Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 October 2018 1 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 I. Important Notice The Board of Directors, the Supervisory Committee and the Directors, members of the Supervisory Committee and senior management of the Company guarantee that there are no misrepresentations or misleading statements, or material omission in this report, and individually and collectively accept full responsibility for the authenticity, accuracy and integrity of the information contained in this report. All the members of the Board of Directors attended the board meeting on which this report was examined. Wang Shu, Chairman of the Company, Gao Lie, the principal in charge of the accounting, and Zhao Zhonghua, Chief of Accounting Affairs, make the pledge for the authenticity, accuracy and integrity of the attached financial statements. 2 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 II. Company Profile I. Summary of Accounting data and Financial index Whether the Company makes retroactive adjustment or restatement of the accounting data of the previous year □ Yes √ No Increase or decrease in this At the end of the current At the end of previous year reporting period over the period previous year Total assets(RMB) 59,738,861,908.85 62,998,143,513.02 -5.17% Net assets attributable to shareholders of the listed company 18,931,762,047.50 14,315,588,729.00 32.25% (RMB) Increase or decrease From the beginning of Compare to the same compared to the same This reporting period the year to the end of period of the previous period of the previous the current period year year Operating income(RMB) 13,313,390,671.44 38.10% 36,754,638,048.58 20.99% Net profit attributable to the shareholders of the listed company 68,230,224.01 -91.58% 825,182,211.60 -38.16% (RMB) Net profit after deducting of non-recurring gain/loss attributable 51,745,834.17 -93.56% 776,668,790.16 -40.83% to the shareholders of listed company(RMB) Net Cash flow generated by -- -- 6,933,467,399.98 269.00% business operation(RMB) Basic earnings per 0.02 -92.31% 0.21 -51.16% share(RMB/Share) Diluted gains per 0.02 -92.31% 0.21 -51.16% share(RMB/Share) Weighted average net assets yield 0.36% -5.82% 4.96% -5.01% (%) Items and amount of non-recurring profit and loss √ Applicable □ Not applicable 3 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Unit: RMB From the beginning of the Items year to the end of the current Notes period Profit or loss from disposal of non-current assets (including the -848,283.58 write-off part for which assets impairment provision is made) Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation, meeting the regulation of 63,413,797.03 national policy and enjoyed constantly in certain quota or quantity according to a certain standard) Profit or loss from debt restructuring 945,892.23 Other non-operating revenue and expenditure other than above 1,347,426.82 items Less: Impact of income tax 16,214,708.13 Impact of minority interests (after tax) 130,702.93 Total 48,513,421.44 -- For the Company’s non-recurring profit and loss items as defined in “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” and its non-recurring profit and loss items as illustrated in “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” which have been defined as recurring profits and losses, it is necessary to explain the reason. □ Applicable √ Not applicable None of Non-recurring profit and loss items recognized as recurring profit and loss items as defined by “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” in the report period. II. Total Number of Shareholders and Shareholding of top 10 shareholders 1. Total number of common shareholders, preferred shareholders whose voting rights restored, and shareholding of top 10 shareholders Unit: Share The total number of preferred Total number of common shareholders whose voting shareholders at the end of the 62,373 rights has been restored at end 0 reporting period of the reporting period (if any) Shareholding by Top 10 shareholders Name of the Nature of Proportion of Quantity of Amount of Number of share pledged/frozen 4 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 shareholder shareholder shares held shares restricted shares State of share Quantity held Benxi Steel & Pledged 1,523,095,133 State-owned legal Iron (Group) Co., 60.78% 2,355,409,263 person Frozen 45,000,000 Ltd. Liaoning Provincial State-owned legal Transportation 4.77% 184,842,883 184,842,883 person Investment Group Co., Ltd. CCB Principal Asset Management – ICBC – CR Trust Others 4.77% 184,842,883 184,842,883 – CR Trust Xing Sheng No. 5 Collective Fund Trust Plan Bei Xin Rui Feng Fund – China Merchants Bank – Bei Xin Rui Others 4.77% 184,842,883 184,842,883 Feng Fund Feng Qing No. 229 Asset Management Plan China