Beijing Shougang Company Limited
2023 Semi-Annual Report
10 August 2023
Section I. Important notice, Content, DefinitionsThe board of directors (the “Board”), the supervisory committee, all directors, supervisors and senior executivesof the Company warrant that there are no false representations, misleading statements or material omissions in thissemi-annual report; and are jointly and individually responsible for the truthfulness, accuracy and completeness ofthe information contained in this semi-annual report.Mr. Zhao Minge, the representative of the Company, Mr. Liu Jianhui, the general manager of the Company, Mr. LiBaizheng, the person overseeing the accounting operations of the Company, and Ms. Gong Juanjuan, head ofAccounting Department, made representations in respect of the truthfulness, accuracy and completeness of thefinancial report contained in the semi-annual report.All Directors have attended the Board meeting to consider this semi-annual report in person.Forward-looking statements contained in this semi-annual report do not constitute any substantive commitmentsto investors by the Company. Investors should be aware of the relevant investment risks.The Company plans not to distribute cash dividends, issue bonus shares, or convert public reserve funds into sharecapital.This report is prepared based on Chinese text and is prepared in both Chinese and English versions. In the event ofany discrepancy between Chinese and English versions, the Chinese version shall prevail.
CONTENTS
SECTION I. IMPORTANT NOTICE, CONTENT, DEFINITIONS .......................................................................................................... 2
SECTION II. COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ........................................................................................ 6
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS .......................................................................................................... 8
SECTION IV. CORPORATE GOVERNANCE................................................................................................................................. 19
SECTION V. ENVIRONMENT AND SOCIAL RESPONSIBILITY ...................................................................................................... 20
SECTION VI. SIGNIFICANT EVENTS ........................................................................................................................................ 27
SECTION VII. MOVEMENTS IN SHARE CAPITAL AND SHAREHOLDERS ....................................................................................... 33
SECTION VIII. PREFERRED SHARES ....................................................................................................................................... 37
SECTION IX. BONDS ............................................................................................................................................................. 38
SECTION X. FINANCIAL REPORT ............................................................................................................................................ 40
File directory for reference
1.The semi-annual report with the signature and seal of Chairman of the Board.
2.Accounting statements with signatures and seals of general manager, chief accountant and person in charge ofaccounting institution.
3. All the original documents and announcements publicly disclosed in newspapers designated by China SecuritiesRegulatory Commission during the reporting period.
4. The Articles of Association of the Company, etc.
5.Other relevant information.
INTERPRETATION
| Items | Refers to | Contents |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZSE | Refers to | Shenzhen Stock Exchange |
| Company, the Company or Shougang Co. | Refers to | Beijing Shougang Company Limited |
| Shougang or Shougang Group | Refers to | Shougang Group (Reforming from an enterprise owned by the whole people to exclusively state-owned companies, name of Shougang Group is changed from Shougang Corporation. The specific content is detailed in 15 June 2017 public announcement.) |
| Listing Rules of SZSE | Refers to | Listing Rules of Shenzhen Stock Exchange |
| The Articles of Association | Refers to | The Articles of Association of Beijing Shougang Company Limited |
| Board of Directors or the Board | Refers to | The board of directors of Beijing Shougang Company Limited |
| Supervisory Committee | Refers to | The supervisory committee of Beijing Shougang Company Limited |
| Shareholders’ General Meeting | Refers to | The Shareholders’ General Meeting of Beijing Shougang Company Limited |
| Qiangang Co. | Refers to | Shougang Qian'an Iron&Steel Co., Ltd. (Branch of the Company) |
| Cold-R Co. | Refers to | Beijing Shougang Cold Rolling Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.2806%) |
| New-E Co. | Refers to | Beijing Shougang New Energy Automobile Material Technology Co., Ltd. (Holding subsidiary of the Company, the Company holds 60%) |
| Zhixin Co. | Refers to | Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. (Holding subsidiary of the Company, the Company holds 68.0293%, New-E Co. holds 6.1483%) |
| Steel Trading | Refers to | Beijing Shougang Steel Trading Investment Management Co., Ltd. (Wholly-owned subsidiaries of the Company) |
| Qianshun Base | Refers to | The integrated production organization and product research and development system formed by Qiangang Co, located in Qian-an, Hebei province, and Cold-R Co., located in Shunyi District, Beijing. |
