Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 October 2020 1 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 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. Gao Lie, Chairman of the Company, Shen Qiang, 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 2020 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 at the end of At the end of the current At the end of previous year this reporting period over the period previous year Total assets(RMB) 65,200,664,816.84 60,731,425,193.90 7.36% Net assets attributable to shareholders of the listed company 20,945,268,782.71 19,487,665,261.17 7.48% (RMB) Increase or decrease From the beginning of Increase or decrease over This reporting period over the same period this year to the end of the same period of the of the previous year this reporting period previous year Operating income(RMB) 12,667,300,144.93 -12.29% 34,851,837,404.98 -9.58% Net profit attributable to the shareholders of the listed company 28,865,084.77 -15.67% 283,509,289.10 -41.84% (RMB) Net profit after deducting of non- recurring gain/loss attributable to 4,967,865.93 -81.11% 244,853,338.47 -48.94% the shareholders of listed company (RMB) Net Cash flow generated by -- -- -1,407,629,344.42 -117.11% business operation(RMB) Basic earnings per 0.01 0.00% 0.07 -46.15% share(RMB/Share) Diluted earnings per 0.01 0.00% 0.07 -46.15% share(RMB/Share) Weighted average net assets yield 0.14% -0.04% 1.37% -1.16% Items and amount of non-recurring profit and loss √ Applicable □ Not applicable 3 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Unit: Yuan From the beginning of the year to Items Notes the end of the current period Profit or loss from disposal of non-current assets (including the write-off part for which assets -19,551,512.21 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 57,452,382.09 operation, meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) Profit or loss from debt restructuring 32,800.02 Other non-operating revenue and expenditure other than 988,008.32 above items Less: Impact of income tax 255,202.08 Impact of minority interests (after tax) 10,525.51 Total 38,655,950.63 -- 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 rights has shareholders at the end of the 50,963 0 been restored at end of the reporting reporting period 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 2020 shareholder shareholder shares held shares restricted shares State of share Quantity held State- Pledged 712,545,000 Benxi Steel & Iron owned legal 62.18% 2,409,628,094 (Group) Co., Ltd. Frozen 102,100,000 person CCB Principal Asset Management – ICBC – CR Trust Others 4.77% 184,842,883 – CR Trust Xing Sheng No. 5 Collective Fund Trust Plan Bei Xin Rui Feng Fund – China Merchants Bank – Bei Xin Rui Feng Others 4.77% 184,842,883 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 Additional Shares Issuance No. 10 Asset Management Plan Liaoning Provincial State- Transportation owned legal 3.92% 151,806,883 Investment Group person Co., Ltd. Domestic Fang Lei natural 0.36% 14,126,600 person Shanghai Yi Cun Investment Management Co., Others 0.31% 12,000,000 Ltd. – Yi Cun Sheng Hui No. 3 5 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Private Securities Investment Fund Domestic Fang Huaiyue natural 0.24% 9,205,501 person Shanghai Ying Shui Investment Management Co., Ltd. – Ying Shui Others 0.24% 9,175,030 Fu Lin No. 10 Private Securities Investment Fund Vanguard Investment Australia Ltd. – Overseas 0.22% 8,384,044 Vanguard legal person Emerging Markets Stock Index Fund Shareholding of top 10 shareholders of unrestricted shares Number of non-restricted common shares held at the Category of shares Name of the shareholder period-end Category of shares Quantity Benxi Steel & Iron (Group) Co., Common shares in 2,409,628,094 2,409,628,094 Ltd. RMB CCB Principal Asset Management – ICBC – CR Trust Common shares in 184,842,883 184,842,883 – CR Trust Xing Sheng No. 5 RMB Collective Fund Trust Plan Bei Xin Rui Feng Fund – China Merchants Bank – Bei Xin Rui Common shares in 184,842,883 184,842,883 Feng Fund Feng Qing No. 229 RMB Asset Management Plan China Life AMP Fund– ICBC – China Life AMP – Hua Xin Common shares in Trust Targeted Additional 184,842,883 184,842,883 RMB Shares Issuance No. 10 Asset Management Plan Liaoning Provincial Common shares in Transportation Investment 151,806,883 151,806,883 RMB Group Co., Ltd. Common shares in Fang Lei 14,126,600 14,126,600 RMB 6 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Shanghai Yi Cun Investment Management Co., Ltd. – Yi Cun Common shares in 12,000,000 12,000,000 Sheng Hui No. 3 Private RMB Securities Investment Fund Common shares in Fang Huaiyue 9,205,501 9,205,501 RMB Shanghai Ying Shui Investment Management Co., Ltd. – Ying Common shares in 9,175,030 9,175,030 Shui Fu Lin No. 10 Private RMB Securities Investment Fund Vanguard Investment Australia Common shares in Ltd. - Vanguard Emerging 8,384,044 8,384,044 RMB Markets Stock Index Fund Related-parties or acting-in- It is unknown to the Company whether there is any related parties or action-in-concert parties as concert parties among the defined in “Measures for the Administration of the Takeover of Listed Companies”among the above-mentioned shareholders above-mentioned shareholders. Benxi Steel & Iron (Group) Co., Ltd. holds 2,170,628,094 shares of the company through an ordinary securities account, and holds 239,000,000 shares through the investor's credit securities account, therefore, it holds a total of 2,409,628,094 shares. Fang Lei holds 14,126,600 shares of the company through an investor's credit securities account. Shanghai Yi Cun Investment Shareholders among the top 10 Management Co., Ltd. – Yi Cun Sheng Hui No. 3 Private Securities Investment Fund holds participating in securities 12,000,000 shares of the company through an investor's credit securities account. Fang Huaiyue margin trading (if any) holds 9,205,501 shares of the company through an investor's credit securities account. Shanghai Ying Shui Investment Management Co., Ltd. – Ying Shui Fu Lin No. 10 Private Securities Investment Fund holds 9,175,030 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 2020 III. Important Events I. Major Changes in Financial Data and Financial Index and Reasons √ 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 Reasons Decrease Due to the increase of accounts receivable Accounts receivable financing 113% received during the current period Due to the increase of construction in progress that did not meet the conditions of Construction in progress 74% transferring to fixed assets at the end of the period Due to the increase of lease guarantee paid Other non-current assets 61% during the current period Due to the increase of employee benefits Employee benefits payables 174% payables during the current period Due to the decrease of VAT payable at the Tax payables -94% end of this period Due to the increase of interest accrued Interest payables 146% during the current period Due to the increase of non-current liabilities Non-current liabilities due within 350% due within one year during the current one year period Due to the increase of lease payment during Long-term payables 169% the current period Due to the increase of unpaid safety Special reserves 13073% production fee during the current period Items and reasons for the changes of more than 30% compared to January to September 2019 in the consolidated financial statements 8 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Increase / 2. Statement of comprehensive income Reasons Decrease Due to the increase of exchange loss during Financial expenses -35% the current period Due to the decrease in assets sold during the Assets disposal gains -87% current period Due to the decrease of other non-operating Non-operating income -82% income Due to the decrease of losses arose from Non-operating expenses -68% fixed assets scrapping Increase / 3. Statement of cash flows Reasons Decrease Due to the