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本钢板B:2019年年度报告(英文版) 下载公告
公告日期:2020-04-24
                            Bengang Steel Plates Co., Ltd. Annual Report 2019
    Bengang Steel Plates Co., Ltd.
          Annual Report 2019
              April, 2020
1
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
       I.     Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of the
Supervisory Committee and senior management of the Company guarantee that there
are no misrepresentations or misleading statements, or material omission in this report,
and individually and collectively accept full responsibility for the authenticity,
accuracy and integrity of the information contained in this report.
Gao Lie, chairman of the Company, Shen Qiang, Chief financial officer, and Zhao
Zhonghua, the person in charge of the accounting department (the person in charge of
the accounting), make the pledge for the authenticity, accuracy and integrity of the
attached financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. This report is prepared in both of Chinese and English.
The Chinese version shall prevail when there are any controversial statements in the
two versions.
The company has described the existing risks and countermeasures in detail in this
report. Please refer to Section 4-9 “Prospects for the Future Development of the
Company”. “China Securities Journal”, “Securities Times”, “Hong Kong Commercial
Daily” and Juchao Information Network (www.cninfo.com.cn) are the company's
selected information disclosure media. All information of the company is based on the
information published in the above-mentioned designated media. Investors are advised
to pay attention to investment risks.
The company plans not to distribute any cash dividends, bonus shares, and not converse
capital reserve to share capital.
2
                                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                          Table of Contents
I.    IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS .......................................................... 2
II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ...................................................................................... 5
III. SUMMARY OF COMPANY BUSINESS ................................................................................................................ 9
IV. MANAGEMENT DISCUSSION AND ANALYSIS .............................................................................................. 12
V. IMPORTANT EVENTS ............................................................................................................................................ 25
VI. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ............................................................ 75
VII. STATUS OF PREFERRED SHARES .................................................................................................................. 81
VIII. STATUS OF CONVERTIBLE CORPORATE BONDS ................................................................................... 82
IX. STATUS OF DIRECTORS, SUPERVISORS, SENIOR EXECUTIVES AND EMPLOYEES ........................ 83
X. CORPORATE GOVERNANCE .............................................................................................................................. 91
XI. RELEVANT INFORMATION ABOUT CORPORATE BONDS ....................................................................... 98
XII. FINANCIAL REPORT .......................................................................................................................................... 99
XIII. DOCUMENTS AVAILABLE FOR INSPECTION ......................................................................................... 241
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                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                      Definition
              Terms to be defined                Refers to                                    Definition
Bengang Bancai, Bengang Steel, the Company, the
                                                Refers to    Bengang Steel Plates Co., Ltd.
Listed Company
Bengang Group                                    Refers to   Bengang Group Co., Ltd.
Bengang Co.                                      Refers to   Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Administration   Refers to   Liaoning State-owned Asset Supervisory and Management Committee
SSE                                              Refers to   Shenzhen Stock Exchange
Bengang Puxiang                                  Refers to   Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
4
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                       II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation                       Bengang Bancai, Bengangban B            Stock Code             000761, 200761
Stock exchange for listing               Shenzhen Stock Exchange
Company name in Chinese                  本钢板材股份有限公司
Abbreviation of Company name in
                                本钢板材
Chinese
Company name in English (If any)         BENGANG STEEL PLATES CO.,LTD.
Abbreviation of Company name in
                                BSP
English (If any)
Legal representative                     Gao Lie
Registration Address                     No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration Address        117000
Office address                           No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address              117000
Web Address                              None
Email                                    bgbcdm@163.com
II. Contact Information
                                                     Secretary of Board of Directors          Representative of Securities Affairs
Name                                            Gao Desheng                               Chen Liwen
                                                No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District,
Address
                                                Benxi City, Liaoning Province          Benxi City, Liaoning Province
Tel                                             024-47827003                              024-47828980
Fax                                             024-47827004                              024-47827004
Email                                           bgbcdm@163.com                            bgbcclw@126.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure                    China Securities Journal, Securities Times, Hong Kong Commercial Daily
Web address for the annual report as assigned by
                                                          http://www.cninfo.com.cn
CSRC
Place for inquiry of the annual report                    Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code                                                   91210000242690243E
Changes of principal business activities since listing (if any)     No change
Changes of the controlling shareholder in the past (is any)         No change
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                                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2019
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm           BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm        Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
Signing name of accountants              Wu Xue, Li Guiying
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
                                          Address of the sponsor             Name of the sponsor
    Name of the sponsor institution                                                                      Sustained supervision period
                                               institution                     representative
Shenwan Hongyuan Securities
                                      No. 19, Taiping Bridge Street,                                   March 5th, 2018 to August 8th,
Underwriting Sponsoring Co.,                                            Zhang Wei, Liu Guoku
                                      Xicheng District, Beijing                                        2019
Ltd.
Guotai Junan Securities Co.,          No. 768, Nanjing West Road,                                      August 9th, 2019 to December
                                                                        Feng Jinjun, Chen Ze
Ltd.                                  Jingan District, Shanghai                                        31st, 2019
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to change of the
accounting policy and correction of accounting errors
□ Yes √ No
                                                                                               Changes over last
                                                        2019                   2018                                       2017
                                                                                                    year
Operating income(RMB)                            52,741,353,582.28      50,181,869,721.54                5.10%    40,507,855,843.72
Net profit attributable to the shareholders
                                                      555,646,971.40       1,036,493,236.07              -46.39%      1,600,110,229.77
of the listed company(RMB)
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders            549,528,817.13       1,093,065,140.59              -49.73%      1,607,675,869.15
of listed company(RMB)
Net Cash flow generated by business
                                                    6,977,824,041.16       3,619,937,841.93               92.76%      2,744,243,492.51
operation(RMB)
Basic earnings per share (RMB/Share)                            0.143                 0.272              -47.43%                    0.51
Diluted earnings per share (RMB/Share)                          0.143                 0.272              -47.43%                    0.51
Weighted average net assets yield                              2.88%                  5.64%               -2.76%                 11.84%
                                                                                               Changed over last
                                                     End of 2019            End of 2018                               End of 2017
                                                                                                    year
Gross assets(RMB)                                60,731,425,193.90      59,632,504,915.83                1.84%    62,998,143,513.02
Net assets attributable to shareholders of
                                                   19,487,665,261.17      19,126,258,116.67                1.89%    14,315,588,729.00
the listed company(RMB)
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                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accounting standards
during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting
standards during the reporting period.
VIII. Main Financial Index by Quarters
                                                                                                                           Unit: Yuan
                                           First quarter           Second quarter            Third quarter          Fourth quarter
Operation income                          11,761,190,575.63        12,341,404,591.51         14,441,830,940.38      14,196,927,474.80
Net profit attributable to the
                                              271,606,318.07             181,603,297.69         34,229,631.12            68,207,724.50
shareholders of the listed company
Net profit after deducting non-
recurring gain/loss attributable to           259,096,025.14             202,242,384.99         18,176,874.87            70,013,532.10
the shareholders of listed company
Net cash flows generated by
                                            2,752,557,195.47       -1,767,770,189.80          7,240,330,854.97       -1,247,293,819.48
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly
report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
                                                                                                                             Unit: Yuan
                      Item                                 2019                2018               2017                   Notes
Gains and losses on disposal of non-current
assets (including the write off part of the            -77,292,030.26      -148,409,630.35      -65,886,612.10
provision for impairment)
Government subsidy attributable to profit and
loss of current period (except such
government subsidy closely related to the
company's normal business operation,                   83,914,522.47         86,085,297.03       39,086,900.00
meeting the regulation of national policy and
enjoyed constantly in certain quota or
quantity according to a certain standard)
Profit or loss from investment or
                                                            605,795.19        5,041,397.26
assets entrusted to others
Gains and losses of debt restructuring                       50,640.00                            4,725,936.17
Net profit of loss of the current period from
beginning of the period to the combination
                                                                                                     24,668.65
date of subsidiaries generated from business
combination under common control
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                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
Other non-operating income and expenses
                                                        779,757.58         771,191.90        14,538,002.49
other than above
Other profit and loss items that meet the
                                                           2,084.65
definition of non-recurring gains and losses
Less: impact of income tax                             1,818,703.48         22,141.38           162,375.42
        impact of minority equity (after tax)            123,911.88         38,018.98          -107,840.83
Total                                                  6,118,154.27    -56,571,904.52        -7,565,639.38            --
Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities Information Disclosure
Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining non-recurring gains and losses items listed in
the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
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                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                  III. Summary of Company Business
I. The   Company's main business during the reporting period
(1) During the reporting period, the Company's main business activities include steel smelting, rolling processing, power generation,
coal chemical industry, special steel profiles, railways, import and export trade, scientific research, and product sales. The introduction
of world advanced equipment technology has enabled the implementation of equipment upgrades for the steel industry. The Company
has built a fine steel base, formed more than 60 varieties, more than 7500 series of product specifications, high value-added and high-
tech product ratio reached more than 80%, automotive surface panels, household appliances, oil pipeline steel, container board
Shipboard and other leading products are widely used in automobiles, home appliances, petrochemicals, aerospace, machinery
manufacturing, energy transportation, construction and decoration, and metal products, and are exported to more than 60 countries and
regions.
During the reporting period, the main performance drivers were: implemented contractual management, improved the incentive and
restraint mechanism of the close connection of "operators and managers", the linkage of results, responsibilities and rights, and
promoted the integration of performance evaluation with the leadership team, the appointment and removal of leading cadres, rewards
and punishments. The organization signed 18 certificates of responsibility, tracked the completion of each unit on a monthly basis, and
formed a monthly notification system, which had a milestone significance in the performance evaluation and cadre management of the
Company. A new round of large-scale technological transformation represented by key projects such as the new No. 5 blast furnace
and CCPP green and efficient power generation was implemented. At present, the project of the transformation of the special steel plate
rolling mill and the energy-saving and environmental protection transformation project of the No. 1 and No. 6 converters of the
Company have been successfully completed and put into production. Strengthened capital management operations, completed cash
acquisition of related party assets, and incorporated 2300mm and 1780mm hot-rolled production line equipment assets into the
Company.
No significant change occurred during the reporting period.
(2) During the reporting period, there were many instable factors in the domestic steel market. Although the country continued to
increase supply-side structural reforms and infrastructure construction, the continuous release of steel production capacity and the
reasonable adjustment of upstream and downstream profits, as well as the formation of market backflow caused by China-US trade
frictions, steel prices are affected to certain extent. However, from the perspective of the country as a whole, domestic steel production
capacity has basically become reasonable, demand and supply has maintained balance, and the steel industry has also maintained a
stable and good development trend. The company adheres to the supply-side structural reform as the main line, implements high-quality
development requirements, and consistently implements the new development concepts, “four determinants” and “three advancements”.
The company has achieved steady economic development, continuous improvement of its comprehensive competitiveness, and
continuous consolidation of its industry position.
II.   Major Changes in Main Assets
1. Major Changes in Main Assets
                Main assets                                                    Notes to major changes
                                            The balance as of 31 December 2019 is RMB 1,833,853.6 thousand and it has increased
 Construction in progress
                                            by 119.2%, which is mainly because projects will be constructed during the next year.
                                            The balance as of 31 December 2019 is RMB 0 and it has decreased RMB 3,580,145.8
                                            thousand compared to the beginning balance, which is mainly caused by the adjustment
 Notes receivables
                                            of notes receivable into the accounts receivable financing applying the financial
                                            instruments standards during the current period.
                                            The balance as of 31 December 2019 is RMB 235,696.3 thousand and it has decreased
                                            by 63.14% compared with the beginning balance, which is mainly caused by the
 Accounts receivables
                                            adjustment of part of the accounts receivables into the accounts receivable financing
                                            applying the financial instruments standards during the current period.
 Other non-current assets                   The balance as of 31 December 2019 is RMB 708,502.6 thousand and it has increased by
                                            828.06% compared with the beginning balance, which mainly due to the increase in the
9
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                            rental deposit paid to Liaoning Hengyi Financial Leasing Co., Ltd. during the current
                                            period.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
The company adheres to the development model of innovation-driven and “quality plus service”. With the strategic goal of building a
highly competitive international high-quality plate base, domestic first-class special steel base and comprehensive service providers, it
plays a strategic leading role, focusing on improving quality and efficiency. In terms of variety upgrading, technological innovation,
green and intelligent manufacturing, it innovates business management ideas, enhances the company's core competitiveness, and
promotes the development of high-quality, green and intelligent enterprises.
1. Manufacturing capacity
The company innovates management ideas, strengthens professional management and control of the entire chain, and continuously
improves corporate management efficiency. All departments and units interact with each other, continue to implement the concept of
production priority, adhere to the iron system as the core, focus on the process of iron and steel. The production line and resources of
the production process and the principle of rationally matches the production process of steel, to make the production process and
operation continuous standardization and refinement, strive to maximize the quality, efficiency and production scale, and promote the
production chain to high-end manufacturing.
2. Equipment transformation and upgrading
In 2019, the Company invested fixed asset of 5.7 billion yuan. A new round of large-scale technological transformation represented by
key projects such as the new No. 5 blast furnace and CCPP green and efficient power generation was implemented.
At present, the special steel rolling mill renovation project, the steelmaking furnace No.1 and No.6 converter energy-saving and
environmental protection transformation projects have been successfully completed and put into production. The No. 5 blast furnace
energy-saving and environmental protection transformation project has completed 60% and is scheduled to be put into operation at the
end of September 2020. The upgrading project will be completed and put into operation in 2021.
3. New product development capabilities
In 2019, the Company successfully developed 41 new products. Among them, the high-strength martensitic steel MS1180 for rolling
broke the production line capacity limit, indicating that Bengang's automotive cold-formed products already have a supply capacity of
1200 MPa. The Company successfully developed quenching steel for cold forming, high-strength bullet-proof steel, and car wheel
bearing steel, which filled the company's product gap. The Chinese Society of Metals held an expert review of scientific and
technological achievements in Beijing, suggested that the two scientific and technological achievements completed by the company,
named “R&D of ultra-high-strength series hot stamping steel” and “Independent R&D and technology integration of electro-galvanized
products”, reached advanced world standard. The ultra-high strength 2000MPa hot-formed steel technology has broken the strength
limit of the hot-formed steel, with an elongation of not less than 6%, and had excellent strong plastic matching; 6mm thick specifications
of 1500MPa-grade hot-formed steel, used in chassis torque Beam parts have achieved a technological breakthrough in the application
of automobile chassis structural parts and met the requirements for lightweight design of the whole vehicle; the width of 1500MPa-
2000MPa ultra-high-strength series of hot-formed steel products can reach 1800mm, formed the widest domestic thermoforming
Production capacity of steel products.
4. Technical innovation capability
Benxi Steel and Shenyang National Research Center for Materials Science signed an agreement to build a joint R&D center, to build
an “industry-university-research-use” R&D platform and actively integrate into the national technological innovation system.
The construction of Bengang Shenyang Research Institute commenced the land acquisition process, and declared to be included in the
national and provincial “14th Five-Year Plan” major engineering projects. And joined the executive director unit of the Corrosion
Resistant Steel Technology Innovation Alliance and the Journal of Iron and Steel Research and became a member unit of the
Automotive Lightweight Innovation Strategic Alliance. In 2019, 146 patents were accepted by the State Intellectual Property Office,
had an increase of 11.5% compared with last year, and 93 patents of them were authorized by the State Intellectual Property Office,
had an increase of 260%. The company successfully joined the China Intellectual Property Development Alliance.
5. Green development capacity
The company has taken social responsibilities and relied on professional planning and research institutions to prepare environmental
protection improvement plans and annual implementation plans by combining the steel industry and local ultra-low emission policy
requirements. Through all-round green improvement such as clean production level, three waste management, and environmental
protection management, the company can achieve "ultra-low emissions" in all directions in 2025, realize the communalization of
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                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
environmental quality, promote the integration of industry and city, and build the company into a harmonious development with the
city "Ecological Steel Factory". At present, 2 sets of coke oven flue gas desulfurization and denitrification devices have been invested
and installed. The surplus gas CCPP power generation project is planned to be completed and put into operation in May 2021. The
new mixing yard and the fully enclosed project of the yard are also under planning and design. It will be completed and put into
operation in 2024.
6. Intelligent manufacturing capabilities
The Company has steadily promoted the construction of projects related to the integration of the two industries and the intelligent
factory. And invested RMB 110 million for the intelligent transformation of manufacturing management, ERP systems and other
fields. It is planned to increase investment in informatization and intelligent manufacturing in 2020-2022, keep up with the pace of
enterprise development in the era of big data, and achieve high-quality development.
7. Marketing competence
The Company adheres to the benefit-oriented, optimizes the variety structure, achieves a steady increase in the output of leading
products, and significantly enhances the core competitiveness of products. The Company developed 32 new customers, 45 new steel
types and achieved the target of 100% production-sales ratio by increasing market development efforts and matching resources
reasonably. Products are sold to more than 30 countries and 1 million tons along the “Belt and Road”, accounting for 42% of total
exports. During 2019, the Company completed 70 brand certifications for cold-rolled, galvanized, pickled, special steel and other
products, with an increase of 25% over last year, covering users such as automobile panels, home appliance panels, and special steel.
Part of the company's automotive sheet products have been included in the Mercedes-Benz BQF (Global Procurement) list. The key
certification work of BMW, Mercedes-Benz, Renault, etc. has achieved periodic results. The Company completed the testing of SGS,
ELV and Reach products.
8. Brand Building
The Company has built a symbiotic and shared quality management model of "supporting a better life with steel power", attached
great importance to the construction of corporate culture, actively expanded brand influence, made great efforts to fulfill social
responsibilities and enhance the social image of the enterprise, successfully won the 2019 Liaoning Provincial Quality Bonus Award,
and became the only iron and steel enterprise to win this honor.
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                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
                          IV. Management Discussion and Analysis
I. General
During the reporting period, the company adhered to Xi Jinping's new era of socialism with Chinese characteristics as the
guide, in-depth study and implementation of the spirit of the important speech by Present Xi during the inspection tour in
Liaoning and in the in-depth promotion of the Northeast Revitalization Symposium. The Company adheres to the supply-
side structural reform as the main line, persists in the general keynote of steady progress, firmly establishes and practices
new concepts of development. It implements high-quality development requirements, achieves stable growth of major
economic indicators. The Company produced 9.7272 million tons of pig iron in the whole year, which increased by
14.61%, 9.9639 million tons of crude steel which increased by 11.2%, 12.22674 million tons of hot-rolled plate which
increased by 6.77%, 5.6263 million tons of cold-rolled sheet which increased by 0.37%, and 0.4867 million tons of special
steel which decreased by 28.44% compared to last period. The company did not have any major personal accidents, major
fire accidents or major equipment accidents throughout the year. Looking back at the past year's production and operation
process, we mainly completed the following work:
First, management innovation. The Company implements contract management, improved the incentive and restraint
mechanism of the close connection of "operators and managers", the linkage of results, responsibilities and rights, and
promoted the integration of performance evaluation with the leadership team, the appointment and removal of leading
cadres, rewards and punishments. The organization signed 18 certificates of responsibility, tracked the completion of each
unit on a monthly basis, and formed a monthly notification system.
Besides, the Company implement accountability and accountability, set up a supervision team to carry out supervision
and management, continue to optimize and streamline the organization in accordance with the principles of compressing
management levels and integrate similar businesses to strengthen process optimization, increase system supervision and
implementation inspection. And strengthen risk management, internal control, carry out in-depth risk identification,
assessment, and risk knowledge training to strengthen informatization construction to provide informatization support for
refined management. Strengthen capital management operations, complete cash acquisition of related party assets, and
incorporate 2300mm and 1780mm hot rolling production line equipment assets into the company.
Second, technology innovation. The Company adheres to the design concept of light weight and green environmental
protection, aims at stable quality, reasonable cost, high added value and strong market competitiveness, closely combines
market demand and future technical development direction, considers the characteristics of its own production line,
develops marketable New product. There were 41 new product brands developed throughout the year, and some
automotive sheet products were included in Mercedes-Benz's global procurement list. And promote the industrial
development of hot-formed steel products, achieve full coverage of products from 1300 MPa to 2000 MPa. They
organized the completion of 70 brand certifications for cold rolling, galvanizing, pickling, special steel and other products.
The Company cooperated and communicated with Beijing University of Science and Technology, China Iron and Steel
Research Institute, Institute of Metals of Chinese Academy of Sciences, Shanghai University, etc. through multi-levels,
multi-channels and multi-forms. The cooperation and communication have accelerated the transformation of scientific
and technological achievements into real productivity. Moreover, a total of 146 patents were accepted by the State
Intellectual Property Office, with 113 new authorized patents. They successfully joined the China Intellectual Property
Development Alliance, successfully passed the annual assessment of "National Intellectual Property Advantage
Enterprise" and "Liaoning Province Intellectual Property Advantage Enterprise"
Third, marketing and purchasing. The company adheres to the benefit-oriented, optimizes the variety structure, reasonably
matches resources, increases market development efforts, and achieves the target of 100% production and sales rate. The
development and certification of OEMs has been actively promoted, sales channels are expanded continuously, orders for
auto plates are gained by efforts. The comprehensive implementation of the import materials under the plate item is
guaranteed by the corporate finance company guarantee letter and the tax collection business, which improves the
efficiency of customs clearance. By lowering anthracite coal prices, introducing high-sulfur coal cost reduction,
controlling land and mineral resources to suppress prices, and implementing benchmarking potentials to reduce prices
and cost, etc. measures to reduce procurement costs. We will continue to implement special cost reductions such as
resource development, variety substitution, and opportunity selection. And fully organize the development and
introduction of high-quality suppliers, and constantly improve the supplier structure to carry out procurement
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                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
benchmarking work, with procurement prices and procurement costs as the core, organize and determine benchmarking
projects.
Fourth, production and operation. The Company fully promotes the work of increasing production, reduces consumption
and increasing efficiency, and the level of production and operation of enterprises has been continuously improved. The
production organization has been further optimized, give full play to the role of dispatching and coordination,
scientifically and efficiently organize the overall balance of various productions, and solidly and steadily advance the
work of reducing costs and increasing efficiency. And adhere to the implementation of the cost management and control
system and the daily clearing and daily settlement mechanism, carry out benchmarking and process cost analysis in an
all-round manner, to realize the dynamic control of key indicators and cost operation.
Fifth, party building. The Company seriously implements the deployment of the Party Central Committee, the Provincial
Party Committee and the company's party committee, comprehensively and deeply carry out the education of "Remain
true to our original aspiration and keep our mission firmly in mind". And revise the system of party building work, carry
out the activities of "big learning, big inspection, big standardization, big promotion", to strengthen the education
management of party members, promote the institutionalization of the normalization of the " studies on the theoretical
and practical issues of party building" learning and education, standardize the basic party organizations, and continue to
standardize Promote.
Sixth, people's livelihood and social responsibility. The Company reconstructs of the three-dimensional parking lot of
No.4 door, with a total construction area of 20,400 square meters, solves the difficulty of parking for employees. The
foundation of safety management has been continuously consolidated, and the safety production responsibility system
has been strictly implemented to achieve full coverage of the safety production responsibility system. In order to innovate
safety training methods, establish a safety training base, strengthen production safety supervision, and carry out special
inspections on building construction and hazardous media.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Breakdown of Operating Income
                                                                                                                   Unit: Yuan
                                             2019                                       2018                 Change over last
                                 Amount               Proportion              Amount           Proportion         year
Total operating income        52,741,353,582.28                 100%      50,181,869,721.54           100%              5.10%
By industries
Industry                      52,741,353,582.28              100.00%      50,181,869,721.54        100.00%              5.10%
By products
Steel plate                   46,805,252,792.90               88.74%       46,228,334,211.43        92.12%              1.24%
Others                         5,936,100,789.38               11.26%        3,953,535,510.11         7.88%             52.25%
By regions
Northeast                     20,024,243,641.60               37.97%      15,200,555,630.64         30.29%             32.26%
North China                    5,084,223,402.71                9.64%        5,695,230,806.71        11.35%            -10.73%
East China                    20,568,857,942.71               39.00%       17,511,020,155.51        34.90%             17.46%
Northwest                         57,451,092.38                0.11%           68,730,984.27         0.14%            -16.41%
Southwest                        232,028,336.48                0.44%          179,439,784.55         0.36%             29.31%
Central south                     26,564,062.51                0.05%           29,348,279.57         0.06%             -9.49%
13
                                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
Export                             6,747,985,103.89                          12.79%       11,497,544,080.29             22.90%             -41.31%
(2) Industry, Product and Regions Accounting for the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
                                                                                                                                       Unit: Yuan
                                                                                            Operating income Operating profit       Gross margin
                      Operating Income Operating profit                Gross margin         change over last change over last      change over last
                                                                                                  year            year                  year
By industries
Industry               52,741,353,582.28      49,211,414,645.62                    6.69%               5.10%              8.77%             -3.15%
By products
Steel plate            46,805,252,792.90      43,900,514,006.74                    6.21%               1.25%              4.66%             -3.05%
Others                    5,936,100,789.38     5,310,900,638.88                   10.53%              50.15%             61.10%             -6.09%
By regions
Northeast              20,024,243,641.60      18,582,038,944.70                    7.20%              31.73%             34.28%             -1.76%
North China               5,084,223,402.71     4,757,714,575.79                    6.42%             -10.73%              -7.74%            -3.03%
East China             20,568,857,942.71      19,203,256,113.50                    6.64%              17.46%             21.91%             -3.40%
Northwest                   57,451,092.38            54,150,705.94                 5.74%             -16.41%             -14.69%            -1.90%
Southwest                  232,028,336.48           217,118,195.58                 6.43%              29.31%             33.81%             -3.15%
Central south               26,564,062.51            24,831,580.92                 6.52%              -9.49%              -6.46%            -3.03%
Export                    6,747,985,103.89     6,372,304,529.20                    5.57%             -41.31%             -37.80%            -5.33%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's main business
statistics caliber has changed during the reporting period
□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
                                                                                                                                 Change over last
     Industry classification                 Item                    Unit                 2019                   2018
                                                                                                                                      year
                                  Sales                              ton                 12,936,378.68           11,921,203.14               8.52%
Steel rolling processing
                                  Production                         ton                 12,753,498.73           11,778,657.64               8.28%
industry
                                  Inventory                          ton                    461,834.13             644,714.08              -28.37%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Operating Cost
Industry classification
                                                                                                                                       Unit: Yuan
        Industry                                               2019                                        2018                    Change over last
                               Item
     classification                                 Amount                  Proportion           Amount            Proportion           year
Steel rolling
                    Raw material              24,287,695,988.38                    49.35%    21,947,301,201.20           48.51%            -48.51%
processing industry
14
                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
Steel rolling       Supplementary
                                             2,244,278,919.58     4.56%      2,042,667,624.99        4.51%             -4.51%
processing industry materials
Steel rolling       Spare parts and
                                              792,470,544.15       1.61%      736,234,636.78         1.63%             -1.63%
processing industry tools
Steel rolling
                    Fuel                    13,563,168,678.04     27.56%    12,532,214,109.19       27.70%            -27.70%
processing industry
Steel rolling
                    Energy                   2,886,572,220.88      5.87%     2,851,020,001.46        6.30%             -6.30%
processing industry
Steel rolling       Salary and
                                             2,132,408,812.44      4.33%     1,995,005,132.35        4.41%             -4.41%
processing industry benefits
Steel rolling
                    Depreciation             2,474,423,868.41      5.03%     2,346,173,478.53        5.19%             -5.19%
processing industry
Steel rolling
                    Others                   830,395,613.74       1.69%       793,119,019.81         1.75%             -1.75%
processing industry
Steel rolling
                    Total                  49,211,414,645.62      100.00%   45,243,735,204.31      100.00%           -100.00%
processing industry
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √No
 (7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan)                         11,215,010,475.74            22,456,322,906.01
Total sales amount of the top five customers accounted for the
                                                                                        21.26%                       45.63%
proportion of total annual sales
The proportion of the total sales of the related parties in the
                                                                                         9.92%                       34.30%
top five customers
Information of the top 5 customers
     No                              Name                             Amount (Yuan)                     Proportion
1             Benxi Beiying Steel & Iron (Group) Co., Ltd.                    5,231,032,903.96                         9.92%
2             Xiamen Jian Fa Metal Co., Ltd.                                  1,621,532,578.32                         3.07%
              Shanghai Min Xing Da International Trade Co.,
3                                                                             1,520,825,639.71                         2.88%
              Ltd.
4             Ningbo AUX Trade Co., Ltd.                                      1,441,869,474.34                         2.73%
5             Zhong Bing (Shanghai) Co., Ltd.                                 1,399,749,879.41                         2.65%
Total                                 --                                     11,215,010,475.74                        21.26%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan)                      22,456,322,906.01             22,456,322,906.01
Total purchase amount of the top five suppliers accounted for
                                                                                        45.63%                        45.63%
the proportion of total purchase
The proportion of the total purchase of the related parties in
                                                                                        34.30%                        34.30%
the top five suppliers
Information of the top 5 suppliers
15
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
     No.                            Name                                  Amount (Yuan)                           Proportion
1            Benxi Beiying Steel & Iron (Group) Co., Ltd.                       12,194,115,817.50                                 24.78%
2            Benxi Steel & Iron (Group) Mining Co., Ltd.                         4,686,937,254.45                                  9.52%
3            Heilongjiang Dragon Coal Group Co., Ltd.                            2,383,245,434.22                                  4.84%
             Liaoning Electric Power Co., Ltd. Benxi Electric
4                                                                                2,177,544,074.59                                  4.42%
             Power Supply Company
5            Shenyang Coking Coal Co., Ltd. Sales Branch                         1,014,480,325.25                                  2.06%
Total                                 --                                        22,456,322,906.01                                 45.63%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
                                                                                                                               Unit: Yuan
                                                                                                                  Notes to significant
                                                2019                   2018           Change over last year
                                                                                                                        change
Selling and distribution expenses          1,096,688,903.70     1,135,004,470.47                    -3.38%
General and administrative expenses         831,945,841.56           916,341,137.85                 -9.21%
                                                                                                           Loss of exchange
                                                                                                           decreases and interest
Financial expenses                          681,842,689.23      1,376,355,160.46                   -50.46%
                                                                                                           income increases during
                                                                                                           the current period
                                                                                                          Increase in the collection
                                                                                                          of research and
Research and development expenses            30,780,463.74             6,399,884.30               380.95%
                                                                                                          development expenses in
                                                                                                          this period.
