Auditors’ Report Consolidated Statement of Cash Flows [Page 61] 2013 Annual Consolidated Statement of Changes in Financial Shareholders’ Equity [Page 64] Statements Balance Sheet [Page 66] Income Statement [Page 68] Statement of Cash Flows [Page 69] Statement of Changes in Shareholders’ Equity [Page 71]

AUDITOR'S REPORT AND FINANCIAL STATEMENTS

56 Auditors’ Report

CITIC Group Corporation

PCPAR [2014] No. 122898

To CITIC Group Corporation:

We have audited the accompanying fi nancial statements of CITIC Group Corporation (hereinafter referred to as “the Company”), which comprise the consolidated balance sheet and the balance sheet as at 31 December 2013, the consolidated income statement and the income statement, the consolidated statement of cash fl ows and the statement of cash fl ows, the consolidated statement of changes in shareholders’ equity and the statement of changes in shareholders’ equity for the year then ended and notes to the fi nancial statements.

Management’s Responsibility for the Financial Statements

Management of the Company is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises to achieve a fair presentation; (2) designing, implementing and maintaining internal control that is necessary to ensure that the fi nancial statements are free from material misstatements, whether due to frauds or errors.

Auditor’s responsibility

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

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

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

Opinion

In our opinion, the fi nancial statements that the Company have been prepared, in all material aspects, in accordance with Accounting Standards for Business Enterprises and present fairly the consolidated fi nancial position and the fi nancial position of the Company as of December 31, 2013 and the consolidated results of options the results of operations, and consolidated cash fl ows and cash fl ows for the year then ended.

BDO CHINA ShuLun Pan Certifi ed Public Accountant of China: Gu Xuefeng Certifi ed Public Accountants LLP Certifi ed Public Accountant of China: Yang Yinhua Shanghai, China 28 April 2014

This auditors’ report and the accompanying notes to the fi nancial statements are English translation of the Chinese auditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall prevail.

57 Consolidated Balance Sheet

As at 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012 Restated

Assets:

Cash and deposits 7(1) 721,331,092 750,803,246

Placements with banks and non-bank financial 7(2) 122,293,046 151,774,132 institutions

Trading financial assets 7(3) 12,922,281 14,544,006

Derivative financial assets 7(4) 7,835,803 4,558,834

Bills and receivables 7(5) 96,620,949 89,629,451

Inventories 7(6) 135,113,963 124,494,829

Financial assets held under resale agreements 7(7) 287,247,417 69,082,079

Loans and advances to customers 7(8) 1,904,850,205 1,635,560,311

Available-for-sale financial assets 7(9) 214,552,643 225,673,870

Held-to-maturity investments 7(10) 155,093,409 134,763,185

Investment classified as receivables 7(11) 300,158,113 56,435,301

Long-term equity investments 7(12) 72,334,003 71,237,092

Investment properties 7(13) 23,281,381 24,747,960

Fixed assets 7(14) 96,311,406 87,965,513

Construction in progress 7(15) 53,329,927 52,195,309

Intangible assets 7(16) 50,495,485 39,178,535

Goodwill 7(17) 11,373,991 4,569,180

Deferred tax assets 7(18) 14,017,540 11,069,286

Other assets 7(19) 20,514,811 17,289,586

Total assets 4,299,677,465 3,565,571,705

58 Consolidated Balance Sheet (Continued)

As at 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012 Restated

Liabilities:

Placements from banks and non-bank financial 7(21) 41,372,356 17,164,732 institutions

Derivative financial liabilities 7(4) 9,069,793 7,628,905

Bills and payables 7(22) 188,698,507 161,438,163

Financial assets sold under repurchase 7(23) 7,949,220 11,031,621 agreements Deposits from banks and non-bank financial 7(24) 3,187,421,184 2,600,589,392 institutions and customers

Employee benefits payable 7(25) 15,511,482 15,104,978

Taxes payable 5(3) 10,775,141 11,267,859

Loans 7(26) 225,419,477 201,770,064

Debts securities issued 7(27) 167,093,448 140,529,251

Provisions 7(28) 5,769,425 5,579,177

Deferred tax liabilities 7(18) 5,796,923 6,598,255

Other liabilities 6,824,402 6,381,885

Total liabilities 3,871,701,358 3,185,084,282

Shareholders’ equity

Paid-in capital 7(29) 183,970,409 183,702,630

Capital reserve/Reserve 7(30) 22,071,573 21,865,787

Surplus reserve 7(31) 55,058 29,753

General reserve 7(32) 15,504,186 9,207,846

Retained earnings 7(33) 51,895,700 20,646,187

Translation differences of financial statements (1,587,156) (40,005) denominated in foreign currency Total equity attributable to 271,909,770 235,412,198 shareholders of the Company

Minority interests 156,066,337 145,075,225

Total shareholders’ equity 427,976,107 380,487,423

Total liabilities and 4,299,677,465 3,565,571,705 shareholders’ equity Legal representative: The person in charge of The head of the accounting affairs: accounting department:

59 Consolidated Income Statement

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012 Restated

I. Operating income 7(34) 375,088,441 349,756,054

Less: Total operating expenses 316,350,707 300,430,413

Includ ing: Operating costs 230,588,491 219,549,695

Business taxes and surcharges 11,536,344 12,122,226

Selling and distribution expenses 5,911,726 5,675,357

General and administrative expenses 45,231,216 40,848,887

Financial expenses 7(35) 8,666,990 6,436,920

Impairment losses 7(36) 14,415,940 15,797,328

Add: gains from changes in fair value 7(37) 2,154,068 1,823,250

Investment income 7(38) 10,364,173 5,196,540

(including: income from investments in associates 3,954,229 3,490,870 and jointly controlled enterprises)

II. Operating profit 71,255,975 56,345,431

Add: Non-operating income 7(39) 3,450,673 5,117,571

Less: Non-operating expenses 7(40) 465,178 345,865

(including: losses from disposal of non-current 45,571 78,747 assets)

III. Profit before income tax 74,241,470 61,117,137

Less: Income tax expense 7(41) 16,561,251 15,102,036

IV. Net profit 57,680,219 46,015,101

Attributable to shareholders of the Company 37,838,937 30,155,066

Attributable to minority interests 19,841,282 15,860,035

V. Other comprehensive income 7(42) (5,390,213) (916,686)

VI. Total comprehensive income 52,290,006 45,098,415

Attributable to shareholders of the Company 33,409,162 29,491,200

Attributable to minority interests 18,880,844 15,607,215

Legal representative: The person in charge of The head of the accounting affairs: accounting department:

60 Consolidated Statement of Cash Flows

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

I. Cash flows from operating activities

Cash received from sale of goods and rendering 261,487,697 274,520,594 of services Net decrease in deposits with banks and non- - 25,608,213 bank financial institutions

Net increase in deposits from customers 410,792,364 284,350,836

Net increase in deposits from banks and non- 190,322,389 - bank financial institutions Cash received relating to interests, fee and 187,299,772 152,870,126 commission Net increase of placements from banks and non- 24,408,894 13,801,820 bank financial institutions Net increase of financial assets sold under - 1,436,603 repurchase agreements Net decrease of financial assets held under resale - 93,128,576 agreements

Net decrease of trading financial assets 5,562,342 305,371

Net decrease of placement with banks and non- 7,203,623 - bank financial institutions

Refund of taxes 1,445,331 1,296,779

Cash received relating to other operating activities 75,544,653 48,249,665

Sub-total of cash inflows from operating 1,164,067,065 895,568,583 activities

Cash paid for goods and services 219,625,738 225,115,541

Net increase of loans and advance to customers 284,811,484 225,821,464

Net increase of balances with central bank 66,147,250 58,576,654

Net decrease of financial assets sold under 3,748,802 - repurchase agreements Net increase of financial assets held under resale 218,223,427 - agreements Net increase of investment classified as 243,722,813 56,435,301 receivables Net increase of deposits with banks and non- 17,302,358 - bank financial institutions

61 Consolidated Statement of Cash Flows (Continued)

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

Net decrease of deposits from banks and non- - 165,427,407 bank financial institutions Net increase of placements with banks and non- - 19,600,517 bank financial institutions

Net increase of trading financial liabilities - 1,662,561

Cash paid relating to interests, fee and 70,543,565 56,058,482 commission

Cash paid to and for employees 33,457,494 26,482,788

Cash paid for taxes 34,691,535 39,406,948

Cash paid relating to other operating activities 85,778,475 53,632,708

Sub-total of cash outflows from operating 1,278,052,941 928,220,371 activities

Net cash inflow from operating activities 7(43) (113,985,876) (32,651,788)

II. Cash flows from investing activities: 2013 2012

Cash received from disposal of investments 525,991,824 579,950,963

Cash received from return on investments 2,921,140 2,662,714

Net cash received from disposal of fixed assets, 895,191 932,888 intangible assets and other long-term assets Net cash received from disposal of associates 3,539,532 274,214 and jointly controlled enterprises

Cash received relating to other investing activities 8,725,317 5,326,967

Sub-total of cash inflows from investing 542,073,004 589,147,746 activities Cash paid for acquisition of fixed assets, 23,570,738 25,481,778 intangible assets and other long-term assets

Cash paid for acquisition of investments 562,112,241 690,802,226

Net cash paid for disposal of subsidiaries - 388,171

Cash paid relating to other investing activities 14,107,744 22,214,285

Sub-total of cash outflows from investing 599,790,723 738,886,460 activities

Net cash flow from investing activities (57,717,719) (149,738,714)

62 Consolidated Statement of Cash Flows (Continued)

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

III. Cash flows from financing activities

Cash received from investors 1,535,660 5,647,908

(Including: Cash received from minority 1,500,226 5,383,711 shareholders)

Cash received from loans 164,164,941 146,882,380

Cash received from issuance of debentures 46,647,340 59,346,933

Cash received relating to other financing activities 1,728,983 1,307,232

Sub-total of cash inflows from financing 214,076,924 213,184,453 activities

Cash repayments of loans 147,138,092 137,425,971

Cash paid for dividends, profit distributions or 22,941,038 21,268,911 interest (Including: Dividends and profits paid to minority 4,719,458 4,484,850 shareholders)

Cash paid relating to other financing activities 4,106,571 2,439,897

Sub-total of cash outflows from financing 174,185,701 161,134,779 activities

Net cash inflow from financing activities 39,891,223 52,049,674

IV. Effect of foreign exchange rate changes on (2,020,782) 73,516 cash and cash equivalents

V. Net increase in cash and cash equivalents 7(43) (133,833,154) (130,267,312)

Add: Cash and cash equivalents at the 7(43) 411,088,962 541,356,274 beginning of the year VI. Cash and cash equivalents at the end of 7(43) 277,255,808 411,088,962 the year Legal representative: The person in charge of The head of the accounting affairs: accounting department:

63 - - - - equity (174,503) 8,192,791 (8,035,139) (4,784,471) 57,680,219 (5,390,213) Unit: RMB’000 52,290,006 427,976,107 380,487,423 380,487,423 Total shareholders’ shareholders’ Total - - - - 44,558 (960,438) 8,192,791 (4,784,471) 19,841,282 18,880,844 (11,342,610) For the year ended 31 December 2013 156,066,337 145,075,225 145,075,225 Minority interests ------Sub-total (219,061) The head of the accounting department: 3,307,471 37,838,937 (4,429,775) 33,409,162 271,909,770 235,412,198 235,412,198 ------(25,305) earnings Retained (267,779) (6,296,340) 51,895,700 37,838,937 20,646,187 20,646,187 37,838,937 ------(40,005) (40,005) (1,547,151) (1,587,156) (1,547,151) Difference in Difference foreign currency foreign ------Consolidated Statement of Changes in Shareholders’ Equity Consolidated Statement of Changes in Shareholders’ 6,296,340 9,207,846 9,207,846 15,504,186 General reserve ------The person in charge of accounting affairs: 55,058 25,305 29,753 29,753 Surplus reserve Equity attributable to the shareholders of the Company Equity attributable to the shareholders ------Reserve (219,061) 3,307,471 (2,882,624) 22,071,573 21,865,787 21,865,787 (2,882,624) Capital reserve/ ------267,779 183,970,409 183,702,630 183,702,630 Paid-in capital Item Balance at the end of 2013 Others Transactions with minority Transactions interests 2. Appropriation general 2. Appropriation reserve 3. Distributions to minority interests Appropriation of profits Appropriation surplus 1. Appropriation reserve Capital injection by shareholders Minority shareholders’ Minority shareholders’ contributions or decrease of capital Sub-total Other comprehensive Other comprehensive income Net profit for the year Net profit Balance at 1 January 2013 Add: Changes in accounting policies Legal representative: Prepared by: CITIC Group Corporation by: CITIC Group Prepared Balance at the end of 2012 (restated)

64 - - - equity (85,066) (137,739) (346,026) (916,686) 5,620,984 (4,461,523) 45,098,415 46,015,101 Unit: RMB’000 380,487,423 334,713,312 334,798,378 Total shareholders’ shareholders’ Total - - (9,415) (36,191) 222,405 (252,820) 5,620,984 (1,558,684) (4,461,523) 15,607,215 15,860,035 145,075,225 129,654,243 129,690,434 Minority interests - - - - The head of the accounting department: For the year ended 31 December 2012 (Restated) (48,875) Sub-total (128,324) (222,405) (663,866) 1,212,658 29,491,200 30,155,066 235,412,198 205,059,069 205,107,944 - - - - -

(29,753) (48,875) (48,875) earnings Retained (222,405) (9,207,846) 20,646,187 30,155,066 30,155,066 ------(40,005) (40,005) (40,005) Difference in Difference foreign currency foreign ------Consolidated Statement of Changes in Shareholders’ Equity Consolidated Statement of Changes in Shareholders’ 9,207,846 9,207,846 The person in charge of accounting affairs: General reserve ------29,753 29,753 Surplus reserve Equity attributable to the shareholders of the Company Equity attributable to the shareholders ------Reserve (128,324) (623,861) (623,861) 1,212,658 21,865,787 21,405,314 21,405,314 Capital reserve/ ------183,702,630 183,702,630 183,702,630 Paid-in capital Item Balance at the end of 2012 (restated) Others Transactions with minority Transactions interests Transfer of state-owned Transfer shares 3. Distributions to minority interests 2. Appropriation general 2. Appropriation reserve Appropriation of profits Appropriation surplus 1. Appropriation reserve Minority shareholders’ Minority shareholders’ contributions or decrease of capital Sub-total Other comprehensive Other comprehensive income Net profit for the year Net profit Balance at 1 January 2012(restated) Add: Changes in accounting policies Legal representative: Prepared by: CITIC Group Corporation by: CITIC Group Prepared Balance at the end of 2011

65 Balance Sheet

As at 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

Assets

Cash and deposits 7(1) 415,226 510,945

Placements with banks and non-bank financial - - institutions

Trading financial assets - -

Derivative financial assets - -

Bills and receivables 7(5) 5,112,389 10,524,514

Inventories - -

Financial assets held under resale agreements - -

Loans and advances to customers 7(8) 2,732,302 3,233,788

Available-for-sale financial assets 7(9) 201,043 200,000

Held-to-maturity investments - -

Investment classified as receivables - -

Long-term equity investments 7(12) 213,164,771 209,886,374

Investment properties - -

Fixed assets 2,700 2,896

Construction in progress - -

Intangible assets - -

Goodwill - -

Deferred tax assets - -

Other assets - -

Total assets 221,628,431 224,358,517

Legal representative: The person in charge of The head of the accounting affairs: accounting department:

66 Balance Sheet (Continued)

As at 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

Liabilities

Placements from banks and non-bank financial - - institutions

Trading financial liabilities - -

Derivative financial liabilities - -

Bills and payables 7(22) 1,245,367 352,360

Financial assets sold under repurchase - - agreements Deposits from banks and non-bank financial - - institutions and customers

Taxes payable 5(3) 16,332 12,205

Loans 7(26) 500,000 4,334,155

Debts securities issued 7(27) 577,710 730,490

Provisions 3,444,219 3,368,776

Deferred tax liabilities 261 -

Other liabilities 7,630 7,760

Total liabilities 5,791,519 8,805,746

Shareholders’ equity

Paid-in capital 183,970,409 183,702,630

Capital reserve/Reserve 7(30) 31,583,697 31,552,609

Surplus reserve 55,058 29,753

Retained earnings 7(33) 227,748 267,779

Total shareholders’ equity 215,836,912 215,552,771

Total liabilities and shareholders’ equity 221,628,431 224,358,517

Legal representative: The person in charge of The head of the accounting affairs: accounting department:

67 Income Statement

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

I. Operating income 7(34) 542,811 536,303

Less: Total operating expenses 269,108 535,214

Including: Operating costs - -

Business taxes and surcharges 21,553 21,483

General and administrative expenses 160,071 39,071

Financial expenses 7(35) 87,484 508,815

Impairment losses - (34,155)

II. Operating profit 273,703 1,089

Add: Non-operating income 1,850 321,936

Less: Non-operating expenses 7(40) 22,500 25,493

(including: losses from disposal of non-current - - assets)

III. Profit before income tax 253,053 297,532

Less: Income tax expense 7(41) - -

IV. Net profit 253,053 297,532

V. Other comprehensive income 7(42) (3,680) 328

VI. Total comprehensive income 249,373 297,860

Legal representative: The person in charge of The head of the accounting affairs: accounting department:

