Bengang Steel Plates Co., Ltd. Annual Report 2019
Bengang Steel Plates Co., Ltd.
Annual Report 2019
April, 2020
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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.
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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.
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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
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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%
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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
107
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.