THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Aluminum International Engineering Corporation Limited, you should at once hand this circular and the accompanying form of proxy and reply slip to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHALIECO

中 鋁 國 際 工 程 股 份 有 限 公 司

China Aluminum International Engineering Corporation Limited

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

(Stock Code: 2068)

RENEWAL OF THE GENERAL SERVICES MASTER AGREEMENT RENEWAL OF THE COMMODITIES SALES AND PURCHASES MASTER AGREEMENT

RENEWAL OF THE ENGINEERING SERVICES MASTER AGREEMENT

ENTERING INTO THE FINANCE LEASE FRAMEWORK

COOPERATION AGREEMENT

PROPOSED ALIGNMENT IN THE PREPARATION OF

FINANCIAL STATEMENTS IN ACCORDANCE WITH THE

CHINA ACCOUNTING STANDARDS FOR

BUSINESS ENTERPRISES

PROPOSED CESSATION OF APPOINTMENT

OF THE INTERNATIONAL AUDITOR

NOTICE OF THE FOURTH

EXTRAORDINARY GENERAL MEETING IN 2019

AND

SUPPLEMENTARY NOTICE OF THE FOURTH

EXTRAORDINARY GENERAL MEETING IN 2019

Independent Financial Adviser to the Independent Board Committee

and the Independent Shareholders

The fourth extraordinary general meeting in 2019 (the "EGM") will be held at Conference Room 211 of China Aluminum International Engineering Corporation Limited, Building C, No. 99 Xingshikou Road, Haidian District, Beijing at 9:30 a.m. on Monday, 30 December 2019. The Notice of the EGM and the Supplementary Notice of the EGM are set out on pages 84 to 87 of this circular.

A form of proxy is enclosed herewith and is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk). Shareholders who intend to appoint a proxy to attend the EGM shall complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending the EGM and voting in person if you so wish.

The reply slip for use at the EGM has been published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) on 30 October 2019. Shareholders who intend to attend the EGM in person or appoint a proxy to attend are requested to complete the enclosed reply slip in accordance with the instructions printed thereon and return it to the Company's Hong Kong H Share registrar, Computershare Hong Kong Investor Services Limited, (in case of holders of H Shares of the Company) on or before Tuesday, 10 December 2019.

13 December 2019

CONTENTS

Page

Definitions . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . .

49

Letter from Gram Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51

Appendix I -

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78

Notice of the Fourth Extraordinary General Meeting in 2019 . . . . . . . . . . . . . . . . .

84

Supplementary Notice of the Fourth Extraordinary General Meeting in 2019 . . . .

86

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

"Articles of Association"

the articles of association of China Aluminum

International Engineering Corporation Limited, as

amended, modified or otherwise supplemented from

time to time

"A Share(s)"

the ordinary Share(s) of the Company with a nominal

value of RMB1.00 each which were issued in the PRC

and subscribed in RMB and are listed on the Shanghai

Stock Exchange

"Board"

the board of Directors of the Company

"China Aluminum Group"

Aluminum Corporation of China (中國鋁業集團有限公

司), a state-owned enterprise incorporated under the

laws of the PRC and a Controlling Shareholder of the

Company

"Chinalco Finance Lease"

Chinalco Finance Lease Co., Ltd. (中鋁融資租賃有限公

司), a company incorporated under the laws of the

PRC with limited liability and the subsidiary of China

Aluminum Group which is the Controlling

Shareholder of the Company

"CNPT"

China Nonferrous Metals Processing Technology Co.,

Ltd. (中色科技股份有限公司), a joint stock limited

company incorporated in the PRC and a subsidiary

owned as to 73.5% by the Company

"Commodities Sales and

the commodities sales and purchases master

Purchases Master Agreement"

agreement entered into between the Company and

China Aluminum Group on 30 October 2019

"Company"

China Aluminum International Engineering

Corporation Limited (中鋁國際工程股份有限公司),

a joint stock limited company incorporated in the

PRC, the A Shares of which are listed on the Shanghai

Stock Exchange and the H Shares of which are listed

on the Stock Exchange

"connected person(s)"

has the meaning ascribed to it under the Listing Rules

"connected transaction(s)"

has the meaning ascribed to it under the Listing Rules

"continuing connected

has the meaning ascribed to it under the Listing Rules

transaction(s)"

- 1 -

DEFINITIONS

"Controlling Shareholder(s)"

has the meaning ascribed to it under the Listing Rules

"Director(s)"

the director(s) of the Company

"EGM"

the fourth extraordinary general meeting in 2019 of

the Company, which is to be held at Conference Room

211 of China Aluminum International Engineering

Corporation Limited, Building C, No. 99 Xingshikou

Road, Haidian District, Beijing at 9:30 a.m. on

Monday, 30 December 2019

"Engineering Services Master

the engineering services master agreement entered

Agreement"

into between the Company and China Aluminum

Group on 30 October 2019

"Finance Lease Framework

the finance lease framework cooperation agreement

Cooperation Agreement"

entered into between the Company and Chinalco

Finance Lease on 30 October 2019 in relation to the

provision of lease services, investment and financial

consulting services and account receivables

management services to the Company by Chinalco

Finance Lease

"General Services Master

the general services master agreement entered into

Agreement"

between the Company and China Aluminum Group

on 30 October 2019

"Group"

the Company and its subsidiaries

"Hong Kong"

the Hong Kong Special Administrative Region of the

People's Republic of China

"H Share(s)"

the overseas listed foreign invested Share(s) with a

nominal value of RMB1.00 each in the ordinary share

capital of the Company, which are subscribed for and

traded in Hong Kong dollars and listed on the Stock

Exchange

"Independent Board

an independent committee of the Board established

Committee"

for the purpose of considering the Commodities Sales

and Purchases Master Agreement, the Engineering

Services Master Agreement and the Finance Lease

Framework Cooperation Agreement and the

transactions contemplated thereunder, including the

annual caps, comprising all independent

non-executive Directors who are independent of the

transactions

- 2 -

DEFINITIONS

"Independent Financial

Gram Capital Limited, a licensed corporation to carry

Adviser" or "Gram Capital"

out Type 6 (advising on corporate finance) regulated

activity under the SFO, being the independent

financial adviser who has been appointed for the

Independent Board Committee and the Independent

Shareholders in relation to considering the

Commodities Sales and Purchases Master Agreement,

the Engineering Services Master Agreement, the

Finance Lease Framework Cooperation Agreement

and the transactions contemplated thereunder,

including the annual caps

"Independent Shareholders"

the shareholders of the Company other than China

Aluminum Group and its associates

"independent third party(ies)"

has the meaning ascribed to it under the Listing Rules

"Latest Practicable Date"

10 December 2019, being the latest practicable date

prior to the printing of this circular to ascertain

certain information contained herein

"Listing Rules"

the Rules Governing the Listing of Securities on The

Stock Exchange of Hong Kong Limited, as amended,

supplemented or otherwise modified from time to

time

"Luoyang Institute"

Luoyang Engineering & Research Institute for

Nonferrous Metals Processing Co., Ltd. (洛陽有色金屬

加工設計研究院有限公司), a company incorporated

under the laws of the PRC with limited liability, a

wholly-owned subsidiary of China Aluminum Group

and holding 2.94% of the existing issued share capital

of the Company

"Notice of the EGM"

the notice of the fourth extraordinary general meeting

in 2019

"PRC"

the People's Republic of China

"RMB"

Renminbi, the lawful currency of the PRC

"SFO"

the Securities and Futures Ordinance (Chapter 571 of

the Laws of Hong Kong), as amended, supplemented

or otherwise modified from time to time

"Shareholders"

the holders of Shares of the Company

- 3 -

DEFINITIONS

"Shares"

the shares in the share capital of the Company at par

value of RMB1.00 per share, including A Shares and H

Shares

"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 company incorporated in the PRC

with limited liability and a wholly-owned subsidiary

of the Company

"Stock Exchange"

The Stock Exchange of Hong Kong Limited

"Supplementary Notice of the

the supplementary notice of the fourth extraordinary

EGM"

general meeting in 2019

- 4 -

LETTER FROM THE BOARD

CHALIECO

中 鋁 國 際 工 程 股 份 有 限 公 司

China Aluminum International Engineering Corporation Limited

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

(Stock Code: 2068)

Non-executive Directors:

Registered Office in the PRC:

Mr. WANG Jun

Building C

Mr. LI Yihua

No. 99 Xingshikou Road

Haidian District

Executive Directors:

Beijing

Mr. WU Jianqiang

PRC

Mr. ZONG Xiaoping

Mr. WU Zhigang

Head Office in the PRC:

Mr. ZHANG Jian

Building C

No. 99 Xingshikou Road

Independent Non-executive Directors:

Haidian District

Mr. GUI Weihua

Beijing

Mr. CHEUNG Hung Kwong

PRC

Mr. FU Jun

Principal Place of Business

in Hong Kong:

Room 4501

Far East Finance Centre

No. 16 Harcourt Road

Admiralty

Hong Kong

To the Shareholders

Dear Sirs or Madams,

RENEWAL OF THE GENERAL SERVICES MASTER AGREEMENT RENEWAL OF THE COMMODITIES SALES AND PURCHASES MASTER AGREEMENT

RENEWAL OF THE ENGINEERING SERVICES MASTER AGREEMENT

ENTERING INTO THE FINANCE LEASE FRAMEWORK

COOPERATION AGREEMENT

PROPOSED ALIGNMENT IN THE PREPARATION OF

FINANCIAL STATEMENTS IN ACCORDANCE WITH THE

CHINA ACCOUNTING STANDARDS FOR

BUSINESS ENTERPRISES

PROPOSED CESSATION OF APPOINTMENT

OF THE INTERNATIONAL AUDITOR

NOTICE OF THE FOURTH

EXTRAORDINARY GENERAL MEETING IN 2019

AND

SUPPLEMENTARY NOTICE OF THE FOURTH EXTRAORDINARY

GENERAL MEETING IN 2019

- 5 -

LETTER FROM THE BOARD

  1. INTRODUCTION

The purpose of this circular is to issue the Notice of the EGM and the Supplementary Notice of the EGM, and provide you with relevant information for making informed decisions to vote for or against the ordinary resolutions regarding the following matters to be proposed at the meeting:

ORDINARY RESOLUTIONS

    1. To consider and approve the renewal of the General Services Master Agreement and its proposed annual caps.
    2. To consider and approve the renewal of the Commodities Sales and Purchases Master Agreement and its proposed annual caps.
    3. To consider and approve the renewal of the Engineering Services Master Agreement and its proposed annual caps.
    4. To consider and approve the Finance Lease Framework Cooperation Agreement and its proposed annual caps.
    5. To consider and approve the alignment in the preparation of financial statements in accordance with the China Accounting Standards for Business Enterprises.
    6. To consider and approve the cessation of appointment of the international auditor.
  2. RENEWAL OF THE GENERAL SERVICES MASTER AGREEMENT, THE COMMODITIES SALES AND PURCHASES MASTER AGREEMENT AND THE ENGINEERING SERVICES MASTER AGREEMENT AND THEIR RESPECTIVE PROPOSED ANNUAL CAPS
    References are made to the announcements of the Company dated 20 March 2017

and 7 April 2017, the circular dated 7 April 2017 and the announcement dated 23 May 2017 in relation to the general services master agreement, commodities sales and purchases master agreement and engineering services master agreement entered into between the Company and China Aluminum Group in order to meet the business needs and to arrange the management by the Company. As the general services master agreement, commodities sales and purchases master agreement and engineering services master agreement entered into between the Company and China Aluminum Group will expire on 31 December 2019, the Company entered into new General Services Master Agreement, Commodities Sales and Purchases Master Agreement and Engineering Services Master Agreement and the proposed annual caps of the respective transactions contemplated thereunder with China Aluminum Group on 30 October 2019 in order to meet the business needs and to arrange the management. The aforesaid agreements shall be effective upon the approval at the EGM, which shall be valid until 31 December 2022.

- 6 -

LETTER FROM THE BOARD

In accordance with the Listing Rules, the transactions contemplated under the Commodities Sales and Purchases Master Agreement and the Engineering Services Master Agreement constitute continuing connected transactions of the Company and are subject to the reporting, annual review, announcement, circular and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules. In the meantime, in accordance with the relevant requirements of the listing rules of the Shanghai Stock Exchange, the matters in relation to the renewal of the General Services Master Agreement are required to be submitted to the general meeting for consideration. Therefore, resolutions regarding the renewal of the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement and the Engineering Services Master Agreement and their respective proposed annual caps have been considered and approved at the Board meeting of the Company on 30 October 2019, and are now submitted to the EGM for consideration.

1. GENERAL SERVICES MASTER AGREEMENT - PROVISION OF GENERAL SERVICES TO CHINA ALUMINUM GROUP BY THE COMPANY

Parties:China Aluminum Group (as service recipient); and the Company (as service provider)

Date:

30 October 2019

Major terms: In accordance with the General Services Master Agreement entered into by the Company and China Aluminum Group on 30 October 2019, the Group and/or its associates may provide certain kinds of services to China Aluminum Group from time to time, primarily including: (1) provision of property leasing, warehousing and transportation services; and (2) provision of operation and management, labour and training services.

The initial term of the General Services Master Agreement shall commence from 1 January 2020 and shall expire on 31 December 2022, unless at any time either party gives at least three months' prior written notice of termination to the other party and as agreed by both parties.

- 7 -

LETTER FROM THE BOARD

Pricing policy:

The Company would first refer to average market

rates when determining the price of its various

general services. Under the limitation of no available

market rates, the Company would negotiate with

China Aluminum Group, and calculate the price on

arm's length basis with reference to costs plus a

reasonable profit margin. The reasonable margin is

determined mainly with reference to the profit rate

level of similar service provided by independent third

parties in the market during the same period, to keep

the price offered by the Company to China Aluminum

Group not lower than that offered to third parties.

Reasons for and

(1) The newly signed General Services Master

benefits of the

Agreement includes the content of general

transactions:

services provided to China Aluminum Group

by the Company. Given that the Company owns

a large number of subsidiaries scattered in

various geographical locations, that the

Company has close contact with China

Aluminum Group and that consideration is

based on the operational management needs

and service costs, the Company estimates that

there will be a need of mutual provision of

general services with China Aluminum Group.

For example, due to the proximity between

CNPT (the subsidiary of the Company) and

Luoyang Institute (the subsidiary of China

Aluminum Group), CNPT will need to rent

offices of Luoyang Institute to satisfy its needs

for production and operation. Meanwhile, due

to the proximity between Sixth Metallurgical

Company (the subsidiary of the Company) and

China Great Wall Aluminum Corporation

Limited (中國長城鋁業有限公司, the subsidiary

of China Aluminum Group), China Great Wall

Aluminum Corporation Limited may purchase

warehousing and transportation services from

Sixth Metallurgical Company in the future to

satisfy the operation needs for transporting

goods and in consideration of the cost.

- 8 -

LETTER FROM THE BOARD

  1. The Group has been able to provide general services such as lease, warehousing and transportation services needed by China Aluminum Group. As an engineering technology segment of China Aluminum Group, the Company provides engineering services to China Aluminum Group under the Engineering Services Master Agreement, and at the same time we are also familiar with the business and operational requirements of China Aluminum Group. The alumina and electrolytic aluminum plants constructed by China Aluminum Group can rent the office premises of the subsidiaries of the Company for their operational needs, taking advantage of the geographical advantages of the subsidiaries of the Company, and at the same time the Company can also provide services such as warehousing and transportation to China Aluminum Group. Based on the current forecast, the Company has consciously conducted preliminary negotiation with China Aluminum Group on the above businesses; and
  2. China Aluminum Group has confirmed the "4+4+4" development strategy, which is to strengthen and improve the four core industries of aluminum, copper, rare earth, lead and zinc, accelerating the development of the four coordinating industries of engineering and technology, industrial services and properties, capital and finance, as well as trade and logistics, to actively cultivate a new pattern of strategic development in the four emerging industries of environmental protection and energy conservation, innovation and development, overseas development and intelligent technology. Based on the "4+4+4" development strategy put forward by China Aluminum Group, the Group will serve as a player of the engineering technology collaboration industry, to provide more comprehensive general services for China Aluminum Group, facilitate the optimisation of the state-owned capital allocation of China Aluminum Group, and boost capital operation efficiency and level of returns.

- 9 -

LETTER FROM THE BOARD

Proposed annual caps:

Unit: RMB million

For the years ending 31 December

2020

2021

2022

Total transaction amounts of the

services provided to China

Aluminum Group by the

Company and/or its

associates under the General

Services Master Agreement

100

100

100

Basis for the caps:

When setting the caps, the Company mainly takes the

following factors into account:

  1. the historical prices of such services provided by the Group to other third parties; and
  2. the estimated increase in labour costs based on the economic conditions both at the moment and in the short term.

