China Aluminum International Engineering : Interim Report 2020

September 11, 2020 at 05:35 am EDT

INTERIM REPORT 2020

Interim Report 2020

IMPORTANT NOTE

The Board of Directors, Board of Supervisors, Directors, Supervisors and senior management of the Company guarantee that the contents of the interim report are truthful, accurate and complete, free from any false statement, misleading representation or major omission, and are legally liable therefor on a several and joint basis.

All Directors of the Company attended the Board Meeting.

This interim report is unaudited.

IV. WU Jianqiang, the Company's principal, ZHANG Jian, the accounting principal, and ZHANG Xiuyin, the accounting function's principal (the person in charge of the accounting function) undertake that: the financial report in this interim report is truthful, accurate and complete.

Proposal for Profit Distribution or Proposal for Converting Capital Reserve into Share Capital for the Reporting Period as Adopted by the Board
No

VI. Forward-looking Risk Statements

✓Applicable □Not applicable

This report contains some predictive statements based on subjective assumptions and judgments about future policies and economic trends. Subject to many variable factors, actual results or trends may deviate from these predictive statements.

Forward-looking statements such as future plans mentioned in this report do not constitute the Company's substantive undertakings to investors. Investors should be aware of investment risks.

VII. Any Funds Occupied by the Controlling Shareholder or its Related Parties for Non-operating Purpose?

VIII. Any Guarantee Provided for Any Third Party in Violation of Required Decision Procedures?

China Aluminum International Engineering Corporation Limited

IMPORTANT NOTE

IX. Material Risk Disclosure

The Company mainly faces the COVID-19 epidemic risk, policy risk, market risk (price risk, exchange rate risk), operational risk, financial risk and overseas business risk. For details, please refer to the section under the heading of "Section 5 Operating Results Discussion and Analysis" - "III. Other Disclosures (II) Potential Risks" of this report. Investor attention is drawn thereto.

Other Note
✓Applicable □Not applicable
For the purpose of this report, all amounts are expressed in RMB unless otherwise specified.

CONTENTS

Section 1	Interpretations	4
Section 2	Company Profile and Key Financial Indicators	6
Section 3	Chairman's Statement	13
Section 4	Business Review	14
Section 5	Operating Results Discussion and Analysis	20
Section 6	Key Matters	45
Section 7	Changes in Ordinary Shares and Shareholders	69
Section 8	Particulars of Preferred Stock	76
Section 9	Particulars of Directors, Supervisors,	77
	Senior Management and Employees
Section 10	Information on Corporate Bonds	81
Section 11	Financial Report	85
Section 12	Documents for Inspection	306

China Aluminum International Engineering Corporation Limited

SECTION 1 INTERPRETATIONS

For the purpose of this report, unless the context otherwise requires, the following terms have the following meanings:

Definition of Terms

"Audit Committee"	the audit committee of the Board
"Board"	the board of directors of the Company
"Board of Supervisors"	the board of supervisors of the Company
"Chalco"	Aluminum Corporation of China Limited (中國鋁業股份有限公司), listed on
	New York Stock Exchange (stock code: ACH), SSE (stock code: 601600)
	and the Stock Exchange (stock code: 2600) and a subsidiary of Chinalco
"Changkan Institute"	China Nonferrous Metals Changsha Investigation and Design Research
	Institute Co., Ltd. (中國有色金屬長沙勘察設計研究院有限公司), a wholly-
	owned subsidiary of our Company
"Changsha Institute"	Changsha Engineering & Research Institute Limited for Nonferrous Metallurgy
	(長沙有色冶金設計研究院有限公司), a wholly-owned subsidiary of the
	Company
"China Aluminum	China Aluminum International Engineering Equipment Co., Ltd. (中鋁國際工
Equipment"	程設備有限公司), a wholly-owned subsidiary of the Company
"Chinalco"	Aluminum Corporation of China (中國鋁業集團有限公司), our controlling
	shareholder
"Chinalco Finance"	Chinalco Finance Company Limited (中鋁財務有限責任公司)
"CNPT"	China Nonferrous Metals Processing Technology Co., Ltd. (中色科技股份有
	限公司), a subsidiary owned as to 73.5% by the Company
"Company", "Chalieco",	China Aluminum International Engineering Corporation Limited (中鋁國際工程
"we", "us", "our"	股份有限公司)
"CSRC"	the China Securities Regulatory Commission
"GAMI"	Guiyang Aluminum & Magnesium Design Institute Co., Ltd. (貴陽鋁鎂設計研
	究院有限公司), a wholly owned subsidiary of the Company
"Group"	the Company and its subsidiaries
"HK$"	the lawful currency of Hong Kong
"Kunming Survey and	Kunming Survey and Design Institute Co., Ltd. of China Nonferrous Metals
Design Institute"	Industry (中國有色金屬昆明勘察設計研究院有限公司), a wholly-owned
	subsidiary of the Company
"Latest Practicable Date"	26 August 2020
"Listing Rules of the Stock	the Rules Governing the Listing of Securities on the Stock Exchange
Exchange"
"Luoyang Institute"	Luoyang Engineering & Research Institute for Nonferrous Metals Processing
	(洛陽有色金屬加工設計研究院有限公司) , o n e o f o u r p r o m o t e r s a n d
	shareholders
"Renminbi" or "RMB"	the lawful currency of the PRC
"SAMI"	Shenyang Aluminum & Magnesium Engineering & Research Institute Co., Ltd.
	(瀋陽鋁鎂設計研究院有限公司), a wholly-owned subsidiary of the Company

Interim Report 2020

SECTION 1 INTERPRETATIONS

"SASAC"	the State-owned Assets Supervision and Administration Commission of the
	State Council
"Shandong Engineering"	Chalco Shandong Engineering Technology Co., Ltd. (中鋁山東工程技術有限
	公司), a subsidiary as to 60% owned by the Company
"Sixth Metallurgical Company"	Sixth Metallurgical Construction Company of China Nonferrous Metals
	Industry (中國有色金屬工業第六冶金建設有限公司), a wholly - owned
	subsidiary of the Company
"SSE"	the Shanghai Stock Exchange
"State Council"	the State Council of the People's Republic of China
"Stock Exchange"	the Stock Exchange of Hong Kong Limited
"Two Guarantees"	to ensure the life safety, physical health, and work safety of all employees,
	to ensure the smooth progress of the project as planned, and the rapid
	formation of a leading position
"Two Constants"	the annual target and task remain unchanged, and the assessment indicators
	for each subsidiary remain unchanged
"USD"	the lawful currency of the US

China Aluminum International Engineering Corporation Limited

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

CORPORATE INFORMATION

	Chinese Name of the Company	中鋁國際工程股份有限公司
	Abbreviation of Chinese Name of	中鋁國際
	the Company
	English Name of the Company	China Aluminum International Engineering Corporation Limited
	Abbreviation of English Name of	CHALIECO
	the Company
	Legal Representative of the Company	WU Jianqiang
II. CONTACTS AND CONTACT INFORMATION
					Representative for
		Secretary to the Board		Joint Company Secretaries	Securities Affairs

	Name	ZHANG Jian		ZHANG Jian, WU Jiawen	LI Gang
	Contact address	Building C, No. 99 Xingshikou	Building C, No. 99 Xingshikou	Building C, No. 99 Xingshikou
		Road, Haidian District, Beijing	Road, Haidian District, Beijing	Road, Haidian District, Beijing
	Tel	010-82406806		010-82406806	010-82406806
	Fax	010-82406666		010-82406666	010-82406666
	E-mail	IR-chalieco@chalieco.com.cn	IR-chalieco@chalieco.com.cn	IR-chalieco@chalieco.com.cn

III. CHANGES IN BASIC INFORMATION

Registered address of the Company	Building C, No. 99 Xingshikou Road, Haidian District,
	Beijing
Postal code for registered address of	100093
the Company
Domestic office of the Company	Building C, No. 99 Xingshikou Road, Haidian District,
	Beijing
Postal code for domestic office of	100093
the Company
Hong Kong Office of the Company	Room 4501, Far East Finance Centre, 16 Harcourt Road,
	Admiralty, Hong Kong
Website of the Company	http://www.chalieco.com.cn
E-mail	IR-chalieco@chalieco.com.cn

Interim Report 2020

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

IV. CHANGES IN THE PLACES FOR INFORMATION DISCLOSURE AND REFERENCE

The Company's designated press media	China Securities Journal, Shanghai Securities News,
for information disclosure	Securities Times, Securities Daily
CSRC designated website for the	http://www.sse.com.cn
interim report
The interim report is available at	Board Office of Chalieco at Building C, No. 99 Xingshikou
	Road, Haidian District, Beijing

V. STOCK PROFILE

Share Class	Listed on	Stock Abbreviation	Stock Code

A Share	The SSE	中鋁國際	601068
H Share	The Stock Exchange	CHALIECO	2068

VI. OTHER RELEVANT INFORMATION

✓Applicable □Not applicable
Accounting firm engaged by the	Name	WUYIGE Certified Public Accountants LLP
Company	Office address	15F Xueyuan International Tower, No.1
		Zhichun Road, Haidian District, Beijing
	Names of accountants	Shi Chenqi, Liu Mingzhe
	who signed the
	review report
Sponsor performing continuous	Name	China Merchants Securities Co., Ltd.
supervision duties during the	Office address	No. 111, Fuhuayi Road, Futian Sub-district,
reporting period		Futian District, Shenzhen, Guangdong
	Names of the	SHEN Tao, WANG Zhiwei
	sponsor's
	representatives who
	signed the report
	Period of continuous	From 31 August 2018 to 31 December 2020
	supervision

China Aluminum International Engineering Corporation Limited

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

Legal advisor as to PRC laws	Name	Jia Yuan Law Office
	Office Address	F408, Ocean Plaza, 158 Fuxing Men Nei
		Street, Xicheng District, Beijing
Legal advisor as to Hong Kong	Name	Clifford Chance
laws	Office Address	27th Floor Jardine House One Connaught
		Place Central Hong Kong
A Share Registrar	Name	China Securities Depository and Clearing Co.,
		Ltd. Shanghai Branch
	Office Address	36/F, China Insurance Building, 166 Lujiazui
		East Road, Pudong New Area, Shanghai
H Share Registrar	Name	Computershare Hong Kong Investor Services
		Limited
	Office Address	Shops 1712-1716, 17th Floor, Hopewell
		Centre, 183 Queen's Road East, Wan Chai
		Hong Kong

Interim Report 2020

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

VII. KEY ACCOUNTING FIGURES AND FINANCIAL INDICATORS OF THE COMPANY

(I) Key Accounting Figures

		Unit: Yuan Currency: RMB
			Changes for this
			reporting period as
			compared with the
	This reporting		corresponding
	period (From	The corresponding	period of
Key Accounting Figures	January to June)	period of last year	last year (%)

Revenue	9,946,610,462.50	13,516,498,871.86	-26.41
Net profit attributable to shareholders of the
listed company	-143,153,691.94	10,061,243.36	N/A
Net profit attributable to shareholders of the
listed company net of non-recurring gain or
loss	-200,566,854.27	852,216.58	N/A
Net cash flow from operating activities	-1,566,940,887.41	-1,086,851,099.52	-44.17
			Changes for this
			reporting period as
	As at the end		compared with
	of this reporting	As at the end of	the end of the
	period	the previous year	previous year (%)

Net assets attributable to shareholders
of the listed company	10,626,746,799.44	11,322,059,940.65	-6.14
Total assets	54,124,028,453.76	55,999,463,120.62	-3.35

10 China Aluminum International Engineering Corporation Limited

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

(II) Key Financial Indicators

			Changes for this
			reporting period as
			compared with the
	This reporting		corresponding
	period (From	The corresponding	period of
Key Financial Indicators	January to June)	period of last year	last year (%)

Basic earnings per share (RMB/share)	-0.07	-0.01	-600.00
Dilute earnings per share (RMB/share)	-	-	-
Basic earnings per share net of non-recurring
gain or loss (RMB/share)	-0.09	-0.01	-800.00
Weighted average return on net assets (%)	-2.55	-0.42	Down by 2.13
			percentage points
Weighted average rate of return on net assets	-3.24	-0.53	Down by 2.71
net of non-recurring gain or loss (%)			percentage points

Explanation of key accounting figures and financial indicators of the Company

□Applicable ✓Not applicable

VIII. DIFFERENCES IN ACCOUNTING FIGURES UNDER DOMESTIC AND FOREIGN ACCOUNTING STANDARDS

□Applicable ✓Not applicable

Interim Report 2020 11

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

IX. ITEMS AND AMOUNTS OF NON-RECURRING PROFIT OR LOSS

✓Applicable □Not applicable

Unit: Yuan Currency: RMB

Non-recurring Profit or Loss	Amount

Gain or loss on disposal of non-current assets	10,122,833.63
Tax return, reduction or exemption arising from ultra vires approval, without official
approval document, or on an occasional basis
Government subsidies recorded in current P&L (except government subsidies closely
rated to business operations granted continuously in a fixed amount or quota
according to the unified national standards)	10,295,329.87
Financing fee income from non-financial enterprises recorded in current P&L	20,060,005.67
Gain arising from the acquisition of interests in a subsidiary, associate or joint ventures
at an investment cost below the share in the fair value of net identifiable assets of the
investee at the time of acquisition
Gain or loss on non-monetary asset exchange
Gain or loss on assets under discretionary investment or management
Asset impairment provisions arising from force majeure factors such as natural
disasters
Gains or losses on debt restructuring	158,620.93
Restructuring costs, such as employee settlement cost and integration cost
Gain or loss in excess of fair value arising from transactions at obviously unfair prices
Net profit or loss of a subsidiary arising from business combination under common
control for the period from the beginning of the reporting period to the combination
date
Gains or losses on contingencies not related to usual operations of the Company
Gains on investment in the fair value of the held-for - trading financial assets, derivative
financial assets, held-for-trading financial liabilities and derivative financial liabilities
held by the Company and investment income from disposal of held-for-trading
financial assets, derivative financial assets, held-for-trading financial liabilities,
derivative financial liabilities and other debt investments other than the valid hedging
services related to the normal operating activities of the Company
Reversal of impairment provisions on receivables and contract assets tested for
impairment individually	3,227,316.09

12 China Aluminum International Engineering Corporation Limited

SECTION 2 COMPANY PROFILE AND KEY FINANCIAL INDICATORS

Non-recurring Profit or Loss		Amount

Gain or loss on entrusted loans
Gain or loss on changes in the fair value of investment property subsequently measured
at fair value
Impact of non-off adjustments to current P&L as required by taxation and accounting
laws and regulations
Trustee fee income from entrusted operations
Other non-operating revenue and expenses other than above items	37,350,222.60
Other items falling within the definition of non-recurring gain or loss
Impact of non-controlling interests	-7,767,184.92
Impact of income tax	-16,033,981.54
Total	57,413,162.33

X. OTHER INFORMATION

□Applicable ✓Not applicable

Interim Report 2020 13

SECTION 3 CHAIRMAN'S STATEMENT

Dear shareholders,

At the beginning of the year, the economy of the PRC and the world took a huge blow due to the sudden outbreak of COVID-19 epidemic. As a market entity, the Company could not stand aloof and was exposed to unprecedented pressure. In face of the dual pressure from epidemic prevention and control, as well as production and operation, the Company firmly put forward the general keynote of "two guarantees" and "two constants". The Company constantly fulfilled its social responsibilities amidst the epidemic, and insisted on putting employees' life safety and physical health first. For 14,000 employees and over 40,000 labors of the Company at home and abroad, none of them were infected. The entire company actively participated in the "fight" against the epidemic, and the Zhuhai Branch of Changkan Institute actively participated in the construction of the Phoenix Mountain Ward of the Fifth Affiliated Hospital of Sun Yat-sen University in Zhuhai and completed the geological survey report within three days. The Company coordinated the resumption of operation and production while conducting epidemic prevention and control, and the construction in progress should be resumed by the end of March, which was acknowledged by property owners and various parties in the society. Our production and operation were faced with tough challenges, but then gradually returned to normal, showing strong resilience.

Currently, the epidemic in the PRC is basically under control, major strategic results have been achieved, and the economy has shown a steady improvement. However, the epidemic is still spreading worldwide and the world economy is still severely challenged and complex. As a result, we will continue to be cautious and do a good job of normalizing the epidemic prevention and control on one hand, and ride on the momentum and enhance confidence, thereby striving to make up for the losses caused by the epidemic. In the second half of the year, the Company's management will consolidate the efforts of all employees, recognize the situation, and spread the sense of unity. Moreover, the management will cultivate new opportunities while facing the crisis, create a new situation amidst changes, adhere to the new concept of high-quality development, transform development momentum, insist on intensive development and refined management, strengthen and establish a market- oriented business philosophy and strengthen the R&D and innovation on the Company's core technology. We will promote stable growth with improved quality and enhanced efficiency, do a good job in preventing and resolving risks, cope with challenges, seek advantages and avoid disadvantages, overcome difficulties, so as to complete our annual objectives with tremendous efforts and strive for the goal of building a first-class nonferrous metal engineering and technology company.

Chairman

WU Jianqiang

14 China Aluminum International Engineering Corporation Limited

SECTION 4 BUSINESS REVIEW

DESCRIPTION OF PRINCIPAL BUSINESS AND OPERATION MODES OF THE COMPANY AND INDUSTRY OVERVIEW FOR THE REPORTING PERIOD
1. Principal business and operation modes
  The Company is a leading technology, engineering service and equipment provider in the nonferrous metals industry in China, capable of providing full business-chain integrated engineering solutions for various stages in nonferrous metals industry chain and other industries. The Company's businesses mainly include engineering design and consultancy, engineering and construction contracting, equipment manufacturing and equipment trading. In the first half of 2020, the Company continued to be among the China's Fortune 500 in 2020; meanwhile, in the 2020 "TOP 150 GLOBAL DESIGN FIRMS" and "TOP 225 INTERNATIONAL DESIGN FIRMS" announced by the Engineering News- Record (ENR) Magazine in the US, the Company was shortlisted again and ranked at 94th and 163rd, respectively.
2. 1. Engineering design and consultancy business
    Engineering design and consultancy is the Company's traditional key business, covering mining, ore dressing, smelting and processing in the non-ferrous metal industry, geological survey and building construction in the construction industry, as well as engineering design in energy, chemical and environmental protection, etc. The Company's main customers are non-ferrous metal smelting and processing enterprises, and employers in construction and other industries. The Company's technicians have expertise in over 40 professional fields such as process design, equipment design, electrical automation, general layout and transportation design, civil engineering, public facilities construction, environmental protection, project budget and technical economy, and have provided engineering design and consultancy services for over 2,000 key construction projects of the state and various industries as well as over 100 overseas projects.
  2. Engineering and construction contracting business
    The Company's engineering and construction contracting business covers metallurgy industry, housing construction, highways, building materials, electricity, water conservancy, chemical industry, mining, municipal utilities, steel structure and other fields. The Company adopts a couple of engineering and construction contracting business modes, including EPC, EP, PC and project management contract. Meanwhile, the Company is exploring other engineering contracting modes such as PPP. With its technology and experience, the Company has established a leading position in China's non-ferrous metal industry, particularly in the aluminum contracting industry. In recent years, the Company has undertaken many large-scale EPC projects at home and abroad.

Interim Report 2020 15

SECTION 4 BUSINESS REVIEW

Equipment manufacturing business
Equipment manufacturing is a high-tech industry that the Company develops vigorously. The Company insists on independent technological innovation, and focuses on research and development of new process, new technologies, advanced materials and new equipment of non-ferrous metal, leading the direction of technology development of China's non-ferrous metal industry. The Company's equipment manufacturing segment mainly provide customized core metallurgical and processing equipment, environmental protection equipment, mechanical and electronic equipment, industrial automation systems and mine safety monitoring and emergency response intelligent systems. The Company's products are used in many areas in the non-ferrous metal industry chain, including mining, ore dressing, smelting and metal material processing. The Company is a leading manufacturer of non-ferrous metal rolling mills in China.
Trading business
Since 2013, under the guidance of relevant diversification strategy, in order to strengthen cost and risk control, the Company has adopted a centralized procurement approach, while appropriately adjusting and broadening its business scope. In establishing the centralized procurement platform, the Company has expanded the equipment and raw material trading business related to its principal operations, which is managed largely by China Aluminum Equipment.

