Angang Steel : 2020 Interim Report

September 15, 2020 at 05:00 am EDT

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

Stock Code: 00347

2020

Interim Report

For identification purposes only

Contents

Important Notice and Definitions	2
Corporate Profile	5
Summary of Accounting Figures and	7
Financial Indicators
Overview of the Company's Business	9
Report of the Board of Directors	14
Significant Matters	43
Movements in Share Capital and Shareholding of	70
Substantial Shareholders
Information on Directors, Supervisors and	78
Senior Management
Financial Report	80
Documents Available for Inspection	292

Important Notice and Definitions

IMPORTANT NOTICE

The Board of Directors (the "Board"), the Supervisory Committee, the Directors and the Supervisors and the senior management of the Company confirm that there are no false representations or misleading statements contained in, or material omissions from, this interim report, and jointly and severally assume responsibility for the truthfulness, accuracy and completeness of the contents contained herein.

Mr. Wang Yidong, the Chairman of the Company, Mr. Ma Lianyong, Chief Accountant and the person-in-charge of accounting as well as Mr. Gong Jin, person in charge of the accounting institution guarantee the truthfulness, accuracy and completeness of the financial statements in this interim report.

The 2020 interim financial report of the Company is unaudited.

The 2020 interim financial report of the Company is prepared in accordance with the Accounting Standards for Business Enterprises of the PRC.

DEFINITIONS

In this interim report, the following expressions shall have the following meanings unless the context indicates otherwise:

Term	Meaning
"Company" or "Angang Steel"	Angang Steel Company Limited* (鞍鋼股份有限公
	司)
"Group"	A n g a n g S t e e l C o m p a n y L i m i t e d* a n d i t s
	subsidiaries
"Angang Holding"	Anshan Iron & Steel Co. Ltd* (鞍山鋼鐵集團有限公
	司), the controlling shareholder of the Company
"Anshan Iron & Steel Group	Angang Holding and the companies in which
Complex"	it holds 30% or above interests (excluding the
	Group)

2 ANGANG STEEL COMPANY LIMITED

Important Notice and Definitions (Continued)

"Angang"	Angang Group Company Limited* (鞍鋼集團有限
	公司), the de facto controller of the Company
"Angang Group"	Angang and the companies in which it holds 30%
	or above interests (excluding the Group)
"Angang Financial Company"	Angang Group Financial Company Limited* (鞍鋼
	集團財務有限責任公司)
"Karara"	Karara Mining Limited* (卡拉拉礦業有限公司)
"Pangang Vanadium & Titanium"	Pangang Group Steel Vanadium & Titanium Co.,
	Ltd.* (攀鋼集團釩鈦資源股份有限公司)
"Pangang Vanadium & Titanium	P a n g a n g V a n a d i u m & T i t a n i u m a n d i t s
Group"	subsidiaries

"Supply of Materials and Services the Supply of Materials and Services Agreement

Agreement (2019-2021)"(2019-2021) entered into between the Company and Angang Group, which was considered and approved at the third extraordinary general meeting of the Company in 2018 on 18 December 2018

"Supply of Materials Agreement	the Supply of Materials Agreement (2019-2021)
(2019-2021)"	entered into between the Company and Pangang
	Vanadium & Titanium, which was considered
	and approved at the third extraordinary general
	meeting of the Company in 2018 on 18 December
	2018
"Financial Service Agreement	the Financial Service Agreement (2019-2021)
(2019-2021)"	entered into between the Company and Angang
	Financial Company, which was considered and
	approved at the third extraordinary general
	meeting of the Company in 2018 on 18 December
	2018

INTERIM REPORT 2020

Important Notice and Definitions (Continued)

"Continuing Connected	collectively, the Supply of Materials and Services
Transaction Agreements"	Agreement (2019-2021), the Supply of Materials
	Agreement (2019-2021) and the Financial
	Service Agreement (2019-2021)
"Bayuquan Branch Company"	Bayuquan Iron & Steel Branch Company* (鮁魚圈
	鋼鐵分公司) of Angang Steel
"Chaoyang Iron and Steel"	Angang Group Chaoyang Iron and Steel Co.,
	Ltd.* (鞍鋼集團朝陽鋼鐵有限公司)
"Angang International Trade"	Angang Group International Economic and Trade
	Co., Ltd. *(鞍鋼集團國際經濟貿易有限公司)
"Delin Zhilian"	Delin Zhilian (Anshan) Co., Ltd.*(德鄰智聯（鞍山）
	有限公司)
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Hong Kong Listing Rules"	The Rules Governing the Listing of Securities on
	The Stock Exchange of Hong Kong Limited
"Reporting Period"	1 January 2020 to 30 June 2020

4 ANGANG STEEL COMPANY LIMITED

Corporate Profile

CORPORATE INFORMATION

Stock Exchange of Listing	Shenzhen Stock Exchange
Stock Abbreviation	Angang Steel	Stock Code	(A share) 000898
Stock Exchange of Listing	Hong Kong Stock Exchange
Stock Abbreviation	Angang Steel	Stock Code	(H share) 00347
Chinese Name of the Company 鞍鋼股份有限公司
Chinese Name Abbreviation	鞍鋼股份
English Name of the Company	Angang Steel Company Limited
English Name Abbreviation	ANSTEEL
Legal Representative of	Wang Yidong
the Company

CONTACT PERSONS AND CONTACT METHODS

			Securities Affairs
	Joint Company Secretary	Representative
Name	Ma Lianyong	Chen Chun	Wang Congqing
Address	Production Area of	40th Floor, Sunlight Tower,	Production Area of Angang
	Angang Steel,	No. 248 Queen's Road	Steel, Tiexi District, Anshan
	Tiexi District,	East, Wanchai, Hong Kong	City, Liaoning Province, the
	Anshan City,		PRC
	Liaoning Province,
	the PRC
Telephone 0412-6734878	00852-3912 0863	0412-8417273
			0412-6751100
Fax	0412-6727772	00852-3912 0801	0412-6727772
E-mail	mly@ansteel.com.cn	jessica.chen@swcsgroup.com	wangcongqing@ansteel.com.cn

INTERIM REPORT 2020

Corporate Profile (Continued)

OTHER INFORMATION
1. Contact methods of the Company
  There was no change in registered address, business address and postal code, website and email address of the Company during the Reporting Period. Please refer to the 2019 Annual Report of the Company for details.
2. Information disclosure and place for inspection
  There was no change in Company's designated newspapers for disclosure of information, website for publication of interim report designated by the CSRC and place for inspection of the Company's interim report during the Reporting Period. Please refer to the 2019 Annual Report of the Company for details.
3. Other relevant information
  There was no change in other relevant information during the Reporting Period.

6 ANGANG STEEL COMPANY LIMITED

Summary of Accounting Figures and Financial Indicators

PRINCIPAL ACCOUNTING FIGURES AND FINANCIAL INDICATORS OF THE GROUP

		Unit: RMB million
			Increase/

			decrease for the
			Reporting Period
	During the		as compared with
	Reporting Period	Corresponding	the corresponding
	(from January	period of	period of the
	to June)	the previous year	previous year
			(%)
Operating income	44,650	51,074	-12.58
Net profit attributable to the shareholders of the Company	500	1,425	-64.91
Net profit attributable to the shareholders of the Company	472	1,367	-65.47
after deduction of non-recurring gains or losses items
Basic earnings per share (RMB/share)	0.053	0.152	-65.13
Diluted earnings per share (RMB/share)	0.053	0.146	-63.70
Returns on net assets on weighted average basis (%)	0.96%	2.70%	Decreased by 1.74
			percentage points
Net cash flow from operating activities	4,779	3,765	26.93
			Increase/decrease

			at the end of the
			Reporting Period
			as compared with
	As at the end	As at	the corresponding
	of the Reporting	the end of	period of the
	Period	the previous year	previous year
			(％)
Total assets	89,836	87,808	2.31
Net assets attributable to the shareholders of the Company	52,093	52,079	0.03
Total share capital of the Company as at 27 August 2020:
Total share capital (shares)			9,405,250,201
Fully diluted earnings per share calculated based on
the latest share capital (RMB/share)		0.053

INTERIM REPORT 2020

Summary of Accounting Figures and Financial Indicators (Continued)

II.	NON-RECURRING ITEMS:
		Unit: RMB million
	Item	Amount	Explanation
	Gains/losses from disposal of non-current
	assets (including the provision for
	impairment that has been written off)	-18	-
	Government subsidies (except for
	government subsidies which are closely
	related to the Company's operations and
	received in fixed amount or quantity in
	conformity with the standards of the State)
	recorded into to gains or losses for the
	period	29	-
	Changes in fair value of financial assets held
	for trading	-12	-
	Changes in fair value of other non-current
	liabilities (part of derivative financial
	instruments)	41	-
	Other non-operating income and expenses
	apart from those stated above	-3	-
	Less: Effect on income tax	9	-

	Total	28	-

Explanations for the Company's non-recurring gains and losses items as defined in the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1 - Non-recurring Gains or Losses, and the non-recurring gains and losses items as illustrated in the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1 - Non-recurring Gains or Losses which have been defined as its recurring gain or loss items.

Applicable ✓ Not applicable

8 ANGANG STEEL COMPANY LIMITED

Overview of the Company's Business

PRINCIPAL BUSINESS OF THE COMPANY DURING THE REPORTING PERIOD

As a large national enterprise for manufacture and sales of iron and steel, the Company is principally engaged in ferrous metal smelting and steel pressing and processing as well as the sales of related products and provision of related services.

At present, the Company has a strategic domestic layout that is improving increasingly, and has three production bases in Anshan, Yingkou and Chaoyang, and processing, distribution or sales service agencies in Dalian, Shanghai, Tianjin, Guangzhou, Shenyang, Wuhan, Hefei and Zhengzhou, etc. and conducts international operations through Angang Group's overseas sales offices.

The Company possesses the comprehensive processes for production of iron and steel including coking, sintering, ironmaking, steel-making, steel rolling, railway transportation, energy power and ancillary facilities, and a relatively complete logistics, trade, steel processing service industry chain. The main facilities have reached modern advanced level. The production structure is diversified and it has a relatively complete production series, ranging from plates, pipes, sections, bars to wires, including hot rolled sheet, medium and thick plates, cold rolled sheets, galvanized steel sheets, color coating plates, cold rolled silicon steel, heavy rails, heavy section, seamless steel pipes and wire rods. These products are widely used in industries such as machinery, metallurgy, petroleum, chemical industry, coal, electric power, railway, shipbuilding, automobile, construction, home electrical appliances and aviation.

The Company has bands with high popularity and reputation, and some of them, used for products such as railway steel, steel plates for containers and ship building plates, enjoy the title of "China Famous Brand Products". The series of steel products with high-tech characteristics made by the Company including steel for automobile, nuclear power, petroleum and petrochemicals, home electrical appliances and container have ranked among famous brand products. The Company's research and development on new types of steel products for vessel plate and railway steel rail as well as technologies for manufacture of steel rail has reached international advanced level. The technology for the series products of high strength thick pipeline steel for undersea high-pressure oil and gas pipeline delivery was industry-leading. Moreover, the Company established the first national key laboratory for metallic material of marine equipment and its application.

INTERIM REPORT 2020

Overview of the Company's Business (Continued)

MATERIAL CHANGES OF MAJOR ASSETS DURING THE REPORTING PERIOD

There was no material change in the major assets of the Company during the Reporting Period.

ANALYSIS ON THE CORE COMPETITIVENESS
1. Product brand advantages
The Company's steel products are comprehensive in types and specifications and have certain differentiation advantages and its brand has high popularity and credibility. The products are sold to various regions in China and dozens of countries in the world, which are widely used in various downstream industries. It has a leading position in producing steel for shipbuilding and marine engineering, automotive steel plates, home appliance plates, container plates and heavy rails. Its railway steels, container steels and shipbuilding plates won the title of "China Famous Brand Products". Its 16 products including hot rolling pickling steel strip, cold rolling hot dip aluminized and galvanized plates and structural steel for bridges are awarded as "Gold Cup" high quality products, and 7 products such as the wire rods for steel cords are acknowledged as "Famous Brand in Liaoning". In terms of major certifications, the Company has obtained certification for more than 60 products, including certification and extended certification by classification societies from 9 countries for its ship plates products, JIS (Japan) certification for its medium- to-thick plates, hot-rolled and cold-rolled products, HPQ (Germany) certification for its bridge steel products, CRCC certification for its hot rolled corrosion-resistance products for the first time, certification by China Standardization Committee on Boilers and Pressure Vessels for its pressure vessel plates products, as well as certifications for its automobile steel products granted by vehicle enterprises and key users. The Company bravely shoulders the heavy responsibility to become the "Pillar of the Great China", its products are applied to the Hong Kong-Zhuhai-Macao Bridge, "Blue Whale I" drilling platform, "Hualong One" nuclear power project and other national key projects.

10 ANGANG STEEL COMPANY LIMITED

Overview of the Company's Business (Continued)

ANALYSIS ON THE CORE COMPETITIVENESS (CONTINUED)
1. Secured resources supply advantages
  The areas of Anshan and its surrounding areas have abundant reserves of iron ore, providing strong secured supply of resources for the production and operation of the Company. Mining companies of Angang Group have iron ore resources of 8,800 million tons and production stripping capacity of 280 million tons per year and mineral processing capacity of 65 million tons per year and iron ore concentrate of 22 million tons, which ranked the first in China and are in leading positions in the world. In addition, Angang Group also owns Karara iron ore base with annual output of 8 million tons overseas, and has relative strong international trading capacity of iron ore.
2. Technological innovation advantages
  Angang Steel has mastered a number of core, leading, basic and cutting-edge key technologies. The progress regarding intellectual property rights marked by patent applications, number of licenses and number of know-hows are in the "first echelon" in the metallurgical industry; it takes an important role in the modification of national project research and development, national standards and industry standards. Many achievements in intellectual property rights have been made in the fields of pre-ironmaking and iron and steel smelting systems, iron and steel products, environmental resources, etc. Since the launch of, 13th Five-Year Plan, the Company has undertaken 52 national scientific research projects, researched and developed 65 leading technologies, added 1,613 new patents, launched 18 products and won 3 national first and second prizes for progress in science and technology.

INTERIM REPORT 2020 11

Overview of the Company's Business (Continued)

ANALYSIS ON THE CORE COMPETITIVENESS (CONTINUED)
1. Technological innovation advantages (Continued)
  The Company's comprehensive research and development strength in products leads in the iron and steel industry. The TWIP1180HR hot coil and other new products produced by the full process technology were launched; the QP1400 cold rolled high-strength automobile steel plates made its world debut; extremely wide and thick steel plates and 90mm crack-resistant steel for ships were launched as the first in China; the longitudinal variable thickness weatherproof LP steels are exclusively used in batch in bridge engineering. The Group successfully developed the 4,000mm ultra-wide nuclear grade duplex stainless steel plates S32101, filling in the gap of our country regarding special steels and reaching the world leading level. Its railway vehicle weather resistant steels can be provided in all kinds of specifications, and the power car bogies lead the development of the industry. The successful development of wide width martensitic stainless steels 4Cr13 for corrosion-resistant dies fills the blank of large martensitic stainless steel plates in China.
2. Technical and equipment management advantages
  Low-cost blast furnace ironmaking technology, rapid selection technology of coking coal and converter ultra-pure steel production technology are among the best of the PRC. The technical equipment of 1,780mm, 2,150mm and 1,580mm hot rolling production line, cold rolling production line, wire rods 2# lines and universal lines and wide and thick plate production line have reached the domestic advanced level, while the self-integrated cold rolling wide strip production technology, self-developed, applied cold rolling mill shape control system core technology and wide and thick plate production technology have all reached the internationally advanced level.