Life AMP Fund– ICBC – China Life AMP – Hua Xin Trust Targeted Others 4.77% 184,842,883 184,842,883 Additional Shares Issuance No. 10 Asset Management Plan VANGUARD EMERGING Overseas legal MARKETS 0.21% 8,157,311 person STOCK INDEX FUND Domestic natural Chen Jinhong 0.19% 7,264,500 person 5 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Domestic natural Lyu Ruijun 0.13% 5,188,800 person VANGUARD TOTAL Overseas legal INTERNATION 0.12% 4,606,141 person AL STOCK INDEX FUND Agricultural bank of China - China Securities 500 Others 0.10% 4,060,900 Trading Open Index Securities Investment Fund Shareholding of top 10 shareholders of unrestricted shares Category of shares Number of non-restricted common shares held at the Name of the shareholder Category of period-end Quantity shares Common shares Benxi Steel & Iron (Group) Co., Ltd. 2,355,409,263 2,355,409,263 in RMB Foreign shares VANGUARD EMERGING placed in 8,157,311 8,157,311 MARKETS STOCK INDEX FUND domestic exchange Common shares Chen Jinhong 7,264,500 7,264,500 in RMB Foreign shares placed in Lyu Ruijun 5,188,800 5,188,800 domestic exchange Foreign shares VANGUARD TOTAL placed in INTERNATIONAL STOCK INDEX 4,606,141 4,606,141 domestic FUND exchange Agricultural bank of China - China Common shares Securities 500 Trading Open Index 4,060,900 4,060,900 in RMB Securities Investment Fund Foreign shares placed in Yu Xiaofan 4,002,707 4,002,707 domestic exchange 6 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Foreign shares placed in Xu Hekun 3,738,800 3,738,800 domestic exchange Foreign shares Haitong International Securities placed in 3,211,109 3,211,109 Company Limited-Account Client domestic exchange Common shares Sui Yu 3,203,700 3,203,700 in RMB Related-parties or acting-in-concert It is unknown to the Company whether there is any related connection or action-in-concert parties among the above-mentioned parties among the top 10 un-restricted shareholders. shareholders Benxi Steel & Iron (Group) Co., Ltd. holds 2,105,409,263 shares of the company through an Shareholders among the top 10 ordinary securities account, and holds 250,000,000 shares through the investor's credit participating in securities margin securities account, therefore, it holds a total of 2,355,409,263 shares. Sui Yu holds 3,203,700 trading (if any) shares of the company through an investor's credit securities account. Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement dealing in reporting period □ Yes √ No Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing in reporting period. 2. Total Number of Preferred Shareholders and Shareholding of Top 10 Preferred Shareholders □ Applicable √ Not applicable 7 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 III. Important Events I. Major Changes in Financial Data and Financial Index And Reason √ Applicable □ Not applicable Items and reasons for the changes of more than 30% compared with the beginning of the year in the consolidated statement Increase / 1. Statement of Financial Position Decrease Reasons Notes receivable and Accounts Due to the increase of payment of notes receivable in -32% receivable the current period Due to the reduction of short-term banking products at Other current assets -73% the end of this period Due to the decrease of VAT payable at the end of this Tax payable -31% period Non-current liabilities due within Due to the decrease in long-term loans due within one -61% one year year Due to the increase of accrued output VAT in the Other current liabilities 142% current period 173% Due to the increase of long-term loans in the current Long-term loans period Due to the premium of targeted additional shares Capital reserves 35% issuance Due to the decrease of payment of safety production Special reserves 3584% cost Undistributed profits 57% Due to the increase of net profit Items and reasons for the changes of more than 30% compared to January to September 2017 in the consolidated statement Increase / 2. Statement of comprehensive income Reasons Decrease Taxes and surcharges 31% Due to the increase of VAT payable and surcharges Financial expenses 224% Due to the change of net exchange loss Due to the increase of the price of products and the Asset impairment loss -39% decrease of reversal of stock provision Due to the increase of deferred income of government Other income 176% subsidies 8 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Asset disposal income -68% Due to the decrease of disposal income on fixed assets Non-operating income -70% Due to the decrease of gains on debt restructuring Non-operating expenses -77% Due to the decrease of disposal loss on fixed assets Income tax expenses -95% Due to the decrease of deferred income tax Net profit attribute to owners of the -38% Due to the increase of exchange loss company Profit