XD Inc. — Interim / Quarterly Report 2020

May 3, 2020

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 2020

I. IMPORTANT NOTICE

• 1.1 The board of directors (the “ Board ”), the supervisory committee and the directors, supervisors and senior management of Chongqing Iron & Steel Company Limited (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. Zou An, the chief financial officer and Lei Xiaodan, 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

In the first quarter, by strictly implementing the prevention and control measures against the epidemic, ensuring its production and operation and striving to achieve stable production, the Company minimized the effect of the epidemic on its production and operation. In the first quarter, the Company produced 1,508,200 tonnes of iron, 1,640,900 tonnes of steel and 1,580,800 tonnes of steel products, and completed 24.64%, 24.13% and 24.78% of annual planned targets, respectively, representing an increase of 28,400 tonnes, 72,100 tonnes and 89,800 tonnes, or 1.92%, 4.60% and 6.02% as compared with the same period of the previous year, respectively.

In the first quarter, the Company focused on the operation policy of “expanding scale, adjusting structure and reducing costs” and simultaneously implemented two basic works of “finding differences from excellent enterprises comprehensively, paying close attention to reducing costs and increasing efficiency” and “promoting the implementation of plans and achieving scale benefit”. By positively advancing management transform, efficiency improvement, cost reduction and portfolio optimization, the Company made breakthroughs in reducing procedure costs. Safety margin of costs was further elevated. In the first quarter, over 77% of the critical technical and economic indicators at the company level outpaced those in the previous year, of which, critical technical and economic indicators such as steel consumption in steelmaking, yield of rolled steel and etc., were improved significantly and cost consumption levels were reduced substantially, thus resulting in an increase of RMB84 million in profit from cost reduction in the aspect of process.

– 2 –

II. BASIC INFORMATION OF THE COMPANY

2.1 Major financial data

Unit: RMB’000

	As at the end of		Changes from
	the reporting	As at the end of	the end of the
	period	the previous year	previous year
			(%)
Total assets	28,377,210	26,975,726	5.20
Net assets attributable to the
shareholders of the Company	19,321,334	19,396,003	-0.38
		From the
		beginning of the
	From the	previous year to
	beginning of the	the end of the
	year to the end	reporting period	Changes from the
	of the reporting	of the previous	same period last
	period	year	year
			(%)
Net cash flow from operating activities	-213,075	-138,559	N/A
		From the
		beginning of the
	From the	previous year to
	beginning of the	the end of the
	year to the end	reporting period	Changes from the
	of the reporting	of the previous	same period last
	period	year	year
			(%)
Operating income	5,178,323	5,307,920	-2.44
Net profit attributable to the
shareholders of the Company	4,173	150,437	-97.23
Net profit attributable to the
shareholders of the Company after
extraordinary profit or loss	253	128,191	-99.80
			Decreased
			by 0.79
Return on net assets (weighted average)			percentage
(%)	0.02	0.81	point
Basic earnings per
share (RMB per share)	0.0005	0.02	-97.50
Diluted earnings per share (RMB per
share)	0.0005	0.02	-97.50

– 3 –

Extraordinary profit or loss items and amounts

✓ Applicable Not applicable

Unit: RMB’000

Item Government grants included in profit or loss of the period other than those closely related with the normal operation of the Company and in compliance with national policies and regulations and conferred on the standard quota or quantity basis Capital occupancy fee from non-financial enterprises recognized through profit or loss Gains or losses on changes in fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading, and derivative financial liabilities and investment income from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other equity investments, excluding those arising from effective hedging business related to operating activities of the Company Other non-operating income and expenses other than the above items Total