16 China Aluminum International Engineering Corporation Limited

SECTION 4 BUSINESS REVIEW

Specific business models for engineering design and consultancy, and engineering and construction contracting
The Company has long being engaged in survey, design and project contracting in the non-ferrous metal field. With technological innovation and industrialization as its core competitiveness, the Company has its business covering engineering survey and design and consultancy, engineering and construction, equipment manufacturing, trade and other fields, and has established a business model covering full industrial chain of "investment and financing-planning-design-engineering construction asset operation/industrial service". Among them, the engineering and construction contracting business covers metallurgical industry, housing construction, highways and other fields, and adopts various business modes such as construction contracting and general engineering contracting (including EPC, EP, PC, etc.), of which the traditional construction contracting business, as a main business mode, accounts for 83% and 7% in EPC; By financing mode, investment, finance and construction accounts for 10%.
1. The Company's engineering design and consultancy business involves compiling relevant technical data and provide technical services based on the engagement of owners, and to carry out engineering consultancy, design and survey service according to the design consultation process to ensure compliance with the requirements stipulated in the contract. Rights and obligations: based on the true and accurate basic information provided by the owner, we have the obligation to provide qualified technical products as agreed in the contract, and also have the right to collect service fees in a timely manner as agreed in the contract. Pricing mechanism: service fees are charged generally by reference to national fee rates for engineering survey and market conditions and based to specific conditions such as the complexity of the project. Relying on the Company's technical advantages in the non-ferrous metallurgy industry, this business brings a higher profit margin compared with engineering construction projects. As to payment terms in the contract, usually an advance payment of about 10%-20% is required, and the remaining amount is paid in installments according to the amount of work completed (as for engineering design business) or settled in full upon delivery of the consultation report (as for engineering consultancy business). The Company bears the risks associated with product design quality and progress pursuant to the contract. This business segment does not involve financing.

Interim Report 2020 17

SECTION 4 BUSINESS REVIEW

The Company's engineering and construction contracting business covers metallurgical industry, housing construction, highways, mines, municipal utilities and other fields. The Company adopts a number of business modes, including traditional contracting, EPC (including EP and PC), and investment-finance-build (including PPP), etc. Risks: Under the traditional contracting mode, the Company acts as a contractor and is responsible for project construction and equipment installation; Under EPC mode, the Company takes charge of the whole design process, procurement of materials and equipment, construction, equipment installation and testing, and is liable to the proprietor for the quality, safety, on-time delivery and cost of the project. The main risk for the Company involves material difference not higher than a certain rate as agreed in the contract, while the proprietor assumes compliance risks of the project and ensures the availability of project funds; Under PC mode, the Company undertakes the procurement and construction of the project according to the contract, and is liable for the quality, safety, progress and cost of the project. Pricing: through participating in competitive bidding, the Company will conduct detailed research on the proposed project in preparing the bid. Specifically, based on onsite visit as well as technical conditions, commercial conditions and other bidding regulations, the Company calculates the cost of items in the bill of quantities, and then adds proposed gross profit at a certain percentage to get the bid price. Payment collection: mainly project progress payments, settled and collected according to the monthly progress or milestones, and advance payment (if any) is collected according to the contract.
According to the direction of national policies, the Company has chosen to undertake some PPP investment-finance-build projects. Risks: Under PPP mode, the Company, as the general contractor and non-government equity investor of the project, mainly undertakes engineering construction and shares operational risks of the project with the government, while the government mainly bears compliance risk and land acquisition and relocation risks. Finance: Under PPP mode, in addition to capital injected by all equity investors, project loans represent a major source of funds for the project. Payment collection: Under PPP mode, the Company, as the general contractor and non-government equity investor of the project, has different sources of income during the construction period and the operation period. During the construction period, income mainly comes from progress payments made by the project company, while during the operation period, income mainly comes from fees paid by users and feasibility gap subsidy from the government. Pricing: Under PPP mode, the pricing is mainly to determine the rate of return on non-governmental investment (including financing), including the annual discount rate and reasonable profit margin, and the government determines the non- governmental investor through public tender. Profit: under PPP mode, the Company, as both an investor and a project contractor, mainly generates profits from construction during the construction period, and from feasibility gap subsidy from the government during the operation period. Rights and obligations: Under PPP mode, the Company has the right of construction during the construction period, and the right to collect fees from users and feasibility gap subsidies from the government as agreed in the contract during the operation period, and the obligation to ensure successful completion and usual operation of the project.

18 China Aluminum International Engineering Corporation Limited

SECTION 4 BUSINESS REVIEW

(III) Industry Overview

As of the end of June 2020, the total electrolytic aluminum production capacity of the PRC was 41.155 million tons per year, representing a year-on-year increase of 3%. The operating capacity was 36.914 million tons per year, representing a year-on-year increase of 1.19%. In the first quarter, due to the impact of the epidemic, the construction efficiency of new projects declined, the completion of production capacity and production commencement were delayed, and the plunge of aluminum prices also caused certain companies to actively arrange maintenance and adjust production. After the second quarter, aluminum prices rebounded sharply, the profitability of the industry continued to increase, and the epidemic in the PRC was effectively controlled, new electrolytic aluminum projects were accelerated and put into production. At the same time, the halted production capacity in the early stage started to resume production, and the operating capacity increased rapidly in the second quarter. The newly invested capacity in the first half of the year was mainly concentrated in southwestern regions such as Yunnan and Sichuan. Driven by the industry's high profit stimulus and local policies, the production of electrolytic aluminum projects will accelerate in the second half of the year, in the third quarter, the performance will be more concentrated. Taking an overview of the nonferrous metal industry, the nonferrous metal industry in the PRC showed a trend of bottoming out and recovering in the first half of the year, and it is expected to maintain a recovering trend in the second half of the year.

In the first half of the year, the growth rate of the construction industry in the PRC was -1.9%, presenting a development trend from low to high. Fixed asset investment decreased by 3.1% year- on-year, of which investment in infrastructure decreased by 2.7% year-on-year. In the post-epidemic era, with the implementation of various measures to stabilize growth, the driving effect of economic growth has been significantly enhanced. The development of China's construction industry has passed its peak and has begun to fluctuate with changes in demand and division in the industry. There is still a great vitality in the market in the field of infrastructure and urbanization. Among them, the construction of urban agglomerations that integrate infrastructure and urbanization will become the "main battlefield" for market competition among key construction enterprises.

MATERIAL CHANGES IN MAJOR ASSETS OF THE COMPANY DURING THE REPORTING PERIOD

□Applicable

✔Not applicable

Interim Report 2020 19

SECTION 4 BUSINESS REVIEW

III. ANALYSIS OF CORE COMPETITIVENESS FOR THE REPORTING PERIOD

✔Applicable

□Not applicable

Strong technological and R&D strength
The Group has four design and research institutes with rich history in the nonferrous metal industry, including SAMI, Guiyang Institute, Changsha Institute, and CNPT that took over Luoyang Institute's assets and business, as well as two survey and design institutes, namely Changkan Institute and Kunming Survey and Design Institute, which can provide its clients with full nonferrous metal industrial-chain technological support and service. As of 30 June 2020, the Group accumulated 6 national-level innovation research platforms, with its provincial-level innovation platforms and engineering laboratories increased to 16, and had 2 national-level corporate post-doctoral scientific research stations, and there were around 140 national and industrial standards or regulations wholly or partly formulated by the Group. The Group completed 137 domestic patent applications in the then year, of which 50% were invention patents. It obtained 86 domestic authorized patents and 4 international patents, which accumulated to 171.
In the first half of 2020, two achievements of the Group, including "high-humidity flue gas waste recycle and deep dust removal, desulfurization and denitrification integrated technology"「( 高濕煙氣餘熱回收利用與深度除塵脫硫脫硝一體化技術」), have completed the industry's technical achievement evaluation and reached the international advanced level. The project of "Accurately Obtaining Shear Strength of Rock Mass Structure Surface and Evaluation of Slope Stability in Open-pit Mines"《( 露天礦山岩體結構面抗剪強度精確獲取與邊坡穩定性評價》) participated by Kunming Survey and Design Institute was awarded with the special prize of the Science and Technology Progress Award of Rock Mechanics and Engineering Society in Zhejiang Province (浙江省岩石力學與工程學會科技進步獎特等獎). SAMI's invention patent, "low-temperature sintering of a retort furnace"「( 一種罐式爐低溫煆燒工藝」), won the third place of the first Liaoning Provincial Patent Award (遼寧省專利獎). The national key R&D project, "Research and Development of Key Technologies and Platforms for Refined Control of Nonferrous Metal Smelting Processes and Network Collaborative Manufacturing" 《( 面向有色金屬冶煉流程精細管控的網絡協同製造關鍵技術與平台研發》), led by Changsha Institute and the national key R&D plan, "Intensive Utilization and Demonstration of Multiple Sources of Inorganic Solid Waste in Typical City Clusters in the Middle Reaches of the Yangtze River"《( 長江中游典型城市群多源無機固廢集約利用及示範》), participated by Changsha Institute were approved, while the project, "Research on the Mechanism of Oxygen Pressure Leaching of Bismuth Sulfide Concentrate and the Law of Mineral Phase Transformation" 《( 硫化鉍精礦氧壓浸出機理與礦相轉化規律研究》) led by Changsha Institute was approved for the first time by the Hunan Provincial Natural Science Youth Fund (湖南省自然科學青年基金) in 2020.

20 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

OPERATING RESULTS DISCUSSION AND ANALYSIS

Business overview in the first half of 2020

In the first half of 2020, the Group achieved operating income of RMB9.947 billion, representing a year-on- year decrease of RMB3.57 billion or 26.41%. Net profit attributable to shareholders of the listed company was RMB-143 million, representing a year-on-year decrease of RMB153 million. The operating loss for the first half of the year was mainly due to:

as affected by the COVID-19 epidemic, the Company's engineering projects were basically suspended from January to February, and construction began at the end of March. The Company actively promoted the resumption of work and production, and accelerated the progress of construction. The Company strived to improve its production and operation, but the overall operating income in the first half of the year still presented a significant year-on-year decline.

Under the adverse situation of the epidemic, property owners were tight on funds, and the original collection plan for the first half of the year was delayed, and the credit impairment losses accrued during the reporting period increased year-on-year.

Business overview in the first half of the year
In the first half of 2020, in face of the pressure of prevention and control of the COVID-19 epidemic and the challenging production and operation environment, the Company carried out various tasks steadily in accordance with the idea of "to strictly administrate the party in an all-round way, to highlight production and operation, to address and solve historical problems, to reform and adjust". Through concerted efforts, tenacious hard work and rising up to challenges, the Company's epidemic prevention and control, as well as production and operation proceeded smoothly.
1. Epidemic prevention and control
The Company closely followed the changes in the epidemic, and established a three- level epidemic prevention and control and work and production resumption system for its headquarters, members and project frontlines. The Company put forward the overall work requirements of "two guarantees", that is, to ensure the life safety, physical health, and work safety of all employees, and to ensure that the project is carried out smoothly as planned, to devote efforts rapidly, and "two constants", that is, the annual target and task remain unchanged, and the assessment indicators for each subsidiary remain unchanged, thereby coordinating and pushing forward epidemic prevention and control and work and production resumption work. The Company actively procured and reserved epidemic prevention materials

Interim Report 2020 21

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

and strictly implemented prevention and control measures. Party organizations at all levels, "Party Vanguards", "Party Commandos" and "Young Volunteers" played the main role in epidemic prevention and control. The Company actively participated in the fight against the epidemic, and the Zhuhai Branch of the Changkan Institute completed and submitted the investigation report of Phoenix Mountain Ward of the Fifth Affiliated Hospital of Sun Yat-sen University, "Huoshenshan" in Zhuhai within 3 days. In response to the increasingly severe overseas epidemic status, the Company paid close attention to the life safety of overseas personnel, dynamically adjusted the emergency plan, purchased personal accident insurance for all overseas employees, and promptly solved the problems of overseas employees' families to mitigate their worries.

None of the 830 employees and overseas employees of the Company in 11 overseas countries, nor 14,000 employees and more than 40,000 labors in the PRC were infected. The construction in progress which should be resumed, resumed in full by the end of March, which was recognized by the owners and parties, and was promoted by media outlets such as the official website of the SASAC of the State Council, Beijing Television Station, China Nonferrous Metals News, etc.

2. Project construction

In such trying times, it is important to improve the quality of services provided to owners, walk in their shoes and meet their urgent needs. The Company tracked and guided key projects every week, and managers at all levels directed and solved problems in a timely manner. The Huasheng, Wenshan, Heqing, Zhaotong and Guinea projects undertaken by the Company progressed smoothly, the Yunnan highway project commenced construction in full swing and has entered its peak construction period. A number of projects won the recognition of the owners, and numerous letters of appreciation were given by the owners of projects, such as Bofa Guinea and Wenshan Aluminum, and highly praised the organizational ability and brand image of the Company's project management.

22 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Market expansion
In the first half of the year, the value of new contracts of the Company amounted to RMB18.258 billion, which was basically the same as that of the same period last year. The Company actively promoted the overseas market, and newly signed overseas contracts amounted to RMB4.563 billion, which was 2 times of that of the same period last year. In January, the Company signed an EPC contract for 1 million tons of alumina in Manpa, West Kalimantan, Indonesia, and was responsible for the implementation of the contract amount of approximately RMB3.7 billion. As one of the breakthroughs in the Company's business transformation, the aluminum application business has made new progress in the development of the aluminum application market, and obtained a number of aluminum contracts for engineering purposes, such as the first large- diameter special-shaped aluminum alloy reticulated shell structure project in the PRC. In the first half of the year, the contract amount of aluminum application reached RMB142 million. The green aluminum application demonstration city construction and ancillary project in Qujing is actively progressing. The green aluminum application demonstration street project in Nanping Street, Kunming is progressing smoothly, and 2 contracts, including the "Commercial facilities in the Night Market" were entered into. Although the amount of certain contracts was insignificant, the demonstration effect was obvious, and the subsequent market potential is large.
Quality improvement and efficiency enhancement
In view of the practical difficulties in production and operation, the Company studied and formulated a special work plan for quality improvement and efficiency enhancement to promote the overall improvement of management level. The Company established a centralized procurement system, carried out benchmarking among enterprises, thereby reducing procurement costs, with a year-on-year decrease of 3% in centralized procurement in the first half of the year. The financing structure was adjusted. The financing scale of the Company decreased by RMB2.1 billion from the beginning of the year, and the financing cost decreased by 30 BPs from the beginning of the year. Long-term capital financing has been increased, and the financing structure has become more healthy and stable. The Company actively strived for preferential policies and tax reductions of more than RMB90 million.

Interim Report 2020 23

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Major risk mitigation
Focusing on the key points, the Company paid close attention to project settlement, further improved the settlement rate of projects under construction, and completed the phased control target. For projects with historical problems, the Company has set up a special working group to mitigate relevant risks through case analysis and various measures, such as debt repayment with assets, assets seizure, the launching of auction and equity transfer. Meanwhile, the Company actively devoted efforts to corporate governance and compliance management, which improved its relevant systems, and established a long-term mechanism for internal control and compliance management.
Deepening reform
Deepening reform is an important measure to achieve high-quality development and transformation and upgrading. The Company is committed to promoting the market-oriented reform of members and improving its independent innovation capability. Changsha Institute was successfully selected as a "Demonstration Enterprise on Scientific Reform" by the State Council. The Company established the Engineering Cost Technology Center in order to provide technical support to the Company to carry out engineering consulting business in the future. Companies such as, Sixth Metallurgical Company, Guiyang Institute, etc., carried out institutional reform to compress management departments and improve management efficiency.
Technological innovation
Innovation has always been an important force for the development of an enterprise, and technology is the profit driver of an enterprise. In the first half of the year, the Company applied for 137 patents, of which invention patents accounted for 50%, and was granted 86 patents. LIU Wenlian of Kunming Survey and Design Institute was elected as a "National Engineering Survey and Design Master" by the Ministry of Housing and Urban-Rural Development. Tong Yizhe of Changsha Institute was awarded the "Outstanding Young Engineer Award" by the China Nonferrous Metals Society. Six additional individuals were entitled to the special government allowance of the State Council. Five individuals were the "Chief Engineer" of Chinalco. National standards such as the "Design Standards for Waste Heat Utilization in the Non-ferrous Metal Industry" compiled by the members of the Company were officially published. A number of projects were awarded the China Nonferrous Metals Industry (ministerial-level) Quality Engineering Award. One project participated by Kunming Survey and Design Institute was awarded the Special Prize of the Provincial Science and Technology Progress Award; one project of SAMI was awarded the first Liaoning Province Patent Award; and two achievements reached the international advanced level.

24 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Business outlook for the second half of the year
In face of the impact and challenges brought by the COVID-19 epidemic, the Company will identify the situation, adopt unified ideas, adjust thinking, and strive to complete the Company's annual target. In the second half of the year, the Company will focus on "two guarantees" and "two constants", deepen reform, refine management, adopt comprehensive benchmark, identify differences, solve problems, make up for shortcomings, achieve stable and long-term development, and promote the Company to a positive development track.
1. To pay close attention to epidemic prevention and control, as well as safe production
  The Group will continue to do a good job in epidemic prevention and control, and will always keep the normalized epidemic prevention and control in mind. Moreover, it will strictly implement various prevention and control measures, conduct risk prevention and control investigations, and implement the responsibility and requirements of prevention and control. Meanwhile, the Company will pay close attention to safety and environmental protection work, carry out the "Three-Year Action Plan for Special Rectification of Safety Production" firmly, strengthen the investigation and management of safety and environmental risks and hidden dangers, deepen the hierarchical risk management and control, focus on organizing safety management training at construction sites to ensure intrinsic safety, and do a good job in environmental protection design and clean and civilized construction of the project, thereby protecting the waters and mountains.
2. To keep a close eye on market expansion
  In accordance with the "4+1" business development direction, the Company will take the initiative to expand the results of project acquisition, focus on nonferrous metallurgy and chemical engineering, municipal administration and expansion of aluminum application, and closely track the progress of proposed major projects. Municipal projects will leverage their regional advantages to assert dominance. The Group will strive for breakthroughs in projects such as Qujing, Kunming Aluminum Application and the "Mid-Levels Hotel in Great Dianxi Tourist Circle". The Company will take the optimization of design as the lead, give full play to the synergy advantages of design and construction, and strive for the implementation of relevant projects in the nonferrous industry.

Interim Report 2020 25

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

To pay close attention to quality and efficiency improvement
In the second half of the year, the Company will continue to improve quality and efficiency, broaden the sources of income and reduce expenditure in accordance with the predetermined annual work objectives. It will improve the efficiency level, and ensure the normal and orderly production and operation by focusing on its current operation. The Company will pay close attention to its key links such as the implementation rate of newly signed contracts, the conversion rate of contracts under construction and project settlement, and focus on the management of progress, quality, cost and safety from the source of production, so as to promote the construction and completion settlement of key projects such as Huasheng, Wenshan, Zhaotong, Yunnan highway and Baiyinhua with premium quality. Furthermore, the Group will strengthen communication and coordination with property owners and actively promote overseas projects in Indonesia and Italy.
To focus on deepening the reform
Reforming is the key to realizing the breakthrough of the Company. The Company will make changes to its mechanism to achieve better marketization, and shift from depending on development through expansion to intensive development. The focus of reform is to solve the "two problems": firstly, to solve the problem regarding responsibility, rights, and benefits, and to streamline the relationship between the headquarters of the Company and its members; secondly, to solve the problem of vitality, and mobilize the enthusiasm, creativity and initiative of employees to participate in the reform and development. The Company will specifically focus on four key aspects: firstly, to accurately position the relationship between the headquarters of the Company and its members; secondly, to improve the management and control of the headquarters; thirdly, to improve the institutional system; fourthly, to explore and establish a sound market-oriented incentive mechanism.
To pay close attention to technical support
The Company will take technological innovation as the key to intensive development, and strive for technological innovation to make up for its shortcomings and overcome its weaknesses. Firstly, we shall shift our focus back to technology. The Company will guide the design institutes to focus on technology and implement special scientific research to solve difficulties, pain points and key points in the production and operation practices of nonferrous metal industry and its related industries; it will focus on building project teams for major breakthroughs and the cultivation of persons-in-charge, build a technical talent pool for the Company, and build a sound and influential team of leading talents in the industry. Secondly, we shall focus on market orientation. With market demand as the direction, and on the premise of creating value, the Company will take the enterprise as the main body to force technological progress and technological innovation under market pressure. Thirdly, we shall focus on technology synergy. The Company will strengthen its scientific and technological management, effectively exert collaborative functions, continuously summarize and improve similar technologies, thereby realizing modular upgrading and application.