68 Statement of Cash Flows

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

I. Cash flows from operating activities:

Cash received relating to interests, fee and 444,555 130,572 commission

Cash received relating to other operating activities 81,663 423,320

Sub-total of cash inflows from operating 526,218 553,892 activities

Cash paid for taxes 13,726 65,186

Cash paid relating to other operating activities 1,709,091 47,441

Sub-total of cash outflows from operating 1,722,817 112,627 activities

Net cash inflow from operating activities (1,196,599) 441,265

II. Cash flows from investing activities:

Cash received from disposal of investments 5,251,194 702,533

Cash received relating to other investing activities 7(43) 699,999

Sub-total of cash inflows from investing 5,951,193 702,533 activities

Cash paid for acquisition of investments 4,751,771 5,161,000

Cash paid relating to other investing activities - 700,000

Sub-total of cash outflows from investing 4,751,771 5,861,000 activities

Net cash outflow from investing activities 1,199,422 (5,158,467)

III. Cash flows from financing activities

Cash received from loans - 4,338,852

Sub-total of cash inflows from financing - 4,338,852 activities

69 Statement of Cash Flows

For the year ended 31 December 2013 Unit: RMB’000

Prepared by: CITIC Group Corporation

Item Note 2013 2012

Cash repayments of loans 61,912 -

Cash paid for interest 32,178 122,701

Cash paid relating to other financing activities - 12,338,163

Sub-total of cash outflows from financing 94,090 12,460,864 activities

Net cash inflow from financing activities (94,090) (8,122,012)

IV. Effect of foreign exchange rate changes on (4,452) (9,302) cash and cash equivalents

V. Net increase in cash and cash equivalents 7(43) (95,719) (12,848,516)

Add: Cash and cash equivalents at the beginning 7(43) 510,945 13,359,461 of the year

VI. Cash and cash equivalents at the end of 7(43) 415,226 510,945 the year

Legal representative: The person in charge of The head of the accounting affairs: accounting department:

70 ------

- 328 (3,680) 34,768 249,373 253,053 297,532 297,860 Unit: RMB’000 Unit: RMB’000 215,552,771 215,552,771 215,254,911 215,254,911 215,836,912 215,552,771 Total shareholders’ equity shareholders’ Total equity shareholders’ Total For the year ended 31 December 2013 For the year ended 31 December 2012 ------(25,305) (29,753) 267,779 267,779 253,053 253,053 227,748 297,532 297,532 267,779 (267,779) The head of the accounting department: The head of the accounting department: Retained earnings Retained earnings ------29,753 29,753 25,305 55,058 29,753 29,753 Statement of Changes in Shareholders’ Equity Statement of Changes in Shareholders’ Surplus reserve Surplus reserve ------328 328 (3,680) (3,680) 34,768 31,552,609 31,552,281 31,552,609 31,552,281 31,583,697 31,552,609 Equity attributable to the shareholders of the Company for 2013 Equity attributable to the shareholders of the Company for 2012 Equity attributable to the shareholders Capital reserve/Reserve Capital reserve/Reserve The person in charge of accounting affairs: The person in charge of accounting affairs: ------267,779 183,702,630 183,702,630 183,702,630 183,702,630 183,970,409 183,702,630 Paid-in capital Paid-in capital Item Item Balance as at the beginning of 2013 Balance as at the beginning of 2012 Add: Change in accounting policies and adjustment revaluation Prior year adjustments Balance at the beginning of year Net profit for the year Net profit Sub-total Capital injection by shareholders of profits Appropriation surplus reserve 1. Appropriation general reserve 2. Appropriation Add: Change in accounting policies and adjustment revaluation Other comprehensive income Other comprehensive 3. Distributions to minority interests Others Prior year adjustments Balance at the beginning of year Balance at the end of 2013 for the year Net profit Other comprehensive income Other comprehensive Sub-total Capital injection by shareholders of profits Appropriation surplus reserve 1. Appropriation general reserve 2. Appropriation 3. Distributions to minority interests Balance at the end of 2012 Prepared by: CITIC Group Corporation by: CITIC Group Prepared Legal representative: Corporation by: CITIC Group Prepared Legal representative:

71 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

CITIC Group Corporation Notes to the Financial Statements

(Expressed in Renminbi’000 unless otherwise stated)

1. Company profile CITIC Group is a multi-business group company, established upon the approval of the State Council of the People’s Republic of China (“PRC”). In 2011, CITIC Group was wholly restructured and renamed as CITIC Group Corporation (“the Company”). On behalf of the State Council, the Ministry of Finance (“MOF”) of PRC took the responsibilities of investor and is the sole shareholder of the Company. On 27 December 2011, the Company obtained the new business license (No.100000000000895 (4-4)) and its registered address is 6 Xinyuannanlu, Chaoyang District, Beijing. According to the resolution of the fifth meeting of the first session of the Board of Directors of the Company and the Approval of MOF on Issues Concerning the Appropriation of profits of CITIC Group Corporation for 2012 (Cai Jin Han [2013] No. 42), the Company transferred retained profit of RMB 267,778,771.84 into paid- up capital, the basis date of which was 23 May 2013. The above-mentioned transfer was verified by Zhongjia Youyi Accounting Firm Co., Ltd. with a capital verification report (Zhong Jia You Yi Yan Zi [2013] No. 10) issued on 19 June 2013. The accumulated paid-up capital of the Company after such transfer was RMB 183,970,408,771.84. The principal activities of the Company and its subsidiaries (together referred to as “the Group”) are financial services, real estate and infrastructure, engineering contracting, resources and energy, manufacturing and other services.

2. Basis of preparation The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises – Basic Standard and 38 Special Standards issued by the MOF of the PRC on 15 February 2006, and application guidance, interpretation and other relevant accounting regulations issued subsequently (collectively referred to as “Accounting Standards for Business Enterprises”).

3. Statement of compliance with Accounting Standards for Business Enterprises The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises, and truly and completely reflect the consolidated financial position and the financial position of the Group on 31 December 2013 and the consolidated results of options the results of operations, the consolidated cash flows and the cash flows for the year then ended.

4. Principal accounting policies and estimates (1) Accounting year Thee accounting year of the Group is from 1 January to 31 December in calendar year. (2) Measurement basis

72 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The measurement basis used in the preparation of the financial statements is the historical cost basis, except for the assets and liabilities set out below: -- Financial assets and financial liabilities designated at fair value through profit or loss (including trading financial assets or trading financial liabilities)(see Note 4(15)) -- Available-for-sale financial assets (see Note 4(15)) -- Investment properties (see Note 4(9)) (3) Functional currency and presentation currency The Company’s functional currency 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. The Company translates the financial statements of subsidiaries from their respective functional currencies into the Company’s functional currency (see Note4 (5)) if the subsidiaries’ functional currencies are not the same as that of the Company. (4) Business combinations and consolidated financial statements (a) Business combinations under common control A business combination under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined on the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium in the capital reserve. If the balance of the capital premium is insufficient, any excess is adjusted to retained earnings. Any costs directly attributable to the combination shall be recognized in profit or loss for the current period when occurred. The e combination date is the date on which one combining enterprise effectively obtains control of the other combining enterprises. (b) Business combinations not under common control A business combination not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. Where 1) the aggregate of the fair value on the acquisition date of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds 2) the acquirer’s interest in the fair value on the acquisition date of the acquiree’s identifiable net assets, the difference is recognized as goodwill. Where 1) is less than 2), the difference is recognized in profit or loss for the current period. The costs of the issuance of equity or debt securities as a part of the consideration paid for the acquisition are included as a part of initial recognition amount of the equity or debt securities. Other acquisition-related costs arising from the business combination are recognized as expenses in the periods in which the costs are incurred. The difference between the fair value and the carrying amount of the assets transferred is recognized in profit or loss. The acquiree’s identifiable asset, liabilities and contingent liabilities,

73 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

if satisfying the recognition criteria, are recognized by the Group at their fair value on the acquisition date. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree. (c) Consolidated financial statements The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. In assessing control, potential voting rights, such as warrants and convertible bonds, which are currently exercisable or convertible, are taken into account. The financial position, financial performance and cash flows of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where a subsidiary was acquired during the reporting period, through a business combination under common control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred on 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 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 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 on the acquisition date. For a business combination not under common control and achieved in stages, the Group re-measures its previously-held equity interest in the acquiree to its fair value on the acquisition date. The difference between the fair value and the carrying amount is recognized as investment income for the current period; the amount recognized in other comprehensive income relating to the previously-held equity interest in the acquiree is reclassified as investment income for the current period. Minority interest is presented separately in the consolidated balance sheet within shareholders’ equity. Net profit or loss attributable to minority shareholders is presented separately in the consolidated income statement under the net profit line item. Comprehensive income attributable to minority shareholders is presented separately in the consolidated income statement under the total comprehensive income line item. When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ portion of the opening balance of shareholders’ equity of the subsidiary, the excess is allocated against the minority interests. When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period or accounting policies. Intra-group balances and transactions, and any unrealized profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized

74 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

losses resulting from intra-group transactions are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. (5) Translation of foreign currencies The foreign currency transactions of Group are, on initial recognition, translated to Renminbi at the spot exchange rates the dates of the transactions. A spot exchange rate is an exchange rate quoted by the People’s Bank of China. Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate on the balance sheet date. The resulting exchange differences, except for those arising from the principal and interest of specific foreign currency borrowings for the purpose of acquisition, construction or production of qualifying assets (see Note 4(21)), are recognized in profit or loss. Nonmonetary items denominated in foreign currencies that are measured at historical cost are translated to Renminbi using the foreign exchange rate on the transaction date. Non- monetary items denominated in foreign currencies that are measured at fair value are translated using the foreign exchange rate on the date the fair value is determined; the resulting exchange differences are recognized in profit or loss, except for the differences arising from the translation of available-for-sale financial assets, which are recognized as other comprehensive income in capital reserve. The assets and liabilities of foreign operations are translated to Renminbi at the spot exchange rate on the balance sheet date. The equity items, excluding “Retained earnings”, are translated to Renminbi at the spot exchange rates on the transaction dates. The income and expenses of foreign operations are translated to Renminbi at the spot exchange rates on the transaction dates. The resulting translation differences are recognized in shareholders’ equity. Upon disposal of a foreign operation, the cumulative amount of the translation differences recognized in shareholders’ equity which relates to that foreign operation is transferred to profit or loss in the period in which the disposal occurs. (6) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid investments, which are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value. (7) Inventories Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditures incurred in bringing the inventories to their present location and condition. Borrowing costs directly related to the production of qualifying inventories are also included in the cost of inventories (see Note 4(21)). Cost of inventories is calculated using appropriate method according to actual situation. In addition to the purchasing cost of raw materials, work in progress and finished goods include direct labor costs and an appropriate allocation of production overheads. On the balance sheet date, inventories are carried at the lower of cost and net realizable value. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. 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 and relevant taxes.

75 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(8) Long-term equity investments (a) Investments in subsidiaries In the Group’s consolidated financial statements, investments in subsidiaries are accounted for in accordance with the principles described in Note 4(4)(c). In the Company’s separate financial statements, investments in subsidiaries are measured as follows: -- The initial investment cost of a long-term equity investment obtained through a business combination under common control is the Company’s share of the carrying amount of the subsidiary’s equity on the combination date. The difference between the initial investment cost and the carrying amounts of the consideration given is adjusted to the capital premium in capital reserve. If the balance of the capital premium is insufficient, any excess is adjusted to retained earnings. -- For a long-term equity investment obtained through a business combination not under common control, the initial investment 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. If it is achieved in stages, the initial cost comprises the carrying value of previously-held equity investment in the acquiree immediately before the acquisition date, and the additional investment cost on the acquisition date. -- An investment in a subsidiary acquired otherwise than through a business combination is initially recognized in accordance with the principles described in Note 4 (8) (b). 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 appropriation of profits declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognizes its share of the cash dividends or appropriation of profits declared by the investee as investment income irrespective of whether these represent the net profit realized by the investee before or after the investment. The investments in subsidiaries are stated in the balance sheet at cost less impairment losses (see Note 4 (16) (c)). (b) Investment in jointly controlled enterprises and associates A jointly controlled enterprise is an enterprise which operates under joint control in accordance with a contractual agreement between the Group and other parties. An associate is an enterprise over which the Group has significant influence. An investment in a jointly controlled enterprise or an associate is initially recognized in accordance with the following principles: at the actual consideration 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, or at the value stipulated in the investment contract or agreement if an investment is contributed by an investor. An investment in a jointly controlled enterprise or an associate is accounted for using the equity method, unless the investment is classified as held for sale (see Note 4(14)). The Group makes the following accounting treatments when using the equity method: -- Where the initial investment cost of a long-term equity investment exceeds the Company’s interest in the fair value of the investee’s identifiable net assets on the date of acquisition, the investment is initially recognized at

76 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

the initial investment cost. Where the initial investment cost is less than the Company’s interest in the fair value of the investee’s identifiable net assets on the date of acquisition, the investment is initially recognized at the investor’s share of the fair value of the investee’s identifiable net assets, and the difference is charged to profit or loss. -- After the acquisition of the investment, the Group recognizes its share of the investee’s profit or loss after deducting the amortization of the debit balance of the equity investment difference, which was recognized by the Group before the first-time adoption of CAS, as investment income or losses, and adjusts the carrying amount of the investment accordingly. The debit balance of the equity investment difference is amortized using the straight-line method over the period which is determined in accordance with previous accounting standards. Once the investee declares any cash dividends or appropriation of profits, the carrying amount of the investment is reduced by that amount attributable to the Group. The Group recognizes its share of the investee’s net profits or losses 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 on the date of acquisition. Unrealized profits and losses resulting from transactions between the Group and its associates or jointly controlled enterprises are eliminated to the extent of the Group’s interest in the associates or jointly controlled enterprises. Unrealized losses resulting from transactions between the Group and its associates or jointly controlled enterprises are eliminated in the same way as unrealized gains but only to the extent that there is no evidence of impairment. -- The Group discontinues recognizing its share of net 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 associate or the jointly controlled enterprise is reduced to zero, except to the extent that the Group has an obligation to assume additional losses. Where net profits are subsequently made by the associate or jointly controlled enterprise, the Group resumes recognizing its share of those profits only after its share of the profits equals the share of losses not recognized. -- The Group adjusts the carrying amount of the long-term equity investment for changes in shareholders’ equity of the investee other than those arising from net profits or losses, and recognizes the corresponding adjustment in equity. At year-end, the Group makes provision for impairment of investments in jointly controlled enterprises and associates in accordance with the principles described in Note 4(16)(c). (c) Other long-term equity investments Other long-term equity investments refer to investments where the Group does not have control, joint control or significant influence over the investees, and the investments are not quoted in an active market and their fair value cannot be reliably measured. Such investments are initially recognized at the cost determined in accordance with the same principles as those for jointly controlled enterprises and associates, and then accounted for using the cost method (see Note 4(8) (a)). At year-end the Group makes provision for impairment of such investments in accordance with the principles described in Note 4(16)(b).

77 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(9) Investment properties Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are accounted for using the fair value model. No depreciation or amortization is provided for an investment property. The carrying amount of the investment property is adjusted to its fair value on the balance sheet date. The difference between the fair value and the original carrying amount is recognized in profit or loss. The fair value of the investment properties is estimated based on the market price and other relevant information regarding the same or similar types of properties from the active property market in the location in which the investment properties are situated. (10) Fixed assets and construction in progress Fixed assets represent the tangible assets held by the Company 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 (see Note 4(16)(c)). Construction in progress is stated in the balance sheet at cost less impairment losses (see Note 4(16)(c)). 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 labor, capitalized borrowing costs (see Note 4(21)), and any other costs directly attributable to bringing the asset to working condition for its intended use. Costs of environmental protection and ecological restoration arising from obligations incurred when fixed assets are disposed of are included in the initial cost of fixed assets. Construction in progress is transferred to fixed assets when it is ready for its intended use. No depreciation is provided against construction in progress. Where the parts of an item of fixed assets have different useful lives or provide benefits to the Company in a different pattern, thus necessitating use of different depreciation rates or methods, each part is recognized as a separate fixed asset. The subsequent costs including the cost of replacing part of an item of fixed assets are recognized in the carrying amount of the item if the criteria to recognize fixed assets are satisfied, and the carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of fixed assets are recognized 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 recognized in profit or loss on the date of retirement or disposal. The cost of fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using the straight-line method over their estimated useful lives, unless the fixed asset is classified as held for sale (see Note 4(14)). The estimated useful lives, residual value and depreciation rates of each class of fixed assets are as follows:

78 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Financial Non-Financial

Useful life Estimated residual value Useful life Estimated residual value

Land, plant and buildings 30-35 years 0-5% 5-70 years 0-10%

Machinery equipment N/A N/A 3-26 years 0-10%

Motor vehicles N/A N/A 3-10 years 0-10%

Others 3-10 0-10% 3-10 years 0-10%

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

(11) Operating lease charges Rental payments under operating leases are recognized as part of the cost of another related asset or as expenses on a straight-line basis over the lease term. (12) Intangible assets Intangible assets are stated in the balance sheet at cost less accumulated amortization (where the estimated useful life is finite) and impairment losses (see Note 4(16) (c)). For an intangible asset with finite useful life, its cost less residual value and impairment loss is amortized on the straight-line method over its estimated useful life, unless the intangible asset is classified as held for sale (see Note 4(14)). An intangible asset is regarded as having an indefinite useful life and is not amortized when there is no foreseeable limit to the period over which the asset is expected to generate economic benefits for the Group. The Group reassesses the useful lives of intangible assets with indefinite useful lives in each accounting period. If there is evidence indicating that the useful life of that intangible asset is finite, the Group estimates its useful life and accounts for it in accordance with the same policy as intangible assets with finite useful lives described above. (13) Goodwill The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair value of the identifiable net assets of the acquiree under the business combination not under common control. Goodwill is not amortized and is stated in the balance sheet at cost less accumulated impairment losses (see Note 4(16) (c)). On disposal of an asset group or a set of asset groups, any attributable amount of purchased goodwill is written off and included in the calculation of the profit or loss on disposal.