Amount for the period 592 283 3,159 -114

3,920

– 4 –

• 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

132,905

Shareholdings of the top 10 shareholders

			Number
	Number of		of shares		Pledged
	shares held as		held subject	and	frozen status
	at the end of the		to trading	Share		Nature of
(Full) Name of shareholder	period	Percentage	moratorium	status	Number	shareholders
		(%)
Chongqing Changshou Iron & Steel	2,096,981,600	23.51	0	Pledged	2,096,981,600	Domestic non-state-
Company Limited						owned legal person
HKSCC NOMINEES LIMITED	531,217,421	5.96	0	Unknown	–	Overseas legal person
Chongqing Qianxin Energy	427,195,760	4.79	0	Pledged	427,190,070	Unknown
Environmental Protection
Company Limited
Chongqing Rural Commercial Bank	289,268,939	3.24	0	Nil	0	Unknown
Co., Ltd.
Chongqing Guochuang Investment	278,288,059	3.12	0	Nil	0	Unknown
and Management Co., Ltd.
Sinosteel Equipment & Engineering	252,411,692	2.83	0	Nil	0	Unknown
Co., Ltd.
Bank of Chongqing Co., Ltd.	226,042,920	2.53	0	Nil	0	Unknown
Industrial Bank Co., Ltd. Chongqing	219,633,096	2.46	0	Nil	0	Unknown
Branch
Agricultural Bank of China Limited	216,403,628	2.43	0	Nil	0	Unknown
Chongqing Branch
China Shipbuilding Industrial	211,461,370	2.37	0	Nil	0	Unknown
Complete Equipment & Logistics
Co., Ltd.

– 5 –

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

	Number of
	shares not
	subject to
	trading
Name of shareholder	moratorium	Class and number	of shares
		Class	Number
Chongqing Changshou Iron & Steel Company	2,096,981,600	RMB-denominated	2,096,981,600
Limited		ordinary shares
HKSCC NOMINEES LIMITED	531,217,421	Overseas listed foreign	531,217,421
		shares
Chongqing Qianxin Energy Environmental	427,195,760	RMB-denominated	427,195,760
Protection Company Limited		ordinary shares
Chongqing Rural Commercial Bank Co., Ltd.	289,268,939	RMB-denominated	289,268,939
		ordinary shares
Chongqing Guochuang Investment and	278,288,059	RMB-denominated	278,288,059
Management Co., Ltd.		ordinary shares
Sinosteel Equipment & Engineering Co., Ltd.	252,411,692	RMB-denominated	252,411,692
		ordinary shares
Bank of Chongqing Co., Ltd.	226,042,920	RMB-denominated	226,042,920
		ordinary shares
Industrial Bank Co., Ltd. Chongqing Branch	219,633,096	RMB-denominated	219,633,096
		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

– 6 –

III. SIGNIFICANT EVENTS

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

✓ Applicable

Not applicable

From January to March in 2020, the Group recorded a total profit of RMB4.33 million, decreasing by 97.15% as compared to the corresponding period last year, which was mainly due to the followings: the increase in prices of raw materials such as ore, coal, alloy, steel scrap, etc., resulted in a decrease of RMB117.76 million in profit; the selling price of steel products amounted to RMB3,335 per tonne, representing a year-on-year decrease of 1.51%, resulting in a decrease of RMB77.20 million in the profit; sales volume of steel products was 1,484,600 tonnes, representing a year-on-year decrease of 1.20%, resulting in a decrease of RMB3.91 million in profit; the Company improved basic management, found differences from excellent enterprises comprehensively, paid close attention to reducing costs and increasing efficiency and as a result, critical technical and economic indicators such as steel consumption in steelmaking, yield of rolled steel and etc., were improved significantly and cost consumption levels were reduced substantially, thus resulting in an increase of RMB84.35 million in profit from cost reduction in the aspect of process. The year-on-year 18.36% increase in the expenses for the period gave rise to a decrease of RMB31.83 million in profit.

(1) Main business by sectors, products and regions

Unit: RMB’000

		Main	business by sectors	business by sectors
				Year-	Year-
				on- year	on- year
				increase/	increase/
				decrease in	decrease in	Year-on-year
	Operating	Operating	Gross	operating	operating	increase/decrease
By sectors	income	cost	Margin	income	cost	in gross margin
			(%)	(%)	(%)	(%)
Iron and steel	5,164,839	4,920,411	4.73	-2.27	-0.96	-1.27
		Main business by products
				Year-	Year-
				on- year	on- year
				increase/	increase/
				decrease in	decrease in	Year-on-year
	Operating	Operating	Gross	operating	operating	increase/decrease
By products	income	cost	Margin	income	cost	in gross margin
			(%)	(%)	(%)	(%)
Rolled steel billet	4,951,905	4,715,431	4.78	-2.70	-1.02	-1.61
Other	212,934	204,980	3.74	8.76	0.56	7.85