26 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

To focus on refined management
The Company will take refined management as the focus of intensive development. Based on the rule of law and compliance management, the Company will focus on risk prevention and control, and create value through refined management to enhance its core competitiveness. The Company will implement the requirements of relevant laws and regulations and strictly implement the negative list of production and operation of Chalieco. The Company will strictly implement the "two systems" of project, further improve the relevant systems, clarify the responsibilities, rights and benefits of project managers, strictly implement the reward and punishment system, and focus on the management of progress, quality, cost and safety from the source of production to ensure the efficient performance of projects. The Company will strengthen internal coordination, actively establish a "One-for-all" mechanism, improve the mechanism of information sharing, business transfer and technical cooperation for market-oriented projects among members, exhibit synergistic effect and strive to enhance competitiveness; the Company will optimize regional operations, promote multi-party cooperation, establish strong brand effect and build a solid base. The "best practices" of project construction will be summarized in a timely manner to solidify the experience and transform the concept of refinement into the specific action of employees.
To closely monitor the preparation of plan
The Company will prepare the "14th Five-Year" development plan in a scientific manner, which concerns the development of the Company in the next five years or even a longer period, so as to maintain the stability and long-term development of the Company in the future. The Company will prepare plans with high quality and high standards, and draw a blueprint for development. In addition, it will keep abreast of leading peers. By keeping abreast of leading peers, the Company will be able to identify differences, areas of weakness and potential; by analyzing reasons, the Company will be able to identify ways and measures; by forming comparative advantages, the Company will be able to strengthen management, improve efficiency and enhance strength. The Company will clearly define its strategic positioning and carefully study its strategic positioning on the basis of comprehensive benchmarking and identification of the current status of the Company and in accordance with the requirements of intensive development. The Company will facilitate the implementation of strategies, continue to adhere to the "technology + going international" strategy, and implement two-wheel drive of technology and going international.

Interim Report 2020 27

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Contracts
From January to June 2020, the Company entered into 2,796 contracts in total, the total amount of which was RMB18.258 billion. Details are as follows:

	From January to June 2020
Type of Contracts	Number	Amount
		(RMB100 million)

Engineering survey, design and consultancy	2,030	11.73
Engineering
construction Industrial projects	323	87.48
Civil buildings	144	67.44
Highways and municipal works	28	12.03
Equipment manufacturing	271	3.89

Total	2,796	182.58

As of 30 June 2020, the amount of uncompleted contracts of the Company was RMB66.673 billion. Details are as follows:

	As of 30 June 2020
Type of Contracts	Number	Amount
		(RMB100 million)

Engineering survey, design and consultancy	3,800	24.47
Engineering
construction Industrial projects	687	183.06
Civil buildings	462	238.35
Highways and municipal works	142	206.12
Equipment manufacturing	512	14.73

Total	5,603	666.73

28 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

(IV) Operation results and discussion

In the first half of 2020, the Group achieved operating income of RMB9.947 billion, representing a year-on-year decrease of RMB3.57 billion or 26.41%. Net profit attributable to shareholders of the listed company was RMB-143 million, representing a year-on-year decrease of RMB153 million. The Group's results suffered a loss in the first half of the year. The main analysis is as follows:

Operating revenue

In the first half of 2020, the Group achieved operating revenue of RMB9.947 billion, representing a decrease of RMB3.57 billion or 26.41% as compared with the same period of last year. Such decrease was mainly due to the impact of the COVID-19 epidemic. The Company's engineering projects were basically suspended from January to February, and constructions successively resumed at the end of March. The Company actively promoted the resumption of work and production and speeded up the construction progress. However, the overall operating revenue for the first half of the year still presented a significant year-on-year decline.

Operating cost

The Group's operating cost for the first half of 2020 was RMB9.017 billion, representing a decrease of RMB3.278 billion or 26.66% as compared with the same period of last year, mainly due to the decrease in operating cost along with the decrease in revenue.

Tax and surcharge

The Group's tax and surcharge for the first half of 2020 was RMB46 million, representing a decrease of RMB5 million as compared with the same period of last year. Such decrease was mainly due to the decrease in tax and surcharge along with the decrease in revenue in the current period.

Sales expense

The Group's sales expense for the first half of 2020 was RMB44 million, representing a decrease of RMB7 million as compared with the same period of last year. Such decrease was mainly due to the decrease in travel expense of sales personnel attributable to the impact of the epidemic.

Administrative expense

The Group's administrative expense for the first half of 2020 was RMB465 million, representing a decrease of RMB61 million as compared with the same period of last year. Such decrease was mainly due to the fact that the Company actively strived for preferential policies for the epidemic in the first half of the year, strived for social security exemptions, job stabilization and epidemic prevention subsidies and other preferential exemptions, as a result, the administrative expense decreased during the reporting period.

Interim Report 2020 29

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

R&D expense

The Group's R&D expense for the first half of 2020 was RMB163 million, representing a decrease of RMB11 million as compared with the same period of last year. The Company continued to invest in scientific and technological research during the reporting period, and R&D expense remained at the original scale.

Financial expense

The Group's financial expense for the first half of 2020 was RMB243 million, representing a decrease of RMB19 million as compared with the same period of last year. Such decrease was mainly due to the fact that the Company made full use of the relatively loose financial policy to adjust its structure, lowered loan interest rates, and controlled the scale of financing during the reporting period, as a result, the financing cost in the first half of the year decreased.

Credit impairment loss

The Group's credit impairment loss for the first half of 2020 was RMB89 million, representing an increase of RMB54 million as compared with the same period of last year. Such increase was mainly due to the tight funds of property owners under the unfavorable situation derived from the epidemic, and the original collection plan for the first half of the year was delayed, as a result, the credit impairment loss accrued during the reporting period increased year-on-year.

Net non-operating income and expenditure

The Group's net non-operating income and expenditure for the first half of 2020 was RMB36 million, representing an increase of RMB49 million as compared with the same period of last year. Such increase was mainly due to the non-operating income transferred from certain outstanding payables upon approval during the reporting period.

Income tax expense

The Group's income tax expense for the first half of 2020 was RMB25 million, representing an increase of RMB6 million as compared with the same period of last year. Such increase was mainly due to the slight increase in income tax expense as a result of the increase in the profits of certain subsidiaries.

30 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Principal business by sectors and regions

					Unit: Yuan Currency: RMB
		Principal business by sector
				YoY	YoY
				change of	change of	YoY
	Operating	Operating	Gross	operating	operating	change of
By sector	revenue	cost	margin	revenue	cost	gross margin
			(%)	(%)	(%)	(%)

Engineering design and						Down by 3.15
consultancy	1,110,576,747.62	871,418,134.87	21.53	-10.07	-6.31	percentage points
Engineering and construction						Down by 0.35
contracting	7,337,792,645.93	6,706,852,063.54	8.60	-14.43	-14.10	percentage points
						Down by 3.43
Equipment manufacturing	567,798,357.16	520,629,387.20	8.31	-18.64	-15.47	percentage points
						Down by 0.83
Trading	1,442,293,018.78	1,420,607,003.05	1.50	-53.49	-53.10	percentage points
Inter-segment elimination	-511,850,306.99	-502,499,926.06		-		-

						Up by 0.31
Total	9,946,610,462.50	9,017,006,662.60	9.35	-26.41	-26.66	percentage point

Engineering design and consultancy segment (before elimination of inter-segment transactions)
Unit: Yuan Currency: RMB

	The reporting	The corresponding
Item	period	period of last year	Growth rate
			(%)

Operating revenue	1,110,576,747.62	1,234,885,767.19	-10.07
Operating cost	871,418,134.87	930,097,930.49	-6.31
Gross profit	239,158,612.75	304,787,836.70	-21.53
			Down by 3.15
Gross margin (%)	21.53	24.68	percentage points
Sales expense	4,095,292.25	3,434,872.35	19.23
Administrative and R&D expense	157,141,349.03	215,103,483.14	-26.95
Total profit	7,075,126.22	6,851,866.94	3.26

Interim Report 2020 31

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

The Company's engineering design and consulting segment achieved revenue of RMB1,110.5767 million during the reporting period, representing a year-on-year decrease of 10.07%. Such decrease was mainly due to the impact of the COVID-19 epidemic, the operating condition of the nonferrous metal industry was greatly affected, and the number of design consulting business orders decreased, as a result, the revenue declined. Gross margin of this segment was 21.53%, representing a year-on-year decrease of 3.15%, mainly due to the decrease in revenue, and expenses such as labor costs were relatively fixed, resulting in the decrease in gross profit margin.

During the reporting period, the engineering design and consultancy segment realized total profit of RMB7.0751 million, representing a year-on-year increase of 3.26%, mainly due to the decrease in revenue of this segment, while the Company strived for social security exemptions, job stabilization/epidemic prevention subsidies, as a result, expense for the period decreased, and total revenue remained the same as compared to that of the corresponding period of last year.

Engineering and construction contracting segment (before elimination of inter-segment transactions)

		Unit: Yuan Currency: RMB
	The reporting	The corresponding
Item	period	period of last year	Growth rate
			(%)

Operating revenue	7,337,792,645.93	8,574,832,181.13	-14.43
Operating cost	6,706,852,063.54	7,807,593,489.84	-14.10
Gross profit	630,940,582.39	767,238,691.29	-17.76
			Down by 0.35
Gross margin (%)	8.60	8.95	percentage point
Sales expense	29,603,896.17	32,399,250.14	-8.63
Administrative and R&D expense	403,647,019.92	388,481,976.59	3.90
Total profit	-18,023,639.49	82,689,790.73	N/A

The Company's engineering and construction contracting business revenue in the first half of the year was RMB7,337.7926 million, representing a year-on-year decrease of 14.43%. Such decrease was mainly due to the impact of the epidemic, engineering construction projects were basically suspended from late January to February. Moreover, overseas projects were subject to the policies of countries where the projects were located, therefore we were unable to travel to the construction sites. Since the end of March, the Company has successively resumed work and production, but the revenue of this segment still decreased significantly in the first half of the year. The gross profit margin of engineering and construction segment in the first half of the year was 8.6%, representing a slight decrease as compared to that of the corresponding period of last year, mainly due to the sluggish progress of key projects with higher gross profit margin as a result of the impact of the epidemic.

32 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

During the reporting period, the engineering and construction contracting segment recorded total profit of RMB-18.0236 million, representing a loss. Such decrease was mainly due to the greater decline in revenue of this segment and the decrease in gross profit; meanwhile, the credit impairment loss accrued in this business segment during the period increased year-on- year.

Equipment manufacturing business (before elimination of inter-segment transactions)

		Unit: Yuan Currency: RMB
	The reporting	The corresponding
Item	period	period of last year	Growth rate
			(%)

Operating revenue	567,798,357.16	697,894,715.98	-18.64
Operating cost	520,629,387.20	615,933,338.67	-15.47
Gross profit	47,168,969.96	81,961,377.31	-42.45
			Down by 3.43
Gross margin (%)	8.31	11.74	percentage points
Sales expense	6,383,807.94	10,294,955.65	-37.99
Administrative and R&D expense	64,689,954.27	87,312,191.30	-25.91
Total profit	-37,812,282.34	-36,768,736.31	-2.84

The Company's equipment manufacturing business revenue in the first half of the year was RMB567.7984 million, representing a year-on-year decrease of 18.64%. Such increase was mainly due to the significant decrease in the number of orders for this segment in the first half of the year as affected by the downturn of the nonferrous metal industry and a significant decrease in revenue scale. The gross profit margin of this segment in the first half of the year was 8.31%, representing a year-on-year decrease of 3.44 percentage points, mainly due to the decrease in revenue of this segment, while costs such as labor costs and equipment depreciation were relatively fixed, resulting in the significant decrease in gross profit margin.

During the reporting period, the equipment manufacturing business recorded total profit of RMB- 37.8123 million, representing a year-on-year decrease of 2.84% as compared with last year. Such decrease was mainly due to the loss incurred by this segment during the reporting period as a result of the significant decrease in revenue.

Interim Report 2020 33

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Trading business (before elimination of inter-segment transactions)

		Unit: Yuan Currency: RMB
	The reporting	The corresponding
Item	period	period of last year	Growth rate
			(%)

Operating revenue	1,442,293,018.78	3,100,922,534.92	-53.49
Operating cost	1,420,607,003.05	3,028,721,113.88	-53.10
Gross profit	21,686,015.73	72,201,421.04	-69.96
			Down by 0.83
Gross margin (%)	1.50	2.33	percentage points
Sales expense	4,041,774.53	5,004,578.06	-19.24
Administrative and R&D expense	9,394,503.06	12,408,617.33	-24.29
Total profit	-9,687,303.22	52,956,717.54	N/A

In the first half of the year, the Company's trading business segment recognized revenue of RMB1.442293 billion, representing a year-on-year decrease of 53.49%, mainly due to the gradual shift in the direction of the Company's trading business to centralized procurement of internal engineering equipment and the reduction of the original business scale. The gross profit margin of this segment was 1.5% during the reporting period, representing a decrease of 0.83 percentage points as compared with that of last year, mainly due to the reduction in revenue and the decrease in gross profit.

During the reporting period, the Company's total profit generated from trading business was RMB-9.6873 million, representing a loss, mainly due to the substantial decrease in gross profit as a result of the decline in revenue in the first half of the year.

In the first half of 2020, the Company's overall gross profit margin was 9.35%, representing an increase of 0.31 percentage points as compared to that of the corresponding period of last year, mainly due to the Company's gradual reduction in the scale of trading business with lower gross profit margin, and the increase in the proportion of revenue from engineering design and consultancy business and construction business with relatively higher gross profit margin.

34 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

OPERATING OVERVIEW FOR THE REPORTING PERIOD
1. Principal Business Analysis
  1 Analysis of changes in relevant items on financial statements

		Unit: Yuan Currency: RMB
		Amount
	Amount	for the
	for the	corresponding	Change in
Item	current period	period of last year	percentage
			(%)

Operating revenue	9,946,610,462.50	13,516,498,871.86	-26.41
Operating cost	9,017,006,662.60	12,294,555,366.55	-26.66
Sales expense	43,997,237.87	51,133,656.20	-13.96
Administrative expense	465,117,121.96	525,882,396.43	-11.55
Financial expense	242,706,295.60	262,157,109.80	-7.42
R&D expense	162,612,950.76	173,181,873.60	-6.10
Net cash flow from operating activities	-1,566,940,887.41	-1,086,851,099.52	-44.17
Net cash flow from investing activities	-1,637,430,905.77	-144,698,045.66	-1,031.62
Net cash flow from financing activities	-358,889,588.26	998,376,733.75	N/A
Credit impairment loss	-89,070,388.11	-35,528,168.58	150.70

Explanation of reasons for changes in operating revenue: The Company's engineering projects were basically suspended from January to February mainly due to the impact of the COVID-19 epidemic, and constructions resumed successively at the end of March. The Company actively promoted the resumption of work and production and speeded up the construction progress, but the overall operating revenue in the first half of the year still presented a significant year-on- year decline.

Explanation of reasons for changes in operating cost: Due to the decline in revenue.

Explanation of reasons for changes in sales expense: As affected by the epidemic, travel expenses of sales personnel decreased.

Explanation of reasons for changes in administrative expense: The main reason was that the Company actively strived for preferential policies in respect of the epidemic in the first half of the year, and strived for social security exemptions, job stabilization/epidemic prevention subsidies and other preferential exemptions, as a result, administrative expense decreased during the reporting period.

Interim Report 2020 35

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Explanation of reasons for changes in financial expense: The Company made full use of the relatively loose financial policy to adjust its structure, lowered loan interest rates, and controlled the scale of financing during the reporting period, as a result, the financing cost decreased.

Explanation of reasons for changes in R&D expense: The Company continued to invest in scientific and technological research during the reporting period, and R&D expense remained at the original scale.

Explanation of reasons for changes in net cash flow from operating activities: In the first half of the year, on one hand, due to the shortage of funds of property owners, the original collection plan was delayed; on the other hand, due to the government's requirement to speed up the payment for construction of private enterprises, etc., the net cash outflow from operating activities during the reporting period increased year-on-year.

Explanation of reasons for changes in net cash flow from investing activities: All funds during the project construction period were included in the cash outflow from investing activities mainly due to the commencement of construction of the Company's Yunnan Miyu Highway PPP project in the second half of 2019, resulting in bigger year-on-year changes in cash flow from investing activities.

Explanation of reasons for changes in net cash flow from financing activities: Mainly due to the redemption of the USD350 million senior USD perpetual bonds issued at the end of 2016 during the reporting period, and at the same time the government's investment in the PPP project of RMB2.3 billion was received.

Explanation of reasons for changes in credit impairment loss: Mainly due to the increase in expected credit loss accrued in the current period attributable to the shortage of funds of property owners under the adverse situation of the epidemic, and the original collection plan for the first half of the year was delayed.

36 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Other
1. Detailed notes to the major changes in the Company's profits structure or profits sources

□Applicable

✔Not applicable

Liquidity capital and capital resources
As of 30 June 2020, the bank deposit and cash held by the Group amounted to RMB6.063 billion, representing a decrease of RMB3.963 billion as compared with that as at 31 December 2019, primarily due to the acceleration of payment of construction payment in respect of private enterprises and the redemption of the redemption of the RMB350 million senior USD perpetual bonds issued in 2016 for the current period, which resulted in a reduction in total monetary funds.
The sources of the Group's fund are mainly from operating income, bank borrowings and offering bonds. The financing channels varied, and the Group had good records of due repayment performance. Cash held are mainly denominated in RMB and USD and borrowings are mainly carried with fixed interest rates. The Group has formulated strict capital management measures to monitor closely on the liquidity position as well as the position of the financial market in order to stipulate appropriate financial strategy.
As of 30 June 2020, the current assets of the Group, exclusive of bank deposit and cash, amounted to RMB35.508 billion, among which notes receivable, receivables, contract assets, prepayments and other receivables and inventories were RMB14.697 billion, RMB12.599 billion, RMB3.236 billion and RMB3.702 billion, respectively.
As of 30 June 2020, the current liabilities of the Group amounted to RMB32.095 billion, among which bills payable and payables were RMB15.021 billion. As of 30 June 2020, the net current assets of the Group, being the balance between current assets and current liabilities, amounted to RMB9.476 billion, representing a decrease of RMB123 million as compared with that as of 31 December 2019.
As of 30 June 2020, the outstanding borrowings of the Group amounted to RMB14.672 billion, among which short-term borrowings and long-term borrowings due within one year were RMB9.238 billion, ultra short-term financing bills of RMB1 billion, and long-term borrowings was RMB4.436 billion. Total borrowings decreased by RMB1.592 billion as compared with that as of 31 December 2019.
At the end of June 2020, the Group's asset-liability ratio was 68.91%, representing a decrease of 3.6 percentage points as compared with 72.51% at the end of 2019. The Group's asset-liability ratio was calculated based on the ratio of total liabilities to total assets.

