Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 October 2017 1 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 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, Han Ge, the principal in charge of the accounting, and Wang Shaoyu, 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 2017 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) 56,692,375,310.29 54,155,710,718.91 4.68% Net assets attributable to shareholders of the listed company 14,061,150,233.15 12,715,354,551.15 10.58% (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) 9,640,672,901.66 31.12% 30,377,159,805.40 52.02% Net profit attributable to the shareholders of the listed company 810,662,349.27 106.76% 1,334,298,002.84 132.21% (RMB) Net profit after deducting of non-recurring gain/loss attributable 803,806,749.08 111.39% 1,312,680,172.92 140.97% to the shareholders of listed company(RMB) Net Cash flow generated by -- -- -4,105,433,271.11 -212.58% business operation(RMB) Basic earnings per 0.259 107.20% 0.425 132.24% share(RMB/Share) Diluted gains per 0.259 107.20% 0.425 132.24% share(RMB/Share) Weighted average net assets yield 6.18% 2.97% 9.97% 5.25% (%) Items and amount of non-recurring profit and loss √ Applicable □ Not applicable Unit: RMB From the beginning of the Items Notes year to the end of the current 3 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 period Profit or loss from disposal of non-current assets (including the -4,990,694.81 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 22,993,400.00 national policy and enjoyed constantly in certain quota or quantity according to a certain standard) Profit or loss from investment or assets entrusted to others 3,294,593.14 Profit or loss from debt restructuring 4,720,886.02 Other non-operating revenue and expenditure other than above 2,879,351.48 items Less: Impact of income tax 7,224,383.96 Impact of minority interests (after tax) 55,321.95 Total 21,617,829.92 -- 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 Total number of common preferred shareholders whose shareholders at the end of the 68,506 voting rights restored at the 0 reporting period end of the reporting period (If any) Shareholding of top 10 shareholders Name of the Nature of Holding Restricted shares Quantity of pledged or frozen shares Number of shares shareholder shareholder Percentage held Status Quantity Benxi Steel & State-owned legal 72.84% 2,284,411,202 Pledged 1,483,095,133 4 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Iron (Group) Co., person Frozen 45,000,000 Ltd. Domestic natural Ma Tengyun 0.42% 13,298,900 person Bank of Communication Limited-Changxi n Quantification Others 0.30% 9,474,258 Pioneer Mixed Securities Investment Fund BBH A/C VANGUARD EMERGING Overseas legal 0.26% 8,157,311 MARKETS person STOCK INDEX FUND Industrial and Commercial Bank of China Limited-South Others 0.24% 7,452,851 Big Data 100 Index Securities Investment Fund GUOTAI JUNAN Overseas legal SECURITIES(H 0.17% 5,376,122 person ONGKONG) LIMITED Domestic natural Chen Jinhong 0.16% 5,077,500 person VANGUARD TOTAL Overseas legal INTERNATION 0.15% 4,606,141 person AL STOCK INDEX FUND Domestic natural Yu Xiaofan 0.14% 4,409,896 person Domestic natural Liu Shihong 0.12% 3,859,240 person Shareholding of top 10 shareholders of unrestricted shares 5 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Category of shares Name of the shareholder Number of un-restricted shares held Category of Quantity shares Common shares Benxi Steel & Iron (Group) Co., Ltd. 2,284,411,202 2,284,411,202 in RMB Common shares Ma Tengyun 13,298,900 13,298,900 in RMB Bank of Communication Limited-Changxin Quantification Common shares 9,474,258 9,474,258 Pioneer Mixed Securities Investment in RMB Fund Foreign shares BBH A/C VANGUARD placed in EMERGING MARKETS STOCK 8,157,311 8,157,311 domestic INDEX FUND exchange Industrial and Commercial Bank of Common shares China Limited-South Big Data 100 7,452,851 7,452,851 in RMB Index Securities Investment Fund Foreign shares GUOTAI JUNAN placed in SECURITIES(HONGKONG) 5,376,122 5,376,122 domestic LIMITED exchange Common shares Chen Jinhong 5,077,500 5,077,500 in RMB Foreign shares VANGUARD TOTAL placed in INTERNATIONAL STOCK INDEX 4,606,141 4,606,141 domestic FUND exchange Foreign shares placed in Yu Xiaofan 4,409,896 4,409,896 domestic