| Jingtang Co./Jingtang Base. | Refers to | Shougang Jingtang United Iron&Steel Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.1823%, Steel Trading Co. holds 29.8177%) |
| First Reorganization, and Previous Major Assets Reorganization | Refers to | Since the shut down of the main process of iron and steel manufacturing in late 2010, which was operated in Shijingshan District, Beijing, a transaction between the Company and Shougang carried out. The transaction event was announced as "Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Swap and Asset Purchase through Issue of Shares". The event was unconditional approved by China Securities Regulatory Commission Restructuring Committee on 16 January 2013. On 29 January 2014, the Company received the approval document, named "The Approval of Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Reorganization and Asset Purchase through Issue of Shares", which was issued by China Securities Regulatory Commission. On 25 April 2014, the reorganization was accomplished. |
| Second Reorganization | Refers to | On 23 April 2015, trading in the shares of the Company was suspended and the major assets swap launched. Main content of the swap is: 100% shareholding of Guizhou Investment Co., Ltd. was replaced with 51% shareholding of Jingtang Co., any insufficiency was paid in cash. This major assets swap was accomplished at the end of 2015. On 27 April 2016, re-election of the board of directors and amendment of Articles of Association of Jingtang Co. was accomplished and the Company was qualified to consolidate the financial statements of Jingtang Co. The second swap was then accomplished. |
| EVI | Refers to | Early Vendor Involvement means involving the downstream users at early stage of product development process and fully understanding users’ requirements for raw material so that high-performance materials and personalized services could be offered to users. |
| Reporting Period | Refers to | From 1 January 2023 to 30 June 2023 |
| Thousand, Million, Billion | Refers to | RMB Thousand, RMB Million, RMB Billion |
Section II. Company Profile and Major Financial IndicatorsI. Company information
| Short name of stock | Shougang Stock | Stock code | 000959 |
| Stock exchange for listing of shares | The Shenzhen Stock Exchange | ||
| Statutory Chinese name of the Company | Beijing Shougang Co., Ltd. | ||
| Statutory Chinese name of the Company | Shougang Co. | ||
| Statutory English name of the Company (if any) | Beijing Shougang Co., Ltd. | ||
| Legal representative of the Company | Zhao Minge | ||
II. Contact information
| Secretary of the board | |
| Name | Chen Yi |
| Correspondence address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC |
| Telephone | 010-88293727 |
| Fax | 010-88292055 |
| Email address | Chenyi@shougang.com.cn |
III. Other
1. Way to contact the Company
Whether registrations address, offices address and codes as well as website and email of the Company changed inreporting period or not
□ Applicable √ Non applicable
The registered address, office address and their postal codes, website address and email address of the Company did not changeduring the reporting period. The said information can be found in the 2022 Annual Report.
2. Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Non applicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this reportand the location where this report is placed did not change during the reporting period. The said information can be found in the 2022Annual Report.
3. Other relevant information
Did any change occur to other relevant information during the reporting period?
□ Applicable √ Non applicable
IV. Major accounting data and financial indicators
Whether the Company has retroactive adjustment or re-statement on previous accounting data or not
√ YES □ NO
Reasons for retroactive adjustment or restatementBusiness combination under common control
| Amount of the current period | Amount of the prior period | Changes over last year | ||
| Before the adjustment | After the adjustment | After the adjustment | ||
| Operating revenue | 57,368,096,029.37 | 63,831,045,675.55 | 63,194,115,447.56 | -9.22% |
| Net profit attributable to shareholders of the listed company | 410,357,394.89 | 1,761,186,441.94 | 1,795,307,073.34 | -77.14% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gain and loss | 385,078,009.98 | 1,752,673,761.21 | 1,752,673,761.21 | -78.03% |
| Net cash flows from operating activities | 355,551,077.60 | 2,284,983,569.84 | 2,417,964,155.29 | -85.30% |
| Basic earnings per share | 0.0548 | 0.2442 | 0.2490 | -77.99% |
| Diluted earnings per share | 0.0548 | 0.2442 | 0.2490 | -77.99% |
| Weighted average return on net assets | 0.84% | 3.87% | 3.94% | 3.10% decrease year-on-year |
| 30 June 2023 | 31 December 2022 | Changes over end of last year | ||
| Before the adjustment | After the adjustment | After the adjustment | ||
| Total assets | 141,596,926,689.81 | 143,173,445,003.35 | 143,173,445,003.35 | -1.10% |
| Net assets attributable to shareholders of the listed company | 49,106,218,376.50 | 47,947,672,865.42 | 47,947,672,865.42 | 2.42% |
V. Difference of accounting data under accounting rules in and out of China
1. Differences of net profit and net assets in financial statements disclosed according to International Financial ReportingStandards and Chinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with InternationalFinancial Reporting Standards and Chinese Accounting Standards during the reporting period of the Company.
