XD Inc. — Interim / Quarterly Report 2018

Apr 26, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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FIRST QUARTERLY REPORT OF 2018

1. IMPORTANT NOTICE

• 1.1 The board of directors, the supervisory committee and the directors, supervisors and senior management of the Company warrant the truthfulness, accuracy and completeness of the contents in the quarterly report, confirm that there are no false representations or misleading statements contained in or material omissions from this report, and jointly and severally accept legal responsibility.

• 1.2 All directors of the Company attended the board meeting to consider the quarterly report.

• 1.3 Mr. Zhou Zhuping, the chairman of the Company and Mr. Lv Feng, the chief financial officer and the chief accountant (accounting officer), warrant the truthfulness, accuracy and completeness of the financial statements contained in the quarterly report.

• 1.4 The first quarterly report of the Company was unaudited.

– 1 –

1.5 Operating highlights of the Company

• Crisis solved with new opportunities reemerged. The Company commenced judicial reorganisation procedures in July 2017 and completed them in December 2017. Having introduced Siyuanhe Fund, a steel industry merger and acquisition fund backed by Baowu Group, the Company managed to resolve the crises in regard to the debt that involves a huge amount of RMB 41.7 billion and to its survival in a market-based, legalized and professional manner with the gearing ratio lowered to 33% and cast off low-efficient and inefficient assets of RMB11.18 billion through judicial auction. Afterwards, the Company achieved greatly cemented asset foundation, turned from the previous losses into gains successfully and avoided the risk of delisting.

• Systematic reform improved quality and enhanced efficiency. Upon the judicial reorganisation, the Company, by leveraging on the shareholding structure with mixed ownership and controlling shareholder’s background and resources, engaged an experienced management team to proactively promote reform on its systems and mechanisms. Specifically, it implemented cost leadership strategy and leading manufacturing technology strategy to enlarge production and sales volume and optimize the product mix, which markedly raised corporate efficiency and comprehensive competitiveness.

• Operating performance hit record high. Under the annual operating guideline of “full production and sales, low costs and high efficiency”, the Company focused on full production and sales and fundamental management improvement by assuring smooth production and stable operation, guaranteeing raw materials supply and expanding sales market in the first quarter. In the first quarter, the Company recorded an operating income of RMB5.152 billion, increasing by 211.3% as compared to the corresponding period last year; and a total profit of RMB351 million, representing a substantial turnaround as compared to the huge losses of RMB595 million incurred in the corresponding period last year and hitting a record high in the corresponding periods in the previous years.

• Full production and sales achieved a better-than-expected outcome. In the first quarter, the Company had adequate supply of fuels to serve its production needs in both quantity and structure, amid loading halt and limitation during the Spring Festival travel rush and navigation restriction at the Three Gorges Dam resulting from overhaul. It manufactured 1,342,700 tons of iron, 1,490,400 tons of steel and 1,419,400 tons of steel products, having fully realized its production target, and recorded an additional steel output of 210,000 tons.

– 2 –

• Market in western China was thoroughly explored and a scientific marketing system was established. Thanks to the active promotion of direct sale and supply, channel expansion, logistics optimization and endeavors in improving customer satisfaction on products, the popularity and reputation of “San Feng” brand in the western regions were improved significantly and the market influence was building up gradually. It took initiative in making use of business opportunities arising from the “Belt and Road Initiative” and “Western Development” construction and took on all materials to be supplied for the largescale and major glorious projects including Tianfu International Airport and the Xi’an Silk Road Conference Center. In the first quarter, sales volume of steel products amounted to 1,379,400 tons, increasing by 133% as compared to the corresponding period last year and hitting record high in the corresponding periods in the previous years.

• Initial success has been achieved in meticulous cost management, and major technological and economic indicators were continuously improved. In accordance with the cost leadership strategy, the Company put in place robust cost management system. Among others, it delegated authority to lower level of cost management, introduced more detailed cost calculation standards, refined data quality and deepened cost analysis through honed calculation system and financial information system. As a result, major technical and economic indicators of the Company were continuously improved in the first quarter, and core indicators for major processes such as high temperature fuel ratio and utilization factor of furnace in steel smelting climbed to the highest level since the relocation of plant. In particular, average comprehensive energy consumption per tons of steel amounted to 516.55kgce/t, having renewed the historic best records for three consecutive months. The Company reduced comprehensive cost of approximately RMB256 million through tapping internal potential in the first quarter.