4. Research and Development Input
√ Applicable □ Not applicable
In order to comprehensively enhance the level of technological innovation and ability to create efficiency and increase profits,
strengthen variety adjustment and market development, improve product quality management, promote low-cost and green
manufacturing technologies, 50 companies and 98 self-managed projects were directly managed by technology around variety, quality
and cost in 2019. All projects were successfully carried out and completed over 76% on schedule. 41 new products were developed
throughout the year, and costs were reduced by more than 100 million yuan through process optimization. R & D projects such as new
product development, technological progress, and low-cost control technology not only create rich profits for the company, but also
consolidate the company’s good corporate influence on the market.
Information of research and development input by the company
                                              2019                               2018                         Change over last year
Number of Research and
                                                            1,632                              1,712                              -4.67%
Development personnel
Proportion of number of
Research and Development                                    9.18%                             9.51%                               -0.33%
personnel
Amount of Research and
Development Investment (In                     1,287,080,000.00                   1,495,775,000.00                               -13.95%
RMB)
Proportion of Research and
Development investment to                                   2.44%                             2.98%                               -0.54%
operating income
Amount of capitalized Research
                                                              0.00                              0.00                               0.00%
and Development investment
Proportion of capitalized                                   0.00%                             0.00%                                0.00%
Research and Development
16
                                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2019
investment accounted to total
Research and Development
investment
Illustrations of the prominent change in proportion of research and development input occupying the operating income over same
period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
                                                                                                                                 Unit: Yuan
               Item                              2019                              2018                     Change over last year
Subtotal of cash inflows from
                                                 48,140,957,956.69                 42,888,958,869.76                               12.25%
operating activities
Subtotal of cash outflows from
                                                 41,163,133,915.53                 39,269,021,027.83                                4.82%
operating activities
Net cash flows from operating
                                                  6,977,824,041.16                  3,619,937,841.93                               92.76%
activities
Subtotal of cash inflows from
                                                     53,984,827.07                    684,483,213.49                              -92.11%
investing activities
Subtotal of cash outflows paid
                                                  4,598,859,687.86                    761,988,848.56                             503.53%
for investing activities
Net cash flows from investing
                                                 -4,544,874,860.79                    -77,505,635.07                         5,763.93%
activities
Subtotal of cash inflows from
                                                 17,484,678,971.97                 35,061,062,441.77                              -50.13%
financing activities
Subtotal of cash outflows from
                                                 18,304,173,598.95                 39,211,589,467.82                              -53.32%
financing activities
Net cash flows from financing
                                                   -819,494,626.98                  -4,150,527,026.05                             -80.26%
activities
Net increase in cash and cash
                                                  1,688,866,366.61                   -565,028,156.96                             -398.90%
equivalents
Illustrations of key factors of significant changes over same period last year
√ Applicable □Not applicable
Notes:
(1) Net cash flows generated from operating activities increased 92.76% compared to the previous period, mainly
    because the increase of cash received from sales of goods is more than the increase of cash paid for goods.
(2) Subtotal of cash inflows from investing activities decreased 92.11% compared to the previous period, mainly because
    the decrease of cash withdrawn from purchase of financial products.
(3) Subtotal of cash outflows from investing activities increased 503.53% compared to the previous period, mainly
    because the increase of cash paid for purchase of production line 2300 and equipment of production line 1780.
(4) Net cash flows from investing activities increased 5763.93% compared to the previous year, mainly because the
    increase of cash paid for purchase of production line 2300 and equipment of production line 1780.
(5) Subtotal of cash inflows from financing activities decreased 50.13% compared to the previous period, mainly because
    the decrease of cash received from financing.
(6) Subtotal of cash outflows from financing activities decreased 53.32% compared to the previous period, mainly
    because the decrease of cash repayment.
(7) Net cash flows from financing activities decreased 80.26% compared to the previous period, mainly because the
    decrease in cash paid for debt repayment in the current period.
Illustrations of significant difference between cash flow from operating activities and net profit during the reporting period
□ Applicable √Not applicable
17
                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
III. Analysis of Non-core Business
√Applicable □ Not applicable
                                                                                                                               Unit: Yuan
                                  Amount           Proportion in total profit         Explanation of cause            Whether sustainable
Investment income                  1,058,377.90                         0.18% Due to external equity investment               No
                                                                              Due to provision of impairment of
Impairment of assets             -43,256,982.72                        -7.51%                                                 No
                                                                              finished products
                                                                                Due to income raised from
Non-operating income              10,306,462.87                         1.79%                                                 No
                                                                                scrapping of non-current assets
                                                                                Due to scrapping of assets in
Non-operating expenses            90,209,742.22                        15.67%                                                 No
                                                                                current period
IV. Assets and Liabilities
1. Significant Change of Assets Components
Adjustment to the beginning balance of the current period due to the first adoption of new financial instruments standards, new revenue
standards or new leasing standards since 2019
√ Applicable □ Not applicable
                                                                                                                           Unit: Yuan
                                  Ending balance of 2019                 Beginning balance of 2019
                                                                                                                               Notes to
                                                   Proportion in                            Proportion in       Proportion
                                                                                                                              significant
                                  Amount          the total assets        Amount           the total assets      change
                                                                                                                                change
                                                        (%)                                      (%)
Cash at bank and on
                          18,415,844,397.77               30.32%     16,567,471,755.77             27.78%            2.54%
hand
Accounts receivable            235,696,265.66               0.39%        639,482,481.45              1.07%           -0.68%
Inventories                 7,700,397,685.61              12.68%     10,677,747,112.40             17.91%            -5.23%
Long-term equity
                                   2,642,998.70             0.00%          2,455,681.55              0.00%           0.00%
investment
Fixed assets              26,123,375,492.40               43.01%     23,924,504,539.97             40.12%            2.89%
Construction in
                            1,833,853,572.58                3.02%        836,594,457.82              1.40%           1.62%
process
Short-term loans          13,151,478,000.00               21.66%     11,938,490,375.85             20.02%            1.64%
Long-term loans             4,849,675,910.73                7.99%      7,083,640,094.16            11.88%            -3.89%
2. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
                                                                                                                                Unit: yuan
                                     Profit and
                                                 Accumulated
                                     loss from                                  Purchase
                                                   fair value   Impairment                   Sales amount
                   Beginning        changes in                                   amount                             Other       Ending
     Item                                           changes    accrued in the                  during the
                    balance        fair value in                                during the                         changes      balance
                                                 recognised in current period                current period
                                    the current                               current period
                                                     equity
                                       period
Financial
assets
3.Other debt                                                                                                      2,429,542,4 2,429,542,4
investments                                                                                                             61.88       61.88
4.Other equity                                                                                                    1,041,824,8 1,041,824,8
18
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
instrument                                                                                                       29.00    29.00
investments
Subtotal of
                                                                                                         3,471,367,2 3,471,367,2
financial
                                                                                                               90.88       90.88
assets
                                                                                                         3,471,367,2 3,471,367,2
Total                      0.00
                                                                                                               90.88       90.88
Financial
                           0.00                                                                                             0.00
liabilities
3. Restricted Assets by the End of the Period
                   Items                             Ending balance                          Reason
Cash at bank and on hand                                   4,974,429,409.19          Deposit for notes and L/C
Accounts receivable financing                                373,576,250.73        Pledged for acceptance bill
Other equity instrument investments                        1,037,735,849.00             Pledged for loans
                   Total                                   6,385,741,508.92
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
19
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                  Unit: 10 thousand yuan
                                                            The
                                                            total
                                                          amount
                                                          of funds                                                              The
                                                                             Accumulat               Total
                                      Used                 raised                                                            amount of
                                                                             ed amount             amount of Purpose of
                                     amount Accumulat for                                                                      funds
             Source of                                                        of funds               funds fund raised
     Year              Total amount during the ively used changin                       Proportion                           raised for
              funding                                                        raised for              raised   have not
                                     current     amount       g                                                              more than
                                                                              changing              have not been used
                                     period               purpose                                                            two years
                                                                              purposes             been used
                                                          s during                                                             of idle
                                                             the
                                                          reportin
                                                          g period
            Private                                     3,183,684,09
2018        placement
                        3,965,799,988.19   13,006,851
                                                                4.45
                                                                         0           0                        0 Deposit                0
                                                        3,183,684,09
Total            --     3,965,799,988.19   13,006,851
                                                                4.45
                                                                         0           0        0.00%           0      --                0
                                             Description of the overall use of raised funds
1. Changes in the implementation location, implementation body, and implementation of the fundraising investment project: There
is no change in the company's investment projects in 2019.
2. Initial investment and replacement of fund raising projects: The 14th meeting of the 7th Board of Directors and the 10th meeting
of the 7th Board of Supervisors reviewed and approved the proposal on self-raised funds for the use of raised funds to replace pre-
investment funds. Before the funds raised received, in order to ensure the smooth implementation of the fundraising project, the
company built the project with self-raised funds. As of February 28, 2018, the amount of pre-investment of self-raised funds with
raised funds was 1,822,749,211.07 yuan, including 1,484,133,089.39 yuan for cold-rolled high-strength steel renovation project and
338,616,121.68 yuan for hot-dip galvanizing production line of three cold rolling mills. Details are as follows:
(1) The replacement amount of the cold-rolled high-strength steel reconstruction engineering company with self-raised funds to raise
funds for the initial investment is RMB 1,484,133,089.39, mainly for equipment purchase and construction, etc.
(2) The replacement amount of the project funded for the Third Cold Rolling Mills Hot-Dip Galvanizing Production Line with self-
raised funds was RMB 338,616,121.68, mainly for equipment purchase and construction.
The company replaced the funds used in the construction of the fundraising project with the self-raised funds to replace the funds
raised. The initial investment and replacement of the above-mentioned fundraising projects has been verified by BDO China Shu Lun
Pan Certified Public Accountants LLP. Please refer to PCPAR [2018] No. ZB10101 “Verification report on the self-raised fund
invested in the raised funds investment project of Bengang Steel Plates Co., Ltd”.
(3) Temporary replenishment of circulating funds with idle raised funds:
In 2018, the Company used 530,000,000.00 yuan of idle raised funds to temporarily supplement working capital. The period of use
shall not exceed 12 months from the date of approval by the board of directors (March 13, 2018). As of March 11, 2019, the Company
has returned all the above-mentioned idle raised funds for temporary supplementary liquidity of 530,000,000 yuan to the Company's
special account for raised funds.
During the current reporting period, according to the progress of the Company's fund-raising investment project construction and the
fund-raising plan, part of the funds raised in this issuance is temporarily idle. According to the regulations of the "Procedures for the
Management of Funds Raised by Listed Companies of the Shenzhen Stock Exchange", in accordance with the principle of maximizing
the interests of shareholders, under the premise of ensuring the fund demand for investment projects and the investment projects for
raising funds. The efficiency of fundraising will further reduce the company's financial costs, reduce financial expenses, and protect
the interests of investors. The Company uses 742,000,000.00 yuan as raised funds will temporarily supplement the working capital,
and the term of use will not exceed 12 months from the date of approval by the board of directors. Based on the one-year loan
benchmark interest rate of 4.35%, the supplementary working capital of 742,000,000.00 yuan will save financial expenses for
32,277,000.00 yuan.
The Company's usage of idle raised funds to temporarily supplement liquidity has been reviewed and approved at the 22th meeting
of the 7th Board of Directors and the 14th meeting of the 7th Board of Supervisors. The company's independent directors have issued
a clear statement. The consent opinion has fulfilled the necessary decision-making procedures. The use of idle raised funds to
temporarily supplement the liquidity matters will change the use of raised funds or affect the normal operation of the raised funds
investment plan. There is no damage to the interests of shareholder. Single replenishment of working capital is no more than 12
months. The Company has promised not to use idle raised funds for high-risk investment, in line with the provisions of the relevant
laws, regulations and regulatory documents, including the “Regulatory Guidelines No. 2 of Listed Companies – Regulatory
Requirements for the Management and Use of Raised Funds of Listed Companies”, “Stock Exchange Listing Rules of Shenzhen
Stock Exchange” and “Shenzhen Stock Exchange the Standard Operating Guidelines for Main Board Listed Companies”. The
sponsor institution agreed to use the idle raised funds to temporarily supplement the working capital and issued the “Verification
Opinions of Shenwan Hongyuan Securities Underwriting and Sponsoring Co., Ltd. on the temporary replenishment of working capital
by Bengang Steel Plate Co., Ltd. using idle raised funds”.
4. Usage of surplus funds raised: None.
5. Usage of over-raised funds: There is no over-raising of funds raised this time. Therefore, during the reporting period, the company
20
                                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2019
did not use over-raising funds.
6. The purpose and destination of the unused raised funds: As of December 31, 2019, in addition to temporarily replenishing working
capital with idle raised funds of RMB 742,000,000.00 in accordance with the resolution of the board of directors, the Company's
remaining raised funds temporarily saved in special account for fund raising.
7. Other use of raised funds: None.
(2) Fundraising commitments
√Applicable □ Not applicable
                                                                                                                                 Unit: 10 thousand yuan
                                                             Accumul
                      Whether                                                               Investme      Date of                    Whether
                                           Total                ated
                         the     Raised             Amount                                       nt          the   Benefits Whether     the
                                          amount             investme
                       project    funds            invested                                  progress     project achieved    the     project
 Committed investment                        of                   nt                         as of the
                      has been promised             during                                                reaches   during expected feasibility
   projects and over-                    investme             amount
                      changed      total              the                                   end of the       the     the    benefits    has
      raised funds                        nt after            as of the
                      (includin investme           reporting                                  period     expected reporting   are    changed
                                         adjustme            end of the
                      g partial     nt               period                                    (3)=       usable   period achieved significan
                                           nt (1)              period
                      changes)                                                                (2)/(1)      status                       tly
                                                                 (2)
Committed invested projects
High Strength Cold                                                                                                              -
                                    2,265,799,98 2,265,799,98                1,780,757,97
Rolling Steel            No                 8.19         8.19
                                                                13,006,851
                                                                                     2.77
                                                                                                78.59%    31.12.2017   117,964,83 No             No
Renovation Project                                                                                                           4.28
The Third Cold Rolling
Work Hot-Dip                                                                                                                    -
                                                                             402,926,121.
Galvanizing            No           700,000,000   700,000,000
                                                                                      68
                                                                                                57.56%    31.12.2018   106,600,00 No             No
Production Line                                                                                                              5.87
Project
Repayment of bank                   1,000,000,00 1,000,000,00                1,000,000,00
                         No                                                                    100.00%                                Yes        No
loans                                          0            0                           0
                                                                                                                                -
                                   3,965,799,9 3,965,799,9            3,183,684,0
Subtotal                      --         88.19       88.19
                                                           13,006,851
                                                                            94.45
                                                                                                --          --         224,564,84           --        --
                                                                                                                             0.15
Over-raised funds
Not applicable                                                                                                                                   No
                                                                                                                                  -
                                   3,965,799,9 3,965,799,9            3,183,684,0
Total                         --         88.19       88.19
                                                           13,006,851
                                                                            94.45
                                                                                                --          --         224,564,840.         --        --
                                                                                                                                 15
Situation and cause of
failure to meet planned The main reason is that although the fundraising project has basically reached the condition of production,
progress or projected the high value-added varieties of the production line is not stable enough, and the market's recognition of
earnings (disclosed by new production line products has a certain delay.
project)
Description of major
changes in project       None.
feasibility
Amount, use and          Not applicable
progress of usage of
over-raised funds
Change in the            Not applicable
implementation
location of the raised
funds investment
project
Adjustment of            Not applicable
implementation
methods of fund-
raising investment
projects
21
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
The initial investment Applicable
and replacement of the
fundraising investment Refer to the Contents in Special Report III 4
project
Temporary                 Applicable
replenishment of
working capital with      Refer to the Contents in Special Report III 5
idle raised funds
The amount and reason Not applicable
for the rest of raised
fund in the project
implementation
Use and destination of
raised funds that have None.
not been used
Problems or other
situations in the use
                         None.
and disclosure of raised
funds
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fundraising project.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
                                                                                                                              Unit: Yuan
                    Company        Main        Registered                                       Operating        Operating
 Company Name                                                  Total assets     Net assets                                      Net Profit
                      type        business      capital                                          income           profit
  Bengang
                                  Processing
  Puxiang Cool
                   Subsidiaries and sales 1,920,000,000.00 5,815,249,242.86 1,982,530,453.39 7,379,865,156.54 25,606,949.96   19,378,253.07
  Rolling Steel
                                  of steel
  Sheet Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
None
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
22
                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
IX. Prospect for Future Development of the Company
1. The development trend of the industry and the market competition
2020 is a crucial year for fully implementing the spirit of the 19th National Congress of the Party, forging ahead with
reforms, accelerating development, and achieving corporate planning goals. From the domestic economic situation,
China's economic development is still in a period of important strategic opportunities, and the basic trend of economic
stability and long-term improvement has not changed. Reform and opening up has further expanded, technological
innovation has continuously given rise to industrial upgrading, new and old domestic kinetic energy has been continuously
converted, and the potential for consumption has been released, laying a solid foundation for the sustained and stable
development of the economy. In 2020, China gradually entered the peak platform area of steel consumption, but a large
number of capacity replacement projects have been put into operation, steel output will continue to grow, and the
contradiction of overcapacity will become a problem again; the export of downstream steel industry has suffered Large
impact by affected by Sino-US economic and trade frictions, at the same time due to factors such as high price fluctuations
of iron ore, scrap steel and coal coke, higher environmental protection operating costs and other factors, the steel industry
is facing an extremely severe development situation.
2. The Company’s development strategy
The overall work idea of 2020: comprehensively implement the spirit of the 19th National Congress of the Party and the
Second, Third and Fourth Plenary Sessions of the 19th CPC National Congress, implement the important speech of
General Secretary Xi Jinping during the inspection tour in Liaoning and in-depth promotion of the Northeast
Revitalization Symposium, adhere to the supply-side structural reform as the main line, implement the high-quality
development requirements, and consistently implement the new development concept to strive to create a new situation
of high-quality development of enterprises.
3. Business plan
The overall goal of production and operation in 2020: strive to complete 10.42 million tons of pig iron, 10.78 million tons
of crude steel, 13.24 million tons of hot rolled sheet, 5.97 million tons of cold rolled sheet, 650,000 tons of special steel,
and achieve "three zeros" for safe production.
In order to achieve the above objectives, we will focus on the following aspects:
(1) Taking the reform of institutional mechanism as a breakthrough to further stimulate the vitality of enterprises.
(2) Continuously optimize resource allocation and create new impetus for innovation and development.
(3) In-depth implement benchmarking potential and comprehensively improve comprehensive competitive strength.
(4) Continue to promote process optimization and build a scientific and rational management and control system.
(5) Strengthen party building and ideological work, and create a new situation for enterprise development.
4.   Maintaining current business and completing the required capital arrangements of invested projects under
     construction.
The company will use its own funds and bank loans to meet the funds needed for production operations and technological
transformation.
5. Potential risks
(1)Operational risks:
At present, the demand for steel for machinery, automobiles, home appliances and other related industries will slow down,
and the contradiction between supply and demand is still outstanding, which increases the competition. Countermeasures:
Maintain existing customers, increase new product development, increase investment in technology research and
development, optimize product structure, and actively explore new markets for new customer resources; comprehensively
improve management level, improve management effectiveness, reduce operating costs, and increase profitability.
(2)Foreign trade risks:
International trade protectionism is on the rise, anti-dumping cases are increasing, trade friction and trade barriers are
becoming more and more serious. In addition, the new epidemic Coronavirus situation has spread globally since 2020. If
the foreign epidemic situation cannot be controlled effectively in time, it may cause turmoil in the international steel
market. The risk of the company's foreign trade export business has increased.
Countermeasures: strengthen international market analysis, track changes in international trade policies, reduce the impact
of trade policy mutations on the company's foreign trade; make a plan in trade friction response programs, resolve the
adverse effects of trade friction, and enhance the competitiveness of company products in the international market.
Conduct research on the market dynamics and industrial policies of the importing country, and grasp the dynamic changes
in the importing country's market; find suitable partners, foster superior products, gradually increase the export ratio of
high-end products, strengthen after-sales service, and increase customer satisfaction. Companies will pay close attention
23
                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
to the possible adverse effects of the Coronavirus subsequently, increase investment in technology research and
development, optimize product structure, and actively expand domestic customer resources to offset possible adverse
effects in the foreign trade market.
(3)Environmental protection risks:
China's environmental protection policies and standards are becoming more and more perfect and strict, and the
environmental protection supervision of enterprises is maintaining a strict trend. The tightening of environmental
protection standards will cause the company's production costs to increase. In addition, the increased awareness of
environmental protection among the public has also increased the environmental protection requirements of the company,
which has made the company face greater pressure on environmental protection.
Countermeasures: pay attention to various national environmental protection policies, improve corporate environmental
standards to meet and properly exceed national standards; strengthen the company's self-supervision and inspection of
various sources of pollution, strengthen the environmental awareness of all employees; accelerate the progress of the
construction of the identified environmental protection projects to ensure meet national environmental requirements.
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period, the Company did not receive any research, communication, interviews and other activities.
24
                                                       Bengang Steel Plates Co., Ltd. Annual Report 2019
                                      V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially
cash dividend policy during the reporting period
□ Applicable √ Not applicable
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into
share capital in recent three years (including the reporting period)
1. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to
the parent company of the year 2019 was RMB 555,646,971.4.After adding the retained profit of RMB
1,945,887,269.82 at the beginning of the year, and deducting the actual dividend of RMB 193,768,576.6
from the previous year, the balance of undistributed profit was RMB 2,307,765,664.62.
Profits distribution plan of 2019:
Considering the uncertainty of the Coronavirus on the economy, it is recommended that the company
will not make profit distribution or convert the provident fund into capital in 2019. This plan must be
submitted to the 2019 Annual General Meeting of Shareholders for consideration.
2. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to
the parent company of the year 2018 was RMB 1,036,493,236.07. After adding the retained profit of
RMB 1,103,162,610.35 at the beginning of the year, and deducting the actual dividend of RMB
193,768,576.6 from the previous year, the balance of undistributed profit was RMB 1,945,887,269.82.
Profits distribution plan of 2018: The company will take existing share capital 3,875,371,532 shares as
the base, distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The
company plans to distribute RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB
1,752,118,693.22 will be carried over to next year’s undistributed profits.
3. Profit distribution plan of 2017
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to
the parent company of the year 2017 was RMB 1,600,110,229.77. After adding the retained profit of
RMB -496,947,619.42 at the beginning of the year, the balance of undistributed profit was RMB
1,103,162,610.35.
Profits distribution plan of 2017: The company will take existing share capital 3,875,371,532 shares as
the base, distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The
company plans to distribute RMB193,768,576.60 dividends of ordinary shares, and the remaining RMB
909,394,033.75 will be carried over to next year’s undistributed profits.
25
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2019
Cash dividend distribution in recent three years
                                                                                                                     Unit: Yuan
                                                                              Amount of cash         Ratio of cash
                                                        Ratio in net profit
                                    Net profit                                  dividends in       dividend in other
                  Cash                                  attributable to the                                               Amount of      Proportion
                                attributable to the                             other ways         way in net profit
                dividend                                parent company in                                                    cash         of cash
     Year                      parent company in                               (repurchasing       attributable to the
                (Including                               the consolidated                                                dividends in dividends in
                                the consolidated                                  shares)          parent company in
                  Tax)                                      financial                                                     other ways     other ways
                               financial statements                                                 the consolidated
                                                           statements
                                                                                                       financial
                                                                                                      statements
     2019              0.00         555,646,971.40                   0.00%                  0.00               0.00%              0.00       0.00%
               193,768,576
     2018                         1,036,493,236.07                 18.69%                   0.00               0.00%              0.00       0.00%
                         .60
               193,768,576
     2017                         1,600,110,229.77                 12.11%                   0.00               0.00%              0.00       0.00%
                         .60
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash
dividend distribution was proposed during the reporting period
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting
Period
□ Applicable √ Not applicable
The company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share
capital.
III. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments
by the end of the period made by actual controller, acquirer, director, supervisor, senior
management personnel and other related parties.
√ Applicable □ Not applicable
                                  Commitment           Type of                                     Commitment Commitment
           Commitments                                                        Contents                                                 Performance
                                      party           commitment                                       time              period
Commitment of shares
reform
26
                                                       Bengang Steel Plates Co., Ltd. Annual Report 2019
Commitment made in the
acquisition report or the
equity change report
Commitment made during
asset restructuring
                                                        According to the
                                                        relevant provisions of
                                                        the China Securities
                                                        Regulatory
                                                        Commission, the
                                                        following commitments
                                                        can be made to the
                                                        company’s efforts to fill
                                                        the rewards: During the
                                                        tenure, faithfully and
                                                        diligently perform duties
                                                        and safeguards the
                                                        legitimate rights and
                                                        interests of the company
                                                        and all shareholders,
                                                        including but not limited
                                                        to: 1. Commitment not
                             Company                    to transfer benefits to
Commitment made during
                             directors,   Other         other units or                                            Under normal
initial public offering or                                                           Jan 26th 2016 Dec 9th 2019
                             senior       commitment    individuals without                                       fulfillment
refinancing
                             management                 compensation or unfair
                                                        conditions, and not to
                                                        damage the company’s
                                                        interests in other ways;
                                                        2. Commitment to
                                                        constrain the behavior of
                                                        job consumption; 3.
                                                        Commitment to not use
                                                        company assets to
                                                        engage in investment
                                                        and consumption
                                                        activities unrelated to
                                                        the performance of their
                                                        duties; 4. Commitment
                                                        to the compensation
                                                        system established by
                                                        the board of directors or
                                                        the Remuneration and
27
                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
                                    Appraisal Committee is
                                    linked to the
                                    implementation of the
                                    company's measures to
                                    cover the return; 5. If
                                    the company launches
                                    an equity incentive plan
                                    in the future, the terms
                                    of the exercise of the
                                    equity incentive plan are
                                    linked to the
                                    implementation of the
                                    company's measures to
                                    fill the rewards.
                                    The allocated shares will
     Liaoning                       be locked for 12 months                        12 months
     Provincial                     from the date of the                           from the date
     Transportation Share sales     listing of the new non-                        of the listing   Under normal
                                                                Mar 5th 2018
     Investment      restriction    public offering of                             of the new       fulfillment
     Group Co.,                     shares, and will not be                        non-public
     Ltd.                           transferred during this                        offering
                                    period.
                                    The allocated shares will
                                    be locked for 12 months                        12 months
     CCB Principal                  from the date of the                           from the date
     Asset           Share sales    listing of the new non-                        of the listing   Under normal
                                                                Mar 5th 2018
     Management      restriction    public offering of                             of the new       fulfillment
     Co.,Ltd.                       shares, and will not be                        non-public
                                    transferred during this                        offering
                                    period.
                                    The allocated shares will
                                    be locked for 12 months                        12 months
     Beixin                         from the date of the                           from the date
     Ruifeng Fund Share sales       listing of the new non-                        of the listing   Under normal
                                                                Mar 5th 2018
     Management      restriction    public offering of                             of the new       fulfillment
     Co., Ltd.                      shares, and will not be                        non-public
                                    transferred during this                        offering
                                    period.
                                    The allocated shares will                      12 months
     China Life
                                    be locked for 12 months                        from the date
     AMP Asset       Share sales                                                                    Under normal
                                    from the date of the        Mar   5th   2018   of the listing
     Management      restriction                                                                    fulfillment
                                    listing of the new non-                        of the new
     Co., Ltd.
                                    public offering of                             non-public
28
                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                shares, and will not be                       offering
                                transferred during this
                                period.
                                According            to      the
                                relevant regulations of
                                the     China        Securities
                                Regulatory Commission,
                                all directors and senior
                                management            of     the
                                Company have made the
                                following commitments
                                to the Company ’ s
                                fulfillment of the diluted
                                immediate                  return
                                measures: 1. I promise to
                                perform         my         duties
                                faithfully and diligently,
                                and        safeguard         the
                                legitimate      rights       and
                                interests of the Company
                                and all shareholders . 2. I
                                promise not to deliver
     Company
                                benefits to other units or
     directors,   Other                                                                    Under normal
                                individuals               without May 22, 2019 Long term
     senior       commitment                                                               fulfillment
                                compensation or under
     management
                                unfair conditions, nor to
                                use     other     means        to
                                damage the Company's
                                interests. 3. I promise to
                                restrict    the       position-
                                related         consumption
                                behavior of company
                                directors       and        senior
                                management personnel.
