Beijing Shougang Company Limited
2022 Annual Report
19 April 2023
Section I. Important notice, Content, DefinitionsThe board of directors (the “Board”), the supervisory committee, all directors, supervisors and senior executivesof the Company warrant that there are no false representations, misleading statements or material omissions in thisannual report; and are jointly and individually responsible for the truthfulness, accuracy and completeness of theinformation contained in this annual report.Mr. Zhao Minge, the representative of the Company, Mr. Liu Jianhui, the general manager of the Company, Mr. LiBaizheng, the person overseeing the accounting operations of the Company, and Ms. Gong Juanjuan, head ofAccounting Department, made representations in respect of the truthfulness, accuracy and completeness of thefinancial report contained in the annual report.Other directors except the following attended the board meeting to consider the annual report in person:
| Name of director not present in person | Title of director not present in person | Reasons for not attending in person | Name of principal |
| Li Jiantao | Director | Other arrangements | Zeng Li |
| Ye Lin | Independent director | Other arrangements | Liu Shen |
Forward-looking statements contained in this annual report do not constitute any substantive commitments toinvestors by the Company. Investors should be aware of the relevant investment risks.Certain risks that may exist have been elaborated by the Company in this report. Please refer to Discussion andAnalysis of Business Operations for details.The Company plans not to distribute cash dividends, issue bonus shares, or convert public reserve funds into sharecapital.This report is prepared based on Chinese text and is prepared in both Chinese and English versions. In the event ofany discrepancy between Chinese and English versions, the Chinese version shall prevail.
CONTENTS
SECTION I. IMPORTANT NOTICE, CONTENT, DEFINITIONS .......................................................................................................... 2
SECTION II. COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ........................................................................................ 6
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS .......................................................................................................... 9
SECTION IV. CORPORATE GOVERNANCE................................................................................................................................. 35
SECTION V. ENVIRONMENT AND SOCIAL RESPONSIBILITY ...................................................................................................... 52
SECTION VI. SIGNIFICANT EVENTS ........................................................................................................................................ 58
SECTION VII. MOVEMENTS IN SHARE CAPITAL AND SHAREHOLDERS ....................................................................................... 66
SECTION VIII. PREFERRED SHARES ....................................................................................................................................... 74
SECTION IX. BONDS ............................................................................................................................................................. 75
SECTION X. FINANCIAL REPORT ............................................................................................................................................ 79
File directory for reference
1.Accounting statements with signatures and seals of Chairman, general manager, chief accountant and person incharge of accounting institution.
2. Original audit report with seals of accounting firm and signature and seals of CPA.
3. All the original documents and announcements publicly disclosed in newspapers designated by China SecuritiesRegulatory Commission during the reporting period.
4. The Articles of Association of the Company, etc.
INTERPRETATION
| Items | Refers to | Contents |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZSE | Refers to | Shenzhen Stock Exchange |
| Company, the Company or Shougang Co. | Refers to | Beijing Shougang Company Limited |
| Shougang or Shougang Group | Refers to | Shougang Group (Reforming from an enterprise owned by the whole people to exclusively state-owned companies, name of Shougang Group is changed from Shougang Corporation. The specific content is detailed in 15 June 2017 public announcement.) |
| Listing Rules of SZSE | Refers to | Listing Rules of Shenzhen Stock Exchange |
| The Articles of Association | Refers to | The Articles of Association of Beijing Shougang Company Limited |
| Board of Directors or the Board | Refers to | The board of directors of Beijing Shougang Company Limited |
| Supervisory Committee | Refers to | The supervisory committee of Beijing Shougang Company Limited |
| Shareholders’ General Meeting | Refers to | The Shareholders’ General Meeting of Beijing Shougang Company Limited |
| Qiangang Co. | Refers to | Shougang Qian'an Iron&Steel Co., Ltd. (Branch of the Company) |
| Cold-R Co. | Refers to | Beijing Shougang Cold Rolling Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.2806%) |
| New-E Co. | Refers to | Beijing Shougang New Energy Automobile Material Technology Co., Ltd. (Holding subsidiary of the Company, the Company holds 45.9184%) |
| Zhixin Co. | Refers to | Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. (Holding subsidiary of the Company, the Company holds 75.3989%, New-E Co. holds 8.9042%) |
| Steel Trading | Refers to | Beijing Shougang Steel Trading Investment Management Co., Ltd. (Wholly-owned subsidiaries of the Company) |
| Qianshun Base | Refers to | The integrated production organization and product research and development system formed by Qiangang Co, located in Qian-an, Hebei province, and Cold-R Co., located in Shunyi District, Beijing. |
| Jingtang Co./Jingtang Base. | Refers to | Shougang Jingtang United Iron&Steel Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.1823%, Steel Trading Co. holds 29.8177%) |
| First Reorganization, and Previous Major Assets Reorganization | Refers to | Since the shut down of the main process of iron and steel manufacturing in late 2010, which was operated in Shijingshan District, Beijing, a transaction between the Company and Shougang carried out. The transaction event was announced as "Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Swap and Asset Purchase through Issue of Shares". The event was unconditional approved by China Securities Regulatory Commission Restructuring Committee on 16 January 2013. On 29 January 2014, the Company received the approval document, named "The Approval of Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Reorganization and Asset Purchase through Issue of Shares", which was issued by China Securities Regulatory Commission. On 25 April 2014, the reorganization was accomplished. |
| Second Reorganization | Refers to | On 23 April 2015, trading in the shares of the Company was suspended and the major assets swap launched. Main content of the swap is: 100% shareholding of Guizhou Investment Co., Ltd. was replaced with 51% shareholding of Jingtang Co., any insufficiency was paid in cash. This major assets swap was accomplished at the end of 2015. On 27 April 2016, re-election of the board of directors and amendment of Articles of Association of Jingtang Co. was accomplished and the Company was qualified to consolidate the financial statements of Jingtang Co. The second swap was then accomplished. |
| EVI | Refers to | Early Vendor Involvement means involving the downstream users at early stage of product development process and fully understanding users’ requirements for raw material so that high-performance materials and personalized services could be offered to users. |
| Reporting Period | Refers to | From 1 January 2022 to 31 December 2022 |
| Thousand, Million, Billion | Refers to | RMB Thousand, RMB Million, RMB Billion |
Section II. Company Profile and Major Financial IndicatorsI. Company information
| Short name of stock | Shougang Stock | Stock code | 000959 |
| Stock exchange for listing of shares | The Shenzhen Stock Exchange | ||
| Statutory Chinese name of the Company | Beijing Shougang Co., Ltd. | ||
| Statutory Chinese name of the Company | Shougang Co. | ||
| Statutory English name of the Company (if any) | Beijing Shougang Co., Ltd. | ||
| Legal representative of the Company | Zhao Minge | ||
| Registered address | Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the registered address | 100041 | ||
| Historical changes in the company's registered address | N/A | ||
| Office address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the office address | 100041 | ||
| The Company’s website | www.sggf.com.cn | ||
| Email address | sggf@sgqg.com | ||
II. Contact information
| Secretary of the board | |
| Name | Chen Yi |
| Correspondence address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC |
| Telephone | 010-88293727 |
| Fax | 010-88292055 |
| Email address | Chenyi@shougang.com.cn |
III. Information disclosure and place for inspection
| Website designated by CSRC for annual report publication | http://www.szse.cn/ |
| Designated media for information disclosure | China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily, http://www.cninfo.com.cn |
| Place for inspection of the annual report | Secretary office of the board of the Company |
IV. Changes of registration
| Organization code | 911100007002343182 |
| Changes of the core business since listing (if any) | No changes |
| Changes of controlling shareholder (if any) | No changes |
V. Other relevant information
Accounting firm engaged by the company
| Name of accounting firm | Grant Thornton LLP |
| Address of accounting firm | 5th Floor of Scitech Plaza, No. 22 Jianguomenwai Avenue, Chaoyang District, Beijing |
| Signed CPA | Qian Bin, Yu Qike |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Non applicable
| Name | Office address | Representatives | Supervision period |
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi, Zhang Zhanpei | 1 May 2021- 31 December 2023 |
| China Securities Co., Ltd. | Building 4, 66 Anli Road, Chaoyang District, Beijing | Lv Jia, Chen Jian | 1 May 2021- 31 December 2023 |
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Non applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi, Zhang Zhanpei | 1 May 2021- 31 December 2023 |
| China Securities Co., Ltd. | Building 4, 66 Anli Road, Chaoyang District, Beijing | Lv Jia, Chen Jian | 1 May 2021- 31 December 2023 |
VI. Major accounting data and financial indicatorsWhether the Company has retroactive adjustment or re-statement on previous accounting data or not
√ YES □ NO
Reasons for retroactive adjustment or restatementBusiness combination under common control
| 2022 | 2021 | Changes over last year | 2020 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Operating revenue | 118,142,183,549.47 | 134,034,486,136.13 | 132,984,304,668.28 | -11.16% | 79,951,181,948.10 | 79,307,013,777.86 |
| Net profit attributable to shareholders of the listed company | 1,124,540,659.14 | 7,014,335,009.45 | 7,106,480,663.26 | -84.18% | 1,786,452,832.06 | 1,860,083,009.29 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gain and loss | 1,052,510,876.43 | 7,014,226,910.72 | 7,014,226,910.72 | -84.99% | 1,714,439,720.83 | 1,714,439,720.83 |
| Net cash flows from operating activities | 10,044,235,497.80 | 15,043,727,257.76 | 15,393,189,844.23 | -34.75% | 10,274,678,796.19 | 10,585,193,889.71 |
| Basic earnings per share | 0.1496 | 1.1291 | 1.1439 | -86.92% | 0.3377 | 0.3517 |
| Diluted earnings per share | 0.1496 | 1.1291 | 1.1439 | -86.92% | 0.3377 | 0.3517 |
| Weighted average return on net assets | 2.42% | 19.07% | 19.42% | Decrease 17.00% | 6.40% | 6.66% |
| 31 December 2022 | 31 December 2021 | Changes over end of last year | 31 December 2020 | |||
| Before the adjustment | After the adjustment | After the adjustment | Before the adjustment | After the adjustment | ||
| Total assets | 143,173,445,003.35 | 147,211,560,696.41 | 149,442,546,290.82 | -4.19% | 144,367,221,971.10 | 146,501,367,231.01 |
| Net assets attributable to shareholders of the listed company | 47,947,672,865.42 | 41,827,745,395.60 | 41,647,543,198.14 | 15.13% | 28,959,395,268.02 | 28,779,193,070.56 |
The Company’s net profit before and after deducting non-recurring gain and loss in the last three fiscal years is negative, and theaudit profit of the last year presents that the Company’s ability of continuing operations is uncertain.
□ YES √ NO
The net profit before and after deducting non - recurring profit and loss is negative.
□ YES √ NO
VII. Difference of accounting data under accounting rules in and out of China
1. Differences of net profit and net assets in financial statements disclosed according to International Financial ReportingStandards and Chinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with InternationalFinancial Reporting Standards and Chinese Accounting Standards during the reporting period of the Company.
2. Difference of net profit and net assets in financial statements disclosed according to foreign accounting standards andChinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with foreign
accounting standards and Chinese Accounting Standards during the reporting period of the Company.VIII. Major financial indicators by quarter
Unit: RMB Yuan
| Q1 | Q2 | Q3 | Q4 | |
| Total revenue | 31,840,817,169.27 | 31,990,228,506.28 | 27,852,802,729.76 | 26,458,335,144.16 |
| Net profit attributable to shareholders of the listed company | 1,053,885,048.28 | 707,301,393.66 | 18,365,744.01 | -655,011,526.81 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gain and loss | 1,055,880,984.57 | 696,792,776.64 | -4,573,325.97 | -695,589,558.81 |
| Net cash flows from operating activities | 193,292,850.10 | 2,091,690,719.74 | 2,958,070,851.39 | 4,801,181,076.57 |
Whether there are significant differences between the above-mentioned financial indicators or the sum and the relevant financialindicators disclosed in the Company’s quarterly report and semi-annual report
□ YES √ NO
IX. Items and amounts of non-recurring gain and loss
√ Applicable □ Non applicable
Unit: RMB Yuan
| Item | 2022 | 2021 | 2020 | Note |
| Gains and losses on disposal of non-current assets (including the write-off that accrued for impairment of assets) | -56,974,152.72 | -55,726,886.68 | -633,491.79 | |
| Government grant included in the current profit and loss (except for the government grant which are closely related to the normal operation of the company that comply with national policies and regulations and continue to be enjoyed according to certain standards, quotas, or quotas) | 67,816,372.72 | 48,447,356.52 | 58,640,213.30 | |
| Current net profit and loss of subsidiaries arising from business combinations under the same control from the beginning of the period to the combinations date | 55,404,276.08 | 92,145,653.81 | 135,152,229.04 | |
| Profit and loss from external entrusted loans | 11,275,389.73 | 10,518,170.49 | 10,361,268.74 | |
| Other non-operating income and expenses except the above items | 10,369,331.96 | 1,941,256.62 | -289,865.40 | |
| Other profit and loss items conforming to the definition of non-recurring gain and loss | -6,922,580.64 | |||
| Less: The impact of income tax | 7,764,321.72 | -950,188.41 | 7,022,263.80 | |
| The impact on non-controlling interests (post-tax) | 8,097,113.34 | 6,021,986.63 | 43,642,220.99 | |
| Total | 72,029,782.71 | 92,253,752.54 | 145,643,288.46 | -- |
Specific situation of other profit and loss items that meet the definition of non-recurring gain and loss:
□ Applicable √ Non applicable
The Company has no specific situation of other profit and loss items that meet the definition of non-recurring gain and loss.Explanation of reclassifying the non-recurring gain and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items as recurring items:
□ Applicable √ Non applicable
The Company has no non-recurring profit and loss item listed in the Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public—Exceptional Gain/Loss Items is reclassied as recurring item.
Section III. Management Discussion and AnalysisI. The industry situation of the Company during the reporting periodIn 2022, due to the turbulence of the international situation, the interest rate hike of the US dollar, and other factors, the demand forsteel market will decline more than expected, the steel price will continue to weaken, the raw fuel price will remain relatively high,and the industry benefit will decline significantly year-on-year. At present, the contradiction between supply and demand in the ironand steel industry is prominent, showing the characteristics of higher output, higher inventory, higher cost and low demand, low priceand low profit "three high and three low". Steel prices remain sluggish in the second half of the year, resulting in a large proportion oflosses in the steel industry.In 2022, CISA key statistics member iron and steel enterprises achieved operating revenue of RMB6,587.5 billion, down by 6.35%year on year, and total profit of RMB98.2 billion, down by 72.27% year on year. Affected by the policy of dual control of productioncapacity and output and downstream demand, China's cumulative production of pig iron in 2022 was 864 million tons, down by
0.80% year on year, 1.018 billion tons of crude steel with a year on year decrease of 1.7%, and 1.340 billion tons of steel whith a yearon year increase of 0.22%.During the reporting period, the Ministry of Industry and Information Technology and other three ministries and commissions jointlyissued the Guiding Opinions on Promoting the High-quality Development of the Iron and Steel Industry, and The State Councilissued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035). The two documents pointed out the directionfor the high-quality development of the iron and steel industry, and the enterprises in the industry will continue to develop in thedirection of high-end, intelligent and green.In 2022, China's electrical steel industry will develop healthily, with the output of oriented electrical steel about 2.17 million tons andnon-oriented electrical steel about 10.92 million tons, making it the world's largest electrical steel producer. The use of high-gradematerials such as energy-saving transformers and driving motors for new energy vehicles has increased significantly, and high-endelectrical steel products have provided strong support for the implementation of the national "dual carbon" policy, the upgrading ofthe manufacturing industry and the development of the power industry.
II. Main business of the Company during the reporting periodThe main business of the Company is the production and sales of steel products and metal soft magnetic materials (electrical steel)
1. Zhixin Co.
Electric steel is an indispensable electromagnetic material in the fields of power, electronics and military industry. It is the core softmagnetic functional material applied in the power industry and serves the generation, transmission and use of electric energy. Electricsteel is divided into oriented electric steel and non-oriented electric steel. Oriented electric steel is mainly used in the field ofultra-high voltage, ultra-high voltage and high energy efficiency distribution transformers. It is used to manufacture transformer cores.Non-oriented electric steel is mainly used in new energy vehicles, household appliances, industrial motors, small and medium-sizedmotors and other industries or fields, used to manufacture motors, frequency conversion compressors and other products.Zhixin Co is a research and development, manufacturing and sales base of metallic soft magnetic materials (electric steel), and hasbecome the world's leading manufacturer and service provider of electric steel. Products include oriented electric steel and electricsteel without orientation two big series, oriented electric steel including high magnetic induction, magnetic domain refinement, lownoise, low excitation, no underlying, intermediate frequency six products, independent research and development of low temperatureslab reheating technics producing high magnetic induction orientation technology of electric steel, as the world's fourth all cryogenictechnology industrialization enterprises. Non-oriented electric steel includes four categories of products including new energyvehicles, stress relief annealing, high efficiency and general, with stable batch production capacity of all grades。
2. Jingtang Co.
Jingtang Co, the large steel base, is a company with international advanced level designed and constructed in accordance with theconcept of circular economy. It has the obvious advantages of being near the sea and near the harbor, large equipments, highproduction efficiency and low cost.Iron and steel products of Jingtang Base include hot and cold plates. The hot plates mainly contain hot-rolled products, i.e., hot-rolledpickling sheet, weather-resistant steel, automobile structure steel, high-performance construction steel, pipeline steel, etc.; and alsocontain medium and thick plates products, such as bridge steel, energy steel, pipeline steel, etc. The cold plates mainly contain:
automobile sheet, tin sheet, cold-rolled special-use plate, color-coated sheet, etc. four main products series.
3. Qianshun Base
Iron and steel products of Qianshun Base is an important high-end plate production base in China, with world-class equipment andindustry-leading clean steel manufacturing technology, with high-end auto plate, high-end household appliance board full range ofsupply capacity.Iron and steel products of Qianshun Base include hot and cold plates. The hot plates mainly contain: hot-rolled pickle sheet,weather-resistant steel, automobile structure steel, high-strength construction machinery steel, pipeline steel, etc. The cold platesmainly contain: automobile sheet, cold-rolled special-use plate, etc.III. Analysis of core competitiveness
1. Market-leading technology
The Company, Jingtang Co., Zhixin Co., Cold-R Co. are high-tech enterprises, R&D investment of RMB5.386 billion in 2022,accounts for 4.56% of the operating revenue. Technological innovation is guided by benefit and demand, relying on the research and
development system of "one institute and multiple centers", making technical research projects, expert workstations and platforms forexternal cooperation. The cultivation of new products, new technologies and new technological processes is accelerating.New Product development: 20SW1200H and ESW1230 are the first electrical steels for new energy vehicles in the world, whichsurpass the performance of conventional electrical steels and can greatly improve the power density and efficiency of motors. Fiveproducts, represented by HJAC980B2M with high respreading and ultra-high strength and S100VD with high fatigue performancesteel for compressor valve plate, were first launched in China. 16 high-end materials represented by automobile outer plate 490+Zand automobile stabilizer bar steel 34MnB5 have been replaced by localization and supplied in batches.Key technological breakthroughs: The "large proportion pellet iron making technology" of blast furnace with obvious carbonreduction effect in China can be assembled up to 65% in pellet ore.Patents: The Company has obtained 654 patents, including 166 invention patents and 488 utility model patents. Two patents "Amethod and system of electricity, heat and water co-generation" and "R&D and Application of unmanned operation of pelletintelligent control" won gold awards at the 121th International Exhibition of Inventions in Paris.Standards: The Company establishes the standardization industry benchmark, participates in the formulation of 46 standards at alllevels, among which, 22 standards are the lead formulation. Cold-rolled Oriented Electrical Steel Belt won the title of "Leader" ofnational Enterprise Standards in 2022.Science and technology awards: The company has won 5 science and technology awards above the provincial and ministerial level(the first enterprise to complete), 18 provincial management innovation awards, among which "the construction and practice ofefficient collaborative steel whole process manufacturing control system" won the first prize of metallurgical enterprise managementinnovation. Deng Zhenyue of iron making Operation Department of the company won the front-line worker Award of MetallurgicalScience and Technology Award of China Steel Association and China Metal Society for his innovative achievements of "Researchand Application of Stable and long life Technology of blast furnace top Equipment".
2. High-end products
The Company's three strategic products adhere to the development strategy of continuous leadership of electrical steel, refinementand strength of automobile plate, and high-end breakthrough of tin plate, and continusly to optimize the product structure, productionline structure and customer structure, and achieve the double improvement of product quality and benefit. During the reporting period,the output of three strategic products (electrical steel, automotive plate, tin (chromium) plate) totaled 5.71 million tons, the output ofeight types of key products (cold-rolled special steel, hot-rolled pickling plate, climate resistant steel, energy steel, automotivestructural steel, high-strength construction machinery steel, pipeline steel, bridge steel) totaled 8.19 million tons, and the total outputof strategic and key products was 13.9 million tons. The above products account for 63% of the company's total steel output.The output of electrical steel reached 1.48 million tons, with the proportion of high-end products steadily increasing. With thepromotion of the national "dual carbon" strategy, the electrification level of the whole society is further improved, and the demandfor high-end electrical steel products continues to grow. The company's high-end electrical steel products account for 63%, which is15% higher than last year.In terms of high magnetic susceptibility orientation electrical steel, the output of 0.20mm and below ultra-thin specifications highmagnetic susceptibility orientation electrical steel products reached 70,000 tons, with a year-on-year growth of about 30%, achievingthe first domestic sales for five consecutive years. The product structure of non-oriented electrical steel continued to be optimized,and the output of high-grade non-oriented electrical steel products was 728,000 tons, up 33% year on year, among which the outputof high-grade non-oriented electrical steel products for new energy vehicles increased 144% year on year. The stable supply of 7 ofthe top 10 global sales of new energy vehicles was achieved by all the top 10 domestic sales.The output of automobile board was 3.61 million tons, up nearly 2% year on year, and new breakthroughs were made in product andchannel structure adjustment. The product mix was further optimized, with the output of galvanized, high-strength and outer plateincreasing by 5%, 23% and 7% year-on-year respectively. Ultra-high strength and aluminized silicon products increased by 80% and54% year-on-year respectively. The company is the second enterprise in the world to pass the GA product certification of 980MPaand above of a Japanese automobile enterprise. Zinc-aluminum-magnesium coating products are used in batches for automobile sidecladding. UF steel domestic first and realize batch supply. The user structure was further optimized, and the share of core oems wasstable and rising. The supply of Japanese customers increased by more than 80% year on year, while the supply of joint venturebrand customers increased by 28% year on year.The output of tin-plated (chrome) plates was 620,000 tons, and the proportion of high-end products further increased. The Companybulk supply domestic leading enterprises this product for milk powder cans. The Company has batch supply of deep drawing cuppingDI materials for export to the world's largest metal packaging enterprises. The Company's DR Material has achieved 0.14mmultra-thin specifications of mass production. The Company has successfully trial-produced chromium-free passivated high-end tinplate, the corrosion resistance of this material far exceeds similar chromium-containing products. The Company's "wing steel"products appeared in the Beijing Winter Olympics and the 20th CPC National Congress.The Company attaches great importance to the product characteristics, differentiation, and in this respect to make new progress. Thecompany's 9Ni steel for Marine LNG fuel tanks and LPG Marine container steel products achieve batch supply. The Companybecame the first domestic high-steel grade hydrogen transmission pipeline steel mass production, and the product supplied the firstdomestic long-distance, high-pressure hydrogen doped pipeline project. The Company's high strength hydropower steel for the firstbatch supply of Ninghai pumped storage hydropower project.
3. Green and low-carbon
The Company takes the lead in achieving ultra-low emissions in the whole process and is the first enterprise in the world to achieveultra-low emissions in the whole process, making ultra-low emissions in the steel industry possible. The Company actively leads andparticipates in the formulation of green product design standards and green production evaluation standards for iron and steel,integrates advanced technical indicators and green manufacturing concepts into industry standards, and guides the high-qualitydevelopment of enterprises.
Qiangang Co. and Jingtang Co. continue to maintain the "Grade A" enterprises in environmental protection performance evaluationof Hebei Province, and take independent emission reduction measures in accordance with policy requirements; Qian Steel Companypromotes ultra-low emission advanced technology and management experience, and has helped nearly 50 iron and steel enterprisesimprove their environmental performance. The Company has steadily promoted the construction of LCA system, and the EPDplatform of hot rolled products in the steel industry has been successfully released. The columns of CCTV's "Morning News" and"Focus Interview" have focused on Shougang Co., which fully affirmed the road of green manufacturing and low-carbondevelopment of Shougang Co.The Company has been awarded the title of national "Industrial Product Green Design Demonstration Enterprise", awarded the labelof "double carbon Best Practice Energy Efficiency Benchmark Demonstration Plant Cultivation Enterprise" by China Iron and SteelAssociation, and awarded the "2022 Industrial Wastewater Recycling Pilot Enterprise" by the Ministry of Industry and InformationTechnology. Five types of products, including cold-rolled high-strength steel plate and steel belt for automobiles and orientedelectrical steel, have been awarded the green design products of the Ministry of Industry and Information Technology.
4. Intelligent manufacturing
New progress was made in intelligent development. The company has built a cross-regional, multi-base and unified production andmarketing integration collaborative management platform, and the evaluation level of the integration of information andindustrialization has generally reached the "innovation breakthrough stage". The digital rate of the company's production equipmentis more than 90%, the amount of "one-click control" process has reached 50, 129 sets of "industrial robots" have been applied, and 15unmanned intelligent warehouse areas have been built. During the reporting period, 11 sub-projects including 55 use cases of the firstphase of Lighthouse Factory of cold rolling Company were all put into operation. The monthly closed volume of automobile plateproducts decreased by about 1000 tons, the monthly turnover days of cold rolling inventory decreased by 1 day, and the serviceresponse time increased from days to minutes. Jingtang Company was awarded the "2022 Intelligent Manufacturing DemonstrationPlant" by four departments including the Ministry of Industry and Information Technology. Shougang's quality digital solution wasrated as an excellent case by the Science and Technology Department of the Ministry of Industry and Information Technology andChina Steel Association, and the company's digital application practice won the "Best Industry Application Award" and "SilverAward of China Data Productivity Competition" respectively.
5. Supply chain security
The company is the only platform for the development and integration of iron and steel and upstream iron ore resources industry ofShougang Group, the controlling shareholder, in China, and the supply of iron ore, coke and coal resources for production isguaranteed. In terms of iron ore, Shousteel Group owns Shuichang Iron Mine and Xingshan Iron Mine with an annual productioncapacity of 4 million tons of iron refined powder in China, Peru iron mine with an annual production capacity of 20 million tons ofiron refined powder held abroad, and Macheng Iron mine under construction with high reserves, low cost, environmentally friendlyand efficient transportation, with an annual production capacity of 7 million tons of iron refined powder, which is expected to bepartly put into operation by the end of 2023. The company's iron ore resources security ability will be further improved. In terms ofcoke, the coke of Qian Steel Company is mainly supplied by Qian 'an Zhonghua Coal Chemical Co., LTD., a joint venture betweenShougang Company and Kailuan Company, while the coke of Jingtang Company is supplied by Tangshan Shougang Jingtang XishanCoking Co., LTD., a joint venture between Jingtang Company and Shanxi Coking Coal, so the supply of coke resources isguaranteed. In terms of coal, the company has signed a long-term agreement with large state-owned coal groups for resources.Shougang Fushan Resources Group Co., LTD., in which Shougang Group is a shareholder, also provides part of high-quality cokingcoal resources to the company, with strong coal supply guarantee.
6、"Technology + Service" marketing
The company takes the customer as the center to deepen the marketing strategy of "technology + service", and creates Shougangservice to enhance the brand value. The company continues to improve the service system, improve service efficiency, strengthen theconstruction of new energy vehicle service team, meet customers' requirements for quality, delivery, research and development,service, technical marketing continues to strengthen. EVI service capacity was improved year by year. During the reporting period,64 EVI projects were promoted, EVI supply quantity increased by more than 20% year on year, and the share of new car contractingobtained by automobile board increased by more than 60% year on year. The product advantage analysis model established by thecompany promotes key products to maintain competitive advantages and strategic products to expand leading advantages bystrengthening product research and development and improving manufacturing capacity.The Company has formed a centralized, unified, rapid response and efficient operation of marketing management network withmarketing center as the core, 5 regional steel trade subsidiaries and 11 processing centers and has effectively guaranteed theproduction stability of downstream customers and consolidated and improved the channel structure combining leading enterprises inthe industrial chain with high-quality small and medium-sized customers. Shenyang Shougang Steel Processing and Distribution Co.,Ltd. was awarded the "Excellent service provider" of a customer's logistics workshop. By cultivating the comparative advantages ofindustrial chain cooperation, the Company carries out all-round, multi-level and high-quality cooperation with key customers in theindustry, which further enhances the depth of cooperation and improves the viscosity of cooperation, which stabilizes the company'sposition in the market.
7. Talent thriving enterprise
The company further promotes the strategy of strengthening the enterprise with talents and builds a multi-level training system for allstaff. Move the normal production line and Zhixin electromagnetic establish the career development system of the whole life cycle of"voyage" for high-potential talents, hold deep blue special training camp and Azure Blue youth training camp to strengthen talentempowerment. Jingtang Company has built a "four horizontal and three vertical" training system for all staff, steadily promoted the"Qinglan Project", and built a platform for cadre improvement and talent growth. During the reporting period, 1 employee wasawarded the Capital Labor Medal, 1 employee was awarded the top ten annual list of "2022 Beijing Model", 3 employees wereawarded the "Capital Citizen Learning Star", 4 employees were awarded the "Post Expert" in the national mechanical metallurgy andbuilding materials industry, and 4 employees were awarded the Shougang Scientist.
The Company improves the talent promotion and evaluation mechanism to smooth the career development path of talents. TheCompany strengthens performance orientation and practical orientation, and refines the vertical development performance evaluationmechanism of the three talent teams of operation and management, professional technology and skill operation, which opens up thechannel of horizontal flow of different sequences of talents. By strengthening the training and development of high-level personnel,the proportion of high-tech and highly skilled personnel in the Company has steadily increased in recent years.IV. Analysis of principal business
1. Overview
In 2022, centering on laying a solid foundation for high-quality development, the Company will actively respond to many difficultiessuch as stricter environmental protection of major national events and limited logistics, and actively resolve the adverse impact of themarket through the implementation of "environmental protection improvement, structural optimization, cost reduction and efficiencyimprovement, capital control and standard improvement". However, affected by the overall market environment, the company'soperating performance during the reporting period still showed a significant year-on-year decrease.The achievement of major accounting data and financial indicators:
Operating revenue is RMB118.142 billion (11.16% year on year decrease); total profit is RMB1.793 billion (81.90% year on yeardecrease); net profit attributable to shareholders of the listed company is RMB1.125 billion (84.18% year on year decrease); EPS isRMB0.15 (86.92% year on year decrease); total asset is RMB143.173 billion; equity attributable to shareholders of the listedcompany is RMB 47.948 billion.The achievement of major products:
(1) Metallic soft magnetic material (Electric steel)
Zhixin Co.：Electric steel 1.485 million tons, 1.0% year on year decrease, of which the output of non-oriented electric steel is 1.279million tons, 2.2% year on year decrease, of which the output of oriented electric steel is 206,000 tons, 6.8% year on year increase.Metal soft magnetic materials sales revenue of RMB 13.401 billion, accounts for 11.34 % of the Company's operating income.
(2) Iron and steel products
Qiangang Co.: Iron 8.122 million tons, (1.5% year on year increase); steel 8.457 million tons (0.4% year on year decrease); material
8.109 million tons (including Cold rolling raw material), 1.3% year on year decrease.
Jingtang Co.: Iron 14.096 million tons (1.3% year on year increase); steel 14.77 million tons (3% year on year decrease); material
14.307 million tons (0.2% year on year decrease).
Cold-R Co.: Cold-rolled plate 1.839million tons (9.3% year on year decrease).Iron and steel products sales revenue RMB 101.202 billion, accounts for 85.66% of the Company's operating revenue.
2. Revenue and cost
(1) Composition of operating revenue
Unit：RMB Yuan
| 2022 | 2021 | Year-on-year Changes | |||
| Amount | Proportion of operating revenue | Amount | Proportion of operating revenue | ||
| Total operating revenue | 118,142,183,549.47 | 100% | 132,984,304,668.28 | 100% | -11.16% |
| According to industries | |||||
| Metallurgy | 118,142,183,549.47 | 100.00% | 132,984,304,668.28 | 100.00% | -11.16% |
| According to products | |||||
| Billet | 546,474,748.00 | 0.46% | 577,251,931.16 | 0.43% | -5.33% |
| Hot-rolled steel | 48,304,009,189.85 | 40.89% | 55,678,740,307.61 | 41.86% | -13.25% |
| Cold-rolled steel | 50,168,306,781.05 | 42.46% | 56,592,919,705.57 | 42.56% | -11.35% |
| Metallic soft magnetic material | 13,401,000,073.28 | 11.34% | 13,307,346,567.78 | 10.01% | 0.70% |
| Other steels | 2,182,776,642.12 | 1.85% | 3,159,205,203.29 | 2.38% | -30.91% |
| Other businesses | 3,539,616,115.17 | 3.00% | 3,668,840,952.87 | 2.76% | -3.52% |
| According to regions | |||||
| North China | 45,126,988,057.24 | 38.20% | 48,802,241,326.04 | 36.71% | -7.53% |
| Northeast China | 2,585,270,587.07 | 2.19% | 4,123,150,971.76 | 3.10% | -37.30% |
| East China | 40,848,885,782.99 | 34.58% | 49,632,951,146.49 | 37.32% | -17.70% |
| Mid-South China | 3,246,213,129.88 | 2.75% | 2,623,070,863.28 | 1.97% | 23.76% |
| South China | 15,338,953,399.84 | 12.98% | 19,205,674,818.92 | 14.44% | -20.13% |
| Southwest China | 2,048,028,590.12 | 1.73% | 1,608,695,620.53 | 1.21% | 27.31% |
| Northwest China | 1,256,111,815.93 | 1.06% | 786,965,070.05 | 0.59% | 59.61% |
| Export | 7,691,732,186.40 | 6.51% | 6,201,554,851.21 | 4.66% | 24.03% |
| Distribution model | |||||
| Direct selling | 110,450,451,363.07 | 93.49% | 126,782,749,817.07 | 95.34% | -12.88% |
| Sale by proxy | 7,691,732,186.40 | 6.51% | 6,201,554,851.21 | 4.66% | 24.03% |
(2) Industries, products, or regions that generated operating revenue or operating profit that over 10% of the total operatingrevenue or operating profit of the Company
√ Applicable □ Non applicable
Unit: RMB Yuan
| Operating revenue | Costs of sales | Gross margin | Year-on-year change of operating revenue | Year-on-year change of costs of sales | Year-on-year change of gross margin | |
| According to industries | ||||||
| Metallurgy | 114,602,567,434.30 | 108,013,843,862.04 | 5.75% | -11.38% | -5.72% | -5.66% |
| According to products | ||||||
| Billet | 546,474,748.00 | 473,163,072.64 | 13.42% | -5.33% | -10.66% | 5.17% |
| Hot-rolled steel | 48,304,009,189.85 | 46,623,686,161.87 | 3.48% | -13.25% | -5.12% | -8.27% |
| Cold-rolled steel | 50,168,306,781.05 | 47,165,512,678.21 | 5.99% | -11.35% | -6.88% | -4.51% |
| Metallic soft magnetic material | 13,401,000,073.28 | 11,852,098,130.92 | 11.56% | 0.70% | 2.04% | -1.16% |
| Other steels | 2,182,776,642.12 | 1,899,383,818.40 | 12.98% | -30.91% | -27.89% | -3.65% |
| According to regions | ||||||
| North China | 41,587,371,942.07 | 39,895,374,706.20 | 4.07% | -7.86% | -2.56% | -5.21% |
| Northeast China | 2,585,270,587.07 | 2,327,747,756.40 | 9.96% | -37.30% | -32.92% | -5.88% |
| East China | 40,848,885,782.99 | 38,501,245,807.59 | 5.75% | -17.70% | -11.33% | -6.76% |
| Mid-South China | 3,246,213,129.88 | 2,920,739,182.48 | 10.03% | 23.76% | 25.53% | -1.27% |
| South China | 15,338,953,399.84 | 14,792,037,695.12 | 3.57% | -20.13% | -11.25% | -9.65% |
| Southwest China | 2,048,028,590.12 | 1,803,747,281.66 | 11.93% | 27.31% | 27.39% | -0.05% |
| Northwest China | 1,256,111,815.93 | 1,087,317,561.84 | 13.44% | 59.61% | 52.15% | 4.25% |
| Export | 7,691,732,186.40 | 6,685,633,870.75 | 13.08% | 24.03% | 19.30% | 3.45% |
| Distribution model | ||||||
| Direct selling | 106,910,835,247.90 | 101,328,209,991.29 | 5.22% | -13.24% | -7.21% | -6.16% |
| Sale by proxy | 7,691,732,186.40 | 6,685,633,870.75 | 13.08% | 24.03% | 19.30% | 3.45% |
The adjusted principal business data according to the financial report of the Company under the circumstances that the statisticalranges of the Company’s principal business data changed during the reporting period.
□Applicable √ Non applicable
(3) Whether revenue from sales of goods is more than from render of services
√ Yes □ No
| Industry | Item | Unit | 2022 | 2021 | Year-on-year change |
| Metallurgy | Sales | Ton | 22,066,038.00 | 22,288,362.00 | -1.00% |
| Output | Ton | 22,175,618.00 | 22,316,080.00 | -0.63% | |
| Storage | Ton | 1,007,071.00 | 897,490.00 | 12.21% |
Explanation in the year-on-year change more than 30% based on aboved data
□ Applicable √ Non applicable
(4) Fulfillment of the singed significant sales contracts and purchase contracts during the reporting period
□ Applicable √ Non applicable
(5) Composition of costs of sales
Presented as industries
Unit: RMB Yuan
| Industry | Item | 2022 | 2021 | Year-on-year change | ||
| Amount | Proportion of costs of sales | Amount | Proportion of costs of sales | |||
| Metallurgy | Raw materials | 56,640,251,091.58 | 52.44% | 66,316,924,003.84 | 57.88% | -5.44% |
| Metallurgy | Fuels | 31,007,832,547.47 | 28.71% | 25,364,248,318.11 | 22.14% | 6.57% |
| Metallurgy | Power cost | 1,825,623,929.41 | 1.69% | 1,840,911,083.84 | 1.61% | 0.08% |
| Metallurgy | Staff cost | 3,111,375,214.85 | 2.88% | 3,271,961,950.60 | 2.86% | 0.02% |
| Metallurgy | Depreciation | 7,279,948,522.16 | 6.74% | 7,057,100,771.85 | 6.16% | 0.58% |
| Metallurgy | Manufacturing cost | 8,148,812,556.57 | 7.54% | 10,712,885,107.17 | 9.35% | -1.81% |
| Total | 108,013,843,862.04 | 100.00% | 114,564,031,235.41 | 100.00% | 0.00% | |
(6) Whether the scope of consolidation changes during the reporting period
√ Yes □ No
Please refer to the relevant contents of Section X. "VI. Change in the scope of consolidation" for details.
(7) Significant adjustments or changes in businesses, products, or services during the reporting period
□ Applicable √ Non applicable
(8) Major clients and suppliers
Major clients of the Company
| Total top five clients in sales (RMB Yuan) | 8,806,467,982.21 |
| Proportion of total sales for the top 5 clients in total annual sales | 7.46% |
| Proportion of the sales from related parties in total annual sales among the top five clients | 4.10% |
Information for top five clients of the Company
| Serial | Name | Sales (RMB Yuan) | Proportion of total annual sales |
| 1 | Client A | 2,901,632,590.54 | 2.46% |
| 2 | Client B | 1,942,972,468.05 | 1.64% |
| 3 | Client C | 1,638,110,305.32 | 1.39% |
| 4 | Client D | 1,227,858,153.88 | 1.04% |
| 5 | Client E | 1,095,894,464.42 | 0.93% |
| Total | -- | 8,806,467,982.21 | 7.46% |
Other information for the major customers of the Company
□ Applicable √ Non applicable
Major suppliers
| Total purchase amount from top five suppliers (RMB) | 80,085,970,883.14 |
| Proportion of total annual purchase amount for top five suppliers | 69.18% |
| Proportion of the purchase from related parties in total annual purchase among the top five suppliers | 65.56% |
Information for the top five suppliers of the Company
| Serial | Name | Procurement (RMB Yuan) | Proportion of total annual procurement |
| 1 | Shougang Group Co., Ltd. | 49,689,484,312.24 | 42.92% |
| 2 | Supplier B | 18,806,466,418.30 | 16.25% |
| 3 | Supplier C | 7,398,085,463.60 | 6.39% |
| 4 | Supplier D | 2,874,135,975.51 | 2.48% |
| 5 | Supplier E | 1,317,798,713.49 | 1.14% |
| Total | -- | 80,085,970,883.14 | 69.18% |
Other information for the major suppliers of the Company
□ Applicable √ Non applicable
3. Expenses
Unit: RMB Yuan
| 2022 | 2021 | Year-on-year change | Notes of material changes | |
| Selling expenses | 237,997,026.22 | 213,309,534.38 | 11.57% | |
| Administrative expenses | 1,271,175,739.06 | 1,301,197,936.20 | -2.31% | |
| Finance expenses | 1,731,584,291.35 | 2,260,406,032.80 | -23.39% | |
| Research and development expenses | 626,923,257.36 | 652,926,385.56 | -3.98% |
4. Research and development investment
√ Applicable □ Non applicable
| Name of main R&D project | Project objective | Progress of the project | Goals to be achieved | The expected impact on the company's future development |
| Co-treatment technology of CO and NOx multi-pollutants in sintering flue gas | Sintering process is the process with the largest air pollution emissions in the iron and steel industry, and its NOx emissions can account for 50% of the total emissions of iron and steel enterprises, so the treatment of sintering flue gas NOx is imminent. | Pilot scale | Develop new technology, new process | The implementation of the project provides theoretical support for similar flue gas treatment, will also open up new ideas for the sustainable emission reduction of CO and NOx in the steel process, and provide technical reserves for the green upgrading of the steel industry in the 14th Five-Year Plan |
| Basic research on rotary kiln hydrogen metallurgy | The carbon emissions of China's iron and steel industry account for about 18% of the national carbon emissions, and the total energy consumption accounts for about 15% of China's total energy consumption. Among them, the carbon emissions mainly come from the iron making process, and 70% of the energy consumption is concentrated in the iron making process. | Pilot scale | Develop new technology, new process | The metallurgical reduction process is dominated by hydrogen, and the carbon content in the flue gas discharged is also greatly reduced to achieve the effect of energy saving and emission reduction, which is in line with the dual carbon policy of "carbon peak and carbon emission reduction" in China. |
| Research on optimization technology of slab cooling system | The surface temperature and solidification end point of the casting billet can be maintained within the preset range through the control of two cold water and pulling speed, and the defects such as internal crack, corner crack, bulge, rhomboidal deformation and central segregation of the casting billet can be improved. | Pilot scale | Develop new technology, new process | Improve the familiarity with continuous casting machine, deeply understand the influence of continuous casting machine parameters on product quality, enhance quality control ability, improve product quality, and further enhance the market competitiveness of enterprises. |
| Research on key control technology of coiled tubing production | Improve the central segregation of coiled tubing slab, reduce the sum of inclusions, ribbon organization and transverse temperature difference control, improve the comprehensive performance of coiled tubing slab, enhance the ability to receive orders, expand the competitiveness and brand effect of Shougang products in the international market, and constantly expand the market share. | Pilot scale | Develop new technology, new process | Improve the profitability of enterprises by developing high and fine end products and new differentiated products. |
| Development of YS series products with low iron loss for new energy vehicles | This project is dedicated to the development of a high strength and low iron loss non-oriented electrical steel product suitable for the rotor of high speed drive motor for new energy vehicles. | Pilot scale | Develop new product | It is conducive to adjusting product structure, improving technology leading edge, expanding market share and enhancing brand image |
| Key technology and application demonstration of high strength steel for advanced automobile of Jipa grade | Narrow the gap between the production and application of automotive steel in Hebei province and the level of advanced foreign enterprises, and realize the substantial improvement of the supply capacity of advanced high-strength steel varieties of Jipa grade for automotive. | Finished | Develop new product | Develop Jipa grade advanced automotive high-strength steel, realize the development of high-quality automotive steel, enhance the core competitiveness of the enterprise |
| Research and development of mechanical expansion axle housing steel in hot rolling line | The drive axle housing is one of the important parts of medium and heavy commercial vehicles. With the progress of material technology and the requirement of lightweight, the mechanical expansion axle housing has been gradually promoted at present. The development of mechanical expansion axle housing steel can meet the market demand. | Finished | Develop new product | The development of lightweight high-strength bridge housing steel, while meeting the needs of the market and users, reduces the cost, and becomes the first product of Shougang Group. |
| 0.5 and 11.2 Coating Study on uniformity and corrosion resistance of tin layer of tin plate | To solve the domestic market sales of tin plating less than 1.1g/m2 of low tin products, can not meet the market requirements of very low tin plate corrosion resistance. | Finished | Develop new technology, new process | Improve the corrosion resistance of extremely low tin-plated plates to meet customer needs and enhance the core competitiveness of enterprises in tin-plated products. |
| Study on strengthening mechanism and control technology of high nitrogen plated tin plate | The strengthening mechanism and control process of high nitrogen strength tin plate are studied to provide strong theoretical and technical support for the research and development of high nitrogen strength tin plate products. | Finished | Develop new technology, new process | It will help enrich Shougang's metal packaging steel products, improve Shougang's high-strength tin plate production technology level, and fill part of the gap in the domestic market, and achieve industry leadership |
| Optimization of rolling rhythm and shape control of Jingtang Plate | In order to improve the performance, size and yield of plate, the problem of plate shape control is solved. | Finished | Develop new technology, new process | Form the company's unique thin specification plate shape control core technology and intelligent production rhythm control core technology, greatly improve Shougang intelligent level and market competitiveness. |
| Research and application of strip production line control technology | Provide strip production line control system, to solve the related technology in the strip production line shutdown, low efficiency of technical problems. | Complete project approval and demand analysis, complete scheme design | Develop new process | The shutdown control of strip production line is realized, and the efficiency of shutdown of strip production line is improved. |
| Research and application of control technology in strip cold rolling process | The control method of strip in cold rolling process is provided to prevent strip deviation and improve the stability of production line. | Complete project approval and demand analysis, complete scheme design | Develop new process | Effectively solve the strip deviation, greatly improve the strip surface quality, reduce the quality loss. |
| Study and application of high strength steel containing phosphorus and its preparation method | Development and development of high strength, good formability of stamping steel plate, with excellent molding performance and surface quality. | 1. Complete the overall planning and design of the project. 2. Consult relevant technical information. | Develop new process, new product | While improving the safety performance of automobiles, it can increase the sales income of enterprises and improve the economic benefits of enterprises. |
| 2. Refer to relevant technical materials |
| Research and application of acid rolling for producing 600MPa grade and 700MPa grade TRIP steel | To solve the existing acid rolling process barrier, improve the mechanical properties of TRIP steel, so as to produce the strength of 600MPa and 700MPa TRIP steel. | 1. Complete the overall planning and design of the project. 2. Consult relevant technical information. | Develop new process | It can solve the existing technical problems and realize industrial production, which can bring considerable economic benefits. |
| 2. Refer to relevant technical materials | ||||
| Steel for automobile construction and production method thereof | Produce materials with high strength, high elongation, good weldability and other characteristics, improve impact safety and meet the needs of lightweight. | Process curing, batch trial production | Develop new process, new product | Accelerate product structure adjustment, improve product performance, increase sales revenue. |
| Research and development of high tension coating for oriented silicon steel | Complete the corrosion resistance research of the coating under high temperature and high humidity environment, and put forward the improvement plan to improve the corrosion resistance of the steel strip surface. | Finished | Develop new technology, new process | It is conducive to make up for the shortcomings of Shougang electrical steel in coating, narrow the gap with advanced enterprises in the surface quality of electrical steel, and improve the application capacity of Shougang electrical steel. |
| Study on the influence of different deoxidation process on inclusions and slag system of oriented silicon steel | The influence of inclusion characteristics (quantity, type, size and distribution) in smelting process is not clear, and the influence of different deoxidation processes on slag composition and slag adsorption capacity has not been studied, so it is necessary to carry out research and technology accumulation. | Pilot scale | Develop new technology, new process | It is beneficial to explore the evolution law of inclusion under different deoxidization processes, determine the deoxidization process and deoxidization conditions of inclusion in stable control oriented steels, and to meet the growing high quality requirements of oriented electrical steels. |
| Development of YS series products with low iron loss for new energy vehicles | This project is dedicated to the development of a high strength and low iron loss non-oriented electrical steel product suitable for the rotor of high speed drive motor for new energy vehicles. | Pilot scale | Develop new product | It is conducive to adjusting the product structure, improving the leading edge of technology, expanding the market share, and enhancing the brand image. |
| Research on processing technology of 0.15mm unoriented silicon steel thin strip core | Research 0.15mm material processing, cutting, stamping, core production and other processing technology. | Lab scale | Develop new technology, new process | To meet the needs of more customers, conducive to market development, improve the visibility of enterprises. |
| Effect of rapid induction heating on the texture of oriented silicon steel | Through the project development, the formation mechanism of the primary recrystaling tissue was clarified, the influence law of the rapid induction heating process on the texture of the primary recrystaling tissue was obtained, and the influence law of the rapid induction heating process on the texture and properties of the secondary recrystaling tissue was obtained by analyzing the structural characteristics of the finished product and the secondary recrystaling process. | Lab scale | Develop new technology, new process | It is beneficial to improve product quality, improve quality and efficiency, and enhance the market competitiveness of oriented silicon steel. |
Research and development investment
| 2022 | 2021 | Proportion of changes | |
| Number of R&D staff | 2,342 | 2,295 | 2.05% |
| Proportion of R&D staff | 12.59% | 12.86% | -0.27% |
| Educational background of R&D personnel | |||
| Bachelor’s degree | 1,212 | 1,179 | 2.80% |
| Master’s degree | 670 | 662 | 1.21% |
| Age structure of R&D personnel | |||
| Below 30 | 105 | 111 | -5.41% |
| 30~40 | 1,273 | 1,348 | -5.56% |
Details about R&D investments:
| 2022 | 2021 | Proportion of changes | |
| R&D investments (RMB Yuan) | 5,386,070,865.84 | 5,321,486,664.95 | 1.21% |
| R&D investments as % of operating revenue | 4.56% | 4.00% | 0.56% |
| Capitalized R&D investments (RMB Yuan) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D investments as % of total R&D investments | 0.00% | 0.00% | 0.00% |
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Non applicable
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Non applicable
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Non applicable
5. Analysis of cash flow
Unit: RMB Yuan
| Item | 2022 | 2021 | Year-on-year changes |
| Cash inflow from operating activities | 61,124,110,070.62 | 78,330,821,588.46 | -21.97% |
| Cash outflow from operating activities | 51,079,874,572.82 | 62,937,631,744.23 | -18.84% |
| Net cash flow from operating activities | 10,044,235,497.80 | 15,393,189,844.23 | -34.75% |
| Cash inflow from investing activities | 266,430,661.79 | 599,102,178.51 | -55.53% |
| Cash outflow from investing activities | 3,428,494,466.51 | 3,683,994,609.78 | -6.94% |
| Net cash flow from investing activities | -3,162,063,804.72 | -3,084,892,431.27 | -2.50% |
| Cash inflow from financing activities | 36,440,713,251.59 | 33,854,046,954.17 | 7.64% |
| Cash outflow from financing activities | 43,529,541,314.07 | 42,586,386,910.41 | 2.21% |
| Net cash flow from financing activities | -7,088,828,062.48 | -8,732,339,956.24 | 18.82% |
| Net increase in cash and cash equivalents | -206,656,369.40 | 3,575,957,456.72 | -105.78% |
Main reasons for significant year-on-year changes in relevant data
√ Applicable □ Non applicable
The decrease in net cash flow from operating activities is mainly due to the decline in steel prices in the current period and the highprice of upstream fuel, which leads to a greater decrease in cash received from selling products and providing services than cash paidfor purchasing goods and receiving services.The decrease in cash inflow from investment activities is mainly due to the decrease in cash received from disposal of investmentsand cash received from investment income.The decrease in the net increase in cash and cash equivalents is mainly due to the decrease in net cash flow from operating activities.Explanation of the significant difference between the net cash flow from operating activities and the annual net profit during thereporting period.
√ Applicable □ Non applicable
During the reporting period, the cash flow from operating activities is RMB10.044 billion, and the annual net profit is RMB 1.509billion, with a difference of RMB 8.535 billion. The main factors causing the difference are: asset impairment provision of RMB 397million, depreciation and amortization of RMB 7.799 billion, financial expense of RMB 1.732 billion, decrease in receivables fromoperating activities of RMB 851 million, decrease in payable from operating activities of RMB -2.899 billion, increase in inventoryof RMB -344 million, investment losses of RMB 211 million, and others of RMB 788 million.
V. Non-principal business analysis
□ Applicable √ Non Applicable
VI. Assets and liabilities
1. Significant changes in the composition of assets
Unit: RMB Yuan
| Year-end of 2022 | Year-begin of 2022 | Proportion changes | Notes | |||
| Amount | Proportion of total assets | Amount | Proportion of total assets | |||
| Cash and Cash equivalents | 9,470,472,522.05 | 6.61% | 10,284,988,713.99 | 6.88% | -0.27% | |
| Accounts receivable | 1,450,008,897.10 | 1.01% | 1,678,608,393.71 | 1.12% | -0.11% | |
| Inventories | 11,960,246,748.15 | 8.35% | 12,425,502,043.91 | 8.31% | 0.04% | |
| Long-term equity investments | 2,724,285,925.35 | 1.90% | 3,065,928,898.28 | 2.05% | -0.15% | |
| Fixed assets | 93,331,072,969.17 | 65.19% | 97,227,169,862.20 | 65.06% | 0.13% | |
| Construction in progress | 7,673,649,852.77 | 5.36% | 7,186,767,838.55 | 4.81% | 0.55% | |
| Right-of-use assets | 83,107,359.45 | 0.06% | 100,279,997.64 | 0.07% | -0.01% | |
| Short-term borrowings | 29,580,006,103.39 | 20.66% | 25,278,373,316.25 | 16.92% | 3.74% | |
| Contract liabilities | 4,508,016,725.74 | 3.15% | 5,230,456,327.37 | 3.50% | -0.35% | |
| Long-term borrowings | 10,594,350,000.00 | 7.40% | 11,692,710,000.00 | 7.82% | -0.42% | |
| Lease liabilities | 72,439,836.79 | 0.05% | 86,123,210.35 | 0.06% | -0.01% | |
Foreign assets account for a relatively high proportion:
□Applicable √ Non Applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Non Applicable
Unit: RMB Yuan
| Item | Opening balance | Fair value changes in the period | Accumulated fair value changes in equity | Impairment accrual in the period | Amount of purchase in the period | Amount of sales in the period | Other changes | Closing balance |
| Financial assets | ||||||||
| Other equity instruments investments | 264,900,763.97 | -32,134,630.16 | 232,766,133.81 | |||||
| Financing receivables | 4,015,188,495.05 | 3,489,134,871.56 | ||||||
| Other non-current financial assets | 80,000,000.00 | -765,992.40 | 79,234,007.60 | |||||
| Total | 4,360,089,259.02 | -765,992.40 | -32,134,630.16 | 0.00 | 0.00 | 0.00 | 0.00 | 3,801,135,012.97 |
| Financial liabilities | 0.00 | 0.00 | ||||||
Whether the company's main asset measurement attributes have changed significantly during the reporting period
□ YES √ NO
3. Major restricted assets at the end of the reporting period
| Item | Carrying amount at 31.12.2022 (RMB) | Restriction reason |
| Cash and Cash equivalents | 1,140,407,749.24 | All kinds of deposits |
| Notes receivable | 328,829,159.08 | Pledged notes |
| Accounts receivable | 24,223,581.32 | Pledged notes |
| Total | 1,493,460,489.64 |
(1) As of December 31, 2022, except for RMB 1,090,407,749.24 of security deposit, RMB 50,000,000.00 of fixed term deposit, theCompany has no balance of cash and cash equivalents that are pledged, guaranteed or blocked frozen or overseas balances thatrestricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 849,769.13. This part of interest does not belong to "cash andcash equivalents."
VII. Investment analysis
1. Overall situation
√ Applicable □ Non Applicable
| Invested amount during the reporting period (RMB Yuan) | Investment amount during the previous reporting period (RMB Yuan) | Change |
| 4,701,092,730.53 | 3,400,636,748.78 | 38.24% |
2. Significant equity investment during the reporting period
□ Applicable √ Non Applicable
3. Significant non-equity investment during the reporting period
√ Applicable □ Non Applicable
Unit: RMB Yuan
| Project name | Investment method | Fixed asset investment or not (Y/N) | Related industries | Investment amount during the reporting period | Actual investment amount up to the end of reporting period | Capital source | Project schedule | Anticipated benefits | Realized income up to the end of reporting period | Reasons for non-achievement of planned schedule and anticipated income | Date of disclosure (if any) | Index of disclosure (if any) |
| New energy automotive electrical steel project | Self-built | Y | Iron and steel | 665,663,669.96 | 1,663,048,752.15 | Self-raised | 94.96% | 437,370,000.00 | 9,678,561.03 | During trial production, the project has been provisionally estimated to be transferred to fixed assets | ||
| Zhixin Co. Oriented phase II project | Self-built | Y | Iron and steel | 641,119,636.03 | 1,314,052,905.22 | Self-raised | 88.23% | 391,380,000.00 | The devices of the project are being installed | |||
| Zhixin Co. High-end heat treatment engineering project | Self-built | Y | Iron and steel | 183,731,602.88 | 183,731,602.88 | Self-raised | 10.65% | 436,810,000.00 | The project is undergoing civil construction | |||
| Total | -- | -- | -- | 1,490,514,908.87 | 3,160,833,260.25 | -- | -- | 1,265,560,000.00 | 9,678,561.03 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
□ Applicable √ Non Applicable
The Company has no securities investment during the reporting period.
(2) Derivatives investment
□ Applicable √ Non Applicable
The Company has no derivatives investment during the reporting period.
5. Use of raised funds
√ Applicable □ Non Applicable
(1) Overall use of raised funds
√ Applicable □ Non Applicable
Unit: RMB’0,000
| Year for fund-rai sing | Method of fund-raising | Total raised funds | Total raised funds that have been used in the current period | Total raised funds that have been used accumulatively | Total raised funds with altered purposes during the Reporting Period | Total accumulative raised funds with altered purposes | Proportion of total accumulative raised funds with altered purposes | Total raised funds that have not been used yet | Use and ownership change of unused raised funds | Raised funds that have been left unused for over two years |
| 2022 | Non-public offering | 29,120 | 21,852.33 | 21,852.33 | 0 | 0 | 0.00% | 6,935.83 | Deposit in Jingtang Co. fund raising special account | 0 |
| Total | -- | 29,120 | 21,852.33 | 21,852.33 | 0 | 0 | 0.00% | 6,935.83 | -- | 0 |
| Explanation of the overall use of raised funds | ||||||||||
| During the reporting period, the total amount of supporting funds raised by the Company through non-public issuance of ordinary shares is RMB291,199,983.58, and after deducting the underwriting fees of the lead underwriter, the special account of the Company for raising funds received subscription funds of RMB287,603,983.82; After deducting the fees of independent financial advisers and other related fees for the restructuring, the net capital raised is RMB 273,368,221.41. During the reporting period, the company has used the raised funds of RMB 218,523,294.14.1. The Company has used RMB 151,603,440.25 to supplement working capital and repay debts; 2. The Company transferred RMB 136,149,157.84 to the special account of Jingtang Co. for the comprehensive transformation project of energy saving and consumption reduction of the front railway system, of which, RMB 66,919,853.89 has been used. As of December 31, 2022, the accumulated interest income generated by the raised funds is RMB 277,617.54, the balance of the special account for the raised funds of the Company is RMB 0.00, and the balance of the special account for the raised funds of Jingtang Co. is RMB69,358,307.22. | ||||||||||
(2) Committed projects of raised funds
√ Applicable □ Non Applicable
Unit: RMB’0,000
| Committed investment projects and investment of | Whether projects | Total committe d | Adjusted total | The investme nt | Accumul ative | Invest ment progre ss as | Date when the projec ts | Benef its recor ded | Whet her the estim | Whet her there are |
| excessive raised funds | have been altered (including partial alternation) | investme nt with raised funds | investme nt amount (1) | amount during the Reporting Period | investme nt amount as of the end of the Reporting Period (2) | of the end of the Report ing Period (3) = (2)/(1) | are ready for their intend ed use | durin g the Repor ting Perio d | ated benefi ts are reach ed | mater ial chang es in the proje ct feasib ility | |
| Committed investment projects | |||||||||||
| Jingtang Co. railway front system energy saving and consumption reduction comprehensive transformation project | No | 125,000 | 13,614.92 | 6,691.99 | 6,691.99 | 49.15% | Not applicable | No | |||
| Supplementary liquidity | No | 125,000 | 15,160.34 | 15,160.34 | 15,160.34 | 100.00% | Not applicable | No | |||
| Subtotal of committed investment projects | -- | 250,000 | 28,775.26 | 21,852.33 | 21,852.33 | -- | -- | 0 | -- | -- | |
| Investment of excessive raised funds | |||||||||||
| Not applicable | 0 | 0 | 0 | 0 | 0.00% | 0 | |||||
| Total | -- | 250,000 | 28,775.26 | 21,852.33 | 21,852.33 | -- | -- | 0 | -- | -- | |
| Explain the circumstances and reasons for failing to achieve the planned progress and estimated income by item (including the reasons why "Reach the estimated benefit" is selected as "Not applicable") | Not applicable | ||||||||||
| Explanations of the material changes in the project feasibility | Not applicable | ||||||||||
| Amount, use, and use progress of excessive raised funds | Not applicable | ||||||||||
| Change of the implementation location of the investment project raised funds | Not applicable | ||||||||||
| Adjustment of implementation methods of investment projects with raised funds | Not applicable | ||||||||||
| Advance investment and replacement of investment projects with raised funds | Not applicable | ||||||||||
| Temporary replenishment of working capital with the idle raised funds | Not applicable | ||||||||||
| Surplus raised funds for project impleme ntation and reasons for the surplus | Not applicable | ||||||||||
| Use of unused raised funds | Deposited in a special fund raising account | ||||||||||
| Problems in the use of raised funds and disclosure, or other cases | Not applicable | ||||||||||
(3) Altered projects of raised funds
□ Applicable √ Not applicable
The Company has no altered projects of raised funds in the reporting period.VIII. Material disposal of assets and equity
1. Material disposal of assets
□ Applicable √ Non Applicable
The Company has no disposal of assets during the reporting period.
2. Material disposal of equity
□ Applicable √ Non Applicable
IX. Analysis of main holding companies and stock-jointly companies
√ Applicable □ Non Applicable
Main subsidiaries and stock-jointly companies that have an impact on the company's net profit of over 10%.