exchange Foreign shares placed in Liu Shihong 3,859,240 3,859,240 domestic exchange Notes to relationship or ‘action in concert’ among the top 10 It is unknown to the Company whether there is any related connection or action-in-concert non-restricted shareholders, and parties among the top 10 un-restricted shareholders. among the top 10 non-restricted 6 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 shareholders and top 10 shareholders Shareholders among the top 10 participating in securities margin None trading (if any) 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 2017 III. Important Events I. Major Changes in Financial Data and Financial Index And Reason √ Applicable □ Not applicable Items and reasons for the change of more than 30% compared with the beginning of the year in the consolidated statement 1. Items of Financial Position Increase/ Reasons Statement Decrease Notes receivables 126% Due to an increase in debt collection Interests receivables -32% Due to a decrease of interest accrued on fixed time deposits Other receivables 30% Due to an increase in receivables and payables Other current assets -48% Due to the reduction of short-term banking products Available-for-sale financial assets -61% Due to the transfer to long-term equity investments Construction materials -41% Due to a decrease in using construction materials -60% Due to the use of deferred tax assets to cover the deficit during the current Deferred tax assets period Notes payables -38% Due to the solution pay of notes at maturity Employee benefits payable 78% Due to an increase on employee benefits Current tax liabilities -56% Due to a decrease in current tax liabilities at the end of the current period Non-current liabilities due within one 373% Due to an increase in long-term loans due within one year year Long-term loans -38% Due to a decrease in long-term loans Special reserves 3085% Due to a decrease in expenses for safety use Undistributed profits 268% Due to an increase in net profits Items and reasons for the change of more than 30% compared to January to September, 2016 in the consolidated statement 2. Statement of comprehensive Increase/ Reasons income Decrease Operating income 52% The settlement price of products increased over the beginning of the year. Operating cost 57% Purchase price of materials increased over the beginning of the year. Property tax, land use tax, vehicle and vessel use tax, stamp tax are reclassified Taxes and surcharges 212% from “General and administrative expenses” to “Tax and surcharges” this period. Selling and distribution expenses 32% Freight expenses increased over the beginning of the year. Financial expenses -33% Net exchange losses increased over the beginning of the year. Asset impairment loss 1577% The price of products increased and the preparation on 8 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 inventory-valuation loss is offset. Income from short-term financial products increased over same period in Income on investment 479% previous year. Non-operating expenses 7942% Fixed assets disposal loss increased over the beginning of the year. Attributable to owners of parent 132% The price of products increased over the beginning of the year. company Attributable to non-controlling -82% Profit of the holding subsidiaries decreased over the beginning of the year. shareholders Increase/ 3. Statement of cash flows Reasons Decrease Tax rebate received -30% Tax rebate received decreased over the beginning of the year. Cash paid for goods and services 102% Cash paid for goods and services increased over the beginning of the year. Cash paid for all types of taxes 62% Cash paid for all types of taxes increased over the beginning of the year. Net cash flows from operating activities -213% Cash flows from operating activities increased over the beginning of the year. Cash received from return on Short-term banking products received this period increased over same period in 41% investments previous year. Cash received from distribution of 479% Income from financial products increased over same period in previous year. dividends or profit Cash paid for acquisition of investments -34% Short-term banking products purchased this period reduced. Cash received from borrowings 51% Cash received from bank loans increased over the beginning of the year. Net cash flows from financing activities 522% Net financed assets increased over the beginning of the year. 