– 7 –

(2) Analysis on material changes in assets and liabilities

Unit: RMB’000 Audit type: unaudited

				Percentage
		Percentage		of the
		of the		amount
		amount at	Amount	at the end	Changes
		the end of	at the end	of the	from the
	Amount at	the period	of the	previous	end of the
	the end of	in total	previous	period in	previous
Item	the period	assets	period	total assets	**period **	Explanation
		(%)		(%)	(%)
Cash and bank balances	3,205,523	11.3	1,783,747	6.61	79.71	Issuance of medium-term
						notes and new loans
						from Baosteel Group
						Finance Company
Financial assets held for	233,000	0.82	400,000	1.48	-41.75	Disposal of wealth
trading						management products
Receivables financing	1,385,969	4.88	861,373	3.19	60.90	Decrease in notes paid
						and notes discounted
Other receivables	8,785	0.03	78,132	0.29	-88.76	Special fund for
						industrial development
						received for 2019
Other current assets	5,476	0.02	43,410	0.16	-87.39	Decrease in input VAT to
						be verified
Construction in process	365,104	1.29	171,858	0.64	112.45	New technical
						transformation and
						technical measure
						projects
Other non-current assets	0	0	12,513	0.05	-100.00	Prepayments for
						engineering spare
						parts recognized as
						engineering materials
Short-term borrowings	695,358	2.45	384,528	1.43	80.83	New loans from
						Baosteel Group
						Finance Company
Debentures payable	992,500	3.5	0	0	N/A	Issuance of first tranche
						of medium-term notes

As of 31 March 2020, the gearing ratio of the Company was 31.91%.

– 8 –

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

✓ Applicable Not applicable

(1) The Third Phase of Employee Share Ownership Plan

As authorized at the 2017 annual general meeting of the Company, the Company convened the 16th meeting of the eighth session of the Board and the 12th meeting of the eighth session of the supervisory committee on 27 December 2019, at which the Resolution in relation to the Third Phase of the Employee Share Ownership Plan of the Company 《關於公司第三期員工持股計劃的議案》( ) was considered and approved. According to the operations in 2019, the bonus fund provision for Employee Share Ownership Plan is made at 9.5% of the total profit (before the withdrawal of the bonus fund) under the audited consolidated statements for 2019.

The Company convened the first holders’ meeting of the Third Phase of the Employee Share Ownership Plan on 22 January 2020, at which the Constitution of the Meeting of the Holders of the Third Phase of the Employee Share Ownership Plan (《第三期員工持股計劃持 有人會議章程》), the Resolution in relation to the Establishment of the Management Committee of the Third Phase of Employee Share Ownership Plan and Authorisation to the Management Committee to be Responsible for Matters Relevant to the Employee Share Ownership Plan (《關於設立第三期員工持股計劃管理委員會並授權 管理委員會負責員工持股計劃管理事宜的議案》) and the Resolution for the Election of the Candidates for the Members of the Management Committee of the Third Phase of the Employee Share Ownership Plan (《關於選舉第三期員工持股計劃管理委員會 候選委員的議案》) were considered and approved.

(2) Repurchase of A shares of the Company

As authorized at the 2018 annual general meeting, the 2019 first class meeting of A shareholders and the 2019 first class meeting of H shareholders, the Resolution on Repurchase of the Shares of the Company through Centralized Bidding Trading was considered and approved at the 18th meeting of the eighth session of the Board of the Company. For the details of the repurchase of A shares of the Company, please refer to the Report on the Repurchase of the Shares of the Company through Centralized Bidding Trading (Announcement No.: 2020–002) and Announcement of Resolutions Passed at the 18th Meeting of the Eighth Session of the Board (Announcement No.: 2020– 003) disclosed by the Company on 3 March 2020.

– 9 –

As at the close of trading on 6 March 2020, the Company repurchased 10,000,000 A shares through centralized bidding trading under the first repurchase, representing 0.11% of the total share capital of the Company. The highest price and the lowest price transacted for such shares were RMB1.71 per share and RMB1.68 per share, respectively. The total amount paid for such shares was RMB16,967,061.00 (excluding transaction costs). Please refer to the Announcement on the First Repurchase of the Shares of the Company Through Centralized Bidding Trading (Announcement No.: 2020–006) disclosed by the Company on 7 March 2020 for details.

