中國冶金科工股份有限公司 (A joint stock limited company incorporated in the People’s Republic of China with limited liability) Stock Code: 1618 2021 INTERIM REPORT 2021 INTERIM REPORT Tel : + 86-10-5986 8666 Fax : + 86-10-5986 8999 Postal Code : 100028 E-mail : [email protected] Website : www.mccchina.com Address : MCC Tower, No. 28 Shuguang Xili, Chaoyang District, Beijing, China * For identification purpose only Important Notice I. The Board and the Supervisory Committee of the Company and its Directors, Supervisors and senior management warrant that the contents of this interim report are true, accurate and complete without false representations, misleading statements or material omissions, and they severally and jointly accept legal responsibility for the above warranty. II. The 31st meeting of the third session of the Board was convened on 30 August 2021. All Directors of the Company attended the Board meeting. III. The interim financial statement of the Company for the first half of 2021 has been reviewed by WUYIGE Certified Public Accountants LLP, but has not been audited. WUYIGE Certified Public Accountants LLP issued a review report with unqualified opinions to the Company. IV. Guo Wenqing, the Chairman and legal representative of the Company, Zou Hongying, the Vice President and General Accountant of the Company, and Fan Wanzhu, the Deputy General Accountant and Head of the Financial Planning Department have declared that they warrant the truthfulness, accuracy and completeness of the financial report contained in this interim report. V. The proposal for profit distribution or transfer of capital reserve to share capital for the Reporting Period as approved by the Board of Directors VI. Statement for the risks involved in the forward-looking statements The forward-looking statements contained in this report regarding the Company’s future plans and others do not constitute any substantive commitment to investors and investors are reminded of investment risks. VII. Is there any misappropriation of funds by the Controlling Shareholder and its related parties for non-operating purpose No VIII. Is there any external guarantee made in violation of the required decision-making procedures No IX. Are there more than half of the Directors unable to guarantee the truthfulness, accuracy and completeness of the interim report disclosed by the Company No X. Warning of major risks 1. International and domestic macroeconomic trends In the current period, the international and domestic economic situation is complex and grim as the instabilities and uncertainties have increased significantly. COVID-19 pandemic has a far-reaching effect, which resulted in the global economy being in deep recession and economic globalization facing a counter current. Since all business operations of the Company are affected by the international and domestic macroeconomic environment, the macroeconomic trends inside or outside China may have an impact on various business segments of the Company, including procurement, production and sale, thereby causing fluctuations in the Company’s operating performance. Since the Company’s operating income is mainly derived from the domestic market, its business operations may perform differently in various domestic economic cycles. 2. Changes in the policies of the industries in which the Company was involved and the demands of its domestic and overseas markets The Company’s engineering contracting, property development and equipment manufacturing businesses were all influenced by the policies of the industry and the market. The sudden outbreak of COVID-19 pandemic has increased the uncertainties of the external market situation. In recent years, the adjustments to the business fields and the regional market layout of the Company have been guided, to a certain extent, by the restructuring and upgrading of the steel and iron industry pushed forward by the PRC’s implementation of Made in China 2025, a nation strengthening strategy focusing on manufacturing industries, and implementation of control measures on the property industry, periodic fluctuations of the industries and changes in the operating situation of upstream and downstream enterprises of the industries, and thereby influencing the Company’s internal structure and hence influencing the Company’s financial position. XI. Others Unless otherwise specified, all the amounts in this report are denominated in RMB. 2021 INTERIM REPORT 1 Contents Definitions 4 Chairman’s Statement 6 Company Profile and Major Financial Indicators 9 Report of the Board of Directors, Management Discussion and Analysis 18 Corporate Governance 58 Environmental and Social Responsibility 61 Significant Events 79 Changes in Shares and Particulars of Shareholders 88 Corporate Bonds 97 Financial Statements 101 Documents for Inspection 312 2 METALLURGICAL CORPORATION OF CHINA LTD. 2021 Interim Report Cover Image Introduction: The main element of the cover of the report is an image of the National Sliding Center Project built by Shanghai Baoye Group Corp., Ltd. (“Shanghai Baoye”), a subsidiary of the Company. This project is located in the southwest Yanqing competition zone for Beijing 2022 Winter Olympics. Among Winter Olympics venues, it is a newly-built one that is among the venues most difficult to design, extremely challenging to construct and with most complex process. It is also the first snowmobile and sled track in China. In the construction, Shanghai Baoye forged ahead in reform and innovation. It made breakthroughs in cutting-edge technology problems and completed the project successfully. On 18 January 2021, the construction of the project was highly appraised by General Secretary Xi Jinping during his inspection. 2021 INTERIM REPORT 3 Definitions In this report, unless the context otherwise requires, the following expressions have the meanings as follows: “A Share(s)” the domestic shares with a nominal value of RMB1.00 each in the ordinary share capital of the Company, which are listed on the SSE and traded in RMB “A Share Listing Rules” the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange “Articles of Association” the articles of association of Metallurgical Corporation of China Ltd.* “Board” the board of Directors of Metallurgical Corporation of China Ltd.* “China Minmetals” China Minmetals Corporation “Company” or “MCC” Metallurgical Corporation of China Ltd.* “Controlling Shareholder” or China Metallurgical Group Corporation “CMGC” “Corporate Governance Code” the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 of the Hong Kong Listing Rules “CSRC” the China Securities Regulatory Commission “Director(s)” the director(s) of the Company, including all executive, Non-executive and Independent Non-executive Directors “H Share(s)” the overseas listed foreign invested shares with a nominal value of RMB1.00 each in the ordinary share capital of the Company, which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars "HKEx Listing Rules", the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong “H Share Listing Rules” or Limited “Hong Kong Listing Rules” “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong, PRC “Independent Director” or a Director who is independent of the Shareholders of the Company and is not an “Independent Non-executive employee of the Company, has no material business connections or professional Director” connections with the Company or its management and is responsible for exercising independent judgment over the Company’s affairs “MCC Real Estate” MCC Real Estate Group Co., Ltd. “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Hong Kong Listing Rules “Related party(ies)” Related party/parties under A Share Listing Rules and connected person(s) under the H Share Listing Rules “Renminbi” or “RMB” Renminbi, the lawful currency of the PRC 4 METALLURGICAL CORPORATION OF CHINA LTD. Definitions “Reporting Period” from 1 January 2021 to 30 June 2021 “SASAC” the State-owned Assets Supervision and Administration Commission of the State Council “SFO” or “Securities and Futures the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as Ordinance” amended, supplemented or otherwise modified from time to time “Shareholder(s)” holder(s) of share(s) of the Company “Shareholders’ Meeting” the shareholders’ meeting of Metallurgical Corporation of China Ltd.* “SSE” the Shanghai Stock Exchange “State Council” the State Council of the People’s Republic of China “Supervisor(s)” the supervisor(s) of the Company “Supervisory Committee” the Supervisory Committee of Metallurgical Corporation of China Ltd.* “USD” United States dollars, the lawful currency of the United States 2021 INTERIM REPORT 5 Chairman’s Statement Chairman Guo Wenqing 6 METALLURGICAL CORPORATION OF CHINA LTD. Chairman’s Statement Dear Shareholders, In the first half of 2021, MCC spared no efforts to obtain remarkable results in its “mid-term examination”, which was also a plain but meaningful gift to celebrate the 100th anniversary of the Communist Party of China. During the Reporting Period, the Company maintained a rapid growth of its operating performance. Its indicators including operating revenue, total profit, net profit and newly signed contract value all hit new highs, and the indicator for asset quality continued to improve. In addition, the Company realized “two