or loss of non-controlling -94% Due to the decrease of profit of holding subsidiaries shareholders Increase / 3. Statement of cash flows Reasons Decrease Due to the increase of VAT and other taxes paid in the Cash paid for all types of taxes 39% period Net cash flows generated from Due to the increase of cash flows from operating 269% operating activities activities in the period Cash paid for acquisition of fixed Due to the increase of payment of acquisition of fixed assets, intangible assets and other 33% assets, intangible assets in the period long-term assets Cash paid for investment -100% Due to the decrease of purchase of banking products Due to the increase of cash on repayment of Cash repayments of borrowings 109% borrowings Cash payments for distribution of Due to the increase of cash payments for distribution 36% dividends, profit or interest of dividends, profit or interest in the period Net cash flow generated by financing -223% Due to the increase of repayment of financing activities Net increase of cash and cash Due to net cash flows from operating activities 231% equivalents increased in the period II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. □ Applicable √ Not applicable III. The Under-Fulfillment Commitments by the End of the Period Made by Actual Controller, Acquirer, Director, Supervisor, Senior Management Personnel and other Related Parties. □ Applicable √ Not applicable There was no under-fulfillment commitment by the end of the period made by actual controller, acquirer, director, supervisor, senior 9 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 management personnel and other related parties. IV. Forecast towards Operating Performance of 2018 Warning and reason for that forecast of the cumulative net profit from the beginning of the year to the end of the next reporting period might be a loss or due to significant change compared to the previous year □ Applicable √ Not applicable V. Investment in Securities □ Applicable √ Not applicable There is no investment in securities during the reporting period. VI. Entrusted Financial Management □ Applicable √ Not applicable There is no entrusted financial management in the reporting period. VII. Investment in Derivatives □ Applicable √ Not applicable There is no investment in derivatives during the reporting period. VIII. Registration form of Activities such as Research, Communication, Interview in this Reporting Period □ Applicable √ Not applicable There is no activity such as research, communication, interview in the reporting period. IX. Violation of Regulations in Provision of External Guaranty □ Applicable √ Not applicable There is no violation of regulations in provision of external guaranty during the reporting period. X. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and Related Parties □ Applicable √ Not applicable There is no non-operating occupation of funds by the controlling shareholder and related parties 10 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 IV. Financial Statements I. Financial Statements 1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Prepared by: Bengang Steel Plates Co., Ltd. 30 September 2018 Unit: RMB Items Ending balance Beginning balance Current assets: Cash at bank and on hand 15,498,765,186.18 17,037,713,410.49 Settlement provisions Capital lent Financial assets at fair value through profit or loss Derivative financial assets Notes receivable and accounts 3,130,334,790.84 4,575,031,627.26 receivable Including: Notes receivable 2,350,933,803.35 3,846,433,700.87 Accounts receivable 779,400,987.49 728,597,926.39 Prepayments 1,406,069,971.25 1,280,689,094.33 Premium receivable Reinsurance accounts receivable Receivable deposit for reinsurance contract Other receivables 287,146,572.24 308,825,505.84 Redemptory financial assets for sale Inventories 12,409,729,513.29 11,209,898,096.16 Assets classified as held for sale Non-current assets due within one year Other current assets 216,187,634.74 809,322,127.79 Total current assets 32,948,233,668.54 35,221,479,861.87 Non-current assets: Loan and advances issued 11 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Available-for-sale financial assets 4,088,980.00 3,888,980.00 Held-to-maturity investment Long-term receivables Long-term equity investments 2,284,192.80 2,726,009.03 Investment properties Fixed assets 22,182,758,920.58 23,852,067,166.10 Construction in progress 3,090,822,270.04 2,396,143,330.06 Productive biological assets Oil and gas assets Intangible assets 279,704,283.74 253,884,881.48 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 193,233,744.15 200,618,461.36 Other non-current assets 1,037,735,849.00 1,067,334,823.12 Total non-current assets 26,790,628,240.31 27,776,663,651.15 Total assets 59,738,861,908.85 62,998,143,513.02 Current