Chongqing Iron & Steel : ANNOUNCEMENT OF ANNUAL RESULTS FOR YEAR ENDED 31 DECEMBER 2020

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

ANNOUNCEMENT OF ANNUAL RESULTS

FOR YEAR ENDED 31 DECEMBER 2020

I IMPORTANT NOTICE

• 1 This summary of annual report is abstracted from the full text of the annual report. In order to completely understand the operating results, financial conditions and future development planning of Chongqing Iron & Steel Company Limited (the "Company"), investors are advised to carefully read the full text of the annual report on the media designated by the China Securities Regulatory Commission (CSRC), such as the website of the Shanghai Stock Exchange.

• 2 The board of directors (the "Board"), the supervisory committee and directors, supervisors and senior management of the Company warrant that there are no false representations, misleading statements contained in or material omissions from the annual report and collectively and individually accept full responsibility for the truthfulness, accuracy and completeness of the contents hereof.

• 3 All directors of the Company attended the Board meeting.

• 4 Ernst & Young Hua Ming LLP issued a standard unqualified audit report for the Company.

• 5 The profit distribution proposal or proposal to transfer capital reserve to share capital for the reporting period as considered by the Board

  According to the auditing by Ernst & Young Hua Ming LLP, the net profit attributable to shareholders of the Company for 2020 amounted to RMB582 million, and the unappropriated profit as at the end of 2020 amounted to RMB-8.786 billion. As the Company recorded a negative unappropriated profit as at the end of 2020, the directors of the Company suggested not to make profit distribution or transfer capital reserve to share capital pursuant to the Article 250 of the Articles of Association for 2020.

• 6 The annual results of the Company for the year ended 31 December 2020 have been reviewed by the audit committee of the Company.

II BASIC INFORMATION ON THE COMPANY

• 1 Company Information

• 2 Main Business Profile during the Reporting Period

  Name	Liu Jianrong (Acting)	Peng Guoju
  Correspondence	No. 2 Jiangnan Avenue, Jiangnan	No. 2 Jiangnan Avenue, Jiangnan
  address	Street, Changshou District,	Street, Changshou District,
  Chongqing	Chongqing
  Tel	86-23-6887 3311	86-23-6898 3482
  E-mail	[e-mail]	[e-mail]

  Stock type
  A share	Shanghai Stock Exchange Chongqing Iron &
  Steel
  H share	The Stock Exchange of Chongqing Iron
  Hong Kong Limited

  Place of listing

• Stock Profile

  Stock abbreviation

  Abbreviated name	Stock code	before adjustment
  601005	N/A
  01053	N/A

  Contact information Secretary to the Board

  Securities affairs representative

• 2.1 Explanation on the Company's Main Business and Business Model

The Company is mainly engaged in the production, processing and sale of steel plates, wire rods, bar materials, billets and thin plates; production and sale of coal chemical products & grain slag, etc. The Company has the following main production lines: 4,100mm wide and thick plate, 2,700mm medium plate, 1,780mm hot rolled sheet, high speed wire rods and bar materials.

The Company's products are applied in various industries, such as machinery, architecture, engineering, automobile, motorbike, shipbuilding, offshore oil, gas cylinder, boiler and oil and gas pipelines. The Company's steel products used in hull structure, boilers and pressure vessels were rewarded the title of "Chinese brand products" and four other products were rewarded the title of "Chongqing's brand products". The Company successively obtained the following titles of honor: national Labor Day certificate, national implementation of performance excellence model advanced enterprises, Chongqing famous trademark, Chongqing quality benefit enterprise and Chongqing contract-abiding and trustworthy enterprises.

Chongqing Iron & Steel, which has integrated into China Baowu, is marching forward with a new attitude towards the goal of high-quality development, striving to build itself into a 10-million-tonne-level iron and steel enterprise, shaping "Chongqing Iron & Steel to be beautiful and picturesque", and becoming a leader in the steel industry in Southwest China. The Company actively implemented the annual production and operation policy of "expanding scale, adjusting structure, and reducing costs" and the working keynotes of "refining management, minimizing resource consumption, conducting comprehensive benchmarking to identify areas for improvement, and increasing efforts in cost reduction and efficiency enhancement", and adhered to the philosophy of "all costs can be lowered", while focusing on "scale + cost" and "efficiency + benefit" by means of maximizing the efficiency and minimizing the costs, so as to promote the Company's production and operation and the implementation of construction projects and various reforms and development, strengthen the foundation for development, push forward the construction of a 10-million-tonne-level iron and steel enterprise, and move steadily towards the goal of development.

2.2 Explanation on the Industry

In 2020, under the severe impact of COVID-19 pandemic and the complex domestic and international environment, and in the face of high costs of raw materials such as iron ore, huge environmental pressure, intensified international competition and market volatility, the domestic iron and steel market witnessed upward fluctuations within a wide range.

According to the National Bureau of Statistics, the General Administration of Customs and the China Iron and Steel Association, in 2020, the domestic production of pig iron and crude steel reached 887.52 million tonnes and 1,064.77 million tonnes, representing a year-on-year increase of 4.3% and 7.0%, respectively; the production of steel products reached 1,324.89 million tonnes, representing a year-on-year increase of 10.0%; the cumulative exports of steel products reached 53.67 million tonnes, representing a year-on-year decrease of 16.5%; the cumulative imports of steel products reached 20.23 million tonnes, representing a year-on-year increase of 64.4%; the monthly average of China's steel price index was 105.57 points, representing a year-on-year decrease of 2.2%; the national cumulative imports of iron ore and its concentrates reached 1,170.1 million tonnes, representing a year-on-year increase of 9.5%; according to the statistics of China Iron and Steel Association, the key iron and steel enterprises realized sales revenue of RMB4.7 trillion, representing a year-on-year increase of 10.9%; and profits of RMB207.4 billion, representing a year-on-year increase of 6.6%.

3

Major Financial Data and Financial Indicators of the Company

3.1 Major financial data and financial indicators for the last three years

Unit: RMB'000

Increase/ decrease from

2020

2019

last year

2018

(%)Total assets Operating income

Net profit attributable to shareholders of listed company

Net profit attributable to shareholders of listed company, netting non-recurring gains and losses

Net assets attributable to shareholders of listed company

Net cash flow from operating activities Basic earnings per share

(RMB/share)

Diluted earnings per share

(RMB/share)Weighted average return on net assets (%)

39,949,856 26,975,726 48.10 26,933,351 24,489,935 23,477,597 4.31 22,638,957

638,479

491,082

20,038,467

925,723

-31.03 1,787,906

726,508

-32.41 1,677,588

19,396,003 3.31 18,531,665

• 1,337,765 -405,326 1,338,195

0.07 0.07

0.10 0.10

-30.00 0.20

-30.00 0.20 Decrease by 1.64

percentage

3.24

4.88 points 10.14

3.2 Major financial data by quarter during the reporting period

Unit: RMB'000

1st

Quarter (January-

2nd Quarter (April-

3rd Quarter (July-

4th

March)June) September)

Quarter (October- December)

Operating income

5,178,323

5,749,044

6,998,527

6,564,041

Net profit attributable to shareholders of listed company

4,173

117,182

• 248,977 268,147

  Net profit attributable to shareholders of listed company, netting non-recurring gains and losses

  Net cash flow from operating activities

  253 -213,075

  107,540 295,661

• 246,030 137,259

• 403,001 852,178

Explanation on the differences between quarterly data and disclosed regular reporting data

Applicable

✓

Not applicable

4 Share Capital and Shareholders

4.1 Table of holdings of the number of ordinary shareholders and preferred shareholders with restored voting rights and the top 10 shareholders

Unit: share

As of the end of the reporting period, the total number

of ordinary shareholders (accounts) 133,960 At the end of the month before the annual report disclosure, the total number of ordinary shareholders

(accounts) 133,736 As of the end of the reporting period, the total number of preferred shareholders with restored voting rights

(accounts) 0 At the end of the month before the annual report disclosure, the total number of preferred shareholders

with restored voting rights (accounts) 0

The top 10 shareholders

Changes

Name of shareholder (Full name)

during the reporting period

Period-end number of stock

Number of restricted

Pledged or frozenRatio (%)

stock held Stock StatusQuantityNature of shareholders

Chongqing Changshou

0 2,096,981,600 23.51

Iron & Steel

Company Limited HKSCC NOMINEES

• 0 Pledged 2,096,981,600 Domestic non-state-owned legal person

  • 23,200 531,240,621 5.96

• 0 Unknown

  LIMITED

  Foreign legal person

  • Chongqing Qianxin 427,195,760 427,195,760 4.79

• 0 Pledged 427,190,070 Unknown

Group Co., Ltd.

