2021 Social Responsibility Report

Charting a Course for

a New Era

About the Report

Solemn Commitment

The information and data disclosed in the Report are derived from the Company's statistical reports and official documents and have been audited by relevant departments. The Company guarantees that there are no false records or misleading statements in the Report and is responsible for the truthfulness, accuracy and completeness of the contents.

Basis of Report

The Report is mainly based on the Environmental, Social and Governance Reporting Guide of the Stock Exchange of Hong Kong, the Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR4.0) of the Chinese Academy of Social Sciences, the Notice on Strengthening the Social Responsibility Commitment of Listed Companies cum Issuing the Guidelines on Environmental Information Disclosure for Listed Companies on the Shanghai Stock Exchange of the Shanghai Stock Exchange, the Guidance on Better Fulfillment of Social Responsibility by State-ownedEnterprises of the State-owned Assets Supervision and Administration Commission of the State Council, the Sustainability Reporting Standards (GRI Standards) of the Global Reporting Initiative, and the United Nations Sustainable Development Goals (SDGs).

Scope of the Report

Unless otherwise specified, the Report mainly describes the economic, social and environmental performance of Masteel and its subsidiaries Changjiang Steel, Hefei Company, and Magang Rail Transportation Equipment Company in terms of their practices in social responsibility fulfillment and performance during the period from January 1, 2021 to December 31, 2021. The selection of the scope of the reporting entities is based primarily on materiality and substantiality. Unless otherwise stated, the currencies involved in the Report shall be in CNY.

About the Report

Name Description

"China Baowu" used in the Report is the shorted form of China Baowu Steel Group Corporation Limited. "Magang Group" used in the Report is the shorted form of "Magang (Group) Holding Co., Ltd.". "Masteel", "Company", and "We" are the shorted form of Maanshan Iron and Steel Co., Ltd., and "Baosteel Hong Kong" is the shorted form of "Baosteel Hong Kong Investment Co., Ltd.".

Preparation Process

Investigation of the concerns of stakeholders - Report planning - Report framework construction - Report preparation training - Collection of materials

• Report preparation - Internal discussion - Report design - Solicitation of opinions - Report revision - Management review - Board of Directors review - Release of the final draft.

Text Language

The Report is available in simplified Chinese, traditional Chinese, and English. If there is any discrepancy between the three versions, the simplified Chinese version shall prevail.

Form of Release

The Report will be published in printed version and PDF electronic version. The PDF electronic version can be downloaded in the social responsibility column (http://www.magang.com.cn/d3/shzr/index.html) at the official website of Masteel. To reduce the impact of printing on the environment, we encourage readers to download the electronic version whenever possible.

The Report is printed on recycling paper. To save paper, we will limit the length to the greatest extent. For more information, please visit the official website, WeChat official account or the annual financial report of Masteel.

About the Report / 01 Message from Chairman / 04 About Masteel /06

Company Profile /06

Organizational Structure /08

Enterprise Culture /09

Big Events in 2021 /10

Focus /12

Build a Green Urban Steel Plant Through the Change from "Minilandscape" to "Integrated Scenery"/12

Help to Achieve Emission Peak and Carbon Neutrality with High Profile and High Standards /16

Corporate Governance/20

Governance Overview /20

Business Ethics /27

Uphold Integrity /28

Manage Enterprises According to Law /30

ESG Statement of the

Board of Directors /31

ESG Management /32

ESG Management Structure /32

ESG Management Improvement /33

Communication with Stakeholders /34

Analysis of Substantive Topics /36

38

Bravely Embrace Innovation and Forge a New Engine for Reform and Development

Innovation Drives Development /40

Promote Intelligent Manufacturing /44

48

Give Priority to Environmental Protection and Establish a New Benchmark

Strengthen Environmental Management /50

Save Energy and Resources /52

Reduce Pollutant Emissions /56

Practice Green Operation/61

62

Care for Employees and Build a Warm and Harmonious New Harbor

Safeguard the Rights and Interests of Employees /64 Pay Attention to Occupational Health /66 Strengthen Workplace Safety /67

Facilitate Employee Development /69

Create a Happy Home /71

74

Go Hand in Hand to Create a New Situation for the Development of the Industry

Create Excellent Services /76

Mobilize Partners to Fulfill Their

Responsibilities /79

CONTENTS

82

Give Back to Society and Share a Better Life in the New Era

Serve Rural Revitalization /84

Drive Community Development /86

Be Actively Involved in Public Welfare and Charity /87

Prospect / 91

Appendix / 92

Key Performance Indicators (KPI) /92

Index of Indicators /96

System Certification /97

Rating Report /98

Feedback /99

2021 ESG Report of Maanshan Iron and Steel Co., Ltd.

Message from Chairman

The year 2021 is the first year of implementing the 14th Five-Year Plan and embarking on a new journey toward building a modern socialist country in an all-round way. The year 2021 is also the first year of Masteel's comprehensive planning during the 14th Five-Year Plan period. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we fully applied the guiding principles of the successive plenary sessions of the 19th National Congress of the Communist Party of China (CPC) and the 19th CPC Central Committee, and put into practice the guiding principles of General Secretary Xi Jinping's important speech during an inspection tour of China Baowu Masteel Group. Centering on the annual targets and tasks, Masteel Group focused on lean and efficient operations, strived to be a trailblazer, seized rare market opportunities, yielded remarkable results in terms of production capacity release, index improvement, efficiency and benefits, innovative breakthroughs, etc., and promoted sustainable high-quality leapfrog development.