2. Difference of net profit and net assets in financial statements disclosed according to foreign accounting standards andChinese Accounting Standards
□ Applicable √ Non applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with foreignaccounting standards and Chinese Accounting Standards during the reporting period of the Company.
VI. Items and amounts of non-recurring gain and loss
√ Applicable □ Non applicable
Unit: RMB Yuan
| Item | Amount of the current period | Note |
| Gains and losses on disposal of non-current assets (including the write-off that accrued for impairment of assets) | -2,234,959.49 | |
| Government grant included in the current profit and loss (except for the government grant which are closely related to the normal operation of the company that comply with national policies and regulations and continue to be enjoyed according to certain standards, quotas, or quotas) | 26,836,052.96 | |
| Profit and loss from external entrusted loans | 5,922,896.67 | |
| Other non-operating income and expenses except the above items | 1,156,972.21 | |
| Less: The impact of income tax | 2,483,528.09 | |
| The impact on non-controlling interests (post-tax) | 3,918,049.35 | |
| Total | 25,279,384.91 | -- |
Specific situation of other profit and loss items that meet the definition of non-recurring gain and loss:
□ Applicable √ Non applicable
The Company has no specific situation of other profit and loss items that meet the definition of non-recurring gain and loss.Explanation of reclassifying the non-recurring gain and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items as recurring items:
□ Applicable √ Non applicable
The Company has no non-recurring profit and loss item listed in the Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public—Exceptional Gain/Loss Items is reclassied as recurring item.
Section III. Management Discussion and Analysis
I. Main business of the Company during the reporting period
1.The industry situation of the Company during the reporting period
In the first half of 2023, China's economy showed a recovery trend, but the market demand is still insufficient. The rapid recovery ofsteel industry production, raw material cost has declined, due to downstream demand recovery less than expected, steel market pricesfell year-on-year, the decline is greater than the raw material end, the steel industry presents "high supply, low demand, lowprofitability" characteristics.Data from the National Bureau of Statistics show that in the first half of the year, ferrous metal smelting and rolling processingindustry increased by 5.5% year-on-year, and the national iron, steel and material production was 452 million tons, 536 million tonsand 677 million tons, up 2.7%, 1.3% and 4.4% respectively. Cisa data show that the average value of the China Steel Price Index(CSPI) was 113.21 points, down 15.4 per cent year-on-year. Among them, the average price index of long materials was 117.53points, down 15.5% year-on-year; The average plate price index was 113.51 points, down 13.9% year-on-year.Cisa key statistics member steel enterprises in the first half of the operating income of RMB 3.19 trillion, down 5.56% year-on-year,operating costs down 3.06% year-on-year, revenue decline is greater than the cost of 2.5 percentage points; Total profit was RMB 33billion, down 68.8% year on year; The average sales profit margin was 1.03%, down 2.1 percentage points year-on-year; The lossreached 44.6 percent, 17.4 percentage points higher than the same period last year.In terms of suppliers, China imported 576 million tons of iron ore in the first half of the year, an increase of 7.7%, and the averageimport price was 114.5 US dollars per ton, down 11.7%. Cisa key statistics of the main raw material procurement costs of enterprisesdecreased year-on-year, including domestic iron concentrate, imported powder ore, coking coal, metallurgical coke, scrap steelprocurement costs decreased by 7.2%, 3.9%, 18.0%, 25.2%, 19.5%.In terms of customers, the steel consumption structure changed in the first half of the year, the proportion of steel used in theconstruction industry declined, and the proportion of steel used in ships, automobiles, home appliances, wind power and photovoltaicincreased. Among them, the automobile industry in the new energy vehicles and export driven performance is better, the shipbuildingindustry to maintain a good momentum of development, wind power, photovoltaic industry to maintain rapid growth, the overalldemand of the home appliance industry to remain stable, the real estate industry continues to slump.Overall, the long-term fundamentals of China's economy have not changed, the economic recovery process presents thecharacteristics of wave-like development and zigzag forward, and the steel industry will still be a challenge and opportunity in thesecond half of the year. On the one hand, the contradiction between supply and demand will continue, the market competition willbecome more and more fierce, and the enterprise operation is still facing greater pressure; On the other hand, the state has introducedpolicies and measures to promote the transformation of urban villages and the construction of "dual use" public infrastructure, andboost the bulk consumption of automobiles, electronic products, home furnishing, etc., and relevant policies and measures will alsobring structural demand to the steel industry.