                                4. I promise not to use
                                the Company’s assets to
                                do      investment           and
                                consumption           activities
                                that are not related to the
                                performance           of     my
                                duties. 5. Within the
                                scope           of           my
                                responsibilities             and
                                authority, I promise to
29
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      make every effort to
      promote the company's
      board of directors or the
      remuneration             system
      established         by          the
      remuneration                and
      appraisal committee to
      be    linked          to        the
      implementation of the
      company's
      compensation measures,
      and vote in favor of the
      relevant            proposals
      reviewed         by             the
      company's        board          of
      directors     and      general
      meeting (If I have voting
      rights). 6. If the company
      intends     to   implement
      equity      incentives,           I
      promise to, within my
      own responsibilities and
      jurisdiction, make every
      effort to promote the
      Company ’ s proposed
      equity incentive exercise
      conditions to be linked to
      the      Company           ’     s
      implementation of the
      return measures, and to
      review the Company’s
      board of directors and
      shareholders ’ general
      meetings. and vote in
      favor of the relevant
      proposals reviewed by
      the company's board of
      directors     and      general
      meeting (If I have voting
      rights). 7. If the future
      issuance         of         this
      commitment          and         the
      implementation of the
      Company ’ s public
30
                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
                                   issuance of convertible
                                   corporate         bonds         are
                                   completed, if the China
                                   Securities         Regulatory
                                   Commission                  makes
                                   other     new      regulatory
                                   provisions          on          the
                                   measures         for        filling
                                   returns          and          their
                                   commitments, and the
                                   above            commitments
                                   cannot           meet           the
                                   requirements           of       the
                                   China               Securities
                                   Regulatory Commission
                                   When other regulations
                                   are       stipulated,             a
                                   commitment             will      be
                                   issued      in     accordance
                                   with         the              latest
                                   regulations of the China
                                   Securities         Regulatory
                                   Commission.                    The
                                   company's          controlling
                                   shareholder, Benxi Iron
                                   and Steel (Group) Co.,
                                   Ltd., promised not to
                                   interfere         with          the
                                   company's operation and
                                   management             activities
                                   beyond its authority and
                                   not to infringe on the
                                   Company's interests.
                                   the sales companies of
                                   Bengang International
                                   Trade Co.,Ltd. and
     Benxi Steel &
                                   Bengang Steel plates in
     Iron (Group)
                                   the same region
     Co., Ltd. and   Other                                                                           Under normal
                                   guarantee independent                  July 24,2019   Long term
     Bengang         Commitment                                                                      fulfillment
                                   personnel, independent
     Group Co.,
                                   business, independent
     Ltd.
                                   finance, and
                                   independent assets, and
                                   are guaranteed not to be
31
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      in the same registration
      place or in the same
      office; The filing of
      foreign economic and
      trade operators, taking
      into account the need to
      gradually improve the
      qualification
      certification of raw
      material suppliers,
      customs import and
      export qualification
      certification, etc. In the
      short term, the actual
      conditions and
      capabilities for
      independent import and
      export business are still
      lacking. In order to
      ensure the normal
      business development of
      Benxi Steel Plate, the
      Group agrees that within
      the period of not more
      than 5 years from the
      date of issuance of this
      commitment, the main
      import and export
      business of Benxi Steel
      Plate will still be
      represented by Bengang
      International Trade until
      Bengang Steel Plates
      can be independently
      developed Import and
      export business, and
      during this period,
      Bengang International
      Trade will provide the
      necessary support for
      the establishment and
      improvement of
      Bengang's import and
      export business. In
32
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      addition, the sales
      company under
      Bengang International
      Trade is only
      responsible for selling
      the products of Beiying
      Iron and Steel Group,
      and never sells third-
      party steel products. 3.
      The three sales
      companies under the
      Group, Shanghai
      Bengang Iron and Steel
      Sales Co., Ltd.,
      Shanghai Bengang Iron
      and Steel Materials Co.,
      Ltd., and Guangzhou
      Free Trade Zone
      Bengang Sales Co., Ltd.,
      are currently no longer
      actually engaged in any
      business activities, as
      follows: (1 ) Shanghai
      Bengang Iron & Steel
      Sales Co., Ltd. filed for
      bankruptcy in 2014, and
      the Shanghai Changning
      District People's Court
      issued an announcement
      to appoint Guohao
      Lawyer (Shanghai)
      Office as the bankruptcy
      administrator. After
      communication with the
      bankruptcy
      administrator, it is
      expected that the
      bankruptcy and
      liquidation of Shanghai
      Bengang Iron and Steel
      Sales Co., Ltd. will be
      completed by the end of
      2020. Upon completion
      of the aforementioned
33
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      bankruptcy liquidation
      procedures, the relevant
      procedures for
      cancellation of Shanghai
      Bengang Iron and Steel
      Sales Co., Ltd. will be
      handled immediately.
      (2) Shanghai Bengang
      Iron & Steel Materials
      Co., Ltd. is a holding
      subsidiary of Shanghai
      Bengang Iron & Steel
      Sales Co., Ltd., and its
      business license has
      been revoked. As the
      shareholder Shanghai
      Bengang Iron & Steel
      Sales Co., Ltd. is in the
      process of bankruptcy
      and liquidation,
      Shanghai Bengang Iron
      & Steel Materials Co.,
      Ltd. was unable to
      convene a shareholders'
      meeting to cancel the
      company and establish a
      liquidation group
      according to law.
      Therefore, the
      cancellation has not yet
      been completed. After
      the aforementioned
      bankruptcy and
      liquidation procedures
      of Shanghai Bengang
      Iron & Steel Sales Co.,
      Ltd. are completed, the
      relevant procedures for
      cancellation of Shanghai
      Bengang Iron & Steel
      Materials Co., Ltd. will
      be processed
      immediately. (3)
      Guangzhou Free Trade
34
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      Zone Bengang Sales
      Co., Ltd. has a contract
      arrears dispute with
      Jiedong County Trading
      Corporation. According
      to the Civil Judgment
      ((1999) Ben Jing No.
      116), Guangzhou Free
      Trade Zone Bengang
      Sales Co., Ltd. applied
      to the court to seal 62
      properties under the
      name of Jiedong County
      Trading Corporation.
      However, due to serious
      local protection,
      property rights and other
      factors, the content of
      the judgment has not
      been enforceable. Later,
      after applying again
      from Guangzhou Free
      Trade Zone Bengang
      Sales Co., Ltd., the
      Intermediate People's
      Court of Benxi City,
      Liaoning Province
      issued an execution
      ruling again, and 62
      properties of Jiedong
      County Trading
      Corporation were re-
      sealed. As of February
      4, 2022. Except for
      participating in the
      litigation activities for
      the purpose of realizing
      creditor's rights,
      Guangzhou Free Trade
      Zone Bengang Sales
      Co., Ltd has not carried
      out other business
      activities. After the
      litigation is completed,
35
                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
                                   the relevant procedures
                                   for the cancellation of
                                   Guangzhou Free Trade
                                   Zone Bengang Sales
                                   Co., Ltd. will be handled
                                   immediately.
                                   The Group's horizontal
                                   competition with Benxi
                                   Steel Plates and the
                                   measures and
                                   commitments to solve
                                   the horizontal
                                   competition The Group's
                                   2300mm hot rolling mill
                                   production line
                                   (hereinafter referred to
                                                                                          The company
                                   as 'three hot rolling')
                                                                                          has completed
                                   The main products
                                                                                          the
                                   produced are ordinary
                                                                                          acquisition of
                                   sheet, low carbon steel,
                                                                                          the 2300mm
                                   automobile The use of
                                                                                          hot rolling
                                   steel, container plates,
                                                                                          mill
                                   oil pipeline steel, etc.,
                                                                                          production
                                   constitutes the same
     Benxi Steel &                                                                        line, and the
                     Other         industry competition
     Iron (Group)                                              July 24,2019   Long term   industry
                     Commitment    with Bengang Steel
     Co., Ltd.                                                                            competition
                                   Plates. In order to solve
                                                                                          problem has
                                   the competition problem
                                                                                          been
                                   in the same industry, the
                                                                                          completely
                                   Group signed a lease
                                                                                          resolved.
                                   agreement with
                                                                                          Other
                                   Bengang Steel Plates,
                                                                                          commitments
                                   and Bengang Steel
                                                                                          continue to be
                                   Plates will be leased
                                                                                          fulfilled
                                   using third hot rolling.
                                   During the lease period,
                                   there is no horizontal
                                   competition between the
                                   Group and Bengang
                                   Steel Plates. The Group
                                   promises: The Group
                                   will continue to permit
                                   the use of third hot-
                                   rolled steel sheets
36
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      production line by lease,
      etc., and the Group will
      never use it itself or use
      the third hot-rolled steel
      production line by any
      means such as renting,
      selling, permitting use,
      entrusted operation, etc.
      used by any third party
      other than Bengang
      Steel Plates. Except for
      the above situation,
      there is no other
      industry competition
      between the Group and
      Bengang Steel Plates. 2.
      Other commitments to
      avoid inter-industry
      competition 1. During
      the period when the
      Group is the controlling
      shareholder of Bengang
      Steel Plates, in addition
      to the matters listed in
      Article 1 of this
      Commitment Letter, the
      Group and other
      enterprises controlled by
      the Group other than
      Bengang Steel Plates no
      longer produce or
      develop any products
      that compete or may
      compete with the
      products produced by
      Bengang Steel Plates
      and its subsidiaries at
      home and abroad, and
      do not directly or
      indirectly operate any
      business that competes
      with Bengang Steel
      Plates and its
      subsidiaries. Businesses
37
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      that may constitute
      competition, nor are
      they involved in
      investing in any other
      enterprise that competes
      with or may compete
      with products or
      businesses produced by
      Bengang Steel Plates
      and its subsidiaries. 2. If
      Bengang Steel Plates
      and its subsidiaries
      further expand their
      business scope, the
      Group and other
      enterprises controlled by
      the Group will not
      compete with the
      expanded business of
      Bengang Steel Plates
      and its subsidiaries; they
      may compete with
      Bengang Steel Plates
      and its subsidiaries If
      the company's expanded
      business produces
      competition, it will
      withdraw from the
      competition with
      Bengang Steel Plates as
      follows: (1) Stop
      business that may or
      may compete with
      Bengang Steel Plates
      and its subsidiaries; (2)
      Will compete The
      business is incorporated
      into Bengang Steel
      Plates and its
      subsidiaries in a legal
      and compliant manner;
      (3) Competitive
      business is transferred to
      unrelated third parties.
38
                                 Bengang Steel Plates Co., Ltd. Annual Report 2019
                                  3. If the Group has any
                                  business opportunities to
                                  engage in or participate
                                  in the competition with
                                  Bengang Steel Plates's
                                  operations, the Group
                                  shall immediately notify
                                  Bengang Steel Plates of
                                  the above commercial
                                  opportunities. Within a
                                  reasonable period
                                  specified in the notice,
                                  Bengang Steel Plates If
                                  an affirmative answer is
                                  made to take advantage
                                  of the business
                                  opportunity, the Group
                                  will endeavour to give
                                  the business opportunity
                                  to Bengang Steel Plates
                                  on terms not less than
                                  that provided to any
                                  independent third party.
                                  4. If the above
                                  commitments are
                                  violated, the Group is
                                  willing to bear all the
                                  responsibilities arising
                                  therefrom, and fully
                                  compensate or
                                  compensate for all direct
                                  or indirect losses caused
                                  to Bengang Steel Plates.
                                  5. This letter of
                                  commitment continues
                                  to be effective during
                                  the period of the Group
                                  as the controlling
                                  shareholder of Bengang
                                  Steel Plates and cannot
                                  be changed or
                                  withdrawn
     Benxi Steel & Other          The horizontal                                         The company
                                                              July 24,2019   Long term
     Iron (Group)   Commitment    competition between the                                has completed
39
                 Bengang Steel Plates Co., Ltd. Annual Report 2019
     Co., Ltd.    Group and Bengang                                  the
                  Steel Plates and                                   acquisition of
                  measures and                                       the 1780mm
                  commitments to avoid                               hot rolling
                  horizontal competition                             mill
                  1. Benxi Iron and Steel                            production
                  (Group) Co., Ltd.                                  line, and the
                  (hereinafter referred to                           industry
                  as the “Benxi Iron and                            competition
                  Steel Group”), a                                  problem has
                  subsidiary of the Group,                           been
                  issues issued the                                  completely
                  "Commitment Letter on                              resolved.
                  Solving and Avoiding                               Other
                  Horizontal Competition"                            commitments
                  to solve the existing                              continue to be
                  horizontal competition.                            fulfilled
                  The Group recognizes
                  the commitment letter
                  issued by Benxi Iron
                  and Steel Group and
                  will urge the Benxi Iron
                  and Steel Group to
                  fulfill the relevant
                  commitments. 2. The
                  products produced by
                  the 1780mm hot rolling
                  mill production line of
                  Benxi Beiying Iron and
                  Steel (Group) Co., Ltd.
                  (hereinafter referred to
                  as 'Beiying Iron and
                  Steel Group'), which is a
                  subsidiary of the Group,
                  are the same as or
                  similar to the products
                  of Benxi Steel Sheet and
                  constitute Industry
                  competition. In order to
                  solve the competition in
                  the same industry,
                  Beiying Iron and Steel
                  Group signed a lease
                  agreement with
40
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      Bengang Steel Plates,
      and Bengang Steel
      Plates leased a 1780mm
      hot rolling mill
      production line. During
      the lease period, there is
      no horizontal
      competition between the
      Group and Bengang
      Steel Plates. The Group
      promises that it will
      continue to permit the
      use of the 1780mm hot
      rolling mill production
      line of Bengang Steel
      Sheets by leasing. And it
      will not used by any
      third party other than
      Bengang Steel Sheets.
      In addition to the
      aforementioned hot
      rolling mill production
      lines, the products
      produced by Beiying
      Iron and Steel Group are
      mainly wire rods, rebars,
      and cast pipes. The main
      products are
      construction steels,
      while Bengang Steel
      Platess mainly produce
      household electrical
      appliances and
      automotive plates. The
      product attributes of the
      two Companies,
      Performance,
      specifications, materials,
      and uses are
      substantially different.
      Except for the above
      circumstances, there is
      no other industry
      competition or potential
41
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      industry competition
      between the Group and
      Bengang Steel Plates. 2.
      Other commitments to
      avoid competition in the
      industry 1. During the
      period when the Group
      is the indirect
      controlling shareholder
      of Bengang Steel Plates,
      in addition to the
      matters listed in Article
      1 of this Commitment
      Letter, the Group and
      the companies
      controlled by the Group
      except Bengang Steel
      Plates no longer produce
      or develop any products
      that compete or may
      compete with the
      products produced by
      Bengang Plate and its
      subsidiaries in China
      and abroad. It may not
      be a business that may
      constitute competition,
      nor will it participate in
      investing in any other
      enterprise that competes
      with or may compete
      with the products or
      businesses produced by
      Bengang Plate and its
      subsidiaries. 2. If
      Bengang Steel Plates
      and its subsidiaries
      further expand their
      business scope, the
      Group and other
      enterprises controlled by
      the Group will not
      compete with the
      expanded business of
42
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      Bengang Steel Plates
      and its subsidiaries; they
      may compete with
      Bengang Steel Plates
      and its subsidiaries If
      the company's expanded
      business produces
      competition, it will
      withdraw from the
      competition with
      Bengang Steel Plates as
      follows: (1) Stop
      business that may or
      may compete with
      Bengang Steel Plates
      and its subsidiaries; (2)
      Will compete The
      business is incorporated
      into Bengang Steel
      Plates and its
      subsidiaries in a legal
      and compliant manner;
      (3) Competitive
      business is transferred to
      unrelated third parties.
      3. If the Group has any
      business opportunities to
      engage in or participate
      in the competition with
      Bengang Steel Plates's
      operation and operation,
      the Group shall
      immediately notify
      Bengang Steel Plates of
      the above commercial
      opportunities. If an
      affirmative answer is
      made to take advantage
      of the business
      opportunity, the Group
      will endeavour to give
      the business opportunity
      to Bengang Steel Plates
      on terms that are not
43
                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
                                   worse than those
                                   provided to or any
                                   independent third party.
                                   4. If the above
                                   commitments are
                                   violated, the Group is
                                   willing to bear all the
                                   responsibilities arising
                                   therefrom, and fully
                                   compensate or
                                   compensate for all direct
                                   or indirect losses caused
                                   to Bengang Steel Plates.
                                   5. This letter of
                                   commitment continues
                                   to be effective during
                                   the period of the Group
                                   as the indirect
                                   controlling shareholder
                                   of Benxi Steel Plates
                                   and cannot be changed
                                   or withdrawn
                                   In order to regulate and
                                   reduce the Company ’s
                                   transactions            with
                                   controlling shareholders
                                   and other related parties,
                                   and      to   protect     the
                                   interests of the Company
                                   and small and medium
     Benxi Steel &                 shareholders, Benxi Iron
     Iron (Group)                  and Steel (Group) Co.,
     Co., Ltd. and   Other         Ltd. and Bengang Group                                     Under normal
                                                                   July 24,2019   Long term
     Bengang         Commitment    Co., Ltd. have issued the                                  fulfillment
     Group Co.,                    following commitments:
     Ltd.                          "Benxi Iron and Steel
                                   (Group) Co., Ltd. and
                                   Bengang       Group     Co.,
                                   Ltd.           (hereinafter
                                   collectively referred to
                                   as the "Group"), as a
                                   direct          controlling
                                   shareholder       and      an
                                   indirect        controlling
44
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      shareholder of Bengang
      Steel Platess Co., Ltd.
      (hereinafter referred to
      as      "Bengang        Steel
      Plates"), in order to
      protect the interests of
      Bengang Steel Plates and
      other    shareholders      of
      Bengang Steel Plates,
      regulate     The     Group's
      related transaction with
      Bengang      Steel     Plates
      hereby promises: 1. The
      Group will fully respect
      the independent legal
      person status of Bengang
      Steel Plates, ensure the
      independent         operation
      and            independent
      decision-making            of
      Bengang Steel Plates,
      ensure the independence
      of Bengang Steel Plates's
      business, asset integrity
      and                 personnel
      Independence             and
      financial independence
      to avoid and reduce
      unnecessary           related
      transactions; the Group
      will     strictly     control
      related transactions with
      Bengang Steel Plates and
      its subsidiaries. 2. The
      Group        and        other
      controlled      companies
      promise not to use loans
      or         occupy          or
      misappropriate the funds
      of Bengang Steel Plates
      and its subsidiaries to
      repay debts, substitute
      funds or otherwise, nor
      We ask Bengang Steel
45
     Bengang Steel Plates Co., Ltd. Annual Report 2019
      Plates           and          its
      subsidiaries to provide
      illegal guarantees for the
      Group           and        other
      companies         under       its
      control. 3. The Group
      and      other     controlled
      companies and Bengang
      Steel          Plates       will
      minimize                 related
      transactions. It is indeed
      necessary                   and
      unavoidable to carry out
      in     the     related     party
      transactions,            strictly
      implement the decision-
      making                authority,
      decision-making
      procedures,        avoidance
      system          and        other
      contents stipulated in
      Bengang's "Articles of
      Association" and related
      party             transaction
      decision-making system,
      give full play to the role
      of       the      board       of
      supervisors                 and
      independent           directors,
      and earnestly fulfill the
      obligation                    of
      information        disclosure
      To           ensure         that
      transactions                 are
      conducted in accordance
      with the open, fair, and
      fair principles of market
      transactions and normal
      commercial terms, the
      Group           and        other
      companies under control
      will not require or accept
      Bengang Steel Sheets to
      give              preferential
46
                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                treatment to third parties
                                                in     any    fair        market
                                                transaction Conditions to
                                                protect                    other
                                                shareholders of Benxi
                                                Steel Plates and the
                                                interests of Benxi Steel
                                                Plates from damage. 4.
                                                The Group guarantees
                                                that         the          above
                                                commitments                  are
                                                continuously         effective
                                                and irrevocable as long
                                                as Bengang Steel Plates
                                                is listed on the domestic
                                                stock exchange and the
                                                Group acts as its direct
                                                and indirect controlling
                                                shareholder.         If     any
                                                violation of the above
                                                commitments occurs, the
                                                Group therefore bear all
                                                the losses caused to
                                                Bengang Steel Plates.
Stock option incentive
commitment
Other commitments to the
company's minority
shareholders
Whether Commitment
                              Yes
fulfilled on time or not
2. The Company made illustrations that there are assets or projects which meet the original
profit forecast and the reasons when there are assets or projects profit forecast of the
Company and the reporting period is still in the forecast period
□ Applicable √ Not applicable
47
                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling
Shareholder and Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If
Applicable) on the Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and
Measurement Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
          (1) Implementation of “Notice of the Ministry of Finance on the revision of the format for
               the issuance of the financial statements of the general enterprise for the year 2019” and
               “Notice on the revision of the format for the issuance of the consolidated financial
               statements for the year 2019”
              Ministry of Finance issued “Notice of the Ministry of Finance on the revision of the format for the
              issuance of the financial statements of the general enterprise for the year 2019” (Cai-Kuai 2019 No.6)
              on 30 April 2019,and “Notice on the revision of the format for the issuance of the consolidated
              financial statements for the year 2019” (Cai-Kuai 2019 No.16) which revised the format of financial
              statement for the general enterprise.
            The following accounting policy changes have been approved by the company's board of directors and
            board of supervisors.
            The major impact of the implementation of the above regulations are as follows:
48
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
     Change of accounting                                  Affected items and amount
       policy content and
                                 Consolidated Financial statement          Parent company financial statement
             reason
                                                                          “Notes receivable and accounts
                              “Notes receivable and accounts             receivable” splits into “Notes
     In the balance sheet,
                              receivable” splits into “Notes            receivable” and “Accounts
     “Notes receivable and
                              receivables” and “Accounts                receivable”, the ending balance of
     accounts receivable”
                              receivables”,   the ending balance of      last year of “Notes receivables” is
     splits into “Notes
                              last year   of “Notes receivables” is     RMB 3,356,020,598.89, the ending
     receivables” and
                              RMB 3,580,145,843.38, and the ending        balance of last year of “Accounts
     “Accounts
                              balance of last year of “Accounts          receivables” is RMB
     receivables”; “Notes
                              receivables” is RMB 639,482,481.45;       409,553,059.27;
     payable and accounts
                              “Notes payable and accounts payable”      “Notes payable and accounts
     payable” splits into
                              splits into “Notes payable” and           payable” splits into “Notes payable”
     “Notes payable” and
                              “Accounts payable”, the ending balance    and “Accounts payable”; the ending
     “Accounts payable”;
                              of last year of “Notes payable” is RMB    balance of last year of “Notes
     the comparative data
                              10,013,192,014.02, the ending balance       payable” is RMB 9,213,748,427.22,
     is adjusted
                              of last year of “Accounts payable” is     the ending balance of last year of
     accordingly.
                              RMB 5,522,042,811.65.                       "Accounts payable" is RMB
                                                                          5,940,816,426.48.
     (2) Implementation of “Accounting Standards for Business Enterprises No.22-Recognition
         and Measurement of Financial Instruments”, “Accounting Standards for Business
         Enterprises No.23-Transfer of Financial Assets”, “Accounting Standards for Business
         Enterprises No.24-Hedging Accounting”, and “Accounting Standards for Business
         Enterprises No.37 - Presentation of Financial Instruments” (2017 revision).
         Ministry of Finance revised “Accounting Standards for Business Enterprises No.22-
         Recognitionand Measurement of Financial Instruments”, “Accounting Standards for
         Business Enterprises No.23-Transfer of Financial Assets”, “Accounting Standards for
         Business Enterprises No.24-Hedging Accounting”, and “Accounting Standards for
         Business Enterprises        No.37 - Presentation of Financial Instruments” in 2017, which
         stipulates financial instruments that have not been derecognised on the date of initial
         implementation, they shall be adjusted retrospectively, if the previous recognition and
         measurement are inconsistent with the requirements of the revised standard. No adjustment
         is required, if the previous comparative financial statements are inconsistent with the
         requirements of the revised standard. Adjustment is required for retained earnings and
         other comprehensive income at the beginning of the year due to cumulative impact of
         retroactive adjustments.
       The following accounting policy changes have been approved by the company's board of. directors and
49
                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
          board of supervisors.
           Based on adjusted ending balance of previous year in accordance with “Cai-Kuai 2019 No.6” and “Cai-
           Kuai 2019 No.16”, the major impact of the implementation of the above standards are as follows:
          Change of accounting                                   Affected items and amount
      policy content and reason                   Consolidated                              Parent company
                                       The    beginning      balance    of
     (1) Non-tradable available-
                                       available-for-sale financial assets   The beginning balance of available-for-
     for-sale equity instrument
                                       decrease         by             RMB   sale financial assets decrease by RMB
     investments are designated
                                       1,041,824,829.00.                     1,041,824,829.00.
     as      "financial       assets
                                       The beginning balance of other        The beginning balance of other equity
     measured     at   fair   value
                                       equity instrument investment:         instrument investment: increase by RMB
     through                  other
                                       increase         by             RMB   1,041,824,829.00.
     comprehensive income"
                                       1,041,824,829.00.
     Reclassify part of                Notes Receivable: decrease by         Notes Receivable: decreases by RMB
     “Accounts receivables” to       RMB 3,580,145,843.38 at the           3,356,020,598.89 at the beginning of the
     “Financial assets at fair        beginning of the year.                year.
     value through other               Accounts receivable financing:        Accounts receivable financing: increases
     comprehensive income              increases RMB 3,580,145,843.38        RMB 3,356,020,598.89 at the beginning
     (debt instruments)”              at the beginning of the year.         of the year.
50
                                                                                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
     Based on adjusted ending balance of previous year according to Cai-Kuai 2019 No. 6 and Cai-Kuai No.16, the financial assets and liabilities recognised and measured before and after the
     amendment are compared as follows:
     Consolidated:
                                                  Old Financial Instrument Standards                                                            New Financial Instrument Standards
         Items                                       Measurement Method                  Book value          Items                         Measurement Method                        Book value
         Cash at bank and on hand                    Amortized cost                      16,567,471,755.77   Cash at bank and on hand      Amortized cost                            16,567,471,755.77
         Financial assets at fair value through                                                              Financial assets held for
                                                     Fair value through profit or loss                                                     Fair value through profit or loss
         profit or loss                                                                                      trading
         Derivative financial assets                 Fair value through profit or loss                       Derivative financial assets   Fair value through profit or loss
                                                                                                             Notes receivable              Amortized cost
         Notes receivable                            Amortized cost                      3,580,145,843.38    Accounts Receivable           Fair value through other comprehensive
                                                                                                                                                                                     3,580,145,843.38
                                                                                                             financing                     income
                                                                                                             Accounts receivable           Amortized cost                            639,482,481.45
         Accounts receivable                         Amortized cost                      639,482,481.45                                    Fair value through other comprehensive
                                                                                                             Receivables financing
                                                                                                                                           income
         Other receivables                           Amortized cost                      202,763,964.98      Other receivable              Amortized cost                            202,763,964.98
         Held to maturity investments                                                                        Debt investment (Including
                                                     Amortized cost                                                                        Amortized cost
         (Including other current assets)                                                                    other current assets)
         Available for sale financial assets         Fair value through other                                Debt investment (Including    Amortized cost
         (Including other current assets)            comprehensive income(Debt                              other current assets)
51
                                                                                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
                                           Old Financial Instrument Standards                                                              New Financial Instrument Standards
                                              instruments)                                          Other debt investment
                                                                                                                                      Fair value through other comprehensive
                                                                                                     (Including other current
                                                                                                                                      income
                                                                                                     assets)
                                              Fair value through other                               Financial assets held for
                                              comprehensive income                                   trading
                                                                                                                                      Fair value through profit or loss
                                              (Equity instruments)
                                                                                                     Other non-current financial
                                                                                                     assets
                                                                                                     Other equity instruments         Fair value through other comprehensive
                                                                                                     investment                       income
                                                                                                     Financial assets held for
                                                                                                     trading
                                                                                                                                      Fair value through profit or loss
                                                                                                     Other non-current financial
                                              Cost (Equity instruments)           1,041,824,829.00
                                                                                                     assets
                                                                                                     Other equity instruments         Fair value through other comprehensive
                                                                                                                                                                                1,041,824,829.00
                                                                                                     investment                       income
                                              Amortized cost                                         Long-term account                Amortized cost
     Long-term account receivable
                                                                                                     receivable
     Financial liabilities at fair value                                                             Financial liabilities held for
                                              Fair value through profit or loss                                                       Fair value through profit or loss
     through profit or loss                                                                          trading
                                                                                                     Derivative financial
     Derivative financial liabilities         Fair value through profit or loss                                                       Fair value through profit or loss
                                                                                                     liabilities
52
                                                                                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
     Parent company
                                         Old Financial Instrument Standards                                                                   New Financial Instrument Standards
     Items                              Measurement Method                  Book value                    Items                                Measurement Method                  Book value
     Cash at bank and on hand           Amortized cost                      15,536,305,375.00             Cash at bank and on hand             Amortized cost                      15,536,305,375.00
     Financial assets at fair value
                                        Fair value through profit or loss                                 Financial assets held for trading    Fair value through profit or loss
     through profit or loss
     Derivative financial assets        Fair value through profit or loss                                 Derivative financial assets          Fair value through profit or loss
                                                                                                          Notes receivable                     Amortized cost
     Notes receivable                   Amortized cost                      3,356,020,598.89                                                   Fair value through other
                                                                                                          Accounts receivable financing                                            3,356,020,598.89
                                                                                                                                               comprehensive income
                                                                                                          Accounts receivable                  Amortized cost                      409,553,059.27
     Accounts receivable                Amortized cost                                   409,553,059.27                                        Fair value through other
                                                                                                          Accounts receivable financing
                                                                                                                                               comprehensive income
     Other receivables                  Amortized cost                      235,037,391.46                Other receivables                    Amortized cost                      235,037,391.46
     Held to maturity investments                                                                         Debt investment (Including other
                                        Amortized cost                                                                                         Amortized cost
     (Including other current assets)                                                                     current assets)
     Available for sale financial       Fair value through other                                          Debt investment (Including other     Amortized cost
53
                                                                                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
                                         Old Financial Instrument Standards                                                             New Financial Instrument Standards
     assets (Including other current    comprehensive income(Debt                             current assets)
     assets)                            instruments)
                                                                                               Other debt investment (Including          Fair    value     through      other
                                                                                               other current assets)                     comprehensive income
                                        Fair value through other                               Financial assets held for trading
                                                                                                                                         Fair value through profit or loss
                                        comprehensive income (Equity
                                                                                               Other non-current financial assets
                                        instruments )
                                                                                               Other equity instruments investment       Fair    value     through      other
                                                                                                                                         comprehensive income
                                        Cost (Equity instruments)                              Financial assets held for trading
                                                                                                                                         Fair value through profit or loss
                                                                                               Other non-current financial assets
                                                                            1,041,624,829.00
                                                                                               Other equity instruments investment       Fair    value     through      other
                                                                                                                                                                                1,041,624,829.00
                                                                                                                                         comprehensive income
     Long-term account receivable       Amortized cost                                         Long-term account receivable              Amortized cost
     Financial liabilities at fair
                                        Fair value through profit or loss                      Financial liabilities held for trading    Fair value through profit or loss
     value through profit or loss
     Derivative financial liabilities   Fair value through profit or loss                      Derivative financial liabilities          Fair value through profit or loss
54
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
     (3) Implementation of “Accounting Standards for Business Enterprises No. 7-Non-Monetary Assets Exchange”
          (2019 Revision)
          Ministry of Finance issued “Accounting Standards for Business Enterprises No. 7-Non-Monetary Assets
          Exchange” (Revised 2019) (Caikuai [2019] No. 8) on May 9, 2019, and came into effect on June 10, 2019.
