CITIC Limited Half-Year Report 2020

41 CITIC Limited Half-Year Report 2020 For the six months ended 30 June 2020 Notes to the Consolidated Financial Statements 2 Basis of preparation (continued) The accounting policies adopted in the preparation of the Accounts are consistent with those adopted in the Company’s annual financial statements for the year ended 31 December 2019, except for the following amendments which became effective for the first time for the financial year beginning on or after 1 January 2020: HKAS 1 and HKAS 8 (Amendments) Definition of Material HKFRS 3 (Amendments) Definition of a Business Revised Conceptual Framework for Financial Reporting Revised Conceptual Framework for Financial Reporting HKAS 39, HKFRS 7 and HKFRS 9 (Amendments) Hedge accounting Adoption of the amendments does not have a significant impact on the Accounts. The Group has not applied the following new standard which is not yet effective for the financial year beginning on or after 1 January 2020 and which have not been early adopted in the Accounts: HKFRS 17 Insurance Contracts (1) (1) Effective for the annual periods beginning on or after 1 January 2023. HKFRS17 is expected to have no significant effect on the consolidated financial statements of the Group. 3 Critical accounting estimates and judgements In addition to those described below, the accounting estimates and judgements required to be made in preparation of the Accounts are consistent with those set out in the Company’s annual financial statements for the year ended 31 December 2019. (a) Metallurgical Corporation of China (“MCC”) claim MCC was appointed as the EPC (engineering, procurement and construction) contractor for the processing area and related facilities at the Group’s Sino Iron project in Western Australia (“Sino Iron Project”). The fixed price contract amount was US$3.4 billion. On 30 January 2013, MCC announced that it had incurred costs over the value of the contract and had provided additional funding of US$858 million to MCC Mining (Western Australia) Pty Ltd (“MCC WA”), its wholly owned subsidiary company responsible for delivering MCC’s obligations under the contract.