• Reform in the incentive mechanism was carried forward actively and the performance-oriented approach was advocated in this regard. In March 2018, the board of directors of the Company considered and approved the Employee Share Ownership Plan from 2018 to 2020 (Draft) and disclosed the same thereafter to fully arouse the enthusiasm of the employees and accomplish shared responsibility, risk and benefits. Meanwhile, it implemented performance incentive and equity incentive simultaneously and integrated the interests of the management, the core and mainstay personnel and the shareholders, aiming to accomplish mutual development of the employees and the Company and facilitate the long-term and stable development of the Company and improvement of the shareholder value.

– 3 –

2. BASIC INFORMATION OF THE COMPANY

2.1 Major financial data

Unit: RMB’000

	As at	As at
	the end of	the end of	Changes from
	the reporting	the previous	the end of the
	period	year	previous year
			(%)
Total assets	25,462,966	25,012,459	1.80
Net assets attributable to the
shareholders of the Company	17,079,358	16,730,115	2.09
		From the
	From the	beginning of
	beginning of	the previous
	year to	year to the end
	the end of	of the reporting	Changes from
	the reporting	period of the	the same
	period	previous year	period last year
			(%)
Net cash flow from operating
activities	-304,134	-148,645	-104.60
		From the
		beginning of
	From the	the previous
	beginning of	year to the
	year to	end of the
	the end of	reporting	Changes from
	the reporting	period of the	the same
	period	previous year	period last year
			(%)
Revenue from operations	5,152,412	1,654,922	211.34
Net profit attributable to the
shareholders of the Company	350,389	-593,874	–
Net profit attributable to the
shareholders of the Company after
extraordinary profit or loss	353,865	-595,254	–
Return on net assets
(weighted average) (%)	2.07	-119.39	–
Basic earnings per share
(RMB per share)	0.04	-0.13	–
Diluted earnings per share
(RMB per share)	0.04	-0.13	–

– 4 –

• Note: Net cash flow from operating activities slid in the first quarter as compared with the same period of the previous year, which is mainly because the Company vigorously advanced the operation guideline of full production and sales, optimized production and operation organizations, reshaped procurement and sale models and conducted strategic procurement. It successfully achieved the target of guaranteeing the supply of raw materials and fuels and recorded new high in production and operation. The inventory of finished goods, iron ores, coal and other raw materials and fuels at the end of the first quarter increased as compared to the corresponding period last year.

Extraordinary profit and loss items and amounts

✓Applicable	Not applicable
			Unit: RMB’000
		Amount of
Item		the period	Explanation
Government grants included in profit
or loss of the period other than those
closely related to the normal operation
of the Company and in compliance
with national policies and regulations
and conferred on the basis of standard
quota or standard quantity		261
Other non-operating	income and expenses
other than the above items		-3,737
Total		-3,476

Unit: RMB’000

– 5 –

• 2.2 Total number of shareholders and shareholdings of the top 10 shareholders and the top 10 holders of tradable shares (or holders of shares not subject to trading moratorium) as at the end of the reporting period

Unit: Share

Total number of shareholders

157,469

Shareholdings of top 10 shareholders

	Number of		Number
	shares held		of shares
	as at the		held subject
	end of the		to trading	Pledged and	frozen status	Nature of
(Full) Name of shareholder	period	Percentage	moratorium	Share status	Number	shareholders
		(%)
Chongqing Changshou Iron &	2,096,981,600	23.51	0	Pledged	2,096,981,600	Domestic
Steel Company Limited						non-state-
						owned legal
						person
HKSCC NOMINEES LIMITED	530,805,740	5.95	0	Unknown		Overseas
						legal person
Chongqing Qianxin Energy	427,195,760	4.79	0	Unknown		Unknown
Environmental Protection
Company Limited
Chongqing Rural Commercial	289,268,939	3.24	0	Unknown		Unknown
Bank Co., Ltd.
Chongqing Guochuang	278,288,059	3.12	0	Unknown		Unknown
Investment and Management
Co., Ltd.
Sinosteel Equipment &	252,411,692	2.83	0	Unknown		Unknown
Engineering Co., Ltd.
Bank of Chongqing Co., Ltd.	226,042,920	2.53	0	Unknown		Unknown
Industrial Bank Co., Ltd.	219,633,096	2.46	0	Unknown		Unknown
Chongqing Branch
Agricultural Bank of China	216,403,628	2.43	0	Unknown		Unknown
Limited Chongqing Branch
China Shipbuilding Industrial	211,461,370	2.37	0	Unknown		Unknown
Complete Equipment &
Logistics Co., Ltd.