- 10 -

LETTER FROM THE BOARD

2. GENERAL SERVICES MASTER AGREEMENT - PROVISION OF GENERAL SERVICES TO THE COMPANY BY CHINA ALUMINUM GROUP

Parties:

China Aluminum Group (as service provider); and the

Company (as service recipient)

Date:

30 October 2019

Major terms:

In accordance with the General Services Master

Agreement entered into by the Company and China

Aluminum Group on 30 October 2019, China

Aluminum Group and/or its associates may provide

certain kinds of services to the Group from

time to time, primarily including: (1) provision of

warehousing, transportation and property leasing

services; and (2) provision of labour services related

to technology, logistics, labour and training.

The initial term of the General Services Master

Agreement shall commence from 1 January 2020 and

shall expire on 31 December 2022, unless at any time

either party gives at least three months' prior written

notice of termination to the other party and as agreed

by both parties.

Pricing policy:

The prices will be determined after arm's length

negotiation with reference to the current market price

of local service providers with similar scale and

quality by inviting certain suppliers who appeared on

the Group's recognized suppliers list to submit

quotations or proposals before the Company places

purchase orders to at least three independent third

parties. The Group would make reference to the

historical fees of such general services, together with

the comparable prices available in the market, to

ensure that the terms of the services provided by

China Aluminum Group are fair and reasonable to the

Group. For the general services which have no

alternatives available in the market, the services fees

received by China Aluminum Group from the Group

would be determined after arm's length negotiation

based on the Company's internal control measures.

Please refer to "6. Internal Control Measures" below

in this circular for the details of the internal control

measures.

- 11 -

LETTER FROM THE BOARD

Reasons for and

(1) Over the years, the Company has been using the

benefits of the

general services provided by China Aluminum

transactions:

Group and/or its associates; and China

Aluminum Group has long been providing

timely and stable general services for the

Group. Accordingly, China Aluminum Group is

able to fully understand the Company's

business and operating requirements;

(2) The Group's management believes that

maintaining the provision of stable and high

quality general services is of utmost importance

to the Company's current and future

production and operations. With reference to its

previous purchasing experience with China

Aluminum Group, the Company believes that

China Aluminum Group is capable of

effectively satisfying the requirement of

providing stable and high quality general

services for the Company;

(3) The fees of providing general services by China

Aluminum Group are no higher than those

provided to the Company by independent third

parties, which could reduce the operational

risks and costs to the Group and is beneficial to

the daily operations and management of the

Group; and

- 12 -

LETTER FROM THE BOARD

  1. Prior to the listing of the H Shares of the Company, some of its subsidiaries, which are geographically proximal, were from the reform and separation of the enterprises within China Aluminum Group. In the case of shortage of land for offices and production, the Company will rent office premises of China Aluminum Group. As such, the Company increases the demand for the provision of property leasing services and logistics services by China Aluminum Group. Moreover, upon the completion of new construction projects, the Company is required to provide training for the production technicians according to the requirements under the contracts. As China Aluminum Group and its subsidiaries are experienced in the operation of production lines, the Company will delegate the related training to the experienced connected persons, depending on its needs. Accordingly, the general services provided by China Aluminum Group to the Company mainly comprise warehousing, property leasing, property management and logistics service, technology service and training, etc.

Historical figures and the proposed annual caps:

Historical amounts

Unit: RMB million

As of

For the years ended

30

31 December

September

2017

2018

2019

Total transaction amounts of the

services provided to the

Group by China Aluminum

Group and/or its associates

under the General Services

Master Agreement

156

104

136

- 13 -

LETTER FROM THE BOARD

Historical annual caps

Unit: RMB million

For the years ended 31 December

2017

2018

2019

Total transaction amounts of the

services provided to the

Group by China Aluminum

Group and/or its associates

under the General Services

Master Agreement

160

160

160

Proposed annual caps

Unit: RMB million

For the years ending 31 December

2020

2021

2022

Total transaction amounts of the

services provided to the

Group by China Aluminum

Group and/or its associates

under the General Services

Master Agreement

160

160

160

- 14 -

LETTER FROM THE BOARD

Basis for the caps: In determining the caps, the Company has primarily considered the following factors:

  1. The historical prices of the general services provided by China Aluminum Group to the Group in the past; and
  2. The estimated increase of the cost of labour after considering the economic trend both at the moment and in the near future. The majority of services provided to the Company by China Aluminum Group under the General Services Master Agreement are services such as leasing and logistics. In view of the close cooperative and friendly relationship between the Company and China Aluminum Group all along, there is certain room for negotiation in determining the contract price. In addition, with reference to the previous year 's actual total amount of general services provided by China Aluminum Group to the Company under the General Services Master Agreement, the amounts have not exceeded RMB160 million, and therefore, the Company has set a proposed annual cap of RMB160 million.

3. COMMODITIES SALES AND PURCHASES MASTER AGREEMENT - PROVISION OF COMMODITIES BY THE COMPANY TO CHINA ALUMINUM GROUP

Parties:China Aluminum Group (as the purchaser); and the

Company (as the supplier)

Date:

30 October 2019

Major terms: Pursuant to the Commodities Sales and Purchases Master Agreement entered into by the Company and China Aluminum Group on 30 October 2019, the Group may provide its products to China Aluminum Group and/or its associates from time to time, as part of the equipment manufacturing business of the Group. These products primarily include equipment, raw materials and commodities for China Aluminum Group's production operation.

- 15 -

LETTER FROM THE BOARD

The initial term of the Commodities Sales and

Purchases Master Agreement shall commence from 1

January 2020 and shall expire on 31 December 2022,

unless at any time either party gives at least three

months' written notice in advance to the other party

to terminate the agreement.

Pricing policy:

(1) In determining the prices of raw materials,

equipment and commodities, the Company

would firstly make reference to the average

market price. In the limited circumstances

where a market price is unavailable, the

Company will negotiate with China Aluminum

Group about the price on arm's length basis

with reference to costs plus a reasonable profit

margin. The relevant costs include raw

materials, auxiliary materials, depreciation,

labour, kinetics, tools, consumption of skills,

repairment of equipment, management fees and

finance fees. For the determination of a

reasonable profit margin, the Company mainly

refers to the profit margin level of the same type

of products provided by the independent third

parties in the market in the corresponding

period to ensure the price offered by the

Company to China Aluminum Group is not

lower than the price offered by the Company to

other third parties. The Company will consider

the price (costs plus a profit margin) only if it is

commercially acceptable to the Company,

meaning the overall price shall fall within the

Company's budget and allow it to meet its

profit targets;

- 16 -

LETTER FROM THE BOARD

  1. The market prices in the industry would be collected by the business department through the industry associations and independent suppliers. The Company would collect market information from at least three independent third parties to consider if the prices of the raw materials, equipment and commodities are fair and reasonable and in line with the market. The Company's business department staff would update the market information on a daily basis with reference to public industry websites, such as Changjiang Non-ferrous Metals Website (http://www.ccmn.cn), Shanghai Metals Market (http://www.smm.cn) and China Aluminum Website (http://www.cnal.com), all of which are independent and timely reflect the market price in the view of the Board. Should the business department staff find the reference prices currently used internally to be outdated upon their assessment of the prices at the dates of the transactions, the staff of business department would submit an adjusted price to the senior management, including the vice president, for final review and approval; and
  2. For the products which have no alternatives available in the market, the prices would be determined after arm's length negotiation by both parties of the contract. The Company would make reference to the relevant historical prices of the products, and ensure that the terms of the products provided to China Aluminum Group are fair and reasonable based on the principle of cost plus a fair and reasonable profit margin. With reference to the method in aforesaid (1), the expected profit margin of equipment to be provided to China Aluminum Group and the expected profit margin of raw materials to be provided to China Aluminum Group by the Company are both in line with the industry standard and no less favorable than the profit margin charged from independent third parties.

- 17 -

LETTER FROM THE BOARD

Reasons for and

(1) China Aluminum Group may reduce the

benefits of the

purchasing cost and the logistics cost through

transactions:

the on-site provision by the Company and its

subsidiaries;

(2) The Company has built up a long-term

cooperation relationship with China Aluminum

Group with mutual understanding of the

operation plans, quality control and certain

special requirements of both parties; and

(3) As the prices and terms of the raw materials,

equipment and products provided to China

Aluminum Group by the Company are no less

favourable than those provided by the

Company to independent third parties, the

provision of commodities to China Aluminum

Group by the Company generates profits for the

Company.

Historical figures and the proposed annual caps:

Historical amounts

Unit: RMB million

As of

For the years ended

30

31 December

September

2017

2018

2019

Total transaction amounts of the

raw materials, equipment and

commodities provided to

China Aluminum Group

and/or its associates by the

Company under the

Commodities Sales and

Purchases Master Agreement

441

653

256

- 18 -

LETTER FROM THE BOARD

Historical annual caps

Unit: RMB million

For the years ended 31 December

2017

2018

2019

Total transaction amounts of the

raw materials, equipment and

commodities provided to

China Aluminum Group

and/or its associates by the

Company under the

Commodities Sales and

Purchases Master Agreement

600

700

800

Proposed annual caps

Unit: RMB million

For the years ending 31 December

2020

2021

2022

Total transaction amounts of the

raw materials, equipment and

commodities provided to

China Aluminum Group

and/or its associates by the

Company under the

Commodities Sales and

Purchases Master Agreement

800

900

1,000

Basis for the caps:

In determining the caps, the Company has primarily

considered the following factors:

  1. The historical prices of the raw materials, equipment and commodities provided to China Aluminum Group by the Company in the past;

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LETTER FROM THE BOARD

  1. The estimated increasing sales volume of products by taking into account macroeconomic conditions as well as the development strategies and business expansion plan of the Group. The Company will set the production plan based on the production capacity and sales volume of the Company in the next three years. In terms of the commodities provided to China Aluminum Group by the Company under the Commodities Sales and Purchases Master Agreement, the production volume of commodities that the Company can provide must be within the production capacity and business development plans of the Group, and the caps will be set by the Company accordingly;
  2. The Company has increased, and will continue to increase, the production capacities of the equipment, and the Group has begun to enhance its business development efforts, resulting in a rapid growth of revenue, and the business with China Aluminum Group and its associates also grew steadily by the same ratio;
  3. The main businesses of the Company include equipment manufacturing business and trading business. As the main non-ferrous metal engineering service provider of China Aluminum Group, upon completion of the constructions, the Company will supply the components and parts required in operating the production lines on an ongoing basis. With the increase in engineering service, the transaction amounts of this business are expected to increase in 2020, 2021 and 2022;

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LETTER FROM THE BOARD

  1. The total transaction amount of the commodities provided by the Company decreased during January to September 2019, which was mainly due to the fact that certain major electrolytic aluminium construction and transformation projects signed between the Company and China Aluminum Group and its subsidiaries in Shanxi, Guangxi and Guizhou in 2017 had basically moved into the final stage of the contract period. The services including the facilities and manufacturing equipment provided for such projects by the Company had fundamentally completed in terms of its installation and commissioning in 2019. In view of the cyclical effect of non-ferrous metal industrial development, the actual transaction amount dropped in 2019. In 2020, according to the strategic planning of China Aluminum Group, the Company, being the largest non-ferrous metal engineering industry chain technology service provider in the PRC, will continue to fully participate in the construction of non-ferrous metals projects of China Aluminum Group, and continue to provide facilities provision services. In determining the caps from 2020 to 2022, the Company has fully considered the demand of China Aluminum Group for facilities and customized equipment provided by the Company for domestic and overseas projects. At present, China Aluminum Group has conducted non-ferrous metal engineering projects in Guinea and Peru. The Company has fully participated in the construction of those projects as well as provided corresponding equipment supply; and

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LETTER FROM THE BOARD

  1. In determining the caps, the Company has also considered the expected demand for the products of the Company from China Aluminum Group. Being the largest chain technology service provider in the non-ferrous metals industry, the Company is able to satisfy the equipment supply service as required by China Aluminum Group in terms of construction, daily maintenance and operations as well as upgrade and transformation of non-ferrous metals projects. Under the strategic planning of China Aluminum Group, being the engineering technology service industry in the "4+4+4 Strategy", the Company is able to provide full range of services in the main industries such as aluminum, copper, rare earth, lead and zinc, and to supply and purchase the equipment required for production and construction. In particular, since 2019, China Aluminum Group has merged with Yunnan Metallurgical Group Co., Ltd. (雲 南冶金集團股份有限公司), such that the third party services originally provided by the Company to Yunnan Metallurgical Group Co., Ltd. (雲南冶金集團股份有限公司) have changed to commodity services provided to China Aluminum Group and its subsidiaries, and it is expected that the aggregate amount of the connected transactions will be increased.

4. COMMODITIES SALES AND PURCHASES MASTER AGREEMENT - PROVISION OF COMMODITIES TO THE COMPANY BY CHINA ALUMINUM GROUP

Parties:China Aluminum Group (as supplier); and the

Company (as purchaser)

Date:

30 October 2019

Major terms: In accordance with the Commodities Sales and Purchases Master Agreement entered into by the Company and China Aluminum Group on 30 October 2019, China Aluminum Group and/or its associates may provide products to the Group from time to time, including non-ferrous products, manufacturing equipment relating to the non-ferrous industry, cement, engineering equipment and components.

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LETTER FROM THE BOARD

The initial term of the Commodities Sales and

Purchases Master Agreement shall commence from 1

January 2020 and shall expire on 31 December 2022,

unless at any time either party gives at least three

months' written notice in advance to the other party

and as agreed by both parties to terminate the

agreement.

Pricing policy:

(1) When deciding the prices of commodities to be

purchased from China Aluminum Group, the

Company would primarily make reference to

the market prices. The Company would collect

market information by inviting certain

suppliers who appeared on the Group's

recognized suppliers list to submit quotations

or proposals before placing purchase orders to

at least three independent third parties to

consider if the prices of the commodities are fair

and reasonable and in line with the market. The

Company's business department staff would

update the market information on a daily basis

with reference to public industry websites, such

as Changjiang Non-ferrous Metals Website

(http://www.ccmn.cn), Shanghai Metals

Market (http://www.smm.cn) and China

Aluminum Website (http://www.cnal.com), all

of which are independent and timely reflect the

market price in the view of the Board. Should

the business department staff find the reference

prices currently used internally to be outdated

upon their assessment of the prices at the dates

of the transactions, the staff of business

department would submit an adjusted price to

the senior management, including the vice

president, for final review and approval;

(2) Determination shall be made upon negotiation

by both parties based on the assessed value

issued by a third appraisal institution; and

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LETTER FROM THE BOARD

(3)

In the limited circumstances where a

comparable market fair value range is

unavailable, the Company would negotiate

with China Aluminum Group to calculate the

price on arm's length basis with reference to

costs plus a reasonable profit margin. The

relevant costs include costs of raw materials

and equipment purchased or produced, labour

cost and staff welfare expenses, electricity and

other utilities costs, depreciation, cost of

machinery maintenance, and sales and

administration expenses and so on. Unit cost

would be determined based on the above

factors. China Aluminum Group shall then

charge the Company a profit rate based on

arm's length negotiation on top of the unit cost.

The Company would consider the profit rate

(costs plus profit margin) only if it is

commercially acceptable to the Company,

meaning the overall price shall fall within the

Company's budget and allow it to meet its

profit targets.

Reasons for and

(1)

These commodities provided by China

benefits of the

Aluminum Group can be purchased from

transactions:

independent third parties on similar terms.

However, the Company has been maintaining,

and expects to maintain, sound business

relationships with China Aluminum Group

which is also familiar with the Company's

specific and special requirements for certain

commodities;

(2) In addition, as the Company provides engineering construction for China Aluminum Group and purchase related goods from China Aluminum Group and its subsidiaries on a proximity basis, the Company will purchase the products such as aluminum busbars and carbon blocks from China Aluminum Group and its subsidiaries where the project is located at or nearby, and will apply such products to the projects undertaken by the Company to provide engineering services to China Aluminum Group. In this way, the Company can effectively reduce its costs of purchasing and logistics with prices not higher than an independent third party. Transportation and administration costs can be saved so that the purchase price of the Company is not higher than the market price;

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LETTER FROM THE BOARD

  1. The Group is following the national "One Belt, One Road" strategy to strengthen international capacity cooperation, and intends to export domestic equipment relating to the non-ferrous industry overseas. In this respect, China Aluminum Group, as the leading enterprise in the nonferrous industry, owns certain assets reserves; and
  2. The Group grasps opportunities from the national supply side structural reform with very effort to promote and expand the application of aluminum materials actively, and by now we have developed various products such as aluminum alloy overpass, aluminum alloy shell for cell-phone, aluminum siding and aluminum template for construction use and aluminum integrated house. The main raw materials of the aforesaid products are aluminum alloy and aluminum profiles. China Aluminum Group, as one of the major domestic manufacturers of aluminum alloy and aluminum profile, is the main supplier of these commodities required by the Company.