          For non-monetary assets exchange occurred from January 1, 2019 to the effective date, the adjustment
          shall be made accordingly. For non-monetary asset exchanges occurred before January 1, 2019,
          retrospective adjustments are not required. The implementation of the above standards by the company
          has no significant impact for the reporting period.
     (4) Implementation of “Accounting Standards for Business Enterprises No. 12-Debt Restructuring” (2019
          Revision)
          Ministry of Finance issued “Accounting Standards for Business Enterprises No. 12-Debt Restructuring”
          2019 Revision) (Caikuai [2019] No. 9) on June 17, 2019, and came into effect on June 17, 2019. For debt
          restructuring occurred from January 1, 2019 to the effective date, the adjustment shall be made accordingly.
          For debt restructuring occurred before January 1, 2019, retrospective adjustments are not required. The
          implementation of the above standards by the company has no significant impact for the reporting period.
Ⅶ. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There is no change of the consolidation scope during the reporting period.
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm                  BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (RMB 10
                                                                                                                               280
thousand)
Service life of domestic accountant’s firm providing
                                                                                                                                12
audit service
Name of CPAs from the domestic accountant’s firm                                                                Wu Xue, Li Guiying
Service life of domestic accountants’ providing audit
                                                                                                                                 5
service
Name of the overseas accountant’s firm (if any)                                                                              None
55
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
Payment to overseas accountant’s firm (RMB 10
                                                                                                                                  0
thousand) (if any)
Service life of overseas accountant’s firm providing
                                                                                                                              None
audit service (if any)
Name of CPAs from the overseas accountant’s firm
                                                                                                                              None
(if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal control auditing at RMB
600 thousand.
During the year, due to the issue of convertible corporate bonds in this year, the company hired Guotai Junan Securities Co., Ltd. as
the sponsor, and has not yet paid the fee.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no implementation situation of stock incentive plan of the Company, employee stock ownership plan or other
employee incentive measures during the reporting period.
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
56
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
                                                                                                  Execute
Benxi                Purchas                Relate
                                                                                                  accordi
Steel & Parent       e of     Accounts On   d
                                                   27,611.                                        ng to              2019.04
Iron      Compan     goods payable agreeme agree                       0.56%    50,000 No                 No
                                                       81                                         the                .19
(Group) y            and      for repair nt ment
                                                                                                  agreeme
Co., Ltd.            services               price
                                                                                                  nt
Bengang
                                                                                                  Execute
Cold-                Purchas                     Relate
                                                                                                  accordi
rolled    Same       e of                On      d
                                                                                                  ng to              2019.04
Stainless controll   goods Products      agreeme agree       171.87    0.00%      1,000 No                Yes
                                                                                                  the                .19
Steel     er         and                 nt      ment
                                                                                                  agreeme
Dandong              services                    price
                                                                                                  nt
Co., Ltd.
Benxi                                                                                             Execute
                     Purchas                       Relate
Steel &                                                                                           accordi
          Same       e of             On           d
Iron                                                                                              ng to              2019.04
          controll   goods Labor cost agreeme      agree     864.66    0.02%            No                No
(Group)                                                                                           the                .19
          er         and              nt           ment
Mining                                                                                            agreeme
                     services                      price
Co., Ltd.                                                                                         nt
Benxi                           Raw                                                               Execute
                     Purchas                       Relate
Steel &                         material                                                          accordi
          Same       e of                On        d
Iron                            and                       466,510                                 ng to              2019.04
          controll   goods               agreeme   agree               9.48% 500,000 No                   Yes
(Group)                         suppleme                       .9                                 the                .19
          er         and                 nt        ment
Mining                          ntary                                                             agreeme
                     services                      price
Co., Ltd.                       material                                                          nt
Benxi                                                                                             Execute
                     Purchas                     Relate
Steel &                                                                                           accordi
          Same       e of                On      d
Iron                                                    1,318.1                                   ng to              2019.04
          controll   goods Freight       agreeme agree                 0.03%            No                Yes
(Group)                                                       6                                   the                .19
          er         and                 nt      ment
Mining                                                                                            agreeme
                     services                    price
Co., Ltd.                                                                                         nt
Benxi
Steel &                         Raw                                                               Execute
                     Purchas                       Relate
Iron                            material                                                          accordi
          Same       e of                On        d
(Group)                         and                       27,932.                                 ng to              2019.04
          controll   goods               agreeme   agree               0.57%    30,000 No                 No
Metallurg                       suppleme                      17                                  the                .19
          er         and                 nt        ment
y                               ntary                                                             agreeme
                     services                      price
Residues                        material                                                          nt
Co., Ltd.
Benxi
Steel &
Iron                                                                                              Execute
                     Purchas                    Relate
(Group)                                                                                           accordi
          Same       e of               On      d
Steel &                       Processin                                                           ng to              2019.04
          controll   goods              agreeme agree        127.67    0.00%        300 No                No
Iron                          g fee                                                               the                .19
          er         and                nt      ment
Process                                                                                           agreeme
                     services                   price
and                                                                                               nt
Logistics
Co., Ltd.
Benxi     Same     Purchas         On              Relate                                         Execute
Steel &                    Raw                            3,648.9                                                    2019.04
          controll e of            agreeme         d                   0.07%    10,000 No         accordi Yes
Iron      er       goods materials nt              agree        5                                 ng to              .19
(Group)            and                             ment                                           the
57
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                  The
                                                           Amount
                                                                               approve             Means
                                       Pricing Price            of                       Whethe             Availabl
                                                                                   d                  of
                   Type of Content of principle of           related Proporti            r exceed               e
                                                                                trading           paymen                       Index
                   related related        of    relate        party    on of                the              market Date of
 Related Relation                                                               limit of             t of                        of
                    party      party   related     d       transacti similar             approve             price of disclosu
 parties  ship                                                                 transacti           related                     disclos
                  transacti transactio party party           ons (in transacti               d               similar     re
                                                                                ons (in             party                        ure
                     ons        ns    transacti transa         10       ons               limited           transacti
                                                                                   10             transacti
                                         ons    ctions      thousan                        (Y/N)               ons
                                                                               thousan               ons
                                                                d)
                                                                                   d)
Real-               services                      price                                           agreeme
estate                                                                                            nt
Develop
ment Co.,
Ltd.
Benxi
Steel &
                                                                                                 Execute
Iron                Purchas                     Relate
                                                                                                 accordi
(Group) Same        e of                On      d
                             Spare                     11,131.                                   ng to              2019.04
Machiner controll   goods               agreeme agree                 0.23%    25,000 No                 Yes
                             parts                         68                                    the                .19
y        er         and                 nt      ment
                                                                                                 agreeme
Manufact            services                    price
                                                                                                 nt
ure Co.,
Ltd.
Benxi
Steel &
                                                                                                 Execute
Iron                Purchas                     Relate
                                                                                                 accordi
(Group) Same        e of                On      d
                             Repair                    2,922.7                                   ng to              2019.04
Machiner controll   goods               agreeme agree                 0.06%            No                No
                             services                        4                                   the                .19
y        er         and                 nt      ment
                                                                                                 agreeme
Manufact            services                    price
                                                                                                 nt
ure Co.,
Ltd.
Benxi
                                                                                                 Execute
Steel &             Purchas                     Relate
                                                                                                 accordi
Iron      Same      e of                On      d
                             Spare                                                               ng to              2019.04
(Group) controll    goods               agreeme agree       787.21    0.02%    50,000 No                 No
                             parts                                                               the                .19
Construct er        and                 nt      ment
                                                                                                 agreeme
ion Co.,            services                    price
                                                                                                 nt
Ltd.
Benxi
                                                                                                 Execute
Steel &             Purchas                     Relate
                                                                                                 accordi
Iron      Same      e of                On      d
                             Project                   18,016.                                   ng to              2019.04
(Group) controll    goods               agreeme agree                 0.37%            No                No
                             fee                           18                                    the                .19
Construct er        and                 nt      ment
                                                                                                 agreeme
ion Co.,            services                    price
                                                                                                 nt
Ltd.
Benxi
                                                                                                 Execute
Steel &             Purchas                     Relate
                                                                                                 accordi
Iron      Same      e of                On      d
                             Repair                    21,561.                                   ng to              2019.04
(Group) controll    goods               agreeme agree                 0.44%            No                No
                             services                      78                                    the                .19
Construct er        and                 nt      ment
                                                                                                 agreeme
ion Co.,            services                    price
                                                                                                 nt
Ltd.
Benxi
                               Raw                                                               Execute
Steel &             Purchas                       Relate
                               material                                                          accordi
Iron      Same      e of                On        d
                               and                                                               ng to              2019.04
(Group) controll    goods               agreeme   agree      236.1    0.00%            No                Yes
                               suppleme                                                          the                .19
Construct er        and                 nt        ment
                               ntary                                                             agreeme
ion Co.,            services                      price
                               material                                                          nt
Ltd.
Benxi       Same     Purchas Freight    On      Relate                                           Execute No         2019.04
                                                            502.47    0.01%            No
Steel &     controll e of               agreeme d                                                accordi            .19
58
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                    The
                                                             Amount
                                                                                 approve             Means
                                       Pricing Price              of                       Whethe             Availabl
                                                                                     d                  of
                   Type of Content of principle of             related Proporti            r exceed               e
                                                                                  trading           paymen                       Index
                   related related        of    relate          party    on of                the              market Date of
 Related Relation                                                                 limit of             t of                        of
                    party      party   related     d         transacti similar             approve             price of disclosu
 parties  ship                                                                   transacti           related                     disclos
                  transacti transactio party party             ons (in transacti               d               similar     re
                                                                                  ons (in             party                        ure
                     ons        ns    transacti transa           10       ons               limited           transacti
                                                                                     10             transacti
                                         ons    ctions        thousan                        (Y/N)               ons
                                                                                 thousan               ons
                                                                  d)
                                                                                     d)
Iron      er          goods               nt        agree                                           ng to
(Group)               and                           ment                                            the
Construct             services                      price                                           agreeme
ion Co.,                                                                                            nt
Ltd.
Benxi
Steel &                          Raw                                                               Execute
                      Purchas                       Relate
Iron                             material                                                          accordi
           Same       e of                On        d
(Group)                          and                                                               ng to              2019.04
           controll   goods               agreeme   agree     19,118    0.39%    30,000 No                 Yes
Industrial                       suppleme                                                          the                .19
           er         and                 nt        ment
Develop                          ntary                                                             agreeme
                      services                      price
ment Co.,                        material                                                          nt
Ltd.
Benxi
Steel &                                                                                            Execute
                      Purchas                     Relate
Iron                                                                                               accordi
           Same       e of                On      d
(Group)                        Repair                    2,157.6                                   ng to              2019.04
           controll   goods               agreeme agree                 0.04%            No                No
Industrial                     services                        5                                   the                .19
           er         and                 nt      ment
Develop                                                                                            agreeme
                      services                    price
ment Co.,                                                                                          nt
Ltd.
Benxi
Steel &                                                                                            Execute
                      Purchas                     Relate
Iron                                                                                               accordi
           Same       e of                On      d
(Group)                                                                                            ng to              2019.04
           controll   goods Freight       agreeme agree        446.8    0.01%            No                No
Industrial                                                                                         the                .19
           er         and                 nt      ment
Develop                                                                                            agreeme
                      services                    price
ment Co.,                                                                                          nt
Ltd.
Benxi
Steel &                                                                                            Execute
                      Purchas                     Relate
Iron                                                                                               accordi
           Same       e of                On      d
(Group)                        Project                                                             ng to              2019.04
           controll   goods               agreeme agree          235    0.00%            No                No
Industrial                     fee                                                                 the                .19
           er         and                 nt      ment
Develop                                                                                            agreeme
                      services                    price
ment Co.,                                                                                          nt
Ltd.
Benxi                          Raw
Steel &                        material                                                            Execute
                      Purchas                       Relate
Iron                           &                                                                   accordi
          Same        e of               On         d
(Group)                        suppleme                                                            ng to              2019.04
          controll    goods              agreeme    agree     256.76    0.01%    28,000 No                 Yes
Construct                      ntary                                                               the                .19
          er          and                nt         ment
ion and                        materials                                                           agreeme
                      services                      price
Repairing                      & spare                                                             nt
Co., Ltd.                      parts
Benxi
Steel &                                                                                            Execute
                      Purchas                     Relate
Iron                                                                                               accordi
          Same        e of                On      d
(Group)                        Project                   4,998.3                                   ng to              2019.04
          controll    goods               agreeme agree                 0.10%            No                No
Construct                      fee                             4                                   the                .19
          er          and                 nt      ment
ion and                                                                                            agreeme
                      services                    price
Repairing                                                                                          nt
Co., Ltd.
59
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
Benxi
Steel &                                                                                           Execute
                     Purchas                Relate
Iron                                                                                              accordi
          Same       e of     Accounts On   d
(Group)                                            19,506.                                        ng to              2019.04
          controll   goods payable agreeme agree                       0.40%            No                No
Construct                                              98                                         the                .19
          er         and      for repair nt ment
ion and                                                                                           agreeme
                     services               price
Repairing                                                                                         nt
Co., Ltd.
                                Raw                                                               Execute
                    Purchas                        Relate
Bengang                         material                                                          accordi
           Same     e of                 On        d
Electronic                      and                                                               ng to              2019.04
           controll goods                agreeme   agree     13,763    0.28%    20,000 No                 Yes
s and Gas                       suppleme                                                          the                .19
           er       and                  nt        ment
Co., Ltd.                       ntary                                                             agreeme
                    services                       price
                                material                                                          nt
                                                                                                  Execute
                    Purchas                      Relate
Bengang                                                                                           accordi
           Same     e of                 On      d
Electronic                   Repair                     1,879.3                                   ng to              2019.04
           controll goods                agreeme agree                 0.04%            No                No
s and Gas                    services                         6                                   the                .19
           er       and                  nt      ment
Co., Ltd.                                                                                         agreeme
                    services                     price
                                                                                                  nt
Benxi
                                                                                                  Execute
High-tech            Purchas                     Relate
                                                                                                  accordi
Drilling Same        e of                On      d
                              Spare                                                               ng to              2019.04
Tools     controll   goods               agreeme agree        26.63    0.00%        500 No                Yes
                              parts                                                               the                .19
Manufact er          and                 nt      ment
                                                                                                  agreeme
ure Co.,             services                    price
                                                                                                  nt
Ltd.
Benxi                                                                                             Execute
                     Purchas                     Relate
New                                                                                               accordi
          Same       e of                On      d
Career                        Repair                                                              ng to              2019.04
          controll   goods               agreeme agree       487.81    0.01%      1,200 No                No
Develop                       services                                                            the                .19
          er         and                 nt      ment
ment Co.,                                                                                         agreeme
                     services                    price
Ltd.                                                                                              nt
                                Raw
Benxi                                                                                             Execute
                     Purchas    material           Relate
New                                                                                               accordi
          Same       e of       and      On        d
Career                                                                                            ng to              2019.04
          controll   goods      suppleme agreeme   agree     907.16    0.02%            No                No
Develop                                                                                           the                .19
          er         and        ntary    nt        ment
ment Co.,                                                                                         agreeme
                     services   material           price
Ltd.                                                                                              nt
                                and food
                                                                                                  Execute
Liaoning             Purchas                     Relate
                                                                                                  accordi
Metallurg Same       e of                On      d
                              Spare                     1,202.0                                   ng to              2019.04
y         controll   goods               agreeme agree                 0.02%      1,500 No                Yes
                              parts                           1                                   the                .19
Technicia er         and                 nt      ment
                                                                                                  agreeme
n College            services                    price
                                                                                                  nt
Liaoning                                                                                                             2019.04
                                                                                                  Execute
Metallurg            Purchas                     Relate                                                              .19
                                                                                                  accordi
ical      Same       e of                On      d
                              Project                                                             ng to
Vocationa controll   goods               agreeme agree                 0.00%      1,000 No                Yes
                              fee                                                                 the
l and     er         and                 nt      ment
                                                                                                  agreeme
Technical            services                    price
                                                                                                  nt
College
60
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                  The
                                                           Amount
                                                                               approve             Means
                                       Pricing Price            of                       Whethe             Availabl
                                                                                   d                  of
                   Type of Content of principle of           related Proporti            r exceed               e
                                                                                trading           paymen                       Index
                   related related        of    relate        party    on of                the              market Date of
 Related Relation                                                               limit of             t of                        of
                    party      party   related     d       transacti similar             approve             price of disclosu
 parties  ship                                                                 transacti           related                     disclos
                  transacti transactio party party           ons (in transacti               d               similar     re
                                                                                ons (in             party                        ure
                     ons        ns    transacti transa         10       ons               limited           transacti
                                                                                   10             transacti
                                         ons    ctions      thousan                        (Y/N)               ons
                                                                               thousan               ons
                                                                d)
                                                                                   d)
Liaoning                                                                                                            2019.04
                                                                                                 Execute
Metallurg             Purchas                     Relate                                                            .19
                                                                                                 accordi
ical      Same        e of                On      d
                               Repair                                                            ng to
Vocationa controll    goods               agreeme agree      580.5    0.01%            No                No
                               services                                                          the
l and     er          and                 nt      ment
                                                                                                 agreeme
Technical             services                    price
                                                                                                 nt
College
Bengang                                                                                                             2019.04
Group                                                                                            Execute            .19
                      Purchas                     Relate
Internatio                                                                                       accordi
           Same       e of                On      d
nal                            Agency                    6,309.7                                 ng to
           controll   goods               agreeme agree               0.13%    25,000 No                 No
Economic                       fee                             3                                 the
           er         and                 nt      ment
and                                                                                              agreeme
                      services                    price
Trading                                                                                          nt
Co., Ltd.
Bengang                                                                                                             2019.04
Group                                                                                            Execute            .19
                      Purchas                       Relate
Internatio                                                                                       accordi
           Same       e of                On        d
nal                            Port                                                              ng to
           controll   goods               agreeme   agree 7,099.2     0.14%            No                No
Economic                       surcharges                                                        the
           er         and                 nt        ment
and                                                                                              agreeme
                      services                      price
Trading                                                                                          nt
Co., Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                                             .19
                                                                                                 Execute
Iron                  Purchas                     Relate
                                                                                                 accordi
(Group) Same          e of                On      d
                               Spare                                                             ng to
Informati controll    goods               agreeme agree     785.28    0.02%    10,000 No                 Yes
                               parts                                                             the
on and    er          and                 nt      ment
                                                                                                 agreeme
Automati              services                    price
                                                                                                 nt
c Tech
Co., Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                                             .19
                                                                                                 Execute
Iron                  Purchas                     Relate
                                                                                                 accordi
(Group) Same          e of                On      d
                               Project                   1,942.5                                 ng to
Informati controll    goods               agreeme agree               0.04%            No                No
                               fee                             2                                 the
on and    er          and                 nt      ment
                                                                                                 agreeme
Automati              services                    price
                                                                                                 nt
c Tech
Co., Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                                             .19
                                                                                                 Execute
Iron                  Purchas                     Relate
                                                                                                 accordi
(Group) Same          e of                On      d
                               Repair                    3,483.2                                 ng to
Informati controll    goods               agreeme agree               0.07%            No                No
                               services                        4                                 the
on and    er          and                 nt      ment
                                                                                                 agreeme
Automati              services                    price
                                                                                                 nt
c Tech
Co., Ltd.
Benxi      Same     Purchas               On      Relate                                         Execute            2019.04
Steel &                     Heating
           controll e of                  agreeme d         115.25    0.00%        500 No        accordi No         .19
Iron       er       goods costs           nt      agree                                          ng to
(Group)             and                           ment                                           the
61
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
Thermal              services                      price                                           agreeme
Power                                                                                              nt
Develop
ment Co.,
Ltd.
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
                                Raw                                                               Execute
Iron                 Purchas                       Relate
                                material                                                          accordi
(Group) Same         e of                On        d
                                and                                                               ng to
Thermal controll     goods               agreeme   agree      70.93    0.00%            No                Yes
                                suppleme                                                          the
Power     er         and                 nt        ment
                                ntary                                                             agreeme
Develop              services                      price
                                material                                                          nt
ment Co.,
Ltd.
Benxi                                                                                             Execute            2019.04
                     Purchas                     Relate
Steel &                                                                                           accordi            .19
          Same       e of                On      d
Iron                          Design                                                              ng to
          controll   goods               agreeme agree 1,323.4         0.03%      1,000 No                No
(Group)                       fees                                                                the
          er         and                 nt      ment
Designing                                                                                         agreeme
                     services                    price
Institute                                                                                         nt
Benxi                           Raw                                                               Execute            2019.04
                     Purchas                       Relate
Beiying                         material                                                          accordi            .19
          Same       e of                On        d
Steel &                         and                       1,154,3        1,800,0                  ng to
          controll   goods               agreeme   agree          23.46%         No                       Yes
Iron                            suppleme                    78.53            00                   the
          er         and                 nt        ment
(Group)                         ntary                                                             agreeme
                     services                      price
Co., Ltd.                       material                                                          nt
Benxi                                                                                             Execute            2019.04
                     Purchas                       Relate
Beiying                                                                                           accordi            .19
          Same       e of              On          d
Steel &                       Energy &                    54,489.                                 ng to
          controll   goods             agreeme     agree               1.11%            No                No
Iron                          Power                           91                                  the
          er         and               nt          ment
(Group)                                                                                           agreeme
                     services                      price
Co., Ltd.                                                                                         nt
Benxi                                                                                             Execute            2019.04
                     Purchas                     Relate
Beiying                                                                                           accordi            .19
          Same       e of                On      d
Steel &                                                                                           ng to
          controll   goods Freight       agreeme agree       571.46    0.01%            No                No
Iron                                                                                              the
          er         and                 nt      ment
(Group)                                                                                           agreeme
                     services                    price
Co., Ltd.                                                                                         nt
Benxi                                                                                             Execute            2019.04
                     Purchas                       Relate
Beiying                                                                                           accordi            .19
          Same       e of             On           d
Steel &                                                   8,663.2                                 ng to
          controll   goods Labor cost agreeme      agree               0.18%            No                No
Iron                                                            3                                 the
          er         and              nt           ment
(Group)                                                                                           agreeme
                     services                      price
Co., Ltd.                                                                                         nt
Benxi                                                                                             Execute            2019.04
                     Purchas                     Relate
Beiying                                                                                           accordi            .19
          Same       e of                On      d
Steel &                       Spare                     1,308.4                                   ng to
          controll   goods               agreeme agree                 0.03%            No                Yes
Iron                          parts                           5                                   the
          er         and                 nt      ment
(Group)                                                                                           agreeme
                     services                    price
Co., Ltd.                                                                                         nt
Liaoning Same     Purchas Raw      On      Relate 8,758.9                                         Execute            2019.04
Hengtong controll e of    material agreeme d            6
                                                                       0.18%    15,000 No         accordi No         .19
Metallurg er      goods and spare nt       agree                                                  ng to
62
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
ical                  and      parts               ment                                            the
Equipmen              services                     price                                           agreeme
t                                                                                                  nt
Manufact
ure Co.,
Ltd.
Liaoning                                                                                          Execute            2019.04
                      Purchas                      Relate
Hengtai                          Raw                                                              accordi            .19
         Same         e of                 On      d
Heavy                            material                                                         ng to
         controll     goods                agreeme agree     231.09    0.00%            No                Yes
Machiner                         and spare                                                        the
         er           and                  nt      ment
y Co.,                           parts                                                            agreeme
                      services                     price
Ltd.                                                                                              nt
Liaoning                                                                                          Execute            2019.04
                      Purchas                      Relate
Hengtai                                                                                           accordi            .19
         Same         e of     Repair On           d
Heavy                                                     1,930.3                                 ng to
         controll     goods and labor agreeme      agree               0.04%      8,000 No                No
Machiner                                                        5                                 the
         er           and      cost   nt           ment
y Co.,                                                                                            agreeme
                      services                     price
Ltd.                                                                                              nt
                                                                                                  Execute            2019.04
                   Purchas                         Relate
                                                                                                  accordi            .19
Bengang Same       e of     Property On            d
                                                                                                  ng to
Group     controll goods managem agreeme           agree               0.00%            No                No
                                                                                                  the
Co., Ltd. er       and      ent fee  nt            ment
                                                                                                  agreeme
                   services                        price
                                                                                                  nt
                                                                                                  Execute            2019.04
                   Purchas                         Relate
                                                                                                  accordi            .19
Bengang            e of             On             d
          Controll                                        15,507.                                 ng to
Group              goods Labor cost agreeme        agree               0.32%            No                No
          er                                                   9                                  the
Co., Ltd.          and              nt             ment
                                                                                                  agreeme
                   services                        price
                                                                                                  nt
                                                                                                  Execute            2019.04
                                             Relate
Bengang               Sales of                                                                    accordi            .19
           Same                      On      d
Electronic            goods Energy &                                                              ng to
           controll                  agreeme agree            76.74    0.00%        500 No                Yes
s and Gas             and      Power                                                              the
           er                        nt      ment
Co., Ltd.             services                                                                    agreeme
                                             price
                                                                                                  nt
                               Raw                                                                                   2019.04
Benxi                          material                                                           Execute            .19
                                                   Relate
Beiying               Sales of &                                                                  accordi
          Same                           On        d
Steel &               goods suppleme                      500,154                                 ng to
          controll                       agreeme   agree               9.48% 300,000 No                   Yes
Iron                  and      ntary                          .15                                 the
          er                             nt        ment
(Group)               services materials                                                          agreeme
                                                   price
Co., Ltd.                      & spare                                                            nt
                               parts
Benxi                                                                                             Execute            2019.04
                                                  Relate
Beiying               Sales of                                                                    accordi            .19
          Same                            On      d
Steel &               goods                              1,286.5                                  ng to
          controll             Products   agreeme agree                0.02%            No                Yes
Iron                  and                                      9                                  the
          er                              nt      ment
(Group)               services                                                                    agreeme
                                                  price
Co., Ltd.                                                                                         nt
Benxi      Same     Sales of Energy & On      Relate 21,662.                                      Execute            2019.04
Beiying    controll goods             agreeme d                        0.41%            No        accordi No         .19
                             Power                       54
Steel &    er       and               nt      agree                                               ng to
63
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
Iron                 services                      ment                                            the
(Group)                                            price                                           agreeme
Co., Ltd.                                                                                          nt
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
                                                                                                  Execute
Iron                                        Relate
                     Sales of                                                                     accordi
(Group) Same                        On      d
                     goods Energy &                                                               ng to
Real-     controll                  agreeme agree             10.44    0.00%        500 No                No
                     and      Power                                                               the
estate    er                        nt      ment
                     services                                                                     agreeme
Develop                                     price
                                                                                                  nt
ment Co.,
Ltd.
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
Iron                                                                                              Execute
                                            Relate
(Group)              Sales of                                                                     accordi
          Same                      On      d
Steel &              goods Energy &                                                               ng to
          controll                  agreeme agree             36.79    0.00%        500 No                No
Iron                 and      Power                                                               the
          er                        nt      ment
Process              services                                                                     agreeme
                                            price
and                                                                                               nt
Logistics
Co., Ltd.
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
Iron                                                                                              Execute
                                                 Relate
(Group)              Sales of                                                                     accordi
          Same                           On      d
Steel &              goods                                                                        ng to
          controll            Products   agreeme agree        89.25    0.00%            No                Yes
Iron                 and                                                                          the
          er                             nt      ment
Process              services                                                                     agreeme
                                                 price
and                                                                                               nt
Logistics
Co., Ltd.
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
                                                                                                  Execute
Iron                                             Relate
                     Sales of                                                                     accordi
(Group) Same                             On      d
                     goods                                                                        ng to
Machiner controll             Products   agreeme agree       980.32    0.02%      8,000 No                Yes
                     and                                                                          the
y        er                              nt      ment
                     services                                                                     agreeme
Manufact                                         price
                                                                                                  nt
ure Co.,
Ltd.