Unit: RMB Yuan
| Company Name | Type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Subsidiary | Iron and steel smelting, steel rolling, other metal smelting and calendering processing and marketing; Production and sale of sinter, pellet, coke and chemical products; Power generation and supply; Production and sales of secondary and multiple energy and resource reuse products | 35,821,676,294.00 | 79,073,296,194.21 | 35,454,264,852.74 | 73,637,550,233.13 | 1,291,801,366.27 | 1,122,052,438.96 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Subsidiary | Cold-rolled electrical steel strip manufacturing; Metallurgical special equipment manufacturing; Motor manufacturing; Manufacturing of transmission, distribution and control equipment; Energy-saving technology promotion services; New material technology promotion services; Business management consulting services; Industrial design services; Product quality inspection services; Building materials, non-metallic minerals and products, metal materials, metal products, chemical products (excluding dangerous chemicals) wholesale and retail | 9,925,868,384.15 | 21,220,225,253.82 | 12,157,609,553.25 | 13,918,944,889.64 | 1,176,341,300.51 | 1,080,892,444.41 |
| Beijing Shougang Cold Rolling Co., Ltd. | Subsidiary | Production of cold rolled sheet, hot dip galvanized steel coil; General freight; Design and sales of cold-rolled sheet, hot-dip galvanized steel coil; Warehousing services; Technical development, technical consultation | 2,600,000,000.00 | 6,153,649,016.46 | -1,063,461,207.16 | 10,781,367,755.25 | 223,905,580.96 | 216,492,299.49 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Subsidiary | Investment management; Project investment; Asset management; Warehousing services; Market research; Technology development; Sale of steel | 1,136,798,235.00 | 20,077,500,669.03 | 12,104,999,464.36 | 955,028,309.36 | 403,939,890.69 | 389,995,788.91 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Subsidiary | Technology development, technology consulting, technology transfer, technology services; Business management consulting; Economic information consulting; Sales of machinery and equipment, steel; Rental of machinery and equipment (except motor vehicles); Import and export of goods; Technology import and export; Agent import and export | 980,000,000.00 | 1,115,103,347.20 | 1,093,813,618.40 | 8,618,382.01 | 134,849,692.29 | 133,942,647.56 |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Subsidiary | Metallurgical technology development and consulting services; Environmental protection technology promotion services; Business management consulting services; Security consulting services; Computer application software development; Special equipment for environmental protection, steel slag, water slag, slag, dust removal ash, desulfurization ash, steel, chemical products (excluding hazardous chemicals) wholesale, retail; Domestic advertising design, production, agency, release; Non-owned house leasing services, etc. (within the scope authorized by the owner of the house) | 1,900,000.00 | 212,187,602.54 | -85,375,345.88 | 39,105,861.65 | 10,558,507.63 | 10,558,507.63 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Joint stock | Coking; Coke oven gas, tar, crude benzene, sulfur, ammonium sulfate, ammonium thiocyanate, primary coal chemical products manufacturing; Waste heat utilization; Hardware products, building materials, mining special equipment and spare parts, construction machinery spare parts, rubber products, plastic products, lubricating grease, pig iron, ferroalloy, iron concentrate powder, pellet iron ore, sintered iron ore, iron ore, limestone, quartzite, dolomite, furnace charge, bentonite, coke, coke powder, billet, chemical products (excluding licensed chemical products), coal wholesale, zero Sell; Coking technical consultation and service | 992,400,000.00 | 4,529,177,685.54 | 1,780,985,407.28 | 8,253,813,834.07 | -409,931,923.56 | -414,611,940.11 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint stock |
Coke, coal tar, benzene, sulfuricacid, ammonium sulfate, gas,CDQ coke waste heat powergeneration, steam production andsales; Technical consultingservices; Labor service(excluding labor dispatch).
| 2,000,000,000.00 | 3,587,876,141.47 | 2,196,287,262.09 | 13,921,855,400.28 | 50,756,339.47 | 54,389,297.30 |
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Non Applicable
X. Structured entity controlled by the Company
□ Applicable √ Non Applicable
XI. Future development prospects
1. Industry competition pattern and development trend
In 2023, under the influence of inflation and geopolitics, global economic growth will slow down, and the economic trend of majoreconomies will diverge. China's economic growth rate will show a low before and high after, gradually climbing trend. In the firsthalf of the year, the economic recovery will be relatively slow due to the impact that macroeconomic relaxation policies will takesome time to take effect. In the second half of 2023, China's economic upswing will be more obvious. Iron and steel industry willstill maintain strong supply and weak demand pattern, the competition situation will be more intense, iron and steel enterprises willstill face greater operating pressure.
2. Corporate development strategy
Shougang takes the promotion and implementation of the "Two Strong and three Excellent" project (the steel industry developmentgoal of strong profitability, strong innovation ability, excellent asset quality, excellent operation efficiency, energy conservation andenvironmental protection) as its strategic focus. Shougang is firmly committed to the strategic focus of "green manufacturing,intelligent manufacturing, high-quality manufacturing, lean manufacturing and precise service", and adheres to the two-wheel driveof "capital + operation" to promote deepening reform and high-quality development of the enterprise. At the same time, Shougangcontinues to adhere to the development direction of "quality + service", and continues to promote the development of high-endproducts focusing on electrical steel, automobile plate and tin (chromium) plating plate. By continuously improving the service leveland operating efficiency of steel material manufacturing, Shougang will form a group of strategic product customer clusters withinternational competitiveness, and strive to build the company into a listed steel company with international competitiveness andinfluence.
3. Operating plans of 2023
(1) Output of Major Products
Iron 21.47 million tons, year-on-year decrease of 3.4%; Steel 22.22 million tons, year-on-year decrease of 4.3%; Material 20.73million tons, year-on-year decrease of 6.5%. The details are as follows:
① Qiangang Co.: 8.00 million tons of iron, year-on-year decrease of 1.5%; 8.42 million tons of steel, year-on-year decrease of 0.4%;
8.10 million tons of steel products, year-on-year decrease of 0.1%.
② Jingtang Co.: 13.47 million tons of iron, year-on-year decrease of 4.5%; 13.80 million tons of steel, year-on-year decrease of
6.6%; 13.05 million tons of steel products, year-on-year decrease of 8.8%.
③ Zhixin Co.: 1.56 million tons of electric steel, year-on-year increase of 5.1%. Including: 1.30 million tons of non-oriented electricsteel, year-on-year increase of 1.6%; 0.26 million tons of oriented electric steel, year-on-year increase of 26.2%.
④ Cold-R Co.: 1.80 million tons of cold-rolled steel sheets, year-on-year decrease of 2.1%. Including: 0.85 million tons ofcontinuous annealing line for cold-rolled steel sheets, year-on-year decrease of 2.9%; 0.85 million tons of galvanized sheet,year-on-year decrease of 6.3%, 0.1 million tons of Cold rolled sheet, year-on-year increase of 78.6%.
(2) Budget arrangement for financial indicators
RMB 107.76 billion for operating revenue, year-on-year decrease of 8.8%, including: RMB 37.25 billion for operating revenue ofparent company, year-on-year decrease of 4.5%; RMB 65 billion for operating revenue of Jingtang Co., year-on-year decrease of
11.7%; RMB14 billion for operating revenue of Zhixin Co., year-on-year increase of 0.6%; RMB10 billion for operating revenue ofCold-R Co., year-on-year decrease of 7.2%; RMB0.76 billion for operating revenue of Steel Trading, year-on-year decrease of 20%.
(3) Budget arrangement for cashflow
RMB 161.088 billion for cash inflows, including RMB 122.017 billion for cash inflow from operating activities, RMB 76 million forcash inflow from investing activities, RMB 38.994 billion for cash inflow from financing activities.RMB 162.148 billion for cash outflows, including RMB 110.038 billion for cash outflow from operating activities, RMB 6.240billion for cash outflow from investing activities, RMB 45.870 billion for cash outflow from financing activities.
(4) Budget arrangement forfixed-assets project capital expenditure
Arrangement of fixed assets investment is RMB 4.808 billion, including: RMB 1.349 billion for Qiangang Co., RMB 2.156 billionfor Jingtang Co., RMB 1.164 billion for Zhixin Co., RMB 70 million for Cold-R Co., RMB 68 million for Steel Trading and RMB 1million for Qian'an Metallurgical Co.
4. Potential risk
(1) Policy and industry risk
According to the Ministry of Industry and Information Technology, the National Development and Reform Commission, theMinistry of Environment jointly issued the "Guidance on promoting the High-quality development of the iron and Steel Industry" "tocontrol the total amount of iron and steel, achieve safe carbon reduction, ensure 2030 carbon peak" provisions, steel productionpolicy gradually implemented, steel enterprises are facing pressure to limit production generally increased. The capacity utilizationrate of some enterprises has been affected, resulting in a pattern of supply exceeding demand in the market. Meanwhile, the price ofiron ore and other raw materials remains high, which increases the production cost and operation difficulty of steel enterprises.In order to cope with the above risks, first, the company actively responds to the external market, strengthens market prediction andanalysis, optimizes resource allocation, fully implements the "three and three" business strategy, and improves the ability to resistmarket risks. Second, the company to improve the very low cost operation capacity, continue to increase cost reduction andefficiency efforts. The company pays close attention to the implementation of measures to improve efficiency and benefit, pays closeattention to the target enterprises, systematically, comprehensively and permanently reduces costs, speeds up the creation ofcomparative advantages, and goes all out to complete the cost control target. Third, the company is promoting in key engineeringprojects, giving full play to the advantages of production line and green manufacturing, improving the ability of "manufacturing +service", promoting the optimization of product structure, strengthening the market promotion of initial products and new products,and providing support for the realization of high-quality development of the enterprise.
(2) Low carbon environmental risk
Under the background of the policy of "carbon peak and carbon neutral", ultra-low emissions have become the norm, andenvironmental protection policies in key regions such as Beijing, Tianjin and Hebei are increasingly stricter, putting higherrequirements on enterprises to implement green and sustainable development, resulting in unprecedented pressure on enterprises'environmental protection costs.In order to cope with the above risks, first, the company will further build a solid foundation for high-quality development, improvehigh-quality development capacity, continue to maintain healthy development, practice the responsibility of the "leader", deeplyimplement the green action plan, and make green become the background of high-quality development of the enterprise. Second, thecompany deepens the construction of LCA system, promotes the release of EPD and carbon border tax certification, speeds up theconstruction of low-carbon management system, and promotes the construction of low-carbon dedicated line of automobile board tomeet the needs of customers for carbon reduction. Third, the company continues to build a green supply chain system, promote theselection of green materials, promote the whole process of procurement, production, transportation and other green process.
(3) Horizontal competition risk
Shougang Group and its related parties have a certain degree of horizontal competition with the Company.In order to solve the horizontal competition, during the first restructuring, Shougang Group issued “the commitment on the settlementmeasures and avoidance of horizontal competition after the assets restructuring”. According to the iron and steel industrydevelopment plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron andsteel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of ShougangGroup's iron and steel and upstream iron ore resources business in China. Since then, Shougang Group has made furthercommitments on the basis of the above-mentioned commitments of horizontal competition. These commitments are fulfilled onschedule and for details, please refer to “Corporate Governance” in the annual report.
(4) Marketing risk
From the perspective of market environment, China's economic development is facing the triple pressure of shrinking demand,supply shock and weakening expectations. The market fluctuation is increasing, which leads to the increasingly severe competitiveenvironment at home and abroad. From the perspective of industrial environment, overcapacity in the iron and steel industry is stillserious, product homogeneity competition is intensifying, and the direction of product structure adjustment is converging.In order to cope with the above risks, first, the company strengthens market awareness, continues to pay attention to the developmenttrend of advanced enterprises in the industry, and focuses on creating competitive advantages. At the same time, the companystabilizes the cooperation with leading enterprises, closely follows the upgrading and development of the industry, actively andcontinuously develops the end user market, and extends and expands the full coverage of the middle and high-end user groups.Second, the company adheres to the responsibility and mission of "service creates value", based on meeting user needs and guided byimproving user service experience, further improves differentiated service ability and consolidates and enhances service brand image.Third, the company gives full play to the advantages of multiple production lines and rich varieties, promotes the in-depthoptimization and adjustment of product structure and channel structure, and improves the contribution of structural adjustment tooperating benefits. Finally, the company strengthens internal and external, internal coordination to improve efficiency and increaseincome and create efficiency, speeds up the market response speed, and supports the improvement of production line efficiency.
(5) Related transactions risk
Related party transactions between Shougang Shares and Shougang Group and its affiliated enterprises, Shougang Co. and ShougangGroup signed the framework agreement of related transactions in accordance with the stock listing rules and other provisions forregular related transactions. If the agreement cannot be strictly executed in the future, interests of the Company will be damaged andalso the risks of related transactions will emerge.The above-mentioned regular related transactions are the continuous related transactions in the ordinary operation and production
process of the Company, all of which are signed agreements in accordance with regulations and approved legally, and thetransactions will not affect the independence of the Company. The Company will strictly implement the provisions of relatedtransactions, perform the obligation of information disclosure in accordance with the requirements of the stock listing rules and theArticles of Association, ensure the openness, fairness and justice of related transactions, and protect the legitimate rights and interestsof the Company and all shareholders.XII. Reception of research, communication, interview and other activities during thereporting period
√ Applicable □ Non Applicable
| Time | Location | Method | Type | Counterparty | Main contents and provided material | Reference for basic information |
| January 18, 2022 | Conference room | Telephone Communication | Institution | China Merchants Securities, Chuangjin Hexin Fund, Fengling Capital, Shaoxia Capital, Zhonghe Capital, and Yaolin Capital and other analysts and institutional investors | Company future product planning, carbon emission reduction measures and electrical steel future development, etc | The details disclosed on the interactive platform on January 20, 2022. |
| March 17, 2022 | Conference room | Telephone Communication | Institution | Nord Fund Liu Gao, Wang Chao, Yin Min, Shaanxi Shiyang Group Fu Gui, Chuanjiang Investment Tu Yulin, Han De Fund Xie Gui, Southern Tianchen Jiang Hao, Weng Kaisong, Dacheng Investment Wan Yan, Lin Zhe, Ivy Capital Xianfeng, Chuanhua Holdings Lu Rongqing, Jin Yuan Asset Management Huang Yizhong, Oriental International Jiang Yumeng, Jin Chen Investment Wu Xiufang, Central African CITIC Bank Lv Shuang, Hunan Light Salt Venture Capital Lei Yu, Shengquan Hengyuan Ouyang Tianyi, Vector Fund Wang Su, Zhao Xueang, Su Min Investment Geng Yan, Suzhou Guoxin Jin Ye, Taiping Asset Shi Jiahuan, Wang Renshuang, Ying Yuxiang, Liu Hao, Shanghai Dehui Investment Prince Heng, Xinda Asset in the Ocean, Ruihua Investment Zhang Xiaobing, Shengquan Hengyuan Zhou Zhou Zhou, Weixing Investment Yang Kehua, Shandong Guohui Xu Qingrui, Dawan Investment Feng Rui, Yi Yi Investment Zhou Gaohua, Hengtaihua Shengli Baicun, Dayan Capital Hua Jie, Huatai Asset Hu Lan, Jinchen Investment Tian Yuan, Wang Xiaoran, Qianhe | Electrical steel, automobile plate and other products, industry forecast, raw material end guarantee, etc | The details disclosed on the interactive platform on March 21, 2022. |
| Capital Xie Ping, Xinda Asset Ma He, Yihe Yinfeng Zhao Fangyi, Yingke Capital Zhou Fengchun, Zhuhai Jinteng Huo Yuchen, Shandong Guohui Liu Ke, Shanghai Hanhui Investment Sun Fan, Guoren Insurance Wang Qiong, Beijing Chuanfa Ao Yukun, Su Gaoxin Investment Zou Wenjun, Yongjin Investment Wen Xin, Hunan Caixin Deng Guoyi, Ansteel Group Capital Zhang Fengjiu, Caixin Securities Liang You, Guoxin Securities Min Xiaoping, Guolian Securities Liu Xing, Yuekai Securities Zhuge Xiuzi, Wu Yuchen from Jianghai Securities, Peng Ling and Fu Miaoquan from Huatai United Securities and other 49 institutions and more than 60 institutional investors | ||||||
| March 18, 2022 | Conference room | Telephone Communication | Institution | Nord Fund Liu Gao, Wang Chao, Yin Min, Shaanxi Shiyang Group Fu Gui, Chuanjiang Investment Tu Yulin, Han De Fund Xie Gui, Southern Tianchen Jiang Hao, Weng Kaisong, Dacheng Investment Wan Yan, Lin Zhe, Ivy Capital Xianfeng, Chuanhua Holdings Lu Rongqing, Jin Yuan Asset Management Huang Yizhong, Oriental International Jiang Yumeng, Jin Chen Investment Wu Xiufang, Central African CITIC Bank Lv Shuang, Hunan Light Salt Venture Capital Lei Yu, Shengquan Hengyuan Ouyang Tianyi, Vector Fund Wang Su, Zhao Xueang, Su Min Investment Geng Yan, Suzhou Guoxin Jin Ye, Taiping Asset Shi Jiahuan, Wang Renshuang, Ying Yuxiang, Liu Hao, Shanghai Dehui Investment Prince Heng, Xinda Asset in the Ocean, Ruihua Investment Zhang Xiaobing, Shengquan Hengyuan Zhou Zhou Zhou, Weixing | Electrical steel, automobile plate and other products, industry forecast, raw material end guarantee, etc | The details disclosed on the interactive platform on March 21, 2022. |
| Investment Yang Kehua, Shandong Guohui Xu Qingrui, Dawan Investment Feng Rui, Yi Yi Investment Zhou Gaohua, Hengtaihua Shengli Baicun, Dayan Capital Hua Jie, Huatai Asset Hu Lan, Jinchen Investment Tian Yuan, Wang Xiaoran, Qianhe Capital Xie Ping, Xinda Asset Ma He, Yihe Yinfeng Zhao Fangyi, Yingke Capital Zhou Fengchun, Zhuhai Jinteng Huo Yuchen, Shandong Guohui Liu Ke, Shanghai Hanhui Investment Sun Fan, Guoren Insurance Wang Qiong, Beijing Chuanfa Ao Yukun, Su Gaoxin Investment Zou Wenjun, Yongjin Investment Wen Xin, Hunan Caixin Deng Guoyi, Ansteel Group Capital Zhang Fengjiu, Caixin Securities Liang You, Guoxin Securities Min Xiaoping, Guolian Securities Liu Xing, Yuekai Securities Zhuge Xiuzi, Wu Yuchen from Jianghai Securities, Peng Ling and Fu Miaoquan from Huatai United Securities and other 49 institutions and more than 60 institutional investors | ||||||
| February 22, 2022 | Conference room | Telephone Communication | Institution | Xu Rong and Jin Binbin from CICC Asset Management, He Xinzhi from Sunshine Asset Management, Zheng Xiaobing from HSBC Jinxin Fund, Zhu Xiaoling from Shaoxia Capital, Zhang Funing from Lide Investment, Wang Xiaoran from Jinchen Investment, Wang Xing from Shaanxi Zhaorong, Zhang Ya from Shanghai Chunda Fund, Ning Bo Renqing Liyao from Ningbo, Tang Changfu from Yihe Yinfeng, Jiang Hao and Weng Kaisong from Southern Tianchen, Tan Qiang from Dongfang Cangshan, Jin Yifeng from Changzhou Investment, Hu Lina from Guitie Fund, and Li Qiwen from China Africa CITIC Bank, | Company strategic product introduction, dual carbon policy impact, etc | The details disclosed on the interactive platform on March 24, 2022. |
| Chang Yulei from China Electronics Technology Investment, Chai Yan from Jimin Trust Group, Liu Yanxi from China State Investment Group, Shen Bohan from Guoxin Investment, Chen Mo from Evergrande Life Insurance, Qin Daocen from Beijing Trust, Hu Yamin from Special Investment, Jin Zhonglei from Greenland Equity Investment, Yang Xuexiang from New Fox Investment, Shen Zhaojun from Huaxi Yinfeng, Zheng Lingqi from China National Science and Technology Reform Fund, Fan Mingkai from Xiamen International Trade, Gao Hongtao and Chang Jing from Yunnan Trust, Gao Yi'an from Donghai Fund, and Guo Qing from Zhongji Taikang, Xingyin Growth Jiang Ming, Qianlu Capital Li Xiang, Golden Eagle Fund Mai Jiahuang, Hengrui Capital Song Qingxiang, Beijing Jinta Wang Dan, Yiluo Capital Qian Lin, CICC Haotian Zhanhui, Jiashi Dayan Cheng Huanqing, Gong Xiaoqin, Marshall Wace Li Li, Shen Wanhongyuan Wu Bin, Ping An Securities Qin Shi, Donghai Securities Ma Ziqiang, CITIC Construction Investment Securities Wang Jiechao, Kou Liyao and other 43 institutions and more than 50 institutional investors | ||||||
| March 23, 2022 | Conference room | Telephone Communication | Institution | Xu Rong and Jin Binbin from CICC Asset Management, He Xinzhi from Sunshine Asset Management, Zheng Xiaobing from HSBC Jinxin Fund, Zhu Xiaoling from Shaoxia Capital, Zhang Funing from Lide Investment, Wang Xiaoran from Jinchen Investment, Wang Xing from Shaanxi Zhaorong, Zhang Ya | Company strategic product introduction, dual carbon policy impact, etc | The details disclosed on the interactive platform on March 24, 2022. |
| April 29, 2022 | Panorama Network studio (http://ir.p5w.net) | Others | Institution | All investors | Explain the company's performance in 2021 and the first quarter of 2022, and answer the questions concerned by investors | The details disclosed on the interactive platform on May 6, 2022. |
| May 12, 2022 | Conference room | Telephone Communication | Institution | Picc Wang Hui. China Life Pension Yu Lei, Shanghai Investment Morgan Xing Da, Chengtong Fund Liu Bo, Huaxia Fund Mao Ying, Huaxia Wealth Management Lv Meng'en, Shenzhen Chuangfu Zhaoye Liu Zhengke, Shanghai Shenzhi Asset Li Haotian, Pengyang Fund Luo Cheng, Ruiyuan Fund Wu Fei, Shenzhen Red Chip Investment Wang Zhidong, Chunhou Fund Wu Ruozong, Danshui Quanqian Yueqiang, Ye Zhishen, Fuanda Zhang Yixin, ICBC Ansheng Fan Yanjun, Guojin Fund Wu Peiwei, Han Qing Hongru Yan Xin, Hangzhou Weiman Li Qiang, Huamei International Fu Nan, Huarun Yuan Da Su Zhan, Golden Eagle Fund Xi Junfeng, Shanghai Mingda Industrial Prince Heng, Shanghai Qushi Zhang Xiuqi, Tianjin Bank Jiang Yunya, Tibet United Yisheng Pang Yuming, Xingyin Fund Shi Liang, Ordinary (Shanghai) Investment Gong Yiming, China Shandong Expressway Capital Wang Zijian, China Science and Technology Wotu Xu Wei, CITIC Prudential Hu Zhe, Shanghai Oriental Securities Wang Yanfei, Huafu Securities Wei Zhengyu, Zeng Zheng and Wang Han from CITIC Securities, Li Sha from GF Securities and other 35 institutions and more than 40 institutional investors | Electrical steel products future planning, iron ore price trend, reduce crude steel output policy impact, etc | The details disclosed on the interactive platform on May 13, 2022. |
| June 15, 2022 | Conference room | Telephone Communication | Institution | China Taibao Chen Xiaoxiao, ICBC Credit Suisse Yin Yue, Bank of Communications Wealth Management Wang Zhejun, HSBC Jinxin Zheng Xiaobing, CICC Asset Management Xu Rong, Shanghai Guqu Zhao | The sales growth of electrical steel for energy vehicles, the impact of crude steel production policy, and rising raw material prices, etc | The details disclosed on the interactive platform on June 17, 2022. |
| Zhen, Guohai Franklin Zhang Dengke, Ruiyuan Fund Cui Lin, Taiping Fund Wei Zhiyu, China National Offshore Fund Ma Tao and Bao Jianglin, Boshi Fund Chen Xi, Guoshou Asset Cui Xinyang, Taibao Asset Zhang Zhe and Wei Wei, Jingshun Great Wall Li Jianlin, Runhui Investment Jiang Yangjing, Rongtong Fund Zhao Yixiang, Zhu Min from Changxin Fund, Ma Rui from Changjiang Pension, He Xinzhi from Sunshine Asset, Wang Huixian from CITIC Securities (self operated), Pang Xinghua from Yanhang Investment, Ma Zhefeng from Heyong Investment (Beijing), Chen Yongqiang from Tailin Investment, Yang Liyuan from Jianxin Fund, Tong Wei from Huaxia Fund, Jiao Yun from Jiashi Fund, Gu Liping from Everbright Baode Trust, Fan Yaoyu from Shenzhen Qiyuan Wealth, Zhang Tingjian from Yingfeng Capital, Wei Hua from Yuanxin (Zhuhai) Private Equity Fund, and Li Xiang from Hangzhou Qianlu Investment, Chongyang Investment He Jianqing, Zhengyuan Investment Tang Zhe, Everbright Securities Dai Mo, Guotai Junan Li Pengfei, Wei Yudi, Wang Hongyu | ||||||
| June 16, 2022 | Conference room | Telephone Communication | Institution | China Taibao Chen Xiaoxiao, ICBC Credit Suisse Yin Yue, Bank of Communications Wealth Management Wang Zhejun, HSBC Jinxin Zheng Xiaobing, CICC Asset Management Xu Rong, Shanghai Guqu Zhao Zhen, Guohai Franklin Zhang Dengke, Ruiyuan Fund Cui Lin, Taiping Fund Wei Zhiyu, China National Offshore Fund Ma Tao and Bao Jianglin, Boshi Fund Chen Xi, Guoshou Asset Cui Xinyang, Taibao Asset Zhang Zhe and Wei Wei, Jingshun Great | The sales growth of electrical steel for energy vehicles, the impact of crude steel production policy, and rising raw material prices, etc | The details disclosed on the interactive platform on June 17, 2022. |
| Wall Li Jianlin, Runhui Investment Jiang Yangjing, Rongtong Fund Zhao Yixiang, Zhu Min from Changxin Fund, Ma Rui from Changjiang Pension, He Xinzhi from Sunshine Asset, Wang Huixian from CITIC Securities (self operated), Pang Xinghua from Yanhang Investment, Ma Zhefeng from Heyong Investment (Beijing), Chen Yongqiang from Tailin Investment, Yang Liyuan from Jianxin Fund, Tong Wei from Huaxia Fund, Jiao Yun from Jiashi Fund, Gu Liping from Everbright Baode Trust, Fan Yaoyu from Shenzhen Qiyuan Wealth, Zhang Tingjian from Yingfeng Capital, Wei Hua from Yuanxin (Zhuhai) Private Equity Fund, and Li Xiang from Hangzhou Qianlu Investment, Chongyang Investment He Jianqing, Zhengyuan Investment Tang Zhe, Everbright Securities Dai Mo, Guotai Junan Li Pengfei, Wei Yudi, Wang Hongyu | ||||||
| July 7, 2022 | Conference room | Telephone Communication | Institution | Danshui Spring (Beijing) Investment Management Cao Yang, Guohua Xingyi Insurance Asset Management Co., Ltd. Han Dongwei, Guanfeng Asset Tang Zhe, Chongyang Investment He Jianqing, 3w Fund Liu Siming, Zhanbo Investment Xiao Bin, Leike Asset Management Guo Jiayi, Yinyou Asset Sun Jiaqi, China Merchants Securities Yue Hengyu, Tang Xiao | Competitive advantage of electrical steel products, impact of crude steel output policy, etc | The details disclosed on the interactive platform on July 8, 2022. |
| July 13, 2022 | Conference room | Telephone Communication | Institution | Guohua Xingyi Insurance Asset Han Dongwei, Zhongcheng Automobile Insurance Yang Zhi, Dongwu Securities Research Institute Wang Qinyang | Electrical steel product future planning, technical barriers, automotive plate, galvanized plate orders, etc | The details disclosed on the interactive platform on July 14, 2022. |
| August 24, 2022 | 8:00am-12:00am: Panorama Network studio (http://ir.p5w.net) 1:00pm-5:00p | Others | Others | 8:00am-12:00am: Small and medium investors 1:00pm-5:00pm: Dai Mo, Shen Yuting, Fan Qin from Everbright Securities, Chen Qiwei | Explain the company's 2022 semi-annual performance and answer the questions concerned by investors | The details disclosed on the interactive platform on August 25, 2022. |
| m: Conference room | from Guangfa Securities, Li Pengfei and Wang Hongyu from Guotai Jun'an, Fu Lianxi from Huatai Securities, Zhang Hao from Industrial Securities, Wang Jiechao and Guo Yanzhe from CITIC Securities, Yue Hengyu from China Merchants Securities, Lv Shicheng from Changjiang Securities, Liu Yaoqi, Wu Yuan, Song Hanqing from Zhongtai Securities, Zhao Yutian from Northeast Securities, Xu Xinzhe from China Europe Fund, Xu Rong from CICC Asset Management, and Zhang Zexun from China Canada Fund, Yu Lei from China Life Pension Insurance, Li Jianlin from Jingshun Great Wall, Huang Jingwen from Southern Fund, Zhang Zhe from Pacific Asset Management, Li Weifeng from Pengyang Fund, Yao Xuzeng from Guangfa Fund, Lu Heng from Huabao Fund, Wang Xiaodan from Hua'an Fund, Han Dongwei from Guohua Xingyi Insurance, Han Chenhao from Fuguo Fund, Hu Xiao from Dongzheng Asset Management, Chen Lirui and Zhang Baiyang from ICBC Credit Suisse, Gong Runhua from Boshi Fund etc. | |||||
| October 28, 2022 | 8:00am-12:00am: Panorama Network studio (http://ir.p5w.net) 1:00pm-5:00pm: Conference room | Others | Others | 8:00am-12:00am: Small and medium investors 1:00pm-5:00pm: Dai Mo and Liu Na from Everbright Securities, Ma Ye from Zhejiang Securities, Li Pengfei and Wang Hongyu from Guotai Junan, Yue Hengyu from China Merchants Securities, Su Xiaojie from CITIC Securities, Wang Le and Chen Qiwei from Guangfa Securities, Liu Yaoqi from Zhongtai Securities, Hu Xiao from Dongfang Securities, Luo Weiyu from Changjiang Securities, Zhao Liming and Zhao | Explain the company's performance in the first three quarters of 2022 and answer investors' questions | The details disclosed on the interactive platform on October 31, 2022. |
| Yutian from Northeast Securities, Xu Rong from CICC Asset Management, Chen Lirui from ICBC Credit Suisse, Guo Chen from Dice Investment, Zhao Jun from Shanghai Shangjin Investment, and Gao Yunfei from Capital Management, Taikang Pension Insurance Bi Yunpeng and Xu Dong etc. | ||||||
| December 28, 2022 | Conference room | Telephone Communication | Institution | Analysts and institutional investors such as Huitianfu Fund, Danshui Spring (Beijing) Investment Management Co., Ltd., Bank of China Fund, Hengyue Fund, Qushi Asset Management, Zhonghe Capital, Teda Hongli Fund, Beijing Jingxi Venture Capital Fund Management Co., Ltd., Fidelity Funds, China Post Securities, Changjiang Securities, Huachuang Securities, CITIC Securities, etc | Electrical steel production situation, future supply and demand situation, automobile plate output situation, etc | The details disclosed on the interactive platform on December 30, 2022. |
| December 29, 2022 | Conference room | Telephone Communication | Institution | Analysts and institutional investors such as Huitianfu Fund, Danshui Spring (Beijing) Investment Management Co., Ltd., Bank of China Fund, Hengyue Fund, Qushi Asset Management, Zhonghe Capital, Teda Hongli Fund, Beijing Jingxi Venture Capital Fund Management Co., Ltd., Fidelity Funds, China Post Securities, Changjiang Securities, Huachuang Securities, CITIC Securities, etc | Electrical steel production situation, future supply and demand situation, automobile plate output situation, etc | The details disclosed on the interactive platform on December 30, 2022. |
Section IV. Corporate Governance
I. Information of corporate governanceIn accordance with the Company Law of People’s Republic of China, the Securities Law of People’s Republic of China, the Code ofCorporate Governance for Listed Companies, Self-regulatory Guide for Listed Companies of Shenzhen Stock Exchange No. 1 -Business Management, the Articles of Association and other applicable regulations and laws, the Company establishes a soundinternal control system, actively promotes the improvement of corporate governance structure, continuously deepens standardizedoperation, improves the level and quality of corporate governance, innovates interactive communication channels, maintains goodinvestor relations, and protects the legitimate rights and interests of the Company and all shareholdersAccording to the Articles of Association and Rules of Procedures of the General Shareholders Meeting, the Board of Directors, theSupervisory Committee, the company organizes the General Shareholders Meeting, the meeting of director board, and the meeting ofsupervisory committee. Directors and supervisors are assiduous and dutiful, complying with the applicable rules and regulations,diligently safeguarding the lawful rights and interests of the company and its all shareholders. The management regularly operatesthe company, and faithfully abide by the rules of internal system. In accordance with the relevant regulations such as the ListingRules of Shenzhen Stock Exchange, the Company perform the duty of information disclosure, and guarantee the truthiness, accuracyand completeness of the prepared information, without any false record, misleading or major omission.During the reporting period, the Company did its corporate governance work in the following aspects: First, the articles ofAssociation shall be amended according to the fact that issuance of shares to purchase assets leads to an increase in the total sharecapital. Second, according to operational needs, the Company has formulated 48 systems such as Authorization Management Systemof the Board of Directors to Managers and Compliance Management System and revised 78 systems such as Rules of Procedure ofthe Board of Directors Fund Management System. Thirdly, in response to business adjustments and system updates, the Companyorganised internal control self-evaluation in conjunction with the Risk Control Process Manual and the Risk Control EvaluationManual. Fourthly, the company carries out the construction of compliance management system centering on organizationalresponsibilities, risk identification, system construction and operation mechanism, and establishes a three-database businessmanagement mode guided by risk management and promoted with the "compliance obligation list database" as the core. The contractlegal audit rate and system compliance audit rate have achieved 100%, and no major compliance risk has occurred. Finnally, inaccordance with the Articles of Association, the Rules of Procedure for General Meetings and relevant regulations, the GeneralMeetings were held by way of "on-site + online voting" to ensure that the matters submitted to the General Meetings forconsideration and approval were in compliance with the law.As at the end of the reporting period, the Company has 529 systems, among which 516 systems are formulated and implemented bythe company and 13 systems are forwarded to the government and regulatory authoritiesWhether there are material differences between the actual state of corporate governance and the regulatory documents issued by theCSRC on the governance of listed companies.
□ Yes √ No
There is no material difference between the fact of corporate governance and the regulations for listing companies required by theCSRC.
II. Independence of the Company from the controlling shareholder and actual controller interms of assets, personnel, finance, organization, businessThe Company has established a corporate governance structure that conforms to the characteristics of the iron and steel industryprocess, supports the strategic development of the enterprise, and ADAPTS to the company's operation and production, and plans andoperates in strict accordance with the law. The company and the controlling shareholders remain completely independent in business,personnel, assets, institutions, finance and other aspects. The company has a complete procurement, production, marketing andoperation management system, product research and development institutions and personnel are complete, and has the ability ofindependent production and operation.
1. Business: The Company has a complete raw fuel procurement, product manufacturing, product marketing and management system,an independent business system, conducts its business independently, operates independently and bears its own risks.
2. Personnel: The Company has a complete human resources management system, which operates independently and has a sound andeffective system. The directors and supervisors of the Company are elected in accordance with the statutory approval proceduressuch as shareholders' meetings or corresponding democratic elections; senior management personnel are appointed or dismissed bythe Board of Directors, and there are no irregularities in their concurrent positions with controlling shareholders and related parties.
3. Assets: The Company has a production system and its supporting facilities that are independent of the controlling shareholder andits related parties. The Company's assets are independent and complete, with clear ownership.
4. Institutions: The Company has a general meeting of shareholders, the board of directors, the board of supervisors, managers andother corporate governance structure, a complete organizational system, independent operation, independent exercise of power. Andthere is no subordinate relationship with the controlling shareholder and its related parties.
5. Financial: The Company has an independent financial management department, equipped with full-time financial personnel, with acomplete internal financial accounting and management system and perfect financial management system, which is sound andcapable of making independent financial decisions, and the Company is independently and legally subject to taxation.
III. Horizontal competition
√ Applicable □ Not applicable
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| Competition in the same industry | The controlling shareholder | Shougang Group Co., Ltd. | Local SASAC | Since the listing of the Company, there has been inter-sector competition and connected transactions resulting from the partial conversion to listing. | 1. Shougang Group undertakes in respect of measures to resolve inter-sector competition and avoid inter-sector competition after the First Reorganisation (1) Except for the situation of inter-sector competition existing prior to the date of this Letter of Undertaking, if the Company obtains opportunities for acquisition, development and investment in the same or similar business as Shougang Co, the Company will immediately notify Shougang Co and offer them to Shougang Co for selection on a priority basis and make its best efforts to make such business opportunities available for transfer to Shougang Co. (2) In integrating and operating existing steel assets not yet transferred to Shougang Co., the Company will select the appropriate platform and means to achieve resource integration in a manner that is conducive to the future transfer to Shougang Co. and will not include provisions in the relevant agreements or arrangements with partners or third parties that restrict or prohibit the injection of such assets or businesses into Shougang Co. (3) The Company will, as far as possible, safeguard the normal operation and profitability of the existing steel assets not injected into Shougang Co. and ensure that the aforesaid assets and businesses do not fall into operational difficulties due to the Company or other circumstances that prevent the ultimate injection into Shougang Co. or render such injection legally impeded. (4) Each commitment made by the Company in eliminating or avoiding competition in the same line of business shall also apply to other enterprises under the direct or indirect control of the Company other than Shougang Co. and its subsidiaries, and the Company is obliged to supervise and ensure that the other subsidiaries of the Company implement the arrangements for each of the matters described in this document and strictly comply with all the commitments. 2. As approved by the second extraordinary general meeting of the Company for 2018 on 27 December 2018, Shougang Group undertakes to: (1) According to the development plan of Shougang's steel industry, Shougang shares will serve as the sole platform for the development and integration of Shougang Group's steel and upstream iron ore resources industries in the PRC, and ultimately realise the overall listing of Shougang Group's steel and upstream iron ore resources businesses in the PRC. (2) In the event that Shougang Group's other companies engaged in steel operations and production further optimise and adjust their product structure through active implementation of national industrial policies and environmental protection requirements, and achieve profits for three consecutive years, and that the overall situation of the industry does not fluctuate significantly, Shougang Group will, in accordance with the requirements of securities laws and regulations and industry | In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. Shougang shares will continue to negotiate with Shougang Group and actively promote the follow-up work in accordance with the commitment to resolve horizontal competition. |
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| policies, initiate a process including but not limited to acquisition, merger, restructuring and other means in the interests of shareholders of the listed company The injection of relevant high-quality assets into Shougang will be completed within 36 months after the commencement of the relevant matters. |
IV. General shareholders’ meetings and extraordinary shareholders’ general meeting duringthe reporting period
1. Information on the general shareholders meeting
| Sessions | Type | Investor participation ratio | Date | Date of Disclosure | Conference resolution |
| 2022 First Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 81.73% | March 18, 2022 | March 19, 2022 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2021 Annual General Meeting | Annual General Shareholders Meeting | 83.64% | June 29, 2022 | June 30, 2022 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2022 Second Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 83.35% | September 09, 2022 | September 10, 2022 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2022 Third Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 27.96% | November 15, 2022 | November 16, 2022 | Please refer to the company announcement on the disclosure date of the meeting resolution |
| 2022 Fourth Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 83.98% | December 23, 2022 | December 24, 2022 | Please refer to the company announcement on the disclosure date of the meeting resolution |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Directors, Supervisors, Senior ManagementI. General information
| Name | Post | Status of employment | Gender | Age | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Zhao Minge | Chairman | Incumbent | Male | 56 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Jianhui | Director | Incumbent | Male | 57 | 2022/12/23 | 2025/12/22 | 290,000 | 0 | 0 | 0 | 290,000 | |
| Zeng Li | Director | Incumbent | Male | 51 | 2022/12/23 | 2025/12/22 | 290,000 | 0 | 0 | 0 | 290,000 | |
| Li Jiantao | Director | Incumbent | Male | 44 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Ye Lin | Independent director | Incumbent | Male | 59 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Gu Wenxian | Independent director | Incumbent | Male | 61 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Yu Xingxi | Independent director | Incumbent | Male | 64 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Shen | Independent director | Incumbent | Male | 47 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Peng Feng | Independent director | Incumbent | Male | 43 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Sun Yi | Supervisory board chairman | Incumbent | Male | 57 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Guo Liyan | Supervisory | Incumbent | Female | 47 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Chang Haiyu | Supervisory | Incumbent | Female | 38 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 |
| Name | Post | Status of employment | Gender | Age | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Wang Xingtao | Employee representative supervisor | Incumbent | Male | 44 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Qu Erlong | Employee representative supervisor | Incumbent | Male | 41 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Jianhui | General manager | Incumbent | Male | 57 | 2022/12/23 | 2025/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Binglong | Vice general manager | Incumbent | Male | 46 | 2022/12/23 | 2025/12/22 | 232,000 | 0 | 0 | 0 | 232,000 | |
| Li Baizheng | Chief accountant | Incumbent | Male | 57 | 2022/12/23 | 2025/12/22 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Sun Maolin | Vice general manager | Incumbent | Male | 46 | 2022/12/23 | 2025/12/22 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Li Jingchao | Vice general manager | Incumbent | Male | 57 | 2022/12/23 | 2025/12/22 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Chen yi | Vice general manager/ secretary of the Board | Incumbent | Male | 55 | 2022/12/23 | 2025/12/22 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Xie Tianwei | Vice general manager | Incumbent | Male | 41 | 2022/12/23 | 2025/12/22 | 203,300 | 0 | 0 | 0 | 203,300 | |
| Wang Kai | Vice general manager | Incumbent | Male | 40 | 2022/12/23 | 2025/12/22 | 203,000 | 0 | 0 | 0 | 203,000 | |
| Qiu Yinfu | Director | Dismissed | Male | 55 | 2019/12/23 | 2022/08/16 | 290,000 | 0 | 0 | 0 | 290,000 | |
| Wu Dongying | Director | Dismissed | Male | 59 | 2019/12/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Yin Tian | Independent director | Dismissed | Male | 68 | 2019/12/23 | 2022/1/6 | 0 | 0 | 0 | 0 | 0 | |
| Yang Mulin | Supervisory | Dismissed | Male | 51 | 2019/12/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Cui Aimin | Employee representative supervisor | Dismissed | Female | 54 | 2021/7/7 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Peng Kaiyu | Vice general manager | Dismissed | Male | 42 | 2019/12/23 | 2022/08/05 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Li Ming | Vice general manager | Dismissed | Male | 48 | 2019/12/23 | 2021/10/20 | 261,000 | 0 | 0 | 0 | 261,000 | |
| Ma Jiaji | Chief engineer | Dismissed | Male | 59 | 2019/12/23 | 2022/10/20 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 3,074,300 | 0 | 0 | 0 | 3,074,300 | -- |
During the reporting period, did any directors and supervisors resign and was any members of the senior management dismissedduring their term of office
√ Yes □ No
For details, please refer to "Changes in directors, supervisors and senior manager".Changes in directors, supervisors and senior manager
√Applicable □Not applicable
| Name | Post | Type | Date | Reason of changes |
| Qiu Yinfu | Director | Dismissed | 2022/08/16 | Resignation upon transfer of work |
| Wu Dongying | Director | Dismissed | 2022/12/22 | Resignation upon expiration of term |
| Yin Tian | Independent director | Dismissed | 2022/01/06 | Resignation upon expiration of term |
| Yang Mulin | Supervisory | Dismissed | 2022/12/22 | Resignation upon expiration of term |
| Cui Aimin | Employee representative supervisor | Dismissed | 2022/12/22 | Resignation upon expiration of term |
| Peng Kaiyu | Vice general manager | Dismissed | 2022/08/05 | Resignation upon transfer of work |
| Li Ming | Vice general manager | Dismissed | 2022/10/20 | Resignation upon transfer of work |
| Ma Jiaji | Chief engineer | Dismissed | 2022/10/20 | Resignation upon transfer of work |
II. Current position
Professional background, main work experience and main responsibilities of the current board members, supervisors, and seniormanager of the CompanyA. Board members
1. Zhao Minge: The chairman of the Company, the professor-level senior engineer, being a PhD of Engineering with doctoraleducation. The major employment history of Mr. Zhao is as follows: a teacher of mining and metallurgy department of Beijing Ironand Steel College; a deputy director of teaching section of educational division, a deputy director (in charge of daily routine) ofeducational division, the vice president of the college; a deputy director of Shougang Training Centre; a deputy director of ShougangIronmaking Factory; a deputy director of the No.2 Ironmaking Plant of Shougang Co.; the secretary of CPC Committee of BeijingShougang Oxygen Factory; a director of Shougang Training Center (Training Department); the head (first vice president of theInstitute) of Technical Quality Department (Technical Research Institute, Xingang Technical Quality Department); a deputy secretaryof CPC Committee and deputy general manager of Xingang Co.; a member of the board and general manager of Shougang ChangzhiSteel&Iron Co., Ltd.; a director and general manager of Shougang Changzhi Steel&Iron Co., Ltd. (assistant level of the headquarter);the assistant of general manager of Shougang Corporation, the deputy chief engineer and president of Shougang TechnologyResearch Institute; later, concurrently, the deputy secretary of the CPC Committee and executive deputy general manager ofShougang Jingtang United Iron&Steel Co., Ltd.; a standing member of CPC Committee, director, vice general manager of ShougangCo., at the same time, appointed as the director of Beijing Shougang Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd.In addition, Mr. Zhao also is a standing member of CPC Committee, director, vice general manager of Shougang Group. Mr. Zhaoserved as Chairman of Beijing Shougang Co., Ltd. Also, Mr. Zhao is the deputy secretary of the Party, the director and the generalmanager of Shougang Group.
2. Liu Jianhui: The director and general manager of the Company, the professor-level senior engineer, being a master of engineeringwith postgraduate education. The major employment history of Mr. Liu is as follows: a professional in the steel-making section ofBeigang Technology Office and deputy director of the steel-making inspection station; a student of Lugou Engineering School ofShougang; a deputy director of the No.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chiefengineer, technical assistant of factory manager and technical section director of the No.2 Steelmaking Plant of Shougang anddirector of the Research Institute; a technical assistant of the factory manager and director of the technical section and technicaldeputy director of the No.2 Steel-making Plant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of BeijingShougang Co., Ltd.; the assistant of general manager and head of steelmaking department of Shouqin Co.; the assistant of generalmanager and deputy general manager of Qiangang Co.; the deputy general manager (acting general manager) and general manager ofsales company of Shougang Corporation; the deputy secretary of CPC Committee, general manager and director of marketingmanagement department of Shougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager anddirector of marketing management department; the deputy secretary of CPC Committee, director and general manager of ShougangCo., concurrently served as secretary of CPC Committee and director for Jingtang Co. At present, Mr. Liu is the secretary of CPCCommittee, director and general manager of Beijing Shougang Co., Ltd.
3. Zeng Li: The director of the Company, the senior engineer, being a master of engineering with postgraduate education. The majoremployment history of Mr. Zeng is as follows: Mr. Zeng used to be a technician, head of technical section, deputy chief of technicalsection, deputy chief of technical section (in charge of work), chief of technical section and deputy director of steelmaking workshopof Shougang No. 3 Steelmaking Plant, director of No. 2 Steelmaking Plant of the Company, director and Secretary of General PartyBranch of Qiangang Co., director of the Second Steelmaking Plant of the Company, director of the Steelmaking Branch of QiangangCo., Secretary of the General Party Branch and Deputy Director of the Steelmaking Operation Department of Jingtang Co., assistantto the general manager and director of the steelmaking plant of Tangshan Shougang Baoye Iron and Steel Co., Ltd., director of theSecond Steelmaking plant of the Company, deputy director of the steelmaking Operation Department of Jingtang Co., deputy chiefengineer and director of the chief Engineer's Office (Chief Engineer's Office of Beijing Shougang New Steel Company) of ShougangCorporation, Director of the deputy chief Engineer and chief Engineer's Office of Shougang Corporation (Beijing Shougang NewSteel Company Chief Engineer's Office), director of the manufacturing Department of Jingtang Co., deputy chief engineer ofShougang Corporation and director of the Manufacturing Department of Jingtang Co., deputy chief engineer of ShougangCorporation, deputy general manager of Jingtang Co., deputy chief engineer of Shougang Corporation, director and deputy generalmanager of Jingtang Co., director and deputy general manager of Jingtang Co., deputy Secretary of the Party Committee, director andgeneral manager of Jingtang Co. At present, Mr. Zeng is currently a director of Beijing Shougang Co., Ltd., Secretary of the PartyCommittee and Chairman of Jingtang Co.
4. Li Jiantao: The director of the Company, the intermediate economist with Bachelor's Degree. The major employment history ofMr. Li is as follows: Mr. Li used to be a member of Finance Department of Baosteel Group Shanghai No. 1 Iron and Steel Co., Ltd.,a member of Finance Department of Shanghai No. 1 Iron and Steel Co., Ltd., a member of asset Management Section, DeputyDirector of Finance Department and Deputy Director of Finance Department of Baosteel Group Shanghai No. 1 Iron and Steel Co.,Ltd., a deputy director of Finance Department and Deputy Director of Transportation Reform Department of Baosteel GroupShanghai No. 1 Iron and Steel Co., Ltd., Senior Manager of expense Management of Operating Finance Department of BaosteelGroup (Head Office), Senior Manager of expense Management of Operating Finance Department of China Baowu Iron and SteelGroup Co., L Ltd., Senior Manager of Fund Management of Finance Department of China Baowu Iron and Steel Group Co., L Ltd.,and Fund Director of Finance Department of China Baowu Iron and Steel Group Co., Ltd. Currently, Mr. Li is director of capitalOperation Department and Capital Operation Center of China Baowu Iron and Steel Group Co., Ltd., and director of BeijingShougang Co., Ltd.
5. Ye Lin: independent director, professor and doctoral supervisor, doctor in law, Ye Lin was serving Law School of RenminUniversity of China (hereinafter “RUC”) as an assistant, lecturer, associate professor and professor, successively. At present, he is thedirector, professor and doctoral supervisor of Civil & Commercial Law Teaching and Research Agency of RUC Law School. He isalso an independent director of China Life Asset Management Co., Ltd., an independent director of Founder Securities Co., Ltd., and
a part-time lawyer of Beijing Shengang Law Firm. Major part-time jobs include: the vice president of China Commercial LawSociety under China Law Society, the vice president of Civil and Commercial Law Society under Beijing Law Society, the presidentof Beijing Consumer Rights Protection Law Society; a legislative consultant of Financial and Economic Affairs Committee of theNational People's Congress of PRC, a consultant of drafting group to Futures Law, a consultant of Administrative PunishmentCommittee of CSRC, a consumer rights protection social supervisor of China Insurance Regulatory Commission, a consultant of theLegal Professional Committee of the Insurance Society of China, a member of the Advisory Committee of Beijing High People’sCourt, a consultant of the Company Law Committee of China Lawyers Association, a consultant of the Company Law Committee ofBeijing Lawyers Association, a member of the Professional Committee of Shanghai Stock Exchange and China Financial FuturesExchange, a arbitrator and expert of the Advisory Committee of China International Economic and Trade Arbitration Commission.Ye Lin serves Shougang Co. as an independent director from 26 December, 2017.
6. Gu Wenxian: The independent director of the Company, a senior accountant and Certified Public Accountant in China withbachelor's degree. He used to be a teacher of Shanghai Railway Medical College, a teacher of Shanghai Fisheries University, a seniormanager of Dahua Certified Public Accountants LLP, a senior manager of Ernst & Young Da Hua Certified Public Accountants, anda member of the first, second and third mergers and acquisitions Committee of China Securities Regulatory Commission. Mr. Gu isnow a senior partner and director of BDO China Shu Lun Pan Certified Public Accountants LLP. Gu Wenxian serves Shougang Co.as an independent director from 20 December, 2021.
7. Yu Xingxi: The independent director of the Company, a senior accountant with master's degree of Management. He used to be asoldier of recruit Company 1 of 46 Regiment of 10th Railway Division, a soldier of logistics service Agency of New ManagementDepartment of 10th Railway Division, a soldier of Finance Department of New Management Department of Qinghai-Tibet Line ofRailway soldier, an assistant of finance Department (platoon) of New Management Department of Qinghai-Tibet Line of Railwaysoldier, a director of the 4th police Station (deputy company) of New Management Department of Qinghai-Tibet Line of Railwaysoldier, an accountant of finance Department (deputy battalion) of new Management Department of Qinghai-Tibet Line of Railwaysoldier, Accountant of Finance Department of New Management Department of Railway 10 Division, member of FinanceDepartment (Deputy section) of New Railway Transportation Department of Railway 20 Bureau, Deputy chief of Planning andStatistics Department and Deputy chief of Finance Department of Railway 20 Bureau 5, Deputy Chief and chief of FinanceDepartment of Construction Engineering Department of Railway 20 Bureau, Deputy chief Accountant of Construction EngineeringDepartment of Railway 20 Bureau, Deputy chief accountant and accountant of Construction Engineering Department of Railway 20Bureau, Chief Accountant and accountant of Construction Department of Railway 20 Bureau, Chief Accountant and senioraccountant of Finance Department of China Railway Construction Corporation, Deputy Minister of Finance Department of ChinaRailway Construction Corporation, Director of Capital Settlement Center and senior accountant of China Railway ConstructionCorporation, Manager and Senior meeting of Investment Department of China Railway Construction Corporation, Minister andsenior meeting of Finance Department of China Railway Construction Corporation, Director of Finance Department and seniorAccountant of China Railway Construction Corporation Limited, Secretary of the Board of Directors, joint secretary of the Company,press spokesperson and senior accountant of China Railway Construction Corporation Limited. He is currently the secretary generalof Beijing Association of Listed Companies, independent director of Ruitai Technology Co., Ltd., independent director of BeijingKerui International Co., Ltd., and independent director of Sinopharm Pharmaceutical Co., Ltd. He has been an independent directorof Beijing Shougang Co., Ltd. since December 23, 2022.
8. Liu Shen: The independent director of the Company with doctor's degree. The major employment history of Mr. Liu is as follows:
Once served as an employee of the real estate credit department of Shanghai Branch of China Construction Bank, assistant manager,manager and senior manager of the listed company Department of Shanghai Stock Exchange, executive manager and assistantdirector of the office of Shanghai Stock Exchange, assistant director of the second Supervision Department of listed company ofShanghai Stock Exchange, deputy director of the issuance and listing business center of Shanghai Stock Exchange and memberDepartment of Shanghai Stock Exchange Deputy director. During the period, Mr. Liu worked in the issuance Supervision Departmentof China Securities Regulatory Commission (CSRC), and is a member of the 16th main board stock issuance examination committeeof CSRC. At present, Mr. Liu is the vice general manager of Shanghai Xinfugang Real Estate Development Co., Ltd., an independentdirector of Shanghai Kangheng environment Co., Ltd. (unlisted company) and an independent director of Guizhou Guotai Liquor Co.,Ltd. (unlisted company). Mr. Liu serves as an independent director of Beijing Shougang Co., Ltd. since 23 June 2020.
9. Peng Feng: The independent director of the Company, a professor level senior engineer with master's degree. The majoremployment history of Mr. Peng is as follows: Mr. Peng once served as assistant engineer, engineer and deputy director of Smeltingraw materials department of Metallurgical Industry Planning and Research Institute, chief designer and vice director of smelting rawmaterials department of Metallurgical Industry Planning and Research Institute, chief designer and director of smelting raw materialsdepartment of Metallurgical Industry Planning and Research Institute. At present, Mr. Peng is vice chief engineer and chief designerof Metallurgical Industry Planning and Research Institute, director of smelting raw materials department, vice chairman of ferroalloybranch of China Society for metals, and executive deputy secretary of Zhongguancun Stainless Steel and Special Alloy New MaterialIndustry Technology Innovation Alliance. Mr. Peng serves as an independent director of Beijing Shougang Co., Ltd. since 23 June2020.B. Supervisors
1. Sun Yi: The chairman of supervisory Board of the Company, a senior economist with doctor's degree of Economics. The majoremployment history of Mr. Sun is as follows: A cadre of machinery workshop of Changchun Bus Factory in Jilin Province, aresearch secretary in the factory director's office, a staff member, section member, deputy director section member of Jilin ProvincialLabor Department labor Management Office, a deputy director of the First General Affairs Department, a director of the first GeneralAffairs Department, chief secretary of the secretariat and deputy secretary of the Secretariat of jilin Provincial Government generalOffice, Director, deputy general manager, chairman of the trade union, standing member of the Party Committee, secretary of theDiscipline inspection Commission and Secretary of the Party Committee of Tonghua Iron & Steel Co., Ltd. Mr. Sun is currently theDirector of the Work Office of the Supervisory Board of Shougang Group Co., Ltd., and the Chairman of the Supervisory Board ofBeijing Shougang Co., Ltd.
2. Guo Liyan: The supervisor of the Company, a senior accountant with master's degree. The major employment history of Mrs.Guo is as follows: She has served as a member of finance Department of Machinery Factory of Shougang Mechanical and ElectricalCompany, auditor of Audit Office of Shougang Mechanical and Electrical Company, chief of Finance Department of HydraulicCenter of Shougang Mechanical and Electrical Company, Deputy Director of Fund Department of Finance Department of ShougangMechanical and Electrical Company, Deputy Director of Cost Department of Finance Department of Shougang Mechanical andElectrical Company, Deputy station chief of financial dispatch station of Technical Research Institute of Finance Department ofShougang Mechanical and Electrical Company, Deputy Director of Audit Division I (in charge of work) of the Audit Department ofShougang Corporation, Assistant Director and Deputy Director of the Audit Department of Shougang Corporation, Director of theaudit Department of Shougang Corporation and supervisor of Beijing Shougang Co., Ltd. Mrs. Guo is the current director of auditdepartment of Shougang Group and the current supervisor of Shougang Co.
3. Chang Haiyu: The supervisor of the Company, an intermediate economist with master's degree. The major employment history ofMr. Chang is as follows: He used to be senior manager of Financing Management Department of Beijing State-owned CapitalOperation Management Co., Ltd., senior manager of key Account Department of head office of Zheshang Bank Co., Ltd., andassistant to general manager of Capital Operation Department of Beijing Financial Holding Group Co., Ltd. Currently, he is theinvestment director of Beijing Jingguorui Equity Investment Fund Management Co., Ltd., and the supervisor of Beijing ShougangCo., Ltd.
4. Wang Xingtao: The employee representative supervisor of the Company, a senior marketer with bachelor's degree. The majoremployment history of Mr. Wang is as follows: He used to be a member of supply and Marketing Department of Shougang First-linematerial Factory, a salesman of Sales Department of high-quality Profile Sales Department of Shougang Sales Company, a researcherof price Management Department of Marketing Management Department of Shougang Sales Company, a deputy chief of priceManagement Department of Marketing Management Department of Shougang Sales Company (probation period of one year), adeputy chief of price Management Department of Marketing Management Department of Shougang Sales Company, and aprofessional manager of marketing Management Department of Marketing Management Department. Currently, he is theprofessional manager of marketing Office of Marketing Management Department of Marketing Center and the employeerepresentative supervisor of Beijing Shougang Co., Ltd.
5. Qu Erlong: The employee representative supervisor of the Company, a senior marketer with bachelor's degree. The majoremployment history of Mr. Qu is as follows: Mr. Qu worked as a worker in Shougang High-speed Wire Mill, Shougang EquipmentMaintenance Center, Qiangang Co. Equipment Maintenance Center, Qiangang Company Equipment Maintenance Center, BeijingShougang Co., Ltd. Equipment Department, hot-rolling Operation Department.
C. Senior manager
1. Liu Jianhui: The director and general manager of the Company, a professor-level senior engineer with master's degree ofengineering. The major employment history of Mr. Liu is as follows: a professional in the steel-making section of BeigangTechnology Office and deputy director of the steel-making inspection station; a student of Lugou Engineering School of Shougang; adeputy director of the No.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chief engineer,technical assistant of factory manager and technical section director of the No.2 Steelmaking Plant of Shougang and director of theResearch Institute; a technical assistant of the factory manager and director of the technical section and technical deputy director ofthe No.2 Steel-making Plant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of Beijing Shougang Co.,Ltd.; the assistant of general manager and head of steelmaking department of Shouqin Co.; the assistant of general manager anddeputy general manager of Qiangang Co.; the deputy general manager (acting general manager) and general manager of salescompany of Shougang Corporation; the deputy secretary of CPC Committee, general manager and director of marketing managementdepartment of Shougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager and director ofmarketing management department; the deputy secretary of CPC Committee, director and general manager of Shougang Co.,concurrently served as secretary of CPC Committee and director for Jingtang Co. At present, he is the secretary of CPC Committee,director and general manager of Beijing Shougang Co., Ltd.
2. Zhang Binglong: The deputy General Manager, a senior engineer with master's degree of engineering. The major employmenthistory of Mr. Zhang is as follows: He used to be the prefurnace worker and professional of technical department of steelmakingworkshop of Shougang No. 1 Steelmaking Plant, researcher and deputy sectional-level researcher of Chief Engineer Office ofShougang, professional engineer of Production technology Office of Jingtang Steelmaking Operation Department of Shougang,deputy director, Assistant minister, deputy minister and minister of steelmaking area, Party Secretary, Discipline InspectionCommission secretary, union chairman and minister of Jingtang Steelmaking Operation Department of Shougang. Secretary of theParty Committee and Minister of the Steelmaking Operation Department of Shougang Jingtang, Assistant to the general manager andMinister of the Manufacturing Department of Shougang Jingtang, Deputy Secretary of the Party Committee and Secretary of theDiscipline Inspection Commission of Shougang Shuicheng Iron and Steel (Group) Co., Ltd., Deputy Secretary of the PartyCommittee of Beijing Shougang Co., Ltd. Deputy Secretary of the Party Committee and deputy General Manager of BeijingShougang Co., Ltd.
3. Li Baizheng: The chief accountant of the Company, an accountant with bachelor's degree. The major employment history of Mr.Li is as follows: the planning controller of No.1 Steelmaking Factory; the dispatcher of production setion, the planning controller ofsteelmaking workshop, the planning controller of production section, the chief controller of production section, the planner ofproduction section, the director of billet area, the deputy director of production section, the director of finance and accounting section,planning person in charge of production and planning section, in No. 2 Steelmaking Factory; the deputy director and then director offinance and accounting department of Qiangang Co.; the director of finance and accounting department of Qiangang Co.; the chiefaccountant of Shougang Co. Li Baizheng is the current chief accountant of Shougang Co., the board member of Beijing ShougangCold Rolling Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd.
4. Sun Maolin: The deputy general manager of the Company, an engineer with master's degree. The major employment history ofMr. Sun is as follows: when serving Shougang Medium and Heavy Plate Factory, a professional in the technical section, the deputy
secretary of CPC Branch and deputy director of hot rolling section, the secretary of CPC Branch of operation zone B, the deputydirector of technical research section; the deputy director of technical section under technical quality division, an assistant to thedirector of technical quality division, the executive deputy director of silicon steel department, the standing deputy director of siliconsteel department in Qiangang Co.; the executive deputy director and then director of silicon steel business department of ShougangCo.; the director of Silicon Steel Engineering Research Center; the secretary of CPC Committee and director of silicon steel businessdepartment, and an assistant to the general manager of Shougang Co.; the director of silicon steel business department. Sun is thecurrent deputy general manager of Shougang Co. and director of Silicon Steel Engineering Research Center. He also serves ZhixinCo. as the executive director, Minmetals Special Steel (Dongguan) Co., Ltd. as the vice chairman of the board, and MinmetalsTianwei Steel Co., Ltd. as a director.