Liabilities: Short-term loans 15,927,954,800.00 21,999,103,900.00 Loan from central bank Absorbed deposit and interbank deposit Loan from other financial institutions Financial liabilities at fair value through profit or loss Derivative financial liabilities Notes payable and accounts payable 11,072,129,300.90 15,392,258,341.04 Advance from customers 4,065,912,701.96 3,308,567,598.05 Financial assets sold for repurchase Handling charges and commission payable Employee benefits payable 47,185,107.04 43,722,537.58 Current tax liabilities 60,186,024.80 87,807,128.50 Other payables 579,206,918.70 661,129,220.33 Reinsurance accounts payable 12 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Provision for insurance contract Receipt from vicariously traded securities Receipt from vicariously underwriting securities Liabilities held for sale Non-current liabilities due within one 1,469,056,325.69 3,811,540,590.84 year Other current liabilities 67,740,181.61 27,979,093.21 Total current liabilities 33,289,371,360.70 45,332,108,409.55 Non-current liabilities: Long-term loans 6,672,883,171.25 2,444,185,630.28 Bonds payable Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable Estimated liabilities Deferred income 310,345,502.97 372,785,000.00 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 6,983,228,674.22 2,816,970,630.28 Total liabilities 40,272,600,034.92 48,149,079,039.83 Shareholders’ equity: Share capital 3,875,371,532.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 12,343,209,847.29 9,114,845,542.05 Less: treasury shares Other comprehensive income Special reserves 17,498,893.01 475,046.75 Surplus reserves 961,105,529.85 961,105,529.85 General risk reserve Undistributed profits 1,734,576,245.35 1,103,162,610.35 13 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Total equity attributable to equity holders 18,931,762,047.50 14,315,588,729.00 of the parent company Non-controlling interests 534,499,826.43 533,475,744.19 Total shareholder’s equity 19,466,261,873.93 14,849,064,473.19 Total liabilities and shareholder’s equity 59,738,861,908.85 62,998,143,513.02 Legal Representative: Wang Shu Person in charge of accounting: Gao Lie Accounting Dept. Leader: Zhao Zhonghua 2. BALANCE SHEET OF THE PARENT COMPANY Unit: RMB Items Ending balance Beginning balance Current assets: Cash at bank and on hand 14,801,259,079.79 16,717,913,081.42 Financial assets at fair value through profit or loss Derivative financial assets Notes receivable and accounts 3,274,255,601.50 3,997,543,586.41 receivable Including: Notes receivable 2,797,038,562.18 3,515,361,992.96 Accounts receivable 477,217,039.32 482,181,593.45 Prepayments 1,406,069,971.25 1,280,354,579.87 Other receivables 384,513,943.10 395,240,485.68 Inventories 10,538,876,842.62 9,228,860,225.75 Assets classified as held for sale Non-current assets due within one year Other current assets 184,195,100.99 682,211,823.73 Total current assets 30,589,170,539.25 32,302,123,782.86 Non-current assets: Available-for-sale financial assets 3,888,980.00 3,888,980.00 Held-to-maturity investment Long-term receivables Long-term equity investments 2,016,281,902.16 1,756,981,902.16 Investment properties Fixed assets 20,212,485,741.91 21,621,369,452.27 Construction in progress 3,080,337,507.28 2,387,667,263.65 14 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Productive biological assets Oil and gas assets Intangible assets 149,602,712.28 152,082,315.24 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 92,805,204.12 100,189,921.33 Other non-current assets 1,037,735,849.00 1,037,735,849.00 Total non-current assets 26,593,137,896.75 27,059,915,683.65 Total assets 57,182,308,436.00 59,362,039,466.51 Current Liabilities: Short-term loans 14,505,914,800.00 20,499,694,500.00 Financial liabilities at fair value through profit or loss Derivative financial liabilities Notes payable and accounts payable 11,865,206,245.70 15,051,433,056.31 Advance from customers 3,824,220,027.48 3,217,423,443.14 Employee benefits payable 46,779,359.79 42,380,713.02 Current tax liabilities 50,133,972.30 66,903,531.67 Other payables 383,345,713.12 422,286,065.92 Liabilities held for sale Non-current liabilities due within one 1,469,056,325.69 3,811,540,590.84 year Other current liabilities 67,740,181.61 27,979,093.21 Total current liabilities 32,212,396,625.69 43,139,640,994.11 Non-current liabilities: Long-term loans 6,672,883,171.25 2,444,185,630.28 Bonds payable Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable Estimated liabilities Deferred income 310,345,502.97 372,785,000.00 Deferred tax liabilities 15 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Other non-current liabilities Total non-current liabilities 6,983,228,674.22 2,816,970,630.28 Total liabilities 39,195,625,299.91 45,956,611,624.39 Shareholders’ equity: Share capital 3,875,371,532.