As at the close of trading on 12 March 2020, the Company repurchased a total of 50,000,000 A shares through centralized bidding trading, representing approximately 0.56% of the total share capital of the Company. The highest, lowest and average prices transacted for such shares were RMB1.71 per share, RMB1.65 per share and RMB1.69 per share, respectively. The total amount paid for such shares was RMB84,333,550.00 (excluding transaction costs). As such, the total number of shares for repurchase of the Company has reached the cap, and the share repurchase plan was fully implemented. Please refer to the Announcement on the Result of Repurchase of the Shares and Changes in Shareholding Structure (Announcement No.: 2020-007) disclosed by the Company on 13 March 2020 for details.

(3) The issuance of 2020 first tranche of medium-term notes

On 21 May 2019, the Company held the 2018 annual general meeting, at which the Proposal for the Grant of General Mandate to the Board of Directors to Issue Debt Financing Instruments was considered and approved. The Company was approved to apply to the National Association of Financial Market Institutional Investors (the “ NAFMII ”) for new registration and issuance of debt financing instruments of nonfinancial enterprises in the inter-bank market (the “ Debt Financing Instruments ”), including but not limited to medium-term notes and short-term financing bonds, etc. For relevant details, please refer to the Announcement of Resolutions Passed at the 8th Meeting of the Eighth Session of the Board (Announcement No.: 2019-006), the Announcement on Grant of General Mandate to the Board to Issue Debt Financing Instruments (Announcement No.: 2019-009) disclosed by the Company on 29 March 2019 and the Announcement of Resolutions Passed at the 2018 Annual General Meeting, 2019 First Class Meeting of A Shareholders and 2019 First Class Meeting of H Shareholders (Announcement No.: 2019-017) disclosed on 22 May 2019.

– 10 –

On 2 March 2020, the Company has received the Notice of Acceptance of Registration (Zhong Shi Xie Zhu [2020] No. MTN106) issued by the NAFMII stating that the registration of medium-term notes of the Company has been accepted. The registered amount was RMB1 billion and such registered amount will be effective for 2 years commencing from the date of issue of the notice. Please refer to the Announcement on the Acceptance of Registration of Medium-Term Notes (Announcement No.: 2020-004) disclosed by the Company on 3 March 2020 for details.

From 17 to 18 March 2020, the Company issued the 2020 first tranche of medium-term notes with a principal amount of RMB1 billion and the proceeds raised were fully received on 19 March 2020. Please refer to the Announcement on the Issuance Results of 2020 First Tranche of Medium-Term Notes (Announcement No.: 2020-008) disclosed by the Company on 20 March 2020 for details.

3.3 Undertakings not being fully performed during the reporting period

Applicable ✓ Not applicable

• 3.4 Warning and explanation on 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 29 April 2020

– 11 –

IV. APPENDICES

4.1 Financial statements

Consolidated Balance Sheet 31 March 2020

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

Item Current assets: Cash and bank balance Balances with clearing companies Placements with banks and other financial institutions Held-for-trading financial assets Derivative financial assets Bills receivable Accounts receivable Receivables financing Prepayments Premiums receivable Accounts receivable from reinsurers Deposits receivable from reinsurers Other receivables Including: Interests receivable Dividends receivable Proceeds from financial assets purchased under agreements to resell Inventories Contract assets Held-for-sale assets Non-current assets due within one year Other current assets Total current assets	31 March 2020 3,205,523 233,000 6,892 1,385,969 596,992 8,785 3,815,913 5,476 9,258,550	31 December 2019 1,783,747 400,000 5,610 861,373 751,498 78,132 3,931,513 43,410
		7,855,283

– 12 –

Item Non-current assets: Loans and advances granted Debt investments Other debt investments Long-term receivables Long-term equity investments Other equity instruments investments Other non-current financial assets Investment properties Fixed assets Construction in progress Biological assets for production Fuel assets Right-of-use assets Intangible assets Development expenses Goodwill Long-term deferred expenditures Deferred income tax assets Other non-current assets Total non-current assets Total assets	31 March 2020 28,254 5,000 16,275,305 365,104 2,376,561 68,436 19,118,660 28,377,210	31 December 2019 28,258 5,000 16,442,264 171,858 2,392,114 68,436 12,513
		19,120,443
		26,975,726