Benxi                                                                                                                2019.04
Steel &                                                                                                              .19
                                                                                                  Execute
Iron                                        Relate
                     Sales of                                                                     accordi
(Group) Same                        On      d
                     goods Energy &                                                               ng to
Machiner controll                   agreeme agree 2,137.3              0.04%            No                No
                     and      Power                                                               the
y        er                         nt      ment
                     services                                                                     agreeme
Manufact                                    price
                                                                                                  nt
ure Co.,
Ltd.
Benxi                Sales of   Raw                Relate                                         Execute            2019.04
            Same                         On
Steel &              goods      material agreeme   d                                              accordi Yes        .19
            controll                                          641.3    0.01%            No
Iron                 and        &                  agree                                          ng to
            er                           nt
(Group)              services   suppleme           ment                                           the
64
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                  The
                                                           Amount
                                                                               approve             Means
                                       Pricing Price            of                       Whethe             Availabl
                                                                                   d                  of
                   Type of Content of principle of           related Proporti            r exceed               e
                                                                                trading           paymen                       Index
                   related related        of    relate        party    on of                the              market Date of
 Related Relation                                                               limit of             t of                        of
                    party      party   related     d       transacti similar             approve             price of disclosu
 parties  ship                                                                 transacti           related                     disclos
                  transacti transactio party party           ons (in transacti               d               similar     re
                                                                                ons (in             party                        ure
                     ons        ns    transacti transa         10       ons               limited           transacti
                                                                                   10             transacti
                                         ons    ctions      thousan                        (Y/N)               ons
                                                                               thousan               ons
                                                                d)
                                                                                   d)
Machiner                     ntary                price                                           agreeme
y                            materials                                                            nt
Manufact                     & spare
ure Co.,                     parts
Ltd.
Benxi                                                                                                               2019.04
                                                                                                 Execute
Steel &                                     Relate                                                                  .19
                     Sales of                                                                    accordi
Iron      Same                      On      d
                     goods Energy &                                                              ng to
(Group) controll                    agreeme agree            593.8    0.01%    10,000 No                 No
                     and      Power                                                              the
Construct er                        nt      ment
                     services                                                                    agreeme
ion Co.,                                    price
                                                                                                 nt
Ltd.
                              Raw                                                                                   2019.04
Benxi
                              material                                                           Execute            .19
Steel &                                           Relate
                     Sales of &                                                                  accordi
Iron      Same                          On        d
                     goods suppleme                                                              ng to
(Group) controll                        agreeme   agree      5,781    0.11%            No                Yes
                     and      ntary                                                              the
Construct er                            nt        ment
                     services materials                                                          agreeme
ion Co.,                                          price
                              & spare                                                            nt
Ltd.
                              parts
Benxi                                                                                            Execute            2019.04
                                            Relate
Steel &              Sales of                                                                    accordi            .19
          Same                      On      d
Iron                 goods Energy &                64,747.                                       ng to
          controll                  agreeme agree                     1.23% 100,000 No                   No
(Group)              and      Power                    81                                        the
          er                        nt      ment
Mining               services                                                                    agreeme
                                            price
Co., Ltd.                                                                                        nt
                              Raw                                                                                   2019.04
Benxi                         material                                                           Execute            .19
                                                  Relate
Steel &              Sales of &                                                                  accordi
          Same                          On        d
Iron                 goods suppleme                      10,078.                                 ng to
          controll                      agreeme   agree               0.19%            No                Yes
(Group)              and      ntary                          34                                  the
          er                            nt        ment
Mining               services materials                                                          agreeme
                                                  price
Co., Ltd.                     & spare                                                            nt
                              parts
Benxi                                                                                            Execute            2019.04
                                                 Relate
Steel &              Sales of                                                                    accordi            .19
          Same                           On      d
Iron                 goods Freight                      1,031.7                                  ng to
          controll                       agreeme agree                0.02%            No                No
(Group)              and      revenue                         9                                  the
          er                             nt      ment
Mining               services                                                                    agreeme
                                                 price
Co., Ltd.                                                                                        nt
Benxi                                                                                            Execute            2019.04
                                                 Relate
Steel &              Sales of                                                                    accordi            .19
          Same                           On      d
Iron                 goods                                                                       ng to
          controll            Products   agreeme agree      502.82    0.01%            No                Yes
(Group)              and                                                                         the
          er                             nt      ment
Mining               services                                                                    agreeme
                                                 price
Co., Ltd.                                                                                        nt
Benxi                                                                                            Execute            2019.04
Steel &                                    Relate                                                                   .19
                    Sales of                                                                     accordi
Iron       Same                    On      d
                    goods Energy &                2,639.7                                        ng to
(Group)    controll                agreeme agree                      0.05%      8,000 No                No
                    and      Power                      3                                        the
Thermal    er                      nt      ment
                    services                                                                     agreeme
Power                                      price
                                                                                                 nt
Develop
65
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                  The
                                                           Amount
                                                                               approve             Means
                                       Pricing Price            of                       Whethe             Availabl
                                                                                   d                  of
                   Type of Content of principle of           related Proporti            r exceed               e
                                                                                trading           paymen                       Index
                   related related        of    relate        party    on of                the              market Date of
 Related Relation                                                               limit of             t of                        of
                    party      party   related     d       transacti similar             approve             price of disclosu
 parties  ship                                                                 transacti           related                     disclos
                  transacti transactio party party           ons (in transacti               d               similar     re
                                                                                ons (in             party                        ure
                     ons        ns    transacti transa         10       ons               limited           transacti
                                                                                   10             transacti
                                         ons    ctions      thousan                        (Y/N)               ons
                                                                               thousan               ons
                                                                d)
                                                                                   d)
ment Co.,
Ltd.
Benxi
                               Raw
Steel &
                               material                                                          Execute
Iron                                               Relate
                      Sales of &                                                                 accordi
(Group) Same                             On        d
                      goods suppleme                      2,749.2                                ng to              2019.04
Thermal controll                         agreeme   agree              0.05%            No                Yes
                      and      ntary                            1                                the                .19
Power     er                             nt        ment
                      services materials                                                         agreeme
Develop                                            price
                               & spare                                                           nt
ment Co.,
                               parts
Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                                             .19
                                                                                                 Execute
Iron                                              Relate
                      Sales of                                                                   accordi
(Group) Same                              On      d
                      goods Freight                                                              ng to
Thermal controll                          agreeme agree               0.00%            No                No
                      and      revenue                                                           the
Power     er                              nt      ment
                      services                                                                   agreeme
Develop                                           price
                                                                                                 nt
ment Co.,
Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                             Relate
Iron                  Sales of                                                                   accordi
           Same                      On      d
(Group)               goods Energy &                                                             ng to
           controll                  agreeme agree          827.49    0.02%      5,000 No                No
Industrial            and      Power                                                             the
           er                        nt      ment
Develop               services                                                                   agreeme
                                             price
ment Co.,                                                                                        nt
Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                                  Relate
Iron                  Sales of                                                                   accordi
           Same                           On      d
(Group)               goods                                                                      ng to
           controll            Products   agreeme agree               0.00%            No                Yes
Industrial            and                                                                        the
           er                             nt      ment
Develop               services                                                                   agreeme
                                                  price
ment Co.,                                                                                        nt
Ltd.
Benxi                          Raw                                                                                  2019.04
Steel &                        material                                                          Execute            .19
                                                   Relate
Iron                  Sales of &                                                                 accordi
           Same                          On        d
(Group)               goods suppleme                      2,295.9                                ng to
           controll                      agreeme   agree              0.04%            No                Yes
Industrial            and      ntary                            6                                the
           er                            nt        ment
Develop               services materials                                                         agreeme
                                                   price
ment Co.,                      & spare                                                           nt
Ltd.                           parts
Benxi                                                                                                               2019.04
Steel &                                                                                                             .19
                                                                                                 Execute
Iron                                         Relate
                      Sales of                                                                   accordi
(Group) Same                         On      d
                      goods Energy &                                                             ng to
Informati controll                   agreeme agree           15.87    0.00%        300 No                No
                      and      Power                                                             the
on and    er                         nt      ment
                      services                                                                   agreeme
Automati                                     price
                                                                                                 nt
c Tech
Co., Ltd.
66
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                  The
                                                           Amount
                                                                               approve             Means
                                       Pricing Price            of                       Whethe             Availabl
                                                                                   d                  of
                   Type of Content of principle of           related Proporti            r exceed               e
                                                                                trading           paymen                       Index
                   related related        of    relate        party    on of                the              market Date of
 Related Relation                                                               limit of             t of                        of
                    party      party   related     d       transacti similar             approve             price of disclosu
 parties  ship                                                                 transacti           related                     disclos
                  transacti transactio party party           ons (in transacti               d               similar     re
                                                                                ons (in             party                        ure
                     ons        ns    transacti transa         10       ons               limited           transacti
                                                                                   10             transacti
                                         ons    ctions      thousan                        (Y/N)               ons
                                                                               thousan               ons
                                                                d)
                                                                                   d)
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                            Relate
Iron                 Sales of                                                                    accordi
          Same                      On      d
(Group)              goods Energy &                                                              ng to
          controll                  agreeme agree           133.05    0.00%      8,000 No                No
Construct            and      Power                                                              the
          er                        nt      ment
ion and              services                                                                    agreeme
                                            price
Repairing                                                                                        nt
Co., Ltd.
Benxi                         Raw                                                                                   2019.04
Steel &                       material                                                           Execute            .19
                                                  Relate
Iron                 Sales of &                                                                  accordi
          Same                          On        d
(Group)              goods suppleme                                                              ng to
          controll                      agreeme   agree      93.84    0.00%            No                Yes
Construct            and      ntary                                                              the
          er                            nt        ment
ion and              services materials                                                          agreeme
                                                  price
Repairing                     & spare                                                            nt
Co., Ltd.                     parts
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                            Relate
Iron                 Sales of                                                                    accordi
          Same                      On      d
(Group)              goods Energy &                                                              ng to
          controll                  agreeme agree           532.33    0.01%    30,000 No                 No
Metallurg            and      Power                                                              the
          er                        nt      ment
y                    services                                                                    agreeme
                                            price
Residues                                                                                         nt
Co., Ltd.
Benxi                         Raw                                                                                   2019.04
Steel &                       material                                                           Execute            .19
                                                  Relate
Iron                 Sales of &                                                                  accordi
          Same                          On        d
(Group)              goods suppleme                      25,018.                                 ng to
          controll                      agreeme   agree               0.47%            No                Yes
Metallurg            and      ntary                          15                                  the
          er                            nt        ment
y                    services materials                                                          agreeme
                                                  price
Residues                      & spare                                                            nt
Co., Ltd.                     parts
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                                 Relate
Iron                 Sales of                                                                    accordi
          Same                           On      d
(Group)              goods Freight                                                               ng to
          controll                       agreeme agree                0.00%            No                No
Metallurg            and      revenue                                                            the
          er                             nt      ment
y                    services                                                                    agreeme
                                                 price
Residues                                                                                         nt
Co., Ltd.
Benxi                                                                                                               2019.04
Steel &                                                                                          Execute            .19
                                                 Relate
Iron                 Sales of                                                                    accordi
          Same                           On      d
(Group)              goods                                                                       ng to
          controll            Products   agreeme agree                0.00%            No                Yes
Metallurg            and                                                                         the
          er                             nt      ment
y                    services                                                                    agreeme
                                                 price
Residues                                                                                         nt
Co., Ltd.
Benxi                                       Relate                                               Execute            2019.04
                     Sales of
Steel & Parent                      On      d                                                    accordi            .19
                     goods Energy &
Iron      Compan                    agreeme agree           232.43    0.00%      1,000 No        ng to   No
                     and      Power
(Group) y                           nt      ment                                                 the
                     services
Co., Ltd.                                   price                                                agreeme
67
                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                 The
                                                          Amount
                                                                              approve             Means
                                       Pricing Price           of                       Whethe             Availabl
                                                                                  d                  of
                   Type of Content of principle of          related Proporti            r exceed               e
                                                                               trading           paymen                       Index
                   related related        of    relate       party    on of                the              market Date of
 Related Relation                                                              limit of             t of                        of
                    party      party   related     d      transacti similar             approve             price of disclosu
 parties  ship                                                                transacti           related                     disclos
                  transacti transactio party party          ons (in transacti               d               similar     re
                                                                               ons (in             party                        ure
                     ons        ns    transacti transa        10       ons               limited           transacti
                                                                                  10             transacti
                                         ons    ctions     thousan                        (Y/N)               ons
                                                                              thousan               ons
                                                               d)
                                                                                  d)
                                                                                                 nt
                          Raw                                                                                      2019.04
                          material                                                              Execute            .19
Benxi                                            Relate
                 Sales of &                                                                     accordi
Steel & Parent                      On           d
                 goods suppleme                                                                 ng to
Iron      Compan                    agreeme      agree     796.46    0.02%            No                Yes
                 and      ntary                                                                 the
(Group) y                           nt           ment
                 services materials                                                             agreeme
Co., Ltd.                                        price
                          & spare                                                               nt
                          parts
Benxi                                                                                           Execute            2019.04
                                            Relate
New                  Sales of                                                                   accordi            .19
          Same                      On      d
Career               goods Energy &                                                             ng to
          controll                  agreeme agree           40.25    0.00%        500 No                No
Develop              and      Power                                                             the
          er                        nt      ment
ment Co.,            services                                                                   agreeme
                                            price
Ltd.                                                                                            nt
                                                                                                Execute            2019.04
Dalian                                           Relate
                     Sales of                                                                   accordi            .19
Boluole Same                             On      d
                     goods                                                                      ng to
Steel     controll            Products   agreeme agree     404.87    0.01%      1,000 No                Yes
                     and                                                                        the
Tube Co., er                             nt      ment
                     services                                                                   agreeme
Ltd.                                             price
                                                                                                nt
Liaoning                                                                                        Execute            2019.04
                                                 Relate
Bengang              Sales of                                                                   accordi            .19
          Same                           On      d
Steel &              goods                                                                      ng to
          controll            Products   agreeme agree               0.00%            No                Yes
Iron                 and                                                                        the
          er                             nt      ment
Trading              services                                                                   agreeme
                                                 price
Co., Ltd.                                                                                       nt
Benxi                                                                                           Execute            2019.04
                                           Relate
Steel &             Sales of                                                                    accordi            .19
           Same                    On      d
Iron                goods Energy &                                                              ng to
           controll                agreeme agree              5.09   0.00%         50 No                No
(Group)             and      Power                                                              the
           er                      nt      ment
General             services                                                                    agreeme
                                           price
Hospital                                                                                        nt
Benxi                                                                                                              2019.04
Steel &                                                                                                            .19
                                                                                                Execute
Iron                                        Relate
                     Sales of                                                                   accordi
(Group) Same                        On      d
                     goods Energy &                                                             ng to
Zhengtai controll                   agreeme agree             5.22   0.00%        500 No                No
                     and      Power                                                             the
Construct er                        nt      ment
                     services                                                                   agreeme
ion                                         price
                                                                                                nt
Materials
Co., Ltd.
Liaoning                                                                                                           2019.04
Hengtong                                                                                                           .19
                                                                                                Execute
Metallurg                                   Relate
                     Sales of                                                                   accordi
ical      Same                      On      d
                     goods Energy &                                                             ng to
Equipmen controll                   agreeme agree                    0.00%      5,000 No                No
                     and      Power                                                             the
t         er                        nt      ment
                     services                                                                   agreeme
Manufact                                    price
                                                                                                nt
ure Co.,
Ltd.
Liaoning Same     Sales of Raw           On      Relate 2,444.7      0.05%            No        Execute Yes        2019.04
Hengtong controll goods material         agreeme d            6                                 accordi            .19
68
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                   The
                                                            Amount
                                                                                approve             Means
                                       Pricing Price             of                       Whethe             Availabl
                                                                                    d                  of
                   Type of Content of principle of            related Proporti            r exceed               e
                                                                                 trading           paymen                       Index
                   related related        of    relate         party    on of                the              market Date of
 Related Relation                                                                limit of             t of                        of
                    party      party   related     d        transacti similar             approve             price of disclosu
 parties  ship                                                                  transacti           related                     disclos
                  transacti transactio party party            ons (in transacti               d               similar     re
                                                                                 ons (in             party                        ure
                     ons        ns    transacti transa          10       ons               limited           transacti
                                                                                    10             transacti
                                         ons    ctions       thousan                        (Y/N)               ons
                                                                                thousan               ons
                                                                 d)
                                                                                    d)
Metallurg er          and      &         nt        agree                                           ng to
ical                  services suppleme            ment                                            the
Equipmen                       ntary               price                                           agreeme
t                              materials                                                           nt
Manufact                       & spare
ure Co.,                       parts
Ltd.
Liaoning                                                                                                              2019.04
Hengtong                                                                                                              .19
                                                                                                    Execute
Metallurg                                         Relate
                      Sales of                                                                      accordi
ical      Same                            On      d
                      goods                                                                         ng to
Equipmen controll              Products   agreeme agree      352.89    0.01%              No                Yes
                      and                                                                           the
t         er                              nt      ment
                      services                                                                      agreeme
Manufact                                          price
                                                                                                    nt
ure Co.,
Ltd.
                               Raw                                                                                    2019.04
Bengang
                               material                                                             Execute           .19
Cold-                                              Relate
                      Sales of &                                                                    accordi
rolled    Same                           On        d
                      goods suppleme                                                                ng to
Stainless controll                       agreeme   agree      46.59    0.00%              No                Yes
                      and      ntary                                                                the
Steel     er                             nt        ment
                      services materials                                                            agreeme
Dandong                                            price
                               & spare                                                              nt
Co., Ltd.
                               parts
Bengang                                                                                                               2019.04
                                                                                                    Execute
Cold-                                             Relate                                                              .19
                      Sales of                                                                      accordi
rolled    Same                            On      d
                      goods                                                                         ng to
Stainless controll             Products   agreeme agree      111.16    0.00%              No                Yes
                      and                                                                           the
Steel     er                              nt      ment
                      services                                                                      agreeme
Dandong                                           price
                                                                                                    nt
Co., Ltd.
                                                                                                    Execute           2019.04
                                                  Relate
Suzhou                Sales of                                                                      accordi           .19
           Same                           On      d
Bengang               goods                              41,269.                                    ng to
           controll            Products   agreeme agree                0.78%    50,000 No                   Yes
Industrial            and                                    54                                     the
           er                             nt      ment
Co., Ltd.             services                                                                      agreeme
                                                  price
                                                                                                    nt
                                                                                                    Execute           2019.04
                                             Relate
Bengang               Sales of                                                                      accordi           .19
          Same                       On      d
Group                 goods Energy &                                                                ng to
          controll                   agreeme agree              1.39   0.00%         50 No                  No
Finance               and      Power                                                                the
          er                         nt      ment
Co., Ltd.             services                                                                      agreeme
                                             price
                                                                                                    nt
                                                                                                    Execute
                                          Relate
                   Sales of                                                                         accordi
Bengang                           On      d
          Controll goods Energy &                                                                   ng to             2019.04
Group                             agreeme agree                 2.78   0.00%        500 No                  No
          er       and      Power                                                                   the               .19
Co., Ltd.                         nt      ment
                   services                                                                         agreeme
                                          price
                                                                                                    nt
                                                             2,605,7            3,137,4
Total                                         --     --                  --                    --     --         --      --       --
                                                               09.82                00
Details of any sales return of a large
                                          Not applicable
amount
69
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                     The
                                                              Amount
                                                                                  approve             Means
                                        Pricing Price              of                       Whethe             Availabl
                                                                                      d                  of
                    Type of Content of principle of             related Proporti            r exceed               e
                                                                                   trading           paymen                       Index
                    related related        of    relate          party    on of                the              market Date of
  Related Relation                                                                 limit of             t of                        of
                     party      party   related     d         transacti similar             approve             price of disclosu
  parties  ship                                                                   transacti           related                     disclos
                   transacti transactio party party             ons (in transacti               d               similar     re
                                                                                   ons (in             party                        ure
                      ons        ns    transacti transa           10       ons               limited           transacti
                                                                                      10             transacti
                                          ons    ctions        thousan                        (Y/N)               ons
                                                                                  thousan               ons
                                                                   d)
                                                                                      d)
Give the actual situation during the
reporting period where a forecast had
been made for the total amounts of
                                             Not applicable
routine related-party transactions,by
type to occur in the current period(if
any)
Reason for any significant difference
between the transaction price and the
                                             Not applicable
Market price for reference (if
applicable)
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□Applicable √ Not applicable
There were no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
√ Applicable □Not applicable
       Related party                 Related transaction content       Amount in current year (tax         Amount in last year (tax
                                                                                exclusive)                        exclusive)
 Benxi Beiying Steel &           Purchase 2300 hot rolling mill                  3,004,988,590.00
 Iron (Group) Co., Ltd.          production line
 Benxi Steel & Iron              Purchase 1780 hot rolling mill                    684,727,905.00
 (Group) Co., Ltd.               production line
Notes:
On August 14, 2019, the company signed the "Asset Transfer Agreement" with Bengang Group Co., Ltd. and Benxi Beiying Steel &
Iron (Group) Co., Ltd. respectively, to acquire the related equipment assets of the 2300mm hot rolling mill production line held by
Bengang Group and the related equipment assets of 1780mm hot rolling mill production line held by Beiying Steel.
70
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
 (2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
 (3) Lease
√ Applicable □ Not applicable
                  Lessee                        Lease capital category        Lease income of 2019            Lease income of 2018
 Benxi Steel & Iron (Group) Steel &                                                        500,000.00                     500,000.00
                                               Warehouse and machinery
 Iron Process and Logistics Co., Ltd.
 Benxi Steel & Iron (Group)                                                                122,500.03                     490,000.00
                                                 Plants and machinery
 Machinery Manufacture Co., Ltd.
Gains or losses from lease counted over 10% of total profit.
□ Applicable √ Not applicable
During the reporting period, there were no lease projects that resulted in a profit or loss of more than 10% of the total profit of the
company during the reporting period
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√ Applicable □ Not applicable
                                                                                                                   Unit:10 thousand
                                  Source of funds for                                                           Overdue amount not
           Type                                                 Amount              Outstanding balance
                                  entrusted financing                                                               recovered
                           Own temporarily idle
Bank financial product                                                     2,450                          0                          0
                           funds
                           Own temporarily idle
Bank financial product                                                     2,400                          0                          0
                           funds
                           Own temporarily idle
Bank financial product                                                     427.3                          0                          0
                           funds
Total                                                                    5,277.3                          0                          0
71
                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing other corporation social responsibilities
During the reporting period, the company actively protected the legitimate rights and interests of creditors and all
employees while pursuing the economic benefits of the company and protecting the interests of shareholders, in
accordance with the spirit of corporate social responsibility, and actively treated suppliers, customers and consumers.
Public welfare undertakings such as environmental protection and community building. In the business activities,
consciously follow the principles of voluntariness, fairness, equal pay, honesty and credit, consciously abide by social
morality, professional ethics, consciously accept the supervision of the government and the public, and actively fulfill the
corporate social responsibility.
2. Performing corporation social responsibility of targeted poverty alleviation
In the annual report of the company, there has been no accurate poverty alleviation work, and there is no follow-up
accurate poverty alleviation plan.
3. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the
environmental protection department.
Yes
                 Main                  The
                                              The distribution Emission               The                  Approved     Surpass the
               pollutants Discharge number of                                                    Total
     Name                                      of discharge concentra              emission                  total       emission
              and specific modes    discharge                                                   emission
                                                   hatch         tion              standard                emission      standard
               pollutants             hatch
Bengang                                            Energy integral                                      Unapproved
                                                                    Sewage
Steel Plates COD           Continuous 1            factory sewage                 Sewage 50 171.54 tons by the     None
                                                                    8-29
Co., Ltd.                                          treatment plant.                                     government
Bengang                                            Energy integral                                         Unapproved
                                                                    Sewage
Steel Plates NH3-N         Continuous 1            factory sewage                 Sewage 5    32.43 tons   by the     None
                                                                    1.1-4
Co., Ltd.                                          treatment plant.                                        government
                                                   Raw material       Raw         Raw                                   None
                                                   dumper, transfer   materials   materials
                                                   station,           7-25;       25; coking
                                                   receiving ore      coking 3-   30-50;
                                                   tank, pre-batch;   30;         ironmaking
                                                   coke oven          Ironmaki    25-50;
Bengang                    Continuous              adding coal,       ng 5-48;    steelmaking              Unapproved
             Particulate                           pushing coke       Steelmaki   20-50;        12828.10
Steel Plates               and          178                                                                by the
Co., Ltd.
             Matter
                           intermittent            dry quenching;     ng 7-14;    special steel tons       government
                                                   ironmaking         Special     20-50;
                                                   tapping field,     steel 7-    power
                                                   furnace roof,      15;         generation
                                                   fuel, solvent,     Power       10-30; cold
                                                   granulation, ore   generatio   rolling 20-
                                                   coke tank;         n 5-10;     30; hot
                                                   sintering head,    Cold        rolling 20-
72
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                    machine Tail;       rolling; 30.
                                                    iron and steel      6-18 hot
                                                    water               rolling 6-
                                                    pretreatment,       15.
                                                    ferroalloy
                                                    feeding, north-
                                                    south infusion
                                                    station, tundish,
                                                    primary dust
                                                    removal,
                                                    secondary dust
                                                    removal,
                                                    refining dust
                                                    removal; special
                                                    steel electric
                                                    furnace, refining
                                                    furnace, electric
                                                    slag furnace;
                                                    power
                                                    generation
                                                    boiler
                                                    desulfurization
                                                    and
                                                    denitrification;
                                                    cold rolling acid
                                                    regeneration,
                                                    Pickling,
                                                    drawing
                                                    straightening,
                                                    welding
                                                    machine,
                                                    smoothing,
                                                    annealing,
                                                    roasting; hot
                                                    rolling heating
                                                    furnace.
                                                                      Coke                               Unapproved None
                                                                      oven                               by the
                                                                      CDQ 16-                            government
                                                                      82;
                                                    Coke oven
                                                                      Sintering   CDQ 100;
                                                    CDQ;
                                                                      machine     Sintering
                                                    Ironmaking
                                                                      head 12-    head 200;
                                                    sintering head;
Bengang                    Continuous                                 40;         power
                                                    power                                      5499.83
Steel Plates SO            and          64                            power       generation
                                                    generation                                 tons
Co., Ltd.                  intermittent                               generatio   100-200;
                                                    boiler; cold
                                                                      n 10-70;    cold rolling
                                                    rolling roasting,
                                                                      cold        150; hot
                                                    annealing; hot
                                                                      rolling     rolling 150.
                                                    rolling furnace.
                                                                      45-141;
                                                                      hot
                                                                      rolling
                                                                      51-98.
                                                                      Sintering                          Unapproved None
                                                                      head 110-                          by the
                                                    Ironmaking
                                                                      230;        Sintering              government
                                                    sintering head;
                                                                      power       head 300;
                                                    power
                                                                      generatio   power
Bengang                    Continuous               generation
             Oxides of                                                n 50-140;   generation 12084.69
Steel Plates               and          57          boiler; cold
             nitrogen                                                 cold        100-200;     tons
Co., Ltd.                  intermittent             rolling roasting,
                                                                      rolling     cold rolling
                                                    annealing; hot
                                                                      69-172;     300; hot
                                                    rolling furnace.
                                                                      hot         rolling 300.
                                                    furnace.
                                                                      rolling
                                                                      105-188.
Construction and operation of pollution prevention facility:
73
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
The company has a total of 178 sets of environmental pollution prevention and control facilities. In addition to the hot rolling mill 2300
production line, the rough-rolling finishing rolling plastic plate dust collector which is designed for the production of stainless steel,
the rest of the facilities are put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects
1. Regarding of the "Environmental Impact Report Form of High-Grade High-Magnetic Induction Non-Oriented Silicon
Steel Project of Bengang Steel Plates Co., Ltd." Benxi City Environmental Protection Bureau issued the environmental
assessment approval: Ben-Huan-Jian-Biao-Zi [2019] No. 03, 2019-5-25;
2. Regarding of the "Environmental Impact Report Form of No. 8 Casting Machine Project of Bengang Steel Plates Co.,
Ltd., Ltd. Steelmaking Plant" Benxi City Environmental Protection Bureau issued the environmental assessment approval:
Ben-Huan-Jian-Biao-Zi [2019] No. 04, 2019-6-18;
3. Regarding of the "Environmental Impact Report Form for the 1700 Hot Rolling Improvement Project of Bengang Steel
Plates Co., Ltd. (Phase I)" Benxi City Environmental Protection Bureau issued the environmental assessment approval:
Ben-Huan-Jian-Biao-Zi [2019] No. 05, 2019-7-24;
4. Regarding of the "Environmental Impact Report Form of the No. 7 Coke Oven Flue Gas Desulfurization and
Denitrification Project of Bengang Steel Plates Co., Ltd. Coking Plant" Environmental Protection Bureau issued the
environmental assessment approval: Ben-Huan-Jian-Biao-Zi [2019] No. 10, 2019-7-12;
5. Regarding the environmental impact report of the No. 5 blast furnace capacity replacement project of Bengang Steel
Plates Co., Ltd., Liaoning Provincial Environmental Protection Bureau issued the environmental assessment approval:
Liao-Huan-Han [2019] No. 171, 2019-11-27;
6. Regarding the environmental impact report of the Special Steel Electric Furnace Upgrading Project of Bengang Steel
Plate Co., Ltd., Liaoning Provincial Environmental Protection Bureau issued the environmental assessment approval:
Liao-Huan-Han [2019] No. 172, 2019-7-12;
7. Discharge permit, complete the discharge permit of the plate company energy plant on schedule.
Emergency plan for emergency environmental incidents
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, and
carried out related work such as risk assessment and investigation of emergency resources in accordance with the "Law
of the People's Republic of China on Incident Responses", "Notice on Printing and Distributing the Guidelines for Risk
Assessment of Enterprises' Environmental Emergencies (Trial)", and "Emergency Preparedness for Environmental
Incidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial).