12 ANGANG STEEL COMPANY LIMITED

Overview of the Company's Business (Continued)

ANALYSIS ON THE CORE COMPETITIVENESS (CONTINUED)
1. Technical and equipment management advantages (Continued)
  Bayuquan production base has a compact layout and leads the world in equipment and craft. It boasts large equipment, constant processing, indicator modelling, automatic operation, IT application in management and information digitization. It has become a green model factory leading the development of steel industry in the world and a demonstration base for iron and steel enterprises to use clean energy. The 1,580mm hot rolling plate production line uses multiple internationally advanced hot rolling technology, and equipped with a fixed width press, a hot coil box and 7 continuous rolling mills; the 5,500mm thick plate production line is currently one of the largest wide and thick plate mills in the world.
  Aiming at ultra-thin, low cost and high quality, Chaoyang Iron and Steel constantly improves the market-oriented system and mechanism, continuously promotes the cost reform and preliminarily forms the low- cost competitive advantage.
2. Corporate culture advantages
  After accumulating, generalizing, extracting, sublimating the spirit of the past generations, the Company has established a profound corporate culture with "Innovation, Factualism, Hard Working and Contribution" as its core value and gave birth to the "Angang Constitution" which is praised as the fundamental law for running socialist enterprises. It abounds in heroic figures like Meng Tai, Lei Feng, Wang Chonglun as well as advanced models in the new period including Guo Mingyi and Li Chao. Its "model culture" plays an irreplaceable role in uniting the teams and making concerted efforts.

INTERIM REPORT 2020 13

Report of the Board of Directors

OVERVIEW

Due to the global spread of the COVID-19 pandemic in the first half of the year, the world economy declined. As a result of the weakening demand in the domestic and overseas steel markets, iron ore prices remaining high and slumping steel exports, the steel price saw a decline. All these caused the significant decrease in the profitability of the steel industry. In the face of the severe external situation, the Group accurately identified changes and made scientific response to them and solidly advanced the prevention and control of the COVID-19 pandemic. Firmly focusing on the production and operation targets, the Group strived to maintain a stable output scale, vigorously promoted innovation and reform, sped up in the implementation of intelligent manufacturing and accelerated the pace of scientific and technological innovation to prevent operating risks.

In the first half of the year, the Group achieved operating income of RMB44,650 million, representing a decrease of 12.58% over the corresponding period of the previous year. The total profit reached RMB618 million, representing a decrease of 66.52% over the corresponding period of the previous year. The net profit attributable to shareholders of the Company was RMB500 million, representing a decrease of 64.91% over the corresponding period of the previous year. The basic earnings per share were RMB0.053, representing a decrease of 65.13% over the corresponding period of the previous year.

1. Its production and operation remained stable. In the face of the sudden outbreak of the COVID-19 pandemic, the Group coordinated the implementation of pandemic prevention and control measures and production and operation, studied, judged and actively responded to the situation, and strengthened production interaction among three production bases in Anshan, Yingkou and Chaoyang. The Group appropriately arranged overhauls of certain production lines and equipment and improved the status of equipment, achieving stable production. During the Reporting Period, the Group produced 12,647,900 tons of iron, representing a decrease of 2.53% over the corresponding period of the previous year; 12,591,700 tons of steel, representing a decrease of 8.07% over the corresponding period of the previous year; and 11,683,200 tons of rolled steel, representing a decrease of 8.31% over the corresponding period of the previous year. Sale of rolled steel amounted to 11,519,400 tons, representing a decrease of 7.64% as compared with the corresponding period of the previous year. The Group achieved a sales-output ratio of 98.60%.

14 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

OVERVIEW (CONTINUED)
2. The cost reform achieved remarkable results. With reference to the standards of leading enterprises in the industry, the Group deeply tapped into internal potentials and implemented cost control for the whole process as well as other measures, achieving remarkable results in cost reduction. Its unit iron cost indicator is quite competitive in the industry. The unit iron cost of Chaoyang Iron and Steel and Bayuquan Branch Company was at the leading level in the domestic iron and steel industry. Indicators such as the utilization coefficient of blast furnaces, the coke ratio of iron-smelting and the yield rate continued to improve. The Group optimized its procurement structure based on market changes to improve the resilience in the procurement work. It reasonably adjusted the procurement cycle and locked resources in advance, which effectively reduced its procurement cost. Systematic management and control was strengthened to reduce energy consumption. In the first half of the year, the cost of outsourcing energy, fresh water consumption for each ton of steel, the recycling of converter gas and the proportion of self-generated power of the Group reached the best level in history. Financing channels were continuously expanded and the financing cost was significantly reduced. In the first half of the year, the overall financing cost of the Group hit a record low and financial expenses decreased by RMB119 million or 19.16% year on year.

INTERIM REPORT 2020 15

Report of the Board of Directors (Continued)

OVERVIEW (CONTINUED)
3. Its enterprise reform continued to be pushed forward. While focusing on the main line of the market-oriented reform, the Group improved the differentiated management and control system and delegated more powers and authorization. By focusing on the two key reform factors of "authorization + same benefits", Chaoyang Iron and Steel's reform achieved initial results, and cost competitiveness has been initially formed. Bayuquan Branch Company comprehensively promoted the reform of the operating mechanism, earnestly turning management responsibilities into drivers for performing responsibilities. Contractual management was deepened. The Group entered into contracts on contractual subcontracting operation with Chaoyang Iron and Steel, small production lines in large plants and other units. Marketing system reform was accelerated. The Group strengthened the separation of management and operation and established a price appraisal system with three points and four dimensions to highlight the incentive mechanism and stimulate the vitality of the marketing team; specified marketing strategies and regional positioning of the integrated construction to establish a strategic layout of domestic and overseas marketing; consolidated manufacturing, marketing, storage, logistics, terminal users and other industrial chains to effectively improve customer experience and strive to achieve intelligent marketing @ customers.

16 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

OVERVIEW (CONTINUED)
1. The Group's core competitiveness was steadily improved. In order to enhance the leading role of core technologies in the industry and the market competitiveness of strategic products and achieve the target of breaking technology "bottlenecks" and enhancing "knock-out products", the Group implemented special plans on improving quality and efficiency and shoring up weaknesses through technology. It signed target and task documents on 5 projects under the outstanding technology program. The Group increased research and development efforts and successfully developed the X80 low-temperature pipeline steel plates. It has completed production testing on high strength safety shell plates and the performance met the requirements on indicators. It actively conducted the layout of core patents. As at the end of June 2020, the Company owned a total of 3,104 valid patents, of which 1,573 were inventions, accounting for 50.7%. The Company owned a total of 5 overseas patents. It formed patent groups in key technical fields and completed core patent layouts in key sectors. Angang Steel was identified as one of the "First Batch of High-value Patent Cultivation Centers in Liaoning Province".
2. The pace of smart manufacturing was accelerating. The Group firmly followed its development strategy and focused on promoting intelligent operation and the construction of intelligent factories, drove the upgrading of traditional industries with the upgraded information technology and adapted to the new development of information technology and new concepts on information construction to improve the intelligent operation of the corporate value chain covering the full life cycle. In the first half of the year, the Group commenced 24 information projects with fixed assets investments, 7 projects on the construction of intelligent factories and 17 projects including the construction of the information system. The Group fully initiated the overall improvement program on management and information. It sped up in the construction of intelligent demonstration production lines and completed the set-up and commencement of the construction of 15 intelligent projects under 6 demonstration production lines.

INTERIM REPORT 2020 17

Report of the Board of Directors (Continued)

OVERVIEW (CONTINUED)
1. The level of risk management was significantly improved. The Company established a concept of safety development and fully carried out special campaigns on "eliminating hidden hazards", arranged all staff to participate in eliminating and rectifying hidden safety and fire hazards, which enhanced the construction of the safety management system and consolidated fundamental work on safety. It continued to carry out the "Thunderclap action" and achieved remarkable results in the comprehensive management system for public security. The Group held onto the bottom line of fund safety, strengthened the management of operating cash flow, optimized the receivable structure of the Company on sales and enhanced the connection among production, supply and sales, to improve the ability to obtain operating cash flow. In the first half of the year, the Group's net cash flow from operating activities amounted to RMB4,779 million, representing a year-on-year increase of RMB1,014 million, which reflected its ability to generate capital being significant enhanced.
2. The construction of its ecological factories was promoted orderly. In the first half of the year, the Group firmly followed the concept that lucid waters and lush mountains are invaluable assets, actively fulfilled the corporate social responsibilities and implemented pollutant prevention and control measures. The Group implemented the environmental transformation plan in 2020 and formulated plans on pollutants treatment and the construction of the online monitoring system. The Group vigorously advanced the ultra-low emission transformation of environmental facilities. In the first half of the year, it carried out a total of 6 environmental transformation projects with a total investment of RMB15.11 million. It improved the environmental management system and strictly controlled environmental risks, achieving no major environmental pollution accident and an implementation rate of 100% in the environmental protection "three simultaneous" system for construction projects.

18 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

ANALYSIS OF PRINCIPAL BUSINESSES
1. Overview

				Unit: RMB million
		Corresponding	Year-on-year

	The Reporting	period of the	increase/
Item	Period	previous year	decrease	Reasons for the changes
			(%)
Operating income	44,650	51,074	-12.58	-
Operating costs	40,742	45,962	-11.36	-
Marketing expenses	1,533	1,539	-0.39	-
Administrative expenses	592	615	-3.74	-
Research and development	155	214	-27.57	-
expenses
Financial expenses	502	621	-19.16	-
Income tax expenses	115	422	-72.75	Income tax expenses decreased by RMB307 million
				as compared with the corresponding period of the
				previous year, mainly due to (i) the decrease in
				current income tax expenses by RMB100 million
				as compared with the corresponding period of the
				previous year; (ii) the decrease in deferred income
				tax adjustment by RMB207 million as compared
				with the corresponding period of the previous year.
Net cash flow from	4,779	3,765	26.93	-
operating activities
Net cash flow from investing	-1,280	-1,588	19.40	-
activities

INTERIM REPORT 2020 19

Report of the Board of Directors (Continued)

ANALYSIS OF PRINCIPAL BUSINESSES
1. Overview

				Unit: RMB million
		Corresponding	Year-on-year

	The Reporting	period of the	increase/
Item	Period	previous year	decrease	Reasons for the changes
			(%)
Net cash flow from	-417	-2,550	83.65	Net cash outflow from financing activities decreased
financing activities				by RMB2,133 million as compared with the
				corresponding period of the previous year, mainly
				because (i) the cash payment for repayment
				of debts decreased by RMB1,297 million as
				compared with the corresponding period of the
				previous year; (ii) the cash payment for dividend
				and profit distribution and interest payment
				decreased by RMB1,082 million as compared with
				the corresponding period of the previous year.
Net increase of cash and	3,082	-373	926.27	Net increase of cash and cash equivalents increased
cash equivalents				by RMB3,455 million as compared with the
				corresponding period of the previous year, mainly
				because (i) the net cash inflow from operating
				activities increased by RMB1,014 million as
				compared with the corresponding period of
				the previous year; (ii) the net cash outflow from
				investing activities decreased by RMB308 million
				as compared with the corresponding period of
				the previous year; (iii) the net cash outflow from
				financing activities decreased by RMB2,133 million
				as compared with the corresponding period of the
				previous year.

2. Whether there is any significant change in profit composition or sources of profit of the Company during the Reporting Period

During the Reporting Period, there was no significant change in profit composition or sources of profit of the Company.

20 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

ANALYSIS OF PRINCIPAL BUSINESSES (CONTINUED)
3. Composition of the principal businesses
Principal businesses of the Group by industry and product

					Unit: RMB million
				Increase/	Increase/	Increase/
				decrease in	decrease in	decrease in
				operating	operating	gross profit
				income as	costs as	margin as
				compared	compared	compared
				with the	with the	with the
				corresponding	corresponding	corresponding
	Operating	Operating	Gross profit	period of the	period of the	period of the
	income	costs	margin	previous year	previous year	previous year
						(percentage
			(%)	(%)	(%)	point)

By industry
Steel pressing and processing
industry	44,482	40,587	8.76	-12.45	-11.24	-1.24
By product
Hot-rolled sheets products	13,207	11,529	12.71	-14.17	-12.27	-1.88
Cold-rolled sheets products	14,475	13,482	6.86	-11.52	-10.67	-0.88
Medium-thick plates	7,504	6,770	9.78	-10.83	-11.31	0.49
By geographical location
China	42,855	39,053	8.87	-8.93	-7.39	-1.51
Export sales	1,627	1,534	5.72	-56.60	-56.84	0.51

Note:

The operating income of full range of products decreased as compared with the corresponding period of the previous year, primarily due to the decline in sales volume and product prices. The operating costs of full range of products decreased as compared with the corresponding period of the previous year, primarily due to the decline in sales volume and unit costs.

INTERIM REPORT 2020 21

Report of the Board of Directors (Continued)

ANALYSIS OF PRINCIPAL BUSINESSES (CONTINUED)
1. Liquidity and financial resources
  As at 30 June 2020, the Group had long-term loans (exclusive of loans due within one year) of RMB3,988 million with interest rates ranging from 2.82% to 5.225% per annum and terms ranging from 3 to 7 years. These loans, falling due in 2023, are mainly used for replenishing the working capital of the Group. The Group's long-term loans due within one year amounted to RMB1,303 million.
  With good credit standing, the Group was reviewed and assigned a long-term credit rating of "AAA" by the rating committee of China Chengxin International Credit Rating Co., Ltd. in 2020. The Group is able to repay its debts as they fall due.
  As at 30 June 2020, the Group had a total capital commitment of RMB2,305 million, which was primarily attributable to the investment contracts of RMB14 million entered into but not yet performed or partially performed and construction and renovation contracts of RMB2,291 million entered into but not yet performed or partially performed.
2. Foreign exchange risk
  The Group carries out import and export through agent trade by Angang International Trade for its main foreign currency transactions, including the export of sales products, import of raw materials for production and engineering equipment. Foreign currency risk is mainly reflected in the impact of exchange rate changes when settling through agent on sales and procurement costs.
  The Group has issued H-share convertible bonds in an aggregate amount of HK$1.85 billion, which exposed the Group to foreign exchange risk arising from the exchange rate fluctuations of RMB against HKD upon redemption of such bonds that were not converted.

22 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

ANALYSIS OF NON-PRINCIPAL BUSINESSES

			Unit: RMB million
		As a
		percentage
		of total		Sustainable
	Amount	profit	Reasons	or not
		(%)

Investment income	88	14.24	Mainly included income from long-term	Yes
			equity investments accounted for
			using equity method and dividend
			income from other equity instrument
			investments during the holding
			period.
Asset impairment	-156	-25.24	Mainly due to the impairment provision	No
losses			for inventories.