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 11,923,058,165.17 8,694,693,859.93 Less: treasury shares Other comprehensive income Special reserves 13,707,699.40 276,727.96 Surplus reserves 961,105,529.85 961,105,529.85 Undistributed profits 1,213,440,209.67 613,351,724.38 Total shareholder’s equity 17,986,683,136.09 13,405,427,842.12 Total liabilities and shareholder’s equity 57,182,308,436.00 59,362,039,466.51 3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Total operating income 13,313,390,671.44 9,640,672,901.66 Including: Operating income 13,313,390,671.44 9,640,672,901.66 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 13,262,549,953.80 8,643,165,739.54 Including: Operating cost 11,807,011,528.70 8,007,060,516.58 Interest cost Expenditure for handling charges and commission Surrender value Net expenditure for compensation 16 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Net provision for insurance contract appropriated Bonus payment for policy Reinsurance premium Taxes and surcharges 65,070,725.45 32,838,776.98 Selling and distribution 277,192,418.87 268,471,511.83 expenses General and administrative 194,084,503.86 183,859,058.32 expenses Research and development 744,560.38 1,168,392.15 expenses Financial expenses 925,267,736.70 151,946,049.78 Including: Interest 341,799,842.63 352,335,836.37 expenses Interest income 47,196,277.02 38,214,461.38 Asset impairment loss -6,821,520.16 -2,178,566.10 Add: Other income 22,139,558.33 7,946,400.00 Income on investment ("-" for loss) Including: Income from associates and joint ventures Gains from the change in fair value ("-" for loss) Exchange Income ("-" for loss) Asset disposal gains ("-" for 284,086.70 476,301.60 loss) 3. Operating profit ("-" for loss) 73,264,362.67 1,005,929,863.72 Add: Non-operating income 160,456.93 4,648,042.92 Less: Non-operating expenses 581,084.33 3,888,870.11 4. Total profit ("-" for loss) 72,843,735.27 1,006,689,036.53 Less: Income tax expenses 5,182,120.12 194,797,871.77 5. Net Profit ("-" for loss) 67,661,615.15 811,891,164.76 Net profit from continuing operation ("-" for loss) Net profit from discontinued operation ("-" for loss) Attributable to: Owners of parent 68,230,224.01 810,662,349.27 17 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 company Non-controlling shareholders -568,608.86 1,228,815.49 6. Other comprehensive income after tax Other comprehensive income attributable to owners of parent company after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) Change of net liabilities or net assets through re-measuring defined benefit plan (2) Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) Share of other comprehensive income of investee to be classified into profit or loss afterwards under equity method (2) Gains and losses on re-measuring available-for-sale financial assets (3) Gains and losses resulting from reclassification of held-to maturity investment to financial assets held-for sale (4) Effective portion of gains or losses from cash flow hedging (5) Gains and losses resulting from translati ng the foreign currency financial statements (6) Others Other comprehensive income attributable to non-controlling 18 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 shareholders after tax 7. Total comprehensive income 67,661,615.15 811,891,164.76 Total comprehensive income attributable to owners of parent 68,230,224.01 810,662,349.27 company Total comprehensive income attributable to non-controlling -568,608.86 1,228,815.49 shareholders 8. Earnings per share: 1) Basic earnings per share 0.02 0.26 2) Diluted earnings per share 0.02 0.26 The current business combination under common control, the net profits of the combined party before achieved: Yuan, net profit of previous period of the combined party realized: Yuan. Legal Representative: Wang Shu Person in charge of accounting: Gao Lie Accounting Dept. Leader: Zhao Zhonghua 4. INCOME STATEMENT OF THE PARENT COMPANY DURING THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Operating income 12,985,694,384.88 9,431,303,159.07 Less: Operating cost 11,617,944,541.11 7,944,761,205.42 Taxes and surcharges 57,126,440.52 24,005,387.31 Selling and distribution 175,224,699.33 182,143,490.01 expenses General and administrative 181,799,889.96 171,833,139.29 expenses Research and development 744,560.38 1,168,392.15 expense Financial expenses 912,638,828.57 136,168,153.13 Including: Interest expenses 326,523,217.57 336,060,319.84 Interest income 45,650,825.86 37,359,001.61 Asset impairment loss -6,821,520.16 -2,177,456.19 Add: Other income 22,139,558.33 7,946,400.00 Income on investment Including: Income from associates and joint ventures 19 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Gains from the change in fair value ("-" for