Angang Steel : (1) CONNECTED TRANSACTION IN RELATION TO FORMATION OF JOINT VENTURE; (2) APPOINTMENT OF DEPUTY GENERAL MANAGER OF THE COMPANY; (3) PROPOSED APPOINTMENT OF EXECUTIVE DIRECTOR OF THE EIGHTH SESSION OF THE BOARD

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

(Stock Code: 0347)

1. 1. 1. CONNECTED TRANSACTION IN RELATION TO FORMATION OF JOINT VENTURE
   2. APPOINTMENT OF DEPUTY GENERAL MANAGER OF THE COMPANY
2. PROPOSED APPOINTMENT OF EXECUTIVE DIRECTOR OF THE EIGHTH SESSION OF THE BOARD

1. FORMATION OF JOINT VENTURE INTRODUCTION
   On 30 December 2019, the Company and Angang Holding, the controlling shareholder of the Company, entered into the JV Agreement in relation to the proposed formation of the Joint Venture in the PRC.
   Pursuant to the JV Agreement, the Company agreed to make a capital contribution of RMB54,600,000 in cash, representing 91% of the total capital contribution of the Joint Venture, and Angang Holding agreed to make a capital contribution of RMB5,400,000 in cash, representing 9% of the total capital contribution of the Joint Venture.
   LISTING RULE IMPLICATIONS
   As at the date of this announcement, Angang Holding is the controlling shareholder of the Company, holding approximately 53.33% of the issued share capital of the Company, and hence a connected person of the Company. Accordingly, the JV Agreement and the formation of the Joint Venture thereunder constitute a connected transaction under Chapter 14A of the Listing Rules.

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As the highest percentage ratio (as defined under the Listing Rules) in respect of the JV Agreement is more than 0.1% but less than 5%, the transactions contemplated under the JV Agreement is subject to the reporting and announcement requirements but exempt from the independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

Mr. Wang Yidong, chairman of the Board who also holds the position of chairman of the board of directors of Angang Holding, is considered to have a material interest in the JV Agreement and the transactions contemplated thereunder. Mr. Wang Yidong has abstained from voting on the resolutions in relation to the JV Agreement proposed to the Board. Save as disclosed above, none of the Directors attended the Board meeting has a material interest in the JV Agreement and the transactions contemplated thereunder.

1. APPOINTMENT OF DEPUTY GENERAL MANAGER OF THE COMPANY
   The Board is please to announce that Mr. Li has been appointed as the deputy general manager of the Company, with immediate effect from the date of this announcement.
2. PROPOSED APPOINTMENT OF EXECUTIVE DIRECTOR OF THE EIGHTH SESSION OF THE BOARD
   The Board is pleased to announce that Mr. Li has been nominated by the Board as a candidate for executive Director of the eighth session of the Board. His appointment is subject to the approval by the Shareholders at a general meeting.

1. FORMATION OF JOINT VENTURE INTRODUCTION
   On 30 December 2019, the Company and Angang Holding, the controlling shareholder of the Company, entered into the JV Agreement in relation to the proposed formation of the Joint Venture in the PRC.
   Pursuant to the JV Agreement, the Company agreed to make a capital contribution of RMB54,600,000 in cash, representing 91% of the total capital contribution of the Joint Venture, and Angang Holding agreed to make a capital contribution of RMB5,400,000 in cash, representing 9% of the total capital contribution of the Joint Venture.

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Upon the formation of the Angang Holding, the Company will hold 91% of the equity interests in the Joint Venture. Therefore, the Joint Venture will become a subsidiary of the Company, and its financial results will be consolidated into the financial statements of the Group.

THE JV AGREEMENT

Date

30 December 2019

Parties

1. the Company; and
2. Angang Holding (a controlling shareholder of the Company).

Scope of Business

The Joint Venture will be principally engaged in (i) e-commerce and technology consulting, technology development, technical services, technology transfer and value-added telecommunications services in the field of e-commerce; (ii) online sales and online settlement of steel, iron, vanadium, titanium products, iron ore, ferrous metal ore, non-ferrous metal ore, coke, chemical products (excluding hazardous chemicals), steel by-products, waste materials (including non-ferrous metal materials), construction materials, machinery and equipment, drinks, beverages, food, packaging materials, office supplies, industrial products, agricultural special products, electronic products, decorative materials and others;

1. application of Internet of Things, blockchain, data credit reporting and other risk control technologies in supply chain financial services; and (iv) economic information, logistics information, business consulting and other services.

Purpose

The main purpose of the Joint Venture is to tap the spillover effects of the steel ecosystem and build an online and offline integrated, open ecosystem service system that integrates services including trading, finance, data, technology and consulting and a "four in one" smart service platform for supply chains integrating logistics, business flow, information flow and capital flow.