– 6 –

Shareholdings of top 10 holders of shares not subject to trading moratorium

	Number of
	shares not	Class and number	of shares
	subject to
	trading
Name of shareholder	moratorium	Class	Number
Chongqing Changshou Iron & Steel	2,096,981,600	RMB-denominated	2,096,981,600
Company Limited		ordinary shares
HKSCC NOMINEES LIMITED	530,805,740	Overseas listed	530,805,740
		foreign shares
Chongqing Qianxin Energy Environmental	427,195,760	RMB-denominated	427,195,760
Protection Company Limited		ordinary shares
Chongqing Rural Commercial Bank Co.,	289,268,939	RMB-denominated	289,268,939
Ltd.		ordinary shares
Chongqing Guochuang Investment and	278,288,059	RMB-denominated	278,288,059
Management Co., Ltd.		ordinary shares
Sinosteel Equipment & Engineering Co.,	252,411,692	RMB-denominated	252,411,692
Ltd.		ordinary shares
Bank of Chongqing Co., Ltd.	226,042,920	RMB-denominated	226,042,920
		ordinary shares
Industrial Bank Co., Ltd. Chongqing	219,633,096	RMB-denominated	219,633,096
Branch		ordinary shares
Agricultural Bank of China Limited	216,403,628	RMB-denominated	216,403,628
Chongqing Branch		ordinary shares
China Shipbuilding Industrial Complete	211,461,370	RMB-denominated	211,461,370
Equipment & Logistics Co., Ltd.		ordinary shares

Explanation about connected relationship and acts in concert of the above shareholders

There is no connected relationship between Chongqing Changshou Iron & Steel Company Limited (the Controlling Shareholder of the Company) and the other 9 shareholders and they are not parties acting in concert as defined in Measures for Management on Information Disclosure of Changes in Shareholdings of Listed Companies’ Shareholders. The Company is not aware of any connected relationship among the other 9 shareholders or whether they are parties acting in concert.

Explanation on preferential shareholders Not applicable. with voting rights restored and their shareholdings

• 2.3 Total number of preferential shareholders and shareholdings of the top 10 preferential shareholders and the top 10 holders of preferential shares not subject to trading moratorium as at the end of the reporting period

Applicable ✓ Not applicable

– 7 –

3. SIGNIFICANT EVENTS

• 3.1 Material changes in items of major accounting statements and financial indicators of the Company and the reason thereof

✓ Applicable Not applicable

In the first quarter of this year, the Company recorded a profit of RMB351,109,000, representing an increase of RMB944,345,000 as compared to that of the corresponding period of last year (RMB-593,236,000), mainly due to the following reasons: production was stable and smooth while output and sales volume recorded a substantial year-on-year increase, with 1,379,400 tons of steel products sold, which represented a year-on-year increase of 133% and an increase in profit of RMB364,978,000; as the steel market recovered in the first quarter, the price of steel products in the first quarter reached RMB3,540/ton, which represented a year-on-year increase of 8% and an increase in profit of RMB101,790,000; initial success has been achieved in meticulous cost management in the first quarter, and major technological and economic indicators were remarkably improved, which was reflected in processing cost reduction of RMB256,279,000; taking into account the increase in purchasing cost of RMB209,060,000 caused by higher prices of raw materials such as ore and coal, sales cost in the first quarter decreased by 4% to RMB3,171/ton, creating an increase in profit of RMB47,219,000; upon judicial reorganisation, the Company’s debt was handled properly and financial expenses in the first quarter amounted to RMB147,594,000, which represented a year-on-year decrease of 68% and an increase in profit of RMB309,059,000.

• 3.2 Analysis and explanation of progress and impact of significant events and their solutions

✓ Applicable Not applicable

On 26 February 2018, all the independent directors of the Company issued the Special Statement and Independent Opinion of Independent Directors on External Guarantees which stated the Company’s guarantees in 2017. A supplementary statement is as follows:

In 2012, each of China Development Bank and Agricultural Bank of China Taizhou Branch provided San Feng Jingjiang Port Logistics Company Limited ( 三峰靖江港務物流有限責任公司 ) (“ San Feng Jingjiang ”) with syndicated loans (loan contract no.: 3200577162012540569, “ Syndicated Loan ”), for which the Company accepted joint guarantee liability.