INTERIM REPORT 2020 23

Report of the Board of Directors (Continued)

IV. ASSETS AND LIABILITIES

1. Significant changes in composition of assets

					Unit: RMB million
		31 December 2019
	30 June 2020
		As a		As a	Increase/
		percentage		percentage	decrease	Explanation
		of total		of total	(percentage	for significant
	Amount	assets	Amount	assets	point)	changes
		(%)		(%)
Monetary capital	7,753	8.63	4,671	5.32	3.31	-
Notes receivable	227	0.25	2,635	3.00	-2.75	-
Accounts receivables	1,944	2.16	2,569	2.93	-0.77	-
Inventories	10,488	11.67	9,793	11.15	0.52	-
Long-term equity
investments	2,932	3.26	2,894	3.30	-0.04	-
Fixed assets	49,858	55.50	50,966	58.04	-2.54	-
Construction in
progress	2,002	2.23	1,549	1.76	0.47	-
Short-term loans	11,855	13.20	12,195	13.89	-0.69	-
Long-term loans	3,988	4.44	3,392	3.86	0.58	-

24 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

IV. ASSETS AND LIABILITIES (CONTINUED)

2. Assets and liabilities measured at fair value

						Unit: RMB million
			Gains or

			losses
			arising from
			changes in	Changes in	Impairment
			fair value	fair value	provision	Purchases	Disposals
		Opening	for the	reported in	made for	during the	during the	Closing
Item	balance	period	equity	the period	period	period	balance
Financial assets
Including:
1.	Financial assets held
	for trading (excluding
	derivative financial assets)	38	-12	-	-	-	-	26
2.	Derivative financial assets	0	2	-	-	-	-	2
3.	Other debt investment	-	-	-	-	-	-	-
4.	Other equity instrument
	investments	465	-	-355	-	-	-	483
Sub-total of financial assets	503	-10	-355	-	-	-	511
Investment properties	-	-	-	-	-	-	-
Productive biological assets	-	-	-	-	-	-	-
Others	-	-	-	-	-	-	-
Total	503	-10	-355	-	-	-	511
Derivative financial liabilities	0	-	-	-	-	-	0

Material changes in measurement of major assets during the Reporting Period

Yes

✓ No

INTERIM REPORT 2020 25

Report of the Board of Directors (Continued)

IV. ASSETS AND LIABILITIES (CONTINUED)

Gearing ratio
A s a t 3 0 J u n e 2 02 0 a n d 31 D e c e m b e r 20 1 9, t h e G r o u p 's equity-to-debt ratio was 1.41 times and 1.49 times, respectively.
Restrictions on assets as at the end of the Reporting Period
1. Notes receivable: The Group pledged notes receivable with a carrying amount of RMB17 million to banks in the period to secure notes payable of RMB17 million. The term of the pledge is from January 2020 to December 2020.
2. Receivable financing: The Group pledged notes receivable with a carrying amount of RMB80 million to banks in the period to secure notes payable of RMB80 million. The terms of the pledge of RMB9 million and RMB71 million are from June 2020 to September 2020 and from January 2020 to December 2020, respectively.
Contingent liabilities
As at 30 June 2020, the Group had no contingent liabilities.

26 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

WORK PLAN FOR THE SECOND HALF OF 2020

At present, the pandemic in the PRC is under control but the pandemic in other parts of the world is still spreading, which resulted in the global economy being in deep recession and economic globalization facing a countercurrent. As the China's macro policies to hedge against the impact of the pandemic were gradually rolled out, especially the policies and measures relating to "six stabilities" and "six guarantees" gradually took effect, the domestic economic operation generally recovered and continued to improve. The downstream steel-using industries resumed the production and work in an orderly manner and accelerated the construction of major infrastructure projects, the supply and demand ends in the manufacturing industry continued to recover, and the consumer market continued to improve. Therefore, the "steel demand" increased significantly, and steel companies are undergoing a rare period of market opportunities. Faced with the complex and changeable internal and external environment, the Company will consistently strengthen party building, practice the concept of "intensification, reduction, intelligence @ customers", optimize spatial layout, product layout and industrial layout, and improve its abilities of efficiency improvement reform, cost reform, service leading, leading technology, intelligent production and ecological integration. It will also maintain strategic determination and seize favorable opportunities to ensure steady growth in operating efficiency.

Focusing on the Company's overall annual operating goals, the Company will primarily carry out the following work in the second half of the year:

Highlight strategic leading and optimize industrial layout.
Adhere to the innovation drives and accelerate intelligent production.
Strengthen refined management and control and improve quality and efficiency.
Monitor the reform implementation and release the vitality of development.

INTERIM REPORT 2020 27

Report of the Board of Directors (Continued)

WORK PLAN FOR THE SECOND HALF OF 2020 (CONTINUED)
1. Enhance brand building and expand market share.
2. Establish bottom-line thinking and enhance risk prevention.
3. Uphold the Party's leadership and strengthen party building.

VI. ANALYSIS OF INVESTMENTS

1.		Overview
	External investments
			Investments for
			the corresponding
		Investments for the	period of the
		Reporting Period	previous year	Change
		(RMB million)	(RMB million)	(%)

		119	70	70

2. Significant equity investments made during the Reporting Period

Applicable ✓ Not applicable

3. Significant non-equity investments being conducted during the Reporting Period

Applicable ✓ Not applicable

28 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

VI. ANALYSIS OF INVESTMENTS (CONTINUED)

4. Financial asset investments

Securities investments

Unit: RMB million

Gains or

Book value

losses on

Accumulative

Loss

at the

fair value

changes in

Purchase

Disposal

or gain

Book value

beginning

change for

fair value

amount for

during the

at the end

Stock

Initial

Accounting

of the

the current

reported in

the current

Reporting

of the

Accounting

Source of

Stock type Stock code

abbreviation

investment

measurements

period

equity

period

Period

period

item

funds

600961

Zhuye Group

Measured at fair

-12

Financial asset

Self-owned

(株冶集團)

value

held for trading

funds

Derivatives investments

Unit: RMB million

Name of the		Related		Initial
derivatives	Relationship	party	Type of	investment
investment	with the	transaction	derivatives	amount of	Date of	Date of
operator	Group	or not	investment	derivatives	commencement	termination

					Proportion
					of
					investments
					at the end
					of the
					period to
					net assets
					of the	Actual
Investments	Purchase	Disposal			Company at	profit
at the	amount	amount	Provision	Investments	the end	or loss
beginning	during the	during the	for	at the end	of the	during the
of the	Reporting	Reporting	impairment	of the	Reporting	Reporting
period	Period	Period	(if any)	period	Period	Period

Angang	None	No	Futures	1	29 April 2015	-	164	434	738	-	165	0.31%	3
Steel			hedging

Total				1	-	-	164	434	738	-	165	0.31%	3

INTERIM REPORT 2020 29

Report of the Board of Directors (Continued)

VI. ANALYSIS OF INVESTMENTS (CONTINUED)

4. Financial asset investments (Continued)

Derivatives investments (Continued)

Source of funds for derivative investments

Litigation case (if applicable)

Date of the announcement disclosing the approval of derivatives investment by the Board

Date of the announcement disclosing the approval of derivatives investment at shareholders' meeting

Self-owned funds

None

On 27 March 2020, the Resolution in Relation to the Company's 2020 Annual Hedging Business Amount was approved at the 21st meeting of the eighth session of the Board.

None

Risk analysis of positions in derivatives during the Reporting Period and explanations of risk control measures (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.)

Market risk exists when the position held by the Company is related to the steel products industry, which is highly relevant to spot commodity operated by the Company. Although the Company makes regular analysis and forecast on the market, the judgment on the market may be deviated, resulting in potential risk. However, the risk is controllable after futures hedging with spot commodities.
As the category of position held has sufficient liquidity, there is no liquidity risk.

30 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

VI. ANALYSIS OF INVESTMENTS (CONTINUED)

4. Financial asset investments (Continued)

Derivatives investments (Continued)

Changes in market price or fair value of derivatives invested during the Reporting Period, where specific methods and relevant assumptions and parameters used shall be disclosed in the analysis of derivatives' fair value

The Futures Exchange provides credit guarantee for the category of position held, thus the credit risk is minimal.
The Company carries out such business in strict compliance with the relevant requirements of hedging and total holding position and term are in line with the Company's approval.

The Company has performed evaluation of relevant legal risks. Business development is carried out in accordance with the laws and regulations of futures exchanges in the PRC, and thus, risks can be controlled.

Deformed bar, hot-rolled coil and nickel quoted on the Shanghai Futures Exchange; iron ore and coking coal quoted on the Dalian Commodity Exchange; on 2 January 2020, the consecutive dominant contract settlement prices of deformed bar, hot-rolled coil, nickel, iron ore and coking coal were RMB3,563/ ton, RMB3,587/ton, RMB111,060/ton, RMB655.5/ton and RMB1,173/ton, respectively; on 30 June 2020, the consecutive dominant contract settlement prices of deformed bar, hot-rolled coil, nickel, iron ore and coking coal were RMB3,568/ton, RMB3,583/ton, RMB102,610/ton, RMB744/ton and RMB1,177.5/ton, respectively. The changes in fair values of deformed bar, hot-rolled coil, nickel, iron ore and coking coal were +RMB5/ton, -RMB4/ton,-RMB8,450/ton, +RMB88.5/ton and +RMB4.5/ton, respectively.

INTERIM REPORT 2020 31

Report of the Board of Directors (Continued)

VI. ANALYSIS OF INVESTMENTS (CONTINUED)

4. Financial asset investments (Continued)

Derivatives investments (Continued)

Explanations of any significant	N/A
changes in the Company's
accounting policies and
specific accounting principles
on derivatives adopted during
the Reporting Period as
compared with those of the
last Reporting Period
Specific opinions of independent	(1)	The Company utilized self-owned capital
Directors on the derivatives		for the development of futures hedging
investment and risk control of		business under its assurance of its
the Company		normal production and operation, and
		performed related approval procedures in
		compliance with relevant requirements of
		the applicable laws and regulations and
		the Articles of Association of the Company,
		which was beneficial to the reduction of
		operating risks of the Company, without
		prejudice to the interest of the Company
		and the shareholders as a whole.
	(2)	T h e C o m p a n y e s t a b l i s h e d t h e
		Administrative Measures on Angang Steel
		Company Limited Commodity Futures
		Hedging, and clarified internal control

procedures such as the business operation procedures, approval process and risk prevention and control, thereby providing assurance for the Company's control of hedging-related risks.

32 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

VI. ANALYSIS OF INVESTMENTS (CONTINUED)

4. Financial asset investments (Continued)

Derivatives investments (Continued)
1. The Company confirmed that the maximum amount and the types of products for trading under the annual hedging guarantees were reasonable and in line with the actual situation of production and operation of the Company, and thus, favorable to the Company's reasonable control over trading risks.

VII. DISPOSAL OF SIGNIFICANT ASSETS AND EQUITY INTERESTS

1. Disposal of significant assets

Applicable ✓ Not applicable

2. Disposal of significant equity interests

	Applicable	✓ Not applicable
VIII. ANALYSIS OF MAJOR SUBSIDIARIES AND INVESTEES
							Unit: RMB million
Name of	Type of			Registered	Total		Operating	Operating
companies	companies	Principal activities		capital	assets	Net assets	income	profit	Net profit

Chaoyang Iron and	Limited Liability	Iron and steel smelting, steel	8,000	5,545	4,372	3,946	331	271
Steel	Company	pressing and processing and
		distribution of steel products
Angang Financial	Limited Liability	Deposit, lending and financing	4,000	26,779	7,299	455	392	295
Company	Company

INTERIM REPORT 2020 33

Report of the Board of Directors (Continued)

IX. STRUCTURED ENTITIES CONTROLLED BY THE COMPANY

Applicable ✓ Not applicable

RISKS FACED BY THE COMPANY AND COUNTERMEASURES THEREOF

In 2020, the Company is affected by multiple factors, such as the macroeconomic situation, the iron and steel industry environment and the Company's own reform and development, interwoven with COVID-19 pandemic, and the production and operation situation of the Company are extremely severe and complicated.

Risk posed by COVID-19 pandemic prevention and control
- Risk description
  In the first half of the year, the global spread of the COVID-19 pandemic has brought severe impact on the world economy and the Chinese economy. With a series of strong pandemic prevention and control measures taken by the Chinese government, the pandemic prevention and control in China has been effectively brought under control and economic and social development has gradually resumed. However, the overseas pandemic continuously prevails, and the international steel market demand continues to decline. Under the situation of repeated outbreak of COVID-19 pandemic in China, the Company still needs to strictly prevent and control the COVID-19 pandemic within the Company, otherwise it will affect the normal production and operation and cause economic losses and adverse effects to the Company.

34 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

RISKS AND FACED BY THE COMPANY COUNTERMEASURES THEREOF (CONTINUED)
1. Risk posed by COVID-19 pandemic prevention and control (Continued)
2. - Risk management solution
    The Company will establish a pandemic prevention and control system. A pandemic prevention and control headquarter has been set up to clarify the responsibilities of all departments for pandemic prevention and control. In respect of carrying out sanitation and anti-pandemic work, the Company will comprehensively strengthen efforts to prevent, disinfect and strictly prevent the spread of the pandemic and coordinate to manage and control key units and strengthen information collection and submission well. In addition, it will implement pandemic prevention and control measures at different levels, carry out a normalized pandemic prevention and control management mechanism and works with the guidance of public opinions. What's more, the Company will conduct extensive publicity of prevention and treatment knowledge, solve problems scientifically, improve staff awareness of pandemic prevention, strengthen training on the correct use of protective equipment and guide workers to intensify pandemic prevention and control. In respect of strengthening supervision and inspection, the Company will monitor, collaborate and guide the implementation of the pandemic prevention and control work well to ensure that all measures are put in place.

INTERIM REPORT 2020 35

Report of the Board of Directors (Continued)

RISKS AND FACED BY THE COMPANY COUNTERMEASURES THEREOF (CONTINUED)
1. Marketing risk
2. - Risk description
    The slowdown of investment growth in real estate and infrastructure and the drop or even decline of growth rate in the downstream steel-using industry resulted in a slowdown in steel demand. The centralized production of capacity replacement projects will bring supply pressure to the steel market, and steel prices will show a downward trend. As a result, the profits of steel companies have continued to narrow and market competition has become increasingly fierce. With the enhancement of international trade protection and trade barriers and the ongoing existence of uncertainties in international trade, the steel enterprises will face more international trade disputes, bringing many adverse effects on steel exports. In addition, as affected by the pandemic, customer demand decreased, liquidity was tight and market competition was more fierce, which caused increasing difficulties in contract organization.