2. The company's development positioning, main business, main products
The company is a world-class enterprise, firmly committed to the strategy of "green manufacturing, intelligent manufacturing,high-quality manufacturing, lean manufacturing, accurate service", adhere to the development direction of "high-quality + service",continue to improve the ability of "manufacturing + service", continue to optimize the product structure, production line structure andcustomer structure, and continue to promote high-end product research and development focusing on electrical steel, automotiveplate, tinplate. From the initial listing of 4 million tons of high-quality rod and wire production enterprises, the company hastransformed into a leading technology, green and low-carbon technology company with 21.7 million tons of high-end plateproduction capacity.The main business of the Company is the production and sales of steel products and metal soft magnetic materials (electrical steel)
(1) Zhixin Co.
Zhixin Co is a research and development, manufacturing and sales base of metallic soft magnetic materials (electric steel), and hasbecome the world's leading manufacturer and service provider of electric steel. Products include oriented electric steel and electricsteel without orientation two big series, oriented electric steel including high magnetic induction, magnetic domain refinement, lownoise, low excitation, no underlying, intermediate frequency six products, independent research and development of low temperatureslab reheating technics producing high magnetic induction orientation technology of electric steel, as the world's fourth all cryogenictechnology industrialization enterprises. Non-oriented electric steel includes four categories of products including new energyvehicles, stress relief annealing, high efficiency and general, with stable batch production capacity of all grades.After building the world's first high-grade non-oriented electrical steel production line for new energy vehicles in August 2022,Zhixin Co. built the world's first professional production line for electrical steel with 100% thin specifications and high magneticinduction orientation in April 2023.
(2) Jingtang Co.
Jingtang Co., the large steel base, is a company with international advanced level designed and constructed in accordance with theconcept of circular economy. It has the obvious advantages of being near the sea and near the harbor, large equipments, highproduction efficiency and low cost.The products include two series of hot and cold plate products, of which the hot plate products form hot rolled sheet products basedon hot rolled pickling plate, weathering steel, automotive structural steel, high-strength engineering machinery steel, pipeline steel,bridge steel, energy steel, pipeline steel, ship plate, Marine steel, medium and thick plate product series; The cold series products are
mainly automobile plate, tinned (chrome) plate, cold rolled special plate and color coated plate.
(3) Qianshun Base
Iron and steel products of Qianshun Base is an important high-end plate production base in China, with world-class equipment andindustry-leading clean steel manufacturing technology, with high-end auto plate, high-end household appliance board full range ofsupply capacity.Iron and steel products of Qianshun Base include hot and cold plates. The hot plates mainly contain: hot-rolled pickle sheet,weather-resistant steel, automobile structure steel, high-strength construction machinery steel, pipeline steel, etc. The cold platesmainly contain: automobile sheet, cold-rolled special-use plate, etc.
3.Overview
The Company focuses on the main business, seize the key links, key tasks continue to follow up. The company with effective andcompetitive supply, to achieve accurate docking with downstream customer demand, at the same time, the company with internalextreme work to hedge external adverse effects, the ultimate efficiency, extreme energy efficiency, extremely low cost conceptthroughout the whole process of operation and production. Therefore, in the first half of the year, a number of production andoperation indicators reached the best level in history, and operational capacity and asset quality continued to improve.