Chongqing Rural

• 0 289,268,939 3.24

  0

  Nil

  0

  Unknown

  Commercial Bank

  Co., Ltd. Chongqing Guochuang

• 0 278,288,059 3.12

  0

  Nil

  0

  Unknown

  Investment and

  Management Co.,

  Ltd.

  Sinosteel Equipment

• 0 252,411,692

  2.83

  0

  Nil

  0

  Unknown

  & Engineering Co.,

  Ltd.

  Bank of Chongqing

• 0 226,042,920

  Co., Ltd. Industrial Bank Co.,

• 0 219,633,096

  2.53 2.46

  0 0

  Nil

  Nil

  0 0

  Unknown

  Unknown

  Ltd., Chongqing

  Branch Agricultural Bank of

• 0 216,403,628

  2.43

  0

  Nil

  0

  Unknown

  China Limited,

  Chongqing Branch China Shipbuilding

• 0 211,461,370

2.37

0

Nil

0

Unknown

Industry Complete

Logistics Co., Ltd.

( ʕ୵ʈุϓࢁ

يݴϞࠢʮ̡)

The above shareholders' connected There is no connection between Chongqing Changshou Iron & Steel Company Limited,relationship or acting in concertthe controlling shareholder of the Company, and the other 9 shareholders, nor are they persons acting in concert regulated in Measures for Management on Information Disclosure of Changes in Shareholdings of Listed Companies' Shareholders. The Company is also not aware of any connected relationship among the other 9 shareholders or whether they are acting in concert

Preferred shareholders with restored voting rights and their shareholding

Not applicable

4.2 Chart of equity and the controlling relationship between the

Company and the controlling shareholder

✓

Applicable

Not applicable

Chongqing Changshou Iron &

Steel Company Limited

4.3 Chart of equity and the controlling relationship between the

Company and the actual controllers

✓

Applicable

Not applicable

Party acting in concert

Chongqing Changshou Iron & Steel Company Limited

23.51%

Chongqing Iron & Steel

Company Limited

4.4 The total number of preferred shareholders of the Company and the top 10 shareholders at the end of the reporting period

Applicable

✓

Not applicable

5 Information on Corporate Bond

Applicable

✓

Not applicable

III MANAGEMENT DISCUSSION AND ANALYSIS 1 Major Operations During the Reporting Period

During the reporting period, the Group produced 6.3784 million tonnes of iron, 7.1155 million tonnes of steel and 6.7775 million tonnes of commodity billet, representing year-on-year growth of 4.39%, 5.83%, and 5.45% respectively, which exceeded the annual planned goals and reached the highest level in history. The sales volume of commodity billet was 6.8256 million tonnes, representing a year-on-year growth of 4.89%. The operating income was RMB24.49 billion, representing a year-on-year increase of 4.31%, while the total profit was RMB624 million, representing a year-on-year decrease of 29.88%.

1.1 Main business analysis

(1) Analysis of changes in certain items from Income Statement and Cash Flow Statement

Unit: RMB'000

Corresponding

Current

period of

Item	period	last year	Change
(%)
Operating income	24,489,935	23,477,597	4.31
Operating cost	22,658,292	21,718,957	4.32
Selling expenses	91,929	121,521	-24.35
Administrative expenses	591,920	597,612	-0.95
R&D expenses	-	-	-
Financial expenses	132,514	170,887	-22.46
Net cash flow from
operating activities	1,337,765	-405,326	Not applicable
Net cash flow from
investing activities	-711,113	-718,828	Not applicable
Net cash flow from
financing activities	2,476,115	749,934	230.18

1) Reasons for change in distribution and selling expenses: The decrease in distribution and selling expenses was mainly due to the decrease in sales transportation fee as a result of the change of sales model of the Company.

• 2) Reasons for change in financial expenses: The decrease in financial expenses was mainly due to the increase in foreign exchange gains.

• 3) Reasons for change in net cash flow from operating activities: The increase in net cash flow from operating activities was mainly due to the increase in advances from customers.

• 4) Reasons for change in net cash flow from financing activities: The increase in net cash flow from financing activities was mainly due to the increase in financing for the period.

(2) Revenue and cost analysis

✓

Applicable

Not applicableDetailed notes to the major changes in the Company's profits structure or profits sources:

In 2020, the Group realized a total profit of RMB624 million, representing a year-on-year decrease of 29.88%, which was mainly due to the following reasons: the selling price of steel products amounted to s RMB3,464/tonne, representing a year-on-year increase of 0.20%, and commodity billet achieved an increase of RMB133 million in profit affected by products structure; the sales volume of commodity billet reached 6.8256 million tonnes, representing a year-on-year increase of 4.89%, and achieving an increase of RMB44 million in profit; the Company continuously promoted cost reduction plan, thus key technical and economic indicators improved significantly, all consumption obviously reduced, thus resulting in an increase of RMB277 million in profit from cost reduction in the aspect of process; the increase in prices of ore and scrap steel, offset by the decrease in price of coal, resulted in a decrease of RMB337 million in profit; the upgrading and trasformation of production line and the impairment of fixed assets resulted in a decrease of RMB385 million in profit.

In 2020, the Group's revenue from main business amounted to RMB24.349 billion, representing a year-on-year increase of 4.19%. In particular, the income from sales of commodity billet amounted to RMB23.569 billion, representing an increase of RMB1.0750 billion as compared with the corresponding period of last year. Firstly, the sales volume of commodity billet was 6.8256 million tonnes, representing a year-on-year increase of 4.89%, resulting in an increase in the sales income of RMB942 million; secondly, the sales price of steel products was RMB3,464/tonne, representing a year-on-year increase of 0.20%, resulting in an increase in the sales income of RMB133 million affected by products structure.