increase of cash paid for goods and Cash paid for goods and services 52% services during the current period Cash paid for acquisition of fixed Due to the decrease of payment of acquisition assets, intangible assets and other -65% of fixed assets, intangible assets during the long-term assets current period Due to the increase of cash on repayment of Cash repayments of borrowings 67% borrowings Due to the increase of cash paid for goods and Cash and cash equivalents at the services, and payment of acquisition of fixed -86% ending of the period assets, intangible assets during the current period II. Progress and influence of significant events, as well as the analysis and explanation on solutions √ Applicable □ Not applicable 1. Public offering and listing of A-share convertible corporate bonds (1) Issue of convertible corporate bonds. Approved by the China Securities Regulatory Commission on Approval of the Public Issuance of A-Share Convertible Corporate Bonds by Bengang Steel Plate Co., Ltd. (Zheng Jian Permit [2020] No. 46), the company was approved to publicly issue a total face value of 6.8 billion convertible bonds to the public with a maturity of 6 years. The company actually issued 68 million convertible corporate bonds to the public, each with a face value of 100 yuan, and the total raised funds were 6.8 billion yuan. After deducting underwriting and sponsorship fees, issuance registration fees and other expenses, a total of 41,084,701.18 yuan (excluding tax) was raised. The net amount of funds is RMB 6,758,915,298.82. The above funds have been transferred to the company's fund-raising account on July 6, 2020. BDO Shu Lun Pan Certified Public Accountants LLP verified the receipt of the funds raised above and issued Xin Kuai Shi Bao Zi [2020] No. ZB11494 "Capital Verification Report". 9 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 (2) Public offering of convertible corporate bonds. On August 4, 2020, the company’s A-share convertible corporate bonds were listed on the Shenzhen Stock Exchange, the abbreviation of the bond: Bengang Convertible Bonds, bond code: 127018, bond listings: 6.800 billion yuan (68 million). The beginning and ending date of existence: June 29, 2020 to June 28, 2026, the beginning and ending date of the conversion of convertible bonds: January 4, 2021 to June 28, 2026. Interim report disclosure Overview of important matters Date of disclosure website query index Public issuance of A-share convertible corporate bonds. The total issuance is www.cninfo.com.cn RMB 6.8 billion, each with a face value June 23, 2020 Announcement No.: 2020-037 of RMB 100, a total of 68 million, with a term of 6 years. The company used RMB 366,180,860.17 to replace self-raised www.cninfo.com.cn funds that were invested in investment July 14, 2020 Announcement No.: 2020-047 projects with raised funds in advance and paid for issuance. The company uses a quota of no more than RMB 4 billion (including) www.cninfo.com.cn temporarily idle raised funds for cash July 14, 2020 Announcement No.: 2020-048 management, and the period is no more than 12 months. The company used idle raised funds of 4,846 million yuan to temporarily supplement working capital, of which 666 million yuan was raised from non- public issuance of stocks, and 4,180 www.cninfo.com.cn July 29, 2020 million yuan was raised from public Announcement No.: 2020-052 issuance of convertible bonds. The use period shall not exceed 12 months from the date of approval by the board of directors. The company’s A-share convertible corporate bonds were listed on the Shenzhen Stock Exchange on August 4, 2020. The abbreviation of the bond: www.cninfo.com.cn August 3, 2020 Bengang Convertible Bond, the bond Announcement No.: 2020-053 code: 127018, and the number of bonds listed: 6.8 billion yuan (68 million pieces) Progress in the implementation of share repurchase 10 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 □ Applicable √ Not Applicable Progress in the implementation of the reduction of shareholding shares by centralized competitive bidding □ 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 Commitment Type of Commitment Commitment Commitments Contents Performance party commitment time period Commitment of shares reform Commitment made in the acquisition report or the equity change report Commitment made during asset restructuring According to the relevant regulations of the China Securities Regulatory Commission, all directors and senior management of the Company have made the following commitments to the Company’s fulfillment of the diluted Company immediate return Commitment made during directors, Other measures: 1. I promise to Under normal initial public offering or May 22, 2019 Long term senior commitment perform my duties fulfillment refinancing management faithfully and diligently, and safeguard the legitimate rights and interests of the Company and all shareholders . 2. I promise not to deliver benefits to other units or individuals without compensation or under unfair conditions, nor to use other means to 11 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 damage the Company's interests. 3. I promise to restrict the position- related consumption behavior of company directors and senior management personnel. 4. I promise not to use the Company’s assets to do investment and consumption activities that are not related to the performance of my duties. 5. Within the scope of my responsibilities and authority, I promise to make every effort to promote the company's board of directors or the remuneration system established by the remuneration and appraisal committee to be linked to the implementation of the company's compensation measures, and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 6. If the company intends to implement equity incentives, I promise to, within my own responsibilities and jurisdiction, make every effort to promote the Company’s proposed equity incentive exercise conditions to be linked to 12 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 the Company’s implementation of the return measures, and to review the Company’s board of directors and shareholders’ general meetings and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 7. If the future issuance of this commitment and the implementation of the Company’s public issuance of convertible corporate bonds are completed, if the China Securities Regulatory Commission makes other new regulatory provisions on the measures for filling returns and their commitments, and the above commitments cannot meet the requirements of the China Securities Regulatory Commission When other regulations are stipulated, a commitment will be issued in accordance with the latest regulations of the China Securities Regulatory Commission. The company's controlling shareholder, Benxi Iron and Steel (Group) Co., Ltd., promised not to 13 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 interfere with the company's operation and management activities beyond its authority and not to infringe on the Company's interests. The sales companies of Bengang International Trade Co.,Ltd. and Bengang Steel plates in the same region guarantee independent personnel, independent business, independent finance, and independent assets, and are guaranteed not to be in the same registration place or in the same office; The filing of foreign economic and trade operators, taking Benxi Steel & into account the need to Iron (Group) gradually improve the Co., Ltd. and Other qualification Under normal July 24,2019 Long term Bengang Commitment certification of raw fulfillment Group Co., material suppliers, Ltd. customs import and export qualification certification, etc. In the short term, the actual conditions and capabilities for independent import and export business are still lacking. In order to ensure the normal business development of Benxi Steel Plate, the Group agrees that within the period of not more than 5 years from the date of issuance of this commitment, the main 14 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 import and export business of Benxi Steel Plate will still be represented by Bengang International Trade until Bengang Steel Plates can be independently developed Import and export business, and during this period, Bengang International Trade will provide the necessary support for the establishment and improvement of Bengang's import and export business. In addition, the sales company under Bengang International Trade is only responsible for selling the products of Beiying Iron and Steel Group, and never sells third-party steel products. 