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 management personnel and other related parties. IV. Forecast towards Operating Performance of 2017 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 9 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 V. Investment in Securities □ Applicable √ Not applicable There is no investment in securities during the reporting period. VI. Investment in Derivatives □ Applicable √ Not applicable There is no investment in derivatives during the reporting period. VII. Registration form of Activities such as Research, Communication, Interview in this Reporting Period √ Applicable □ Not applicable Reception time Way of reception Types of visitors Basic index 20 July, 2017 Onsite investigation Organization http://www.cninfo.com.cn VIII. 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. IX. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and Related Parties □ Applicable √ Not applicable There are no non-operating occupation of funds by the controlling shareholder and related parties X. Performing Corporation Social Responsibility of Targeted Poverty Alleviation The company has not carried out targeted poverty alleviation work during the reporting period, and has no plan for follow-up targeted poverty alleviation. IV. Financial Statements I. Financial Statements 1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Prepared by: Bengang Steel Plates Co., Ltd. 30 September 2017 Unit: RMB 10 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Items Ending balance Beginning balance Current assets: Cash at bank and on hand 12,382,277,330.45 12,931,912,017.84 Settlement provisions Capital lent Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 4,591,065,268.47 2,030,681,138.03 Accounts receivable 593,371,229.51 623,865,427.25 Prepayments 597,926,580.84 493,839,659.44 Premium receivable Reinsurance accounts receivable Receivable deposit for reinsurance contract Interests receivable 2,873,285.16 4,208,818.85 Dividends receivable Other receivables 153,329,935.10 117,909,972.49 Redemptory financial assets for sale Inventories 10,737,088,464.68 9,782,173,936.74 Assets classified as held for sale Non-current assets due within one year Other current assets 266,731,866.97 513,398,815.83 Total current assets 29,324,663,961.18 26,497,989,786.47 Non-current assets: Loan and advances issued Available-for-sale financial assets 5,856,585.63 14,856,585.63 Held-to-maturity investment Long-term receivables Long-term equity investments Investment properties Fixed assets 19,220,677,904.84 20,688,468,637.44 Construction in progress 7,692,896,205.61 6,210,673,674.11 Construction materials 4,558,919.60 7,783,370.29 11 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Disposal of fixed assets Productive biological assets Oil and gas assets Intangible assets 255,376,344.53 259,837,410.93 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 188,345,388.90 476,101,254.04 Other non-current assets Total non-current assets 27,367,711,349.11 27,657,720,932.44 Total assets 56,692,375,310.29 54,155,710,718.91 Current Liabilities: Short-term loans 23,691,178,750.00 18,762,472,779.48 Loan from central bank Absorbed deposit and interbank deposit Loan from other financial institutions Financial liabilities at fair value through profit or loss Advance from customers Notes payable 3,958,342,631.60 6,372,173,897.13 Accounts payable 4,648,449,675.39 5,680,244,661.52 Advance from customers 3,148,966,302.80 3,679,477,129.80 Financial assets sold for repurchase Handling charges and commission payable Employee benefits payable 42,905,543.60 24,063,493.70 Current tax liabilities 20,253,168.60 45,771,585.46 Interests payable 62,437,326.76 75,115,265.66 Dividends payable Other payables 441,012,518.96 460,009,213.78 Reinsurance accounts payable Provision for insurance contract Receipt from vicariously traded securities 12 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Receipt from vicariously underwriting securities Liabilities held for sale Non-current liabilities due within one 2,071,159,300.00 437,669,535.66 year Other current liabilities Total current liabilities 38,084,705,217.71 35,536,997,562.19 Non-current liabilities: Long-term loans 2,127,071,927.87 3,448,931,721.62 Bonds payable 1,498,275,260.78 1,494,825,782.32 Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable Special accounts payable Estimated liabilities Deferred income 388,878,500.00 410,399,000.00 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 4,014,225,688.65 5,354,156,503.94 Total liabilities 42,098,930,906.36 40,891,154,066.13 Shareholders’ equity: Share capital 3,136,000,000.