Composition of income from main businesses:

2019	Year-on-
year increase
Type	Amount	Percentage	Amount	Percentage	in amount
(RMB'000)	(%)	(RMB'000)	(%)	(%)
Plate	7,394,107	30.37	6,894,166	29.50	7.25
Hot rolling	12,385,118	50.85	10,792,992	46.18	14.75
Bars	1,464,818	6.02	2,480,253	10.61	-40.94
Profiles	1,133,878	4.66	2,326,636	9.96	-51.27
Billet	1,190,733	4.89	-	-	-
Subtotal	23,568,654	96.79	22,494,047	96.25	4.78
Other	780,503	3.21	875,587	3.75	-10.86
Total	24,349,157	100.00	23,369,634	100.00	4.19
- 10 -

2020

Hot rolling Bars Profiles Sub-total of steel products

Hot rolling Bars Profiles Sub-total of steel products

Total of commodity billet

Total of commodity billet

Sales prices of commodity billet:

2020

Year-
on-year	Income
growth	increase
(%)	(RMB'000)
0.45	31,479
2.55	305,327
-7.34	-116,628
-7.18	-87,819
0.20	132,359
-	-
-0.12	132,359
Sales volumes of commodity billet:
Sales	Year-
on-year	Income
growth	increase
(%)	(RMB'000)
6.80	468,462
11.92	1,286,799
-36.24	-898,807
-47.49	-1,104,939
-0.73	-248,485
-	1,190,733
4.89	942,248

2019 Sales price

Item

Sales price

(RMB/tonne) (RMB/tonne)

Plate

3,603 3,587

3,423 3,338

3,293 3,554

3,299 3,554

3,464 3,457

Billet

3,254 3,453

Itemvolume for 2020

-

3,457

Sales volume for 2019

(Ten thousand tonnes)

(Ten thousand

tonnes)Plate

205.25 192.19

361.86 323.31

44.49 69.78

34.37 65.46

645.97 650.74

Billet

36.59

682.56

-

650.74

Main business by sectors, products and regions

Unit: RMB'000

Main business by sectors

By sectorsYear-on-year increase/Year-on-year increase/

decrease in decrease inOperating incomeOperating cost

Gross margin

operating incomeoperating cost (%)

Year-on-year increase/ decrease in gross margin

(%)

(%)

(%)Iron and steel

24,349,157 22,554,529

Main business by products

By products

7.37

4.19

4.19

Year-on-year increase/Year-on-year increase/

decrease in decrease in

Decrease by 0.00 percentage points

Operating incomeOperating cost

Gross margin

operating incomeoperating cost (%)

Year-on-year increase/ decrease in gross margin

(%)

(%)

(%)Commodity billet

23,568,654 21,749,854

Other

780,503 804,675

-3.10

7.72

-10.86

4.78

-6.04

4.61

Decrease by 0.15 percentage points Decrease by 5.29 percentage points

Main business by regions

By regionsYear-on-year increase/Year-on-year increase/

decrease in decrease inOperating incomeOperating cost

Gross margin

operating incomeoperating cost (%)

Year-on-year increase/ decrease in gross margin

(%)

(%)

(%)Southwest

22,638,697 20,968,609

Other regions

1,710,460 1,585,920

7.38

7.28

18.54

18.62

• -59.95 -60.06

Decrease by 0.06 percentage points Decrease by 0.25 percentage points

Total

24,349,157 22,554,529

7.37

4.19

4.19 Decrease by 0.00 percentage points

2)Table of production and sales volume analysis

✓

Applicable

Not applicable

Main productsUnitProduction volumeSales volumeInventoryYear-on-year increase/ decrease in production volumeYear-on-year increase/ decrease in sales volumeYear-on-year increase/ decrease in inventory

(%)

(%)

(%)PlateTen thousandtonnes

Hot rolling Ten thousand tonnes

201.90

205.25

3.23

5.75

• 6.80 -32.29

  360.64

  361.86

  3.50

  13.21

• 11.92 26.81

  BarsProfilesBilletTen thousand tonnes Ten thousand tonnes Ten thousand tonnes

  42.68

  44.49

  0.01

  -38.27

• -36.24 -99.46

  34.30

  34.37

  -

  -46.51

• -47.49 -100.00

38.23

36.59

1.64

-

-

-

Cost analysis table

By sectors

By sectorsPercentage of the amount

Amountfor the correspondingAmount for the period

for the corresponding

Unit: RMB'000

Percentage of the amount for the

Cost componentperiod in total costsperiod of last year

period of last year in total costs

Year-on-year change

(%)

(%)

(%)Iron and steel Iron and steel Iron and steel

Raw material Energy

Labor and other costs

By products

By products

17,393,884 1,043,748 4,116,898

77.12 4.63 18.25

16,364,965 1,120,692 4,162,412

Percentage of the amount

Amountfor the correspondingAmount for the period

for the corresponding

75.59 6.29 5.18 -6.87 19.23 -1.09

Percentage of the amount for the

Cost componentperiod in total costsperiod of last year

period of last year in total costs

Year-on-year change

(%)

(%)

(%)Commodity billetRaw material and energy costs Raw material and energy costs

21,749,854

• 96.43 20,791,682

96.04

4.61

Other

804,675

3.57

856,387

3.96

-6.04

4) Major buyers and major suppliers

✓

Applicable

Not applicableThe sales attributable to the five largest buyers amounted to RMB7,710,296,000, representing 31.48% of the total sales for the year, of which the sales attributable to related parties amounted to RMB1,535,082,000, representing 6.27% of the total sales for the year.

The purchase amount attributable to the five largest suppliers amounted to RMB7,622,376,000, representing 33.64% of the total purchase amount for the year, of which the purchase amount attributable to related parties amounted to RMB1,685,747,000, representing 7.44% of the total purchase amount for the year.

(3) Expenses

✓ApplicableNot applicable

Unit: RMB'000

Amount

Amount for the

for the Year-previous on-year

Item	period	period	change
(%)
Selling expenses	91,929	121,521	-24.35
Administrative expenses	591,920	597,612	-0.95
Financial expenses	132,514	170,887	-22.46

(4) R&D investment

Table of R&D investment

✓

Applicable

Not applicable

Unit: RMB'000
Expensed R&D investment for the period	889,617
Capitalized R&D investment for the period	-
Total R&D investment	889,617
Percentage of the total R&D investment in
operating income (%)	3.63
Number of R&D personnel of the Company	1,224
Percentage of R&D personnel in total number of
employees of the Company (%)	16.57
Percentage of capitalized R&D investment in total
R&D investment (%)	-
(5) Cash flow
✓ApplicableNot applicable
Unit: RMB'000

Item

Net cash flow from operating activities

2020 1,337,765

2019 Main reasons for changes

-405,326 Increase in advances from customers

Net cash flow from investing activities

-711,113

-718,828

-

Net cash flow from financing activities

• 2,476,115 749,934 Increase in financing

  Net increase in cash and cash equivalents

• 3,102,767 -374,220 -

1.2 Analysis of assets and liabilities

✓

Applicable

(1) Assets and liabilitiesNot applicable

Unit: RMB'000

ItemAmount at the end of the period

Percentage of the amount at the end of the period in total assets

Amount at the end of the previous periodPercentage of the amount at the end of the previous period in total assetsYear- on-year changeExplanation

(%)

(%)

(%)Cash and bank balances

Financial assets held for trading

4,943,231

12.37

1,783,747

6.61

177.13

-

-

400,000

1.48

-100.00

Increase in advances from customers and financing Redemption of wealth management productsTrade receivables Receivables financing Prepayments Other receivables

35,041 2,068,546

0.09 5.18 1.34 0.05

5,610 861,373

0.02

524.62 Spread settlement

3.19 140.15 Increase in pledged billing

534,516 18,013

751,498 78,132

2.79 -28.87

0.29 -76.95 Recovery of government grants for the prior periodInventories

5,054,908

12.65

3,931,513

14.57 28.57 Scale expansion and increase in inventory of materials

ItemAmount at the end of the period

Percentage of the amount at the end of the period in total assets

Amount at the end of the previous periodPercentage of the amount at the end of the previous period in total assetsYear- on-year changeExplanation

(%)

(%)

(%)Other current assetsLong-term equity investmentsOther equity investments Property, plant and equipment Construction in processRight-of-use assetsIntangible assets Goodwill