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Registered Capital
	Capital	Shareholding
Shareholder	Contribution	Percentage
	(RMB)
The Company	54,600,000		91%
Angang Holding	5,400,000		9%
Total	60,000,000		100%

The total registered capital of the Joint Venture will be RMB60,000,000. The capital contributions will be payable by the parties in cash upon establishment of the Joint Venture and within 1 month of the Joint Venture completing its business registration.

The Company will finance its capital commitment in the Joint Venture from its internal resources.

The capital requirement of the Joint Venture was determined by arm's length negotiation between the parties after taking into account the development plans of the Joint Venture.

Composition of the Board of Directors and the Board of Supervisors

The board of directors of the Joint Venture will consist of five (5) directors, of which three (3) directors will be nominated by the Company and one (1) director will be nominated by Angang Holding. The remaining one (1) director shall be appointed by the employees via election. The chairman of the board of directors of the Joint Venture shall be selected from the directors nominated by the Company. Each of the directors will be appointed for a term of three (3) years, subject to re-election at the expiry of the term of office. The Company and Angang Holding may substitute its nominee directors during his term of office.

The board of supervisors of the Joint Venture will consist of three (3) supervisors, of which one (1) supervisor will be nominated by each of the Company and Angang Holding. The remaining one (1) supervisor shall be appointed by the employees via election. The chairman of the board of supervisors will be elected by more than half of all supervisors. The supervisors will be appointed for a term of three (3) years, subject to re-nomination at the expiry of the term of office by the respective nominating parties. The Company and Angang Holding may substitute its nominee supervisor during his term of office.

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Senior Management

The senior management of the Joint Venture shall consist of one (1) general manager and two (2) deputy general managers, who shall be engaged by the board of directors of the Joint Venture. The general manager shall be the legal representative of the Joint Venture.

INFORMATION ON THE PARTIES

The Company

The Company is a major steel manufacturing enterprise in the PRC. It is principally engaged in the production and sale of hot-rolled steel sheets, cold- rolled steel sheets, galvanized steel sheets, color coating plates, silicon steel, medium and thick plates, wire rods, large steel products and seamless steel pipes.

Angang Holding

Angang Holding is the controlling shareholder of the Company, holding approximately 53.33% of the issued share capital of the Company as at the date of the JV Agreement and the date of the announcement. Angang Holding is a major enterprise in the iron and steel industry in the PRC and engaged in a wide range of iron and steel-related business activities including steel products, metal wares (exclusive of franchised products), cast iron pipes, metal structure materials, iron wire ropes and relevant products, coking and coking products, cement, electricity generation, metallurgical appliance and equipment and related spare parts and components, electrical machinery, equipment, instruments and apparatus for power transmission, distribution and control, mining and beneficiation of iron ore and manganese ore as well as quarrying of refractory pebble, etc.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

With the rapid development of modern information technology and Internet technology, the way for iron and steel enterprises to connect the upstream and downstream of the supply chain through Internet by using modern information technologies in modern Internet economy has become the key to enterprise development.

For the formation of the Joint Venture by the Company and Angang Holding, first, it can promote the close integration of e-commerce with procurement, sales, logistics, finance, etc. and enhance the Company's overall competitiveness through vigorous development of the Company's e-commerce, enabling the Company to transform into a comprehensive operator in the industry chain of iron and steel; second, through in-depth cooperation with Angang Holding, the Company, relying on the e-commerce platform, will exert efforts on the shift of steel trading from offline to online operation through the e-commerce of steel

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trading in the future, which will drive relevant businesses including purchase of raw materials such as iron ore at the upstream and distribution and processing at the downstream, thus making the Company's e-commerce platform larger and stronger; third, the Company will grasp the opportunities arising from the integration of the steel industry chain to lay a solid foundation for the Company's integration at the steel industry level and consolidate the Company's position in the industry chain.

The Directors (including the independent non-executive Directors) consider the terms of the JV Agreement are fair and reasonable and on normal or better commercial terms. The formation of the Joint Venture is in the ordinary and usual course of business of the Company and is in the interest of the Company and its Shareholders as a whole.

LISTING RULE IMPLICATIONS

As at the date of this announcement, Angang Holding is the controlling shareholder of the Company, holding approximately 53.33% of the issued share capital of the Company, and hence a connected person of the Company. Accordingly, the JV Agreement and the formation of the Joint Venture thereunder constitute a connected transaction under Chapter 14A of the Listing Rules.

As the highest percentage ratios (as defined under the Listing Rules) in respect of the JV Agreement is more than 0.1% but less than 5%, the transactions contemplated under the JV Agreement is subject to the reporting and announcement requirements but exempt from the independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

Mr. Wang Yidong, chairman of the Board who also holds the position of chairman of the board of directors of Angang Holding, is considered to have a material interest in the JV Agreement and the transactions contemplated thereunder. Mr. Wang Yidong has abstained from voting on the resolutions in relation to the JV Agreement proposed to the Board. Save as disclosed above, none of the Directors attended the Board meeting has a material interest in the JV Agreement and the transactions contemplated thereunder.