Historical figures and the proposed annual caps:

Historical amounts

Unit: RMB million

As of

For the years ended

30

31 December

September

2017

2018

2019

Total transaction amounts of the

commodities provided to the

Company by China

Aluminum Group and/or its

associates under the

Commodities Sales and

Purchases Master Agreement

1,031

493

193

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LETTER FROM THE BOARD

Historical annual caps

Unit: RMB million

For the years ended 31 December

2017

2018

2019

Total transaction amounts of the

commodities provided to the

Company by China

Aluminum Group and/or its

associates under the

Commodities Sales and

Purchases Master Agreement

1,800

1,400

1,400

Proposed annual caps

Unit: RMB million

For the years ending 31 December

2020

2021

2022

Total transaction amounts of the

commodities provided to the

Company by China

Aluminum Group and/or its

associates under the

Commodities Sales and

Purchases Master Agreement

1,000

1,000

1,000

Basis for the caps:

In determining the caps, the Company has primarily

considered the following factors:

  1. The historical prices of the commodities provided to the Company by China Aluminum Group in the past;

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LETTER FROM THE BOARD

  1. Capitalizing on the national supply-side structural reform, the Group has actively expanded the application of aluminum materials. At present, we have developed various products such as aluminum alloy overpass, aluminum alloy shell for cell-phone, aluminum siding and aluminum template for construction use and aluminum integrated house. The main raw materials for the aforesaid products are aluminum alloy and aluminum profiles. As one of the major domestic manufacturers of aluminum alloy and aluminum profiles, China Aluminum Group serves as a main supplier for the Group. It is anticipated that the Company will need to purchase a certain amount of aluminum material from China Aluminum Group to cater to the aluminum application business over the next three years;
  2. The Group is following the national "One Belt, One Road" strategy to strengthen international capacity cooperation, and intends to export domestic equipment relating to the nonferrous industry overseas. In this respect, China Aluminum Group, as the leading enterprise in the non-ferrous industry of China, owns certain assets reserves. China Aluminum Group acts as an important supplier of non-ferrous metal facilities and equipment under the Group's "Go Global" strategy. Based on the above factors, commodities supplied by China Aluminum Group to the Group in the coming few years will significantly increase. Accordingly, the Company will continue to purchase non-ferrous metal equipment from China Aluminum Group to cater to the overseas non-ferrous business for the next three years; and

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LETTER FROM THE BOARD

  1. The actual transaction amount of the products provided by China Aluminum Group to the Company decreased in 2018 and 2019 compared to that in 2017, which was mainly due to the fact that certain large-scalenon-ferrous metal development projects undertaken by the Company in 2017 had procured the equipment and materials required under the contract in advance in 2017 in accordance with the requirements of the project progress by the owner. As a result, such progress was achieved earlier than it was originally planned. Accordingly, the scale of commodity procured from China Aluminum Group in 2018 and 2019 decreased. In determining the caps from 2020 to 2022, the main considerations are the new progress made by the Company in overseas projects, especially the electrolytic aluminum project in Italy and the project in Indonesia signed in 2019, which require further commodity procurement from China Aluminum Group. Secondly, the Company has vigorously developed the aluminium application business, and its market is gradually opening up, of which, procurement of aluminum raw materials from China Aluminum Group is required for the business of aluminum overpasses, aluminum template and aluminum trailers, in order to meet the production demand. Such market is expected to expand after 2020. In determining the caps from 2020 to 2022, the Company has also reduced the transaction amount of commodity procurement from China Aluminum Group as compared to that in the previous three years.

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LETTER FROM THE BOARD

5. ENGINEERING SERVICES MASTER AGREEMENT

Parties:

China Aluminum Group (as service recipient); and

the Company (as service provider)

Date:

30 October 2019

Principal terms:

In accordance with the Engineering Services Master

Agreement entered into by the Company and China

Aluminum Group on 30 October 2019, the Group may

from time to time provide engineering services to

China Aluminum Group and/or its associates,

including but not limited to construction engineering,

technology (right of use) transfer, project supervision,

survey, engineering design, engineering consultancy,

equipment agency and equipment sales, engineering

management and other engineering-related services.

The initial term of the Engineering Services Master

Agreement shall commence from 1 January 2020 and

shall expire on 31 December 2022, unless at any time

either party gives at least three months' prior written

notice of termination to the other party and as agreed

by both parties.

Pricing policy:

The prices for the engineering services provided by

the Company shall be determined: (1) through the

tender by China Aluminum Group; or (2) by arm's

length negotiation between the parties. For

determining the prices of survey and design projects,

the Company would refer to the Engineering Survey

and Design Charging Administration Regulations (Ji

Jia Ge [2002] No. 10) 《( 工程勘察設計收費管理規定》

（計價格[2002]第10號）) promulgated by the then

National Development Plan Commission and

Ministry of Construction and refer to the pricing

factors such as the scale and complexity of the

projects and determine after negotiation with the

parties. The price is usually not lower than the price

provided by the independent third parties.

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LETTER FROM THE BOARD

For determining the prices of engineering and

construction contracting projects, the Company

would estimate prices on the basis of the project size

and the exact work to be done, which is also the basis

that the Company makes reference to when

participating in the bidding or negotiation process. In

addition, the Company would also calculate the base

prices of engineering and construction contracting

projects in accordance with the provincial and

industrial standard of construction quota where the

project is located and then decide the final price of

contract on arm's length basis with the parties. All

such transactions in relation to engineering services

are on normal commercial terms.

Reasons for and

(1) As the Company has long been providing stable

benefits of the

engineering services to China Aluminum

transactions:

Group, we are able to fully understand the

business and operating requirements of China

Aluminum Group; and

(2) As the prices and terms of engineering services

provided by the Company to China Aluminum

Group are no less favourable than those

provided to independent third parties by the

Company, the transactions shall generate

profits for the Company.

Historical figures and the proposed annual caps:

Historical amounts

Unit: RMB million

As of

For the years ended

30

31 December

September

2017

2018

2019

Total fees for the engineering

services provided to China

Aluminum Group by the

Company under the

Engineering Services Master

Agreement

8,336

5,762

2,499

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LETTER FROM THE BOARD

Historical annual caps

Unit: RMB million

For the years ended 31 December

2017

2018

2019

Total fees for the engineering

services provided by the

Company to China Aluminum

Group under the Engineering

Services Master Agreement

11,000

6,600

6,000

Proposed annual caps

Unit: RMB million

For the years ending 31 December

2020

2021

2022

Total fees for the engineering

services provided by the

Company to China Aluminum

Group under the Engineering

Services Master Agreement

7,000

6,500

6,000

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LETTER FROM THE BOARD

Basis for the caps: In determining the caps, the Company has primarily considered the following factors:

  1. The historical prices of the engineering services provided by the Group to China Aluminum Group;
  2. Based on the current project implementation of the Group and the development planning of China Aluminum Group. Actively responding to the national supply-side structural reform, and following the policies including the "Three Cuts, One Drop, One Improve" (i.e. cut production capacity, cut inventories, de-leveraging, reduce costs, improve shortcomings), China Aluminum Group has proactively implemented strategic transformation and structural adjustment, phased out and shut down the production lines with insufficient capacity and no competitiveness, and reduced the production costs as a whole and improved the shortcomings of the enterprise development to raise the competitiveness by means of capacity replacement and technological improvement and upgrades in the regions with rich energy resources. China Aluminum Group has confirmed the "4+4+4" development strategy, which is to strengthen and improve the four core industries of aluminum, copper, rare earth, lead and zinc, accelerating the development of the four coordinating industries of engineering and technology, industrial services and properties, capital and finance, as well as trade and logistics, to actively cultivate a new pattern of strategic development in the four emerging industries of environmental protection and energy conservation, innovation and development, overseas development and intelligent technology. As an important segment in the engineering technology collaboration industry under the "4+4+4" strategic blueprint of China Aluminum Group, the Group will continue to serve for the core industrialization development of non-ferrous metals, grow new capabilities for general contracting of project construction, and fully engage itself in the construction of non-ferrous metals development projects of China Aluminum Group;

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LETTER FROM THE BOARD

  1. The estimated increase of the cost of labour after considering the economic trend both at the moment and within the short term; and
  2. The Group's estimation of the transaction amounts of the engineering services to China Aluminum Group is RMB19.5 billion in total from 2020 to 2022. Such demand was estimated based on, among other things, the historical amounts of the engineering services transactions for the two years ended 31 December 2018 and the estimated amounts of the engineering services transactions for the year ending 31 December 2019. From 2017 to 2019, the aggregated amount of the transactions of providing engineering services by the Group to China Aluminium Group was RMB17.43 billion. From 2020 to 2022, with reference to the Company's historical performance, the growth rate of the aggregated transaction amount set by the Company will be approximately 12%. The growth rate set by the Company is lower than the overall average growth of engineering design, construction and contracting services of the Group for the past three years. The Directors also expect that the Group will undertake more projects at the beginning of such period (i.e. 2020 to 2022) so that they adjusted the average of RMB6.5 billion per annum during such period (i.e. 2020 to 2022) to RMB7 billion, RMB6.5 billion and RMB6 billion for each of the three years from 2020 to 2022 ending 31 December.

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LETTER FROM THE BOARD

6. INTERNAL CONTROL MEASURES

The Company has adopted the following internal management procedures to ensure that the above continuing connected transactions are fair and reasonable and on normal commercial terms:

  • The Company has adopted and implemented a set of management system on connected transactions. Under the system, the Company's financial department is responsible for conducting reviews on compliance with relevant laws, regulations, the Company's policies and the Listing Rules in respect of continuing connected transactions. In addition, the financial department and other relevant operation departments of the Company are jointly responsible for evaluating the transaction terms under each agreement of continuing connected transactions, in particular, the fairness and reasonableness of the pricing terms under each agreement; and
  • Independent non-executive Directors have also reviewed the agreements of continuing connected transactions, to ensure that such agreements entered into on normal commercial terms, are fair and reasonable, and are carried out pursuant to the terms of such agreements. The auditors of the Company will also conduct an annual review on the pricing and annual caps of such agreements.

When determining the actual prices of products supplied and services provided by China Aluminum Group to the Company, China Aluminum Group will provide the Company with a proposed price before determination. As mentioned above, in order to ensure that the pricing terms under the agreements of continuing connected transactions are fair and reasonable, the tendering companies, the Company's financial department and other relevant operation departments will conduct the following review procedures on the proposed price offered by China Aluminum Group.

  • If a comparable market price is available, the proposed price will be compared with the market price to ensure that such proposed price is not higher than the selling price of the materials, components and parts or products with similar specifications, technology and quality requirements provided by other manufacturers in the market;
  • The Company has established a stringent management method on market price inquiries:
    1. For selection of potential suppliers, the Group has developed standards for the selection of suppliers based on different purchase needs. Such standards include, but are not limited to, the scale of business, industry recognition, experiences in supplying the same types of products and services, technological

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LETTER FROM THE BOARD

level and financial conditions, etc. The same standards are applicable to both connected persons and independent third-party suppliers. The Company does not give any preferential treatment to connected persons in respect of the selection of potential suppliers. The selection of suppliers shall be determined by the collective decision of a comprehensive tender assessment board with members including representatives from the tendering companies, the financial department and other relevant operation departments jointly participating in such assessment. The Company will make market price inquiries with various suppliers and conducted rounds of internal assessment with reference to the factors including price, quality, technology, product risks and after-sales services;

    1. For price inquiry procedures, the Company requires at least three potential suppliers participating in the same purchase, of which at least two of them shall be independent third-party suppliers. Price inquiry procedures that fail to meet the above requirements will be void. Price inquiry procedures are conducted in strict accordance with the above model and the entire process is under the supervision of the tendering companies, the discipline inspection department and the financial department. Any violation of those measures will be recorded. The result of price inquiry will undergo a final review by the management of the Company. The winner of the price inquiry procedure will enter into a written agreement with the Company. If there is any evidence of frauds or breaches of the supplier during the procedure, the Company will terminate cooperation and pursue legal responsibility, regardless of whether such supplier is the Company's connected person. All of the written documents involved in the price inquiry procedure shall be kept for at least ten years. In case the parties involved in the price inquiry procedure have any reasonable doubt about the result of price inquiry, they may check relevant documents upon the Company's approval;
  • If no comparable market price is available, the fairness and reasonableness of the proposed price will be determined with reference to: (1) the market price of the raw materials or products and services forming relevant equipment or products; and (2) the cost estimated to be required for manufacturing such equipment, products and services with reference to requirements in relation to their nature, functionality, technology and quality standards, etc., which can be used to work out the total cost of such equipment, products and services plus a profit margin of not more than the maximum level as stipulated in the relevant agreements, depending on the complexity of technologies and quality control procedures involved; and

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LETTER FROM THE BOARD

  • The Company has established a bidding leading team, which comprises the vice president, heads of the purchase, engineering management and the financial department and legal personnel. The members of the team have more than 10 years of experience in the industry as well as rich work experience, and each of them possesses professional specialties. The bidding leading team will review the proposed price to ensure that it is in line with the pricing terms of the relevant agreements and the terms provided to the Company are no less favorable than those offered by the supplier to independent third parties.

7. GENERAL INFORMATION

Information on the Company

The Company is a leading technology, engineering service and equipment provider in the non-ferrous metals industry in China, capable of providing full business-chain integrated engineering solutions throughout various stages of the non-ferrous metals industry chain. The Group is primarily engaged in engineering design and consultancy, engineering and construction contracting, equipment manufacturing, and trading.

Information on China Aluminum Group

China Aluminum Group is a state-owned enterprise incorporated under the PRC law in 2001. China Aluminum Group is the Controlling Shareholder of the Company and directly and indirectly holds 76.50% of the existing issued share capital as at the Latest Practicable Date. China Aluminum Group is principally engaged in mineral resources development, smelting and processing of non-ferrous metals, relevant trading and related engineering and technical services.

8. LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, China Aluminum Group directly and indirectly holds 76.50% of the existing issued share capital of the Company, and is a Controlling Shareholder of the Company and thus a connected person thereof. As a result, the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement entered into by the Company and the China Aluminum Group and the transactions contemplated thereunder constitute continuing connected transactions of the Company under the Listing Rules.

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LETTER FROM THE BOARD

As the highest applicable percentage ratios of the annual caps for the general services provided to the Company by China Aluminum Group and the general services provided to China Aluminum Group by the Company exceed 0.1% but are less than 5%, the General Services Master Agreement and the transactions contemplated thereunder are subject to the reporting, announcement and annual review requirements but are exempt from the circular and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratios of the annual caps for the commodities provided to and purchased from China Aluminum Group and the engineering services provided to China Aluminum Group by the Company exceed 5%, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the transactions contemplated thereunder are subject to the reporting, annual review, announcement, circular and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratios of the annual caps for the commodities provided to and purchased from China Aluminum Group by the Company exceed 5% but are less than 25%, the Commodities Sales and Purchases Master Agreement and the transactions contemplated thereunder also constitute the discloseable transactions of the Company and are subject to reporting and announcement requirements but are exempted from Shareholders' approval requirements under Chapter 14 of the Listing Rules.

9. CONFIRMATION OF THE DIRECTORS

As Mr. WANG Jun and Mr. LI Yihua, the Directors of the Company, hold management positions in China Aluminum Group and its subsidiaries, they are deemed to have material interests in the above continuing connected transactions. They have abstained from voting in respect of the Board resolutions for the approval of the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and their respective proposed annual caps.

An Independent Board Committee has been formed by all the independent non-executive Directors who are independent from those transactions to consider the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the transactions contemplated thereunder, including the annual caps. The Independent Board Committee advises the Independent Shareholders on the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the transactions contemplated thereunder, including the annual caps. Gram Capital has been appointed as the Independent Financial Adviser, to advise Independent Board Committee and Independent Shareholders in relation to the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the transactions contemplated thereunder, including the annual caps.

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LETTER FROM THE BOARD

The Directors (excluding the Directors who have abstained from voting, but including the independent non-executive Directors, having received and considered the advice from Gram Capital) are of the view that: (1) it is beneficial to the Company to continue the above continuing connected transactions as these transactions have facilitated and will continue to facilitate the operation and growth of the Company's business; (2) the above continuing connected transactions and their respective annual caps for 2020, 2021 and 2022 have been entered into on normal commercial terms and on terms no less favourable than those available to the Company by independent third parties under prevailing local market conditions, and were conducted in the ordinary and usual course of business of the Company; and (3) they are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

Accordingly, the Directors recommend the Independent Shareholders vote in favor of the resolutions of the renewal of the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement and the Engineering Services Master Agreement and their respective proposed annual caps as set out in this circular.

  1. ENTERING INTO THE FINANCE LEASE FRAMEWORK COOPERATION AGREEMENT

Reference is made to the announcement of the Company dated 30 October 2019 in relation to the Finance Lease Framework Cooperation Agreement entered into between the Company and Chinalco Finance Lease on 30 October 2019, pursuant to which, Chinalco Finance Lease agrees to provide lease services, investment and financial consulting services and account receivables management services to the Group pursuant to the terms and conditions of the Finance Lease Framework Cooperation Agreement. The aforesaid agreement shall be effective upon the approval at the EGM.

In accordance with the Listing Rules, the transactions contemplated under the Finance Lease Framework Cooperation Agreement constitute continuing connected transactions of the Company and are subject to the reporting, annual review, announcement, circular and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules. The resolution regarding the entering into the Finance Lease Framework Cooperation Agreement has been considered and approved at the Board meeting of the Company on 30 October 2019, and is now submitted to the EGM for consideration.