Long-term deferred expenditures Deferred tax assets

394,153

0.99 0.20

43,410

79,494

28,258

5,000

0.01

5,000

16,630,788

• 41.63 16,442,264

0.16 0.10

807.98 Increase in excess

VAT paid

181.32

Purchase of equity interest in Baocheng Charcoal ( ᘒ ͮލҿ ) and Baowu Raw Materials

0.02

-

60.95

1.15

2,844,665

7.12

171,858

0.64

1,555.24 Increase in fixed asset investments

4,095,211

10.25

-

- Not applicable Change in the method of leasing equipment

2,394,593 295,407

5.99 0.74

2,392,114 -

8.87 -

0.10

Not applicable Goodwill arising from the acquisition of Chongqing Iron & Steel Energy

299,730

0.75

-

- Not applicable Leasehold improvements

131,468

0.33

68,436

0.25

92.10 Increase in deductible temporary differences such as provision for asset impairment

ItemAmount at the end of the period

Percentage of the amount at the end of the period in total assets

Amount at the end of the previous periodPercentage of the amount at the end of the previous period in total assetsYear- on-year changeExplanation

(%)

(%)

(%)Other non-current assetsShort-term borrowings Notes payableTrade payablesContract liabilitiesEmployee benefits payable

Taxes payableOther payablesNon-current liabilities due within one year

125,092

700,788

0.31

1.75

384,528

12,513

0.05 899.70 Increase in prepayments for fixed investment projects 1.43 82.25 New borrowings

1,272,291

3.18

91,127

0.34 1,296.17

Increase in bills payment

2,652,728

2,554,165

6.64

6.39

1,726,883

1,145,615

6.40 53.61 Increase in purchase of mine and coal and changes of settlement method 4.25 122.95 Increase in advance receipts due to enhancement of sales policy

283,969

0.71

257,143

0.95 10.43

9,177

0.02

70,867

0.26

• -87.05 No VAT payable due to excess VAT paid at the end of the period

  1,567,619

  3.92

  421,768

  1.56

• 271.68 Increase in construction payables

  4,056,471

  10.15

  841,576

  3.12

• 382.01 Reclassification of judicial reorganization loan and lease liabilities into that due within one year

ItemAmount at the end of the period

Percentage of the amount at the end of the period in total assets

Amount at the end of the previous periodPercentage of the amount at the end of the previous period in total assetsYear- on-year changeExplanation

(%)

(%)

(%)Other current liabilitiesLong-term borrowings

Bonds payablesLease liabilitiesLong-term payablesLong-term employee benefits payable

Deferred income Deferred tax liabilitiesOther non-current liabilities

332,041

0.83

150,208

0.56

121.05 Increase in advance receipts and increase in taxation involved

450,000

1.13

-

- Not applicable

995,150

2.49

-

-

New merger and acquisition loan from China Merchants Bank

Not applicable Issuance of medium- term notes in 2020

3,022,612

7.57

-

- Change of method of leasing equipment

1,352,264

3.38

-

-

Not applicable

Not applicable New financing leases

179,557

0.45

201,737

0.75 -10.99

35,902 1,176

0.09 0.00

38,271 -

0.14 -6.19 - Not applicable Increase in taxable temporary differences in the period

445,480

1.12

2,250,000

8.34

-80.20 Reclassification of judicial reorganization loan into that due within one year

(2) Major restricted assets at the end of the reporting period

✓

Applicable

Not applicable

Unit: RMB'000

Carrying

Carrying amount at the

amount at	beginning	Reason
the end of	of the	for
the period	period	restrictions
Cash and bank balances	245,141	188,424	Note 1
Notes receivables	1,343,223	190,000	Note 2
Property, plant and
equipment - houses and
buildings	3,529,913	1,928,087	Note 3
Intangible assets	1,027,708	2,392,114	Note 4
Total	6,145,985	4,698,625

Item

Note 1: As at 31 December 2020, the Group's ownership of cash and bank deposits with carrying amount of RMB245,141,000 (31 December 2019: RMB188,424,000) was restricted for issuing bank acceptances and letters of credit.

Note 2: As at 31 December 2020, the Group's bank acceptances with carrying amount of RMB1,343,233,000 were pledged for issuing bank acceptances (31 December 2019: the Group obtained short-term borrowings by discounting bank acceptances with carrying amount of RMB190,000,000).

Note 3: As at 31 December 2020, the Group's houses and buildings with carrying amount of RMB987,609,000 (31 December 2019: RMB1,928,087,000) and machinery and other equipment with carrying amount of RMB2,542,304,000 (31 December 2019: nil) were pledged for obtaining bank borrowing and working capital loan facilities.

Note 4: As at 31 December 2020, the Group's land use right with carrying amount of RMB1,027,708,000 (31 December 2019: RMB2,392,114,000) was pledged for obtaining bank borrowing and working capital loan facilities, and the amortised amount of the land use right was RMB27,459,000 (2019: RMB62,213,000) during the current year.

2. Management Discussion and Analysis on Future Development of the Company

2.1 Industry competition pattern and development trend

✓

Applicable

Not applicable

2020 was the final year of China's 13th Five-Year Plan. Under the favourable policies, China's economy continued to recover steadily. The abundant supply in the steel industry satisfied the new demand in the new development period, but the steel industry was still exposed to certain risks such as the high costs of raw materials such as iron ore, huge environmental pressure, intensified international competition and market volatility.

2021 is the first year of China's 14th Five-Year Plan. Due to the rebound of global economy overlapping with the adjustments to import tariffs, both imports and exports of steel may see a boom. The tightening standards on capacity replacement will effectively regulate the industry layout, and the market support from rising raw material costs will be significantly enhanced. The steel market may continue to fluctuate within a wide range, and the average price of steel will increase.

In 2021, the in-depth promotion of ultra-low emission transformation will enable more steel enterprises to effectively control their pollutant emissions, and help the steel industry to achieve green development. On 16 December 2020, the Ministry of Industry and Information Technology publicly solicited opinions on the revised draft of the Implementation Measures of Capacity Replacement in the Steel Industry ( ፻᚛Бุପঐໄ౬ྼ݄፬ج' ). The new version of the capacity replacement measures improved and perfected the original one. It will help resolve excess capacity in the industry, optimize the regional capacity layout, and effectively regulate the capacity development of the steel industry through strict execution of the Implementation Measures of Capacity Replacement. In the future, the steel industry will break the current "small, scattered and weak" status through mergers and reorganizations to create predominant enterprises groups at different levels, build an innovative pattern of industry collaboration, effective competition and common development, increase the industrial concentration, so as to promote the rationalization of the industrial structure and layout, and promote the realization of high-quality development of the steel industry.

2.2 Corporate development strategy

✓

Applicable

Not applicableAs the Company has integrated into the big family of China Baowu, it embarks on a new development journey. Standing at the new historic starting point, the Company begins the layout of green manufacturing and smart manufacturing, launches a new round of development planning, to create a high-quality green and smart steel manufacturing enterprise with the capacity of over 10 million tonnes, and shape "Chongqing Iron & Steel to be beautiful and picturesque". The Company is committed to becoming a leader in the steel industry in Southwest China, and moving forward firmly towards the goal of high-quality development.

The Company is strategically located in Southwest China, close to the Yangtze River, and owns unique advantages in geographical location. Relying on Chongqing, it integrates into the construction of the Chengdu-Chongqing Double City Economic Circle, boosts the development of the Yangtze River Economic Belt, and contributes to the western development strategy. The Company strives to become an over 10-million-tonne-level iron and steel enterprise with the first comprehensive strength and dominant market position in Southwest China, possessing sound governance structure, efficient management system, advanced production technology, significant scale efficiency, leading cost, low carbon and environmental protection, and strong ability to cope with changes in the external environment. On the occasion of the implementation of the 14th Five-Year Plan, the Company will seek for the ultimate efficiency with scale enhancement, firmly follow the path of green development, build a smart factory with technological innovation, seize the opportunities and ride on the momentum, embarking on a new journey of high-quality development, and striving to achieve the development goal of building itself into an over 10-million-tonne-level iron and steel enterprise.