Interim Report 2020 37

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

1. Cash flows
  Net cash flows of operating activities. For the six months ended 30 June 2020, net cash outflow generated from operating activities amounted to RMB1.567 billion, representing an increase in outflow of RMB480 million as compared to that of the same period of the previous year, primarily due to the shortage of funds of property owners under the adverse situation of the epidemic in the first half of the year, and the original collection plan was delayed on one hand; on the other hand, due to the government's requirement to speed up the payment for construction of private enterprises, etc. The net cash outflow from operating activities during the reporting period increased year-on-year.
  Net cash flows of investing activities. For the six months ended 30 June 2020, net cash outflow generated from investing activities amounted to RMB1.637 billion, representing an increase of outflow of RMB1.493 billion as compared with the net outflow for the same period of the previous year, primarily due to the act that all funds during the project construction period were included in the cash outflow from investing activities attributable to the commencement of construction of the Company's Yunnan Miyu Highway PPP project, resulting in bigger year-on-year changes in cash flow from investing activities.
  Net cash flows of financing activities. For the six months ended 30 June 2020, net cash generated from our financing activities was net outflow amounted to RMB359 million as compared with the net inflow of RMB998 million for the same period of the previous year, primarily due to the redemption of the USD350 million senior USD perpetual bonds issued at the end of 2016 during the reporting period, and at the same time the principal in relation to Yunnan Miyu Highway PPP project in the amount of RMB2.3 billion was received.
2. Pledge of assets
  As of 30 June 2020, the Group pledged property, plant and equipment, investment property, account receivables and restricted bank deposits of RMB174.6674 million, RMB25.2416 million, RMB474.3769 million and RMB213.6095 million, respectively, to obtain short-term borrowings, long-term borrowings and bills payable of RMB332.7018 million, RMB32.9594 million and RMB625.8344 million, respectively.
3. Contingent liabilities
  As of 30 June 2020, the Group did not have any material contingent liabilities.
Other

□Applicable

✔Not applicable

38 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

(II) Explanation of Material Changes in Profit Caused by Non-principal Business

□Applicable

✔Not applicable

(III) Analysis of Assets and Liabilities

✔Applicable

□Not applicable

1. Assets and liabilities

						Unit: RMB '0000
				Percentage
				in total
		Percentage	Amount at	assets at
		in total	the end of the	the end of the
	Amount at	assets at	corresponding	corresponding
	the end of	the end of	period of	period of	YoY
Item	the period	the period	last year	last year	change	Explanation
		(%)		(%)	(%)

Monetary fund	606,287.18	11.20	1,002,592.54	17.90	-39.53	In this period, private enterprise payments were
						made and the USD350 million USD senior
						perpetual bonds were redeemed.
Derivative financial assets	1,294.24	0.02	-	-	N/A	Invested in the hedging business of aluminum
						ingot futures.
Bills receivable	26,771.85	0.49	56,995.90	1.02	-53.03	The transfer of the endorsement of the bills
						receivable was used for construction
						payment.
Prepayment	51,494.42	0.95	37,606.55	0.67	36.93	Partial advance payment for equipment
						purchase.
Dividends receivable	343.20	0.01	181.59	0.00	88.99	The recognition of dividend declared by Zhuzhou
						Tianqiao Crane Co., Ltd.
Non-current assets due within	62,403.33	1.15	40,540.34	0.72	53.93	Reclassification of certain long-term receivables
one year						due within one year.

Interim Report 2020 39

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

				Percentage
				in total
		Percentage	Amount at	assets at
		in total	the end of the	the end of the
	Amount at	assets at	corresponding	corresponding
	the end of	the end of	period of	period of	YoY
Item	the period	the period	last year	last year	change	Explanation
		(%)		(%)	(%)

Right-of-use assets	1,725.20	0.03	2,698.64	0.05	-36.07	The decrease in the Company's rented houses,
						equipment and other assets during the
						reporting period.
Other non-current assets	499,537.53	9.23	344,537.95	6.15	44.99	Yunnan Miyu Highway PPP project construction
						investment continued to increase during the
						period.
Bills payable	62,583.44	1.16	95,726.62	1.71	-34.62	The bills issued by the Company to the
						subcontractors in the previous period were
						due for acceptance and payment.
Taxes payable	15,320.34	0.28	26,705.87	0.48	-42.63	The income tax expense recognized in 2019
						was paid in this period.
Other payables	252,502.52	4.67	497,914.09	8.89	-49.29	The redemption of USD350 million perpetual
						bonds issued at the end of 2016.
Dividends payable	14,777.77	0.27	3,000.00	0.05	392.59	Mainly due to the recognition of dividends on
						the issued equity instruments
Lease liability	425.93	0.01	1,390.94	0.02	-69.38	The Company's assets such as the operating
						leased houses and equipment decreased,
						resulting in a decrease in lease payments.
Deferred income	7,140.52	0.13	5,303.64	0.09	34.63	Mainly due to the receipt of government
						subsidies that have yet to reach the beneficial
						period.

Other explanations

40 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

2. Details of significant restricted assets as at end of the reporting period

✔Applicable

□Not applicable

Unit: Yuan Currency: RMB

	Book value as at	Reasons for
Item	30 June 2020	restriction

Cash	539,375,298.59	Deposits and pledged
Bills receivable	56,304,844.39	Pledged
Accounts receivable	474,376,890.70	Pledged
Fixed assets	174,667,435.41	Secured
Investment properties	25,241,637.85	Secured
Total	1,269,966,106.94	-

3. Other explanations

□Applicable

✔Not applicable

(IV) Investment Analysis

1. Overall analysis of equity investments

✔Applicable

□Not applicable

As at 30 June 2020, the balance (original value) of long-term equity investment of the Company was RMB845.30 million, representing an increase of RMB74.993 million or 9.74% from the beginning of the year, of which the provision for impairment of long-term equity investment was RMB8.6653 million, representing a decrease of RMB2.4679 million as compared with RMB11.1332 million at the beginning of the year.

Major equity investments

□Applicable

✔Not applicable

Significant non-equity investments

□Applicable

✔Not applicable

Financial assets measured at fair value

✔Applicable

□Not applicable

During the period, the Company's Baiyinhua project used futures contracts to hedge the changes in the market prices of the main products procured, namely aluminum bus bars and steel. The corresponding hedging plan was formulated in accordance with the actual quantity procured by the project department. The hedged items were futures contracts of aluminum ingots and rebar. During the reporting period, the derivative financial assets were valued at RMB12.9424 million.

(V) Disposal of Significant Assets and Equity

□Applicable

✔Not applicable

Interim Report 2020 41

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

(VI) Analysis of principal controlling and investee companies

✔Applicable	□Not applicable
			Total assets at the	Net assets at the	Operating income	Net profit
Subsidiary		Business scope	end of the period	end of the period	for the period	for the period
			(RMB '0000)	(RMB '0000)	(RMB '0000)	(RMB '0000)

Shenyang Aluminum & Magnesium		Engineering survey
Engineering & Research Institute		and design
Co., Ltd.			135,471.43	62,161.60	21,721.20	954.33
Guiyang Aluminum & Magnesium Design	Design and
Institute Co., Ltd.		consultancy	224,926.25	71,366.73	24,353.01	-1,260.65
Changsha Engineering & Research		Survey and design
Institute Limited for Nonferrous
Metallurgy			264,090.37	101,328.70	50,841.95	-32.07
China Nonferrous Metals Processing		Engineering design
Technology Co., Ltd.		and equipment
		manufacturing	2,007,78.56	9,379.15	33,019.63	-1,143.87
China Nonferrous Metals Changsha		Survey and design
Investigation and Design Research
Institute Co., Ltd.			1,105,76.67	39,803.04	49,399.90	655.67
Kunming Survey and Design Institute		Engineering survey
Co., Ltd. of China Nonferrous Metals	and design
Industry			113,981.39	37,457.79	48,320.53	988.22
Chalco Shandong Engineering		Construction and
Technology Co., Ltd.		installation	143,822.11	39,086.34	36,384.07	-413.90
Sixth Metallurgical Construction Company	Construction work
of China Nonferrous Metals Industry			1,259,225.42	296,699.96	296,993.45	6,781.17
Ninth Metallurgical Construction Co., Ltd.	Building and
		construction	910,585.34	87,186.21	191,929.29	5,222.30
China Nonferrous Metals Industry's 12th	Construction work
Metallurgical Construction Co., Ltd.			507,042.74	96,330.04	65,557.99	90.68
Chalieco (Tianjin) Construction Co., Ltd.	Construction work	200,885.78	21,827.89	39,232.97	-1,564.77
China Aluminum International Engineering	Construction work
Equipment Co., Ltd.			274,300.37	20,158.55	132,936.24	-1,435.18

Note: The above net assets is the net assets attributable to owners of the parent; net profit is the net profit attributable to owners of

the parent.

(VII) Particulars of structured entities controlled by the Company

□Applicable

✔Not applicable

42 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

OTHER DISCLOSURES
1. Warnings on any potential loss in accumulated net profit for the period from the beginning of the year to the end of next reporting period or any material changes from the corresponding period last year and the explanations therefor

□Applicable

✔Not applicable

(II) Potential Risks

✔Applicable

□Not applicable

The Company is primarily exposed to the COVID-19 epidemic risks, policy risks, market risks (including price risks, exchange rate risks), operational risks, financial risks and overseas operational risks in the ordinary course of business.

The COVID-19 epidemic risks
In January 2020, the COVID-19 epidemic broke out nationwide, and spread globally in February. The epidemic may lead to the delay in construction projects undertaken by the Company, difficulty in obtaining construction commencement approval, failure to complete on time, increased construction costs, and difficulty in procurement of epidemic prevention materials, which will directly affect the achievement of the Company's annual business objectives.
Policy risks
Our business is subject to a certain extent of the policies and investment expenses of the government on infrastructure construction such as highways, municipal works construction and other public transportation. There will be unpredictable impacts on the Company if the government makes any adjustments to the infrastructure construction policy, PPP project policy, monetary policy, foreign exchange management policy, taxation policy and policy relating to real estate industry.
Price risks
The price and supply of materials, subcontracting and labor may have significant fluctuation according to customers' needs, manufacturers' production capacity, market condition, costs of materials and labor costs in different times; and conditions of price changes of energy (including fuel and electricity or water supply) may also affect our business.

Interim Report 2020 43

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

Exchange rate risks
We conduct our engineering and construction contracting business overseas, and may make significant equity and other investments in overseas projects. Our assets and liabilities denominated in foreign currency are expected to increase significantly as we further expand our overseas business, particularly when undertaking more EPC projects. Changes in the exchange rate could affect our costs denominated in Renminbi, revenues, the prices of our exported products and imported equipment, which in turn would affect our profits.
Operational risks
In recent years, we have rapidly expanded our business scale and involved in more business aspects. As new business models are gradually increasing, project management becomes more difficult and poses challenge to the project safety and quality management, cadre ethics and upholding the stability of the enterprise. We are exposed to certain management operational risks.
Financial risks
As we have insufficient assessment on the credit status of property owners, delays in construction settlement and payment by the property owners, or deterioration in property owners' financial position resulted in funding pressure, or unable to collect working capital in a timely manner, these could severely affect the capital use efficiency of the Company, resulting in reducing turnover rate of account receivables. In case we are not able to obtain sufficient fund, the Company's expansion plan and development prospects will be affected.
Overseas operational risks
The Company has selectively tapped into various overseas markets and strategically developed overseas business. The Company will continue to earn considerable income and profits from international projects and other overseas business in the foreseeable future. Any changes in the condition of politics, economics, legal and taxation in the countries where the Company operates as well as other emergency issues would affect the Company in fulfilling its business objectives.
To guard against the occurrence of various types of risks, the Company has formulated a comprehensive internal control system. We incorporate risk management into each business process. Pursuant to which, we identify the critical control point of business processes, develop specific control measures, prepare documents for critical control points of procedures, identify the responsibilities of various types of risks and critical control point, work closely with the daily management and control, and control risk factors and elements. In addition, the Company strictly supervises the important control aspects of earlier stage of feasibility study, planning, reviewing, approval and decision-making; enhances process control and risk assessment work; and makes measures and contingency plans to deal with risks, aiming to ensure the Company's overall control on various types of risk.

44 China Aluminum International Engineering Corporation Limited

SECTION 5 OPERATING RESULTS DISCUSSION AND ANALYSIS

(III) Other disclosures

✔Applicable

□Not applicable

Contract of significance
Save for disclosed in the section headed "MATERIAL RELATED-PARTY TRANSACTIONS" in this interim report, none of the Company or any of its subsidiaries entered into any contracts of significance with the controlling Shareholder or any of its subsidiaries other than the Company, nor was there any contracts of significance between the Company and the controlling Shareholder or any of its subsidiaries other than the Company in relation to provision of services.
Business in connection with sanctioned countries
As at the latest practicable date, the Risk Management Committee of the Company confirmed that the proceeds raised from the global offering of the Company had been deposited with a designated bank account and no such proceeds had been used in business in connection with sanctioned countries or used as payment for the compensation under the Iran Contracts. From the beginning of the reporting period to the latest practicable date, the Company did not enter into any new business in connection with sanctioned countries, nor did it have any business planning or arrangement for transactions with sanctioned countries. The Board has no intention to enter into any new business with sanctioned countries.
Interim dividend
The Board has not made any recommendation on the payment of an interim dividend for the six months ended 30 June 2020.

Interim Report 2020 45

SECTION 6 KEY MATTERS

SHAREHOLDERS' MEETING

			Websites
			designated	Resolutions
			for disclosure of	disclosing date
Session of meeting	Convening date	resolutions	(A Share/H Share)

The 2019 annual general meeting,	23 June 2020	www.sse.com.cn	24 June 2020
the first A share class meeting		www.hkexnews.hk	23 June 2020
of 2020 and the first H share
class meeting of 2020 of China
Aluminum International Engineering
Corporation Limited
Particulars of the general meeting
✓Applicable	□Not applicable

On 23 June 2020, the Company convened the 2019 annual general meeting, the first A share class meeting of 2020 and the first H share class meeting of 2020. The 2019 annual general meeting reviewed and approved 16 resolutions, including board of directors' work report for 2019, Board of Supervisors' work report for 2019, the financial report for 2019, the profits distribution plan for 2019, etc. Both the first A share class meeting of 2020 and the first H share class meeting of 2020 reviewed and approved two resolutions in relation to the amendments to the Articles of Association and the amendments to the Rules of Procedures for the Shareholders' General Meeting.

46 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

PROPOSAL FOR PROFIT DISTRIBUTION OR FOR CONVERTING CAPITAL RESERVE INTO SHARE CAPITAL
1. The proposed profit distribution plan or converting capital reserve into share capital plan for the half year

Whether to distribute profit or transfer reserves	No
Number of bonus shares for every 10 shares (share)	0
Amount of dividend for every 10 shares (RMB) (tax inclusive)	0
Number of shares converted for every 10 shares (share)	0

Details of the implementation or adjustment of the profit distribution plan during the reporting period
The profits distribution plan for 2019 was reviewed and approved at the 2019 annual general meeting of the Company on 23 June 2020, at which a cash dividend of RMB0.036 (tax inclusive) per 10 shares based on the total share capital of 2,959,066,667 shares was declared, totaling RMB10,652,640.00 As of 24 July 2020, the distribution of the above cash dividend had been completed.

Interim Report 2020 47

SECTION 6 KEY MATTERS

PERFORMANCE OF COMMITMENTS
1. Commitments of the Company and its effective controller, shareholders, related parties, acquirers that were made in or continued into the reporting period

✓Applicable	□Not applicable
							Whether
						Whether	commitment	Specific	Subsequent
						there is	is performed	reasons	plan in
						time limit	strictly in	for any	case of any
Background of	Type of			Content of	Date and term of	for	a timely	delay in	delay in
commitment	commitment	Party of commitment	commitment	commitment	performance	manner	performance	performance

	Restriction on sales	Chinalco	Commitment on share lockup	Three years from the	Yes	Yes	N/A	N/A
	of shares			and intention of reducing	date of A share listing,
				shareholding	and two years from
					expiration of the
					lockup period
	Restriction on sales	Luoyang Institute	Commitment on share lockup	Three years from the	Yes	Yes	N/A	N/A
	of shares			and intention of reducing	date of A share listing,
				shareholding	and two years from
					expiration of the
					lockup period
	Others		Chinalco, the Company, and our	Stock price stabilisation plan	Three years from the	Yes	Yes	N/A	N/A
			nonindependent directors and		date of A share listing
			senior management
	Others		Our directors and senior management	Making up for diluted return for	Long term	Yes	Yes	N/A	N/A
				the current period
IPO related	Resolving		Chinalco	Peer competition	Long term	Yes	Yes	N/A	N/A
commitments	competition
	among peers
	Resolving related	Chinalco	Related transaction	Long term	Yes	Yes	N/A	N/A
	transactions
	Resolving related	Chalco Finance	Credit facility service provided	Long term	Yes	Yes	N/A	N/A
	transactions		by related party
	Others		Our directors, supervisors and senior	Qualifications	Long term	Yes	Yes	N/A	N/A
			management
	Others		Chinalco	Defect in title of land	Long term	Yes	Yes	N/A	N/A
	Others		The Company	Real estate related business	Long term	Yes	Yes	N/A	N/A
				(Note)
	Others		Chinalco, the Company, our	Undertakings that the	Long term	Yes	Yes	N/A	N/A
			directors, supervisors and senior	prospectus do not carry any
			management, sponsor, auditor,	false statement, misleading
			legal advisor	representation or material
				omission

Note: In order to safeguard the interests of the Company and its shareholders, Guiyang Aluminum and Magnesium Design Institute Construction Contracting Co., Ltd., a wholly-owned subsidiary of our subsidiary Guiyang Institute, shall undertake the Shenzhou Science and Technology Park (Zhizao Mansion) Project by way of real estate development and complete the disposal of project assets as soon as possible. The general meeting of the Company agreed to exempt its commitment regarding the Company's real estate development business set out in the A share initial public offering prospectus in respect of the project. For details, please refer to the Company's Announcement No. Pro 2020-033 issued and Announcement No. Pro 2020-041 on the designated media for information disclosure on 28 May 2020 and 24 June 2020, respectively.

48 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

IV. APPOINTMENT AND REMOVAL OF AUDITOR

Explanation of appointment and removal of the auditor

✓Applicable

□Not applicable

As approved at the 2019 annual general meeting of the Company, WUYIGE Certified Public Accountants LLP was re-appointed as the Company's auditor for 2020, responsible for the annual audit and interim review of the financial statements of the Company prepared in accordance with the China Accounting Standard for Business Enterprises. The continuous audit period of this firm is the fifth year, and the interim review cost of the financial statements of this year is RMB1.17 million.

Explanation on change in the auditor during the auditing period

□Applicable

✓Not applicable

Explanation of the Company on issuance of a "Non-Standard Auditing Report" by the auditor

□Applicable

✓Not applicable

Explanation of the Company on issuance of a "Non-Standard Auditing Report" by the registered accountant in the financial statements of the last year's annual report.

□Applicable

✓Not applicable

V. BANKRUPTCY AND REORGANIZATION RELATED ISSUES

□Applicable

✓Not applicable

Interim Report 2020 49

SECTION 6 KEY MATTERS

VI. MATERIAL LITIGATION AND ARBITRATION

✓The Company was involved in any material litigation or arbitration during the year. □The Company was not involved in any material litigation or arbitration during the year.

Litigation and arbitration disclosed in provisional announcements and without subsequent development

✓Applicable	□Not applicable
Summary and type of the issue	Reference

Dispute arising from the technical consultancy contract between our Guiyang Branch and Qinghai Western Hydropower Co., Ltd.

For details, please refer to the Company's Announcement No. Pro 2019-071, Announcement No. Pro 2019-096, Announcement No. Pro 2020- 001 and Announcement No. Pro 2020-013 issued on 16 October 2019, 18 December 2019, 4 January 2020 and 10 March 2020 respectively on designated media for information disclosure.

Disputes arising from engineering construction c o n t r a c t b e t w e e n S i x t h M e t a l l u r g i c a l Construction Company of China Nonferrous Metals Industry, a wholly-owned subsidiary of the Company, and Kaiyang County Ronghe City Development Investment Co., Ltd.

For details, please refer to the Company's Announcement No. Pro 2020-002 issued by the Company on the designated media for information disclosure on 4 January 2020.

Disputes arising from engineering construction contract between Chang Cheng Construction Co., Ltd., a wholly-owned subsidiary of our subsidiary Sixth Metallurgical Construction Company of China Nonferrous Metals Industry, and Changge Hongji Weiye Real Estate Development Co., Ltd.

For details, please refer to Announcement No. Pro 2019-032 and Announcement No. Pro 2020-005 issued by the Company on the designated media for information disclosure on 8 May 2019 and 10 January 2020.

Dispute arising from the engineering general contracting and advance repayment agreement between Guiyang Aluminum and Magnesium Design Institute Construction Contracting Co., Ltd., a wholly-owned subsidiary of our subsidiary Guiyang Aluminum and Magnesium Design Institute Co., Ltd. and Guizhou Huada Real Estate Development Co., Ltd.

For details, please refer to the Company's A n n o u n c e m e n t N o . P r o 2 0 1 9 - 0 6 1 a n d Announcement No. Pro 2020-009 issued on 11 September 2019 and 23 January 2020 respectively on the designated media for information disclosure.

50 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

Summary and type of the issue	Reference

Dispute arising from engineering construction c o n t r a c t b e t w e e n S i x t h M e t a l l u r g i c a l Construction Company of China Nonferrous Metals Industry, a wholly-owned subsidiary of the Company, and Huimin Advanced Materials Co., Ltd.

For details, please refer to the Company's A n n o u n c e m e n t N o . P r o 2 0 1 9 - 0 9 1 a n d Announcement No. Pro 2020-010 issued on the designated media for information disclosure on 29 November 2019 and 23 January 2020.

For details, please refer to the Company's A n n o u n c e m e n t N o . P r o 2 0 1 9 - 0 9 2 a n d Announcement No. Pro 2020-010 issued on 29 November 2019 and 23 January 2020 on the designated media for information disclosure.