loss) Asset disposal gains ("-" for 284,086.70 476,301.60 loss) 2. Operating profit ("-" for loss) 69,460,590.20 981,823,549.55 Add: Non-operating income 125,720.44 4,525,197.68 Less: Non-operating expenses 575,548.65 3,888,870.11 3. Total profit ("-" for loss) 69,010,761.99 982,459,877.12 Less: Income tax expenses 1,705,380.04 187,447,328.04 4. Net Profit ("-" for loss) 67,305,381.95 795,012,549.08 Net profit from continuing 67,305,381.95 795,012,549.08 operation ("-" for loss) Net profit from discontinued operation ("-" for loss) 5. Other comprehensive income after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) Change of net liabilities or net assets through re-measuring defined benefit plan (2) Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) Share of other comprehensive income of investee to be classified into profit or loss afterwards under equity method (2) Gains and losses on re-measuring available-for-sale financial assets (3) Gains and losses resulting from reclassification of held-to maturity investment to financial assets 20 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 held-for sale (4) Effective portion of gains or losses from cash flow hedging (5) Gains and losses resulting from translati ng the foreign currency financial statements (6) Others 6. Total comprehensive income 67,305,381.95 795,012,549.08 7. Earnings per share: 1) Basic earnings per share 2) Diluted earnings per share 5. CONSOLIDATED STATEMENT OF INCOME STATEMENT FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Total operating income 36,754,638,048.58 30,377,159,805.40 Including: Operating income 36,754,638,048.58 30,377,159,805.40 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 35,980,536,279.10 28,752,295,499.49 Including: Operating cost 32,611,218,949.68 26,697,726,482.69 Interest cost Expenditure for handling charges and commission Surrender value Net expenditure for compensation Net provision for insurance contract appropriated Bonus payment for policy Reinsurance premium Taxes and surcharges 218,378,101.09 166,595,508.05 21 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Selling and distribution 791,230,427.82 856,104,219.26 expenses General and administrative 655,926,928.42 541,175,527.36 expenses Research and development 3,215,201.91 2,803,328.19 expenses Financial expenses 1,728,306,153.98 533,459,454.58 Including: Interest 916,801,457.83 783,517,850.44 expenses Interest income 108,801,680.36 74,986,530.45 Asset impairment loss -27,739,483.80 -45,569,020.64 Add: Other income 63,413,797.03 22,993,400.00 Income on investment ("-" for 3,493,150.68 3,294,593.14 loss) Including: Income from associates and joint ventures Gains from the change in fair value ("-" for loss) Exchange Income ("-" for loss) Asset disposal gains ("-" for 1,109,667.33 3,491,595.60 loss) 6. Operating profit ("-" for loss) 842,118,384.52 1,654,643,894.65 Add: Non-operating income 2,298,854.73 7,600,237.50 Less: Non-operating expenses 1,963,486.59 8,482,290.41 7. Total profit ("-" for loss) 842,453,752.66 1,653,761,841.74 Less: Income tax expenses 16,818,346.16 311,902,932.93 8. Net Profit ("-" for loss) 825,635,406.50 1,341,858,908.81 Net profit from continuing operation ("-" for loss) Net profit from discontinued operation ("-" for loss) Attributable to: Owners of parent 825,182,211.60 1,334,298,002.84 company Non-controlling shareholders 453,194.90 7,560,905.97 6. Other comprehensive income after tax Other comprehensive income 22 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 attributable to owners of parent company after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) Change of net liabilities or net assets through re-measuring defined benefit plan (2) Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) Share of other comprehensive income of investee to be classified into profit or loss afterwards under equity method (2) Gains and losses on re-measuring available-for-sale financial assets (3) Gains and losses resulting from reclassification of held-to maturity investment to financial assets held-for sale (4) Effective portion of gains or losses from cash flow hedging (5) Gains and losses resulting from translati ng the foreign currency financial statements (6) Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 825,635,406.50 1,341,858,908.81 Total comprehensive income attributable to owners of parent 825,182,211.60 1,334,298,002.84 company 23 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Total comprehensive income attributable to non-controlling 453,194.90 7,560,905.97 shareholders 8. Earnings per share: 1) Basic earnings per share 0.21 0.43 2) Diluted earnings per share 0.21 0.43 The current business combination under common control, the net profits of the combined party before achieved: Yuan, net profit of previous period of the combined party realized: Yuan. 6. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY FROM THE BEGGING OF THE YEAR TO THE END OF THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Operating income 36,668,559,494.02 30,628,819,938.27 Less: Operating cost 33,019,136,503.31 27,427,737,279.74 Taxes and surcharges 192,669,833.48 140,788,803.31 Selling and distribution 440,779,566.79 555,662,676.40 expenses General and administrative 619,992,907.29 506,568,479.27 expenses Research and development 3,215,201.91 2,803,328.19 expense Financial expenses 1,687,162,319.17 486,344,038.55 Including: Interest expenses 870,205,608.54 733,104,694.96 Interest income 103,955,252.77 71,262,161.56 Asset impairment loss -27,739,483.80 -45,567,910.73 Add: Other income 63,413,797.03 22,993,400.00 Income on investment 3,493,150.68 105,369,227.90 Including: Income from associates and joint ventures Gains from the change in fair value ("-" for loss) Asset disposal gains ("-" for 1,109,667.33 3,491,595.60 loss) 2. Operating profit ("-" for loss) 801,359,260.91 1,686,337,467.04 Add: Non-operating income 1,840,469.10 6,739,985.54 24 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 Less: Non-operating expenses 1,957,950.91 8,482,290.41 3. Total profit ("-" for loss) 801,241,779.10 1,684,595,162.17 Less: Income tax expenses 7,384,717.21 287,755,865.14 4. Net Profit ("-" for loss) 793,857,061.89 1,396,839,297.03 Net profit from continuing 793,857,061.89 1,396,839,297.03 operation ("-" for loss) Net profit from discontinued operation ("-" for loss) 5. Other comprehensive income after tax 1) Other comprehensive income unable to be reclassified into profit and loss afterwards (1) Change of net liabilities or net assets through re-measuring defined benefit plan (2) Share of other comprehensive income of investee not to be classified into profit or loss afterwards under equity method 2) Other comprehensive income to be reclassified into profit and loss afterwards (1) Share of other comprehensive income of investee to be classified into profit or loss afterwards under equity method (2) Gains and losses on re-measuring available-for-sale financial assets (3) Gains and losses resulting from reclassification of held-to maturity investment to financial assets held-for sale (4) Effective portion of gains or losses from cash flow hedging (5) Gains and losses resulting from translati ng the foreign currency financial statements 25 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 (6) Others 6. Total comprehensive income 793,857,061.89 1,396,839,297.03 7. Earnings per share: 3) Basic earnings per share 4) Diluted earnings per share 7. CONSOLIDATED STATEMENT OF CASH FLOWS FROM THE BEGGINING OF THE YEAR TO THE END OF THE CURRENT PERIOD Unit: RMB Items The Current Period The Previous Period 1.Cash flow from operating activities: Cash received from sale of goods 26,188,229,365.29 21,053,946,910.03 or rendering of services Net increase of customers’ deposit and interbank deposit Net increase of loan from central bank Net increase of loans from other financial institutions Cash received for premium of original insurance contract Net cash received for reinsurance business Net increase of deposit and investment of the insured Net increase of Financial assets at fair value through profit or loss Cash from receiving interest, handling charge and commission Net increase of loans from other financial institutions Net increase of fund for buy-back business Tax rebate received 284,799,886.80 247,722,320.84 Other cash received relating to 83,617,244.68 93,241,794.79 operating activities Subtotal of cash inflow received from 26,556,646,496.77 21,394,911,025.66 26 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 operation activities Cash paid for goods and services 17,207,337,978.80 23,277,409,481.43 Net increase of customer’s loan and advances Net increase of deposit in central bank and interbank deposit Cash for payment of compensation for original insurance contract Cash for payment of interest, handling charge and commission Cash for payment of policy bonus Cash paid to and on behalf of 1,438,947,941.23 1,372,504,441.92 employees Cash paid for all types of taxes 618,124,974.18 443,361,163.06 Other cash paid relating to 358,768,202.58 407,069,210.36 operating activities Subtotal of cash outflow received from 19,623,179,096.79 25,500,344,296.77 operation activities Net cash flows generated from 6,933,467,399.98 -4,105,433,271.11 operating activities 2. Cash flows from investing activities: Cash received from return on 500,000,000.00 424,000,000.00 investments Cash received from distribution of 3,493,150.68 3,294,593.14 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiary and other operating units Other cash paid relating to investing activities Subtotal of cash