3. The three sales companies under the Group, Shanghai Bengang Iron and Steel Sales Co., Ltd., Shanghai Bengang Iron and Steel Materials Co., Ltd., and Guangzhou Free Trade Zone Bengang Sales Co., Ltd., are currently no longer actually engaged in any business activities, as follows: (1 ) Shanghai Bengang Iron & Steel Sales Co., Ltd. filed for bankruptcy in 2014, and the Shanghai Changning District People's Court issued an 15 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 announcement to appoint Guohao Lawyer (Shanghai) Office as the bankruptcy administrator. After communication with the bankruptcy administrator, it is expected that the bankruptcy and liquidation of Shanghai Bengang Iron and Steel Sales Co., Ltd. will be completed by the end of 2020. Upon completion of the aforementioned bankruptcy liquidation procedures, the relevant procedures for cancellation of Shanghai Bengang Iron and Steel Sales Co., Ltd. will be handled immediately. (2) Shanghai Bengang Iron & Steel Materials Co., Ltd. is a holding subsidiary of Shanghai Bengang Iron & Steel Sales Co., Ltd., and its business license has been revoked. As the shareholder Shanghai Bengang Iron & Steel Sales Co., Ltd. is in the process of bankruptcy and liquidation, Shanghai Bengang Iron & Steel Materials Co., Ltd. was unable to convene a shareholders' meeting to cancel the company and establish a liquidation group according to law. 16 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Therefore, the cancellation has not yet been completed. After the aforementioned bankruptcy and liquidation procedures of Shanghai Bengang Iron & Steel Sales Co., Ltd. are completed, the relevant procedures for cancellation of Shanghai Bengang Iron & Steel Materials Co., Ltd. will be processed immediately. (3) Guangzhou Free Trade Zone Bengang Sales Co., Ltd. has a contract arrears dispute with Jiedong County Trading Corporation. According to the Civil Judgment ((1999) Ben Jing No. 116), Guangzhou Free Trade Zone Bengang Sales Co., Ltd. applied to the court to seal 62 properties under the name of Jiedong County Trading Corporation. However, due to serious local protection, property rights and other factors, the content of the judgment has not been enforceable. Later, after applying again from Guangzhou Free Trade Zone Bengang Sales Co., Ltd., the Intermediate People's Court of Benxi City, Liaoning Province issued an execution ruling again, and 62 17 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 properties of Jiedong County Trading Corporation were re- sealed. As of February 4, 2022. Except for participating in the litigation activities for the purpose of realizing creditor's rights, Guangzhou Free Trade Zone Bengang Sales Co., Ltd has not carried out other business activities. After the litigation is completed, the relevant procedures for the cancellation of Guangzhou Free Trade Zone Bengang Sales Co., Ltd. will be handled immediately. The Group's horizontal competition with Benxi Steel Plates and the The company measures and has completed commitments to avoid the acquisition inter-industry of the competition 1. During 2300mm hot the period when the rolling mill Group is the controlling production shareholder of Bengang line, and the Benxi Steel & Steel Plates, in addition Other industry Iron (Group) to the matters listed in July 24,2019 Long term Commitment competition Co., Ltd. Article 1 of this problem has Commitment Letter, the been Group and other completely enterprises controlled by resolved. the Group other than Other Bengang Steel Plates no commitments longer produce or continue to be develop any products fulfilled that compete or may compete with the products produced by 18 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Bengang Steel Plates and its subsidiaries at home and abroad, and do not directly or indirectly operate any business that competes with Bengang Steel Plates and its subsidiaries. Businesses that may constitute competition, nor are they involved in investing in any other enterprise that competes with or may compete with products or businesses produced by Bengang Steel Plates and its subsidiaries. 2. If Bengang Steel Plates and its subsidiaries further expand their business scope, the Group and other enterprises controlled by the Group will not compete with the expanded business of Bengang Steel Plates and its subsidiaries; they may compete with Bengang Steel Plates and its subsidiaries If the company's expanded business produces competition, it will withdraw from the competition with Bengang Steel Plates as follows: (1) Stop business that may or may compete with Bengang Steel Plates and its subsidiaries; (2) Will compete The business is incorporated into Bengang Steel Plates and 19 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 its subsidiaries in a legal and compliant manner; (3) Competitive business is transferred to unrelated third parties. 3. If the Group has any business opportunities to engage in or participate in the competition with Bengang Steel Plates’ operations, the Group shall immediately notify Bengang Steel Plates of the above commercial opportunities. Within a reasonable period specified in the notice, Bengang Steel Plates If an affirmative answer is made to take advantage of the business opportunity, the Group will endeavor to give the business opportunity to Bengang Steel Plates on terms not less than that provided to any independent third party. 4. If the above commitments are violated, the Group is willing to bear all the responsibilities arising therefrom, and fully compensate or compensate for all direct or indirect losses caused to Bengang Steel Plates. 5. This letter of commitment continues to be effective during the period of the Group as the controlling shareholder of Bengang 20 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Steel Plates and cannot be changed or withdrawn In order to regulate and reduce the Company ’s transactions with controlling shareholders and other related parties, and to protect the interests of the Company and small and medium shareholders, Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. have issued the following commitments: "Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectively referred to Benxi Steel & as the "Group"), as a Iron (Group) direct controlling Co., Ltd. and Other shareholder and an Under normal July 24,2019 Long term Bengang Commitment indirect controlling fulfillment Group Co., shareholder of Bengang Ltd. Steel Plates Co., Ltd. (hereinafter referred to as "Bengang Steel Plates"), in order to protect the interests of Bengang Steel Plates and other shareholders of Bengang Steel Plates, regulate The Group's related transaction with Bengang Steel Plates hereby promises: 1. The Group will fully respect the independent legal person status of Bengang Steel Plates, ensure the independent operation and independent decision-making of 21 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Bengang Steel Plates, ensure the independence of Bengang Steel Plates’ business, asset integrity and personnel Independence and financial independence to avoid and reduce unnecessary related transactions; the Group will strictly control related transactions with Bengang Steel Plates and its subsidiaries. 