5. Li Jingchao: The deputy general manager of the Company, an engineer with bachelor's degree. The major employment history ofMr. Li is as follows: a milling worker of rail workshop in Shougang Middle-sized Factory; an electrician of electrical apparatusworkshop in Shougang Power Factory; the person in charge of the Youth League Committee of Shougang Testing Branch; inShougang No. 3 Steel Mill, the worker of steelmaking workshop, the administrative person in charge of the billet cast machineworkshop, the production deputy director of power workshop, the director (leading roles of sections or equivalents) of powerworkshop, the director (leading roles of sections or equivalents) of spare parts section, the deputy director (leading roles of sectionsor equivalents) of mobile section, the deputy director (leading roles of sections or equivalents) of equipment section, the deputydirector (leading roles of sections or equivalents) of equipment section and director (leading roles of sections or equivalents) ofpower workshop, the deputy director (leading roles of sections or equivalents) of equipment section; an assistant to the director, thedeputy director, the director of equipment division and the director of equipment department of Qiangang Co.; an assistant to thegeneral manager and the director of equipment department of Qiangang Co.; an assistant to the general manager of Qiangang Co.; anassistant to the general manager of Qiangang Co., and the secretary of CPC Committee and the director of equipment department ofShougang Co.; an assistant to the general manager of Qiangang Co.; an assistant to the general manager of Qiangang Co., and thesecretary of CPC Committee and the director of equipment department of Shougang Co., the director of intelligent applicationdepartment of Shougang Co.; an assistant to the general manager of Qiangang Co., and secretary of CPC Committee and the directorof equipment department of Shougang Co. At present, Li Jingchao is the deputy general manager of Shougang Co., and concurrentlyvice chairman of Qian'an Sinochem Coal Chemical Industrial Co., Ltd. and the director of Qian'an China Petroleum Kunlun Gas Co.,Ltd.
6. Chen Yi: The deputy general manager of the Company, and the board secretary of the Company, a senior economist with doctor'sdegree of Management. The major employment history of Mr. Chen is as follows: a professional in the mobile section, an assistant tothe director of the maintenance workshop, the deputy director of the mobile section of Shougang Medium-sized Rolling Mill; thesecretary of the CPC Committee office; a trainee of the overseas training course of Shougang University; the deputy director of theengineering division of the Jichai technical transformation leading group of Shougang; the deputy director of the Office (CPC Office)under the Shougang Economy & Trade Department; the deputy director of the board secretary office of Beijing ShougangXinganglian Technology&Trade Co., Ltd.; the deputy manager of Shougang Marketing Co.; the deputy director of marketingmanagement department, the deputy director of marketing management department and the person in charge of the board secretaryoffice, in Shougang Co.; the board secretary and the director of the board secretary office of Shougang Co.; the general counsel,board secretary and director of the board secretary office of Shougang Co., and director of Cold-R Co. and Jingtang Co. At the end ofthe reporting report, Chen Yi was the deputy general manager, board secretary, general counsel of Shougang Co., and director ofCold-R Co. and Jingtang Co.
7. Xie Tianwei: The deputy general manager of the Company, a senior engineer with master's degree of Management. The majoremployment history of Mr. Xie is as follows: He used to be an intern of Shougang Medium thick Plate Factory, a member ofShougang 2160 preparatory Group, chief operation officer (seconded) of Operation Area A, chief operation officer of Operation AreaA, director of production technology Office, assistant director of hot rolling operation Department, Assistant director of ProductionDepartment and deputy director of hot rolling Operation Department of Shougang Relocated Steel Company, Vice Minister of hotrolling Operation Department, Vice Minister of Production Department, Vice Minister of Manufacturing Department, Vice Ministerof Manufacturing Department and Vice Minister of System Innovation Department, Vice Minister of Manufacturing Department andDirector of Contract Planning Room of Marketing Center of Beijing Shougang Co., Ltd., Assistant to general manager of MarketingCenter of Beijing Shougang Co., Ltd., director (director) of Contract Planning Office of Marketing Management Department, DeputyDirector of Manufacturing Department of Beijing Shougang Co., Ltd. Deputy General manager of Beijing Shougang Co., Ltd.
8. Wang Kai: The deputy general manager of the Company, a senior engineer with master's degree of Management. The majoremployment history of Mr. Wang is as follows: He used to be deputy foreman of 1# blast furnace, deputy foreman of 2# blast furnace,chief foreman of 2# blast furnace, technician of 2# blast furnace, deputy foreman of 2# blast furnace operation area, chief operator of1# blast furnace operation area (one-year probation), chief operator of 1# blast furnace operation area, assistant minister (temporaryvice minister) and deputy minister (in charge of work) of Iron Making Division of Shouqin Company. Deputy Minister, Deputyminister (in charge of work) and minister of the Iron making Operation Department of Shougang Jingtang Company, assistant to thegeneral manager and head of the Iron making Operation Department of Shougang Jingtang Company. Deputy General manager ofBeijing Shougang Co., Ltd.Employment at the shareholder of the Company
√Applicable □Not applicable
| Name | Entity | Position in shareholder company | Start date of term | End date of term | Received remuneration from other entity (Y/N) |
| Zhao Minge | Shougang Group Co., Ltd. | Deputy secretary of the Party Committee, Director and General Manager | June 2020 | Y | |
| Sun Yi | Shougang Group Co., Ltd. | Executive director of the office of the board of supervisors | January 2021 | Y |
| Name | Entity | Position in shareholder company | Start date of term | End date of term | Received remuneration from other entity (Y/N) |
| Guo Liyan | Shougang Group Co., Ltd. | Director of audit department | June 2017 | Y | |
| Li Jiantao | China Baowu Steel Group Corporation Ltd. | Capital Operation Department, Director of capital Operation of Industry and Finance Center | March 2021 | Y | |
| Chang Hiyu | Beijing Jingguorui Equity Investment Fund Management Co., Ltd. | Investment director | November 2011 | Y | |
| Notes to the position in the shareholders’ company | None | ||||
Position in other entity
□ Applicable √ Not applicable
Notes for any punishment from securities review and management authorities, on resigned or current directors, supervisors, andsenior managers within the three years
□ Applicable √ Not applicable
IIⅠ. Remuneration of directors, supervisors and senior managementDecision making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior managers：
Remuneration for directors: the independent directors of the Company collect the allowance of independent directors, and theallowance standard of independent directors is determined by the general meeting of shareholders; the director who concurrentlyserves as the general manager does not collect the remuneration of directors; director Qiu Yinfu collects remuneration in Jingtang Co.,which is not the director remuneration; other directors do not collect remuneration from the Company.Remuneration for supervisors: employee representative supervisors collect remuneration from the Company, while other supervisorsdo not collect remuneration from the Company. The employee representative supervisor shall be remunerated according to theposition of non-supervisor in the Company.Remuneration of senior management personnel: The remuneration and Appraisal Committee of the Board of Directors of thecompany shall, in accordance with the provisions, formulate the Distribution Measures for the Remuneration and Appraisal of theGeneral Manager in 2022, and put forward the appraisal opinions, which shall be submitted to the annual board of Directors fordeliberation and approval before implementation. The remuneration of the deputy general manager and other senior managementpersonnel in 2022 shall be assessed and distributed by the general manager (and director) according to the completion of the worktasks of each senior management personnel including the deputy general manager as authorized by the board of directors.Remuneration of directors, supervisors and senior management during the reporting period
Unit：RMB 0,000
| Name | Position | Gender | Age | Status of employment | Total pretax remuneration received from the company | Whether to get remuneration from related parties of the company |
| Zhao Minge | Chairman | Male | 56 | Incumbent | 0 | Yes |
| Liu Jianhui | Director | Male | 57 | Incumbent | 0 | No |
| Zeng Li | Director | Male | 51 | Incumbent | 12.52 | No |
| Li Jiantao | Director | Male | 44 | Incumbent | 0 | Yes |
| Ye Lin | Independent director | Male | 59 | Incumbent | 12 | No |
| Gu Wenxian | Independent director | Male | 61 | Incumbent | 12 | No |
| Yu Xingxi | Independent director | Male | 64 | Incumbent | 0 | No |
| Liu Shen | Independent director | Male | 47 | Incumbent | 12 | No |
| Peng Feng | Independent director | Male | 43 | Incumbent | 0 | No |
| Sun Yi | Supervisory board chairman | Male | 57 | Incumbent | 0 | No |
| Guo Liyan | Supervisory | Female | 47 | Incumbent | 0 | No |
| Chang Haiyu | Supervisory | Female | 38 | Incumbent | 0 | Yes |
| Wang Xingtao | Employee representative supervisor | Male | 44 | Incumbent | 0 | No |
| Qu Erlong | Employee representative supervisor | Male | 41 | Incumbent | 25.79 | No |
| Liu Jianhui | General manager | Male | 57 | Incumbent | 89.43 | No |
| Zhang Binglong | Vice general manager | Male | 46 | Incumbent | 8.83 | No |
| Name | Position | Gender | Age | Status of employment | Total pretax remuneration received from the company | Whether to get remuneration from related parties of the company |
| Li Baizheng | Chief accountant | Male | 57 | Incumbent | 80.83 | No |
| Sun Maolin | Vice general manager | Male | 46 | Incumbent | 81.01 | No |
| Li Jingchao | Vice general manager | Male | 57 | Incumbent | 81.45 | No |
| Chen yi | Vice general manager/ secretary of the Board | Male | 55 | Incumbent | 74.19 | No |
| Xie Tianwei | Vice general manager | Male | 41 | Incumbent | 7.78 | No |
| Wang Kai | Vice general manager | Male | 40 | Incumbent | 7.29 | No |
| Qiu Yinfu | Director | Male | 55 | Dismissed | 66.72 | Yes |
| Yin Tian | Independent director | Male | 68 | Dismissed | 0 | No |
| Yang Mulin | Supervisory | Male | 51 | Dismissed | 0 | Yes |
| Cui Aimin | Employee representative supervisor | Female | 54 | Dismissed | 23.62 | No |
| Peng Kaiyu | Vice general manager | Male | 42 | Dismissed | 57.48 | No |
| Li Ming | Vice general manager | Male | 48 | Dismissed | 75.73 | No |
| Ma Jiaji | Chief engineer | Male | 59 | Dismissed | 138.14 | No |
| Total | -- | -- | -- | -- | 866.81 | -- |
VI. Performance of Directors during the reporting period
1. Board meetings during the reporting period
| Meeting | Convening date | Disclosure date | Resolutions of meeting |
| The seventh meeting of the twelfth session of the Board | February 28, 2022 | March 1, 2023 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The first Extraordinary General Meeting of the year 2022 | March 31, 2023 | April 1, 2023 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The seventh meeting of the thirteenth session of the Board | April 27, 2023 | April 28, 2023 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The second Extraordinary General Meeting of 2022 | May 20, 2022 | May 21, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The seventh meeting of the fourteenth session of the Board | June 7, 2022 | June 8, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The third Extraordinary General Meeting of shareholders in 2022 | August 22, 2022 | August 22, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The fourth Extraordinary General Meeting of shareholders in 2022 | September 5, 2022 | September 6, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The fifth Extraordinary General Meeting of shareholders of 2022 | October 27, 2022 | October 28, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The eleventh meeting of the fifteenth session of the Board | December 6, 2022 | December 7, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The sixth Extraordinary General Meeting of shareholders of 2021 | December 16, 2022 | December 17, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
| The eighth meeting of the first session of the Board | December 23, 2022 | December 24, 2022 | Detailed information can be found in the company's announcement on the date of disclosure of the meeting resolution |
2. Attendance of Directors at Board meetings and general meetings
| Attendance of Directors at Board meetings and general meetings | |||||||
| Name of Directors | Number of attendance required for Board meetings during the reporting period | Attendance at Board meetings in person | Attendance at Board meetings by communication | Attendance at Board meetings by proxy | Absence from Board meetings | Absent from Board meetings twice in a row (in person) | Attendance at general meetings |
| Zhao Minge | 11 | 4 | 7 | 0 | 0 | No | 4 |
| Liu Jianhui | 11 | 2 | 9 | 0 | 0 | No | 5 |
| Zeng Li | 4 | 0 | 4 | 0 | 0 | No | 2 |
| Li Jiantao | 1 | 0 | 1 | 0 | 0 | No | 1 |
| Ye Lin | 11 | 0 | 11 | 0 | 0 | No | 0 |
| Gu Wenxian | 11 | 0 | 11 | 0 | 0 | No | 0 |
| Yu Xingxi | 1 | 0 | 1 | 0 | 0 | No | 1 |
| Liu Shen | 11 | 0 | 11 | 0 | 0 | No | 0 |
| Peng Feng | 11 | 1 | 10 | 0 | 0 | No | 0 |
| Qiu Yinfu | 5 | 3 | 2 | 0 | 0 | No | 2 |
| Wu Dongying | 10 | 0 | 10 | 0 | 0 | No | 0 |
Explanation for absent from Board meetings twice in a row (in person)Not applicable
3. Objections from Directors on related issues of the Company
Whether the directors raise any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other details about the performance of duties by Directors
Whether the directors' suggestions on the Company have been adopted
√ Yes □ No
Explanation on the adoption or non-adoption with related suggestions from the directors
□ Applicable √ Not applicable
VII. Special committees under the board of directors during the reporting period
| Name of the committee | Member | Number of meeting convened | Convening date | Details of the meeting | Important opinion and advice | Other performance of duty | Details of objection (if any) |
| Strategic and Risk Management Committee | Composed by 5 directors, including 2 independent directors. | 0 | Independent directors express independent opinions in accordance with regulations | ||||
| Audit Committee | Composed by 3 independent directors. | 2 | February 28, 2022 | Summary of communication between CPA and audit committee (independent director) before audit | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | |
| April 8, 2022 | The communication letter between the CPA participating in the annual report and the independent directors and the audit committee of the board of directors after issuing preliminary audit opinions on the audit report of the company's financial final accounts in 2021 | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | ||||
| Remuneration and Assessment Committee | Composed by 3 independent directors. | 1 | April 8, 2022 | Proposal on the general manager's salary cashing in 2021and the salary and assessment distribution method in 2022 | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | |
| Nomination Committee | Composed by 3 directors, including 2 independent directors. | Independent directors express independent opinions in accordance with regulations |
VIII. Performance of duties by the supervisory committeeWhether the board of supervisors found any risks in the company during the supervision activities during the reporting period
□ Yes √ No
None of those issues under the supervision was objected by the supervisory committee during the reporting period.IX. Personnel of the Company
1. Number of employees, professional composition and education background
| Number of employees in the parent company | 6,374 |
| Number of employees in the main subsidiary | 12,234 |
| Total number of employees | 18,608 |
| Total number of employees receiving salary in the current period | 18,608 |
| Number of retired employees to be borne by parent company and main subsidiary | 1,242 |
| Professional composition | |
| Professional composition category | Number of professional composition |
| Production | 12,619 |
| Salesman | 679 |
| Technician | 2,196 |
| Finance | 294 |
| Administrative | 2,329 |
| Services and other | 491 |
| Total | 18,608 |
| Education background | |
| Type | Quantity |
| Master degree or above | 1,497 |
| Bachelor's degree | 7,895 |
| College | 5,809 |
| Vocational secondary and below | 3,407 |
| Total | 18,608 |
2. Remuneration policies
The middle-level employees of the company implement the annual salary system, and the annual salary structure includes three parts:
basic annual salary, performance annual salary and term incentive. The basic salary is paid monthly. The performance bonus links tothe performing duty monthly or annually, and is distributed monthly and annually in terms of the Responsible Agreement of BusinessObjectives. After performance appraisal at the end of employment term according to the Responsible Agreement of Objective duringThe Employment Term, the incentives bonuses to employment term will be afforded flowing the assessment results.The salary system of front-line and blow staff is composed of occupation salary and benefit salary. The occupation salary isinfluenced by the attendance, and the benefit salary is distributed as the monthly performance on the duty.
3. Training program
In accordance with the national and Beijing Municipal Vocational Skills Improvement action plan, combined with the overallrequirements of the construction of the workforce, Qianshun Base and Zhixin Co. take quality improvement, ability training andtalent value-added as the core, adhere to the combination of theory and practice, learning and summary, and establish the "voyage"development system for the whole life cycle career of high-potential talents. According to the talent positioning needs of differentlevels, such as training reserve, backbone, core, key and strategy, Qianshun Base and Zhixin Co. design talent development andtraining projects at five levels, such as "wave, sail, set sail, pilot and pilot", to form a continuous and progressive high-potential talenttraining and development map, which is continuously promoted in stages and levels. Qianshun Base and Zhixin Co. formulate aseries of talent training implementation projects according to the characteristics of talent ability and growth factors at different stages,effectively realize the unified guidance of high-potential talent training of the three talent sequences and accelerate talent growth.Qianshun Base and Zhixin Co. organized and completed more than 130 training programs at all levels throughout the year, realizingfull coverage of the three talent teams of operation and management, professional technology and skill operation, providing strongsupport for building a team of employees with both political integrity and ability and excellent quality, and constantly enhancingenterprise cohesion and high-quality development.
Jingtang Co. focuses on improving the quality and ability of the staff and continues to expand and grow into a talent platform.Jingtang Co. establishes the correct orientation of personnel selection and employment, pays attention to practical training inundertaking urgent, difficult and heavy tasks, holds training classes for middle management personnel and rotation training classesfor grassroots management personnel, implements "seedling" training and "hanging up" learning for young backbone, andstrengthens the construction of management personnel. Jingtang Co. gives full play to the advantages of school-enterprise jointtraining, and holds the second phase of high-end compound technical personnel training class to improve the ability of professionaland technical personnel. Jingtang Co. continues to carry out skills competition and hierarchical training of team leaders to improvethe operation skills of staff. Jingtang Co. explores the differentiated training path of graduates, focuses on the "Qinglan" training plan,and strengthens the training of reserve force.
4. Outsourcing of labor source
□ Applicable √ Not applicable
X. Porposal for profit distribution and transfer of capital reserve to share capitalFormulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe reporting period
√Applicable □Not applicable
1. Since the establishment, the Company highly valued the investment return for shareholders, the protection for legitimate rights andinterests of all shareholders, especially for the small and medium shareholders. According to various regulations and relevantrequirements issued by the regulatory authority, the Company timely revised and improved the provisions of the profit distributionpolicy in the Articles of Association of the Company, and the standard and proportion of cash dividends shall be explicit and clarity.
2. During the reporting period, profit distribution proposal complied with the provision of profit distribution in the Articles ofAssociation of the Company, complied with the provisions of normative documents issued by CSRC and other regulatory agenciesand fulfilled the procedures for independent directors to issue independent opinions and legal approval.
| Special description on cash dividend policy | |
| Whether it meets the requirements of the Article of Association or the Resolution of the General Meeting (Y/N): | Y |
| Whether the bonus standards and proportion is clear and well-defined (Y/N): | Y |
| Whether has a completed relevant decision-making procedures and mechanism (Y/N): | Y |
| Whether independent directors fulfill duties and play a due role (Y/N): | Y |
| Minority shareholders whether has opportunity of full expression and appeals, the legal interest of the minority are being protected adequately (Y/N): | Y |
| As for the adjustment and change of cash bonus policy, the condition and procedures whether meets regulations and transparent (Y/N): | Y |
The Company was profitable during the reporting period and the Parent Company’s profit available for distribution to shareholderswas positive, but no cash dividend distribution plan was proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends, bonus shares or increase share capital with provident fund.XI. Implementation of the equity incentive plan, employee shareholding plan or otheremployee incentive measures of the Company.
√Applicable □Not applicable
1. Equity incentive
According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-ownedAssets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and theresolution of the Company's first interim general Meeting of shareholders in 2021, the Company implemented the 2021 restrictedstock Incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel andmanagement backbones. The restricted stock grant date is December 9, 2021, and the restricted stock is booked as of December 23,2021.
Information on share option scheme provided to directors and senior management during the reporting period
√Applicable □Not applicable
Unit: share
| Name | Position | Number of Restricted shares held at the beginning of the period | Number of newly granted restricted shares during the reporting period d | Number of shares exercisable during the reporting period | Number of shares exercised during the reporting period | Exercise price of the shares exercised during the reporting period (RMB/ share) | Number of restricted shares held at the end of the period | Market price at the end of the reporting period (RMB/ share) | Number of restricted shares held at the beginning of the period | Number of unlocked shares during the current period | Number of newly granted restricted shares during the reporting period | Grant price of restricted shares (RMB/ share) | Number of restricted shares held at the end of the period |
| Liu Jianhui | Director, General manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 290,000 | 0 | 0 | 290,000 | ||
| Zeng Li | Director | 0 | 0 | 0 | 0 | 0 | 3.77 | 290,000 | 0 | 0 | 290,000 | ||
| Zhang Binglong | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 232,000 | 0 | 0 | 232,000 | ||
| Li Baizheng | Chief accountant | 0 | 0 | 0 | 0 | 0 | 3.77 | 261,000 | 0 | 0 | 261,000 | ||
| Sun Maolin | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 261,000 | 0 | 0 | 261,000 | ||
| Li Jingchao | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 261,000 | 0 | 0 | 261,000 | ||
| Chen Yi | Vice General Manager, Company secretary | 0 | 0 | 0 | 0 | 0 | 3.77 | 261,000 | 0 | 0 | 261,000 | ||
| Xie Tianwei | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 203,300 | 0 | 0 | 203,300 | ||
| Wang Kai | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 3.77 | 203,000 | 0 | 0 | 203,000 | ||
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 2,262,300 | 0 | 0 | -- | 2,262,300 |
| Notes (if any) | |||||||||||||
Evaluation mechanism and incentive of senior managementThe general manager of the company shall implement the annual salary system (including base salary, performance-based annualsalary and term incentive). The Compensation and Appraisal Committee of the Board of Directors shall, in accordance with theprovisions, formulate the 2022 General Manager Salary Appraisal and Distribution Method and put forward the appraisal andimplementation opinions, which shall be submitted to the board of Directors for deliberation and approval before implementation.The assessment of the deputy general manager and other senior management personnel in 2022 shall be assessed and allocated by thegeneral manager (and director) according to the completion of the work tasks of each senior management personnel including thedeputy general manager as authorized by the board of directors.With the approval of Beijing State-owned Assets Supervision and Administration Commission and the approval of the generalmeeting of shareholders of the Company, the Company implements restricted stock incentive for senior managers. According to the2021 Restricted Stock Incentive Plan of Beijing Shougang Co., Ltd. (Revised Draft), the Company's 2022 annual indicators do notmeet the performance assessment conditions of the incentive plan. If 15 incentive objects no longer meet the incentive conditions dueto organizational or personal reasons, the board of Directors of the Company intends to repurchase and cancel the correspondingrestricted shares. Please refer to the relevant announcements disclosed by the company for the above repurchase cancellation matters.
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established a sound internal control system, and timely revised and improved according to the actual operation,giving full play to its institutional guarantee role. During the reporting period, the Company formulated 48 systems including theBoard of Directors' Authorization Management System for Managers and Compliance Management System, and revised 78 systemsincluding the Articles of Association and Rules of Procedure of the Board of Directors. By the end of the report period, the Companyhas 529 systems, among which 516 systems are formulated and implemented by the company and 13 systems are forwarded to thegovernment and regulatory authorities.
2.Particulars of material deficiencies in internal control detected during the reporting period
□Yes √ No
XIII. The Company’s management and control of subsidiaries during the reporting periodNot applicableXIV. Self-assessment report on internal control or auditor’s report on internal control
1. Appraisal Report of Internal Control
| Disclosure date of full internal control evaluation report | 21 April 2023 | |
| Disclosure index of full internal control evaluation report | Beijing Shougang Co., Ltd. 2022 Internal Control Self-Assessment Report, disclosed on CNINFO Website (http://www.cninfo.com.cn/). | |
| Proportion of total assets included in internal control evaluation report accounting for the total assets in the consolidated financial statements | 99.22% | |
| Proportion of operating revenue included in internal control evaluation report accounting for operating revenue in the consolidated financial statements | 99.99% | |
| Defect identification criteria | ||
| Type | Financial Reports | Non-financial reporting |
| Qualitative criteria | 1. General deficiency: it may or has caused slight impact on business activities, which is not an objective reason and has exceeded the budget by 1% - 5% in terms of time, manpower or cost without proper approval; 2. Significant deficiency: it may or has slowed down the business operation, or unable to achieve some business | 1. General deficiency: it may or has temporarily affected the health of employees or the public; may or has caused slight impact on business activities, which is not an objective reason and has exceeded the budget by 1% - 5% in terms of time, manpower or cost without proper approval; negative news may or has caused slight impact on the company, spreading within the company or locally, and will not attract the attention of stakeholders; violation of the company or relevant rules and regulations or conflict with self-made rules and regulations may have caused slight social impact, basically will not lead to the attention of regulators. |
| objectives, or not exceeding the budget by 6% - 20% in terms of time, manpower or cost for non-objective reasons and without proper approval; 3. Material deficiency: (1) it may or has made the company unable to achieve all operating objectives, resulting in business suspension. It is not an objective reason and has exceeded the budget by more than 20% in terms of time, manpower or cost without proper approval, and has exceeded the level of importance; (2) The company has financial related fraud, which affects the accuracy of financial statements. | 2. Significant deficiency: it may or has had a negative impact; it may or has seriously affected the health of many employees or the public, or caused general environmental damage, and the situation needs external support to be controlled; may or has slowed down the business operation, or unable to achieve some business objectives, or not exceeding the budget by 6% - 20% in terms of time, manpower or cost for non-objective reasons and without proper approval; the negative news may or has caused a greater impact on the company, and disseminates in a certain region It has attracted the attention of relevant stakeholders, such as the suspension of cooperation by partners, low efficiency of employees, reduction of customer loyalty, etc.; it has violated national and regional laws and regulations or industry norms, faced with legal proceedings, economic compensation, which may or has caused general social impact, attracted the attention of regulatory agencies, and required regular rectification. 3. Material deficiency: there is causing casualties of many employees and local residents, causing serious damage to the environment and out of control of the situation; may or has made the company unable to achieve all operating objectives, resulting in business suspension. It is not an objective reason and has exceeded the budget by more than 20% in terms of time, manpower or cost without proper approval, and has exceeded the level of importance; the negative information may or has caused significant impact on the company, which is widely spread, causing significant damage to the reputation of the enterprise. The government or regulatory authorities conduct investigation, causing public concern and irreparable damage to the reputation of the enterprise; violating laws and regulations, in the face of business suspension, legal proceedings or economic compensation,; it may or has caused serious social impact; it has been notified or publicly condemned by regulatory authorities, or even ordered to suspend business for rectification. | |
| Quantitative criteria | 1. General misstatement: amount of misstatement < 0.5% of total assets 2. Significant misstatement: 0.5% of total assets≤amount of misstatement < 1% of total assets 3. Material misstatement: 1% of total assets≤amount of misstatement | 1. General misstatement: RMB 100,000≤amount of direct loss < RMB 5,000,000 2. Significant misstatement: RMB 5,000,000≤ amount of direct loss < RMB 10,000,000 3. Material misstatement: RMB 10,000,000≤ amount of direct loss |
| Number of material defects in financial reports | 0 | |
| Number of material defects in non-financial reports | 0 | |
| Number of significant defects in financial reports | 0 | |
| Number of significant defects in non-financial reports | 0 | |
2.Audit report for internal control
√ Applicable □ Not applicable
| Audit opinion on internal control |
| Shougang Co. has kept the effective internal control over financial reporting in all material matters on 31 December 2022, in accordance with the “Basic Standards for Internal Control of Enterprises” and other relevant regulations. |
| Disclosure of internal control audit report | Disclosed |
| Date of disclosure of the internal control audit report | 21 April 2023 |
| Source for the internal control audit report | Searching for: http://www.cninfo.com.cn/. |
| Audit opinion on internal control | Standard unqualified opinion |
| Whether material deficiency over non-financial reporting | No |
Whether non-standard unqualified opinion from independent auditors in the audit report on internal control
□ Yes √ No
Whether there is consistent opinion between the audit report on internal control and the self-assessment report on internal control
√ Yes □ No
XV. Rectification of problems found in self-inspection under the special initiative oncorporate governance of the listed companyThe Company has no problems found in self-inspection under the special initiative on corporate governance of the listed company.
Section V. Environment and Social Responsibility
I. Major environmental protection matters
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection department
√ Yes □ No
Environmental protection related policies and industry standardsThe policies and industry standards related to environmental protection implemented by the Company and its subsidiaries mainlyinclude: Environmental Protection Law of the People's Republic of China, Cleaner Production Promotion Law of the People'sRepublic of China, Air Pollution Prevention and Control Law of the People's Republic of China, Water Pollution Prevention andControl Law of the People's Republic of China, Environmental Pollution Prevention and Control Law of the People's Republic ofChina by Solid Waste, Noise Pollution Prevention and Control Law of the People's Republic of China, Soil Pollution Prevention andControl Law, Environmental Impact Assessment Law of the People's Republic of China, Regulations on the Administration ofPollutant Emission Permits, Regulations of Hebei Province on Ecological and Environmental Protection, Ultra-Low EmissionStandards of Air Pollutants for the Iron and Steel Industry, Regulations of Tangshan City on Ecological and Environmental Protection,etc.Administrative license for environmental protectionDuring the reporting period, Qiangang Co. successively completed the transformation project of steel slag production line pressingball line drying equipment and the EIA approval work of nine general decline project, which ensured the compliance ofenvironmental protection projects in accordance with the law. In September 2017, Qiangang Co. obtained a new version of sewagedischarge permit issued by Tangshan Ecological Environment Bureau of Hebei Province. In November 2022, Qiangang Co. extendedthe sewage discharge permit and obtained a new version of the sewage discharge permit, which is valid unti 29l November 2027.Jingtang Co. adheres to the principle of attaching equal importance to production development and environmental protection, so itcarries out environmental impact assessment of construction projects strictly in accordance with the Environmental ImpactAssessment Law of the People's Republic of China. In the process of project implementation, Jingtang Co. carries out constructionstrictly in accordance with the EIA approval, and all construction projects are supporting the construction of environmental protectionfacilities, environmental protection approval procedures are complete, which meets the requirements of "three simultaneous"management of environmental protection. In August 2017, Jingtang Co. obtained a new version of the sewage discharge permitissued by Tangshan Environmental Protection Bureau, which enabled the construction of the second-phase one-step project toproceed smoothly. In April 2019, Jingtang Co. completed the change of sewage discharge permit and obtained relevant certificates,and incorporated the sewage discharge outlet of the second-phase one-step project into standardized management. In August 2020,Jingtang Co. completed the extension of the sewage discharge permit, with the validity period extended to August 2025. In February2023, the permit was renewed again, this time extending until February 2028.In strict accordance with the Environmental Impact Assessment Law of the People's Republic of China, Regulations on PollutantEmission Permit Management and other laws and regulations, according to the requirements of pollutant emission permit and EIAmanagement, Zhixin Co. continues to improve the post- emission permit management work, and continues to do a good job in EIAand acceptance. In August 2022, Zhixin Co. went through the procedures for changing the sewage discharge permit, which is validuntil July 2026. In July 2022, Zhixin Co. completed the approval procedures for the environmental impact report form of theconstruction project of the environmental protection capacity improvement project of the wastewater station.In October 2017, Cold-R Co. obtained the first pollutant emission permit for key enterprises in Shunyi District, Beijing. In September2020, Cold-R Co. submitted an application for the renewal of the sewage permit in accordance with relevant regulations, and inOctober 2022, the application passed the government review, which extended the validity of the permit to October 2025.
Industrial discharge standards and details of the discharge of pollutants involved in production and business activities
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| Qiangang Co. | Water pollutant | COD (Chemical Oxygen Demand) | Direct | 1 | Wastewater discharge port | 3.64mg/L | 50mg/L | 1.5596 | 648.399 | No |
| Qiangang Co. | Water pollutant | Ammonia Nitrogen | Direct | 1 | Wastewater discharge port | 0.197mg/L | 5mg/L | 0.086025 | 64.899 | No |
| Qiangang Co. | Air pollutants | Sulfur Dioxide | Organized | 32 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 9.54mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 24mg/m?, power generation < 22mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, power generation < 35mg/m? | 883.6218 | 1698.055 | No |
| Qiangang Co. | Air pollutants | Nitrogen Oxides | Organized | 32 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 38mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 34mg/m?, power generation < 33mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, power generation < 100mg/m? | 1545.339 | 3493.843 | No |
| Qiangang Co. | Air pollutants | Particulate Matter | Organized | 129 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, blast furnace iron field dust removal, blast furnace silo dust removal, steelmaking converter secondary dust removal, converter primary dust removal, CCPP combustion exhaust gas, hot rolling heating furnace exhaust gas, environmental dust removal, material transfer exhaust gas | Sintering, pelleting < 3.5mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln, other environment < 7.5mg/m?, power generation < 4mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, power generation < 5mg/m? | 2036.834 | 2524.85 | No |
| Jingtang Co. | Air pollutants | Sulfur Dioxide | Organized | 42 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering, pelletizing < 15mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 25mg/m?, coke oven flue gas < 15mg/m?, coal-fired power generation < 10mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 30mg/m?, coal-fired power generation < 35mg/m? | 2022.4 | 2965.74 | No |
| Jingtang Co. | Air pollutants | Nitrogen Oxides | Organized | 38 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering < 25mg/m?, pelletizing < 30mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 45mg/m?, coal-fired power generation < 30mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, coke oven flue gas < 130mg/m?, coal-fired power generation < 50mg/m? | 5231.9 | 6379.92 | No |
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| Jingtang Co. | Air pollutants | Particulate Matter | Organized | 176 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering, pelletizing < 5mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 8mg/m?, coke oven flue gas < 8mg/m?, coal-fired power generation < 5mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, coke oven flue gas < 10mg/m?, coal-fired power generation < 10mg/m? | 2745.5 | 4330.44 | No |
| Zhixin Co. | Air pollutants | Sulfur Dioxide | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <30mg/m3 | 30mg/m3 | 5.048 | 45 | No |
| Zhixin Co. | Air pollutants | Nitrogen Oxides | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <100mg/m3 | 100mg/m3 | 33.978 | 131.649 | No |
| Zhixin Co. | Air pollutants | Particulate Matter | Organized | 69 | Acid regeneration, continuous annealing furnace, constant annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace, scoring | Acid regeneration < 30 mg/m3, heat treatment furnace, score < 10 mg/m3 | Heat treatment furnace, pull straightening machine, finishing and shot blasting: 10 mg/m3, acid regeneration: 30 mg/m3 | 16.31 | 19 | No |
| Cold-R Co. | Water pollutant | COD | Organized | 1 | Wastewater stations | 8.36-15.93 mg/m3 | 30mg/m3 | 21.345 | 67.5 | No |
| Cold-R Co. | Water pollutant | Ammonia Nitrogen | Organized | 1 | Wastewater stations | 0.01-0.71 mg/m3 | 1.5(2.5) mg/m3 | 0.1681 | 3.937 | No |
| Cold-R Co. | Air pollutants | Sulfur Dioxide | Organized | 8 | Around the plant | 3 mg/m3 | Furnace and dust removal chamber: 20 mg/m3； boiler room: 10 mg/m3 | 3.8524 | 18 | No |
| Cold-R Co. | Air pollutants | Nitrogen Oxides | Organized | 8 | Around the plant | Furnace and dust removal chamber: 1-97 mg/m3； boiler room: 1-79 mg/m3 | Furnace and dust removal chamber: 100 mg/m3； boiler room: 80 mg/m3 | 49.326 | 99.58 | No |
| Cold-R Co. | Air pollutants | Particulate Matter | Organized | 10 | Around the plant | Furnace and dust removal chamber: 1-9 mg/m3； boiler room: 1-4.43 mg/m3 | Furnace and dust removal chamber:10 mg/m3； boiler room: 5 mg/m3 | 18.5014 | 18.75 | No |
Treatment of pollutantsEach production process of Qiangang Co. is equipped with perfect environmental protection facilities, which will be regularlymonitored by qualified testing departments. The test results prove that all dust removal facilities achieve ultra-low emission and theemission concentration of bag dust collector reaches less than 10 mg/m?. The key pollution sources of Qiangang Co. are equippedwith 56 sets of online monitoring systems, including 1 set of online monitoring system for water pollution, which are all connectedwith the ecological environment department. The online monitoring system is compared and monitored quarterly by a qualifiedmonitoring company, which ensures that the data is true and reliable. Qiangang Co. attaches great importance to saving waterresources and reducing wastewater discharge, so it has invested in the construction of two sewage treatment plants, and theconstruction of deep water desalting station, which adopts the international advanced membrane treatment process, can all thewastewater generated in the production process after treatment and recycling, so the water recycling rate of Qiangang Co. reaches
98.4%.
Jingtang Co. has desulfurization denitrification and other waste gas treatment facilities, which can be highly efficient treatment of allkinds of waste gas, but also built complete dust removal facilities, the measures using bag dust removal, plastic burning plate dustremoval, electric dust removal and other ways to remove particulate matter; Coke oven flue gas is removed by moving bed calciumdesulfurization +SCR denitration process. The sintering and pellet were removed by circulating fluidized bed desulfurization andSCR denitration process. Desulfurization of self-built power plant adopts seawater desulfurization +SCR denitration process toremove, and dense coherent tower desulfurization +SCR denitration process to blast furnace hot blast furnace. Jingtang Co. hascomplete wastewater treatment facilities, including coking phenol cyanide sewage treatment system, continuous casting wastewatertreatment system, hot rolling, cold rolling, medium thickness plate, steel rolling wastewater treatment system and comprehensivesewage treatment station, etc. At the same time, the production wastewater generated by steelmaking and other processes is treatedinto the comprehensive sewage treatment station for treatment, so as to achieve coupling zero discharge of wastewater. Jingtang Co.has complete solid waste treatment facilities, including the construction of rotary hearth furnace - zinc resource recycling project,slag fine grinding cement production line, etc., to achieve comprehensive utilization of solid waste. During the reporting period, allthe above environmental protection facilities ran well, and all processes in the whole process reached ultra-low emission standards.Zhixin Co. continues to promote pollutant emission reduction. According to the "Green project" transformation plan, Zhixin Co. hascompleted the denitrification transformation of source treatment project CA1/2/4, which effectively reduces nitrogen oxide emissions.Zhixin Co. reached the ultra-low emission standard of Hebei Province, thanks to the continuous environmental protection capacityimprovement project. According to the requirements, Zhixin Co. has completed the networking of 5 video monitoring systems and 3CEMS, which provides data support for improving the level of environmental protection management.During the reporting period, the pollution prevention and control facilities of Cold-R Co. maintained efficient operation, and allcombustion exhaust gas was generated by using clean fuel natural gas through low nitrogen burners, which minimized theconcentration of pollutants. The dust generated in the production of Cold-R Co. is disposed of by coated bag dust collector, and thefiltration effect reaches 99.99%. The wastewater generated by the cold rolling company is treated by physical, chemical, biochemicaland membrane processes and discharged after treatment. The emission concentration of all pollutants of Cold-R Co. maintains theleading level in China, and the emissions are far lower than the permitted emissions.Environmental self-monitoring programmeAccording to the Measures for Self-Monitoring and Information Disclosure of State Key Monitoring Enterprises (Trial), Measuresfor Supervisory Monitoring and Information Disclosure of Pollution Sources of State Key Monitoring Enterprises (Trial) and otherrelevant provisions, Qiangang Co. has established and improved the pollution source monitoring and information disclosure systemand formulated the Pollutant Emission Monitoring Plan for 2022, and strictly implemented it. In 2022, all environmental monitoringprojects were entrusted to qualified third-party institutions for monitoring, and Qiangang Co. actively organized and coordinatedself-monitoring work and completed monthly monitoring tasks, which strengthened the management of online monitoring operationand maintenance units and achieved 100% annual monitoring completion rate in 2022. Qiangang Co. fully completed the annualnational pollution source monitoring information disclosure work, up to 100%.The environmental monitoring system of Jingtang Co. consists of automatic monitoring and manual monitoring. The manualmonitoring system is entrusted to a third-party testing institution. The automatic monitoring regularly conducts environmentalmonitoring on pollution sources, waste gas, waste water, noise, radioactive sources and other items in the plant according to theSelf-Monitoring Plan of Key Monitoring Enterprises in 2022, and forms monitoring data and reports at the same time. Themonitoring plan for 2022 has been completed, and all environmental control indicators have reached the standard.Zhixin Co. adheres to green development, strictly observes the bottom line of environmental protection, and fully implements themain responsibility of enterprise environmental protection. In 2022, Zhixin Co. will achieve zero pollution of environmentalprotection, 100% synchronous operation of environmental protection facilities, and 100% smooth passing of environmentalprotection inspection. According to relevant laws and regulations, Zhixin Co. formulates self-monitoring plans and strictlyimplements them. While entrusting qualified third-party institutions to conduct monitoring, Zhixin Co. also actively organizesself-monitoring work. In 2022, Zhixin Co. carried out self-monitoring 75 times, reaching the standard rate of 100%.Cold-R Co. shall formulate its own monitoring plan in accordance with the requirements of laws and regulations and sewagedischarge permit, entrust a qualified third-party organization to monitor pollutants on a weekly, monthly and quarterly basis, andupload the data to the government-designated information disclosure system. The emission targets of pollution sources will all meetthe standards in 2022.Contingency planNo ecological and environmental emergencies occurred in the Company and its holding subsidiaries in 2022.In accordance with the Environmental Protection Law of the People's Republic of China and other laws, regulations, rules andnormative documents, Qiangang Co. has formulated the Emergency Plan for Environmental Emergencies. On this basis, QiangangCo. also formulated three special plans respectively: Atmospheric Special Emergency Plan for Environmental Emergencies, WaterSpecial Emergency Plan for Environmental Emergencies and Hazardous Waste Special Emergency Plan for Environmental
Emergencies, which further improved the emergency disposal capacity of air pollution, water pollution and hazardous wasteemergencies.Jingtang Co. identified gas storage cabinets, pipelines, benzene storage tanks, acid storage tanks, liquid ammonia storage tanks andother dangerous chemicals and toxic and harmful substances production and storage areas as emergency rescue dangerous targets.According to the requirements of Shougang Jingtang United Iron&Steel Co., Ltd. 's Emergency Treatment Plan for EnvironmentalEmergencies (Fourth Edition), in 2022, Jingtang Co. carried out 25 emergency drills such as oil leakage emergency drill, oily sludgeleakage emergency drill and radiation accident emergency drill, which ensures that Jingtang Co. can effectively carry out rescue inaccordance with the requirements of the Plan. At the same time, the emergency drills also improve the skills and actual combatability of preventing and dealing with sudden environmental pollution accidents.In accordance with the requirements of laws and regulations, Zhixin Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies, which mainly consists of atmospheric special plan, water special plan, hazardous waste disposal, riskassessment, emergency resource investigation, on-site disposal plan and other plans. In 2022, Zhixin Co. mainly conducted drills foracid leakage, gas leakage and other risk points. Through the drill, Zhixin Co. found problems and rectifies them in time, whichenhanced the company's ability to deal with environmental emergencies.In accordance with the requirements of laws and regulations, Cold-R Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies. According to the plan, Cold-R Co. organizes drills in each workshop every year according to therequirements of the plan, through which problems are found and rectifies in time, which enhances Cold-R Co.'s ability to deal withenvironmental emergencies.Environmental protection input and environmental protection taxDuring the reporting period, Qiangang Co. continued to implement 29 continuous improvement projects such as flue gas treatment ofblast furnace hot blast furnace, increase of denitration facilities for heating furnace of hot rolling section, denitration improvement ofthree-fired particulate matter emission and desulfurization ash transformation, new electric dust removal and fan for the primary lineof desulfurization in recycling industrial park, with an annual investment of RMB785 million. In 2022, Qiangang Co. paidRMB10.2702 million of environmental protection tax, with a reduction of RMB5.8853 million.Jingtang Co. promoted the implementation of 13 key environmental protection and deep treatment projects, including hot rollingfurnace desulfurization, blast furnace hot blast furnace flue gas denitrification, and sleeve kiln flue gas denitrification, with theannual investment of RMB 436 million. In 2022, RMB23.21 million of environmental protection tax was paid, with a reduction ofRMB9.4064 million.Zhixin Co. effectively reduced pollutant emissions by increasing environmental protection treatment facilities, with an annualinvestment of RMB9.8 million. In 2022, RMB759,100 was paid for environmental protection tax, with a reduction of RMB143,800.Cold-R Co. actively promoted environmental management and protection work, with an annual investment of RMB52.636 million.In 2022, RMB698,300 was paid for environmental protection tax, with a reduction of RMB207,400.Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable □ Not applicable
In order to accelerate the implementation of national industrial policies in the company, the Company scientifically and standardizedto promote the development of "carbon management" activities, the company organized the preparation of Shougang Low-carbonAction Plan and Shougang Low-carbon Development Organization Implementation Plan, including the formulation of phased goals,clear realization path and determined the schedule and roadmap. This undoubtedly accelerated the company to build a green andlow-carbon development pattern. The company actively carries out carbon reduction tests, builds LCA basic models for carbonreduction technology, and carries out carbon reduction effect accounting. The Company has completed the environmental productstatement (EPD) report and release of hot rolled steel plate and steel strip products in two bases, which strongly supports the greenmanufacturing of products. The Company started the third-party low-carbon certification work in response to the policies related tothe carbon border adjustment mechanism.Jingtang Co. focuses on the implementation of the "dual carbon" strategy and actively promotes the clean development of energystructure. Jingtang Co. continues to strengthen the basic capacity construction of carbon management, vigorously promote the greenupgrading of low-carbon process, steadily layout revolutionary deep decarbonization technology research, simultaneously promoteprocess carbon reduction and source carbon reduction, and enter the green electricity market transaction and purchase greenelectricity for the first time. To meet customers' carbon reduction needs, Jingtang Co. has steadily promoted the construction of LCAsystem, released EPD of weathering steel, completed the application of green products of key brands such as high-strength steel, andcreated a brand image of green manufacturing.Zhixin Co. focuses on the implementation of the "dual carbon" strategy and actively promotes the clean development of energystructure. Zhixin Co. continues to strengthen the basic capacity construction of carbon management, promote the transformation ofburner and SCR, vigorously promote the green upgrading of low-carbon process, and steadily layout revolutionary deepdecarbonization technology. Zhixin Co. simultaneously promotes process carbon reduction and source carbon reduction, and activelypromotes green electricity use and photovoltaic construction. In 2022, photovoltaic power generation was 2,594,800kwh. To meetcustomers' carbon reduction needs, Zhixin Co. has steadily promoted the construction of LCA system, completed the green designproduct application of two series of non-oriented electrical steel and oriented electrical steel for new energy vehicles and obtainednational recognition, and created a green manufacturing brand image.Cold-R Co. adheres to the concept of green development and integrates carbon reduction into the whole process of development andinto all links of production and operation. By adjusting the product structure in 2022, Cold-R Co. increased the proportion of highvalue-added products and further reduced energy consumption, meanwhile, the carbon emissions decreased by 4.3% year-on-yearthrough such as market procurement of green electricity and photovoltaic power generation and other measures.Administrative penalties imposed due to environmental problems during the reporting periodDuring the reporting period, neither the Company nor its holding subsidiaries were punished by regulatory authorities in respect of
environmental protection. At the same time, the Company urges the shareholding companies to abide by the EnvironmentalProtection Law of the People's Republic of China and other laws, regulations, rules and normative documents.Other environmental information that shall be disclosedOn the basis of adhering to the work of environmental protection, Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co. monitorand manage the national pollution source information and sharing platform and the website of the government environmentalprotection department, as well as establish the information publication platform by themselves. This propagates and displaysenvironmental protection information such as enterprise environmental protection projects, operation of environmental protectionfacilities, name and emissions of main pollution sources, monitoring methods, name of monitoring indicators, comprehensiveutilization of solid waste and so on. This is one of the ways that the company takes the initiative to accept social supervision.Other environmental protection related informationIn order to develop circular economy and low-carbon economy, build resource-saving, environment-friendly and low-carbon orientedenterprises, and achieve sound and rapid development of the company, the Company started the preparation of environmentalresponsibility report at the end of 2016, covering the preparation scope of Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co.and other subsidiaries. In April 2022, the Company's website (http://www.sggf.com.cn) released the 2021 Annual EnvironmentalResponsibility Report of Beijing Shougang Co., Ltd.II.Social responsibility
The Company independently prepared the 2022 annual social responsibility report and submit it to the second board meeting of theeighth session for deliberation. Please refer to the company announcement on 21 April 2023 for details.III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
1. According to the Opinions of the Central Committee of the Communist Party of China on Continuously Appointing the FirstSecretary and Task Force to Key Villages, the deployment of the Organization Department of the Party Committee of BeijingMunicipal Committee and the deployment of the State-owned Assets Supervision and Administration Commission of Beijing, and thearrangement of the Organization Department of the Party Committee of Shougang Group Co., Ltd., the Company and Jingtang Co.each appoint a staff member to serve as the first secretary of the collective economically weak villages of Beijing. Under theleadership of the local Party committee and government, they conscientiously performed their duties and contributed to theimplementation of the rural revitalization strategy.
2. The Company actively fulfills its social responsibilities, expands the achievements of poverty alleviation, implements povertyalleviation through consumption, and helps rural revitalization. In 2022, the Company purchased RMB3.387 million of agriculturalmaterials for poverty alleviation in paired assistance areas.
Section VI. Significant Events
I. Implementation of commitment
1.Commitments made by the company's actual controller, shareholders, related parties, acquirers and the company andother committed parties have been fulfilled during the reporting period and have not been fulfilled by the end of thereporting period
√ Applicable □ Not applicable
| Commitment | Commitment party | Type | Contents | Commitment date | Commitment term | Implementation |
| Commitment in assets restructuring | Shougang Group Co., Ltd. | 1.According to the iron and steel industry development plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron and steel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of Shougang Group's iron and steel and upstream iron ore resources business in China 2. As for the other companies of Shougang Group engaged in iron and steel production business, if the profits could be achieved for three consecutive years through optimizing and adjusting the product structure and actively implementing national industrial policies and environmental protection requirements, and the overall situation of the industry does not appear large fluctuation, Shougang Group will activate the manners in line with the interests of shareholders of listed companies, including but not limited to acquisition, merger, reorganization, etc. to invest relevant high-quality assets in Shougang Co. in accordance with the requirements of securities laws, regulations and industrial policies, and will complete the investment within 36 months after start-up. | 27 Dec. 2018 | Refer to contents of commitment | Implementing. In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. | |
| Shougang Group Co., Ltd. | When the market improves in the future, Shougang Mining Corporation achieves stable profits for two consecutive years, and the overall situation of the industry is not fluctuated greatly, Shougang Corporation will start the injection of Shougang Mining Corporation in Shougang Co. and complete it within 36 months. Before Shougang Mining Corporation joined in Shougang Co., Shougang Group will urge Shougang Mining Corporation to conduct necessary related party transactions with Shougang Co. in accordance with fair and reasonable market price, strictly conform to the requirements of laws and regulations, normative documents, the articles of association of Shougang Co. and related transaction management system, and perform the corresponding review, approval and information disclosure procedures for the necessary related transactions between Shougang Co. and Shougang Mining Corporation. | 20 Apr. 2017 | Refer to contents of commitment | Implementing. | ||
| Shougang Group Co., Ltd. | The company will not damage the independence of Shougang Co. due to the increase of the proportion of shares held by Shougang Co. after the completion of the reorganization. The company will maintain "the five-aspect separation principle", which means assets, personnel, financial affairs, institution and business should be independent of Shougang Co., strictly conform to relevant provisions of the CSRC on the independence of listed companies, not illegally utilize Shougang Co. to provide guarantees, not illegally occupy the assets of Shougang Co. and keep and maintain the independence of Shougang Co. | 20 Jul. 2012 | After the completion of assets reorganization (completion date: 25 April 2014) | Implementing of the long-term commitment. |
| Shougang Group Co., Ltd. | Shougang Group is the largest shareholder and controlling shareholder of Shougang. On July 17, 2012, Shougang Group issued the "Letter of Commitment of Shougang Corporation on Reducing and Standardizing Related Party Transactions" (i.e. the commitments listed above, hereinafter referred to as the "original letter of commitment"), and promised that after the completion of major asset replacement purchase of assets by issuing shares between Shougang Co., and Shougang Group [hereinafter referred to as "the previous major asset restructuring (completed on April 25, 2014)", Shougang Group will take relevant measures including joining Shougang Mining Company into Shougang Co., to reduce and standardize related party transactions with Shougang Co. In order to reduce and standardize the related party transactions after the major asset replacement and related party transactions of Shougang Co. and safeguard the legitimate rights and interests of Shougang Co. and its public shareholders, the company promises to continue to fulfill the contents of the original commitment letter after the major asset replacement, and further promises as follows: 1. The company will perform its obligations as the controlling shareholder of Shougang Co. in good faith, try to avoid and reduce the related transactions with Shougang Co. (including the enterprises it controls); as for the related transactions, which are unavoidable or occur for reasonable reasons between the company and other enterprises under the control of the company, and Shougang Co. and the enterprises it controls, the company will not require or accept the more favorable conditions provided by Shougang Co. than the conditions to an independent third party in any fair market transaction. The company and other enterprises under the control of the company will sign a standardized related party transaction agreement with Shougang Co. in accordance with the law, follow the market principles of openness, fairness and justice, in accordance with fair and reasonable market price, conform to relevant provisions of laws, regulations and normative documents in the decision-making procedures of related transactions and disclose information in accordance with the law. 2. The company and other enterprises controlled by the company will not obtain any improper benefits or make Shougang Co. bear any improper obligations through related party transactions with Shougang Co. or the enterprises controlled by Shougang Co. 3. The company will be liable for the losses to Shougang Co. and the enterprise controlled by Shougang Co. due to the related party transactions with them in violation of the above commitments. | 29 Sep. 2015 | During and after the assets replacement | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Co.) to complete relevant matters: 1. The company promises to urge Jingtang Co. not to actually carry out port operation business of general bulk cargo berth project (552-meter shoreline wharf project) without obtaining formal or temporary port operation license. 2. The company promises to urge Port Co. not to actually carry out port operation business of general wharf project (1600-meter shoreline wharf project) without obtaining formal or temporary port operation license. | 29 Sep. 2015 | Refer to contents of commitment | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Company) to complete relevant matters: 1. Shougang Group promises to urge Jingtang Co. to complete the overall acceptance procedures of supporting wharf project (1240-meter shoreline wharf project) and obtain the formal port operation license before 31 December 2022, and carry out port operation business in accordance with the requirements of relevant competent departments. 2. Shougang Group promises to urge Jingtang Co. to complete the application of ownership certificate of all self-built houses of Jingtang Co. before 31 December 2022. | 23 Dec. 2022 | Refer to contents of commitment | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., the company made the following commitments in urging Jingtang Co. and its holding subsidiary, Port Company, to complete the relevant matters of obtaining land use right certificate: The company promises to urge Jingtang Co. to obtain state-owned land use right certificate of all the land used before 31 December 2023, including but not limited to the land used by Jingtang Co. Phase I project, Jingtang Co. supporting wharf project (1240-meter shoreline wharf project), general bulk cargo berth project (552-meter shoreline wharf project) and Jingtang Co. Phase II project. | 31 Dec. 2023 | Implementing |
| Beijing Jingtou Investment Holding Co., Ltd. | 1. When the company obtains the shares of the listed company through the issuance of shares to purchase assets, if the equity interests of Jingtang Co. held by the company have reached 12 months, the shares of the listed company acquired by the company in this transaction shall not be traded or transferred in any way within 12 months from the end of the issuance of shares; If the equity interests of Jingtang Co. held by the company are less than 12 months, the shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date of the end of share issuance. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authorities, the company will adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authorities. | 21 May. 2021 | 20 May. 2022 | The performance has been completed. The restricted shares held by Beijing Jingtou Investment Holding Co., Ltd. were lifted from the restriction on May 23, 2022 | ||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | The shares of the listed company acquired by the Fund as a result of the purchase of assets through the issuance of shares shall not be transferred within 36 months from the date of the completion of the issuance of shares. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. | 21 May. 2021 | 20 May. 2024 | Implementing | ||
| Shougang Group Co., Ltd. | 1. The shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date when the shares are issued. However, transfers permitted by applicable law are not subject to this restriction. Within six months after completion of the transaction, if the closing price of the shares of the listed company for 20 consecutive trading days is lower than the issuing price of the shares, or the closing price at the end of six months after the completion of this transaction is lower than the issue price of this share, the locking period of shares obtained by the company through this transaction will be automatically extended for six months on the basis of the above locking period. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authority, the company shall adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authority. | 20 Dec.2021 | 19 Apr. 2025 | Implementing | ||
| Shougang Group Co., Ltd. | The Asset Appraisal Report evaluates partial of intellectual property rights of Jingtang Co. and Shanxi Coking Co., Ltd. (hereinafter referred to as "performance commitment assets") based on future earnings expectations. The appraisal value of 1,346 patent rights, 190 proprietary technologies, 32 software copyrights and other assets of Jingtang Co. is RMB 242.8 million, and the appraisal value of 57 patent rights assets of Shanxi Coking Co., Ltd. is RMB 40 million. In accordance with the forecast income sharing of the performance committed assets, if the purchase of assets by issuing shares is completed before 31 December 2022, Shougang Group commitments that, in 2022, 2023 and 2024, the total income sharing of performance commitment assets in the current period shall be no less than RMB 90.9182 million, RMB 79.414 million and RMB 61.5618 million respectively. If the above performance commitments are not met, please refer to "Performance Commitments and Impairment Compensation Arrangements" in Beijing Shougang Co., Ltd. 's Report on Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions issued by the Company for detailed compensation methods and arrangements. | 20 Dec.2021 | 31 Dec. 2024 | Implementing. The commitments for 2022 have been fulfilled | ||
| Completed on time | Yes | |||||
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period,explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party during the reporting period.III. External guarantees against the rules and regulations
□ Applicable √ Not applicable
No external guarantee provided by the Company which against the rules and regulations during the reporting period.
IV. Opinions of the Directors regarding the latest modified auditor’s report
□ Applicable √ Not applicable
V. Explanation from board of directors, supervisory committee and independent directors (ifapplicable) for audit report with modified opinion.
□ Applicable √ Not applicable
VI. Changes in accounting policies, accounting estimates or correction of major accountingerrors as compared to the financial report for the prior year
√ Applicable □ Not applicable
Please refer to Section X, Changes in Significant Accounting Policies and Estimates for details.
VII. Explanation on the change in the scope of consolidated financial statements during thereporting period as compared to financial report of the previous year
√ Applicable □ Not applicable
Please refer to Section X, Changes in the Scope of Consolidation for details.VIII. Appointment and non-reappointment (dismissal) of CPACurrent accounting firm
| Name of domestic accounting firm | Grant Thornton LLP. |
| Remuneration for domestic accounting firm (RMB 0,000) | 180 |
| Continuous life of auditing service for domestic accounting firm (year) | 23 |
| Name of domestic CPA | Qian Bin, Yu Qike |
| Continuous life of auditing service for domestic accounting firm (year) | 5 |
Whether to change the accounting firm during the audit period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company engaged Grant Thornton LLP. as the auditor for internal control of the Company for 2022.
IX. Suspension and termination of listing after disclosure of annual report
□ Applicable √ Not applicable
X. Insolvency or restructuring related matters
□ Applicable √ Not applicable
No insolvency or restructuring related matters during the reporting period
XI. Material litigation or arbitration cases
□ Applicable √ Not applicable
No material litigation or arbitration cases during the reporting period.
XII. Punishment or rectification
□ Applicable √ Not applicable
No punishment or rectification during the reporting period.XIII. Integrity of the Company and its controlling shareholders and actual controllers duringthe reporting period
□ Applicable √ Not applicable
XIV. Material related party transactions
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Transaction price | Related transaction price (RMB’0,000) | Proportion in similar transactions | Approved transaction quota (RMB’0,000) | Whether it exceeds the approved quota(Y/N) | Related transaction settlement methods | Available market prices for similar transactions | Date of disclosure | Disclosure index |
| Shougang Group and its subsidiaries | Parent company | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 4,968,948 | 6,233,440 | N | Cash at bank and on hand | Market price | 1 April 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network (http://www.cninfo.com.cn) | |
| Shougang Group and its | Parent company | Related sales | Steel, solid waste, | Market price | Market price | 290,163 | 442,928 | N | Cash at bank and on hand | Market price | 1 April 2022 | Ditto |
| subsidiaries | power energy, etc | ||||||||||||
| Other related parties | Joint venture and associates | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 2,689,401 | 2,504,924 | N | Cash at bank and on hand | Market price | 1 April 2022 | Ditto | |
| Other related parties | Joint venture and associates | Related sales | Steel, power energy, etc | Market price | Market price | 402,571 | 532,738 | N | Cash at bank and on hand | Market price | 1 April 2022 | Ditto | |
| Total | -- | -- | 8,351,083 | -- | 9,714,030 | -- | -- | -- | -- | -- | |||
| Details of large sales returns | No | ||||||||||||
| The Company classifies the daily related transactions by category and estimates the transaction amount that will take place in the current period, and discloses the actual transaction amount (if any) | The Company estimates the daily related Party transactions to occur based on the total amount. The Proposal on the Daily Related Party Transactions in January-February 2022 and the Expected Daily Related Party Transactions in 2022 was deliberated and approved by the first interim meeting of the Board of Directors of the Company in 2022 on March 31, 2022, and submitted to the company's 2021 Annual General Meeting of shareholders on June 29, 2022 for approval. The total amount of transactions approved by the general meeting of shareholders in the current period was RMB 9,7140.3 million, and RMB 8,3510.83 million occurred in the current period, which did not exceed the approved quota. For details of the related parties and related party transactions, please refer to Section X. | ||||||||||||
| The reason for the material difference between the transaction price and the market reference price (if applicable) | Not Applicable | ||||||||||||
2. Related party transactions by assets or equity acquisition and sold
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Carry value of assets transferred (RMB’0,000) | Evaluation value of assets transferred (RMB’0,000) | Tranfer price (RMB’0,000) | Related transaction settlement methods | Profit or loss of the transaction (RMB’0,000) | Date of disclosure | Disclosure index |
| Shougang Group Co., Ltd. | The controlling shareholder of the Company | Asset purchase | Purchase 49% equity of Steel Trading Co. held by Shougang Group Co., Ltd. by issuing shares | Evaluation price | 527,388.42 | 585,895.82 | 585,895.82 | Issue shares to purchase assets | 0 | 19 March 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network (http://www.cninfo.com.cn) |
| Shougang Group Co., Ltd. | The controlling shareholder of the Company | Asset purchase | Acquisition of pellet-sintering assets held by Shougang Mining Corp. for cash | Evaluation price | 105,815.03 | 130,032.58 | 130,032.58 | Cash purchase | 0 | 16 November 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network (http://www.cninfo.com.cn) |
| The reason for the material difference between the transfer price and the carrying value or evluation value (if applicable) | Not applicable | ||||||||||
| Impact on the operation results and financial position of the Company | (1) The transaction of "Purchasing 49% equity of Steel Trading Company held by Shougang Group Co., Ltd. by issuing shares" aims to fulfill the commitment of Shougang Group to build Shougang Shares into the only listing platform of the group's steel sector, realize the agglomeration of main steel assets of Shougang Shares, and improve the overall profitability. Through this transaction, the independence of listed companies can be further enhanced in terms of equity structure, the control and decision-making efficiency of listed companies over subsidiaries can be improved, so as to better realize the optimal allocation of resources within the listed company system, and ensure the long-term steady development of the main steel industry of listed companies. (2) The transaction of "Acquisition of pellet-sintering assets held by Shougang Mining Corp. for cash." is to fulfill the commitment made by Shougang Group during the material assets restructuring of Shougang Shares in 2014. After the completion of this related party transaction, the related party transaction between Shougang Shares and Shougang Group will be effectively reduced, the coordination of the whole process of the company will be strengthened, the steel production process will be more perfect, which will help improve the management efficiency and enhance the overall profitability and comprehensive strength of the Company. | ||||||||||
| Performance achievement during the reporting period if thtere is any performance agreement attached in related transaction | Not applicable | ||||||||||
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No related party transactions in respect of jointly investment during the reporting period.