Date of the Agreement

30 October 2019

Parties

The Company (as the service recipient, for itself and on behalf of its subsidiaries); and

Chinalco Finance Lease (as the service provider, for itself and on behalf of its subsidiaries)

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LETTER FROM THE BOARD

Term

The Finance Lease Framework Cooperation Agreement has a term of 3 years effective from the date of passing the ordinary resolution at the general meeting of the Company in respect of entering into the Finance Lease Framework Cooperation Agreement and the parties thereto signing the agreement.

Principal Terms

The services that Chinalco Finance Lease intends to provide for the Group in accordance with the Finance Lease Framework Cooperation Agreement include:

  1. Lease services. Chinalco Finance Lease will actively explore and facilitate the Group with the finance lease business, and assist the Group in revitalising its existing assets, improving the structure of assets and liabilities and broadening financing channels, in order to provide comprehensive and integrated financing services to the Group. The principal leasing models include but are not limited to finance lease, operating lease, start-up lease and leverage lease. To the extent permitted by the existing laws, Chinalco Finance Lease may work with other leasing companies to adopt various leasing models such as joint leases, to satisfy the capital demand of the Group for a particular financing project;
  2. Investment and financial consulting services. Chinalco Finance Lease will actively utilize its resources advantage to establish a close cooperative relationship with organisations, such as banks, insurance companies, trust companies and fund companies, to provide diversified financing products to the Company through multiple combinations; and
  3. Account receivables management services. Chinalco Finance Lease may provide related commercial factoring services (including but not limited to the factoring with the right of recourse, the factoring without the right of recourse and other account receivables transactions) and integrated financing services combined with factoring and lease.

Within the term of the Finance Lease Framework Cooperation Agreement, Chinalco Finance Lease and the Group have agreed on an intended scale of cooperation worth RMB1 billion, which is a revolving limit. The intended limit of scale of cooperation is, at any time within the validity period of the Finance Lease Framework Cooperation Agreement, the cap of balance of lease services, investment and financial consulting services and account receivables management services obtained by the Group from Chinalco Finance Lease. For the business applications of the Group or its holding enterprises that conform to the conditions of Chinalco Finance Lease (which vary among different cooperative fields), Chinalco Finance Lease will sign specific transaction documents with the Group after the review and approval by Chinalco Finance Lease. Viewing Chinalco Finance Lease as its most significant long-term partner, the Group would prefer cooperation with Chinalco Finance Lease under equal conditions.

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LETTER FROM THE BOARD

Financing Costs and Payment Method

Financing costs principally include lease interests and handling fee, etc. The financing costs of finance lease services provided by Chinalco Finance Lease are not higher than the finance cost of services of the same or similar nature provided by independent third party finance lease companies in the PRC (subject to the after-tax internal rate of return). The lease interest shall be determined with reference to the benchmark interest rates for RMB-denominated loans published by the People's Bank of China on a regular basis; if such rates are not available, the lease interest shall be determined with reference to the interest rates charged or quoted by other major financial institutions for providing services of the same or similar nature. The Company and Chinalco Finance Lease will, based on the actual cash flows, design flexible payment methods, including not limited to payment of principal in equal instalments on a quarterly basis, payment of principal and interest in equal instalments on a quarterly basis, payment of principal in unequal instalments on a quarterly basis, payment of principal in equal instalments on a semi-annual basis, payment of principal and interest in equal instalments on an annual basis, etc.

Proposed Cap under the Finance Lease Framework Cooperation Agreement and Basis of Determination

Having considered the demand for the finance lease services of Chinalco Finance Lease under the future business development plan and in the daily operation and development of the Group, at any time during the term of Finance Lease Framework Cooperation Agreement, the balance of financial services including lease services, investment and financial consulting services and account receivables management services, received from Chinalco Finance Lease by the Group shall not be higher than RMB1 billion.

The Company determined the proposed cap with reference to the following factors:

  1. The demand for services of Chinalco Finance Lease under the future business development plan and in the daily operation and development of the Group. The Company's need for the services provided by Chinalco Finance Lease is mainly derived from the equipment procurement business of the Company's EPC general contracting business and the Company's expansion of aluminum application business. The Company has signed the EPC general contracting contract for four expressways in Yunnan, of which the equipment procurement business is estimated to exceed RMB1 billion. In order to alleviate the Company's financial pressure in the course of construction, the Company intends to use the financial leasing methods to carry out the above-mentioned equipment procurement business. Meanwhile, the Company is vigorously promoting the application of aluminum products (including engineering application of aluminum such as aluminum overpasses, aluminum template, aluminum trailers and municipal facilities). The Company undertook the construction of 11

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LETTER FROM THE BOARD

aluminum overpasses across the country in 2018. It is estimated that the demand for aluminum application products will sustain at a certain level in the future. Therefore, the Company needs to adopt measures such as finance leasing for the procurement of aluminum application products;

  1. Current conditions of the financing market, interest rate levels and the possible adjustments to the interest rates of RMB loans by the People's Bank of China. If the People's Bank of China makes any adjustment to the benchmark interest rates of RMB loans in the future, the lease interest rates in the newly executed individual specific agreements will be determined with reference to the adjusted benchmark interest rates of RMB loans. In determining whether to adopt finance lease mode, the Company will at the same time consider its capital cost when seeking financing at the capital market and the average cost of leasing industry to ensure the reasonableness of the finance lease cost undertaken by the Company and that such cost is within its acceptable range;
  2. The nature and carrying value of lease assets. The carrying value of lease assets shall not fall below the principal of the finance lease under any circumstance. The Company intends to adopt finance lease mode mainly for the equipment of construction projects and aluminum products. However, based on risk control, the carrying amount of financing assets is generally required to be higher than financing amount by finance lease companies, but the Company will still actively improve the financing ratio of its assets; and
  3. Although the services contemplated to provide to the Group under the Finance Lease Framework Cooperation Agreement include lease services, investment and financial consulting services and account receivables management services, the Company has primarily taken into account the demand for the finance lease services of purchasing aluminum templates, equipments and tools (i.e. the demand for the lease services provided by Chinalco Finance Lease) when determining the proposed caps under the Finance Lease Framework Cooperation Agreement. The main reason is that the Company expects that the estimated service fees of investment and financial consulting services for the next three years ending 31 December 2022 will not exceed RMB5 million (which accounts for less than 0.5% of the proposed caps) and are immaterial compared with the proposed caps of the Finance Lease Framework Cooperation Agreement. Secondly, the Company entered into the factoring cooperation framework agreement (the "Factoring Cooperation Framework Agreement") with China Aluminum Business Factoring (Tianjin) Co., Ltd. (中鋁商業保理（天津）有限公司) ("China Aluminum Business") on 28 March 2019, pursuant to which, (i) the Group proposed to transfer the account receivables under the elementary transaction contracts entered into with the purchaser to China Aluminum Business so as to secure the factoring facility funds

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LETTER FROM THE BOARD

from China Aluminum Business; and (ii) the caps of the Factoring Cooperation Framework Agreement entered into with China Aluminum Business for the three years ending 31 December 2021 amounted to RMB1 billion (including the factoring limit, factoring service charge and handling charge). Since (i) the services under the Factoring Cooperation Framework Agreement and the account receivables management services under the Finance Lease Framework Cooperation Agreement are of similar nature, the Group may conduct factoring business according to the Factoring Cooperation Framework Agreement before 31 December 2021 (i.e. the expiry date of the Factoring Cooperation Framework Agreement) and conduct account receivables management business according to the Finance Lease Framework Cooperation Agreement after 1 January 2022; and (ii) the Company can further revise the caps in accordance with the requirement of the Listing Rules or receive similar services provided by independent third parties in the event that the demand for account receivables management services or the demand for finance lease services under the Finance Lease Framework Cooperation Agreement is estimated to exceed the proposed caps, the Company did not separately consider the potential demand for account receivables management services when determining the proposed caps under the Finance Lease Framework Cooperation Agreement.

Reasons for and Benefits of Entering into the Finance Lease Framework Cooperation Agreement

The Finance Lease Framework Cooperation Agreement and the continuing connected transactions thereunder help to meet part of daily financing needs of the Company, expand financing channels, collect fund in advance and lower the fund appropriation. As compared with other financing methods, it is a simple and convenient procedure which will allow the Company to optimize its financial management, improve its capital utilization efficiency, reduce financing costs and risks, and thus facilitate the smooth business development and operations of the Company. The Finance Lease Framework Cooperation Agreement and the continuing connected transactions contemplated thereunder are conducted in objective, fair and equitable principles, safeguarding the interests of the parties concerned. They are in line with the overall development strategies of the Company and are in the interests of the Company and its shareholders as a whole.

The overall development strategy of the Company in capital management is to control the financing scale of interest-bearing debt and improve capital efficiency on the basis of upholding liquidity, maintaining the leverage ratio, total debt/total capital, to approximately 50%. As at the end of September 2019, the total debt/total capital ratio was 54%, which was slightly higher than the target value of 50%. It was mainly due to the fact that the Company announced in August 2019 that it would redeem the renewable corporate bonds of "16 Zhong Gong Y1 (16中工Y1)" amounting to RMB1.208 billion in October 2019, which makes the total debt/total gearing ratio slightly higher at that point of time. In October 2019, the Company

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LETTER FROM THE BOARD

completed the issuance of the equity capital of the renewable corporate bonds amounting to RMB1.5 billion, such that the ratio indicator will return to around 50%. As of 30 September 2019, the Company's total interest-bearing debt amounted to approximately RMB15.78 billion. As the Company is undergoing relatively high pressure on financing and liquidity, increasing the financing channels of the Chinalco Finance Lease will be helpful in meeting the fund demand for project development, reduce capital pressure of the Company, release liquidity and lower the overall leverage level. The finance costs under the Finance Lease Framework Cooperation Agreement are not higher than those of services of the same or similar nature provided by independent third party finance lease companies in the PRC, and will not adversely affect the Company's continuing operation ability, profitability and asset independence or rely excessively on related parties.

Internal Control Measures

To ensure that the Company complies with the above pricing policies from time to time and that the fee for the services provided by Chinalco Finance Lease does not exceed the cost of services of similar nature provided by independent-third-party banks or companies which operate finance lease business in the PRC, the Company will adopt a series of internal control measures in its daily course of operation, which will be conducted and monitored by the finance department of the Company:

  • The Company has formulated and adopted a set of administrative measures regarding connected transactions, pursuant to which the finance department is responsible for collecting and monitoring the information of connected transactions. For the same transaction, the Company shall ensure that at least two independent third parties will participate in quotation as a supplier. The finance department shall conduct integrated comparison on the quotation materials submitted by no less than two suppliers, and assess the fairness of transaction and pricing terms. If the contract terms are comparable or similar, the one with a lower price shall be selected initially. Officers handling the relevant matters shall submit a report to the head of the finance department and the chief financial officer of the Company to illustrate the details of the preliminary candidate for approval;
  • Before Chinalco Finance Lease commences the finance lease business, after internal discussion, the unit in handling relevant matters shall submit to the finance department an application for approval, which is subject to the preliminary and final review by the head of the finance department and the chief financial officer of the Company based on the relevant internal control policies of the Group; and

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LETTER FROM THE BOARD

  • The directors of the Company have also reviewed and will continue to review the Finance Lease Framework Cooperation Agreement and the transactions thereunder to ensure that the agreement is entered into on normal commercial terms and in the interest of the Company and the shareholders as a whole. The auditors of the Company will also conduct an annual review on the pricing and proposed cap for such continuing connected transactions.

General Information

Information on the Company

The information of the Company sets forth on page 36 of this circular.

Information on Chinalco Finance Lease

Chinalco Finance Lease is a company incorporated in the PRC with limited liability, primarily engaged in the finance lease business, lease business, purchase of lease assets from home and abroad, disposal of residual value and maintenance of lease assets, lease transaction consultation and guarantee business. Chinalco Finance Lease is the subsidiary of China Aluminum Group, the Controlling Shareholder of the Company.

Information on China Aluminum Group

The information of China Aluminum Group sets forth on page 36 of this circular.

Listing Rules Implications

As at the Latest Practicable Date, China Aluminum Group directly and indirectly holds 76.50% of the existing issued share capital of the Company, and is a Controlling Shareholder of the Company and thus a connected person thereof. At the same time, Chinalco Finance Lease is a subsidiary of Chinalco Capital Holdings Co., Ltd. (a subsidiary of China Aluminum Group), and therefore Chinalco Finance Lease is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the Finance Lease Framework Cooperation Agreement and the transactions contemplated thereunder constitute the continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As each applicable percentage ratio of the Finance Lease Framework Cooperation Agreement and the transactions contemplated thereunder calculated pursuant to the Listing Rules exceeds 5% but is less than 25%, in accordance with Chapter 14 and Chapter 14A of the Listing Rules, the Finance Lease Framework Cooperation Agreement and the continuing connected transactions contemplated thereunder also constitute the discloseable transactions of the Company and are

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LETTER FROM THE BOARD

subject to reporting, announcement, circular and Independent Shareholders' approval requirements under Chapter 14 and Chapter 14A of the Listing Rules.

Confirmation of the Directors

As Mr. WANG Jun and Mr. LI Yihua hold management positions in China Aluminum Group and its subsidiaries, they are deemed to have material interests in the aforementioned continuing connected transactions. They have abstained from voting on the Board resolution approving the Finance Lease Framework Cooperation Agreement and the proposed caps of the transactions contemplated thereunder.

An Independent Board Committee has been formed by all the independent non-executive Directors who are independent of those transactions to consider the Finance Lease Framework Cooperation Agreement and the proposed caps of the transactions contemplated thereunder. The Independent Board Committee advises the Independent Shareholders on the Finance Lease Framework Cooperation Agreement and the proposed caps of the transactions contemplated thereunder. Gram Capital has been appointed as the Independent Financial Adviser, to advise Independent Board Committee and Independent Shareholders in relation to the Finance Lease Framework Cooperation Agreement and the proposed caps of the transactions contemplated thereunder.

The Directors (excluding the Directors who have abstained from voting, but including the independent non-executive Directors, having received and considered the advice from Gram Capital) are of the view that the transactions under the Finance Lease Framework Cooperation Agreement were negotiated on arm's length basis and entered into in the ordinary course of business of the Company on normal commercial terms or better, and the terms of the Finance Lease Framework Cooperation Agreement and the proposed caps thereof are fair and reasonable, and are in the interests of the Company and its Shareholders as a whole.

IV. PROPOSED ALIGNMENT IN THE PREPARATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH THE CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES

The Company has been preparing its financial statements in accordance with the International Financial Reporting Standards and the China Accounting Standards for Business Enterprises respectively since the date on which the H Shares of the Company became listed on the Stock Exchange on 6 July 2012. A Shares of the Company are issued and listed on the Shanghai Stock Exchange on 31 August 2018. As of 30 June 2019, the Company prepared financial statements for the H Share annual and half-year reports in accordance with the International Financial Reporting Standard, and prepared financial statements for the A Share annual and half-year reports in accordance with the China Accounting Standards for Business Enterprises.

According to the regulations of the "Consultation Conclusions on Acceptance of Mainland Accounting and Auditing Standards and Mainland Audit Firms for Mainland

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LETTER FROM THE BOARD

Incorporated Companies Listed in Hong Kong" 《( 有關接受在香港上市的內地註冊成立公司

採用內地的會計及審計準則以及聘用內地會計師事務所的諮詢總結》) published by the Stock Exchange in December 2010, the PRC incorporated issuers listed in Hong Kong are allowed to prepare their financial statements in accordance with the China Accounting Standards for Business Enterprises and the PRC audit firms approved by the Ministry of Finance and the China Securities Regulatory Commission are allowed to audit these financial statements in accordance with the China Accounting Standards for Business Enterprises.

In view of the issuance and listing of A Shares of the Company on the Shanghai Stock Exchange in August 2018 and in order to improve the efficiency and reduce the cost of disclosure and audit expenses, the Company proposed alignment in the preparation of financial statements in accordance with the China Accounting Standards for Business Enterprises and disclosure of the corresponding financial reports. The change of accounting standard is subject to the approval of shareholders by way of an ordinary resolution at the general meeting.

Subject to the approval at the general meeting, it is expected that the 2019 financial report of the Company and the subsequent financial reports in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited will be prepared in accordance with the China Accounting Standards for Business Enterprises. The Company believes that the change of accounting standard will not have material effect on the financial position, operating results and cash flow of the Company in 2019 and in the future.

The proposal regarding the alignment in the preparation of financial statements in accordance with the China Accounting Standards for Business Enterprises has been considered and approved by the Board of the Company on 27 November 2019, and is hereby submitted for consideration at the EGM.

  1. PROPOSED CESSATION OF APPOINTMENT OF THE INTERNATIONAL AUDITOR

PKF Hong Kong has been engaged by the Company as the international auditor to audit the financial statements of the Company prepared in accordance with the International Financial Reporting Standards. In light of the proposed change of accounting standard, the Board proposes to cease to appoint PKF Hong Kong as the international auditor of the Company, subject to the approval by the shareholders by way of an ordinary resolution at the general meeting. PKF Hong Kong has confirmed that there were no matters regarding its retirement as the international auditor of the Company that need to be brought to the attention of the shareholders of the Company.