36 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

RISKS AND FACED BY THE COMPANY COUNTERMEASURES THEREOF (CONTINUED)
1. Marketing risk (Continued)
2. - Risk management solution
    While continuously increasing the ratio of direct supply, the Group will give effect to its leading role in the industry, accelerates the development of new products according to the needs of the market and customers, strives to increase the market share of unique products, increase high-value-added products and high-end products, and strive to build Angang Steel to a high-quality,low-cost production base. The Group will make efforts to improve product quality to ensure a one- time pass rate of products; increase the speed of objection processing, optimize the process of objection processing, and increase customer satisfaction rate. The Group will also establishes a customer-centric service concept within the Group, which provides customers with efficient, high-quality and satisfactory services, guaranteed delivery time and improves customer stickiness while outputting products. The Group will establish a risk control and review team to evaluate customers, and at the same time use a third-party institution to evaluate customers' credit, establish and improve customer rating and customer service systems to further improve customer management. The Group will established overseas marketing service department, which is responsible for Angang Steel's overseas marketing planning and overseas technical service support, making full use of Angang International Trade's platform to expand overseas sales business, overall planning the market layout of special steel for the overseas market, expanding channels, and enhancing marketing capabilities in overseas markets.

INTERIM REPORT 2020 37

Report of the Board of Directors (Continued)

RISKS AND FACED BY THE COMPANY COUNTERMEASURES THEREOF (CONTINUED)
1. Safety and fire protection risk
2. - Risk description
    The new version of the Safety Production Law is about to be promulgated and the Regulations on Safety Administration of Dangerous Chemicals will be implemented soon, which shows the government's intensified efforts in the supervision and management of enterprises' safety production and occupational health, as well as the imposition of relevant penalties. Where measures of the safety production are not in place, and responsibilities are not fulfilled, various potential accidents and safety risks would occur in an intertwined and superposed way during the process of production and maintenance, which may cause production safety accidents and further results in economic losses to and adverse impacts on the enterprises.

Risk management solution
While intensifying the promotion and implementation of the Safety Production Law, the Regulations on Safety Administration of Dangerous Chemicals and other laws and regulations, the Group will investigate and identify the non- conformities one by one according to the new requirements, and implement rectifications on the problems identified. We will strictly implement the dual responsibilities of prevention and management, including management and control of safety risks at different levels, and identification and management of hidden dangers, strengthen safety management of projects and implement management responsibility for regional safety in accordance with the grid management requirements, so as to control and remove safety risks and hidden dangers and curb the occurrence of all kinds of accidents.

38 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

XI. EMPLOYEES

Staff composition as at 30 June 2020 is set out as follows:

Number of current employees in the Company (person)	28,826
Number of current employees in major subsidiaries
(person)	4,638
Total number of current employees (person)	33,464
Total number of employees receiving remuneration
during the period (person)	33,464
Number of ex-employees or retired employees for
which the Company and the major subsidiaries have
obligations (person)	0
Specialty composition
Category of specialty composition	Number of people
	(person)

Production	23,672
Sales	321
Technical	2,949
Finance	245
Administration	2,357
Others	3,920

Total	33,464

INTERIM REPORT 2020 39

Report of the Board of Directors (Continued)

XI. EMPLOYEES (CONTINUED)

	Education level
Category of education level	Number of people
	(person)
Bachelor's degree and above	9,379
Post-secondary	9,489
Technical secondary school	13,189
Others	1,407

Total	33,464

In the first half of the year, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, aimed at Angang Steel's overall work deployment for 2020, and led by the target of cultivating technology leading talents and a core team in the industry, the Company made great efforts to strengthen the training results and give full play to the training efficiency. Focusing on the development concept of innovation, information and intelligence, the Company made use of the opportunity of human resources optimization and formulated new ideas for training work with production and operation as its center. We speeded up the promotion of systematic, modular and precise education and training, deepened the implementation of technological talents training and further conducted lean management and training, so as to increasingly improve the occupational quality of the employee team and facilitate the transformation and upgrading of the Company. Affected by COVID-19, the number of training programs in the first half of 2020 declined. As at the end of June 2020, the attendance of the annual special training of the Company was 8,928 in 649 programs of 21 categories; 10,792 primary employees received training for job knowledge and skills in 1,128 programs; and the attendance of employees holding the work permits for special operations for safety qualification training was 3,107. The planned training targets were achieved.

40 ANGANG STEEL COMPANY LIMITED

Report of the Board of Directors (Continued)

XI. EMPLOYEES (CONTINUED)

The Company has adopted position-and-performance based salary and risk- linked annual remuneration packages for senior management; position-and- performance based remuneration and new product development incentive packages for research personnel; sales/profit-linked remuneration package for sales personnel; and position-and-performance based remuneration packages for other personnel.

XII. PURCHASE, SALE OR REDEMPTION OF LISTED SHARES OF THE COMPANY

During the six months ended 30 June 2020, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's shares.

XIII. SECURITIES TRANSACTIONS BY DIRECTORS

The Board has adopted the relevant code for directors' securities transactions for the purpose of complying with the Hong Kong Listing Rules. In response to the Company's specific enquiries with all Directors, the Directors have confirmed that they have complied with the standards set out in Appendix 10 to the Hong Kong Listing Rules throughout the Reporting Period.

XIV. INDEPENDENT NON-EXECUTIVE DIRECTORS

Throughout the Reporting Period, the Board had been in compliance with Rule 3.10(1) of the Hong Kong Listing Rules, which requires a company to maintain at least three independent non-executive directors, and Rule 3.10(2) of the Hong Kong Listing Rules, which requires one of the independent non-executive directors to possess professional qualifications or accounting or related financial management expertise.

INTERIM REPORT 2020 41

Report of the Board of Directors (Continued)

XV. AUDIT COMMITTEE

The Company has established an audit committee (the "Audit Committee") in compliance with Rule 3.21 of the Hong Kong Listing Rules.

The Audit Committee and the management have reviewed the accounting standards, principles and measurements adopted by the Company, and considered the related audit, internal control and the unaudited interim financial report for the six months ended 30 June 2020.

XVI. CHAPTER 13 DISCLOSURE OF THE HONG KONG LISTING RULES

The Directors confirmed that there was no matter occurring for the six months ended 30 June 2020 which would have given rise to a disclosure requirement under Rules 13.13 to 13.19 of the Hong Kong Listing Rules. The Company's controlling shareholder did not pledge any of its shares in the Company to secure any debts, guarantees or other support of obligations of the Company, nor did the Company sign loan agreements imposing specific performance obligations on the controlling shareholders.

XVII. SUFFICIENT PUBLIC FLOAT

According to the information that is publicly available to the Company and within the knowledge of the Directors, the Company had been maintaining sufficient public float as required by the Hong Kong Listing Rules during the six months ended 30 June 2020.

42 ANGANG STEEL COMPANY LIMITED

Significant Matters

INFORMATION ON THE ANNUAL GENERAL MEETINGS AND EXTRAORDINARY GENERAL MEETINGS HELD IN THE REPORTING PERIOD
1. General meetings held in the Reporting Period

		Proportion
	Type of	of investors	Date of
Session of Meeting	Meeting	involvement	convening

The 2020 first	Extraordinary	58.27%	16	March 2020
extraordinary	general meeting
general meeting
2019 annual general	Annual general	56.81%	28	May 2020
meeting	meeting

PROPOSALS OF PROFIT DISTRIBUTION AND TRANSFER OF RESERVE TO SHARE CAPITAL DURING THE REPORTING PERIOD

The Company proposed not to distribute cash dividends, issue bonus shares or transfer reserve to share capital for the interim period.

INTERIM REPORT 2020 43

LIMITED COMPANY STEEL ANGANG 44

THE UNDERTAKINGS PERFORMED BY DE FACTO CONTROLLERS, SHAREHOLDERS, CONNECTED PARTIES, OFFERORS AND THE COMPANY DURING THE REPORTING PERIOD AS WELL AS THE UNDERTAKINGS THAT THEY HAVE NOT YET PERFORMED AS AT THE END OF THE REPORTING PERIOD

Reason for	Undertaking	Type of			Date of	Period of	Performance of
Undertaking	Party	Undertaking	Details of Undertaking	Undertaking	Undertaking	Undertaking

Undertaking	Angang	Non-competition	The Non-competition Undertaking Letter of Anshan Iron & Steel Group Complex《鞍山鋼鐵集團公司避免同業競	20 May 2007	Indefinite	There was
made	Holding	undertakings	爭承諾函》:			no breach
during the			(1)	Angang Holding and its wholly-owned and controlled subsidiaries have complied with relevant			of such
restructuring				requirements of the state on the non-competition.			undertaking
of assets			(2)	Angang Holding and its wholly-owned and controlled subsidiaries have never engaged in any business
				which directly or indirectly competes with the iron and steel business, the principal business of the
				Company.
			(3)	Angang Holding undertakes that the Company is entitled to the pre-emptive rights for the assets and
				business to be disposed by Angang Holding or the wholly-owned and controlled subsidiaries of Angang
				Holding under the same conditions, which are related to the iron and steel business of the Company.
			(4)	If the enterprises in which Angang Holding holds equity interests produce products or engage in
				business which compete or may compete with the Company, Angang Holding undertakes that, at the
				request of the Company, it will transfer all the capital contribution, shares or equity interests it holds in
				such companies and grant the Company preemptive rights for such capital contribution, shares or equity
				interests under the same conditions.

(Continued) Matters Significant

THE UNDERTAKINGS PERFORMED BY DE FACTO CONTROLLERS, SHAREHOLDERS, CONNECTED PARTIES, OFFERORS AND THE COMPANY DURING THE REPORTING PERIOD AS WELL AS THE UNDERTAKINGS THAT THEY HAVE NOT YET PERFORMED AS AT THE END OF THE REPORTING PERIOD (CONTINUED)

	Reason for	Undertaking	Type of			Date of	Period of	Performance of
	Undertaking	Party	Undertaking	Details of Undertaking	Undertaking	Undertaking	Undertaking

				(5)	If Angang Holding and its wholly-owned and controlled subsidiaries have assets and business which
					compete or may compete with the Company, when the Company proposes to purchase such assets and
					business, Angang Holding and its wholly-owned and controlled subsidiaries will transfer relevant assets
					and business to the Company with priority based on reasonable prices and conditions according to the
					processes required by laws.
				(6)	During the effective period of the undertakings, on the premise of equal investment qualifications,
					Angang Holding shall inform the Company first of the opportunity of new business.
					If the Company accepts such opportunity of new business, Angang Holding shall transfer such new
					business to the Company for free. Angang Holding and its wholly-owned and controlled subsidiaries
					have the rights to invest in the new business only if the Company expressly refuses such opportunity.
					If the Company proposes to acquire such business in the future, Angang Holding and its wholly-owned
					and controlled subsidiaries still need to transfer the assets and business formed by such opportunities
2020 REPORT INTERIM					to the Company with priority based on reasonable prices and conditions.

(Continued) Matters Significant

LIMITED COMPANY STEEL ANGANG 46

THE UNDERTAKINGS PERFORMED BY DE FACTO CONTROLLERS, SHAREHOLDERS, CONNECTED PARTIES, OFFERORS AND THE COMPANY DURING THE REPORTING PERIOD AS WELL AS THE UNDERTAKINGS THAT THEY HAVE NOT YET PERFORMED AS AT THE END OF THE REPORTING PERIOD (CONTINUED)

Reason for	Undertaking	Type of		Date of	Period of	Performance of
Undertaking	Party	Undertaking	Details of Undertaking	Undertaking	Undertaking	Undertaking

Other effective measures to avoid and eliminate horizontal competition.

The above undertakings do not limit the business of Angang Holding and its wholly-owned and controlled subsidiaries which do not compete with the Company, especially the business of provision of required materials or services necessary for the operation of the Company.

All the undertakings made by Angang Holding are based on the national requirements and subject to the adjustments according to the national requirements. Angang Holding is eligible to engage in business not prohibited by the state. Such undertakings became effective from the date of issuance, and shall be terminated once one of following conditions occurs:

Angang Holding ceases to be the controlling shareholder of the Company;
The shares of the Company cease to be listed on any stock exchanges (except for temporary suspension of trading of the shares of the Company due to any reason);
When the state does not require the contents of certain undertakings, relevant section shall be terminated automatically.

Considering that Angang Holding does not have any iron and steel production projects already put into production which compete with the Company, therefore, the undertakings made in the undertaking letter shall prevail if any inconsistencies occur between such undertakings and all the undertakings made by Angang Holding concerning the competitions with the Company before the date of the issuance of the undertaking letter.

Whether the	Yes
commitment

are fulfilled on time

(Continued) Matters Significant

IV. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM

Significant Matters (Continued)

This interim report of the Company is unaudited.

EXPLANATION OF CHANGES IN ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND ACCOUNTING METHOD OF THE GROUP DURING THE REPORTING PERIOD AS COMPARED WITH THE FINANCIAL REPORT OF THE PREVIOUS YEAR
1. Changes in accounting policies
  There was no change in accounting policies of the Group during the Reporting Period.
2. Changes of accounting estimates

There was no change in accounting estimates of the Group during the Reporting Period.

VI. MATTERS RELATING TO INSOLVENCY AND RESTRUCTURING

There was no matter relating to insolvency and restructuring during the Reporting Period.

VII. LITIGATION

INTERIM REPORT 2020 47

Significant Matters (Continued)

The Company was not involved in any material litigation and arbitration during the Reporting Period.

Other litigations

Basic	Amount			Results of trial	Execution of
information of	involved	Whether caused		of litigation	judgment of
the litigation	in the	estimated	Progress of the litigation	(arbitration) and	the litigation	Disclosure	Disclosure
(arbitration)	Litigation	liabilities or not	(arbitration)	effects thereof	(arbitration)	date	index
	(RMB'0,000)

Non-material	122,695	-	Case built, and some of	Cases in court	-	-	-
proceedings			the cases are in court	all win in the first
				instance
Non-material	6,428	-	In trial	-	-	-	-
response to
proceedings

Note: The non-material proceedings were mainly the actions brought by the Company against certain financial companies and related liable entities on overdue bank acceptance bills.

VIII. MATTERS RELATED TO MEDIA SKEPTICISM

48 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

During the Reporting Period, the Company had no matters related to widespread media skepticism.

IX. PENALTY AND RECTIFICATIONS

The Company has not been subject to any material penalty and rectification during the Reporting Period.

CREDIBILITY OF THE COMPANY, ITS CONTROLLING SHAREHOLDERS AND DE FACTO CONTROLLERS

Applicable

✓ Not applicable

XI. IMPLEMENTATION OF THE SHARE-BASED INCENTIVES, EMPLOYEE STOCK OWNERSHIP SCHEME AND OTHER EMPLOYEE INCENTIVE MEASURES OF THE COMPANY

Applicable

✓ Not applicable

XII. MAJOR CONNECTED TRANSACTIONS

INTERIM REPORT 2020 49

Significant Matters (Continued)

The connected transactions set out below fall within the definition relating to "Connected Transaction" or "Continuing Connected Transaction" under Chapter 14A of the Hong Kong Listing Rules. Relevant connected transactions have complied with the disclosure requirements under Chapter 14A of the Hong Kong Listing Rules.

