Angang Steel : First Quarter Financial Report 2021

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)

First Quarter Financial Report 2021

The board of directors (the "Board") of Angang Steel Company Limited* (鞍鋼股份有 限公司) (the "Company") is pleased to announce the unaudited results of the Company and its subsidiaries for the three months ended 31 March 2021 (the "Reporting Period"), prepared in accordance with the Accounting Standards for Business Enterprises of the People's Republic of China. This announcement is made pursuant to Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

The contents of this announcement are consistent with the announcement published on the Shenzhen Stock Exchange. This announcement is published simultaneously in Hong Kong and Shenzhen.

- 1 -

SECTION I IMPORTANT NOTICE

The Board, the supervisory committee of the Company, the directors, supervisors and senior management members warrant the truthfulness, accuracy, and completeness of the contents of this quarterly report, and that there is no false representation or misleading statement contained in, or material omission from this quarterly report and assume joint and several legal liabilities.

All directors have attended the Board meeting to consider this quarterly report.

Wang Yidong, person-in-charge of the Company, Wang Baojun, Chief Accountant and You Yu, person-in-charge of the accounting institution, warrant the truthfulness, accuracy and completeness of the financial statements in this quarterly report.

The first quarter financial report of the Company is unaudited.

SECTION II BASIC INFORMATION OF THE COMPANY

1. Principal accounting figures and financial indicators

Whether the Company has made retrospective adjustment to, or restatement of, the accounting data of prior year(s)

	Yes	✓	No
					Unit: RMB million
						Increase/decrease
						in the Reporting
						Period as
					Corresponding	compared with
					period	the corresponding
				The Reporting	of the previous	period of the
				Period	year	previous year
Operating revenue			31,878	20,337	56.75%
Net profit attributable to the shareholders
of the Company			1,520	292	420.55%
Net profit attributable to the shareholders
of the Company after extraordinary
items			1,530	272	462.50%
Net cash flow from operating activities	1,908	-3,064	162.27%
Basic earnings per share (RMB/share)	0.162	0.031	422.58%

- 2 -

			Increase/decrease
			in the Reporting
			Period as
		Corresponding	compared with
		period	the corresponding
	The Reporting	of the previous	period of the
	Period	year	previous year
Diluted earnings per share (RMB/share)	0.160	0.031	416.13%
			Increased by
			2.25 percentage
Weighted average return on net assets (%)	2.81	0.56	points
			Increase/decrease
			in the Reporting
			Period as
	As at the		compared with
	end of the		the corresponding
	Reporting As at the end of	period of the
	Period	the previous year	previous year
Total assets	89,354	88,046	1.49%
Net assets attributable to the shareholders
of the Company	54,926	53,365	2.93%

- 3 -

Extraordinary items and amounts
✓ Applicable	Not applicable
		Unit: RMB million
			Amount from
			the beginning of
			the year to the
			end of the
Item			Reporting Period
Profit or loss on disposal and scrapping of non-current
assets		-20
Government subsidies (except for government subsidies
which are closely related to the Company's operations,
in which the Company is entitled to a fixed amount or
quantity in conformity with the common standards of
the State) attributable to gains or losses for the period	15
Changes in fair value of financial assets held for trading	-5
Changes in fair value of other non-current liabilities
(portion of derivative financial instruments)	-5
Other non-operating income and expenses apart from
those stated above		1
Sub-total		-14
Less: Effect of income tax		-4
Total		-10

Please explain the reasons for the Company's extraordinary gain or loss items as defined in the Explanatory Announcement on Information Disclosure by Companies Offering Their Securities to the Public No. 1 - Extraordinary Gains or Losses and the extraordinary gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure by Companies Offering Their Securities to the Public No. 1 - Extraordinary Gains or Losses which have been defined accordingly as recurring gain or loss items.

Applicable

✓ Not applicable

During the Reporting Period, the Company does not have any item of extraordinary gain or loss as defined and illustrated in accordance with the Explanatory Announcement on Information Disclosure by Companies Offering Their Securities to the Public No. 1 - Extraordinary Gains or Losses as an item of recurring gain or loss.

- 4 -

1. Statement of the total number of shareholders and the particulars of the shareholdings of the top 10 shareholders as at the end of the Reporting Period
   1. Statement of the total number of holders of ordinary shares and holders of preference shares with restored voting rights, and the particulars of the shareholdings of the top 10 shareholders

Unit: share

Total number of holders of ordinary shares as at the end of the Reporting Period

90,489, amongst whom Total number of holders of	0
484 are holders of H	preference shares with
shares	restored voting rights as at
	the end of the Reporting
	Period (if any)

Shareholding of the top 10 shareholders

				Number
				of shares
				held subject	Pledged or frozen
	Nature of	Percentage of	Number of	to selling	Status of
Name of shareholder	shareholder	shareholding	shares held	restrictions	shares	Number
		(%)
Anshan Iron & Steel Group Co. Ltd	State-owned legal	53.33%	5,016,111,529	0	-	-
(鞍山鋼鐵集團有限公司)	person
HKSCC (Nominees) Limited	Overseas legal person	14.86%	1,397,250,196	0	-	-
China National Petroleum Corporation	State-owned legal	8.98%	845,000,000	0	-	-
(中國石油天然氣集團有限公司)	person
Power Construction Corporation of China	State-owned legal	4.98%	468,000,000	0	-	-
(中國電力建設集團有限公司)	person
Hong Kong Securities Clearing Company	Overseas legal person	2.64%	247,960,073	0	-	-
Limited
Central Huijin Asset Management Limited	State-owned legal	1.00%	94,348,670	0	-	-
(中央匯金資產管理有限責任公司)	person
#Ma Liang	Domestic natural	0.57%	53,819,110	0	-	-
	person
#Liao Qiang	Domestic natural	0.21%	20,083,000	0	-	-
	person
Fang Wei	Domestic natural	0.18%	17,380,756	0	-	-
	person
Taikang Life Insurance Co., Ltd. －	Others	0.18%	17,236,100	0	-	-
Dividend－Individual Dividend -019L-
FH002 Shenzhen