4. Related creditor's rights and debts
√ Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Applicable √ Not applicable
No related creditor's rights and debts in the reporting period
5. Transactions with related financial companies
√ Applicable □ Not applicable
Deposit
| Related party | Relationship with the Company | Maximum daily deposit limit (RMB’0,000) | Range of deposit interest rate | Beginning balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total deposit amount of current period (RMB’0,000) | Total withdrawal amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | 1,600,000 | 1.40%-2.05% | 999,359.98 | 16,634,650.5 | 16,755,744.15 | 878,266.33 |
Loan
| Related party | Relationship with the Company | Amount (RMB’0,000) | Loan interest rate range | Beginning balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total loan amount of current period (RMB’0,000) | Total repayment amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | 3,200,000 | 2.35%-4.05% | 1,598,419.9 | 2,312,109.54 | 2,108,840.02 | 1,801,689.43 |
Credit granting or other financial services
| Related party | Relationship with the Company | Business types | Total amount(RMB’0,000) | Actual amount(RMB’0,000) |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | Credit | 3,200,000 | 1,801,689.43 |
6. Transactions between financial companies controlled by the company and related parties
□ Applicable √ Not applicable
The Company has no deposits, loans, credits, or other financial services between the financial companies controlled by the Companyand the related parties
7. Other significant related party transactions
□ Applicable √ Not applicable
No other significant related party transaction of the Company during the reporting period.XV. Material contracts and implementation
1. Entrustment, contract and leasing
(1) Entrustment
□ Applicable √ Not applicable
No entrustment during the reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing during the reporting period.
2. Material guarantees
√ Applicable □ Not applicable
Unit: RMB0,000
| External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 8 June 2022 | 21,000 | 20 September 2022 | 18,200 | Guarantee of joint and several liability | One year | No | Yes | ||
| Ningbo Shougang Zhejin Steel Co., Ltd. | 8 June 2022 | 4,400 | 29 August 2022 | 2,400 | Guarantee of joint and several liability | One year | No | Yes | ||
| Total external guarantees approved during the reporting period (A1) | 25,400 | Total actual external guarantees during the reporting period (A2) | 20,600 | |||||||
| Total external guarantees approved at the end of the reporting period (A3) | 25,400 | Balance of total actual guarantees at the end of the reporting period (A4) | 20,600 | |||||||
| Guarantees between the Company and its subsidiaries | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shanghai Shougang Steel & Iron Trading Co., Ltd. | 8 June 2022 | 16,050 | 0 | Guarantee of joint and several liability | One year | No | Yes | |||
| Total amount of guarantee provided for subsidiaries approved during the reporting period (B1) | 16,050 | Total amount of guarantee provided for subsidiaries during the reporting period (B2) | 0 | |||||||
| Total amount of guarantee provided for subsidiaries approved as at the end of the reporting period (B3) | 16,050 | Total balance of guarantee provided for subsidiaries as at the end of the reporting period (B4) | 0 | |||||||
| Guarantees between subsidiaries | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Total amount of guarantee provided (i.e. sum of the above three guarantee amount) | ||||||||||
| Total amount of guarantee approved during the reporting period (A1+B1+C1) | 41,450 | Total amount of guarantee during the reporting period (A2+B2+C2) | 20,600 | |||||||
| Total amount of guarantee approved as at the end of the reporting period (A3+B3+C3) | 41,450 | Total balance of guarantee as at the end of the reporting period (A4+B4+C4) | 20,600 | |||||||
| The percentage of total amount of guarantee provided (i.e. A4+B4+C4) to the net assets of the Company | 0.43% | |||||||||
| Including: | ||||||||||
Explanation of the specific situation of using composite guarantee
3. Entrusted asset management, entrusted loans and other wealth management and derivatives investment
(1) Entrusted asset management and other wealth management and derivatives investment
□ Applicable √ Not applicable
No entrusted asset management and other wealth management and derivatives investment during the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
No entrusted loan during the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts during the reporting period.
XVI. Explanation of other significant matters
√ Applicable □ Not applicable
On March 18, 2022, the Company received the reply of Approval for Beijing Shougang Co., Ltd. to issue shares to Shougang GroupCo., Ltd. to purchase assets and raise supporting funds (CSRC License [2022] No. 553) issued by China Securities RegulatoryCommission.On April 20, 2022, the Company completed the issuance of 1,015,417,369 shares to Shougang Group Co., Ltd. to purchase theremaining 49% equity of Beijing Shougang Steel Trading Investment Management Co., Ltd. On June 7, 2022, the Companycompleted the issuance and listing of 54,126,391 non-publicly offering shares with supporting raised funds. The total share capital ofthe Company increased to 7,819,869,170 shares.XVII. Significant matters of subsidiaries of the Company
√ Applicable □ Not applicable
1. In April 2022, Zhixin Co. and New-E Co. and its wholly-owned subsidiary Shougang Qian'an New Energy Automobile ElectricalSteel Co., Ltd. (hereinafter referred to as "Qian'an Electrical Steel") signed the "Absorption and Merger Agreement betweenShougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., Shougang Qian'an New Energy Automobile Electrical Steel Co., Ltd.,and Beijing Shougang New Energy Automobile Material Technology Co., Ltd.". The agreement stipulates the relevant content ofzhixin electromagnetic absorption and Qian'an Electrical Steel. After the completion of the merger, the New-E Co. becomed theshareholder of Zhixin Electromagnetic, with the equity ratio of 8.9042%, and the equity ratio of Zhixin Co. held by the Companychanged to 75.3989%.
2. In December 2022, the Company signed the "Capital Increase Agreement on Shougang Zhixin Qian'an Electromagnetic MaterialsCo., Ltd." with Zhixin Co., the original shareholders of Zhixin Co. and all investors participating in the capital increase, and theinvestors jointly invested RMB 2 billion to become the strategic investors of Zhixin Co. After the completion of the project, theCompany holds 68.0293% of the shares of Zhixin Co.
Section VII. Movements in share capital and shareholdersI. Share movement
1. Share movement
Unit: share
| Before change | Increase (/decrease) during the year | After change | |||||||
| Amount | Ratio | New shares issued | Bonus issue | Converted from reserves | Others | Subtotal | Amount | Ratio | |
| I. Restricted shares | 1,693,222,164 | 25.08% | 1,069,543,760 | -956,202,095 | 113,341,665 | 1,806,563,829 | 23.10% | ||
| 1. State ownership | |||||||||
| 2. State-owned corporation shares | 1,467,185,339 | 21.74% | 1,015,417,369 | -740,940,679 | 274,476,690 | 1,741,662,029 | 22.27% | ||
| 3. Shares held by other domestic investors | 190,420,387 | 2.82% | 54,126,391 | -179,644,978 | -125,518,587 | 64,901,800 | 0.83% | ||
| Of which: Shares held by domestic legal persons | 125,518,587 | 1.86% | 54,126,391 | -179,644,978 | -125,518,587 | ||||
| Shares held by domestic natural persons | 64,901,800 | 0.96% | 64,901,800 | 0.83% | |||||
| 4.Foreign ownership | 35,616,438 | 0.53% | -35,616,438 | -35,616,438 | |||||
| Of which: Shares held by overseas legal persons | 35,616,438 | 0.53% | -35,616,438 | -35,616,438 | |||||
| Shares held by overseas natural persons | |||||||||
| II. Non-restricted shares | 5,057,103,246 | 74.92% | 956,202,095 | 956,202,095 | 6,013,305,341 | 76.90% | |||
| 1. RMB ordinary shares | 5,057,103,246 | 74.92% | 956,202,095 | 956,202,095 | 6,013,305,341 | 76.90% | |||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4.Others | |||||||||
| III. Total number of shares | 6,750,325,410 | 100.00% | 1,069,543,760 | 1,069,543,760 | 7,819,869,170 | 100.00% | |||
Reasons of shares movements
√Applicable □ Not applicable
Beijing Shougang Co., Ltd. issued shares to purchase assets and raised supporting funds according to the "Reply on Approval forBeijing Shougang Co., Ltd. to issue shares to Shougang Group Co., Ltd. to purchase assets and raise supporting funds" issued byChina Securities Regulatory Commission (CSRC License [2022] No. 553). As of the close of market on 19 April 2022, the companypurchased 1,015,417,369 shares issued by Shougang Group Co., Ltd. holding 49% equity of Beijing Shougang Steel TradingInvestment Management Co., Ltd. and registered them in the account, which were listed on 20 April 2022; As of the close of themarket on 6 June 2022, 54,126,391 non-publicly offering shares of the Company's supporting funds have been registered and listedon 7 June 2022.Approval of share movements
√ Applicable □ Not applicable
On 18 March 2022, the Company received the reply of Approval for Beijing Shougang Co., Ltd. to issue shares to Shougang GroupCo., Ltd. to purchase assets and raise supporting funds (CSRC License [2022] No. 553) issued by China Securities RegulatoryCommission, and the Company completed the work of purchasing assets by issuing shares and raising supporting funds accordingly.Transfer of shares arising from changes in shareholding
□ Applicable √ Not applicable
Influences of shares movements on basic EPS, diluted EPS, net assets per share attributable to common shareholders of the companyand other financial indicators for both the latest year and the latest period
√ Applicable □ Not applicable
During the reporting period, after the Company completed the above issuing shares to purchase assets and raising supporting funds,the earnings per share and net asset per share of the Company during the reporting period and the latest period has been diluted due tothe expansion of the total share capital of the Company.Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Movements of restricted shares
√ Applicable □ Not applicable
Unit: share
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Shougang Group Co., Ltd. | 232,286,354 | 1,015,417,369 | 0 | 1,247,703,723 | Reasons for restricted sales of 232,286,354 shares: The commitment made by Shougang Group when the Company was first restructured. For details, please refer to the company's announcements in "China Securities Journal" "Securities Times" "Shanghai Securities News", CNINFO (http://www.cninfo.com.cn)on 28 September 2019. Reasons for restricted sales of other shares: Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | The restriction can be lifted after the performance of the commitment; 19 April 2025 |
| Beijing Jingtou Investment Holding Co., Ltd. | 740,940,679 | 0 | 740,940,679 | 0 | For details, please refer to the relevant announcement issued by the Company on 20 May 2021. Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | 23 May 2022 |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 493,958,306 | 0 | 0 | 493,958,306 | For details, please refer to the relevant announcement issued by the Company on 20 May 2021. Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | 20 May 2024 |
| Shanxi Coking Coal Group Finance Co., Ltd. | 39,138,943 | 0 | 39,138,943 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Qingdao Haidayuan Procurement Service Co., Ltd. | 39,138,943 | 18,587,360 | 57,726,303 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021 and 2 June 2022. | 5 January 2022; 7 December 2022 |
| UBS AG | 35,616,438 | 0 | 35,616,438 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Shanghai Blueink Investment Management Co., Ltd.-Blueink exclusive No. 5 private equity investment fund | 19,569,471 | 0 | 19,569,471 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shanghai C&D Material Co., Ltd. | 9,784,735 | 0 | 9,784,735 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Qianhe Capital Management Co., Ltd.-Yun Jin No. 2 private equity investment fund | 6,007,827 | 0 | 6,007,827 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Qianhe Capital Management Co., Ltd.-Yun Jin No. 3 private equity investment fund | 6,007,827 | 0 | 6,007,827 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shanghai Boshen Investment LP- Boshen No. 21 securities investment private equity fund | 5,870,841 | 0 | 5,870,841 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Xin'an Growth Investment Partnership(LP) No.9 private equity investment fund | 0 | 3,717,472 | 3,717,472 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Xin'an Growth Investment Partnership(LP) No.1 private equity investment fund | 0 | 3,717,472 | 3,717,472 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Zhong Ou Asset Management Company Limited | 0 | 6,505,576 | 6,505,576 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Sunshine Asset - Industrial and Commercial Bank of China - actively allocate No. 2 asset management product | 0 | 3,717,472 | 3,717,472 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Huashi Haorui (Wuhan) Asset Management Co., Ltd. - Wuhan Hua Shijinhong Private Equity Investment Fund Partnership (Limited Partnership) | 0 | 7,434,944 | 7,434,944 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Lord Abbert China Asset Management Co., Ltd. | 0 | 3,754,646 | 3,754,646 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Caitong Fund Management Co., Ltd. | 0 | 6,691,449 | 6,691,449 | 0 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the transfer the shares within 6 months after the completion of the issue is prohibited according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 June 2022. | 7 December 2022 |
| Shougang Directors, senior executives and other equity incentive objects (386 persons in total) | 64,901,800 | 0 | 0 | 64,901,800 | In accordance with relevant regulations, the Company's 2021 restricted stock incentive plan will arrange the lock-up period of the restricted stock grants. For details, please refer to the relevant announcement issued by the Company on 13 November 2021. | The restricted shares granted will be restricted for 24, 36 and 48 months from the date of registration of the grant, i.e., 24 December 2023, 24 December 2024 and 24 December 2025, respectively. |
| Total | 1,693,222,164 | 1,069,543,760 | 956,202,095 | 1,806,563,829 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting period
√ Applicable □ Not applicable
| Name of Stock and derivative securities thereof | Issue date | Issue price (interest) | Issue amount | Listing date | Approved amount for listing | Termination date for trading | Disclosure index | Disclosure date |
| Stock | ||||||||
| Ordinary A-share | 7 April 2022 | RMB 5.77 per share | 1,015,417,369 | 20 April 2022 | 1,015,417,369 | For details, please refer to "Beijing Shougang Co., Ltd. 's Implementation of Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions & Listing Notice of Newly Added Shares" disclosed by the company on http://www.cninfo.com.cn. | 19 April 2022 | |
| Ordinary A-share | 25 May 2022 | RMB 5.38 per share | 54,126,391 | 7 June 2022 | 54,126,391 | For details, please refer to the Announcement of Beijing Shougang Co., Ltd. on completion of registration for Restricted Stock Grants under the 2021 Restricted Stock Incentive Plan in "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network. | 2 June 2022 | |
Description of securities issuance (excluding preference shares) during the reporting periodBeijing Shougang Co., Ltd. issued shares to purchase assets and raised supporting funds according to the "Reply on ApprovingBeijing Shougang Co., Ltd. to issue shares to Shougang Group Co., Ltd. to purchase assets and raise supporting funds (CSRCLicense [2022] No. 553) issued by China Securities Regulatory Commission. As of the close of market on April 19, 2022, theCompany purchased 1,015,417,369 shares issued by Shougang Group Co., Ltd. holding 49% equity of Beijing Shougang SteelTrading Investment Management Co., Ltd. and registered them in the account, which were listed on April 20, 2022; As of the close ofthe market on June 6, 2022, 54,126,391 non-publicly offering shares of the Company's supporting funds have been registered andlisted on June 7, 2022.
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
√ Applicable □ Not applicable
Beijing Shougang Co., Ltd. issued shares to purchase assets and raised supporting funds according to the " Reply on ApprovingBeijing Shougang Co., Ltd. to issue shares to Shougang Group Co., Ltd. to purchase assets and raise supporting funds (CSRCLicense [2022] No. 553) issued by China Securities Regulatory Commission. As of the close of market on April 19, 2022, thecompany purchased 1,015,417,369 shares issued by Shougang Group Co., Ltd. holding 49% equity of Beijing Shougang SteelTrading Investment Management Co., Ltd. and registered them in the account, which were listed on April 20, 2022; As of the close ofthe market on June 6, 54,126,391 non-publicly offering shares of the Company's supporting funds have been registered and listed onJune 7, 2022. The above shares were listed on June 7, 2022, increasing the total share capital of the company from 7,765,742,779shares to 7,819,869,170 shares and changing the shareholder structure.The Company's issuance of shares to purchase assets has no effect on the Company's assets and liabilities; Additional issuance ofshares to raise matching funds increased current assets and owners' equity.
3. Current internal staff shares
□ Applicable √ Not applicable
III. Shareholders and the actual controller
1. Amount of shareholders and shareholding
Unit: Share
| Total common stock shareholders in reporting period-end | 100,134 | Total common stock shareholders at end of last month before annual report disclosed | 0 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note 8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (found in note 8) | 0 | ||||||||
| Shareholders holding above 5% or top 10 shareholders | |||||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of unrestricted shares held | Shares pledged or frozen | ||||||||
| Status | Amount | ||||||||||||||
| Shougang Group | State-owned corporation | 56.53% | 4,420,769,800 | 1,015,417,3690 | 1,247,703,723 | 3,173,066,077 | ||||
| Baowu Group | State-owned corporation | 10.15% | 793,408,440 | 0 | 793,408,440 | |||||
| Beijing Jingtou Investment Holding Co., Ltd. | 9.48% | 740,940,679 | 0 | 740,940,679 | ||||||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 6.32% | 493,958,306 | 493,958,306 | 0 | ||||||
| Sunshine Life Insurance Co., Ltd. - Traditional insurance products | 0.98% | 76,692,529 | 0 | 76,692,529 | ||||||
| National Social Security Fund - Eight combinations | 0.86% | 67,547,683 | 0 | 67,547,683 | ||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | 0.72% | 56,159,243 | 0 | 56,159,243 | ||||||
| Liu Wei | 0.69% | 54,000,000 | 0 | 54,000,000 | ||||||
| Hong Kong Securities Clearing Company Limited | 0.56% | 43,730,398 | 0 | 43,730,398 | ||||||
| Beijing Yizhen Technology Development Co., Ltd. | 0.49% | 38,206,800 | 0 | 38,206,800 | ||||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (found in note 10) | Not applicable | |||||||||
| Related or acting-in-concert parties among the shareholders above | Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. In addition, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | |||||||||
| Above shareholders involved in entrusting / being entrusted with voting rights and giving up voting rights | Not applicable | |||||||||
| Special account for share repurchases (if any) among the top 10 shareholders(found in note 10) | Not applicable | |||||||||
| Shareholding of the top 10 shareholders unrestricted shares held | ||||||||||
| Name of shareholders | Amount of unrestricted shares held at period-end | Type of shares | ||||||||
| Type | Amount | |||||||||
| Shougang Group | 3,173,066,077 | |||||||||
| Baowu Group | 793,408,440 | |||||||||
| Beijing Jingtou Investment Holding Co., Ltd. | 740,940,679 | |||||||||
| Sunshine Life Insurance Co., Ltd.- Traditional insurance products | 76,692,529 | |||||||||
| National Social Security Fund - eight combinations | 67,547,683 | |||||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | 56,159,243 | |||||||||
| Liu Wei | 54,000,000 | |||||||||
| Hong Kong Securities Clearing Company Limited | 43,730,398 | |||||||||
| Beijing Yizhen Technology Development Co., Ltd. | 38,206,800 | |||||||||
| Shanxi Coking Coal Group Finance Co., Ltd. | 32,155,928 | |||||||||
| Connected associated relationship or acting in concert among the top 10 shareholders holding tradable shares without selling restrictions, and between the top 10 shareholders holding tradable shares without selling restrictions and the top 10 shareholders | Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. In addition, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | |||||||||
| Top 10 ordinary shareholders involved in securities margin trading (if any) | Liu Wei holds 54,000,000 shares of the company through its credit securities account; Beijing Yizhen Technology Development Co., Ltd. holds 38,206,800 shares of the Company through credit securities account. | |||||||||
Whether top ten common stock shareholders or top ten common stock shareholders with unrestricted shares have a buy-backagreement dealing during the reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with unrestricted shares of the Company have nobuy-back agreement dealing during the reporting period.
2. Controlling shareholders
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
| Name of controlling shareholders | Legal representative / person in charge of the company | Date of establishment | Organization code | Main businesses |
| Shougang Group | Zhang Gongyan | 13 May 1981 | 911100001011200015 | Industry, construction, geological examination, transportation, foreign trade, post and telecommunications, finance and insurance, scientific research and comprehensive technical services, domestic commerce, public catering, material supply and marketing, warehousing, real estate, residential services, consulting services, leasing, agriculture, forestry, animal husbandry and fishery (excluding business without special permission); authorized operation and management of state-owned assets; hosted Shougang Daily newspaper; design and production of TV advertisements; use of self-owned TV stations to publish advertisements; design and production of print advertising; use of self-owned Shougang Daily to publish advertisements; sewage treatment and recycling; seawater desalination; literary and artistic creation and performance: sports project management (excluding high-risk sports projects); stadium management; Internet information services; Municipal solid waste treatment. (enterprises shall independently choose business projects and carry out business activities in accordance with the law; municipal solid waste treatment, Internet information services and projects subject to approval in accordance with the law after licensing; they shall not engage in business projects prohibited or restricted by local policies) |
| Shareholdings of controlling shareholders who have control or hold shares in other domestic or overseas listed companies during the reporting period | 1. Domestic: (1) Hua Xia Bank Co., Ltd., holding 21.68%; (2) Beiqi Foton Motor Co., Ltd., holding 0.15%; (3) Bank of Communications Co., Ltd., holding 0.01%; (4) China Galaxy Securities Co., Ltd., holding 0.02%; (5) BAIC MOTOR Corporation., Ltd. (H-share), holding 12.83%. 2. Overseas: (1) Success Yiu Global Company Limited, holding 60.88%; (2) Shoucheng Holdings Limited, holding 24.98%; (3) Shougang Fushan Resources Group Ltd., holding 17.09%; (4) Shougang Century Holdings Limited, holding 49.68%; (5) Global Digital Creations Holdings Limited, holding 41.05%. | |||
Controlling shareholder turnover during the reporting period
□ Applicable √ Not applicable
There were no changes of controlling shareholders during the reporting period.
3. Actual controller of the company and persons acting in concert
Nature of actual controller: local management agency of state-owned assetsType of actual controller:
Actual controller turnover during the reporting period
□ Applicable √ Not applicable
The actual controller of the company was not changed during the reporting period.Block diagram of property rights and controlling relations between the Company and actual controllers
Actual controller controlling the company through trust or other asset management methods
□ Applicable √ Not applicable
4. The number of shares pledged by the controlling shareholder or the largest shareholder of the Company and personsacting in concert with it reaches 80% of the number of shares held by them in aggregate
□ Applicable √ Not applicable
5. Other legal person shareholders with over 10% shares held
√ Applicable □ Not applicable
| Name of legal person shareholders | Legal representative / person in charge of the company | Date of establishment | Registered capital | Main businesses |
| China Baowu Steel Group Corporation Ltd. | Chen Derong | 1 Jan. 1992 | RMB 52,791,101,000 | State-owned assets operation within the scope authorized by the State Council and investment and operation of state-owned capital. (if necessary, carrying out business activities only after approval of government agencies) |
6. Limitation on reducing the holdings of shares of controlling shareholders, actual controllers, restructuring side and othercommitment subjects
□ Applicable √ Not applicable
IV. The implementation of share repurchase during the reporting periodProgress of share repurchase
□ Applicable √ Not applicable
Progress of decrease in the holding of repurchased shares by way of bidding
□ Applicable √ Not applicable
Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares issued by the Company during the reporting period.
Section IX. Bonds
√ Applicable □ Not applicable
Ⅰ. Enterprise bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.II. Corporate Bonds
√ Applicable □ Not applicable
1. Basic information on Corporate Bonds
Unit: RMB
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | 20 Shouqian 01 | 149236 | 15 Sep. 2020 | 17 Sep. 2020 | 17 Sep. 2025 | 2,500,000,000.00 | 3.98% | Interest is calculated on an annual basis, not compound. The interest is paid once a year, and the principal is repaid once it is due. The last installment of interest is paid together with the repayment of the principal. | Shenzhen Stock Exchange |
| Investor eligibility arrangement (if any) | Public offering for professional investors | ||||||||
| Applicable trading mechanism | Bidding, quotation, inquiry and agreement trading methods | ||||||||
| Whether there are delisting risks (if any) and counter-measures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
√ Applicable □ Not applicable
The bond (20 Shouqian 01) has a five-year maturity with an issuer option to adjust the coupon rate at the end of the third year and aninvestor recall option. It has not yet reached the exercise period.
3.Particulars of intermediary organisations
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel. |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, China | Qian Bin, Yu Qike, Long Chuanxi | Qian Bin, Yu Qike, Long Chuanxi | 010-85665231 |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Huatai United Securities Co., Ltd. | 6F, Building A, Fengming International Building, 22 Fengsheng Hutong, Xicheng District, Beijing | Jiang Jiaxiang | 010-56839300 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | China Securities Co., Ltd. | 16F, Building B, Kaiheng Center, No.2 Chaonei Street, Dongcheng District, Beijing, China | Liu Chuyu | 010-65608485 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | China International Capital Corporation Limited | 33F, Tower 2, Guomao Building, Jianguomenwai Street, Chaoyang District, Beijing, China | Wang Hongtai | 010-65051166 |
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel. |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Capital Securities Corporation Limited | 11-21/F, Building A, Building 13, Yard 5, Anding Road, Chaoyang District, Beijing, China | Li Kang | 010-81152595 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Beijing Jingtian Gongcheng Law Firm | 34F, Office Building No.3, Huamao Center, 77 Jianguo Road, Chaoyang District, Beijing, China | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | Dagong Global Credit Rating Co., Ltd. | 3F, China Foreign Language Building, 89 Xisanhuan North Road, Haidian District, Beijing, China | Jia Yuehua | 010-67413364 |
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of proceeds
Unit: RMB
| Bond Name | Total amount of proceeds | Utilised amount | Unutilised amount | Operation of special account for the proceeds (if any) | Rectification of irregularities in the use of proceeds (if any) | Is the use of proceeds consistent with the use of proceeds guaranteed under the prospectus, proposed use of proceeds and other agreement？ |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | 2,500,000,000.00 | 2,500,000,000.00 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
Proceeds to be used for construction projects
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
III. Non-financial corporate debt financing instruments
√ Applicable □ Not applicable
1.Basic information of non-financial corporate debt financing instruments
Unit: RMB
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Bill) | 22Shouganggufen SCP002 (Kechuang Bill) | 012282924 | 18 August 2022 | 19 August 2022 | 24 April 2023 | 1,000,000,000.00 | 1.68% | Repayment of principal and interest once due | National inter-bank bond market |
| Investor eligibility arrangement (if any) | Institutional investors in the national inter-bank bond market (except purchasers prohibited by national laws and regulations) | ||||||||
| Applicable trading mechanism | Non-financial enterprise debt financing instrument trading system | ||||||||
| Whether there are delisting risks (if any) and countermeasures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
□ Applicable √ Not applicable
3. Particulars of intermediary organisations
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Tel |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Bill) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, China | Qian Bin, Yu Qike, Long Chuanxi | Qian Bin, Yu Qike, Long Chuanxi | 010-85665231 |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Bill) | Beijing Jingtian Gongcheng Law Firm | 34F, Office Building no.3, Huamao Center, 77 Jianguo Road, Chaoyang District, Beijing, China | Deng Qing, Yang Yao | 010-58091281 010-58091048 | |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Bill) | Bank of Beijing Co., Ltd. | No. 17 C, Financial Street, Xicheng District, Beijing | Zhang Guoxia | 010-66223400 |
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of proceeds
Unit: RMB
| Bond Name | Total amount of proceeds | Utilised amount | Unutilised amount | Operation of special account for the proceeds (if any) | Rectification of irregularities in the use of proceeds (if any) | Is the use of proceeds consistent with the use of proceeds guaranteed under the prospectus, proposed use of proceeds and other agreement |
| Beijing Shougang Co., Ltd.2022 Ultra-short-term financing note (Phase II) (Kechuang Bill) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Consistent |
Proceeds to be used for construction projects
□ Applicable √ Not applicable
Change in the use of proceeds from the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
IV. Convertible bonds
□ Applicable √ Not applicable
The Company has no convertible bonds during the reporting period.V. The loss in the scope of the consolidated financial statements during the reportingperiodexceeding 10% of the net assets as at the end of the prior year
□ Applicable √ Not applicable
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable √ Not applicable
VII. Breaches of the regulations during the reporting period
□ Yes √ No
VIII. Major accounting data and financial indicators of the Company over the past two yearsas at the end of the reporting period
Unit: RMB0’000
| Items | As at the end of the reporting period | As at the end of the prior year | Increase/decrease as at the end of the reporting period as compared to the end of the prior year |
| Current ratio | 0.45 | 0.46 | -2.17% |
| Gearing ratio | 65.03% | 67.21% | -2.18% |
| Quick ratio | 0.30 | 0.31 | -3.23% |
| The reporting period | The corresponding period of the prior year | Increase/decrease of the reporting period as compared to corresponding period of the prior year | |
| Net profit after extraordinary gains or losses | 105,251.09 | 701,422.69 | -84.99% |
| Proportion of EBITDA to total debts | 12.28% | 19.58% | -7.30% |
| Interest coverage ratio | 1.95 | 5.15 | -62.14% |
| Cash interest coverage ratio | 6.92 | 8.15 | -15.09% |
| EBITDA interest coverage ratio | 6.08 | 8.33 | -27.01% |
| Loans payment ratio | 100.00% | 100.00% | 0.00% |
| Interest payment ratio | 100.00% | 100.00% | 0.00% |
Section X. Financial Report
(This section is translated based on the Chinese version of the full audit report of the Company. Immaterial difference may existbeween this section in Chinese version annual report and English version annual report. The difference is due to the specific template
required by the Shenzhen Stock Exchange in Chinese version which is not applied in English version.)Auditor’s Report
| Type of audit opinion | Standard unqualified opinion |
| Date of signing of audit report | 19 April 2023 |
| Name of audit institution | Grant Thornton LLP |
| Number of audit report | GTSZ (2023) No. 110A012340 |
| Chinese Certified Public Accountant | Qian Bin, Yu Qike |
Main Body of Audit ReportTo the Shareholders of Beijing Shougang Company Limited：
I. OpinionWe have audited the financial statements of Beijing Shougang Company Limited (theCompany), which are comprised of the consolidated and company statements offinancial position as of 31 December 2022, and the consolidated and companyincome statements, statements of changes in equity and statements of cash flows forthe year then ended, and notes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all materialrespects, the consolidated and company financial position of the Company as of 31December 2022, and the consolidated and company’s financial performance and cashflows for the year then ended in accordance with Accounting Standards for BusinessEnterprises.II. Basis for OpinionWe conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’sResponsibilities for the Audit of the financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics for ChineseCertified Public Accountants, and we fulfilled our other ethical responsibilities. Webelieve that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinionon these matters.(I) The provision for inventory impairments
The disclosures related to the impairment of inventories are disclosed in Notes III.11and V.7 to the financial statements.
1. Description of the matter
As of 31 December 2022, the carry value of inventory of the Company amounted toRMB 12.303 billion with an impairment of RMB 343 million in the consolidatedfinancial statements. Inventory had been regarded as the material part of the currentassets of the Company at the end of the period, and the provision for inventoryimpairment referred to the application of management’s accounting estimates. Hence,we have identified the provision for inventory impairments as a key audit matter.According to the accounting policy of the Company, if the cost is in excess of the netrealizable value, impairment of inventories is recognized on the date of balance sheet.Net realizable value is determined based on the estimated selling price on normalbusiness terms deducted by the estimated costs to completion and the relatedexpenses.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to provision for inventory impairment includes:
(1) Understanding and assessing the management’s internal controls related toimpairment testing of inventories, and testing the effectiveness of key controlexecutions.
(2) Testing, on a sample basis during the inventory monitoring procedure, observingthe inventory status and checking the inventory age
(3) Recalculating the impairment of inventories at the end of the reporting period
(4) Implementing the analysis procedure to determine whether there is a significantdifference between the estimated selling price and the market price, and examiningwhether there is a significant difference between the post-period selling price and theestimated price in conjunction with a subsequent-event audit.
(5) Evaluating the reasonableness of carrying value of the inventory as at 31December 2022 by analyzing manufacturing costs of current inventories.
(6) Inspecting whether the related information of inventory impairments provision isproperly, appropriately and adequately presented and disclosed in the financialstatements.(II) Recognition of RevenueThe disclosures related to the recognition of revenue are disclosed in Notes III.25 andV.41 to the financial statements.
1. Descriptions of the matter
In 2022, the revenue was RMB 118.142 billion in the consolidated financialstatements. Considering that the revenue has a significant impacted on the financial
statements of the Company and steel price could exert a great influence on the profitsof the Company since the steel industry is a pro-cyclical industry, we regarded therecognition of revenue as a key audit matter.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to recognition of revenue includes:
(1) Understanding and assessing the management’s internal controls related torecognition of revenue, and testing the effectiveness of key control executions.
(2) Assessing whether the revenue recognition conditions, methods and timecomplied with the related standards in Accounting Standards for BusinessEnterprises.
(3) Selecting revenue transaction samples, checking the supporting documents ofrevenue recognition such as sales contracts, orders, delivery records, etc. to evaluatethe authenticity of revenue recognition.
(4) Selecting major customers to perform the confirmation procedures on annual salesto evaluate the completeness of revenue recognition.
(5) Implementing cut-off tests to the sales transactions before and after balance sheetdate.
(6) Checking the adequacy and appropriateness of disclosures in relation to revenuein the financial statements.IV. Other InformationThe management of the Company is responsible for the other information. The otherinformation comprises the information included in the Annual Report of 2022, otherthan the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.Based on the work we have performed on other information we obtained before theaudit report date, if we conclude that there is material misstatement of otherinformation, we are required to report that fact. We have nothing to report in thisregard.V. Responsibilities of the Management and Those Charged with Governance forthe Financial StatementsManagement of the Company is responsible for the preparation and fair presentationof the financial statements in accordance with Accounting Standards for Business
Enterprises, and designing, implementing and maintaining internal control asmanagement determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’sfinancial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and aregenerally considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.As part of an audit in accordance with China Standards on Auditing, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. Wealso:
(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basisof accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onthe Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, further events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information ofthe entities or business activities within the Company to express an opinion on thefinancial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, includingany significant deficiencies in internal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards (if any).From the matters communicated with the governance, we determine those mattersthat were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matteror when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of suchcommunication.
| Consolidated and Parent Company Statement of Financial Position | ||||
| Beijing Shougang Co., Ltd. as at 31 December 2022 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 31 December 2022 | 31 December 2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: | |||||
| Cash and Cash equivalents | V. 1 | 9,470,472,522.05 | 1,973,471,254.47 | 10,284,988,713.99 | 1,426,549,662.05 |
| Notes receivable | V. 2 | 6,691,086,020.85 | 898,640,149.83 | 6,830,376,685.96 | 1,311,383,591.78 |
| Accounts receivable | V. 3 | 1,450,008,897.10 | 1,396,660,925.53 | 1,678,608,393.71 | 1,917,892,195.00 |
| Financing receivables | V. 4 | 3,489,134,871.56 | 835,526,685.55 | 4,015,188,495.05 | 1,285,597,772.66 |
| Prepayments | V. 5 | 636,469,216.98 | 326,340,746.62 | 1,192,569,996.90 | 789,330,458.38 |
| Other receivables | V. 6 | 13,168,697.56 | 1,163,994,995.68 | 16,992,715.92 | 1,017,482,945.07 |
| Including: Interest receivable | |||||
| Dividends receivable | 200,000.00 | 9,713,244.06 | |||
| Inventories | V. 7 | 11,960,246,748.15 | 1,904,197,806.47 | 12,425,502,043.91 | 2,457,421,238.04 |
| Other current assets | V. 8 | 1,025,942,949.49 | 565,959,166.92 | 864,665,729.52 | 397,054,514.15 |
| Total current assets | 34,736,529,923.74 | 9,064,791,731.07 | 37,308,892,774.96 | 10,602,712,377.13 | |
| Non-current assets: | |||||
| Long-term equity investments | V. 9 | 2,724,285,925.35 | 37,687,890,460.88 | 3,065,928,898.28 | 31,996,332,940.16 |
| Other equity instruments investments | V. 10 | 232,766,133.81 | 232,766,133.81 | 264,900,763.97 | 264,900,763.97 |
| Other non-current financial assets | V. 11 | 79,234,007.60 | 79,234,007.60 | 80,000,000.00 | 80,000,000.00 |
| Investment properties | |||||
| Fixed assets | V. 12 | 93,331,072,969.17 | 19,254,378,866.41 | 97,227,169,862.20 | 20,124,641,301.41 |
| Construction in progress | V. 13 | 7,673,649,852.77 | 1,490,601,326.57 | 7,186,767,838.55 | 1,509,116,630.96 |
| Right-of-use assets | V. 14 | 83,107,359.45 | 27,014,444.30 | 100,279,997.64 | 36,019,259.06 |
| Intangible assets | V. 15 | 3,906,907,128.11 | 1,702,786,981.19 | 4,017,658,268.36 | 1,747,376,604.69 |
| Development expenditures | |||||
| Goodwill | |||||
| Long-term prepaid expenses | V. 16 | 3,535,748.04 | 1,226,463.57 | ||
| Deferred tax assets | V. 17 | 402,355,955.31 | 205,022,924.46 | 189,721,423.29 | 26,622,171.77 |
| Other non-current assets | |||||
| Total non-current assets | 108,436,915,079.61 | 60,679,695,145.22 | 112,133,653,515.86 | 55,785,009,672.02 | |
| Total assets | 143,173,445,003.35 | 69,744,486,876.29 | 149,442,546,290.82 | 66,387,722,049.15 | |
| Consolidated and Parent Company Statement of Financial Position (Continued) | ||||
| Beijing Shougang Co., Ltd. as at 31 December 2022 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 31 December 2022 | 31 December 2021 | ||
| Consolidated | Consolidated | Consolidated | Company | ||
| Current liabilities: | |||||
| Short-term borrowings | V. 18 | 29,580,006,103.39 | 10,586,336,291.69 | 25,278,373,316.25 | 11,063,960,704.04 |
| Notes payable | V. 19 | 7,261,510,000.00 | 989,500,000.00 | 7,488,930,793.77 | 987,600,000.00 |
| Accounts payable | V. 20 | 19,810,594,484.05 | 9,833,463,235.41 | 20,197,494,619.65 | 9,348,168,380.88 |
| Receipts in advance | |||||
| Contract liabilities | V. 21 | 4,508,016,725.74 | 521,402,199.01 | 5,230,456,327.37 | 756,726,439.51 |
| Payroll and employee benefits | V. 22 | 620,796,429.60 | 207,863,353.07 | 519,564,874.98 | 164,419,821.76 |
| Taxes payable | V. 23 | 172,300,416.40 | 22,570,197.17 | 425,210,314.30 | 19,217,188.00 |
| Other payables | V. 24 | 2,761,819,276.69 | 1,100,551,048.35 | 3,082,192,028.33 | 2,370,468,929.04 |
| Including: Interest payable | |||||
| Dividend payable | 11,440,046.38 | ||||
| Liabilities classified as held for sale | |||||
| Current portion of non-current liabilities | V. 25 | 4,038,768,022.60 | 3,419,903,869.77 | 10,451,293,628.20 | 61,012,464.36 |
| Other current liabilities | V. 26 | 8,088,749,910.74 | 1,927,653,981.82 | 8,222,007,536.63 | 2,296,975,448.24 |
| Total current liabilities | 76,842,561,369.21 | 28,609,244,176.29 | 80,895,523,439.48 | 27,068,549,375.83 | |
| Non-current liabilities: | |||||
| Long-term borrowings | V. 27 | 10,594,350,000.00 | 1,267,120,000.00 | 11,692,710,000.00 | 1,792,710,000.00 |
| Bonds payable | V. 28 | 2,500,000,000.00 | 2,500,000,000.00 | ||
| Lease liabilities | V. 29 | 72,439,836.79 | 19,284,063.32 | 86,123,210.35 | 28,263,649.37 |
| Long-term payable | V. 30 | 2,300,000.00 | 2,300,000.00 | 14,659,657.85 | 14,659,657.85 |
| Long-term payroll and employee benefits | V. 31 | 82,565,651.02 | 82,565,651.02 | 81,120,000.00 | 81,120,000.00 |
| Provisions | |||||
| Deferred income | V. 32 | 472,861,881.90 | 85,269,577.62 | 404,010,785.39 | 79,906,503.16 |
| Deferred tax liabilities | V. 17 | 502,268,362.26 | 365,393,047.63 | 208,958,292.75 | 208,958,292.75 |
| Other non-current liabilities | V. 33 | 4,532,018,467.20 | 4,563,283,607.60 | ||
| Total non-current liabilities | 16,258,804,199.17 | 1,821,932,339.59 | 19,550,865,553.94 | 4,705,618,103.13 | |
| Total liabilities | 93,101,365,568.38 | 30,431,176,515.88 | 100,446,388,993.42 | 31,774,167,478.96 | |
| Shareholders’equity： | |||||
| Share capital | V. 34 | 7,819,869,170.00 | 7,819,869,170.00 | 6,750,325,410.00 | 6,750,325,410.00 |
| Capital reserve | V. 35 | 29,644,048,551.50 | 22,176,353,536.77 | 24,861,776,641.72 | 17,070,281,351.14 |
| Less: treasury shares | V. 36 | 210,930,850.00 | 210,930,850.00 | 210,930,850.00 | 210,930,850.00 |
| Other comprehensive income | V. 37 | 158,251,774.94 | 158,251,774.94 | 185,566,210.59 | 185,566,210.59 |
| Special reserve | V. 38 | 31,852,310.79 | 21,054,371.78 | ||
| Surplus reserve | V. 39 | 1,908,883,208.67 | 1,908,883,208.67 | 1,908,883,208.67 | 1,908,883,208.67 |
| Retained earnings | V. 40 | 8,595,698,699.52 | 7,460,883,520.03 | 8,130,868,205.38 | 8,909,429,239.79 |
| Equity attributable to shareholders of the Company | 47,947,672,865.42 | 39,313,310,360.41 | 41,647,543,198.14 | 34,613,554,570.19 | |
| Non-controlling interests | 2,124,406,569.55 | 7,348,614,099.26 | |||
| Total shareholders' equity | 50,072,079,434.97 | 39,313,310,360.41 | 48,996,157,297.40 | 34,613,554,570.19 | |
| Total liabilities and shareholders' equity | 143,173,445,003.35 | 69,744,486,876.29 | 149,442,546,290.82 | 66,387,722,049.15 | |
| Consolidated and Parent Company Income Statement | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||
| Unit: RMB Yuan | |||||
| Item | Notes | 2022 | 2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Operating revenue | V. 41 | 118,142,183,549.47 | 39,004,809,105.09 | 132,984,304,668.28 | 44,037,155,561.17 |
| Less: Cost of sales | V. 41 | 111,067,555,320.28 | 38,195,755,653.87 | 117,394,695,070.53 | 41,325,543,005.37 |
| Taxes and surcharges | V. 42 | 823,261,082.93 | 215,684,348.68 | 1,064,429,887.98 | 295,122,175.34 |
| Selling expenses | V. 43 | 237,997,026.22 | 147,362,228.16 | 213,309,534.38 | 129,253,892.82 |
| General and administrative expenses | V. 44 | 1,271,175,739.06 | 533,105,120.91 | 1,301,197,936.20 | 565,748,773.19 |
| R&D expenses | V. 45 | 626,923,257.36 | 207,810,181.56 | 652,926,385.56 | 242,853,866.40 |
| Financial expenses | V. 46 | 1,731,584,291.35 | 460,293,091.81 | 2,260,406,032.80 | 592,635,561.68 |
| Including: Interest expense | 1,863,709,861.13 | 507,359,008.32 | 2,353,346,784.74 | 625,241,774.26 | |
| Interest income | 132,829,545.65 | 27,521,639.77 | 131,307,065.33 | 31,270,904.41 | |
| Add: Other income | V. 47 | 76,142,005.96 | 11,800,586.33 | 54,544,488.92 | 9,859,440.42 |
| Investment income/ (loss) | V. 48 | -211,209,023.35 | 59,234,973.72 | 106,379,717.79 | 240,889,493.89 |
| Including: Share of profits or loss of associates and joint ventures | -227,515,854.43 | -178,256,786.93 | 93,142,769.92 | 203,181,607.90 | |
| Gain/ (loss) on the changes in fair value | V. 49 | -765,992.40 | -765,992.40 | ||
| Credit impairment losses | V. 50 | 5,643,463.88 | 337,922.33 | -127,539,908.64 | -1,593,807.77 |
| Assets impairment losses | V. 51 | -402,994,496.88 | -63,210,278.38 | -167,567,546.04 | -66,598,535.40 |
| Gain/ (loss) from disposal of assets | V. 52 | -611,088.11 | -611,088.11 | 3,716,485.22 | 3,820,932.50 |
| II. Operating profit/ (loss) | 1,849,891,701.37 | -748,415,396.41 | 9,966,873,058.08 | 1,072,375,810.01 | |
| Add: Non-operating income | V. 53 | 11,304,199.78 | 4,718,009.36 | 6,554,194.97 | 2,854,654.64 |
| Less: Non-operating expenses | V. 54 | 68,082,023.32 | 51,970,642.22 | 65,521,293.40 | 37,535,685.19 |
| III. Profit/ (loss) before tax | 1,793,113,877.83 | -795,668,029.27 | 9,907,905,959.65 | 1,037,694,779.46 | |
| Less: Income tax expense | V. 55 | 283,698,478.31 | -6,832,474.51 | 1,489,229,219.26 | 143,495,502.68 |
| IV. Net profit / (loss) | 1,509,415,399.52 | -788,835,554.76 | 8,418,676,740.39 | 894,199,276.78 | |
| (1) Categorized by operation continuity: | |||||
| Including: Net profit/ (loss) from continuing operations | 1,509,415,399.52 | -788,835,554.76 | 8,418,676,740.39 | 894,199,276.78 | |
| Net profit/ (loss) from discontinuing operations | |||||
| (2) Categorized by ownership: | |||||
| Including: Net profit/ (loss) attributable to shareholders of the Company | 1,124,540,659.14 | 7,106,480,663.26 | |||
| Net profit/ (loss) attributable to non-controlling interests | 384,874,740.38 | 1,312,196,077.13 | |||
| V. Other comprehensive income, net of tax | -27,314,435.65 | -27,314,435.65 | -9,644,034.23 | -9,644,034.23 | |
| Other comprehensive income, net of tax, attributable to shareholders of the company | -27,314,435.65 | -27,314,435.65 | -9,644,034.23 | -9,644,034.23 | |
| (1) Other comprehensive income that will not be reclassified to profit or loss | -27,314,435.65 | -27,314,435.65 | -9,644,034.23 | -9,644,034.23 | |
| Changes in fair value of other equity instrument investments | -27,314,435.65 | -27,314,435.65 | -9,644,034.23 | -9,644,034.23 | |
| (2) Other comprehensive income to be reclassified to profit or loss | |||||
| Other comprehensive income, net of tax, attributable to non-controlling interests | |||||
| VI. Total comprehensive income | 1,482,100,963.87 | -816,149,990.41 | 8,409,032,706.16 | 884,555,242.55 | |
| Total comprehensive income attributable to shareholders of the company | 1,097,226,223.49 | 7,096,836,629.03 | |||
| Total comprehensive income attributable to non-controlling interests | 384,874,740.38 | 1,312,196,077.13 | |||
| VII. Earnings per share | |||||
| (1) Basic earnings per share | 0.1496 | 1.1439 | |||
| (2) Diluted earnings per share | |||||
| Consolidated and Parent Company Statement of Cash Flows | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||
| Unit: RMB Yuan | |||||
| Items | Note | 2022 | 2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Cash flows from operating activities | |||||
| Cash receipts from the sale of goods and the rendering of services | 60,167,389,548.82 | 16,484,868,626.13 | 78,204,394,163.17 | 18,990,463,340.31 | |
| Tax refunds received | 189,506,469.09 | 42,188,257.67 | 63,091,299.47 | ||
| Cash received relating to other operating activities | V. 56 | 767,214,052.71 | 20,415,777.73 | 63,336,125.82 | 144,818,152.82 |
| Sub-total of cash inflows | 61,124,110,070.62 | 16,547,472,661.53 | 78,330,821,588.46 | 19,135,281,493.13 | |
| Cash paid for purchase of goods and services | 43,094,229,128.26 | 11,560,257,021.52 | 51,897,231,678.90 | 13,549,077,636.55 | |
| Cash paid to and on behalf of employee | 4,581,065,361.90 | 1,542,021,128.22 | 4,679,450,437.00 | 1,587,524,293.24 | |
| Cash paid for taxes | 3,011,630,025.15 | 471,766,716.43 | 5,508,114,238.05 | 1,223,075,074.28 | |
| Cash paid relating to other operating activities | V. 56 | 392,950,057.51 | 200,956,450.23 | 852,835,390.28 | 382,575,353.81 |
| Sub-total of cash outflows | 51,079,874,572.82 | 13,775,001,316.40 | 62,937,631,744.23 | 16,742,252,357.88 | |
| Net cash flows from operating activities | 10,044,235,497.80 | 2,772,471,345.13 | 15,393,189,844.23 | 2,393,029,135.25 | |
| II. Cash flows from investing activities | |||||
| Cash received from disposal of investments | 38,609,883.16 | 212,000,000.00 | 2,700,000,000.00 | ||
| Cash received from investment income | 82,626,235.37 | 242,968,827.72 | 210,139,106.61 | 814,127,544.38 | |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 12,405,207.57 | 9,996,517.46 | 46,031,802.86 | 39,106,972.93 | |
| Cash received from disposal of subsidiaries and other business units | |||||
| Cash received relating to other investing activities | V. 56 | 132,789,335.69 | 28,160,581.65 | 130,931,269.04 | 31,252,743.28 |
| Sub-total of cash inflows | 266,430,661.79 | 281,125,926.83 | 599,102,178.51 | 3,584,487,260.59 | |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 2,639,013,873.80 | 493,955,501.86 | 3,270,336,323.78 | 1,584,616,246.57 | |
| Cash paid for investments | 789,480,592.71 | 781,780,592.71 | 113,658,286.00 | 306,616,735.00 | |
| Net cash paid for acquisition of a subsidiary and other operating units | |||||
| Cash paid relating to other investing activities | V. 56 | 153,910,000.00 | 300,000,000.00 | ||
| Sub-total of cash outflows | 3,428,494,466.51 | 1,429,646,094.57 | 3,683,994,609.78 | 1,891,232,981.57 | |
| Net cash flows from investing activities | -3,162,063,804.72 | -1,148,520,167.74 | -3,084,892,431.27 | 1,693,254,279.02 | |
| III. Cash flows from financing activities | |||||
| Cash received from investment | 1,278,391,712.18 | 287,603,983.82 | 3,003,858,828.08 | 1,023,858,828.08 | |
| Including: Cash receipts from capital contributions from non-controlling interests of subsidiaries | 990,787,728.36 | 1,980,000,000.00 | |||
| Proceeds from borrowings | 33,162,321,539.41 | 13,549,741,539.41 | 28,850,188,126.09 | 13,447,283,452.18 | |
| Proceeds from issuing bonds | 2,000,000,000.00 | 2,000,000,000.00 | 2,000,000,000.00 | 2,000,000,000.00 | |
| Cash receipts relating to other financing activities | |||||
| Sub-total of cash inflows | 36,440,713,251.59 | 15,837,345,523.23 | 33,854,046,954.17 | 16,471,142,280.26 | |
| Repayments for debts | 40,872,794,754.59 | 15,706,004,754.59 | 38,534,214,910.91 | 18,072,850,237.00 | |
| Cash payments for distribution of dividends or profit and interest expenses | 2,519,777,625.43 | 1,150,312,727.17 | 3,088,089,392.94 | 1,401,619,756.90 | |
| Including: Dividends or profits paid to non-controlling shareholders of subsidiaries | 45,895,343.51 | ||||
| Cash payments relating to other financing activities | V. 55 | 136,968,934.05 | 163,699,124.52 | 964,082,606.56 | 946,843,330.04 |
| Sub-total of cash outflows | 43,529,541,314.07 | 17,020,016,606.28 | 42,586,386,910.41 | 20,421,313,323.94 | |
| Net cash flows from financing activities | -7,088,828,062.48 | -1,182,671,083.05 | -8,732,339,956.24 | -3,950,171,043.68 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | |||||
| V. Net increase in cash and cash equivalents | -206,656,369.40 | 441,280,094.34 | 3,575,957,456.72 | 136,112,370.59 | |
| Add: Cash and cash equivalents as at the beginning of year | 8,535,871,373.08 | 1,022,866,541.00 | 4,959,913,916.36 | 886,754,170.41 | |
| VI. Cash and cash equivalent as at the end of year | 8,329,215,003.68 | 1,464,146,635.34 | 8,535,871,373.08 | 1,022,866,541.00 | |
| Consolidated Statement of Changes in Equity | |||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||||||||
| Unit: RMB Yuan | |||||||||||
| Item | 2022 | ||||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | |||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||||
| I. Balance at the end of previous year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 | ||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Business combination under common control | |||||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 | ||
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 4,782,271,909.78 | -27,314,435.65 | 10,797,939.01 | 464,830,494.14 | -5,224,207,529.71 | 1,075,922,137.57 | ||||
| (1)Total comprehensive income | -27,314,435.65 | 1,124,540,659.14 | 384,874,740.38 | 1,482,100,963.87 | |||||||
| (2)Shareholders' contributions and reduction | 1,069,543,760.00 | 4,795,867,598.63 | -5,544,665,254.82 | 320,746,103.81 | |||||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 4,738,436,210.82 | -5,544,665,254.82 | 263,314,716.00 | |||||||
| (ii) Amount of share-based payments recognized in equity | 36,147,743.13 | 36,147,743.13 | |||||||||
| (iii) Others | 21,283,644.68 | 21,283,644.68 | |||||||||
| (3) Profit distribution | -659,710,165.00 | -57,585,389.89 | -717,295,554.89 | ||||||||
| (i) Transfer to surplus reserve | |||||||||||
| (ii) Distribution to shareholders | -625,589,533.60 | -57,585,389.89 | -683,174,923.49 | ||||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | |||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||||
| (v) Others | |||||||||||
| (5) Special reserve | 7,687,955.83 | 10,797,939.01 | -6,831,625.38 | 11,654,269.46 | |||||||
| (i) Additions | 7,687,955.83 | 10,797,939.01 | -6,831,625.38 | 11,654,269.46 | |||||||
| (ii) Utilisation | |||||||||||
| (6) Others | -21,283,644.68 | -21,283,644.68 | |||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 | ||
| Consolidated Statement of Changes in Equity | |||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||||||||
| Unit: RMB Yuan | |||||||||||
| Item | 2021 | ||||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | |||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 19,759,259,120.40 | 195,210,244.82 | 21,577,537.20 | 1,828,677,846.37 | 1,865,280,919.23 | 9,871,784,638.95 | 38,831,179,906.97 | |||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Business combination under common control | -180,202,197.46 | -180,202,197.46 | |||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 19,579,056,922.94 | 195,210,244.82 | 21,577,537.20 | 1,828,677,846.37 | 1,865,280,919.23 | 9,871,784,638.95 | 38,650,977,709.51 | |||
| III. Increase/(decrease) during the period | 1,460,935,810.00 | 5,282,719,718.78 | 210,930,850.00 | -9,644,034.23 | -523,165.42 | 80,205,362.30 | 6,265,587,286.15 | -2,523,170,539.69 | 10,345,179,587.89 | ||
| (1)Total comprehensive income | -9,644,034.23 | 7,106,480,663.26 | 1,312,196,077.13 | 8,409,032,706.16 | |||||||
| (2)Shareholders' contributions and reduction | 1,460,935,810.00 | 5,284,171,993.19 | 210,930,850.00 | -3,822,775,473.29 | 2,711,401,479.90 | ||||||
| (i) Shareholders’ contributions in ordinary share | 1,396,034,010.00 | 5,132,245,332.82 | -5,618,843,879.35 | 909,435,463.47 | |||||||
| (ii) Amount of share-based payments recognized in equity | 64,901,800.00 | 151,926,660.37 | 210,930,850.00 | 5,897,610.37 | |||||||
| (iii) Others | 1,796,068,406.06 | 1,796,068,406.06 | |||||||||
| (3) Profit distribution | 80,205,362.30 | -840,893,377.11 | -760,688,014.81 | ||||||||
| (i) Transfer to surplus reserve | 80,205,362.30 | -80,205,362.30 | |||||||||
| (ii) Distribution to shareholders | -668,542,361.00 | -668,542,361.00 | |||||||||
| (iii) Others | -92,145,653.81 | -92,145,653.81 | |||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||||
| (v) Others | |||||||||||
| (5) Special reserve | -1,452,274.41 | -523,165.42 | -12,591,143.53 | -14,566,583.36 | |||||||
| (i) Additions | -1,452,274.41 | -523,165.42 | -12,591,143.53 | -14,566,583.36 | |||||||
| (ii) Utilisation | |||||||||||
| (6) Others | |||||||||||
| IV. Balance at the end of the year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 | ||
| Parent Company Statement of Changes in Shareholders’ Equity | |||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||||||||
| Unit: RMB Yuan | |||||||||||
| Item | 2022 | ||||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | ||||
| I. Balance at the end of previous year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | ||||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Business combination under common control | |||||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | ||||
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 5,106,072,185.63 | -27,314,435.65 | -1,448,545,719.76 | 4,699,755,790.22 | ||||||
| (1) Total comprehensive income | -27,314,435.65 | -788,835,554.76 | -816,149,990.41 | ||||||||
| (2) Shareholders' contributions and reduction | 1,069,543,760.00 | 5,127,355,830.31 | 6,196,899,590.31 | ||||||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 5,062,782,685.03 | 6,132,326,445.03 | ||||||||
| (ii) Amount of share-based payments recognized in equity | 43,289,500.60 | 43,289,500.60 | |||||||||
| (iii) Others | 21,283,644.68 | 21,283,644.68 | |||||||||
| (3) Profit distribution | -659,710,165.00 | -659,710,165.00 | |||||||||
| (i) Transfer to surplus reserve | |||||||||||
| (ii) Distribution to shareholders | -625,589,533.60 | -625,589,533.60 | |||||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | |||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||||
| (v) Others | |||||||||||
| (5) Special reserve | |||||||||||
| (i) Additions | |||||||||||
| (ii) Utilisation | |||||||||||
| (6) Others | -21,283,644.68 | -21,283,644.68 | |||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | ||||
| Parent Company Statement of Changes in Shareholders’ Equity | |||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2022 | |||||||||||
| Unit: RMB Yuan | |||||||||||
| Item | 2021 | ||||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | ||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 12,129,563,493.89 | 195,210,244.82 | 1,828,677,846.37 | 8,856,123,340.12 | 28,298,964,525.20 | |||||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Business combination under common control | -180,202,197.46 | -180,202,197.46 | |||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 11,949,361,296.43 | 195,210,244.82 | 1,828,677,846.37 | 8,856,123,340.12 | 28,118,762,327.74 | |||||
| III. Increase/(decrease) during the period | 1,460,935,810.00 | 5,120,920,054.71 | 210,930,850.00 | -9,644,034.23 | 80,205,362.30 | 53,305,899.67 | 6,494,792,242.45 | ||||
| (1) Total comprehensive income | -9,644,034.23 | 894,199,276.78 | 884,555,242.55 | ||||||||
| (2) Shareholders' contributions and reduction | 1,460,935,810.00 | 5,120,920,054.71 | 210,930,850.00 | 6,370,925,014.71 | |||||||
| (i) Shareholders’ contributions in ordinary share | 1,396,034,010.00 | 5,113,754,895.99 | 6,509,788,905.99 | ||||||||
| (ii) Amount of share-based payments recognized in equity | 64,901,800.00 | 7,165,158.72 | 210,930,850.00 | -138,863,891.28 | |||||||
| (iii) Others | |||||||||||
| (3) Profit distribution | 80,205,362.30 | -840,893,377.11 | -760,688,014.81 | ||||||||
| (i) Transfer to surplus reserve | 80,205,362.30 | -80,205,362.30 | |||||||||
| (ii) Distribution to shareholders | -668,542,361.00 | -668,542,361.00 | |||||||||
| (iii) Others | -92,145,653.81 | -92,145,653.81 | |||||||||
| (4) Transfer within equity | |||||||||||
| (i) Capital reserves converted to share capital | |||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||||
| (v) Others | |||||||||||
| (5) Special reserve | |||||||||||
| (i) Additions | |||||||||||
| (ii) Utilisation | |||||||||||
| (6) Others | |||||||||||
| IV. Balance at the end of the year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | ||||
Notes to the Financial Statements
I. General Informantion of the Company
1. Company profile
Beijing Shougang Company Limited (hereinafter referred to as the Company) is a joint stocklimited company established by means of raising, which is approved by Beijing Municipal People'sGovernment Jingzhenghan [1998] No. 34 and exclusively initiated by Shougang Group Co., Ltd.With the approval of zjxz [1999] No. 91 document issued by China Securities RegulatoryCommission, the Company was the first to issue 350,000.00 thousand ordinary shares (A shares) tothe public in Shenzhen Stock Exchange from 21 to 27 September, 1999 by the combination of legalperson placement and online issuance, with par value of RMB 1 per share and issue price of RMB
5.15 per share, with the stock code of 000959. The Company registered with approval of BeijingAdministration for Industry and Commerce on 15 October, 1999. The Company holds the businesslicense with unified social credit code of 1100001028663 (1-1), with the registered capital of RMB2,310,000,000.00.The Company issued the convertible corporate bonds worthed RMB 2,000,000 thousand on 16December, 2003 upon the approval of zjfxz [2003] No. 107 document issued by China SecuritiesRegulatory Commission. On 31 December, 2003, the convertible bond was listed and traded inShenzhen Stock Exchange. The bond is abbreviated as “Shougang Convertible Bond” with the bondcode of “125959”. The convertible bonds were converted into shares since June 16, 2004, and metthe redemption conditions until 26 February 2007. Accordingly, the board of directors of thecompany issued the redemption announcement. As of 6 April, 2007, the date of convertible bondredemption, the total amount of Shougang convertible bonds was RMB1,950,217,500.00, whichwas converted into the Company's shares, with an accumulated increase of RMB 656,526,057.00 inshare capital. The Company obtained a new business license of legal entity on November 20, 2008,with the registration number 110000000286633 (1-1), and the registered capital changed to RMB2,966,526,057.00.On 16 January, 2013, the Company's material assets reorganization was reviewed by thereorganization committee of CSRC and passed unconditionally. On 29 January, 2014, ChinaSecurities Regulatory Commission issued “Reply on approving material assets reorganization ofBeijing Shougang Co., Ltd. and shares issuance to Shougang Group to purchase assets”. As of 25April, 2014, the implementation of material assets reorganization of the Company has beencompleted. In the material assets reorganization, the private placement to Shougang Group was2,322,863,543 shares, with par value of RMB 1 each and issue price of RMB 4.29 each. TheCompany obtained the new business license of legal entity after capital increment on 9 July, 2014,with the registration number of 110000000286633, and the registered capital changed to RMB5,289,389,600.On 21 April 2021, the event of "Share Issuing to Beijing Jingtou Investment Holding Co., Ltd. etc.for Assets Purchase and Fundraising" has been approved by the CSRC (CSRC Permit No. [2021]1400). According to the approval, the Company issued 1,234,898,985.00 shares to Beijing JingtouInvestment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) foracquiring 19.1823% shares of Shougang Jingtang United Iron & Steel Co., Ltd. (hereinafter referredto as the Jingtang Co.) on 23 April 2021. On 17 June 2021, the Company issued 161,135,025 sharesto 8 investors at the price of RMB 5.11 per share, and RMB 823,399,977.75 were collected. Afterthis issuing, the registered capital of the Company is RMB 6,685,423,610.00.