2. The Group and other controlled companies promise not to use loans or occupy or misappropriate the funds of Bengang Steel Plates and its subsidiaries to repay debts, substitute funds or otherwise, nor We ask Bengang Steel Plates and its subsidiaries to provide illegal guarantees for the Group and other companies under its control. 3. The Group and other controlled companies and Bengang Steel Plates will minimize related transactions. It is indeed necessary and unavoidable to carry out in the related party transactions, strictly implement the decision- making authority, decision-making procedures, avoidance system and other 22 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 contents stipulated in Bengang's "Articles of Association" and related party transaction decision-making system, give full play to the role of the board of supervisors and independent directors, and earnestly fulfill the obligation of information disclosure To ensure that transactions are conducted in accordance with the open, fair, and fair principles of market transactions and normal commercial terms, the Group and other companies under control will not require or accept Bengang Steel Sheets to give preferential treatment to third parties in any fair market transaction Conditions to protect other shareholders of Benxi Steel Plates and the interests of Benxi Steel Plates from damage. 4. The Group guarantees that the above commitments are continuously effective and irrevocable as long as Bengang Steel Plates is listed on the domestic stock exchange and the Group acts as its direct and indirect controlling shareholder. If any violation of the above 23 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 commitments occurs, the Group therefore bear all the losses caused to Bengang Steel Plates. Stock option incentive commitment Other commitments to the company's minority shareholders Whether Commitment Yes fulfilled on time or not IV. Financial Asset Investment 1. Investment in Securities □ Applicable √ Not applicable There are no securities investments in the reporting period. 2. Investment in Derivatives □ Applicable √ Not applicable There is no investment in derivatives in the reporting period. V. Progress of Investment Projects with Raised Funds √ Applicable □ Not applicable 1. Funds raised by non-public offering of shares From the beginning of the year to the end of the reporting period, the company actually used RMB 93,860,100 to raise funds. As of September 30, 2020, the unused amount of the company's raised funds was 685,287,300, of which the supplementary working capital balance was 660 million, and the raised funds account balance was 25,287,300. 2. Public issuance of convertible bonds to raise funds Approved by the China Securities Regulatory Commission on Approval of the Public Issuance of A- Share Convertible Corporate Bonds by Bengang Steel Plate Co., Ltd. (Zheng Jian Permit [2020] No. 46), the company was approved to publicly issue a total face value of 6.8 billion convertible bonds Corporate bonds with a maturity of 6 years. The company actually issued 68 million convertible corporate bonds to the public, each with a face value of 100 yuan, and the total raised funds were 6.8 billion yuan. After deducting underwriting and sponsorship fees, issuance registration fees and other expenses, a total of 41,084,701.18 yuan (excluding tax) was raised. The net amount of funds is RMB 6,758,915,298.82. The above funds have been transferred to the company's fund-raising account on July 6, 2020. BDO Shu Lun 24 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Pan Certified Public Accountants LLP verified the receipt of the funds raised above and issued Xin Kuai Shi Bao Zi [2020] No. ZB11494 "Capital Verification Report". As of the end of the reporting period, the company actually used the raised funds of RMB 2,425.36 million. As of September 30, 2020, the unused amount of the company's raised funds was 4,332.81 million, of which the supplementary working capital balance was 4,180 million, and the raised funds account balance was 152.81 million. VI. Forecast of 2020 Business Performance A warning and explanation of the reason for predicting that the cumulative net profit from the beginning of the year to the end of the next reporting period may be a loss or a significant change compared with the same period of the previous year □ Applicable √ Not applicable VII. Major Contracts for Daily Operations □ Applicable √ Not applicable VIII. Entrusted Financial Management □ Applicable √ Not applicable There is no entrusted financial management 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. XI. Registration form of Activities such as Research, Communication, Interview in this Reporting Period □ Applicable √ Not applicable There is no researches, visits and interviews received in the reporting period. 25 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 IV. Financial Report I. Financial Statements 1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Prepared by: Bengang Steel Plates Co., Ltd. Unit: Yuan Items Sep 30th , 2020 Dec 31st, 2019 Current assets: Cash at bank and on hand 18,428,336,735.95 18,415,844,397.77 Settlement provisions Capital lent Financial assets held for trading Derivative financial assets Notes receivable Accounts receivable 237,139,957.62 235,696,265.66 Accounts receivable financing 5,164,706,591.79 2,429,542,461.88 Prepayments 1,251,892,309.68 1,291,047,458.11 Premium receivable Reinsurance accounts receivable Receivable deposit for reinsurance contract Other receivables: 170,756,516.11 172,807,036.77 Including: Interest receivables 19,697,718.27 20,504,422.47 Dividend receivables Redemptory financial assets for sale Inventories 9,481,415,336.65 7,700,397,685.61 Contract assets Assets classified as held for sale Non-current assets due within one year Other current assets 274,237,764.53 312,904,824.09 Total current assets 35,008,485,212.33 30,558,240,129.89 Non-current assets: Loan and advances issued 26 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Debt investments Other debt investments Long-term receivables Long-term equity investments 2,642,998.70 2,642,998.70 Other equity instrument investments 1,042,024,829.00 1,041,824,829.00 Other non-current financial assets Investment properties Fixed assets 24,355,855,265.63 26,123,375,492.40 Construction in progress 3,187,454,346.07 1,833,853,572.58 Productive biological assets Oil and gas assets Right of use assets Intangible assets 278,072,797.76 271,500,023.34 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 182,418,902.56 191,485,595.49 Other non-current assets 1,143,710,464.79 708,502,552.50 Total non-current assets 30,192,179,604.51 30,173,185,064.01 Total assets 65,200,664,816.84 60,731,425,193.90 Current Liabilities: Short-term loans 10,971,919,000.00 13,151,478,000.00 Loan from central bank Absorbed deposit and interbank deposit Financial liabilities held for trading Derivative financial liabilities Notes payable 9,755,186,320.32 11,828,514,676.95 Accounts payable 5,650,489,113.68 4,527,513,030.27 Advance from customers 4,429,821,526.79 Contract Liabilities 4,395,896,282.20 Financial assets sold for repurchase Deposits from customers and interbank Acting trading securities Acting underwriting securities 27 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Employee benefits payable 64,817,798.23 23,698,174.56 Current tax liabilities 16,033,518.47 284,825,814.80 Other payables 685,226,321.42 662,701,744.97 Including: Interest payables 26,573,361.30 10,818,986.30 Dividend payables Handling charges and commission payable Reinsurance accounts payable Liabilities held for sale Non-current liabilities due within one 1,055,994,293.11 234,474,657.99 year Other current liabilities Total current liabilities 32,595,562,647.43 35,143,027,626.33 Non-current liabilities: Provision for insurance contract Long-term loans 3,917,863,991.04 4,849,675,910.73 Bonds payable 5,647,525,812.18 Including: Preferred stock Perpetual bond Lease liabilities Long-term payables 1,390,036,449.50 516,939,408.14 Long-term employee benefits payables Estimated liabilities Deferred income 