- 5 -

Shareholding of the top 10 shareholders not subject to trading moratorium

	Number of shares
	not subject to
	trading	Class of shares
Name of shareholder	moratorium	Class of shares	Number
Anshan Iron & Steel Group Co. Ltd	5,016,111,529	Renminbi ordinary	5,016,111,529
		shares
HKSCC (Nominees) Limited	1,397,250,196	Overseas-listed	1,397,250,196
		foreign shares
China National Petroleum Corporation	845,000,000	Renminbi ordinary	845,000,000
		shares
Power Construction Corporation of China	468,000,000	Renminbi ordinary	468,000,000
		shares
Hong Kong Securities Clearing Company	247,960,073	Renminbi ordinary	247,960,073
Limited		shares
Central Huijin Asset Management Limited	94,348,670	Renminbi ordinary	94,348,670
		shares
#Ma Liang	53,819,110	Renminbi ordinary	53,819,110
		shares
#Liao Qiang	20,083,000	Renminbi ordinary	20,083,000
		shares
Fang Wei	17,380,756	Renminbi ordinary	17,380,756
Taikang Life Insurance Co., Ltd. －		shares
17,236,100	Renminbi ordinary	17,236,100
Dividend－Individual Dividend -019L-		shares
FH002 Shenzhen
Explanations on the connected	The Company is not aware of any connected relationship
relationship or concert party	among the above shareholders of the Company or any

relationship among the shareholders such shareholders acting in concert within the meaning

mentioned above	of the Procedures on the Administration of Information
	Disclosure for Change in Shareholdings of the
	Shareholders of Listed Companies.
Description of top ten shareholders to	Among the top ten shareholders, Ma Liang held
participate in financing business (if	44,552,000 shares through an investor credit securities
any)	account, and held 9,267,110 shares through an ordinary
	securities account. Liao Qiang held 20,082,854 shares
	through an investor credit securities account, and held
	146 shares through an ordinary securities account.

- 6 -

Whether any of the top 10 holders of ordinary shares and the top 10 holders of ordinary shares not subject to selling restriction(s) of the Company conducted any transactions on agreed repurchases during the Reporting Period

Yes

✓ No

The top 10 holders of ordinary shares and the top 10 holders of ordinary shares who are not subject to selling restriction(s) of the Company did not conduct any transactions on agreed repurchases during the Reporting Period.

SECTION III SIGNIFICANT EVENTS

1. Changes in the major financial data and financial indicators during the Reporting Period and reasons for the changes

✓ Applicable

Not applicable

During the first quarter of 2021, the Company seized the favorable opportunities from the recovery of the steel and iron market, overcame the impact of the COVID-19 pandemic, production limitation in haze days and other unfavorable factors and focused on improving efficiency, leading to an another record high of production amount; actively promoted cost reform, which led to effective control of cost; pursued quantity reduction development, which led to the stable improvement of technique and economic indicators; strengthened refined management, leading to continuous improvement of product quality; effectively allocated its resources, adjusted variety structure, promoted synergy between production and sales and vigorously expanded market, hence, the operating results achieving significant increase as compared with the corresponding period of the previous year.

- 7 -

Changes in major financial data and financial indicators and reasons for the changes are as follows:

1. The increase of RMB11,541 million in operating income during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in sales volume and rise in product price during the Reporting Period.
2. The increase of RMB9,783 million in operating costs during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in sales volume and rise in the price of raw materials during the Reporting Period.
3. The increase of RMB60 million in research and development expenses during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in fees for trial production of new products.
4. The increase of RMB35 million in investment income during the Reporting Period as compared with the corresponding period of the previous year was mainly due to (i) the increase of RMB45 million in income from investment in joint ventures and associates; (ii) the decrease of RMB10 million in income from investment in commodity futures.
5. The decrease of RMB38 million in gains from fair value variation during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the changes in fair value of derivative financial instruments and others.
6. The decrease of RMB143 million in impairment losses on assets during the Reporting Period as compared with the corresponding period of the previous year was mainly due to (i) the loss of RMB22 million in release of depreciation of inventory during the Reporting Period; (ii) the provision of RMB121 million made for depreciation of inventory during the corresponding period of the previous year.
7. The increase of RMB1 million in non-operating income during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in gains from government grants which were included in non-operating income.