(14) Non-current assets held for sale A non-current asset is accounted for as held for sale when the Group has made a decision and signed a non- cancellable agreement on the transfer of the asset with the transferee, and the transfer is expected to be completed within one year. Such non-current assets may include fixed assets, intangible assets, investment properties subsequently measured using the cost model, long-term equity investment and etc., but do not include financial assets and deferred tax assets. Non-current assets held for sale are stated at the lower of carrying amount and net realizable value. Any excess of the carrying amount over the net realizable value is recognized as an impairment loss. On the balance sheet date, non-current assets held for sale continue to be presented under the same asset classification as before they were held for sale.

79 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(15) Financial instruments Financial instruments include cash at bank and on hand, investments in debt and equity securities other than long-term equity investments (see Note 4(8)), loans and receivables, payables, borrowings, debts securities issued and paid-in capital. (a) Recognition and measurement of financial assets and financial liabilities A financial asset or financial liability is recognized in the balance sheet when the Group becomes a party to the contractual provisions of a financial instrument. The Group classifies financial assets and liabilities into different categories at initial recognition based on the purpose of acquiring assets or assuming liabilities: financial assets and financial liabilities designated at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets and other financial liabilities. Financial assets and financial liabilities are measured initially at fair value. For financial assets and financial liabilities designated at fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs. Subsequent to initial recognition, financial assets and liabilities are measured as follows: -- Financial assets and financial liabilities designated at fair value through profit or loss (including financial assets or financial liabilities held for trading) A financial asset or financial liability is classified as at fair value through profit or loss if it is acquired or incurred principally for the purpose of selling or repurchasing in the near term or if it is a derivative, unless the derivative is a designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. Subsequent to initial recognition, financial assets and financial liabilities designated at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. -- Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than: (i) those that the Group intends to sell immediately or in the near term, which will be classified as held for trading; (ii) those that the Group, upon initial recognition, designates as at fair value through the profit or loss or as available-for-sale; or (iii) those where the Group may not recover substantially all of its initial investment, other than because of credit deterioration, which will be classified as available-for-sale. The Group’s loans and receivables mainly include deposits with banks and non-bank financial institutions, placements with banks and non-bank financial institutions, parts of bills and receivables, financial assets held under resale agreements (see Note 4(15)(g)), loans and advances to customers etc. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method.

80 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

-- Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method. -- Available-for-sale financial assets Available-for-sale financial assets include non-derivative financial assets that are designated upon initial recognition as available for sale and other financial assets which do not fall into any of the above categories. Equity instruments investment whose fair value cannot be measured reliably are measured at cost subsequent to initial recognition. Other available-for-sale financial assets are measured at fair value subsequent to initial recognition and changes therein, except for impairment losses and foreign exchange gains and losses from monetary financial assets which are recognized directly in profit or loss, are recognized as other comprehensive income in capital reserve. When an investment is derecognized, the cumulative gain or loss is reclassified from equity to profit or loss. Dividend income from the available-for-sale equity instruments is recognized in profit or loss when the investee declares the dividends. Interest on available-for-sale financial assets calculated using the effective interest method is recognized in profit or loss (see Note 4(20)(a)). -- Other financial liabilities Financial liabilities other than the financial liabilities designated at fair value through profit or loss are classified as other financial liabilities. Other financial liabilities mainly include placements from banks and non-bank financial institutions, parts of bills and payables, financial assets sold under repurchase agreements (see note 4(15)(g)), deposits from banks and non- bank financial institutions and customers, parts of employee benefits payable, borrowings, debts securities issued and provisions etc. Financial guarantees are contracts that require the Group (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the holder) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Where the Group issues a financial guarantee, subsequent to initial recognition, the guarantee is measured at the higher of the amount initially recognized less accumulated amortization and the amount of a provision determined in accordance with the principles of contingencies (see Note 4(19)). Except for the liabilities arising from financial guarantee contracts described above, subsequent to initial recognition, other financial liabilities are measured at amortized cost using the effective interest method. (b) Derivatives and embedded derivatives Derivatives mainly include forward and swap contracts performed in foreign currency market and interest rate market. The Group uses derivatives to hedge its exposure on foreign exchange and interest rate risks. The Group adopts hedge accounting in accordance with Note 4(22) for derivatives designated as hedging instruments if the

81 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

hedge is effective. Other derivatives are accounted for as trading financial assets or financial liabilities. Derivatives are recognized at fair value upon initial recognition. The positive fair value is recognized as assets while the negative fair value is recognized as liabilities. The gain or loss on re-measurement to fair value is recognized immediately in profit or loss. Certain derivative is embedded into a non-derivative instrument (the host contract). The embedded derivatives are separated from the host contract and accounted for as a derivative when (i) the economic characteristics and risks of the embedded derivative are not closely related to the host contract; (ii) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and (iii) the hybrid (combined) instrument is not measured at fair value with changes in fair value recognized in profit or loss. When the embedded derivative is separated, the host contract is accounted for in accordance with Note 4(15)(a). (c) Offsetting a financial asset against a financial liability Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, a financial asset and a financial liability are offset and the net amount is presented in the balance sheet when both of the following conditions are satisfied: -- The Group has a legal right to set off the recognized amounts and the legal right is currently enforceable; and -- The Group intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously. (d) Determination of fair value If there is an active market for a financial asset or financial liability, the quoted price in the active market is used to establish the fair value of the financial asset or financial liability. If no active market exists for a financial instrument, a valuation technique is used to establish the fair value. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis, and option pricing models. The Group calibrates the valuation technique and tests it for validity periodically. (e) De-recognition of financial assets and financial liabilities A financial asset is derecognized if the Group’s contractual rights to the cash flows from the financial asset expire or if the Group transfers substantially all the risks and rewards of ownership of the financial asset to another party. Where a transfer of a financial asset in its entirety meets the criteria for de-recognition, the difference between the two amounts below is recognized in profit or loss: -- The carrying amount of the financial asset transferred -- The sum of the consideration received from the transfer and any cumulative gain or loss that has been recognized directly in equity. The Group derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged, cancelled or expires. (f) Equity instrument

82 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

An equity instrument is a contract that proves the ownership interest of the assets after deducting all liabilities in the Company. The consideration received from the issuance of equity instruments net of transaction costs is recognized in shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-issued equity instruments are deducted from shareholders’ equity. (g) Financial assets held under resale and financial assets sold under repurchase agreements Financial assets held under resale agreements are transactions which the Group acquires financial assets which will be resold at a predetermined price in the future date under resale agreements. Financial assets sold under repurchase agreements are transactions which the Group sells financial assets which will be repurchased at a predetermined price in the future date under repurchase agreements. The cash advanced or received is recognized as amounts held under resale and repurchase agreements on the statement of financial position. Assets held under resale agreements are recorded in memorandum accounts as off-balance sheet items. Assets sold under repurchase agreements continue to be recognized in the financial statements. The difference between the sale and repurchase consideration, and that between the purchase and resale consideration, are amortized over the period of the respective transaction using the effective interest method and are included in interest income and interest expense respectively. (16) Impairment of Assets Except for impairment of assets in Note 4(7), impairment of assets is accounted for using the following principles: (a) Impairment of financial assets The carrying amounts of financial assets (other than those at fair value through profit or loss) are reviewed on each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, an impairment loss is recognized. -- Loans and receivables and held-to-maturity investments Held-to-maturity investments, loans and receivables are assessed for impairment both on an individual basis and on a collective group basis. Where impairment is assessed on an individual basis, an impairment loss in respect of a loan, receivable or held-to-maturity investment is calculated as the excess of its carrying amount over the present value of the estimated future cash flows (exclusive of future credit losses that have not been incurred) discounted at the original effective interest rate. All impairment losses are recognized in profit or loss. The assessment is made collectively where loans, receivables and held-to-maturity investments share similar credit risk characteristics (including those having not been individually assessed as impaired), based on their historical loss experiences, and adjusted by the observable factors reflecting present economic conditions. If, after an impairment loss has been recognized on loans, receivables or held-to-maturity investments, there is objective evidence of a recovery in value of the financial asset which can be related objectively to an event occurring

83 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss. A reversal of an impairment loss will not result in the asset’s carrying amount exceeding what the amortized cost would have been had no impairment loss been recognized in prior years. -- Available-for-sale financial assets Available-for-sale financial assets are assessed for impairment on an individual basis. When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value that has been recognized directly in equity is reclassified to profit or loss even though the financial asset has not been derecognized. If, after an impairment loss has been recognized on an available-for-sale debt instrument, the fair value of the debt instrument increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognized, the impairment loss is reversed through profit or loss. An impairment loss recognized for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss. (b) Impairment of other long-term equity investments Other long-term equity investments (see Note 4(8)(c)) are assessed for impairment on an individual basis. For other long-term equity investments, the amount of the impairment loss is measured as the difference between the carrying amount of the investment and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversed. (c) Impairment of other assets The carrying amounts of the following assets are reviewed on each balance sheet date based on the internal and external sources of information to determine whether there is any indication of impairment: -- fixed assets -- construction in progress -- intangible assets -- goodwill -- long-term equity investments in subsidiaries, associates and jointly controlled enterprises If any indication exists that an asset may be impaired, 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 once during each year 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

84 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

decisions about continuing or disposing of the Group’s assets. The recoverable amount of an asset (asset group or set of asset groups, same as follows) is the higher of its fair value less costs to sell and its present value of expected future cash flows. An asset’s fair value less costs to sell is the amount determined by the price of a sale agreement in an arm’s length transaction, less the costs that are directly attributable to the disposal of the asset. 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. If the result of the recoverable amount calculation indicates the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is recognized as an impairment loss and charged to profit or loss for the current period. A provision for impairment of the asset is recognized accordingly. For impairment losses related to an asset group or a set of asset groups, first reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis. However, the carrying amount of an impaired asset will not be lower than the greatest amount of its individual fair value less costs to sell (if determinable), the present value of expected future cash flows (if determinable) and zero. Once an impairment loss is recognized, it is not reversed in a subsequent period. (17) Employee benefits Employee benefits are all forms of consideration given and other relevant expenditures incurred in exchange for services rendered by employees. Except for termination benefits, employee benefits are recognized as a liability in the period in which the associated services are rendered by employees, with a corresponding increase in the cost of relevant assets or expenses in the current period. (a) Social insurance and housing fund Pursuant to the relevant laws and regulations of the PRC, employees of the Group participate in the social insurance system established and managed by government organizations. The Group makes social insurance contributions - including contributions to basic pension insurance, basic medical insurance, unemployment insurance, work-related injury insurance, maternity insurance and etc. - as well as contributions to housing fund, at the applicable benchmarks and rates stipulated by the government for the benefit of its employees. The social insurance and housing fund contributions are recognized as part of the cost of assets or charged to profit or loss on an accrual basis. (b) Supplementary retirement benefit The Group’s obligations in respect of supplementary retirement benefits are calculated by estimating the amount of future benefits that the Group is committed to pay to the employees after their retirement using actuarial techniques. Such benefits are discounted to determine its present values. When calculating the Group’s obligations, if any cumulative unrecognized gains or losses are larger than 10% of the present value of the obligation, the

85 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

difference is recognized in profit or loss for the current period, otherwise no profit or loss is recognized. (c) Termination benefits When the Group terminates the employment relationship with employees before the employment contracts expire, or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision for the termination benefits to be provided is recognized in profit or loss when both of the following conditions are satisfied: -- The Group has a formal plan for the termination of employment or has made an offer to employees for voluntary redundancy, which will be implemented shortly; -- The Group is not allowed to withdraw from termination plan or redundancy offer unilaterally. (18) Income tax Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to items recognized directly in equity, in which case they are recognized in equity. Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus any adjustment to tax payable in respect of previous years. On the balance sheet date, current tax assets and liabilities are offset if the Group has a legally enforceable right to set them off and also intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases, which include the deductible losses and tax credits carried forward to subsequent periods. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilized. Deferred tax is not recognized for the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or tax loss). Deferred tax is not recognized for taxable temporary differences arising from the initial recognition of goodwill. On the balance sheet date, the amount of deferred tax recognized is measured based on the expected manner of recovery or settlement of the carrying amount of the assets and liabilities, using tax rates that are expected to be applied in the period when the asset is recovered or the liability is settled in accordance with tax laws. The carrying amount of a deferred tax asset is reviewed on each balance sheet date. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. On the balance sheet date, deferred tax assets and liabilities are offset if all the following conditions are met: -- The taxable entity has a legally enforceable right to offset current tax liabilities and assets; -- They relate to income taxes levied by the same tax authority on the same taxable entity; or different taxable

86 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

entities which intend either to settle the current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. (19) Provisions and contingent liabilities A provision is recognized for an obligation related to a contingency if the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows. In terms of a possible obligation resulting from a past transaction or event, whose existence will only be confirmed by the occurrence or non-occurrence of uncertain future events or a present obligation resulting from a past transaction or event, where it is not probable that the settlement of the above obligation will cause an outflow of economic benefits, or the amount of the outflow cannot be estimated reliably, the possible or present obligation is disclosed as a contingent liability (20) Revenue recognition Revenue is the gross inflow of economic benefit arising in the course of the Group’s ordinary activities when those inflows result in increases in equity, other than increases relating to contributions from shareholders. Revenue is recognized in profit or loss when it is probable that the economic benefits will flow to the Group, the revenue and costs can be measured reliably and the following respective conditions are met: (a) Interest income Interest income of financial assets is recognized in income statement based on the duration and the effective interest rate. Interest income includes the amortization of any discount or premium or other differences between the initial carrying amount of an interest-bearing instrument and its amount at maturity calculated on an effective interest rate basis. The effective interest method is a method of calculating the amortized 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, prepayment, call and similar options). The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Interest on the impaired financial assets is recognized using the rate of interest used to discount future cash flows (“unwinding of discount”) for the purpose of measuring the elatedr impairment loss. (b) Fee and commission income Fee and commission income is recognized in profit or loss when the corresponding service is provided. Origination or commitment fees received by the Group which result in the creation or acquisition of a financial asset

87 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

are deferred and recognized as an adjustment to the effective interest rate. If the commitment expires without the Group making a loan, the fee is recognized as revenue on expiry. (c) Sale of goods Revenue from sale of goods is recognized when all of the general conditions stated above and following conditions are satisfied: -- The significant risks and rewards of shareholdership of goods have been transferred to the buyer; -- The Group retains neither continuing managerial involvement to the degree usually associated with shareholdership nor effective control over the goods sold. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable under the sales contract or agreement. Revenue from sales of properties is recognized when the construction of the relevant properties have been completed and accepted, the sales contract is signed, and there is a proof of payment (usually the advance deposits on certain percent of contract amount or more, or a confirmed arrangement of the remaining unpaid amount) provided by the buyer pursuant to the sales contract. (d) Revenue from construction contracts On the balance sheet date, where the outcome of a construction contract can be estimated reliably, contract revenue and contract expenses associated with the construction contract are recognized using the percentage of completion method. The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed to date to the estimated total contact costs. When the outcome of a construction contract cannot be estimated reliably: -- If the contract costs can be recovered, revenue is recognized to the extent of contract costs incurred that can be recovered, and the contract costs are recognized as contract expenses when incurred; -- If the contract costs cannot be recovered, the contract costs are recognized as contract expenses immediately when incurred, and no contract revenue is recognized. (21) Borrowing costs Borrowing costs incurred directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Except for the above, other borrowing costs are recognized as financial expenses in the income statement when incurred. During the capitalization period, the amount of interest (including amortization of any discount or premium on borrowing) to be capitalized 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 capitalized 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.