– 13 –

	31 March	31 December
Item	2020	2019
Current liabilities:
Short-term borrowings	695,358	384,528
Borrowings from central bank
Placements from banks and other financial
institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Bills payable	91,127	91,127
Accounts payable	2,015,981	1,726,883
Advances from customers
Contract liabilities	920,561	1,145,615
Disposal of repurchased financial assets
Deposit taking and deposit in interbank
market
Customer deposits for trading in securities
Customer deposits for underwriting
Employee remuneration payable	285,565	257,143
Taxes payable	75,949	70,867
Other payables	483,542	421,768
Including: Interests payable
Dividends payable
Handling charges and commissions
payable
Payable to reinsurers
Held-for-sale liabilities
Non-current liabilities due within one year	895,751	841,576
Other current liabilities	122,929	150,208
Total current liabilities	5,586,763	5,089,715

– 14 –

Item Non-current liabilities: Deposits for insurance contracts Long-term borrowings Debentures payable Including: Preferential shares Perpetual bonds Lease liabilities Long-term payables Long-term employee remuneration payable Accrued liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities	31 March 2020 992,500 188,934 37,679 2,250,000 3,469,113 9,055,876	31 December 2019 201,737 38,271 2,250,000
		2,490,008
		7,579,723

– 15 –

	31 March	31 March	31 December
Item		2020	2019
Owners’ equity (or Shareholders’ equity):
Paid-in capital (or 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		146,648	62,314
Other comprehensive income
Special reserve		20,065	14,573
Surplus reserve		606,991	606,991
General risk provision
Undistributed profit	-9,359,823		-9,363,996
Total equity attributable to owners of
the parent company (or shareholders’
equity)	19,321,334		19,396,003
Minority interests
Total owners’ equity (or shareholders’
equity)	19,321,334		19,396,003
Total liabilities and owners’ equity (or
shareholders’ equity)	28,377,210		26,975,726
Legal Representative: Chief Financial Officer:		Chief	Accountant:
Zhou Zhuping Zou An		Lei Xiaodan

– 16 –

31 March 2020

Balance Sheet of the Parent Company

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

Item Current assets: Cash and bank balance Held-for-trading financial assets Derivative financial assets Bills receivable Accounts receivable Receivables financing Prepayments Other receivables Including: Interests receivable Dividends receivable Inventories Contract assets Held-for-sale assets Non-current assets due within one year Other current assets Total current assets	31 March 2020 3,200,443 233,000 7,222 1,385,969 566,471 8,680 3,805,784 4,159 9,211,728	31 December 2019 1,779,736 400,000 5,610 861,373 707,289 78,027 3,931,513 43,410
		7,806,958

– 17 –

Item Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments Other equity instruments investments Other non-current financial assets Investment properties Fixed assets Construction in progress Biological assets for production Fuel assets Right-of-use assets Intangible assets Development expenses Goodwill Long-term deferred expenditures Deferred income tax assets Other non-current assets Total non-current assets Total assets	31 March 2020 28,254 5,000 16,275,135 365,104 2,376,561 68,192 19,118,246 28,329,974	31 December 2019 28,258 5,000 16,442,087 171,858 2,392,114 68,192 12,513
		19,120,022
		26,926,980

– 18 –

Item Current liabilities: Short-term borrowings Held-for-trading financial liabilities Derivative financial liabilities Bills payable Accounts payable Advances from customers Contract liabilities Employee remuneration payable Taxes payable Other payables Including: Interests payable Dividends payable Held-for-sale liabilities Non-current liabilities due within one year Other current liabilities Total current liabilities	31 March 2020 695,358 91,127 2,015,735 882,800 285,565 75,485 483,363 895,751 118,020 5,543,204	31 December 2019 384,528 91,127 1,726,883 1,105,972 257,143 70,398 421,590 841,576 144,958
		5,044,175