1. Connected transactions related to daily operations

							As a
				Pricing			percentage				Market
						of the		Whether	Settlement	price of
		Type of	Content of	principle of	Connected	Connected	amount		exceeding	method of	available
Connected	Connected	connected	connected	connected	transaction	transaction	of similar	Transaction	approved	connected	similar
party	relationship	transaction	transaction	transaction	price	amount	transactions	cap	cap	transactions	transactions
						(RMB		(RMB
						million)	(%)	million)

Angang Holding	Controlling	Purchase	Purchase main	Market	-	3,383	17.01	27,336	No	In cash	-
	shareholder	goods/	materials	principle
		Receive
		services
Angang Group	Controlled by	Purchase	Purchase main	Market	-	1,623	8.16			In cash	-
Mining	the same	goods/	materials	principle
Gongchangling	controlling	Receive
Co., Ltd.	shareholder	services
Angang Mining Co.,	Controlled by	Purchase	Purchase main	Market	-	1,189	5.98			In cash	-
Ltd.	the same	goods/	materials	principle
	controlling	Receive
	shareholder	services
Angang International	Controlled by	Purchase	Purchase main	Market	-	859	4.32			In cash	-
Trade	the same	goods/	materials	principle
	controlling	Receive
	shareholder	services
Angang Group	Controlled by	Purchase	Purchase main	Market	-	758	3.81			In cash	-
Anqian Mining	the same	goods/	materials	principle
Company	controlling	Receive
Limited	shareholder	services
Shanxi Wuchan	Controlled by	Purchase	Purchase main	Market	-	742	3.73			In cash	-
International	the same	goods/	materials	principle
Energy Co., Ltd.	controlling	Receive
(山西物產國際能	shareholder	services
源有限公司)
Angang Group	Controlled by	Purchase	Purchase main	Market	-	604	3.04			In cash	-
Guanbaoshan	the same	goods/	materials	principle
Mining Co. Ltd.	controlling	Receive
	shareholder	services
Other subsidiaries of	Controlled by	Purchase	Purchase main	Market	-	550	2.77			In cash	-
Angang Group	the same	goods/	materials	principle
	controlling	Receive
	shareholder	services
Sub-total	-	-	Purchase main	-	-	9,708	48.83			-	-
			materials

50 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XII. MAJOR CONNECTED TRANSACTIONS (CONTINUED)

1. Connected transactions related to daily operations (Continued)

							As a
				Pricing			percentage				Market
						of the		Whether	Settlement	price of
		Type of	Content of	principle of	Connected	Connected	amount		exceeding	method of	available
Connected	Connected	connected	connected	connected	transaction	transaction	of similar	Transaction	approved	connected	similar
party	relationship	transaction	transaction	transaction	price	amount	transactions	cap	cap	transactions	transactions
						(RMB		(RMB
						million)	(%)	million)

Anshan Steel	Controlled by	Purchase	Purchase auxiliary	Market	-	391	6.99	3,569	No	In cash	-
Metallurgy Lucai	the same	goods/	materials	principle
Technology Co.,	controlling	Receive
Ltd. (鞍山鋼鐵冶	shareholder	services
金爐材科技有限公
司)
Angang Naihuo Co.,	Controlled by	Purchase	Purchase auxiliary	Market	-	302	5.40			In cash	-
Ltd.	the same	goods/	materials	principle
	controlling	Receive
	shareholder	services
Other subsidiaries of	Controlled by	Purchase	Purchase auxiliary	Market	-	474	8.48			In cash	-
Angang Group	the same	goods/	materials	principle
	controlling	Receive
	shareholder	services
Sub-total	-	-	Purchase auxiliary	-	-	1,167	20.87			-	-
			materials
Angang Holding	Controlling	Purchase	Procurement of	Market	-	714	35.88	1,950	No	In cash	-
	shareholder	goods/	energy and power	principle
		Receive
		services
Other subsidiaries of	Controlled by	Purchase	Procurement of	Market	-	21	1.06			In cash	-
Angang Group	the same	goods/	energy and power	principle
	controlling	Receive
	shareholder	services
Sub-total	-	-	Procurement of	-	-	735	36.93			-	-
			energy and power

INTERIM REPORT 2020 51

Significant Matters (Continued)

XII. MAJOR CONNECTED TRANSACTIONS (CONTINUED)

1. Connected transactions related to daily operations (Continued)

							As a
				Pricing			percentage				Market
						of the		Whether	Settlement	price of
		Type of	Content of	principle of	Connected	Connected	amount		exceeding	method of	available
Connected	Connected	connected	connected	connected	transaction	transaction	of similar	Transaction	approved	connected	similar
party	relationship	transaction	transaction	transaction	price	amount	transactions	cap	cap	transactions	transactions
						(RMB		(RMB
						million)	(%)	million)

Delin Land Ports	Controlled by	Purchase	Receive supporting	Market	-	964	18.32	6,341	No	In cash	-
(Anshan) Co.,	the same	goods/	services	principle
Ltd.	controlling	Receive
	shareholder	services
Angang Holding	Controlling	Purchase	Receive supporting	Market	-	369	7.01			In cash	-
	shareholder	goods/	services	principle
		Receive
		services
Angang Cold Rolled	Controlled by	Purchase	Receive supporting	Market	-	240	4.56			In cash	-
Steel Plate Co.,	the same	goods/	services	principle
Ltd. (Putian)	controlling	Receive
	shareholder	services
Angang Construction	Controlled by	Purchase	Receive supporting	Market	-	230	4.37			In cash	-
Group Co., Ltd.	the same	goods/	services	principle
	controlling	Receive
	shareholder	services
Angang Auto	Controlled by	Purchase	Receive supporting	Market	-	173	3.29			In cash	-
Transport Co.,	the same	goods/	services	principle
Ltd	controlling	Receive
	shareholder	services
Angang Group	Controlled by	Purchase	Receive supporting	Market	-	157	2.98			In cash	-
Engineering	the same	goods/	services	principle
Technology Co.,	controlling	Receive
Ltd.	shareholder	services
Angang Group	Controlled by	Purchase	Receive supporting	Market	-	151	2.87			In cash	-
Energy-saving	the same	goods/	services	principle
Technology	controlling	Receive
Service Co., Ltd	shareholder	services
(鞍鋼集團節能技
術服務有限公司)
Other subsidiaries of	Controlled by	Purchase	Receive supporting	Market	-	790	15.01			In cash	-
Angang Group	the same	goods/	services	principle
	controlling	Receive
	shareholder	services
Sub-total	-	-	Receive supporting	-	-	3,074	58.42			-	-
			services

52 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XII. MAJOR CONNECTED TRANSACTIONS (CONTINUED)

1. Connected transactions related to daily operations (Continued)

							As a
				Pricing			percentage				Market
						of the		Whether	Settlement	price of
		Type of	Content of	principle of	Connected	Connected	amount		exceeding	method of	available
Connected	Connected	connected	connected	connected	transaction	transaction	of similar	Transaction	approved	connected	similar
party	relationship	transaction	transaction	transaction	price	amount	transactions	cap	cap	transactions	transactions
						(RMB		(RMB
						million)	(%)	million)

Delin Land Ports	Controlled by	Sales of	Sales of products	Market	-	667	1.59	5,398	No	In cash	-
(Anshan) Co.,	the same	goods/		principle
Ltd.	controlling	Provide
	shareholder	services
Angang Green	Controlled by	Sales of	Sales of products	Market	-	221	0.53			In cash	-
Resources	the same	goods/		principle
Technology Co.,	controlling	Provide
Ltd.	shareholder	services
Other subsidiaries of	Controlled by	Sales of	Sales of products	Market	-	371	0.89			In cash	-
Angang Group	the same	goods/		principle
	controlling	Provide
	shareholder	services
Sub-total	-	-	Sales of products	-	-	1,259	3.01			-	-
Angang Group	Controlled by	Sales of	Sell scrap steel	Market	-	107	81.06	361	No	In cash	-
	the same	goods/	material and	principle
	controlling	Provide	abandoned
	shareholder	services	material
Sub-total	-	-	Sell scrap steel	-	-	107	81.06			-	-
			material and
			abandoned
			material
Angang Holding	Controlling	Sales of	Provide	Market	-	281	11.88	2,028	No	In cash	-
	shareholder	goods/	comprehensive	principle
		Provide	services
		services
Other subsidiaries of	Controlled by	Sales of	Provide	Market	-	106	4.48			In cash	-
Angang Group	the same	goods/	comprehensive	principle
	controlling	Provide	services
	shareholder	services
Sub-total	-	-	Provide	-	-	387	16.36			-	-
			comprehensive
			services

INTERIM REPORT 2020 53

Significant Matters (Continued)

XII. MAJOR CONNECTED TRANSACTIONS (CONTINUED)

1. Connected transactions related to daily operations (Continued)

							As a
				Pricing			percentage				Market
						of the		Whether	Settlement	price of
		Type of	Content of	principle of	Connected	Connected	amount		exceeding	method of	available
Connected	Connected	connected	connected	connected	transaction	transaction	of similar	Transaction	approved	connected	similar
party	relationship	transaction	transaction	transaction	price	amount	transactions	cap	cap	transactions	transactions
						(RMB		(RMB
						million)	(%)	million)

Angang Financial	Controlled by	Receive	Settle fund and	Market	-	16	69.57	50	No	In cash	-
Company	the same	finance	deposit interest	principle
	controlling	services
	shareholder
Angang Financial	Controlled by	Receive	Maximum daily	Market	-	3,500	-	3,500	No	-	-
Company	the same	finance	deposit balance	principle
	controlling	services
	shareholder
Angang Financial	Controlled by	Receive	Credit business	Market	-	2	0.43	250	No	In cash	-
Company	the same	finance	interest	principle
	controlling	services
	shareholder
Angang Financial	Controlled by	Receive	Entrusted loan	Market	-	50	100	2,000	No	In cash	-
Company	the same	finance		principle
	controlling	services
	shareholder
Angang Financial	Controlled by	Receive	Entrusted loan	Market	-	0	0	120	No	In cash	-
Company	the same	finance	interest	principle
	controlling	services
	shareholder

Particulars on refund of bulk sale

Estimated total amount for continuing connected transactions to be conducted during the period and their actual implementing during the Reporting Period

During the Reporting Period, the total amount of continuing connected transactions of the Company did not exceed the relevant caps applicable to such types as specified under the Continuing Connected Transaction Agreements which were approved at the general meeting and the estimated amount of various continuing connected transactions at the beginning of the year.

Reason for the large difference between transaction price and market	-
reference price
Relevant explanation on connected transactions	As production in the iron and steel industry is on a continuous basis, Angang Group has been engaged in mining,
	supplying, processing and manufacturing of raw materials, auxiliary materials and energy and power, which is
	a part of the supply chain of the Company. In the meantime, its subsidiaries have a high technological level and
	service capabilities, which can provide necessary support services for production and operation of the Company.
	The Company would sell certain products, abandoned steel, abandoned materials and integrated services to
	Angang Group which is a client of the Company

54 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XII. MAJOR CONNECTED TRANSACTIONS (CONTINUED)

Connected transactions in relation to asset or equity acquisition or disposal

There was no connected transaction in relation to acquisition or disposal of assets or equity during the Reporting Period.

Connected transactions in relation to joint external investments Unit: RMB million

			Principal	Registered	Total	Net assets	Net profit
	Connected		business of	capital of	assets of	of the	of the
Joint parties	relationship	Investee	the investee	the investee	the investee	investee	investee

Angang Holding	Controlling	Delin	E-commerce; online	60	75	61	1
	shareholder	Zhilian	sales of steel and
			iron and supply
			chain finance, etc.
Progress of significant	-
projects under
construction of the
investee (if any)

4. Debts and obligations due from/owed to connected parties

During the Reporting Period, the Company did not have any debts and obligations due from/owed to connected parties incurred from non- operating activities.

INTERIM REPORT 2020 55

Significant Matters (Continued)

XIII. USE OF THE CAPITAL OF THE LISTED COMPANY BY THE CONTROLLING SHAREHOLDER AND ITS CONNECTED PARTIES FOR NON-OPERATING PURPOSES

During the Reporting Period, neither the controlling shareholder nor its connected parties used the capital of the Company for non-operating purposes.

XIV. MATERIAL CONTRACTS AND THEIR PERFORMANCE

1. Entrustment, contracting and leasing matters

Entrustment
The Company and Angang Holding entered into the Asset and Business Entrustment and Management Service Agreement approved at the general meeting of the Company, which is the specific agreement for execution under the approved Supply of Materials and Services Agreement (2019-2021). Pursuant to the Asset and Business Entrustment and Management Service Agreement, Angang Holding authorized the Company to conduct daily operation and management over the assets, businesses, future assets and business expansion of its unlisted controlled subsidiaries.
During the Reporting Period, there was no entrusted project which generated profit of more than 10% of the gross profit of the Company for the Reporting Period.
Contracting
There was no contractual arrangement during the Reporting Period.

56 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XIV. MATERIAL CONTRACTS AND THEIR PERFORMANCE (CONTINUED)

Entrustment, contracting and leasing matters (Continued)
1. Leasing
  The Company used certain land assets of Angang Holding and its subsidiaries for its production and operation. Pursuant to the Land Lease Agreements entered into between the Company and relevant parties, the Company paid a land leasehold payment with reference to the market rates to Angang Holding and its subsidiaries, representing a total amount of RMB35 million in the first half of 2020.
  During the Reporting Period, there was no lease which generated profit of more than 10% of the gross profit of the Company for the Reporting Period.
During the Reporting Period, there was no guarantee provided by the Company, nor was there any guarantee subsisting during the Reporting Period.
The Company did not enter into any other material agreement during the Reporting Period.

INTERIM REPORT 2020 57

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES

1. Material matters regarding environmental protection

	Major pollutant					Pollutant	Total	Total
	and			Location of		discharge	discharge	discharge
Company or	particular	Discharge	Discharge	discharge	Emission	standard	amount	amount	Excess
subsidiary	pollutant	manner	outlet	outlets	concentration	adopted	(tonnes)	approved	discharge
Angang Steel	COD	Standard discharge	3	Main outlet	〈50mg/L	50mg/L	44.5	not assessed	Nil
(including Angang		of wastewater after						by the
Steel Anshan		treatment						government
plant, Bayuquan	Ammoniacal	Standard discharge	3	Main outlet	〈5mg/L	5mg/L	2.19		Nil
Iron & Steel	nitrogen	of wastewater after
Branch Company,		treatment
and Chaoyang	Particulates	Standard discharge	540	Coking	〈30mg/m3	30mg/m3	5,849.7		Nil
Iron and Steel)		of exhaust gas after		Iron making	〈50mg/m3	50mg/m3
		treatment		Steel making	〈20mg/m3	20mg/m3
				Steel rolling	〈30mg/m3	30mg/m3
	Sulphur dioxide	Standard discharge	201	Coking	〈50mg/m3	50mg/m3	4,779.2		Nil
		of exhaust gas after		Sintering	〈200mg/m3	200mg/m3
		treatment		Steel rolling	〈150mg/m3	150mg/m3
	Nitrogen oxides	Standard discharge	170	Coking	〈500mg/m3	500mg/m3	12,696.1		Nil
		of exhaust gas after		Sintering	〈300mg/m3	300mg/m3
		treatment		Steel rolling	〈200mg/m3	200mg/m3

58 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

1. Material matters regarding environmental protection (Continued)

Suggestions on and operation of pollution prevention facilities
In the first half of 2020, Angang Steel invested a total of RMB15.11 million in the commencement and implementation of 6 environmental protection and renovation projects. The existing environmental protection facilities were under stable operation and the exhaust gas was discharged in compliance with the standards. Wastewater from Chaoyang Iron and Steel and Bayuquan Iron & Steel Branch Company was discharged in compliance with the standard. Zero discharge of wastewater was achieved during non-rainy periods in Anshan plant.
Due to the long history of the Company's Anshan plant, large area of the main factory and complex terrain pipe network, flood control drainage was discharged through Xidagou wastewater discharge outlet during concentrated rainfall in flood season, which led to the risk that some indicators of external drainage pollutants would exceed the limits of comprehensive wastewater discharge standards in Liaoning Province.
Environmental impact assessment on construction projects and other environment protection administrative permits
The environmental impact assessment was carried out for all new construction projects of Angang Steel according to relevant regulations and all such projects were completely in line with the "three simultaneities" principle in respect of environmental protection. Angang Steel is in the process of changing its pollutant discharge permit according to the requirements of relevant laws and regulations on pollutant discharge permit.