– 8 –

After the Company underwent judicial reorganisation, Chongqing Qianxin International Trade Co., Ltd. ( 重慶千信國際貿易有限公司 ) (“ Qianxin International ”) submitted an “Alternative Guarantee Commitment Letter” to the Company’s manager on 13 November 2017, confirming that it would communicate with China Development Bank and Agricultural Bank of China Taizhou Branch and go through relevant procedures and undertaking to pay off debt to assume its guarantee liability in case they claim compensation when the principal debtor San Feng Jingjiang defaults.

On 28 December 2017, Qianxin International, China Development Bank, Agricultural Bank of China Taizhou Branch and San Feng Jingjiang jointly signed the Change of RMB Syndicated Loan Contract (contract no.: 3200577162012540569004) which provided that Qianxin International, as the guarantor of Syndicated Loan, accepted joint guarantee liability. On the same day, Qianxin International, as the guarantor, entered into the Syndicated Loan Guarantee Contract with San Feng Jingjiang, China Development Bank and Agricultural Bank of China Taizhou Branch which served as a guarantee contract of Syndicated Loan (contract no. 3200577162012540569).

In conclusion, the guarantee made to China Development Bank and Agricultural Bank of China Taizhou Branch by the Company for San Feng Jingjiang was properly handled.

3.3 Undertakings not being fully performed during the reporting period

Applicable ✓ Not applicable

• 3.4. Warning and explanation in the forecast of any possible loss in accumulated net profit from the beginning of the year to the end of next reporting period or any material changes compared to the corresponding period of last year

Applicable ✓ Not applicable Company Name Chongqing Iron & Steel Company Limited Legal Representative Zhou Zhuping Date 25 April 2018

– 9 –

4. APPENDICES

4.1 Financial Statements

Consolidated Balance Sheet

31 March 2018

Prepared by: Chongqing Iron & Steel Company Limited

	Unit：RMB’000 Audit	type：unaudited
	Closing balance	Opening balance
	at the end	at the beginning
Item	of the period	of the year
Current assets:
Cash and bank balance	1,240,582	2,050,538
Balances with clearing companies
Placements with banks and other
financial institutions
Financial assets at fair value through
profit or loss
Derivative financial assets
Bills receivable	530,821	123,096
Accounts receivable	118,372	44,038
Prepayments	333,444	70,022
Premiums receivable
Accounts receivable from reinsurers
Deposits receivable from reinsurers
Interests receivable
Dividends receivable
Other receivables	11,912	10,355
Proceeds from financial assets
purchased under agreements	to resell
Inventories	2,784,971	1,330,469
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets	366,172	1,128,655
Total current assets	5,386,274	4,757,173

– 10 –

	Closing balance	Opening balance
	at the end	at the beginning
Item	of the period	of the year
Non-current assets:
Loans and advances granted
Available-for-sale financial assets	5,000	5,000
Held-to-maturity investments
Long-term receivables
Long-term equity investments	124,158	124,158
Investment properties
Fixed assets	17,417,188	17,595,699
Construction in progress	24,160	8,695
Constructions materials
Liquidation of fixed assets
Biological assets for production
Fuel assets
Intangible assets	2,506,186	2,521,734
Development expenses
Goodwill
Long-term deferred expenditures
Deferred income tax assets
Other non-current assets
Total non-current assets	20,076,692	20,255,286
Total assets	25,462,966	25,012,459

– 11 –

Closing balance Opening balance at the end at the beginning of the period of the year

Item Current liabilities: Short-term borrowings Borrowings from central bank Deposit taking and deposit in interbank market Placements from banks and other financial institutions Financial liabilities at fair value through profit or loss Derivative financial liabilities Bills payable Accounts payable Advances from customers Financial assets sold under agreements to repurchase Handling charges and commissions payable Staff remuneration payable Taxes payable Interests payable Dividends payable Other payables Reinsurance accounts payable Deposits for insurance contracts Customer deposits for trading in securities Customer deposits for underwriting Liabilities classified as held-for-sale Non-current liabilities due within one year Other current liabilities Total current liabilities	of the period 63,300 2,422,405 857,323 23,189 29,820 5,045 1,136,536 400,000 4,937,618	of the year 80,700 2,074,594 187,099 563,547 13,095 7,174 1,484,738 400,000
		4,810,947