On 9 December 2021, by the approval of 2021 First Extraordinary General Meeting and StateOwned Assets Supervision and Administration Commission (hereinafter referred to as “SASAC”),the Company has completed the 2021 restricted stock incentive plan. There were 64,901,800.00shares issued to 386 directors, senior management, key technicians and management backbone withthe issue price of RMB 3.25 per share. Aftere this offering, the registered capital of the Companychanges to RMB 6,750,325,410.00.On March 18, 2022, the Company obtained the Reply on the Approval for Beijing Shougang Co.,Ltd. 's to Issue Shares to Shougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds(CSRC License [2022] No. 553) issued by China Securities Regulatory Commission. On March 31,2022, the Company issued 1,015,417,369 shares to Shougang Group Co., Ltd. to purchase 49.00%equity of Beijing Shougang Steel Trade Investment Management Co., Ltd. held by Shougangaccording to the approval document. On May 20, 2022, the Company issued 54,126,391 shares toeight investors at an issue price of RMB5.38 per share and the total amount of raised funds isRMB291,199,983.58. After this offering, the registered capital of the Company changes to RMB7,819,869,170.00.The Company obtained the new business license of legal entity on 22 December, 2016 after theintegration of five certificates, with the unified social credit code 911100007002343182.The statutory address is Shijingshan Road, Shijingshan District, Beijing.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and the board of supervisors. At present, the Company sets upserval functional departments, for instance, secretary office of the board of directors, the planningand financing department, the manufacturing department, the marketing center, the purchasingcenter, the human resources department, the equipment department, the energy department, theenvironmental protection department, the quality inspection department, the office, etc, as well asthe subordinate factories such as Shougang Qian'an Iron&Steel Co., Ltd. and auxiliary productiondepartment, like the technical center. The company has six subsidiaries: Shougang Jingtang UnitedIron&Steel Co., Ltd., Beijing Shougang Cold Rolling Co., Ltd., Qian'an Shougang MetallurgicalTechnology Co., Ltd., Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., BeijingShougang New Energy Automobile Material Technology Co., Ltd., and Beijing Shougang SteelTrade Investment Management Co., Ltd.The business scope of the Company includes iron and steel smelting, steel calendering processing,copper smelting and calendering processing and sales; manufacturing and sales of sinter, coke andchemical products; blast furnace residual pressure power generation and production and sales of gas;processing and sales of industrial waste; sales of metal materials, coke, chemical products,mechanical and electrical equipment, building materials, general equipment, hardware, furnitureand decorative materials; equipment leasing (excluding automobiles); telecommunications services;insurance agency services; insurance broker services; loading, unloading and handling services;software delevopment; advertising design and agency; warehousing services; technologydevelopment, technical consultation, technology transfer, technical service and technical training;investment and investment management.The financial statements and notes were approved by the second meeting of the eighth Board ofDirectors on 19 April 2023.
2. Scope of consolidated financial statements
The scope of the consolidated financial statements is determined on the control basic, the scope
includes six subsidiaries, which are Shougang Jingtang United Iron&Steel Co., Ltd., BeijingShougang Cold Rolling Co., Ltd., Qian'an Shougang Metallurgical Technology Co., Ltd., ShougangZhixin Qian'an Electromagnetic Materials Co., Ltd., Beijing Shougang New Energy AutomobileMaterial Technology Co., Ltd., and Beijing Shougang Steel Trade Investment Management Co.,Ltd.The details refer to Note VI. Changes in the scope of consolidation and VII. Interests in otherentities.II. Basis of preparationThe financial statements are prepared in accordance with the latest “China Accounting Standardsfor Business Enterprises” and other issued application guidance, interpretations and other relatedregulations (collectively known as the “CASBE”) issued by the Ministry of Finance of the PRC(MOF). Additionally, the Company discloses relevant financial information in accordance withrequirements in the “Preparation Convention of Information Disclosure by Companies OfferingSecurities to the Public No.15—General Rules on Financial Reporting” (2014 revised) issued by theChina Securities Regulatory Commission.The financial statements are prepared on a going concern basis.The Company adopts the accrual basis of accounting. The financial statements have been preparedunder the historical cost convention, except for certain financial instruments. If the assets areimpaired, corresponding provisions for impairment shall be made in accordance with relatedregulations.III. Significant accounting policies and estimatesThe Company has determined the accounting policies and accounting estimates based on thecharacteristics of the operation, especially those related to depreciation of fixed assets, amortizationof intangible assets, capitalization conditions of R&D expenses and revenue recognition policies,the detailed accounting policies refer to Note III. 14, Note III. 18, Note III. 19 and Note III. 25.
1. Statement of compliance with the CAS
The financial statements have been prepared in accordance with CAS, and present truly andcompletely the financial position of the consolidated and the Company as at 31 December 2022,and the financial performance and cash flows for the year ended 31 December 2022.
2. Accounting period
The accounting year of the Company is from 1 January to 31 Decemeber of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as functional currency.The financial statements of the Company have been prepared in RMB.
5. Accounting treatments for business combination involving entities under common control and
business combination involving entities not under common control.
(1) Business combination involving entities under common control
For the business combination involving entities under common control, the assets and liabilities thatare obtained in the business combination shall be measured at original carrying amounts at thecombination date as recorded by the party being combined. The difference between the carryingamount of the net assets obtained and the carrying amount of consideration paid for the combinationshall be adjusted to capital reserve (equity premium), if the capital reserve (equity premium) is notsufficient to absorb the difference, any excess shall be adjusted to retained earnings.Business combinations involving entities under common control through multiple transactions toachieve in stagesIn the separate financial statements, the initial investment cost is calculated based on theshareholding portion of net assets of the consolidated party in the carrying amount of the ultimatecontrolling party’s consolidated financial statement at the acquisition date. The difference betweenthe initial investment cost and the sum of the carrying amount of the original investment cost andthe carrying amount of consideration paid for the combination is adjusted to the capital reserve(equity premium), if the capital reserve is not sufficient to absorb the difference, the excess shall beadjusted to retained earning.In the consolidated financial statements, the assets and liabilities obtained at the combination shallbe measured at the carrying value as recorded by the ultimate controlling party at the acquisitiondate. The difference between the sum of the carrying value from original shareholding portion andthe new consideration incurred at the acquisition date and the carrying value of net assets obtainedat acquisition date shall be adjusted to capital reserve (equity premium), if the balance of capitalreserve is not sufficient to absorb the differences, any excess is adjusted to retained earnings. Thelong-term investment held by combining party before acquisition of control, the profit or loss,comprehensive income and other change of shareholder’s equity recongnized at the closer date ofthe acquisition date and combination date under common control shall separately offset the openingbalance of retained earnings and profit or loss during comparative statements.
(2) Business combinations involving entities not under common control
For business combinations involving entities not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. The acquirer shallrecognize the acquiree’s identifiable asset, liabilities and contingent liabilities that satisfy therecognition criteria at fair values at the date of acquisition.The excess of combination costs and the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets is recognized as goodwill, which is measured at cost less any accumulatedimpairment losses subsequently. If the acquirer’s interest in the net fair value of the acquiree’sidentifiable net assets exceeds the combination costs, the acquirer shall reassess the measurementand recognize any excess remaining in profit or loss after reassessment.Business combinations involving entities not under common control through multiple transactionsto achieve in stagesIn the separate financial statements, the initial investment cost is the sum of the carrying amount ofthe equity investment held by the entity prior to the acquisition date and the additional investment
cost at the acquisition date. The disposal accounting policy of other comprehensive income relatedwith equity investment prior to the purchase date recognized under equity method shall becompliance with the method when the acquire disposes the related assets or liabilities.Shareholder’s equity due to the changes of other shareholder’s equity other than the changes of netprofit, other comprehensive income and profit distribution shall be transferred to profit or lose forcurrent period when disposed. If the equity investment held by the entity prior to the acquisitiondate is measured at fair value, the cumulative change in fair value recognized in othercomprehensive income shall be transferred to retained earnings for current period under costaccounting method.In the consolidated financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity held prior to acquisition date; the equity ofthe acquiree held prior to acquisition date shall be re-measured at the fair value at acquisition date,the difference between the fair value and book value shall be recognized as investment gain or lossfor the current period. Other comprehensive income and changes of other shareholder’s equityrelated with acquiree’s equity held prior to acquisition date shall be transferred to profit or loss forcurrent period at acquisition date, besides the other comprehensive income incurred by the changesof net assets or net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overheads for the business combination, including the expenses of audit, legal services,valuation advisory, and other related administrative expenses, are recorded in profit or loss for thecurrent period when expenditure incurred. The transaction costs of equity or debt securities issuedas the considerations of business combination are included in the initial recognition amount of theequity or debt securities.
6. Method of preparing consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the control basis. Control existswhen the Company has power over the investee, rights to variable returns from involvement withrelated activities of investee and has the ability to affect its returns through its power over theinvestee. A subsidiary is an entity that is controlled by the Company (including separable parts of anenterprise or investee and structured entities controlled by the Company, etc).
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the Company in accordance with other relevant information. Inpreparing the consolidated financial statements, the Company and its subsidiaries are required toapply consistent accounting policy and accounting period, intra-group transactions and balancesshall be offset.The subsidiary acquired through a business combination involving entities under common controlin the reporting period shall be included in the scope of the consolidation from the beginning of thecombination date, the subsidiary’s income, expenses and profits should be included in theconsolidated results of operations and cash flows from the acquisition date respectively.
The subsidiary acquired through a business combination involving entities not under commoncontrol in the reporting period, the subsidiary’s income, expenses and profits are included in theconsolidated results of operations, and cash flows are included in the consolidated cash flowstatement from the acquisition date to the end of the reporting date.The portion of the subsidiary’s equity that is not attributable to the Company is treated asnon-controlling interests and separately presented in the consolidated balance sheet withinshareholders’ equity. The portion of a subsidiary’s profit or loss that is attributable tonon-controlling interests presented in the consolidated income statement of net profit or loss as “netprofit attributable to non-controlling interests”. Where the amout of losses of a subsidiaryattributable to the non-controlling shareholders in the current period exceeds the share of theopening balance of owner’s equity of the subsidiary, the excess shall offset non-controllinginterests.
(3) Purchase of the minority equity in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minorityequity and the share of the net assets that the subsidiaries have to continue to calculate from the dateof purchase or the date of consolidation in proportion to the new shareholding ratio is adjusted tothe capital reserve (equity premium), if the capital reserve is not sufficient, any excess is adjusted toretained earning. The difference between disposal of partial equity investment without losingcontrol over its subsidiary and the disposal of long-term equity investment corresponding to theshare of the net assets of the subsidiaries from the date of purchase or the date of consolidation is aswell.
(4) Loss of control of subsidiaries
If the control right is lost due to disposal of partial equity investment or other reasons, theremaining equity shall be re-measured according to its fair value on the date of losing control. Thedifference between the summary of consideration obtained from the disposal of the equity and thefair value of the remaining equity, less the difference between the share of the original assets andthe share of the net assets that have been continuously calculated from the date of purchase from thedate of the original shareholding, is included in the current period profit or loss and; if there is agoodwill for the subsidiary, the amount of the goodwill also shall be deducted.The other comprehensive income related to the original subsidiary’s equity investment shall betransferred to current period profit and loss when control is lost, except for the other comprehensiveincome arising from the movement of net liabilities or assets investee’s re-measurement of definedbenefit plan.
(5) Treatment of step disposal until the loss of control of subsidiaries
By stepping through multiple transactions to dispose of the equity investment in the subsidiary untilit loses control, if the clauses, conditions and economic impacts of the transaction satisfy one ormore of the following criteria, the Company will consider the transactions as a package transactionfor the accounting treatment:
①The transactions are entered simultaneously or in consideration of the mutual influence;
②Only the transactions as a whole can achieve one complete business outcome;
③The occurrence of a transaction is depending on the occurance of at least one of other
transactions;
④The transaction alone is not economical, however, it becomes economical to consider the othertransactions together.In the separate financial statements, by stepping through multiple transactions to dispose of theequity investment in the subsidiary until it loses control, when it is not a package transaction,carrying forward the book value of each disposal of equity relative to the corresponding long-termequity investment, and the difference between the considerations and the book value of the disposalof long-term equity investment is recognized in the current period investment income or loss. Whenit is a package transaction, the price difference between the disposal price and the disposalinvestment before the loss of control is recognized as other comprehensive income in theconsolidated financial statements, and is transferred to the current period profit or loss of controlwhen the control is lost.In the consolidated financial statements, the measurement of the remaining equity and treatment ofthe loss of disposal is in accordance to “Treatment of loss of control of subsidiaries” as describedabove. The difference between the disposal consideration and the related share of net assets of thesubsidiaries, which has been continuously calculated since the purchase date corresponding to theequity disposal should be treated as follows:
①When it is a package transaction, the difference shall be recognized as the other comprehensiveincome and transferred to the current period profit or loss of control when the control is lost
②When it is not a package transaction, the difference shall be recorded to capital reserve (sharepremium) as equity transaction and could not be transferred to the current period profit or loss ofcontrol when the control is lost.
7. Joint arrangement and joint operations
Joint arrangement refers to an arrangement under the joint control of two or more entities. The jointarrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
Joint operation is a joint arrangement whereby the Company have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items in relation to its interest in a joint operation inaccordance with CAS:
A. its solely-held assets, and its share of any assets held jointly;B. its solely-assumed liabilities, and its share of any liabilities incurred jointly;C. its revenue from the sale of its share of the output arising from the joint operation;D. its share of the revenue from the sale of the output by the joint operation;E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a type of joint arrangement whereby the Company that has joint control of thearrangement has rights to the net assets of the joint venture.The Company conducts accounting treatment for the investment of joint ventures in accordancewith the provisions of equity method accounting related to long-term equity investment.
8. Cash and cash equivalents
Cash represents the cash on hand and deposits which are readily available for payment. Cashequivalents represent the Company’s short-term highly liquid investments which are readilyconvertible into known amounts of cash and subject to an insignificant risk of changes in value.
9. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
The Company recognises a financial asset or a financial liability when, and only when, it becomes aparty to the contractual provisions of the instrument.A financial asset will be derecognized when it satisfies one or more of the following conditions:
① The contractual rights to receive cash flows from the financial asset expire;
② The financial asset has been transferred, and it satisfies the following conditions forderecognition.The financial liability (or part of it) is derecognized when its contractual rights (or part of it) expire.If the Company (as a debtor) makes an agreement with the creditor to replace the current financialliability with assuming a new financial liability, and contractual provisions are different insubstance, the current financial liability shall be derecognized and a new financial liability shall berecognized.All financial assets purchased or sold in regular way are recognised or derecognised on the tradingdate when the Company commits to purchase or sell the asset.
(2) Classification and measurement of financial assets
The Company classifies its financial assets, based on the entity's business model for managing thefinancial assets and the contractual cash flow characteristics of the financial assets, as financialassets at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets measured at amortized costThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured atamortized cost:
? The financial asset is held whose objective is to collect contractual cash flows;
? The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.After initial recognition, this type of financial asset using effective interest rate method to bemeasured at amortized cost. The gain or loss generated by the financial assets measured atamortized cost and not part of any hedging relationship shall be accounted in the profit or loss forthe year when the financial assets are derecognized, amortized by effective interest method orrecognized impairment.Financial assets measured at fair value through other comprehensive incomeThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured at fairvalue through other comprehensive income:
? The financial asset is held within a business model whose objective will be achieved by both
collecting contractual cash flows and trading financial assets;? The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.After initial recognition, the financial assets are subsequently measured at fair value. Interest,impairment loss/gain and exchange loss/gain calculated by the effective interest rate method arerecognised in profit or loss, while other profit or loss shall be recognised in other comprehensiveincome. When derecognized, the accumulated profit or loss previously recognised in othercomprehensive gains shall be transferred to current profit or loss.Financial assets measured at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair valuethrough other comprehensive income, the Company classifies all other financial assets as financialassets measured at fair value through profit or loss. In order to eliminate and significantly reduceaccounting mismatches, the Company irrevocably designates some financial assets that should bemeasured at amortized cost or at fair value through other comprehensive income as financial assetsat fair value through profit or loss during the initial recognition.After initial recognition, the financial assets are subsequently measured at fair value, and the profitor loss (including interest and dividend income) generated shall be recognised in current profit orloss, unless the financial assets are part of the hedging relationship.The business model of managing financial assets refers to how the Company manages financialassets to generate cash flow. The business model determines if the source of cash flow for financialassets managed by the Company is collecting contract cash flow, selling financial assets or both ofthem. The Company determines the business model of financial assets management on the basis ofobjective facts and the specific business goals of financial assets management decided by keymanagers.The Company evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and the interest, which is based on the amount of unpaid principal. Among them,principal refers to the fair value of financial assets at initial recognition; interest includes theconsideration of time value of money, credit risk related to the unpaid principal in a specific period,
and other basic credit risks, costs and profits. Additionally, the Company evaluates the terms andconditions of the contracts that may alter time distribution or amount of cash flow in financial assetcontracts to determine whether they satisfy the requirements of the aboving contract cash flow’scharacteristics.Only when the Company changes its business model of managing financial assets, all the financialassets affected shall be reclassified on the first day of the first reporting period after the businessmodel alteration, otherwise, financial assets shall not be reclassified after initial recognition.A financial asset is measured at its fair value at initial recognition. For financial assets measured atfair value thorugh profit or loss, the relevant transaction costs are charged to profit or loss; for otherfinancial assets, the relevant transaction costs are recognized as initial investment costs. For thetrade receivables arising from the sale of goods or services provided do not contain or take intoaccount significant financing components, the initial investment costs shall be the consideration,which the Company is entitled to receive with the expectation.
(3) Classification and measurement of financial liabilities
The Company classifies its financial liabilities at initial recognition as financial liabilities measuredat fair value through profit or loss and financial liabilities at amortized cost. With respect tofinancial liabilities not classified as at fair value through profit or loss, transactions costs arecharged to initial recognition cost.Financial liabilities measured at fair value through profit or lossFinancial liabilities at fair value through profit or loss, including financial liabilities held for tradingand those are designated as at fair value through profit or loss at initial recognition. For thesefinancial liabilities, they are subsequently measured at fair value and gains or lossess from thechange of fair value and related dividend and interest expense are recognized in profit or loss for theyear.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod, the gains and losses arising from derecognition or amortization is recognised in profit orloss for the year.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that satisfies one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse conditions, contractual obligation to exchange financial assets orfinancial liabilities with other entity.
③ The contract that will or may be settled in the entity’s own equity instruments and is anon-derivative for which the entity is or may be obliged to deliver a variable number of the entity’sown equity instruments.
④ The derivative contract that will or may be settled in the entity’s own equity instruments otherthan by the exchange of a fixed number of the entity’s own equity instruments for a fixed amount ofcash or other financial assets.
Equity instrument is the contract that evidences the residual equity in the assets of an entity afterdeducting all of its liabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cashor other financial assets, the contractual obligation satisfies the definition of financial liability.If the financial instrument must or could be settled by the Company’s own equity instrument, theCompany should consider whether the Company’s equity instrument as the settlement instrument isa substitute of cash or other financial assets or the residual equity in the assets of an entity afterdeducting all of its liabilities. If it is the former one, the financial instrument is the Company’sfinancial liability; if it is the latter one, the tool is the equity instrument of the Company.
(4) Fair value of financial instruments
For the determination method of fair value of financial assets and financial liabilities, please refer toNote III.10.
(5) Impairment of financial assets
The Company performs impairment assessment and recognizes loss allowance for the followingfinancial assets based on the expected credit losses.? Financial assets measured at amortized cost;? Debt investment and trade receivables measured at fair value through other comprehensiveincome;? Contract assets as defined in Accounting Standards for Enterprises No.14- Revenues;? Lease receivables;? Financial guarantee contracts (expect for the contracts measured at fair value through profit orloss, financial assets transformation not qualify for derecognition and continuing involvementof transferred financial assets).Measurement of expected credit lossThe expected credit loss refers to the weighted average of the credit loss of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractualcash flows receivable from the contracts and all cash flows expected to be received, that is, thepresent value of all cash shortages.The Company considers the reasonable and basis information about past events, current situationand forecast of future economic situation, calculates the probability weighted amount of the presentvalue of the difference between the receivable cash flow of the contract and the expected cash flowwith the risk of default as the weight, and confirms the expected credit loss.The Company separately measures the expected credit losses of financial instruments at differentstages. The credit risk on a financial instrument has not increased significantly since initialrecognition, which is in Stage I. The Company measures the loss provision in accordance withexpected credit losses for the next 12 months. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which isin Stage II. The Company measures the loss provision in accordance with the expected credit losses
for the whole lifetime of the financial instrument. If the financial instrument has occurred creditimpairment since initial recognition, which is in Stage III, and the Company measures the lossprovision in accordance with the expected credit losses for the whole lifetime of the financialinstrument.For the financial instruments with lower credit risk at the balance sheet date, the Company assumesthat the credit risk has not increased significantly since the initial recognition, and measures the lossprovision in accordance with expected credit losses for the next 12 months.The whole lifetime expected credit loss, refers to the expected credit loss caused by all possibledefaults during the whole expected lifetime. The 12-month expected credit losses, refer to theexpected credit loss caused by all possible defaults during the next 12 months after balance sheetdate (if the expected duration of financial instrument is less than 12 months, then for the expectedduration), which is part of the whole lifetime expected credit losses.When measuring the expected credit loss, the maximum maturity period that the Company needs toconsider is the maximum contract maturity period (including the consideration of option of renewal)the enterprise facing credit risk.For financial instruments in Stage I, Stage II and with lower credit risk, the Company calculatesinterest income on the basis of the book balances without deduction of impairment provisions andwith effective interest rates. For financial instruments in Stage III, the Company calculates interestincome on the basis of the book balances minus the impairment provision and with effective interestrate.Notes receivable, Accounts receivable, and Contract assetsFor notes receivable, accounts receivable and contract assets, whether or not there are significantfinancing elements, the Company always measures the loss provision in accordance with the wholelifetime expected credit losses.If the expected credit loss information of the the independent financial asset cannot be evaluated bya reasonable cost, the Company divides and combines notes receivable and accounts receivableaccording to the characteristics of credit risk. On the basis of the combination, the Companycalculates the expected credit losses. The basis of determining combination is as follows:
A. Notes receivable? Combination 1: Bank acceptances? Combination 2: Bank acceptances with lower credit rating and Commercial acceptancesB. Accounts receivable: Accounts of receivable-tradeOther receivablesAccording to the characteristics of credit risk, the Company divides other receivables into servalcombinations. On the basis of the combination, the Company calculates the expected credit losses.The basis of determining the combination is as follows:
? Other receivables Combination 1: Imprest and deposit, etc.? Other receivables Combination 2: Other current account
For the other receivables combination, the Company calculates the expected credit losses throughthe exposure on default and the next 12-month or the whole lifetime expected credit loss rate.Debt investments and other debt investmentsFor debt investments and other debt investments, the Company calculates the expected credit lossesthrough the exposure on default and the next 12-month or the whole lifetime expected credit lossrate, according to the nature of the investment, the types of counterparty and risk exposure.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet date with the default risk oninitial recognition date, the Company determines the relative change of default risk of financialinstruments during the expected lifetime of financial instruments to evaluate whether the credit riskof financial instruments has increased significantly since the initial recognition.When determining whether credit risk has increased significantly since the initial recognition, theCompany considers reasonable and valid information, including forward-looking information,which can be obtained without unnecessary additional costs or efforts. Information considered bythe Company includes:
? The debtor cannot pay principal and interest on the expiration date of the contract;? Serious deterioration of external or internal credit ratings (if any) of financial instruments that
have occurred or are expected to occur;? Serious deterioration of the debtor’s operating results that have occurred or are expected tooccur;? Changes in the existing or anticipated technological, market, economic or legal environmentwill have the significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Company evaluates whether credit risk hasincreased significantly on the basis of an independent financial instrument or a combination offinancial instruments. When assessing on the basis of the combination of financial instruments, theCompany can classify financial instruments based on common credit risk characteristics, such asoverdue information and credit risk rating.If the delay exceeds 30 days, the Company determines that the credit risk of financial instrumentshas increased significantly.Financial assets that have occured credit impairmentOn the balance sheet date, the Company assesses whether credit impairment has occurred infinancial assets measured at amortized cost and debt investments measured at fair value throughother comprehensive income. When one or more events adversely affect the expected future cashflow of the financial assets occur, the financial assets transfer to the financial assets with creditimpairment. Evidence of credit impairment of financial assets includes the following observableinformation:
? Issuer or debtor suffer from significant financial difficulties;
? Debtor breaches any of the contractual stipulations, for example, fails to pay or delays thepayment of interests or the principal, etc.;? In consideration of economic situationand contract related to the financial difficulties of thedebtor, the Company grants concessions to the debtor that will not be made under any othercircumstances.? Debtor is probable to go bankrupt or undergo other financial restructuring.? Financial difficulties of issuer or debtor lead to the disappearance of financial assets active
market.Presentation of expected credit loss reserveIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Company recalculates the expected credit loss on each balance sheet date. Theincrease or reversal of the loss provision resulting therefrom is recognised as an impairment loss orgain in the current profit or loss.For financial assets measured at amortized cost, loss provisionoffsets the carrying amount of the financial assets presentated on the balance sheet; for debtinvestments measured at fair value through other comprehensive income, the Company recognizesits loss provision through other comprehensive income and does not offset the financial assets’carrying amount.Write offIf the Company no longer reasonably expects that the financial assets contract cash flow can berecovered fully or partially, the financial assets book balance will be reduced directly. Suchreduction constitutes derecognition of the financial assets. The situation usually occurs when theCompany determines that the debtor has no assets or income to generate sufficient cash flows topay the amount to be reduced. However, in accordance with the Company’s procedures forrecovering due payment, the financial assets reduced may still be affected by enforcement activities.If the reduced financial assets can be recovered later, the returns as impairment losses shall berecorded in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another entity (thetransferee) other than the issuer of financial assets.A financial asset is derecognised when the Company has transferred substantially all the risks andrewards of the asset to the transferee. A financial asset is not derecognised when the Companyretains substantially all the risks and rewards of the financial asset.When the Company has neither transferred nor retained substantially all the risks and rewards of thefinancial asset, it either (i) derecognises the financial asset and recognises the assets and liabilitiescreated in the transfer when it has not retained control of the asset; or (ii) continues to recognise thetransferred asset to the extent of the Company’s continuing involvement, in which case, theCompany also recognises an associated liability.
(7) Offsetting of financial assets and financial liabilities
When the Company has currently enforceable legal rights to offset the recognized financial assets
and financial liabilities, and there is an intention to settle on a net basis or to realize the financialassets and settle the financial liabilities, the financial assets and financial liabilities shall bepresented in balance sheet with the amount after offsets. Besides, the financial assets and financialliabilities shall be presented separately in balance sheet and are not allowed to be offset.
10. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.The Company measures related assets or liabilities at fair value and assumes that selling assets ortransferring liabilities in an orderly transaction in the principal market of related assets or liabilities;in the absence of a principal market, the Company assumes the transaction in the mostadvantageous market. Principal market (or the most advantageous market) is the market that theCompany can enter into on measurement date. The Company adopts the presumptions used bymarket participants in achieving the maximum economic value of pricing the assets or liabilities.For financial assets or financial liabilities in the active market, the Company uses the quoted pricein active market as fair value. Otherwise, the Company uses valuation technique to determine thefair value.Fair value measurement of non-financial assets considers market participants’ ability to generateeconomic benefits by using the assets in its highest and best use or by selling it to another marketparticipant that would use the asset in its highest and best use.The Company adopts the valuation techniques that are appropriate under current circumstances andfor which sufficient data and other supporting information are available to measure fair value,giving priority to the use of relevant observable inputs, and using unobservable inputs only if theobservable inputs are unavailable or not feasible to obtain.All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level inputthat is significant to the fair value measurement as a whole: Level 1 inputs are quoted (unadjusted)market prices in active markets for identical assets or liabilities; Level 2 inputs are observableinputs for related assets or liabilities, either directly or indirectly other than the inputs within Level1; Level 3 inputs are unobservable inputs for related assets or liabilities.For assets and liabilities that are recognized in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between levels in the hierarchy byreassessing categorization at the end of each reporting period.
11. Inventories
(1) Classification
Inventories of the Company include raw materials, finished goods, lower-valued consumables andself-made semi-finished goods
(2) Mesurement method of cost of delivered inventories
Inventories are quoted at actual costs when acquired. Raw materials, finished goods and self-madesemi-finished goods are determined on the weighted average basis.
(3) Basis for determining the net realisable value and method for inventories provision
Net realisable value is the estimated selling price deducted by the estimated costs to completion, theestimated selling expenses and related taxes. The net realisable value is measured on the basis ofobtained verified evidences and considerations for the purpose of holding inventories and the effectof post balance sheet events.At the end of each reporting period, if the cost is in excess of net realisable value, provision forinventories is recognized in profit or loss. The Company usually recognizes provision according tothe independent inventory item. When the circumstances that previously caused inventories to bewritten down below cost no longer exist, the original amount of the write-down is reversed.
(4) Inventory system
Inventories are accounted for using the perpetual inventory system.
(5) Amortization method for consumables and packaging
Low-valued consumables are charged with the one-off amortization method and multi-stageamortization method at consumption.
12. Assets classified as held for sale and discontinued operations
(1) Classification and measurement of non-current assets or disposal groups held for saleThe Company classifies the non-current asset or disposal group as held for sale when the carryingamount of the non-current asset or disposal group will be recovered through sale (includingexchange transactions of non-monetary assets with commercial substance) rather than throughcontinuing use.Above mentioned non-current assets not include investment properties subsequently measured withthe fair value model, biological assets measured at fair value less cost of sales, assets arising fromemployee benefits, financial assets, deferred tax assets and contractual rights under insurancecontracts.The disposal group is the group of assets to be disposed of, by sale or otherwise, together as a wholein a single transaction, and liabilities directly associated with those assets that will be transferred inthe transaction. Under certain circumstances, disposal group included goodwill acquired in thebusiness combination.The non-current asset or disposal group is classified as held for sale when all the following criteriaare satisfied: According to the trading routine of selling such asset or disposal group in similartransactions, the non-current asset or disposal group is available for immediate sale in currentcircumstance; the sale is highly probable to occur, that is, the Company has made a resolution on asale plan and obtained the assured purchase agreement. The sale is expected to be completed withinone year. If the control of the subsidiary is lost due to the sale of investment on the subsidiary andthe investment intended to be sold satisfies all conditions for the classification of assets held for sale,the Company classifies all the investment in that subsidiary as held for sale in separate financial
statements, and classifies all the assets and liabilities of that subsidiary as held for sale inconsolidated financial statements no matter whether the Company will keep part of the equityinvestment.Excess of the carrying amount over the fair value less costs to sell is recognized as assetsimpairment losses in the initial recognition or remeasurement on balance sheet date of non-currentasset or disposal group. The carrying amount of goodwill allocated to the disposal group shall bededucted firstly by the impairment loss recognized for the disposal group, and then the carryingamount of each non-current asset in the disposal group shall be proportionately deducted inaccordance with the proportion of the carrying value of the non-current assets in the disposal group.If net amount of fair value of the non-current asset or disposal group less costs to sell increases, theamount of the write-down will be recovered but not in excess of the cumulative impairment lossthat has been recognised after classified as held for sale. The reverse amount is recorded in thecurrent profit or loss. Additionally, the reduced carrying amount of goodwill could not be recovered.The Company does not depreciate (or amortise) the non-current assets classified as held for sale orassets of the disposal group classified as held for sale. Interest and other expenses attributable to theliabilities of the disposal group classified as held for sale continue to be recognised. If aninvestment or a part of the investment in an associate or a joint venture is classified as held for sale,equity method is not used for the part classified as held for sale, while equity method is used for therest part (the part not classified as held for sale) continuely. When the Company does not havematerial impact on an associate or a joint venture due to the sale transaction, equity method will bediscontinued.Where a non-current asset or disposal group is classified as held for sale but no longer meets theconditions for holding for sale classification, the Company discontinues its classification as held forsale and counts it according to the lower of:
① The carrying amount of the asset and disposal group before classification as held for sale,adjusted for any depreciation, amortisation or impairment recognised under the assumption that theasset or disposal group has not been classified as held for sale;
② Recoverable amount
(2) Discontinued operations
Discontinued operation refers to the separately identifiable component that has been disposed orbeen classified as held for sale and satisfies one of the follwing conditions:
① It represents am independent major business line or a separate geographical area of operations;
② It is part of a single co-ordinated plan to dispose of an independent major business or a separategeographical area of operations;
③ It is a subsidiary acquired exclusively with a view to resale.
(3) Presentation
The Comapany presents the non-current assets classified as held for sale and the assets of disposalgroup classified as held for sale as “Assets classified as held for sale” in balance sheet. Theliabilities of disposal group classified as held for sale is presented as “Liabilities classified as heldfor sale” in balance sheet.The Company presents profit or loss from discontinued operations separately from profit or lossfrom continuing operations in income statement. Impairment loss and reversal amount and anydisposal gain or loss of the non-current asset or disposal group classified as held for sale that doesnot satisfy the definition of a discontinued operation is presented in profit or loss from continuingoperations. Any impairment loss and reversal amount belongs to discontinued operations, anddisposal gain or loss is presented in profit or loss from discontinued operations.The disposal group which is planned to cease use rather than for sale, and satisfies the conditions ofcomponents of discontinued operation, the Company presents it as discontinued operation from thedate of cessation.For the discontinued operation presented in the current period, former profit or loss of continuingoperations will be presented as discontinued operations for comparative accounting period in thecurrent financial statements. If the discontinued operations no longer satisfy the conditions to beclassified as held for sale, former profit or loss of discontinued operations will be presented ascontinuing operations for comparative accounting period in the current financial statements.
13. Long-term equity investments
Long-term equity investments consist of equity investments in subsidiaries, joint ventures andassociates. An associate is an enterprise over which the Company has significant influence.
(1) Recognition of initial investment cost
Long-term equity investment from the business combination: For a long-term equity investmentacquired through a business combination under common control, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of theowners’ equity of the party being absorbed in the consolidated financial statements of the ultimatecontrolling party at combination date. For business combination involving entities not undercommon control, the initial investment cost of long-term equity should be the cost of acquisition.Long-term equity investment from other methods：for a long-term equity investment acquired bypaying cash, the initial investment cost shall be the actual purchase price paid; for those acquired bythe issue of equity securities, the initial investment cost shall be the fair value of the equitysecurities issued.
(2) Subsequent measurement and recognition of profit or loss
The cost method is applied for the investment of subsidiaries unless the investment satisfies theconditions of held for sale; the equity method is applied for the investment of joint ventures andassociates.When the cost method is adopted in long-term equity investments, except for cash dividends orprofit distributions declared but not yet distributed in the purchase price or consideration ofobtaining the investment, profits or cash dividends declared to be distributed by the investee shouldbe recognised as investment income in the current period.
When the equity method is adopted in long-term equity investments, the initial cost of aninvestment in excess of the share of investee’s fair value on identifiable net assets remainsunchanged; the initial cost of the investment that falls short of the share of investee’s fair value onidentifiable net assets shall be adjusted, for the difference which had been charged to current profitor loss.When the equity method is adopted, the Company recognises its share of the investee’s profit orloss, as well as its share of the investee’s other comprehensive income, as investment income or lossand other comprehensive income, and adjusts the carrying amount of the investment accordingly;the investor’s share of profit distributions or cash dividends declared by the investee is deductedfrom the carrying amount of the investment. For the changes of equity in an investee other thanprofit or loss, the investor adjusts the carrying amount of the investment and recognised it in capitalreserve (other capital reserves). The recognition of the investee’s results should be based on the fairvalues of the individual identifiable assets of the investee according to the Company’s accountingpolicies and accounting period. Additionally, the recognition should be based on the adjusted net profitof the investee.If the Company has significant influences or can implement joint control over investees due toadditional investment, the initial investment cost is recognized as the sum of the fair value of theoriginal portion of equity investment and the additional investment cost under equity method on thetransformation date. The accumulated fair value changes accounted in other comprehensive incomeof non tradable equity instrument investment which is initially classified as fair value through othercomprehensive income are transferred to retained earnings while accounting by equity methodinstead.If the Company loses control of an investee with joint control or significant influence retained afterpartial disposal of its shares, the remaining equity after disposal should be accounted in accordancewith the rules “CASBE 22-Recognition and Measurement of Financial Instruments” and thedifference between the fair value on the day of losing control and the book value is recognised inprofit or loss. For the other comprehensive income recognized by equity investment under theequity method, the basis of the accounting treatment is the same as that on disposal of related assetsor liabilities by the investee, the amount recognised in the equity on the changes in other equitymovements should be all charged to the profit or loss for the year.If the Company loses control of an investee after partial disposal of its shares, the remaining equityafter disposal has joint control or significant influence over the investee, the equity method shall beadopted and the remaining equity shall be deemed to be recognized under equity method since theacquisition date; if the remaining equity has no joint control or significant influence over theinvestee, the remaining equity after disposal should be accounted in accordance with therules“CASBE 22-Recognition and Measurement of Financial Instruments” and the differencebetween the fair value on the day of losing control and the book value is recognised in profit or loss.If the shareholding ratio of the Company is reduced due to the increase of investments of otherinvestors and thus the control is lost, but the joint control or significant influence can be exerted onthe investee, the Company should recognize the incremental shares of net assets according to thenew investments. The difference between the original book value of the long-term equityinvestment corresponding to the decrease in the shareholding ratio should be included in the currentprofit or loss; then, the equity shall be deemed to be recognized under equity method since theinvestment date and adjusted according to the new shareholding ratio.Unrealised profit or loss resulting from transactions between the Company and its associates or
joint ventures shall be calculated according to the proportion of its shareholding, which isattributable to the Company, and then to be recognized in investment income after offset. Whileunrealised profit or loss resulting from transactions between the Company and investee belongs toimpairment loss of transferred assets cannot be offset.
(3) Basis of determining the existence of joint control or significant influence over an investeeJoint control is the agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require unanimous consent of the parties sharing control. Indetermining whether there is a joint control, the first judge is determining whether the relevantarrangement is controlled collectively by all the participants involved or the group of theparticipants involved and then to determine whether the decisions related to the basic operatingactivities should require the unanimous consent of the participants involved. If all participants or thegroup of the participants involved must act consistently to determine the relevant arrangement, it isconsidered that all participants or the group of the participants control the arrangement. If two ormore participants in the collectively control of certain arrangement, it shall not be considered asjoint control. Protection of rights shall not be considered in determining whether there is jointcontrol.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control over those policies. When determining whether thereis the significant influence over the investee, the voting rights held by the investors or the otherentites and the effect of potential voting rights if it can be converted into the equity of investee,including the effect of current convertible warrants, security option and convertible bonds.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including20% ) or more but less than 50% of the voting shares, it has significant impact on the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and has no significant influence; when theCompany owns 20% (excluding) or less of the voting shares, it is not considered to have significantimpacts on the investee in general, unless there is clear evidence to show that in this case theCompany can participate in the production and business decisions of the investee so as to have thesignificant influence.
(4) Held-for-sale equity investments
Accounting treatment for the entity investment, or a portion of an equity investment, in associatesor joint ventures that is classified as held for sale refers to Note III, 12.Any remaining equity investment that has not been classified as held for sale shall be accountedunder the equity method.When the equity investment in associates or joint ventures previously classified as held for sale andno longer satisfies the conditions to be classified as held for sale, it will be adjusted under equitymethod retrospectively as from the date of classification as held for sale.
(5) Method of impairment testing and impairment provision
For investment in subsidiaries, associates and joint ventures, refers to Note III, 20 for the method ofasset impairment provision.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, usein supply of services, rental or for administrative purposes with useful lives over one accountingyear.Fixed assets are recognised when it is probable that the related future economic benefits will flowinto the company, and the cost can be measured reliably.Fixed assets of the Company are initially measured at actual costs in acquisition.The subsequent expenditure related to fixed assets is included in cost of the fixed assets when therelevant economic benefits are likely to flow into the Company and its cost can be measuredreliably; routine repair expenditure of fixed assets that do not meet the conditions for capitalizationis included in the profit and loss or the cost of relevant assets according to the beneficiaries when itoccurs. The book value of the replaced part shall be derecognized.
(2) Depreciation of fixed assets
Depreciation of the fixed assets is calculated on the straight-line basis. The fixed asset isdepreciated since the state of intended use and no longer depreciated when recognition is terminatedor being classified as non-current assets held for sale. Without considering impairment provision,the estimated useful lifetime, estimated residual values, and the annual depreciation rates of eachcategory of fixed assets are as follows:
| Category | Estimated useful life | Estimated residual value | Annual depreciation rate |
| Pant and buildings | 25-43 years | 5% | 3.80-2.21% |
| Machinery and equipment | 12-28 years | 5% | 7.92-3.39% |
| Vehicles | 10 years | 5% | 9.50% |
| Electronic equipment | 10 years | 5% | 9.50% |
| Industrial furnace | 13 years | 5% | 7.31% |
| Metallurgical equipment | 19 years | 5% | 5.00% |
| Others | 14-22 years | 5% | 6.79-4.32% |
The fixed assets that have been withdrawn for impairment provision shall also be deducted from theaccumulative amount of impairment provision to recognize depreciation rate.
(3) Impaitment test and impairment provision of fixed assets refer to Note III, 20.
(4) Useful lives, residual values and the depreciation method are reviewed by the Company at least ateach financial year end.Useful lives are adjusted if the expected useful lives are different from the original estimates; theestimated net residual values are adjusted if they are different from the original estimates.
(5) Disposal of fixed assets
The fixed assets are derecognied when the fixed assets are diposed or when it is not expected togenerate economic benefits through use or disposal of the fixed assets. The amount of the disposalincome from the sale, transfer, scrapping or damage of fixed assets after deducting its book valueand relevant taxes shall be included in the current profit and loss.
15. Construction in progress
Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowedfunds during the period of construction.Construction in progress is reclassified to the appropriate category of fixed assets when completedand ready for use.Impairment provision of construction in progress refers to Note III. 20.
16. Materials for construction of fixed assets
The materials for construction of fixed assets of the Company refers to the material prepared forconstruction in progress, including engineering materials, equipments not yet installed and toolsprepared for production, etc.Purchase measured at cost, the recipients transfer to construction in progree, and the remainingtransfer to inventory after the completion of construction.Impairment provision of materials for construction of fixed assets refers to Note III, 20.Closing balance of materials for construction of fixed assets is presented in “Construction inprogress” in balance sheet.
17. Borrowing costs
(1) Principles of capitalising borrowing costs
All the borrowing costs that are directly attributable to construction or production of all qualifyingassets are capitalized and recorded in relevant assets costs. Other borrowing costs are treated as anexpense and recorded in the profit or loss. The capitalization of borrowing costs commences when:
① Expenditures for the assets are incurred, including paying cash, transferring non-cash assets orundertaking interest-bearing debt for acquisition or construction of the assets, which could becapitalized;
② Borrowing costs are incurred; or
③ The acquisition and construction activities that are necessary to bring the assets to get ready forthe intended use or sale have commenced.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs ceases when the asset being acquired or constructed issubstantially ready for its intended use or sale and borrowing costs incurred thereafter are treated asan expense to be recorded in the profit or loss.
Capitalization of borrowing costs is suspended during extended periods in which the acquisition orconstruction of a fixed asset is interrupted abnormally and the interruption lasts for more than threemonths until the acquisition or construction is resumed; borrowing costs in normal interruptionperiod continue to be capitalized.
(3) Calculation of capitalization rate and amount of borrowing costs.
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowingcosts incurred during the current period deducted by any temporary interest or investment income;for general borrowings, the borrowing costs eligible for capitalization are determined by applying acapitalization rate to the weighted average of capital expenditure that exceeds the specificborrowings. The capitalization rate is calculated based on the weighted average interest rate ofgeneral borrowings.During the capitalization period, exchange differences on foreign currency specific borrowings shallbe capitalized; exchange differences on foreign currency general borrowings shall be recognized ascurrent profit or loss.
18. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets include land use rights, software and etc.Intangible assets are measured at cost initially and its useful lifetime shall be analyzed andrecognized when obtained. An intangible asset with finite useful lifetime shall be amortized over theexpected useful life using method which can reflect the expected recognition of economic benefitsrelated to the assets when the intangible asset is available for use; an intangible asset whoseexpected recognition cannot be reliably determined is amortized at straight-line amortizationmethod; an intangible asset with indefinite useful lifetime shall not be amortized.The amortization method of intangible assets with limited service life is as follows:
Intangible assets with finite useful lives are amortized over the useful lives on the straight-line basisaccording to the category, expected useful lifetime and estimated residual value. The annualamortization rates of each category of intangible assets are as follows:
| Category | Useful lifetime | Amortisation method | Annual amortization rate |
| Software | 5-10 years | Straight line method | 10.00-20.00% |
| Land use rights | 40-50 years | Straight line method | 2.00-2.50% |
The Company reviews the useful lives and amortization method of intangible assets with finiteuseful lifetime, adjusts original estimated amount and processes according to the accountingestimate change if there are any differences with original estimated, at least at the end of eachreporting period.The Company estimates an intangible asset can no longer bring future economic benefits at the
balance sheet date, and then the carrying amount of the intangible asset should be reversed to thecurrent profit or loss.For the impairment provision of intangible assets, refers to Note III, 20.
19. Development expenditure
Expenditure on internal research and development projects is classified into expenditure on theresearch stage and expenditure on the development stage.Expenditure on the research stage is recognised in the profit or loss when incurred.Expenditure on the development stage is capitalized only when: the technical feasibility ofcompleting the intangible asset so that it is available for use or sale; the intention to complete theintangible asset is to use or sell it; the method of generating economic benefits by the intangibleassets, including that the intangible asset can be proved that the output or the intangible asset itselfhas market or, if it is to be used internally, the usefulness of the intangible asset also need to beproved; the availability of adequate technical, financial and other resources to complete thedevelopment and the ability to use or sell the intangible asset; the expenditure attributable to thedevelopment stage can be measured reliably. Otherwise, it shall be presented in the profit or loss.The research and development projects of the Company will enter into the development stage aftermeeting the above conditions and passing through the studies of technical feasibility and economicfeasibility, and the projects approval.Capitalized expenditure on the development stage is presented as “Development expenditures” inthe balance sheet and shall be transferred to intangible assets when the project is completed to itsintended use state.
20. Impairment of assets
The impairment for the long-term equity investments, fixed assets, construction in progress,right-of-use asset, intangible assets, etc. (excluding inventories, investment property measured atfair value model, deferred income tax assets and financial assets) of subsidiaries, associates andjoint ventures are determined as follows:
The Company assesses whether any indicator of impairment exists as of the end of each reportingperiod, and, if yes, performs impairment test by estimation of the asset’s recoverable amount. Forgoodwill acquired in business combinations, intangible assets with indefinite lives and intangibleassets without intended use state, an annual impairment test is performed no matter whether there isany indicator of impairment.An asset’s recoverable amount is calculated as the higher of the asset’s fair value less costs to selland the present value of estimated future cash flows generated from the use of assets. Therecoverable amount is calculated on individual basis unless it is not applicable, in which case therecoverable amount is determined for the asset group to which the asset belongs. An asset group isrecognized based on whether the cash inflows generated by the asset group are largely independentto those of other assets or asset groups.
When the recoverable amount of an asset or an asset group is less than its carrying amount, thecarrying amount is reduced to its recoverable amount. The reduction amount is charged to profit orloss and an impairment allowance is provided.In terms of impairment test of the goodwill, the carrying amount of the goodwill arising frombusiness combination shall be allocated to the related asset group in accordance with a reasonablebasis at acquisition date. Those that are difficult to be allocated to relevant assets shall be allocatedto relevant assets groups. Relevant assets or assets groups refer to those that can benefit from thesynergies of business combination and are not larger than the Company’s recognized reportingsegment.When there is an indication that the goodwill related asset and asset group are prone to impair, theCompany should execute impairment test for the asset and asset group excluding goodwill,calculate the recoverable amount and recognize the corresponding impairment loss. The Companyshould execute impairment test for the asset or asset group including goodwill and compare therecoverable amount with carrying amount, provision for impairment of assets shall be recognizedwhen the recoverable amount of assets is lower than its carrying amount.Impairment losses cannot be reversed in subsequent accounting periods after recognition.
21. Long-term prepaid expenses
The long-term prepaid expenses of the Company are recorded as the actual cost and evenlyamortized on straight-line basis over the expected beneficial period. For the long-term prepaidexpense items that cannot benefit the later accounting period, the amortized value is recognized inthe profit or loss.
22. Payroll and employee benefits payable
(1) The scope of employee benefits payable
Payroll and employee benefits payable are all forms of consideration given by an entity in exchangefor service rendered by employees or the termination of employment, including short-termemployee benefits, post-employment benefits, termination benefits and other long-term employeebenefits. The benefits that the Company provides to the spouses, children and dependents ofemployees, the late employees’ family and other beneficiaries also shall be deemed as payroll andemployee benefits payable.According to liquidity, employment benefits are presented separately as “Payroll and employeebenefits payable” and “Long-term payroll and employee benefits payable” in the balance sheet.
(2) Short-term employee benefits payable
A liability when an employee has provided service in exchange for employee benefits, such aswages, bonuses, social security contributions (including medical insurance, injury insurance,maternity insurance, etc.) and house funding to be paid is recognized as the current profit or loss orcosts of related assets.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plan and defined benefit plan. Definedcontribution plan is the post-employment benefit plan under which the Company pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions.
Defined benefit plan is the post-employment benefit plan other than defined contribution plan.Defined contribution planDefined contribution plan includes basic pension insurance, unemployment insurance, etc.During the accounting period of service provided by the employee, the Company shall recognise thecontribution payable according to the defined contribution plan as the liability and record thecorresponding amount in the current profit or loss or the cost of the relevant asset.
(4) Termination benefits
The Company is required to recognize termination benefits with a corresponding charge to profit orloss at the earlier of when the entity can no longer withdraw an offer of those benefits and when itrecognizes any related restructuring costs.For implementing the internal retirement plan, the economic compensation before the officialretirement date belongs to termination benefits. From the date of ceasing service to the normalretirement date, the wages of the internally retired employees and the social insurance premiums tobe paid are included in the current profit or loss one time. Economic compensation after the officialretirement date (such as normal pension) should be treated as post-employment benefits.
23. Provisions
If the contingent considerations or contingent liabilities satisfy the following conditionssimultaneously, a provision will be recognized by the Company:
(1) The obligation is a present obligation assumed by the Company; and
(2) It is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation; and
(3) A reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the presentobligation, after considering risks, uncertainties, present value, etc. If the impact of time value ofmoney is significant, the best estimate is determined as its present value of future cash outflow.Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the currentbest estimate.If the settlement of provision is fully or partially compensated by a third party or the others, and thecompensated amount can be definitely received, then the provision can be recognised as assetseparately. The compensated amount shall not be greater than the carrying amount of the recognizedliability.
24. Share-based payments and equity instruments
(1) Category of share-based payments
The Company’s share-based payment is either equity-settled share-based payment or cash-settledshare-based payment.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by theCompany, the fair value is determined at the quoted price in the active market. For options andother equity instruments with no active market, option pricing model shall be used to estimate thefair value of the equity instruments. The following factors shall be taken into account using optionpricing models: A. the exercise price of the option; B. the validity period of the option; C. thecurrent market price of the share; D. the expected volatility of the share price; E. predicted dividendof the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimateOn each balance sheet date within the vesting period, the estimated number of equity instrumentsexpected to vest is revised based on the best estimate made by the Company according to the latestavailable subsequent information as to changes in the number of employees with exercisable rights.On the vesting date, the final estimated number of equity instruments expected to vest should equalthe actual number of equity instruments expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based paymentEquity-settled share-based payment shall be measured at the fair value of the equity instrumentsgranted to employees. If the right may be exercised immediately after the grant, the fair value ofequity instrument shall, on the date of the grant, be included in the relevant costs or expenses, andthe capital reserve shall be increased accordingly. If the right can not be exercised until the vestingperiod comes to an end or until the specified performance conditions are met, then on each balancesheet date within the vesting period, the services obtained in the current period shall, based on thebest estimate of the number of vested equity instruments, be included in the relevant costs orexpenses and the capital reserve at the fair value of the equity instrument on the date of the grant.After the vesting date, the Company make no adjustment to the relevant costs or expenses as well asthe total amount of the owner’s equities which have been confirmed.Cash-settled share-based payment shall be measured in accordance with the fair value of liabilitycalculated and recognised based on the shares or other equity instruments undertaken by theCompany. If the right may be exercised immediately after the grant, the fair value of the liabilityundertaken by the Company shall, on the date of the grant, be included in the relevant costs orexpenses, and the liabilities shall be increased accordingly. If the right may not be exercised untilthe vesting period comes to an end or until the specified performance conditions are met, on eachbalance sheet date within the vesting period, the services obtained in the current period shall, basedon the best estimate of the information about the exercisable right, be included in the relevant costsor expenses and the corresponding liabilities at the fair value of the liability undertaken by theCompany. On each balance sheet date and on each account date prior to the settlement of therelevant liabilities, the Company re-measures the fair value of the liabilities and include the changesin the current profits and losses.When there are changes in Company’s share-based payment plans, if the modification increases thefair value of the equity instruments granted, corresponding recognition of service increase inaccordance with the increase in the fair value of the equity instruments; if the modificationincreases the number of equity instruments granted, the increase in fair value of the equityinstruments is recognised as a corresponding increase in service achieved. Increase in the fair valueof equity instruments refer to the difference between the fair values of the modified date. If themodification reduces the total fair value of shares paid or not conductive to the use of otheremployees share-based payment plans to modify the terms and conditions of service, it will
continue to be accounted for in the accounting treatment as if the change had not occurred, unlessthe Company cancelled some or all of the equity instruments granted.During the vesting period, if the cancelled equity instruments (except for failure to meet theconditions of the non-market vesting conditions) granted by the Company to cancel the equityinstruments granted amount treated as accelerated vesting of the remaining period should berecognised immediately in profit or loss, while recognising capital reserves. If employees or otherparties can choose to meet non-vesting conditions but they are not met in the vesting period, theCompany will treat them as cancelled equity instruments granted.
25. Revenue
(1) General principle
Revenue is recognized when the Company has satisfied its performance obligations in the contract,that is, when the customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations, the Company determines thestand-alone selling price at contract inception of the distinct good or service underlying eachperformance obligation in the contract and allocates the transaction price in proportion to thosestand-alone selling prices. The Company recognises as revenue the amount of the transaction pricethat is allocated to each performance obligation.The Company satisfies a performance obligation over time if one of the following criteria is met; orotherwise, a performance obligation is satisfied at a point in time:
① The customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs;
② The customer can control the asset created or enhanced during the Company’s performance;
③ The Company’s performance does not create an asset with an alternative use to it and theCompany has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time, the Company recognises revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. When theoutcome of that performance obligation cannot be measured reasonably, but the Company expectsto recover the costs incurred in satisfying the performance obligation, the Company recognisesrevenue only to the extent of the costs incurred until such time that it can reasonably measure theoutcome of the performance obligation.For performance obligation satisfied at a point in time, the Company recognises revenue at the pointin time at which the customer obtains control of relevant goods or services. To determine whether acustomer has obtained control of goods or services, the Company considers the followingindicators:
① The Company has a present right to payment for the goods or services, as the customer obtainsthe current payment obligation for the goods.
② The Company has transferred the legal title of the goods, as the customer has obtained the legaltitle of the goods.
③ The Company has transferred physical possession of the goods to the customer, as the customerhas obtained the physical possession of the goods.
④ The Company has transferred the significant risks and rewards of legal title of the goods to thecustomer, as the customer has obtained the significant risks and rewards of legal title of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has obtained control of goods.A contract asset is the Company’s right to consideration in exchange for goods or services that it hastransferred to a customer when that right is conditional on factors other than the passage of time.The Company recognises loss allowances for expected credit loss on contract assets. TheCompany’s right to consideration that is unconditional (only the passage of time is required) shallbe presented as accounts receivable. The Company’s obligation to transfer goods or services to acustomer for which the Company has received consideration (or an amount of consideration is due)from the customer shall be presented as the contract liability.The Company offsets the contract assets and contract liabilities under the same contract andpresents the net amount. If the net amount is the debit balance, it is presented under “contractassets” or “other non-current assets” according to its liquidity; if the net amount is the creditbalance, it is presented under “contract liabilities” or “other non-current liabilities” according to itsliquidity.
(2) Specific recognition methods
The specific revenue recognition methods of the company are as follows:
Contracts for the sale of goodsContracts for the sale of goods between the Company and its customers usually only involves theperformance obligations of the transferring of the goods. The Company generally recognizesrevenue based on the following considerations, taking into account the timing of control transfer.This includes obtaining the current collection rights of the goods, the transfer of the main risks andrewards of the ownership of the goods, the transfer of the legal ownership of the goods, the transferof the physical assets of the goods, and the acceptance of the goods by the customer.Contracts for rendering of servicesThe service contract between the Company and its customers usually includes performanceobligations for labor services, technical consulting or technical services. As a result of thesatisfaction of the performance obligation the Company, the customers obtain and consume theeconomic benefits of the service while the Company provides the service simultaneously. TheCompany is entitled to recover from the accumulative performance of the contract that has beencompleted to date, except when progress of the performance cannot be reasonably determined. TheCompany determines the progress of the performance of the services provided in accordance withthe input method. When the progress of the performance cannot be reasonably determined, and thecosts incurred by the Company are expected to be compensated, the revenue will be recognizedbased on the amount of costs incurred, until the progress of the performance can be reasonablydetermined.
26. Contract cost
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs tofulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain acontract with a customer that it would not have incurred if the contract had not been obtained e.g.an incremental sales commission. The Company recognises as an asset the incremental costs ofobtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining acontract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or otheraccounting standards, the Company recognises an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipatedcontract, including direct labour, direct materials, allocations of overheads (or similar costs), coststhat are explicitly chargeable to the customer and other costs that are incurred only because theCompany entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or incontinuing to satisfy) performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for thecosts to fulfill a contract (the “assets related to contract costs”) are amortised on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assets relateand recognised in profit or loss for the current period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amountof an asset related to contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less
② The costs that relate directly to providing those goods or services that have not yet beenrecognised as expenses.The contract performance cost recognized as an asset shall be shown in the "Inventories" item withan amortization period of no more than one year or one normal operating cycle at the time of initialrecognition, while the amortization period exceeding one year or one normal operating cycle at thetime of initial recognition shall be shown in the item of "Other non-current assets".The contract acquisition cost recognized as an asset shall be listed in the item of "Other currentassets" when the amortization period does not exceed one year or one normal operating cycle at thetime of initial recognition, and listed in the item of "other non-current assets" when the amortizationperiod exceeds one year or one normal operating cycle at the time of initial recognition.
27. Government grants
Government grants are recognized in profit or loss, when they are highly probable to be receivedand all conditions are fulfilled.
If a government grant is in form of monetary asset, it is measured at the amount received orreceivable. If a government grant is in form of nonmonetary asset, it is measured at fair value of theasset. If the fair value cannot be reliably determined, it is measured at the nominal amount as RMB1.Asset-related government grants are recognized when the government document designates that thegovernment grants are used for constructing or forming long-term assets. Otherwise, thegovernment grants should be income-related.If the government document is inexplicit, the Company should recognize the part corresponding toassets value of government grants as asset-related government grants if the conditions are to formlong-term assets and the remaining part as income-related grants. As for indistinguishablegovernment grants, the whole should be recognized as income-related grants.Asset-related government grants can be accounted by offsetting the carrying amout of related assetsor being recognized as deferred income, and amortized systematically and reasonably to profit orloss over the useful life of the related asset. If the income-related grant is a compensation for relatedincurred expenses or losses, the grant shall be recognized in the current pofit or loss or offset relatedcosts immediately; if the grant is a compensation for related expensesor losses in future period, thegrant is recognized as deferred income and should be recognized in profit or loss for the periodwhen the expenses or losses are incurred. For the government grant measured at the nominalamount, it should be recognized in profit or loss immediately for the period. The Company adopts aconsistent approach to the same or similar government grants.The government grants related to daily activities shall be recognized in other income or offsetrelated expenses. Otherwise, it shall be recognized in non-operating income and expenses.When the recognized government grants need to be returned, the carrying amount of the assets shallbe adjusted if the carrying amount of related assets is written down during the initial recognition; ifthere is the balance of related deferred income, the book balance of related deferred income shall bewritten off, and the excess part shall be recognized in the current profit or loss; for the othercircumstances, the government grants shall be recognized in the current profit or loss directly.
28. Deferred tax assets and deferred tax liabilities
Income tax comprises current tax and deferred tax, and is normally recognized as income taxexpense in profit or loss, except for goodwill generated in a business combination or relateddeferred tax items that have been recognized directly in equity.Based on the differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base, the Company adopts the liability method for the provision ofdeferred tax.A deferred tax liability is recognized in respect of all taxable temporary differences except thosearising from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in atransaction which is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for the temporary differences associated with subsidiaries, joint ventures and associates: theCompany is able to control the timing of the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable future.A deferred tax asset is recognized in respect of all deductible temporary differences to the extentthat it is probable that taxable profit will be available against which the deductible temporarydifference will be utilized except those arising from the initial recognition of an asset or liability ina transaction which:
(1) The transaction is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for deductible temporary differences associated with subsidiaries, joint ventures andassociates: a deferred tax asset is recognized to the extent that it is probable that the temporarydifference will reverse in the foreseeable future, and taxable profit will be available against whichthe temporary difference can be utilized.At the end of each reporting period, deferred tax assets and liabilities are measured at the tax ratesthat are expected to apply to the period when the asset is realized or the liability is settled, takinginto account the income tax effect of expected asset realization or liability settlement at the end ofeach reporting period.The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and isreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow the related tax benefit to be utilized. Any such reduction is reversed to the extent that itbecomes probable that sufficient taxable profits will be available.