For details, please refer to the Company's A n n o u n c e m e n t N o . P r o 2 0 1 9 - 0 5 0 , A n n o u n c e m e n t N o . P r o 2 0 1 9 - 0 9 4 , A n n o u n c e m e n t N o . P r o 2 0 2 0 - 0 1 1 a n d Announcement No. Pro 2020-052 issued on 16 July 2019, 12 December 2019, 22 February 2020 and 19 August 2020 on the designated media for information disclosure.

Dispute arising from engineering construction c o n t r a c t b e t w e e n N i n t h M e t a l l u r g i c a l Construction Co., Ltd., a controlling subsidiary of the Company, and Gree Electric (Zhengzhou) Co., Ltd.

Dispute arising from guarantee contract between Guiyang Aluminum and Magnesium Design Institute Construction Contracting Co., Ltd.,

wholly-ownedsubsidiary of our subsidiary Guiyang Aluminum and Magnesium Design Institute Co., Ltd. and Xixiu District Urban Investment Development Co., Ltd. of Anshun City, Guizhou Huada Real Estate Development Co., Ltd.

For details, please refer to the Announcement No. Pro 2019-024 and Announcement No. Pro 2020-014 issued by the Company on 17 April 2019 and 11 March 2020 on the designated media for information disclosure.

For details, please refer to the Announcement No. Pro 2020-035 issued by the Company on 3 June 2020 on the designated media for information disclosure.

Arbitration in respect of dispute arising from contract between the Company and Qingdao Xinfu Gongchuang Asset Management Company Limited, Shandong Real Estate Development Company Qingdao Company, Qingdao Liangyou Catering Co., Ltd., Liang Yongjian, Wang Xiaoning

For details, please refer to the Announcement No. Pro 2020-036 issued by the Company on 6 June 2020 on the designated media for information disclosure.

Interim Report 2020 51

SECTION 6 KEY MATTERS

Summary and type of the issue	Reference

Dispute arising from engineering construction contract between China Nonferrous Metals Industry's Twelfth Metallurgical Construction Co., Ltd., a wholly-owned subsidiary of the Company, and China National Aviation Fuel Northern Storage and Transportation Co., Ltd.

Dispute arising from sales and purchase contract between Shanghai China Aluminum International Supply Chain Management Co., Ltd., a wholly- owned subsidiary of the Company, and Shanghai Golden Elephant Aluminium Co., Ltd.

Dispute arising from engineering construction contract between Henan Xinchangcheng Construction Engineering Co., Ltd and Xinyang Jieming Earthwork and Stonework Construction Co., Ltd., and Sixth Metallurgical Construction Company of China Nonferrous Metals Industry, a wholly-owned subsidiary of the Company, was deemed as the third party

For details, please refer to the Announcement No. Pro 2020-037 issued by the Company on 6 June 2020 on the designated media for information disclosure.

For details, please refer to the Announcement No. Pro 2020-047 issued by the Company on 31 July 2020 on the designated media for information disclosure.

For details, please refer to the Announcement No. Pro 2020-049 issued by the Company on 7 August 2020 on the designated media for information disclosure.

For details, please refer to the Announcement No. Pro 2020-050 issued by the Company on 7 August 2020 on the designated media for information disclosure.

Dispute arising from engineering construction contract between Guiyang Aluminum and Magnesium Design Institute Co., Ltd., the Company's wholly-owned subsidiary, Guiyang Aluminum and Magnesium Design Institute Construction Contracting Co., Ltd., its wholly- owned subsidiary, and Seventh Metallurgical Civil Engineering Co., Ltd.

For details, please refer to the Announcement No. Pro 2020-038, Announcement No. Pro 2020-040 and Announcement No. Pro 2020- 051 issued by the Company on 10 June 2020, 18 June 2020 and 14 August 2020 on the designated media for information disclosure.

For details, please refer to the Announcement No. Pro 2020-053 issued by the Company on 20 August 2020 on the designated media for information disclosure.

52 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

Particulars of litigations and arbitrations not disclosed in provisional announcements or with subsequent development

✓Applicable	□Not applicable
							Unit: '0000 Yuan	Currency: RMB
During the reporting period:
							Whether
							estimated
							liability
						Amount	arose from	Current
			Party with			concerning	the litigation	status of	Judgment/	Enforcement
			several and	Litigation or	Basic information of	litigation	(arbitration)	the litigation	award and	of judgment
Plaintiff (Applicant)	Defendant (Respondent)	joint liability	Arbitration	litigation (arbitration) (arbitration)	and amount	(arbitration)	impact	(award)

China Aluminum International	Shandong Jiate Plastic Package Co.,	None	Litigation	Dispute over sales and	7,461.06	No	Judgment	Note 1	Under
Shandong Chemical	Ltd., Huang Chunqing, Huang Feng,			purchase contract			handed down		enforcement
Industry Co., Ltd.	Lin Yulei, Huang Zhongqing, Huang
	Shunqing, Zhao Youjie
Xinyang Jieming Earthwork	Henan Xinchangcheng Construction	Sixth Metallurgical	Litigation	Dispute over	7,212.79	No	Judgment	Note 2	Executed and
and Stonework	Engineering Co., Ltd., Sixth	Construction Company		engineering			handed down		case closed
Construction Co., Ltd.	Metallurgical Construction Company	of China Nonferrous		construction
	of China Nonferrous Metals Industry,	Metals Industry		contract
	Zhengzhou Airport Zone State-owned
	Asset Operation and Management
	Co., Ltd
Changsha Engineering &	Zhangjiajie Xinxin Real Estate	None	Arbitration	Dispute over	8,282.37	No	Judgment	Note 3	Executed and
Research Institute Limited	Development Co., Ltd.			engineering			handed down		case closed
for Nonferrous Metallurgy					construction
					contract

Note 1: 1. The court ruled that Shandong Jiate should pay RMB72.0137 million for the goods and RMB4.8032 million for liquidated damages within ten days of the effective date of the judgment. 2. Shandong Chemical had the right to use the proceeds from the auction and sale of the pledged equity of Huang Chunqing, Huang Feng, and Lin Yulei in Shandong Jiate within the range of RMB150 million, with priority in receiving compensation. 3. Huang Chunqing, Huang Feng, Lin Yulei, Huang Zhongqing, Huang Shunqing, and Zhao Youjie shall assume joint and several liability for the settlement of the debts (The payment for goods of RMB72.0137 million and the liquidated damages of RMB4.8032 million) under the abovementioned first payment within the range of RMB150 million.

Note 2: The results of the second-instance judgment of the Higher People's Court of Henan Province are as follows: 1. To uphold the third item (To dismiss other claims of the plaintiff, Xinyang Jieming) of the civil judgment of the Intermediate People's Court of Zhengzhou City, Henan Province (2017) Yu 01 Min Chu No. 5103. 2. To amend the first item (The defendant, Henan Xinchangcheng Construction Engineering Co., Ltd, paid the construction payment of RMB51.7567 million and the interests to the plaintiff, Xinyang Jieming, within ten days after the judgment became effective (the interests was calculated based on RMB51.7567 million and in accordance to the bank loan interest rate for the same period from 28 January 2016 to the date when the principal and interest of the project were settled)) of the civil judgment of the Intermediate People's Court of Zhengzhou City, Henan Province (2017) Yu 01 Min Chu No. 5103, where Henan Xinchangcheng Construction Engineering Co., Ltd. shall pay the project payment of RMB53.6072 million and the interests therein to Xinyang Jieming. 3. Sixth Metallurgical Company assumed joint and several liability for payment in the range of RMB53.6072 million.

Note 3: The Zhangjiajie Intermediate People's Court of Hunan Province ruled that the entire building of the house No. 18 the "Zhangjiajie Future City" project developed by Zhangjiajie Xinxin Real Estate Co., Ltd. of RMB98.3607 million will be used to compensate all debts owed to the Changsha Institute for the project principal, interest, costs for realizing the creditor's rights, arbitration fees, and interest on the debt during the delayed performance period. After paying off the debts, the ownership of the house shall be transferred to Changsha Institute after the service of this ruling.

(III) Other information

□Applicable

✓Not applicable

Interim Report 2020 53

SECTION 6 KEY MATTERS

VII. PUNISHMENTS UPON THE LISTED COMPANY AND ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING SHAREHOLDER, BENEFICIAL OWNER, ACQUIRER AND RECTIFICATIONS

□Applicable

✓Not applicable

VIII. CREDIBILITY OF THE COMPANY AND ITS CONTROLLING SHAREHOLDER AND EFFECTIVE CONTROLLER DURING THE REPORTING PERIOD

✓Applicable

□Not applicable

During the reporting period, the Company, and its controlling shareholder and effective controller were in good credit conditions and did not have any bad credit conditions, such as failure to perform any effective judgment of the court and failure to pay any significant amounts of debts when due.

IX. SHARE OPTION INCENTIVE PLAN, EMPLOYEE STOCK OPTION PLAN OR OTHER EMPLOYEE INCENTIVE MEASURES AND THEIR IMPACT

Incentives disclosed in provisional announcements and with no subsequent development or change

□Applicable

✓Not applicable

Incentives not disclosed in provisional announcements or with subsequent development

Particulars of share option incentives

□Applicable	✓Not applicable
Other information
□Applicable	✓Not applicable

Particulars of employee stock option plan

□Applicable	✓Not applicable
Other incentive measures
□Applicable	✓Not applicable

54 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

MATERIAL RELATED-PARTY TRANSACTIONS
1. Related-partytransactions related to daily operations

1. Events disclosed in provisional announcements and without subsequent development or change in implementation

□Applicable

✔Not applicable

2. Events disclosed in provisional announcements but with subsequent development or change in implementation

✔Applicable

□Not applicable

The daily continuous connected transactions that occurred from January to June 2020 were all within the annual cap and did not exceed the limit. The specific transaction types and amounts are as follows:

	Unit: '0000 Yuan Currency: RMB
			Actual
			transaction
			amount from
Events of connected		Annual cap	January to
transactions	Connected persons	for 2020	June 2020

Provision of engineering services by the Group	Chinalco	700,000	161,914.5
Provision of general services to the Group	Chinalco	16,000	2,001.17
Provision of general services by the Group	Chinalco	10,000	42.32
Provision of commodities by the Group	Chinalco	80,000	25,296.62
Provision of commodities to the Group	Chinalco	100,000	10,755.23
Provision of deposit services to the Group	Chinalco Finance	280,000	279,500.00
Provision of factoring facility services	Chinalco Commercial	100,000	14,000
to the Group	Factoring Company
Provision of financial services such as	China Aluminum Finance	100,000Note 1	-
financial leasing to the Group	Lease Co., Ltd.

Note 1: According to the financial leasing framework cooperation agreement between China Aluminum Finance Lease Co., Ltd. and the Group effective on 30 December 2019, the credit limit was revolving in nature, and the validity period was any point in time during the validity period of the financial leasing cooperation agreement.

Interim Report 2020 55

SECTION 6 KEY MATTERS

3. Events not disclosed in provisional announcements

□Applicable

✔Not applicable

(II) Related-party transactions from acquisition and disposal of assets, equity interests

1. Events disclosed in provisional announcements and without subsequent development or change in implementation

□Applicable

✔Not applicable

2. Events disclosed in provisional announcements but with subsequent development or change in implementation

□Applicable

✔Not applicable

3. Events not disclosed in provisional announcements

□Applicable

✔Not applicable

4. In case of any guaranteed performance, whether the performance is achieved for the reporting period shall be disclosed.

□Applicable

✔Not applicable

(III) Material connected transactions in joint external investments

1. Events disclosed in provisional announcements and without subsequent development or change in implementation

□Applicable

✔Not applicable

2. Events disclosed in provisional announcements but with subsequent development or change in implementation

□Applicable

✔Not applicable

3. Events not disclosed in provisional announcements

□Applicable

✔Not applicable

56 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

(IV) Amounts due to or from related parties

1. Events disclosed in provisional announcements and without subsequent development or change in implementation

□Applicable

✔Not applicable

2. Events disclosed in provisional announcements but with subsequent development or change in implementation

□Applicable

✔Not applicable

3. Events not disclosed in provisional announcements

✔Applicable	□Not applicable
			Unit: '0000 Yuan Currency: RMB
	Provision of funds		Provision of funds to
Related party	Relationship	to related party		the listed company by related party
	Opening		Closing	Opening		Closing
	balance	Accrual	balance	balance	Accrual	balance

Aluminum Corporation of China	Parent			200,000.00	-100,000.00	100,000.00
Chalieco Finance Company	Wholly-owned subsidiary of			80,100.00	160,400.00	240,500.00
Limited	the parent
China Aluminum Commercial	Wholly-owned subsidiary of			43,850.00	-16,000.00	27,850.00
Factoring (Tianjin) Co., Ltd.	the parent
Total	-	-	-	323,950.00	44,400.00	368,350.00

Cause to claims and liabilities between related parties

Impact of such claims and liabilities between related parties on the Company's operating result and financial position

Amounts provided by related parties for the listed company included entrusted loans, lending and factoring facility No material impact

Interim Report 2020 57

SECTION 6 KEY MATTERS

(V) Other significant related-party transactions

□Applicable

✔Not applicable

(VI) Other

□Applicable

✔Not applicable

XI. MATERIAL CONTRACTS AND THEIR PERFORMANCE

1. Custody, contracting and lease

□Applicable

✔Not applicable

2. Guarantees

✔Applicable

□Not applicable

Unit: '0000 Yuan

Currency: RMB

Guarantees provided for external parties (except those for subsidiaries)

Relation of

Date of

the guarantor

guarantee

Guarantee

Counter

party

to the listed

Guaranteed

(agreement

Commencement

Ending

Type of

performed

Overdue

guaranteed

guarantee

The guarantor

company

The guaranteed

amount

signing date)

date

guarantee

or not

amount

or not

Hanzhong Ninth Metallurgical Construction Co.,

Controlling

Mian County Urban and Rural

6,815

2015/10/20

2027/10/19

General

Ltd.

subsidiary

Infrastructure Construction

guarantee

Co., Ltd.

Ninth Metallurgical Construction Co., Ltd.

Controlling

Mian County Urban

3,450

2013/1/7

2023/1/6

General

subsidiary

Development Investment

guarantee

Co., Ltd.

China Aluminum International Engineering

Headquarters

Yunnan Ningyong

25,716

2019/12/18

2019/12/30

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Ningyong

21,430

2019/12/18

2020/3/31

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Ningyong

21,430

2019/12/18

2019/10/31

2047/10/30

General

Corporation Limited

Expressway Co. Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Ningyong

30,002

2019/12/18

2019/10/31

2047/10/30

General

Corporation Limited

Expressway Co. Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linyun Expressway

8,572

2019/12/18

2020/6/18

2047/10/30

Joint liability

Corporation Limited

Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linyun Expressway

34,288

2019/12/18

2019/10/31

2047/10/30

Joint liability

Corporation Limited

Co., Ltd.

guarantee

58 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

Guarantees provided for external parties (except those for subsidiaries)

Relation of

Date of

the guarantor

guarantee

Guarantee

Counter

party

to the listed

Guaranteed

(agreement

Commencement

Ending

Type of

performed

Overdue

guaranteed

guarantee

The guarantor

company

The guaranteed

amount

signing date)

date

guarantee

or not

amount

or not

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

9,429.2

2020/5/6

2018/1/23

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

8,572

2020/5/6

2018/3/23

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

8,572

2020/5/6

2019/2/14

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

2,143

2020/5/6

2019/5/23

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

10,715

2020/5/6

2019/9/5

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

17,144

2020/5/6

2019/11/7

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

China Aluminum International Engineering

Headquarters

Yunnan Linshuang

12,858

2020/5/6

2020/1/7

2047/10/30

General

Corporation Limited

Expressway Co., Ltd.

guarantee

Cumulative amount of guarantees provided during the reporting period (excluding those for subsidiaries)

42,860

Total balance of guarantees at end of the reporting period (A) (excluding those for subsidiaries)

221,136.2

Guarantees provided by the Company to subsidiaries

Cumulative amount of guarantees provided for subsidiaries during the reporting period

186,300.00

Total balance of guarantees provided for subsidiaries at end of the reporting period (B)

686,772.40

Total amount of guarantees provided by the Company (including those provided for subsidiaries)

Total amount of guarantees (A+B)

907,908.6

Ratio of total amount of guarantees to net assets of the Company (%)

85.44%

Including:

Amount of guarantees provided for shareholders, effective controller and their related parties (C)

Amount of guarantees provided directly or indirectly to secure debts of the guaranteed with a assets-liabilities ratio over 70% (D)

656,772.40

Total amount of guarantees in excess of 50% of net assets (E)

Total of the above three types of guarantees (C+D+E)

656,772.40

Explanation on the potential joint liability arising from the immature guarantees

Explanation on the guarantees

The amount of external guarantee is the actual amount of the bank loan.

Interim Report 2020 59

SECTION 6 KEY MATTERS

3. Other material contracts

✓Applicable	□Not applicable
				Contract amount		Term of
No.	Contract date	Project name	(RMB'00 million)	Contracting party	performance

1	11 January 2020	EPC engineering	49.25 (of which the	PT Borneo Alumina	31 months

general contracting	contract amount	Indonesia, a	from the
contract for the	that the Company	consortium formed	commencement
metallurgical grade	is responsible for	by Chalieco (leading	date (inclusive)
alumina project with	implementing is	party) and PT. PP.
an annual output	approximately	(Persero) Tbk
of 1 million tons	RMB3.694 billion)
(expandable) in
Indonesia

Note: For details, please refer to the Announcement No. Pro 2020-006 issued by the Company on 14 January 2020 on the designated media for information disclosure.

XII. POVERTY ALLEVIATION EFFORTS OF THE LISTED COMPANY

✓Applicable

□Not applicable

1. Targeted poverty alleviation plan

✓Applicable

□Not applicable

2020 is the year to achieve the goal of building a well-off society in an all-round way, and it is the year to end the war to overcome poverty. The task of consolidating the results of poverty alleviation and preventing the return to poverty is relatively heavy. The Company and its members actively responded to General Secretary, Xi Jinping's general requirements on "Policies, responsibilities, assistance and governance should continue after poverty alleviation". According to the actual situation of the Company's poverty alleviation work, the Company has improved the long-term assistance mechanism after poverty alleviation, and steadily improved the four villages that have already achieved poverty alleviation. The company has taken targeted measures for the remaining households that were still in poverty to ensure that no household or one person will be omitted amidst poverty alleviation, and the task of poverty alleviation will be completed with high quality.

60 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

2. Overview of targeted poverty alleviation efforts for the reporting period

✓Applicable

□Not applicable

In the first half of 2020, the four villages designated for assistance by the four tier-2 subsidiaries, including CNPT, Changkan Institute, Changsha Institute, and Guiyang Institute, have all been lifted out of poverty. Except for the remaining 3 households and 4 people in Wangcun Village, Cangtou Town, Xin'an County, Luoyang City, Henan Province have not gotten rid of poverty, the 407 households and 1,576 people from the remaining villages that were registered as poor households have all been lifted out of poverty, and the Company's poverty alleviation work is basically in the stage of consolidation and improvement. In order to further consolidate the results of poverty alleviation and ensure that the remaining poor households get rid of poverty on time, the Company and its members continued to adopt a developmental assistance method that combines "blood transfusion" with "hematopoiesis", and focused on "hematopoiesis" to facilitate various tasks to consolidate the results of poverty alleviation. The Company and its members deployed 4 temporary cadres in total. Three working teams including 9 people were stationed in the villages. RMB209,200 of various kinds was directly invested in those villages, and so were materials worth RMB22,000. They helped targeted poverty alleviation counties introduce a supportive capital of RMB4.23 million and RMB92,000 worth of social donations. They purchased RMB853,500 worth of agricultural products from the poverty- stricken areas and assisted them in selling RMB136,000 worth of agricultural products. 109 people received vocational skill education in each round of training. The Company also encouraged the Party members, leading cadres and employees to donate RMB31,800 and materials worth RMB15,000.