174,010,233.06 208,955,407.30 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 11,129,436,485.78 5,575,570,726.17 Total liabilities 43,724,999,133.21 40,718,598,352.50 Shareholders’ equity: Share capital 3,875,371,532.00 3,875,371,532.00 Other equity instruments 1,146,290,662.42 Including: Preferred stock Perpetual bond Capital reserves 12,343,209,847.29 12,343,209,847.29 Less: treasury shares 28 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Other comprehensive income Special reserves 28,016,257.43 212,687.41 Surplus reserves 961,105,529.85 961,105,529.85 General risk reserves Undistributed profits 2,591,274,953.72 2,307,765,664.62 Total equity attributable to equity holders of 20,945,268,782.71 19,487,665,261.17 the parent company Non-controlling interests 530,396,900.92 525,161,580.23 Total shareholder’s equity 21,475,665,683.63 20,012,826,841.40 Total liabilities and shareholder’s equity 65,200,664,816.84 60,731,425,193.90 Legal Representative: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua 2. STATEMENT OF FINANCIAL POSITION OF THE PARENT COMPANY Unit: Yuan Items Sep 30th, 2020 Dec 31st, 2019 Current assets: Cash at bank and on hand 16,766,413,093.60 16,982,227,928.89 Financial assets held for trading Derivative financial assets Notes receivable Accounts receivable 374,165,618.46 388,997,108.46 Accounts receivable financing 4,753,243,417.46 2,193,319,842.60 Prepayments 1,151,892,309.68 1,184,632,345.13 Other receivables 254,693,349.32 266,663,235.81 Including: Interest receivables 19,697,718.27 19,658,230.77 Dividend receivables Inventories 7,835,149,045.38 6,114,582,832.33 Contract assets Assets classified as held for sale Non-current assets due within one year Other current assets 226,583,443.14 191,249,460.42 Total current assets 31,362,140,277.04 27,321,672,753.64 Non-current assets: Debt investments 29 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Other debt investments Long-term receivables Long-term equity investments 2,016,281,902.16 2,016,281,902.16 Other equity instrument investments 1,041,624,829.00 1,041,624,829.00 Other non-current financial assets Investment properties Fixed assets 22,851,496,439.85 24,447,763,305.12 Construction in progress 3,119,248,726.75 1,813,889,136.42 Productive biological assets Oil and gas assets Right of use assets Intangible assets 183,630,437.72 145,470,040.68 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 84,273,622.44 93,555,276.54 Other non-current assets 1,141,588,572.16 696,351,867.38 Total non-current assets 30,438,144,530.08 30,254,936,357.30 Total assets 61,800,284,807.12 57,576,609,110.94 Current Liabilities: Short-term loans 10,011,919,000.00 11,851,478,000.00 Financial assets held for trading Derivative financial liabilities Notes payable 7,980,864,104.70 10,225,969,445.22 Accounts payable 5,631,646,967.19 4,909,389,629.86 Advance from customers 5,597,707,687.22 Contract liabilities 5,635,804,031.87 Employee benefits payable 63,498,749.91 21,872,906.71 Current tax liabilities 10,049,192.88 274,181,048.14 Other payables 387,153,718.08 384,125,032.59 Including: Interest payables 23,918,986.30 10,818,986.30 Dividend payables Liabilities held for sale Non-current liabilities due within one 1,055,994,293.11 234,474,657.99 30 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 year Other current liabilities Total current liabilities 30,776,930,057.74 33,499,198,407.73 Non-current liabilities: Long-term loans 3,917,863,991.04 4,849,675,910.73 Bonds payable 5,647,525,812.18 Including: Preferred stock Perpetual bond Lease liabilities Long-term payables 1,390,036,449.50 516,939,408.14 Long-term employee benefits payable Estimated liabilities Deferred incomes 174,010,233.06 208,955,407.30 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 11,129,436,485.78 5,575,570,726.17 Total liabilities 41,906,366,543.52 39,074,769,133.90 Shareholders’ equity: Share capital 3,875,371,532.00 3,875,371,532.00 Other equity instruments 1,146,290,662.42 Including: Preferred stock Perpetual bond Capital reserves 11,923,058,165.17 11,923,058,165.17 Less: treasury shares Other comprehensive income Special reserves 24,191,289.71 53,330.99 Surplus reserves 961,105,529.85 961,105,529.85 Undistributed profits 1,963,901,084.45 1,742,251,419.03 Total shareholder’s equity 19,893,918,263.60 18,501,839,977.04 Total liabilities and shareholder’s equity 61,800,284,807.12 57,576,609,110.94 3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE CURRENT REPORTING PERIOD Unit: Yuan Items The Current Period The Previous Period 31 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 1. Total operating income 12,667,300,144.93 14,441,830,940.38 Including: Operating income 12,667,300,144.93 14,441,830,940.38 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 12,682,362,775.14 14,421,363,860.63 Including: Operating cost 12,169,624,645.87 13,739,273,641.14 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 53,364,357.78 60,775,436.14 Selling and distribution expenses 255,130,098.08 257,155,173.90 General and administrative 200,521,607.24 219,140,981.53 expenses Research and development 9,059,465.61 7,306,019.67 expenses Financial expenses -5,337,399.44 137,712,608.25 Including: interest expenses 260,988,980.85 136,052,012.01 Interest incomes 91,001,679.51 89,695,933.07 Add: Other incomes 18,865,049.69 20,821,500.00 Income on investment ("-" for loss) 77,242.47 Including: Income from associates and joint ventures Income from derecognition of financial assets measured at amortised cost ("-" for loss) Exchange Income ("-" for loss) Hedging income from net exposure (“-" for loss) 32 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Gains from the change in fair value (“-" for loss) Expected credit losses (“-" for loss) 1,394,133.21 2,093,121.45 Asset impairment losses (“-" for loss) 48,426,143.08 Assets disposal gains(“-” for loss) 68,683.20 579,216.73 3. Operating profit ("-" for loss) 53,768,621.44 43,960,917.93 Add: Non-operating income 604,118.24 1,506,324.18 Less: Non-operating expenses 239,714.81 6,120,953.63 4. Total profit ("-" for loss) 54,133,024.87 39,346,288.48 Less: Income tax expenses 22,372,416.47 4,904,499.90 5. Net Profit ("-" for loss) 31,760,608.40 34,441,788.58 (1) Classification by continuing operating 1 Net profit from continuing 31,760,608.40 34,441,788.58 operation 2 Net profit from discontinued operation (2) Classification by ownership 1 Net profit attributable to the 28,865,084.77 34,229,631.12 owners of parent company 2 Net profit attributable to non- 2,895,523.63 212,157.46 controlling shareholders 6. Other comprehensive income after tax Other comprehensive income attributable to owners of parent company after tax 1) Other comprehensive income items that will not be reclassified into gains/losses (1) . Re-measurement of defined benefit plans of changes in net debt or net assets (2) . Other comprehensive income under the equity method cannot be reclassified into profit or loss (3). Changes of fair value of other equity instrument investments (4). Changes in the fair value of the company's own credit risk 33 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 (5). Others 2) Other comprehensive income that will be reclassified into profit or loss (1) . Other comprehensive income under the equity method can be reclassified into profit or loss (2). Gains and losses from fair value changes of other debt investments (3). Gains and losses resulting from reclassification of financial assets recognised in other comprehensive income (4). Credit impairment losses of other debt investments (5). Effective portion of gains or losses from cash flow hedging (6). Translation differences in foreign currency financial statements (7). Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 31,760,608.40 34,441,788.58 Total comprehensive income attributable 28,865,084.77 34,229,631.12 to owners of parent company Total comprehensive income attributable 2,895,523.63 212,157.46 to non-controlling shareholders 8. Earnings per share: 1) Basic earnings per share 0.01 0.01 2) Diluted earnings per share 0.01 0.01 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: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua 4. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY OF THE CURRENT REPORTING PERIOD Unit: Yuan Items The Current Period The Previous Period 1. Total operating income 13,000,555,008.97 14,566,987,831.66 Less: Operating cost 12,660,551,211.93 14,024,765,556.43 34 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Taxes and surcharges 42,476,807.35 49,468,259.31 Selling and distribution expenses 163,145,859.93 147,799,392.26 General and administrative expenses 186,584,532.02 205,034,439.76 Research and development expenses 9,059,465.61 7,306,019.67 Financial expenses -8,934,597.73 127,265,933.34 Including: interest expenses 249,633,292.63 120,934,881.27 Interest incomes 81,952,729.77 84,996,191.09 Add: Other incomes 18,861,219.48 20,821,500.00 Income on investment ("-" for loss) 77,242.47 27,594,915.42 Including: Income from associates and joint ventures Income from derecognition of financial assets measured at amortised cost ("-" for loss) Hedging income from net exposure (“-" for loss) Gains from the change in fair value (“-" for loss) Expected credit losses (“-" for loss) 1,394,133.21 1,245,121.45 Asset impairment losses (“-" for loss) 48,426,143.08 Assets disposal gains(“-” for loss) 68,683.20 579,216.73 2. Operating profit ("-" for loss) 16,499,151.30 55,588,984.49 Add: Non-operating income 574,699.43 1,141,958.73 Less: Non-operating expenses 226,440.47 6,116,261.39 3. Total profit ("-" for loss) 16,847,410.26 50,614,681.83 Less: Income tax expenses 12,455,069.07 521,085.42 4. Net Profit ("-" for loss) 4,392,341.19 50,093,596.41 (1) Net profit from continuing operation 4,392,341.19 50,093,596.41 ("-" for loss) (2) Net profit from discontinued operation ("-" for loss) 5. Other comprehensive income after tax 1) Other comprehensive income items that will not be reclassified into gains/losses (1) . Re-measurement of defined benefit plans of changes in net debt or net 35 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 assets (2) . Other comprehensive income under the equity method cannot be reclassified into profit or loss (3). Changes of fair value of other equity instrument investments (4). Changes in the fair value of the company's own credit risk (5). Others 2) Other comprehensive income that will be reclassified into profit or loss (1) . Other comprehensive income under the equity method can be reclassified into profit or loss (2). Gains and losses from fair value changes of other debt investments (3). Gains and losses resulting from reclassification of financial assets recognised in other comprehensive income (4). Credit impairment losses of other debt investments (5). Effective portion of gains or losses from cash flow hedging (6). Translation differences in foreign currency financial statements (7). Others 6. Total comprehensive income 4,392,341.19 50,093,596.41 7. Earnings per share: 1) Basic earnings per share 2) Diluted earnings per share 5. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT REPORTING PERIOD Unit: Yuan Items The Current Period The Previous Period 1. Total operating income 34,851,837,404.98 38,544,426,107.52 Including: Operating income 34,851,837,404.98 38,544,426,107.52 36 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Interest income Premium earned Income from handling charges and commission 2. Total operating cost 34,609,468,735.28 38,043,189,142.86 Including: Operating cost 32,609,871,008.54 35,806,886,370.79 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 141,762,794.46 174,900,799.11 Selling and distribution expenses 897,523,316.86 831,600,373.04 General and administrative 581,349,923.65 665,908,793.30 expenses Research and development 29,262,450.81 22,714,491.95 expenses Financial expenses 349,699,240.96 541,178,314.67 Including: interest expenses 700,850,334.78 703,293,515.07 Interest incomes 245,883,963.84 216,779,712.65 Add: Other incomes 57,452,382.09 62,516,500.00 Income on investment ("-" for loss) 106,546.47 25,907.49 Including: Income from associates and joint ventures Income from derecognition of financial assets measured at amortised cost ("-" for loss) Exchange Income ("-" for loss) Hedging income from net exposure (“-" for loss) Gains from the change in fair value (“-" for loss) 37 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Expected credit losses (“-" for loss) 4,881,916.63 5,844,635.28 Asset impairment losses (“-" for loss) 33,104,544.46 Assets disposal gains(“-” for loss) 394,334.81 2,997,921.07 6. Operating profit ("-" for loss) 338,308,394.16 572,621,928.50 Add: Non-operating income 1,744,482.36 9,716,506.42 Less: Non-operating expenses 20,275,186.23 64,095,275.68 7. Total profit ("-" for loss) 319,777,690.29 518,243,159.24 Less: Income tax expenses 31,610,231.55 30,866,681.63 8. Net Profit ("-" for loss) 288,167,458.74 487,376,477.61 (1) Classification by continuing operating 1 Net profit from continuing 288,167,458.74 487,376,477.61 operation ("-" for loss) 2 Net profit from discontinued operation ("-" for loss) (2) Classification by ownership 1 Net profit attributable to the 283,509,289.10 487,439,246.88 owners of parent company 2 Net profit attributable to non- 4,658,169.64 -62,769.27 controlling shareholders 6. Other comprehensive income after tax Other comprehensive income attributable to owners of parent company after tax 1) Other comprehensive income items that will not be reclassified into gains/losses (1) . Re-measurement of defined benefit plans of changes in net debt or net assets (2) . Other comprehensive income under the equity method cannot be reclassified into profit or loss (3). Changes of fair value of other equity instrument investments (4). Changes in the fair value of the company's own credit risk (5). Others 2) Other comprehensive income that will 38 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 be reclassified into profit or loss (1) . Other comprehensive income under the equity method can be reclassified into profit or loss (2). Gains and losses from fair value changes of other debt investments (3). Gains and losses resulting from reclassification of financial assets recognised in other comprehensive income (4). Credit impairment losses of other debt investments (5). Effective portion of gains or losses from cash flow hedging (6). Translation differences in foreign currency financial statements (7). Others Other comprehensive income attributable to non-controlling shareholders after tax 7. Total comprehensive income 288,167,458.74 487,376,477.61 Total comprehensive income attributable 283,509,289.10 487,439,246.88 to owners of parent company Total comprehensive income attributable 4,658,169.64 -62,769.27 to non-controlling shareholders 8. Earnings per share: 1) Basic earnings per share 0.07 0.13 2) Diluted earnings per share 0.07 0.13 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: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua 6. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT REPORTING PERIOD Unit: Yuan Items The Current Period The Previous Period 1. Total operating income 34,760,336,691.09 38,014,203,689.59 Less: Operating cost 33,039,699,493.20 35,782,055,553.61 39 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Taxes and surcharges 116,717,589.70 133,935,663.72 Selling and distribution expenses 550,078,792.86 482,893,940.32 General and administrative expenses 541,211,684.30 647,086,930.06 Research and development expenses 29,262,450.81 22,714,491.95 Financial expenses 328,569,658.11 515,337,847.93 Including: interest expenses 659,897,744.52 659,441,927.72 Interest incomes 223,250,379.61 199,185,818.03 Add: Other incomes 56,863,565.01 62,516,500.00 Income on investment ("-" for loss) 77,242.47 27,594,915.42 Including: Income from associates and joint ventures Income from derecognition of financial assets measured at amortised cost ("-" for loss) Hedging income from net exposure (“-" for loss) Gains from the change in fair value (“-" for loss) Expected credit losses (“-" for loss) 4,022,071.94 4,996,635.28 Asset impairment losses (“-" for loss) 33,104,544.46 Assets disposal gains(“-” for loss) 394,334.81 3,044,923.32 2. Operating profit ("-" for loss) 249,258,780.80 551,046,727.97 Add: Non-operating income 1,386,359.30 9,279,999.48 Less: Non-operating expenses 19,713,820.58 64,051,443.56 3. Total profit ("-" for loss) 230,931,319.52 496,275,283.89 Less: Income tax expenses 9,281,654.10 15,830,148.17 4. Net Profit ("-" for loss) 221,649,665.42 480,445,135.72 (1) Net profit from continuing operation 221,649,665.42 480,445,135.72 ("-" for loss) (2) Net profit from discontinued operation ("-" for loss) 5. Other comprehensive income after tax 1) Other comprehensive income items that will not be reclassified into gains/losses (1) . Re-measurement of defined benefit plans of changes in net debt or net 40 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 assets (2) . Other comprehensive income under the equity method cannot be reclassified into profit or loss (3). Changes of fair value of other equity instrument investments (4). Changes in the fair value of the company's own credit risk (5). Others 2) Other comprehensive income that will be reclassified into profit or loss (1) . Other comprehensive income under the equity method can be reclassified into profit or loss (2). Gains and losses from fair value changes of other debt investments (3). Gains and losses resulting from reclassification of financial assets recognised in other comprehensive income (4). Credit impairment losses of other debt investments (5). Effective portion of gains or losses from cash flow hedging (6). Translation differences in foreign currency financial statements (7). Others 6. Total comprehensive income 221,649,665.42 480,445,135.72 7. Earnings per share: 1) Basic earnings per share 2) Diluted earnings per share 7. CONSOLIDATED STATEMENT OF CASH FLOWS FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT PERIOD Unit: Yuan Items The Current Period The Previous Period 1. Cash flow from operating activities: Cash received from sale of goods or 25,444,022,450.66 26,790,594,559.41 41 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 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 387,294,316.80 330,537,134.71 Other cash received relating to 168,025,766.48 179,458,663.12 operating activities Subtotal of cash inflow received from 25,999,342,533.94 27,300,590,357.24 operation activities Cash paid for goods and services 24,909,229,260.23 16,361,584,571.18 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 Net increase in funds lent Cash for payment of interest, handling charge and commission Cash for payment of policy bonus Cash paid to and on behalf of 1,408,629,415.56 1,450,655,474.24 employees 42 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Cash paid for all types of taxes 758,524,302.98 911,658,861.03 Other cash paid relating to operating 330,588,899.59 351,573,590.15 activities Subtotal of cash outflow received from 27,406,971,878.36 19,075,472,496.60 operation activities Net cash flows generated from operating -1,407,629,344.42 8,225,117,860.64 activities 2. Cash flows from investing activities: Cash received from return on investments Cash received from distribution of 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 investing activities Cash paid for acquisition of fixed assets, intangible assets and other long-term 1,765,038,590.65 5,012,911,837.02 assets Cash paid for acquisition of 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 investing 1,765,038,590.65 5,012,911,837.02 activities The net cash flow generated by investment -1,765,038,590.65 -5,012,911,837.02 activities 3. Cash flows from financing activities: Proceeds from investment Including: Proceeds from investment of non-controlling shareholders of subsidiary 43 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Proceeds from borrowings 9,297,194,000.00 7,482,429,000.00 Other proceeds relating to financing 6,800,000,000.00 activities Subtotal cash inflow received from financing 16,097,194,000.00 7,482,429,000.00 activities Cash repayments of borrowings 11,555,411,601.25 6,938,475,606.71 Cash payments for distribution of 956,166,264.68 1,194,142,072.60 dividends, profit or interest expenses Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries Other cash payments relating to 43,549,783.25 financing activities Subtotal of cash outflows from financing 12,555,127,649.18 8,132,617,679.31 activities The net cash flow generated by financing 3,542,066,350.82 -650,188,679.31 activities 4. Effect of foreign exchange rate changes on -12,482,658.90 57,000,333.44 cash and cash equivalents 5. Net increase in cash and cash equivalents 356,915,756.85 2,619,017,677.75 Add: Cash and cash equivalents at the 13,441,414,988.58 11,752,548,621.97 beginning of the period 6. Cash and cash equivalents at the ending of 13,798,330,745.43 14,371,566,299.72 the period 8. STATEMENT OF CASH FLOWS OF THE PARENT COMPANY FROM THE BEGINNING OF THE YEAR TO THE END OF THE CURRENT PERIOD Unit: Yuan Items The Current Period The Previous Period 1.Cash flow from operating activities: Cash received from sale of goods or 24,484,591,411.24 25,300,199,068.22 rendering of services Tax rebate received 324,249,789.72 284,437,850.97 Other cash received relating to 163,745,932.07 174,941,066.19 operating activities Subtotal of cash inflow received from 24,972,587,133.03 25,759,577,985.38 operation activities 44 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Cash paid for goods and services 24,410,006,721.64 14,731,205,692.56 Cash paid to and on behalf of 1,344,314,670.02 1,371,069,525.86 employees Cash paid for all types of taxes 660,630,096.94 789,815,447.75 Other cash paid relating to operating 291,312,691.44 310,224,763.98 activities Subtotal of cash outflow received from 26,706,264,180.04 17,202,315,430.15 operation activities Net cash flows generated from operating -1,733,677,047.01 8,557,262,555.23 activities 2. Cash flows from investing activities: Cash received from return on 27,594,915.42 investments Cash received from distribution of 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 27,594,915.42 investing activities Cash paid for acquisition of fixed assets, intangible assets and other long-term 1,746,442,503.88 5,006,076,777.58 assets Cash paid for acquisition of investments Net cash received from subsidiary and other operating unit Other cash paid relating to investing activities Subtotal of cash outflows from investing 1,746,442,503.88 5,006,076,777.58 activities The net cash flow generated by investment -1,746,442,503.88 -4,978,481,862.16 activities 3. Cash flows from financing activities: Proceeds from investment 45 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Proceeds from borrowings 8,237,194,000.00 6,282,429,000.00 Other proceeds relating to financing 6,800,000,000.00 activities Subtotal cash inflow received from financing 15,037,194,000.00 6,282,429,000.00 activities Cash repayments of borrowings 10,155,411,601.25 5,438,545,606.71 Cash payments for distribution of 917,902,736.92 1,112,682,499.61 dividends, profit or interest expenses Other cash payments relating to 43,549,783.25 financing activities Subtotal of cash outflows from financing 11,116,864,121.42 6,551,228,106.32 activities The net cash flow generated by financing 3,920,329,878.58 -268,799,106.32 activities 4. Effect of foreign exchange rate changes on -12,477,383.25 56,922,645.03 cash and cash equivalents 5. Net increase in cash and cash equivalents 427,732,944.44 3,366,904,231.78 Add: Cash and cash equivalents at the 13,029,616,298.47 10,807,824,843.20 beginning of the period 6. Cash and cash equivalents at the ending of 13,457,349,242.91 14,174,729,074.98 the period 46 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 II. Adjustments of Financial Statements 1. Adjustments of beginning balance due to the first-time