29. Lease
(1) Identification of lease
On the commencement date of the contract, as the lessee or lessor, the Company evaluates whetherthe customer in the contract has the right to obtain almost all the economic benefits arising from theuse of the identified assets during the use period, and has the right to dominate the use of theidentified assets during the use period. If one party in the contract transfers the right to control theuse of one or more identified assets within a certain period in exchange for consideration, theCompany recognizes the contract as lease or includes lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilitiesfor all leases, except for short-term lease and low-value asset lease with simplified approach.For the right-of-use assets, refers to Note III.30.Lease liabilities are initially measured according to the present value of the unpaid lease paymentsat the beginning of the lease term calculated by the embedded interest rate of the lease. Where theembedded interest rate cannot be determined, the incremental loan interest rate shall be used as thediscount rate. Lease payments includes: fixed payments and in-substance fixed payments, andwhere the lease incentives exists, the lease payment is the payment amount less any lease incentivesreceivable; variable lease payments depending on index or ratio; the exercise price of a purchaseoption if the lessee is reasonably certain to exercise that option; payments for terminating the lease,if the lease term reflects the lessee exercising that option of terminating; and amounts expected tobe payable by the lessee under residual value guarantees. Subsequently, the interest expense on thelease liability for each period during the lease term is calculated using a constant periodic rate of
interest and is recognised in current profit or loss. The variable lease payments that are not includedin the measurement of the lease liability are recognised in profit or loss when actually incurred.Short-term leaseShort-term leases refer to leases with a lease term of less than 12 months from the commencementdate, except for those with a purchase option.Lease payments of short-term leases are recognised in the cost of related assets or current profit orloss on a straight-line basis over the lease term.For short-term leasing, the Company selects the following types of assets that meet the conditionsfor short-term leasing based on the category of leased assets and adopts the simplified processingmethod mentioned above.Low-value asset leaseLow-value asset lease refers to the lease with lower value when the single leased asset is abrand-new asset.Lease payments of low-value asset lease are recognised in the cost of related assets or current profitor loss on a straight-line basis over the lease term.For a low-value asset lease, the Company chooses to adopt the above simplified approach accordingto the specific conditions of each lease.Lease modificationThe Company accounts for a lease modification as a separate lease when the modification occursand the following conditions are met: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where the lease modification is not accounted for as a separate lease, on the effective date of thelease modification, the Company will reallocate the consideration of the contract after themodification, redefine the lease term, and remeasure the lease liability based on the present value ofthe lease payments after the modification and the revised discount rate.If a lease modification results in reduction in the scope of the lease or a shortening of the lease term,the Company reduces the carrying amount of the right-of-use asset accordingly and includes theprofit or loss related to the partial or complete termination of the lease is included in the currentprofits and losses.Other lease modifications result in a remeasurement of the lease liability, the Company adjusts thecarrying amount of the right-of-use asset accordingly.
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease when the terms of the leasetransfer substantially all the risks and rewards of asset ownership to the lessee. All leases other thanfinancial leases are classified as operating leases.
Finance leaseUnder finance lease, the Company accounts for finance lease receivables at the beginning of thelease term at the net lease investment, which is the sum of the unsecured residual value and thepresent value of the lease receipts outstanding at the commencement date of the lease, discounted atthe interest rate implicit in the lease. The Company as lessor calculates and recognises interestincome for each period of the lease term based on a fixed periodic interest rate. Variable leasepayments acquired by the Company as lessor that are not included in the net measurement of leaseinvestments are included in profit or loss for the period when actually incurred.Derecognition and impairment of finance lease receivables are accounted for in accordance with therequirements under the Accounting Standard for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments and the Accounting Standards for Business Enterprises No.23 – Transfer of Financial Assets.Operating leaseLease payments under operating lease are recognised in profit or loss on a straight-line basis overthe lease term. Initial direct costs incurred in relation to operating leases are capitalised andamortised over the lease term on the same basis as rental income and recognised in profit or loss forthe according period. The variable lease payments obtained in relation to operating leases that arenot included in the lease payments are recognised in profit or loss in the period when actuallyincurred.Lease modificationWhere the operating lease is modified, the Company accounts for the modification as a new leasefrom the effective date of the modification. The amount of lease receipts received in advance orreceivable in respect of the lease prior to the modification is treated as a receipt under the new lease.Where a finance lease is modified and the following conditions are met, the Company accounts forthe modification as a separate lease: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where a finance lease is modified and not accounted for as a separate lease, the Company accountsfor the modified lease in the following circumstances: ① If the modification effectives on thelease commencement date, the lease will be classified as an operating lease, the Company accountsas a new lease from the effective date of the lease modification, and the net amount of the leaseinvestment before the effective date of the lease modification shall be taken as the book value of theleased asset; ② If the modification effectives on the lease commencement date, the lease will beclassified as a finance lease, and the Company conducts accounting treatment in accordance withthe Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement ofFinancial Instruments on modifying or renegotiating contracts.
30. Use-right assets
(1) Recognition conditions of use-right assets
Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during thelease term.
On the commencement date of the lease term, the use-right assets shall be initially measured at cost.The cost includes: the initial measurement amount of the lease liability; The lease payment made onor before the commencement date of the lease term, if there is a lease incentive, shall be deductedfrom the amount related to the lease incentive already enjoyed; Initial direct expenses incurred bythe Company as the lessee; The costs expected to be incurred by the Company, as the lessee, todismantle and remove the leased assets, restore the leased assets to the site where they are locatedor restore the leased assets to the state specified in the lease terms. As the lessee, the Company shallrecognize and measure the costs of demolition and restoration in accordance with the rules“CASBE13- Contingencies”. Subsequent adjustments are made for any remeasurement of lease liabilities.
(2) Depreciation method of use-right assets
The Company uses the straight-line method of depreciation. If the Company, as the lessee, canreasonably determine the ownership of the leased asset at the end of the lease term, depreciationshall be calculated and withdrawn during the remaining service life of the leased asset. Where it isnot reasonably certain that the ownership of the leased asset can be acquired at the end of the leaseterm, depreciation shall be calculated and withdrawn during the period during which the lease termand the remaining service life of the leased asset are shorter.
(3) For the impairment test method and impairment provision method of use-right assets, please refer toNote III. 20.
31. Safety fund and maintenance fee
According to the relevant provisions of CQ [2012] No. 16 document issued by Ministry of Finance,National Development and Reform Commission, State Administration of Work Safety, the actualoperating income of metallurgical and transportation enterprises in the preceding year is the basisfor the provision of safety fund and maintenance fee of the Company, and the method of excessretirement shall be adopted for the provision.Safety funds and maintenance fees are included in the cost of relevant products or recognized in thecurrent profit or loss for the related products, and credited to the special reserve at the same time.When safety funds and maintenance fees are utilized in compliance with relevant regulations, if thecosts incurred can be categorized as expenditure, the costs incurred should be charged against thespecial reserve; if the reserve is used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the projects reach the status ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount and the fixedassets will not be depreciated in the future.
32. Restricted stock
In the equity incentive plan, the Company grants restricted stock to the incentivied. The incentiviedfirst subscribe for the stock. If the unlocking conditions specified in the equity incentive plan arenot met, the Company repurchases the stock at the price agreed in advance. Where the restrictedstock issued to the employees has gone through registration and other capital increase procedures inaccordance with relevant provisions, the Company shall, on the grant date, confirm the share capitaland capital reserve (capital premium) according to the subscription payment received from theemployees, also recognize treasury shares and other payables with respect to repurchaseobligations.
33. Significant accounting judgments and estimates
The Company provides continuous assessment of the reasonable expectations of future events, thecritical accounting estimates and key assumptions based on the historical experience and otherfactors. The critical accounting estimates and key assumptions that are likely to lead to significantadjustment risks of the carrying amount of assets and liabilities for the next accounting period arelisted as follows:
Classification of financial assetsThe major judgments of the Company involved in determining the classification of financial assetsincludes the analysis of business models and the characteristics of contract cash flows, etc.At the level of financial assets portfolio, the Company determines the business model for managingfinancial assets, taking into account factors such as methods of evaluating and reporting financialassets performance to key managers, the risks of affecting financial assets performance and riskmanagement methods, and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Company has the following judgments: whether the principal’s time distributionor amount may change during the lifetime for early repayment and other reasons; whether theinterest only includes the time value of money, credit risk, other basic lending risks and theconsideration with cost and profit. For example, whether the advance payment only reflects theunpaid principals and interests based on the unpaid principal, and reasonable compensation paid forthe early termination of the contract.Measurement of expected credit loss of account receivablesThe Company calculates the expected credit losses of accounts receivable through default riskexposure and expected credit losses rate, and determines the expected credit losses rate on the basisof default probability and default loss rate. In determining the expected credit losses rate, theCompany uses the experience of internal historical credit loss, and adjusts the historical data withcurrent situation and forward-looking information. In considering forward-looking information, theindicators include the risks of economic downturn, external market environment, technologicalenvironment and changes of customer conditions. The Company monitors and reviews regularly theassumptions related to the calculation of expected credit losses.Deferred tax assetsDeferred tax assets are recognized to the extent that it is probable that taxable profit will beavailable against which the deductible temporary difference and unused tax credit can be utilized.Significant management judgement is required to determine the amount of deferred tax assets thatcan be recognized, based upon the likely timing and level of future taxable profits together with taxplanning strategies.Determination of unlisted equity investment fair valueThe fair value of unlisted equity investment is the estimated future cash flow discounted by thecurrent discount rate of the project with similar terms and risk characteristics. The valuationrequires the Company to estimate the expected future cash flow and discount rate and is thereforeuncertain. Under limited circumstances, if the information used to determine the fair value isinsufficient, or the possible estimates of the fair value are widely distributed, and the cost represents
the best estimate of the fair value within the range, the cost could represent the appropriate estimateof the fair value within the distribution range.
34. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
① Accounting Standards for Business Enterprises Interpretation No. 15The Ministry of Finance issued the "Interpretation of Accounting Standards for BusinessEnterprises No. 15" (Cai Kuai [2021] No. 35) in December 2021 (hereinafter referred to as"Interpretation No. 15")Interpretation No. 15 stipulates that, in case an enterprise conducts external sales of products orby-products produced before fixed assets reaching the intended use or during the R&D process(collectively, “Trial Sales”), the accounting treatment shall be carried out separately in accordancewith the Accounting Standards for Business Enterprises No. 14 – Revenue and the AccountingStandards for Business Enterprises No. 1 – Inventories.The Interpretation No. 15 is effected since 1 January 2022, and the Company shall retroactivelyadjust the trial sales that occurred between the beginning of the earliest period for financialstatement presentation and January 1, 2022.Interpretation No. 15 stipulates that when determining a loss contract, the cost of fulfilling thecontract by the enterprise includes the incremental cost of fulfilling the contract and the allocationamount of other costs directly related to fulfilling the contract. Among them, the incremental cost offulfilling the contract includes direct labor, direct materials, etc; The allocation amount of othercosts directly related to the performance of the contract includes the depreciation expense allocationamount of fixed assets used for the performance of the contract. The Interpretation No. 15 iseffected since 1 January 2022, and the Company shall implement this provision for contracts thathave not fulfilled all the obligations by January 1, 2022. The cumulative impact shall be adjusted tothe retained earnings and other related financial statement items at the beginning of the year on theimplementation date, without adjusting the comparative financial statement data in the previousperiod.The adoption of Interpretation No. 15 had no material impact on the financial position andoperating performance of the Company.
② Interpretation No. 16 of the Accounting Standards for Business EnterprisesThe Ministry of Finance issued Interpretation No. 16 of the Accounting Standards for BusinessEnterprises (Cai Kuai [2022] No. 31) (“Interpretation No. 16”) in November 2022.Interpretation No. 16 stipulates that, for financial instruments such as perpetual bonds classified asequity instruments, the enterprise shall recognise the income tax effect related to dividends whenrecognising dividend receivables. For distributed profits from transactions or events that previouslygenerated profit or loss, the income tax effect of the dividend shall be included in profit or loss forthe period; for distributed profits from transactions or events that was previously recognised inowner’s equity, the income tax effect of the dividend shall be included in owner’s equity. The aboveregulations were implemented since November 30, 2022. Companies shall adjust the impact ofincome tax on financial instruments retrospectively that occurred before January 1, 2022 and therelevant financial instruments have not been derecognized as of January 1, 2022.
Interpretation No. 16 stipulates that, if an enterprise replaces cash-settled share-based payment withequitysettled share-based payment in accordance with terms and conditions under cash-settledshare-based payment agreement, on the date of change, equity-settled share-based payment shall bemeasured at the fair value as at the date of grant of such equity instrument, with services received tobe included in capital reserve. Meanwhile, recognised liability in relation to cash-settledshare-based payment as at the date of change shall be derecognised, with difference thereof to beincluded in profit or loss for the current period. If the vesting period is extended or shortened due tothe revision, the enterprise shall perform the above accounting treatment according to the revisedvesting period. The above regulations were implemented since November 30, 2022. Companiesshall adjust retained earnings and other related financial statement items for transactions thatoccurred before January 1, 2022, and do not adjust comparable period information.The adoption of Interpretation No. 16 had no material impact on the financial position andoperating performance of the Company.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.IV. Tax
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| Value-added tax | Taxable Revenue | 13/9/6 |
| City construction and maintenance tax | Turnover tax payable | 7/5 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
| Income tax | Taxable Income | 25 |
2. Tax preferential benefits and approvals
On 25 October 2021, the Company obtained the high-tech enterprise certificate issued by Beijing
Municipal Science and Technology Commission with the certificate number of GR202111003103
and the certificate is valid for three years.
On 14 September 2021, Beijing Shougang Cold Rolling Co., Ltd., a subsidiary of the Company
obtained the high-tech enterprise certificate issued by Beijing Municipal Science and Technology
Commission with the certificate number of GR202111000699 and the certificate is valid for three
years.
On 18 September 2021, Shougang Jingtang United Iron & Steel Co., Ltd., a subsidiary of the
Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202113000808 and the certificate is valid for three
years.
On 18 October 2022, Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., a subsidiary of
the Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202213001060 and the certificate is valid for three
years.In accordance to relevant regulations, above companies enjoy a preferential income tax rate at 15%in 2021.Since 1 January 2019, according to Cai Shui [2019] No.13 “Notice of the State Administration ofTaxation on implementing policy of tax reduction for small and low-profit enterprises”, for the partof annual taxable income less than RMB 1 million of small and low-profit enterprises, tax reductionof 25% shall be included, and then income tax shall be paid at 20%. Since 1 January 2021 to 31December 2022, according to Cai Shui [2021] No.12 “Announcement on the implementation ofpreferential income tax policies for small and micro enterprises and individual industrial andcommercial households”, for the part of annual taxable income less than RMB 1 million of smalland low-profit enterprises, the enterprise income tax is reduced by half on the base of thepreferential policies of Cai Shui [2019] No.13. Wuhan Shougang Automobile Material Co., Ltd., thesub-subsidiary of the Company, satisfies the requirements of small and low-profit enterprisedeclaration and its income taxes have been declared as the policy of small and low-profit enterprise.
V. Notes to consolidated financial statements
1. Cash and Cash equivalents
| Item | 2022.12.31 | 2021.12.31 |
| Cash on hand | 23,581.90 | 53,404.48 |
| Bank deposits | 8,330,041,178.17 | 8,536,627,515.03 |
| Including: financial companies deposited | 7,693,973,274.02 | 8,496,270,996.46 |
| Other monetary assets | 1,140,407,761.98 | 1,748,307,794.48 |
| Including: financial companies deposited | 1,088,690,000.00 | 1,497,328,783.36 |
| Total | 9,470,472,522.05 | 10,284,988,713.99 |
Others: (1) As at December 31, 2022, except for RMB 1,090,407,749.24 of security deposit, RMB50,000,000.00 of fixed term deposit, the Company has no balance of cash and cash equivalents thatare pledged, guaranteed or blocked frozen or overseas balances that restricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 849,769.13. This part ofinterest does not belong to "cash and cash equivalents."
2. Notes receivable
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 1,096,900,639.55 | 1,096,900.64 | 1,095,803,738.91 |
| Commercial acceptance notes | 5,600,883,165.11 | 5,600,883.17 | 5,595,282,281.94 |
| Total | 6,697,783,804.66 | 6,697,783.81 | 6,691,086,020.85 |
Continued:
| Item | 2021.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 606,890,114.70 | 606,890.11 | 606,283,224.59 |
| Commercial acceptance notes | 6,230,323,785.17 | 6,230,323.80 | 6,224,093,461.37 |
| Total | 6,837,213,899.87 | 6,837,213.91 | 6,830,376,685.96 |
(1) The pledged notes receivable of the Company at the end of the year
| Item | Amount pledged at the end of the year |
| Commercial acceptance notes | 6,190,000.00 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2022 | Amount not-derecognized as of December 31, 2022 |
| Bank acceptance notes | -- | 950,045,846.29 |
| Commercial acceptance notes | -- | 5,408,779,162.42 |
| Total | -- | 6,358,825,008.71 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as of December 31, 2022 |
| Commercial acceptance notes | 5,673,594.85 |
(4) Classified by bad debt provision method
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Total | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
Continued:
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
| Total | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
(5) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 6,837,213.91 |
| Provision | -- |
| Item | Bad debt provision |
| Recovery or reversal | 139,430.10 |
| As at 31 December 2022 | 6,697,783.81 |
(6) There is no notes receivable written off during the reporting period.
3. Accounts receivable
(1) Disclosed by the ageing
| Ageing | 2022.12.31 | 2021.12.31 |
| Within 1 year | 1,492,629,056.11 | 1,734,897,859.01 |
| 1 – 2 years | 13,542,310.43 | 5,469,120.72 |
| 2 – 3 years | 3,980,837.55 | 7,533,727.52 |
| Over 3 years | 13,036,557.92 | 8,900,931.48 |
| Subtotal | 1,523,188,762.01 | 1,756,801,638.73 |
| Less: provision for bad debts | 73,179,864.91 | 78,193,245.02 |
| Total | 1,450,008,897.10 | 1,678,608,393.71 |
(2) Disclosed by bad debt provision
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 13,036,557.92 | 0.86 | 13,036,557.92 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,510,152,204.09 | 99.14 | 60,143,306.99 | 3.98 | 1,450,008,897.10 |
| Total | 1,523,188,762.01 | 100.00 | 73,179,864.91 | 4.80 | 1,450,008,897.10 |
Disclosed by bad debt provision (continued):
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 12,828,816.67 | 0.73 | 12,828,816.67 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,743,972,822.06 | 99.27 | 65,364,428.35 | 3.75 | 1,678,608,393.71 |
| Total | 1,756,801,638.73 | 100.00 | 78,193,245.02 | 4.45 | 1,678,608,393.71 |
Assessed bad debt provision individually:
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 7,362,963.07 | 7,362,963.07 | 100.00 | Long aging |
| Overdue recourse notes | 5,673,594.85 | 5,673,594.85 | 100.00 | Overdue recourse notes |
| Total | 13,036,557.92 | 13,036,557.92 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2021.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 3,377,121.82 | 3,377,121.82 | 100.00 | Long aging |
| Overdue recourse notes | 9,451,694.85 | 9,451,694.85 | 100.00 | Overdue recourse notes |
| Total | 12,828,816.67 | 12,828,816.67 | 100.00 | |
Assessed bad debt provision in portfolios:
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,492,629,056.11 | 53,147,749.56 | 3.56 |
| 1 – 2 years | 13,542,310.43 | 4,032,265.53 | 29.78 |
| 2 – 3 years | 3,980,837.55 | 2,963,291.90 | 74.44 |
| Over 3 years | -- | -- | -- |
| Total | 1,510,152,204.09 | 60,143,306.99 | 3.98 |
Continued:
| Item | 2021.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,734,897,859.01 | 60,842,691.31 | 3.51 |
| 1 – 2 years | 4,469,120.72 | 1,253,706.63 | 28.05 |
| 2 – 3 years | 4,605,842.33 | 3,268,030.41 | 70.95 |
| Over 3 years | -- | -- | -- |
| Total | 1,743,972,822.06 | 65,364,428.35 | 3.75 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 78,193,245.02 |
| Provision | -- |
| Recovery or reversal | 5,013,380.11 |
| As at 31 December 2022 | 73,179,864.91 |
(4) There is no accounts receivable write-off during reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 796,180,178.42, accounts for 52.28% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 28,348,972.41.
| Company Name | Closing balance | Percentage of total accounts receivable (%) | Closing balance of bad debt provision |
| Shougang Casey Steel Co., Ltd. | 290,361,751.31 | 19.06 | 10,336,878.35 |
| BYD (Shenzhen)Supply Chain Management Co., Ltd. | 181,675,741.56 | 11.93 | 6,470,080.15 |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 134,179,518.89 | 8.81 | 4,776,790.86 |
| China Petrochemical International Co., Ltd. | 102,744,407.80 | 6.75 | 3,659,071.64 |
| China First Automobile Co., Ltd. | 87,218,758.86 | 5.73 | 3,106,151.41 |
| Total | 796,180,178.42 | 52.28 | 28,348,972.41 |
4. Financing receivable
| Item | 2022.12.31 | 2021.12.31 |
| Notes receivable | 3,489,134,871.56 | 4,015,188,495.05 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 3,489,134,871.56 | 4,015,188,495.05 |
The Company discounts and endorses most bank acceptance notes in accordance with routine fundmanagement, therefore the bank acceptance notes are classified as financial assets at fair valuethrough other comprehensive income.
(1) Classified by bad debt provision method
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 1 | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
Continued:
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
| Portfolio 1 | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 802,905.09 |
| Provision | -- |
| Recovery or reversal | 104,938.54 |
| Written-off | -- |
| As at 31 December 2022 | 697,966.55 |
(3) The pledged notes receivable of the Company at the end of the year
| Item | Pledged amount at the end of the year |
| Bank acceptance notes | 322,639,159.08 |
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized at the end of the year | Amount not-derecognized at the end of the year |
| Bank acceptance notes | 26,363,006,094.32 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 26,363,006,094.32 | -- |
5. Prepayments
(1) Disclosed by the ageing of prepayments
| Ageing | 2022.12.31 | 2021.12.31 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 630,526,142.92 | 99.07 | 1,187,511,241.63 | 99.58 |
| 1 – 2 years | 4,353,052.19 | 0.68 | 2,390,257.98 | 0.20 |
| 2 – 3 years | 859,392.60 | 0.14 | 1,787,907.90 | 0.15 |
| Over 3 years | 730,629.27 | 0.11 | 880,589.39 | 0.07 |
| Total | 636,469,216.98 | 100.00 | 1,192,569,996.90 | 100.00 |
(2) As at December 31, 2022, there is no material prepayment with an aging of over 1 year.
(3) The top five prepayments classified by debtors are as follows:
During the year, the total amount of the top five prepayments classified by debtors at the end of theperiod is RMB 279,454,502.98, accounts for 43.90% of the total amount of prepayments at the endof the period.
| Company Name | 2022.12.31 | Percentage of total prepayments (%) |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 87,043,657.93 | 13.68 |
| Shougang Group Co., Ltd. | 74,027,519.11 | 11.63 |
| Tianjin Freight Center of China Beijing RAILWAY Administration | 44,372,578.76 | 6.97 |
| Tianjin Jintie Xincheng Freight Forwarding Co., Ltd. | 37,899,945.34 | 5.95 |
| Beijing Hegang Steel Trade Co., Ltd. | 36,110,801.84 | 5.67 |
| Total | 279,454,502.98 | 43.90 |
6. Other receivables
| Item | 2022.12.31 | 2021.12.31 |
| Dividends receivable | 200,000.00 | -- |
| Other receivables | 12,968,697.56 | 16,992,715.92 |
| Total | 13,168,697.56 | 16,992,715.92 |
(1) Dividends receivable
| Item | 2022.12.31 | 2021.12.31 |
| Guangzhou Jinghai Shipping Co., Ltd. | 200,000.00 | -- |
| Less: bad debt provision | -- | -- |
| Total | 200,000.00 | -- |
(2) Other receivables
①Disclosed by the ageing of other receivables
| Ageing | 2022.12.31 | 2021.12.31 |
| Within 1 year | 9,880,237.95 | 9,257,052.78 |
| 1 – 2 years | 3,309,333.81 | 7,918,680.72 |
| 2 – 3 years | 143,721.00 | 649,678.57 |
| 3 – 4 years | 1,074,861.94 | 587,104.55 |
| 4 – 5 years | 813,907.90 | 503,460.47 |
| Over 5 years | 5,143,256.32 | 5,859,075.32 |
| Subtotal | 20,365,318.92 | 24,775,052.41 |
| Less: provision for bad debts | 7,396,621.36 | 7,782,336.49 |
| Total | 12,968,697.56 | 16,992,715.92 |
②Disclosed by nature of other receivables
| Item | 2022.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 1,550,710.10 | 483,358.60 | 1,067,351.50 |
| Deposits | 11,399,556.26 | 864,254.76 | 10,535,301.50 |
| Due from other companies | 5,110,002.96 | 3,743,958.40 | 1,366,044.56 |
| Court debit | 2,305,049.60 | 2,305,049.60 | -- |
| Total | 20,365,318.92 | 7,396,621.36 | 12,968,697.56 |
Continued:
| Item | 2021.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 2,928,009.49 | 423,868.66 | 2,504,140.83 |
| Deposits | 12,643,770.00 | 812,188.50 | 11,831,581.50 |
| Due from other companies | 6,381,935.32 | 3,724,941.73 | 2,656,993.59 |
| Court debit | 2,821,337.60 | 2,821,337.60 | -- |
| Total | 24,775,052.41 | 7,782,336.49 | 16,992,715.92 |
③Provision for bad debts
As at 31 December 2022, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 | |
| Petty cash and deposits | 9,046,161.66 | 5.00 | 452,308.08 | 8,593,853.58 |
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Due from other companies | 834,076.29 | 5.00 | 41,703.80 | 792,372.49 | |
| Total | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 |
As at 31 December 2022, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 | |
| Petty cash and deposits | 3,532,303.64 | 14.82 | 523,504.28 | 3,008,799.36 | |
| Due from other companies | 795,659.01 | 27.90 | 221,986.88 | 573,672.13 | |
| Total | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 |
As at 31 December 2022，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | |||||
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 370,720.00 | 100.00 | 370,720.00 | -- | |
| Due from other companies over 5 years | 3,481,348.72 | 100.00 | 3,481,348.72 | -- | |
| Total | 6,157,118.32 | 100.00 | 6,157,118.32 | -- |
As at 31 December 2021, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 9,237,576.78 | 5.00 | 461,878.85 | 8,775,697.93 | |
| Petty cash and deposits | 7,797,303.58 | 5.00 | 389,865.18 | 7,407,438.40 | |
| Due from other companies | 1,440,273.20 | 5.00 | 72,013.67 | 1,368,259.53 | |
| Total | 9,237,576.78 | 5.00 | 461,878.85 | 8,775,697.93 |
As at 31 December 2021, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 9,142,636.31 | 10.12 | 925,618.32 | 8,217,017.99 | |
| Petty cash and deposits | 7,603,755.91 | 8.88 | 675,471.97 | 6,928,283.94 | |
| Due from other companies | 1,538,880.40 | 16.26 | 250,146.35 | 1,288,734.05 | |
| Total | 9,142,636.31 | 10.12 | 925,618.32 | 8,217,017.99 |
As at 31 December 2021，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | |||||
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- | |
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 170,720.00 | 100.00 | 170,720.00 | -- | |
| Due from other companies over 5 years | 3,402,781.72 | 100.00 | 3,402,781.72 | -- | |
| Total | 6,394,839.32 | 100.00 | 6,394,839.32 | -- |
④Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 1 January 2022 | 461,878.85 | 925,618.32 | 6,394,839.32 | 7,782,336.49 |
| Changes during the year | ||||
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| -- Back to Phase I | -- | -- | -- | -- |
| Provision | 32,133.03 | -- | -- | 32,133.03 |
| Reversal | -- | 180,127.16 | 237,721.00 | 417,848.16 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 31 December 2022 | 494,011.88 | 745,491.16 | 6,157,118.32 | 7,396,621.36 |
⑤There is no write-off of provision for bad debts during reporting period.
⑥The top five other receivables classified by debtors are as follows:
| Company Name | Nature | Closing balance | Ageing | Percentage of total other receivable (%) | Closing balance of bad debt provision |
| BMW Brilliance Automotive Ltd. | Security fund | 6,000,000.00 | Within 1 years | 29.46 | 300,000.00 |
| Lawsuit of Henan Taihang Vibrating Machinery Co., Ltd. | Court debit | 2,305,049.60 | over 5 years | 11.32 | 2,305,049.60 |
| Due from other companies over 5 years | Due from other companies | 2,000,000.00 | over 5 years | 9.82 | 2,000,000.00 |
| Petty cash | Petty cash | 1,550,710.10 | 1-5 years | 7.61 | 483,358.60 |
| China Petrochemical International Co., Ltd. | Security fund | 1,039,331.06 | Within 1 years | 5.10 | 51,966.55 |
| Total | 12,895,090.76 | 63.31 | 5,140,374.75 |
7. Inventories
(1) Classification of inventories
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 2,887,646,758.41 | 42,207,819.20 | 2,845,438,939.21 |
| Finished goods | 5,232,868,448.19 | 300,694,621.62 | 4,932,173,826.57 |
| Consumables | 605,976,815.09 | -- | 605,976,815.09 |
| Self-made semi-finished goods | 3,576,657,167.28 | -- | 3,576,657,167.28 |
| Total | 12,303,149,188.97 | 342,902,440.82 | 11,960,246,748.15 |
Continued:
| Item | 2021.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 3,773,690,951.92 | 44,544,258.60 | 3,729,146,693.32 |
| Finished goods | 4,461,908,245.34 | 102,584,159.77 | 4,359,324,085.57 |
| Consumables | 528,353,704.73 | -- | 528,353,704.73 |
| Self-made semi-finished goods | 3,808,677,560.29 | -- | 3,808,677,560.29 |
| Total | 12,572,630,462.28 | 147,128,418.37 | 12,425,502,043.91 |
(2) Impairment provision for inventories or performance costs
| Item | 2021.12.31 | Increase | Decrease | 2022.12.31 | ||
| Provision | Others | Reversal or Write-off | Others | |||
| Raw materials | 44,544,258.60 | -- | -- | 2,336,439.40 | -- | 42,207,819.20 |
| Finished goods | 102,584,159.77 | 402,994,496.88 | -- | 204,884,035.03 | -- | 300,694,621.62 |
| Total | 147,128,418.37 | 402,994,496.88 | -- | 207,220,474.43 | -- | 342,902,440.82 |
8. Other current assets
| Item | 2022.12.31 | 2021.12.31 |
| Input value added tax | 2,814,012.14 | 267,822,797.14 |
| Input value added tax to be certified | 655,944,515.37 | 429,476,806.82 |
| Prepaid income tax | 200,264,001.14 | 20,063,782.91 |
| Entrusted Loans | 166,880,103.67 | 147,227,500.00 |
| Carbon emission rights assets | 40,317.17 | 74,842.65 |
| Total | 1,025,942,949.49 | 864,665,729.52 |
9. Long-term equity investments
| Company Name | 2022.1.1 | Movements during the year | 2022.12.31 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | ||||
| ①Joint ventures | |||||||||||
| Tangshan Guoxing Industrial Co., Ltd. | 36,287,575.86 | -- | -- | 3,895,285.46 | -- | 385.62 | 2,000,000.00 | -- | -- | 38,183,246.94 | -- |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 21,536,229.44 | -- | -- | -11,895,926.23 | -- | -- | -- | -- | -- | 9,640,303.21 | -- |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,113,168,103.04 | -- | -- | 28,070,751.94 | -- | 2,904,776.06 | 46,000,000.00 | -- | -- | 1,098,143,631.04 | -- |
| Subtotal | 1,170,991,908.34 | -- | -- | 20,070,111.17 | -- | 2,905,161.68 | 48,000,000.00 | -- | -- | 1,145,967,181.19 | -- |
| ②Associates | |||||||||||
| Tangshan Tangcao Railway Co., Ltd. | 382,410,987.12 | -- | -- | -69,780,414.90 | -- | 115,080.97 | -- | -- | -- | 312,745,653.19 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 79,041,891.73 | -- | -- | 925,107.71 | -- | -- | 12,500,000.00 | -- | -- | 67,466,999.44 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 1,098,085,352.91 | -- | -- | -206,574,842.59 | -- | -- | -- | -- | -- | 891,510,510.32 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 112,715,820.57 | -- | -- | 24,947,007.16 | -- | -- | 15,232,424.74 | -- | -- | 122,430,402.99 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 13,987,090.36 | -- | -- | 2,843,468.38 | -- | -- | -- | -- | -- | 16,830,558.74 | -- |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 20,677,157.68 | -- | -- | 13,516.21 | -- | -- | 479,668.99 | -- | -- | 20,211,004.90 | -- |
| Company Name | 2022.1.1 | Movements during the year | 2022.12.31 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | ||||
| Guangzhou Jinghai Shipping Co., Ltd. | 30,589,124.00 | -- | -- | -1,522,712.70 | -- | -- | 200,000.00 | -- | -- | 28,866,411.30 | -- |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 56,603,361.76 | -- | -- | 1,397,364.48 | -- | -- | -- | -- | -- | 58,000,726.24 | -- |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | 39,028,999.74 | -- | 39,193,323.93 | 164,324.19 | -- | -- | -- | -- | -- | -- | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 20,347,151.86 | -- | -- | -3,703,264.02 | -- | 49,241.27 | -- | -- | -- | 16,693,129.11 | -- |
| Hebei Jingji Industry & Trading Co., Ltd. | 7,451,138.24 | -- | -- | 3,176,900.36 | -- | -- | 2,799,259.52 | -- | -- | 7,828,779.08 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 33,998,913.97 | 1,208,074.76 | -- | 527,580.12 | -- | -- | -- | -- | -- | 35,734,568.85 | -- |
| Subtotal | 1,894,936,989.94 | 1,208,074.76 | 39,193,323.93 | -247,585,965.60 | -- | 164,322.24 | 31,211,353.25 | -- | -- | 1,578,318,744.16 | -- |
| Total | 3,065,928,898.28 | 1,208,074.76 | 39,193,323.93 | -227,515,854.43 | -- | 3,069,483.92 | 79,211,353.25 | -- | -- | 2,724,285,925.35 | -- |
10. Other equity instrument investments
| Item | 2022.12.31 | 2021.12.31 |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 197,880,464.00 | 226,566,944.00 |
| Minmetals Special Steel (Dongguan) Co., Ltd. | 4,103,981.86 | 3,608,571.79 |
| Qian'an Shoujia Construction Material Co., Ltd. | 5,456,139.10 | 13,765,068.94 |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 19,084,152.28 | 14,937,088.81 |
| Minmetals Tianwei Steel Co., Ltd. | 6,241,396.57 | 6,023,090.43 |
| Total | 232,766,133.81 | 264,900,763.97 |
Continued:
| Item | Dividend recognized during the year | Accumulated gain | Accumulated loss | Other comprehensive income transferred to retained earnings | Reasons |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 2,812,400.00 | 188,179,264.00 | -- | -- | |
| Minmetals Special Steel (Dongguan) Co., Ltd. | -- | -- | 896,018.14 | -- | |
| Qian'an Shoujia Construction Material Co., Ltd. | -- | -- | 17,410,235.90 | -- | |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 2,802,482.12 | 17,284,152.28 | -- | -- | |
| Minmetals Tianwei Steel Co., Ltd. | -- | -- | 978,603.43 | -- | |
| Total | 5,614,882.12 | 205,463,416.28 | 19,284,857.47 | -- |
11. Other non-current financial assets
| Item | 2022.12.31 | 2021.12.31 |
| Financial assets measured at fair value and recorded into current profit and loss | 79,234,007.60 | 80,000,000.00 |
Continued:
| Item | 2022.12.31 | 2021.12.31 |
| Beijing Shouxin Jin'an Equity Investment Partnership (Limited Partnership) | 79,234,007.60 | 80,000,000.00 |
Note: The fair value and investment of Beijing Shouxin Jin'an Equity Investment Partnership(Limited Partnership) refer to Note Ⅶ. 3 and Note Ⅸ.
12. Fixed assets
| Item | 2022.12.31 | 2021.12.31 |
| Fixed assets | 93,331,072,969.17 | 97,227,169,862.20 |
| Fixed assets to be disposed | -- | -- |
| Total | 93,331,072,969.17 | 97,227,169,862.20 |
Fixed assets
①Details of fixed assets
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| Cost： | ||||||||
| 1. At 1 January 2022 | 37,792,567,408.57 | 42,412,123,945.38 | 2,546,920,936.91 | 9,616,910,484.31 | 1,247,475,999.21 | 66,252,907,958.61 | 1,051,560,125.71 | 160,920,466,858.70 |
| 2. Increase | 1,206,275,181.97 | 5,185,702,944.01 | 289,943,324.55 | 694,317,859.88 | 80,643,283.20 | -3,741,466,309.74 | 75,623,199.43 | 3,791,039,483.30 |
| (1) Purchase | 3,195,623.52 | 32,138,396.08 | 17,093,084.36 | 44,511,939.02 | 188,000.00 | 26,232,007.07 | 840,248.86 | 124,199,298.91 |
| (2) Transferred from construction in progress | 1,203,079,558.45 | 5,153,564,547.93 | 272,850,240.19 | 649,805,920.86 | 80,455,283.20 | -3,767,698,316.81 | 74,782,950.57 | 3,666,840,184.39 |
| 3. Decrease | 64,302,967.36 | 51,477,877.89 | 18,411,599.67 | 5,544,101.52 | -- | 45,714,201.08 | 679,033.27 | 186,129,780.79 |
| (1) Disposal or retirement | 64,302,967.36 | 44,287,490.10 | 18,411,599.67 | 5,544,101.52 | -- | 30,535,620.54 | 679,033.27 | 163,760,812.46 |
| (2) Other decreases | -- | 7,190,387.79 | -- | -- | -- | 15,178,580.54 | -- | 22,368,968.33 |
| 4. At 31 December 2022 | 38,934,539,623.18 | 47,546,349,011.50 | 2,818,452,661.79 | 10,305,684,242.67 | 1,328,119,282.41 | 62,465,727,447.79 | 1,126,504,291.87 | 164,525,376,561.21 |
| Accumulated depreciation: | ||||||||
| 1. At 1 January 2022 | 10,205,522,708.98 | 14,974,748,302.71 | 1,654,267,578.30 | 5,435,628,418.41 | 578,655,337.28 | 30,482,174,232.58 | 362,300,418.24 | 63,693,296,996.50 |
| 2. Increase | 2,069,060,491.97 | 4,635,493,944.85 | 359,545,483.57 | 1,130,503,478.30 | 66,285,323.87 | -782,296,390.70 | 127,894,550.33 | 7,606,486,882.19 |
| (1) Depreciation | 1,159,589,038.26 | 2,394,221,623.58 | 200,256,415.24 | 652,504,341.83 | 65,980,588.15 | 2,997,697,043.63 | 136,237,831.50 | 7,606,486,882.19 |
| (2) Other increases | 909,471,453.71 | 2,241,272,321.27 | 159,289,068.33 | 477,999,136.47 | 304,735.72 | -3,779,993,434.33 | -8,343,281.17 | -- |
| 3. Decrease | 22,414,353.38 | 35,688,387.94 | 15,527,506.98 | 5,101,660.72 | -- | 26,106,271.48 | 642,106.15 | 105,480,286.65 |
| (1) Disposal or retirement | 22,414,353.38 | 32,298,406.98 | 15,527,506.98 | 5,101,660.72 | -- | 19,695,172.80 | 642,106.15 | 95,679,207.01 |
| (2) Other decreases | -- | 3,389,980.96 | -- | -- | -- | 6,411,098.68 | -- | 9,801,079.64 |
| 4. At 31 December 2022 | 12,252,168,847.57 | 19,574,553,859.62 | 1,998,285,554.89 | 6,561,030,235.99 | 644,940,661.15 | 29,673,771,570.40 | 489,552,862.42 | 71,194,303,592.04 |
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| Impaiment | ||||||||
| 1. At 1 January 2022 | -- | -- | -- | -- | -- | -- | -- | -- |
| 2. Increase | -- | -- | -- | -- | -- | -- | -- | -- |
| 3. Decrease | -- | -- | -- | -- | -- | -- | -- | -- |
| 4. At 31 December 2022 | -- | -- | -- | -- | -- | -- | -- | -- |
| Carrying value | ||||||||
| 1. 31 December 2022 | 26,682,370,775.61 | 27,971,795,151.88 | 820,167,106.90 | 3,744,654,006.68 | 683,178,621.26 | 32,791,955,877.39 | 636,951,429.45 | 93,331,072,969.17 |
| 2. 1 January 2022 | 27,587,044,699.59 | 27,437,375,642.67 | 892,653,358.61 | 4,181,282,065.90 | 668,820,661.93 | 35,770,733,726.03 | 689,259,707.47 | 97,227,169,862.20 |
Note: As at 31 December 2022, there is no mortgaged or guaranteed fixed assets.
②As at 31 December 2022, there is no temporarily idle fixed assets.
③As at 31 December 2022, fixed assets leased through operating leases are as follows:
| Item | Carrying value |
| Plant and buildings | 54,375,551.85 |
④Fixed assets pending certificates of ownership
| Item | Carrying value | Reasons for pending certificates |
| Building of Beijing Shougang Cold Rolling Co., Ltd. | 34,888,371.00 | Property certificate is in the process |
| Building of Shougang Jingtang United Iron & Steel Co., Ltd. | 10,452,783,176.18 | To be handled after completing the relevant procedures of the occupied phase I project land |
| Building of Beijing Shougang Steel Trading Investment Management Co., Ltd. | 175,670,446.03 | Property certificate is in the process |
13. Construction in progress
| Item | 2022.12.31 | 2021.12.31 |
| Construction in progress | 7,598,541,035.50 | 6,566,873,922.61 |
| Construction materials | 75,108,817.27 | 619,893,915.94 |
| Total | 7,673,649,852.77 | 7,186,767,838.55 |
(1) Construction in progress
①Details of construction in progress
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang Co. Phase-I project | 3,076,233,760.72 | -- | 3,076,233,760.72 |
| New energy automotive electrical steel project | 37,653,248.54 | -- | 37,653,248.54 |
| Zhixin Co. Oriented phase II project | 1,314,052,905.22 | -- | 1,314,052,905.22 |
| Zhixin Co. High-end heat treatment engineering project | 183,731,602.88 | -- | 183,731,602.88 |
| Other projects | 2,986,869,518.14 | -- | 2,986,869,518.14 |
| Total | 7,598,541,035.50 | -- | 7,598,541,035.50 |
Continued:
| Item | 2021.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang Co. Phase-I project | 2,042,734,311.07 | -- | 2,042,734,311.07 |
| Jingtang Co. Phase-II project | 21,094,822.03 | -- | 21,094,822.03 |
| Item | 2021.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| New energy automotive electrical steel project | 997,385,082.19 | -- | 997,385,082.19 |
| Zhixin Co. Oriented phase II project | 672,933,269.19 | -- | 672,933,269.19 |
| Other projects | 2,832,726,438.13 | -- | 2,832,726,438.13 |
| Total | 6,566,873,922.61 | -- | 6,566,873,922.61 |
②The major construction projects in progress are as follows:
| Project name | 2022.1.1 | Additions | Transferred to fixed assets | Other deduction | Accumulated interest capitalization | Capitalized Interest during reporting year | % of interest capitalization | 2022.12.31 |
| New energy automotive electrical steel project | 997,385,082.19 | 665,663,669.96 | 1,625,395,503.61 | -- | 19,983,166.66 | 12,335,416.66 | 4.05 | 37,653,248.54 |
| Zhixin Co. Oriented phase II project | 672,933,269.19 | 641,119,636.03 | -- | -- | -- | -- | -- | 1,314,052,905.22 |
| Zhixin Co. High-end heat treatment engineering project | -- | 183,731,602.88 | -- | -- | -- | -- | -- | 183,731,602.88 |
| Total | 1,670,318,351.38 | 1,490,514,908.87 | 1,625,395,503.61 | -- | 19,983,166.66 | 12,335,416.66 | 4.05 | 1,535,437,756.64 |
The major construction projects in progress are as follows (continued): (Unit: RMB hundredmillion)
| Project name | Budget | The propotion of projects investment account for budget % | Progress (%) | Source of fund |
| New energy automotive electrical steel project | 19.79 | 94.96 | The project has been provisionally estimated to be transferred to fixed assets | Selfraised |
| Zhixin Co. Oriented phase II project | 16.83 | 88.23 | The devices of the project are being installed | Selfraised |
| Zhixin Co. High-end heat treatment engineering project | 19.49 | 10.65 | The project is undergoing civil construction | Selfraised |
③As at 31 December 2022, there is no provision for impairment of construction in progress.
(2) Construction materials
| Item | 2022.12.31 | 2021.12.31 |
| Specific materials | 12,234,976.71 | 17,081,983.66 |
| Specific equipments | 62,873,840.56 | 602,811,932.28 |
| Subtotal | 75,108,817.27 | 619,893,915.94 |
| Provision for impairment of construction materials | -- | -- |
| Total | 75,108,817.27 | 619,893,915.94 |
14. Right-of-use assets
| Item | Plant and buildings | Land use rights | Motor vechiles | Total |
| Cost： | ||||
| 1. At 1 January 2022 | 116,101,586.50 | 311,888.26 | 474,802.94 | 116,888,277.70 |
| 2. Increase during the period | -124,860.87 | -- | -- | -124,860.87 |
| Adjustment of lease liabilities | -124,860.87 | -- | -- | -124,860.87 |
| 3. Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2022 | 115,976,725.63 | 311,888.26 | 474,802.94 | 116,763,416.83 |
| Accumulated depreciation | ||||
| 1. At 1 January 2022 | 16,440,339.87 | 55,860.60 | 112,079.59 | 16,608,280.06 |
| 2. Increase during the period | 16,774,378.68 | 55,860.60 | 217,538.04 | 17,047,777.32 |
| (1) Provision | 16,774,378.68 | 55,860.60 | 217,538.04 | 17,047,777.32 |
| 3. Decrease during the period | ||||
| 4. At 31 December 2022 | 33,214,718.55 | 111,721.20 | 329,617.63 | 33,656,057.38 |
| Impaiment | ||||
| 1. At 1 January 2022 | -- | -- | -- | -- |
| 2. Increase during the period | -- | -- | -- | -- |
| 3. Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2022 | -- | -- | -- | -- |
| Carrying value | ||||
| 1. 31 December 2022 | 82,762,007.08 | 200,167.06 | 145,185.31 | 83,107,359.45 |
| 2. 1 January 2022 | 99,661,246.63 | 256,027.66 | 362,723.35 | 100,279,997.64 |
Note: As of December 31, 2022, the Company recognizes lease expenses related to short-termleases and leases of low value assets as shown in Note XIV, 2.
15. Intangible assets
Details of intangible assets
| Item | Software | Land use rights | Total |
| Cost | |||
| 1. At 1 January 2022 | 435,479,121.74 | 4,589,498,925.91 | 5,024,978,047.65 |
| 2. Increase | 61,996,396.65 | 1,946,285.00 | 63,942,681.65 |
| (1) Purchase | 61,996,396.65 | 1,946,285.00 | 63,942,681.65 |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2022 | 497,475,518.39 | 4,591,445,210.91 | 5,088,920,729.30 |
| Accumulated amortization | |||
| 1. At 1 January 2022 | 122,249,951.73 | 885,069,827.56 | 1,007,319,779.29 |
| Item | Software | Land use rights | Total |
| 2. Increase | 79,524,948.65 | 95,168,873.25 | 174,693,821.90 |
| Provision | 79,524,948.65 | 95,168,873.25 | 174,693,821.90 |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2022 | 201,774,900.38 | 980,238,700.81 | 1,182,013,601.19 |
| Impairment | |||
| 1. At 1 January 2022 | -- | -- | -- |
| 2. Increase | -- | -- | -- |
| 3. Decrease | -- | -- | -- |
| 4. At 31 December 2022 | -- | -- | -- |
| Carrying value | |||
| 1. 31 December 2022 | 295,700,618.01 | 3,611,206,510.10 | 3,906,907,128.11 |
| 2. 1 January 2022 | 313,229,170.01 | 3,704,429,098.35 | 4,017,658,268.36 |
Notes for land use rights without completed property rights certificates
| Item | Carrying value | Reason for not completing the property rights certificate |
| Land of Shougang Qiangang | 61,973,257.95 | In processing |
16. Long-term prepaid expenses
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 | |
| Amortization | Others | ||||
| Renovation costs | 1,226,463.57 | 2,898,000.00 | 588,715.53 | -- | 3,535,748.04 |
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities without offsetting
| Item | 2022.12.31 | 2021.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Deferred tax assets： | ||||
| Asset impairment provision | 505,555,574.09 | 79,322,751.40 | 337,661,843.04 | 54,026,814.61 |
| The actual payment amount of payroll payable less than the withdrawal amount | 11,804,882.71 | 1,770,732.41 | 11,854,543.71 | 1,778,181.56 |
| Defferred income | 376,219,302.71 | 56,819,612.63 | 222,651,867.20 | 33,808,482.45 |
| Asset amortization difference | 5,629,387.82 | 844,408.16 | 6,443,561.93 | 966,534.25 |
| Unrealized internal transaction | 269,210,907.64 | 40,381,636.15 | 323,189,435.59 | 48,478,415.34 |
| Joint commissioning cost | 311,745,046.78 | 46,761,757.02 | 330,082,990.71 | 49,512,448.61 |
| Differences in amortization of right-of-use assets | 3,523,175.04 | 755,873.27 | 2,078,979.09 | 437,933.60 |
| Item | 2022.12.31 | 2021.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Equity Incentive | 6,855,496.85 | 1,052,157.60 | 4,643,140.32 | 712,612.87 |
| Deferred income assets for loss provision | 1,164,313,511.12 | 174,647,026.67 | -- | -- |
| Subtotal | 2,654,857,284.76 | 402,355,955.31 | 1,238,606,361.59 | 189,721,423.29 |
| Deferred tax liabilities： | ||||
| Joint commissioning cost | 1,085,461,580.60 | 162,819,237.09 | 1,174,742,095.80 | 176,211,314.37 |
| Changes in fair value of in other equity instruments investments | 186,178,558.81 | 27,926,783.87 | 218,313,188.97 | 32,746,978.38 |
| New-E Co. disposal subsidiary Electrical Steel Co. investment income | 83,212,329.87 | 20,803,082.47 | -- | -- |
| Fourth quarter equipment additional deduction | 1,938,128,392.15 | 290,719,258.83 | -- | -- |
| Subtotal | 3,292,980,861.43 | 502,268,362.26 | 1,393,055,284.77 | 208,958,292.75 |
(2) Details of unrecognized deferred tax assets from deductible temporary differences anddeductible tax losses:
| Item | 2022.12.31 | 2021.12.31 |
| Deductible temporary differences | 56,162,050.68 | 111,280,769.32 |
| Deductible tax losses | 2,051,259,102.58 | 136,319,094.41 |
| Total | 2,107,421,153.26 | 247,599,863.73 |
(3) Unrecognized deferred tax liabilities from deductible tax losses will expire in the followingyears:
| Years | 2022.12.31 | 2021.12.31 | Note |
| 2022 | —— | 32,710,500.17 | |
| 2023 | 33,894,110.96 | 33,894,110.96 | |
| 2024 | 34,063,776.18 | 34,359,166.04 | |
| 2025 | 18,967,253.01 | 20,479,539.98 | |
| 2026 | 14,769,965.09 | 14,875,777.26 | |
| 2027 | 1,949,563,997.34 | —— | |
| Total | 2,051,259,102.58 | 136,319,094.41 |
18. Short-term loans
Classification of short-term loans
| Item | 2022.12.31 | 2021.12.31 |
| Pledged loans | 1,090,000.00 | 19,753,215.18 |
| Guaranteed loans | 6,907,003,333.35 | 8,787,335,054.82 |
| Credit loans | 22,671,912,770.04 | 16,471,285,046.25 |
| Total | 29,580,006,103.39 | 25,278,373,316.25 |
Note: The loan of RMB 1,090,000.00 is pledged by a discounted but unmatured andnon-terminatingly recognized note with a carrying value of RMB 1,090,000.00.
19. Notes payable
| Item | 2022.12.31 | 2021.12.31 |
| Commercial acceptance notes | 7,141,510,000.00 | 6,915,076,896.08 |
| Bank acceptances | 120,000,000.00 | 573,853,897.69 |
| Total | 7,261,510,000.00 | 7,488,930,793.77 |
20. Accounts payable
| Item | 2022.12.31 | 2021.12.31 |
| Payables for goods | 17,215,600,362.40 | 16,618,588,143.52 |
| Payables for construction | 2,594,994,121.65 | 3,578,906,476.13 |
| Total | 19,810,594,484.05 | 20,197,494,619.65 |
Among which, the material trade payables aged over 1 year was as follows:
| Company name | 2022.12.31 | Reason for non-settlement |
| Beijing Shougang Special Steel Co., Ltd. | 94,949,940.33 | In the execution |
| Beijing Teyu Plate Co., Ltd. | 85,095,430.63 | In the execution |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | In the execution |
| Fujian Longking Co., Ltd. | 33,069,015.00 | In the execution |
| Ansteel Construction Group Corp.,Ltd. | 25,027,906.68 | In the execution |
| Total | 295,832,719.28 |
21. Contract liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Advance from product sales | 4,508,016,725.74 | 5,230,456,327.37 |
| Less: contractual liabilities included in other non-current liabilities | -- | -- |
| Total | 4,508,016,725.74 | 5,230,456,327.37 |
22. Payroll and employee benefits payable
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Short-term employee benefits | 492,938,709.78 | 4,336,724,255.42 | 4,236,525,787.96 | 593,137,177.24 |
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Post-employment benefits (defined contribution plans) | 21,456,165.20 | 497,033,781.76 | 496,720,694.60 | 21,769,252.36 |
| Termination benefits | -- | 70,727,831.32 | 70,727,831.32 | -- |
| Other retirement benefits due within one year | 5,170,000.00 | 5,890,000.00 | 5,170,000.00 | 5,890,000.00 |
| Total | 519,564,874.98 | 4,910,375,868.50 | 4,809,144,313.88 | 620,796,429.60 |
(1) Short-term employee benefits
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Salaries, bonuses and subsidies | 97,121,464.93 | 3,124,590,654.26 | 3,075,947,905.03 | 145,764,214.16 |
| Welfare | -- | 358,005,240.87 | 358,005,240.87 | -- |
| Social insurance | 149,464,466.92 | 345,078,313.01 | 318,211,452.87 | 176,331,327.06 |
| Including: 1.Medical insurance | 149,116,813.18 | 305,743,729.80 | 278,737,241.72 | 176,123,301.26 |
| 2.Work-related injury insurance | 346,094.64 | 39,244,991.20 | 39,384,555.19 | 206,530.65 |
| 3.Maternity insurance | 1,559.10 | 89,592.01 | 89,655.96 | 1,495.15 |
| Housing fund | 50,567.00 | 343,748,321.29 | 343,746,789.29 | 52,099.00 |
| Labor union fee and employee education fee employee education fee | 246,302,210.93 | 121,444,215.02 | 96,756,888.93 | 270,989,537.02 |
| Equity incentive | -- | 43,289,500.60 | 43,289,500.60 | -- |
| Short-term profit-sharing plan | -- | -- | -- | -- |
| Non-monetary benefits | -- | -- | -- | -- |
| Other short-term employee benefits | -- | 568,010.37 | 568,010.37 | -- |
| Total | 492,938,709.78 | 4,336,724,255.42 | 4,236,525,787.96 | 593,137,177.24 |
(2) Defined contribution plans
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Post-employment benefits | 21,456,165.20 | 497,033,781.76 | 496,720,694.60 | 21,769,252.36 |
| Including: 1.Pension insurance | 9,325,670.10 | 479,074,594.41 | 478,745,713.64 | 9,654,550.87 |
| 2.Unemployment insurance | 12,130,495.10 | 17,959,187.35 | 17,974,980.96 | 12,114,701.49 |
| Total | 21,456,165.20 | 497,033,781.76 | 496,720,694.60 | 21,769,252.36 |
(3) Termination benefits
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Compensation for employee resettlement | -- | 70,727,831.32 | 70,727,831.32 | -- |
23. Taxes payable
| Item | 2022.12.31 | 2021.12.31 |
| Item | 2022.12.31 | 2021.12.31 |
| Value-added tax | 112,823,148.09 | 62,122,718.96 |
| City construction and maintenance tax | 939,514.85 | 8,001,876.62 |
| Corporate income tax | 6,615,902.30 | 317,223,625.65 |
| Land use tax | 440,536.03 | 440,536.03 |
| Real estate tax | 1,014,521.32 | 869,141.45 |
| Education surcharge | 681,006.31 | 6,022,083.47 |
| Resouorce tax | 4,912,568.40 | 7,531,618.50 |
| Stamp duty | 33,470,591.03 | 8,864,862.42 |
| Individual income tax | 2,812,207.41 | 3,797,661.67 |
| Environment protection tax | 8,567,976.00 | 10,336,189.53 |
| Other taxes | 22,444.66 | -- |
| Total | 172,300,416.40 | 425,210,314.30 |
24. Other payables
| Item | 2022.12.31 | 2021.12.31 |
| Dividends payable | 11,440,046.38 | -- |
| Other payables | 2,750,379,230.31 | 3,082,192,028.33 |
| Total | 2,761,819,276.69 | 3,082,192,028.33 |
(1) Dividends payable
| Item | 2022.12.31 | 2021.12.31 |
| Shougang Group Co., Ltd. | 2,806,049.55 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 6,475,498.15 | -- |
| Qian'an Jingji Equity Investment Fund (Limited Partnership) | 2,158,498.68 | -- |
| Total | 11,440,046.38 | -- |
(2) Other payables
| Item | 2022.12.31 | 2021.12.31 |
| Deposits | 6,137,315.23 | 6,242,141.60 |
| Guarantee | 35,705,705.74 | 35,537,715.10 |
| Due from Shougang Group | 56,575,231.05 | 57,154,287.37 |
| Due from Shougang Mining Corp. | 796,194,091.55 | 2,066,250,402.53 |
| Restricted stock repurchase obligations | 210,930,850.00 | 210,930,850.00 |
| Zhixin Co's second round of financing | 990,787,728.36 | -- |
| Item | 2022.12.31 | 2021.12.31 |
| Due from other companies | 654,048,308.38 | 706,076,631.73 |
| Total | 2,750,379,230.31 | 3,082,192,028.33 |
25. Current portion of non-current liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Long-term loans due within one year | 1,480,490,424.42 | 10,404,580,520.24 |
| Bonds payable due within one year | 2,528,468,055.61 | 28,468,055.61 |
| Long-term payables due within one year | 15,781,907.85 | 3,407,794.44 |
| Lease liabilities due within one year | 14,027,634.72 | 14,837,257.91 |
| Total | 4,038,768,022.60 | 10,451,293,628.20 |
(1) Long-term loans due within one year
| Item | 2022.12.31 | 2021.12.31 |
| Guaranteed loans | 613,355,833.34 | 413,924,166.67 |
| Credit loans | 867,134,591.08 | 9,990,656,353.57 |
| Total | 1,480,490,424.42 | 10,404,580,520.24 |
(2) Bonds payable due within one year
| Item | 2022.12.31 | 2021.12.31 |
| 20 shouqian 01 (Accrued interest) | 2,528,468,055.61 | 28,468,055.61 |
(3) Long-term payables due within one year
| Item | 2022.12.31 | 2021.12.31 |
| Finance lease payables | 15,781,907.85 | 3,407,794.44 |
26. Other current liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Short-term bonds payable | 1,006,213,698.66 | 1,007,299,452.05 |
| Tax to be exported | 724,801,203.37 | 901,212,275.43 |
| Backed notes | 6,357,735,008.71 | 6,313,495,809.15 |
| Total | 8,088,749,910.74 | 8,222,007,536.63 |
Short-term bonds payable:
| Bond name | Nominal value | Issue date | Maturity of bond | Issue amount |
| SCP1 | 1,000,000,000.00 | 2021/9/16 | 239 days | 1,000,000,000.00 |
| SCP2 | 1,000,000,000.00 | 2022/5/20 | 188 days | 1,000,000,000.00 |
| Bond name | Nominal value | Issue date | Maturity of bond | Issue amount |
| SCP3 | 1,000,000,000.00 | 2022/8/19 | 248 days | 1,000,000,000.00 |
| Subtotal | 3,000,000,000.00 | 3,000,000,000.00 |
Short-term Bonds Payable (continued):
| Bond name | 2022.1.1 | Issued during current period | Interest accrued per nominal value | Amortization of premium and discount | Repaid in the current period | 2022.12.31 |
| SCP1 | 1,007,299,452.05 | -- | 9,004,931.51 | -- | 1,016,304,383.56 | -- |
| SCP2 | -- | 1,000,000,000.00 | 10,301,369.86 | -- | 1,010,301,369.86 | -- |
| SCP3 | -- | 1,000,000,000.00 | 6,213,698.66 | -- | -- | 1,006,213,698.66 |
| Total | 1,007,299,452.05 | 2,000,000,000.00 | 25,520,000.03 | -- | 2,026,605,753.42 | 1,006,213,698.66 |
27. Long-term loans
| Item | 2022.12.31 | Range of interest rate | 2021.12.31 | Range of interest rate |
| Guaranteed loans | 9,413,355,833.34 | 4.65% | 9,813,924,166.67 | 4.75%-4.90% |
| Credit loans | 2,661,484,591.08 | 2.85%-3.85% | 12,283,366,353.57 | 3.5%-4.90% |
| Subtotal | 12,074,840,424.42 | 22,097,290,520.24 | ||
| Less: Long-term loans due within one year | 1,480,490,424.42 | 2.85%-4.65% | 10,404,580,520.24 | 3.5%-4.90% |
| Total | 10,594,350,000.00 | 11,692,710,000.00 |
28. Bonds payable
| Item | 2022.12.31 | 2021.12.31 |
| Common bond | -- | 2,500,000,000.00 |
Increase or decrease in bonds payable
| Bond name | Par value | Issue date | Term to maturity | Amount on offer |
| 20 shouqian 01 | 2,500,000,000.00 | 2020/9/15 | 5 years | 2,500,000,000.00 |
Bonds payable (continued):
| Bond name | 2022.1.1 | Current year issuance | Accrued interest by par value | Amortisation of discount | Current year repayment | 2022.12.31 |
| 20 shouqian 01 | 2,528,468,055.61 | -- | 99,500,000.00 | -- | 99,500,000.00 | 2,528,468,055.61 |
| Less: Long-term loans due within one year | 28,468,055.61 | -- | -- | -- | -- | 2,528,468,055.61 |
| Total | 2,500,000,000.00 | -- | -- | -- | -- | -- |
29. Lease liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Lease liabilities | 86,467,471.51 | 100,960,468.26 |
| Less: lease liabilities due within one year | 14,027,634.72 | 14,837,257.91 |
| Total | 72,439,836.79 | 86,123,210.35 |
Note: The amount of interest expense of lease liabilities in 2022 is RMB 4,408,691.60, whichis included in financial expense - interest costs.
30. Long-term payables
| Item | 2022.12.31 | 2021.12.31 |
| Long-term payables | -- | 12,359,657.85 |
| Special payables | 2,300,000.00 | 2,300,000.00 |
| Total | 2,300,000.00 | 14,659,657.85 |
(1) Long-term payables
| Item | 2022.12.31 | 2021.12.31 |
| Finance lease payables | 15,781,907.85 | 15,767,452.29 |
| Less: Long-term payables due within one year | 15,781,907.85 | 3,407,794.44 |
| Total | -- | 12,359,657.85 |
(2) Special payables
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 | Reason |
| Research and development funds | 2,300,000.00 | -- | -- | 2,300,000.00 |
31. Long-term employee benefits payables
| Item | 2022.12.31 | 2021.12.31 |
| Termination benefits | 23,239,569.30 | 21,310,000.00 |
| Other long-term benefits | 65,216,081.72 | 64,980,000.00 |
| Subtotal | 88,455,651.02 | 86,290,000.00 |
| Less: Long-term Employee benefits payables due within one year | 5,890,000.00 | 5,170,000.00 |
| Total | 82,565,651.02 | 81,120,000.00 |
32. Deferred revenue
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 | Reason |
| Government grant | 404,010,785.39 | 108,685,396.00 | 39,834,299.49 | 472,861,881.90 |
Note: The government grants which recognized as deferred revenue refer to Note V. 60 governmentgrants.