88 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

-- Where funds are borrowed generally and used for the acquisition, construction or production of a qualifying asset, the amount of interest to be capitalized on such borrowings is determined by applying a capitalization rate to the weighted average of the excess amounts of cumulative expenditures on the asset over the above amounts of specific borrowings. The capitalization 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 recognized amount of the borrowings. During the capitalization period, exchange differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency are capitalized 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 recognized as a financial expense in the period in which they are incurred. The capitalization period is the period from the date of commencement of capitalization of borrowing costs to the date of cessation of capitalization, excluding any period over which capitalization is suspended. Capitalization 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. Capitalization of borrowing costs is suspended when the acquisition, construction or production activities are interrupted abnormally and the interruption lasts for more than three months. (22) Hedge Accounting Hedge accounting is a method which recognizes the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item in the same accounting period. Hedged items are the items that expose the Group to risks of changes in fair value and that are designated as being hedged. A hedging instrument is a designated derivative whose changes in fair value are expected to offset changes in the fair value of the hedged item. The hedge is assessed by the Group for effectiveness on an ongoing basis and determined to have been highly effective throughout the accounting periods for which the hedging relationship was designated. The hedge is considered to be highly effective if the hedging instrument must be expected to be highly effective in achieving offsetting changes in fair value or cash flow attributive to the hedged risk during the period for which the hedge is designated. (a) Cash flow hedges A cash flow hedge is a hedge of the exposure to variability in cash flow. The effective part of any unrealized gain or loss on the instrument is recognized directly in hedging reserve. The amount of an effective part would be the lower of: -- The accumulative gain or loss on the instrument from the beginning of the hedging period;

89 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

-- The accumulative movement of the projected future cash flow of the hedged items from the beginning of the hedging period. The ineffective part of the unrealized gain or loss on the instrument would be recognized in the profit and loss. When the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognized directly in shareholders’ equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability. When the forecast transaction that is hedged results in the recognition of a financial asset or a liability, the associated gain or loss recorded in shareholders’ equity will be reclassified into profit or loss in the same period during which the transaction it hedges is recognized in the profit or loss. However, if the Group expects that all or a portion of a net loss recognized directly in shareholder’s equity will not be recovered in future accounting periods, the Group will reclassify the amount that is not expected to be recovered into profit or loss. For cash flow hedges other than those covered above, gain or loss of the hedging instruments that had been recognized directly in shareholders’ equity shall be reclassified into profit or loss in the same period during which the hedged forecast transaction it hedges is recognized in the profit or loss. When a hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, the Group discontinues prospectively the hedge accounting treatments and the cumulative gain or loss recognized directly in shareholders’ equity in the effective hedging period will not be transferred out until the transaction occurs and it is recognized in accordance with the above policy. If the hedged transaction is no longer expected to take place, the cumulative unrealized gain or loss is reclassified from equity to profit or loss immediately. (b) Fair value hedges A fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment, or an identified portion of such an asset, liability or firm commitment, that is attributable to a particular risk and could affect profit or loss. The gain or loss from re-measuring the hedging instrument at fair value is recognized in profit or loss. The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the hedged item and is recognized in profit or loss. When a hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, the Group discontinues prospectively the hedge accounting treatments. If the hedged item is a financial instrument measured at amortized cost, any adjustment to the carrying amount of the hedged item is amortized to profit or loss from the adjustment date to the maturity date using the recalculated effective interest rate on the adjustment date. (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.

90 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

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. (24) Appropriation of profits Distributions of profit proposed in the profit appropriation plan to be authorized and declared after the balance sheet date are not recognized as a liability on the balance sheet date but disclosed in the notes separately. (25) Related parties If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or where two or more parties are subject to common control or joint control from another party, they are considered to be related parties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control only from the State and that have no other related party relationships are not regarded as related parties of the Group. Related parties of the Group and the Company include, but are not limited to: (a) The Company’s parent; (b) The Company’s subsidiaries; (c) Enterprises that are controlled by the Company’s parent; (d) Investors that have joint control or exercise significant influence over the Group; (e) Enterprises or individuals if a party has control or joint control over both the enterprises or individuals and the Group; ( f ) Jointly controlled enterprises of the Group, including subsidiaries of jointly controlled enterprises; (g) Associates of the Group, including subsidiaries of associates; (h) Principal individual investors and close family members of such individuals; ( i ) Key management personnel of the Group and close family members of such individuals; ( j ) Key management personnel of the Company’s parent and close family members of such individuals; and (k) Other enterprises that are controlled or jointly controlled by principal individual investors, key management personnel of the Group, or close family members of such individuals. (26) Segment reporting Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organization, management requirements and internal reporting system. An operating segment is a component of the Group that satisfies the following conditions: -- The component engages in business activities from which it may earn revenues and incur expenses; -- The Group’s management could regularly review the component’s financial performance to make decisions about resource to be allocated to the segment and assess its performance;

91 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

-- The Group could obtain financial information of the component regarding financial position, financial performance and cash flows. Two or more operating segments may be aggregated into a single operating segment if the segments have the following same or similar economic characteristics in respect of: -- The nature of each products and service; -- The nature of production processes; -- The type or class of customers for products and services; -- The methods used to distribute products or provide services; -- The nature of the regulatory environment. In the preparation of the Group’s segment reporting, 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 Group’s financial statements. (27) Significant accounting estimates and judgments The preparation of financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. Except that the notes containing information about the assumptions and their risk factors relating to valuation of investment properties measured using fair value model, impairment of goodwill, termination benefits, and fair value of financial instruments, other key sources of estimation uncertainty are as follows: (a) Impairment of loans and receivables As described in Note 4(16)(a), loans and receivables that are measured at amortized cost are reviewed on each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, an impairment loss is recognized. Objective evidence of impairment includes observable data that comes to the attention of the Group about loss events such as a significant decline in the estimated future cash flow of an individual debtor or the portfolio of debtors, and significant changes in the financial condition that have an adverse effect on the debtor. If there has been a change in the factors used to determine the provision for impairment which indicates that the value of the loan or receivable has recovered, the impairment loss recognized in prior years is reversed. (b) Provision for diminution in value of inventories As described in Note 4(7), the net realizable value of inventories is under management’s regular review, and as a result, provision for diminution in value of inventories is recognized for the excess of inventories’ carrying amounts over their net realizable value. When making estimates of net realizable value, the Group takes into consideration the use of inventories held on hand and other information available to form the underlying assumptions, including the inventories’ market prices and the Group’s historical operating costs. The actual selling price, the costs of completion and the costs necessary to make the sale and relevant taxes may vary based on the changes in market conditions

92 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

and product saleability, manufacturing technology, and the actual use of the inventories, resulting in the changes in provision for diminution in value of inventories. The net profit or loss may then be affected in the period when the provision for diminution in value of inventories is adjusted. (c) Impairment of assets such as fixed assets and intangible assets As described in Note 4(16)(c), assets such as fixed assets and intangible assets are reviewed on 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 recognized. 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 judgments 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. (d) Depreciation and amortization of fixed assets and intangible assets As described in Note 4(10) and (12), fixed assets and intangible assets are depreciated and amortized over their useful lives after taking into account residual value. The useful lives of the assets are regularly reviewed to determine the depreciation and amortization 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 amortization, the rate of depreciation or amortization is revised prospectively. (e) Income taxes Determining income tax provisions involves judgment on the future tax treatment of certain transactions. The Group carefully evaluates the tax implications of transactions and tax provisions are set up accordingly. The tax treatment of such transactions is reconsidered periodically to take into account all changes in tax legislations. Deferred tax assets are recognized for tax losses not yet used and temporary deductible differences. As those deferred tax assets can only be recognized to the extent that it is probable that future taxable profits will be available against which the unused tax credits can be utilized, management’s judgment is required to assess the probability of future taxable profits. Management’s assessment is constantly reviewed and additional deferred tax assets are recognized if it becomes probable that future taxable profits will allow the deferred tax assets to be recovered. ( f ) Retirement benefit obligations The Group has established liabilities in connection with supplementary retirement benefits. The amounts of employee benefit expense and these liabilities are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, pension benefit inflation rates, medical benefit inflation rates, and other factors. Actual results that differ from the assumptions are recognized the Group’s profit and loss at the end of each reporting period. While management believes that its assumptions are appropriate, differences in actual experience or changes in assumptions may affect the Group’s expense related to its employee retirement benefit obligations.

93 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

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

Tax Name Tax basis

Business tax 3% or 5% of taxable revenue

Output VAT is 3% - 17% of product sales and taxable services revenue, based on tax laws. The VAT remaining balance of output VAT, after subtracting the deductible input VAT of the period, is VAT payable

Land appreciation tax Appreciation amount in transferring property and applicable tax rate

(2) Income tax The statutory income tax rate of the Company is 25%. The applicable income tax rate for the year is the statutory rate (2012: 25%). The Group’s subsidiaries have paid income tax in accordance with the local tax regulations. (3) Taxes payable The Group

Item 2013 2012

Income tax payable 6,303,030 6,374,410

Business tax payable 2,569,666 2,480,045

VAT payable 525,286 643,870

Land appreciation tax payable 680,793 767,263

Others 696,366 1,002,271

Total 10,775,141 11,267,859

The Company

Item 2013 2012

Business tax payable 353 10,618

Urban construction tax 25 743

Educational surcharge payable 11 319

Local educational surcharge payable 7 213

Others 15,936 312

Total 16,332 12,205

94 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

6. Business combinations and the consolidated financial statements (1) As at 31 December 2013, major subsidiaries included in the Company’s consolidated financial statements are as follows: Shareholding Registered capital Name Registered place Business nature Currency percentage (’000) direct/indirect Investment CITIC Limited (note 2) Mainland China 128,000,000 RMB 100% holding Investment CITIC Guoan Group Mainland China 1,500,000 RMB 100% holding CITIC Asset Management Mainland China Financial services 1,480,000 RMB 100% Corporation Ltd

CITIC International Co., Ltd. Mainland China Services 15,000 RMB 100%

CITIC International Cooperation Engineering Mainland China 160,000 RMB 100% Co., Ltd. contracting

CITIC Networks Co., Ltd. Mainland China Information 4,400,000 RMB 100%

CITIC Medical & Health Group Mainland China Services 55,600 RMB 100% Co., Ltd. CITIC Mining Technology Energy and Mainland China 300,000 RMB 81.70% Development Co., Ltd. resources Beijing CITIC Enterprise Mainland China Services 200,000 RMB 100% Management Co., Ltd. CITIC Bohai Aluminium Industries Mainland China Manufacturing 1,050,000 RMB 100% Holding Company Ltd. CITIC Machinery Manufacturing Mainland China Manufacturing 681,512 RMB 100% Co., Ltd.

CITIC Heavy Machinery Co., Ltd. Mainland China Services 62,000 RMB 100%

(2) Business combinations not involving enterprises under common control during the year CITIC Telecom International Holdings Limited (“Telecom International”), a controlling subsidiary of CITIC Limited (the subsidiary of the Company), acquired 79% equity interest of Companhia de Telecomunicacoes de Macau, S.A.R.L. (“CTM”) by paying USD 1,250 million (RMB 7,755 million) in cash. After the acquisition, Telecom International held 99% equity interest of CTM, and CTM became a subsidiary of Telecom International.

7. Interpretation for Important Accounts of the Financial Statements Unless otherwise stated, in the following notes (including the notes to the main items of the financial statements of the Company), 2013 refers to 31 December 2013, and 2012 refers to 31 December 2012. The “current year” refers to year 2013, and the “last year” refers to year 2012.

95 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(1) Cash and deposits The Group

Item 2013 2012

Cash on hand 6,900,017 6,750,260

Deposits with banks 84,204,312 81,038,757

Balances with central banks

-Statutory deposit reserve funds 420,657,756 356,243,637

-Surplus deposit reserve funds 66,055,452 62,222,525

-Fiscal deposits 3,639,882 3,033,862

Deposits with banks and non-bank financial institutions 139,873,673 241,514,205

Total 721,331,092 750,803,246

In addition to statutory deposit reserve funds ,as at 31 December 2013, the Group’s restricted cash and deposits amounted to RMB11.574 billion (2012: RMB10.653 billion), which mainly comprised security deposits for loans, cash advance under supervision of Real Estate Bureau and guarantees.

The Company

Item 2013 2012

Cash on hand - -

Deposits with banks 415,226 510,945

Total 415,226 510,945

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

Item 2013 2012

Mainland China

-Banks 94,532,125 125,474,765

-Non-bank financial institutions 21,196,848 19,124,543

Sub-total 115,728,973 144,599,308

Outside Mainland China

-Banks 6,578,922 7,182,691

Sub-total 6,578,922 7,182,691

Less: Provision for impairment 14,849 7,867

Net balance 122,293,046 151,774,132

96 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(3) Trading financial assets The Group

Item 2013 2012

Debt investments held for trading 11,079,263 12,208,662

Investment funds held for trading 44,863 1,678,971

Equity securities investments held for trading 1,291,661 101,890

Financial assets designated at fair value through profit or loss 506,494 554,483

Total 12,922,281 14,544,006

(4) Derivative financial instruments The Group

2013 2012

Item Nominal amount Assets Liabilities Nominal amount Assets Liabilities

Hedging instruments

- Interest rate derivatives 21,004,796 213,346 1,962,648 32,318,623 470,148 3,814,572

- Currency derivatives 1,008,620 29,075 69,166 963,327 149,590 -

- Other derivatives 39,805 1,442 82,183 188,898 93,467 158,990

Non-hedging instruments

- Interest rate derivatives 202,329,857 1,362,245 1,398,425 219,836,728 951,500 1,138,267

- Currency derivatives 900,216,467 6,229,695 5,555,795 552,103,930 2,894,082 2,502,182

- Other derivatives 63,254,777 - 1,576 21,583,782 47 14,894

Total 1,187,854,322 7,835,803 9,069,793 826,995,288 4,558,834 7,628,905

(5) Bills and receivables The Group

Item Note 2013 2012 (restated)

Bills receivable (1) 4,684,063 6,621,853

Accounts receivable (2) 20,550,931 19,919,356

Prepayments (3) 11,992,587 12,841,501

Other receivables (4) 29,926,641 27,039,565

Dividends receivable 2,038,695 1,913,074

Interest receivable 16,607,741 13,730,686

Long-term receivable 10,820,291 7,563,416

Total 96,620,949 89,629,451

97 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item Note 2013 2012

Amounts due from subsidiaries 4,879,531 10,325,541

Dividends receivable 46,299 46,299

Interest receivable 38,963 4,818

Other receivables (4) 147,596 147,856

Total 5,112,389 10,524,514

(a) Bills receivable The Group

Item 2013 2012

Bank acceptance bills 4,616,586 6,563,177

Commercial acceptance bills 67,477 58,676

Total 4,684,063 6,621,853

(b) Accounts receivable Accounts receivable by customer type: The Group Item 2013 2012

Amounts due from related parties 51,174 136,618

Amounts due from other customers 21,633,255 21,118,146

Sub-total 21,684,429 21,254,764

Less: Provision for impairment 1,133,498 1,335,408

Total 20,550,931 19,919,356

Related parties 10,160 720

Other customers 12,058,390 12,891,647

Sub-total 12,068,550 12,892,367

Less: Provision for impairment 75,963 50,866

Total 11,992,587 12,841,501

98 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(d) Other receivables Other receivables by customer type: The Group

Item 2013 2012

Amounts due from related parties 5,968,855 4,288,044

Amounts due from other customers 25,417,708 24,215,341

Sub-total 31,386,563 28,503,385

Less: Provision for impairment 1,459,922 1,463,820

Total 29,926,641 27,039,565

The Company

Item 2013 2012

Amounts due from related parties 63,312 63,312

Amounts due from other customers 152,596 152,856

Sub-total 215,908 216,168

Less: Provision for impairment 68,312 68,312

Total 147,596 147,856

(6) Inventories (a) An analysis of the movements of inventories for the year is as follows: The Group Effect of foreign 1 January 2013 Additions during Reductions during Item exchange rate 31 December 2013 (restated) the year the year changes and others Raw materials 8,253,639 90,848,403 (89,305,980) (153,214) 9,642,848

Work in progress 7,157,464 78,438,589 (77,764,455) (3,896) 7,827,702

Finished goods 16,425,195 150,809,501 (148,559,918) (197,289) 18,477,489

Properties 93,047,166 77,165,255 (71,690,606) (180,008) 98,341,807 Engineering 2,981,063 84,987 (110,125) (84,304) 2,871,621 construction Others 516,618 4,268,494 (3,661,689) (142,146) 981,277

Sub-total 128,381,145 401,615,229 (391,092,773) (760,857) 138,142,744 Provision for diminution 3,886,316 368,060 (1,122,311) (103,284) 3,028,781 in value of inventories Total 124,494,829 401,247,169 (389,970,462) (657,573) 135,113,963

99 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(b) An analysis of provision for diminution in value of inventories is as follows: The Group Provision made Decrease during Item 1 January 2013 Others 31 December 2013 during the year the year

Reversal Write-off

Raw materials 609,125 44,839 (1,746) (96,114) 88 556,192

Work in progress 90,765 47,519 (15,793) (30,416) (327) 91,748

Finished goods 567,142 188,507 (96,082) (29,425) (58,305) 571,837

Properties 1,116,268 87,187 (55,656) (794,998) - 352,801

Engineering 1,496,231 - - - (44,740) 1,451,491 construction

Others 6,785 8 - (2,081) - 4,712

Total 3,886,316 368,060 (169,277) (953,034) (103,284) 3,028,781

(7) Financial assets held under resale agreements The Group

Item 2013 2012

Securities 48,292,625 15,127,438

Bills 225,046,160 44,707,434

Loans 528,127 -

Others 13,380,505 9,247,207

Total 287,247,417 69,082,079

(8) Loans and advances to customers The Group

Item Note 2013 2012

Corporate loans

- Loans 1,442,591,819 1,263,091,930

- Discounted bills 64,769,424 74,994,005

- Lease payments receivable 695,864 1,042,862

Sub-total 1,508,057,107 1,339,128,797

Personal loans

- Residential mortgages 220,924,362 195,271,452

- Credit cards 86,493,984 54,164,673

100 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Item Note 2013 2012

- Others 133,689,874 85,868,272

Sub-total 441,108,220 335,304,397

Total 1,949,165,327 1,674,433,194

Less: Provision for impairment (3)

- Individual allowance 11,973,884 10,189,362

- Collective allowance 32,341,238 28,683,521

Net balance 1,904,850,205 1,635,560,311

The Company

Item 2013 2012

Corporate loans and advances 3,141,371 3,642,857

Less: Individual impairment allowance 409,069 409,069

Net balance 2,732,302 3,233,788

(a) Analysed by types of collaterals The Group

Item 2013 2012

Unsecured loans 404,225,160 335,378,162

Guaranteed loans 499,527,917 417,546,243

Loans with pledged assets

- Loans secured by tangible assets 746,629,309 637,012,226

- Loans secured by monetary assets 234,013,517 209,502,558

Sub-total 1,884,395,903 1,599,439,189

Discounted loans 64,769,424 74,994,005

Total 1,949,165,327 1,674,433,194

The Company

Item 2013 2012

Unsecured loans 3,076,371 3,577,857

Loans secured by monetary assets 65,000 65,000

Total 3,141,371 3,642,857

101 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(b) Analysed by assessment method of allowance for impairment losses The Group

Impaired loans and advances (ii)

Loans and advances for which for which Gross impaired loans for which allowances allowances allowances and advances as a Item Total are collectively are collectively are individually % of gross total loans assessed(i) assessed assessed and advances

2013

Gross loans and 1,920,876,172 6,438,764 21,850,391 1,949,165,327 1.45% advances

Less: Impairment allowance against 29,629,580 2,711,658 11,973,884 44,315,122 loans and advances

Total 1,891,246,592 3,727,106 9,876,507 1,904,850,205

2012

Gross loans and 1,655,264,644 1,296,137 17,872,413 1,674,433,194 1.14% advances

Less: Impairment allowance against 27,700,330 983,191 10,189,362 38,872,883 loans

Total 1,627,564,314 312,946 7,683,051 1,635,560,311

( i ) Compared to the total amount of loans and advances, the amount of impaired loans and advances for which allowances are collectively assessed is not significant. (ii) Impaired loans and advances to customers include loans and advances for which objective evidence of impairment exists. These loans and advances include loans and advances for which loss provisions have been assessed - Individually, or - collectively, represent portfolio of homogeneous loans and advances.