Interim Report 2020 61

SECTION 6 KEY MATTERS

3. Achievements in targeted poverty alleviation

✓Applicable	□Not applicable
			Unit: '0000 Yuan Currency: RMB
	Indicators			Quantity and details

	I. Overview
	Specifically, 1.	Funds	20.92
		2.	Materials (equivalent in cash)	2.2
		3.	Number of registered poverty-stricken people	0
			lifted out from poverty

Investment by item
1. Poverty alleviation through industrial development

Specifically, 1.1	Type of poverty alleviation program through	✓Poverty alleviation through
	industrial development	agricultural and forestry
		industry
		□Poverty alleviation through
		tourism
		□Poverty alleviation through
		e-commerce
		□Poverty alleviation through
		assets income
		□Poverty alleviation through
		science and technology
		□Others
1.2	Number of poverty alleviation programs	2
	through industrial development (program)
1.3	Funds invested in poverty alleviation programs	11
	through industrial development
1.4	Number of registered poverty-stricken people	0
	receiving help lifted out from poverty (person)
2. Poverty alleviation through employment transfer
Specifically, 2.1	Funds invested in vocational skill training	0.5
2.2	Number of people receiving vocational skill	109
	training (person/time)
2.3	Number of registered poverty-stricken people	18
	receiving help in employment (person)

62 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

Indicators		Quantity and details

3. Poverty alleviation through relocation
Specifically, 3.1	Number of relocated people receiving help in	36
	employment (person)
4. Poverty alleviation through education
Specifically, 4.1	Funds invested in supporting poverty-stricken	1.25
	students
4.2	Number of subsidized poverty-stricken	66
	students
4.3	Funds invested in improving educational	0
	resources in poverty-stricken areas
5. Poverty alleviation in health domains
Specifically, 5.1 Funds invested in medical and health resources	2
in poverty-stricken areas
6. Other programs
Specifically, 6.1 Number of program	2
6.2	Investment amount	6.17
6.3	Number of registered poverty-stricken people	0
	receiving help lifted out from poverty (person)
6.4. Description of other programs	Repairing damaged roads, etc
III. Awards Received (content, rank)

Zhou Xiong, the leader of the village assistance team of the Changkan Institute, was awarded "Excellent" in the comprehensive assessment of Hunan Province in 2019.

The Cangtou Town team participated by LU Tingge, the first stationed secretary from CNPT, won the first place in the data entry quality evaluation of the Luoyang Smart Poverty Alleviation System.

Interim Report 2020 63

SECTION 6 KEY MATTERS

4. Phased progress in performance of social responsibility for targeted poverty alleviation

✓Applicable

□Not applicable

The Company and its members performed their duties and fulfilled their responsibilities, and steadily pushed forward the poverty alleviation work. In the first half of 2020, the Company and its members' targeted poverty alleviation work is as follows:

To fight against the epidemic: Around the Spring Festival, the COVID-19 epidemic swept the country, and the epidemic prevention work was extremely challenging. The village assistance team took the initiative to obtain permission from the Company's president to fight against the epidemic, and quickly went to the village to report duty. The task force specifically formulated epidemic prevention and control work plans and emergency plans. While doing a good job of self-protection, it actively mobilized the majority of Party members, volunteers and the masses to strive for epidemic prevention and control.
To strive for the resumption of agricultural work and production: While not slacking in the prevention and control of the epidemic, the task force actively promoted the resumption of agricultural work and production in the whole village, and made every effort to secure the income of farmers. The task force rented agricultural machinery to help the people in need loosen the soil, plow fields and plant seeds, and endeavored to overcome the adverse effects of the epidemic, thereby turning crises into opportunities, and fully restoring agricultural production.
To carry out employment assistance work: In the past six months, the task force actively connected with the local government and organized villagers to participate in online job fairs and on-site job fairs organized by the government in a timely manner. In addition, the task force extensively collected job demand information from all parts of the country, and published it in the WeChat group of registered users in a timely manner to ensure that villagers in poverty can find jobs that meet their own conditions. For a large group of commuters, the task force actively applied to the local government for private shuttle service. For those who take public transportation to commute, the task force distributed epidemic prevention and control materials to them and helped them apply for transportation subsidies in time. At the same time, the Company also leverage its own employment advantages to recruit two willing villagers to work in the Company.

64 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

5. Subsequent targeted poverty alleviation plan

✓Applicable

□Not applicable

The Company will continue its work adhering to elevating the annual income of poverty-stricken families above current national standards for poverty alleviation, fully meeting living needs for food and clothing, and guaranteeing compulsory education, basic medical treatment, and housing security, concerning the omission in the registration and elimination of poverty-stricken population, as well as comprehensive poverty incidence, and satisfaction degree of the masses. The Company will always follow General Secretary Xi Jinping's important discourse on poverty alleviation, strictly benchmark against advanced enterprises, strengthen responsibility fulfillment and set up a lofty sense of political responsibility and mission. The Company will continue to work hard regardless of difficulties and win the battle against poverty with firm resolution.

XIII. PARTICULARS OF CONVERTIBLE BONDS

□Applicable

✓Not applicable

XIV. ENVIRONMENTAL INFORMATION

Environmental protection information of companies and their important subsidiaries on the watch list of key pollutant discharging units published by the environmental protection authority

□Applicable

✓Not applicable

Explanation of environmental protection information of companies not on the watch list of key pollutant discharging units

✓Applicable

□Not applicable

Chalieco adhered to the guidance of Xi Jinping's ecological civilization thought, thoroughly implemented the new development concept, and strictly abided by the national environmental protection laws and regulations. The Company continued to deepen its internal environmental protection work, discharged various pollutants in compliance with laws and regulations, strengthened the prevention and control of pollution at the front line of production and construction, and earnestly fulfilled the main responsibility for environmental protection among enterprises.

The first is to thoroughly study and implement Xi Jinping's thoughts on ecological civilization and the decisions and deployments of the Party Central Committee, the State Council and the Ministry of Ecology and Environment. The Company shall actively carry out the study and promotion of Xi Jinping's new thoughts on ecological civilization construction, and take the "battle for environmental protection" and the "deployment of leaders into teams" as the starting point in order to carry out in-depth integration of Xi Jinping's ecological civilization thoughts and business, thereby achieving consistent learning, promotion, guidance and application.

Interim Report 2020 65

SECTION 6 KEY MATTERS

The second is to continuously strengthen the construction of the environmental management system, implement the risk management and control system by level, formulate annual internal audit and external audit work plans, and organize the implementation according to the plan. The Company underwent the construction of the CAHSE management system in a comprehensive manner, conscientiously drew inferences about the problems discovered in the audit process in 2019, and earnestly carried out work of "learning by analogy" thereby striving to achieve continuous improvement and steady enhancement of system operation.

The third is to strive to improve the level of essential environmental protection work and strengthen source control. Each design companies of the Company carried out design work in strict accordance with environmental protection standards and regulations, and timely updated the standards implemented during the design process to ensure that the designs of products fulfill environmental protection requirements. The Company encouraged design companies to strengthen the design optimization of energy-saving and emission-reduction technical solutions in the design process, and carry out research on new technologies and new manufacturing processes. Moreover, the Company actively advocated the research and development of new technologies, new materials and new products, and promoted and facilitated environmental protection work in a comprehensive manner.

The fourth is to strengthen the management and control of noise, sewage, waste, dust, and exhaust gas during construction and production, and strictly comply with the requirements of the local government regarding the project to equip with environmental protection equipment and facilities such as dust and noise reduction equipment, spray facilities, water trucks, fog machines, and dust monitoring devices. The Company set up fences and access control systems to achieve complete sealing management. It planned and managed the construction site by partition, and paved both permanent and temporary road surface, so that the road in the site area was completely hardened. Before the excavation of each part of the project, a fog machine was used to reduce dust. The muck was transported to the designated location, and the loess and muck accumulation area were exposed on site. Dust nets were laid to ensure that the waste residue was fully covered. The Company sprinkled the work sites to reduce dust, so that the cleaning of the sprinkling sweeping was completely cleaned. The muck transportation vehicles used airtight containers so that the materials were completely sealed and transported. The Company set up car-wash pools, car-wash stations and other devices at the entrance and exit of the sites to ensure that the vehicles were completely cleaned.

In the first half of 2020, the overall environmental protection situation of Chalieco was promising. There was no sudden environmental incident and no major administrative penalty in respect of environmental protection. The environmental protection awareness among all employees has been continuously improved. Each companies have made significant improvements in environmental protection system construction, environmental risk management and control, solid waste control, and environmental protection investment.

66 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

The reason why companies not on the watch list did not disclose environmental information

□Applicable

✓Not applicable

(IV) Explanation of subsequent development or changes of environmental information disclosed in the reporting period

□Applicable

✓Not applicable

XV. EXPLANATIONS OF OTHER MATERIAL MATTERS

Compared with the last accounting period, the change of accounting policies, accounting estimates and calculation methods and their reasons and impact

□Applicable

✓Not applicable

The correction on significant accounting errors required to be restated, its amount after correction, reasons and impact during the reporting period

□Applicable

✓Not applicable

(III) Other

□Applicable

✓Not applicable

Interim Report 2020 67

SECTION 6 KEY MATTERS

XVI. CORPORATE GOVERNANCE AND GOVERNANCE OF THE COMPANY

COMPLIANCE WITH CORPORATE GOVERNANCE CODE
The Company has always been committed to improving the level of corporate governance and regards corporate governance as an indispensable part of creating value for shareholders. With reference to the code provisions set out in the Corporate Governance Code and Corporate Governance Report in Appendix 14 to the Listing Rules of the Stock Exchange, the Company has established a modern corporate governance structure composed of general meetings, the Board, the Board of Supervisors and the senior management that can effectively balance each other's powers and operate independently. The Company has also adopted the Corporate Governance Code as its corporate governance practices.
As a company listed on the Stock Exchange, the Company has been committed to maintaining a high standard of corporate governance practices. For the six months ended 30 June 2020, the Company complied with all the code provisions and, where appropriate, adopted the recommended best practices set out in the Corporate Governance Code contained in Appendix 14 to the Listing Rules of the Stock Exchange.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS, SUPERVISORS AND RELEVANT EMPLOYEES
The Company has adopted the Model Code set out in Appendix 10 to the Listing Rules of the Stock Exchange as the code of conduct and rules governing dealings by all of our directors and supervisors in the securities of the Company. Having made specific enquiries to the directors and supervisors of the Company, all directors and supervisors have confirmed that they had strictly complied with the required standard set out in the Model Code during the reporting period. The Company has also set up guidelines in respect of the dealings by its relevant employees (as defined in the Listing Rules of the Stock Exchange) in the Company's securities, which are on no less exacting terms than the Model Code. The Company is not aware of any breach of the guidelines by its relevant employees.

The Board will examine the corporate governance practices and operations of the Company from time to time so as to ensure the compliance with relevant requirements under the Listing Rules of the Stock Exchange and to protect Shareholders' interests.

INDEPENDENT NON-EXECUTIVE DIRECTORS
The Company has appointed a sufficient number of independent non-executive directors with appropriate professional qualifications or appropriate accounting or related financial management expertise in accordance with the requirements of the Listing Rules of the Stock Exchange. The Company has appointed a total of three independent non-executive directors, being Mr. GUI Weihua, Mr. CHEUNG Hung Kwong and Mr. FU Jun.

68 China Aluminum International Engineering Corporation Limited

SECTION 6 KEY MATTERS

(IV) AUDIT COMMITTEE

The Company has established an Audit Committee in accordance with the requirements of the Listing Rules of the Stock Exchange. The primary responsibilities of the Audit Committee include communication with, and supervision and inspection of, external auditor on behalf of the Company, regulation of internal audit, evaluation on and improvement of the Company's internal control system and risk analysis on the Company's significant investment projects under operation. In performing these duties, the committee is required to make recommendation to the Board on appointment or removal of external audit firms, review and monitor the external auditor's independence and objectivity and the effectiveness of the audit procedures in accordance with applicable standards, approve the terms of remuneration and engagement of the external auditor; supervise the internal auditing mechanism of the Company and its implementation and ensure that the internal audit function is funded by adequate internal resources of the Company, review and monitor the effectiveness of the internal audit; act as the bridge of communication between the internal audit personnel and the external auditor; audit financial information of the Company and its disclosure, examine the Company's accounting practices and policies; examine the Company's internal control system and express opinion and make suggestions for the improvement and perfection of the Company's internal control system; oversee the Company's internal control and risk management system, and study important investigation results on internal control issues and the response from the management; express opinion and make suggestions on appraisal and replacement of the person in charge of the Audit Committee of the Company; review any letters issued by the external auditor to the management including any important queries raised by the auditor in respect of accounting records, financial statements or internal control systems and the management's response; determine whether the mechanism allowing employees to report on or complain about, by way of whistle-blowing, any misconduct in respect of the Company's financial reports, internal control or other matters is well established and ensure a proper arrangement of the Company which may enable fair and independent investigations and follow-up procedures for relevant issues; set up relevant procedures to deal with complaints within the scope of duties and conduct fair and independent investigations and take appropriate actions; and keep regular contact with the Board, senior management and the external auditor.

The Audit Committee consists of three directors, Mr. WANG Jun (non-executive director), Mr. CHEUNG Hung Kwong (independent non-executive director) and Mr. FU Jun (independent non- executive director). Mr. CHEUNG Hung Kwong serves as the chairman of the Audit Committee.

REVIEW OF INTERIM RESULTS
On 25 August 2020, the Audit Committee reviewed and confirmed the Company's announcement of interim results for the six months ended 30 June 2020, the 2020 interim report and unaudited interim condensed consolidated financial information for the six months ended 30 June 2020 prepared in accordance with China Accounting Standards for Business Enterprises 32 "Interim Financial Reporting".

Interim Report 2020 69

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

EQUITY INTERESTS

As at 30 June 2020, the total share capital of the Company was RMB2,959,066,667, divided into 2,959,066,667 Shares of RMB1.00 each (including 399,476,000 H Shares and 2,559,590,667 A Shares).

CHANGES IN SHARE CAPITAL
1. Changes in share capital
2. 1. Table of changes in shares
    There was no change in the total number of shares and the structure of share capital of the Company during the reporting period.
  2. Explanation of changes in shares

□Applicable

✓Not applicable

3. Effect of changes in shares on financial indicators such as earnings per share and net assets per share within the period from the end of the Reporting Period to the disclosure date of the interim report (if any)

□Applicable

✓Not applicable

4. Other information disclosure which the Company deems necessary or is required by the securities regulatory authority

□Applicable

✓Not applicable

(II) Particulars of changes of restricted shares

□Applicable

✓Not applicable

PURCHASE, SALE OR REDEMPTION OF THE LISTED SECURITIES OF THE COMPANY
As of 30 June 2020, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's securities.

70 China Aluminum International Engineering Corporation Limited

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

PARTICULARS OF SHAREHOLDERS
1. The issuance and listing of the shares

The Company is a subsidiary of China Aluminum Group and listed on the Main Board of the Stock Exchange (Stock Code: 2068) on 6 July 2012 with an offering price of HK$3.93 per H Share. The Company listed on the SSE (Stock Code: 601068) on 31 August 2018 with an offering price of RMB3.45 per A Share and 295,906,667 A Shares were issued. As at 30 June 2020, the total number of Shares in issuance of the Company is 2,959,066,667 shares, which is comprised of 399,476,000 H Shares, representing 13.5% of the issued share capital, and 2,559,590,667 A Shares, representing 86.5% of the issued share capital.

(II) Total number of shareholders

Total Number of ordinary shareholders at end of reporting period	41,159
Total Number of shareholders of preferred shares with voting right
reinstated at end of reporting period	N/A

Interim Report 2020 71

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

Table of Shareholding by top 10 shareholders and top 10 unrestricted shareholders as at end of the reporting period

							Unit: Share
		Shareholding of top 10 shareholders
					Pledged or frozen shares
		Number of		Number of
	Changes	shares held		restricted
Shareholder name	in reporting	at end of	Percentage	shares	Status		Nature of
(full name)	period	the year	(%)	held	of shares	Number	shareholder

Aluminum Corporation of China Limited	0	2,176,758,534.00	73.56	2,176,758,534.00	Nil	0	State-owned
							legal person
Hong Kong Securities Clearing Company	0	399,476,000	13.50	0	Unknown	-	Other
Nominees Limited
Luoyang Engineering & Research Institute for	0	86,925,466.00	2.94	86,925,466.00	Nil	0	State-owned
Nonferrous Metals Processing							legal person
LUAN Meixia	2,238,887.00	7,508,613.00	0.25	0	Nil	0	Domestic
							natural person
HKSCC	1,356,599.00	4,849,041.00	0.16	0	Nil	0	Other
Song Huafeng	4,368,200.00	4,645,400.00	0.16	0	Nil	0	Domestic
							natural person
Cao Xiaoluo	3,931,724.00	3,931,724.00	0.13	0	Nil	0	Domestic
							natural person
Zheng Yuhua	3,480,000.00	3,480,000.00	0.12	0	Nil	0	Domestic
							natural person
GU Jing	-230,400.00	2,556,400.00	0.09	0	Nil	0	Domestic
							natural person
ZHANG Huaiyun	175,800.00	2,502,700.00	0.08	0	Nil	0	Domestic
							natural person

72 China Aluminum International Engineering Corporation Limited

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

Shareholding of top 10 unrestricted shareholders
	Number of	Class and number of shares
	unrestricted
Shareholder name	shares held	Class	Number

Hong Kong Securities Clearing Company Nominees	399,476,000.00	Overseas listed	399,476,000.00
Limited		foreign shares
RAN Meixia	7,508,613.00	Renminbi	7,508,613.00
		ordinary shares
HKSCC	4,849,041.00	Renminbi	4,849,041.00
		ordinary shares
Song Huafeng	4,645,400.00	Renminbi	4,645,400.00
		ordinary shares
Cao Xiaoluo	3,931,724.00	Renminbi	3,931,724.00
		ordinary shares
Zheng Yuhua	3,480,000.00	Renminbi	3,480,000.00
		ordinary shares
GU Jing	2,556,400.00	Renminbi	2,556,400.00
		ordinary shares
ZHANG Huaiyun	2,502,700.00	Renminbi	2,502,700.00
		ordinary shares
Agricultural Bank of China Limited. - CSI 500	2,269,669.00	Renminbi	2,269,669.00
Exchange-traded and Open-ended Index		ordinary shares
Securities Investment Fund
Bank of Communications Co., Ltd. -GF China	1,879,560.00	Renminbi	1,879,560.00
Securities Infrastructure Project Index-based		ordinary shares
Securities Investment Fund

Explanation of related relationship or acting in concert in respect of the above shareholders

Explanation of shareholders of preferred shares with reinstated voting rights and the number of shares held

Note 1: The number of shares held by Chinalco did not include A shares of the Company indirectly held through its subsidiary Luoyang Institute and H shares of the Company indirectly held through its subsidiary Yunnan Aluminum International Company Limited (雲鋁國際有限公司). Chinalco and its subsidiaries held a total of 2,283,179,000 shares of the Company, including 2,263,684,000 A shares and 19,495,000 H shares, accounting for 77.16% of the total share capital of the Company.

Note 2: The 19,495,000 H shares of the Company held by Aluminum Corporation of China Limited through its subsidiary Yunnan Aluminum International Company Limited (雲鋁國際有限公司) were held by Hong Kong Securities Clearing Company Nominees Limited on its behalf.

Note 3: The 399,476,000 H shares of the Company held by Hong Kong Securities Clearing Company Nominees Limited included the 19,495,000 H shares held by Aluminum Corporation of China Limited through its subsidiary Yunnan Aluminum International Company Limited (雲鋁國際有限公司).

Note 4: Except the above, the Company is not aware that the above shareholders have any related relationship or are acting in concert among each other.

Not applicable.

Note: H shares held by Hong Kong Securities Clearing Company Nominees Limited were held on behalf of multiple clients, and A shares held by HKSCC were held on behalf of multiple clients. At the end of the reporting period, Hong Kong Securities Clearing Company Nominees Limited held 399,476,000 shares of the Company, and details on pledge or freeze of shares were unknown.

Interim Report 2020 73

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

Number of shares held by top ten restricted shareholders and restriction conditions

✓Applicable	□Not applicable
						Unit: Share
				Restricted shares admitted for
				trading
					Number of
					additional
			Number of		shares
			restricted	Admitted	admitted
No.	Restricted shareholder name	shares held	listing date	for listing	Restriction conditions

1	Aluminum Corporation of China Limited	2,176,758,534	31 August 2021	0	Three years from the date
						of A share listing, and
						two years from expiration
						of the lock-up period
2	Luoyang Engineering & Research Institute	86,925,466	31 August 2021	0	Three years from the date
	for Nonferrous Metals Processing				of A share listing, and
						two years from expiration
						of the lock-up period

Explanation of related relationship or acting in concert in respect of the above shareholders

The number of shares held by Chinalco did not include A shares of the Company indirectly held through its subsidiary Luoyang Institute and H shares indirectly held through its subsidiary Yunnan Aluminum International Company Limited (雲鋁國際有限公司). Chinalco and its subsidiaries held a total of 2,283,179,000 shares of the Company, including 2,263,684,000 A shares and 19,495,000 H shares, accounting for 77.16% of the total share capital of the Company.