- 8 -

1. The increase of RMB5 million in non-operating expenses during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in loss on retirement of fixed assets.
2. The significant increase in operating profit, total profit, net profit, net profit attributable to the owner of the parent company during the Reporting Period as compared with the corresponding period of the previous year was mainly due to that in the first quarter of 2021, with the increasing prosperity in the steel and iron industry, the Company seized the favorable opportunities from the recovery of the steel and iron market, vigorously expanded the market, strengthened marketing management, promoted the synergy between production and sales, effectively allocated resources, adjusted the variety structure, deeply tapped the potential for internal cost reduction and efficiency enhancement, and strictly refined the management, leading to continuous improvement of all-factor production efficiency and consistent upward development of production and operation.
3. The increase of RMB446 million in income tax expenses during the Reporting Period as compared with the corresponding period of the previous year was mainly due to the increase in total profit of the Company as compared with the corresponding period of the previous year, which affected the income tax for the current period.
4. The increase of RMB95 million in notes receivable as compared with the end of the previous year was mainly due to the increase in notes received in the process of sales as a result of the rise in the price of steel products.
5. The increase of RMB390 million in receivables financing as compared with the end of the previous year was mainly due to the increase in notes received in the process of sales as a result of the rise in the price of steel products.
6. The increase of RMB19 million in other receivables as compared with the end of the previous year was mainly due to the increase in disposal of fixed assets which led to the increase in other receivables.
7. The increase of RMB117 million in other current assets as compared with the end of the previous year was mainly due to the increase in outstanding VAT credit.

- 9 -

1. The decrease of RMB4,380 million in short-term loans as compared with the end of the previous year was mainly due to the repayment of borrowings to banks.
2. The increase of RMB1,264 million in notes payable as compared with the end of the previous year was mainly due to the increase in notes rendered to meet the need for payment in notes.
3. The increase of RMB500 million in non-current liabilities due within 1 year as compared with the end of the previous year was mainly due to the impact of the transferred long-term borrowings due within 1 year.
4. The increase of RMB45 million in special reserve as compared with the end of the previous year was mainly due to the provision for safety production expenses.
5. The increase of RMB4,972 million in net cash flow from operating activities as compared with the corresponding period of the previous year was mainly due to (i) the sales volume and unit price of the steel products during the Reporting Period were both higher than that of the corresponding period of the previous year, which led to the increase of RMB14,128 million in cash received from sales of goods as compared with the corresponding period of the previous year; (ii) the increase in the sales volume and the price of raw materials during the Reporting Period, which led to the increase of RMB8,738 million in cash expenditure on purchase of goods and receipt of services; (iii) the increase of RMB371 million in tax and charges payment.
6. The decrease of RMB449 million in net cash outflow from investing activities as compared with the corresponding period of the previous year was mainly due to (i) the decrease of RMB486 million in cash paid for acquisition of fixed assets, intangible assets and other long- term assets; (ii) the increase of RMB89 million in cash paid for other investing related activities.
7. The decrease of RMB5,151 million in net cash flow from financing activities as compared with the corresponding period of the previous year was mainly due to (i) the decrease of RMB5,530 million in cash receipt from borrowings obtained as compared with the corresponding period of the previous year; (ii) the decrease of RMB217 million in cash paid for the repayment of borrowings as compared with the corresponding period of the previous year.

- 10 -

1. Progress and impact of significant events and the analysis on solutions

✓ Applicable

Not applicable

On 8 January 2021, the Resolution on the Adjustment in Relevant Matters

of the 2020 Restricted Share Incentive Scheme of Angang Steel Company Limited*(《關 於 調 整 鞍 鋼 股 份 有 限 公 司2020 年 限 制 性 股 票 激 勵

計 劃 相 關 事 項 的 議 案》) and the Resolution on the First Grant of the Restricted Shares to Incentive Participants 《( 關 於 向 激 勵 對 象 首 次 授 予 限 制 性 股 票 的 議 案》) were considered and approved at the thirty-eighth meeting of the eighth session of the Board and the thirteenth meeting of the eighth session of the Supervisory Committee the Company. The first grant date of the 2020 Restricted Share Incentive Scheme was 8 January 2021.

On 27 January 2021, the Company completed the registration for the first grant of the 2020 Restricted Share Incentive Scheme and the listing date of the grated restricted shares was 27 January 2021.

On 7 February 2021, the Company was informed that Li Wenbing, a supervisor, had surrendered himself. Li Wenbing is currently under the disciplinary review by the CPC Commission for Discipline Inspection of Angang Group Company Limited* and the supervision investigation by the Supervision Committee of Anshan City ( 鞍 山 市 監 察 委 員 會) for being potentially involved in serious breach of discipline and law. At present, the relevant reviews and investigations are still in progress.

Implementation of shares repurchase

Applicable

✓ Not applicable

The implementation of reducing shareholdings in shares repurchased through centralized bidding

Applicable

✓ Not applicable

- 11 -

1. The undertakings not being fully performed by actual controllers, shareholders, related parties and offerors of the Company as well as undertaking-related companies concerned during the Reporting Period

	✓	Applicable			Not applicable
									Performance
			Type of				Time of	Period of	of
Undertaking	Undertaker	Undertaking	Details of undertaking	undertaking	undertaking	undertaking
Undertakings	Anshan Iron &	Industry	Non-competition Undertaking Letter of	20 May	Indefinite	There was
made during	Steel Group	competition	Anshan Iron & Steel Group Co. Ltd ("Anshan	2007		no breach
assets	Co. Ltd	undertakings	Holding") 《( 鞍山鋼鐵集團有限公司避			of such
restructuring				免同業競爭承諾函》：			undertaking
				(1) Angang Holding and its wholly-owned
					and holding subsidiaries have complied
					with relevant requirements of the State on
					the non-competition.
				(2) Angang Holding and its wholly-owned
					and controlling 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 preemption
					rights for the assets and business to
					be disposed of by Angang Holding
					or the wholly-owned and controlling
					subsidiaries of Angang Holding, which
					are related to the principal 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, when required by the Company, it will transfer all the capital contribution, shares or equity interests and grant the Company preemptive rights for such capital contribution, shares or equity interests.