As at 31 December 2013, the loans and advances of the Group for which the impairment allowances were individually assessed amounted to RMB 21,850 million (2012: RMB 17,872 million). The covered portion and uncovered portion of these loans and advances were RMB 6,162 million (2012: RMB 6,308 million) and RMB 15,437 million (2012: RMB 11,313 million) respectively. The fair value of collaterals held against these loans and advances amounted to RMB 13,157 million (2012: RMB 12,387 million). The individual impairment allowances made against these loans and advances were RMB 11,974 million (2012: RMB 10,189 million). The fair value of collaterals was estimated by management based on the latest available external valuations adjusted by taking into account the current realization experience as well as market situation.

102 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(c) Movements of allowances for loan losses The Group Impaired loans and advances Loans and advances for for which allowances are for which allowances are Item which allowances are Total collectively assessed individually assessed collectively assessed

1 January 2013 27,700,330 983,191 10,189,362 38,872,883

New impairment allowances charged to 1,999,911 2,594,073 11,392,270 15,986,254 profit or loss

Impairment allowances (39,495) (42,122) (5,064,672) (5,146,289) release to profit or loss

Unwinding of discount - - (274,501) (274,501)

Transfers out - - (43,162) (43,162)

Write-offs - (896,773) (4,407,889) (5,304,662)

Recoveries of loans and advances previously - 42,123 182,476 224,599 written off

31 December 2013 29,660,746 2,680,492 11,973,884 44,315,122

d) Analysis of overdue loans The Group Overdue between Overdue between Overdue within Overdue over three Item three months and one year and three Total three months years one year years

2013

Unsecured loans 2,491,637 1,738,567 1,104,182 982,563 6,316,949

Guaranteed loans 3,774,219 4,572,437 1,977,941 499,080 10,823,677

Loans with pledged assets 9,158,231 6,086,822 4,910,652 781,728 20,937,433

Total 15,424,087 12,397,826 7,992,775 2,263,371 38,078,059

2012

Unsecured loans 2,211,082 1,082,605 712,631 602,322 4,608,640

Guaranteed loans 2,525,094 1,102,532 340,410 1,070,468 5,038,504

Loans with pledged assets 7,152,360 3,840,702 3,569,038 881,612 15,443,712

Total 11,888,536 6,025,839 4,622,079 2,554,402 25,090,856

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

103 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(9) Available-for-sale financial assets The Group

Item 2013 2012

Debts securities 173,285,128 192,617,274

Financing products of financial institutions 34,628,820 26,900,959

Equity instruments 3,244,842 3,110,086

Certificate of deposit 4,828,277 3,787,475

Sub-total 215,987,067 226,415,794

Less: Provision for impairment 1,434,424 741,924

Total 214,552,643 225,673,870

The Company

Item 2013 2012

Available-for-sale investment funds 201,043 200,000

Total 201,043 200,000

(10) Held-to-maturity investments The Group

Item 2013 2012

Debts securities 154,840,217 134,535,130

Others 301,339 358,306

Sub-total 155,141,556 134,893,436

Less: Provision for impairment 48,147 130,251

Total 155,093,409 134,763,185

In 2013, the Group did not sell any held-to-maturity investment that was not yet due (2012: nil).

104 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(11) Investment classified as receivables Investments classified as receivables are analysed by type of assets: The Group Item 2013 2012

Trust products 96,999,621 26,880,480 Investment management products managed by securities 114,987,136 3,269,311 companies Financing products of financial institutions 65,557,586 4,030,000

Corporate bonds 20,813,770 15,369,860

Others 1,800,000 6,885,650

Sub-total 300,158,113 56,435,301

Less: Provision for impairment - -

Total 300,158,113 56,435,301

The above funds from investment classified as receivables all belong to China CITIC Bank Corporation Ltd., the controlling subsidiary of CITIC Limited, the subsidiary of the Company. As at 31 December 2013, among the above funds from investment classified as receivables, RMB 27,983 million (2012: RMB 31,380 million) was managed by CITIC Securities Co., Ltd, the associate of the Company, and CITIC Trust Co., Ltd. (“CITIC Trust”), the wholly- owned subsidiary of CITIC Limited.

(12) Long-term equity investments The Group Item Note 2013 2012 Investments in jointly controlled (2) 24,097,185 26,107,088 enterprises Investments in associates (3) 44,137,613 41,547,654 Other long-term equity (4) 7,628,119 7,305,285 investments Sub-total 75,862,917 74,960,027

Less: Provision for impairment 3,528,914 3,722,935

Total 72,334,003 71,237,092

The Company Item Note 2013 2012

Investments in subsidiaries (1) 210,972,411 208,817,554 Investments in jointly controlled 18,453 18,543 enterprises Investments in associates 40,186 - Other long-term equity 2,133,721 1,050,277 investments Total 213,164,771 209,886,374

105 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

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

Item 2013 2012

CITIC Limited 204,273,622 204,273,622

Others 6,698,789 4,543,932

Total 210,972,411 208,817,554

See Note 6 (1) for details of the subsidiaries.

(b) Investments in major jointly controlled enterprises are as follows: The Group

Item 2013 2012

CITIC Capital Holding Limited 2,637,132 2,525,954

CITIC-Prudential Life Insurance Co., Ltd 2,365,872 2,262,128

Bowenvale Limited 2,262,027 2,338,311

Shandong Xinjulong Energy Co., Ltd. 2,061,638 2,054,552

Silver Wings Enterprises Inc. - 2,323,903

Others 14,770,516 14,602,240

Sub-total 24,097,185 26,107,088

Less: Provision for impairment 72,297 107,968

Total 24,024,888 25,999,120

106 the year 548,487 203,656 596,379 1,324,678 Net profit for Net profit EXPRESSED IN RENMINBI’ 000 506,814 5,185,302 1,195,773 5,592,027 for the year Total revenue revenue Total FOR THE YEAR ENDED 31 DECEMBER 2013 798,023 5,040,546 3,800,363 25,979,064 Total liabilities Total at the year end OF CITIC GROUP CORPORATION 6,717,832 6,623,189 11,191,621 28,426,016 the year end Total assets at Total NOTES TO THE FINANCIAL STATEMENTS 41.42% 50.00% 50.50% 30.00% The Group’s The Group’s direct/indirect direct/indirect share-holding HKD HKD RMB RMB Currency (’000) capital 65,000 29,117 2,360,000 1,000,000 Registered Registered sale Information reinsurance Insurance and Business nature Investment holding Coal production and Coal production place Islands Registered Registered Hong Kong British Virgin Mainland China Mainland China Name CITIC Capital Holding Limited CITIC-Prudential Life Insurance Co., Ltd Bowenvale Limited Shandong Xinjulong Energy Co., Ltd. Details of major jointly controlled enterprises are as follows: enterprises are Details of major jointly controlled

107 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Item 2013 2012

CITIC Securities Company Limited 19,368,699 19,111,836

Hong Kong Resort Company Limited 3,610,089 3,686,363

CITIC Dameng Holdings Limited 3,312,754 3,437,009

Alumina Limited 2,894,576 -

Shenyang Coking Coal Company Limited 2,720,063 2,860,013

Sinopec Yizheng Chemical Fibre Company Limited 1,343,213 1,554,774

Others 10,888,219 10,897,659

Sub-total 44,137,613 41,547,654

Less: Provision for impairment 2,866,476 2,731,600

Total 41,271,137 38,816,054

108 3,095 53,710 104,424 (253,487) 5,308,047 for the year (1,454,217) Net profit/(loss) Net profit/(loss) 1,857 EXPRESSED IN RENMINBI’ 000 922,217 2,326,511 7,078,196 for the year 16,115,272 17,677,171 Total revenue revenue Total FOR THE YEAR ENDED 31 DECEMBER 2013 2,154,726 4,389,734 1,040,131 3,532,816 10,751,516 181,952,154 Total liabilities Total at the year end OF CITIC GROUP CORPORATION 4,767,830 7,282,419 18,071,212 15,088,917 10,629,304 the year end 271,354,249 Total assets at Total NOTES TO THE FINANCIAL STATEMENTS 20.88% 50.00% 49.26% 13.62% 21.86% 17.25% The Group’s The Group’s direct/indirect share-holding USD HKD HKD RMB RMB RMB Currency 237,500 302,480 2,620,000 3,000,000 4,000,000 Registered Registered 11,016,908 capital(’000) Manufacturing Business nature Financial services Energy and resources Energy and resources Energy and resources Property development Property place Australia Bermuda Registered Registered Hong Kong Mainland China Mainland China Mainland China Name CITIC Securities Company Limited Hong Kong Resort Company Limited CITIC Dameng Holdings Limited Alumina Limited Shenyang Coking Coal Company Limited Sinopec Yizheng Chemical Sinopec Yizheng Company Limited Fibre Details of the Group’s major associates are as follows: major associates are Details of the Group’s

109 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(d) The major other long-term equity investments are as follows: The Group Item 2013 2012

Other long-term equity investments 7,628,119 7,305,285

Less: Provision for impairment 590,141 883,367

Total 7,037,978 6,421,918

(13) Investment properties The Group’s investment properties are mainly located in Mainland China and Hong Kong. The Group’s investment properties are properties and buildings held by subsidiaries and are rent to the third party under operation lease. There are active real estate markets where the investment properties locate and the Group is able to obtain market price and related information of similar properties, and therefore makes estimation about the fair value of the investment properties; for those whose market price and related information of similar properties cannot be obtained, the Group refers to the recent transaction price of similar properties along with the transaction conditions, transaction date and regions, or estimate the fair value of investment properties based on present value of expected rent income and related cash flows. As at 31 December 2013, the major investment properties of the Group were revalued by independent, professional qualified firms of surveyors Jones Lang LaSalle, Knight Frank Petty Limited, DeveChina International Appraisals and Yinxin Appraisal Co., Ltd. (2012: Beijing Sinotop Appraisal Co., Ltd., Knight Frank Petty Limited and Network Real Estate Appraisal Co Ltd). As at 31 December 2013, the net book value of the Group’s investment property for which the registration procedures for ownership had not been completed was approximately RMB 330 million (2012 (restated): RMB 330 million).

(14) Fixed assets The Group Plant and Machinery Office and other Item Motor vehicles Others Total buildings equipment equipment

Cost

1 January 2013 51,459,931 45,630,360 7,632,485 5,614,548 13,005,828 123,343,152

Additions during the year 2,333,818 10,263,018 3,061,588 2,087,504 1,370,500 19,116,428

Transfer from construction 2,250,602 3,927,164 136,532 71,230 841,586 7,227,114 in progress

Disposal during the year (1,814,036) (1,832,924) (551,873) (1,018,984) (2,315,638) (7,533,455)

Exchange differences (307,620) (1,081,865) 125,184 924,271 (1,102,585) (1,442,615)

31 December 2013 53,922,695 56,905,753 10,403,916 7,678,569 11,799,691 140,710,624

110 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Plant and Machinery Office and other Item Motor vehicles Others Total buildings equipment equipment Less: Accumulated depreciation

1 January 2013 9,797,277 14,159,731 4,108,214 2,197,949 3,441,189 33,704,360

Charge for the year 882,411 5,828,468 1,667,972 931,087 715,526 10,025,464

Written off on disposal (395,013) (795,828) (369,212) (438,721) (461,778) (2,460,552)

Exchange differences 477,240 366,113 78,786 300,756 (1,173,203) 49,692

31 December 2013 10,761,915 19,558,484 5,485,760 2,991,071 2,521,734 41,318,964

Less: Provision for impairment

1 January 2013 555,799 570,836 231 2,047 544,366 1,673,279

Charge for the year 53,084 1,418,137 - 29,212 - 1,500,433

Written off on disposal (25,703) (9,267) (1) (709) (8,831) (44,511)

Exchange differences 9,738 (25,760) 1,580 54 (34,559) (48,947)

31 December 2013 592,918 1,953,946 1,810 30,604 500,976 3,080,254

Carrying amount

31 December 2013 42,567,862 35,393,323 4,916,346 4,656,894 8,776,981 96,311,406

1 January 2013 41,106,855 30,899,793 3,524,040 3,414,552 9,020,273 87,965,513

As at 31 December 2013, the net book value of the Group’s premises for which the registration procedures for ownership had not been completed was approximately RMB 3,131 million (2012:RMB 2,244 million). The Group anticipates that there would be no significant issues and costs in completing such procedures.

(15) Construction in Progress The Group

Cost

1 January 2013 52,484,149

Additions during the year 11,053,409

Including: Interest capitalised 1,812,387

Transfer to fixed assets (7,227,114)

Decrease due to other reasons (874,399)

Exchange differences (1,431,388)

31 December 2013 54,004,657

111 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Cost

Less: Provision for impairment

1 January 2013 288,840

Charge for the year 303,923

Written off on disposal (10,394)

Exchange differences 92,361

31 December 2013 674,730

Carrying amount

31 December 2013 53,329,927

1 January 2013 52,195,309

As at 31 December 2013, the Group’s construction in progress mainly includes the iron mine developed in Western Australia of RMB40.67 billion (2012: RMB39.54billion).

(16) Intangible assets The Group Roads and tunnels Item Land use rights Mining rights Others Total operating rights

Cost

1 January 2013 10,143,219 17,229,308 10,154,677 5,921,267 43,448,471

Charge for the year 10,342,358 6,500,380 2,415,436 (649,572) 18,608,602

Written off on disposal (720,729) (2,397,179) (10,729) (2,506,725) (5,635,362)

Exchange differences (236,911) (425,354) (129,431) 106,410 (685,286)

31 December 2013 19,527,937 20,907,155 12,429,953 2,871,380 55,736,425

Less: Accumulated amortisation

1 January 2013 929,859 253,178 1,559,052 1,373,660 4,115,749

Charge for the year 281,207 642,028 239,221 348,645 1,511,101

Written off on disposal (25,986) (266,478) (319) (26,058) (318,841)

Exchange differences (231,764) (3,095) (96,596) 76,749 (254,706)

31 December 2013 953,316 625,633 1,701,358 1,772,996 5,053,303

112 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Roads and tunnels Item Land use rights Mining rights Others Total operating rights Less: Provision for impairment

1 January 2013 1,331 - - 152,856 154,187

Charge for the year 9,779 36,100 - - 45,879

Written off on disposal (354) - - - (354)

Exchange differences 1,397 (1,095) - (12,377) (12,075)

31 December 2013 12,153 35,005 - 140,479 187,637

Carrying amount

31 December 2013 18,562,468 20,246,517 10,728,595 957,905 50,495,485

1 January 2013 9,212,029 16,976,130 8,595,625 4,394,751 39,178,535

As at 31 December 2013, the net value of the Group’s land use rights for which the ownership registration procedures or transfer had not been completed was approximately RMB1.91 billion (2012: RMB 280 million).