inflow received from 503,493,150.68 427,294,593.14 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 1,261,912,086.54 947,149,945.24 long-term assets Cash paid for acquisition of 380,000,000.00 27 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 investments Net increase of mortgage loan Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from 1,261,912,086.54 1,327,149,945.24 investing activities The net cash flow generated by -758,418,935.86 -899,855,352.10 investment activities 3. Cash flows from financing activities: Proceeds from investment 3,965,799,988.19 Including: Proceeds from investment of non-controlling shareholders of subsidiary Proceeds from borrowings 21,592,058,293.24 19,545,352,799.54 Cash received from bond issuance Other proceeds relating to financing activities Subtotal cash inflow received from 25,557,858,281.43 19,545,352,799.54 financing activities Cash repayments of borrowings 29,751,998,311.55 14,264,079,011.29 Cash payments for distribution of 1,220,039,424.07 895,675,683.07 dividends, profit or interest expenses Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries Other cash payments relating to financing activities Subtotal of cash outflows from 30,972,037,735.62 15,159,754,694.36 financing activities The net cash flow generated by -5,414,179,454.19 4,385,598,105.18 financing activities 4. Effect of foreign exchange rate 173,516,701.33 -92,924,890.05 changes on cash and cash equivalents 5. Net increase in cash and cash 934,385,711.26 -712,615,408.08 equivalents Add: Cash and cash equivalents at 12,317,576,778.93 12,273,574,488.67 28 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 the beginning of the period 6. Cash and cash equivalents at the 13,251,962,490.19 11,560,959,080.59 ending of the period 8. CASH FLOW STATEMENT OF THE PARENT COMPANY FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT PERIOD Unit: RMB Items The Current Period The Previous Period 1.Cash flow from operating activities: Cash received from sale of goods 25,652,120,540.51 20,467,726,400.98 or rendering of services Tax rebate received 119,119,395.04 172,271,080.18 Other cash received relating to 80,682,696.51 87,160,373.20 operating activities Subtotal of cash inflow received from 25,851,922,632.06 20,727,157,854.36 operation activities Cash paid for goods and services 17,009,484,822.48 23,052,858,946.77 Cash paid to and on behalf of 1,372,731,925.30 1,304,133,489.37 employees Cash paid for all types of taxes 528,120,047.39 363,002,738.78 Other cash paid relating to 322,705,026.46 344,550,652.82 operating activities Subtotal of cash outflow received from 19,233,041,821.63 25,064,545,827.74 operation activities Net cash flows generated from 6,618,880,810.43 -4,337,387,973.38 operating activities 2. Cash flows from investing activities: Cash received from return on 500,000,000.00 424,000,000.00 investments Cash received from distribution of 3,493,150.68 105,369,227.90 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiary and other operating units Other cash paid relating to 29 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 investing activities Subtotal of cash inflow received from 503,493,150.68 529,369,227.90 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 1,241,365,059.32 930,544,967.24 long-term assets Cash paid for acquisition of 259,300,000.00 380,000,000.00 investments Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from 1,500,665,059.32 1,310,544,967.24 investing activities The net cash flow generated by -997,171,908.64 -781,175,739.34 investment activities 3. Cash flows from financing activities: Proceeds from investment 3,965,799,988.19 Proceeds from borrowings 20,515,395,400.00 18,182,352,799.54 Cash received from bond issuance Other proceeds relating to financing activities Subtotal cash inflow received from 24,481,195,388.19 18,182,352,799.54 financing activities Cash repayments of borrowings 28,587,442,043.95 13,159,153,564.72 Cash payments for distribution of 1,176,598,972.79 701,660,667.03 dividends, profit or interest expenses Other cash payments relating to financing activities Subtotal of cash outflows from 29,764,041,016.74 13,860,814,231.75 financing activities The net cash flow generated by -5,282,845,628.55 4,321,538,567.79 financing activities 4. Effect of foreign exchange rate 173,504,704.68 -92,971,403.22 changes on cash and cash equivalents 5. Net increase in cash and cash 512,367,977.92 -889,996,548.15 equivalents Add: Cash and cash equivalents at 12,152,285,550.21 11,876,536,613.66 30 Bengang Steel Plates Co., Ltd. Third Quarter Report 2018 the beginning of the period 6. Cash and cash equivalents at the 12,664,653,528.13 10,986,540,065.51 ending of the period II. Audit report Whether the third quarter report is audited □ Yes √ No The third quarter report is not audited. 31