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1. APPOINTMENT OF DEPUTY GENERAL MANAGER OF THE COMPANY
   The Board is please to announce that Mr. Li Zhongwu ( 李 忠 武 先 生) ("Mr. Li") has been appointed as the deputy general manager of the Company, with immediate effect from the date of this announcement.
   The biographical details of Mr. Li are set out below:
   Mr. Li, aged 56, is currently a director of Pangang Group Vanadium & Titanium Resources Co., Ltd.* ( 攀 鋼 集 團 釩 鈦 資 源 股 份 有 限 公 司) (a company listed
   on the Shenzhen Stock Exchange) and a senior steel-making engineer. Mr. Li graduated from the Metallurgy Department of Anshan Institute of Iron & Steel (鞍 山 鋼 鐵 學 院 冶 金 系) majoring in iron and steel metallurgy with a bachelor's degree in engineering. Mr. Li joined Angang Holding in 1987, and had previously
   held various positions including the deputy general manager of Angang Holding, general manager of Chaoyang Anling Iron & Steel Company Limited* ( 朝 陽 鞍 淩 鋼 鐵 有 限 公 司), deputy general manager of Angang Holding, executive
   Director and deputy general manager of the Company, general manager of Angang Group Automobile Steel Marketing (Service) Center* ( 鞍 鋼 集 團 汽 車 鋼 營 銷（服 務）中 心), director of Angang Holding, external director of Angang Group Mining Co., Ltd.* ( 鞍 鋼 集 團 礦 業 有 限 公 司), and director and deputy general manager of Pangang Group Company ( 攀 鋼 集 團 有 限 公 司).
2. PROPOSED APPOINTMENT OF EXECUTIVE DIRECTOR OF THE EIGHTH SESSION OF THE BOARD
   The Board is pleased to announce that Mr. Li has been nominated by the Board as a candidate for executive Director of the eighth session of the Board. His appointment is subject to the approval by the Shareholders at a general meeting. Please refer to the above for the biographical details of Mr. Li.
   The term of office of Mr. Li will commence upon the approval of his appointment by the Shareholders of the Company at the general meeting and shall expire at the end of the eighth session of the Board. The Company will enter into a service contract with Mr. Li. The remuneration of Mr. Li will be determined by the Board with reference to his responsibilities, the Company's remuneration policy and the prevailing market conditions.
   As at the date of this announcement, save as disclosed above, Mr. Li has not held any directorship in any other publicly listed companies, whether in Hong Kong or overseas, in the past three years, does not have any relationship with any director, senior management, substantial or controlling shareholder (as defined in the Listing Rules) of the Company, and does not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.
   Save as disclosed above, there is no other matter relating to the appointment of Mr. Li that needs to be brought to the attention of the Shareholders of the Company, and there is no other matter which is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

"Angang Holding"	Anshan Iron & Steel Group Co., Ltd. ( 鞍 山 鋼 鐵 集
	團 有 限 公 司), a company established in the PRC with
	limited liability, and the controlling shareholder of the
	Company
"Board"	the board of directors of the Company
"Company"	Angang Steel Company Limited* ( 鞍 鋼 股 份 有 限
	公 司), a joint stock limited company incorporated in
	Anshan, Liaoning Province, the PRC, the H shares of
	which are listed on the Hong Kong Stock Exchange and
	the A shares of which are listed on the Shenzhen Stock
	Exchange
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules
"controlling shareholder"	has the meaning ascribed thereto under the Listing Rules
"Director(s)"	the director(s) of the Company
"Group"	the Company and its subsidiaries
"Joint Venture"	the joint venture to be formed under the JV Agreement,
	the proposed name fo which is Delin Zhilian (Anshan)
	Co., Ltd.*( 德 鄰 智 聯（鞍 山）有 限 公 司), a limited
	liability company to be incorporated in the PRC
"JV Agreement"	the joint venture agreement entered into on 30 December
	2019 between the Company and Angang Holding in
	relation to the proposed formation of the Joint Venture
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange
"PRC"	the People's Republic of China which, for the purposes
	of this announcement, excludes the Hong Kong
	Special Administrative Region, the Macau Special
	Administrative Region and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC

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"Shareholders"	the shareholders of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"	has the meaning ascribed thereto under the Listing Rules
"%"	per cent
	By Order of the Board
	Angang Steel Company Limited*
	Wang Yidong
	Executive Director and Chairman of the Board

Anshan City, Liaoning Province, the PRC

30 December 2019

As at the date of this announcement, the Board comprises the following Directors:

Executive Directors:	Independent Non-executive Directors:
Wang Yidong	Wu Dajun
Li Zhen	Ma Weiguo
Ma Lianyong	Feng Changli
	Wang Jianhua

• For identification purpose only

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