– 12 –

	Closing balance	Opening balance
	at the end	at the beginning
Item	of the period	of the year
Non-current liabilities:
Long-term borrowings	700,000	700,000
Debentures payable
Including: Preferential shares
Perpetual bonds
Long-term payables
Long-term staff remuneration payable	230,142	243,190
Special payables
Accrued liabilities		11,204
Deferred income	42,335	43,154
Deferred income tax liabilities
Other non-current liabilities	2,400,000	2,400,000
Total non-current liabilities	3,372,477	3,397,548
Total liabilities	8,310,095	8,208,495

– 13 –

	Closing	Closing	balance	Opening balance	Opening balance
		at	the end		at the beginning
Item		of the period			of the year
Owners’ equity
Share capital		8,918,602			8,918,602
Other equity instruments
Including: Preferential	shares
Perpetual bonds
Capital reserve		19,282,147			19,282,147
Less: Treasury stock
Other comprehensive income
Special reserve
Surplus reserve			606,991		606,991
General risk provision
Undistributed profit		-11,728,382			-12,077,625
Total equity attributable to owners of
the Company		17,079,358			16,730,115
Minority interests			73,513		73,849
Total owners’ equity		17,152,871			16,803,964
Total liabilities and owners’ equity		25,462,966			25,012,459
Legal Representative:	Chief Financial Officer:		Chief Account：
Zhou Zhu Ping	Lv Feng			Lv Feng

– 14 –

Balance Sheet of the Parent Company 31 March 2018

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

	Closing balance	Opening balance
	at the end of	at the beginning
Item	the period	of the year
Current assets:
Cash and bank balance	502,450	1,961,403
Financial assets at fair value through
profit or loss
Derivative financial assets
Bills receivable	530,821	123,096
Accounts receivable	121,826	46,853
Prepayments	333,025	69,581
Interests receivable
Dividends receivable
Other receivables	11,912	10,355
Inventories	2,784,971	1,330,469
Assets classified as held-for-sale
Non-current assets due within one year
Other current assets	366,154	478,510
Total current assets	4,651,159	4,020,267

– 15 –

	Closing balance	Opening balance
	at the end of	at the beginning
Item	the period	of the year
Non-current assets:
Available-for-sale financial assets	5,000	5,000
Held-to-maturity investments
Long-term receivables
Long-term equity investments	835,780	835,780
Investment properties
Fixed assets	17,417,188	17,595,699
Construction in progress	24,160	8,695
Construction materials
Liquidation of fixed assets
Biological assets for production
Fuel assets
Intangible assets	2,506,186	2,521,734
Development expenses
Goodwill
Long-term deferred expenditures
Deferred income tax assets
Other non-current assets
Total non-current assets	20,788,314	20,966,908
Total assets	25,439,473	24,987,175

– 16 –

	Closing balance	Opening balance
	at the end of	at the beginning
Item	the period	of the year
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit or loss
Derivative financial liabilities
Bills payable	63,300	80,700
Accounts payable	2,471,359	2,123,370
Advances from customers	857,107	185,905
Staff remuneration payable	23,077	563,518
Taxes payable	29,820	13,113
Interests payable	5,045	7,174
Dividends payable
Other payables	1,130,827	1,479,009
Liabilities classified as held-for-sale
Non-current liabilities due within one
year	400,000	400,000
Other current liabilities
Total current liabilities	4,980,535	4,852,789

– 17 –

	Closing balance	Opening balance
	at the end of	at the beginning
Item	the period	of the year
Non-current liabilities:
Long-term borrowings	700,000	700,000
Debentures payable
Including: Preferential shares
Perpetual bonds
Long-term payables
Long-term staff remuneration payable	230,142	243,190
Special payables
Accrued liabilities		11,204
Deferred income	42,335	43,154
Deferred income tax liabilities
Other non-current liabilities	2,400,000	2,400,000
Total non-current liabilities	3,372,477	3,397,548
Total liabilities	8,353,012	8,250,337

– 18 –

	Closing balance	Closing balance	Opening balance
		at the end of	at the beginning
Item		the period	of the year
Owners’ equity:
Share capital		8,918,602	8,918,602
Other equity instruments
Including: Preferential shares
Perpetual bonds
Capital reserve		19,313,090	19,313,090
Less: Treasury stock
Other comprehensive income
Special reserve
Surplus reserve		577,012	577,012
Undistributed profit		-11,722,243	-12,071,866
Total owners’ equity		17,086,461	16,736,838
Total liabilities and owners’ equity		25,439,473	24,987,175
Legal Representative:	Chief Financial Officer: Chief Account：
Zhou Zhu Ping	Lv Feng		Lv Feng