implementation of the new revenue standards and new lease standards from 2020 √ Applicable □ Not applicable Whether to adjust the balance sheet accounts at the beginning of the year √ Applicable □ Not applicable CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unit: yuan Items Dec 31 ,2019 st Jan 1 , 2020 st Adjustment amount Current assets: Cash at bank and on hand 18,415,844,397.77 18,415,844,397.77 Settlement provisions Capital lent Financial assets held for trading Derivative financial assets Notes receivable Accounts receivable 235,696,265.66 235,696,265.66 Accounts receivable financing 2,429,542,461.88 2,429,542,461.88 Prepayments 1,291,047,458.11 1,291,047,458.11 Premium receivable Reinsurance accounts receivable Receivable deposit for reinsurance contract Other receivables: 172,807,036.77 172,807,036.77 Including: Interest receivables 20,504,422.47 20,504,422.47 Dividend receivables Redemptory financial assets for sale Inventories 7,700,397,685.61 7,700,397,685.61 Contract assets Assets classified as held for sale Non-current assets due within one year Other current assets 312,904,824.09 312,904,824.09 47 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Total current assets 30,558,240,129.89 30,558,240,129.89 Non-current assets: Loan and advances issued Debt investments Other debt investments Long-term receivables Long-term equity investments 2,642,998.70 2,642,998.70 Other equity instrument 1,041,824,829.00 1,041,824,829.00 investments Other non-current financial assets Investment properties Fixed assets 26,123,375,492.40 26,123,375,492.40 Construction in progress 1,833,853,572.58 1,833,853,572.58 Productive biological assets Oil and gas assets Right of use assets Intangible assets 271,500,023.34 271,500,023.34 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 191,485,595.49 191,485,595.49 Other non-current assets 708,502,552.50 708,502,552.50 Total non-current assets 30,173,185,064.01 30,173,185,064.01 Total assets 60,731,425,193.90 60,731,425,193.90 Current Liabilities: Short-term loans 13,151,478,000.00 13,151,478,000.00 Loan from central bank Absorbed deposit and interbank deposit Financial liabilities held for trading Derivative financial liabilities Note payables 11,828,514,676.95 11,828,514,676.95 Account payables 4,527,513,030.27 4,527,513,030.27 Advance from customers 4,429,821,526.79 -4,429,821,526.79 48 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Contract liabilities 4,429,821,526.79 4,429,821,526.79 Financial assets sold for repurchase Deposits from customers and interbank Acting trading securities Acting underwriting securities Employee benefits payable 23,698,174.56 23,698,174.56 Current tax liabilities 284,825,814.80 284,825,814.80 Other payables 662,701,744.97 662,701,744.97 Including: Interest payables 10,818,986.30 10,818,986.30 Dividend payables Handling charges and commission payable Reinsurance accounts payable Liabilities held for sale Non-current liabilities due within 234,474,657.99 234,474,657.99 one year Other current liabilities Total current liabilities 35,143,027,626.33 35,143,027,626.33 Non-current liabilities: Provision for insurance contract Long-term loans 4,849,675,910.73 4,849,675,910.73 Bonds payable Including: Preferred stock Perpetual bond Lease liabilities Long-term payables 516,939,408.14 516,939,408.14 Long-term employee benefits payables Estimated liabilities Deferred income 208,955,407.30 208,955,407.30 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 5,575,570,726.17 5,575,570,726.17 49 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Total liabilities 40,718,598,352.50 40,718,598,352.50 Shareholders’ equity: Share capital 3,875,371,532.00 3,875,371,532.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 12,343,209,847.29 12,343,209,847.29 Less: treasury shares Other comprehensive income Special reserves 212,687.41 212,687.41 Surplus reserves 961,105,529.85 961,105,529.85 General risk reserves Undistributed profits 2,307,765,664.62 2,307,765,664.62 Total equity attributable to equity 19,487,665,261.17 19,487,665,261.17 holders of the parent company Non-controlling interests 525,161,580.23 525,161,580.23 Total shareholder’s equity 20,012,826,841.40 20,012,826,841.40 Total liabilities and shareholder’s 60,731,425,193.90 60,731,425,193.90 equity Notes: None STATEMENOT OF FINANCIAL POSITION OF THE PARENT COMPANY Unit: Yuan Items Dec 31st, 2019 Jan 1st, 2020 Adjustment amount Current assets: Cash at bank and on hand 16,982,227,928.89 16,982,227,928.89 Financial assets held for trading Derivative financial assets Notes receivable Accounts receivable 388,997,108.46 388,997,108.46 Accounts receivable financing 2,193,319,842.60 2,193,319,842.60 Prepayments 1,184,632,345.13 1,184,632,345.13 Other receivables 266,663,235.81 266,663,235.81 Including: Interest receivables 19,658,230.77 19,658,230.77 Dividend receivables 50 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Inventories 6,114,582,832.33 6,114,582,832.33 Contract assets Assets classified as held for sale Non-current assets due within one year Other current assets 191,249,460.42 191,249,460.42 Total current assets 27,321,672,753.64 27,321,672,753.64 Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments 2,016,281,902.16 2,016,281,902.16 Other equity instrument investments 1,041,624,829.00 1,041,624,829.00 Other non-current financial assets Investment properties Fixed assets 24,447,763,305.12 24,447,763,305.12 Construction in progress 1,813,889,136.42 1,813,889,136.42 Productive biological assets Oil and gas assets Right of use assets Intangible assets 145,470,040.68 145,470,040.68 Development expenditure Goodwill Long-term deferred expenses Deferred tax assets 93,555,276.54 93,555,276.54 Other non-current assets 696,351,867.38 696,351,867.38 Total non-current assets 30,254,936,357.30 30,254,936,357.30 Total assets 57,576,609,110.94 57,576,609,110.94 Current Liabilities: Short-term loans 11,851,478,000.00 11,851,478,000.00 Financial assets held for trading Derivative financial liabilities Notes payable 10,225,969,445.22 10,225,969,445.22 Accounts payable 4,909,389,629.86 4,909,389,629.86 Advance from customers 5,597,707,687.22 -5,597,707,687.22 51 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Contract liabilities 5,597,707,687.22 5,597,707,687.22 Employee benefits payable 21,872,906.71 21,872,906.71 Current tax liabilities 274,181,048.14 274,181,048.14 Other payables 384,125,032.59 384,125,032.59 Including: Interest payables 10,818,986.30 Dividend payables Liabilities held for sale Non-current liabilities due within one year 234,474,657.99 234,474,657.99 Other current liabilities Total current liabilities 33,499,198,407.73 33,499,198,407.73 Non-current liabilities: Long-term loans 4,849,675,910.73 4,849,675,910.73 Bonds payable Including: Preferred stock Perpetual bond Lease liabilities Long-term payables 516,939,408.14 516,939,408.14 Long-term employee benefits payable Estimated liabilities Deferred incomes 208,955,407.30 208,955,407.30 Deferred tax liabilities Other non-current liabilities Total non-current liabilities 5,575,570,726.17 5,575,570,726.17 Total liabilities 39,074,769,133.90 39,074,769,133.90 Shareholders’ equity: Share capital 3,875,371,532.00 3,875,371,532.00 Other equity instruments Including: Preferred stock Perpetual bond Capital reserves 11,923,058,165.17 11,923,058,165.17 Less: treasury shares Other comprehensive income Special reserves 53,330.99 53,330.99 Surplus reserves 961,105,529.85 961,105,529.85 52 Bengang Steel Plates Co., Ltd. Third Quarter Report 2020 Undistributed profits 1,742,251,419.03 1,742,251,419.03 Total shareholder’s equity 18,501,839,977.04 18,501,839,977.04 Total liabilities and shareholder’s equity 57,576,609,110.94 57,576,609,110.94 Notes: None 2. Retroactive adjustment due to the first time implementation of the new revenue standards and new lease standards □ Applicable √ Not applicable III. Audit report Whether the third quarter report is audited □ Yes √ No The third quarter report is not audited. 53