Environmental self-monitoring project.
In 2019, the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.
The monitoring points of Bengang Steel pollution sources: 156 flue gas, 10 wastewater monitoring points, 5 noise points
at the boundary of the plant, 27 atmospheric dustfall points, and newly added unorganized monitoring. The number of
points is 50. From the plate factory to the mine, the monitoring is divided into weekly, monthly, seasonal, semi-annual
and annual frequency monitoring. The main monitoring items of the automatic air quality monitoring station are PM10,
PM2.5, sulfur dioxide and nitrogen dioxide. , O3, CO, one set of data per hour, a total of 52,560 monitoring data were
obtained throughout the year; 27 steel dust points were distributed in the steel plant area, and 324 monitoring data were
obtained; routine monitoring tasks for flue gas were completed, and monitoring was achieved throughout the year 936
data; 5 noise monitoring points at the boundary of the plant, 160 monitoring data; 10 wastewater monitoring points, 4,335
monitoring data; 172 temporary monitoring data, and a total of 5926 monitoring data reported by the monitoring station.
Monthly, quarterly reports and separate monitoring reports for each mine are reported.
Other environmental information that should be disclosed
None
Other environmental protection related information
None
XIX. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
74
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
               VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
                                                                                                                                Unit: Share
                                 Before the change                     Increase/decrease(+,-)                          After the Change
                                                                                Capitaliz
                                                                                ation of
                                                Percenta Issuing of new Bonus                                                        Percenta
                                 Quantity                                       common Others         Subtotal         Quantity
                                                   ge         share      shares                                                         ge
                                                                                 reserve
                                                                                  fund
                                                                                         -            -
 I. Restricted Shares            739,371,532     19.08%                                  739,371,53   739,371,5   0
                                                                                         2            32
                                                                                         -            -
 2. State-own Legal-person
                                 184,842,883      4.77%                                  184,842,88   184,842,8   0
 Shareholding                                                                            3            83
                                                                                         -            -
 3. Other domestic
                                 554,528,649     14.31%                                  554,528,64   554,528,6   0
 shareholdings                                                                           9            49
                                                                                         -            -
 Including: Domestic legal
                                 554,528,649     14.31%                                  554,528,64   554,528,6   0
 person holding                                                                          9            49
                                                                                         739,371,53   739,371,5
 II. Non-restricted Shares      3,136,000,000    80.92%
                                                                                              2          32
                                                                                                                      3,875,371,532 100.00%
  1. Common shares in                                                                    739,371,53   739,371,5
                                2,736,000,000 70.60%                                                          3,475,371,532 89.68%
  RMB                                                                                    2            32
  2. Foreign shares in
                                   400,000,000 10.32%                                                            400,000,000 10.32%
  domestic market
  III. Total shares             3,875,371,532 100.00%                                                          3,875,371,532 100.00%
Causation of share capital changes
√Applicable □Not applicable
The Company’s private issuance of 739,371,532(RMB) common shares to Liaoning Traffic Investment Co., Ltd., Jianxin Fund
Management Co., Ltd., Beixin Ruifeng Fund Management Co., Ltd., and Guoshou Security Fund Management Co., Ltd. has expired.
The Company completed the lifting of sales restrictions on April 18, 2019.
Approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, and net asset per
share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
√Applicable □ Not applicable
                                                                                                                                  Unit: Share
                        Number of initial   Number of    Increased number End-of-Term                 Restriction
     Shareholder                                                                                                             Release date
                        restricted shares Limited Shares    of restricted Limited Shares                reason
75
                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
                                             Released in the    shares in the
                                             Current Period    current period
                           184,842,883             0            184,842,883             0       The number of
   Liaoning
                                                                                                restricted shares
   Provincial
                                                                                                participating in
   Transportation                                                                                                   April 18th 2019
                                                                                                the additional
   Investment Group
                                                                                                issue was
   Co., Ltd.
                                                                                                184,842,883.
   CCB Principal           184,842,883             0           184,842,883              0
                                                                                                The number of
   Asset Management
                                                                                                restricted shares
   – ICBC – CR Trust
                                                                                                participating in
   – CR Trust  Xing                                                                                                April 18th 2019
                                                                                                the additional
   Sheng No. 5
                                                                                                issue was
   Collective Fund
                                                                                                184,842,883.
   Trust Plan
   Bei Xin Rui Feng        184,842,883             0           184,842,883              0
                                                                                                The number of
   Fund – China
                                                                                                restricted shares
   Merchants Bank –
                                                                                                participating in
   Bei Xin Rui Feng                                                                                                 April 18th 2019
                                                                                                the additional
   Fund Feng Qing
                                                                                                issue was
   No. 229 Asset
                                                                                                184,842,883.
   Management Plan
   China Life AMP          184,842,883             0           184,842,883              0
   Fund– ICBC –
                                                                                                The number of
   China Life AMP –
                                                                                                restricted shares
   Hua Xin Trust
                                                                                                participating in
   Targeted                                                                                                         April 18th 2019
                                                                                                the additional
   Additional Shares
                                                                                                issue was
   Issuance No. 10
                                                                                                184,842,883.
   Asset Management
   Plan
   Total                   739,371,532             0           739,371,532              0               --                 --
   II. Securities Issuance and Listing
   1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
   □ Applicable √ Not applicable
   2. Total Share and Shareholder Change and Asset and Liability Structure Change
   □ Applicable √ Not applicable
   3. Employee Shareholding Status
   □ Applicable √ Not applicable
   III. Shareholders and Actual Controller
   1. Total Number of shareholders and shareholding
                                                                                                                         In Shares
                                     Total                        The total number of                Total preferred
Total number of                      shareholders at                                                 shareholders at the
common shareholders                                               preferred shareholders             end of the month from
                    52,294           the end of the  52,784
at the end of the                                                 voting rights restored at 0        the date of disclosing
                                                                                                                            0
                                     month from the
reporting period                                                  the end of the reporting           the annual report (if
                                     date of
                                                                  period (See Notes 8)               any) (See Notes 8)
                                     disclosing the
   76
                                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2019
                                     annual report
                                 Shareholding of shareholders holding more than 5% or top 10 shareholders
                                           Holding    Number of            Changes in                                    Number of pledged or
     Name of the           Nature of                                                        Restricted   Un-restricted      frozen shares
                                          Percentage shares held at         reporting
     shareholder          shareholder                                                      shares held    shares held
                                             (%)      period-end              period                                     Status      Number
Benxi Steel & Iron      State-owned                                                                                      Pledged    110,000,000
                                              61.44%       2,381,105,094 25,695,831                      2,381,105,094
(Group) Co., Ltd.       legal person                                                                                      Frozen     45,000,000
Liaoning Provincial
Transportation          State-owned
                                               4.77%        184,719,383                                   184,719,383
Investment Group        legal person
Co., Ltd.
CCB Principal Asset
Management – ICBC
– CR Trust – CR
                        Others                 4.77%        184,842,883                                   184,842,883
Trust  Xing Sheng
No. 5 Collective Fund
Trust Plan
Bei Xin Rui Feng
Fund – China
Merchants Bank – Bei
Xin Rui Feng Fund       Others                 4.77%        184,842,883                                   184,842,883
Feng Qing No. 229
Asset Management
Plan
China Life AMP
Fund– ICBC – China
Life AMP – Hua Xin
Trust Targeted          Others                 4.77%        184,842,883                                   184,842,883
Additional Shares
Issuance No. 10 Asset
Management Plan
                        Domestic
Liang Zhongqing                                0.65%          25,090,000 25,090,000                        25,090,000
                        natural person
Agricultural bank of
China - China
Securities 500 Trading Others                  0.32%          12,590,111 8,532,301                         12,590,111
Open Index Securities
Investment Fund
                        Domestic
Liu Qiuying                                    0.31%          11,839,000 11,839,000                        11,839,000
                        natural person
                        Domestic
Yi Honglu                                      0.24%           9,458,570 9,458,570                           9,458,570
                        natural person
VANGUARD
EMERGING                Foreign legal
                                               0.21%           8,157,311                                     8,157,311
MARKETS STOCK           person
INDEX FUND
Strategy investors or general legal
person becomes top 10 shareholders due None
to rights issued (if any) (See Notes 3)
                                         It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as
Notes to relationship or ‘action in
                                         described by Rules of Information Disclosing Regarding Changing of Shareholding Status of
concert’ among the top 10 shareholders.
                                         Listed Companies existing among the above shareholders.
                                             Shareholding of top 10 unrestricted shareholders
                                                       Un-restricted shares held at                      Category of shares
            Name of the shareholder
                                                     the end of the reporting period           Category of shares                  Quantity
Benxi Steel & Iron (Group) Co., Ltd.                                 2,381,105,094 Common shares in RMB                            2,381,105,094
Liaoning Provincial Transportation Investment
                                                                       184,719,383 Common shares in RMB                             184,719,383
Group Co., Ltd.
CCB Principal Asset Management – ICBC – CR                           184,842,883 Common shares in RMB                             184,719,383
   77
                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
 Trust – CR Trust  Xing Sheng No. 5 Collective
 Fund Trust Plan
 Bei Xin Rui Feng Fund – China Merchants
 Bank – Bei Xin Rui Feng Fund Feng Qing No.                         184,842,883 Common shares in RMB                          184,719,383
 229 Asset Management Plan
 China Life AMP Fund– ICBC – China Life
 AMP – Hua Xin Trust Targeted Additional                            184,842,883 Common shares in RMB                          184,719,383
 Shares Issuance No. 10 Asset Management Plan
 Liang Zhongqing                                                      25,090,000 Common shares in RMB                           25,090,000
 Agricultural bank of China - China Securities
 500 Trading Open Index Securities Investment                         12,590,111 Common shares in RMB                           12,590,111
 Fund
 Liu Qiuying                                                          11,839,000 Common shares in RMB                           11,839,000
 Yi Honglu                                                             9,458,570 Common shares in RMB                            9,458,570
 VANGUARD EMERGING MARKETS
                                                                       8,157,311 Foreign shares in domestic exchange              8,157,311
 STOCK INDEX FUND
                                                   Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with
                                                   any of the other shareholders among the top 10 shareholders, neither being regarded as
                                                   action-in-concert parties by the Information Disclosure Regulations for Change of
 Notes to relationship or ‘action in concert’
                                                   Shareholding in PLC. The Company is not aware of any relationship among the other
 among the top 10 non-restricted shareholders,
                                                   shareholders, neither being regarded as action-in-concert parties by the Information
 and among the top 10 non-restricted
                                                   Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
 shareholders and top 10 shareholders
                                                   of any relationship among the top 10 shareholders, neither being regarded as action-in-
                                                   concert parties by the Information Disclosure Regulations for Change of Shareholding in
                                                   PLC.
                                                   Benxi Steel & Iron (Group) Co., Ltd. Holds 2,142,105,094 shares of the Company’s stock
                                                   through credit security account and holds 239,000,000 shares of the Company’s stock,
 Shareholders among the top 10 participating in    totaling 2,381,105,094 shares. Liang Zhongqing holds 25,090,000 shares of the
 securities margin trading (if any) (see Note 4)   Company’s stock through credit security account. Liu Qiuying holds 11,839,000 shares
                                                   of the Company’s stock through credit security account. Yi Honglu holds 9,458,570 shares
                                                   of the Company’s stock through credit security account.
    Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
    dealing in reporting period
    □ Yes √ No
    Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing in
    reporting period.
    2. Controlling Shareholder
    Nature of Controlling Shareholders: Local state holding
    Type of Controlling Shareholders: Legal person
  Name of the
                 Legal representative       Date of         Organization
  Controlling                                                                                Principal business activities
                   / person in charge    incorporation         Code
  shareholder
                                                                          Business scope: steel smelt, mine exploitation, panel
                                                                          rolling, oxygen manufacturing, pipe manufacturing, power
                                                                          generating, coal industry, special steel material
                                                                          manufacturing, heating, supply of the water, electricity,
                                                                          wind and gas, metal processing, electro mechanics builds,
                                                                          device manufacturing, architecture installation, railway,
                                                                          highway transportation, import and export trade, traveling
Benxi Steel & Iron                                          9121050011972 industry, construction material, refractory material,
                   Yang Chengguang      July 10,1996
(Group) Co., Ltd.                                           6263U         measuring device instrument, goods and materials supply
                                                                          and marketing, development of real estate, scientific
                                                                          research, design, information service, property
                                                                          management, telecommunication, processing of waste
                                                                          iron, property leasing, exchange of steel material, and
                                                                          recycling of waste oils (to the extent of licensed to the
                                                                          subsidiary companies) , property management; publishing
                                                                          of Bengang Daily; designing and making of presswork and
    78
                                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                               advertisement, releasing, producing of TV advertisements
                                                                               in the country and abroad.
Equity of other
domestic/foreign
listed company
with share
controlling and     None
share participation
by controlling
shareholder in
reporting period
      Changes of controlling shareholders during the reporting period
      □ Applicable √ Not applicable
      The controlling shareholder of the company has not changed during the reporting period.
     3. Actual Controller
      Actual controller nature: Local state owned assets management
      Actual controller type: Legal person
                                                 Legal representative        Date of                                Principal business
      Name of the controlling shareholder                                                  Organization Code
                                                  / person in charge      incorporation                                 activities
Liaoning Provincial State-owned Assets
                                                 Unknown                                 Unknown                 Unknown
Supervision and Administration Commission
Equity of other domestic/foreign listed
company with share controlling and share         The Company was not informed of the actual controller's control of the equity of other
participation by controlling shareholder in      domestic and foreign listed companies during the reporting period.
reporting period
      Change of actual controller during the reporting period
      □ Applicable √ Not applicable
      There is no change of actual controller during the reporting period.
      Block diagram of the ownership and control relations between the Company and the actual controller
                                Liaoning Provincial State-owned Assets
                              Supervision and Administration Commission
                                                          Liaoning Council for social security fund
                                          80%                    20%
                               Bengang Group Co., Ltd.                  Huatai Securities (Shanghai) Asset Management Co., Ltd.
                                                    85.33%                                           14.67%
                                                   Benxi Steel & Iron (Group) Co., Ltd.
                                                                            61.44%
                                                      Bengang Steel Plates Co., Ltd.
     Whether the actual controller is controlling the Company through trusteeship or other asset management service
     □ Applicable √ Not applicable
     4. Shareholders holding More than 10% of the Shares
     □ Applicable √ Not applicable
     79
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring Party
and Other Commitment Subjects
□ Applicable √ Not applicable
80
                                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
                                    VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock in the company during the reporting period.
81
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2019
                        VIII. Status of Convertible Corporate Bonds
□ Applicable √ Not applicable
There were no convertible corporate bonds in the reporting period.
82
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
 IX. Status of Directors, Supervisors, Senior Executives and
                                                  Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
                                                                                 Shares Shares       Shares
                                                  Starting                                                       Other    Shares
                                                                  Expiry         held at increased   decreased
                         Office              Ag date         of                                                  increase held     at
Name       Position                  Sex                          date      of the       during the during the
                         status              e    office                                                         /        the year-
                                                                  office term year-      reporting   reporting
                                                  term                                                           decrease end
                                                                                 begin   period      period
           Director,                              March 14, May            16,
Gao Lie                  In office Male      52
           Chairman                               2019            2022
           Director,
                                                  June       3, May        16,
Cao Aimin Vice           In office Male      52
                                                  2010            2022
           Chairman
           Director,
Shen                                              May      16, May
           General       In office Male      51
Qiang                                             2019            16,2022
           Manager
Hunag                                             May      24, May
           Director      In office Male      56
Xinghua                                           2018            16,202
Zhong      Independent               Femal        May      20, May
                         In office           63
Tianli     Director                  e            2014            20,2022
Zhao       Independent                            May      21, May
                         In office Male      59
Xinan      Director                               2015            21,2021
Zhang      Independent               Femal        May      16, May
                         In office           64
Suxun      Director                  e            2019            16,2022
           Supervisor,
           Chairman of               Femal        February May
Han Mei                  In office           50
           Supervisory               e            19, 2014 16,2022
           Committee
                                                  February May
Li Lin     Supervisor    In office Male      51
                                                  19, 2014 16,2022
                                                  March 14, May
Li Xiaowei Supervisor    In office Male      44
                                                  2019            16,2022
Zhao                                              June     26, May
           Supervisor    In office Male      47
Xingtao                                           2018            16,2022
Zhang                                             January         May
           Supervisor    In office Male      42
Yanlong                                           26, 2014 16,2022
Bao        Deputy                                 December May
                         In office Male      56
Mingwei    General                                28, 2012 16,2022
83
                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2019
             Manager
             Deputy
Wang                                                      January       May
             General          In office Male        54
Fengmin                                                   26, 2014 16,2022
             Manager
             Deputy
                                          Femal           March         May
Huo Gang General              In office             46
                                          e               14,2019       16,2022
             Manager
Zhao         Director    of               Femal           April 18, May
                              In office             35
Zhonghua Finance                          e               2019          16,2022
Gao          Secretary of                                 Septembe May
                              In office Male        45
Desheng      the Board                                    r 20,2018 16,2022
             Director,        Leaving                     December March
Wang Shu                                  Male      48
             Chairman          office                      27,2016 14,2019
             Independent Leaving                          May           May
Jin Yongli                                Male      61
             Director          office                     17,2013       16,2019
Liu                           Leaving                     August        June
             Supervisor                   Male      48
Yansong                        office                     09, 2018 26,2019
Hu           Deputy
                              Leaving                     January       March
Guangyua General                          Male      59
                               office                     26, 2014 14,2019
n            Manager
Total        --               --          --        --    --            --
II.       Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
                                                    Type of
      Name               Position                                                 Date                 Reason
                                                    change
Wang Shu          Director, Chairman            Leaving office               March 14,2019        Voluntary turnover
                                                Leaving        office
                  Independent                                                                Leaving office after expiry of
Jin Yongli                                      after expiry of              May 16,2019
                  Director                                                                               term
                                                term
                  Supervisor,
                  Chairman                 of
Dong Liju                                       Leaving office               April 18,2018        Voluntary turnover
                  Supervisory
                  Committee
Liu Yansong       Supervisor                    Leaving office               June 26,2019         Voluntary turnover
                                                Appointments
Gao Lie           General Manager                                            March 14,2019            Job change
                                                and dismissals
                  Deputy           General
Sun Yanbin                                      Dismissal                    March 14,2019            Job change
                  Manager
84
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
III. Posts holding
Work experience in the past five years of Directors, Supervisors and Senior Executives in current office
Profiles of the members of the Board:
Gao Lei, Male, 52, undergraduate, master of engineering, professor-level senior engineer. Once Chairman of Benxi
Iron and Steel(Group)Mining Co.,Ltd; Manager of Mineral Resources Development Company; Assistant General
Manager of Bengang Group Co., Ltd. and Manager of Mineral Resources Development Company; He is now
Member of the Standing Committee of the company’s party committee, Deputy General Manager of Bengang Group
Co.,Ltd, chairman of Bengang Steel Plate Co.,Ltd.
Cao Aimin, Male, 52, undergraduate, professor-level senior accountant. Once Head of Capital Division of Finance
Department; Head of Planning and Finance Division; and Chief Accountant. Director and Chief Accountant of Benxi
Iron and Steel (Group) Co., Ltd., Ltd. He is now Member of the Standing Committee of the company’s party
committee, Director and Chief Accountant of Bengang Group Co.,Ltd,, Vice Chairman of Bengang Steel Plates Co.,
Ltd.
Shen Qiang, Male, 51 years old, undergraduate, master of engineering, senior engineer. He has served as Secretary
of the Board of Directors and Director of the Board of Directors of Bengang Group Corporation, Director of the
Office, Director of the Secretary of Secretaries, Secretary of the Party Committee of Bengang Group Corporation,
Chairman of the Board of Directors of the Real Estate Company, Secretary of the Party Committee; Director of
Benxi Iron and Steel Company, Deputy Secretary of the Party Committee, Deputy General Manager, Board of
Directors Secretary; Assistant General Manager of Bengang Group Corporation, Minister of Human Resources
Department (Organization Department); current Director and General Manager of Bengang Steel Plate Co., Ltd.
Huang Xinghua, Male, 56, College degree, senior accountant. Once Deputy director of the planning and finance
department of Benxi Iron and Steel (Group) Co.,Ltd; Director and Chief accountant of Benxi Iron and Steel(Group)
Co.,Ltd; Director of the finance department of Bengang Group Co., Ltd. He is now the head of the finance department
of Bengang Group Co., Ltd., Director of Benxi Iron and Steel (Group) Co., Ltd., Director of Bengang Steel Plate
Co., Ltd.
Profiles of the Supervisory Committee:
Han Mei, Female, 50, undergraduate, senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee of
Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of Audit
Dept. She now is Head of Audit Department, Director of Bengang Group Finance, and Chairman of Supervisory
Committee of Bengang Steel Plates Co. Ltd.
Li Lin, Female, 51, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group;
Vice Chief Engineer of Transportation Department of the Company; Substitute Chairman of the Trade Union of
Transportation Department of the Company, Secretary of Commission for Discipline Inspection of Transportation
Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd, Group leader of Discipline
Inspection and Supervision group One Assigned by Discipline Inspection Commission of Bengang Group Co., Ltd.
85
                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
She is now Party secretary of Railway company; Supervisor of Bengang Steel Plates Co. Ltd.
Li Xiaowei, Male, 44, undergraduate, economist. He was once senior officer of the audit department and Division
chief of the operation audit department of Bengang Group Co., Ltd. He is now the deputy director of the Audit
Department of Bengang Group Co., Ltd., the supervisor of the board of supervisors of Bengang Steel Plate Co., Ltd.
Zhang Yanlong, Male, 42, undergraduate, senior engineer. He once was the workshop manager of steel-making
factory; Vice Chief of QC department of iron-making factory, Director of Steel-making plant, Manager of
Manufacturing Department of Bengang Steel Plates Co., Ltd., Assistant of Director of Production Division of Steel-
Making Plant; He is now Vice Director of Production Division of Steel-Making Plant and Supervisor of Bengang
Steel Plates Co. Ltd.
Zhao Xingtao, Male, 48, undergraduate, master of engineering, senior engineer. He was once Deputy Director of
Cold Rolling Plant of Bengang Steel Plate Co., Ltd. He is now Secretary of Party Committee and Chairman of Labor
Union of Cold Rolling Plant of Bengang Steel Plate Co., Ltd, and supervisor of Bengang Steel Plate Co., Ltd.
Executives other than directors:
Bao Mingwei, Male, 56 years old, Undergraduate, senior engineer. He has successively served as Secretary of the
Party Committee, Vice Director and Factory Director of the Hot Strip Mill of Benxi Steel Co., Ltd., Vice General
Manager of Benxi Steel Co., Ltd. and Director of the Third Cold Rolling Mill. He is now Vice General Manager of
Bengang Steel Plates Co. Ltd.
Wang Fengmin, Male, 54, postgraduate, professor-level senior engineer. He has been the deputy director, director
and Secretary of the Party Committee of the ironmaking plant of Benxi Iron and Steel Co., Ltd., deputy general
manager and manufacturing Minister of Bengang Steel Plate Co., Ltd. He is now Deputy General Manager of
Bengang Steel Plate Co., Ltd.
Huo Gang, Male, 46, postgraduate, PHD of engineering, professor-level senior engineer. He has been the acting
general manager of Bengang Puxiang Cold Rolling Plant, the Secretary and executive vice director of the Party
Committee of Bengang No. 3 Cold Rolling Plant, the Secretary and director of the Party Committee of Bengang No.
3 Cold Rolling Plant, and the current director of Bengang Cold Rolling Plant, the general manager of Puxiang Cold
Rolling Plant and the deputy general manager of Bengang Steel Plate Co., Ltd.
Zhao Zhonghua, Female, 35, graduate degree, master of management, accountant. She has successively been deputy
director and director of the Finance Department of Bengang Steel Plate Co., Ltd., assistant director of the Finance
Department of Bengang Group Co., Ltd., deputy manager of Bengang Group Finance Co., Ltd., and currently the
CFO and finance minister of Bengang Steel Plate Co., Ltd.
Gao Desheng, Male, 45, undergraduate, master of management, senior economist. He has been the acting director
of the Business Planning Department of the Operation Improvement Department of Bengang Group Co., Ltd., the
director of the Ownership Management Department of the Operation Improvement Department of Bengang Group
Co., Ltd., the director of the Ownership Management Department of the Operation Improvement Department of
Bengang Group Co., Ltd., the vice-chairman of the First Supervisory Board, and now he is the director of the office
86
                                                                Bengang Steel Plates Co., Ltd. Annual Report 2019
and Secretary of the board of Bengang Group Co., Ltd..
Posts holding in Shareholders
√ Applicable □ Not applicable
                                                                                                             Does he /she
                                                                                                  Expiry         receive
 Names of the
                          Names of the           Titles engaged in the          Starting date of date of remuneration
     persons in
                          shareholders                  shareholders              office term      office    or allowance
       office
                                                                                                    term         from the
                                                                                                              shareholder
                   Bengang Group Co.,
Gao Lie                                    Vice General Manager                 March 1, 2014                      Yes
                   Ltd.
                   Bengang Group Co.,                                           November 1,
Cao Aimin                                  Director, Chief Accountant                                              Yes
                   Ltd.                                                         2010
                   Bengang Group Co.,
Huang Xinghua                              Minister of Finance                  August 1, 2017                     Yes
                   Ltd.
                   Benxi Iron and Steel
Huang Xinghua                              Director                             April 1, 2018                      No
                   (Group) Co., Ltd.
                   Bengang Group Co.,                                           February 1,
Han Mei                                    Director of Audit Department                                            Yes
                   Ltd.                                                         2016
                   Bengang Group Co.,      Vice Director of Audit               January 1,
Li Xiaowei                                                                                                         Yes
                   Ltd.                    Department                           2018
Office taking
in shareholder None
companies
Posts holding in other companies
√Applicable □Not applicable
                                                                                                             Does he /she
  Names of the                                        Titles engaged                            Expiry           receive
                           Names of the other                            Starting date of
     persons in                                          in other                               date of     remuneration or
                               companies                                   office term
        office                                         companies                              office term allowance from
                                                                                                            the shareholder
                   Bengang Group Finance
Han Mei                                           Director             December, 1,2016                     No
                   Co., Ltd.
Office taking in
other              None
companies
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
87
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors, Supervisors
and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented upon
approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
                                                                                                         Unit: RMB 10 thousand
                                                                                                      Total           Whether receive
                                                                                                  remuneration        remuneration in
      Name                     Position                Sex        Age          Office status
                                                                                                received from the     the Company's
                                                                                                  shareholder          related parties
Gao Lie                   Director, Chairman       Male            52               In office                   8.4         Yes
Cao Aimin               Director, Vice Chairman    Male            52               In office                               Yes
Shen Qiang             Director, General Manager   Male            51               In office                 33.27
Huang Xinghua                  Director            Male            56               In office                               Yes
Zhong Tianli             Independent Director      Female          63               In office                    5
Zhao Xinan               Independent Director      Male            59               In office                    5
Zhang Suxun              Independent Director      Female          64               In office                    5
                        Supervisor, supervisory
Han Mei                                            Female          50               In office                               Yes
                            board chairman
Li Lin                        Supervisor           Female          51               In office                 23.35
Li Xiaowei                    Supervisor           Male            44               In office                               Yes
Zhao Xingtao                  Supervisor           Male            47               In office             20.96
Zhang Yanlong                 Supervisor           Male            42               In office                 25.18
Bao Mingwei            Deputy General Manager      Male            56               In office                 31.07
Wang Fengmin           Deputy General Manager      Male            54               In office             30.86
Huo Gang               Deputy General Manager      Male            46               In office                 32.87
Zhao Zhonghua                    CFO               Female          35               In office                 25.64
Gao Desheng               Secretary of Board       Male            45               In office                 24.76
88
                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
Wang Shu                   Director, Chairman           Male         48              Leaving office                            Yes
Jing Yongli               Independent Director          Male         61              Leaving office
Liu Yansong                    Supervisor               Male         48              Leaving office                 27.73
Hu Guangyuan              Vice General Manager          Male         59              Leaving office                  3.14
Total                --                            --          --               --                                 302.23 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company                                                                                     17,040
Population of in-service staff in main subsidiaries                                                                                    542
Total population of in-service staff                                                                                                 17,582
Total population of staff receiving remuneration in the current
                                                                                                                                     17,582
period
Population of retired staff whose expense was borne by parent
                                                                                                                                     22,996
company and major subsidiary companies
                                                         Professional Composition
                  Type of Professional Composition                                                    Population
Production Staff                                                                                                                     13,932
Sales Staff                                                                                                                            197
Technician                                                                                                                            1,463
Financial Staff                                                                                                                        141
Administrative Staff                                                                                                                  1,849
Total                                                                                                                                17,582
                                                           Educational Degree
                    Type of Educational Degree                                                        Population
PhD.                                                                                                                                    15
Postgraduate                                                                                                                           348
Undergraduate                                                                                                                         3,690
Junior College                                                                                                                        5,427
Technical secondary school                                                                                                             371
High School and Technical School                                                                                                      3,119
Middle School and others                                                                                                              4,612
Total                                                                                                                                17,582
89
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
2. Remuneration Policies
In 2019, the Company will further strengthen the management of salary distribution, establish a "de-administrative"
broadband salary system, open up channels for the functional development of business, technology and operational
posts, and improve the salary standards of employees. We should implement total compensation contract, guide all
units to allocate human resources rationally, optimize the distribution mechanism and improve labor productivity,
and give full play to the role of salary incentives and constraints. Simplify the annual salary structure and establish
an annual salary assessment system which is linked to the group's efficiency and employee's income. Promote and
strengthen the management of ERP salary, and realize the direct connection between banks and enterprises and the
closed-loop management of salary.