– 19 –

Consolidated Income Statement

January to March 2018

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000: Audit type: unaudited

			Amount for	Amount for the
Item			the period	previous period
I.	Total revenue from operations		5,152,412	1,654,922
	Including:	Revenue from operations	5,152,412	1,654,922
		Interest income
		Premiums earned
		In come from fee and
		commission
II.	Total operating costs		4,797,827	2,249,537
	Including:	Operating costs	4,620,307	1,773,046
		Interest expenses
		Fee and commission expenses
		Surrender value
		Ne t expenditure for
		compensation payments
		Ne t drawing on deposits for
		insurance contracts
		Ex penditures for insurance
		policy dividend
		Reinsurance costs
		Taxes and surcharges	29,926	19,838
		Selling expenses	21,891	13,134
		Administrative expenses	93,734	186,033
		Finance cost	31,969	257,486
		Asset impairment loss
	Add:	Ga in from change in fair
		value(loss is represented
		by “-”)
		Ga ins from investment (loss
		is represented by “-”)
	Including:	Ga ins from investment
		in associates and joint
		ventures
		Ga in on disposal of assets
		(loss is represented by “-”)
		Ex change gain (loss is
		represented by “-”)
		Other income

– 20 –

			Amount for	Amount for the
Item			the period	previous period
III.	Pr ofit from operations (loss is
	represented by “-”)		354,585	-594,615
	Add:	Non-operating income	451	1,390
	Less:	Non-operating expenses	3,927	10
IV.	To tal	profit (total loss is represented
	by	“-”)	351,109	-593,235
	Less:	Income tax expense	620	704
V.	Ne t profit (net loss is represented by
	“-”)		350,489	-593,939
	(I)	Classified on a going concern basis
		1. Net profit from continuing
		operations (net loss
		represented by “-”)	350,489	-593,939
		2. Net profit from discontinued
		operations (net loss
		represented by “-”)
	(II)	Cl assified according to the
		ownership
		1. Profit or loss attributable to
		minority shareholders	100	-65
		2. Net profit attributable to owners
		of the parent company	350,389	-593,874
VI.	Ot her comprehensive income (net of
	tax)
	Ot her comprehensive income (net of
		tax) attributable to owners of
		the parent company
	(I)	Ot her comprehensive income that
		will not be reclassified to profit
		or loss subsequently
		1. Changes in re-measurement of
		net liabilities or net assets of
		defined benefit plan
		2. Share of other comprehensive
		income (that will not be
		reclassified to profit or loss
		subsequently) of investees
		accounted for using equity
		method

– 21 –

Amount for Amount for the the period previous period

Item

(II) Ot her comprehensive income that	(II) Ot her comprehensive income that
	will be reclassified to profit or
	loss subsequently
	1. Share of other comprehensive
	income (that will be
	reclassified to profit or loss
	subsequently) of investees
	accounted for using equity
	method
	2. Gain or loss on changes in fair
	value of available-for-sale
	financial assets
	3. Gain or loss on reclassification
	of held-to-maturity
	investments to available-for-
	sale financial assets
	4. Effective portion of cash flow
	adjusted for hedging gain or
	loss
	5. Exchange difference on
	translation of foreign
	financial statements
	6. Others
Other comprehensive income (net of tax)
	attributable to minority shareholders
VII. Total comprehensive income		350,489	-593,939
To tal comprehensive income attributable
	to owners of the parent company	350,389	-593,874
To tal comprehensive income attributable
	to minority shareholders	100	-65
VIII. Earnings per share:
(I)	Ba sic earnings per share
	(RMB per share)
(II) Di luted earnings per share
	(RMB per share)
Legal Representative: Chief Financial Officer:		Chief Account：
Zhou Zhu Ping Lv Feng			Lv Feng