2.3 Operating plans

✓

Applicable

Not applicableIn 2021, the Company will focus on the goal of the annual production capacity of steel totaling 10 million tonnes, in accordance with the production and operation policy of "expanding scale, adjusting structure, and reducing costs" and the basic work of "finding differences from excellent enterprises comprehensively, paying close attention to reducing costs and increasing efficiency, promoting the implementation of plans and achieving the scale benefits", and focusing on "scale + cost" and pursing "perfection + efficiency", so as to give full play to the advantages of system and mechanism and building a "green and intelligent manufacturing steel enterprise in high quality with a production capacity over 10 million tonnes" by accurately motivating the vitality of all employees.

The Company plans to produce 8.50 million tonnes of pig iron, 10 million tonnes of steel and 9.58 million tonnes of commodity billets, and realize sales volume of 9.58 million tonnes of commodity billets and revenue of RMB34.5 billion (tax exclusive) in the year of 2021.

Centering on the operating goal in the year of 2021, the Company will focus on promoting the following works:

• 1. Comprehensively deepening reform and improving management efficiency.

• 2. Elaborately organizing the production and forging ahead to build itself a steel and iron enterprise with the production capacity of 10 million tonnes.

• 3. Promoting marketing capacity and building the leading force in regional market.

• 4. Improving the purchase competitiveness and establishing a highly effective supply chain.

• 5. Strengthening the safety environmental protection management and constructing green plant.

• 6. Effectively advancing the intelligent manufacturing, providing supports for high quality development.

• 7. Focusing on talent project construction and releasing the vitality of employees.

2.4 Potential risks

✓

Applicable

Not applicable

• (1) There is still a great challenge for controlling the COVID-19 pandemic around the world. The uncertainties for the global economy at the macro level are increasing, China-U.S. relations are still bewildering, the repeated outbreak of COVID-19 in China and other uncertain factors always exist and the development of steel and iron industry is also with large variables.

• (2) The iron and steel industry is a strong cyclical industry. Domestic and international situation, macro-economic and industrial policies may have certain effects on the operation of the Company.

• (3) The implementation of new environmental law, pollutant emission standards and other relevant laws poses further pressure on the environmental protection of the steel and iron industry.

• (4) The steel price still presents a wide shock pattern, which may have certain effects on the profitability of the Company.

• (5) The Company may suffer increasing cost pressures as a result of the possible fluctuations of raw material price at a high level.

• 3 Reasons for the Suspension of Listing

  Applicable

  ✓

  Not applicable

• 4 The Circumstances and Reasons for the Termination of the Listing

  Applicable

  ✓

  Not applicable

• 5 The Company's Analysis and Explanation about the Reasons for and Impact of Changes in Accounting Policy and Accounting Estimates

✓

Applicable

Not applicable

• (1) Scope of disclosure of related parties

  According to the requirements of the Accounting Standards for Business Enterprises - Interpretation No. 13, since 1 January 2020, the associates of investment parties which pose material impact on the Company shall no longer to be disclosed as the related parties. Such change in accounting policies has affected the determination of related parties and disclosure of related party transactions, and no retrospective adjustment to comparative data is required according to the transitional provisions.

• (2) Whether it constitutes judgement on business

  According to the requirements of the Accounting Standards for Business Enterprises - Interpretation No. 13, since 1 January 2020, "a portfolio obtained shall have at least one investment and one substantial processing procedure, and the combination of both shall contribute significantly to the production capacity" shall be taken as the judgement condition for whether the portfolio constitutes a business, and "a portfolio with two elements of investment and processing procedures" shall no longer be the judgement condition. Such change in accounting policies has affected the determination of whether a transaction constitutes a business merger, and no retrospective adjustment to comparative data is required according to the transitional provisions.

  The implementation of such standard has no impact on the mergers and balance sheets of the Company on 1 January 2021 as well as the mergers and financial statements of the Company in 2020.

• (3) Accounting treatment on carbon emission rights trading

  On 16 December 2019, the Ministry of Finance issued the Notice on the Issuance of Interim Provisions on Accounting Treatment of Carbon Emission Rights Trading ( ᗫ׵Ι೯၁ર׳ᛆʹ׸Ϟᗫึࠇஈ ଣᅲБ஝֛'ٙஷٝ' ) (Cai Kuai [2019] No. 22) ( ৌึ [2019]22 ໮ ), which stipulates that if the relevant enterprises in the key emission units that conduct carbon emission rights trading business acquire carbon emission quota through purchase, they should recognize the carbon emission quota acquired as carbon emission rights assets on the date of purchase, and measure it at cost, debit it under the item of "carbon emission rights assets" and credit it under the items of "bank deposits" or "other payables"; if the carbon emission quota is acquired through allocation by the government for free, no accounting treatment will be made. If the carbon emission quota is purchased to fulfill the contract

(to fulfill the emission reduction obligation), the carrying amount of the quota used shall be debited under the item of "non-operating expense" and credited under the item of "carbon emission rights assets"; if the carbon emission quota is acquired for free and is used to fulfill the contract, no accounting treatment will be made.

• 6 Company's analysis on the cause and impact of correction of material errors of accounting

  Applicable

  ✓

  Not applicable

• 7 The Company shall make specific explanations regarding the changes in the scope of consolidation of financial statements compared to last year's financial report

✓

Applicable

Not applicableIn the year, the Company acquired 100% equity interests in Chongqing Iron & Steel Energy Environmental Protection Company Limited (ࠠ ᅅ ፻᚛ঐ๕ᐑڭϞࠢʮ̡ ) (former name: Chongqing Qianxin Energy Environmental Protection Company Limited ( ࠠᅅɷڦঐ๕ᐑڭϞࠢ ʮ̡ )) from Chongqing Qianxin Group Co., Ltd. (former name: Chongqing Qianxin International Trade Co., Ltd.* ( ࠠᅅɷڦ਷ყ൱׸Ϟࠢʮ̡ )), an independent third party, with a cash consideration of RMB837,610,000. The acquisition date was 30 July 2020, which the Group determined as the acquisition date for this transaction and from which, Chongqing Iron & Steel Energy Environmental Protection Company Limited ( ࠠᅅ፻᚛ঐ๕ᐑڭ Ϟࠢʮ̡ ) has been consolidated into the Company's account.

D. RELEVANT DISCLOSURE MADE ACCORDING TO THE RULES

GOVERNING THE LISTING OF SECURITIES ON THE HONG KONG

STOCK EXCHANGE

1 Compliance of Corporate Governance Code

To the best of knowledge of the Board, the Company had complied with the requirements of the "Corporate Governance Code" as set out in Appendix 14 the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the "Listing Rules") during the reporting period, and was not aware of any deviation from the Code.

• 2 Model Code for Securities Transactions by Directors

  The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 of the Listing Rules as the code for trading of the Company's securities by directors. All directors of the Company confirmed upon specific enquiries that they had complied with the required standards as set out in the Model Code for the year ended 31 December 2020.