- 12 -

					Performance
		Type of	Time of	Period of	of
Undertaking	Undertaker	Undertaking Details of undertaking	undertaking	undertaking	undertaking

1. If Angang Holding and its wholly- owned and controlling 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 holding subsidiaries will transfer the relevant assets and business to the Company in priority based on reasonable prices and terms according to the processes required by laws.
2. During the effective period of the undertakings, on the premise of equal investment qualifications, Angang Holding shall inform the Company first regarding any 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 controlling subsidiaries have the rights to invest in the new business only if the Company expressly refuses to pursue such opportunity of new business.
   If the Company proposes to acquire such business in the future, Angang Holding and its wholly-owned and controlling subsidiaries are still required to transfer the assets and business formed by such opportunities to the Company in priority based on reasonable prices and terms.

- 13 -

					Performance
		Type of	Time of	Period of	of
Undertaking	Undertaker	Undertaking Details of undertaking	undertaking	undertaking	undertaking

1. 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 holding subsidiaries which do not compete with the Company, especially the business of provision of relevant materials or services required 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 businesses not prohibited by the State.
   Such undertakings became effective from the date of issuance, and shall be terminated upon the occurence of one of the following conditions:
2. 1. Angang Holding ceases to be the controlling shareholder of the Company;
   2. The shares of the Company cease to be listed on any stock exchange (except for temporary suspension of the shares of the Company due to any reason);
   3. When the State does not require the contents of certain undertakings, the relevant parts shall be terminated automatically.

- 14 -

					Performance
		Type of	Time of	Period of	of
Undertaking	Undertaker	Undertaking Details of undertaking	undertaking	undertaking	undertaking

Whether the undertakings have been timely performed

Considering that Angang Holding does not have any iron and steel production projects 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 competition with the Company before the date of the issuance of the undertaking letter.

Yes

There were no undertakings not being fully performed by actual controllers, shareholders, related parties and offerors of the Company as well as undertaking-related companies concerned during the Reporting Period.

- 15 -

IV. Investment in Financial Assets

1. Investment in securities

✓

Applicable

Not applicable

Unit: RMB million

Gains

Book

and losses

value

from

at the changes in Accumulated

Purchase

Disposal

Loss

Book value

beginning

fair value

changes in

amount

amount

or gain

at the end

Initial

Accounting

of the during the

fair value

during the

during the

during the

of the

Stock

Stock

investment

measurement

Reporting

Reporting

reported in

Reporting

Reporting

Reporting

Reporting

Accounting

Source of

type

code

Abbreviation

cost

model

Period

Period

equity

Period

Period

Period

Period

item

funds

Shares 600961

Zhuzhou Group

81

Measured at

34

5

-

-

-

5

29

Financial

Self-

(株冶集團)

fair value

assets held

financed

for trading

funds

Other securities investments held

-

-

-

-

-

-

-

-

-

-

-

at the end of the Reporting

Period

Total

81

-

34

5

-

-

-

5

29

-

-

Disclosure date of the Board's

-

announcement on approval of

securities investments

Disclosure date of the general

-

meeting announcement

on approval of securities investments (if any)

- 16 -

2. Investment in derivatives

✓

Applicable

Not applicable

Unit: RMB million

Proportion of

investments

at the end of

the period to

Investments

net assets of

Actual

Name

Initial

at the

Purchase

Disposal

Investments the Company

profit

of the

Related

investment

beginning

amount

amount

Provision

at the end

at the

or loss

derivative

party

Type of

amount of

of the

during the during the

for

of the

end of the

during the

investment

Connected

transactionderivative

derivative

Date of

Date of

Reporting

Reporting

Reporting impairment

Reporting

Reporting

Reporting

operator

relationship or not

investment investment commencementtermination

Period

Period

Period

(if any)

Period

Period

Period

Angang

None

No

Futures

1

29 April 2015

-

150

678

493

-

180

0.32%

-31

Steel

hedging

Angang

None

No

Foreign

-

29 October

18 May 2021

-

-

-

-

-

-

0

Steel

exchange

2020

rate swap

Total

1

-

-

150

678

493

-

180

0.32%

-31

- 17 -

Source of funds for derivative investments

Litigation involved (if applicable)

Date of the announcement disclosing the approval of derivative investment by the Board (If any)

Date of the announcement disclosing the approval of derivatives investment at shareholders' meeting (If any)

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

Self-owned funds

None

On 30 March 2021, the Resolution in relation to the Company's 2021 Annual Hedging Business Amount was approved at the 41st meeting of the eighth session of the Board.

On 29 October 2020, the Resolution in relation to the Carrying out of Foreign Exchange Hedging Business by the Company was approved at the 29th meeting of the eighth session of the Board.

None

❖  Futures hedging:

1. Market risks exist when the category of the position held by the Company is related to the steel industry, which is highly relevant to spot commodities operated by the Company. Although the Company makes regular analysis and estimation on the market, the judgment on the market may be deviated, resulting in potential risks. However, the risk is controllable after futures are hedged with spot commodities.
2. As the category of posit ions held has a sufficient level of liquidity, there is no liquidity risk.
3. The Futures Exchange provides credit guarantee for the category of positions held, thus the credit risk is minimal.
4. The Company carries out such business in strict compliance with the relevant requirements of hedging and total positions held and the time are in line with the Company's approval.