– 22 –

Income Statement of the Parent Company

January to March 2018

Prepared by： Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

				Amount for	Amount for the
Item				the period	previous period
I.	Revenue from operations			5,152,412	1,563,690
	Less:		Operating costs	4,620,307	1,682,360
			Taxes and surcharges	29,922	19,638
			Selling expenses	21,757	11,730
			Administrative expenses	93,190	183,046
			Finance cost	36,712	259,986
			Asset impairment loss
	Add:		Ga in from change in fair
			value (loss is represented
			by “-”)
			Ga ins from investment (loss
			is represented by “-”)
	Including: Ga ins from investment
			in associates and joint
			ventures
			Ga ins from disposal of assets
			(loss is represented by “-”)
			Other incomes
II.	Pr ofit from operations (loss is
		represented by “-”)		350,524	-593,070
	Add:		Non-operating income	366	1,390
	Less:		Non-operating expenses	1,270	10
III.	To tal		profit (total loss is represented
		by	“-”)	349,620	-591,690
	Less:		Income tax expense
IV.	Ne t profit (net loss is represented by
		“-”)		349,620	-591,690
	(I)		Ne t profit from continuing
			operations (net loss is
			represented by “-”)	349,620	-591,690
	(II)		Ne t profit from discontinued
			operations (net loss is
			represented by “-”)

– 23 –

Item

Amount for Amount for the the period previous period

• V. Ot her comprehensive income (net of tax)

• (I) Ot her comprehensive income that will not be reclassified to profit or loss subsequently

• 1. Changes in re-measurement of net liabilities or net assets of defined benefit plan

• Share of other comprehensive income (that will not be reclassified to profit or loss subsequently) of investees accounted for using equity method

(II) Ot her comprehensive income that will be reclassified to profit or loss subsequently

1. Share of other comprehensive income (that will be reclassified to profit or loss subsequently) of investees accounted for using equity method

2. Gain or loss on changes in fair value of available-for-sale financial assets

3. Gain or loss on reclassification of held-to-maturity investments to available-forsale financial assets

4. Effective portion of cash flow adjusted for hedging gain or loss

5. Exchange difference on translation of foreign financial statements

6. Others

VI. Total comprehensive income 349,620 -591,690 VII. Earnings per share: (I) Ba sic earnings per share (RMB per share)

(II) Di luted earnings per share (RMB per share)

Legal Representative: Chief Financial Officer: Chief Account： Zhou Zhu Ping Lv Feng Lv Feng

– 24 –

Consolidated Cash flow Statement

January to March 2018

Prepared by： Chongqing Iron & Steel Company Limited

Unit：RMB’000 Audit type：unaudited

		Amount for	Amount for the
Item		the period	previous period
I.	Cash flow from operating activities:
	Cash received from sale of goods or
	rendering of services	3,614,301	620,576
	Net increase in customer and interbank
	deposits
	Net increase in borrowings from central
	bank
	Net increase in placements from other
	financial institutions
	Cash received from premiums under original
	insurance contract
	Net cash received from reinsurance business
	Net increase in deposits of policy holders
	and investment
	Net increase in disposal of financial assets
	at fair value through profit or loss
	Cash received from interest, fees and
	commissions
	Net increase in placements from banks and
	other financial institutions
	Net increase in capital from repurchase
	business
	Refunds of taxes
	Other cash received relating to operating
	activities	61,684	414,144
	Sub-total of cash inflow from operating
	activities	3,675,985	1,034,720
	Cash paid for goods purchased and service
	received	2,922,266	600,167
	Net increase in customer loans and advances
	Net increase in deposit in central bank and
	interbank deposit
	Cash paid for compensation payments under
	original insurance contract
	Cash paid for interest, fee and commission
	Cash paid for insurance policy dividend

– 25 –

	Amount for	Amount for the
Item	the period	previous period
Cash paid to and on behalf of employees	235,733	173,384
Cash paid for all types of taxes	13,933	145
Other cash paid relating to operating
activities	808,187	409,669
Sub-total of cash outflow from operating
activities	3,980,119	1,183,365
Net cash flow from operating activities	-304,134	-148,645
II. Cash flows from investment activities:
Cash received from disposal of investments
Cash received from return on investments
Net cash received from disposal of fixed
assets, intangible assets and other long-
term assets		16
Net cash received from disposal of
subsidiaries and other operating entities
Other cash received relating to investing
activities
Sub-total of cash inflow from investing
activities		16
Cash paid for acquisition and construction
of fixed assets, intangible assets and other
long-term assets		2,840
Cash paid for investments
Net increase in pledged loans
Net cash paid for acquiring subsidiaries and
other operating entities
Other cash paid relating to investing
activities
Sub-total of cash outflow from investing
activities		2,840
Net cash flow from investing activities		-2,824