• 3 Purchase, Sale or Redemption of Listed Securities of the Company

  As authorized at the 2018 annual general meeting, the 2019 first class meeting of A shareholders and the 2019 first class meeting of H shareholders of the Company, the Resolution on Repurchase of the Shares of the Company through Centralized Bidding Trading was considered and approved at the eighteenth meeting of the eighth session of the Board of the Company. For details of the repurchase of A shares of the Company, please refer to the Report on the Repurchase of A Shares of the Company through Centralized Bidding Trading (Announcement No.: 2020-002) and the Announcement on Resolution Passed at the Eighteenth Meeting of the Eighth Session of the Board (Announcement No.: 2020-003) disclosed on 3 March 2020 by the Company.

  As at the close of trading on 6 March 2020, the Company repurchased 10,000,000 A shares through centralized bidding trading under the first repurchase, representing 0.11% of the total share capital of the Company. The highest price and the lowest price transacted for such shares were RMB1.71 per share and RMB1.68 per share, respectively. The total amount paid for such shares was RMB16,967,061.00 (excluding transaction costs). For details, please refer to the Announcement on the First Repurchase of Shares of the Company through Centralized Bidding Trading (Announcement No.: 2020-006) disclosed on 7 March 2020 by the Company.

  As at the close of trading on 12 March 2020, the Company repurchased a total of 50,000,000 A shares through centralized bidding trading, representing approximately 0.56% of its total share capital of the Company. The highest, lowest and average price transacted for such shares were RMB1.71 per share, RMB1.65 per share and RMB1.69 per share, respectively. The total amount paid for such shares was RMB84,333,550.00 (excluding transaction costs). As such, the total amount of repurchase of the Company has reached the cap, and the repurchase plan was fully implemented. For details, please refer to the Announcement on the Result of Repurchase of Shares and Changes in Shareholding Structure (Announcement No.: 2020-007) disclosed on 13 March 2020 by the Company.

4 Major Acquisition and Disposal of Subsidiaries and Affiliates

On 27 March 2020, the Company held the 20th meeting of the eighth session of the Board, at which The Resolution in Relation to Participation in Online Bidding for Acquisition of 100% Equity Interest in Chongqing Qianxin Energy Environmental Protection Company Limited ( ࠠᅅɷڦঐ๕ᐑ ڭϞࠢʮ̡ ) was considered and approved. The Company was granted approval to participate in the online bidding for 100% equity interest in Chongqing Qianxin Energy Environmental Protection Company Limited ("Qianxin Energy") held by Chongqing Qianxin Group Co., Ltd. ("Qianxin Group") based on its needs for business development, and the management was authorized to sign relevant agreements, documents and handle other related specific matters in accordance with the relevant procedures and laws and regulations. For details, please refer to the Announcement of Resolutions Passed at the 20th Meeting of the Eighth Session of the Board (Announcement No.: 2020-010) disclosed by the Company on 30 March 2020.

On 15 July 2020, the Company and Qianxin Group signed the Equity Transaction Contract in Changshou District, Chongqing, which shall come into effect from the date of signing and sealing by the Company and Qianxin Group, i.e., 15 July 2020. For details, please refer to the Further Announcement on Participation in Online Bidding for Acquisition of 100% Equity Interest in Chongqing Qianxin Energy Environmental Protection Company Limited (Announcement No.: 2020-042) disclosed by the Company on 16 July 2020.

On 30 July 2020, Qianxin Energy completed the change of industrial and commercial registration and become a wholly-owned subsidiary of the Company. On 3 December 2020, Qianxin Energy changed its name to Chongqing Iron & Steel Energy Environmental Protection Company Limited. The goodwill of the Company arising from this transaction at consolidation level was RMB295 million.

• 5 Audit Committee

  The Audit Committee of the Company is comprised of three independent non-executive directors and one non-executive director, namely, Xin Qingquan, Xu Yixiang, Wong Chunwa and Zhang Shuogong with Mr. Xin Qingquan acting as the chairman of the Audit Committee.

  The annual results for the year ended 31 December 2020 of the Company had been reviewed by the members of the Audit Committee before being submitted to the Board for approval.

• 6 Interests or Short Positions

  As at 31 December 2020, the interests or short positions (including interests or short positions which they were taken or deemed to have under relevant provisions of the SFO) of the directors, supervisors or senior management members of the Company in the shares or underlying shares or debentures of the Company and any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Rules Governing the Listing of Securities on the Stock Exchange, to be notified to the Company and the Stock Exchange, were as follows:

  NameThe Company/ associated corporations CapacityNature of interestsTotal number of interested shares heldPercentage in the share capital of A shares of the

  CompanyPercentage in the total share capital of the Company

  Class of shares

  (share)

  (%)

  (%)Wang LiThe Company Director

  (Resigned)Beneficial interests

  113,800 (long position)

  0.00136

  0.00128

  A share

• 7 Pre-emptive Rights

  According to the Articles of Association of the Company and the laws of the People's Republic of China, there are no pre-emptive rights which would require the Company to issue new shares to its existing shareholders on a pro-rata basis.

• 8 Public Float of H Shares

  As of the date hereof, to the best knowledge of the Board, the Company has maintained sufficient public float as required by the Listing Rules of the Stock Exchange.

• 9 Circulating Market Capitalisation

  Based on the available information to the Company, as at 31 December 2020, the circulating market capitalisation of H Shares of the Company [circulating H Share capital Ò closing price of H Shares (HK$0.79)] was approximately HK$425 million and the circulating market capitalisation of A Shares [circulating A Share capital Ò closing price of A Shares (RMB1.48)] was approximately RMB12.403 billion.

• 10 Final Dividend

  The Company's profit distribution policies are set out in detail in the Articles of Association, which provides the principles, forms and conditions of distribution, the justification procedures for distribution scheme and decision-making mechanism, as well as policy adjustments. When determining profit distribution (including dividend payment) and distribution proportion, the Company will follow several major principles including the continuity and stability of profit distribution policies, paying full attention to the reasonable investment return for investors, and considering the long-term interests of the Company, sustainable development and the interests of all shareholders as a whole, and the Board will prepare the proposal for profit distribution according to the operating situations and development of the Company, then submit it to the general meetings for approval. Please refer to the profit distribution policies set out in the Articles of Association for more details.

  The Company does not have any predetermined dividend distribution proportion or dividend distribution ratio, and the distribution and the amount of dividend will be determined by the Board's discretion as aforesaid.

  According to the auditing by Ernst & Young Hua Ming LLP, the net profit attributable to shareholders of the Company for 2020 amounted to RMB582 million, and the unappropriated profit as at the end of 2020 amounted to RMB-8.786 billion. As the Company recorded a negative unappropriated profit as at the end of 2020, the Board suggested not to make profit distribution or transfer capital reserve to share capital in 2020 pursuant to Article 250 of the Articles of Association.