(17) Goodwill The Group

Cost

1 January 2013 4,871,692

Additions during the year(i) (i) 7,106,999

Disposal during the year (266,650)

31 December 2013 11,712,041

Less: Provision for impairment

1 January 2013 302,512

Additions during the year 35,538

Written off on disposal -

31 December 2013 338,050

Carrying amount

31 December 2013 11,373,991

1 January 2013 4,569,180

(i) International Telecom, the controlling subsidiary of CITIC Limited, the subsidiary of the Company, paid HKD 9,000 million as combination cost for the purchase of 79% equity interest of CTM in 2013. The excess of combination cost over the Group’s interest in the fair value of CTM’s identifiable assets and liabilities, amounting to RMB 6,991 million, was recognised as goodwill attributable to CTM.

113 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(18) Deferred tax assets and liabilities The Group

Deferred tax assets /(liabilities)

Item Current year increase/ Current year increase/ Exchange 1 January 2013 31 December decrease charged to decrease recognised difference and (restated) 2013 profit or loss directly in equity others

Deductible tax losses 3,622,872 757,463 (8,692) (138,699) 4,232,944

Accrued expenses 2,095,109 7,648 - 3,535 2,106,292

Impairment loss of assets 3,057,145 296,176 (4,494) (77,911) 3,270,916

Fair value changes of financial (179,347) 232,128 1,431,890 20,483 1,505,154 instruments Depreciation difference and (699,378) 456,536 - 4,445 (238,397) impairment of fixed assets Fair value changes of (2,742,872) 258,998 (2,248) 3,500 (2,482,622) investment properties

Others (682,498) 950,688 (6,427) (435,433) (173,670)

Total 4,471,031 2,959,637 1,410,029 (620,080) 8,220,617

(a) At the balance sheet date, the deferred tax assets and liabilities presented on the balance sheet after offsetting each other were as follows: The Group

Item 2013 2012 (restated)

Deferred tax assets 14,017,540 11,069,286

Deferred tax liabilities (5,796,923) (6,598,255)

Total 8,220,617 4,471,031

(b) Deferred tax assets not recognised The Deferred tax assets not recognised of the Group are as follows: The Group

Item 2013 2012 (restated)

Deductible temporary differences 817,459 1,778,091

Deductible tax losses 8,533,133 9,635,955

Taxable temporary differences (955,522) (913,052)

Total 8,395,070 10,500,994

According to the current PRC corporate income tax law, as at 31 December 2013, the tax losses of RMB 2.959 billion will expire in five years (2012: RMB2.76 billion). According to the current tax regulations, the rest of the losses will not expire in five years.

114 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(c) Deferred tax liabilities not recognized The Group has temporary differences relating to the undistributed profits of subsidiaries. Deferred tax liabilities have not been recognised in respect of the tax that would be payable on the distribution of these retained profits as the Company controls the dividend policy of these subsidiaries and it has been determined that it is probable that profits will not be distributed in the foreseeable future.

(19) Other Assets The Group’s other assets are mainly advances and deposits for purchase of long-term assets.

(20) Provisions for impairment The provisions for impairment of the Group are set out as follows:

Effect of foreign 1 January Charge for exchange 31 December Item Note Decrease during the year 2013 the year rate changes 2013 and others

Reversal Write-off

Placement with banks and nonbank 2 7,867 7,218 - - (236) 14,849 financial institutions

Bills and receivables 5 3,771,449 1,411,285 (661,116) (299,708) 4,860 4,226,770

Inventories 6 3,886,315 368,060 (169,277) (953,033) (103,284) 3,028,781

Loans and advances 8 38,872,884 15,986,253 (5,146,289) (5,304,662) (93,064) 44,315,122 to customers

Available-for-sale 9 741,924 749,958 (17,993) - (39,465) 1,434,424 financial assets

Held-to-maturity 10 130,251 - (84,529) - 2,425 48,147 investments

Long-term equity 12 3,722,935 62,427 - (83,087) (173,361) 3,528,914 investments

Fixed assets 14 1,673,279 1,500,433 - (44,511) (48,947) 3,080,254

Construction in 15 288,840 303,923 - (10,394) 92,361 674,730 progress

Intangible assets 16 154,187 45,879 - (354) (12,075) 187,637

Others 1,886,210 100,623 (40,915) (63,031) 36,509 1,919,396

Total 55,136,141 20,536,059 (6,120,119) (6,758,782) (334,275) 62,459,024

See notes related to those items for the reason to recognized the impairment losses of assets in the current year.

115 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(21) Placements from banks and non-bank financial institutions The Group’s placements are all from banks financial institutions.

(22) Bills and payables The Group

Item Note 2013 2012 (restated)

Bills payable 4,401,980 5,593,819

Accounts payable 45,097,877 37,139,325

Advances from customers 40,144,599 45,560,810

Other payables (1) 63,931,352 44,740,850

Interest payable 30,474,953 23,646,032

Others 4,647,746 4,757,327

Total 188,698,507 161,438,163

The Company Item Note 2013 2012

Other payables (1) 1,027,804 129,352

Interest payable 29,071 19,669

Long-term payables 188,492 203,339

Total 1,245,367 352,360

(a) Other payables The Group Item 2013 2012 (restated)

Amounts due to related parties 529,413 1,657,953

Amounts due to third parties 63,401,939 43,082,897

Total 63,931,352 44,740,850

The Company Item 2013 2012

Amounts due to subsidiaries 908,766 90,959

Amounts due to related parties - -

Amounts due to third parties 119,038 38,393

Total 1,027,804 129,352

116 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(23) Financial assets sold under repurchase agreements The Group

Item 2013 2012

Debt securities 3,000,356 10,300,589

Discounted bills 4,948,864 731,032

Total 7,949,220 11,031,621

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

Item 2013 2012 (restated)

Demand deposits

-Corporate customers 917,576,393 828,791,666

-Personal customers 127,429,613 102,119,971

Sub-total 1,045,006,006 930,911,637

Time and call deposits

-Corporate customers 1,190,860,592 983,527,070

-Personal customers 387,311,028 310,310,909

Sub-total 1,578,171,620 1,293,837,979

Deposits from banks and non-bank financial institutions 557,900,952 369,403,317

Outward remittance and remittance payables 6,342,606 6,436,459

Total 3,187,421,184 2,600,589,392

Deposits from customers include pledged deposit for: The Group

Item 2013 2012

Bank acceptance 302,968,632 309,525,781

Letters of credit 35,882,498 32,012,062

Guarantees 22,017,848 14,516,178

Others 85,265,120 54,337,238

Total 446,134,098 410,391,259

117 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(25) Employee benefits payable The Group Accrued during the Paid during the Item 1 January 2013 31 December 2013 year year Salaries, bonuses and allowances and 13,448,074 26,477,982 (26,119,866) 13,806,190 subsidies Labour union fee, staff and workers’ 682,663 744,966 (665,960) 761,669 education fee

Staff welfare 213,973 1,674,370 (1,674,769) 213,574

Social insurance 352,943 3,817,985 (3,871,359) 299,569

Housing fund 79,417 1,213,592 (1,231,582) 61,427

Termination benefits 18,999 2,718 (15,017) 6,700

Others 308,909 763,669 (710,225) 362,353

Total 15,104,978 34,695,282 (34,288,778) 15,511,482

(26) Loans Analysed by types of collaterals: The Group

Item 2013 2012

Bank loans

- Unsecured loans 117,081,267 123,567,917

- Loans pledged with assets 35,994,093 36,157,850

- Guaranteed loans 21,739,701 15,365,751

Sub-total 174,815,061 175,091,518

Other loans

- Unsecured loans 44,422,108 20,524,752

- Loans pledged with assets 3,302,715 2,094,209

- Guaranteed loans 2,879,593 4,059,585

Sub-total 50,604,416 26,678,546

Total 225,419,477 201,770,064

As at 31 December 2013, among the total loans of the Group, total unsecured loans was RMB 161.5 billion (2012: RMB 144.1 billion), total guaranteed loans was RMB 24.6 billion (2012: RMB 19.4 billion), and loans pledged with assets was RMB 39.3 billion (2012: RMB 38.3 billion). Cash and deposits, bills and accounts receivable, inventories, investment assets, fixed assets, intangible assets and other assets of the Group with carrying amount of RMB 99.074billion (2012: RMB 98.32 billion) was pledged for loans. As at 31 December 2013, all of the loans of the Company were unsecured loans of banks.

118 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Analysed by currencies: The Group Item 2013 2012

Loans in RMB 111,671,688 104,652,985

Loans in USD 89,200,711 73,426,872

Loans in HKD 19,412,575 20,446,311

Loans in other currencies 5,134,503 3,243,896

Total 225,419,477 201,770,064

The Company Item 2013 2012

Loans in RMB 500,000 500,000

Loans in USD - 3,834,155

Total 500,000 4,334,155

As at 31 December 2013, the Group’s total loans in foreign currency was RMB 113.7 billion (2012: equivalent to RMB 97.1 billion), among which loans in USD was RMB 89.2 billion (2012: RMB 73.4 billion), loans in HKD was RMB19.4 billion (2012: RMB 20.4 billion), and loans in other currencies was RMB 5.1 billion (2012: RMB3.2 billion).

The maturity analysis of loans is as follows: The Group Item 2013 2012

Due within 1 year (inclusive) 89,518,198 73,886,422

Due after 1 year but within 5 years (inclusive) 107,390,201 94,763,666

Due after 5 years 28,511,078 33,119,976

Total 225,419,477 201,770,064

The Company Item 2013 2012

Due within 1 year (inclusive) 500,000 125,710

Due after 1 year but within 5 years (inclusive) - 4,208,445

Due after 5 years - -

Total 500,000 4,334,155

As at 31 December 2013, the fixed interest rates per annum for the Group’s loans range from 0.6% to 14.4% (2012: 0% to 14.4%), and the floating interests rates per annum for the Group’s loans are based on domestic and overseas inter-bank offered rates plus an interest margin. As at 31 December 2013, the interest rates for the Group’s loans range from 1.0% to 7.6% (2012: 0.7% to 5.0%). As at 31 December 2013, the interest rate for the Company’s long-term loans (RMB) based on 3-year PBOC benchmark interest rate was 6.15% on the last interest payment date of the year. (27) Debts securities issued

119 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Group Item 2013 2012

Corporate bonds issued 60,323,147 54,218,320

Notes issued 29,678,738 29,416,723

Subordinated debts issued 45,279,432 43,901,395

Certificates of deposit issued 12,717,736 11,592,799

Debt securities issued 15,903,658 907,917

Convertible bonds issued 222,757 492,097

Certificates of interbank deposit issued 2,967,980 -

Total 167,093,448 140,529,251

The Company Item 2013 2012

Corporate bonds issued 577,710 730,490

Notes issued - -

Total 577,710 730,490

The maturity analysis of debts securities issued is as follows: The Group Item 2013 2012

Due within 1 year (inclusive) 28,843,272 15,845,544

Due after 1 year but within 5 years (inclusive) 45,659,198 29,095,620

Due after 5 years 92,590,978 95,588,087

Total 167,093,448 140,529,251

The Company

Item 2013 2012

Due within 1 year (inclusive) - -

Due after 1 year but within 5 years (inclusive) 577,710 730,490

Due after 5 years - -

Total 577,710 730,490

As at 31 December 2013 and 2012, the fixed interest rates per annum for the Group’s debt securities range from 0.5%-6.9%, and the floating interests rates per annum for the Group’s debt securities based on Interbank Offered rates of different region plus-margins of bank from different districts.

120 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(28) Provisions The Group Charges Payment Written off Exchange 31 December Item 1 January 2013 for the year during the year during the year differences 2013 Environment restoration 1,667,570 234,585 (177,492) (377,019) (43,096) 1,304,548 expenditures Others 3,911,607 705,997 (140,038) - (12,689) 4,464,877

Total 5,579,177 940,582 (317,530) (377,019) (55,785) 5,769,425

(29) Paid-in capital The Company Increase in Decrease in Item 2012 2013 current year current year Paid-in capital 183,702,630 267,779 - 183,970,409

Total 183,702,630 267,779 - 183,970,409

This item reflects the Paid-in capital of the Company by the Ministry of Finance of the People’s Republic of China. The increase in the current year was due to the transfer of the undistributed profits of RMB267,778,771.84 to the paid-in capital, and has been verified by Zhongjia Youyi Certified Public Accountants Co., Ltd with Zhong Jia You Yi Yan Zi [2013] No.10 capital verification report issued.

30) Capital reserve/Reserves The Group

Item 2013 2012

Paid-in capital premium (i) (6,313,851) (9,621,322)

Private provident accumulation fund (ii) 31,552,281 31,552,281 Share of owners’ equity of inventees accounted for under the (46,072) 56,393 equity method Reserve from available-for-sale financial assets (3,521,082) (159,073)

Reserve from cash flow hedges 810,958 45,335

Others (410,661) (7,827)

Total 22,071,573 21,865,787

Note (i): the Group’s paid-in capital premium included the adjustment for none-restructured subsidiaries as a result of the Restructuring of the Company. Note (ii): As at 31 December 2011, the Company carried forward the change of RMB31.552 billion in the net assets of the Group from 1 January 2011 to 31 December 2011 to the private provident accumulation fund for contributors.

121 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item 2013 2012

Private provident accumulation fund 31,552,280 31,552,280 Share of owners’ equity of inventees accounted for under the (4,133) 328 equity method Paid-in capital premium 1 1

Available-for-sale financial assets 782 -

Other capital reserves 34,767 -

Total 31,583,697 31,552,609

(31) Surplus reserve The Group and the Company

Item 1 January 2013 Additions 31 December 2013

Statutory surplus reserve 33(1) 29,753 25,305 55,058

(32) General reserve The Group

Item 1 January 2013 Additions 31 December 2013

General reserve 9,207,846 6,296,340 15,504,186

(33) Appropriation of profits and retained earnings at the end of the year (a) Appropriation to statutory surplus reserve In accordance with the Articles of Association and relevant laws and regulations, the Company made appropriations to statutory surplus reserve of 10% of net profit for 2013. (b) Appropriation to general reserve Pursuant to relevant MOF notices, financial institutions in Mainland China are required to set aside a general reserve to cover potential losses against their assets. The minimum general reserve balance should be not less than 1.5% of the ending balance of gross risk-bearing assets. (c) Retained earnings at the end of the year Statutory surplus reserve of RMB4.536 billion attributable to the Company was made by the subsidiaries in 2013. On 28 April 2014, the thirteenth meeting of the first session of the Board of directors of the Company approves the 2013 profit appropriation plan. In accordance with the plan, after the appropriations to statutory surplus reserve, the Company’s remaining distributable profit amounting to RMB227,748,087.19 will be converted to CITIC Group Corporation’s state-owned capital.

122 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(34) Operating income The Group Item 2013 2012

Operating income from non-financial business

- Sale of goods 221,920,041 217,569,180

- Rendering of service and construction contracts 33,150,873 30,386,580

- Other non-financial income 5,677,176 4,256,690

Net interest income 87,702,162 77,625,209

Net fee and commission income 21,612,179 14,937,250

Investment income from financial business 2,811,829 3,033,113

Other income from financial business 2,214,181 1,948,032

Total 375,088,441 349,756,054

The Company Item 2013 2012

Interest income from loans to customers 462,291 343,754

Investment income 79,450 191,404 - Associates/jointly controlled enterprises accounted for under 19,205 25,732 the equity method - Equity investment accounted for under the cost method 54,645 142,973

-Gains on disposal 5,600 22,699

Other income 1,070 1,145

Total 542,811 536,303

(35) Financial expenses The Group Item 2013 2012

Non-financial business

Interest expenses from loans and payables 17,758,597 15,829,949

Less: Borrowing costs capitalised 6,618,911 7,393,599

Net interest expenses 11,139,686 8,436,350

Interest income from deposits and receivables (2,262,740) (2,302,046)

Net exchange gains (835,848) (104,836)

Other financial expenses 625,892 407,452

Total 8,666,990 6,436,920

123 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item 2013 2012

Interest expenses 90,922 507,882

Interest income from deposits (3,532) (57)

Other financial expenses 94 990

Total 87,484 508,815

The Group’s capitalised interest rates for 2013 range from 3% to 7.86% (2012: 2.5%-8.6%).

