China International Capital : ANNOUNCEMENT IN RELATION TO PROVISION FOR ASSET IMPAIRMENT

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China International Capital Corporation Limited ʕ਷਷ყږፄٰ΅Ϟࠢʮ̡

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 03908)

ANNOUNCEMENT IN RELATION TO PROVISION FOR ASSET IMPAIRMENT

This announcement is made by China International Capital Corporation Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

On March 30, 2021, the Company convened the Eleventh Meeting of the Second Session of the Board of Directors (the "Board") and the Eighth Meeting of the Second Session of the Supervisory Committee (the "Supervisory Committee"), at which the Proposal regarding the Provision for Asset Impairment was considered and approved. Details are hereby announced as follows (the financial data contained in this announcement is on a consolidated basis):

I. OVERVIEW ON PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR

To give a true and fair view of the financial position of the Company as of December 31, 2020 and the operating results of the Company for 2020, in accordance with the requirements of relevant accounting standards and financial reporting standards, the Company and its subsidiaries made an assessment on expected credit loss of various types of assets which were subject to impairment as of December 31, 2020, of which the provision for the impairment of assets required to be made in 2020 amounted to be RMB973 millionNote (the "Provision for Asset Impairment of This Year"). The details are as follows:

Unit: RMB Million
Provision for
impairment
Items	of 2020
Accounts receivable and other receivables	572.0589
Financial assets held under resale agreements ("Reverse REPOs")	287.0541
Receivable from margin clients	111.9609
Financial assets at fair value through other
comprehensive income and others	1.7214
Total	972.7953
Note: Certain amounts included in this announcement have been subject to rounding.
1

II. IMPACT OF PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR ON THE COMPANY

In 2020, the provision for impairment losses under expected credit loss model of the Company amounted to RMB973 million, resulting in a negative impact of RMB973 million on profit before income tax and a negative impact of RMB749 million on net profit of the Company.

III. DETAILS OF PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR

The impairment losses in 2020 increased as compared with that in 2019, mainly due to an increased impairment provided for financing businesses including margin financing and securities lending, stock-pledged repurchase and agreed repurchase and an increased impairment provided for accounts receivable and other receivables. The Company cautiously assesses its credit risk, and comprehensively and reasonably recognizes impairment losses by taking into account the credit status and performance guarantees of clients and forward-looking macro information.

(I) Accounts receivable and other receivables

The provision for impairment of accounts receivable and other receivables of the Company amounted to RMB572.0589 million in 2020 and RMB187.9400 million in 2019 respectively.

• (II) Reverse REPOs

  The provision for impairment of Reverse REPOs amounted to RMB287.0541 million in 2020; the reversal of impairment amounted to RMB43.1963 million in 2019.

• (III) Receivable from margin clients

  The provision for impairment of receivable from margin clients of the Company amounted to RMB111.9609 million in 2020 and RMB18.7721 million in 2019 respectively.

• (IV) Financial assets at fair value through other comprehensive income and others

  The provision for impairment of financial assets at fair value through other comprehensive income and others of the Company amounted to RMB1.7214 million in 2020; the reversal of impairment amounted to RMB3.9180 million in 2019.

IV. OPINION OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS ON THE PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR

The independent non-executive directors of the Company are of the view that the Provision for Asset Impairment of This Year of the Company is in accordance with Chinese Accounting Standards for Business Enterprises ("CASs"), and gives a true and fair view of the financial position of the Company as at December 31, 2020 and the operating results of the Company for 2020, which is in the interests of the Company and minority shareholders. The decision-making procedures for the Provision for Asset Impairment of This Year are in compliance with the relevant laws and regulations and the Articles of Association of China International Capital Corporation Limited (the "Articles of Association"). The Provision for Asset Impairment of This Year of the Company was approved by the independent non-executive directors.

V. OPINION OF THE AUDIT COMMITTEE OF THE BOARD ON THE PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR

On March 25, 2021, the Company convened the First Meeting of the Audit Committee of the Board for 2021, at which the Proposal regarding the Provision for Asset Impairment was considered and approved. The Audit Committee of the Board is of the view that the Provision for Asset Impairment of This Year of the Company is in accordance with CASs, and gives a true and fair view of the financial position of the Company as at December 31, 2020 and the operating results of the Company for 2020. The Provision for Asset Impairment of This Year of the Company was approved by the Audit Committee of the Board.

VI. OPINION OF THE BOARD ON THE PROVISION FOR ASSET IMPAIRMENT OF THIS YEAR

On March 30, 2021, the Company convened the Eleventh Meeting of the Second Session of the Board, at which the Proposal regarding the Provision for Asset Impairment was considered and approved. The Board is of the view that the Provision for Asset Impairment of This Year of the Company is in accordance with CASs, and gives a true and fair view of the financial position of the Company as at December 31, 2020 and the operating results of the Company for 2020. The Provision for Asset Impairment of This Year of the Company was approved by the Board.

VII. OPINION OF THE SUPERVISORY COMMITTEE ON THE PROVISION FOR ASSET

IMPAIRMENT OF THIS YEAR

On March 30, 2021, the Company convened the Eighth Meeting of the Second Session of the Supervisory Committee, at which the Proposal regarding the Provision for Asset Impairment was considered and approved. The Supervisory Committee is of the view that the Provision for Asset Impairment of This Year of the Company is in accordance with CASs, and gives an true and fair view of the financial position of the Company as at December 31, 2020 and the operating results of the Company for 2020. The relevant decision-making procedures are in compliance with the relevant laws and regulations and the Articles of Association, without prejudice to the interests of the Company and the shareholders. The Provision for Asset Impairment of This Year of the Company was approved by the Supervisory Committee.

By order of the Board

China International Capital Corporation Limited

Secretary to the Board

Sun Nan

Beijing, the PRC

March 30, 2021

As at the date of this announcement, the Executive Director of the Company is Mr. Huang Zhaohui; the Non-executive Directors are Mr. Shen Rujun, Ms. Tan Lixia and Mr. Duan Wenwu; and the Independent Non-executive Directors are Mr. Liu Li, Mr. Siu Wai Keung, Mr. Ben Shenglin and Mr. Peter Hugh Nolan.