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

- 18 -

❖  Foreign exchange hedging:

The hedging process is to first enter into a swap contract with a bank and purchase foreign exchange at the agreed price at maturity. The purpose of the transaction is to prevent against the exchange rate risk arising from the sell-back of convertible bonds by investors in May 2021. The transaction is simple and convenient to conduct and there exists no significant risk. However, there may exists risk of mismatch between the sell-back amount and the Company's hedge amount due to the uncertainty of investors' intention to resell in the future.

Control measures:

1. In order to regulate the behavior of foreign exchange derivatives trading and strengthen the supervision and management of foreign exchange derivatives trading business, the Company has issued the Foreign Exchange Capital Management Measures on the basis of relevant laws, regulations and policies, which provides for detailed regulations on the principles, conditions and implementation of trading, capital management and position management of the foreign exchange derivatives trading, as well as the corresponding approval process and authority;
2. The Company strengthens the management of bank accounts and funds, strictly complies with the approval procedures for the allocation and use of funds, arranges full-time personnel, clarifies the responsibilities, and strictly engages in the above business within the scope of authorization, properly arranges funds for completion to ensure delivery on schedule; in case a special circumstance requires early completion through swap transactions, extension or adoption of other methods acceptable to counterparties, etc., relevant procedures should be completed in accordance with the regulations of foreign exchange derivatives transactions;
3. Regarding the risk of mismatch between the amount of future sell-back and the Company's hedge amount, as some of the bonds may be held until maturity, the Company can take measures such as closing out the positions or extension of the term to control the risk in the future after communication and consultation with professional financial institutions.

- 19 -

Changes in market price or product 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

Explanations of any significant 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

❖  Futures hedging:

Deformed bar, hot-rolled coil and nickel quoted on the Shanghai Futures Exchange; iron ore, coking coal and coke quoted on the Dalian Commodity Exchange; on 4 January 2021, the settlement prices of main connected contracts of deformed bar, hot- rolled coil, nickel, iron ore, coking coal and coke were RMB4,346/ton, RMB4,472/ton, RMB126,820/ ton, RMB999/ton, RMB1,668/ton and RMB2,887.5/ ton, respectively; on 31 March 2021, the settlement prices of main connected contracts of deformed bar, hot-rolled coil, nickel, iron ore, coking coal and coke were RMB4,956/ton, RMB5,384/ton, RMB121,080/ton, RMB1,091.5/ton, RMB1,657.5/ ton and RMB2,285.0/ton, respectively. The changes in fair values of deformed bar, hot-rolled coil, nickel, iron ore, coking coal and coke were +RMB610/ton, +RMB912/ton, -RMB5,740/ton, +RMB92.5/ton, -RMB10.5/ton and -RMB602.5/ton, respectively.

❖  Foreign exchange hedging:

At the time of signing the contract, an exchange rate of 0.866 HKD/RMB was adopted as the settlement price on 18 May 2021. The central parity of HKD/RMB on 31 March 2021 was 0.84518. The Company paid interest to the bank on the principal amount of HK$1 billion (converted to RMB866 million at the settlement price of 0.866 at maturity) at an annualized interest rate of 3.58% based on the actual number of subsisting days of the contracts.

N/A

- 20 -

Specific opinions of independent directors on the derivatives investment and risk control of the Company

❖  Futures hedging:

1. The Company utilized the self-owned funds for the development of futures hedging business on the basis of ensuring its normal production and operation, and performed the related approval procedures in compliance with relevant requirements of the relevant laws, regulations and the Articles and Association, which was beneficial to the reduction of operating risks of the Company, without prejudice to the Company and shareholders as a whole.
2. The Company established Administrative Measures on Angang Steel Company Limited Commodity Futures Hedging, and explicitly confirmed internal control procedures such as the business operation procedures, approval process and risks prevention and control, achieving a protection for the Company to control future risks.
3. The Company confirmed that the maximum amount and the types for trading of the annual hedging guarantees were reasonable and in compliance with the actual situation of production and operation of the Company, and thus it is in favour of the Company to reasonably control the trading risks.

❖  Foreign exchange hedging:

1. In order to prevent foreign exchange risks, the Company has carried out foreign exchange hedging business and fulfilled the relevant approval procedures, which are in compliance with the relevant national laws, regulations and the relevant provisions of the Articles of Association, and are conducive to reducing of operating risks of the Company, without prejudice to the interests of the Company and its shareholders.

- 21 -

1. 1. The Company has formulated the Measures for the Management of Foreign Exchange Funds of Angang Steel Company Limited*
      《( 鞍 鋼 股 份 有 限 公 司 外 匯 資 金 管 理 辦 法》), which provides clear regulations on the principles of foreign exchange derivatives trading, trading process, internal control and risk prevention measures, and plays a protective role in controlling the risk of foreign exchange derivatives trading by the Company.
   2. The types and quantities of foreign exchange hedging trading determined by the Company are in line with the business requirements of the Company and are conducive to reasonably controlling risks by the Company.
2. Progress of projects financed by proceeds

Applicable

✓ Not applicable

VI. Estimate of the operating results for January-June 2021

Warning of projection on cumulative net profit for the period from the beginning of the year to the end of the next reporting period to be at a loss or expected to have material changes as compared to the corresponding period of prior year and its explanation

Applicable

✓ Not applicable

VII. Major contracts during daily operations

Applicable

✓ Not applicable

VIII. Entrusted wealth management

Applicable

✓ Not applicable

During the Reporting Period, the Company did not have entrusted wealth management.