(1) Completion of the Company's main operating indicators
During the reporting period, the Company's operating income was RMB 57.368 billion, a decrease of 9.22% year-on-year; Totalprofit was RMB 566 million, a decrease of 76.49% compared with the same period last year; Net profit attributable to shareholders oflisted companies was RMB 410 million, down 77.14% year-on-year; Earnings per share of RMB 0.05, down 77.97%; The totalassets are RMB 141.597 billion, and the equity attributable to shareholders of listed company was RMB 49.106 billion.In the second quarter, the Company's operating income was RMB 28.653 billion, down 0.22% from the previous quarter. The totalprofit was RMB 579 million, an increase of 4553.85% from the previous quarter; Net profit attributable to shareholders of the listedcompany was RMB 468 million, an increase of 906.90% from the previous quarter; and the earnings per share was RMB 0.0623, up
930.67% from the previous quarter.
(2) The achievement of major products:
i. Metallic soft magnetic material (Electric steel)Zhixin Co.: Metal soft magnetic materials (electrical steel) production 848,200 tons, an increase of 18.23%. Among them, 135,500tons, an increase of 39.24%; Non-oriented medium and low grade 31,700 tons, an increase of 15.68%; Non-oriented high grade 40.09million tons, an increase of 14.39%.The sales volume of metal soft magnetic material (Electrical steel) was 839,100 tons, and the operating income was RMB 6.976billion, accounts for 12.16% of the Company's operating income.ii. Iron and steel productsQiangang Co.: Iron 4.302,800 tons, an increase of 3.13%; Steel 4.52 million tons, an increase of 2.68%; 4.384,900 tons of materials(including cold-rolled raw materials), an increase of 4.54%. Jingtang Co.: 7,310,600 tons of iron, an increase of 2.69%; Steel 7.715million tons, an increase of 0.12%; 7,332,100 tons of material, an increase of 0.99%. Cold-R Co: cold rolled sheet 926,300 tons,down 8.42%. The sales revenue of steel products was RMB 48.623 billion, accounts for 84.76% of the Company's operating income.
| Item | Categories | Sales volume (tons in 0,000) |
| 1 | Billet | 3.68 |
| 2 | Hot rolling | 610.23 |
| 3 | Cold rolling | 467.35 |
4.The company's business highlights
(1) Continuously optimized product mix
The Company's three strategic products adhere to the development strategy of continuous leadership of electrical steel, fine andstrong automotive plate, and high-end breakthrough of tinplate, to achieve double improvement of product quality and efficiency.During the reporting period, the total output of the three strategic products (electrical steel, automotive plate, tin-plated (chromium)plate) was 3.13 million tons, the output of nine key products (cold-rolled steel, hot-rolled pickling plate, weathering steel, energysteel, automotive structural steel, high-strength engineering machinery steel, pipeline steel, bridge steel, ship plate Marine steel) was
4.61 million tons, and the total output of strategic and key products was 7.74 million tons. Accounted for 66% of the company's totalsteel production, an increase of 4 percentage points.
| Item | Categories | Sales volume (tons in 0,000) |
| 1 | Metal soft magnetic materials (electrical steel) | 85 |
| 2 | Automobile sheet | 195 |
| 3 | Tin-plated (chrome) plate | 33 |
| 4 | Special steel for cold rolling | 140 |
| 5 | Weathering resistant steel | 35 |
| 6 | Automotive structural steel | 42 |
| 7 | Hot rolled pickling plate | 104 |
| 8 | High strength steel for construction machinery | 33 |
| 9 | Pipeline steel | 17 |
| 10 | Energy steel | 36 |
| 11 | Bridge steel | 12 |
| 12 | Ship plate Marine steel | 42 |
Note: The above data are rounded data.