INTERIM REPORT 2020 59

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

1. Material matters regarding environmental protection (Continued)

Emergency plans for environmental pollution accidents
Angang Steel appointed a third party to amend Emergency Plan for Environmental Pollution Accidents in compliance with the requirements of relevant laws and regulations, and completed the filing work with the environmental protection department of the government.
Environmental protection self-monitoring plan
Angang Steel has formulated an environmental monitoring plan and carried out monitoring in accordance with the requirements of relevant laws and regulations in respect of emission permits.
Other environmental information subject to disclosure
In the first half of 2020, as some indicators (pH, total nitrogen) of water pollutants in flood control drainage discharged from Xidagou wastewater outlet of Angang Steel had exceeded the limits of comprehensive wastewater discharge standards in Liaoning Province, Anshan Ecological Environment Bureau issued a decision on environmental protection administrative penalty to Angang Steel in June and July 2020, with fines of RMB200,000, RMB100,000 and RMB100,000 respectively. Angang Steel was working on the systematic rectification measures in order to completely solve the problem of excessive water pollutants in flood control drainage discharged from Xidagou wastewater outlet.

60 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation

Targeted poverty alleviation plans
Under the guidance of the General Secretary Xi Jinping's spirit regarding new-era socialism with Chinese characteristics, the Group has thoroughly studied and implemented the Party's 19th National Congress and the Party Central Committee and the State Council's strategic plan for poverty eradication. The unified requirements of Angang Group was followed, problem-driven improvement measures were focused, the principle of "external supports" and "internal efforts" were observed to achieve the combined aims of poverty alleviation, ambition cultivation and intelligence development, and the "Six Targeting" requirements were followed to appropriately carry out targeted poverty alleviation including livelihood poverty alleviation, industrial poverty alleviation, education poverty alleviation, medical poverty alleviation and talent support. The Group will fully leverage its resource advantages, mobilize various forces and make every effort to implement the targeted poverty alleviation throughout the whole process of poverty eradication, and help poverty alleviation targets successfully complete the poverty eradication goals.

INTERIM REPORT 2020 61

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Summary of targeted poverty alleviation during the first half of 2020
In the first half of the year, Angang Steel earnestly studied the spirit of the speech delivered by General Secretary Xi Jinping at the symposium on critical battle against poverty, stayed true to its original aspirations, kept in mind the mission, overcame the impact of COVID-19 epidemic, accurately facilitated poverty-alleviation work, and achieved remarkable results.

A n g a n g S t e e l c a r e f u l l y p l a n n e d a n d p r o m o t e d t h e implementation of poverty-alleviation projects in 2020. The Company has invested RMB14.7802 million as poverty alleviation funds in the first half of the year, comprising RMB14.4802 million for Ta County of Xinjiang Province, RMB300,000 for Shangtao Village of Chaoyang City. Through supporting and investing in the construction project of remote consultation platform of People's Hospital in Ta County, purchase of medical equipment, distance education project of township primary schools, agricultural planting and agricultural material procurement, yak breeding and yak meat processing projects, pairing support with Shangtao Village in respect of road construction, fruit tree planting and other specific projects, 16,599 impoverished households have benefited from our poverty alleviation work in relation to health care, industry, education and people's livelihood.

62 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Results of targeted poverty alleviation during the half year of 2020

					Number/
Indicator			Unit	progress

I.	Overview			-	-
	Including: 1.	Cash	RMB'0,000	1,478.02
	2. Supplies converted into cash	RMB'0,000	-
	3.	Number of archived
		impoverished
		population casting
		off poverty	Person	16,599
II.	Subentry			-	-
	1. Poverty alleviation through industrial
	development		-	-
	Including:	1.1	Type of industrial
			development projects
			for poverty alleviation	-	-
		1.2	Number of industrial
			development projects
			for poverty alleviation	Project	6
		1.3	Capital invested in
			industrial development
			projects for poverty
			alleviation	RMB'0,000	1,046.33
		1.4	Number of archived	Person	16,599
			impoverished
			population casting off
			poverty

INTERIM REPORT 2020 63

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Results of targeted poverty alleviation during the half year of 2019 (Continued)

				Number/
Indicator			Unit	progress

2. Poverty alleviation through allopatric
employment		-	-
Including:	2.1	Capital invested in	RMB'0,000	-
		occupational skill
		trainings
	2.2	People attending	Person	153
		occupational skill
		trainings
	2.3	Employment of	Person	24
		archived impoverished
		population
3. Poverty alleviation through resettlement	-	-
Including: Employment of relocated	Person	-
	households
4. Poverty alleviation through education	-	-
Including:	4.1	Capital contributed for	RMB'0,000	-
		aiding impoverished
		students
	4.2	Number of students	Person	-
		receiving financial aid
	4.3	Capital contributed for	RMB'0,000	147.69
		improving educational
		resources in poverty
		stricken areas

64 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Results of targeted poverty alleviation during the half year of 2019 (Continued)

				Number/
Indicator			Unit	progress

5. Poverty alleviation from the perspective of	-	-
hygiene
Including:	5.1	Capital invested in	RMB'0,000	282
		medical and health
		resources in poverty
		stricken areas
6. Poverty alleviation from the perspective of	-	-
ecological protection
Including:	6.1	Type of project	-	-
	6.2	Capital contributed	RMB'0,000	-
7. Bottomlined guarantee	-	-
Including:	7.1	Capital for "staybehind"	RMB'0,000	-
		children, elderly and
		women
	7.2	Number of "staybehind"	Person	-
		children, elderly and
		women getting help
	7.3	Capital for the disabled
		in difficulties	RMB'0,000	-
	7.4	Number of the disabled
		in difficulties getting
		help	Person	-

INTERIM REPORT 2020 65

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Results of targeted poverty alleviation during the half year of 2019 (Continued)

					Number/
Indicator			Unit	progress

8.	Social poverty alleviation	-	-
	Including:	8.1	Capital contributed for	RMB'0,000	-
			collaborative poverty
			alleviation in eastern
			and western regions
		8.2	Capital for targeted	RMB'0,000	-
			poverty alleviation
			work
		8.3	Capital donated to	RMB'0,000	-
			poverty alleviation-
			related charity funds
9.	Others			-	-
	Including:	9.1	Number of projects	Project	-
		9.2	Capital contributed	RMB'0,000	-
		9.3	Number of archived	Person	-
			impoverished
			population casting off
			poverty
III. Awards (nature and class)	-	-

66 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XV. SOCIAL RESPONSIBILITIES (CONTINUED)

2. Performance of Social Responsibility in Respect of Targeted Poverty Alleviation (Continued)

Follow-uptargeted poverty alleviation plans
In the second half of the year, Angang Steel will earnestly implement the spirit of the speech delivered by General Secretary Xi Jinping at the symposium on critical battle against poverty, and make its best efforts to alleviate poverty to ensure the successful completion of the targets of the poverty alleviation plan for the year.
The year 2020 is the closing year for building a well-off society in an all-round way. Angang Steel will earnestly implement the spirit of the important speech delivered by General Secretary Xi Jinping at the symposium on critical battle against poverty alleviation. We shall strengthen confidence and strive to advance poverty alleviation work with greater determination and efforts.

XVI. OTHER SIGNIFICANT MATTERS

Reference is made to the announcement dated 12 July 2018 of the Company in relation to the agreement regarding a connected transaction for subscription of new shares to be issued by An Steel International Co., Limited (the "Subscription Agreement"). Considering the unavailability of financing and the adjustment to the overall planning for the utilization of the relevant land, together with the significant changes in Indonesia's domestic market environment, the Indonesian partner of the project has indicated its intention not to proceed with the project, resulting in the failure of the fulfilling of the conditions precedent under the Subscription Agreement. After arm's length negotiations among the parties, on 28 August 2020 (after trading hours), the Company and An Steel entered into a termination agreement (the "Termination Agreement"), pursuant to which the parties thereto have agreed to terminate the Subscription Agreement.

Save for the above matters, there were no other significant matters need to be explained by the Group.

INTERIM REPORT 2020 67

Significant Matters (Continued)

XVII. CORPORATE GOVERNANCE OF THE COMPANY

In strict compliance with the requirements of the Company Law, the Securities Law, the relevant requirements of the China Securities Regulatory Commission (the "CSRC"), the Hong Kong Listing Rules, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange and the Corporate Governance Guideline of Listed Companies and other requirements, the Company has regulated its operations and established a comprehensive corporate governance system and an effective internal control system. There is no difference between the Company's corporate governance practice and the Company Law and the relevant requirements of the CSRC.

With shares listed in both Hong Kong and Shenzhen, the Company is committed to improving its corporate governance in accordance with international corporate governance standards. The Board and the management understand that they are responsible for establishing good corporate governance practices and procedures and the strict implementation of such practices and procedures, in order to protect the interests of the shareholders and to create return for the shareholders in the long term.

The Company has adopted the code provisions of the Corporate Governance Code (the "Code Provisions") set out in Appendix 14 to the Hong Kong Listing Rules as currently in force. The Company has reviewed its corporate governance practices from time to time. Save as set out below, the Company complied with all Code Provisions during the Reporting Period.

68 ANGANG STEEL COMPANY LIMITED

Significant Matters (Continued)

XVII. CORPORATE GOVERNANCE OF THE COMPANY (CONTINUED)

According to provision A.1.8 in Appendix 14 to the Hong Kong Listing Rules, "an issuer should arrange appropriate insurance cover in respect of legal action against its directors".
The Company did not arrange any insurance cover for its Directors in the first half of 2020.
In strict compliance with the requirements of the Company Law, the Securities Law, the relevant requirements of the CSRC, the Hong Kong Listing Rules, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange, and other regulations, the Company has regulated its operations and established a comprehensive corporate governance system and an effective internal control system, which has lowered the legal risks to the Directors. Therefore, no insurance arrangement has been made in respect of the Directors.
According to provision E.1.2 in Appendix 14 to the Hong Kong Listing Rules, "The chairman of the board should attend the annual general meeting".
The chairman of the Company, Mr. Wang Yidong, has not attended the annual general meeting of the Company in person due to corporate affairs, and appointed Mr. Li Zhen, the Director of the Company, to attend and preside over the meeting on his behalf.

INTERIM REPORT 2020 69

Movements in Share Capital and Shareholding of Substantial Shareholders

MOVEMENTS IN SHARES
1. Movements in Shares
As at 30 June 2020, the structure of share capital of the Company was as follows:

										Unit: Share
			Before the change		Increase/decrease during the period (+/-)		After the change
							Shares
							transferred
							from
					Issue of new	Bonus	accumulated
			Number	Percentage	shares	shares	fund	Others	Sub-total	Number	Percentage
				(%)							(%)
I.	Shares subject to trading moratorium	7,458	0.00	-	-	-	+1	+1	7,459	0.00
	1.	State-owned shares	-	-	-	-	-	-	-	-	-
	2.	State-owned legal person shares	-	-	-	-	-	-	-	-	-
	3.	Other domestic shares	-	-	-	-	-	-	-	-	-
		Including: shares held by domestic
		Legal persons	-	-	-	-	-	-	-	-	-
		shares held by domestic
		natural persons	7,458	0.00	-	-	-	+1	+1	7,459	0.00
	4.	Foreign investment shares	-	-	-	-	-	-	-	-	-
		Including: shares held by overseas
		legal persons	-	-	-	-	-	-	-	-	-
		shares held by overseas
		natural persons	-	-	-	-	-	-	-	-	-

II.	Shares not subject to trading
		moratorium	9,405,242,743	100.00	-	-	-	-1	-1	9,405,242,742	100.00
	1.	Renminbi ordinary shares	7,993,702,743	84.99	-	-	-	-1	-1	7,993,702,742	84.99
	2.	Domestically listed foreign investment
		shares	-	-	-	-	-	-	-	-	-
	3.	Overseas listed foreign investment
		shares	1,411,540,000	15.01	-	-	-	-	-	1,411,540,000	15.01
	4.	Others	-	-	-	-	-	-	-	-	-

III.	Total shares	9,405,250,201	100.00	-	-	-	0	0	9,405,250,201	100.00

70 ANGANG STEEL COMPANY LIMITED

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

MOVEMENTS IN SHARES (CONTINUED)
1. Movements in Shares (Continued) Notes:
1. Reasons for movement in share capital:
  At the beginning of the year, China Securities Depository and Clearing Co., Ltd., Shenzhen Branch reviewed and determined the number of shares subject to trading moratorium held by Directors, Supervisors and senior management. Upon rounding up, the number of shares subject to trading moratorium held by Directors, Supervisors and senior management increased by one.
2. Approval of movement in share capital:

Applicable

✓ Not applicable

Impact of movement in share capital on the basic earnings per share, diluted earnings per share and net assets per share attributable to ordinary shareholders of the Company in the latest year:

Applicable

✓ Not applicable

INTERIM REPORT 2020 71

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

MOVEMENTS IN SHARES (CONTINUED)
2. Changes in shares subject to trading moratorium

					Unit: Share
	Shares subject	Increase in	Decrease in	Shares subject
	to trading	shares subject	shares subject	to trading
	moratorium at	to trading	to trading	moratorium at		Date of release
Name of	the beginning	moratorium	moratorium	the end of	Reason for the	of the trading
Shareholder	of the period	during the period	during the period	the period	trading moratorium	moratorium

Wang Yidong	7,458	1	-	7,459	At the beginning of the year,	-
					China Securities Depository
					and Clearing Co., Ltd.,
					Shenzhen Branch reviewed
					and determined the number
					of shares subject to trading
					moratorium held by Directors,
					Supervisors and senior
					management. Upon rounding
					up, the number of shares
					subject to trading moratorium
					held by Directors, Supervisors
					and senior management
					increased by one.