 3. Training Plan
The company plans to complete 123 training projects and train 13,103 people throughout the year. Ensure that the
training rate of the whole staff reaches 70%, and the implementation rate of the annual training plan reaches 85%.
4. Outsourcing
□ Applicable √ Not applicable
90
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
                            X. Corporate Governance
I. Basic Situation of Corporate Governance
Since listed in the stock exchange, the Company has been following the laws, regulations and
documents such as the Company Law, Securities Law, Listed Company Governance Rules,
Shareholders’ Meeting Criteria of Listed Companies, Guide of Lifting the Quality of Listed
Company, and Instructions for Articles of Association of Listed Companies. The Company has been
establishing and improving governance structure to protect the interests of the Company and the
investors. The Shareholders’ Meeting was working with clear responsibilities and decision-making
procedures. Arrangements were made to enable convenient participating of the public investors.
Online voting system was introduced for material decision making processes. During the reporting
period, according to the relevant laws and regulations, and combining with the actual situation of
the Company, ‘Company policy’ and ‘Rules of Shareholders' General Meeting’ was formulated.
Whether there exists any difference in compliance with corporate governance, PRC Company Law
and relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance, PRC Company Law and
relevant provisions of CSRC
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel, assets,
organization and finance, etc. and has its own independent and complete business operation.
(1) In business operation: The Company has its own production and business planning, financial
affairs check and calculate, labor and personnel, raw material supplies and products selling business
system independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor,
personnel and salary management. Such senior executives as company's chairman, general manager,
vice general manager, secretary of Board of Directors, etc. get salary from the Company, and hold
the important position other than a director in shareholder department.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The
Company has its own independent purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structure
and working function are totally independent.
(5) In finance: The company has independent financial management department, the accounting and
financial management system where are complete and operated independently, and has bank account
91
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
                                                           Investor                                                   Index of information
          Sessions                   Type                                     Meeting Date       Date of disclosure
                                                      participation ratio                                                   disclosure
     First Extraordinary
                               Extraordinary                                                                          Announcement No.:
  General Meeting of                                       61.37%            March 14, 2019       March 15, 2019
                             General Meeting                                                                                2019-008
           2019
      Annual General          Annual General                                                                          Announcement No.:
                                                           61.36%             May 16, 2019         May 17, 2019
      Meeting of 2019            Meeting                                                                                    2019-029
 Second Extraordinary
                               Extraordinary                                                                          Announcement No.:
  General Meeting of                                       61.83%             June 10, 2019        June 11, 2019
                             General Meeting                                                                                2019-038
           2019
 Third Extraordinary
                               Extraordinary                                                                          Announcement No.:
  General Meeting of                                       76.24%            August 30, 2019      August 31, 2019
                             General Meeting                                                                                2019-057
           2019
 Forth Extraordinary
                               Extraordinary                                                                          Announcement No.:
  General Meeting of                                       62.08%           November 14, 2019 November 15, 2019
                             General Meeting                                                                                2019-076
           2019
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□ Applicable √ Not applicable
V. Duty fulfillment of Independent Directors in Reporting Period
1. The situation of independent directors attending the BOD and shareholders meeting
                                                  Attendance of independent directors
                           Number of                                                                          Failure to
                                                               Number of
                             Board                                             Number of                     personally       Number of
                                            Number of           meetings
      Independent          meetings                                           attendances      Number of    attend board        general
                                               spot           attended by
       Directors        necessary to be                                           by            absence       meetings      meetings to be
                                            attendances      Communicatio
                           attended                                          representative                 successively       attended
                                                                      n
                           during the                                                                      twice (Yes/No)
92
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
                    reporting
                      period
Zhong Tianli           12             2             10            0              0           No         5
Zhao Xinan             12             2             10            0              0           No         5
Zhang Suxun             7             1             6             0              0           No         3
Jin Yongli              5             1             4             0              0           No         2
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
The Remuneration and Assessment Committee is responsible to inspect the assessment process of
the executives in year 2018.
The Development and Strategy Committee is responsible to examine the Board of Directors’ Work
Report 2018 and the Proposal of Investment Structural Planning 2019 in advance and provide
suggestions on the Company’s long-term development basing on its researches.
The Auditing Committee is responsible to inspect the operation of internal auditing system, to verify
the financial information disclosure, to examine the Financial Report 2018, and the Internal Control
Introspective Evaluation Report, etc.
Nomination Committee provided opinions on the adjustment of executive positions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting
period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
93
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives implements a combination of daily
accountability and annual comprehensive assessment and evaluation. Senior Executives shall be
punished if they fail to perform their duties properly, make mistakes or neglect their duty. The annual
comprehensive assessment is conducted in the form of positive evaluation, horizontal evaluation
and reverse democratic evaluation. The comprehensive evaluation results are an important basis for
selecting and appointing senior management personnel, cultivating education, management
supervision and incentives.
IX. Internal Control
1. Significant defects of the internal control found in the internal control self-assessment report in
the reporting period
√Yes □ No
                       Significant Defects of The Internal Control Found In The Report Period
No significant defects of the internal control were found during the reporting period
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing
                                                April 24, 2020
report full text
Index of the internal control auditing report
                                                http://www.cninfo.com.cn
full text
Proportion of total assets of subsidiaries
belong to the scope of self-evaluation
                                                                                                                94.00%
report in the total assets of the Company’s
consolidated financial statements
Proportion of operation income of
subsidiaries belong to the scope of self-
evaluation report in the operation income                                                                       77.00%
of the Company’s consolidated financial
statements
                                             Standards of Defects Evaluation
                   Category                                  Financial Report                   Non-financial Report
                                                1. Material deficiencies:The frauds made by 1.              Material
                                                the directors, or supervisors, or senior deficiencies : Major
                                                management       personnel   that   leads   to errors    caused     by
Qualitative criteria
                                                significant losses and adverse effects to the decision-making
                                                company. 2. Significant deficiencies:Not in procedure; the important
                                                accordance       with   generally    accepted business            lacks
94
                     Bengang Steel Plates Co., Ltd. Annual Report 2019
     accounting      standards      selection     and institutional control or
     application of accounting policies; ; Not has a systematic failure
     established anti-fraud procedures and control while lacking effective
     measures; Not established the corresponding compensatory                  control;
     control mechanism or not implemented the serious drain of senior
     corresponding compensatory control on the and                middle          level
     accounting treatment of non-conventional or management personnel
     special deals; there are one or more defects in and        senior       technical
     the process control of the final financial report staff;     the    results    of
     and which leads to cannot reasonably internal                             control
     guaranteeing the financial report compiled to evaluation,               especially
     achieve the goal of being true and accurate. the                    significant
     3. General deficiencies:the internal control deficiencies have not
     deficiencies except those constitute the been corrected; other
     material deficiencies and the significant circumstances that have
     deficiencies.                                     big negative impact on
                                                       the        company.           2.
                                                       Significant
                                                       deficiencies : General
                                                       errors       caused          by
                                                       decision-making
                                                       procedure;        there     are
                                                       defects in the important
                                                       business regulations and
                                                       system serious drain of
                                                       business personnel in
                                                       key posts; the results of
                                                       internal                control
                                                       evaluation,           especially
                                                       the                   important
                                                       deficiencies have not
                                                       been corrected; other
                                                       circumstances that have
                                                       comparably big negative
                                                       impact on the company.
                                                       3. General deficiencies:
                                                       low-efficiency on the
                                                       decision-making
                                                       process; existed defects
                                                       in the ordinary business
                                                       institution or system;
                                                       serious drain of business
                                                       personnel        in     general
                                                       posts;                  general
95
                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                         deficiencies that have
                                                                                         not been corrected.
                                                                                         1. Material
                                                                                         deficiencies:1)
                                                                                         misstatement≥5% of the
                                                                                         total profits;2)
                                                                                         misstatement≥3% of the
                                                                                         total assets;3)
                                                                                         misstatement≥1% of the
                                                                                         total operating income.
                                           1. Material deficiencies:1)                 4)misstatement≥1% of
                                           misstatement≥5% of the total profits; 2)    the total amount of the
                                           misstatement≥3% of the total assets; 3)     owner’s equity. 5) 3%
                                           misstatement≥1% of the total operating       of the total profits
                                           income; 4)misstatement≥1% of the total      ≤misstatement<5% of
                                           amount of the owner’s equity. 5) 3% of the   the total profits;2.
                                           total profits ≤misstatement<5% of the total Significant
                                           profits;2. Significant deficiencies:1)     deficiencies:1)0.5%
                                           0.5% of the total assets ≤misstatement<3% of the total assets
                                           of the total assets;2)0.5% of the total     ≤misstatement<3% of
Quantitative criteria                      operating income ≤misstatement<1% of the the total assets;2)
                                           total operating income; 3)0.5% of the       0.5% of the total
                                           total amount of the owner’s equity           operating income
                                           ≤misstatement<1% of the total amount of     ≤misstatement<1% of
                                           the owner’s equity。3. General               the total operating
                                           deficiencies:1)misstatement<3% of the      income;3)0.5% of
                                           total profits;2)misstatement<0.5% of the the total amount of the
                                           total assets;3)misstatement<0.5% of the owner’s equity
                                           total operating income;4)misstatement< ≤misstatement<1% of
                                           0.5% of the total amount of the owner’s      the total amount of the
                                           equity。                                      owner’s equity。3.
                                                                                         General deficiencies:
                                                                                         1)misstatement<3%
                                                                                         of the total profits;2)
                                                                                         misstatement<0.5% of
                                                                                         the total assets;3)
                                                                                         misstatement<0.5% of
                                                                                         the total operating
                                                                                         income;
Number of major defects in financial
                                                                                                                   0
reporting(a)
Number of major defects in non-financial
                                                                                                                   0
reporting (a)
Number of important defects in financial                                                                           0
96
                                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
reporting(a)
Number of important defects in non-
                                                                                                                 0
financial reporting(a)
X. Internal Control Audit Report
√ Applicable □ Not applicable
                                    Review opinions in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2019.
Internal Control Audit Report
                                         Disclosure
Status
Disclosure date of audit report of
                                         April 24, 2020
internal control (full-text)
Index of audit report of internal
                                         http://www.cninfo.com.cn
control (full-text)
Internal audit report’s opinion         Standard unqualified opinion
Whether there is significant defect
                                         No
in non-financial report
Whether the accountants’ firm issued a qualified auditor’s report of internal control
  □ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-
assessment report of the Board of Directors
√ Yes □ No
97
                                               Bengang Steel Plates Co., Ltd. Annual Report 2019
        XI. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock
Exchange or any matured corporate bonds which the listed company failed to pay in full at the
approval date of the annual report.
No.
98
                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
                                XII. Financial Report
                                  Auditors’ Report
                                                           PCPAR [2020] No. ZB 10666
     To All Shareholders of Bengang Steel Plates Co., Ltd.:
     Auditor’s Opinion
     We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
     (hereinafter referred to as “the Company”) which comprise the consolidated statement of
     financial position and statement of financial position as at 31 December 2019, the
     consolidated statement of comprehensive income and statement of comprehensive income,
     the consolidated statement of changes in equity and statement of changes in equity, the
     consolidated statement of cash flows and statement of cash flows for the year then ended,
     and notes to the financial statements.
     In our opinion, the financial statements present fairly, in all material respects, the
     consolidated financial position and financial position of the Company as at 31 December
     2019, and the consolidated results of operations and results of operations and the
     consolidated cash flows and cash flows of the Company for the year then ended in
     accordance with the requirements of Accounting standards for Business Enterprises.
     Basis for Opinion
     We conducted our audit in accordance with Chinese Certified Public Accountants Auditing
     Standards. Our responsibilities under those standards are further described in the Auditor’s
     Responsibilities for the Audit of the Financial Statements section of our report. We are
     independent of the Company in accordance with the China Code of Ethics for Certified
     Public Accountants, and we have fulfilled our other ethical responsibilities in accordance
     with China Code of Ethics for Certified Public Accountants. We believe that the audit
     evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
     Key Audit Matters
     The key audit matters are matters that we consider to be the most important for the audit of
     the current financial statements based on professional judgment. The response to these
     matters is based on the overall audit of the financial statements and the formation of audit
     opinions. We do not express a separate opinion on these matters. We have identified the
     following items as key audit matters that need to be disclosed in the audit report.
                  Key Audit Matters                               Audit Procedure
       1. Provision for Bad Debts
99
                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
      Please refer to the Note (10) Bad debt          The audit process implemented for
      provision for accounts receivable under “3.    recoverability of Accounts receivable
      Significant accounting policies and             includes mainly:
      accounting estimates” and Note (3)             1. Understand, evaluate and test
      Accounts receivable under “5. Notes to         management's       aging    analysis    of
      consolidated financial statements”.            receivables and determine internal control
                                                      related to bad debt provision for accounts
      As at December 31, 2019, the carrying           receivable;
      amount of Accounts receivable is RMB            2. Review the management's consideration
      422,027,232.44 and the bad debt is RMB          and objective evidence for the impairment
      186,330,996,78.                                 test of accounts receivable and pay close
                                                      attention to whether the management has
                                                      fully identified the items that have been
      The management determines the estimated
                                                      impaired;
      recoverable amount of accounts receivable
      based on the assessment of the credit           3. Sample the accounts receivable tested
      status, financial status and actual             for impairment individually, and review on
      repayment status of relevant customers.         the assumption and reasonableness of
                                                      future cash flows estimation made by the
                                                      management;
      The management determines the estimated
                                                      4. For accounts receivable tested for
      recoverable amount of accounts receivable
                                                      impairment by portfolio, evaluate the
      based on significant accounting estimation
                                                      reasonableness of the bad debt provision
      and judgement. And impact amount is
                                                      proportion;
      significant, we determine that the
      recoverability of accounts receivable is a      5. Perform confirmation procedure, and
      key audit matter.                               check the confirmation results with the
                                                      amount recorded by the management;
                                                      6. Check the amount received after the
                                                      reporting period and evaluate the
                                                      reasonableness of provision for bad debts
                                                      made by the management.
      2. Impairment of Inventory
      Please refer to the Note (11)Inventory        The procedures carried out for the
      under “3. Significant accounting policies      impairment of inventory include:
      and accounting estimates” and (7)              1. Test and evaluate the effectiveness of
      Inventory        under “5. Notes to            internal control in relation to the
      consolidated financial statements”.            impairment of inventory;
                                                      2. Supervise stock taking and check the
      As at December 31,2019, the carrying            quantity and status of inventory, especially
      amount of inventory in consolidated             slow-moving and aged inventory;
      statement is RMB 7,770,641,202.02,              3. Obtain the calculation of the impairment
      impairment of inventory is RMB                  of inventory. Check any changes of the
      70,243,516.41, the book value of inventory      accrual of inventory impairment in the
      is RMB 7,700,397,686.61. Inventory is           current period and analyse the sufficiency
      measured at the lower of cost and net           of impairment;
      realizable value. The sufficiency of            4. For products with open market selling
      impairment for inventory will exert a great     price, we inquired the open market price
      impact on the financial statement.              independently and compared with the
                                                      estimated selling price. For products
      The net realizable value of finished            without open market selling price, we
      products held for direct selling in the daily   compare the estimated price of the
      business activity shall be calculated by        products with the latest actual selling price
      deducting the estimated sale expense and        or selling price after the reporting period.
                                                      5.Evaluate the estimated sales expenses
100
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2019
       relevant taxes from the estimated sale price and related taxes and fees made by the
       of inventories.                              management and compare with the
                                                    historical data of similar products and
       It involves significant judgement when the compare with the actual costs occurred
       management determines the estimated after the balance sheet date.
       selling price of the finished products based
       on status.
       As at December 31, 2019, the carrying
       amount of inventory was significant and
       involves the estimation of net realizable
       value. Therefore, we identified it as a key
       audit matter.
      Other information
      The management of the Company is responsible for the other information. The other
      information comprises information of the Company's annual report for the period of 2019
      but excludes the financial statements and our auditor's report.
      Our opinion on the financial statements does not cover the other information and we do not
      and will not express any form of assurance conclusion thereon.
      In connection with our audit of the financial statements, our responsibility is to read the
      other information identified above and, in doing so, consider whether the other information
      is materially inconsistent with the financial statements or our knowledge obtained in the
      audit if there appears to be a material misstatement.
      Based on the work we have performed, if we determine that there is a material misstatement
      of other information, we should report that fact. In this regard, we have nothing to report.
      Responsibilities of Management and Those Charged with Governance for the Financial
      Statements
      Management is responsible for the preparation and fair presentation of the financial
      statements in accordance with requirements of Accounting Standards for Business
      Enterprises, and for such internal control as management determines is necessary to enable
      the preparation of financial statements that are free from material misstatement, whether
      due to fraud or error.
      In preparing the financial statements, management of the Company is responsible for
      assessing the Company's ability to continue as a going concern, disclosing, as applicable,
      matters related to going concern and using the going concern basis of accounting unless
      management either intends to liquidate the Company or to cease operations, or has no
      realistic alternative but to do so.
      Those charged with governance are responsible for supervising the Company's financial
      reporting process.
      Auditor's Responsibilities for the Audit of the Financial Statements
101
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2019
      Our objectives are to obtain reasonable assurance about whether the financial statements
      are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
      report that includes our opinion. Reasonable assurance is a high level of assurance but is
      not a guarantee that an audit conducted in accordance with Chinese Certified Public
      Accountants Auditing Standards will always detect a material misstatement when it exists.
      Misstatements can arise from fraud or error and are considered material if, individually or
      in the aggregate, they could reasonably be expected to influence the economic decisions of
      users taken on the basis of these financial statements.
      As part of an audit in accordance with accordance with Chinese Certified Public
      Accountants Auditing Standards, we exercise professional judgment and maintain
      professional skepticism throughout the audit. We also:
      (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 to those risks,
      and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
      The risk of not detecting a material misstatement resulting from fraud 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 design audit
      procedures that are appropriate in the circumstances.
      (3) Evaluate the appropriateness of accounting policies used and the reasonableness of
      accounting estimates and related disclosures made by management.
      (4) Conclude on the appropriateness of management’s use of the going concern basis of
      accounting and, based on the audit evidence obtained, whether a material uncertainty exists
      related to events or conditions that may cast significant doubt on Bengang Steel Plate’s
      ability to continue as a going concern. If we conclude that a material uncertainty exists, we
      are required to draw attention in our auditor’s report to the related 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 to the date of our auditor’s report.
      However, future events or conditions may cause Bengang Steel Plates to cease to continue
      as a going concern.
      (5) Evaluate the overall presentation, structure and content of the financial statements,
      including the disclosures, and whether the financial statements represent the underlying
      transactions and events in a manner that achieves fair presentation.
      (6) Obtain sufficient and appropriate audit evidence regarding the financial information of
      entities or business activities within Bengang Steel Plates to express an opinion on the
      financial statements. We are responsible for guiding, supervising and executing the group
      audit and assume full responsibility for the 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, including any
      significant deficiencies in internal control that we identify during our audit.
      We also provide a statement to those charged with governance on compliance with the
      ethical requirements associated with independence and communicate with those charged
      with governance all relationships and other matters that may reasonably be considered to
      affect our independence, and related precautions (if applicable).
      From the matters communicated with those charged with governance, we determine those
      matters that were of most significance in the audit of the financial statements of the current
      period and are therefore the key audit matters. We describe these matters in our auditor's
      report unless law or regulation precludes public disclosure about the matter or when, in
102
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
      extremely rare circumstances, we determine that a matter should not be communicated in
      our report because the adverse consequences of doing so would reasonably be expected to
      outweigh the public interest benefits of such communication.
  BDO CHINA SHULUN PAN CERTIFIED                                   Certified Public Accountants of China
      PUBLIC ACCOUNTANTS LLP                                       (Engagement Partner)
                                                                  Certified Public Accountants of China
  Shanghai, the People’s Republic of China                                       22 April 2019
This auditor’s report and the accompanying notes to the financial statement are English translation of the
Chinese auditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall
prevail.
103
                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
                                 BENGANG STEEL PLATES CO., LTD.
                         CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                          As at 31 December 2019
                             (Expressed in Renminbi unless otherwise indicated)
                            Asset                         Notes 5       20191231            20181231
 Current assets
 Cash at bank and on hand                                   (1)      18,415,844,397.77   16,567,471,755.77
 Settlement provisions
 Capital lent
 Financial assets held for trading
 Financial assets at fair value through profit or loss
 Derivative financial assets
 Notes receivable                                           (2)                           3,580,145,843.38
 Accounts receivable                                        (3)        235,696,265.66      639,482,481.45
 Accounts receivable financing                              (4)       2,429,542,461.88
 Prepayments                                                (5)       1,291,047,458.11    1,321,537,514.78
 Premium receivable
 Reinsurance accounts receivable
 Receivable deposit for reinsurance contract
 Other receivables                                          (6)        172,807,036.77      202,763,964.98
 Redemptory financial assets for sale
 Inventories                                                (7)       7,700,397,685.61   10,677,747,112.40
 Assets held for sale
 Non-current assets due within one year
 Other current assets                                       (8)        312,904,824.09      292,119,771.13
 Total current assets                                                30,558,240,129.89   33,281,268,443.89
 Non-current assets
 Loan and advances issued
 Debt Investments
 Available-for-sale financial assets                        (9)                           1,041,824,829.00
 Other debt investments
 Held-to-maturity investment
 Long-term receivables
 Long-term equity investments                              (10)           2,642,998.70        2,455,681.55
 Other equity instrument investments                       (11)       1,041,824,829.00
 Other non-current financial assets
 Investment property
 Fixed assets                                              (12)      26,123,375,492.40   23,924,504,539.97
 Construction in progress                                  (13)       1,833,853,572.58     836,594,457.82
 Productive biological assets
 Oil and gas assets
104
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2019
                                    Asset                             Notes 5        20191231              20181231
 Intangible assets                                                     (14)         271,500,023.34         278,062,441.04
 Development expenditure
 Goodwill
 Long-term deferred expenses
 Deferred tax assets                                                   (15)         191,485,595.49         191,452,547.21
 Other non-current assets                                              (16)         708,502,552.50          76,341,975.35
 Total non-current assets                                                         30,173,185,064.01     26,351,236,471.94
 Total assets                                                                     60,731,425,193.90     59,632,504,915.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                                  Chief Financial Officer:                  Chief Accountant:
                           BENGANG STEEL PLATES CO., LTD.
               CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
                                    As at 31 December 2019
                       (Expressed in Renminbi unless otherwise indicated)
                           Liabilities and equities                   Notes 5         20191231              20181231
 Current Liabilities
 Short-term loans                                                       (17)        13,151,478,000.00     11,938,490,375.85
 Loan from central bank
 Loan from other banks
 Financial liability held for trading
 Financial liabilities at fair value through profit or loss
 Derivative financial liabilities
 Notes payable                                                          (18)        11,828,514,676.95     10,013,192,014.02
 Accounts payable                                                       (19)         4,527,513,030.27      5,522,042,811.65
 Advance from customers                                                 (20)         4,429,821,526.79      3,331,854,098.42
 Financial assets sold for repurchase
 Deposits from customers and interbank
 Receipt from vicariously traded securities
 Receipt from vicariously underwriting securities
 Employee benefits payable                                              (21)            23,698,174.56        51,466,231.72
 Current tax liabilities                                                (22)           284,825,814.80       515,752,369.68
 Other payables                                                         (23)           662,701,744.97       862,511,178.96
 Handling charges and commission payable
 Reinsurance accounts payable
 Liabilities held for sale
 Non-current liabilities due within one year                            (24)           234,474,657.99       350,965,576.32
 Other current liabilities
 Total current liabilities                                                          35,143,027,626.33     32,586,274,656.62
 Non-current liabilities
 Provision for insurance contract
 Long-term loans                                                        (25)         4,849,675,910.73      7,083,640,094.16
 Bonds payable
 Including: Preferred stock
105
                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
                           Liabilities and equities                        Notes 5       20191231                20181231
               Perpetual bond
   Long-term payables                                                        (26)         516,939,408.14          13,686,705.92
   Long-term employee benefits payable
   Estimated liabilities
   Deferred income                                                           (27)         208,955,407.30         289,499,002.97
   Deferred tax liabilities
   Other non-current liabilities
   Total non-current liabilities                                                         5,575,570,726.17    7,386,825,803.05
   Total liabilities                                                                    40,718,598,352.50   39,973,100,459.67
   Shareholders' equity:
   Share capital                                                             (28)        3,875,371,532.00    3,875,371,532.00
   Other equity instruments
   Including: Preferred stock
               Perpetual bond
   Capital reserves                                                          (29)       12,343,209,847.29   12,343,209,847.29
   Less: treasury shares
   Other comprehensive income
   Special reserves                                                          (30)             212,687.41             683,937.71
   Surplus reserves                                                          (31)         961,105,529.85         961,105,529.85
   General risk reserve
   Undistributed profits                                                     (32)        2,307,765,664.62    1,945,887,269.82
   Total equity attributable to equity holders of the parent company                    19,487,665,261.17   19,126,258,116.67
   Non-controlling interests                                                              525,161,580.23         533,146,339.49
   Total shareholder's equity                                                           20,012,826,841.40   19,659,404,456.16
   Total of liabilities and owners’ equity                                             60,731,425,193.90   59,632,504,915.83
The notes to the financial statements attached form part of these financial statements.
 Legal Representative:                               Chief Financial Officer:               Chief Accountant:
                                               BENGANG STEEL PLATES CO., LTD.
                                             STATEMENT OF FINANCIAL POSITION
                                                          As at 31 December 2019
                                        (Expressed in Renminbi unless otherwise indicated)
                                   Assets                                  Notes 14       20191231                20181231
   Current assets
   Cash at bank and on hand                                                            16,982,227,928.89    15,536,305,375.00
   Financial assets held for trading
   Financial assets at fair value through profit or loss
   Derivative financial assets
   Notes receivable                                                              (1)                         3,356,020,598.89
   Accounts receivable                                                           (2)      388,997,108.46         409,553,059.27
   Accounts receivable financing                                                 (3)    2,193,319,842.60
   Prepayments                                                                          1,184,632,345.13     1,309,194,738.97
   Other receivables                                                             (4)      266,663,235.81         235,037,391.46
 106
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
                            Assets                            Notes 14          20191231               20181231
 Inventories                                                                  6,114,582,832.33       8,681,362,081.72
 Assets held for sale
 Non-current assets due within one year
 Other current assets                                                          191,249,460.42          193,989,096.20
 Total current assets                                                       27,321,672,753.64       29,721,462,341.51
 Non-current assets
 Debt investments
 Available-for-sale financial assets                                                                 1,041,624,829.00
 Other debt investments
 Held-to-maturity investment
 Long-term receivables
 Long-term equity investments                                    (5)          2,016,281,902.16       2,016,281,902.16
 Other equity instrument investments                                          1,041,624,829.00
 Other non-current financial assets
 Investment property
 Fixed assets                                                               24,447,763,305.12       22,035,187,328.57
 Construction in progress                                                     1,813,889,136.42         825,553,510.15
 Productive biological assets
 Oil and gas assets
 Intangible assets                                                             145,470,040.68          148,776,177.96
 Development expenditure
 Goodwill
 Long-term deferred expenses
 Deferred tax assets                                                             93,555,276.54          96,220,003.00
 Other non-current assets                                                      696,351,867.38           76,341,975.35
 Total non-current assets                                                   30,254,936,357.30       26,239,985,726.19
 Total assets                                                               57,576,609,110.94       55,961,448,067.70
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                         Chief Financial Officer:                    Chief Accountant:
                                       BENGANG STEEL PLATES CO., LTD.
                             STATEMENT OF FINANCIAL POSITION (Continued)
                                               As at 31 December 2019
                                (Expressed in Renminbi unless otherwise indicated)
            Liabilities and shareholders' equities            Notes 14          20191231               20181231
 Current liabilities
 Short-term loans                                                           11,851,478,000.00       10,624,270,375.85
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                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
           Liabilities and shareholders' equities              Notes 14        20191231            20181231
 Financial liability held for trading
 Financial liabilities at fair value through profit or loss
 Derivative financial liabilities
 Notes payable                                                             10,225,969,445.22    9,213,748,427.22
 Accounts payable                                                           4,909,389,629.86    5,940,816,426.48
 Prepayments                                                                5,597,707,687.22    3,189,143,565.45
 Employee benefits payable                                                     21,872,906.71       49,378,095.47
 Current tax liabilities                                                      274,181,048.14      507,003,883.57
 Other payables                                                               384,125,032.59      538,051,513.13
 Liabilities held for sale
 Non-current liabilities due within one year                                  234,474,657.99      350,965,576.32
 Other current liabilities
 Total current liabilities                                                 33,499,198,407.73   30,413,377,863.49
 Non-current liabilities
 Long term loans                                                            4,849,675,910.73    7,083,640,094.16
 Bonds payable
 Including: Preferred stock
             Perpetual bond
 Long-term payables                                                           516,939,408.14       13,686,705.92
 Long-term employee benefits payable
 Estimated liabilities
 Deferred income                                                              208,955,407.30      289,499,002.97
 Deferred tax liabilities
 Other non-current liabilities
 Total non-current liabilities                                              5,575,570,726.17    7,386,825,803.05
 Total liabilities                                                         39,074,769,133.90   37,800,203,666.54
 Shareholder’s equity:
 Share capital                                                              3,875,371,532.00    3,875,371,532.00
 Other equity instruments
 Including: Preferred stock
             Perpetual bond
 Capital reserves                                                          11,923,058,165.17   11,923,058,165.17
 Less: Treasury shares
 Other comprehensive income
 Special reserves                                                                  53,330.99          525,218.48
 Surplus reserves                                                             961,105,529.85      961,105,529.85
 Undistributed Profits                                                      1,742,251,419.03    1,401,183,955.66
 Total shareholder's equity                                                18,501,839,977.04   18,161,244,401.16
108
                                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2019
                 Liabilities and shareholders' equities                                  Notes 14             20191231                   20181231
 Total liabilities and shareholder’s equity                                                          57,576,609,110.94             55,961,448,067.70
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                                          Chief Financial Officer:                             Chief Accountant:
                                              BENGANG STEEL PLATES CO., LTD.