IX. Information on illegal external guarantees

Applicable

✓ Not applicable

During the Reporting Period, the Company had no illegal external guarantee.

- 22 -

1. Information on the non-operating use of funds of the listed company by the controlling shareholder and its related parties

Applicable

✓ Not applicable

During the Reporting Period, there was no non-operating use of funds of the listed company by the controlling shareholder and its related parties.

XI. Record sheet for reception of activities such as survey, communication and interview during the Reporting Period

		✓	Applicable			Not applicable
								Major discussion
Date of	Site of		Type of		points and information	Index of the basic
reception	reception	Way of reception recipient	Recipient	provided	particulars of the survey
25 January	The Company	Telephone	Institutions	Sumitomo Mitsui DS Asset	Company production	Irm.cninfo.com.cn

2021	communication	Management- Hashidzume	and operation and	under Shenzhen Stock
		Kenji (橋爪謙治), Ogata	industry operation	Exchange/Investor
		Yūsuke (尾形優介)	conditions	Relations Activity
		Sumitomo Mitsui Banking		Record Form on 25
		Corporation-Yang Yunqin		January 2021
		(楊韻欽)

Dahl Capital Management (達 爾資本管理)-Pui Yee Lee

- 23 -

4.	FINANCIAL STATEMENTS
	I. Financial statements
	Consolidated Balance Sheet
	As at 31 March 2021
	Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
			31 March	31 December
	Items	2021	2020
	Current assets:
	Cash and cash equivalents	3,745	5,329
	Derivative financial assets	4
	Notes receivable	158	63
	Accounts receivable	2,711	2,593
	Receivables financing	1,399	1,009
	Prepayments	3,230	3,117
	Other receivables	75	56
	Including: interests receivable
	Dividends receivable
	Inventories	13,470	10,618
	Other current assets	348	231
	Total current assets	25,140		23,016
	Non-current assets:
	Long-term equity investments	3,033		2,965
	Other investments in equity
	instruments	476	476
	Other non-current financial assets	29	34
	Fixed assets	49,582	50,372
	Construction in progress	1,975	1,814
	Right-of-use assets	788	822
	Intangible assets	5,942	5,988
	Deferred income tax assets	1,224	1,369
	Other non-current assets	1,165	1,190
	Total non-current assets		64,214		65,030
	Total assets		89,354		88,046

- 24 -

	31 March	31 December
Items	2021	2020
Current liabilities:
Short-term loans	4,125	8,505
Derivative financial liabilities	45	43
Notes payable	3,884	2,620
Accounts payable	8,617	7,939
Contract liabilities	6,381	5,611
Employee benefits payable	237	228
Tax payable	352	387
Other payables	2,175	1,960
Including: interests payable	31	15
Dividends payable
Non-current liabilities due within 1
year	909	409
Total current liabilities	26,725		27,702
Non-current liabilities:
Long-term loans	4,254		3,478
Bonds payable	1,497	1,476
Lease liability	587	665
Long-term employee benefits payable	125	125
Deferred income	585	595
Deferred income tax liabilities	112	112
Other non-current liabilities	40	35
Total non-current liabilities	7,200		6,486
Total liabilities	33,925		34,188

- 25 -

			31 March	31 December
Items			2021	2020
Shareholders' equity:
Share capital			9,405	9,405
Capital reserve			33,423	33,485
Less: Treasury shares			104	166
Other comprehensive income	(81)	(80)
Special reserve			119	74
Surplus reserve			3,849	3,849
Undistributed profit			8,315	6,798
Subtotal of Shareholders' equity
attributable to shareholders of
parent company			54,926		53,365
Minority interests			503		493
Total shareholders' equity			55,429	53,858
Total liabilities and shareholders'
equity			89,354		88,046
			Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun			You Yu

- 26 -

Consolidated Income Statement

For the three months Ended 31 March 2021

Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
January-MarchJanuary-March
Items	2021	2020
Operating income	31,878	20,337
Including: operating income	31,878	20,337
Operating costs	29,914	19,919
Less: operating costs	28,145	18,362
Tax and surcharges	247	258
Marketing expenses	857	705
Administrative expenses	320	277
Research and development expenses	137	77
Financial expenses	208	240
Including: interests expenses	204	207
Interests revenue	13	10
Add: Other income	13	12
Investment income ("-" for losses)	75	40
Including: income from investment
in jointly ventures and
associates	75	30
Gains/losses from fair
value variation
("-" for losses)	(28)	10
Impairment losses on
assets ("-" for losses)	22	(121)
Credit impairment loss
("-" for losses)
Asset disposal income
("-" for losses)	1
Operating profit ("-" for losses)	2,047	359
Add: Non-operating income	3	2
Less: Non-operating expenses	21	16