Total	7,458	1	-	7,459	-	-

ISSUANCE AND LISTING OF SECURITIES

Applicable

✓ Not applicable

72 ANGANG STEEL COMPANY LIMITED

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

NUMBER OF SHAREHOLDERS AND DETAILS OF SHAREHOLDING OF THE COMPANY

Unit: Share

The total number of ordinary shareholders of the Company as at the end of the Reporting Period

103,898 of which 505 were holders of H shares

Details of shareholders holding more than 5% of ordinary shares or top ten shareholders holding ordinary shares

						Number of
			Number of		Number of	ordinary
			ordinary shares	Increase/	ordinary	shares
			held as at the	decrease	shares held	held not	Shares pledged or frozen
		Percentage	end of the	during the	subject	subject to
	Nature of	of	Reporting	Reporting	to trading	trading	Status of
Name of shareholder	shareholder	shareholding	Period	Period	moratorium	moratorium	shares	Number
		(%)

Anshan Iron & Steel Group	State-owned legal	53.33%	5,016,111,529	0	-	5,016,111,529	-	-
Co. Ltd.	person
HKSCC (Nominees) Limited	Overseas Legal	14.85%	1,396,914,620	-1,279,186	-	1,396,914,620	-	-
	person
China National Petroleum	State-owned legal	8.98%	845,000,000	0	-	845,000,000	-	-
Corporation	person
Power Construction	State-owned legal	4.98%	468,000,000	0	-	468,000,000	-	-
Corporation of China	person
Hong Kong Securities	Overseas Legal	1.04%	97,348,418	1,515,746	-	97,348,418	-	-
Clearing Company	person
Limited
Central Huijin Asset	State-owned legal	1.00%	94,348,670	0	-	94,348,670	-	-
Management Ltd.	person
China Merchants Bank Co.,	Other	0.23%	21,781,438	429,668	-	21,781,438	-	-
Ltd. - Boshi Zhongzheng
Sate-owned Enterprise
Innovation-Driven

Trading Open Type Index Security Investment Fund (招商銀行股份有限公司－博時中證央企創新驅動交易型開放式指數證券投資基金)

INTERIM REPORT 2020 73

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

NUMBER OF SHAREHOLDERS AND DETAILS OF SHAREHOLDING OF THE COMPANY (CONTINUED)

						Number of
			Number of		Number of	ordinary
			ordinary shares	Increase/	ordinary	shares
			held as at the	decrease	shares held	held not	Shares pledged or frozen
		Percentage	end of the	during the	subject	subject to
	Nature of	of	Reporting	Reporting	to trading	trading	Status of
Name of shareholder	shareholder	shareholding	Period	Period	moratorium	moratorium	shares	Number
		(%)

Agricultural Bank Of China	Other	0.15%	14,177,148	14,177,148	-	14,177,148	-	-
Limited - Zhongzheng
500 Trading Open
Type Index Security
Investment Fund (中國農
業銀行股份有限公司－中
證500交易型開放式指數
證券投資基金)
Bank of China Limited -	Other	0.15%	14,058,500	-7,293,270	-	14,058,500	-	-
Jiabao Zhongzheng
Sate-owned Enterprise
Innovation-Driven
Trading Open Type
Index Security
Investment Fund (中國銀
行股份有限公司－嘉實中
證央企創新驅動交易型開
放式指數證券投資基金)
#Liao Qiang (廖強)	Domestic natural	0.15%	13,793,711	350	-	13,793,711	-	-
	person

Explanations on the connected relationship or acting in concert among the shareholders mentioned above

The Company is not aware of any connected relationship among the above-mentioned shareholders of the Company or any party acting in concert as provided in the Procedures for the Administration of Information Disclosure for Changes in Shareholdings of the Shareholders of Listed Companies.

74 ANGANG STEEL COMPANY LIMITED

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

NUMBER OF SHAREHOLDERS AND DETAILS OF SHAREHOLDING OF THE COMPANY (CONTINUED)

Top ten shareholders holding ordinary shares not subject to trading moratorium

	Number of shares held
	not subject to trading
	moratorium as at the	Type of share
	end of the Reporting
Name of shareholder	Period	Type of share	Number

Anshan Iron & Steel Group Co. Ltd.		Renminbi ordinary
	5,016,111,529	shares	5,016,111,529
HKSCC (Nominees) Limited		Overseas listed
	1,396,914,620	foreign shares	1,396,914,620
China National Petroleum Corporation		Renminbi ordinary
	845,000,000	shares	845,000,000
Power Construction Corporation of China		Renminbi ordinary
	468,000,000	shares	468,000,000
Hong Kong Securities Clearing Company Limited		Renminbi ordinary
	97,348,418	shares	97,348,418
Central Huijin Asset Management Ltd.		Renminbi ordinary
	94,348,670	shares	94,348,670
China Merchants Bank Co., Ltd. - Boshi Zhongzheng Sate-		Renminbi ordinary
owned Enterprise Innovation-Driven Trading Open Type		shares
Index Security Investment Fund (招商銀行股份有限公司－
博時中證央企創新驅動交易型開放式指數證券投資基金)	21,781,438		21,781,438
Agricultural Bank Of China Limited - Zhongzheng 500 Trading		Renminbi ordinary
Open Type Index Security Investment Fund (中國農業銀行		shares
股份有限公司－中證500交易型開放式指數證券投資基金)	14,177,148		14,177,148
Bank of China Limited - Jiabao Zhongzheng Sate-owned		Renminbi ordinary
Enterprise Innovation-Driven Trading Open Type Index		shares
Security Investment Fund (中國銀行股份有限公司－嘉實中
證央企創新驅動交易型開放式指數證券投資基金)	14,058,500		14,058,500
#Liao Qiang (廖強)		Renminbi ordinary
	13,793,711	shares	13,793,711

INTERIM REPORT 2020 75

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

NUMBER OF SHAREHOLDERS AND DETAILS OF SHAREHOLDING OF THE COMPANY (CONTINUED)

Explanations on the connected relationship or acting in concert among the top ten shareholders not subject to trading moratorium, and the top ten shareholders not subject to trading moratorium and the top 10 shareholders

Description of top ten shareholders holding ordinary shares - to participate in financing business (if any)

The top ten shareholders holding ordinary shares and the top ten shareholders holding of ordinary shares not subject to trading moratorium of the Company did not conduct any agreed repurchase transactions during the Reporting Period.

IV. CHANGE TO CONTROLLING SHAREHOLDER AND DE FACTO CONTROLLER

During the Reporting Period, there was no change to the controlling shareholder and the de facto controller of the Company.

SUBSTANTIAL SHAREHOLDERS AND OTHER PARTIES' INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

Save as disclosed below, as at 30 June 2020, no parties (other than Directors, Supervisors and senior management of the Company) had any interest or short position in the shares and underlying shares of the Company which were recorded in the register required to be kept under Section 336 of the SFO:

76 ANGANG STEEL COMPANY LIMITED

Movements in Share Capital and Shareholding of Substantial Shareholders (Continued)

SUBSTANTIAL SHAREHOLDERS AND OTHER PARTIES' INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY (CONTINUED)

Interests in ordinary shares of the Company as at 30 June 2020

					Percentage
			Percentage	Percentage	of total
		Number of	of total	of total	domestic
Name of	Class of	shares held	share	H Shares	Shares
shareholder	shares	(shares) Note 1	capital	in issue	in issue	Capacity
			(%)	(%)	(%)

Anshan Iron & Steel	A Shares	5,016,111,529(L)	53.33(L)	-	62.75(L)	Beneficial owner
Group Co. Ltd.
China National	A Shares	845,000,000(L)	8.98(L)	-	10.57(L)	Beneficial owner
Petroleum
Corporation
Citigroup Inc.	H Shares	156,064,143(L)	1.66(L)	11.05(L)	-	Interest of
		43,734,547(S)	0.47(S)	3.09(S)		corporation
		112,186,718(P)	1.19(P)	7.94(P)		controlled by
						the substantial
						shareholder
Brown Brothers	H Shares	109,422,025(L)	1.16(L)	7.75(L)	-	Interest of
Harriman & Co.		109,422,025(P)	1.16(P)	7.75(P)		corporation
						controlled by
						the substantial
						shareholder
Power Construction	A Shares	468,000,000 (L)	4.98(L)	-	5.85(L)	Beneficial owner
Corporation of
China

Note 1: L-Long Position, S-Short Position, P-Lending Pool.

INTERIM REPORT 2020 77

Information on Directors, Supervisors and Senior Management

CHANGES IN THE SHARES HELD BY DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

							No. of	No. of	No. of
						No. of shares	shares	shares	shares held
		Current				held at the	increased in	reduced in	at the end of
		status of		Commencement	End date	beginning of the	the Reporting	the Reporting	the Reporting
Name	Position	position	Sex	date of term	of term	Reporting Period	Period	Period	Period
						(share)	(share)	(share)	(share)

Wang Yidong	Chairman	In office	Male	2017.11.23	-	9,945	-	-	9,945
	Executive Director	In office		2013.07.08	-
Li Zhen	General Manager	In office	Male	2020.03.27	-	0	-	-	0
	Executive Director	In office		2018.03.05	-
Li Zhongwu	Executive Director	In office	Male	2020.03.16	-	0	-	-	0
	Deputy General Manager	In office		2019.12.30	-
Ma Lianyong	Deputy General Manager,	In office	Male	2018.01.10	-	0	-	-	0
	Chief Accountant, Joint Company
	Secretary (i.e. Company
	Secretary)
	Executive Director	In office		2018.03.05	-
Wu Dajun	Independent Non-executive Director	In office	Male	2016.06.08	-	0	-	-	0
Feng Changli	Independent Non-executive Director	In office	Male	2016.06.05	-	0	-	-	0
Wang Jianhua	Independent Non-executive Director	In office	Male	2019.05.28	-	0	-	-	0
Wang Wanglin	Independent Non-executive Director	In office	Male	2020.03.16	-	0	-	-	0
Wang Baojun	Chairman of Supervisory Committee	In office	Male	2020.03.16	-	0	-	-	0
Li Wenbing	Supervisor	In office	Male	2020.03.16	-	0	-	-	0
Yuan Peng	Supervisor	In office	Male	2016.06.08	-	0	-	-	0
Liu Jie	Deputy General Manager	In office	Male	2020.03.27	-	0	-	-	0
Meng Jinsong	Deputy General Manager	In office	Male	2020.03.30	-	0	-	-	0
Xiao Mingfu	Deputy General Manager	In office	Male	2020.03.27	-	0	-	-	0
Chen Chun	Joint Company Secretary (i.e.	In office	Femail	2017.10.20	-	0	-	-	0
	Company Secretary)
Ma Weiguo	Independent Non-executive Director	Resigned	Male	2016.06.08	2020.2.24	0	-	-	0
Lu Yongli	Chairman of the Supervisory	Resigned	Male	2019.05.28	2020.03.16	0	-	-	0
	Committee
Liu Xiaohui	Supervisor	Resigned	Female	2016.06.08	2020.03.16	0	-	-	0
Xu Shishuai	Deputy General Manager	Resigned	Male	2016.06.30	2020.03.24	0	-	-	0

78 ANGANG STEEL COMPANY LIMITED

Information on Directors, Supervisors and Senior Management (Continued)

CHANGES IN DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT DURING THE REPORTING PERIOD

Name	Position	Category	Date	Reason

Ma Weiguo	Independent	Resigned	2020.02.24	Personal
	Non-Executive			reasons
	Director
Lu Yongli	Supervisor,	Resigned	2020.03.16	Change of job
	Chairman of
	Supervisory
	Committee
Liu Xiaohui	Supervisor	Resigned	2020.03.16	Change of job
Xu Shishuai	Deputy General	Resigned	2020.03.24	Change of job
	Manager
Li Zhongwu	Director	Elected	2020.03.16	Election
Wang Wanglin Independent	Elected	2020.03.16	Election
	Non-Executive
	Director
Wang Baojun	Supervisor,	Elected	2020.03.16	Election
	Chairman of
	Supervisory
	Committee
Li Wenbing	Supervisor	Elected	2020.03.16	Election
Li Zhen	General Manager	Appointed	2020.03.27	Appointment
Liu Jie	Deputy General	Appointed	2020.03.27	Appointment
	Manager
Xiao Mingfu	Deputy General	Appointed	2020.03.27	Appointment
	Manager

INTERIM REPORT 2020 79

Financial Report

Consolidated Balance Sheet

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
			31 December
		30 June
Items	Notes	2020	2019
Current assets:
Cash and cash equivalents	6.1	7,753	4,671
Derivative financial assets	6.2	2
Notes receivable	6.3	227	2,635
Accounts receivable	6.4	1,944	2,569
Accounts receivable financing	6.5	2,063
Prepayments	6.6	2,580	3,405
Other receivables	6.7	105	100
Including: interests receivable	6.7
Dividends receivable	6.7
Inventories	6.8	10,488	9,793
Other current assets	6.9	484	319
Total current assets		25,646	23,492
Non-current assets:
Long-term equity investments	6.10	2,932	2,894
Other investments in equity
instruments	6.11	483	465
Other non-current financial assets	6.12	26	38
Fixed assets	6.13	49,858	50,966
Construction in progress	6.14	2,002	1,549
Right-of-use assets	6.15	877	162
Intangible assets	6.16	6,080	6,163
Deferred income tax assets	6.17	1,151	1,028
Other non-current assets	6.18	781	1,051
Total non-current assets		64,190	64,316
Total assets		89,836	87,808

80 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Balance Sheet (Continued)

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
			31 December
		30 June
Items	Notes	2020	2019
Current liabilities:
Short-term loans	6.19	11,855	12,195
Notes payable	6.20	3,671	3,143
Accounts payable	6.21	5,774	5,424
Contract liabilities	6.22	5,101	4,896
Employee benefits payable	6.23	242	153
Tax payable	6.24	206	(3)
Other payables	6.25	1,949	2,530
Including: interests payable	6.25	10	9
Dividends payable	6.25		8
Non-current liabilities due within
1 year	6.26	1,303	1,003
Total current liabilities		30,101	29,341
Non-current liabilities:
Long-term loans	6.27	3,988	3,392
Bonds payable	6.28	1,572	1,513
Lease liability	6.29	808	160
Long-term employee benefits
payable	6.30	99	98
Deferred income	6.31	563	584
Deferred income tax liabilities	6.17	97	93
Other non-current liabilities	6.32	38	79
Total non-current liabilities		7,165	5,919
Total liabilities		37,266	35,260

INTERIM REPORT 2020 81

Financial Report (Continued)

Consolidated Balance Sheet (Continued)

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
				31 December
			30 June
Items	Notes		2020	2019
Shareholders' equity:
Share capital	6.33		9,405	9,405
Capital reserve	6.34		33,485	33,485
Other comprehensive income	6.35		(126)	(139)
Special reserve	6.36		91	54
Surplus reserve	6.37		3,723	3,723
Undistributed profit	6.38		5,515	5,551
Subtotal of Shareholders' equity
attributable to shareholders of
parent company			52,093	52,079
Minority interests			477	469
Total shareholders' equity			52,570	52,548
Total liabilities and shareholders'
equity			89,836	87,808
			Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma	Jin Gong