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 9,114,845,542.05 9,114,845,542.05 Less: treasury shares Other comprehensive income Special reserves 11,870,401.02 372,721.86 Surplus reserves 961,105,529.85 961,105,529.85 General risk reserve Undistributed profits 837,328,760.23 -496,969,242.61 Total equity attributable to equity holders 14,061,150,233.15 12,715,354,551.15 of the parent company 13 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Non-controlling interests 532,294,170.78 549,202,101.63 Total shareholder’s equity 14,593,444,403.93 13,264,556,652.78 Total liabilities and shareholder’s equity 56,692,375,310.29 54,155,710,718.91 Legal Representative:Wang Shu Person in charge of accounting:Han Ge Accounting Dept. Leader:Wang Shaoyu 1. BALANCE SHEET OF THE PARENT COMPANY Unit: RMB Items Ending balance Beginning balance Current assets: Cash at bank and on hand 11,802,294,961.74 12,402,995,087.03 Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 4,326,785,270.23 1,870,384,367.64 Accounts receivable 533,431,999.97 455,070,302.00 Prepayments 597,389,713.18 487,869,713.72 Interests receivable 2,873,285.16 4,208,818.85 Dividends receivable Other receivables 188,862,951.00 210,089,804.88 Inventories 9,186,877,171.69 8,308,291,029.07 Assets classified as held for sale Non-current assets due within one year Other current assets 237,628,505.09 431,675,085.33 Total current assets 26,876,143,858.06 24,170,584,208.52 Non-current assets: Available-for-sale financial assets 3,888,980.00 12,888,980.00 Held-to-maturity investment Long-term receivables Long-term equity investments 1,756,981,902.16 1,700,981,902.16 Investment properties Fixed assets 16,910,808,981.22 18,125,714,092.15 Construction in progress 7,671,941,238.07 6,196,524,880.06 Construction materials 4,134,133.28 4,134,139.52 Disposal of fixed assets 14 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Productive biological assets Oil and gas assets Intangible assets 152,908,849.57 155,388,452.53 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 90,940,739.88 378,696,605.02 Other non-current assets Total non-current assets 26,591,604,824.18 26,574,329,051.44 Total assets 53,467,748,682.24 50,744,913,259.96 Current Liabilities: Short-term loans 21,908,769,350.00 17,376,963,500.00 Financial liabilities at fair value through profit or loss Advance from customers Notes payable 3,372,632,631.27 5,768,523,196.16 Accounts payable 5,467,695,605.54 5,939,417,729.46 Advance from customers 3,044,873,924.58 3,671,944,099.35 Employee benefits payable 42,463,682.22 22,386,057.59 Current tax liabilities 4,185,733.81 28,902,954.65 Interests payable 62,238,801.13 70,109,821.13 Dividends payable Other payables 288,583,226.21 289,522,026.53 Liabilities held for sale Non-current liabilities due within one 2,071,159,300.00 437,669,535.66 year Other current liabilities Total current liabilities 36,262,602,254.76 33,605,438,920.53 Non-current liabilities: Long-term loans 2,127,071,927.87 3,448,931,721.62 Bonds payable 1,498,275,260.78 1,494,825,782.32 Including: Preferred stock Perpetual bond Long-term payables Long-term employee benefits payable 15 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Special accounts payable Estimated liabilities Deferred income 388,878,500.00 410,399,000.00 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 4,014,225,688.65 5,354,156,503.94 Total liabilities 40,276,827,943.41 38,959,595,424.47 Shareholders’ equity: Share capital 3,136,000,000.00 3,136,000,000.