The proposal regarding the cessation of appointment of the international auditor has been considered and approved by the Board of the Company on 27 November 2019, and is hereby submitted for consideration at the EGM.

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LETTER FROM THE BOARD

VI. THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

The fourth extraordinary general meeting in 2019 will be held at Conference Room 211 of China Aluminum International Engineering Corporation Limited, Building C, No. 99 Xingshikou Road, Haidian District, Beijing at 9:30 a.m. on Monday, 30 December 2019. The Notice of the EGM and the Supplementary Notice of the EGM are set out on pages 84 to 87 of this circular.

In accordance with Rule 14A.36 of the Listing Rules, any connected persons and shareholders and their associates who have a material interest in the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement, the Finance Lease Framework Cooperation Agreement and the transactions contemplated thereunder are required to abstain from voting in respect of the related resolutions at the EGM. As China Aluminum Group, the Controlling Shareholder of the Company, together with its associate Luoyang Institute, a wholly-owned subsidiary of China Aluminum Group, directly and indirectly holds 76.50% existing issued share capital of the Company as at the Latest Practicable Date, they have material interests in the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement, the Finance Lease Framework Cooperation Agreement and their respective transactions contemplated thereunder. Accordingly, due to the interests of China Aluminum Group and Luoyang Institute in these transactions, China Aluminum Group and its associate Luoyang Institute will abstain from voting at the EGM on the resolutions to approve the General Services Master Agreement, the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement, the Finance Lease Framework Cooperation Agreement and their respective proposed annual caps. The total number of Shares held by China Aluminum Group and its associate Luoyang Institute to abstain from voting is 2,263,684,000 Shares.

In order to determine the Shareholders' entitlement to attend the EGM to be convened on Monday, 30 December 2019, the register of members will be closed from Saturday, 16 November 2019 to Monday, 30 December 2019, both days inclusive, during which period no transfer of the Company's Shares will be registered. In order to be eligible to attend and vote at the EGM, the holders of H Shares of the Company shall lodge the relevant share transfer documents with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong not later than 4:30 p.m. on Friday, 15 November 2019.

Shareholders intending to attend the EGM must return the reply slip to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by hand or by post (in case of holders of H Shares of the Company) on or before Tuesday, 10 December 2019.

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LETTER FROM THE BOARD

VII. VOTING BY POLL AT THE EXTRAORDINARY GENERAL MEETING

Pursuant to Rule 13.39(4) of the Listing Rules, all votes of the Shareholders at the extraordinary general meeting must be taken by poll. The chairman of the EGM will therefore demand a poll for the proposed resolutions at the EGM pursuant to the Articles of Association.

On a poll, every Shareholder presents in person or by proxy or (being a corporation) by its duly authorized representative at the EGM shall have one vote for each Share registered in his/her/its name in the register of members. A Shareholder entitled to more than one vote needs not use all his/her/its votes or cast all the votes he/she uses in the same manner.

VIII. RECOMMENDATION

The Board considers that the above resolutions are in the best interests of the Company and its Shareholders. The Board therefore recommends the Shareholders to vote in favor of the resolutions as set out in the Notice of the EGM as well as the Supplementary Notice of the EGM and to be proposed at the EGM.

IX. GENERAL

Your attention is also drawn to the letter from the Independent Board Committee and the letter from Gram Capital.

By order of the Board

China Aluminum International Engineering Corporation Limited

ZHANG Jian

Joint Company Secretary

Beijing, the PRC, 13 December 2019

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

CHALIECO

中 鋁 國 際 工 程 股 份 有 限 公 司

China Aluminum International Engineering Corporation Limited

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

(Stock Code: 2068)

13 December 2019

To the Independent Shareholders

Dear Sir or Madam,

We refer to the circular dated 13 December 2019 issued by the Company to its Shareholders of which this letter forms part. Terms defined in the circular shall have the same meanings when used in this letter, unless the context otherwise requires.

We, being the independent non-executive Directors, have been appointed as members of the Independent Board Committee to advise the Independent Shareholders in relation to the renewal of the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the proposed annual caps thereunder and the entering into the Finance Lease Framework Cooperation Agreement and the proposed caps thereunder, the details of which are set out in the Letter from the Board in the circular. Gram Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the transactions.

We wish to draw your attention to the Letter from the Board and the Letter from Gram Capital to us (the Independent Board Committee) and the Independent Shareholders, containing its advice in relation to the renewal of the Commodities Sales and Purchases Master Agreement, Engineering Services Master Agreement and the proposed annual caps thereunder and the entering into the Finance Lease Framework Cooperation Agreement and the proposed caps thereunder as set out in the circular. Having taken into account the principal factors and reasons considered by Gram Capital and its conclusion and advice, we are of the view that the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement, the Finance Lease Framework Cooperation Agreement and the transactions contemplated thereunder, including the annual caps, are entered into in the ordinary and usual course of business of the Group and on normal commercial terms, and that the terms of the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement, the Finance Lease Framework Cooperation Agreement and the transactions contemplated thereunder, including the annual caps, are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favor of the ordinary resolutions to be proposed at the EGM to approve the renewal of the Commodities Sales and Purchases Master Agreement, the Engineering Services Master Agreement and the proposed annual caps thereunder and the entering into the Finance Lease Framework Cooperation Agreement and the proposed caps thereunder.

Yours faithfully,

Independent Board Committee

Mr. GUI Weihua

Mr. CHEUNG Hung Kwong

Mr. FU Jun

Independent

Independent

Independent

non-executive Director

non-executive Director

non-executive Director

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LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Transactions for the purpose of inclusion in this circular.

Room 1209, 12/F.

Nan Fung Tower

88 Connaught Road Central/

173 Des Voeux Road Central

Hong Kong

13 December 2019

To: The independent board committee and the independent shareholders of China Aluminum International Engineering Corporation Limited

Dear Sir/ Madam,

    1. CONTINUING CONNECTED TRANSACTIONS; AND
  2. DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTIONS
    We refer to our appointment as the Independent Financial Adviser to advise the

Independent Board Committee and the Independent Shareholders in respect of the Commodities Sales and Purchases Master Agreement, Engineering Services Master Agreement, Finance Lease Framework Cooperation Agreement (collectively, the "Agreements") and transactions contemplated thereunder (the "Transactions"), details of which are set out in the letter from the Board (the "Board Letter") contained in the circular dated 13 December 2019 issued by the Company to the Shareholders (the "Circular"), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

With reference to the Board Letter, as the commodities sales and purchases master agreement, general services master agreement and engineering services master agreement entered into between the Company and China Aluminum Group will expire on 31 December 2019, the Company entered into (among other things) the Commodities Sales and Purchases Master Agreement and Engineering Services Master Agreement and the proposed annual caps of the respective transactions contemplated thereunder with China Aluminum Group on 30 October 2019 in order to meet the business needs and to arrange the management. The aforesaid agreements shall be effective upon the approval at the EGM, which shall be valid until 31 December 2022.

In addition, on 30 October 2019, the Company entered into the Finance Lease Framework Cooperation Agreement with Chinalco Finance Lease, pursuant to which, Chinalco Finance Lease agrees to provide lease services, investment and financial consulting services and account receivables management services to the Group pursuant to the terms and conditions of the Finance Lease Framework Cooperation Agreement.

With reference to the Board Letter, each of the Transactions constitute non-exempt continuing connected transactions of the Company and are subject to the reporting,

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LETTER FROM GRAM CAPITAL

annual review, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules. The transactions contemplated under the Finance Lease Framework Cooperation Agreement also constitute discloseable transactions, and are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

The Independent Board Committee comprising Mr. GUI Weihua, Mr. CHEUNG Hung Kwong and Mr. FU Jun (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Transactions are on normal commercial terms and are fair and reasonable; (ii) whether the Transactions are in the interests of the Company and the Shareholders as a whole and are conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the Agreements and the transactions contemplated thereunder at the EGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

INDEPENDENCE

During the past two years immediately preceding the Latest Practicable Date, Mr. Graham Lam was the person signing off the opinion letters from the independent financial adviser contained in (i) the circular dated 18 April 2018 in respect of, among other things, discloseable and continuing connected transactions of the Company; (ii) the circular dated 5 November 2018 in respect of, among other things, (a) continuing connected transaction and major transaction; and (b) connected transaction and discloseable transaction of the Company; and (iii) the circular dated 27 May 2019 in respect of discloseable and continuing connected transactions.

Notwithstanding the aforesaid past engagements, as at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company, or any other parties that could be reasonably regarded as hindrance to Gram Capital's independence to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders.

Besides that, apart from the advisory fee to us in connection with our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we shall receive any other fees or benefits from the Company.

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LETTER FROM GRAM CAPITAL

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors' representation and confirmation that there are no undisclosed private agreements/arrangements or implied understanding with anyone concerning the Transactions. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement as contained in the Circular or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, China Aluminum Group, Chinalco Finance Lease and each of their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Transactions. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources.

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LETTER FROM GRAM CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Transactions, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the Transactions

Information on the Group

With reference to the Board Letter, the Company is a leading technology, engineering service and equipment provider in the non-ferrous metals industry in China, capable of providing full business-chain integrated engineering solutions throughout various stages of the non-ferrous metals industry chain. The Group is primarily engaged in engineering design and consultancy, engineering and construction contracting, equipment manufacturing, and trading.

Information on China Aluminum Group

According to the Board Letter, China Aluminum Group is a state-owned enterprise incorporated under the PRC law in 2001. China Aluminum Group is the controlling Shareholder of the Company and directly and indirectly holds 76.50% of the Company's issued share capital as at the Latest Practicable Date. China Aluminum Group is principally engaged in mineral resources development, smelting and processing of non-ferrous metals, relevant trading and related engineering and technical services.

Information on Chinalco Finance Lease

According to the Board Letter, Chinalco Finance Lease is a company incorporated in the PRC with limited liability, primarily engaged in the finance lease business, lease business, purchase of lease assets from home and abroad, disposal of residual value and maintenance of lease assets, lease transaction consultation and guarantee business. Chinalco Finance Lease is a subsidiary of China Aluminum Group, the controlling Shareholder.

Reasons for and benefits of the Transactions

  1. Provision of commodities to China Aluminum Group by the Group (the "Sale Transactions")

With reference to the Board Letter and as understood from the Directors, the reasons for and benefits of the Sale Transactions are as follows: (i) due to the close proximity (i.e. the Group's facilities are located in a close proximity with China Aluminum Group), the Group may reduce its selling cost and the logistics cost while China Aluminum Group may also reduce the purchasing cost and the logistics cost through the on-site provision by the Company and its subsidiaries; (ii) as the Company has built up a long-term cooperation relationship with China Aluminum Group with mutual understanding of the operation plans, quality control and

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LETTER FROM GRAM CAPITAL

certain special requirements of both parties, smoother manufacturing process can help the Group to improve its resources management and plan the utilization of its facilities; and (iii) the prices and terms of the products provided to China Aluminum Group by the Company are no less favourable than those provided by the Company to independent third parties and the provision of commodities to China Aluminum Group by the Company generates profits to the Company.

We further discussed with the Directors and understood that the process of equipment manufacturing in the nonferrous metals industry is highly technical and the equipment is subject to a number of different construction and technical standards. Given the unmatched familiarity the Group has with China Aluminum Group, the Directors believe they are in a more competent position to manufacture equipment that is in full accordance with China Aluminum Group's requirements. We also noted that the Group has been providing similar commodities before its listing on the Stock Exchange in 2009 to both the independent third parties and China Aluminum Group. As advised by the Directors, economies of scale could be achieved by bulk production of the similar goods, which may further reduce the cost of production as compared to the low-level production of goods (i.e. fixed cost will be reduced by bulk production of similar goods). Furthermore, we understood from the Directors that the Sale Transactions are revenue nature for the Group.

With reference to the Board Letter, the Sale Transactions are conducted in the ordinary and usual course of business of the Company. As also confirmed by the Directors, the Sale Transactions are conducted on a frequent and regular basis. Therefore, the Directors consider that it would be costly and impractical to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules. Accordingly, the Directors are of the view that the Sale Transactions will be beneficial to the Company and the Shareholders as a whole.

In light of the above factors, we concur with the Directors that the Sale Transactions are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole.

  1. Provision of commodities to the Group by China Aluminum Group (the "Purchase Transactions")

With reference to the Board Letter and as understood from the Directors, the reasons for and benefits of the Purchase Transactions are as follows: (i) China Aluminum Group is familiar with the Company's specific and special requirements for certain commodities; (ii) while the Company purchases relevant commodities directly from China Aluminum Group, the Company also provide its engineering services to them in order to save transport and administrative costs; and (iii) the main raw materials of the Group's certain products are aluminum alloys and aluminum profiles. China Aluminum Group, as one of the major domestic manufacturers of aluminum alloy and aluminum profile, is the main supplier of these commodities required by the Company.

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With reference to the Board Letter, the Purchase Transactions are conducted in the ordinary and usual course of business of the Company. As also confirmed by the Directors, the Purchase Transactions are conducted on a frequent and regular basis. Therefore, the Directors consider that it would be costly and impractical to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules. Accordingly, the Directors are of the view that the Purchase Transactions will be beneficial to the Company and the Shareholders as a whole.

In light of the above factors, we concur with the Directors that the Purchase Transactions are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole.

  1. Provision of engineering services to China Aluminum Group by the Group (the "Engineering Transactions")

With reference of the Board Letter, the Group has long been providing stable engineering services to China Aluminum Group, the Group is able to fully understand the business and operating requirements of China Aluminum Group.

As advised by the Directors, a substantial portion of the Group's engineering services revenue is from contracts with a pre-agreed price which may therefore expose the Group to cost overruns. In performance of the contract, the Group may need to execute extra work when the project owner changes the design for non-technical reasons after the design plan is confirmed. As the Group has been providing the engineering services to China Aluminum Group before the Company's listing on the Stock Exchange in 2009, the Group is able to fully understand the business and operating requirements of China Aluminum Group and is accordingly familiar with China Aluminum Group and therefore the aforesaid costs could be minimized.

In addition, any delay caused by the extra work may affect the progress of the Group's projects and thus the ability to meet the established milestone dates of the specific contract. The Directors consider that it would costly and impractical to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules. Accordingly, the Directors are of the view that the Engineering Transactions will be beneficial to the Company and the Shareholders as a whole.

In light of the above factors, we concur with the Directors that the Engineering Transactions, being a revenue nature transaction for the Group, are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole.

  1. Provision of services pursuant to the Finance Lease Framework Cooperation Agreement by Chinalco Finance Lease to the Group (the "Lease Transactions")

With reference of the Board Letter, the Finance Lease Framework Cooperation Agreement and the continuing connected transactions thereunder help to meet part

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LETTER FROM GRAM CAPITAL

of daily financing needs of the Company, expand financing channels, collect fund in advance and lower the fund appropriation. As compared with other financing methods, it is a simple and convenient procedure which will allow the Company to optimize its financial management, improve its capital utilization efficiency, reduce financing costs and risks, and thus facilitate the smooth business development and operations of the Company. The Lease Transactions are conducted in objective, fair and equitable principles, safeguarding the interests of the parties concerned. They are in line with the overall development strategies of the Company and are in the interests of the Company and its shareholders as a whole. The finance costs under the Finance Lease Framework Cooperation Agreement are not higher than those of services of the same or similar nature provided by independent third party finance lease companies in the PRC, and will not adversely affect the Company's continuing operation ability, profitability and asset independence, nor will rely excessively on related parties. For our due diligence purpose, we reviewed the Finance Lease Framework Cooperation Agreement and noted that the aforesaid disclosure is in line with the pricing policy under the Finance Lease Framework Cooperation Agreement.

As also confirmed by the Directors, it would be costly and impractical to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders, as required by the Listing Rules. Accordingly, the Directors are of the view that the Lease Transactions will be beneficial to the Company and the Shareholders as a whole.

In light of the above factors, we concur with the Directors that the Lease Transactions are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole.

2. Principal terms of the Agreements

  1. The Sale Transactions
    Date
    30 October 2019
    Parties
    1. China Aluminum Group (as the purchaser); and
    2. the Company (as the supplier)

Major terms

The Group may provide its products to China Aluminum Group and/or its associates from time to time, as part of the equipment manufacturing business of the Group. These products primarily include equipment, raw materials and commodities for China Aluminum Group's production operation.

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The initial term of the Commodities Sales and Purchases Master Agreement shall commence from 1 January 2020 and shall expire on 31 December 2022, unless at any time either party gives at least three months' written notice in advance to the other party to terminate the agreement.