33. Other non-current liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Shougang Group advance payment for construction | 4,532,018,467.20 | 4,563,283,607.60 |
34. Share capital
| Item | 2022.1.1 | Changes in current (+/-) | 2022.12.31 | ||||
| Shares issued | Bonus issue | Shares transferred from reserves | Others | Subtotal | |||
| Total amount of shares | 6,750,325,410.00 | 1,069,543,760.00 | -- | -- | -- | 1,069,543,760.00 | 7,819,869,170.00 |
Note: ①On March 31, 2022, the Company issued 1,015,417,369.00 new shares to purchase 49.00%shares of Beijing Shougang Steel Trade Investment Management Co., Ltd held by Shougang GroupCo., Ltd. Grant Thornton LLP examined the newly added share capital and issued the capitalverification report of GTYZ (2022) No.110C000177；②On May 20, 2022, the Company issued atotal of 54,126,391 new shares in the non-public offering to eight subjects, with a price of RMB
5.38 per share. After this offering, the registered capital of the Company changed to RMB7,819,869,170.00. Grant Thornton LLP examined the newly added share capital and issued thecapital verification report GTYZ (2022) No.110C000271.
35. Capital reserve
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Share premium | 24,856,733,491.93 | 4,738,436,210.82 | -- | 29,595,169,702.75 |
| Other capital reserve | 5,043,149.79 | 43,835,698.96 | -- | 48,878,848.75 |
| Total | 24,861,776,641.72 | 4,782,271,909.78 | -- | 29,644,048,551.50 |
Note: the movement of other capital reserve is the change in other equity of joint venturesrecognized by the Company in accordance with shareholding ratio and equity incentiveamortization expense.
36. Treasury shares
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Restricted stock incentive plan | 210,930,850.00 | -- | -- | 210,930,850.00 |
37. Other comprehensive income
Other comprehensive income attributable to the parent company in the balance sheet:
| Item | 2022.1.1 | During the period | 2022.12.31 | |
| Attributable to the parent company after tax | Less: Transferred from other comprehensive income in prior periods to retained earnings during the period | |||
| I. Other comprehensive income which cannot be reclassified into profits or losses | 185,566,210.59 | -27,314,435.65 | -- | 158,251,774.94 |
| Changes in fair value of other equity instrument investments | 185,566,210.59 | -27,314,435.65 | -- | 158,251,774.94 |
| II. Other comprehensive income to be reclassified into profits or losses | -- | -- | -- | -- |
| Total other comprehensive incomes | 185,566,210.59 | -27,314,435.65 | 158,251,774.94 |
Other comprehensive income attributable to the parent company in the income statement:
| Item | During the period | ||||
| Incurred before income tax for the period | Less: Transferred from other comprehensive income in prior periods to profit or loss during the period | Less: Income tax expenses | Less: Attributable to minority shareholders after tax | Attributable to parent company after tax | |
| I. Other comprehensive income which cannot be reclassified into profits or losses | -32,134,630.16 | -- | -4,820,194.51 | -- | -27,314,435.65 |
| Changes in fair value of other equity instrument investments | -32,134,630.16 | -- | -4,820,194.51 | -- | -27,314,435.65 |
| II. Other comprehensive income to be reclassified into profits or losses | -- | -- | -- | -- | -- |
| Total other comprehensive incomes | -32,134,630.16 | -- | -4,820,194.51 | -- | -27,314,435.65 |
Note: The net-of-tax amount of other comprehensive income for the period is RMB -27,314,435.65,Among which, the net-of-tax amount of other comprehensive income attributable to the parentcompany is RMB -27,314,435.65; and net-of-tax amount of other comprehensive incomeattributable to minority shareholders is RMB 0.00.
38. Special reserve
| Item | 2022.1.1 | Increase | Decrease | 2022.12.31 |
| Safety fund | 21,054,371.78 | 110,550,791.17 | 99,752,852.16 | 31,852,310.79 |
39. Surplus reserve
| Item | 2022.1.1 | Increase | Decrease | 2021.12.31 |
| Statutory reserve | 1,908,883,208.67 | -- | -- | 1,908,883,208.67 |
| Discretionary surplus reserve | -- | -- | -- | -- |
| Total | 1,908,883,208.67 | -- | -- | 1,908,883,208.67 |
40. Retained earnings
| Item | 2022 | 2021 | Appropriation/ Distribution ratio |
| Retained earnings at previous year before adjustment | 8,130,868,205.38 | 1,865,280,919.23 | -- |
| Adjustment of total retained earnings at previous year (Increase in “+”, decrease in “-”) | -- | -- | -- |
| Retained earnings at previous year after adjustment | 8,130,868,205.38 | 1,865,280,919.23 | |
| Add: Net profit attributable to shareholders of the company | 1,124,540,659.14 | 7,106,480,663.26 | -- |
| Less: Transfer to statutory surplus reserve | -- | 80,205,362.30 | |
| Transfer to discretionary surplus reserve | -- | -- | |
| Common Stock dividends payable | 625,589,533.60 | 668,542,361.00 | |
| Dividends payable to other equity holders | 34,120,631.40 | 92,145,653.81 | |
| Retained earnings at current year | 8,595,698,699.52 | 8,130,868,205.38 | |
| Including: Surplus reserve attributable to shareholders of the company extracted by subsidiaries | -- | -- |
41. Revenue and cost of sales
(1) Revenue and cost of sales
| Item | 2022 | 2021 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 114,602,567,434.30 | 108,013,843,862.04 | 129,315,463,715.41 | 114,564,031,235.41 |
| Other business | 3,539,616,115.17 | 3,053,711,458.24 | 3,668,840,952.87 | 2,830,663,835.12 |
| Total | 118,142,183,549.47 | 111,067,555,320.28 | 132,984,304,668.28 | 117,394,695,070.53 |
(2) Revenue and cost of sales presented as products
| Item | 2022 | 2021 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 546,474,748.00 | 473,163,072.64 | 577,251,931.16 | 529,612,988.15 |
| Hot-rolled steel | 48,304,009,189.85 | 46,623,686,161.87 | 55,678,740,307.61 | 49,137,279,925.26 |
| Cold-rolled steel | 63,569,306,854.33 | 59,017,610,809.13 | 69,900,266,273.35 | 62,263,262,571.46 |
| Other steels | 2,182,776,642.12 | 1,899,383,818.40 | 3,159,205,203.29 | 2,633,875,750.54 |
| Subtotal | 114,602,567,434.30 | 108,013,843,862.04 | 129,315,463,715.41 | 114,564,031,235.41 |
| Other business | ||||
| Power | 1,386,026,949.59 | 1,380,897,100.66 | 1,151,297,257.25 | 1,090,178,413.66 |
| Solid waste | 1,338,134,781.31 | 1,199,982,844.66 | 1,705,579,006.40 | 1,385,103,949.54 |
| Others | 815,454,384.27 | 472,831,512.92 | 811,964,689.22 | 355,381,471.92 |
| Subtotal | 3,539,616,115.17 | 3,053,711,458.24 | 3,668,840,952.87 | 2,830,663,835.12 |
| Item | 2022 | 2021 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Total | 118,142,183,549.47 | 111,067,555,320.28 | 132,984,304,668.28 | 117,394,695,070.53 |
(3) Breakdown of revenue information
| Item | 2022 |
| Revenue from main business | 114,602,567,434.30 |
| Including: recognised at a certain point in time | 114,602,567,434.30 |
| recognised during a certain period of time | -- |
| Revenue from other business | 3,539,616,115.17 |
| Total | 118,142,183,549.47 |
As of 31 December 2022, the amount of revenue corresponding to the performance obligationsthat the company has signed but not yet fulfilled is RMB 4,396.548 million. The Companyexpects to recognize all the revenue in 2023.
42. Taxes and surcharges
| Item | 2022 | 2021 |
| Environmental protection tax | 33,744,422.88 | 39,374,373.13 |
| Urban maintenance and construction tax | 101,654,296.06 | 240,494,550.69 |
| Education surcharge | 74,499,878.54 | 173,874,358.48 |
| Resources duty | 41,927,760.60 | 51,626,025.36 |
| Property tax | 197,700,840.52 | 196,202,384.06 |
| Land usage tax | 221,682,543.86 | 223,625,023.01 |
| Vehicle and vessel usage tax | 336,360.10 | 336,864.01 |
| Stamp duty | 151,537,114.35 | 138,546,538.99 |
| Other taxes | 177,866.02 | 349,770.25 |
| Total | 823,261,082.93 | 1,064,429,887.98 |
Note: The provision and payment standards of taxes and surcharges refer to Note IV. Taxation.
43. Selling and distribution expenses
| Item | 2022 | 2021 |
| Staff costs | 183,609,735.80 | 174,833,606.06 |
| Depreciation and amortization | 107,397.02 | 131,640.69 |
| Other regualr expenses | 54,279,893.40 | 38,344,287.63 |
| Total | 237,997,026.22 | 213,309,534.38 |
44. General and administrative expenses
| Item | 2022 | 2021 |
| Staff costs | 668,044,773.52 | 700,517,923.75 |
| Depreciation and amortization | 336,647,438.61 | 310,789,699.88 |
| Other regular expenses | 266,483,526.93 | 289,890,312.57 |
| Total | 1,271,175,739.06 | 1,301,197,936.20 |
45. Research and development expenses
| Item | 2022 | 2021 |
| Staff costs | 575,278,177.87 | 600,350,698.99 |
| Other regular expenses | 51,645,079.49 | 52,575,686.57 |
| Total | 626,923,257.36 | 652,926,385.56 |
46. Financial expenses
| Item | 2022 | 2021 |
| Interest costs | 1,876,045,277.79 | 2,360,994,534.74 |
| Including: Interest expenses on lease liabilities | 4,408,691.60 | 4,895,508.99 |
| Less: interest capitalized | 12,335,416.66 | 7,647,750.00 |
| Interest expenses | 1,863,709,861.13 | 2,353,346,784.74 |
| Less:interest income | 132,829,545.65 | 131,307,065.33 |
| Discount on notes acceptance | 22,128,963.88 | 31,976,398.68 |
| Exchange losses and gains | -29,489,525.05 | 9,582,515.98 |
| Bank charges and others | 8,064,537.04 | -3,192,601.27 |
| Total | 1,731,584,291.35 | 2,260,406,032.80 |
Note: Capitalized interest amounts have been accounted for construction in progress. Thecapitalization rate used to calculate and determine the capitalization amount of borrowing costsin the current period is 4.05% (previous period: 4.05%).
47. Other income
| Item | 2022 | 2021 |
| Related to assets | 39,401,467.49 | 24,060,120.26 |
| Related to income | 33,934,028.23 | 24,387,236.26 |
| Value added tax deduction | 646,083.96 | 4,210,393.94 |
| Tax refund | 2,160,426.28 | 1,886,738.46 |
| Total | 76,142,005.96 | 54,544,488.92 |
Note: (1) The details of government grants refer to Note V. 60 Government grants.
(2) The specific reasons for government grants recognized as recurring gains or losses, please refer
to Note XVI. 1.
48. Investment income
| Item | 2022 | 2021 |
| Investment income from long-term equity investments under the equity method | -227,515,854.43 | 93,142,769.92 |
| Investment income on disposal of long-term equity investments | -583,440.77 | -- |
| Dividend from other equity instruments investments | 5,614,882.12 | 2,718,777.38 |
| Interest income from entrusted loans | 11,275,389.73 | 10,518,170.49 |
| Total | -211,209,023.35 | 106,379,717.79 |
49. Gains from changes in fair value
| Sources of gains from changes in fair value | 2022 | 2021 |
| Other non-current financial assets: designated as measured at fair value and whose changes are recorded in current profit or loss | -765,992.40 | -- |
50. Credit impairment losses (loss in “-”)
| Item | 2022 | 2021 |
| Provision for bad debts of notes receivable | 139,430.10 | -713,475.06 |
| Provision for bad debts of accounts receivable | 5,013,380.11 | -9,079,090.99 |
| Provision for bad debts of financing receivable | 104,938.54 | 103,604.74 |
| Provision for bad debts of other receivables | 385,715.13 | 282,710.81 |
| Provision for bad debts of other current assets | -- | -118,133,658.14 |
| Total | 5,643,463.88 | -127,539,908.64 |
51. Impairment losses on assets (loss in “-”)
| Item | 2022 | 2021 |
| Provision for invertory impairment | -402,994,496.88 | -167,567,546.04 |
52. Gains on disposal of assets
| Item | 2022 | 2021 |
| Gains from disposal of fixed assets (loss in “-”) | -611,088.11 | 385,299.27 |
| Gains from disposal of intangible assets (loss in “-”) | -- | 3,331,185.95 |
| Total | -611,088.11 | 3,716,485.22 |
53. Non-operating income
| Item | 2022 | 2021 | Recognised as non-recurring gains or losses in 2022 |
| Gains on disposal of assets s | 5,051,368.61 | 4,449,256.58 | 5,051,368.61 |
| Compensation payments | 243,985.86 | 10,638.10 | 243,985.86 |
| Others | 6,008,845.31 | 2,094,300.29 | 6,008,845.31 |
| Total | 11,304,199.78 | 6,554,194.97 | 11,304,199.78 |
54. Non-operating expenses
| Item | 2022 | 2021 | Recognised as non-recurring gains or losses in 2022 |
| Losses on disposal of assets | 61,414,433.22 | 63,892,628.48 | 61,414,433.22 |
| Compensation and penalty | 17,550.00 | 727.98 | 17,550.00 |
| Carbon emission quota trading | 5,264,317.89 | 1,464,983.15 | 5,264,317.89 |
| Others | 407,108.31 | 162,953.79 | 407,108.31 |
| Donation | 978,613.90 | -- | 978,613.90 |
| Total | 68,082,023.32 | 65,521,293.40 | 68,082,023.32 |
55. Income tax expenses
(1) Details of income tax expenses
| Item | 2022 | 2021 |
| Current tax in accordance with tax laws and related regulations | 219,005,828.78 | 1,578,636,762.92 |
| Deffered income tax expenses | 64,692,649.53 | -89,407,543.66 |
| Total | 283,698,478.31 | 1,489,229,219.26 |
(2) Reconciliation between income tax expenses and profit before income tax is as follows:
| Item | 2022 | 2021 |
| Profit before tax | 1,793,113,877.83 | 9,907,905,959.65 |
| Tax at the applicable tax rate of 15% | 268,967,081.67 | 1,486,185,893.95 |
| Taxation effect of different tax rates of subsidiaries | 9,416,049.20 | 9,147,288.50 |
| Adjustment of income tax in the prior year | -167,423.08 | 10,277,388.90 |
| Share of profit or loss of joint ventures and associates under the equity method | 37,956,945.34 | -5,776,903.71 |
| Income not subject to tax（expressed in“-”） | -842,232.32 | -407,816.61 |
| Non-deductible costs, expenses and losses | 9,328,763.06 | 3,816,854.15 |
| Taxation effect of the change in the applicable tax rate on the beginning disclosure of the deffered income tax | -- | -- |
| Taxation effect of utilizing previous unrecognized tax losses and deductible temporary differences (expressed in “-”) | -39,016,139.47 | -28,888,868.85 |
| Taxation effect of unrecognized tax losses and deductible temporary differences | 296,879,494.17 | 6,106,882.02 |
| Item | 2022 | 2021 |
| Taxation effect of research and development expenses (expressed in “-”) | -7,022,222.63 | -- |
| Others | -291,801,837.63 | 8,768,500.91 |
| Income tax expenses | 283,698,478.31 | 1,489,229,219.26 |
56. Notes to cash flow statement
(1) Proceeds from other operating activities
| Item | 2022 | 2021 |
| Government grants received | 144,356,668.51 | 54,359,336.26 |
| Security deposit received | 7,797,264.28 | 3,208,000.00 |
| Other non-operating income received | 6,252,831.17 | 2,104,938.39 |
| Other receivables received | 907,256.25 | 3,663,851.17 |
| Restricted funds received | 607,900,032.50 | -- |
| Total | 767,214,052.71 | 63,336,125.82 |
(2) Payments for other operating activities
| Item | 2022 | 2021 |
| Expenses paid | 386,282,467.41 | 435,051,105.11 |
| Non-operating expenses paid | 6,667,590.10 | 1,628,664.92 |
| Restricted funds paid | -- | 416,155,620.25 |
| Total | 392,950,057.51 | 852,835,390.28 |
(3) Proceeds from other investing activities
| Item | 2022 | 2021 |
| Interest income | 132,789,335.69 | 130,931,269.04 |
(4) Payment for other investing activities
| Item | 2022 | 2021 |
| Jinshi Investment Co., Ltd. | -- | 300,000,000.00 |
(5) Payment for other financing activities
| Item | 2022 | 2021 |
| Financial commissions | 1,087,113.74 | 1,735,566.18 |
| Paying back the borrowings from Shougang Group | 102,661,561.32 | 917,013,635.51 |
| Lease payments | 18,776,827.47 | 18,974,740.74 |
| Non-public offering fees paid | 14,443,431.52 | 18,562,551.86 |
| Return the loan to Wuhan Zhongxin | -- | 2,800,000.00 |
| Return Liuzhou Shougang Automobile Co. minority shareholders investment funds | -- | 4,996,112.27 |
| Total | 136,968,934.05 | 964,082,606.56 |
57. Supplements to statement of cash flows
(1) Supplementary information
| Supplementary information | 2022 | 2021 |
| 1. Reconciliation of net profit to net cash flows from operating activities: | ||
| Net profit | 1,509,415,399.52 | 8,418,676,740.39 |
| Add: Impairment losses on assets | 402,994,496.88 | 167,567,546.04 |
| Credit impairment losses | -5,643,463.88 | 127,539,908.64 |
| Depreciation of fixed assets | 7,606,486,882.19 | 7,378,106,118.45 |
| Depreciation of right-of-use assets | 17,047,777.32 | 16,608,280.06 |
| Amortization of intangible assets | 174,693,821.90 | 138,072,177.23 |
| Amortizaiton of long-term deffered expenses | 588,715.53 | 345,030.83 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gains as in “-”) | 611,088.11 | -3,716,485.22 |
| Losses on written-off fixed assets (Gains as in “-”) | 56,363,064.61 | 59,443,371.90 |
| Losses on fair value changes (Gain as in “-”) | 765,992.40 | -- |
| Financial expenses (Income as in “-”) | 1,731,584,291.35 | 2,260,406,032.80 |
| Investment losses (Income as in “-”) | 211,209,023.35 | -106,379,717.79 |
| Decrease in deferred tax assets (Increase as in “-”) | -212,634,532.02 | -41,819,052.19 |
| Increase in deferred tax liabilities (Decrease as in “-”) | 277,327,181.55 | -47,588,491.47 |
| Decrease in inventories (Increase as in “-”) | -344,414,864.08 | -1,447,427,404.02 |
| Decrease in receivables from operating activities (Increase as in “-”) | 850,893,260.68 | -2,744,997,757.88 |
| Increase in payables from operating activities (Decrease as in “-”) | -2,898,834,775.85 | 1,627,023,348.36 |
| Others | 665,782,138.24 | -408,669,801.90 |
| Net cash flow from operating activities | 10,044,235,497.80 | 15,393,189,844.23 |
| 2. Significant non-cash payments for investing and financing activities: | ||
| Conversion of debt into capital | -- | -- |
| Convertible bonds due within one year | -- | -- |
| Newly added right-of-use assets in the current period | -- | -- |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 8,329,215,003.68 | 8,535,871,373.08 |
| Less: Opening balance of cash | 8,535,871,373.08 | 4,959,913,916.36 |
| Supplementary information | 2022 | 2021 |
| Add: Closing balance of cash equivalents | -- | -- |
| Less: Opening balance of cash equivalents | -- | -- |
| Net increase in cash and cash equivalents | -206,656,369.40 | 3,575,957,456.72 |
Note: The amount of endorsement and transfer of acceptance notes received from goods sales of theCompany is RMB 79,259,034,500.00.
(2) Components of cash and cash equivalents
| Item | 2022.12.31 | 2021.12.31 |
| 1. Cash | 8,329,215,003.68 | 8,535,871,373.08 |
| Including: Cash on hand | 23,581.90 | 53,404.48 |
| Balances in banks without restriction | 8,329,191,409.04 | 8,535,817,955.86 |
| Digital currency without restriction | -- | -- |
| Other monetary funds without restriction | 12.74 | 12.74 |
| 2. Cash equivalents | -- | -- |
| Including: bonds investment due within three months | -- | -- |
| 3. Closing balance of cash and cash equivalents | 8,329,215,003.68 | 8,535,871,373.08 |
| Including: restricted cash and cash equivalents from the parent company or its subsidiaries | -- | -- |
58. Notes to Statement of Changes in Shareholders' Equity
Note: Item with material amounts in ‘VI. Others’ is the transitional net profit of the pelletizing-sintering business of Shougang Mining Corporation from July to November 2022 under commoncontrol of RMB 21,283,644.68. The above event increases the combined capital reserve of RMB-21,283,644.68.
59. Restricted assets
| Item | 2022.12.31 | Restricted reasons |
| Cash and cash balances | 1,140,407,749.24 | Security deposits, fixed term deposits |
| Notes receivable | 328,829,159.08 | Pledge billing |
| Accounts receivable | 24,223,581.32 | Pledge billing |
| Total | 1,493,460,489.64 |
60. Government grants
(1) Government grants recognized as deferred income and subsequently measured via gross method.
| Item | Type | 2022.1.1 | Increase | Transfer to profit or loss | Other changes | 2022.12.31 | Item recognized in income statement | Related to assets/ Related to income |
| Discount funds for imported equipments | Financial appropriation | 13,335,340.67 | -- | 1,229,110.56 | -- | 12,106,230.11 | Other income | Related to assets |
| Government grants for engineering informationization project (Qian'an Iron and Steel, Cold-R Co.) | Financial appropriation | 375,000.24 | -- | 99,999.96 | -- | 275,000.28 | Other income | Related to assets |
| Government grants for energy central project from the Ministry of Industry and Information Technology of the People’s Republic of China | Financial appropriation | 4,000,000.24 | -- | 2,000,000.36 | -- | 1,999,999.88 | Other income | Related to assets |
| Special government grants from the Finance Bureau of Qian'an | Financial appropriation | 4,200,000.00 | -- | 60,869.58 | -- | 4,139,130.42 | Other income | Related to assets |
| Government grants for hot-rolled steel strip TMCP project | Financial appropriation | 1,368,421.04 | -- | 105,263.16 | -- | 1,263,157.88 | Other income | Related to assets |
| Government grants for dedusting system upgrading project (Qian'an Iron and Steel) | Financial appropriation | 26,105,263.24 | -- | 1,631,578.92 | -- | 24,473,684.32 | Other income | Related to assets |
| Government grants for advanced sewage treatment | Financial appropriation | 5,161,851.80 | -- | 342,222.24 | -- | 4,819,629.56 | Other income | Related to assets |
| Special government grants for denitration engineering from the Hebei Provincial Finance Department | Financial appropriation | 735,000.00 | -- | 245,000.00 | -- | 490,000.00 | Other income | Related to assets |
| Government grants for online environmental monitoring project from the Finance Bureau of Caofeidian | Financial appropriation | 3,000,000.00 | -- | 500,000.00 | -- | 2,500,000.00 | Other income | Related to assets |
| The steelmaking technology and facilities demonstration project through carbon dioxide-oxygen mixed injection, funded by University of Science and Technology Beijing | Financial appropriation | 3,929,824.56 | -- | 210,526.32 | -- | 3,719,298.24 | Other income | Related to assets |
| National funds for the national 863 project | Financial appropriation | 834,600.00 | -- | 278,200.00 | -- | 556,400.00 | Other income | Related to assets |
| Government grants for Phase II seawater dsalination project | Financial appropriation | 17,894,736.88 | -- | 1,052,631.56 | -- | 16,842,105.32 | Other income | Related to assets |
| Government grants for cold-rolled intelligent manufacturing project | Financial appropriation | 11,587,500.00 | 11,470,000.00 | 1,832,947.36 | -- | 21,224,552.64 | Other income | Related to assets |
| Government grants for R & D and demonstration projects of seawater dsalination based on reuse of steelmaking waste heat | Financial appropriation | 8,700,000.00 | -- | 8,700,000.00 | -- | -- | Other income | Related to assets |
| Government grants for the desulfurization of pelletizing flue gas | Financial appropriation | 22,291,578.94 | -- | 1,486,105.28 | -- | 20,805,473.66 | Other income | Related to assets |
| Environmental protection government grants for closing limestone yards | Financial appropriation | 1,680,000.00 | -- | 80,000.00 | -- | 1,600,000.00 | Other income | Related to assets |
| Government grants for intelligent interface closed-loop control technology in multi-target optimize steelmaking and ironmaking | Financial appropriation | 2,400,000.00 | -- | 2,400,000.00 | -- | -- | Other income | Related to assets |
| Government grants for new metal, ceramic composite powder, and refractory anticorrosion coating | Financial appropriation | 838,100.00 | -- | 838,100.00 | -- | -- | Other income | Related to assets |
| Item | Type | 2022.1.1 | Increase | Transfer to profit or loss | Other changes | 2022.12.31 | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for intelligent collaborative allocation techonglogy about material flow and power flow in steelmaking program | Financial appropriation | 2,350,000.00 | -- | 2,350,000.00 | -- | -- | Other income | Related to assets |
| Government grants for energy-saving incentive for No.3 hydrogen generator | Financial appropriation | 1,018,184.17 | -- | 67,878.96 | -- | 950,305.21 | Other income | Related to assets |
| Government grants for cold rolling operation department aluminized silicon high strength steel automotive plate renovation project | Financial appropriation | 3,065,263.13 | -- | 191,578.96 | -- | 2,873,684.17 | Other income | Related to assets |
| Government grants for cold rolling operation department high strength steel 18 roll single stand project | Financial appropriation | 11,900,000.00 | -- | 449,056.60 | -- | 11,450,943.40 | Other income | Related to assets |
| Government grants for the operation-control system of production-marketing integration | Financial appropriation | 20,390,000.00 | -- | 617,878.80 | -- | 19,772,121.20 | Other income | Related to assets |
| Government grants for green and intelligent collaborative mechanism of steel process and comprehensive energy efficiency assessment | Financial appropriation | 580,000.00 | -- | 580,000.00 | -- | -- | Other income | Related to assets |
| Government grants for the specialized production line project of Zinc-plated high-strengthen auto sheet | Financial appropriation | 89,473,684.24 | -- | 5,263,157.88 | -- | 84,210,526.36 | Other income | Related to assets |
| Government grants for reforming of sinter desulfurization and denitrification | Financial appropriation | 25,789,473.70 | -- | 1,578,947.36 | -- | 24,210,526.34 | Other income | Related to assets |
| Government grants for thin slab casting and rolling engineering | Financial appropriation | 5,000,000.00 | 322,500.00 | 142,857.14 | -- | 5,179,642.86 | Other income | Related to assets |
| Government grants for reform project of reducing oxynitride concentration in emissed flue gas from annealing furnace | Financial appropriation | 6,161,842.15 | -- | 331,578.84 | -- | 5,830,263.31 | Other income | Related to assets |
| Government grants for industrial mechanism model base | Financial appropriation | 4,800,000.00 | -- | -- | -- | 4,800,000.00 | Other income | Related to assets |
| Government grants for 10,000 tons/d desalination project | Financial appropriation | 8,431,578.95 | -- | 468,421.04 | -- | 7,963,157.91 | Other income | Related to assets |
| Government grants for enhancing the core competitiveness of the manufacturing industry | Financial appropriation | 78,540,000.00 | -- | -- | -- | 78,540,000.00 | Other income | Related to assets |
| Government grants for sintering waste heat power generation project | Financial appropriation | -- | 20,000,000.00 | 663,716.81 | -- | 19,336,283.19 | Other income | Related to assets |
| Government grants for comprehensive optimization and upgrading project of hot blast furnace system in Phase I of ironmaking Operation Department | Financial appropriation | -- | 24,450,900.00 | 767,517.04 | -- | 23,683,382.96 | Other income | Related to assets |
| Government grants for energy conservation and emission reduction optimization and improvement projects | Financial appropriation | -- | 13,489,900.00 | 60,606.06 | -- | 13,429,293.94 | Other income | Related to assets |
| Government grants for Zinc containing solid waste disposal project | Financial appropriation | -- | 5,000,000.00 | 121,359.22 | -- | 4,878,640.78 | Other income | Related to assets |
| Government grants for high-tech industry development projects | Financial appropriation | -- | 7,000,000.00 | -- | -- | 7,000,000.00 | Other income | Related to assets |
| Government grants for new energy automotive electrical steel project | Financial appropriation | -- | 698,509.00 | 347,537.32 | -- | 350,971.68 | Other income | Related to assets |
| Government grants for high performance oriented silicon steel project | Financial appropriation | -- | 19,640,000.00 | -- | -- | 19,640,000.00 | Other income | Related to assets |
| Other government grants related to assets | Financial appropriation | 17,683,541.44 | 6,530,755.00 | 2,306,820.16 | -- | 21,907,476.28 | Other income | Related to assets |
| Item | Type | 2022.1.1 | Increase | Transfer to profit or loss | Other changes | 2022.12.31 | Item recognized in income statement | Related to assets/ Related to income |
| Other government grants related to income | Financial appropriation | 390,000.00 | 82,832.00 | 432,832.00 | -- | 40,000.00 | Other income | Related to income |
| Total | 404,010,785.39 | 108,685,396.00 | 39,834,299.49 | -- | 472,861,881.90 |
(2) Government grants directly recorded as profit or loss for the current period and measured via gross method.
| Item | Type | Amount recognised in profit or loss in prior period | Amount recognised in profit or loss in the period | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for steady post | Financial appropriation | 7,773,848.31 | 7,645,337.02 | Other income | Related to income |
| Government grants for promoting the development of enterprises operate in the region | Financial appropriation | -- | 2,700,000.00 | Other income | Related to income |
| Other government grants related to income | Financial appropriation | 25,727,347.92 | 14,041,899.24 | Other income | Related to income |
| Total | 33,501,196.23 | 24,387,236.26 |
VI. Changes in the scope of consolidationBusiness combination under common control
(1) Business combination under common control occurring in the current period. (Unit: RMB0,000)
| Name of the combined party | The proportion of equity acquired in business combination | The basis for the business combinations under the common control | Combination date | Revenue of the combined party from the beginning of the consolidation period to the date of consolidation | Net profit of the combined party from the beginning of the consolidation period to the date of consolidation | Revenue of the combined party in the previous period | Net profit of the combined party in the previous period |
| The pelletizing -sintering business of Shougang Mining Corporation | 100.00% | Under the control of the same parent company | 2022/11/30 | 1,024,765.19 | 5,540.43 | 1,307,612.22 | 9,214.57 |
On November 15, 2022, upon the approval of the third interim shareholders' meeting in 2022, theCompany acquired the effective operating assets and liabilities of the pelleting and sintering(pelletizing-sintering) process held by the Shougang Mining Corporation (hereinafter referred to asShougang Mining Corp.) in cash. The pelletizing -sintering business is evaluated on June 30, 2022as the base date, and its net assets are evaluated at RMB 1,300,325,799.36. On November 28, 2022,the Company signed the Asset Purchase Agreement with Shougang Mining Corp., whichdetermined November 30, 2022 as the delivery date of the acquisition. The final price of the assetspurchased is RMB 1,300,325,799.36. The Company has paid the initial purchase price of RMB650,162,899.68 on December 7, 2022, and the remaining purchase price will be paid in accordancewith the agreement.The pelletizing -sintering business was originally a subsidiary of Shougang Group, the parentcompany of the Company. Since both parties were controlled by Shougang Group before and afterthe combination and the control was not temporary, this acquisition is a combination of businessesunder common control. The Company completed the delivery and continuation of the assets,liabilities and personnel of the pelletizing -sintering business on November 30, 2022, and thereforethe combination date was determined to be November 30, 2022. All assets and liabilities acquiredby the Company in the acquisition of the ball-burning business is measured at the book value of thecombined party on the combination date.
(2) Acquisition costs
| Item | The pelletizing -sintering business of Shougang Mining Corporation |
| Cash | 1,300,325,799.36 |
| Book value of debt assumed | |
| The total of the acquisition costs | 1,300,325,799.36 |
(3) Assets and liabilities of the merged party
| Item | The pelletizing -sintering business of Shougang Mining Corporation | |
| 2022.11.30 | 2021.12.31 | |
| Assets: | ||
| Accounts receivable | -- | 136,824,254.72 |
| Item | The pelletizing -sintering business of Shougang Mining Corporation | |
| 2022.11.30 | 2021.12.31 | |
| Other receivable | 21,283,644.68 | -- |
| Inventories | 386,071,523.33 | 524,883,808.40 |
| Fixed assets | 1,545,167,347.75 | 1,594,344,450.58 |
| Construction in progress | 211,170,008.86 | 49,784,077.48 |
| Intangible assets | 63,235,836.57 | 61,973,257.95 |
| Total assets | 2,226,928,361.19 | 2,367,809,849.13 |
| Liabilities: | ||
| Accounts payable | 981,170,128.23 | 382,223,910.42 |
| Payroll and employee benefits | 15,580,986.38 | 13,247,733.64 |
| Other payables | -- | 765,924,603.17 |
| Long-term payables | 88,770,000.00 | 86,290,000.00 |
| Total liabilities | 1,085,521,114.61 | 1,247,686,247.23 |
| Total equity | 1,141,407,246.58 | 1,120,123,601.90 |
| Net assets acquired on consolidation | 1,141,407,246.58 | 1,120,123,601.90 |
| Acquisition costs (cash paid to Shougang Mining Corp.) | 1,300,325,799.36 | |
| Difference (recognised in equity) | -158,918,552.78 | |
VII. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Company
| Subsidiary | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | |||||
| Shougang Jingtang United Iron & Steel Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Production and sales | 70.18 | 29.82 | Business combination under common control |
| Beijing Shougang Cold Rolling Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 70.28 | -- | Establish or investment, etc. |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Consulting service | 100.00 | -- | Business combination under common control |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Production and sales | 75.40 | 8.90 | Establish or investment, etc. |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Production and sales | 45.92 | -- | Establish or investment, etc. |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 100.00 | -- | Business combination under common control |
(2) Significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | Proportion of minority shareholders (%) | Net profit/ (loss) attributable to non-controlling interests in reporting period | Dividends declared and distributed to non-controlling interests in reporting period | Non-controlling interests at the end of reporting period |
| Beijing Shougang Cold Rolling Co., Ltd. | 29.72 | 64,341,511.41 | -- | -317,199,002.85 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 15.70 | 180,688,410.18 | 45,895,343.51 | 1,914,326,127.88 |
(3) Major financial information of significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | 2022.12.31 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,317,199,255.15 | 3,836,449,761.31 | 6,153,649,016.46 | 2,646,502,899.97 | 4,570,607,323.65 | 7,217,110,223.62 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 5,760,507,592.72 | 15,459,717,661.10 | 21,220,225,253.82 | 7,660,663,373.94 | 1,401,952,326.63 | 9,062,615,700.57 |
Continued (1):
| Subsidiary | 2021.12.31 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,292,638,370.58 | 3,982,540,841.55 | 6,275,179,212.13 | 2,987,915,522.96 | 4,574,607,301.55 | 7,562,522,824.51 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 4,815,349,946.90 | 13,874,497,322.96 | 18,689,847,269.86 | 7,183,851,434.42 | 1,118,800,705.05 | 8,302,652,139.47 |
Continued (2):
| Subsidiary | 2022 | 2021 | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 10,781,367,755.25 | 216,492,299.49 | 216,492,299.49 | 92,949,448.40 | 12,553,753,097.50 | 164,435,553.57 | 164,435,553.57 | 1,166,412,291.28 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 13,918,944,889.64 | 1,080,892,444.41 | 1,080,892,444.41 | 1,658,031,259.27 | 13,857,367,585.59 | 1,082,906,520.97 | 1,082,906,520.97 | 2,337,657,467.37 |
2. Interests in joint ventures and associates
(1) Significant joint ventures and associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| ①Jiont ventures | ||||||
| Tangshan Guoxing Industrial Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Manufacturing | 50.00 | Equity method | |
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Chemical | 50.00 | Equity method | |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Coking | 50.00 | Equity method | |
| ②Associates | ||||||
| Tangshan Tangcao Railway Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Transportation | 16.19 | Equity method | |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Building Material | 25.00 | Equity method | |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Coking | 49.82 | Equity method | |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing, PRC | Beijing, PRC | Investment | 20.00 | Equity method | |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Beijing, PRC | Beijing, PRC | Manufacturing | 45.00 | Equity method | |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Manufacturing | 40.00 | Equity method | |
| Guangzhou Jinghai Shipping Co., Ltd. | Guangzhou, PRC | Guangzhou, PRC | Transportation | 20.00 | Equity method | |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Qingdao, PRC | Qingdao, PRC | Manufacturing | 35.00 | Equity method | |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Manufacturing | 35.00 | Equity method | |
| Hebei Jingji Industry & Trading Co., Ltd. | Shijiazhuang, PRC | Shijiazhuang, PRC | Manufacturing | 35.71 | Equity method | |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Building Material | 35.00 | Equity method | |
(2) Primary financial information of significant joint ventures
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| Current assets | 81,326,897.38 | 68,956,595.25 | 4,453,756.17 | 1,866,851.04 | 2,203,316,115.22 | 3,190,992,791.00 |
| Including： Cash and cash equivalents | 15,459,879.44 | 4,077,794.50 | 4,153,756.17 | 1,564,673.04 | 909,643,194.30 | 1,254,139,718.41 |
| Non-current assets | 76,981,144.98 | 75,006,601.75 | 595,492,113.45 | 590,178,060.36 | 1,384,560,026.25 | 1,522,676,202.64 |
| Total assets | 158,308,042.36 | 143,963,197.00 | 599,945,869.62 | 592,044,911.40 | 3,587,876,141.47 | 4,713,668,993.64 |
| Current liabilities | 75,404,455.29 | 66,004,351.88 | 580,665,263.21 | 548,972,452.52 | 1,384,913,879.38 | 2,480,101,537.56 |
| Non-current liabilities | 6,537,093.21 | 5,383,693.40 | -- | -- | 6,675,000.00 | 7,231,250.00 |
| Total liabilities | 81,941,548.50 | 71,388,045.28 | 580,665,263.21 | 548,972,452.52 | 1,391,588,879.38 | 2,487,332,787.56 |
| Net assets | 76,366,493.86 | 72,575,151.72 | 19,280,606.41 | 43,072,458.88 | 2,196,287,262.09 | 2,226,336,206.08 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 76,366,493.86 | 72,575,151.72 | 19,280,606.41 | 43,072,458.88 | 2,196,287,262.09 | 2,226,336,206.08 |
| Net assets calculated by shareholding proportion | 38,183,246.94 | 36,287,575.86 | 9,640,303.21 | 21,536,229.44 | 1,098,143,631.04 | 1,113,168,103.04 |
| Adjustment | ||||||
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| Including: Goodwill | -- | -- | -- | -- | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the joint venture | 38,183,246.94 | 36,287,575.86 | 9,640,303.21 | 21,536,229.44 | 1,098,143,631.04 | 1,113,168,103.04 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| Operating revenue | 164,773,046.58 | 72,575,151.72 | -- | -- | 13,921,855,400.28 | 10,931,089,729.11 |
| Financial expenses | 188,156.32 | 277,191.32 | 23,772,275.17 | 22,071,333.99 | 32,965,577.94 | 59,540,904.10 |
| Income tax expense | 3,565,111.77 | 4,668,092.98 | -- | -- | -5,515,983.23 | 23,671,445.98 |
| Net profit | 7,790,570.91 | 10,753,141.86 | -23,791,852.47 | -174,429,403.75 | 56,141,503.88 | 56,774,860.49 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 7,790,570.91 | 10,753,141.86 | -23,791,852.47 | -174,429,403.75 | 56,141,503.88 | 56,774,860.49 |
| Dividends received from joint venture | 2,000,000.00 | 2,000,000.00 | -- | -- | 46,000,000.00 | -- |
(3) Primary financial information of significant associates
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| Current assets | 37,615,636.69 | 200,714,996.01 | 77,330,625.86 | 126,804,287.51 | 2,071,780,230.13 | 1,965,253,903.76 |
| Non-current assets | 8,175,281,488.59 | 8,400,213,950.72 | 224,215,514.07 | 235,304,874.32 | 2,457,397,455.41 | 2,255,751,305.36 |
| Total assets | 8,212,897,125.28 | 8,600,928,946.73 | 301,546,139.93 | 362,109,161.83 | 4,529,177,685.54 | 4,221,005,209.12 |
| Current liabilities | 1,026,481,331.40 | 1,189,477,610.98 | 31,678,142.16 | 45,941,594.92 | 2,727,774,901.17 | 2,014,924,895.69 |
| Non-current liabilities | 5,254,694,650.00 | 5,049,431,650.00 | -- | -- | 20,417,377.09 | 10,482,966.04 |
| Total liabilities | 6,281,175,981.40 | 6,238,909,260.98 | 31,678,142.16 | 45,941,594.92 | 2,748,192,278.26 | 2,025,407,861.73 |
| Net assets | 1,931,721,143.88 | 2,362,019,685.75 | 269,867,997.77 | 316,167,566.91 | 1,780,985,407.28 | 2,195,597,347.39 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 1,931,721,143.88 | 2,362,019,685.75 | 269,867,997.77 | 316,167,566.91 | 1,780,985,407.28 | 2,195,597,347.39 |
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| Net assets calculated by shareholding proportion | 312,745,653.19 | 382,410,987.12 | 67,466,999.44 | 79,041,891.73 | 887,363,090.11 | 1,093,937,932.70 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | -- | -- | 4,147,420.21 | 4,147,420.21 |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 312,745,653.19 | 382,410,987.12 | 67,466,999.44 | 79,041,891.73 | 891,510,510.32 | 1,098,085,352.91 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| Current assets | 63,963,941.09 | 204,542,687.73 | 59,655,006.56 | 46,604,298.17 | 32,667,291.24 | 65,438,102.92 |
| Non-current assets | 694,420,798.63 | 492,971,452.05 | 618,495.73 | 560,866.81 | 214,254,258.49 | 34,618,324.64 |
| Total assets | 758,384,739.72 | 697,514,139.78 | 60,273,502.29 | 47,165,164.98 | 246,921,549.73 | 100,056,427.56 |
| Current liabilities | 152,354,244.94 | 139,570,827.95 | 22,971,249.27 | 16,181,730.58 | 56,004,281.62 | 2,916,673.38 |
| Non-current liabilities | -- | -- | -- | -- | 88,818,500.00 | -- |
| Total liabilities | 152,354,244.94 | 139,570,827.95 | 22,971,249.27 | 16,181,730.58 | 144,822,781.62 | 2,916,673.38 |
| Net assets | 606,030,494.78 | 557,943,311.83 | 37,302,253.02 | 30,983,434.40 | 102,098,768.11 | 97,139,754.18 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 606,030,494.78 | 557,943,311.83 | 37,302,253.02 | 30,983,434.40 | 102,098,768.11 | 97,139,754.18 |
| Net assets calculated by shareholding proportion | 122,430,402.99 | 112,715,820.57 | 16,786,013.86 | 13,942,545.49 | 35,734,568.85 | 33,998,913.97 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | 44,544.87 | 44,544.87 | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 122,430,402.99 | 112,715,820.57 | 16,830,558.74 | 13,987,090.36 | 35,734,568.85 | 33,998,913.97 |
| Fair value of equity investment with | -- | -- | -- | -- | -- | -- |
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | 2022.12.31 | 2021.12.31 | |
| quoted market price | ||||||
Continued:
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| Operating revenue | 93,455,166.47 | 104,729,545.83 | 440,890,510.08 | 578,541,511.89 | 8,253,813,834.07 | 6,295,880,462.27 |
| Net profit | -431,009,356.99 | -418,134,678.91 | 3,700,430.86 | 32,185,557.39 | -414,611,940.11 | 292,507,527.36 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | -431,009,356.99 | -418,134,678.91 | 3,700,430.86 | 32,185,557.39 | -414,611,940.11 | 292,507,527.36 |
| Dividend received from associates | -- | -- | 12,500,000.00 | 12,500,000.00 | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| Operating income | 167,658,027.20 | 334,174,126.04 | 147,636,999.45 | 128,110,940.82 | 34,551,131.55 | 16,867,497.02 |
| Net profit | 123,487,685.42 | 258,828,753.79 | 6,318,818.62 | 5,792,411.77 | 1,507,371.77 | 591,396.34 |
| Net profit from discontinuing operation | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 123,487,685.42 | 258,828,753.79 | 6,318,818.62 | 5,792,411.77 | 1,507,371.77 | 591,396.34 |
| Dividend received from associates | 15,232,424.74 | 173,716,946.85 | -- | -- | -- | -- |
(4) Summary financial information of no significant joint ventures and associates
| Item | 2022.12.31 or Current period | 2021.12.31 or Pervious period |
| Associates | ||
| Total carrying value of investment | 131,600,050.63 | 174,696,933.28 |
| Items calculated according to shareholding ratio | ||
| Net profit | -473,871.48 | 3,061,477.93 |
| Other comprehensive income | ||
| Total comprehensive income | -473,871.48 | 3,061,477.93 |
3. Interests in unconsolidated structured entities
(1) Basic information of unconsolidated structured entities
The unconsolidated structured entities are the Limited Partnership initiated by the Company-Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) (Hereinafterreferred to as Shouxin Jinyuan Fund or the Partnership) and Beijing Shouxin Jin'an EquityInvestment Partnership (Limited Partnership) (Hereinafter referred to as Shouxin Jin'an Fund or thePartnership). In accordance with the provisions of the limited partnership agreement, the Companyhas no control over the Partnership.
①The purpose of establishing Shouxin Jinyuan Fund is combining the relevant policies of Beijingon the development of sophisticated industry with the market-oriented operation of M&Ainvestment, actively responding to the strategic goal of Beijing to build a sophisticated industrialstructure, promoting the upgrading and development of Beijing's sophisticated industry,contributing to the local economic development and industrial structure adjustment of Beijing, andcreating satisfactory return on investment for investors.The total subscribed capital of all partners to Shouxin Jinyuan Fund is no less than RMB 1 billion.The partners of the Fund are divided into general partner and limited partner, the contributionagreement is as follows: Beijing Shouyuan New Energy Investment Management Co., Ltd., thegeneral partner, contributes RMB 10,000 thousand; and among the limited partners, the Companyagrees to contribute RMB 200,000 thousand, and the other limited partners agrees to contributeRMB 790,000 thousand in total.As at 31 December 2022, Shouxin Jinyuan Fund has conducted investment activities and threeexternal investment projects has been invested with the amount of RMB 829,432.10 thousand. Nofinancing activity has been conducted by the Fund.
② The purpose of establishing Shouxin Jin'an Fund is to focus on investment in shougang Groupsystem of leading enterprises, to enlarge and strengthen shougang Group new material industry, tofocus on the advanced electrical steel materials, casting superalloys and precision alloys, as well ashigh performance special steel and other metal new materials that Shougang Group has advantagesin.The total subscribed capital of all partners to Shouxin Jin'an Fund is no less than RMB 2,070.5455million. The partners of the Fund are divided into general partner and limited partner, thecontribution agreement is as follows: Beijing Shouyuan Xinneng Investment Management Co., Ltd.,the general partner, contributes RMB 20.7055 million; and among the limited partners, theCompany agrees to contribute RMB 200,000 thousand, and the other limited partners agrees tocontribute RMB 1,849.84 million in total.As at 31 December 2022, Shouxin Jin'an Fund has completed fund raising and registered on TheChinese Association of Securities Investment Funds and two external investment projects has beeninvested with the amount of RMB 230 million. No financing activity has been conducted by theFund.
(2) Carrying value and maximum loss exposure of interests related assets and liabilitiesAs at 31 December 2022, no assets and liabilities related to the interests in Shouxin Jinyuan Fundrecognized are recognized in the financial statements of the Company except for the partnercontribution agreed in the partner agreement. The maximum loss exposure of the Company'sinterests in Shouxin Jinyuan Fund is RMB 105.8864 million. The maximum loss exposure of theCompany's interests in Shouxin Jin'an Fund is RMB 22.2164 million.
(3) The support provided to the unconsolidated structured entities
As at 31 December 2022, the Company had no intention to provide financial support or othersupport for Shouxin Jinyuan Fund and Shouxin Jin'an Fund.
(4) Additional information disclosure of unconsolidated structured entities
As at 31 December 2022, no additional information related to Shouxin Jinyuan Fund and ShouxinJin'an Fund should be disclosed by the Company.VIII. Financial instruments and risk managementThe major financial instruments of the Company include cash and cash equivalents, notesreceivable, accounts receivable, financing receivables, other receivables, current portion ofnon-current assets, other current assets, other equity instrument investments, other non-currentfinancial assets, long-term receivables, notes payable, accounts payable, other payables, short-termborrowings, financial liabilities held for trading, current portion of non-current liabilities, long-termborrowings and bond payables, lease liabilities and long-term payables. The details of financialinstruments are disclosed in the respective notes. Risks relate to these financial instruments and riskmanagement policies used by the Company to minimize the risks are disclosed as below.Management of the Company manages and monitors the risk exposures to ensure the risks arecontrolled in the limited range.
1. Objectives and policies of risk management
The objective of the Company in risk management is to obtain an appropriate equilibrium betweenrisk and return, and also focuses on minimizing potential adverse effects on the financialperformance of the Company bring by the unpredictability of financial risk. Based on the objectivesof risk management, certain policies are established to recognize and analyze the risk. Also, in orderto monitor the risk position of the Company, internal control procedures are designed according toacceptable level of risk. Both the policies and internal control procedures are reviewed and revisedregularly to adapt the changes of the market and business activities of the Company.The primary risks caused by the financial instruments of the Company are credit risk and liquidityrisk.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to dischargeits obligation under the terms of the financial instrument and cause a financial loss to the Company.The Company manages the credit risk on portfolio basis. Credit risks are mainly caused by cash andcash equivalents, notes receivable, accounts receivable, other receivables.The Company mainly deposits in financial institutions with good reputation and high credit ratingtherefore no significant credit risk associated with cash and cash equivalents is expected.In addition, policies related to limit the credit risk exposure on notes receivable, accounts receivableand other receivables are established by the Company. The Company evaluates credit quality andsets credit limits on customers by taking into account the financial position, credit records and otherfactors such as current market conditions. The credit history of the customers is regularly monitoredby the Company. In respect of customers with a poor credit history, the Company will use writtenpayment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of theCompany is limited to a controllable extent.The highest credit risk exposure to the Company is limited to the carrying value of each financialinstrument illustrated in the financial statements. The Company has not provided any guarantee thatmight cause credit risk to the Company.Among the accounts receivable of the Company, the accounts receivable of the top five customers
accounted for 52.28% (2021: 45.99%); among the other receivables of the Company, the otherreceivables of the top five customers accounted for 63.31% (2021: 59.06%)
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations associatedwith its financial liabilities that are settled by delivering cash or other financial assets.The Company maintains and monitors sufficient level of cash and cash equivalents as considered bythe management while managing liquidity risk in order to meet operational needs of the Companyand reduce the effect of floating cash flow. The usage of bank loan is monitored by the managementof the Company and the loan covenants are ensured to be complied. Meanwhile, primary financialinstitution commits to provide sufficient reserve funds to satisfy the short term and long term fundrequirement of the Company.
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, toenhance the return to shareholders, to benefit other related parties and to maintain the best capitalstructure to minimize the cost of capital.To the maintenance or adjustment of the capital structure, the Company might adjust the amount ofdividends paid to shareholders, return capital to shareholders, issue new shares and other equityinstruments, or make an asset disposal to reduce debt liabilities.The Company monitors the capital structure on the basis of leverage ratio (total liabilities dividedtotal assets). As at 31 December 2022, the leverage ratio of the Company is 65.03% (31 December2021: 67.21%).IX. Fair valueFair value hierarchies are categorized into three levels as the lowest level input that is significant tothe entire fair value measurement.Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities.Level 2: inputs are inputs other than quoted prices included within Level 1 that are observable forthe asset or liability, either directly or indirectly.Level 3: inputs are unobservable inputs for the asset or liability.
(1) Fair value of assets and liabilities measured at fair value
As at 31 December 2022, assets and liabilities measured at fair value are shown as follows:
| Item | Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total |
| I. Recurring fair value measurement | ||||
| (1) Financing receivable | -- | -- | 3,489,134,871.56 | 3,489,134,871.56 |
| (2) Other equity instrument investment | 197,880,464.00 | -- | 34,885,669.81 | 232,766,133.81 |
| (3) Other non-current financial assets | -- | -- | 79,234,007.60 | 79,234,007.60 |
| Total assets measured at fair value on a recurring basis | 197,880,464.00 | -- | 3,603,254,548.97 | 3,801,135,012.97 |
(2) Fair values of items not measured at fair value
Financial assets and financial liabilities measured at amortized cost include: cash and cashequivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, notespayable, accounts payable, other payables, long-term borrowings due within one year, long-termborrowings and bonds payable, etc.No additional details of financial assets and financial liabilities should be disclosed since thedifference between the fair value and carrying value of financial assets and financial liabilities ofthe Company is approximately equal.X. Related parties and related party transactions
1. Information about the parent company of the Company
| Parent company | Registration place | Business nature | Registered capital (RMB 0,000) | Shareholding percentage (%) | Percentage of voting rights (%) |
| Shougang Group Co., Ltd. | Beijing | Company with limited liability(wholly state-owned) | 2,875,502.50 | 56.53 | 56.53 |
The ultimate controlling party of the Company is State-owned Assets Supervision andAdministration Commission of People’s Government of Beijing Municipality.During the reporting period, the change of the registered capital of the parent company is as follows(Unit: RMB 0,000):
| As at 31 December 2021 | Increase | Decrease | As at 31 December 2022 |
| 2,875,502.50 | -- | -- | 2,875,502.50 |
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII, 1.