(IV) Strategic investors or general legal persons who become top 10 shareholders due to rights issue

□Applicable

✓Not applicable

Interests and short positions of substantial shareholders in shares and underlying shares
As at 30 June 2020, so far as known to the directors of the Company, the following persons (other than the directors, supervisors or chief executives of the Company) had interests or short positions in the Shares and underlying Shares of the Company which would fall to be disclosed pursuant to Divisions 2 and 3 of Part XV of the SFO, or recorded in the register required to be kept pursuant to Section 336 of the SFO, or who were directly and/or indirectly deemed to be interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company:

74 China Aluminum International Engineering Corporation Limited

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

				Approximate
				percentage of	Approximate
				shareholding	percentage of
				in relevant	shareholding
				class of	in total share
			Number of	Shares	capital
	Class of	Capacity/Nature	Shares Held	(%)	(%)
Name of Shareholder	Shares	of interest	(Share)	(Note 1)	(Note 1)

Chinalco (Note 2)	A share	Beneficiary owner/	2,263,684,000	88.44	76.50
		Interest of controlled	(Long position)
		corporation
The Seventh Metallurgical	H share	Beneficiary owner	69,096,000	17.30	2.34
Construction Corp. Ltd.			(Long position)
CNMC Trade Company Limited	H share	Beneficiary owner	59,225,000	14.83	2.00
			(Long position)
Leading Gain Investments Limited	H share	Nominee of another	29,612,000	7.41	1.00
(Note 3)		person (other than	(Long position)
		passive trustee)
China XD Group	H share	Beneficiary owner	29,612,000	7.41	1.00
			(Long position)
Yunnan Tin (Hong Kong) Yuan Xing	H share	Beneficiary owner	29,612,000	7.41	1.00
Company Limited			(Long position)
National Council for Social Security	H share	Beneficiary owner	20,599,000	5.16	0.70
Fund (Note 4)			(Long position)
Global Cyberlinks Limited	H share	Beneficiary owner	20,579,000	5.15	0.70
			(Long position)

Note 1. The percentage is calculated by dividing number of relevant class of Shares in issue of the Company as at 30 June 2020 by total number of Shares.

Note 2. Chinalco is beneficially interested in 2,263,684,000 A Shares, representing approximately 76.50% of the total share capital of the Company. Luoyang Institute is a wholly-owned subsidiary of Chinalco and is interested in 86,925,466 A Shares, representing approximately 2.94% of the total share capital of the Company. Chinalco is therefore also deemed to be interested in the A Shares held by Luoyang Institute under the SFO.

Note 3. Leading Gain Investments Limited is the nominee holder of Beijing Jundao Technology Development Co., Ltd.

Note 4. The Company was informed in the distribution of annual dividend for 2019 that, as at 30 June 2020, the National Council for Social Security Fund held 20,599,000 H shares.

Interim Report 2020 75

SECTION 7 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

IV. CHANGES IN CONTROLLING SHAREHOLDER AND EFFECTIVE CONTROLLER

□Applicable

✓Not applicable

76 China Aluminum International Engineering Corporation Limited

SECTION 8 PARTICULARS OF PREFERRED STOCK

□Applicable

✓Not applicable

Interim Report 2020 77

SECTION 9 PARTICULARS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

PARTICULARS OF CHANGES IN SHAREHOLDING
1. Particulars of changes in shareholding of existing and resigned directors, supervisors and senior management during the reporting period

□Applicable

✓Not applicable

Descriptions of other information

□Applicable

✓Not applicable

Share incentives granted to directors, supervisors and senior management during the reporting period

□Applicable	✓Not applicable
□Applicable	✓Not applicable

Interests held by directors, supervisors and chief executives
As of 30 June 2020, none of the directors, supervisors and chief executives of the Company had any interest or short position in the Shares, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to us and the Stock Exchange.

78 China Aluminum International Engineering Corporation Limited

SECTION 9 PARTICULARS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

CHANGES IN DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE COMPANY

✓Applicable	□Not applicable
Name	Position	Change

Zong Xiaoping	Director, member of the strategy committee of	Resigned
	the Board, president

Descriptions of changes in directors, supervisors and senior management of the company

✓Applicable

□Not applicable

Mr. Zong Xiaoping has resigned from his position as a director, member of the strategic committee of the Board and president of the Company due to work redeployment, and resigned from his position as the authorized representative of the Company under Rule 3.05 of the Listing Rules of the Stock Exchange, effective from 15 June 2020. Mr. Zong Xiaoping no longer holds any position in the Company.

Except for the above changes, the Company had no other changes in directors, supervisors and senior management. At the same time, directors, supervisors and senior management confirmed that there is no information that needs to be disclosed in accordance with Rule 13.51B(1) of the Listing Rules of the Stock Exchange.

For details, please refer to the Company's announcement No. Pro 2020-039 dated 15 June 2020.

CHANGES IN THE BIOGRAPHY OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT DURING THE REPORTING PERIOD

During the reporting period, Mr. Fu Jun, the independent non-executive director of the Company, serves as the arbitrator of the Wenzhou Arbitration Commission since March 2020, and Mr. Bi Xiaoge, the Company's vice president, serves as the executive director of Beijing Zichen Investment Development Corporation Limited since March 2020. The biography of other directors, supervisors and senior management of the Company remained unchanged.

Interim Report 2020 79

SECTION 9 PARTICULARS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

IV. EMPLOYEES AND REMUNERATION POLICY

As of 30 June 2020, the Company had a total of 14,730 employees in service, among which male employees accounted for 11,284 and female employees accounted for 3,446, 77% and 23% respectively. Moreover, the Company has off-post reserved labor force of 1,658.

The following table shows a breakdown of the employees in service by business segment as of 30 June 2020:

Number of

Percentage

employees in service in the total number (%)

Operation and management personnel	3,689	25
Engineering technicians	6,954	47
Production and operation personnel	2,967	20
Service and other personnel	1,120	8

Total	14,730	100

The following table shows a breakdown of the employees in service by level of education as of 30 June 2020:

Number of

Percentage

employees in service in the total number (%)

Postgraduate degree and above	1,373	9
Undergraduate degree	6,718	46
Diploma degree	2,930	20
TAFE (Technical And Further Education) and below	3,709	25

Total	14,730	100

In accordance with regulations applicable to enterprises and the relevant requirements of all levels of local governments in areas in which the Company operates, the Company established the pension insurance, medical insurance, unemployment insurance, maternity insurance and workers' injury compensation insurance for employees. In addition, the Company and some of its subsidiaries also set up a corporate annuity system for providing retired employees with further protection. In accordance with applicable laws and regulations, the aforesaid social insurance premiums are contributed as strictly required by the state, provincial, autonomous region and municipal requirements. The Company also established an employee housing fund in accordance with applicable regulations.

For the first half of 2020, the Company's total wages amounted to RMB703 million. The Company does not have employee's share option scheme currently.

80 China Aluminum International Engineering Corporation Limited

SECTION 9 PARTICULARS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

Pursuant to the Labor Contract Law, the Company signs written employment contracts with employees, which stipulate terms on the probation period and violation penalties, dissolution of labor contracts, payment of remuneration and economical compensation as well as social insurance premium. The Company has taken a variety of measures to improve employment relationship management and fulfill its statutory obligations in a practical manner. The Company provides training for employees according to corporate business development strategies, operation objectives and job responsibilities and keeps exploring innovative training models.

The Company has established a labor union to protect employees' rights and encouraged employees to participate in the management of the Company. The Company has not experienced any strikes or other labor disputes which have interfered with its management and operations during the reporting period.

The Company endeavors to provide training for its staff. The scope of its induction and ongoing training programs covers management skills and techniques training, overseas exchange programs and other courses. Through continuing payment of education allowance, the Company also encourages its staff to engage in programs to obtain higher academic diploma and employment qualifications.

V. OTHER DESCRIPTIONS

□Applicable

✓Not applicable

Interim Report 2020 81

SECTION 10 INFORMATION ON CORPORATE BONDS

BASIC INFORMATION ON BONDS OF THE COMPANY

✓Applicable	□Not applicable
							Unit: Yuan Currency: RMB
				Date of		Outstanding	Interest	Repayment	Trading
Bond name	Abbreviation	Code	issuance	Maturing date	balance	rate (%)	terms	place

2019 Renewable	19 Zhong Gong Y1	155867	30 Oct 2019	3 (year) +N	1,500,000,000	5.29	Interest paid once	SSE
Corporate Bonds								year if the issuer
(Tranche 1)								does not exercise
								the option of
								deferred interest
								payment
Information on payment of principal of and interest on bonds of the Company
□Applicable	✓Not applicable
Other information on bonds of the Company
□Applicable	✓Not applicable

CONTACT PERSON AND CONTACT DETAILS OF CUSTODIAN AND CREDIT RATING AGENCY OF BONDS OF THE COMPANY

Custodian of bonds	Name	Ping An Securities Co., Ltd.
	Office address	61-64/F, Ping An Financial Center, 5033 Yitian Road,
		Futian District, Shenzhen
	Contacts	PAN Linhui, DONG Jingjing
	Tel	010-56800164
Credit rating agency	Name	United Credit Ratings Co., Ltd.
	Office address	508 Ai Li Yuan Apartment,
		No. 38, Shuishang Park Avenue (North),
		Nankai District, Tianjin
Other explanations:

□Applicable

✓Not applicable

82 China Aluminum International Engineering Corporation Limited

SECTION 10 INFORMATION ON CORPORATE BONDS

III. USE OF PROCEEDS OF BOND OFFERING

✓Applicable

□Not applicable

Pursuant to the China Aluminum International Engineering Corporation Limited Prospectus for Public Offering of 2019 Renewable Corporate Bonds (Tranche 1) (to Qualified Investors) disclosed by the Company on 30 October 2019, the proceeds of offering of "19 Zhong Gong Y1" bonds, net of offering costs, would be used to supplement the Company's working capital. The proceeds of offering of this tranche of bonds have been applied for such purposes as disclosed in the prospectus.

IV. CREDIT RATING OF BONDS

✓Applicable

□Not applicable

According to its Credit Rating Report (Lian He [2020] No.947) dated 21 May 2020, United Credit Ratings Co., Ltd. gave China Aluminum International Engineering Corporation Limited a long-term issuer rating of AA+ with a stable outlook, and gave its "19 Zhong Gong Y1" bond a credit rating of AAA.

CREDIT ENHANCEMENT MECHANISM, REPAYMENT SCHEME AND OTHER RELEVANT INFORMATION OF AND ON BONDS OF THE COMPANY DURING THE REPORTING PERIOD

✓Applicable

□Not applicable

According to its overall funding arrangement, the Company will duly honor the principal of and interest on bonds "19 Zhong Gong Y1" in accordance with the agreement. Please refer to the Company's subsequent announcements for specific payment arrangements.

VI. HOLDING OF BONDHOLDER MEETINGS OF THE COMPANY

✓Applicable

□Not applicable

From the date of issuance of corporate bonds to the date of disclosure of the report, the Company has not had any matters falling into the scope of authority of the bondholder meeting, so the custodian of bonds has not convened any bondholder meeting.

VII. DUTY PERFORMANCE BY CUSTODIAN OF BONDS OF THE COMPANY

✓Applicable

□Not applicable

The custodian of bonds, i.e. Ping An Securities Co., Ltd. actively performed its duties to timely issue annual reports and provisional reports on custody affairs, and to continuously supervise the Company's performance of bond-related disclosure obligations.

Interim Report 2020 83

SECTION 10 INFORMATION ON CORPORATE BONDS

VIII. ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE COMPANY AS AT THE END OF THE REPORTING PERIOD AND THE END OF LAST YEAR (OR DURING THE REPORTING PERIOD AND THE CORRESPONDING PERIOD LAST YEAR)

			Increase or decrease of
			the end of the
			Reporting Period
	At the end of the	At the end	as compared with
Main Indicators	reporting period	of last year	the end of last year (%)

Current ratio	1.30	1.27	1.77
Quick ratio	1.18	1.18	-0.38
Asset-liability ratio (%)	68.91	72.51	-4.96
Loan repayment rate (%)	100.00	100.00	-
	During the		Increase or decrease in the
	reporting	During the	Reporting Period
	period (From	corresponding	as compared with
	January	period of	the corresponding
	to June)	last year	period of last year (%)

EBITDA to interest ratio	1.11	1.47	-24.49
Interest payment rate (%)	100	100	-

Note:

1. The EBITDA calculation process is as follows:

			Unit: RMB
		This reporting	The corresponding
	Item	period	period of last year

	Net profit①	-83,058,965.87	95,046,107.89
	Add: Income tax expense②	24,610,867.04	18,509,916.37
	Interest expense paid for the then year, including interests on
	equity instruments and USD perpetual bonds ③	498,288,119.81	469,664,597.22
	Depreciation and amortization expenses accrued this year ④	115,449,659.97	108,721,648.05
	EBITDA⑤=① +②+③+④	555,289,680.95	691,942,269.53
2.	EBITDA to interest ratio
			Unit: RMB
		This reporting	The corresponding
	Item	period	period of last year

	EBITDA	555,289,680.95	691,942,269.53
	Interest expense paid for the then year, including interests on	498,288,119.81
	equity instruments and USD perpetual bonds	469,664,597.22
	EBITDA to interest ratio	1.11	1.47

84 China Aluminum International Engineering Corporation Limited

SECTION 10 INFORMATION ON CORPORATE BONDS

IX. EXPLANATION ON THE INDEBTEDNESS THAT HAS FALLEN DUE

□Applicable

✓Not applicable

INFORMATION ON PAYMENT OF PRINCIPAL OF AND INTEREST ON OTHER BONDS AND DEBT INSTRUMENTS OF THE COMPANY

✓Applicable

□Not applicable

The Company has made timely payment of principal of and interest on any other bonds and debt instruments and has disclosed relevant issues as required.

XI. CREDIT LINE GRANTED BY BANKS DURING THE REPORTING PERIOD

✓Applicable

□Not applicable

As of the reporting date, the Company had obtained RMB55.6 billion of credit line from banks, and had utilized RMB18.4 billion of credit line, leaving the available balance of credit line being RMB37.2 billion.

XII. PERFORMANCE OF AGREEMENTS OR UNDERTAKINGS IN THE PROSPECTUS FOR BONDS DURING THE REPORTING PERIOD

✓Applicable

□Not applicable

During the reporting period, the Company strictly observed relevant agreements or undertakings in the prospectus for bonds of the Company's bonds, and there was no information that shall be disclosed but was undisclosed.

XIII. MATERIAL EVENTS OF THE COMPANY AND THE IMPACT ON OPERATING RESULTS AND SOLVENCY OF THE COMPANY

□Applicable

✓Not applicable

Interim Report 2020 85

SECTION 11 FINANCIAL REPORT

大信會計師事務所	WUYIGE Certified Public Accountants.LLP	電話Telephone：+86 (10) 82330558
北京市海澱區知春路1號	15/F,Xueyuan International Tower	傳真Fax：+86 (10) 82327668
學院國際大厦15層	No.1Zhichun Road,Haidian Dist.	網址Internet：www.daxincpa.com.cn
郵編100083	Beijing,China,100083

Auditor's Report

DA XIN YUE ZI [2020] No. 1-00023

To the Shareholders of China Aluminum International Engineering Corporation Limited,

We have reviewed the accompanying financial statements of China Aluminum International Engineering Corporation Limited (hereinafter referred to as the "Company"), which comprise the consolidated and parent company's statements of financial position as at 30 June 2020, and the consolidated and parent company's statements of comprehensive income, the consolidated and parent company's statements of cash flows and the consolidated and parent company's statements of changes in shareholders' equity from January to June 2020, and notes to the financial statements. The preparation of such financial statements is the responsibility of the management of the Company, and our responsibility is to issue a review report regarding such financial statements based on our review.

We conducted our review in accordance with Chinese Institute of Certified Public Accountants Review Standards No.2101-Review of Financial Statement. This standard requires that we plan and perform the review to obtain limited assurance as to whether the financial statements are free of material misstatement. Review primarily consists of making inquiries of relevant employees within the Company and applying analytical procedures. A review is substantially less in scope than an audit conducted. We did not conduct audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the financial statements are not prepared in accordance with the Accounting Standards for Business Enterprises, which cannot present fairly, in all material respects, the consolidated and the Company's financial position as at 30 June 2020, operating results and cash flows from January to June 2020.

WUYIGE Certified Public Accountants LLP.	China Certified Public Accountant: Shi Chenqi
Beijing, China	China Certified Public Accountant: Liu Mingzhe

26 August 2020

86 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

CONSOLIDATED BALANCE SHEET

As at 30 June 2020

			Unit: RMB
Item	Note	30 June 2020	1 January 2020

Current assets
Monetary fund	5.1	6,062,871,800.85	10,025,925,365.07
Held-for-trading financial assets
Derivative financial assets	5.2	12,942,360.00
Notes receivable	5.4		569,959,008.85
Accounts receivable	5.3	14,429,586,647.13	14,284,215,819.57
Factoring of receivables	5.4	267,718,520.16
Prepayments	5.5	514,944,180.92	376,065,504.37
Other receivables	5.6	2,720,742,489.04	2,353,289,986.09
of which: Interest receivable
Dividends receivable	5.6	3,431,957.85	1,815,949.86
Inventories	5.7	3,701,876,963.48	3,110,392,382.89
Contract assets	5.8	12,598,526,645.30	13,008,312,180.99
Held-for-sale assets
Non-current asset due within one year	5.9	624,033,323.97	405,403,386.22
Other current assets	5.10	637,655,479.37	656,337,615.69

Total current assets		41,570,898,410.22	44,789,901,249.74
Non-current assets:
Debt investments
Other debt investments
Long-term receivables	5.11	1,550,980,150.25	1,910,972,285.42
Long-term equity investments	5.12	845,299,512.32	770,306,732.72
Other equity instrument investments	5.13	41,705,240.25	45,422,963.86
Other non-current financial assets	5.14	18,900,000.00	18,900,000.00
Investment properties	5.15	509,330,348.32	478,102,673.52
Fixed assets	5.16	2,256,673,594.82	2,313,832,928.14
Construction in progress	5.17	341,988,798.16	300,722,025.12
Bearer biological assets
Oil & gas assets
Rights-of-use assets	5.18	17,252,001.64	26,986,403.95
Intangible assets	5.19	1,156,269,000.88	1,086,857,150.91
Development costs	5.20	2,297,253.07	2,297,253.07
Goodwill
Long-term unamortized expenses	5.21	27,325,525.71	27,138,251.28
Deferred income tax assets	5.22	789,733,331.21	782,643,655.49
Other non-current assets	5.23	4,995,375,286.91	3,445,379,547.40

Total non-current assets		12,553,130,043.54	11,209,561,870.88

Total assets		54,124,028,453.76	55,999,463,120.62

Interim Report 2020 87

SECTION 11 FINANCIAL REPORT

Item	Note	30 June 2020	1 January 2020

Current liabilities:
Short-term borrowings	5.24	8,188,227,259.02	7,198,295,269.03
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable	5.25	625,834,357.34	957,266,218.53
Accounts payable	5.26	14,394,721,145.00	15,737,937,151.26
Advances from customers
Contract liabilities	5.27	2,453,221,168.88	2,381,391,809.44
Employee benefits payable	5.28	159,572,456.78	200,663,502.30
Taxes payable	5.29	153,203,351.87	267,058,741.21
Other payables	5.30	2,525,025,196.70	4,979,140,933.59
of which: Interest payable
Dividends payable	5.30	147,777,692.29	30,000,000.00
Held-for-sale liabilities
Non-current liabilities due within one year	5.31	1,049,955,506.07	872,946,075.66
Other current liabilities	5.32	2,545,291,315.59	2,596,562,617.52

Total current liabilities		32,095,051,757.25	35,191,262,318.54
Non-current liabilities:
Long-term borrowings	5.33	4,435,792,573.50	4,666,498,225.22
Debentures payable
of which: Preferred stock
Perpetual bonds
Lease liabilities	5.34	4,259,300.73	13,909,401.66
Long-term payables	5.35	4,898,377.18	4,598,530.23
Long-term employee benefits payable	5.36	612,815,000.00	599,488,000.00
Estimated liabilities
Deferred income	5.37	71,405,213.71	53,036,425.27
Deferred income tax liabilities	5.22	74,897,416.28	75,290,268.87
Other non-current liabilities