(36) Impairment losses The Group Item 2013 2012

Placement with banks and non-bank financial institutions 7,218 -

Bills and receivables 750,169 (168,830)

Inventories 198,783 1,402,635

Loans and advances to customers 10,839,964 12,500,404

Available-for-sale financial assets 731,965 62,726

Held-to-maturity investments (84,529) (6,319)

Long-term equity investments 62,427 1,539,377

Fixed assets 1,500,433 93,066

Construction in progress 303,923 51,890

Intangible assets 45,879 25,764

Others 59,708 296,615

Total 14,415,940 15,797,328

(37) Gains from changes in fair value The Group

Item 2013 2012

Investment properties 1,670,361 1,854,574

Trading financial assets/liabilities 280,817 (85,620)

Derivative financial instruments 198,035 54,296

Others 4,855 -

Total 2,154,068 1,823,250

124 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(38) Investment income The Group

Item 2013 2012

Long-term equity investments

- Associates/jointly controlled enterprises accounted for under 3,954,229 3,490,870 the equity method

- Equity investment accounted for under the cost method 206,543 46,849

- Gains on disposal 4,913,287 994,098

Others 1,290,114 664,723

Total 10,364,173 5,196,540

(39) Non-operating income The Group

Item 2013 2012

Gains on disposal of fixed assets 54,329 113,650

Gains on disposal of repossessed assets 15,335 52,735

Gains on disposal of intangible assets 4,671 4,782

Sub-total gains on disposal of non-current assets 74,335 171,167

Government grants 1,767,893 2,967,158

Others 1,608,445 1,979,246

Sub-total 3,376,338 4,946,404

Total 3,450,673 5,117,571

(40) Non-operating expenses The Group

Item 2013 2012

Donation 81,532 56,906

Losses on disposal of fixed assets 45,571 78,747

Others 338,075 210,212

Total 465,178 345,865

125 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item 2013 2012

Donation 21,887 650

Losses on disposal of fixed assets - -

Others 613 24,843

Total 22,500 25,493

(41) Income tax (a) Income tax expense for the year represents: The Group

Item 2013 2012

Current tax expense for the year 19,051,289 18,010,056

Deferred income tax (2,490,038) (2,908,020)

Total 16,561,251 15,102,036

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

Item 2013 2012 (restated)

Profits before taxation 74,241,469 61,114,774

Expected income tax expense at tax rate of 25% 18,560,367 15,278,694

Effect of different tax rates applied by subsidiaries (759,814) (575,428)

Tax effect of non-deductible expenses 1,743,019 2,183,425

Tax effect of results from associates and jointly controlled (1,181,877) (979,046) enterprises

Other non-taxable income (2,239,336) (1,806,394)

Unrecognised tax losses 171,447 454,781

Others 267,445 546,004

Total 16,561,251 15,102,036

126 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item 2013 2012

Profits before taxation 253,053 297,532

Expected income tax expense at tax rate of 25% 63,263 74,383

Tax effect of non-deductible expenses 9,013 1,124

Tax effect of dividend distribution from subsidiaries (13,661) (35,743) Tax effect of results from associates and jointly controlled (4,801) (6,433) enterprises Other non-taxable income - (90,148)

Unrecognised tax losses (53,814) 56,817

Others - -

Total - -

(42) Other comprehensive income The Group

Item 2013 2012

Losses arising from available-for-sale financial assets (7,284,702) (199,118) Less: Net amounts previously recognised in other comprehensive (743,958) 222,730 income transferred to profit or loss in the current period Tax effect of available-for-sale financial assets (1,524,642) (156,971)

Sub-total (5,016,102) (264,877) Share of other comprehensive income of investees accounted for 839,329 421,097 under the equity method Less: Net amounts previously recognised in other comprehensive 7,541 (6,254) income transferred to profit or loss in the current period Sub-total 831,788 427,351

Profits/(losses) arising from cash flow hedges 1,048,568 (436,887) Less: Net amounts previously recognised in other comprehensive 217,032 1,334,536 income transferred to profit or loss in construction in progress Net amounts previously recognised in other comprehensive (406,136) (536,733) income transferred to profit or loss in the current period Tax effect of cash flow hedges 105,324 (354,563)

Sub-total 1,132,348 (880,127)

Exchange differences on translation of financial statements (2,338,247) (199,033) denominated in foreign currencies and others

Total (5,390,213) (916,686)

127 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company

Item 2013 2012

Gain arising from available-for-sale financial assets 782 -

Less: Net amounts previously recognised in other comprehensive - - income transferred to profit or loss in the current period

Tax effect of available-for-sale financial assets - -

Sub-total 782 -

Share of other comprehensive income of investees accounted for (4,462) 328 under the equity method Less: Net amounts previously recognised in other comprehensive - - income transferred to profit or loss in the current period

Sub-total (4,462) 328

Exchange differences on translation of financial statements - denominated in foreign currencies and others

Total (3,680) 328

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

Item 2013 2012

Net profit (including the minority interest income) 57,680,219 46,015,101

Add: Impairment losses 14,415,940 15,797,328

Depreciation of fixed assets 10,025,463 7,415,465

Amortisation of intangible assets 1,511,101 872,890

Gains on disposal of fixed assets, intangible assets, and other (28,764) (92,420) long-term assets

Gain on changes in fair value (2,154,068) (1,823,250)

Financial expenses 8,876,947 6,134,304

Investment income (11,419,796) (6,033,560)

Net movement in deferred tax assets (2,490,038) (2,908,020)

Increase in inventories (10,619,133) (14,329,078)

Increase in operating receivables (818,398,604) (258,178,313)

Increase in operating payables 638,614,857 174,477,765

Net cash inflow from operating activities (113,985,876) (32,651,788)

128 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

The Company Item 2013 2012

Net profit 253,053 297,532

Add: Provision for assets impairment (34,155)

Depreciation of fixed assets 223 1,336

Long-term prepaid expenses amortization - - Gains on disposal of fixed assets, intangible assets, and other - - long-term assets Investment income (5,600) (48,431)

Net increase in deferred tax assets 261 - Decrease in operating receivables (increase stated in negative 1,258,698 28,750,521 value) Increase in operating payables (increase stated in negative value) (2,703,234) (28,525,538)

Net cash inflow from operating activities (1,196,599) 441,265

(b) Change in cash and cash equivalents: The Group Item 2013 2012

Cash at the end of the year 74,924,826 75,156,775

Less: Cash at the beginning of the year 75,156,775 66,135,079

Add: Cash equivalents at the end of the year 202,330,982 335,932,187

Less: Cash equivalents at the beginning of the year 335,932,187 475,221,195

Net decrease in cash and cash equivalents (133,833,154) (130,267,312)

The Company Item 2013 2012

Cash at the end of the year 415,226 510,945

Less: Cash equivalents at the beginning of the year 510,945 13,359,461

Net increase in cash and cash equivalents (95,719) (12,848,516)

(a) Cash at bank and on hand 91,104,329 87,789,017

- Cash on hand 6,900,017 6,750,260

- Bank deposits on demand 68,024,809 68,406,515

- Fixed term deposits due over three months 6,010,989 4,537,651

- Restricted cash 10,168,514 8,094,591

129 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

Item 2013 2012

(b) Cash equivalents 202,330,982 335,932,187

- Surplus deposit reserve funds 66,055,452 62,222,525

- Investment in debt securities due within three months 12,041,975 9,378,524

- Deposits with banks and non-bank financial institutions 97,617,057 216,253,094 due within three months when acquired -Placements with banks and non-bank financial institutions 26,616,498 48,078,044 due within three months when acquired

Less: Deposits due over three months 6,010,989 4,537,651

Less: Restricted cash 10,168,514 8,094,591 (d) Closing balance of cash and cash equivalents available 277,255,808 411,088,962 on demand

(d) Other cash received and paid by the Company in respect of investment activities mainly represents the cash received and paid in respect of short-term investment activities.

8. Segment reporting (1) General information The Group has six reportable segments, namely finance, real estate and infrastructure, engineering contracting, resources and energy, manufacturing and other services segment, which are determined based on the structure of its internal organisation, management requirements and internal reporting system. Each reportable segment is a separate business unit which offers different products and services, and is managed separately because they require different technology and marketing strategies. The financial information of the different segments is regularly reviewed by the Group’s management to make decisions about resources to be allocated to each segment and assess its performance. (2) Segment results and assets For the purposes of assessing segment performance and allocating resources between segments, the Group’s management regularly reviews the assets, revenue, expenses and financial performance, attributable to each reportable segment on the following bases: Segment assets include all tangible and intangible assets, loans and receivables, and investments, with the exception of deferred tax assets and other unallocated corporate assets. Segment results are operating income (including operating income from external customers and inter-segment operating income) after deducting expenses, depreciation, amortisation and impairment losses attributable to the individual segments, and financial expenses from cash balances and borrowings managed directly by the segments, and profit or loss of fair value changes and investment income. Inter-segment sales are determined with reference to prices charged to external parties for similar transactions. The Group’s tax expenses are not allocated to individual segments.

130 - - Total Total 71,255,975 56,345,431 375,088,441 375,088,441 349,756,054 349,756,054 4,299,677,465 3,565,571,705 - - EXPRESSED IN RENMINBI’ 000 (648,431) (623,735) Elimination Elimination (5,550,633) (5,550,633) (6,559,886) (6,559,886) (98,441,315) (110,480,138) FOR THE YEAR ENDED 31 DECEMBER 2013 (544,151) (430,659) 3,629,403 2,186,241 1,443,163 4,269,185 2,188,329 2,080,856 Unallocated Unallocated 122,877,157 128,604,955 OF CITIC GROUP CORPORATION Others Others 335,738 655,354 NOTES TO THE FINANCIAL STATEMENTS 1,713,999 1,991,507 72,103,859 58,437,681 58,101,942 85,838,549 57,249,798 56,594,444 9,662 4,956 1,312,987 2,148,567 82,908,152 55,762,437 55,752,775 85,602,232 56,692,841 56,687,885 Manufacturing Manufacturing 5,253 energy energy 122,565 (174,877) (167,530) 161,914,854 108,219,995 108,214,742 168,482,038 101,484,060 101,361,495 Resources and Resources Resources and Resources 2,865,812 2,128,721 2,480,311 1,980,661 contracting contracting 38,173,210 16,452,721 14,324,000 38,213,578 18,472,837 16,492,176 Engineering Engineering 5,386,815 1,173,098 7,986,285 1,679,799 16,851,125 15,678,027 31,033,721 29,353,922 189,537,220 211,841,658 infrastructure infrastructure Real estate and Real estate and 35,695 services services Financial Financial (288,080) 46,433,277 95,953,325 96,241,405 57,871,229 112,445,885 112,410,190 2,996,498,568 3,691,574,593 Information regarding to the Group’s reportable segments set out below regularly reviewed by the chief operating decision maker: reviewed segments set out below regularly reportable to the Group’s Information regarding Segment assets (Note i) Operating profit Segment operating income Inter-segment operating Inter-segment income Operating income from Operating income from external customers Segment assets (Note i) Operating profit Segment operating income Operating income from Operating income from external customers operating Inter-segment income Industry segments in 2013 Industry segments in 2012 (restated) tax assets and other unallocated assets. Note i: The unallocated items of segment total assets include deferred

131 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(3) Geographic information The majority assets of the Group are from China. The following table sets out information about the geographical location of the Group’s operating income from external customers and the Group’s assets. The geographical information is based on the location of customers receiving services or goods. Operating income from external customers

2013 2012

PRC

Including: Mainland China 306,201,849 289,487,161

Hong Kong and Macau 36,397,313 30,272,615

Sub-total 342,599,162 319,759,776

Other countries 32,489,279 29,996,278

Total 375,088,441 349,756,054

(4) Major customers Operating income from each individual customer of the Group is less than 10% of the Group’s total operating income.

9. Commitments and contingent liabilities (1) Credit commitments The Group

Item 2013 2012

Loan commitments 138,414,658 118,091,205

Guarantees 129,669,927 103,644,536

Letters of credit 199,513,888 166,110,943

Acceptances 695,018,241 665,235,069

Credit card commitments 95,217,491 80,451,575

Others 2,567,900 4,400,000

Total 1,260,402,105 1,137,933,328

The loan commitment represents undrawn amount of approved loans with signed contracts and credit card limits. Guarantees and letters of credit reflect the greatest losses that the secured party can bear on the balance sheet date if it fails to fully comply with the contract.

132 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(2) Bonds redemption obligations One subsidiary of the Group is an underwriting agent of PRC government bonds. The Group has the responsibility to buy back those bonds sold by it should the holders decide to early redeem the bonds held. The redemption price for the bonds at any time before their maturity date is based on the coupon value plus any interest unpaid and accrued up to the redemption date. Accrued interest payables to the bond holders are calculated in accordance with relevant rules of the MOF and the PBOC. The redemption price may be different from the fair value of similar instruments traded on the redemption date. The redemption obligations below represent the nominal value of government bonds underwritten and sold by the Group, but not yet matured on the reporting date: The Group

Item 2013 2012

Bonds redemption obligations 3,792,169 4,524,842

The PRC government bonds which were redeemed before maturity in the Group have been reflected in the financial statements. The Group estimates that the possibility of redemption before maturity is remote.

(3) Guarantees provided Except for guarantees that have been recognised as liabilities, the Group’s and the Company’s guarantee issued for other enterprises are as follows: The Group

Item 2013 2013

Related parties 4,852,791 4,456,633

Third parties 7,941,165 2,735,855

Total 12,793,956 7,192,488

The Company

Item 2013 2012

Subsidiaries 4,118,625 4,550,670

Related parties 117,500 117,500

Third parties 285,000 345,000

Total 4,521,125 5,013,170

As at 31 December 2013, the amount of guarantees issued to third parties of the Group is RMB 36 million (2012: RMB 0 million).

133 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(4) Capital commitments As at 31 December, the Group’s total capital commitments are as follows: The Group

2013 2012 (restated)

Contracted for 23,592,248 27,149,481

Authorized but not contracted for 1,720,348 1,933,456

Total 25,312,596 29,082,937

(5) Operating lease commitments As of 31 December 2012, the total future minimum lease payments under non-cancellable operating leases of properties, fixed assets and so on were payable as follows: The Group

Item 2013 2012

Within 1 year 3,281,953 2,610,794

After 1 year but within 2 years (inclusive) 2,932,304 2,217,430

After 2 years but within 3 years (inclusive) 2,604,591 1,985,813

After 3 years 9,070,528 6,850,342

Total 17,889,376 13,664,379

(6) Outstanding litigations and arbitration The Group is involved in certain pending litigations as defendant. Based on the opinion of internal and external legal counsels of the Group, the Group made provisions in the consolidated balance sheet for those litigations of which outflow of economic benefits are probable and the outflow can be estimated reliably. The Group believes that these accruals are reasonable and adequate. Management believes any liabilities result from those litigation of which outcome cannot be reliably estimated will not have significant negative impact on the Group’s financial status or operating results.

134 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

10. Related party relationships and transactions (1) Subsidiaries of the Company (a) Please refer to Note 6 (1) for details of the Company’s subsidiaries. (2) The Group and the Company’s transactions with related parties: (a) Transaction amounts with related parties: The Group

2013 2012

Sale of goods 82,840 430,663

Purchase of goods 50,571 2,937,167

Net interest expense 381,129 389,526

Net fee of charges and commissions 65,428 67,253

Income from supplementary services - 41,345

Expenses for supplementary services 52,221 68,048

Interest income from deposits and receivables 12,571 182,907

Business and administrative expenses - 3,432

The Company

2013 2012

Interest income from entrust loans 279,488 169,494

Interest income from deposits 3,093 58

Commission income 1,500 1,500

Commission expense 72 2

Consulting service income - 252

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

135 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

(b) The balances of transactions with related parties are set out as follows: The Group

Item 2013 2012

Bills and receivables 5,944,614 5,259,493

Loans and advances 150,763 166,219

Cash and deposits 101 329,143

Bills and payables 558,384 2,179,611

Deposits from customers, banks and non-bank institution 3,755,777 22,652,685

Other liabilities 267 61,455

Guarantees provided 4,852,791 4,456,633

The Company

Item 2013 2012

Bills and receivables 4,964,793 10,376,658

Loans and advances 2,728,529 2,365,921

Bills and payables 908,766 90,959

Guarantees provided 4,236,125 4,668,170

Company Name Relationship with the Group

CITIC Capital Holding Limited Jointly controlled by the Group

CITIC Polytec Property (Foshan) Company Limited Jointly controlled by the Group

Guangdong Li He Property Development Company Limited Significantly influenced by the Group

CITIC Securities Company Limited Significantly influenced by the Group

Guangdong Eastern Fibernet Investment Company Limited Significantly influenced by the Group

Chongqing Expressway Group Co., Ltd Significantly influenced by the Group

Dongguan CITIC Taikang Real Estate Development Co., Ltd. Significantly influenced by the Group

136 NOTES TO THE FINANCIAL STATEMENTS OF CITIC GROUP CORPORATION

FOR THE YEAR ENDED 31 DECEMBER 2013 EXPRESSED IN RENMINBI’ 000

11. Post Balance Sheet Events (1) The description of the appropriation of profits for the post balance sheet events: On 28 April 2014, the thirteenth meeting of the first session of the Board of directors of the Company approves the 2013 profit appropriation plan. In accordance with the plan, after the appropriations to statutory surplus reserve, the Company’s remaining distributable profit amounting to RMB 227,748,087.19 will be converted to CITIC Group Corporation’s state-owned capital.

(2) Shares transfer The overseas wholly-owned subsidiaries of CITIC Limited (a subsidiary of the Company) which hold the shares of CITIC Pacific Limited (hereinafter referred to as “CITIC Pacific”) will transfer such shares of CITIC Pacific to one or more overseas wholly-owned subsidiaries of the Company for their respective business needs. The relevant parties entered into framework agreements in March 2014 to transfer such shares of CITIC Pacific, the completion of which is subject to consent of the relevant third parties and regulatory authorities. As at the issuance date of these financial statements, the underlying transfer has not been completed.

(3) Acquisition According to the announcement of CITIC Pacific dated 16 April 2014, CITIC Pacific entered into a share transfer agreement, under which CITIC Pacific agreed to acquire 100% of the total issued shares of CITIC Limited from the Company and Beijing CITIC Enterprise Management Company Limited (hereinafter referred to as “CITIC Enterprise Management”). The acquisition is subject to a number of conditions precedent including approvals from relevant regulatory bodies.