- 27 -

		January-MarchJanuary-March
Items	2021	2020
Profit before income tax ("-" for losses)	2,029	345
Less: Income tax expenses	500	54
Net profit for the period ("-" for losses)	1,529	291
Classification according to the continuity
	of operation
	i. Continuous operating net profit
	("-" for losses)	1,529	291
	ii. Termination of net profit ("-" for
	losses)
Classification according to ownership
	i. The net profit belongs to the
	owners of the company	1,520	292
	ii. Minority interest income	9	(1)
The net amount after tax of other
	comprehensive income	(1)
Net after-tax net of other comprehensive
	income attributable to the parent
	company owner	(1)
I.	The other comprehensive income
	which can not be reclassified into
	profit or loss
	i. Changes in fair value of other
	investments in equity
	instruments investment
II.	The other comprehensive income
	which can be classified into profit
	or loss	(1)

1. The shares of the other comprehensive income which can be reclassified in profit or loss of the invested company

in equity method

(1)

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

- 28 -

	January-MarchJanuary-March
Items		2021	2020
Total comprehensive income	1,528	291
The comprehensive income attributed to
the owners of the company	1,519	292
The comprehensive income attributed to
the minority		9	(1)
Earning per share:
Basic earning per share (RMB/share)	0.162	0.031
Diluted earning per share (RMB/share)	0.160	0.031
		Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun		You Yu

- 29 -

Consolidated Statement of Cash Flows

For the three months Ended 31 March 2021

Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
January-MarchJanuary-March
Items	2021	2020
Cash flows from operating activities:
Cash received from selling of goods or
rendering of services	32,361	18,233
Refund of taxes and fares	3
Other cash received from operating
activities	20	11
Sub-total of cash inflows	32,384	18,244
Cash paid for goods and services	27,332	18,594
Cash paid to and for the employees	1,189	1,031
Cash paid for all types of taxes	1,040	669
Other cash paid for operating activities	915	1,014
Sub-total of cash outflows	30,476	21,308
Net cash flow from operating activities	1,908	(3,064)
Cash flows from investing activities:
Cash received from return of investments
Cash received from investment income
Net cash received from disposal of fixed
assets, intangible assets and other
non-current assets	1	4
Other cash received from investment
activities	76	21
Sub-total of cash inflows	77	25
Cash paid for acquisition of fixed assets,
intangible assets and other non-
current assets	331	817
Cash paid for acquisition of investments
Other cash paid for investment activities	89
Sub-total of cash outflows	420	817
Net cash flow from investing activities	(343)	(792)

- 30 -

	January-MarchJanuary-March
Items		2021	2020
Cash flows from financing activities:
Cash received from absorbing investments		5
Including: received of subsidiary from
minority shareholders		5
Cash received from borrowings	2,105	7,635
Cash received from the issuance of bonds
Other cash received from financing
activities		86
Sub-total of cash inflows		2,191	7,640
Cash paid for settling of debts	5,209	5,426
Cash paid for distribution of dividends or
profit and repayment of interests	109	190
Including: dividends or profit paid to
minority shareholders
Other cash paid for financing activities	22	22
Sub-total of cash outflows		5,340	5,638
Net cash flow from financing activities	(3,149)	2,002
Effect of changes in foreign exchange
rate on cash and cash equivalents
Net increase in cash and cash
equivalents		(1,584)	(1,854)
Add: Cash and cash equivalents at
beginning of this period	5,329	4,671
Cash and cash equivalents at the end of
this period		3,745	2,817
		Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun		You Yu

- 31 -

Balance Sheet

As at 31 March 2021

Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
		31 March	31 December
Items	2021		2020
Current assets:
Cash and cash equivalents	1,475	1,586
Derivative financial assets	4
Notes receivable	14	46
Accounts receivable	3,017	2,567
Receivables financing	1,129	716
Prepayments	2,953	2,927
Other receivables	122	102
Including: interests receivable
Dividends receivable
Inventories	10,951	8,263
Other current assets	400	304
Total current assets	20,065		16,511
Non-current assets:
Long-term equity investments	12,679		12,612
Other investments in equity instruments	476	476
Other non-current financial assets	29	34
Fixed assets	42,553	43,292
Construction in progress	1,717	1,529
Right-of-use assets	776	808
Intangible assets	5,517	5,561
Deferred income tax assets	1,051	1,277
Other non-current assets	1,126	1,124
Total non-current assets	65,924		66,713
Total assets	85,989		83,224

- 32 -

	31 March	31 December
Items	2021		2020
Current liabilities:
Short-term loans	4,120	8,505
Derivative financial liabilities	45	43
Notes payable	3,782	2,519
Accounts payable	7,723	7,240
Contract liabilities	5,616	4,995
Employee benefits payable	160	176
Tax payable	141	180
Other payables	2,952	1,732
Including: interests payable	30	12
Dividends payable
Non-current liabilities due within 1 year	800	300
Total current liabilities	25,339		25,690
Non-current liabilities:
Long-term loans	4,200		3,350
Bonds payable	1,497	1,476
Lease liability	576	652
Long-term employee benefits payable	122	122
Deferred income	454	463
Deferred income tax liabilities	112	112
Other non-current liabilities	40	35
Total non-current liabilities	7,001		6,210
Total liabilities	32,340		31,900

- 33 -

	31 March	31 December
Items	2021		2020
Shareholders' equity:
Share capital	9,405	9,405
Capital reserve	26,465	26,527
Less: Treasury shares	104	166
Other comprehensive income	(81)	(80)
Special reserve	54	25
Surplus reserve	3,839	3,839
Undistributed profit	14,071	11,774
Subtotal of Shareholders' equity
attributable to shareholders of parent
company	53,649		51,324
Minority interests
Total shareholders' equity	53,649		51,324
Total liabilities and shareholders'
equity	85,989		83,224

		Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun	You Yu

- 34 -

Income Statement

For the three months Ended 31 March 2021

Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
January-MarchJanuary-March
Items	2021	2020
Operating income	28,684	20,944
Including: operating income	28,684	20,944
Operating costs	27,085	20,640
Less: operating costs	25,568	19,280
Tax and surcharges	202	227
Marketing expenses	714	579
Administrative expenses	275	237
Research and development	127
expenses	75
Financial expenses	199	242
Including: interests expenses	190	207
Interests revenue	7	7
Add: Other income	12	11
Investment income ("-" for losses)	1,129	40
Including: income from investment
in jointly ventures and	74
associates	29
Gains/losses from fair
value variation ("-"	(28)
for losses)	10
Impairment losses on	21
assets ("-" for losses)	(121)
Credit impairment loss
("-" for losses)
Asset disposal income	1
("-" for losses)
Operating profit ("-" for losses)	2,734	244
Add: non-operating income	1	1
Less: non-operating expenses	21	16

- 35 -

		January-MarchJanuary-March
Items	2021	2020
Profit before income tax ("-" for losses)	2,714	229
Less: income tax expenses	417	59
Net profit for the period ("-" for losses)	2,297	170
Classification according to the continuity
	of operation
i.	Continuous operating net profit ("-"	2,297
	for losses)	170
ii.	Termination of net profit ("-" for
	losses)
Classification according to ownership
i.	The net profit belongs to the owners	2,297
	of the company	170
ii.	Minority interest income
The net amount after tax of other
	comprehensive income	(1)
Net after-tax net of other comprehensive
	income attributable to the parent	(1)
	company owner

1. The other comprehensive income

which can not be reclassified into profit or loss

1. 1. Changes in fair value of other investments in equity instruments investment
2. The other comprehensive income which can be classified into profit

or loss

(1)

1. The shares of the other

comprehensive income which can be reclassified in profit or loss of the invested company

in equity method(1) Net after-tax net of other comprehensive

income attributable to minority shareholders

Total comprehensive income	2,296	170
The comprehensive income attributed to	2,296
the owners of the company	170
The comprehensive income attributed to
the minority
		Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun		You Yu

- 36 -

Statement of Cash Flows

For the three months Ended 31 March 2021

Prepared by: Angang Steel Company Limited	Monetary unit: RMB million
January-MarchJanuary-March
Items	2021	2020
Cash flows from operating activities:
Cash received from selling of goods or
rendering of services	28,816	17,212
Refund of taxes and fares
Other cash received from operating
activities	14	8
Sub-total of cash inflows	28,830	17,220
Cash paid for goods and services	24,714	17,533
Cash paid to and for the employees	1,021	894
Cash paid for all types of taxes	694	534
Other cash paid for operating activities	1,164	1,006
Sub-total of cash outflows	27,593	19,967
Net cash flow from operating activities	1,237	(2,747)
Cash flows from investing activities:
Cash received from return of investments
Cash received from investment income	1,054
Net cash received from disposal of fixed
assets, intangible assets and other non-
current assets	1	34
Net cash received from disposal of
subsidiaries and other business units
Other cash received from investment
activities	71	18
Sub-total of cash inflows	1,126	52
Cash paid for acquisition of fixed assets,
intangible assets and other non-current
assets	310	739
Cash paid for acquisition of investments		55
Other cash paid for investment activities	89
Sub-total of cash outflows	399	794
Net cash flow from investing activities	727	(742)

- 37 -

	January-MarchJanuary-March
Items		2021	2020
Cash flows from financing activities:
Cash received from borrowings	2,100	7,685
Cash received from the issuance of bonds
Other cash received from financing
activities		1,086
Sub-total of cash inflows		3,186	7,685
Cash paid for settling of debts	5,135	5,475
Cash paid for distribution of dividends or
profit and repayment of interests	105	190
Including: dividends or profit paid to
minority shareholders
Other cash paid for financing activities	21	21
Sub-total of cash outflows		5,261	5,686
Net cash inflow from financing activities	(2,075)	1,999
Effect of changes in foreign exchange
rate on cash and cash equivalents
Net increase in cash and cash
equivalents		(111)	(1,490)
Add: Cash and cash equivalents at
beginning of this period		1,586	3,237
Cash and cash equivalents at the end of
this period		1,475	1,747
		Person-in-charge of
Legal representative:	Chief Accountant:	accounting department:
Wang Yidong	Wang Baojun		You Yu

- 38 -

1. Explanation on adjustment to the Financial Statements

1. The related conditions on the adjustment of the financial statements at the beginning of the year of initial implementation arising from initial implementation of new lease standard since 2021

Applicable

✓ Not applicable

2. Explanation on retrospective adjustment to the previous comparative data by initial adoption of new lease standard since 2021

Applicable

✓ Not applicable

III. Audit Report

Whether this first quarterly report has been audited or not

Yes

✓ No

This first quarterly report of the Company is unaudited.

By Order of the Board

ANGANG STEEL COMPANY LIMITED*

Wang Yidong

Executive Director and Chairman of the Board

Anshan City, Liaoning Province, the PRC

29 April 2021

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

Executive Directors	Independent Non-executive Directors
Wang Yidong	Feng Changli
Li Zhen	Wang Jianhua
Li Zhongwu	Wang Wanglin
	Zhu Keshi

• For identification purposes only

- 39 -