82 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Income Statement

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Operating income		44,650	51,074
Including: operating income	6.39	44,650	51,074
Operating costs		44,003	49,423
Less: operating costs	6.39	40,742	45,962
Tax and surcharges	6.40	479	472
Marketing expenses	6.41	1,533	1,539
Administrative expenses	6.42	592	615
Research and development
expenses	6.43	155	214
Financial expenses	6.44	502	621
Including: interests expenses	6.44	474	631
Interests revenue	6.44	25	22
Add: Other income	6.45	29	36
Investment income ("-" for losses)	6.46	88	75
Including: income from investment
in jointly ventures and
associates	6.46	85	70
Gains/losses from fair value
variation ("-" for losses)	6.47	31	29
Impairment losses on assets
("-" for losses)	6.48	(156)	97
Credit impairment loss
("-" for losses)	6.49		(27)
Asset disposal income
("-" for losses)	6.50		1
Operating profit ("-" for losses)		639	1,862
Add: Non-operating income	6.51	21	12
Less: Non-operating expenses	6.52	42	28
Profit before income tax ("-" for losses)		618	1,846
Less: Income tax expenses	6.53	115	422

INTERIM REPORT 2020 83

Financial Report (Continued)

Consolidated Income Statement (Continued)

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Net profit for the period ("-" for losses)		503	1,424
Classification according to the continuity
of operation
i. Continuous operating net profit
("-" for losses)		503	1,424
ii. Termination of net profit
("-" for losses)
Classification according to ownership
i. The net profit belongs to the owners
of the company		500	1,425
ii. Minority interest income		3	(1)

The net amount after tax of other
comprehensive income	6.54	13	(83)
Net after-tax net of other comprehensive
income attributable to the parent
company owner	6.54	13	(83)
I. The other comprehensive income
which can not be reclassified into
profit or loss	6.54	13	(83)
i. Changes in fair value of other
investments in equity instruments
investment	6.54	13	(83)
II. The other comprehensive income
which can be classified into profit or
loss	6.54
i. The shares of the other
comprehensive income which can
be reclassified in profit or loss of
the invested company in equity
method	6.54
ii. The profit or loss from the change
at fair value of available-for-sale
financial assets

Net after-tax net of other comprehensive income attributable to minority shareholders

84 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Income Statement (Continued)

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million
	Notes		Last period
Items	This period
Total comprehensive income		516	1,341
The other comprehensive income
attributed to the owners of the
company		513	1,342
The other comprehensive income
attributed to the minority		3	(1)
Earning per share:
Basic earning per share (RMB/share)	19.2	0.053	0.152
Diluted earning per share (RMB/share)	19.2	0.053	0.146

		Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma	Jin Gong

INTERIM REPORT 2020 85

Financial Report (Continued)

Consolidated Statement of Cash Flows

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Cash flows from operating activities:
Cash received from selling of goods or
rendering of services		45,755	45,135
Refund of taxes and fares		11	88
Other cash received from operating
activities	6.55	52	21
Sub-total of cash inflows		45,818	45,244
Cash paid for goods and services		35,760	35,769
Cash paid to and for the employees		2,000	2,150
Cash paid for all types of taxes		1,242	1,902
Other cash paid for operating activities	6.55	2,037	1,658
Sub-total of cash outflows		41,039	41,479
Net cash flow from operating
activities	6.56	4,779	3,765

86 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Statement of Cash Flows (Continued)

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Cash flows from investing activities:
Cash received from return of investments
Cash received from investment income		80	189
Net cash received from disposal of fixed
assets, intangible assets and other
non-current assets		6	2
Other cash received from investment
activities	6.55	36	37
Sub-total of cash inflows		122	228
Cash paid for acquisition of fixed assets,
intangible assets and other non-
current assets		1,378	1,727
Cash paid for acquisition of investments		14	70
Other cash paid for investment activities	6.55	10	19
Sub-total of cash outflows		1,402	1,816
Net cash flow from investing activities		(1,280)	(1,588)

INTERIM REPORT 2020 87

Financial Report (Continued)

Consolidated Statement of Cash Flows (Continued)

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Cash flows from financing activities:
Cash received from absorbing
investments		5
Including: Received of subsidiary from
minority shareholders		5
Cash received from borrowings		12,155	12,415
Other cash received from financing
activities	6.55		33
Sub-total of cash inflows		12,160	12,448
Cash paid for settling of debts		11,599	12,896
Cash paid for distribution of dividends or
profit and repayment of interests		936	2,018
Including: dividends or profit paid to
minority shareholders
Other cash paid for financing activities	6.55	42	84
Sub-total of cash outflows		12,577	14,998
Net cash flow from financing activities		(417)	(2,550)

88 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Statement of Cash Flows (Continued)

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Effect of changes in foreign exchange
rate on cash and cash equivalents
Net increase in cash and cash
equivalents	6.56	3,082	(373)
Add: Cash and cash equivalents at
beginning of this period	6.56	4,671	2,154
Cash and cash equivalents at the end of
this period	6.56	7,753	1,781

		Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma	Jin Gong

INTERIM REPORT 2020 89

Financial Report (Continued)

Consolidated Statement of Changes in Shareholders' equity

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited Monetary unit: RMB million
						This period
				Shareholders' equity attributable to shareholders of the parent company
				Less:	Other						Total of
		Share	Capital	treasury	comprehensive	Special	Surplus	General risk	Undistributed	Minority	shareholders'
Items		capital	reserve	stock	income	reserve	reserve	reserve	profit	interests	equity

Balance as at the end of last year	9,405	33,485		(139)	54	3,723		5,551	469	52,548
Add: Changes of accounting policy
	Business combination under the common control
	Others
Balance as at the beginning of this period	9,405	33,485		(139)	54	3,723		5,551	469	52,548
Increase/decrease in this period ("-" represents loss)				13	37			(36)	8	22
(1)	Total amount comprehensive income				13				500	3	516
(2)	Capital introduced or withdrawn by owners									5	5
	i. Capital introduced by owners									5	5

Capital introduced by other investments in equity instruments holders
Others

(3) Profit distribution	(536)	(1)	(537)
i.	Transfer to surplus reserve
ii.	Distribution to shareholders	(536)	(1)	(537)

1. Others
Transfer within shareholder's equity
1. Transfer from capital reserve to share capital
2. Transfer from surplus reserve to share capital
3. .Making up losses with surplus reserve
4. Transfer from other comprehensive income to

	retained earnings
v.	Others
(5) Special reserve				37			1	38
i.	Extracts of this period				61			1	62
ii.	Usage of this period				(24)				(24)
Balance as at the end of this period	9,405	33,485	(126)	91	3,723	5,515	477	52,570

90 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Consolidated Statement of Changes in Shareholders' equity (Continued)

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
							Last year
						Shareholders' equity attributable to shareholders of the parent company
					Less:	Other							Total of
			Share	Capital	treasury	comprehensive	Special	Surplus	General risk	Undistributed	Minority	shareholders'
Items			capital	reserve	stock	income	reserve	reserve	reserve	profit	interests	equity

Balance as at the end of last year	7,235	35,655		(241)	49	3,628			5,636	503	52,465
Add: Changes of accounting policy
	Business combination under the common control
	Others
Balance as at the beginning of this period	7,235	35,655		(241)	49	3,628			5,636	503	52,465
Increase/decrease in this period ("-" represents loss)	2,170	(2,170)		102	5	95			(85)	(34)	83
(1)	Total amount comprehensive income				(83)					1,787	(27)	1,677
(2)	Capital introduced or withdrawn by owners
	i.	Capital introduced by owners
	ii.	Capital introduced by other investments in
		equity instruments holders
	iii.	Others
(3)	Profit distribution						95			(1,687)	(8)	(1,600)
	i.	Transfer to surplus reserve						95			(95)
	ii.	Distribution to shareholders									(1,592)	(8)	(1,600)
	iii.	Others
(4)	Transfer within shareholder's equity	2,170	(2,170)		185					(185)
	i.	Transfer from capital reserve to share capital	2,170	(2,170)
	ii.	Transfer from surplus reserve to share capital
	iii.	Making up losses with surplus reserve
	iv.	Transfer from other comprehensive income to
		retained earnings				185					(185)
	v.	Others
(5)	Special reserve					5					1	6
	i.	Extracts of this period					120					2	122
	ii.	Usage of this period					(115)					(1)	(116)
Balance as at the end of this period	9,405	33,485		(139)	54	3,723			5,551	469	52,548

		Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma	Jin Gong

INTERIM REPORT 2020 91

Financial Report (Continued)

Balance Sheet

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
			31 December
		30 June
Items	Notes	2020	2019
Current assets:
Cash and cash equivalents		5,942	3,237
Derivative financial assets		2
Notes receivable		145	2,200
Accounts receivable	16.1	2,421	2,760
Accounts receivable financing		1,526
Prepayments		2,239	3,239
Other receivables	16.2	150	203
Including: interests receivable	16.2
Dividends receivable	16.2		12
Inventories		7,290	7,308
Other current assets		181
Total current assets		19,896	18,947
Non-current assets:
Long-term equity investments	16.3	11,625	11,483
Other investments in equity
instruments		483	465
Other non-current financial assets		26	38
Fixed assets		42,753	43,784
Construction in progress		1,820	1,319
Right-of-use assets		870	159
Intangible assets		5,647	5,725
Deferred income tax assets		1,069	887
Other non-current assets		752	1,022
Total non-current assets		65,045	64,882
Total assets		84,941	83,829

92 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Balance Sheet (Continued)

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
			31 December
		30 June
Items	Notes	2020	2019
Current liabilities:
Short-term loans		12,505	12,895
Derivative financial liabilities
Notes payable		3,559	2,894
Accounts payable		4,925	4,700
Contract liabilities		3,453	3,660
Employee benefits payable		202	138
Tax payable		127	(69)
Other payables		1,743	2,356
Including: interests payable		6	4
Dividends payable
Non-current liabilities due within
1 year		1,200	900
Total current liabilities		27,714	27,474
Non-current liabilities:
Long-term loans		3,850	3,200
Bonds payable		1,572	1,513
Lease liability		802	157
Long-term employee benefits
payable		95	95
Deferred income		427	446
Deferred income tax liabilities		96	93
Other non-current liabilities		38	79
Total non-current liabilities		6,880	5,583
Total liabilities		34,594	33,057

INTERIM REPORT 2020 93

Financial Report (Continued)

Balance Sheet (Continued)

As at 30 June 2020 Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
				31 December
			30 June
Items	Notes		2020	2019
Shareholders' equity:
Share capital			9,405	9,405
Capital reserve			26,527	26,527
Other comprehensive income			(126)	(139)
Special reserve			42	22
Surplus reserve			3,713	3,713
Undistributed profit			10,786	11,244
Subtotal of Shareholders' equity
attributable to shareholders of
parent company			50,347	50,772
Minority interests
Total shareholders' equity			50,347	50,772
Total liabilities and shareholders'
equity			84,941	83,829
			Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma	Jin Gong

94 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Income Statement

For the six months Ended June 30, 2020 Prepared by: Angang Steel Company Limited Monetary unit: RMB million

Items	Notes	This period	Last period
Operating income		41,547	48,867
Including: operating income	16.4	41,547	48,867
Operating costs		41,435	48,023
Less: operating costs	16.4	38,571	44,973
Tax and surcharges		414	403
Marketing expenses		1,293	1,288
Administrative expenses		512	540
Research and development
expenses		150	214
Financial expenses		495	605
Including: interests expenses		461	610
Interests revenue		18	17
Add: Other income		24	32
Investment income
("-" for losses)	16.5	91	386
Including: income from
investment in
jointly ventures
and associates	16.5	84	69
Gains/losses from fair value
variation ("-" for losses)		31	29
Impairment losses on
assets("-" for losses)		(155)	100
Credit impairment loss
("-" for losses)			(27)
Asset disposal income
("-" for losses)
Operating profit ("-" for losses)		103	1,364
Add: Non-operating income		20	5
Less: Non-operating expenses		42	10

INTERIM REPORT 2020 95

Financial Report (Continued)

Income Statement (Continued)

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited Monetary unit: RMB million
Items	Notes	This period	Last period

Profit before income tax ("-" for
losses)		81	1,359
Less: Income tax expenses		3	220

Net profit for the period ("-" for
losses)		78	1,139
Classification according to the
continuity of operation
i. Continuous operating net profit
("-" for losses)		78	1,139

Termination of net profit ("-" for losses)

Classification according to ownership

i. The net profit belongs to the

owners of the company781,139 ii. Minority interest income

The net amount after tax of other
comprehensive income	13	(83)
Net after-tax net of other
comprehensive income
attributable to the parent company
owner	13	(83)
I. The other comprehensive income
which can not be reclassified
into profit or loss	13	(83)
i. Changes in fair value of other
investments in equity
instruments investment	13	(83)

96 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Income Statement (Continued)

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited Monetary unit: RMB million
Items	Notes	This period	Last period

The other comprehensive income which can be classified into profit or loss

The shares of the other comprehensive income which can be reclassified in profit or loss of the invested company in equity method
The profit or loss from the change at fair value of available- for-sale financial assets

Net after-tax net of other comprehensive income attributable to minority shareholders

Total comprehensive income		91	1,056
The other comprehensive income
attributed to the owners of the
company		91	1,056
The other comprehensive income
attributed to the minority

		Person-in-charge of the
Legal representative:	Chief Accountant:	accounting department:
Yidong Wang	Lianyong Ma		Jin Gong

INTERIM REPORT 2020 97

Financial Report (Continued)

Statement of Cash Flows

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited Monetary unit: RMB million
	Notes		Last period
Items	This period
Cash flows from operating activities:
Cash received from selling of goods
or rendering of services		42,585	43,736
Refund of taxes and fares			85
Other cash received from operating
activities		80	23
Sub-total of cash inflows		42,665	43,844
Cash paid for goods and services	33,499	36,257
Cash paid to and for the employees	1,733	1,873
Cash paid for all types of taxes	1,026	1,510
Other cash paid for operating
activities		2,002	1,723
Sub-total of cash outflows		38,260	41,363
Net cash flow from operating
activities		4,405	2,481
Cash flows from investing activities:
Cash received from return of
investments
Cash received from investment
income		96	498
Net cash received from disposal of
fixed assets, intangible assets and
other non-current assets		37	221
Other cash received from investment
activities		29	32
Sub-total of cash inflows		162	751

98 ANGANG STEEL COMPANY LIMITED

Financial Report (Continued)

Statement of Cash Flows (Continued)

For the six months Ended June 30, 2020	Prepared by: Angang Steel Company Limited Monetary unit: RMB million
	Notes		Last period
Items	This period
Cash paid for acquisition of fixed
assets, intangible assets and
other non-current assets		1,274	1,675
Cash paid for acquisition of
investments		119	70
Other cash paid for investment
activities		10	19
Sub-total of cash outflows		1,403	1,764
Net cash flow from investing
activities		(1,241)	(1,013)
Cash flows from financing activities:
Cash received from borrowings	12,205	12,795
Other cash received from financing
activities		5	69
Sub-total of cash inflows		12,210	12,864
Cash paid for settling of debts	11,645	12,815
Cash paid for distribution of
dividends or profit and repayment
of interests		934	2,013
Including: dividends or profit paid to
minority shareholders
Other cash paid for financing
activities		90
Sub-total of cash outflows		12,669	14,828
Net cash inflow from financing
activities		(459)	(1,964)

INTERIM REPORT 2020 99

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ANSTEEL - Angang Steel Company Limited published this content on 15 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 September 2020 08:59:05 UTC

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