CONSOLIDATED BALANCE SHEET As at 31 December 2020

RMB'000
31 December	31 December
Assets	2020	2019
Current assets
Cash and bank balances	4,943,231	1,783,747
Financial assets held for trading	-	400,000
Trade receivables	35,041	5,610
Receivables financing	2,068,546	861,373
Prepayments	534,516	751,498
Other receivables	18,013	78,132
Inventories	5,054,908	3,931,513
Other current assets	394,153	43,410
Total current assets	13,048,408	7,855,283
Non-current assets
Long-term equity investments	79,494	28,258
Other equity investments	5,000	5,000
Property, plant and equipment	16,630,788	16,442,264
Construction in progress	2,844,665	171,858
Right-of-use assets	4,095,211	-
Intangible assets	2,394,593	2,392,114
Goodwill	295,407	-
Long-term prepaid expenses	299,730	-
Deferred tax assets	131,468	68,436
Other non-current assets	125,092	12,513
Total non-current assets	26,901,448	19,120,443
Total assets	39,949,856	26,975,726

31 December	31 December
Liabilities and shareholders' equity	2020	2019
Current liabilities
Short-term borrowings	700,788	384,528
Notes payable	1,272,291	91,127
Trade payables	2,652,728	1,726,883
Contract liabilities	2,554,165	1,145,615
Employee benefits payable	283,969	257,143
Taxes payable	9,177	70,867
Other payables	1,567,618	421,768
Non-current liabilities due within one year	4,056,471	841,576
Other current liabilities	332,041	150,208
Total current liabilities	13,429,248	5,089,715
Non-current liabilities
Long-term borrowings	450,000	-
Bonds payable	995,150	-
Lease liabilities	3,022,612	-
Long-term payables	1,352,264	-
Long-term employee benefits payable	179,557	201,737
Deferred income	35,902	38,271
Deferred tax liabilities	1,176	-
Other non-current liabilities	445,480	2,250,000
Total non-current liabilities	6,482,141	2,490,008
Total liabilities	19,911,389	7,579,723
Shareholders' equity
Share capital	8,918,602	8,918,602
Capital reserves	19,282,147	19,282,147
Less: Treasury shares	65,940	62,314
Special reserves	22,184	14,573
Surplus reserves	606,991	606,991
Unappropriated profit	(8,725,517)	(9,363,996)
Total shareholders' equity	20,038,467	19,396,003
Total liabilities and shareholders' equity	39,949,856	26,975,726

CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2020

RMB'000
2020	2019
Revenue	24,489,935	23,477,597
Less: Cost of sales	22,658,292	21,718,957
Taxes and surcharges	172,493	168,336
Distribution and selling expenses	91,929	121,521
General and administrative expenses	591,920	597,612
Finance expenses	132,514	170,887
Including: Interest expenses	271,072	216,278
Interest income	69,528	52,977
Add: Other income	196,430	144,872
Investment income	6,803	15,894
Impairment losses on credit	(23)	(531)
Impairment losses on assets	(364,917)	-
Operating profit	681,080	860,519
Add: Non-operating income	2,703	39,638
Less: Non-operating expenses	59,396	9,648
Total profit	624,387	890,509
Less: Income tax expenses/(credit)	(14,092)	(35,214)
Net Profit	638,479	925,723
Breakdown by continuity of operations
Net profit from continuing operations	638,479	925,723

2020	2019
Breakdown by attributable interests
Net profit attributable to
shareholders of the parent	638,479	925,723
Non-controlling interests	-	-
Other comprehensive income after tax	-	-
Total comprehensive income	638,479	925,723
Total comprehensive income attributable to
shareholders of the parent	638,479	925,723
Total comprehensive income attributable to non-
controlling interests	-	-
Earnings per share:
Basic earnings per share (RMB/share)	0.07	0.10
Diluted earnings per share (RMB/share)	0.07	0.10

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2020

2020

I.

I.

III. Closing balance for the yearIII. Closing balance for the yearII.

II.

2019

(III) Special reserve

(III) Special reserve

Closing balances of the preceding year and

opening balances of the current year

Changes in the current year

Closing balances of the preceding year and

opening balances of the current year

Changes in the current year

1.	Amount established
during the year
2.	Amount utilized during the year

1.	Amount established
during the year
2.	Amount utilized during the year

Less:	Other
Share	Capital	treasury	comprehensive	Special	Surplus	Unappropriated	shareholders'
capital	reserves	shares	income	reserves	reserves	losses	equity
8,918,602	19,282,147	62,314	-	14,573	606,991	(9,363,996)	19,396,003
-	-	-	-	-	-	638,479	638,479
1.	Amount increased during the year	-	-	84,334	-	-	-	-	(84,334)
2.	Amount decreased during the year	-	-	(80,708)	-	-	-	-	80,708
-	-	-	-	29,564	-	-	29,564
-	-	-	-	(21,953)	-	-	(21,953)
8,918,602	19,282,147	65,940	-	22,184	606,991	(8,725,517)	20,038,467
Less:	Other	Total
Share	Capital	treasury	comprehensive	Special	Surplus	Unappropriated	shareholders'
capital	reserves	shares	income	reserves	reserves	losses	equity
8,918,602	19,282,147	-	-	13,644	606,991	(10,289,719)	18,531,665
-	-	-	-	-	-	925,723	925,723
-	-	62,314	-	-	-	-	(62,314)
-	-	-	-	25,680	-	-	25,680
-	-	-	-	(24,751)	-	-	(24,751)
8,918,602	19,282,147	62,314	-	14,573	606,991	(9,363,996)	19,396,003
- 36 -

Total

• (I) Total comprehensive income

• (II) shareholders' contribution and decrease in share capital

• (I) Total comprehensive income

• (II) shareholders' contribution and decrease in share capital

1.

Amount increased during the year

RMB'000

CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2020

RMB'000

2020	2019
I.	Cash flows from operating activities:
Cash received from sale of goods and
rendering of services	23,942,238	22,376,737
Receipts of taxes refunds	19,761	-
Other cash received relating to
operating activities	387,232	149,412
Sub-total of cash inflows from
operating activities	24,349,231	22,526,149
Cash paid for purchase of goods and services	20,923,245	20,843,771
Cash paid to and on behalf of employees	1,206,760	1,205,096
Cash paid for all types of taxes	605,904	553,961
Other cash paid relating to operating activities	275,557	328,647
Sub-total of cash outflows from
operating activities	23,011,466	22,931,475
Net cash flows from operating activities	1,337,765	(405,326)
II.	Cash flows from investing activities:
Cash received from disposal of investments	433,000	1,008,800
Cash received from return on investments	6,803	15,894
Other cash received relating to
investing activities	-	980
Sub-total of cash inflows from
investing activities	439,803	1,025,674

2020

2019

Cash paid for acquisition of property plant and equipment, intangible assets and other long-term assets

Cash paid for acquisition of investments Net cash payments for acquisition of subsidiaries and other business units

223,158

337,444

• 84,236 1,407,058

843,522

-

Sub-total of cash outflows from investing activities

1,150,916

1,744,502

Net cash flows from investing activities

III. Cash flows from financing activities:

Cash received from borrowings

Other cash received relating to

financing activities

(711,113)

(718,828)

2,742,480 591,545

1,478,358 795,088

Sub-total of cash inflows from financing activities

4,220,838 1,386,633

Cash repayments of borrowings

Cash paid for distribution of dividends or profits, and for interest expenses

Other cash paid relating to financing activities

1,251,050 410,000

203,007 157,441

290,666 69,258

Sub-total of cash outflows from financing activities

1,744,723 636,699

Net cash flows from financing activities

2,476,115 749,934

• IV. Effect of changes in exchange rate on cash and cash equivalents

  -

  -

• V. Net increase/(decrease) in cash and cash equivalents

  Add: Cash and cash equivalents at the

  beginning of the year

  3,102,767

  (374,220)

  1,595,323 1,969,543

• VI. Cash and cash equivalents at the end of the year

4,698,090 1,595,323

STATEMENT OF BALANCE SHEET As at 31 December 2020

RMB'000
31 December	31 December
Assets	2020	2019
Current assets
Cash and bank balances	4,925,021	1,779,736
Financial assets held for trading	-	400,000
Trade receivables	39,503	5,610
Receivables financing	2,062,046	861,373
Prepayments	516,190	707,289
Other receivables	17,181	78,027
Inventories	5,015,067	3,931,513
Other current assets	383,123	43,410
Total current assets	12,958,131	7,806,958
Non-current assets
Long-term equity investments	917,104	28,258
Other equity investments	5,000	5,000
Property, plant and equipment	15,705,686	16,442,087
Construction in progress	2,844,665	171,858
Right-of-use assets	4,095,211	-
Intangible assets	2,329,901	2,392,114
Long-term prepaid expenses	299,730	-
Deferred tax assets	87,653	68,192
Other non-current assets	87,173	12,513
Total non-current assets	26,372,123	19,120,022
Total assets	39,330,254	26,926,980