– 19 –

	31 March	31 March	31 December
Item		2020	2019
Non-current liabilities:
Long-term borrowings
Debentures payable		992,500
Including: Preferential shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee remuneration
payable		188,934	201,737
Accrued liabilities
Deferred income		37,679	38,271
Deferred income tax liabilities
Other non-current liabilities	2,250,000		2,250,000
Total non-current liabilities	3,469,113		2,490,008
Total liabilities	9,012,317		7,534,183
Owners’ equity (or Shareholders’
equity):
Paid-in capital (or 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		146,648	62,314
Other comprehensive income
Special reserve		20,065	14,573
Surplus reserve		577,013	577,012
Undistributed profit	-9,364,465		-9,368,166
Total owners’ equity (or shareholders’
equity)	19,317,657		19,392,797
Total liabilities and owners’ equity (or
shareholders’ equity)	28,329,974		26,926,980
Legal Representative: Chief Financial Officer:		Chief Accountant:
Zhou Zhuping	Zou An	Lei Xiaodan

– 20 –

Consolidated Income Statement

January to March 2020

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

			First quarter	First quarter
Item			of 2020	of 2019
I.	Total	revenue from operations	5,178,323	5,307,920
	Including: Revenue from operations		5,178,323	5,307,920
		Interest income
		Premiums earned
		Income from fee and commission
II.	Total	operating costs	5,177,630	5,171,614
	Including: Operating costs		4,931,502	4,983,100
		Interest expenses
		Fee and commission expenses
		Surrender value
		Net expenditure for compensation
		payments
		Net drawing on deposits for insurance
		contracts
		Expenditures for insurance policy
		dividend
		Reinsurance costs
		Taxes and surcharges	40,884	41,104
		Selling expenses	26,476	12,991
		Administrative expenses	133,711	113,485
		R&D expenses
		Finance cost	45,057	20,934
		Including: Interest expenses	53,507	40,021
		Interest income	-9,023	-20,062
	Add:	Other income	592	3,176
		Gains from investment (loss is
		represented by “-”)	3,159
		Including: Gains from investment in
		associates and joint ventures

– 21 –

First quarter First quarter of 2020 of 2019

Item	of 2020	of 2019
Gains from derecognition of financial
assets measured at amortized cost
Exchange gain (loss is represented by
“-”)
Income on hedging the net exposure
(loss is represented by “-”)
Gain from change in fair value (loss is
represented by “-”)
Credit impairment loss (loss is
represented by “-”)
Asset impairment loss (loss is
represented by “-”)
Gain on disposal of assets (loss is
represented by “-”)		-359
III. Profit from operations (loss is represented by
“-”)	4,444	139,123
Add: Non-operating income	166	12,888
Less: Non-operating expenses	280	104
IV. Total profit (total loss is represented by “-”)	4,330	151,907
Less: Income tax expense	157	1,470
V. Net profit (net loss is represented by “-”)	4,173	150,437
(I) Classified on a going concern basis
1. Net profit from continuing operations (net
loss is represented by “-”)	4,173	150,437
2. Net profit from discontinued operations
(net loss is represented by “-”)
(II) Classified according to the ownership
1. Net profit attributable to shareholders
of the parent company (net loss is
represented by “-”)	4,173	150,437
2. Profit or loss attributable to minority
shareholders (net loss is represented by
“-”)

– 22 –

First quarter First quarter Item of 2020 of 2019

VI. Other comprehensive income (net of tax)

• (I) Other comprehensive income (net of tax) attributable to owners of the parent company

• Other comprehensive income that will not be reclassified to profit or loss

  • (1) Changes in re-measurement of defined benefit plan

  • (2) Other comprehensive income accounted for using equity method that will not be reclassified to profit or loss

  • (3) Changes in fair value of other equity instruments investment

  • (4) Changes in fair value of the enterprise’s own credit risk

• Other comprehensive income that will be reclassified to profit or loss

  • (1) Ot her comprehensive income accounted for using equity method that will be reclassified to profit and loss

  • (2) Ch anges in fair value of other debt investments

  • (3) Fi nancial assets reclassified into other comprehensive income

  • (4) Pr ovision for credit impairment of other debt investments

  • (5) Hedging reserve for cash flows

  • (6) Ex change difference on translation of foreign currency financial statements

  • (7) Others

• (II) Other comprehensive income (net of tax) attributable to minority shareholders

– 23 –

	First quarter	First quarter	First quarter
Item		of 2020	of 2019
VII. Total comprehensive income		4,173	150,437
(I) Total comprehensive income attributable to
owners of the parent company		4,173	150,437
(II) Total comprehensive income attributable to
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB per share)		0.0005	0.02
(II) Diluted earnings per share (RMB per share)		0.0005	0.02
Legal Representative: Chief Financial Officer:		Chief Accountant:
Zhou Zhuping Zou An		Lei Xiaodan