Pricing policy

  1. In determining the prices of raw materials, equipment and commodities, the Company would firstly make reference to the average market price. In the limited circumstances where a market price is unavailable, the Company will negotiate with China Aluminum Group about the price on arm's length basis with reference to costs plus a reasonable profit margin. The relevant costs include raw materials, auxiliary materials, depreciation, labour, kinetics, tools, consumption of skills, repairment of equipment, management fees and finance fees. For the determination of a reasonable profit margin, the Company mainly refers to the profit margin level of the same type of products provided by the independent third parties in the market in the corresponding period to ensure the price offered by the Company to China Aluminum Group is not lower than the price offered by the Company to other third parties. The Company will consider the price (costs plus a profit margin) only if it is commercially acceptable to the Company, meaning the overall price shall fall within the Company's budget and allow it to meet its profit targets.
  2. The market prices in the industry would be collected by the Group's

business department through the industry associations and independent suppliers. The Company would collect market information from at least three independent third parties to consider if the prices of the raw materials, equipment and commodities are fair and reasonable and in line with the market. The Company's business department staff would update the market information on a daily basis with reference to public industry websites, such as Changjiang Non-ferrous Metals Website (http://www.ccmn.cn), Shanghai Metals Market (http:/ / www.smm.cn) and China Aluminum Website (http://www.cnal.com), all of which are independent and timely reflect the market price in the view of the Board. Should the business department staff find the reference prices currently used internally to be outdated upon their assessment of the prices at the dates of the transactions, the staff of business department would submit an adjusted price to the senior management, including the vice president, for final review and approval.

  1. For the products which have no alternatives available in the market, the prices would be determined after arm's length negotiation by both parties of the contract. The Company would make reference to the relevant historical prices of the products, and ensure that the terms of the products provided to China Aluminum Group are fair and

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reasonable based on the principle of cost plus a fair and reasonable profit margin. With reference to the method in aforesaid (i), the expected profit margin of equipment to be provided to China Aluminum Group and the expected profit margin of raw materials to be provided to China Aluminum Group by the Company are both in line with the industry standard and no less favorable than the profit margin charged from independent third parties.

As per our request, the Company provided us two individual contracts entered into between the Group and China Aluminum Group during 2019. As advised by the Directors, there were no similar products sold to independent third parties. We further selected six products in total as mentioned in the aforesaid two individual contracts. Upon our further request, the Directors advised us the gross profit margins of the aforesaid products under the aforesaid individual contracts and the historical gross profit margins of such products sale. We noted that the gross profit margins of the aforesaid products were in line with their respective historical gross profit margins. Upon our further request, the Directors provided calculations for the gross profit margins of the aforesaid products.

With reference to the Board Letter, the Company formulated a series of internal management procedures to ensure the continuing connected transactions are fair and reasonable. We understood from the Directors that all the quotations to China Aluminum Group prepared by the business department of the Group are subject to review and pre-approval by multiple departments, including but not limited to finance and business departments (who does not have any direct interest in the transactions) of the Company. The staff in business department will compare the profit rate of sales to China Aluminum Group to the level of profit rates in the industry as well as those of sales to other independent third party customers, and obtain final approval from the department head before going through a formal approval process with involvement from other departments. If the price of the orders by China Aluminum Group after price negotiations are below a fair and reasonable profit rate, the Group may choose not to accept the orders placed by China Aluminum Group. In light of the aforesaid requirement of the procedures and after reviewing the internal control measures document as provided by the Company, we consider that the effective implementation of the procedures would help to ensure the fair pricing under the Sale Transactions.

With reference to Rule 14A.56 of the Listing Rules, among other things, the auditors of the Company must provide a letter to the Board confirming whether anything has come to their attention that causes them to believe that the continuing connected transactions were not, in all material respects, in accordance with the pricing policies of the listed issuer 's group if the transactions involve the provision of goods or services by the listed issuer 's group. We obtained the letter from the Company's auditors, showing their confirmation that, among other things, nothing has come to their attention that causes them to believe that the Sale Transactions for the year ended 31 December 2018 were not, in all material respects, in accordance with the pricing policies of Group.

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We also discussed with staffs of Company's relevant departments/ subsidiaries (which will be principally involved in the pricing/budgeting of Sale Transactions) and understood that such departments/subsidiaries are aware of the procedures and will comply with the procedures when conducting transactions contemplated under the Sale Transactions.

Having considered (i) our findings on the individual contracts as mentioned above; (ii) our discussion with relevant departments/subsidiaries of the Company; and (iii) the auditors' confirmation for the year ended 31 December 2018, we do not doubt the effectiveness of the aforesaid procedures.

In light of the above factors, we consider that terms of the Sale Transactions are on normal commercial terms and are fair and reasonable.

Historical figures and the proposed annual caps

Set out below are (i) the historical amounts of the Sale Transactions for the three years ending 31 December 2019 with existing annual caps; and (ii) the proposed annual caps of the Sale Transactions for the three years ending

31 December 2022:

For the year

For the year

For the year

ended

ended

ending

31 December

31 December

31 December

2017

2018

2019

RMB'million

RMB'million

RMB'million

Historical amounts

441

653

256

(Note)

Existing annual caps

600

700

800

Utilization Rate

73.5

93.3

N/A

For the year

For the year

For the year

ending

ending

ending

31 December

31 December

31 December

2020

2021

2022

RMB'million

RMB'million

RMB'million

Proposed annual caps

800

900

1,000

Note: the figure was for the nine months ended 30 September 2019

According to the Board Letter, in determining the caps, the Directors considered certain factors, details of which are set out under the sub-section headed "Historical figures and the proposed annual caps" under the section headed "COMMODITIES SALES AND PURCHASES MASTER AGREEMENT

  • PROVISION OF COMMODITIES BY THE COMPANY TO CHINA ALUMINUM GROUP" of the Board Letter.

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As depicted from the table above, we note that the relevant utilization rate of the existing annual caps were approximately 73.5% and 93.3% for the two years ended 31 December 2018. We also noted that the proposed annual caps for the year ending 31 December 2020 represented an increase of approximately 22.5% as compared to the historical amounts of the Sale Transactions for FY2018.

To further assess the fairness and reasonableness of the proposed annual caps for the three years ending 31 December 2022 (in particular, the aforementioned estimated increases), we extracted historical amounts of the Sale Transactions from the Company's previous annual reports as follows:

For the year

For the year

For the year

For the year

For the year

ended

ended

ended

ended

ended

31 December

31 December

31 December

31 December

31 December

2014

2015

2016

2017

2018

RMB million

RMB million

RMB million

RMB million

RMB million

Historical amounts

134.00

231

469

441

653

Change from

previous year

72.4%

103.0%

-6.0%

48.1%

Average change

54.4%

According to the above table, the estimated growth rates of the Sale Transactions for the three years ending 31 December 2022 were lower than the average growth rate for the Sale Transactions for the five years ended 31 December 2018. Accordingly, we consider the estimated increase of Sale Transactions for the three years ending 31 December 2022 to be justifiable.

Upon our further request, we obtained and reviewed a list showing the calculation of the proposed annual caps for the three years ending 31 December 2022. We noted that certain subsidiaries of the Company provided estimates of the forecasted transaction amount for the Sale Transactions, the sum of which was in line with the proposed annual caps for the each of three years ending 31 December 2022. As confirmed by the Directors, the forecasted transaction amount was approved by management of the above-mentioned subsidiaries before submitting to the Company for consolidation and review.

In light of the above factors, including (i) our analysis on estimated increase rates as mentioned above; and (ii) the calculation of the proposed annual caps for the three years ending 31 December 2022 as provided by the Company upon our request, we consider that the proposed annual caps of the Sale Transactions for the three years ending 31 December 2022 are fair and reasonable.

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Shareholders should note that as the proposed annual cap of the Sale Transactions for the three years ending 31 December 2022 are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2022, and they do not represent forecasts of revenue/income/cost to be incurred from the Sale Transactions. Consequently, we express no opinion as to how closely the actual revenue/income/cost to be incurred from the transactions contemplated under the Sale Transactions will correspond with the proposed annual caps.

  1. The Purchase Transactions
    Date
    30 October 2019
    Parties
    1. China Aluminum Group (as the supplier); and
    2. the Company (as the purchaser)

Major terms

China Aluminum Group and/or its associates may provide products to the Group from time to time, including non-ferrous products, manufacturing equipment relating to the non-ferrous industry, cement, engineering equipment and components.

The initial term of the Commodities Sales and Purchases Master Agreement shall commence from 1 January 2020 and shall expire on 31 December 2022, unless at any time either party gives at least three months' written notice in advance to the other party and as agreed by both parties to terminate the agreement.

Pricing policy

  1. When deciding the prices of commodities to be purchased from China Aluminum Group, the Company would primarily make reference to the market prices. The Company would collect market information by inviting certain suppliers who appeared on the Group's recognized suppliers list to submit quotations or proposals before placing purchase orders to at least three independent third parties to consider if the prices of the commodities are fair and reasonable and in line with the market. The Company's business department staff would update the market information on a daily basis with reference to public industry websites, such as Changjiang Non-ferrous Metals Website (http://www.ccmn.cn), Shanghai Metals Market (http://www.smm.cn) and China Aluminum Website

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LETTER FROM GRAM CAPITAL

(http://www.cnal.com), all of which are independent and timely reflect the market price in the view of the Board. Should the business department staff find the reference prices currently used internally to be outdated upon their assessment of the prices at the dates of the transactions, the staff of business department would submit an adjusted price to the senior management, including the vice president, for final review and approval;

  1. Determination shall be made upon negotiation by both parties based on the assessed value issued by a third appraisal institution; and
  2. In the limited circumstances where a comparable market fair value range is unavailable, the Company would negotiate with China Aluminum Group to calculate the price on arm's length basis with reference to costs plus a reasonable profit margin. The relevant costs include costs of raw materials and equipment purchased or produced, labour cost and staff welfare expenses, electricity and other utilities costs, depreciation, cost of machinery maintenance, and sales and administration expenses and so on. Unit cost would be determined based on the above factors. China Aluminum Group shall then charge the Company a profit rate based on arm's length negotiation on top of the unit cost. The Company would consider the profit rate (costs plus profit margin) only if it is commercially acceptable to the Company, meaning the overall price shall fall within the Company's budget and allow it to meet its profit targets.

For our due diligence purpose, we requested the Company to provide three individual contracts entered into between the Group and China Aluminum Group in respect of the purchase of products under the existing Purchase Transactions during 2019 with relevant documents showing the Group's price quotation results. We noted from the aforesaid documents that

  1. there were three suppliers provided their quotations for each transaction; and (ii) the price offered by connected persons were the lowest price among the three quotations for each transaction.

With reference to the Board Letter, the Company formulated a series of internal management procedures to ensure the actual prices of products supplied by China Aluminum Group to the Company is fair and reasonable. We understood from the Directors that a proposed price will be provided to Company by China Aluminum Group before determination subject to review by multiple departments of the Company, including E-commerce center, financial department and other relevant operation departments. If the price offered by China Aluminum Group after price negotiations are above a fair and reasonable profit rate/selling price, the Group may choose not to accept the price offered by China Aluminum Group. In light of the aforesaid requirement of the internal management procedures and after reviewing the internal control measures document as provided by the Company, we consider that the effective implementation of the aforesaid procedures would help to ensure the fair pricing under the Purchase Transactions.

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We discussed with staffs of Company's relevant departments/ subsidiaries (which will be principally involved in the pricing/budgeting of Purchase Transactions) and understood that such departments/subsidiaries are aware of the procedures and will comply with the procedures when conducting transactions contemplated under the Purchase Transactions.

Having considered our discussion with relevant departments/ subsidiaries of the Company, we do not doubt the effectiveness of the aforesaid procedures.

In light of the above factors, we consider that the Purchase Transactions under the Commodities Sales and Purchases Master Agreement is on normal commercial terms and is fair and reasonable.

Historical figures and the proposed annual caps

Set out below are (i) the historical amounts of the Purchase Transactions for the three years ending 31 December 2019 with existing annual caps; and

  1. the proposed annual caps of the Purchase Transactions for the three years ending 31 December 2022:

For the year

For the year

For the year

ended

ended

ending

31 December

31 December

31 December

2017

2018

2019

RMB'million

RMB'million

RMB'million

Historical amounts

1,031

493

193

(Note)

Existing annual caps

1,800

1,400

1,400

Utilization Rate

57.3

35.2

N/A

For the year

For the year

For the year

ending

ending

ending

31 December

31 December

31 December

2020

2021

2022

RMB'million

RMB'million

RMB'million

Proposed annual caps

1,000

1,000

1,000

Note: the figure was for the nine months ended 30 September 2019

According to the Board Letter, in determining the caps, the Directors considered certain factors, details of which are set out under the sub-section headed "Historical figures and the proposed annual caps" under the section headed "COMMODITIES SALES AND PURCHASES MASTER AGREEMENT

  • PROVISION OF COMMODITIES TO THE COMPANY BY CHINA ALUMINUM GROUP" of the Board Letter.

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The Group recorded a significant increase in historical amounts of the Purchase Transactions for the year ended 31 December 2017 as compared to that for the year ended 31 December 2016 (i.e. approximately RMB1,031 million, 2016: approximately RMB87 million). However, the amounts of Purchase Transactions for the year ended 31 December 2018 decreased by approximately 52% as compared to that for the year ended 31 December 2017. Despite the substantial decrease in the amounts of Purchase Transactions for 2018, the historical amounts of the Purchase Transactions for the year ended 31 December 2018 still represented a significant increase of more than 4 times as compared to that for the year ended 31 December 2016.

With reference to the Board Letter, the actual transaction amount of the products provided by China Aluminum Group to the Company decreased in 2018 and 2019 as compared to that in 2017, which was mainly due to procurement of products for certain large-scalenon-ferrous metal development projects undertaken by the Company in 2017 (as required under the contract in advance in 2017 in accordance with the requirements of the project progress by the owner). As a result, such progress was achieved earlier than it was originally planned. Accordingly, the scale of products procured from China Aluminum Group in 2018 and 2019 decreased.

In determining the caps from 2020 to 2022, the main considerations are the new progress made by the Company in overseas projects, especially the electrolytic aluminium project in Italy and the project in Indonesia signed in 2019, which require further commodity procurement from China Aluminum Group. Secondly, the Company has vigorously developed the aluminium application business, and its market is gradually opening up, of which, procurement of aluminum raw materials from China Aluminum Group is required for the business of aluminium overpasses, aluminum template and aluminium trailers, in order to meet the production demand. Such market is expected to expand after 2020.

As advised by the Directors, the amounts under the Purchase Transactions for the three years ending 31 December 2022 may fluctuate. Nevertheless, the Company expects that the amounts under the Purchase Transactions during each of the three years ending 31 December 2022 will be within RMB1,000 million, which is determined after taking into account of the amounts of the Purchase Transactions for the year ended 31 December 2017 (being the highest purchase amounts during recent five years). Accordingly, the proposed annual caps for the three years ending 31 December 2022 were set at the similar level (i.e. RMB1,000 million per annum) to the historical amounts of the Purchase Transactions for the year ended 31 December 2017. For our due diligence purpose, we extracted historical amounts of the

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LETTER FROM GRAM CAPITAL

Purchase Transactions for the five years ended 31 December 2018 from the Company's previous annual reports as follows:

For the year

For the year

For the year

For the year

For the year

ended

ended

ended

ended

ended

31 December

31 December

31 December

31 December

31 December

2014

2015

2016

2017

2018

RMB'million

RMB'million

RMB'million

RMB'million

RMB'million

Historical amounts

of the Purchase

Transactions

26

69

87.26

1,031

493

Previous/existing

annual caps

180

70

160

1,800

1,400

We consider that should the amounts of the Purchase Transactions during the three years ending 31 December 2022 recover to the highest purchase amounts level during recent five years, the Group will have sufficient room and flexibility in conducting the Purchase Transactions, in particular the possible procurement of the products required under the contract in advance, which are in the interest of the Company and Shareholders as a whole.

As further advised by the Directors, the Group purchase raw products (i.e. products under the Purchase Transactions) from China Aluminum Group on a proximity basis, and will apply such products to the projects undertaken by the Group to provide engineering services to its clients (including China Aluminium Group and independent third parties).

With reference to the 2018 Annual Report, the gross profit margin of engineering and construction contracting business were 10.4% and 10.3% for the year ended 31 December 2018 and 31 December 2017 respectively (in the other words, cost of sales represented approximately 89.6% and 89.7% to segment revenue). As confirmed by the Directors, majority of cost for engineering and construction contracting business was derived from purchase of the above mentioned raw products. As per our analysis under sub-section headed "Historical figures and the proposed annual caps" of the section headed "Engineering Transactions", the Group's estimation of engineering services to China Aluminium Group to be RMB19.5 billion in total during 2020 to 2022. For illustration purposes only, based on the Group's estimation of engineering services to China Aluminium Group during 2020 to 2022, and portion of cost of sales to segment revenue, the implied cost of sales would be approximately RMB17.5 billion during 2020 to 2022, of which majority of cost may be derived from purchase of raw products (i.e. products under the Purchase Transactions).