Total non-current liabilities		5,204,067,881.40	5,412,820,851.25

Total liabilities		37,299,119,638.65	40,604,083,169.79

88 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

Item	Note	30 June 2020	1 January 2020

Shareholders' equity:
Share capital	5.38	2,959,066,667.00	2,959,066,667.00
Other equity instruments	5.39	2,498,584,905.65	2,996,084,905.65
of which: Preferred stock
Perpetual bonds		2,498,584,905.65	2,996,084,905.65
Capital reserve	5.40	866,668,019.15	795,341,809.69
Less: treasury stock
Other comprehensive income	5.41	247,605,235.56	223,826,729.99
Special reserve	5.42	91,727,042.59	124,905,233.17
Surplus reserve	5.43	201,586,598.10	201,586,598.10
Undistributed profit	5.44	3,761,508,331.39	4,021,247,997.05

Total shareholders' equity attributable to the parent		10,626,746,799.44	11,322,059,940.65
Minority shareholders' interests		6,198,162,015.67	4,073,320,010.18

Total shareholders' equity		16,824,908,815.11	15,395,379,950.83

Total liabilities and shareholders' equity		54,124,028,453.76	55,999,463,120.62

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

Interim Report 2020 89

SECTION 11 FINANCIAL REPORT

BALANCE SHEET OF THE PARENT

As at 30 June 2020

			Unit: RMB
Item	Note	30 June 2020	1 January 2020

Current assets:
Monetary fund		1,718,418,990.05	2,373,696,059.99
Held-for-trading financial assets
Derivative financial assets		6,861,900.00
Notes receivable			139,433,342.34
Accounts receivable	15.1	1,665,223,326.00	1,516,735,150.81
Factoring of receivables		27,118,017.00
Prepayments		162,096,118.33	83,025,087.51
Other receivables	15.2	6,250,816,733.83	5,320,321,539.47
of which: Interest receivable
Dividends receivable		243,861,714.08	130,825,077.12
Inventories		139,595,451.54	156,652,612.17
Contract assets		584,519,893.42	559,798,235.37
Held-for-sale assets
Non-current asset due within one year		925,985,752.00	1,150,000,000.00
Other current assets		81,460,546.37	96,188,791.51

Total current assets		11,562,096,728.54	11,395,850,819.17
Non-current assets:
Debt investments
Other debt investments
Long-term receivables		1,057,457,487.39	1,038,065,453.50
Long-term equity investments	15.3	6,193,481,937.80	6,160,668,872.38
Other equity instrument investments		18,180,000.00	18,180,000.00
Other non-current financial assets		18,900,000.00	18,900,000.00
Investment properties
Fixed assets		77,782,365.52	80,233,096.11
Construction in progress
Bearer biological assets
Oil & gas assets
Rights-of-use assets
Intangible assets		144,275,881.15	147,688,005.51
Development costs
Long-term unamortized expenses
Deferred income tax assets		89,732,670.51	81,208,124.13
Other non-current assets

Total non-current assets		7,599,810,342.37	7,544,943,551.63

Total assets		19,161,907,070.91	18,940,794,370.80

90 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

Item	Note	30 June 2020	1 January 2020

Current liabilities:
Short-term borrowings		3,748,492,679.44	2,849,800,200.00
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable		53,215,000.00	129,848,202.57
Accounts payable		1,854,563,417.08	1,899,655,199.50
Advances from customers
Contract liabilities		727,544,961.58	706,997,265.31
Employee benefits payable		4,600,506.00	5,152,326.82
Taxes payable		6,175,249.52	7,021,293.26
Other payables		1,302,555,448.74	1,180,427,289.85
of which: Interest payable
Dividends payable		90,002,640.00	30,000,000.00
Held-for-sale liabilities
Non-current liabilities due within one year		609,073,055.55	740,000,000.00
Other current liabilities		1,033,777,125.18	1,045,727,361.76

Total current liabilities		9,339,997,443.09	8,564,629,139.07
Non-current liabilities:
Long-term borrowings		3,094,000,000.00	2,990,000,000.00
Debentures payable
of which: Preferred stock
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable		3,814,000.00	3,754,000.00
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities

Total non-current liabilities		3,097,814,000.00	2,993,754,000.00

Total liabilities		12,437,811,443.09	11,558,383,139.07

Interim Report 2020 91

SECTION 11 FINANCIAL REPORT

Item	Note	30 June 2020	1 January 2020

Shareholders' equity:
Share capital		2,959,066,667.00	2,959,066,667.00
Other equity instruments		2,498,584,905.65	2,996,084,905.65
of which: Preferred stock
Perpetual bonds		2,498,584,905.65	2,996,084,905.65
Capital reserve		1,190,696,521.57	1,193,196,521.57
Less: treasury stock
Other comprehensive income		17,566,885.00	11,735,970.00
Special reserve		843,612.00	810,240.05
Surplus reserve		201,586,598.10	201,586,598.10
Undistributed profit		-144,249,561.50	19,930,329.36

Total shareholders' equity		6,724,095,627.82	7,382,411,231.73

Total liabilities and shareholders' equity		19,161,907,070.91	18,940,794,370.80

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

92 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

CONSOLIDATED INCOME STATEMENT

From January to June 2020

			Unit: RMB
		From January	From January
Item	Note	to June 2020	to June 2019

I. Operating revenue	5.45	9,946,610,462.50	13,516,498,871.86
Less: operating cost	5.45	9,017,006,662.60	12,294,555,366.55
Taxes and surcharges	5.46	46,223,717.19	50,981,259.22
Sales expense	5.47	43,997,237.87	51,133,656.20
Administrative expense	5.48	465,117,121.96	525,882,396.43
R&D expense	5.49	162,612,950.76	173,181,873.60
Finance expense	5.50	242,706,295.60	262,157,109.80
of which: Interest expense		310,655,807.61	353,906,746.61
Interest income		98,842,810.55	119,500,230.46
Add: other gains	5.51	38,554,451.01	6,103,533.24
Gain on investment ("-" for loss)	5.52	-23,173,017.33	-6,343,498.25
of which: Share of investment gain of profits of associates
and joint ventures		-2,972,919.15	-2,525,244.67
Gain on de-recognition of financial assets
measured at amortized cost ("-" for loss)		-21,011,252.42
Gain on exposure netting ("-" for loss)
Gain on fair value change ("-" for loss)	5.53		164,450.00
Credit impairment loss ("-" for loss)	5.54	-89,070,388.11	-35,528,168.58
Asset impairment loss ("-" for loss)
Gins on disposal of assets ("-" for loss)	5.55	10,018,573.55	3,496,137.16

II. Operating profit ("-" for loss)		-94,723,904.36	126,499,663.63
Add: non-operating income	5.56	38,872,680.64	17,163,224.31
Less: non-operating expense	5.57	2,596,875.11	30,106,863.68

III. Total profit ("-" for total loss)		-58,448,098.83	113,556,024.26
Less: income tax expense	5.58	24,610,867.04	18,509,916.37

IV. Net profit ("-" for net loss)		-83,058,965.87	95,046,107.89
(I) Classified on a going concern basis:
1. Net profit from continuing operations ("-" for net loss)		-83,058,965.87	95,046,107.89
2. Net profit from discontinued operations ("-" for net loss)
(II) Classified according to the ownership:
1. Net profit attributable to owners of the parent company
("-" for net loss)		-143,153,691.94	10,061,243.36
2. Profit and loss attributable to minority shareholders
("-" for net loss)		60,094,726.07	84,984,864.53

Interim Report 2020 93

SECTION 11 FINANCIAL REPORT

			From January	From January
Item		Note	to June 2020	to June 2019

V. Other comprehensive income, net of tax		23,791,556.97	34,258,788.26
(I) Other comprehensive income attributable to shareholders
of the parent, net of tax		23,778,505.57	34,195,410.67
1. Items that may not be reclassified to profit or loss		-3,205,216.47	23,365,405.60
(1)	Change on remeasurement of defined benefit plan		-28,709.18	-13,356.50
(2)	Other comprehensive income under equity method
	that may not be transferred to profit or loss
(3)	Change in fair value of other equity instrument
	investment		-3,176,507.29	23,378,762.10

Fair value change arising from credit risk of the Company

2. Items that will be reclassified subsequently to profit loss	26,983,722.04	10,830,005.07
(1)	Other comprehensive income under equity method
	that may be transferred to profit or loss
(2)	Change in fair value of other debt investments
(3)	Amount recorded in other comprehensive income
	upon financial assets reclassification
(4)	Credit impairment provision for other debt
	investment
(5)	Cash flow hedge reserve	10,392,960.00
(6)	Exchange difference on translation of financial
	statements in foreign currency	16,590,762.04	10,830,005.07

1. Others
Other comprehensive income attributable to minority

	shareholders, net of tax	13,051.40	63,377.59

VI. Total comprehensive income	-59,267,408.90	129,304,896.15
(I)	Total comprehensive income attributable to
	shareholders of the parent	-119,375,186.37	44,256,654.03
(II)	Total comprehensive income attributable to
	minority shareholders	60,107,777.47	85,048,242.12

VII.EPS
(I)	Basic	-0.07	-0.01
(II)	Diluted	-	-

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

94 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

INCOME STATEMENT OF THE PARENT

From January to June 2020

			Unit: RMB
		From January	From January
Item	Note	to June 2020	to June 2019

I. Operating revenue	15.4	525,678,666.49	319,789,341.90
Less: operating cost	15.4	500,340,072.63	277,775,377.21
Taxes and surcharges		2,078,149.45	1,834,585.23
Sales expense		14,753,045.33	16,957,798.50
Administrative expense		77,428,175.63	63,837,755.32
R&D expense		15,991,870.05	19,837,768.03
Finance expense		31,672,586.21	107,541,700.77
of which: Interest expense		186,268,609.52	285,664,743.21
Interest income		157,128,158.63	185,264,271.68
Add: other gains		866,074.99	277,985.08
Gain on investment ("-" for loss)	15.5	122,338,531.77	205,195,718.16
of which: Share of investment gain of associates and
joint ventures		3,759,073.41	-949,718.57
Gain on de-recognition of financial assets
measured at amortized cost ("-" for loss)
Gain on exposure netting ("-" for loss)
Gain on fair value change ("-" for loss)
Credit impairment loss ("-" for loss)		-64,434,922.76	-25,016,364.05
Asset impairment loss ("-" for loss)
Gins on disposal of assets ("-" for loss)

II. Operating profit ("-" for loss)		-57,815,548.81	12,461,696.03
Add: non-operating income		264,629.12	182,428.35
Less: non-operating expense		10,040.38	49,927.77

III. Total profit ("-" for total loss)		-57,560,960.07	12,594,196.61
Less: income tax expense		-9,967,042.93	-6,102,027.10

IV. Net profit ("-" for net loss)		-47,593,917.14	18,696,223.71
(I) Net profit from continuing operations ("-" for net loss)		-47,593,917.14	18,696,223.71
(II) Net profit from discontinued operations ("-" for net loss)

Interim Report 2020 95

SECTION 11 FINANCIAL REPORT

		From January	From January
Item	Note	to June 2020	to June 2019

V. Other comprehensive income, net of tax		5,830,915.00	23,349,615.46
(I) Items that may not be reclassified to profit or loss		-1,700.00	23,349,615.46
1. Change on remeasurement of defined benefit plan		-1,700.00	-1,700.00

Other comprehensive income under equity method that may not be transferred to profit or loss
Change in fair value of other equity instrument

investment	23,351,315.46
4. Fair value change arising from credit risk of the
Company
(II) Items that will be reclassified subsequently to profit loss	5,832,615.00

Other comprehensive income under equity method that may be transferred to profit or loss
Change in fair value of other debt investments
Amount recorded in other comprehensive income upon financial assets reclassification
Credit impairment provision for other debt investment

(5) Cash flow hedge reserve

5,832,615.00

Exchange difference on translation of financial statements in foreign currency
Others

VI. Total comprehensive income	-41,763,002.14	42,045,839.17

VII.EPS

Basic

Diluted

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

96 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

CONSOLIDATED STATEMENT OF CASH FLOWS

From January to June 2020

				Unit: RMB
			From January	From January
Item	Note	to June 2020	to June 2019

I.	Cash flows from operating activities:
	Cash received from sales of goods or rendering of services		10,720,584,781.08	12,060,059,218.99
	Tax rebate received		22,277,592.17	21,505,031.26
	Other cash received relating to operating activities		571,790,944.23	459,039,246.98

	Subtotal of cash inflows from operating activities		11,314,653,317.48	12,540,603,497.23
	Cash paid for sales of goods or rendering of services		11,198,030,493.92	11,538,236,487.26
	Cash paid to and for employees		1,049,082,352.05	1,166,691,668.71
	Taxes paid		393,505,426.79	440,616,206.52
	Other cash paid relating to operating activities		240,975,932.13	481,910,234.26

	Subtotal of cash outflows from operating activities		12,881,594,204.89	13,627,454,596.75

	Net cash flows from operating activities		-1,566,940,887.41	-1,086,851,099.52
II.	Cash flows from investing activities:
	Refund of investments		115,333,933.92	765,795,875.34
	Gain on investment received		29,864,553.49	23,332,754.73
	Net proceeds from disposal of fixed assets, intangible assets
	and other long-term assets		1,169,873.93	7,946,769.23
	Net proceeds from disposal of a subsidiary and other business
	unit			89,855,835.11
	Other cash received relating to investing activities		50,000,000.00

	Subtotal of cash inflows from investing activities		196,368,361.34	886,931,234.41
	Cash paid for purchase and construction of fixed assets,
	intangible assets and other long-term assets		1,596,147,833.82	165,017,087.41
	Payment for investments		137,626,014.73	618,743,653.06
	Net cash paid for acquisition of a subsidiary and other
	business unit		25,418.56	247,868,539.60
	Other cash paid relating to investing activities		100,000,000.00

	Subtotal of cash outflows from investing activities		1,833,799,267.11	1,031,629,280.07

	Net cash flows from investing activities		-1,637,430,905.77	-144,698,045.66

Interim Report 2020 97

SECTION 11 FINANCIAL REPORT

		From January	From January
Item	Note	to June 2020	to June 2019

III. Cash flows from financing activities:
Capital contributions received		2,300,000,000.00
of which: Capital contributions received by subsidiaries from
minority shareholders		2,300,000,000.00
Borrowings received		12,656,835,977.77	10,781,159,148.17
Other cash received relating to financing activities

Subtotal of cash inflows from financing activities		14,956,835,977.77	10,781,159,148.17
Repayment of debts		11,858,000,000.00	9,308,106,823.09
Distribution of dividends or profit or payment of interest		498,288,119.81	469,664,597.22
of which: Dividends or profits paid by subsidiaries to non-
controlling interests			68,987,253.17
Other cash paid relating to financing activities		2,959,437,446.22	5,010,994.11

Subtotal of cash outflows from financing activities		15,315,725,566.03	9,782,782,414.42

Net cash flows from financing activities		-358,889,588.26	998,376,733.75
IV. Impact of exchange rate on cash and cash equivalents		-33,737,566.46	7,936,775.95

V. Net increase in cash and cash equivalents		-3,596,998,947.90	-225,235,635.48
Add: Cash and cash equivalents at beginning of the period		9,120,495,450.16	5,831,581,515.94

VI. Cash and cash equivalents at end of the period		5,523,496,502.26	5,606,345,880.46

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

98 China Aluminum International Engineering Corporation Limited

SECTION 11 FINANCIAL REPORT

STATEMENT OF CASH FLOWS OF THE PARENT

From January to June 2020

				Unit: RMB
			From January	From January
Item	Note	to June 2020	to June 2019

I.	Cash flows from operating activities:
	Cash received from sales of goods or rendering of services		989,085,001.19	525,628,734.76
	Tax rebate received
	Other cash received relating to operating activities		416,357,671.87	98,550,826.89

	Subtotal of cash inflows from operating activities		1,405,442,673.06	624,179,561.65
	Cash paid for sales of goods or rendering of services		1,344,003,623.59	836,824,551.07
	Cash paid to and for employees		115,162,106.07	131,482,513.16
	Taxes paid		5,415,818.56	11,412,982.89
	Other cash paid relating to operating activities		28,366,111.48	741,355,874.31

	Subtotal of cash outflows from operating activities		1,492,947,659.70	1,721,075,921.43

	Net cash flows from operating activities		-87,504,986.64	-1,096,896,359.78
II.	Cash flows from investing activities:
	Refund of investments		2,188,600,000.00	3,588,860,000.00
	Gain on investment received		176,170,364.13	344,272,815.96
	Net proceeds from disposal of fixed assets, intangible assets
	and other long-term assets
	Net proceeds from disposal of a subsidiary and other business
	unit
	Other cash received relating to investing activities

	Subtotal of cash inflows from investing activities		2,364,770,364.13	3,933,132,815.96
	Cash paid for purchase and construction of fixed assets,
	intangible assets and other long-term assets		242,428.99	1,928,853.96
	Payment for investments		2,956,900,000.00	3,904,325,779.80
	Net cash paid for acquisition of a subsidiary and other
	business unit		30,670,000.00
	Other cash paid relating to investing activities		10,000,000.00

	Subtotal of cash outflows from investing activities		2,997,812,428.99	3,906,254,633.76

	Net cash flows from investing activities		-633,042,064.86	26,878,182.20

Interim Report 2020 99

SECTION 11 FINANCIAL REPORT

		From January	From January
Item	Note	to June 2020	to June 2019

III. Cash flows from financing activities:
Capital contributions received
Borrowings received		9,034,627,777.77	7,300,000,000.00
Other cash received relating to financing activities

Subtotal of cash inflows from financing activities		9,034,627,777.77	7,300,000,000.00
Repayment of debts		8,170,000,000.00	6,198,496,823.09
Distribution of dividends or profit or payment of interest		247,478,014.31	271,926,069.81
Other cash paid relating to financing activities		500,225,536.28

Subtotal of cash outflows from financing activities		8,917,703,550.59	6,470,422,892.90

Net cash flows from financing activities		116,924,227.18	829,577,107.10
IV. Impact of exchange rate on cash and cash equivalents		-18,909,145.62	12,421.20

V. Net increase in cash and cash equivalents		-622,531,969.94	-240,428,649.28
Add: Cash and cash equivalents at beginning of the period		2,319,883,981.64	2,184,186,118.60

VI. Cash and cash equivalents at end of the period		1,697,352,011.70	1,943,757,469.32

Legal representative:	Accounting principal:	Accounting function's principal:
WU Jianqiang	ZHANG Jian	ZHANG Xiuyin

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

Original document
Permalink

Disclaimer

China Aluminum International Engineering Corp. Ltd. published this content on 11 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 September 2020 09:34:08 UTC

End-of-day quote Shanghai S.E. Other stock markets 06:00:00 2024-04-25 pm EDT			5-day change	1st Jan Change
4.67 ^CNY	+3.09%		-5.27%	+1.08%

Apr. 19	China Aluminum International Engineering Q1 Profit Surges, Shares Gain 16%	MT
Apr. 18	China Aluminum International Engineering Corporation Limited Reports Earnings Results for the First Quarter Ended March 31, 2024	CI

China Aluminum International Engineering Corporation Limited

Equities

601068

CNE1000036M9

Construction & Engineering

China Aluminum International Engineering : Interim Report 2020

Latest news about China Aluminum International Engineering Corporation Limited

Chart China Aluminum International Engineering Corporation Limited

Company Profile

Income Statement Evolution

Sector Other Construction & Engineering

	1st Jan change	Capi.
CHINA ALUMINUM INTERNATIONAL ENGINEERING CORPORATION LIMITED	+1.08%	1.75B
VINCI	-2.29%	67.67B
LARSEN & TOUBRO LIMITED	+3.09%	59.37B
QUANTA SERVICES, INC.	+21.25%	38.3B
CHINA STATE CONSTRUCTION ENGINEERING CORPORATION LIMITED	+11.23%	30.73B
FERROVIAL SE	+2.06%	26.35B
CHINA RAILWAY GROUP LIMITED	+22.89%	22.01B
WSP GLOBAL INC.	+15.06%	19.47B
CHINA COMMUNICATIONS CONSTRUCTION COMPANY LIMITED	+24.43%	17.6B
EMCOR GROUP, INC.	+64.33%	16.64B