137 P139 P140 CITIC Group Corporation CITIC Limited

138 CITIC Group Corporation

Telephone: 86-10-64660088 Fax: 86-10-64661186 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Beijing 100004, China Website: http://www.citicgroup.com.cn

CITIC Limited CITIC Medical & Health Group Co., Ltd. Telephone: 86-10-64660088 Telephone: 86-10-59661196 Fax: 86-10-64661186 Fax: 86-10-84865699 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Address: 23/F, Borui PLAZA, 26A, Dongsanhuanbeilu, Beijing 100004, China Chaoyang District, Beijing 100026, China Website: http://www.citic.com Website: http://www.citic-health. com

Beijing CITIC Enterprise Management Co., Ltd. CITIC Ningbo Group Telephone: 86-10-59668666 Telephone: 86-574-56156077 Fax: 86-10-59660666 Fax: 86-574-56156006 Address: Room 615, Capital Mansion, 6 Xinyuannanlu, Address: 29 Jiangdongbeilu, Ningbo, Zhejiang Province Chaoyang District, Beijing 100004, China 315040, China

CITIC Guoan Group CITIC Heavy Machinery Co., Ltd. Telephone: 86-10-65007700 Telephone: 86-379-64088888 Fax: 86-10-65010854 Fax: 86-379-64214680 Address: 4/F, Guoan Mansion, 1 Guandongdianbeijie, Address: 206 Jianshelu, Luoyang, Henan Province 471039, Chaoyang District, Beijing 100020, China China Website: http://www.¬guoan.¬citic.¬com Website: http://www.citichmc.com

CITIC Asset Management Corporation Ltd. CITIC International Cooperation Co., Ltd. Telephone: 86-10-64196666 Telephone: 86-10-59660133 Fax: 86-10-64196519 Fax: 86-10-84861799, 84417396 Address: 3/F,Office Tower A,Donghuan Plaza,9 Dongzhongjie, Address: 22/F, Tower A, TYG Center, C2 Dongsanhuanbeilu, Dongcheng District, Beijing 100027, China Chaoyang District, Beijing 100027, China Website: http:// amc.ecitic.com Website: http://www.icc.citic.com

CITIC Networks Co., Ltd. CITIC International Co., Ltd. Telephone: 86-10-84868800 Telephone: 86-10-84862288 Fax: 86-10-84868080 Fax: 86-10-84862255 Address: 1/F, Capital Mansion, 6 Xinyuannanlu, Chaoyang Address: 45 /F, Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Beijing 100004, China District, Beijing 100004, China Website: http://www.networks.citic.com Website: http://www.intl.citic.com

CITIC Machinery Manufacturing Inc., Ltd. CITIC Mining Technology Development Co., Ltd. Telephone: 86-357-4083008 Telephone: 86-10-85261246 Fax: 86-357-4083007 Fax: 86-10-65927167 Address: 85 Fangzhidongxiang, Huibinjie, Houma, Shanxi Address: 26/F, CITIC Building, 19 Jianguomenwaidajie, Province 043001, China Beijing 100004, China Website: http://www.machine.citic.com

CITIC Bohai Aluminium Industries Holding Company Ltd. Telephone: 86-335-3850667

Fax: 86-335-3850687 Address: 95 Beihuanlu, Haigang District, Qinhuangdao, Hebei Province 066003, China

Website: http://www.bohai.citic.com

139 CITIC Limited

Telephone: 86-10-64660088 Fax: 86-10-64661186 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Beijing 100004, China Website: http://www.citic.com

CITIC Holdings CITIC Securities International Co., Ltd. CITIC Pacific Mining Management Pty Ltd. Telephone: 86-10-59661838 Customer Service Line: 00852-22379338 Telephone: 61-8-92268888 Fax: 86-10-84861342 Overseas call: 400-818-0338 Fax: 61-8-92268899 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Address: 26/F CITIC Tower, 1 Tim Mei Avenue, Address: Level 13, 99 St Georges Terrace Perth 6000, Beijing 100004, China Central, Hong Kong Australia Website: http://www.ecitic.com Website: www.citics.com.hk Website: http://www.citicpacificmining.com

China CITIC Bank Corporation Limited China Asset Management Co., Ltd. CITIC Pacific China Holding Limited (listed company) Telephone: 010-88066688 Telephone: 86-21-62156215 Telephone: 86-10-65558888 Customer Service Line: 400-818-6666 Fax: 86-21-52984330 Fax: 86-10-65550801 Address: 12/F Tower B Tongtai Plaza, 33 Jinrongdajie, Address: CITIC Square 45/F, 1168 Nanjingxilu, Address: C Block, Fuhua Mansion, 8 Chaoyangmenbeidajie, Xicheng District, Beijing 100033, China Shanghai 200041, China Dongcheng District, Beijing 100027, China Website: http://www.chinaamc.com Website: http://bank.ecitic.com Sunburst Energy Development Co., Ltd. CITIC Trust Co., Ltd. Telephone: 86-10-65910166 CITIC International Financial Holdings Telephone: 86-10-84861327 Fax: 86-10-65004005 Limited Fax: 86-10-84861380 Address: 17 /F, CITIC Building, 19 Jianguomenwaidajie., Telephone: 852-36073000 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Beijing 100004, China Fax: 852-25253303 Beijing 100004, China Address: Suites 2701-9, 27 /F, CITIC Tower, 1 Tim Mei Website: http://trust.ecitic.com CITIC Real Estate Co., Ltd. Avenue, Central, Hong Kong Telephone: 86-10-84868966 Website: http://www.citicfh.com CITIC-Prudential Life Insurance Co., Ltd. Fax: 86-10-84868918 Telephone: 010-8587899 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, CITIC Securities Co., Ltd. (listed company) Fax: 010-85878577 Beijing 100004, China Telephone: 86-755-23835888 86-10-60838888 Address: Room 01-10, E16/F, World Financial Centre, 1 Website: http://www.realestate.citic.com Address: CITIC Securities Mansion, 8 Zhongxinsanlu, Futian Dongsanhuanzhonglu, Chaoyang District, Beijing District, Shenzhen, Guangdong Province 518048, 100020, China CITIC Heye Investment (Beijing) Co., Ltd. China Website: http://www.citic-prudential.com.cn Telephone: 86-10-84868966 CITIC Securities Mansion, 48 Liangmaqiaolu, Fax: 86-10-84868583 Chaoyang District, Beijing 100125, China CITIC Finance Company Limited Address: Room 3401, Capital Mansion, 6 Xinyuannanlu, Website: http://www.cs.ecitic.com http://www.citics.com Telephone: 010-59668280 Chaoyang District, Beijing 100004, China Fax: 010-84861879 Website: http://www.realestate.citic.com CITIC Securities (Zhejiang) Co., Ltd. Address: Capital Mansion B, 6 Xinyuannanlu, Chaoyang Telephone: 86-571-85783737 District, Beijing 100004, China CITIC Industrial Investment Group Corp., Ltd. Address: 19-20/F, Hengxin Tower, 588 Jiangnandadao, Telephone: 86-21-26019900 Binjiang District, Hangzhou, Zhejiang CITIC Pacific Ltd. (listed company) Fax: 86-21-26019990 Province 310052, China Telephone: 852-28202111 Address: 55/F, CITIC Plaza, 859 Sichuanbeilu, Shanghai Website: http://www.bigsun.com.cn Fax: 852-28772771 200085, China Address: 32/F CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong Website: http://www.east.citic.com CITIC Wantong Securities Co., Ltd. Website: http://www.citicpacific.com Customer Service Line: 95548 CITIC Port Investment Co., Ltd. Address: 20/F, Building 1，Qingdao International CITIC Pacific Special Steel Holdings Telephone: 86-574-86750001 Financial Square, 222 Shenzhenlu, Laoshan Telephone: 86-21-61713366 Fax: 86-574-86750001 District, Qingdao, Shandong Province Fax: 86-21-61710111 Address: 9/F, West Building of CITIC Plaza, Ningbo 266061, China Address: CITIC Square 15/F, 1168 Nanjingxilu, Daxie Development Zone, Zhejiang Province Website: www.zxwt.com.cn Shanghai 200041, China 315812, China

140 CITIC Infrastructure Investment Co., Ltd. Joint Stock Company KARAZHANBASMUNAI Tianjin Precious Metals Exchange Co., Ltd. Telephone: 86-21-26019900 Telephone: 7-729-2433600 Telephone: 86-022-58678686 Fax: 86-21-26019990 Fax: 7-729-2435062 Fax: 86-022-58678180 Address: 55/F, CITIC Plaza, 859, Sichuanbeilu, Address: 8 build., 15 microdistrict 130000, Aktau, Address: 28-1-101, Airport Business Park, Airport

Shanghai 200085, China Mangistau region, Republic of Kazakhstan Economic Area, Tianjin 300300, China Website: http://www.tjpme.com CITIC Industrial Investment Ningbo Co., Ltd. CITIC Resources Australia Pty Ltd. Telephone: 86-574-86766600 Telephone: 61-3-96148000 CITIC Australia Pty. Ltd. Fax: 86-574-86766366 Fax: 61-3-96148800 Telephone: 61-3-96148000 Address: 8/F, West Building, CITIC Plaza, Ningbo Address: Level 7, CITIC House 99/King Street, Fax: 61-3-96148000

Daxie Development Zone, Zhejiang Melbourne, Victoria 3000, Australia Address: CITIC House 99/King Street, Melbourne, Victoria Province 315812, China 3000, Australia CITIC Dameng Mining Industries Ltd. CITIC Construction Co., Ltd. (listed company) CITIC Kazakhstan Limited Liability Partnership Telephone: 86-10-59660133 Telephone: 86-771-5556555 Telephone: 7-727-3201960 Fax: 86-10-84861799, 84417396 Fax: 86-771-5556558 Fax: 7-727-3201967 Address: 22/F, Tower A, TYG Center, C2 Dongsanhuanbeilu, Address: CITIC Dameng Building, 18 Zhujinlu, Address: b-n 1, Building 4/2, the Village Karaotkel 3, Chaoyang District, Beijing 100027, China Nanning, Guangxi Zhuang Autonomous Kurgaldzhin Road, Esil District, Astana, Republic of Website: http://www.ccc.citic.com Region 530029, China Kazakhstan Website: http://www.citicdameng.com CITIC International Contracting Co., Ltd. CITIC Heavy Industries Co., Ltd. Telephone: 86-10-59660133 CITIC United Asia Investments Ltd. (listed company) Fax: 86-10-84861799, 84417396 Telephone: 852-28612727 Telephone: 86-379-64088888 Address: 22/F, Tower A, TYG Center, C2 Fax: 852-28611901 Fax: 86-379-64214680 Dongsanhuanbeilu, Chaoyang District, Address: Rm.2118 Hutchison House, 10 Harcourt Road, Address: 206 Jianshelu, Luoyang, Henan Province 471039, China Beijing 100027, China Hong Kong Website: http://www.citichmc.com Website: http://www.cici.citic.com Website: http://www.citicua.com CITIC Investment Holdings Ltd. CITIC Engineering Design & Construction Co., Ltd. CITIC Jinzhou Metal Co., Ltd. Telephone: 86-10-84865526 Telephone: 86-27-82731196 Telephone: 86-416-7186666 Fax: 86-10-84865250 Fax: 86-27-82726178 Fax: 86-416-7186666 Address: 15 /F, Capital Mansion, 6 Xinyuannanlu, Chaoyang Address: 8 Siweilu, Wuhan, Hubei Province 430014, China Address: 59 Hejinli, Taihe District, Jinzhou, Liaoning District, Beijing 100004, China Province 121005, China Website: http://www.invest.citic.com Central and Southern China Municipal Website: http://www.jzthj.com.cn Engineering Design & Research CITIC Dicastal Co., Ltd. Institute Co., Ltd. China Platinum Company Telephone: 86-335-5358888 Telephone: 86-27-82865081 Telephone: 86-10-88469559 Fax: 86-335-5359999 Fax: 86-27-82426679 Fax: 86-10-96096680 Address: 185 Longhaidao, Qinhuangdao Economic and Address: 41 Liberation-park Road, Jiang’an District, Address: 15F-A, Tower C, Empark Grand Hotel, 69 Technical Development Zone, Hebei Province Wuhan, Hubei Province 430010, China Banjinglu, Haidian District,Beijing 100097, 066011, China Website: http://www.znszy. com.cn China Website: http://www.dicastal.com

CITIC General Institute of Architectural Design and Research Co., Ltd. CITIC Metal Co., Ltd. Asia Satellite Telecommunications Holding Co., Ltd. (Listed company) Telephone: 86-27-82732804 Telephone: 86-10-59661921 Telephone: 852-25000888 Fax: 86-27-82726178 Fax: 86-10-59661919 Fax: 852-25764111 Address: 8 Siweilu, Wuhan, Hubei Province 430014, China Address: Room 1903, Capital Mansion, 6 Xinyuannanlu, Address: 19/F, Sunning Plaza, 10 Hysan Avenue, Causeway Website: http://www.whadi.citic.com Chaoyang District, Beijing 100004, China Website: http://www.metal.citic.com Bay, Hong Kong Website: http://www.asiasat.com.cn CITIC Resources Holdings Limited (listed company) CITIC Metal Hong Kong Investment Limited Telephone: 852-28998200 Telephone: 852-25988776 CITIC Telecom International Holdings Limited (Listed company) Fax: 852-28159723 Fax: 852-25988909 Telephone: 852-23778888 Address: Suites 3001-3006, 30/F, Building A, Pacific Place Address: Unit 1105, 11/F, Tower 1, Lippo Centre, No.89 Fax: 852-23762063 88 Queensway, Hong Kong Queensway, Admiralty, Hong Kong, China Address: 25/F CITIC Telecom Tower, Kwai Fuk Road, Kwai Website: http://www.citicresources.com Website: http://www.metal.citic.com Chung, Hong Kong Website: http://www.citictel.com

141 Companhia de Telecomunicaҫões de CITIC Capital Mansion Co., Ltd. OVERSEAS OFFFICES Macau S.A.R.L. Telephone: 86-10-64660088 Telephone: 853-28833833 Fax: 86-10-84868135 Fax: 853-88913210 Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, CITIC Representative Office in Japan Address: Rua de Lagos, Telecentro, Taipa, Macau Beijing 100004, China Telephone: 81-3-35842635 Website: http:// www.ctm.net Website: http://www.citiccm.com.cn Fax: 81-3-35056235 Address: 1-14-5, Akasaka, Minatuku, Tokyo, Tu, Japan

CITIC Press Group CITIC Building Management Co., Ltd. CITIC Representative Office in New York Telephone: 86-10-84849555 Telephone: 86-10-85263348 Telephone: 1-212-5887000 Fax: 86-10-84849000 Fax: 86-10-85263344 Fax: 1-212-7913857 Address: 8 -10/F, 2 Fusheng Tower, 4 Huixindongjie, Address: 19 Jianguomenwaidajie, Beijing 100004, China Address: 410 Park Avenue, 18/F, New York, NY 10022, USA Chaoyang District, Beijing 100029, China Website: http://www.citic-bld.com.cn Website: http://www.publish.citic.com CITIC Representative Office in Kazakhstan Telephone: 7-727-3201960 China International Economic Consultants CITIC Tianjin Investment Holding Co., Ltd. Co., Ltd. (CIEC) Fax: 7-727-3201967 Telephone: 86-22-66233996 Telephone: 86-10-84861310 Address: 5th Floor, 135 Abylaikhan Avenue, Almaty, Republic Fax: 86-22-66233988 Fax: 86-10-84865509 of Kazakhstan, 050000 Address: 249 Huanghailu, Tianjin Economic-technological Address: Capital Mansion, 6 Xinyuannanlu, Chaoyang District, Development Area, Tianjin 300457, China Beijing 100004, China Website: http://www.tianjin.citic.com Website: http://www.ciecworld.com

CITIC Zhonghaizhi Corporation Beijing Guoan Football Club Co., Ltd. Telephone: 86-755-25589393 Telephone: 86-10-65527930 Fax: 86-755-25588810 Fax: 86-10-65527932 Address: 20/F, Building A, Constructing Group Mansion, Address: Stand No.18, Beijing Workers’ Stadium, Chaoyang 2118 Honglingzhonglu, Luohu District, Shenzhen, District, Beijing 100027, China Guangdong Province 518028, China Website: http://www.fcguoan.com

China Offshore Helicopter Co., Ltd. (listed company) Telephone: 86-755-26971826 Fax: 86-755-26971617 Address: Airport of Helicopters, Nanhaidadao, Nanshan District, Shenzhen, Guangdong Province 518052, China Website: http://www.china-cohc.com

CITIC Tourism Group Co., Ltd. Telephone: 86-10-85263636 Fax: 86-10-85263737 Address: 7 /F, #2 BLD, CITIC Building, 19 Jianguomenwaiadajie, Beijing 100004, China Website: http://www.travel.citic.com

CITIC Automobile Co., Ltd. Telephone: 86-10-64929880 Fax: 86-10-64929680 Address: 14/F, Poly Plaza, 14 Dongzhimennandajie, DongCheng District, Beijing 100027, China Website: http://www.auto.citic.com

CITIC USA Holding Inc. Telephone: 1-212-5887000 Fax: 1-212-7913857

Address: 410 Park Avenue, 18/F, New York, NY 10022, USA

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