                                    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                For the year ended 31 December 2019
                                          (Expressed in Renminbi unless otherwise indicated)
                                                  Items                                             Notes 5              2019                  2018
 1. Total operating income                                                                                         52,741,353,582.28       50,181,869,721.54
 Including: Operating income                                                                         (33)          52,741,353,582.28       50,181,869,721.54
 Interest income
 Premium earned
 Income from handling charges and commission
 2. Total operating cost                                                                                           52,124,252,623.88       49,034,254,641.50
 Including: Operating cost                                                                           (33)          49,211,414,645.62       45,243,735,204.31
               Interest expense
               Expenditure for handling charges and commission
               Surrender value
               Net expenditure for compensation
               Net provision for insurance contract appropriated
               Bonus payment for policy
               Reinsurance premium
               Tax and surcharges                                                                    (34)            271,580,080.03          356,418,784.11
               Selling and distribution expenses                                                     (35)           1,096,688,903.70        1,135,004,470.47
               General and administrative expenses                                                   (36)            831,945,841.56          916,341,137.85
               Research and development expenses                                                     (37)             30,780,463.74             6,399,884.30
               Financial expenses                                                                    (38)            681,842,689.23         1,376,355,160.46
               Including: Interest expense                                                                           948,799,627.90         1,278,508,985.59
                            Interest income                                                                          333,750,262.79          200,356,927.95
        Add: Other income                                                                            (39)             83,916,607.12           86,085,297.03
               Income on investment(“-” for loss)                                                (40)                1,058,377.90           5,212,886.01
               Including: Income from associates and joint ventures                                                        452,582.71            171,488.75
               Income from derecognition of financial assets measured at amortized cost
               Exchange gains(“-” for loss)
               Net exposure hedge income(“-” for loss)
               Gains from change of fair value (“-” for loss)
               Credit impairment loss (“-” for loss)                                             (41)                -6,541,900.62
               Asset impairment loss (“-” for loss)                                              (42)             -43,256,982.72          -37,147,168.61
               Assets disposal gains(“-” for loss)                                               (43)                3,441,646.67            213,401.13
 3. Operational profit(“-” for loss)                                                                             655,718,706.75         1,201,979,495.60
      Add: Non-operating income                                                                      (44)             10,306,462.87             8,384,120.14
      Less: Non-operating expenses                                                                   (45)             90,209,742.22          156,235,959.72
 4. Total profit (“-” for loss)                                                                                    575,815,427.40         1,054,127,656.02
      Less: Income tax expenses                                                                      (46)             18,954,938.42           17,949,597.66
 5. Net profit(“-” for loss)                                                                                     556,860,488.98         1,036,178,058.36
      1.Classification by continuing operating
           1.Net profit from continuing operation(“-” for loss)                                                  556,860,488.98         1,036,178,058.36
           2.Net profit from discontinued operation(“-” for loss)
      2.Classification by ownership
           1. Net profit attributable to the owners of parent company (“-” for loss)                             555,646,971.40         1,036,493,236.07
           2. Net profit attributable to non-controlling shareholders   (“-” for loss)                               1,213,517.58            -315,177.71
 6.Other comprehensive income
109
                                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2019
                                               Items                                                      Notes 5               2019                       2018
      Other comprehensive income attributable to owners of the parent company after tax
       1.Other comprehensive income items that will not be reclassified into gains/losses
         1)Re-measurement of defined benefit plans of changes in net debt or net assets
         2)Other comprehensive income under the equity method cannot be reclassified into
 profit or loss
         3)Changes in fair value of investments in other equity instruments
         4)Changes in fair value of company's credit risk
       2.Other comprehensive income that will be reclassified into profit or loss.
         1)Other comprehensive income under the equity method investee can be reclassified
 into profit or loss
         2)Changes in fair value of other debt investments
         3)Gains and losses from changes in fair value available for sale financial assets
         4)Amount of financial assets reclassified into other comprehensive income
         5)Held-to-maturity investments reclassified to gains and losses of available for sale
 financial assets
         6)Credit impairment provision of other debt investments
         7)The effective portion of cash flow hedges and losses
         8) Translation differences in foreign currency financial statements
         9)Other
       Other comprehensive income attributable to non-controlling shareholders’ equity after tax
 7. Total comprehensive income                                                                                               556,860,488.98            1,036,178,058.36
       Total comprehensive income attributable to the owner of the parent company                                            555,646,971.40            1,036,493,236.07
       Total comprehensive income attributable to non-controlling shareholders                                                  1,213,517.58                -315,177.71
 8. Earnings per share
       1)Basic earnings per share                                                                                                      0.143                      0.272
       2)Diluted earnings per share                                                                                                    0.143                      0.272
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                      Chief Financial Officer:                  Chief Accountant:
                                                BENGANG STEEL PLATES CO., LTD.
                                            STATEMENT OF COMPREHENSIVE INCOME
                                                  For the year ended 31 December 2019
                                            (Expressed in Renminbi unless otherwise indicated)
                                          Items                                               Notes 14                   2019                       2018
 1. Total operating income                                                                          (6)             52,605,113,207.02      50,425,079,247.74
 Less: Operating cost                                                                               (6)             49,734,189,460.60      46,181,928,781.43
 Tax and surcharges                                                                                                   219,994,347.76             315,916,612.32
 Selling and distribution expenses                                                                                    640,211,381.70             649,990,454.92
 General and administrative expenses                                                                                  775,147,352.42             865,648,309.29
 Research and development expenses                                                                                     30,780,463.74                6,399,884.30
 Financial expenses                                                                                                   654,332,095.34            1,322,508,429.72
 Including: Interest expense                                                                                          889,827,373.77            1,214,448,750.09
               Interest income                                                                                        302,622,279.00             189,652,832.19
         Add: Other income                                                                                             83,594,522.47              85,795,297.03
                 Income on investment(“-” for loss)                                             (7)                27,594,915.42                5,041,397.26
                 Including: Income from associates and joint ventures
                       Income from derecognition of financial assets
 measured at amortized cost
               Net exposure hedge income(“-” for loss)
               Gains from change of fair value (“-” for loss)
               Credit impairment loss(“-” for loss)                                                                 -4,408,068.83
110
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                 Items                                    Notes 14              2019                2018
                    Assets impairment loss(“-” for loss)                                                  -43,256,982.72     -40,515,739.88
                    Assets disposal gains(“-” for loss)                                                     3,488,648.92         213,401.13
      2. Operational profit(“-” for loss)                                                                 617,471,140.72   1,133,221,131.30
              Add: Non-operating income                                                                        10,128,386.99       7,861,687.83
              Less: Non-operating expenses                                                                     90,098,761.28    155,512,092.92
      3. Total profit (“-” for loss)                                                                        537,500,766.43    985,570,726.21
              Less: Income tax expenses                                                                         2,664,726.46       3,969,918.33
      4. Net profit(“-” for loss)                                                                         534,836,039.97    981,600,807.88
               1.Net profit from continuing operation (“-” for loss)                                        534,836,039.97    981,600,807.88
               2.Net profit from discontinued operation (“-” for loss)
      5.Other comprehensive income
           1.Other comprehensive income items that will not be reclassified into
      gains/losses
                1)Re-measurement of defined benefit plans of changes
                2)Other comprehensive income under the equity method cannot
      be reclassified into profit or loss
                3)Changes in fair value of investments in other equity instruments
                4)Changes in fair value of company's credit risk
              2.Other comprehensive income that will be reclassified into profit or
      loss.
                1)Other comprehensive income under the equity method investee
      can be reclassified into profit or loss
                2)Changes in fair value of other debt investments
                3)Gains and losses from changes in fair value available for sale
      financial assets
      4)Amount of financial assets reclassified into other comprehensive income
                5)Held-to-maturity investments reclassified to gains and losses of
      available for sale financial assets
                6)Credit impairment provision of other debt investments
                7)The effective portion of cash flow hedges and losses
                8) Translation differences in foreign currency financial statements
                9)Other
      6. Total comprehensive income                                                                           534,836,039.97    981,600,807.88
      7. Earnings per share
              1)Basic earnings per share
              2)Diluted earnings per share
    The notes to the financial statements attached form part of these financial statements.
    Legal Representative:                                   Chief Financial Officer:                           Chief Accountant:
                                                  BENGANG STEEL PLATES CO., LTD.
                                             CONSOLIDATED STATEMENT OF CASH FLOWS
                                                    For the year ended 31 December 2019
                                              (Expressed in Renminbi unless otherwise indicated)
                                         Items                                  Notes 5                2019                      2018
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services                                            47,399,776,780.22          42,328,152,309.09
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
    111
                                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2019
                                        Items                                              Notes 5        2019                 2018
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest, handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received                                                                                        364,095,520.25       302,924,880.47
Other cash received relating to operating activities                                        (48)           377,085,656.22       257,881,680.20
Subtotal of cash inflows from operating activities                                                      48,140,957,956.69     42,888,958,869.76
Cash paid for goods and services                                                                        37,675,995,353.53     36,193,580,135.37
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Net increase in capital lent
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees                                                                  2,109,471,410.71      1,979,770,272.66
Cash paid for all types of taxes                                                                         1,054,705,726.35       736,309,593.47
Other cash paid relating to operating activities                                            (48)           322,961,424.94       359,361,026.33
Subtotal of cash outflows from operating activities                                                     41,163,133,915.53     39,269,021,027.83
Net cash flows from operating activities                                                                 6,977,824,041.16      3,619,937,841.93
2. Cash flows from investing activities
Cash received from disposal of investments                                                                  52,773,000.00       679,000,000.00
Cash received from return on investments                                                                         871,060.75        5,483,213.49
Net cash received from disposal of fixed assets, intangible assets and other long-
                                                                                                                 340,766.32
term assets
Net cash received from disposal of subsidiary and other operating units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities                                                          53,984,827.07       684,483,213.49
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets                  4,546,086,687.86       588,988,848.56
Cash paid for acquisition of investments                                                                    52,773,000.00       173,000,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities                                                      4,598,859,687.86       761,988,848.56
Net cash flows from investing activities                                                                 -4,544,874,860.79       -77,505,635.07
3. Cash flows from financing activities
Proceeds from investment                                                                                                       3,965,799,988.19
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings                                                                                15,913,409,000.00     30,454,154,238.01
Other proceeds relating to financing activities                                             (48)         1,571,269,971.97       641,108,215.57
Subtotal of cash inflows from financing activities                                                      17,484,678,971.97     35,061,062,441.77
Cash repayments of borrowings                                                                           17,121,821,388.69     37,598,204,701.96
Cash payments for distribution of dividends, profit or interest expenses                                 1,172,008,803.59      1,546,758,168.22
Including: Cash paid to non-controlling shareholders as dividend and profit by
                                                                                                             9,198,305.14
subsidiaries
Other cash payments relating to financing activities                                        (48)            10,343,406.67        66,626,597.64
Subtotal of cash outflows from financing activities                                                     18,304,173,598.95     39,211,589,467.82
Net cash flows from financing activities                                                                  -819,494,626.98     -4,150,527,026.05
    112
                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2019
                                      Items                                   Notes 5         2019                   2018
4. Effect of foreign exchange rate changes on cash and cash equivalents                         75,411,813.22             43,066,662.23
5. Net increase in cash and cash equivalents                                                 1,688,866,366.61            -565,028,156.96
Add: Cash and cash equivalents at the beginning of the period                               11,752,548,621.97       12,317,576,778.93
6. Cash and cash equivalents at the ending of the period                                    13,441,414,988.58       11,752,548,621.97
   The notes to the financial statements attached form part of these financial statements.
   Legal Representative:                                    Chief Financial Officer:                 Chief Accountant:
                                              BENGANG STEEL PLATES CO., LTD.
                                                 STATEMENT OF CASH FLOWS
                                                For the year ended 31 December 2019
                                          (Expressed in Renminbi unless otherwise indicated)
                                      Items                                      Notes 14            2019                    2018
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services                                   45,925,314,655.54       42,632,583,197.28
Tax rebate received                                                                            318,311,209.48             118,774,962.17
Other cash received relating to operating activities                                           289,883,909.31             231,198,417.23
Subtotal of cash inflows from operating activities                                          46,533,509,774.33       42,982,556,576.68
Cash paid for goods and services                                                            35,992,848,593.70       37,353,692,318.60
Cash paid to and on behalf of employees                                                      1,975,902,597.93        1,859,006,850.63
Cash paid for all types of taxes                                                               897,467,468.84             624,727,175.93
Other cash paid relating to operating activities                                               231,467,233.26             283,003,821.64
Subtotal of cash outflows from operating activities                                         39,097,685,893.73       40,120,430,166.80
Net cash flows from operating activities                                                     7,435,823,880.60        2,862,126,409.88
2. Cash flows from investing activities
Cash received from disposal of investments                                                                                650,000,000.00
Cash received from return on investments                                                         27,594,915.42               5,041,397.26
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets
Net cash received from disposal of subsidiary and other
operating units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities                                               27,594,915.42            655,041,397.26
Cash paid for acquisition of fixed assets, intangible assets and
                                                                                             4,500,165,073.02             583,816,993.15
other long-term assets
Cash paid for acquisition of investments                                                                                  409,300,000.00
Net cash paid for acquisition of subsidiary and other operating
unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities                                      4,500,165,073.02             993,116,993.15
Net cash flows from investing activities                                                    -4,472,570,157.60            -338,075,595.89
3. Cash flows from financing activities
Proceeds from investment                                                                                             3,965,799,988.19
Cash received from borrowings                                                               14,603,409,000.00       28,965,014,238.01
   113
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2019
                             Items                                   Notes 14        2019                    2018
Other cash received relating to financing activities                             1,484,945,138.77          641,108,215.57
Subtotal of cash inflows from financing activities                              16,088,354,138.77     33,571,922,441.77
Cash repayments of borrowings                                                   15,794,901,388.69     36,001,575,301.96
Cash payments for distribution of dividends, profit or interest                  1,101,521,395.66      1,479,949,919.63
Other cash payments relating to financing activities                                 8,731,273.67            1,958,720.83
Subtotal of cash outflows from financing activities                             16,905,154,058.02     37,483,483,942.42
Net cash flows from financing activities                                          -816,799,919.25     -3,911,561,500.65
4. Effect of foreign exchange rate changes on cash and cash
                                                                                    75,337,651.52           43,049,979.65
equivalents
5. Net increase in cash and cash equivalents                                     2,221,791,455.27     -1,344,460,707.01
Add: Cash and cash equivalents at the beginning of the period                   10,807,824,843.20     12,152,285,550.21
6. Ending balance of cash and cash equivalents                                  13,029,616,298.47     10,807,824,843.20
  The notes to the financial statements attached form part of these financial statements.
  Legal Representative:                       Chief Financial Officer:                 Chief Accountant:
  114
                                                                                                                                                                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                         BENGANG STEEL PLATES CO., LTD.
                                                                                                                 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                                           For the year ended 31 December 2019
                                                                                                                     (Expressed in Renminbi unless otherwise indicated)
                                                                                                                                                                              2019
                                                                                                                              Owner's equity attributable to parent company
                     Items                                                   Other equity instruments                                                                                                                                                           Non-controlling    Total of owner's
                                                                                                                                              Less:              Other                                         General
                                                                                                                                                                               Special                                   Undistributed                             interest             equity
                                                   Share capital      Preference     Perpetual                      Capital reserves        Treasury         comprehensive                  Surplus reserves     risk                          Subtotal
                                                                                                        Others                                                                reserves                                      profit
                                                                        shares         bond                                                  shares             income                                         reserve
1. Ending balance of last year                     3,875,371,532.00                                                 12,343,209,847.29                                         683,937.71      961,105,529.85             1,945,887,269.82   19,126,258,116.67     533,146,339.49   19,659,404,456.16
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year               3,875,371,532.00                                                 12,343,209,847.29                                         683,937.71      961,105,529.85             1,945,887,269.82   19,126,258,116.67     533,146,339.49   19,659,404,456.16
3. Changes in current year (“-” for decrease)                                                                                                                               -471,250.30                                 361,878,394.80      361,407,144.50       -7,984,759.26      353,422,385.24
1) Total comprehensive income                                                                                                                                                                                             555,646,971.40      555,646,971.40        1,213,517.58      556,860,488.98
2) Capital increase          and   decrease   by
shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to
owners' equity
(4) Others
3) Profit distribution                                                                                                                                                                                                    -193,768,576.60    -193,768,576.60       -9,198,305.14     -202,966,881.74
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders                                                                                                                                                                                   -193,768,576.60    -193,768,576.60       -9,198,305.14     -202,966,881.74
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in
capital (or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred
into Retained Earnings
(6) Others
    115
                                                                                                                                                                                                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                                                                                              2019
                                                                                                                                   Owner's equity attributable to parent company
                       Items                                                     Other equity instruments                                                                                                                                                                                  Non-controlling        Total of owner's
                                                                                                                                                      Less:              Other                                                  General
                                                                                                                                                                                               Special                                     Undistributed                                      interest                 equity
                                                   Share capital          Preference       Perpetual                     Capital reserves           Treasury         comprehensive                          Surplus reserves      risk                               Subtotal
                                                                                                            Others                                                                            reserves                                        profit
                                                                            shares           bond                                                    shares             income                                                  reserve
 5) Special reserves                                                                                                                                                                          -471,250.30                                                               -471,250.30                   28.30             -471,222.00
 (1) Provision of special reserves                                                                                                                                                          47,843,133.40                                                            47,843,133.40                    28.30           47,843,161.70
 (2) Use of special reserves                                                                                                                                                                48,314,383.70                                                            48,314,383.70                                    48,314,383.70
 6) Others
 4. Ending balance of current year                 3,875,371,532.00                                                      12,343,209,847.29                                                    212,687.41      961,105,529.85               2,307,765,664.62       19,487,665,261.17          525,161,580.23       20,012,826,841.40
      The notes to the financial statements attached form part of these financial statements
      Legal Representative:                                                                                                         Chief Financial Officer:                                                                                       Chief Accountant:
                                                                                                                      BENGANG STEEL PLATES CO., LTD.
                                                                                                           CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
                                                                                                                        For the year ended 31 December 2019
                                                                                                                     (Expressed in Renminbi unless otherwise indicated)
                                                                                                                                                                                                   2018
                                                                                                                                            Owner's equity attributable to parent company
                          Items                                                        Other equity instruments                                                                                                                                                                                Non-controlling      Total of owner's
                                                                                                                                                          Less:              Other                                              General
                                                                                                                                                                                               Special                                                                                             interest              equity
                                                          Share capital         Preference       Perpetua                    Capital reserves            Treasury       comprehensive                       Surplus reserves      risk     Undistributed profit          Subtotal
                                                                                                                Others                                                                        reserves
                                                                                  shares          l bond                                                  shares            income                                               reserve
                                                                                                                                                                                                                                                                                                                    14,849,064,473.1
1. Ending balance of last year                          3,136,000,000.00                                                       9,114,845,542.05                                                475,046.75      961,105,529.85                 1,103,162,610.35        14,315,588,729.00          533,475,744.19
                                                                                                                                                                                                                                                                                                                                      9
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
                                                                                                                                                                                                                                                                                                                    14,849,064,473.1
2. Beginning balance of current year                    3,136,000,000.00                                                       9,114,845,542.05                                                475,046.75      961,105,529.85                 1,103,162,610.35        14,315,588,729.00          533,475,744.19
                                                                                                                                                                                                                                                                                                                                      9
3. Changes in current year (“-” for decrease)           739,371,532.00                                                       3,228,364,305.24                                                208,890.96                                       842,724,659.47          4,810,669,387.67            -329,404.70     4,810,339,982.97
1) Total comprehensive income                                                                                                                                                                                                                 1,036,493,236.07          1,036,493,236.07            -315,177.71     1,036,178,058.36
2) Capital increase and decrease by shareholders          739,371,532.00                                                       3,228,364,305.24                                                                                                                         3,967,735,837.24                            3,967,735,837.24
(1) Common share invested by shareholders                 739,371,532.00                                                       3,228,364,305.24                                                                                                                         3,967,735,837.24                            3,967,735,837.24
      116
                                                                                                                                                                                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                                                                                                     2018
                                                                                                                                               Owner's equity attributable to parent company
                               Items                                                               Other equity instruments                                                                                                                                                            Non-controlling    Total of owner's
                                                                                                                                                             Less:              Other                                             General
                                                                                                                                                                                                 Special                                                                                   interest           equity
                                                                           Share capital     Preference     Perpetua               Capital reserves         Treasury       comprehensive                       Surplus reserves    risk     Undistributed profit     Subtotal
                                                                                                                          Others                                                                 reserves
                                                                                               shares        l bond                                          shares            income                                             reserve
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners' equity
(4) Others
3) Profit distribution                                                                                                                                                                                                                          -193,768,576.60     -193,768,576.60                       -193,768,576.60
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders                                                                                                                                                                                                         -193,768,576.60     -193,768,576.60                       -193,768,576.60
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or
stock)
(2) Surplus reserves transferred into paid-in capital (or
stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into Retained
Earnings
(5) Others
5) Special reserves                                                                                                                                                                              208,890.96                                                              208,890.96          -14,226.99        194,663.97
(1) Provision of special reserves                                                                                                                                                              46,823,964.39                                                          46,823,964.39                         46,823,964.39
(2) Use of special reserves                                                                                                                                                                    46,615,073.43                                                          46,615,073.43           14,226.99     46,629,300.42
6) Others
                                                                                                                                                                                                                                                                                                          19,659,404,456.1
4. Ending balance of current year                                         3,875,371,532.00                                         12,343,209,847.29                                             683,937.71      961,105,529.85                1,945,887,269.82    19,126,258,116.67    533,146,339.49
                                                                                                                                                                                                                                                                                                                         6
       The notes to the financial statements attached form part of these financial statements
       Legal Representative:                                                                                                              Chief Financial Officer:                                                                                  Chief Accountant:
       117
                                                                                                                                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                   BENGANG STEEL PLATES CO., LTD.
                                                                                                  STATEMENT OF CHANGES IN EQUITY
                                                                                                     For the year ended 31 December 2019
                                                                                               (Expressed in Renminbi unless otherwise indicated)
                                                                                                                                                           2019
                                                                                             Other equity instruments                            Less:               Other
                                 Items                                                                                                                                            Special                          Undistributed      Total shareholder’s
                                                                    Share capital       Preferenc    Perpetual              Capital reserves    Treasury          comprehensi                   Surplus reserves
                                                                                                                   Others                                                        reserves                            profits                 equity
                                                                                         e shares      bond                                      shares            ve income
1. Ending balance of last year                                       3,875,371,532.00                                       11,923,058,165.17                                     525,218.48      961,105,529.85   1,401,183,955.66    18,161,244,401.16
Add: Change of accounting policies
     Correction of errors for last period
     Others
2. Beginning balance of current year                                 3,875,371,532.00                                       11,923,058,165.17                                     525,218.48      961,105,529.85   1,401,183,955.66    18,161,244,401.16
3. Changes in current year (“-” for decrease)                                                                                                                                   -471,887.49                       341,067,463.37         340,595,575.88
1) Total comprehensive income                                                                                                                                                                                       534,836,039.97         534,836,039.97
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution                                                                                                                                                                                             -193,768,576.60        -193,768,576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders                                                                                                                                                                            -193,768,576.60        -193,768,576.60
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into
Retained Earnings
(5) Other comprehensive income transferred into retained earnings
(6) Others
5) Special reserves                                                                                                                                                               -471,887.49                                                 -471,887.49
(1) Provision of special reserves                                                                                                                                               45,445,975.41                                               45,445,975.41
 118
                                                                                                                                                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                                                                2019
                                                                                                Other equity instruments                              Less:               Other
                                 Items                                                                                                                                                 Special                            Undistributed      Total shareholder’s
                                                                  Share capital          Preferenc      Perpetual                Capital reserves    Treasury          comprehensi                     Surplus reserves
                                                                                                                        Others                                                        reserves                              profits                 equity
                                                                                          e shares        bond                                        shares            ve income
(2) Use of special reserves                                                                                                                                                          45,917,862.90                                                 45,917,862.90
6) Others
4. Ending balance of current year                                   3,875,371,532.00                                             11,923,058,165.17                                      53,330.99        961,105,529.85   1,742,251,419.03    18,501,839,977.04
 The notes to the financial statements attached form part of these financial statements
 Legal Representative:                                                                                  Chief Financial Officer:                                                                     Chief Accountant:
                                                                                                  BENGANG STEEL PLATES CO., LTD.
                                                                                            STATEMENT OF CHANGES IN EQUITY (Continued)
                                                                                                    For the year ended 31 December 2019
                                                                                              (Expressed in Renminbi unless otherwise indicated)
                                                                                                                                                                2018
                                                                                            Other equity instruments                                  Less:               Other
                                 Items                                                                                                                                                 Special                            Undistributed      Total shareholder’s
                                                                Share capital      Preference         Perpetual                  Capital reserves    Treasury          comprehensi                     Surplus reserves
                                                                                                                       Others                                                         reserves                                profits              equity
                                                                                       shares           bond                                          shares            ve income
1. Ending balance of last year                                 3,136,000,000.00                                                   8,694,693,859.93                                     276,727.96        961,105,529.85    613,351,724.38     13,405,427,842.12
Add: Change of accounting policies
     Correction of errors for last period
     Others
2. Beginning balance of current year                           3,136,000,000.00                                                   8,694,693,859.93                                     276,727.96        961,105,529.85    613,351,724.38     13,405,427,842.12
3. Changes in current year (“-” for decrease)                 739,371,532.00                                                    3,228,364,305.24                                     248,490.52                          787,832,231.28       4,755,816,559.04
1) Total comprehensive income                                                                                                                                                                                              981,600,807.88         981,600,807.88
2) Capital increase and decrease by shareholders                739,371,532.00                                                    3,228,364,305.24                                                                                              3,967,735,837.24
(1) Common share invested by shareholders                       739,371,532.00                                                    3,228,364,305.24                                                                                              3,967,735,837.24
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution                                                                                                                                                                                                    -193,768,576.60        -193,768,576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders                                                                                                                                                                                   -193,768,576.60        -193,768,576.60
 119
                                                                                                                                                                                           Bengang Steel Plates Co., Ltd. Annual Report 2019
                                                                                                                                                                2018
                                                                                             Other equity instruments                                 Less:               Other
                               Items                                                                                                                                                   Special                             Undistributed      Total shareholder’s
                                                                    Share capital     Preference     Perpetual                   Capital reserves    Treasury          comprehensi                      Surplus reserves
                                                                                                                        Others                                                        reserves                                 profits              equity
                                                                                        shares         bond                                           shares            ve income
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into
Retained Earnings
(5) Others
5) Special reserves                                                                                                                                                                    248,490.52                                                      248,490.52
(1) Provision of special reserves                                                                                                                                                    40,685,554.06                                                  40,685,554.06
(2) Use of special reserves                                                                                                                                                          40,437,063.54                                                  40,437,063.54
6) Others
4. Ending balance of current year                                  3,875,371,532.00                                              11,923,058,165.17                                     525,218.48         961,105,529.85   1,401,183,955.66    18,161,244,401.16
The notes to the financial statements attached form part of these financial statements
Legal Representative:                                                                                   Chief Financial Officer:                                                                     Chief Accountant:
120
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2019
                   Bengang Steel Plates Co., Ltd.
                                Notes to the financial statements
                                For the year ended 31 December 2019
                       (Expressed in Renminbi unless otherwise indicated)
1.    Basic Information of the Company
(1)   Company profile
      Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “the Company”), as
      approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Government on 27 March 1997, was incorporated
      as a joint stock limited company through public share offer of domestic listed foreign currency denominated
      shares (B shares) in the People’s Republic of China (the “PRC”) on 27 June 1997 by Benxi Steel and Iron
      (Group) Co., Ltd. (“Bengang Group”), through reorganization of operations, assets and liabilities of its plants,
      namely, Steel Smelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant.
      As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”), the Company
      issued 400,000,000 B-shares at HKD 2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November
      1997, the Company issued another 120,000,000 A-shares (Renminbi common Shares) at RMB 5.40 each, and
      listed in Shenzhen Stock Exchange since 15 January 1998. The capital shares were totaled to 1,136,000,000
      shares.
      On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation,
      the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation
      issued by Liaoning Provincial Government State-owned Asset Administrative Committee, Bengang Group –
      the only holder of non-negotiable state-owned legal person shares paid the consideration to the current
      shareholders to obtain the current option for the 40,800,000 shares of the total 616,000,000 shares it was holding.
     

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