3. Information about joint ventures and associates of the Company
For information about joint ventures and associates of the Company, refer to Note VII, 2.Joint ventures and associates that have related transactions with the Company in current period orthe previous period are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint ventures of the Company |
| Tangshan Guoxing Industrial Co., Ltd. | Joint ventures of the Company |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Joint ventures of the Company |
| Tangshan Tangcao Railway Co., Ltd. | Associates of the Company |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Associates of the Company |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Associates of the Company |
| Name of joint venture or associate | Relationship with the Company |
| Guangzhou Jinghai Shipping Co., Ltd. | Associates of the Company |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Associates of the Company |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Associates of the Company |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Associates of the Company |
| Hebei Jingji Industry & Trading Co., Ltd. | Associates of the Company |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Associates of the Company |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Associates of the Company |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Associates of the Company |
4. Information about other related parties
| Related party | Relationship with the Company |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company |
| Shougang Mining Corporation | Under the control of the same parent company |
| China Shougang International Trade&Engineering Corporation | Under the control of the same parent company |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Machinery Co., Ltd. | Under the control of the same parent company |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Qian'an First Real Packaging Service Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Equipment Structure Co., Ltd. | Under the control of the same parent company |
| Beijing Soly Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shouye Instruments&Meters Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Landscaping Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Under the control of the same parent company |
| Beijing Huaxia Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Catering Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Beijing Shoujia Steel Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Ferroalloy Co., Ltd. | Under the control of the same parent company |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Under the control of the same parent company |
| Yantai Shougang Mining 3D Co., Ltd. | Under the control of the same parent company |
| Tianjin Shougang Electric Equipment Co., Ltd. | Under the control of the same parent company |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Under the control of the same parent company |
| Beijing Shoucheng Packaging Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Materials Trading Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Futong Elevator Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Under the control of the same parent company |
| Tonghua Iron and Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Shougang Environmental Industry Co., Ltd. | Under the control of the same parent company |
| Beijing Teyu Plate Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Zhongshou Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Mining Construction Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Industrial Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Cultural Development Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Under the control of the same parent company |
| Shougang Casey Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Under the control of the same parent company |
| Qiangang Hotel. | Under the control of the same parent company |
| Beijing Shougang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Under the control of the same parent company |
| Bohai International Conference Center Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Under the control of the same parent company |
| Shougang Guiyang Special Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Shoukuang Cleaning Iron Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Under the control of the same parent company |
| Shougang Changzhi Steel&Iron Co., Ltd. | Under the control of the same parent company |
| Beijing Beiye Functional Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Metal Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Under the control of the same parent company |
| Guizhou Bohong Industrial Co., Ltd. | Under the control of the same parent company |
| Dachang Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Lanzatech Co., Ltd. | Under the control of the same parent company |
| South China International Leasing Co., Ltd | Under the control of the same parent company |
| Beijing Shouxinsheng Trading Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Plate Mill Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Fulushi Color Coated Plate Co., Ltd. | Under the control of the same parent company |
| Bejing Shougang International Travel Co., Ltd. | Under the control of the same parent company |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Under the control of the same parent company |
| Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | Under the control of the same parent company |
| Tonggang Jilin Welded Pipe Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Mining Investment Co., Ltd | Under the control of the same parent company |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Property Management Co., Ltd. | Under the control of the same parent company |
| Beijing Shouao Real Estate Co., Ltd | Under the control of the same parent company |
| Beijing Shouronghui Technology Development Co., Ltd. | Under the control of the same parent company |
| Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Tangshan Co., Ltd. | Under the control of the same parent company |
| Guizhou Shuigang Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Investment Co., Ltd. | Under the control of the same parent company |
| Shougang Commercial Factoring Co., Ltd. | Under the control of the same parent company |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Under the control of the same parent company |
| Guiyang Steel Mills I/E Corp. | Under the control of the same parent company |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shouyi Mining Hospital Co., Ltd. | Under the control of the same parent company |
| Peking University Shougang Hospital | Under the control of the same parent company |
| Shougang Yili Steel Co., Ltd. | Under the control of the same parent company |
| Mine Hospital of Shougang Group Co. Ltd. | Under the control of the same parent company |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gitane New Materials Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Beijing Shougang Shape Metal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shouyu Industry and Trade Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Industry Port Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| YASKAWA Shougang Robert Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Cmi Engineering (Beijing) Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Qian'an Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Sanhe Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Hua Xia Bank Co.,Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingxi Shoutang Supply Chain Management Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Beijing Shoubang New Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingtang Port Shougang Terminal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Directors, Supervisors, CFO and Board Secretary | Key management personnel |
5. Information about related party transactions
(1) Details of related purchase and sales
①Purchase of goods and receiving of services from related parties
| Related party | Nature of transaction | 2022 | 2021 |
| Shougang Group Co., Ltd. | Raw material | 30,738,244,970.15 | 38,213,705,218.31 |
| Shougang Group Co., Ltd. | Fuel material | 1,755,484,533.11 | 1,436,079,743.96 |
| Shougang Group Co., Ltd. | Engineering equipment | -- | 107,886,266.97 |
| Shougang Group Co., Ltd. | Spare parts | 288,719.70 | 61,664,063.35 |
| Shougang Group Co., Ltd. | Production service | 24,483,467.94 | 25,846,478.94 |
| Shougang Group Co., Ltd. | Fund usage charges | 71,217,912.21 | 75,407,530.12 |
| Shougang Group Finance Co., Ltd. | Fund usage charges | 308,397,762.40 | 292,800,216.58 |
| Shougang Mining Corporation | Raw material | 3,801,893,028.27 | 4,609,820,903.85 |
| Shougang Mining Corporation | Spare parts | 5,484,172.00 | 3,778,051.70 |
| Shougang Mining Corporation | Production service | 113,846,405.24 | 130,707,744.54 |
| Shougang Mining Corporation | Engineering equipment | 1,904,158.00 | 626,686.00 |
| Shougang Mining Corporation | Fund usage charges | 2,210,553.86 | -- |
| China Shougang International Trade&Engineering Corporation | Export cost | 82,530,156.00 | 71,055,095.49 |
| China Shougang International Trade&Engineering Corporation | Raw material | 2,531,173,902.66 | 4,089,317,261.70 |
| China Shougang International Trade&Engineering Corporation | Fuel material | 96,591,728.29 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Fuel material | 7,005,052,052.73 | 5,465,442,208.53 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 393,033,410.87 | 362,255,517.37 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Production service | 1,458,000.00 | 3,758,115.00 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Engineering service | 6,000,851.01 | 10,770,342.75 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 473,493,304.04 | 622,929,389.39 |
| Beijing Shougang Construction Group Co., Ltd. | Spare parts | 26,646,250.93 | 16,630,652.40 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering equipment | -- | 61,946.00 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering service | 704,479,068.44 | 930,940,085.69 |
| Beijing Shougang Gas Co., Ltd. | Spare parts | 3,642,954.04 | 1,635,395.19 |
| Beijing Shougang Gas Co., Ltd. | Production service | 51,120,800.84 | 57,272,804.78 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 94,449,984.15 | 109,544,662.97 |
| Beijing Shougang Gas Co., Ltd. | Auxiliary material | 4,742,161.45 | 9,208,242.96 |
| Related party | Nature of transaction | 2022 | 2021 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 314,726,062.22 | 345,978,795.76 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Spare parts | 6,119,863.00 | 7,529,718.33 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering service | 164,940,165.69 | 115,338,195.80 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering equipment | 56,830,246.32 | 76,320,731.33 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | 108,341,720.51 | 113,462,788.79 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 291,903,126.80 | 271,132,744.28 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering equipment | 33,623,091.14 | 26,536,094.40 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering service | 2,106,619.54 | 8,184,437.70 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Spare parts | 49,708,124.60 | 53,445,297.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 164,741,681.95 | 161,443,825.72 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Auxiliary material | 534,000.00 | 181,612.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Engineering equipment | 2,849,600.00 | 631,639.35 |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Production service | 123,198,193.34 | 119,293,169.06 |
| Qian'an First Real Packaging Service Co., Ltd. | Production service | 330,518,074.43 | 354,866,870.91 |
| Qian'an First Real Packaging Service Co., Ltd. | Raw material | -- | 288,102.67 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Spare parts | 16,770,235.00 | 20,007,338.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 74,615,037.69 | 109,479,534.70 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering equipment | 6,099,531.07 | 1,604,206.84 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering service | 688,292.46 | 825,909.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Raw material | 216,797,429.95 | 519,943,875.16 |
| Huludao Shougang Donghua Machinery Co., Ltd. | Spare parts | -- | 1,271,577.00 |
| Huludao Shougang Donghua Machinery Co., Ltd. | Production service | -- | 5,814,300.00 |
| Beijing Soly Technology Co., Ltd. | Engineering equipment | 612,341.00 | 830,868.00 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Spare parts | 30,692,578.79 | 37,559,656.13 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Engineering equipment | 4,608,458.59 | 5,208,510.00 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 45,870,911.70 | 90,841,047.04 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Auxiliary material | 5,154,000.00 | 5,659,200.00 |
| Related party | Nature of transaction | 2022 | 2021 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering service | 5,962,127.57 | 1,128,873.68 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering equipment | 9,790,200.00 | 355,200.76 |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Production service | 1,785,000.00 | 1,925,000.00 |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Spare parts | 573,207.00 | 939,736.80 |
| Beijing Shougang Landscaping Co., Ltd. | Life service | 25,701,356.25 | 26,567,532.41 |
| Beijing Shougang Landscaping Co., Ltd. | Engineering service | -- | 733,072.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Spare parts | 13,777,316.00 | 12,607,597.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering equipment | 197,970,778.68 | 72,137,555.51 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering service | 475,003,098.49 | 537,616,321.63 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 664,296.23 | 17,945,708.90 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 67,493,491.20 | 76,299,884.11 |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Production service | -- | 10,852,343.50 |
| Beijing Huaxia Technology Co., Ltd. | Spare parts | 3,781,380.33 | 5,512,346.85 |
| Beijing Huaxia Technology Co., Ltd. | Engineering equipment | -- | 57,216.00 |
| Beijing Huaxia Technology Co., Ltd. | Production service | 86,000.00 | 1,239,998.00 |
| Beijing Shougang Catering Co., Ltd. | Life service | 14,014,372.50 | 32,281,673.78 |
| Beijing Shoujia Steel Construction Co., Ltd. | Production service | 44,258,026.72 | 43,447,842.27 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw material | 436,896,664.79 | 448,631,993.28 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw material | 350,495,042.52 | 254,273,652.15 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Production service | 53,344,775.21 | 59,356,273.21 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Auxiliary material | 8,312,204.20 | 8,208,732.96 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Auxiliary material | 128,141,883.61 | 108,337,207.14 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Engineering equipment | -- | 2,287,610.62 |
| Yantai Shougang Mining 3D Co., Ltd. | Spare parts | 577,091.09 | 1,172,351.11 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Engineering equipment | 19,847,769.10 | 14,876,285.81 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Spare parts | 4,465,189.00 | 10,249,090.00 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Engineering service | 7,529,528.15 | 5,839,707.47 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Production service | 3,717,879.25 | 1,044,069.80 |
| Related party | Nature of transaction | 2022 | 2021 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 107,663,074.01 | 121,321,417.29 |
| Beijing Shougang Materials Trading Co., Ltd. | Fuel material | 269,025,918.47 | 309,682,912.34 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw material | 996,216,356.30 | 927,016,812.76 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 1,063,798,684.12 | 961,379,395.21 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Fuel material | 17,586,534,301.71 | 13,163,464,122.66 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Raw material | 3,610,282.21 | 3,021,523.41 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 152,523,150.26 | 248,887,913.91 |
| Beijing Shougang Futong Elevator Co., Ltd. | Spare parts | 177,460.00 | 91,115.00 |
| Beijing Shougang Futong Elevator Co., Ltd. | Production service | 884,800.00 | 869,600.00 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 145,637,666.86 | 117,579,964.30 |
| Tangshan Guoxing Industrial Co., Ltd. | Engineering service | 2,236,643.61 | 4,552,565.46 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Production service | 386,060,741.11 | 457,270,718.97 |
| Tonghua Iron and Steel Co., Ltd. | Engineering equipment | -- | 3,236,416.51 |
| Tonghua Iron and Steel Co., Ltd. | Raw material | 358,614,209.66 | 66,026,550.32 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Production service | -- | 94,339.62 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Engineering equipment | -- | 1,362,800.00 |
| Shougang Environmental Industry Co., Ltd. | Production service | 4,790,641.42 | 4,282,264.11 |
| Qinhuangdao Zhongshou Logistics Co., Ltd. | Production service | -- | 587,690.19 |
| Beijing Shougang Mining Construction Co., Ltd. | Engineering service | 32,202,238.47 | 61,119,047.72 |
| Beijing Shougang Mining Construction Co., Ltd. | Production service | 3,124,511.85 | 8,300,086.81 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Engineering equipment | 2,640,623.65 | 1,618,385.43 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Raw material | -- | 1,268,839.82 |
| Beijing Shougang Industrial Group Co., Ltd. | Life service | 5,463,312.46 | 8,354,159.55 |
| Beijing Shougang Shape Metal Co., Ltd. | Raw material | 1,157,199.12 | 1,114,889.38 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Production service | 132,716,435.98 | 117,572,234.28 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Auxiliary material | 2,588,730.00 | 2,330,402.40 |
| Beijing Shougang Cultural Development Co., Ltd. | Production service | 580,274.11 | 149,009.43 |
| Jingxi Commercial Factoring Co., Ltd. | Raw material | 2,294,124.34 | -- |
| Related party | Nature of transaction | 2022 | 2021 |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Spare parts | 202,712.00 | 261,453.00 |
| Shougang Casey Steel Co., Ltd. | Production service | 99,663,335.28 | 102,954,696.79 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Life service | 103,510,367.58 | 23,414,022.52 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Spare parts | 2,092,860.00 | -- |
| Qiangang Hotel. | Production service | 20,138,607.00 | 25,876,769.55 |
| Beijing Shougang Special Steel Co., Ltd. | Production service | -- | 426,234.71 |
| Beijing Shougang Special Steel Co., Ltd. | Power energy | -- | 20,612.25 |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Spare parts | 8,985,583.27 | 478,270.00 |
| Bohai International Conference Center Co., Ltd. | Life service | 872,777.64 | 103,046.23 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 5,228,810.04 | 2,721,359.52 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Auxiliary material | 46,730,677.66 | 47,844,677.06 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Spare parts | 21,599,664.94 | 19,576,171.83 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 11,997,608.00 | 13,757,098.00 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 355,036,509.27 | 407,924,922.93 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Spare parts | 61,667,449.21 | 51,088,635.32 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Production service | 810,772.36 | 802,443.04 |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Engineering equipment | 255,912.13 | 690,603.97 |
| Beijing Shouyu Industry and Trade Co., Ltd. | Auxiliary material | 11,422,545.27 | 10,603,136.18 |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Spare parts | 9,600.00 | 15,262.00 |
| Shougang Guiyang Special Steel Co., Ltd. | Auxiliary material | -- | 13,263,605.26 |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Production service | 179,731,432.37 | 187,299,390.37 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Production service | 476,275,284.06 | 442,226,204.61 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Production service | 3,093,058.92 | 3,771,028.94 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Raw material | 137,219.49 | 2,598,673.80 |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Spare parts | 20,983,879.94 | 1,556,522.23 |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Raw material | 180,923,753.72 | 287,802,331.88 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Raw material | 908,220.09 | 28,003,765.33 |
| Related party | Nature of transaction | 2022 | 2021 |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Life service | 1,477,352.85 | 1,458,695.68 |
| YASKAWA Shougang Robert Co., Ltd. | Production service | 141,500.00 | 99,190.00 |
| Beijing Shouxinsheng Trading Co., Ltd. | Raw material | -- | 660,000.00 |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Production service | 431,358.48 | 593,547.16 |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Production service | 37,269,512.82 | 8,612,479.50 |
| Beijing Shouao Real Estate Co., Ltd | Life service | 23,794.00 | 65,373.00 |
| Cmi Engineering (Beijing) Co., Ltd. | Engineering equipment | 12,892,700.00 | 2,350,492.00 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Production service | -- | 137,342.41 |
| South China International Leasing Co., Ltd | Fund usage charges | 751,226.41 | 408,154.27 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Fund usage charges | 21,900,000.00 | 14,223,287.67 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Fuel material | -- | 6,491,155.75 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Raw material | 1,509,854.85 | -- |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Life service | 861,700.00 | 903,720.00 |
| Bejing Shougang International Travel Co., Ltd. | Life service | -- | 186,162.47 |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Raw material | -- | 10,514,058.58 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Production service | 23,335,032.81 | 5,440,692.45 |
| Beijing Shougang Property Management Co., Ltd. | Production service | 2,935,902.84 | 2,903,326.07 |
| Guiyang Steel Mills I/E Corp. | Production service | 13,153,495.39 | 3,371,370.88 |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Raw material | 936,100,776.46 | 812,062,129.47 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 1,858,061.44 | 1,554,416.90 |
| Beijing Shouyi Mining Hospital Co., Ltd. | Production service | 3,486,466.50 | 1,953,842.62 |
| Peking University Shougang Hospital | Production service | 122,228.18 | 631,300.18 |
| Beijing Shougang Construction Investment Co., Ltd. | Production service | 15,000.00 | -- |
| Shougang Yili Steel Co., Ltd. | Engineering equipment | 2,096,637.16 | -- |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Raw material | 407,104,956.47 | 395,735,341.91 |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 6,091,794.34 | 1,296,226.42 |
②Sale of goods and rendering of services to related parties
| Related party | Nature of transaction | 2022 | 2021 |
| Shougang Group Co., Ltd. | Management service | 233,378,200.00 | 322,856,073.40 |
| Shougang Group Co., Ltd. | Production service | 16,202,255.66 | 16,384,180.19 |
| Shougang Mining Corporation | Steel | 2,076,407.04 | 9,657,678.23 |
| Shougang Mining Corporation | Raw fuel material | 11,262,064.60 | 17,317,593.28 |
| Shougang Mining Corporation | Power energy | 127,160.60 | 93,318.05 |
| Shougang Mining Corporation | Production service | 15,600,062.87 | 16,106,593.88 |
| Shougang Group Finance Co., Ltd. | Interest income | 130,624,439.00 | 129,218,534.77 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 247,263,882.72 | 277,517,105.35 |
| Shougang Casey Steel Co., Ltd. | Steel | 535,645,904.62 | 872,744,622.51 |
| Shougang Casey Steel Co., Ltd. | Production service | 1,136,801.76 | 1,821,488.40 |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Steel | -- | 52,568.33 |
| Beijing Shougang Construction Group Co., Ltd. | Power energy | 3,264,125.51 | 2,519,371.08 |
| Beijing Shougang Construction Group Co., Ltd. | Steel | 9,098,035.59 | 37,736,546.55 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 1,985,086.15 | 977,440.97 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 110,053,446.78 | 151,854,252.56 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Steel | 613,930,630.06 | 147,153,949.07 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Power energy | 3,913,938.59 | 3,337,782.11 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 1,604,228.13 | 1,513,633.98 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | -- | 180,310.18 |
| Beijing Shougang Ferroalloy Co., Ltd. | Power energy | 3,676,369.55 | 2,829,746.71 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw fuel material | 21,241,039.12 | 20,619,652.70 |
| Beijing Shougang Ferroalloy Co., Ltd. | Production service | 473,569.14 | 484,625.75 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 707,298,397.35 | 600,722,568.59 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 221,751,315.34 | 214,700,900.89 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Raw material | 1,041,626.43 | -- |
| Beijing Beiye Functional Materials Co., Ltd. | Billet | 8,300,691.98 | 14,900,608.66 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Raw fuel material | 6,901,691.83 | 56,998,443.29 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Production service | 118,539.00 | 118,539.00 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Steel | 3,649,548.62 | 36,292,975.72 |
| Related party | Nature of transaction | 2022 | 2021 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Power energy | 359,523.37 | 296,380.80 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 1,872,706.78 | 1,868,192.00 |
| Qian'an First Real Packaging Service Co., Ltd. | Steel | 102,754,677.80 | 39,934,460.63 |
| Beijing Shouronghui Technology Development Co., Ltd. | Steel | 41,264,142.20 | 1,966,033.60 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Raw fuel material | 167,597,204.04 | 281,348,426.05 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Power energy | 139,527,704.49 | 120,645,752.67 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 28,288,337.62 | 27,043,499.52 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Steel | -- | 622,011.63 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Power energy | -- | 34,249.96 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 1,342,075.48 | 452,830.19 |
| Beijing Shougang Metal Co., Ltd. | Steel | 40,394,334.29 | 42,108,282.48 |
| Beijing Shougang Metal Co., Ltd. | Power energy | 1,445,681.43 | 1,453,606.94 |
| Beijing Shougang Metal Co., Ltd. | Production service | 2,754,311.93 | 2,756,334.23 |
| Beijing Shougang Mining Construction Co., Ltd. | Steel | 9,394.34 | 1,241,277.67 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Steel | -- | 41,892,931.70 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Raw fuel material | 579,784,184.94 | 937,014,959.13 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Power energy | 541,746.35 | 508,092.44 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 653,463.03 | 1,888,757.36 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Power energy | -- | 21,000.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 221,876.15 | 164,068.27 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Steel | 3,027,566.84 | 223,401.77 |
| Tangshan Guoxing Industrial Co., Ltd. | Power energy | 1,720,010.15 | 812,139.20 |
| Tangshan Guoxing Industrial Co., Ltd. | Raw fuel material | 1,253,595.05 | 4,072,506.20 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 1,736,728.31 | 1,962,692.75 |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Power energy | 55,369.38 | 125,248.13 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Power energy | 920,768.85 | 873,443.01 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Power energy | 23,403.49 | 1,305,678.06 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 1,045,424.53 | 237,735.85 |
| Related party | Nature of transaction | 2022 | 2021 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 123,024,177.15 | 93,846,906.81 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Production service | 2,142,857.14 | 1,714,285.71 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 1,188,957.33 | 198,165.14 |
| Tonghua Iron and Steel Co., Ltd. | Raw fuel material | 283,018.87 | 778,164.50 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw fuel material | 2,764,398.78 | 12,677,501.44 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw fuel material | -- | 10,752,760.18 |
| Beijing Shougang Materials Trading Co., Ltd. | Production service | 54,194.35 | -- |
| Beijing Shougang Materials Trading Co., Ltd. | Steel | -- | 31,365,842.84 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Raw fuel material | -- | 46,410.02 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Production service | 141,509.43 | 330,188.68 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Power energy | 3,778,635.00 | 3,390,814.00 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Interest income | 11,275,389.73 | 10,518,170.49 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Production service | -- | 613,153.25 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Steel | 432,375,321.23 | 733,790,833.50 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Steel | 1,935,625,780.26 | 2,635,744,920.56 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Production service | 7,346,687.79 | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Steel | 27,569,222.18 | 12,410,581.55 |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | Steel | -- | 20,147,152.24 |
| Qian'an Shoujia Construction Material Co., Ltd. | Power energy | 22,884,203.10 | 26,424,700.75 |
| Qian'an Shoujia Construction Material Co., Ltd. | Raw fuel material | 36,514,508.74 | 78,768,061.55 |
| Qian'an Shoujia Construction Material Co., Ltd. | Production service | 248,418.37 | 270,782.37 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Power energy | 44,068.34 | 72,289.19 |
| Guizhou Bohong Industrial Co., Ltd. | Production service | 129,836.50 | 88,038.87 |
| Beijing Shougang Landscaping Co., Ltd. | Power energy | 1,430.47 | 4,162.17 |
| Dachang Shougang Machinery&Electric Co., Ltd. | Steel | 1,547,925.87 | 2,382,335.68 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 50,495,018.05 | 46,548,850.68 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Power energy | 32,357.74 | 25,414.27 |
| Related party | Nature of transaction | 2022 | 2021 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Steel | 65,202,291.10 | 125,306,810.27 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Steel | 35,007,815.91 | 50,832,468.42 |
| Beijing Shougang Gas Tangshan Co., Ltd. | Production service | 235,714.29 | 565,714.29 |
| Beijing Shougang Catering Co., Ltd. | Power energy | 524,090.49 | 706,148.05 |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Steel | 64,207,092.86 | -- |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Production service | 65,725.38 | 22,871.70 |
| Guizhou Shuigang Logistics Co., Ltd. | Production service | 157,558.15 | 9,040.57 |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Production service | 26,335.85 | 81,484.90 |
| Hebei Jingji Industry & Trading Co., Ltd. | Steel | 8,578,020.68 | 13,707,273.61 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Raw fuel material | 3,096,681.58 | 5,670,282.21 |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 327,224.25 | 286,751.34 |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Production service | -- | 1,681,415.93 |
| Tonggang Jilin Welded Pipe Co., Ltd | Steel | -- | 17,830.09 |
| Shoujia Huanke (Qian'an) Co., Ltd. | Raw fuel material | 26,345,440.31 | 23,094,037.69 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | -- | 19,018.87 |
| Beijing Shoujia Steel Construction Co., Ltd. | Power energy | 1,160,424.21 | -- |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 8,962.26 | -- |
| Beijing Shougang Lanzatech Co., Ltd. | Production service | 727,265.93 | -- |
| Tangshan Tangcao Railway Co., Ltd. | Production service | 3,323,611.75 | -- |
(2) Details of related party leases
① The Company as a lessor
| Lessee | Type of assets leased | Lease income recognized in 2022 | Lease income recognized in 2021 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Land use right | 1,065,067.58 | 824,536.83 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Land use right | 25,046,418.55 | 25,046,418.55 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Land use right | 2,380,761.90 | 2,380,761.90 |
| Beijing Shougang Lanzatech Co., Ltd. | Land use right | 165,333.33 | 165,333.33 |
② The Company as a lessee
| Lessor | Type of assets leased | Lease expenses recognized in 2022 | Lease expenses recognized in 2021 |
| Beijing Shougang Construction Investment Co., Ltd. | Property | 10,139,897.90 | 10,139,897.90 |
| Shougang Group Co., Ltd. | Property | 2,856,131.74 | 3,198,777.88 |
| Beijing Shougang Special Steel Co., Ltd. | Property | -- | 11,333.33 |
Newly added right-of-use assets during the reporting period
| Lessor | Type of assets leased | increase in the current period | Increase in the previous period |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | -- | 45,024,073.82 |
Interest expenses incurred on lease liabilities during the reporting period
| Lessor | Type of assets leased | Interest expenses of the current period | Interest expenses of the previous period |
| Shougang Group Co., Ltd. | Plant and buildings | 1,470,426.80 | 1,493,817.76 |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | 1,566,004.04 | 1,953,367.31 |
(3) Details of related party guarantees
① The Company as a guarantor
| Guarantee | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 182,000,000.00 | 2022/9/20 | 2023/11/18 | Incomplete |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 24,000,000.00 | 2022/8/29 | 2023/8/28 | Incomplete |
② The Company as a guarantee
| Guarantor | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang Group Co., Ltd. | 75,000,000.00 | 2022/9/6 | 2023/3/19 | Incomplete |
| Shougang Group Co., Ltd. | 6,907,003,333.35 | 2022/1/5 | 2023/10/24 | Incomplete |
| Shougang Group Co., Ltd. | 9,413,355,833.34 | 2019/9/6 | 2031/9/3 | Incomplete |
(4) Details of related party funding
| Related party | Closing balance | Beginning date | Maturity date | Note |
| Shougang Group Co., Ltd. | 195,126,863.30 | 2020/3/25 | 2025/9/6 | Entrust loans |
| Shougang Group Finance Co., Ltd. | 10,582,321,996.95 | 2022/1/28 | 2023/12/23 | Short-term loans |
| Shougang Group Finance Co., Ltd. | 500,435,416.67 | 2022/11/4 | 2025/11/4 | Long-term loans |
| Shougang Group Finance Co., Ltd. | 6,739,010,000.00 | 2022/7/5 | 2023/6/26 | Notes payable |
| South China International Leasing Co., Ltd | 15,781,907.85 | 2020/1/7 | 2023/3/5 | Long-term payable |
| Related party | Closing balance | Beginning date | Maturity date | Note |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 285,013,761.81 | —— | —— | Other current assets |
(5) Asset transfer and debt restructuring of related parties
| Related party | Content of related party transactions | 2022 | 2021 |
| Shougang Mining Corporation | The pelletizing -sintering business | 1,300,325,799.36 | -- |
(6) Remuneration of key management personnel
The Company has 21 key management personnel in 2022, and 22 key management personnel in2021. The remuneration payment is as follows:
| Item | 2022 | 2021 |
| Remuneration of key management personnel (excluding share payment) | 8.6681 million | 12.3913 million |
6. Receivables from and payables to related parties
(1) Receivables from related parties
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Bank deposits | Shougang Group Finance Co., Ltd. | 8,782,663,274.02 | -- | 9,993,599,779.82 | -- |
| Bank deposits | Hua Xia Bank Co.,Ltd. | 6,713,364.79 | -- | 92,946,504.55 | -- |
| Accounts receivable | Beijing Shougang Gas Co., Ltd. | -- | -- | 3,870,237.73 | 135,713.01 |
| Accounts receivable | Shougang Group Co., Ltd. | 57,479.37 | 2,047.03 | 57,219.54 | 2,006.45 |
| Accounts receivable | Shougang Casey Steel Co., Ltd. | 290,361,751.31 | 10,336,878.35 | 259,971,350.16 | 9,116,105.40 |
| Accounts receivable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 1,748,412.19 | 487,967.75 | 1,623,946.24 | 56,944.99 |
| Accounts receivable | Hebei Shoulang New Energy Technology Co., Ltd. | 34,418,648.92 | 1,225,303.90 | 23,052,262.12 | 808,346.19 |
| Accounts receivable | Qian'an Shoujia Construction Material Co., Ltd. | 56,221,363.06 | 2,002,230.58 | 61,221,363.06 | 2,146,776.55 |
| Accounts receivable | Sanhe Shoujia Construction Material Co., Ltd. | 8,775,968.24 | 8,214,183.99 | 9,275,968.24 | 6,437,863.04 |
| Accounts receivable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 1,438,064.93 | 1,070,495.53 | 1,438,064.93 | 403,415.27 |
| Accounts receivable | Tonghua Iron and Steel Co., Ltd. | 506,248.00 | 17,810.17 | 810,000.00 | 28,403.30 |
| Accounts receivable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | -- | -- | 4,028.00 | 141.25 |
| Accounts receivable | Beijing Shougang International Engineering&Technology Co., Ltd. | 428,540.00 | 297,559.83 | 412,800.00 | 401,297.79 |
| Accounts receivable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 6,617,509.64 | 235,583.34 | 9,607,053.73 | 336,879.10 |
| Accounts receivable | Beijing Shougang Mining Construction Co., Ltd. | 9,958.00 | 349.19 | -- | -- |
| Accounts receivable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | -- | -- | 1,261,607.93 | 44,239.30 |
| Accounts receivable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 734.50 | 218.70 | 734.50 | 25.76 |
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Beijing Shougang Machinery&Electric Co., Ltd. | 100,000.00 | 3,561.33 | 42,400.00 | 1,486.79 |
| Accounts receivable | Beijing Shouke Xingye Engineering Technology Co., Ltd. | 400,000.00 | 112,210.59 | 900,000.00 | 31,559.23 |
| Accounts receivable | Tangshan Tangcao Railway Co., Ltd. | 3,523,028.46 | 125,419.81 | -- | -- |
| Accounts receivable | Beijing Shougang Construction Group Co., Ltd. | 37,260.00 | 1,306.55 | -- | -- |
| Accounts receivable | Beijing Shougang Automation Information Technology Co., Ltd. | 771,150.00 | 27,041.00 | -- | -- |
| Prepayments | Tonghua Iron and Steel Co., Ltd. | 20,254,497.50 | -- | 16,968,576.00 | -- |
| Prepayments | Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 87,043,657.93 | -- | 262,876,222.88 | -- |
| Prepayments | Qinhuangdao Shouqin Metal Materials Co., Ltd. | -- | -- | 763,907.90 | -- |
| Prepayments | Tangshan Caofeidian Industry Port Co., Ltd. | 1,760,930.71 | -- | -- | -- |
| Prepayments | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 4,996,705.97 | -- | 671,424.66 | -- |
| Prepayments | Chengde Xintong Shoucheng Mining Co., Ltd. | -- | -- | 10,522,946.92 | -- |
| Prepayments | Shougang Group Co., Ltd. | 74,027,519.11 | -- | -- | -- |
| Prepayments | Cmi Engineering (Beijing) Co., Ltd. | 50,850.00 | -- | -- | -- |
| Prepayments | China Shougang International Trade&Engineering Corporation | 7,633,348.80 | -- | -- | -- |
| Prepayments | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 4,171,441.39 | -- | -- | -- |
| Prepayments | Shougang Changzhi Steel&Iron Co., Ltd. | 7,609.04 | -- | -- | -- |
| Dividend receivable | Guangzhou Jinghai Shipping Co., Ltd. | 200,000.00 | -- | -- | -- |
| Other current assets | Tangshan Zhonghong Carbon Chemical Co., Ltd. | 285,013,761.81 | 118,133,658.14 | 265,361,158.14 | 118,133,658.14 |
(2) Payables to related parties
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 |
| Accounts payable | Shougang Group Co., Ltd. | 655,732,407.11 | 1,384,249,837.28 |
| Accounts payable | Shougang Mining Corporation | 4,125,595,337.09 | 4,522,110,751.63 |
| Accounts payable | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 470,845,391.07 | 580,911,994.24 |
| Accounts payable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,859,004,046.73 | 502,790,483.78 |
| Accounts payable | Beijing Shoucheng Packaging Service Co., Ltd. | 13,350,654.51 | 13,987,818.77 |
| Accounts payable | Beijing Shougang Automation Information Technology Co., Ltd. | 182,889,510.51 | 206,945,927.88 |
| Accounts payable | Beijing Shougang Construction Group Co., Ltd. | 618,622,996.56 | 815,350,440.40 |
| Accounts payable | Beijing Shoujian Equipment Maintenance Co., Ltd. | 25,594,363.58 | 22,827,921.30 |
| Accounts payable | Beijing Shougang Landscaping Co., Ltd. | 23,883,634.56 | 19,375,454.67 |
| Accounts payable | Beijing Shougang Catering Co., Ltd. | 1,327,588.66 | 1,276,876.62 |
| Accounts payable | Beijing Huaxia Technology Co., Ltd. | 5,762,815.76 | 5,949,926.35 |
| Accounts payable | Qinhuangdao Shougang Machinery Co., Ltd. | 64,415,151.43 | 77,660,313.32 |
| Accounts payable | Beijing Shougang Machinery&Electric Co., Ltd. | 162,405,176.47 | 132,681,857.63 |
| Accounts payable | Beijing Shouye Instruments&Meters Co., Ltd. | 13,442,009.63 | 13,682,200.89 |
| Accounts payable | Tianjin Shougang Electric Equipment Co., Ltd. | 9,099,757.38 | 16,682,673.00 |
| Accounts payable | Beijing Shougang Gas Co., Ltd. | 66,619,195.56 | 51,211,959.35 |
| Accounts payable | Beijing Shougang International Engineering&Technology Co., Ltd. | 310,818,935.04 | 512,869,667.60 |
| Accounts payable | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 15,100,355.24 | 10,002,976.59 |
| Accounts payable | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 158,972,406.25 | 68,994,235.34 |
| Accounts payable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | -- | 174,964.00 |
| Accounts payable | Qian'an Shougang Equipment Structure Co., Ltd. | 85,360,764.98 | 79,254,052.59 |
| Accounts payable | Yantai Shougang Mining 3D Co., Ltd. | 313,811.63 | 337,462.12 |
| Accounts payable | Beijing Shoujian Hengji Construction Engineering Co., Ltd. | 1,602,115.93 | 1,355,139.65 |
| Accounts payable | Beijing Soly Technology Co., Ltd. | 210,904.43 | 1,322,967.10 |
| Accounts payable | Qian'an Shouxin Automation Information Technology Co., Ltd. | 25,515,132.74 | 18,536,805.29 |
| Accounts payable | Qian'an First Real Packaging Service Co., Ltd. | 96,388,811.17 | 108,038,561.30 |
| Accounts payable | Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | -- | 15,421,690.84 |
| Accounts payable | Beijing Shoujia Steel Construction Co., Ltd. | 14,995,775.16 | 5,451,674.96 |
| Accounts payable | Beijing Shougang Ferroalloy Co., Ltd. | 73,607,022.86 | 56,826,692.95 |
| Accounts payable | Beijing Shougang Materials Trading Co., Ltd. | 426,891,995.64 | 218,553,880.01 |
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 |
| Accounts payable | Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | 57,690,426.64 |
| Accounts payable | Shougang Environmental Industry Co., Ltd. | 334,080.00 | 829,080.00 |
| Accounts payable | China Shougang International Trade&Engineering Corporation | 663,787,332.95 | 402,434,528.89 |
| Accounts payable | Beijing Chengxin Engineering Supervision Co., Ltd. | 6,127,851.86 | 4,895,538.32 |
| Accounts payable | Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | 61,808,291.36 | 53,995,540.32 |
| Accounts payable | Tangshan Shoukuang Cleaning Iron Co., Ltd. | -- | 137,489,080.84 |
| Accounts payable | Tangshan Guoxing Industrial Co., Ltd. | 40,465,093.70 | 37,617,722.80 |
| Accounts payable | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 138,903,339.92 | 162,441,310.98 |
| Accounts payable | Beijing Shougang Futong Elevator Co., Ltd. | 310,319.85 | 178,815.55 |
| Accounts payable | Beijing Teyu Plate Co., Ltd. | 85,095,430.63 | 85,095,430.63 |
| Accounts payable | Jingxi Shoutang Supply Chain Management Co., Ltd | 9,289,106.10 | 888,650.02 |
| Accounts payable | Beijing Shougang Mining Construction Co., Ltd. | 3,354,289.89 | 27,209,286.63 |
| Accounts payable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 19,824,419.55 | 17,970,896.72 |
| Accounts payable | Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | 466,070.62 | 361,229.80 |
| Accounts payable | Beijing Shoushe Metallurgical Technology Co., Ltd. | 14,002.60 | 42,036.40 |
| Accounts payable | Beijing Shougang Fulushi Color Coated Plate Co., Ltd. | -- | 10,950,942.80 |
| Accounts payable | Beijing Shougang Industrial Group Co., Ltd. | 24,377,193.66 | 10,454,655.52 |
| Accounts payable | Bejing Shougang International Travel Co., Ltd. | 8,688.00 | 144,566.00 |
| Accounts payable | Beijing Shougang Cultural Development Co., Ltd. | -- | 157,950.00 |
| Accounts payable | Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | 3,664,099.23 | 2,396,999.79 |
| Accounts payable | Qiangang Hotel. | 8,662,628.97 | 12,384,514.68 |
| Accounts payable | Beijing Dingshengcheng Packaging Materials Co., Ltd. | 17,452,797.76 | 14,641,606.12 |
| Accounts payable | Beijing Shougang Special Steel Co., Ltd. | 94,949,940.33 | 101,949,940.33 |
| Accounts payable | Hebei Shougang Jingtang Machinery Co., Ltd. | 18,999,797.17 | 4,208,507.88 |
| Accounts payable | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | 7,330,595.55 | 7,313,225.55 |
| Accounts payable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 4,945,999.84 | 10,413,229.91 |
| Accounts payable | Bohai International Conference Center Co., Ltd. | -- | 104,450.00 |
| Accounts payable | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 25,442,826.43 | 26,612,943.68 |
| Accounts payable | Beijing Shouyi Mining Hospital Co., Ltd. | 1,958,389.00 | 3,630,791.00 |
| Accounts payable | Beijing Shouyu Industry and Trade Co., Ltd. | 7,177,859.06 | 7,359,998.22 |
| Accounts payable | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 14,973,290.67 | 11,432,572.79 |
| Accounts payable | YASKAWA Shougang Robert Co., Ltd. | 235,384.79 | 388,207.98 |
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 |
| Accounts payable | Beijing Shoubang New Material Co., Ltd. | 2,927,759.28 | 1,685,368.21 |
| Accounts payable | Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | 1,845,155.82 | 1,056,900.10 |
| Accounts payable | Chaoyang Shougang Beifang Machinery Co., Ltd. | 931,110.35 | 1,019,783.85 |
| Accounts payable | Chengde Xintong Shoucheng Mining Co., Ltd. | 851,714.56 | -- |
| Accounts payable | Guangzhou Jinghai Shipping Co., Ltd. | 102,688,729.55 | 113,750,687.97 |
| Accounts payable | Jingtang Port Shougang Terminal Co., Ltd. | -- | 2,927.40 |
| Accounts payable | Tangshan Caofeidian Industry Port Co., Ltd. | 55,335,586.91 | 62,255,892.01 |
| Accounts payable | Shougang Guiyang Special Steel Co., Ltd. | 6,975,000.00 | 10,488,904.44 |
| Accounts payable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 149,948.85 | 208,116.72 |
| Accounts payable | Cmi Engineering (Beijing) Co., Ltd. | 552,200.00 | -- |
| Accounts payable | Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | 200,408.00 | 200,408.00 |
| Accounts payable | Shougang (Qingdao) Steel Industry Co., Ltd. | 1,545,599.81 | 1,673,343.05 |
| Accounts payable | Beijing Shougang Mining Investment Co., Ltd | -- | 175,708,332.43 |
| Accounts payable | Qinhuangdao Shougang Racing Valley Co., Ltd | 95,860.00 | 229,160.00 |
| Accounts payable | Beijing Shougang Property Management Co., Ltd. | -- | 1,957,224.08 |
| Accounts payable | Beijing Shougang Park Comprehensive Service Co., Ltd. | 2,300.00 | 4,700.00 |
| Accounts payable | Beijing Shouao Real Estate Co., Ltd | -- | 33,960.00 |
| Accounts payable | Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | -- | 29,597.98 |
| Accounts payable | Tonghua Iron and Steel Co., Ltd. | -- | 3,754,243.16 |
| Accounts payable | Beijing Shougang Environmental Engineering Technology Co., Ltd. | 1,109,886.20 | 1,039,146.20 |
| Accounts payable | Guiyang Steel Mills I/E Corp. | 4,161,841.55 | 6,450,970.10 |
| Accounts payable | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 5,274,968.79 | 1,650,945.20 |
| Accounts payable | Mine Hospital of Shougang Group Co. Ltd. | -- | 411,453.00 |
| Accounts payable | Shougang Commercial Factoring Co., Ltd. | 17,148,576.40 | 94,520.31 |
| Accounts payable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 1,888,425.49 | 757,423.42 |
| Accounts payable | Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | 132,159,697.12 | 68,415,101.59 |
| Accounts payable | Beijing Shoutaizhongxin Science & Technology Co., Ltd | 6,185,421.93 | -- |
| Accounts payable | Peking University Shougang Hospital | 3,088,704.96 | -- |
| Contract liabilities | Beijing Shoucheng Packaging Service Co., Ltd. | 53,217.02 | 716,930.07 |
| Contract liabilities | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 1,494,914.05 | 5,245,386.29 |
| Contract liabilities | Beijing Beiye Functional Materials Co., Ltd. | 34,194.22 | 1,060,401.14 |
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 |
| Contract liabilities | Beijing Shougang Gitane New MATERIALS Co., Ltd. | 45,093.66 | 45,093.66 |
| Contract liabilities | Beijing Shouronghui Technology Development Co., Ltd. | 6,564,678.23 | 5,659,780.67 |
| Contract liabilities | Beijing Shougang Machinery&Electric Co., Ltd. | 9,143,010.03 | 9,900,333.17 |
| Contract liabilities | Beijing Shougang Construction Group Co., Ltd. | 385,946.71 | 112,823.19 |
| Contract liabilities | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | -- | 5,000,915.64 |
| Contract liabilities | Qinhuangdao Shougang Machinery Co., Ltd. | 1,031,671.69 | 858,701.10 |
| Contract liabilities | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 50,000.00 | 31,485.93 |
| Contract liabilities | Tangshan Guoxing Industrial Co., Ltd. | -- | 28,189.37 |
| Contract liabilities | Beijing Shougang International Engineering&Technology Co., Ltd. | -- | 312,038.71 |
| Contract liabilities | Qian'an First Real Packaging Service Co., Ltd. | 2,164,319.43 | 781,919.64 |
| Contract liabilities | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 1,901,697.48 | 1,325,363.50 |
| Contract liabilities | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 341,185.21 | 50,000.00 |
| Contract liabilities | Qian'an Shougang Equipment Structure Co., Ltd. | 14,753.10 | -- |
| Contract liabilities | Qinhuangdao Shougang Plate Mill Co., Ltd. | 13,028.81 | 13,028.81 |
| Contract liabilities | Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | 182,697.15 | 182,697.15 |
| Contract liabilities | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 1,378,893.98 | 1,378,594.00 |
| Contract liabilities | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shougang Materials Trading Co., Ltd. | 188,861.00 | 188,861.00 |
| Contract liabilities | Guizhou Bohong Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shougang Mining Construction Co., Ltd. | 52,088.04 | 52,088.04 |
| Contract liabilities | Tianjin Shougang Electric Equipment Co., Ltd. | 169.19 | 169.19 |
| Contract liabilities | Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | 805.61 | 805.61 |
| Contract liabilities | Dachang Shougang Machinery&Electric Co., Ltd. | 2,503.67 | 2,280.20 |
| Contract liabilities | Ningbo Shougang Zhejin Steel Co., Ltd. | 18,320,032.79 | 18,370,671.65 |
| Contract liabilities | Guangzhou Jinghai Shipping Co., Ltd. | 810,846.20 | 5,311,397.37 |
| Contract liabilities | Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | 2,046.68 | 2,046.68 |
| Contract liabilities | Beijing Shougang Shape Metal Co., Ltd. | 995,551.60 | 10,095,842.56 |
| Contract liabilities | Ordos Baotou Steel Shourui Material Technology Co., Ltd. | -- | 3,865,016.99 |
| Contract liabilities | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 7,184,262.58 | 12,452,455.41 |
| Contract liabilities | Shougang Casey Steel Co., Ltd. | 51,682.17 | 645,198.15 |
| Contract liabilities | Shougang (Qingdao) Steel Industry Co., Ltd. | 154,086,174.29 | 82,388,551.58 |
| Item | Related party | As at 31 December 2022 | As at 31 December 2021 |
| Contract liabilities | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | -- | 38,202.45 |
| Contract liabilities | Chaoyang Shougang Beifang Machinery Co., Ltd. | 114.02 | 114.02 |
| Contract liabilities | Beijing Shouyu Industry and Trade Co., Ltd. | 58,437.91 | 58,437.91 |
| Contract liabilities | Hebei Jingji Industry & Trading Co., Ltd. | 487,472.16 | 572,635.52 |
| Contract liabilities | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shoujian Equipment Maintenance Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 111,022.04 | 105,416.50 |
| Contract liabilities | Shoujia Huanke (Qian'an) Co., Ltd. | 200,000.00 | 200,000.00 |
| Contract liabilities | Beijing Shoujia Steel Construction Co., Ltd. | 198,653.22 | -- |
| Contract liabilities | Beijing Huaxia Technology Co., Ltd. | 50,000.00 | -- |
| Contract liabilities | Beijing Jingxi Supply Chain Management Co., Ltd. | 747,440.91 | -- |
| Other payables | Shougang Group Co., Ltd. | 56,575,231.05 | 57,154,287.37 |
| Other payables | Shougang Mining Corporation | 796,194,091.55 | 2,066,250,402.53 |
| Other payables | Beijing Shougang Automation Information Technology Co., Ltd. | -- | 749,720.20 |
| Other payables | Beijing Shougang Construction Group Co., Ltd. | 3,450,000.00 | 3,458,000.00 |
| Other payables | Beijing Shougang Landscaping Co., Ltd. | -- | 19,893.26 |
| Other payables | Beijing Chengxin Engineering Supervision Co., Ltd. | -- | 269,324.00 |
| Other payables | Beijing Shougang Industrial Group Co., Ltd. | 3,865,587.23 | 3,865,587.23 |
| Other payables | Tangshan Guoxing Industrial Co., Ltd. | 4,450,973.55 | 4,450,973.55 |
| Other payables | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | -- | 190,000.00 |
| Other payables | Guangzhou Jinghai Shipping Co., Ltd. | -- | 311,320.00 |
| Other payables | Beijing Shougang Gas Co., Ltd. | 1,123,099.67 | 1,650,000.00 |
| Other payables | Hebei Shougang Jingtang Machinery Co., Ltd. | 2,776,577.52 | 2,776,577.52 |
| Other payables | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 341,400,000.00 | 319,500,000.00 |
| Other payables | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 2,910,814.91 | -- |
| Other non-current liabilities | Shougang Group Co., Ltd. | 4,532,018,467.20 | 4,563,283,607.60 |
XI. Share-based payment
1. General information of share-based payment
| Total equity instruments of the Company granted during the period | None |
| Total exercised equity instruments of the Company during the period | |
| Total invalid equity instruments of the Company during the period |
| Total equity instruments of the Company granted during the period | None |
| Range of exercise prices and contractual remaining period for share options issued by the Company at the end of the period | |
| Range of exercise prices and remaining contractual maturity of other equity instruments issued by the Company at the end of the period |
2. Equity-settled share-based payment
| The method of determining the fair value of equity instrument on the grant date | The price of restricted stock shall be determined at the closing price on the grant date |
| Basis for determining the quantity of exercisable equity instruments | The actual unlocked quantity is determined according to the performance assessment |
| Reasons for significant difference between the current estimate and previous estimate | None |
| Accumulated amount of equity settled share-based payments recognized in capital reserve | 36,147,743.13 |
| The total amount of expenses recognized for equity settled share-based payments in this period | 43,289,500.60 |
Note: On 29 November 2021, approved by Beijing State Owned Assets Supervision andAdministration Commission, confirmed with no objection and recorded by China SecuritiesRegulatory Commission, Proposal on Beijing Shougang Co., Ltd.2021 Restricted Stock IncentivePlan (Draft Amendment)and its Summary, Proposal of Beijing Shougang Co., Ltd.2021 RestrictedStock Incentive Plan Implementation Assessment Management Method (Revised), BeijingShougang Co., Ltd. 's Proposal on requesting the General Meeting of Shareholders to authorize theBoard of Directors to handle matters related to 2021 Restricted stock Incentive Plan wereconsidered and approved at the seventh meeting of the eleventh Board of Directors and the firstextraordinary General Meeting of the year 2021 of the Company. The grant date was 9 December2021 and a total of 64,901,800.00 restricted stock shares were granted to 386 incentive objects. Thegrant price of the restricted stock is RMB3.25 per share. After the completion of subscription of thisincentive plan, as a result of additional issuance of new shares, the Company's share capital (NoteⅤ,34) and capital reserve (Note Ⅴ,35) increased by RMB 64,901,800.00 and RMB 146,029,050.00respectively, and treasury shares increased by RMB 210,930,850.00. At the same time, equityincentive repurchase obligations are recognized in RMB 210,930,850.00 in other payables (Note Ⅴ,
24). The restriction period of restricted shares granted by the incentive plan shall be 24 months, 36months and 48 months respectively from the registration date of the corresponding partial equitygrant. The restricted shares granted under this incentive Plan shall not be transferred, used forsecurity or debt repayment during the restricted sale period.The Company has provided lock-up periods and unlock-up conditions for the stock granted to theincentive subjects by way of non-public offering, and the Company has fully recognized otherpayables - restricted stock repurchase obligations and treasury share in respect of the repurchaseobligations based on the subscription amounts received. If the unlocking conditions specified in thefinal Equity Incentive Plan are not met, the Company will repurchase the shares at the grant priceand write down the outstanding shares. The portion of restricted stock that meets the unlockingconditions is offset from the treasury share.The cost and expense recognized during the waiting period of this period is RMB 43,289,500.60,and the consolidated capital reserve is increased by RMB 36,147,743.13 according to theshareholding ratio of the subsidiaries.XII. Commitments and contingencies
1. Material commitments
As at 31 December 2022, the Company has no commitments that should be disclosed.
2. Contingencies
As at 31 December 2022, the Company has no pending litigation, external guarantees or othercontingencies that should be disclosed.XIII. Events after balance sheet dateAs at 19 April 2023, the Company has no undisclosed event that should be disclosed after thebalance sheet date.XIV. Other significant events
1. Segment information
According to internal organizational structure, management requirement and requirement of internalreporting system, the Company divides businesses into iron and steel segment. The segmentinformation is determined based on the financial information required by routine internalmanagement of the Company. The management periodically evaluates the operating results of thesegment to determine its allocation of resources and evaluate the performance of the segment.The segment information of the Company includes: iron and steel segment.The segment information is disclosed in accordance with the accounting policies and measurementbasis used in the reports of the management, which are in line with those adopted in financialstatements.
(1) Segment profit or loss, assets and liabilities
| Current period or end of current period | Iron and steel Segment | Offset | Total |
| Operating revenue | 118,142,183,549.47 | -- | 118,142,183,549.47 |
| Including: External revenue | 118,142,183,549.47 | -- | 118,142,183,549.47 |
| Inter-segment revenue | -- | -- | -- |
| Including: Main operating revenue | 114,602,567,434.30 | -- | 114,602,567,434.30 |
| Cost of sales | 111,067,555,320.28 | -- | 111,067,555,320.28 |
| Including: Main operating cost of sales | 108,013,843,862.04 | -- | 108,013,843,862.04 |
| Operating expenses | 2,959,357,105.57 | -- | 2,959,357,105.57 |
| Operating profit/(loss) | 1,849,891,701.37 | -- | 1,849,891,701.37 |
| Total assets | 143,173,445,003.35 | -- | 143,173,445,003.35 |
| Total liabilities | 93,101,365,568.38 | -- | 93,101,365,568.38 |
| Supplementary information: | |||
| 1.Capital expenditure | 2,639,013,873.80 | -- | 2,639,013,873.80 |
| Current period or end of current period | Iron and steel Segment | Offset | Total |
| 2.Depreciation and amortisation | 7,798,817,196.94 | -- | 7,798,817,196.94 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4. 4.Assets impairment losses | 397,351,033.00 | -- | 397,351,033.00 |
| Prior period or end of prior period | Iron and steel Segment | Offset | Total |
| Operating revenue | 132,984,304,668.28 | -- | 132,984,304,668.28 |
| Including: External revenue | 132,984,304,668.28 | -- | 132,984,304,668.28 |
| Inter-segment revenue | -- | -- | -- |
| Including: Main operating revenue | 129,315,463,715.41 | -- | 129,315,463,715.41 |
| Cost of sales | 117,394,695,070.53 | -- | 117,394,695,070.53 |
| Including: Main operating cost of sales | 114,564,031,235.41 | -- | 114,564,031,235.41 |
| Operating expenses | 3,231,863,744.12 | -- | 3,231,863,744.12 |
| Operating profit/(loss) | 9,966,873,058.08 | -- | 9,966,873,058.08 |
| Total assets | 149,442,546,290.82 | -- | 149,442,546,290.82 |
| Total liabilities | 100,446,388,993.42 | -- | 100,446,388,993.42 |
| Supplementary information: | |||
| 1.Capital expenditure | 3,270,336,323.78 | -- | 3,270,336,323.78 |
| 2.Depreciation and amortisation | 7,533,131,606.57 | -- | 7,533,131,606.57 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4.Assets impairment losses | 295,107,454.68 | -- | 295,107,454.68 |
(2) Other segment information
① External revenue of goods and services
| Item | 2022 | 2021 |
| Iron and steel | 118,142,183,549.47 | 132,984,304,668.28 |
② Geographical information
No more details of geographical information should be disclosed as the production and sales of theCompany are all located in mainland China.
2. Lease
The Company as lesseeAdditional information on rental fees
①The Company simplifies the treatment of short-term leases and low-value leases, andunrecognized right-of-use assets and lease liabilities. The information of short-term leases,low-value leases and variable lease payments measured outside lease liabilities included in the
current profit and loss are as follows:
| Item | 2022 |
| short-term leases | 1,524,402.52 |
| low-value leases | -- |
| variable lease payments measured outside lease liabilities | -- |
The Company as lessorFormation of operating leases:
② lease revenue, and separately disclose income related to variable lease payments not included inlease receipts;
| Item | 2022 |
| lease revenue | 38,048,285.06 |
| income related to variable lease payments not included in lease receipts | -- |
③ The amount of undiscounted lease receipts that will be received in each of the five consecutivefiscal years after the balance sheet date and the total amount of undiscounted lease receipts that willbe received in the remaining fiscal years.
| Item | 2022.12.31 |
| Within 1 year | 33,328,200.36 |
| 1 – 2 years | 1,793,773.33 |
| 2 – 3 years | -- |
| 3 – 4 years | -- |
| 4 – 5 years | -- |
| Over 5 years | -- |
| Total | 35,121,973.69 |
XV. Notes to the financial statements of parent company
1. Notes receivable
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
| Total | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
| Item | 2021.12.31 |
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 1,312,696,288.07 | 1,312,696.29 | 1,311,383,591.78 |
| Total | 1,312,696,288.07 | 1,312,696.29 | 1,311,383,591.78 |
(1) The pledged notes receivable of the Company at the end of the year
| Item | Amount pledged as of December 31, 2022 |
| Commercial acceptances | 1,090,000.00 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2022 | Amount not-derecognized as of December 31, 2022 |
| Bank acceptances | -- | -- |
| Commercial acceptances | -- | 854,747,997.30 |
| Total | -- | 854,747,997.30 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as of December 31, 2022 |
| Commercial acceptance notes | 2,000,000.00 |
(4) Classified by bad debt provision method
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Portfolio 1 | -- | -- | -- | - | -- |
| Portfolio 2 | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Total | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
Continued:
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
| Group 1 | -- | -- | -- | - | -- |
| Group 2 | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
| Total | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
(5) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 1,312,696.29 |
| Provision | -- |
| Recovery or reversal | 413,156.60 |
| Written-off | -- |
| As at 31 December 2022 | 899,539.69 |
(6) The Company has no notes receivable actually written off in reporting period.
2. Accounts receivable
(1) Disclosed by ageing of account receivables
| Ageing | 2022.12.31 | 2021.12.31 |
| Within 1 year | 1,398,579,212.14 | 1,917,663,119.14 |
| 1 – 2 years | -- | 3,197,756.62 |
| 2 – 3 years | 2,197,756.62 | 6,327,199.80 |
| Over 3 years | 8,578,211.62 | 2,751,011.82 |
| Subtotal | 1,409,355,180.38 | 1,929,939,087.38 |
| Less: provision for bad debts | 12,694,254.85 | 12,046,892.38 |
| Total | 1,396,660,925.53 | 1,917,892,195.00 |
(2) Disclosed by bad debt provision
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 8,578,211.62 | 0.61 | 8,578,211.62 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,400,776,968.76 | 99.39 | 4,116,043.23 | 0.29 | 1,396,660,925.53 |
| Portfolio of aging analysis | 71,836,571.46 | 5.10 | 4,116,043.23 | 5.73 | 67,720,528.23 |
| Portfolio of consolidation scope | 1,328,940,397.30 | 94.29 | -- | -- | 1,328,940,397.30 |
| Total | 1,409,355,180.38 | 100.00 | 12,694,254.85 | 0.90 | 1,396,660,925.53 |
Continued:
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 5,751,011.82 | 0.30 | 5,751,011.82 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,924,188,075.56 | 99.70 | 6,295,880.56 | 0.33 | 1,917,892,195.00 |
| Portfolio of aging analysis | 80,928,756.18 | 4.19 | 6,295,880.56 | 7.78 | 74,632,875.62 |
| Portfolio of consolidation scope | 1,843,259,319.38 | 95.51 | -- | -- | 1,843,259,319.38 |
| Total | 1,929,939,087.38 | 100.00 | 12,046,892.38 | 0.62 | 1,917,892,195.00 |
Assessed bad debt provision individually：
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 6,578,211.62 | 6,578,211.62 | 100.00 | Long aging |
| Recourse for overdue bills | 2,000,000.00 | 2,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 8,578,211.62 | 8,578,211.62 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2021.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable (by debtor) | 2021.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 2,751,011.82 | 2,751,011.82 | 100.00 | Long aging |
| Recourse for overdue bills | 3,000,000.00 | 3,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 5,751,011.82 | 5,751,011.82 | 100.00 | |
Assessed bad debt provision in portfolios：
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,398,579,212.14 | 2,480,070.86 | 0.18 |
| 1 – 2 years | -- | -- | -- |
| 2 – 3 years | 2,197,756.62 | 1,635,972.37 | 74.44 |
| Over 3 years | -- | -- | -- |
| Total | 1,400,776,968.76 | 4,116,043.23 | 0.29 |
Continued:
| Item | 2021.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,917,663,119.14 | 2,609,029.34 | 0.14 |
| 1 – 2 years | 2,197,756.62 | 616,528.89 | 28.05 |
| 2 – 3 years | 4,327,199.80 | 3,070,322.33 | 70.95 |
| Over 3 years | -- | -- | -- |
| Total | 1,924,188,075.56 | 6,295,880.56 | 0.33 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 12,046,892.38 |
| Provision | 647,362.47 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2022 | 12,694,254.85 |
(4) The Company has no accounts receivable write-off during the reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 1,397,675,296.54, accounting for 99.18% of the total amount of accounts
receivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 10,349,521.85.
| Company Name | Closing balance of accounts receivable | Percentage % | Closing balance of provision |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,303,469,746.34 | 92.49 | -- |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 25,470,650.96 | 1.81 | -- |
| Qian'an Shoujia Construction Material Co., Ltd. | 56,221,363.06 | 3.99 | 2,002,230.58 |
| Nantong Zhongji Energy Equipment Co., Ltd.. | 3,737,567.94 | 0.27 | 133,107.28 |
| Sanhe Shoujia Construction Material Co., Ltd. | 8,775,968.24 | 0.62 | 8,214,183.99 |
| Total | 1,397,675,296.54 | 99.18 | 10,349,521.85 |
3. Financing receivables
| Item | 2022.12.31 | 2021.12.31 |
| Notes receivable | 835,526,685.55 | 1,285,597,772.66 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 835,526,685.55 | 1,285,597,772.66 |
(1) Classified by bad debt provision method
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | |||||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 1 | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
Continued:
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | |||||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
| Portfolio 1 | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| As at 1 January 2022 | 257,170.99 |
| Provision | -- |
| Recovery or reversal | 90,032.23 |
| Written-off | -- |
| As at 31 December 2022 | 167,138.76 |
(3) The company has no pledged notes receivable at the end of the year
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of December 31, 2022 | Amount not-derecognized as of December 31, 2022 |
| Bank acceptance notes | 4,382,619,253.99 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 4,382,619,253.99 | -- |
4. Other receivables
| Item | 2022.12.31 | 2021.12.31 |
| Dividends receivable | 9,713,244.06 | -- |
| Other receivables | 1,154,281,751.62 | 1,017,482,945.07 |
| Total | 1,163,994,995.68 | 1,017,482,945.07 |
(1) Dividends receivable
| Item | 2022.12.31 | 2021.12.31 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | 9,713,244.06 | -- |
| Less: Bad debt provision | -- | -- |
| Total | 9,713,244.06 | -- |
(2) Other receivables
① Disclosed by the ageing of other receivables
| Ageing | 2022.12.31 | 2021.12.31 |
| Within 1 year | 1,154,320,981.69 | 1,017,487,983.11 |
| 1 – 2 years | -- | 516,288.00 |
| 2 – 3 years | -- | -- |
| Over 3 years | -- | -- |
| Subtotal | 1,154,320,981.69 | 1,018,004,271.11 |
| Less: provision for bad debts | 39,230.07 | 521,326.04 |
| Total | 1,154,281,751.62 | 1,017,482,945.07 |
② Disclosed by nature of other receivables
| Item | 2022.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 282,590.68 | 14,129.53 | 268,461.15 |
| Deposits | 500,000.00 | 25,000.00 | 475,000.00 |
| Due from other companies | 2,010.86 | 100.54 | 1,910.32 |
| Due from intra-companies | 1,153,536,380.15 | -- | 1,153,536,380.15 |
| Total | 1,154,320,981.69 | 39,230.07 | 1,154,281,751.62 |
Continued:
| Item | 2021.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 98,749.98 | 4,937.50 | 93,812.48 |
| Deposits | -- | -- | -- |
| Due from other companies | 2,010.86 | 100.54 | 1,910.32 |
| Due from intra-companies | 1,017,387,222.27 | -- | 1,017,387,222.27 |
| Court attachment | 516,288.00 | 516,288.00 | -- |
| Total | 1,018,004,271.11 | 521,326.04 | 1,017,482,945.07 |
③ Provision for bad debts
As at 31 December 2022, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 | |
| Petty cash and deposits | 782,590.68 | 5.00 | 39,129.53 | 743,461.15 |
| Due from other companies | 2,010.86 | 5.00 | 100.54 | 1,910.32 | |
| Due from intra-companies | 1,153,536,380.15 | -- | -- | 1,153,536,380.15 | |
| Total | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 |
As at 31 December 2022, the Company has no other receivables in Phase IIAs at 31 December 2022, the Company has no other receivables in Phase IIIAs at 31 December 2021, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 1,017,487,983.11 | -- | 5,038.04 | 1,017,482,945.07 | |
| Petty cash and deposits | 98,749.98 | 5.00 | 4,937.50 | 93,812.48 | |
| Due from other companies | 2,010.86 | 5.00 | 100.54 | 1,910.32 | |
| Due from intra-companies | 1,017,387,222.27 | -- | -- | 1,017,387,222.27 | |
| Total | 1,017,487,983.11 | -- | 5,038.04 | 1,017,482,945.07 |
As at 31 December 2021, the Company has no other receivables in Phase IIAs at 31 December 2021, bad debts provision for Phase III:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Assessed bad debt provision individually | |||||
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- |
④ Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 1 January 2022 | 5,038.04 | -- | 516,288.00 | 521,326.04 |
| Changes during the year: | ||||
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| -- Back to Phase I | -- | -- | -- | -- |
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| Provision | 34,192.03 | -- | -- | 34,192.03 |
| Reversal | -- | -- | 516,288.00 | 516,288.00 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 31 December 2022 | 39,230.07 | -- | -- | 39,230.07 |
⑤ No write-off of provision for bad debts during the reporting period.
⑥ The top five other receivables classified by debtors are as follows:
| Company Name | Nature of transaction | Closing balance | Ageing | Percentage (%) | Closing balance of provisions |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Due from intra-companies | 1,147,536,380.15 | Within 1 year | 99.41 | -- |
| Shenyang Shougang steel processing and Distribution Co., Ltd. | Due from intra-companies | 6,000,000.00 | Within 1 year | 0.52 | -- |
| China Petroleum Materials Company Limited | Deposits | 500,000.00 | Within 1 year | 0.04 | 25,000.00 |
| Petty cash | Petty cash | 282,590.68 | Within 1 year | 0.02 | 14,129.53 |
| Total | 1,154,318,970.83 | 99.99 | 39,129.53 |
5. Long-term equity investments
| Item | 2022.12.31 | 2021.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Investments in subsidiaries | 36,621,384,419.98 | -- | 36,621,384,419.98 | 30,737,545,762.35 | -- | 30,737,545,762.35 |
| Investment in associates | 1,066,506,040.90 | -- | 1,066,506,040.90 | 1,258,787,177.81 | -- | 1,258,787,177.81 |
| Total | 37,687,890,460.88 | -- | 37,687,890,460.88 | 31,996,332,940.16 | -- | 31,996,332,940.16 |
(1) Investments in subsidiaries
| Subsidiaries | 2022.1.1 | Increase | Decrease | 2022.12.31 | Provision for impairment | Impairment at the end of the year |
| Shougang Jingtang United Iron & Steel Co., Ltd. | 16,288,241,360.88 | 19,967,378.70 | -- | 16,308,208,739.58 | -- | -- |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,831,251,988.00 | 1,063,865.00 | -- | 1,832,315,853.00 | -- | -- |
| Subsidiaries | 2022.1.1 | Increase | Decrease | 2022.12.31 | Provision for impairment | Impairment at the end of the year |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | 1,900,000.00 | -- | -- | 1,900,000.00 | -- | -- |
| Shougang Zhixin Qian'an Electromagnetic materials Co., Ltd. | 7,484,303,856.61 | 1,802,434.10 | -- | 7,486,106,290.71 | -- | -- |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | 450,022,411.20 | 135,401.00 | -- | 450,157,812.20 | -- | -- |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 4,681,826,145.66 | 5,860,869,578.83 | -- | 10,542,695,724.49 | -- | -- |
| Total | 30,737,545,762.35 | 5,883,838,657.63 | -- | 36,621,384,419.98 | -- | -- |
Note: the long-term equity investments of RMB 24,880,434.00 was increased due to equityincentive during the reporting period.
(2) Investments in associates
| Associates | 2022.1.1 | Changes during the year | 2022.12.31 | Impairment at the end of the year | |||||||
| Increase | Decrease | Investment income under the equity method | Other comprehensive income | Other equity movement | Cash dividend | Provision for impairment | Others | ||||
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 1,098,085,352.91 | -- | -- | -206,574,842.59 | -- | -- | -- | -- | -- | 891,510,510.32 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 112,715,820.57 | -- | -- | 24,947,007.16 | -- | -- | 15,232,424.74 | -- | -- | 122,430,402.99 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 13,987,090.36 | -- | -- | 2,843,468.38 | -- | -- | -- | -- | -- | 16,830,558.74 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 33,998,913.97 | 1,208,074.76 | -- | 527,580.12 | -- | -- | -- | -- | -- | 35,734,568.85 | -- |
| Total | 1,258,787,177.81 | 1,208,074.76 | -- | -178,256,786.93 | -- | -- | 15,232,424.74 | -- | -- | 1,066,506,040.90 | -- |
6. Operating revenue and costs of sales
(1) Operating revenue and costs of sale
| Item | 2022 | 2021 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 37,952,493,407.65 | 37,315,733,518.02 | 42,977,859,406.94 | 40,552,466,616.01 |
| Other business | 1,052,315,697.44 | 880,022,135.85 | 1,059,296,154.23 | 773,076,389.36 |
| Total | 39,004,809,105.09 | 38,195,755,653.87 | 44,037,155,561.17 | 41,325,543,005.37 |
(2) Operating revenue and operating costs of sale by product
| Product type | 2022 | 2021 |
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 546,474,748.00 | 473,163,072.64 | 576,652,349.47 | 524,683,887.65 |
| Hot rolled | 36,748,637,995.88 | 36,218,585,936.96 | 41,398,472,411.41 | 39,093,488,700.61 |
| Cold rolled | -- | -- | -- | -- |
| Other steel products | 657,380,663.77 | 623,984,508.42 | 1,002,734,646.06 | 934,294,027.75 |
| Subtotal | 37,952,493,407.65 | 37,315,733,518.02 | 42,977,859,406.94 | 40,552,466,616.01 |
| Other business: | ||||
| power | 603,897,153.58 | 692,208,727.34 | 514,071,930.10 | 564,622,140.71 |
| Solid waste | 16,142,266.98 | 14,549,025.28 | 36,702,556.92 | 32,811,328.92 |
| Others | 432,276,276.88 | 173,264,383.23 | 508,521,667.21 | 175,642,919.73 |
| Subtotal | 1,052,315,697.44 | 880,022,135.85 | 1,059,296,154.23 | 773,076,389.36 |
| Total | 39,004,809,105.09 | 38,195,755,653.87 | 44,037,155,561.17 | 41,325,543,005.37 |
(3) Breakdown of operating revenue
| Item | 2022 |
| Main operating revenue | 37,952,493,407.65 |
| Including: recognized at a certain point | 37,952,493,407.65 |
| Recognized during a certain period of time | -- |
| Other revenue | 1,052,315,697.44 |
| Total | 39,004,809,105.09 |
7. Investment income
| Item | 2022 | 2021 |
| Investment income from long-term investment under cost method | 230,168,137.37 | -- |
| Investment income from long-term investment under equity method | -178,256,786.93 | 203,181,607.90 |
| Dividend from other equity instruments investments | 5,614,882.12 | 2,718,777.38 |
| Interest income from entrusted loans | 1,708,741.16 | 34,989,108.61 |
| Total | 59,234,973.72 | 240,889,493.89 |
XVI. Supplementary information
1. Non-recurring gains or losses
| Item | 2022 | Note |
| Gains or losses on disposal of non-current assets | -56,974,152.72 | |
| Government grants recognized in profit or loss during reporting period (excluding those close related to the Company’s normal business, conforming to the national policies and regulations and enjoying ongoing fixed amount or quantity according to certain standard) | 67,816,372.72 |
| Item | 2022 | Note |
| Current net profit or loss of subsidiary from the beginning of the period to the date of the combination under the same control | 55,404,276.08 | |
| Gains or losses from external entrusted loans | 11,275,389.73 | |
| Non-operating income/(expenses) except the above | 10,369,331.96 | |
| Other items that conform to the definition of non-recurring profit or loss | -- | |
| Total non-recurring gains or losses | 87,891,217.77 | |
| Less: income tax effect on non-recurring gains or losses | 7,764,321.72 | |
| Net non-recurring gains or losses | 80,126,896.05 | |
| Less: non-recurring gains or losses attributable to non-controlling interests of the Company (after tax) | 8,097,113.34 | |
| Non-recurring gains or losses attributable to shareholders of the Company | 72,029,782.71 |
2. Return on net assets and earnings per share
| Profit of reporting period | Weighted average return on net assets % | Earnings per share | |
| Basic | Diluted | ||
| Net profit/ (loss) attributable to shareholders of the company | 2.42 | 0.1496 | -- |
| Net profit/ (loss) attributable to shareholders of the Company excluding non-recurring gains or losses | 2.26 | 0.1400 | -- |
Board of Directors of Beijing Shougang Company Limited19 April 2023