– 24 –

Income Statement of the Parent Company January to March 2020

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

		First quarter	First quarter
Item		of 2020	of 2019
I.	Revenue from operations	5,187,760	5,301,839
	Less: Operating costs	4,941,631	4,983,100
	Taxes and surcharges	40,848	40,987
	Selling expenses	26,444	12,906
	Administrative expenses	133,712	113,485
	R&D expenses
	Finance cost	45,061	20,935
	Including: Interest expenses	53,507	40,021
	Interest income	-9,018	-20,060
	Add: Other income	592	3,176
	Gains from investment (loss is represented
	by “-”)	3,159	4,220
	Including: Gains from investment in
	associates and joint ventures
	Gains from derecognition of financial assets
	measured at amortized cost
	Income on hedging the net exposure (loss is
	represented by “-”)
	Gain from change in fair value (loss is
	represented by “-”)
	Credit impairment loss (loss is represented
	by “-”)
	Asset impairment loss (loss is represented
	by “-”)
	Gain on disposal of assets (loss is
	represented by “-”)		-359
II.	Profit from operations (loss is represented by
	“-”)	3,815	137,463
	Add: Non-operating income	166	12,887
	Less: Non-operating expenses	280	104

– 25 –

First quarter First quarter Item of 2020 of 2019 III. Total profit (total loss is represented by “-”) 3,701 150,246 Less: Income tax expense IV. Net profit (net loss is represented by “-”) 3,701 150,246

Item

III. Total profit (total loss is represented by “-”) Less: Income tax expense

• (I) Net profit from continuing operations (net loss is represented by “-”)

• (II) Net profit from discontinued operations (net loss is represented by “-”)

V. Other comprehensive income (net of tax)

• (I) Other comprehensive income that will not be reclassified to profit or loss

• Changes in re-measurement of defined benefit plan

• Other comprehensive income accounted for using equity method that will not be reclassified to profit or loss

• Changes in fair value of other equity instruments investment

• Changes in fair value of the enterprise’s own credit risk

– 26 –

First quarter	First quarter	First quarter
Item	of 2020	of 2019
(II) Other comprehensive income that will be
reclassified to profit or loss
1. Other comprehensive income accounted
for using equity method that will be
reclassified to profit and loss
2. Changes in fair value of other debt
investments
3. Financial assets reclassified into other
comprehensive income
4. Provision for credit impairment of other
debt investments
5. Hedging reserve for cash flows
6. Exchange difference on translation of
foreign currency financial statements
7. Others
VI. Total comprehensive income	3,701	150,246
VII. Earnings per share:
(I) Basic earnings per share (RMB per share)	0.0004	0.02
(II) Diluted earnings per share (RMB per share)	0.0004	0.02
Legal Representative: Chief Financial Officer:	Chief Accountant:
Zhou Zhuping Zou An	Lei Xiaodan

– 27 –

Consolidated Cash flow Statement

January to March 2020

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

Item I. Cash flow from operating activities: Cash received from sale of goods and rendering of services 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 contracts Net cash received from reinsurance business Net increase in deposits of policy holders and investment Cash received from interest, fee and commission Net increase in placements from banks and other financial institutions Net increase in capital from repurchase business Net cash received from trading in securities Refunds of taxes Other cash received relating to operating activities Sub-total of cash inflow from operating activities	First quarter of 2020 4,152,133 85,483 4,237,616	First quarter of 2019 5,191,781 378,730 5,570,511

– 28 –

Item Cash paid for goods purchased and service received 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 contracts Net increase in placements with banks and other financial institutions Cash paid for interest, fee and commission Cash paid for insurance policy dividend Cash paid to and on behalf of employees Cash paid for all types of taxes Other cash paid relating to operating activities Sub-total of cash outflow from operating activities Net cash flow from operating activities 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 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	First quarter of 2020 3,983,601 229,884 141,908 95,298 4,450,691 -213,075 200,000 3,159 203,159	First quarter of 2019 4,538,459 234,537 159,759 776,315 5,709,070 -138,559 220,000 6,782 226,782