– 26 –

Amount for Amount for the the period previous period

Item

III. Cash flow from financing activities:
Cash received from investments
Including: Pr oceeds received by subsidiaries
from minority shareholders’
investment
Cash received from borrowings		1,909,751
Cash received from issuing bonds
Other cash received relating to financing
activities		23,000
Sub-total of cash inflow from financing
activities		1,932,751
Cash paid for repayments of debts		1,577,781
Cash paid for distribution of dividends and
profits or for interest expenses	41,592	144,672
Including: Di vidend and profit paid by
subsidiaries to minority
shareholders
Other cash paid relating to financing
activities		38,489
Sub-total of cash outflow from financing
activities	41,592	1,760,942
Net cash flow from financing activities	-41,592	171,809
IV. Ef fect of fluctuations in exchange rates on
cash and cash equivalents	-2,710	-5,062
V. Ne t increase in cash and cash equivalents	-348,436	15,278
Add: Ba lance of cash and cash
equivalents at the beginning of
the period	868,961	745,445
VI. Ba lance of cash and cash equivalents at
the end of the period	520,525	760,723
Legal Representative: Chief Financial Officer:	Chief Account:
Zhou Zhu Ping Lv Feng		Lv Feng

– 27 –

Cash flow statement of the Parent Company January to March 2018

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

		Amount for	Amount for the
Item		the period	previous period
I.	Cash flow from operating activities:
	Cash received from sale of goods or
	rendering of services	3,614,301	551,175
	Refunds of taxes
	Other cash received relating to operating
	activities	54,228	406,898
	Sub-total of cash inflow from operating
	activities	3,668,529	958,073
	Cash paid for goods purchased and service
	received	2,921,057	533,533
	Cash paid to and on behalf of employees	235,410	170,436
	Cash paid for all types of taxes	13,045	93
	Other cash paid relating to operating
	activities	804,858	406,183
	Sub-total of cash outflow from operating
	activities	3,974,370	1,110,245
	Net cash flow from operating activities	-305,841	-152,172
II.	Cash flows from investment activities:
	Cash received from disposal of investments
	Cash received from return on investments
	Net cash received from disposal of fixed
	assets, intangible assets and other long-
	term assets		16
	Net cash received from disposal of
	subsidiaries and other operating entities
	Other cash received relating to investing
	activities
	Sub-total of cash inflow from investing
	activities		16
	Cash paid for acquisition and construction
	of fixed assets, intangible assets and other
	long-term assets		1,880
	Cash paid for investments
	Net cash paid for acquiring subsidiaries and
	other operating entities
	Other cash paid relating to investing
	activities
	Sub-total of cash outflow from investing
	activities		1,880
	Net cash flow from investing activities		-1,864

– 28 –

	Amount for	Amount for	Amount for the
Item	the period		previous period
III. Cash flow from financing activities:
Cash received from investments
Cash received from borrowings			1,909,751
Other cash received relating to financing
activities			23,000
Sub-total of cash inflow from financing
activities			1,932,751
Cash paid for repayments of debts			1,577,781
Cash paid for distribution of dividends and
profits or for interest expenses		41,592	144,672
Other cash paid relating to financing
activities			38,489
Sub-total of cash outflow from financing
activities		41,592	1,760,942
Net cash flow from financing activities		-41,592	171,809
IV. Ef fect of fluctuations in exchange rates on
cash and cash equivalents			-4,647
V. Net increase in cash and cash equivalents		-347,433	13,126
Add: Ba lance of cash and cash
equivalents at the beginning of
the period		779,826	5,137
VI. Ba lance of cash and cash equivalents at
the end of the period		432,393	18,263
Legal Representative: Chief Financial Officer:		Chief Account：
Zhou Zhu Ping Lv Feng			Lv Feng

4.2 Auditor’s Report

Applicable ✓ Not applicable

By order of the Board Chongqing Iron & Steel Company Limited Yu Hong Secretary to the Board

Chongqing, the PRC, 26 April 2018

As at the date of this announcement, the Directors of the Company are: Mr. Zhou Zhuping (Non-executive Director), Mr. Zheng Jie (Non-executive Director), Mr. Li Yongxiang (Executive Director), Mr. Tu Deling (Executive Director), Mr. Zhang Shuogong (Executive Director), Mr. Hwang Yuhchang (Independent Non-executive Director), Mr. Xu Yixiang (Independent Non-executive Director), Mr. Xin Qingquan (Independent Non-executive Director) and Mr. Wong Chunwa (Independent Non-executive Director).

– 29 –