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In light of the above factors, in particular (i) the Company expects that the amounts under the Purchase Transactions during each of the three years ending 31 December 2022 will be within RMB1,000 million, which is determined after taking into account of the amounts of the Purchase Transactions for the year ended 31 December 2017; and (ii) the proposed use of products to be purchased under the Purchase Transactions, the gross profit margin of engineering and construction contracting business and the Group's estimation of engineering services to China Aluminium Group during 2020 to 2022, we consider that the proposed caps for the three years ending 31 December 2022 of the Purchase Transactions to be fair and reasonable.

Shareholders should note that as the proposed annual cap of the Purchase Transactions for the three years ending 31 December 2022 are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2022, and they do not represent forecasts of revenue/income/cost to be incurred from the Purchase Transactions. Consequently, we express no opinion as to how closely the actual revenue/income/cost to be incurred from the transactions contemplated under the Purchase Transactions will correspond with the proposed annual caps.

  1. Engineering Transactions
    Date
    30 October 2019
    Parties
    1. China Aluminum Group (as the service recipient); and
    2. the Company (as the service provider)

Major terms

The Group may from time to time provide engineering services to China Aluminum Group and/or its associates, including but not limited to construction engineering, technology (right of use) transfer, project supervision, survey, engineering design, engineering consultancy, equipment agency and equipment sales, engineering management and other engineering-related services.

The initial term of the Engineering Services Master Agreement shall commence from 1 January 2020 and shall expire on 31 December 2022, unless at any time either party gives at least three months' prior written notice of termination to the other party and as agreed by both parties.

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Pricing policy

The prices for the engineering services provided by the Company shall be determined (1) through the tender by China Aluminum Group; or (2) by arm's length negotiation between the parties. For determining the prices of survey and design projects, the Company would refer to the Engineering Survey and Design Charging Administration Regulations (Ji Jia Ge [2002] No.

  1. 《( 工程勘察設計收費管理規定》(計價格[2002]第10號)) promulgated by the then National Development Plan Commission and Ministry of Construction and refer to the pricing factors such as the scale and complexity of the projects and determine after negotiation with the parties. The price is usually not lower than the price provided by the independent third parties.

For determining the prices of engineering and construction contracting projects, the Company would estimate prices on the basis of the project size and the exact work to be done, which is also the basis that the Company makes reference to when participating in the bidding or negotiation process. In addition, the Company would also calculate the base prices of engineering and construction contracting projects in accordance with the provincial and industrial standard of construction quota where the project is located and then decide the final price of contract on arm's length basis with the parties. All such transactions in relation to engineering services are on normal commercial terms.

Upon our request, the Company provided us three individual contracts entered into between the Group and China Aluminum Group regarding the Engineering Transaction during 2018 and 2019 with relevant tendering documents. We noted that cost budgets were prepared for all these engineering services projects on the basis of the project size, material price, the workload and the individual contracts were all entered into based on the winning bid prices.

We understood from the Directors that before participating tender procedures for the construction services by one of the Company's subsidiaries (which is principally engaged in construction business), the subsidiary's 風控 與成本管理部 (Risk Control and Cost Management Department*) will determine the cost/budget of the proposed project based on, among other things, the scale, complexity of the projects, scope of work, etc. The bidder price will not be less than the estimated cost/budget. Furthermore, we also enquired into the Directors the background of the subsidiary's department and understood that relevant staff of the subsidiary hold relevant qualifications for cost budgeting and/or have extensive experience in the industry. In light of the aforesaid requirement of the internal management procedures and after reviewing the internal control measures document as provided by the Company, we consider that the effective implementation of the aforesaid procedures would help to ensure the fair pricing under the Engineering Transactions.

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With reference to Rule 14A.56 of the Listing Rules, among other things, the auditors of the Company must provide a letter to the Board confirming whether anything has come to their attention that causes them to believe that the continuing connected transactions were not, in all material respects, in accordance with the pricing policies of the listed issuer 's group if the transactions involve the provision of goods or services by the listed issuer 's group. We obtained the letter from the Company's auditors, showing their confirmation that, among other things, nothing has come to their attention that causes them to believe that the Engineering Transactions for the year ended 31 December 2018 was not, in all material respects, in accordance with the pricing policies of Group.

We also discussed with staffs of Company's relevant departments/ subsidiaries (which will be principally involved in the pricing/budgeting of Engineering Transactions) and understood that such departments/subsidiaries are aware of the procedures and will comply with the procedures when conducting transactions contemplated under the Engineering Transactions.

Having considered (i) our findings on the individual contracts as mentioned above; (ii) our discussion with relevant departments/subsidiaries of the Company; and (iii) the auditors' confirmation for the year ended 31 December 2018, we do not doubt the effectiveness of the aforesaid procedures.

In light of the above factors, we consider that terms of the Engineering Transactions are on normal commercial terms and is fair and reasonable.

Historical figures and the proposed annual caps

Set out below are (i) the historical amounts of the Engineering Transactions for the three years ending 31 December 2019 with existing annual caps; and (ii) the proposed annual caps of the Engineering Transactions for the three years ending 31 December 2022:

For the year

For the year

For the year

ended

ended

ending

31 December

31 December

31 December

2017

2018

2019

RMB'million

RMB'million

RMB'million

Historical amounts

8,336

5,762

2,499

(Note)

Existing annual caps

11,000

6,600

6,000

Utilization Rate

76%

87%

N/A

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LETTER FROM GRAM CAPITAL

For the year

For the year

For the year

ending

ending

ending

31 December

31 December

31 December

2020

2021

2022

RMB'million

RMB'million

RMB'million

Proposed annual caps

7,000

6,500

6,000

Note: the figure was for the nine months ended 30 September 2019

According to the Board Letter, in determining the caps, the Directors considered certain factors, details of which are set out under the sub-section headed "Historical figures and the proposed annual caps" under the section headed "ENGINEERING SERVICES MASTER AGREEMENT" of the Board Letter.

As depicted from the table above, we note that the utilization rate of the existing annual caps were approximately 76% and 87% for the two years ended 31 December 2018 respectively.

Upon our enquiry, the Directors advised us that the Group's estimation of engineering services to China Aluminium Group amounting to RMB19.5 billion in total during 2020 to 2022. Such demand was estimated based on, among other things, the historical amounts of the Engineering Transactions for the two years ended 31 December 2018 and the estimated amounts of the Engineering Transactions for the year ending 31 December 2019.

We noted that the estimated amount of Engineering Transactions of RMB19.5 billion in total during 2020 to 2022 represented an increase of approximately 12% as compared to the total amounts of Engineering Transactions of RMB17.43 billion in total during 2017 to 2019 (including the annualised amounts of RMB3,332 million for the year ending 31 December 2019, calculated by historical amounts of RMB2,499 million/9 x 12).

As further advised by the Directors, the estimated increase of 12% as mentioned above was determined based on the historical performance of the Group.

To further assess the fairness and reasonableness of the proposed annual caps for the three years ending 31 December 2022 (in particular, the aforementioned estimated increases), we extracted the Company's revenue generated from (i) engineering design and consultancy; and (ii) engineering

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LETTER FROM GRAM CAPITAL

and construction contracting for the three years ended 31 December 2018 from previous annual reports as follows:

For the year

For the year

For the year

ended

ended

ended

31 December

31 December

31 December

2016

2017

2018

RMB'000

RMB'000

RMB'000

(Restated)

Engineering design

and consultancy

1,616,491

1,740,349

2,305,941

Engineering and

construction

contracting

16,482,127

23,906,705

21,693,929

Sub-total

18,098,618

25,647,054

23,999,870

Change from

previous year

41.7%

-6.4%

Average change

17.6%

According to the above table, the estimated increase of approximately 12% as mentioned above was less than the average change of the Group's revenue generated from engineering design and consultancy and engineering and construction contracting during 2016 to 2018. Accordingly, we consider the estimated increase to be justifiable.

In light of the above factors, we consider that the estimated transactions amount of the Engineering Transactions of RMB19.5 billion in total for the three years ending 31 December 2022 to be fair and reasonable.

As further advised by the Directors, they expected to undertake more projects at the beginning of the period (i.e. 2020 to 2022) so that they adjusted the average of RMB6.5 billion per annum during the period (i.e. 2020 to 2022) to RMB7 billion, RMB6.5 billion and RMB6 billion for the three years ending 31 December 2022. Based on the above, we consider that the proposed annual caps of the Engineering Transactions for the three years ending 31 December 2022 to be fair and reasonable.

Shareholders should note that as the proposed annual caps of the Engineering Transactions for the three years ending 31 December 2022 are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2022, and they do not represent forecasts of revenue/income/cost to be incurred from the Engineering Transactions. Consequently, we express no opinion as to how

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LETTER FROM GRAM CAPITAL

closely the actual revenue/income/cost to be incurred from the transactions contemplated under the Engineering Transactions will correspond with the proposed annual caps.

  1. Lease Transactions
    Date
    30 October 2019
    Parties
    1. The Company (as the service recipient, for itself and on behalf of its subsidiaries); and
    2. Chinalco Finance Lease (as the service provider, for itself and on behalf of its subsidiaries)

Term

The Finance Lease Framework Cooperation Agreement has a term of 3 years effective from the date of passing the ordinary resolution at the general meeting of the Company in respect of entering into the Finance Lease Framework Cooperation Agreement and the parties thereto signing the agreement.

Principal terms

The services that Chinalco Finance Lease intends to provide for the Group in accordance with the Finance Lease Framework Cooperation Agreement include (i) lease services; (ii) investment and financial consulting services; and (iii) account receivables management services.

Within the term of the Finance Lease Framework Cooperation Agreement, Chinalco Finance Lease and the Group have agreed on an intended scale of cooperation worth RMB1 billion, which is a revolving limit. For the business applications of the Group or its holding enterprises that conform to the conditions of Chinalco Finance Lease (which vary among different cooperative fields), Chinalco Finance Lease will sign specific transaction documents with the Group after the review and approval by Chinalco Finance Lease. Viewing Chinalco Finance Lease as its most significant long-term partner, the Group would prefer cooperation with Chinalco Finance Lease under equal conditions.

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LETTER FROM GRAM CAPITAL

Financing costs and payment method

Financing costs principally include lease interests and handling fee, etc. The financing costs of finance lease services provided by Chinalco Finance Lease are not higher than the finance cost of services of the same or similar nature provided by independent third party finance lease companies in the PRC (subject to the after-tax internal rate of return). The lease interest shall be determined with reference to the benchmark interest rates for RMB-denominated loans published by the People's Bank of China on a regular basis; if such rates are not available, the lease interest shall be determined with reference to the interest rates charged or quoted by other major financial institutions for providing services of the same or similar nature. The Company and Chinalco Finance Lease will, based on the actual cash flows, design flexible payment methods, including not limited to payment of principal in equal instalments on a quarterly basis, payment of principal and interest in equal instalments on a quarterly basis, payment of principal in unequal instalments on a quarterly basis, payment of principal in equal instalments on a semi-annual basis, payment of principal and interest in equal instalments on an annual basis, etc.

As confirmed by the Directors, the Group did not enter into any finance lease arrangement with Chinalco Finance Lease.

With reference to the Board Letter, the Company formulated a series of internal management procedures to ensure the Lease Transactions are fair and reasonable. Details of the internal management procedures are set out under the section headed "Internal Control Measures" of the Board Letter. Having considered internal management procedures, in particular, there would be price comparison procedures and different staff's approval procedures and after reviewing the internal control measures document as provided by the Company, we consider that the effective implementation of the procedures would help to ensure the fair pricing under the Lease Transactions according to its pricing policy.

We also discussed with staffs of Company's relevant departments/ subsidiaries (which will be principally involved in the pricing of Lease Transactions) and understood that such departments/subsidiaries are aware of the procedures and will comply with the procedures when conducting transactions contemplated under the Lease Transactions.

Having considered our discussion with relevant departments/ subsidiaries of the Company, we do not doubt the effectiveness of the aforesaid procedures.

In light of the above factors, we consider that terms of the Lease Transactions are on normal commercial terms and are fair and reasonable.

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LETTER FROM GRAM CAPITAL

The Proposed Cap

With reference to the Board Letter, Chinalco Finance Lease and the Group have agreed on an intended scale of cooperation worth RMB1 billion (the "Proposed Cap"), which is a revolving limit. The intended limit of scale of cooperation is, at any time within the validity period of the Finance Lease Framework Cooperation Agreement, the cap of balance of lease services, investment and financial consulting services and account receivables management services obtained by the Group from Chinalco Finance Lease.

According to the Board Letter, in determining the Proposed Cap, the Directors considered certain factors, details of which are set out under the sub-section headed "Proposed Cap under the Finance Lease Framework Cooperation Agreement and Basis of Determination" under the section headed "ENTERING INTO THE FINANCE LEASE FRAMEWORK COOPERATION AGREEMENT" of the Board Letter.

To assess the fairness and reasonableness of Proposed Cap, we discussed with the Directors the calculation for the Proposed Cap. We understood that the estimated demand of Lease Transactions for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement was calculated based on estimated demand finance lease services for purchase of aluminium template (鋁模板); and for purchase of equipments and tools.

For our due diligence purpose, we obtained historical purchase data of aluminium template and noted that the Group purchased approximately RMB265.3 million, RMB65.8 million and approximately RMB92.1 million of aluminium template for the year ended 31 December 2017, 31 December 2018 and the nine months ended 30 September 2019 respectively.

In addition, we understood from the Directors that the Group was selected as construction services providers for road construction projects. The Directors determined the estimated demand of finance lease services for purchase of equipments and tools for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement based on the estimated purchase amounts of equipments and tools for such road construction projects. Upon our further request, the Directors provided us notices of successful biding of such projects and documents showing the approved budgets for the purchase of equipments and tools. We noted from the relevant documents that the approved budgets for the purchase of equipments and tools for such road construction projects, which indicates the Group's possible demand of lease services to be provided by qualified independent financial institution and/or Chinalco Finance Lease, were more than the estimated demand of finance lease services for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement of RMB1,000 million.

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LETTER FROM GRAM CAPITAL

Having considered (i) the historical purchase of aluminium templates; and (ii) that the approved budgets for the purchase of equipments and tools for the road construction projects were more than the estimated demand of finance lease services for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement, we consider that the estimated demand of the Lease Transactions for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement to be fair and reasonable.

As advised by the Directors, for the sake of prudence, the Directors assumed the total estimated demands of finance lease services for purchase of aluminium template; and equipments and tools for the second and third years after the effective of the terms of Finance Lease Framework Cooperation Agreement would remain at similar level of those for the first year after the effective of the terms of Finance Lease Framework Cooperation Agreement.

Despite that the services which Chinalco Finance Lease intends to provide for the Group in accordance with the Finance Lease Framework Cooperation Agreement include (i) lease services; (ii) investment and financial consulting services; and (iii) account receivables management services, the Directors determined the Proposed Cap based primarily on estimated demand finance lease services for purchase of aluminium template (鋁模板); and for purchase of equipments and tools (i.e. the estimated demand of lease services). The Directors advised us that such bases were made mainly due to the factors as set out below:

  • the estimated service fees for investment and financial consulting services (being less than RMB5 million during the terms of the Finance Lease Framework Cooperation Agreement) to be immaterial to the Proposed Cap (represented less than 0.5% to Proposed Cap);
  • the Company entered into the factoring agreement with China Aluminum Business on 28 March 2019 (the "Factoring Agreement"), pursuant to which (i) the Company intended to transfer the account receivables under the elementary transaction contracts entered into between the Group and the buyer(s) to China Aluminum Business so as to obtain the factoring facility funds from China Aluminum Business. China Aluminum Business agreed on the transfer of the account receivables and provides the Company with the factoring services; and (ii) annual caps (including factoring limit and factoring service charge and handling charge) will not be more than RMB1,000 million for the three years ending 31 December 2021 (the "Existing Factoring Cap(s)"). The Factoring Agreement was approved by the then independent shareholders of the Company at the Company's annual general meeting on 18 June 2019.
    We understood that (i) the services under the Factoring Agreement were of similar nature to account receivables

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LETTER FROM GRAM CAPITAL

management services under the Lease Transactions; (ii) the Directors can revise the Proposed Cap (subject to the requirements of the Listing Rules) should the demand of account receivables management services under the Lease Transactions anticipated to exceed the Proposed Cap; and (iii) the Proposed Cap was RMB1,000 million, which was the same as the amount of Existing Factoring Caps.

Accordingly, the Group could conduct factoring services (similar nature to account receivables management services) by 31 December 2021 pursuant to the Factoring Agreement and conduct account receivables management services (similar nature to factoring services) pursuant to the Lease Transactions during the period from 1 January 2022 (i.e. the expiry date of the Factoring Agreement) to the date of third anniversary after the effective of the terms of Finance Lease Framework Cooperation Agreement pursuant to the Lease Transactions. Despite that the Group may also require finance lease services under the Lease Transactions during the period from 1 January 2022 to the date of third anniversary after the effective of the terms of Finance Lease Framework Cooperation Agreement, the Directors can revise the Proposed Cap (subject to the requirements of the Listing Rules) should the demands of Lease Transactions are anticipated to exceed the Proposed Cap or accept similar services from independent third parties. Therefore, the Directors did not separately consider the possible demand of account receivables management services when determining the Proposed Cap.