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 8,694,693,859.93 8,694,693,859.93 Less: treasury shares Other comprehensive income Special reserves 8,994,342.20 230,735.89 Surplus reserves 961,105,529.85 961,105,529.85 Undistributed profits 390,127,006.85 -1,006,712,290.18 Total shareholder’s equity 13,190,920,738.83 11,785,317,835.49 Total liabilities and shareholder’s equity 53,467,748,682.24 50,744,913,259.96 3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Total operating income 9,640,672,901.66 7,352,413,667.74 Including: Operating income 9,640,672,901.66 7,352,413,667.74 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 8,643,165,739.54 6,782,057,523.51 Including: Operating cost 8,007,060,516.58 6,125,972,410.63 Interest cost 16 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 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 32,838,776.98 27,088,709.48 Selling and distribution 268,471,511.83 219,452,625.67 expenses General and administrative 185,027,450.47 200,432,767.91 expenses Financial expenses 151,946,049.78 209,946,899.42 Asset impairment loss -2,178,566.10 -835,889.60 Add: Gains from the change in fair value ("-" for loss) Income on investment ("-" for 569,498.63 loss) Including: Income from associates and joint ventures Exchange Income ("-" for loss) Other Income 3. Operating profit ("-" for loss) 997,507,162.12 570,925,642.86 Add: Non-operating income 13,070,744.52 15,234,307.48 Including: Gain on disposal of 476,301.60 2,475,142.83 non-current assets Less: Non-operating expenses 3,888,870.11 Including: Loss on disposal of 3,888,870.11 non-current assets 4. Total profit ("-" for loss) 1,006,689,036.53 586,159,950.34 Less: Income tax expenses 194,797,871.77 174,795,525.68 5. Net Profit ("-" for loss) 811,891,164.76 411,364,424.66 Attributable to: Owners of parent 810,662,349.27 392,077,397.20 company 17 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Non-controlling shareholders 1,228,815.49 19,287,027.46 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 resulti ng from translating the foreign currency financial statements (6) .Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 811,891,164.76 411,364,424.66 18 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Total comprehensive income attributable to owners of parent 810,662,349.27 392,077,397.20 company Total comprehensive income attributable to non-controlling 1,228,815.49 19,287,027.46 shareholders 8. Earnings per share: 1) Basic earnings per share 0.259 0.125 2) Diluted earnings per share 0.259 0.125 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: Han Ge Accounting Dept. Leader: Wang Shaoyu 4. INCOME STATEMENT OF THE PARENT COMPANY DURING THE CURRENT REPORTING PERIOD Unit: RMB Items The Current Period The Previous Period 1. Turnover 9,431,303,159.07 7,541,752,295.18 Less: Operating cost 7,944,761,205.42 6,506,196,116.23 Taxes and surcharges 24,005,387.31 24,375,185.52 Selling and distribution 182,143,490.01 155,519,980.97 expenses General and administrative 173,001,531.44 185,740,284.28 expenses Financial expenses 136,168,153.13 195,326,877.96 Asset impairment loss -2,177,456.19 -368,932.75 Add: Gains from the change in fair value ("-" for loss) Income on investment ("-" for 569,498.63 loss) Including: Income from associates and joint ventures Other Income 2. Operating profit ("-" for loss) 973,400,847.95 475,532,281.60 Add: Non-operating income 12,947,899.28 15,117,388.95 19 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Including: Gain on disposal of 476,301.60 2,406,422.22 non-current assets Less: Non-operating expenses 3,888,870.11 Including: Loss on disposal of 3,888,870.11 non-current assets 3. Total profit ("-" for loss) 982,459,877.12 490,649,670.55 Less: Income tax expenses 187,447,328.04 170,060,434.17 4. Net Profit ("-" for loss) 795,012,549.08 320,589,236.38 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 resulti ng from translating the foreign currency financial statements 20 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 (6) .Others 6. Total comprehensive income 795,012,549.08 320,589,236.38 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 30,377,159,805.40 19,981,998,237.09 Including: Operating income 30,377,159,805.40 19,981,998,237.09 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 28,752,295,499.49 19,089,375,328.26 Including: Operating cost 26,697,726,482.69 17,040,154,712.67 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 166,595,508.05 53,421,604.24 Selling and distribution 856,104,219.26 649,513,688.81 expenses General and administrative 543,978,855.55 552,387,486.39 expenses Financial expenses 533,459,454.58 796,614,724.61 Asset impairment loss -45,569,020.64 -2,716,888.46 Add: Gains from the change in fair 