– 29 –

Item Cash paid for acquisition and construction of fixed assets, intangible assets and other long-term assets 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 Net cash flow from investing activities III. Cash flow from financing activities: Cash received from investments Including: Proceeds received by subsidiaries from minority shareholders’ investment Cash received from borrowings Other cash received relating to financing activities Sub-total of cash inflow from financing activities	First quarter of 2020 33,000 33,000 170,159 500,000 1,052,500 1,552,500	First quarter of 2019 374,400 28,538 402,938 -176,156 52,500 52,500

– 30 –

	First quarter	First quarter	First quarter
Item		of 2020	of 2019
	Cash paid for repayment of debts		200,000
	Cash paid for distribution of dividends and profits
	or for interest expenses	41,128
	Including: Dividend and profit paid by
	subsidiaries to minority shareholders
	Other cash paid relating to financing activities	85,000
	Sub-total of cash outflow from financing
	activities	126,128	200,000
	Net cash flow from financing activities	1,426,372	-147,500
IV.	Effect of fluctuation in exchange rates on cash
	and cash equivalents
V.	Net increase in cash and cash equivalents	1,383,456	-462,215
	Add: Balance of cash and cash equivalents at the
	beginning of the period	1,595,323	1,969,543
VI.	Balance of cash and cash equivalents at the end
	of the period	2,978,779	1,507,328
Legal Representative: Chief Financial Officer:		Chief Accountant:
	Zhou Zhuping Zou An	Lei Xiaodan

– 31 –

Cash Flow Statement of the Parent Company

January to March 2020

Prepared by: Chongqing Iron & Steel Company Limited

Unit: RMB’000 Audit type: unaudited

Item I. Cash flow from operating activities: Cash received from sale of goods and rendering of services Refunds of taxes Other cash received relating to operating activities Sub-total of cash inflow from operating activities Cash paid for goods purchased and service received Cash paid to and on behalf of employees Cash paid for all types of taxes Other cash paid relating to operating activities Sub-total of cash outflow from operating activities	First quarter of 2020 4,037,899 85,079 4,122,978 3,870,743 229,884 141,619 94,875 4,337,121	First quarter of 2019 4,873,468 12,208
		4,885,676 4,538,459 234,537 159,760 94,875
		5,027,631

– 32 –

Item Net cash flow from operating activities 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 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 Cash paid for acquisition and construction of fixed assets, intangible assets and other long-term assets 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 Net cash flow from investing activities	First quarter of 2020 -214,143 200,000 3,159 203,159 33,000 33,000 170,159	First quarter of 2019 -141,955 220,000 6,782
		226,782
		374,400 28,539
		402,939
		-176,157

– 33 –

	First quarter	First quarter		First	quarter
Item		of 2020		of 2019
III. Cash flow from financing activities:
Cash received from investments
Cash received from borrowings		500,000
Other cash received relating to financing activities		1,052,500			52,500
Sub-total of cash inflow from financing
activities		1,552,500			52,500
Cash paid for repayment of debts				200,000
Cash paid for distribution of dividends and profits
or for interest expenses		41,128
Other cash paid relating to financing activities		85,000
Sub-total of cash outflow from financing
activities		126,128		200,000
Net cash flow from financing activities		1,426,372		-147,500
IV. Effect of fluctuation in exchange rates on cash
and cash equivalents
V. Net increase in cash and cash equivalents		1,382,388		-465,612
Add: Balance of cash and cash equivalents at the
beginning of the period		1,591,312		1,967,354
VI. Balance of cash and cash equivalents at the end
of the period		2,973,700		1,501,742
Legal Representative: Chief Financial Officer:		Chief Accountant:
Zhou Zhuping Zou An		Lei Xiaodan

– 34 –

• 4.2 Adjustments to relevant items in the opening financial statements upon initial application of the New Revenue Standard and the New Lease Standard Since 2020

Applicable ✓ Not applicable

• 4.3 Retrospective adjustments to comparative figures of previous periods upon initial application of the New Revenue Standard and the New Lease Standard Since 2020

Applicable ✓ Not applicable

4.4 Auditor’s report

Applicable ✓ Not applicable

By order of the Board Chongqing Iron & Steel Company Limited Meng Xiangyun Secretary to the Board

Chongqing, the PRC, 30 April 2020

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

– 35 –