Based on the above factors, we consider that the Proposed Cap to be fair and reasonable.

Shareholders should note that as the Proposed Cap during the terms of Finance Lease Framework Cooperation Agreement are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period of the terms of Finance Lease Framework Cooperation Agreement.

3. Listing Rules implication regarding the Transactions

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the values/maximum amounts of the Transactions must be restricted by their respective proposed annual cap for the period concerned under the Agreements; (ii) the terms of the Transactions (including their respective proposed annual caps) must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors' annual review on the terms of the Transactions must be included in the Company's subsequent published annual reports and financial accounts.

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LETTER FROM GRAM CAPITAL

Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, whether anything has come to their attention that causes them to believe that the Transactions (i) have not been approved by the Board; (ii) were not, in all material respects, in accordance with the pricing policies of the Group; (iii) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions; and (iv) have exceeded the proposed annual caps.

In the event that the total amounts of each of the Transactions are anticipated to exceed their respective annual caps, or that there is any proposed material amendment to the terms of the Agreements, as confirmed by the Directors, the Company shall comply with the applicable provisions of the Listing Rules governing continuing connected transaction.

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the Transactions and thus the interest of the Independent Shareholders would be safeguarded.

4. Recommendation on the Transactions

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Transactions are on normal commercial terms and are fair and reasonable; and (ii) the Transactions are in the interests of the Company and the Shareholders as a whole and are conducted in the ordinary and usual course of business of the Group. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Agreements and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully,

For and on behalf of

Gram Capital Limited

Graham Lam

Managing Director

Note: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has over 20 years of experience in investment banking industry.

- 77 -

APPENDIX I

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This document, for which the Directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirmed that to the best of their knowledge and belief the information contained in this document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

2. DISCLOSURE OF INTERESTS AND CONFIRMATION

As at the Latest Practicable Date, none of the Directors, Supervisors or senior management of the Company had an interest or a short position in the shares, underlying shares and debentures of the Company or any associated corporation. As at the Latest Practicable Date:

  1. none of the Directors, Supervisors and senior management 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 the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were deemed or taken to have under such provisions of the SFO), or which were, pursuant to section 352 of the SFO, required to be recorded in the register referred therein, or otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers;
  2. none of the Directors, Supervisors and senior management of the Company or their spouses or children under the age of 18 was granted any rights to subscribe for any equity security or debt security of the Company;
  3. except that Mr. WANG Jun and Mr. LI Yihua who hold management positions in China Aluminum Group and its subsidiaries, none of the Directors has material interests in any contract or arrangement which has been entered by any member of the Group since 31 December 2018 (being the date to which the latest published audited annual financial statements of the Company were made up), was subsisting as at the Latest Practicable Date and significant in relation to the business of the Group;

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APPENDIX I

GENERAL INFORMATION

  1. none of the Directors has any interest, either directly or indirectly, in the assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group, since 31 December 2018 (being the date to which the latest published audited annual financial statements of the Company were made up);
  2. save as disclosed in "Directors' interest in competing business" in Appendix I, so far as is known to the Directors, none of the Directors and any of their respective associates were interested in any business (excluding the business of the Group) which competes or is likely to compete either directly or indirectly with the business of the Group; if each of them was a Controlling Shareholder, they are required to make disclosure under Rule 8.10 of the Listing Rules;
  3. the Company has not been aware of any material adverse change in the financial or trading position of the Group since 31 December 2018 (being the date to which the latest published audited annual financial statements of the Company were made up); and
  4. the Board, having made all reasonable enquiries, confirms that to the best of their knowledge, information and belief, as at the Latest Practicable Date, there was no voting trust or other agreement or other arrangement or understanding (other than an outright sale) entered into by or binding upon any Shareholder and there was no obligation or entitlement of any Shareholder whereby he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his Shares to a third party either generally or on a case-by-case basis.

3. SERVICE CONTRACTS

The Company has entered into service contracts with all the Directors and Supervisors. The details of such service contracts mainly consist of: (1) term of three years from 23 May 2017 (Mr. GUI Weihua was appointed in place of Mr. SUN Chuanyao as the independent non-executive Director of the Company on 27 February 2018 and the service contract commenced from 27 February 2018 and will end upon the date of the election of the next session of the Board); and (2) termination subject to terms of each contract. For compliance with relevant regulations and the Articles and the provisions of arbitration, the Company had entered into contracts with each Supervisor. Save as the aforesaid, none of the Directors has entered into a service contract with the Company. None of the Directors or Supervisors has a service contract with the Company which is not determined by the Company within one year without payment of compensation, other than statutory compensation.

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APPENDIX I

GENERAL INFORMATION

4. LITIGATION

As at the Latest Practicable Date, the Company was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against the Company.

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that there are no any material adverse change in the financial or trading position of the Company since 31 December 2018, being the date to which the latest published audited consolidated financial statements of the Company were made up.

6. DIRECTORS' INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, save as disclosed below, none of the Directors and their respective associates had any competing interest in any business which directly or indirectly competes or is likely to compete with the business of the Company:

Name of

Position

Director

in the Company

Other Interest

Mr. WANG Jun

Non-executive

The former deputy chief accountant,

Director

former director of the finance

department and capital operation

department of China Aluminum

Group; and

The chief financial officer and

secretary of the Board of Aluminum

Corporation of China Limited.

Mr. LI Yihua

Non-executive

The former director of the legal

Director

department of China Aluminum

Group; and

The director of capital operation

department of China Aluminum

Group.

7. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, 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

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APPENDIX I

GENERAL INFORMATION

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:

Approximate

Approximate

percentage of

percentage of

shareholding in

shareholding in

Capacity/ Nature of

Number of

relevant class of

total share

Name of Shareholder

Class of Shares

interest

Shares held

Shares

capital

(Share)

(%)

(%)

(Note 1)

(Note 1)

China Aluminum Group

A Shares

Beneficial owner/

2,263,684,000

88.44

76.50

(Note 2)

Interest of

(Long position)

controlled

corporation

The Seventh Metallurgical

H Shares

Beneficial owner

69,096,000

17.30

2.34

Construction Corp. Ltd.

(Long position)

CNMC Trade Company Limited

H Shares

Beneficial owner

59,225,000

14.83

2.00

(Long position)

Leading Gain Investments

H Shares

Nominee of another

29,612,000

7.41

1.00

Limited (Note 3)

person (other than

(Long position)

passive trustee)

China XD Group

H Shares

Beneficial owner

29,612,000

7.41

1.00

(Long position)

Yunnan Tin (Hong Kong) Yuan

H Shares

Beneficial owner

29,612,000

7.41

1.00

Xing Company Limited

(Long position)

Global Cyberlinks Limited

H Shares

Beneficial owner

20,579,000

5.15

0.70

(Long position)

Notes:

  1. The percentage is calculated by dividing number of relevant class of Shares in issue of the Company as at 30 June 2019 by total number of Shares.
  2. China Aluminum Group 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 China Aluminum Group and is interested in 86,925,466 A Shares, representing approximately 2.94% of the total share capital of the Company. China Aluminum Group is therefore also deemed to be interested in the A Shares held by Luoyang Institute under the SFO.
  3. Leading Gaining Investments Limited is the nominee holder of Beijing Jundao Technology Development Co., Ltd.

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APPENDIX I

GENERAL INFORMATION

8. QUALIFICATION AND CONSENT OF EXPERT

Set out below is the qualification of the expert who provided views or advice for inclusion in the circular:

Name

Qualification

Gram Capital Limited

a licensed corporation to carry out Type 6 (advising

on corporate finance) regulated activity under the

SFO.

  1. As at the Latest Practicable Date, Gram Capital did not have any shareholding in any member of the Group, nor did it have rights (whether legally enforceable or not) to subscribe for or to nominate others to subscribe for the securities in any member of the Group.
  2. As at the Latest Practicable Date, Gram Capital has given and has not withdrawn its written consent to the issue of the circular with its statement included in the form and context in which it is included.
  3. As at the Latest Practicable Date, Gram Capital did not have any interest in the assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group, since 31 December 2018 (being the date to which the latest published audited annual financial statements of the Company were made up).
  4. Gram Capital issued a letter dated 13 December 2019 in respect of its recommendation to the Independent Board Committee and the Independent Shareholders for the purpose of incorporation in this circular.

9. OTHER INFORMATION

  1. Mr. ZHANG Jian and Ms. NG Ka Man are the joint company secretaries of the Company. Mr. ZHANG Jian has been granted by the Stock Exchange a waiver from complying with the company secretary qualification requirement for Hong Kong listed companies. Ms. NG Ka Man is an associate member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators in the United Kingdom.
  2. The address of the Company's registered office is Building C, No. 99 Xingshikou Road, Haidian District, Beijing, the PRC.
  3. The Company's H Share registrar is Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong.

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APPENDIX I

GENERAL INFORMATION

  1. In the event of any discrepancy between the English version and the Chinese version, the English version shall prevail over the Chinese version.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal

place of business of the Company at Room 4501, Far East Finance Centre, No. 16 Harcourt Road, Admiralty, Hong Kong during normal business hours from the date of the circular to 30 December 2019 (both days inclusive):

  1. the service contracts entered into between the Company and all the Directors and Supervisors;
  2. the General Services Master Agreement;
  3. the Commodities Sales and Purchases Master Agreement,
  4. the Engineering Services Master Agreement;
  5. the Finance Lease Framework Cooperation Agreement;
  6. the Letter from the Independent Board Committee, the text of which is set out on page 49 to 50 of the circular;
  7. the Letter from Gram Capital, the text of which is set out on pages 51 to 77 of the circular; and
  8. the written consent from the experts mentioned in the paragraph 8 of this appendix.

- 83 -

NOTICE OF THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

CHALIECO

中 鋁 國 際 工 程 股 份 有 限 公 司

China Aluminum International Engineering Corporation Limited

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

(Stock Code: 2068)

NOTICE OF THE FOURTH EXTRAORDINARY GENERAL MEETING

IN 2019

NOTICE IS HEREBY GIVEN that the 2019 fourth extraordinary general meeting of China Aluminum International Engineering Corporation Limited (the "Company") will be held at Conference Room 211 of China Aluminum International Engineering Corporation Limited, Building C, No. 99 Xingshikou Road, Haidian District, Beijing at 9:30 a.m. on Monday, 16 December 2019 to consider and, if thought fit, pass the following resolutions.

ORDINARY RESOLUTIONS

  1. To consider and approve the renewal of the General Services Master Agreement and its proposed annual caps.
  2. To consider and approve the renewal of the Commodities Sales and Purchases Master Agreement and its proposed annual caps.
  3. To consider and approve the renewal of the Engineering Services Master Agreement and its proposed annual caps.
  4. To consider and approve the Finance Lease Framework Cooperation Agreement and its proposed annual caps.

By Order of the Board

China Aluminum International Engineering Corporation Limited

ZHANG Jian

Joint Company Secretary

Beijing, the PRC, 31 October 2019

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NOTICE OF THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

Notes:

  1. In order to determine the list of shareholders entitled to attend the 2019 fourth extraordinary general meeting to be convened on Monday, 16 December 2019, the register of members of the Company will be closed from Saturday, 16 November 2019 to Monday, 16 December 2019 (both days inclusive), during which period no transfer of shares will be registered. In order to be qualified to attend and vote at the 2019 fourth extraordinary general meeting, the holders of H shares of the Company shall lodge relevant share transfer documents with the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong not later than 4:30 p.m. on Friday, 15 November 2019.
  2. A shareholder who is entitled to attend and vote at the 2019 fourth extraordinary general meeting may appoint one or more proxies (regardless of whether he/she is a shareholder) to attend and vote at the 2019 fourth extraordinary general meeting on his/ her behalf.
  3. The instrument appointing a proxy shall be signed by the appointer or his/her attorney duly authorised in writing or, in the case of a legal person, must be either executed under its common seal or under the hand of its directors or attorney duly authorised.
  4. To be valid, the form of proxy must be lodged with the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (for shareholders of H shares of the Company) not less than 24 hours prior to the holding of the 2019 fourth extraordinary general meeting. If such instrument is signed by another person under a power of attorney or other authorisation documents given by the appointer, such power of attorney or other authorisation documents shall be notarised. The notarised power of attorney or other authorisation documents shall, together with the form of proxy, be deposited at the specified place at the time set out in such form of proxy.
  5. If the appointer is a legal person, its legal representative or any person authorised by resolutions of the Board or other governing bodies may attend the 2019 fourth extraordinary general meeting on behalf of the appointer.
  6. The Company has the rights to request a proxy who attends the extraordinary general meeting on behalf of a shareholder to provide his/her proof of identity.
  7. The 2019 fourth extraordinary general meeting is expected to take less than half a day. Shareholders who attend the 2019 fourth extraordinary general meeting shall be responsible for their own travel and accommodation expenses.
  8. The address of the Company's head office in the PRC is as follows:
    Building C, No. 99, Xingshikou Road, Haidian District, Beijing, the PRC

As at the date of this notice, the non-executive directors are Mr. WANG Jun and Mr. LI Yihua; the executive directors are Mr. WU Jianqiang, Mr. ZONG Xiaoping, Mr. WU Zhigang and Mr. ZHANG Jian; and the independent non-executive directors are Mr. GUI Weihua, Mr. CHEUNG Hung Kwong and Mr. FU Jun.

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SUPPLEMENTARY NOTICE OF THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

CHALIECO

中 鋁 國 際 工 程 股 份 有 限 公 司

China Aluminum International Engineering Corporation Limited

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

(Stock Code: 2068)

SUPPLEMENTARY NOTICE OF

THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

References are made to the circular dated 13 December 2019 (the "EGM Circular"), the notice of the postponement of the EGM dated 28 November 2019 and the notice of the EGM dated 31 October 2019 (collectively, the "Notices of the EGM") of China Aluminum International Engineering Corporation Limited (the "Company"), which set out the time, venue and resolutions proposed for consideration and approval by shareholders of the Company (the "Shareholders") at the fourth extraordinary general meeting in 2019 (the "EGM") to be convened by the Company. Unless the context otherwise specified, the capitalised terms used in this supplementary notice shall have the same meanings as those defined in the EGM Circular.

Supplementary notice is hereby given that the EGM will be held at 9:30 a.m. on Monday, 30 December 2019. Save for the resolutions set out in the notice of EGM of the Company dated 31 October 2019, the following resolutions will also be considered and approved:

ORDINARY RESOLUTIONS

To consider the following matters as ordinary resolutions:

  1. To consider and approve the alignment in the preparation of financial statements in accordance with the China Accounting Standards for Business Enterprises.
  2. To consider and approve the cessation of appointment of the international auditor.

By Order of the Board

China Aluminum International Engineering Corporation Limited

ZHANG Jian

Joint Company Secretary

Beijing, the PRC, 13 December 2019

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SUPPLEMENTARY NOTICE OF THE FOURTH EXTRAORDINARY GENERAL MEETING IN 2019

Notes:

  1. Save for the newly proposed resolutions, there are no other changes to the resolutions set out in the Notice of the EGM. For details and other related matters in relation to the other resolutions to be considered at the EGM, please refer to the Notices of the EGM and the EGM Circular.
  2. A form of proxy for use at the EGM is enclosed, which is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.chalieco.com.cn). Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending the EGM and voting in person if you so wish.
  3. A Shareholder who is entitled to attend and vote at the EGM may appoint one or more proxies (regardless of whether he/she is a Shareholder) to attend and vote at the EGM on his/her behalf.
  4. The instrument appointing a proxy shall be signed by the appointer or his/her attorney duly authorised in writing or, in the case of a legal person, must be either executed under its common seal or under the hand of its directors or attorney duly authorised.
  5. To be valid, the form of proxy must be lodged with the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong (for Shareholders of H shares of the Company) not less than 24 hours prior to the holding of the EGM. If such instrument is signed by another person under a power of attorney or other authorisation documents given by the appointer, such power of attorney or other authorisation documents shall be notarised. The notarised power of attorney or other authorisation documents shall, together with the form of proxy, be deposited at the specified place at the time set out in such form of proxy.
  6. If the appointer is a legal person, its legal representative or any person authorised by resolutions of the Board or other governing bodies may attend the EGM on behalf of the appointer.
  7. The Company has the rights to request a proxy who attends the EGM on behalf of a Shareholder to provide his/her proof of identity.
  8. The EGM is expected to take less than half a day. Shareholders who attend the EGM shall be responsible for their own travel and accommodation expenses.
  9. The address of the Company's head office in the PRC is as follows:
    Building C, No. 99, Xingshikou Road, Haidian District, Beijing, the PRC

As at the date of this notice, the non-executive directors are Mr. WANG Jun and Mr. LI Yihua; the executive directors are Mr. WU Jianqiang, Mr. ZONG Xiaoping, Mr. WU Zhigang and Mr. ZHANG Jian; and the independent non-executive directors are Mr. GUI Weihua, Mr. CHEUNG Hung Kwong and Mr. FU Jun.

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China Aluminum International Engineering Corp. Ltd. published this content on 12 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 December 2019 09:20:04 UTC