21 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 value ("-" for loss) Income on investment ("-" for 3,294,593.14 569,498.63 loss) Including: Income from associates and joint ventures Exchange Income ("-" for loss) Other Income 3.Operating profit ("-" for loss) 1,628,158,899.05 893,192,407.46 Add: Non-operating income 34,085,233.10 39,430,977.03 Including: Gain on disposal of 3,491,595.60 4,595,601.72 non-current assets Less: Non-operating expenses 8,482,290.41 105,474.99 Including: Loss on disposal of 8,482,290.41 105,474.99 non-current assets 4.Total profit ("-" for loss) 1,653,761,841.74 932,517,909.50 Less: Income tax expenses 311,902,932.93 314,857,746.97 5.Net Profit ("-" for loss) 1,341,858,908.81 617,660,162.53 Attributable to: Owners of parent 1,334,298,002.84 574,615,573.52 company Non-controlling shareholders 7,560,905.97 43,044,589.01 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 22 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 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 resulti ng from translating the foreign currency financial statements (6) .Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 1,341,858,908.81 617,660,162.53 Total comprehensive income attributable to owners of parent 1,334,298,002.84 574,615,573.52 company Total comprehensive income attributable to non-controlling 7,560,905.97 43,044,589.01 shareholders 8. Earnings per share: 1) Basic earnings per share 0.425 0.183 2) Diluted earnings per share 0.425 0.183 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 23 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 1.Turnover 30,628,819,938.27 20,727,140,742.37 Less: Operating cost 27,427,737,279.74 18,236,082,900.44 Taxes and surcharges 140,788,803.31 39,015,159.45 Selling and distribution 555,662,676.40 507,779,490.30 expenses General and administrative 509,371,807.46 507,214,377.27 expenses Financial expenses 486,344,038.55 750,350,717.43 Asset impairment loss -45,567,910.73 -2,249,931.61 Add: Gains from the change in fair value ("-" for loss) Income on investment ("-" for 105,369,227.90 14,282,827.08 loss) Including: Income from associates and joint ventures Other Income 2.Operating profit ("-" for loss) 1,659,852,471.44 703,230,856.17 Add: Non-operating income 33,224,981.14 38,679,929.93 Including: Gain on disposal of 3,491,595.60 4,456,927.98 non-current assets Less: Non-operating expenses 8,482,290.41 105,474.99 Including: Loss on disposal of 8,482,290.41 105,474.99 non-current assets 3.Total profit ("-" for loss) 1,684,595,162.17 741,805,311.11 Less: Income tax expenses 287,755,865.14 308,151,093.24 4.Net Profit ("-" for loss) 1,396,839,297.03 433,654,217.87 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 24 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 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 resulti ng from translating the foreign currency financial statements (6) .Others 6.Total comprehensive income 1,396,839,297.03 433,654,217.87 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 21,053,946,910.03 16,580,702,769.37 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 25 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 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 247,722,320.84 353,037,007.15 Other cash received relating to 93,241,794.79 84,677,742.77 operating activities Subtotal of cash inflow received from 21,394,911,025.66 17,018,417,519.29 operation activities Cash paid for goods and services 23,277,409,481.43 11,511,671,889.04 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 1,372,504,441.92 1,247,371,996.56 employees Cash paid for all types of taxes 443,361,163.06 273,035,353.99 Other cash paid relating to 407,069,210.36 339,714,850.94 operating activities Subtotal of cash outflow received from 25,500,344,296.77 13,371,794,090.53 operation activities Net cash flows generated from -4,105,433,271.11 3,646,623,428.76 operating activities 26 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 2. Cash flows from investing activities: Cash received from return on 424,000,000.00 300,000,000.00 investments Cash received from distribution of 3,294,593.14 569,498.63 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other 4,296,555.00 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 427,294,593.14 304,866,053.63 