We deepened reform and innovation, and achieved excellence-based prosperity. To maintain the enterprise's vitality, we built the management and control model of "one headquarters, multiple bases". We kept to innovation-leddevelopment, eliminated bottlenecks that stifle technological innovation, accelerated the R&D and application of new technologies, new materials and new products, and enhanced the overall manufacturing capability and technology leadership capabilities. In accordance with the requirements of the "Four Uniformlys", we moved faster to implement the intelligent manufacturing strategy, promoted the upgrading of intelligent manufacturing, and accelerated digital and intelligent development to build efficient, safe and environmentally friendly intelligent steelworks, lead the high-qualitydevelopment of the steel industry, and help achieve the strategic goal of making China a manufacturing power.

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Message from Chairman

We seized the opportunity presented by the "Dual Carbon" goals to ensure long-term development through green development. Upholding the concept of "lucid waters and lush mountains are invaluable assets", we stayed committed to green development, followed the requirements of peak carbon dioxide emissions and carbon neutrality, and resolutely pursued green, recyclable and low-carbondevelopment. We produced steel goods that are both environmentally friendly and of high quality, and demonstrated the green and low-costadvantages of high-performanceproducts throughout the lifecycle. We earnestly implemented the notion of environmental protection management featuring "treatment of three wastes - waste gas, waste water and solid waste" and "cleaning, greening, beautifying and civilizing" as well as "two better and one integration". We promoted the "Yangtze River Protection" initiative, carried out large-scalegreening of the factory grounds, comprehensively improved the essential ecological and environmental protection, improved on-siteenvironment from bonsai to scenery and built the "garden-styleriverside urban eco-steelworks".

We built a high ground for talents, and achieved a win-win situation for both employees and the enterprise via mutual concerning. We improved the incentive mechanism for employee post innovation and value creation, designed and managed scientific and effective employee career advancement channels, comprehensively improved employees' competence and quality, sparked employees' passion for work, and promoted the harmonious progress of employees and enterprise. We put people first, and earnestly helped employees in difficulty solve problems and worries; we held diverse recreational activities to add diversity to employees' lives, increasing their sense of benefit, happiness and security. We met employees' yearning for a better life with "Three Haves" and built consensus and pooled strength for the long-termcorporate development of the Company.

We kept the rural vitalization campaign alive, forged a vision of common prosperity, and drew a blueprint for harmony. We implemented plans on ensuring the alignment between the results of poverty alleviation and rural vitalization, strengthened organization and leadership, prioritized the work, and fulfilled work responsibilities, so that rural vitalization is for and depends on the people, and its results are shared by the people. In line with the requirements of "responsibility, policy, assistance, supervision", we increased the input of assistance funds, and implemented innovative and detailed assistance measures in terms of industry, education, consumption, etc. We made significant progress in developing agriculture, building beautiful countryside and helping farmers become wealthy, and pooled the efforts for rural vitalization.

We forge ahead courageously for sustained growth. At the starting point of "CNY 100 Billion Masteel", we nurture the ambition to "become the global leader of excellent and special long steel products", accelerate intelligent upgrading, keep to green and low-carbon development, do a good job in work safety, and accelerate the implementation of new projects. We regard the beginning as the decisive battle and the initial stage as the home stretch. We work with the spirit of "accomplishing what requires three-year efforts in one year". With a sense of selfless dedication, we make pioneering and innovative efforts, push the envelope, achieve unprecedented results, and strive to build a new Masteel with sustained growth!

-Ding Yi,

Secretary of the Party Committee and the Chairman of Masteel

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2021 ESG Report of Maanshan Iron and Steel Co., Ltd.

About Masteel

Company Profile

As one of the largest steel manufacturers and retailers in China, Masteel has a supporting production scale of 20 million tons of steel and nearly 20,000 employees. In 2021, the crude steel output of the Company reached 20.97 million tons. The Company achieved an operating revenue of CNY 113.85 billion and a total profit of CNY 7.02 billion. Listed in both Hong Kong and Shanghai, the Company ranked 139th in 2021 Fortune Top 500 China Enterprises.

The predecessor of the Company is Maanshan Iron Factory founded in 1953. Maanshan Iron and Steel Company was founded in 1958. In 1993, Maanshan Iron and Steel Company went through the reorganization of joint-stock system. On September 1, 1993, it was divided into Maanshan Masteel Corporation and Maanshan Iron and Steel Co., Ltd. In 1998, the controlling shareholder Maanshan Masteel Corporation was reorganized into Masteel (Group) Holding Co., Ltd. On September 19, 2019, the State-owned Assets Supervision and Administration Commission of Anhui Province, which held 100% of equity of Masteel Group transferred 51% equity of Masteel Group to China Baowu, with the direct controlling shareholder of the Company remaining unchanged, i.e. Masteel Group. China Baowu became the indirect controlling shareholder of the Company. The actual controller of the Company changed to State-owned Assets Supervision and Administration Commission of the State Council from the State-owned Assets Supervision and Administration Commission of Anhui Province.

The Company boasts advanced cold-rolled and hot-rolled sheets, galvanized sheets, color-coated sheets, non-oriented silicon steel, large and small H-beams, heavy H-beams,high-speed wire (bar) materials, high-speed wheels, and other production lines. It is mainly engaged in sales of the automobile sheets, home appliance sheets, non-oriented silicon steel, hot-rolled sheets, H-beams,high-quality special steel, construction wires and bars, wheels, and other steel products, forming a unique structure with four dominant products of "high-quality, special steels, train wheels and axles, sheets and strips, and long products". The Company's products are widely applied in aviation, railway, maritime industries, automobiles, home appliances, shipbuilding, construction, machinery manufacturing, and other fields and national key projects, and exported to over 50 countries and regions.

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