31 December	31 December
Liabilities and shareholders's equity	2020	2019
Current liabilities
Short-term borrowings	700,788	384,528
Notes payable	1,256,400	91,127
Trade payables	2,692,577	1,726,883
Contract liabilities	2,554,123	1,105,972
Employee benefits payable	280,322	257,143
Taxes payable	6,822	70,398
Other payables	1,565,471	421,590
Non-current liabilities due within one year	3,711,113	841,576
Other current liabilities	332,036	144,958
Total current liabilities	13,099,652	5,044,175
Non-current liabilities
Long-term borrowings	450,000	-
Bonds payable	995,150	-
Lease liabilities	3,022,612	-
Long-term payables	1,125,491	-
Long-term employee benefits payable	179,557	201,737
Deferred income	35,902	38,271
Other non-current liabilities	445,480	2,250,000
Total non-current liabilities	6,254,192	2,490,008
Total liabilities	19,353,844	7,534,183
Shareholders' equity
Share capital	8,918,602	8,918,602
Capital reserves	19,313,090	19,313,090
Less: Treasury shares	65,940	62,314
Special reserves	19,398	14,573
Surplus reserves	577,012	577,012
Unappropriated profit	(8,785,752)	(9,368,166)
Total shareholders' equity	19,976,410	19,392,797
Total liabilities and shareholders' equity	39,330,254	26,926,980

INCOME STATEMENT

For the year ended 31 December 2020

Revenue

RMB'000
2020	2019
24,486,676	23,467,962
22,731,657	21,718,485
168,062	168,087
91,572	121,111
580,949	597,612
112,667	170,898
251,069	216,278
69,371	52,966
175,565	144,872
6,791	20,114
(364,474)	-
Operating profit	619,651	856,755
Add: Non-operating income	2,697	39,638
Less: Non-operating expenses	59,396	9,648
Total profit	562,952	886,745
Less: Income tax expenses/(credit)	(19,462)	(37,125)
Net Profit	582,414	923,870
Including: Net profit from continuing
operations	582,414	923,870
Other comprehensive income after tax	-	-
Total comprehensive income	582,414	923,870

Less: Cost of sales

Taxes and surcharges Distribution and selling expenses General and administrative expenses Finance expenses

Including: Interest expenses

Interest income

Add: Other income

Investment income Impairment losses on assetsSTATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2020

2020

I.

III. Closing balance for the yearII.

III.

II.

2019

I.

Closing balances of the preceding year and

opening balances of the current year

Changes in the current year

Closing balances of the preceding year and

opening balances of the current year

Changes in the current year

1.	Amount increased during the year
2.	Amount decreased during the year

1.	Amount established during the year
2.	Amount utilized during the year

Less:	Other
Share	Capital	treasury	comprehensive	Special	Surplus	Unappropriated	shareholders'
capital	reserves	shares	income	reserves	reserves	profit	equity
8,918,602	19,313,090	62,314	-	14,573	577,012	(9,368,166)	19,392,797
-	-	-	-	-	-	582,414	582,414
-	-	84,334	-	-	-	-	(84,334)
-	-	(80,708)	-	-	-	-	80,708
1.	Amount established during the year	-	-	-	-	25,908	-	-	25,908
2.	Amount utilized during the year	-	-	-	-	(21,083)	-	-	(21,083)
8,918,602	19,313,090	65,940	-	19,398	577,012	(8,785,752)	19,976,410
Less:	Other	Total
Share	Capital	treasury	comprehensive	Special	Surplus	Unappropriated	shareholders'
capital	reserves	shares	income	reserves	reserves	profit	equity
8,918,602	19,313,090	-	-	13,644	577,012	(10,292,036)	18,530,312
-	-	-	-	-	-	923,870	923,870
-	-	62,314	-	-	-	-	(62,314)
-	-	-	-	25,680	-	-	25,680
-	-	-	-	(24,751)	-	-	(24,751)
8,918,602	19,313,090	62,314	-	14,573	577,012	(9,368,166)	19,392,797
- 42 -

Total

(I) Total comprehensive income

• (II) shareholders' contribution and decrease in share capital

• (III) Special reserves

Closing balance for the year

(I) Total comprehensive income

• (II) shareholders' contribution and decrease in share capital

  1.

  Amount increased during the year

  RMB'000

• (III) Special reserves

STATEMENT OF CASH FLOWS For the year ended 31 December 2020

RMB'000

2020	2019
I.	Cash flows from operating activities:
Cash received from sale of goods and
rendering of services	23,939,650	22,365,668
Other cash received relating to
operating activities	384,574	149,135
Sub-total of cash inflows from
operating activities	24,324,224	22,514,803
Cash paid for purchase of goods and services	21,174,171	20,843,237
Cash paid to and on behalf of employees	1,190,067	1,205,096
Cash paid for all types of taxes	581,329	549,662
Other cash paid relating to operating activities	269,804	328,176
Sub-total of cash outflows from
operating activities	23,215,371	22,926,171
Net cash flows from operating activities	1,108,853	(411,368)
II.	Cash flows from investing activities:
Cash received from disposal of investments	433,000	1,008,800
Cash received from return on investments	6,791	20,114
Other cash received relating to
investing activities	-	980
Sub-total of cash inflows from
investing activities	439,791	1,029,894
Cash paid for acquisition of property plant and
equipment, intangible assets and
other long-term assets	223,078	337,444
Cash paid for investments	84,236	1,407,058
Net cash payments for acquisition of
subsidiaries and other business units	849,610	-

2020	2019
Sub-total of cash outflows from
investing activities	1,156,924	1,744,502
Net cash flows from investing activities	(717,133)	(714,608)
III.	Cash flows from financing activities:
Cash received from borrowings	2,742,480	591,545
Other cash received relating to
financing activities	1,478,358	795,088
Sub-total of cash inflows from
financing activities	4,220,838	1,386,633
Cash repayments of borrowings	1,134,500	410,000
Cash paid for distribution of dividends or
profits, and for interest expenses	185,858	157,441
Other cash paid relating to financing activities	194,051	69,258
Sub-total of cash outflows from
financing activities	1,514,409	636,699
Net cash flows from financing activities	2,706,429	749,934
IV.	Effect of changes in foreign exchange
rate on cash and cash equivalents	-	-
V.	Net increase in cash and cash equivalents	3,098,149	(376,042)
Add: Cash and cash equivalents
at the beginning of the year	1,591,312	1,967,354
VI.	Cash and cash equivalents
at the end of the year	4,689,461	1,591,312

The annual report of the Company for the year ended 31 December 2020 will be published on the website of The Stock Exchange of Hong Kong Limited (www. hkexnews.hk) and the website of the Company (www.cqgt.cn) respectively on or before 20 March 2021.

By order of the Board

Chongqing Iron & Steel Company Limited

Liu Jianrong

Chairman

Chongqing, the PRC, 20 March 2021

As at the date of this announcement, the Directors of the Company are: Mr. Liu Jianrong (Executive Director), Mr. Zhang Wenxue (Executive Director), Mr. Tu Deling (Executive Director), Mr. Zou An (Executive Director), Mr. Song De An (Non-executive Director), Mr. Zhou Ping (Non-executive Director), Mr. Xin Qingquan (Independent Non-executive Director), Mr. Xu Yixiang (Independent Non-executive Director) and Mr. Wong Chunwa (Independent Non-executive Director).