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 947,149,945.24 1,016,048,866.75 long-term assets Cash paid for acquisition of 380,000,000.00 572,000,000.00 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 1,327,149,945.24 1,588,048,866.75 investing activities The net cash flow generated by -899,855,352.10 -1,283,182,813.12 investment activities 3. Cash flows from financing activities: Proceeds from investment Including: Proceeds from investment of non-controlling shareholders of subsidiary Proceeds from borrowings 19,545,352,799.54 12,925,514,125.63 Cash received from bond issuance Other proceeds relating to 210,000,000.00 financing activities Subtotal cash inflow received from 19,545,352,799.54 13,135,514,125.63 27 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 financing activities Cash repayments of borrowings 14,264,079,011.29 11,692,619,787.29 Cash payments for distribution of 895,675,683.07 737,477,171.35 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 15,159,754,694.36 12,430,096,958.64 financing activities The net cash flow generated by 4,385,598,105.18 705,417,166.99 financing activities 4. Effect of foreign exchange rate -92,924,890.05 39,845,240.81 changes on cash and cash equivalents 5. Net increase in cash and cash -712,615,408.08 3,108,703,023.44 equivalents Add: Cash and cash equivalents at 12,273,574,488.67 4,612,782,772.98 the beginning of the period 6. Cash and cash equivalents at the 11,560,959,080.59 7,721,485,796.42 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 20,467,726,400.98 17,325,991,437.46 or rendering of services Tax rebate received 172,271,080.18 343,392,974.16 Other cash received relating to 87,160,373.20 76,149,013.82 operating activities Subtotal of cash inflow received from 20,727,157,854.36 17,745,533,425.44 operation activities Cash paid for goods and services 23,052,858,946.77 12,379,218,031.50 Cash paid to and on behalf of 1,304,133,489.37 1,181,632,960.47 employees 28 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Cash paid for all types of taxes 363,002,738.78 146,872,420.32 Other cash paid relating to 344,550,652.82 295,590,912.91 operating activities Subtotal of cash outflow received from 25,064,545,827.74 14,003,314,325.20 operation activities Net cash flows generated from -4,337,387,973.38 3,742,219,100.24 operating activities 2. Cash flows from investing activities: Cash received from return on 424,000,000.00 300,000,000.00 investments Cash received from distribution of 105,369,227.90 569,498.63 dividends or profit Net cash received from disposal of fixed assets, intangible assets and other 4,107,574.00 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 529,369,227.90 304,677,072.63 investing activities Cash paid for acquisition of fixed assets, intangible assets and other 930,544,967.24 996,101,897.66 long-term assets Cash paid for acquisition of 380,000,000.00 572,000,000.00 investments Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from 1,310,544,967.24 1,568,101,897.66 investing activities The net cash flow generated by -781,175,739.34 -1,263,424,825.03 investment activities 3. Cash flows from financing activities: Proceeds from investment Proceeds from borrowings 18,182,352,799.54 11,862,514,125.63 Cash received from bond issuance 29 Bengang Steel Plates Co., Ltd. Third Quarter Report 2017 Other proceeds relating to 210,000,000.00 financing activities Subtotal cash inflow received from 18,182,352,799.54 12,072,514,125.63 financing activities Cash repayments of borrowings 13,159,153,564.72 10,841,064,067.53 Cash payments for distribution of 701,660,667.03 691,202,152.71 dividends, profit or interest expenses Other cash payments relating to financing activities Subtotal of cash outflows from 13,860,814,231.75 11,532,266,220.24 financing activities The net cash flow generated by 4,321,538,567.79 540,247,905.39 financing activities 4. Effect of foreign exchange rate -92,971,403.22 39,834,229.35 changes on cash and cash equivalents 5. Net increase in cash and cash -889,996,548.15 3,058,876,409.95 equivalents Add: Cash and cash equivalents at 11,876,536,613.66 4,489,630,951.08 the beginning of the period 6. Cash and cash equivalents at the 10,986,540,065.51 7,548,507,361.03 ending of the period II. Audit report Whether the third quarter report is audited □ Yes √ No The third quarter report is not audited. 30