(2) Reduce costs and increase efficiency
The Company continues to explore cost reduction measures, actively respond to market changes, and vigorously promote processcost reduction, technology cost reduction, collaborative cost reduction, product structure efficiency. Qiangang Co. to develop 107key work to reduce costs and increase efficiency, and Jingtang Co. set up 18 reduce costs and increase efficiency research group, stepby step breakdown of detailed measures 1303, through the weekly promotion, monthly supervision, special supervision, tons of steelto reduce costs and increase efficiency exceeded the plan.In terms of process cost reduction, strengthen the operation of the integrated platform before iron, Qiangang Co. and Jingtang Co.carry out research on coal and ore blending, adhere to economic materials, resource coordination and mutual availability, reduceinventory costs, Qiangang Co.'s iron cost decreased by 14% year-on-year, and Jingtang Co.'s iron cost decreased by 12%year-on-year; Breaking the process interface, the iron water temperature of Qiangang Co. decreased by 7.7℃ compared with theprevious year, hitting a new low. In terms of technology cost reduction, we carried out in-depth alloy replacement and compositionoptimization, improved the control accuracy level through technical research, optimized product material design, and steadilyincreased the product yield, among which the product yield of non-oriented electrical steel products for new energy vehiclesincreased by 4.5% over the previous year. In terms of collaborative cost reduction, the formation of a production and supplycoordination mechanism to carry out comprehensive and all-factor material cost reduction; Strengthen supplier negotiations, extendthe pressure forward, and reduce costs at the source; Strengthen the control of equipment costs, reduce single maintenance andoutsourcing, and reduce the purchase price of spare parts. In terms of product structure efficiency, guided by product profitability,production and marketing coordination, dynamic optimization of product structure, the market demand for pickling productsincreased in May, and the company's pickling products increased by 30,000 tons more than planned.
(3) Production line efficiency improved
The company dug deep into the ultimate efficiency of the production line, the whole process of production continues to be efficientand stable, and the production efficiency of each production process of iron, steel and materials has improved significantly in thesecond quarter compared with the first quarter. The coke load of Qiangang Co. No. 3 blast furnace was stable at 6.0, refreshing thehistorical record, and the iron output exceeded the best level for 3 times; Steelmaking achieved daily production and daily production"double records", pickling product production in May hit the best monthly production level in history, and the comprehensive hotcharge heat delivery rate increased by 8% over the previous year. The utilization coefficient of Jingtang Co. 's three blast furnaceswas 2.45, maintaining the industry leading; Monthly production records were refreshed 17 times in each production line. Thecomprehensive hot-charging and hot-delivery rate of hot-rolled and medium-thick plate products was 10% higher than that of theprevious year; The MCCR production line continued to improve efficiency, and the maximum number of cast furnaces was increasedto 27. Zhixin Co.'s overall output of electrical steel in May refreshed the monthly production record.In April, Zhixin Company built the world's first professional production line of electrical steel with 100% thin specifications and highmagnetic induction orientation, 5 months ahead of the planned period, and contributed about RMB 150 million to the profit of thesecond quarter's oriented product increase. The key equipment of the production line is 100% independent integration, independentinstallation and independent debugging of the ring furnace. The localization rate of the equipment is as high as 95%, and the unitefficiency is improved by more than 30% compared with the original design of the foreign party, creating the best operating level ofsimilar units in China. Through continuous research and comprehensive optimization, the process speed of the decarbonizingannealing unit has set a new record, and the efficiency of the machine has increased by more than 27%. The process speed of the hotdrawing flat breaks the bottleneck, and the efficiency of the machine is increased by 15%. The new production line provides a strongsupport for Shougang electrical steel product innovation research and development and upgrade iteration.
(4) Process energy consumption to pursue the ultimate
At the end of 2022, Qiangang Co. and Jingtang Co. were awarded the first batch of "Double carbon Best Practice Energy EfficiencyBenchmarking Demonstration Plant Cultivation Enterprises" by CISA. During the reporting period, the company formulated the"Beijing Shougang Co., Ltd. energy cost reduction and extreme energy Efficiency integrated promotion Plan", establishedinstitutions and improved mechanisms, determined the ultimate energy efficiency goals and tasks of each process according to therelevant national standard bank benchmark values, and promoted the "extreme energy efficiency" project in steps.The cumulative energy consumption of the coking process of Qiangang Co. completed 109.6kgce/t, reaching the benchmark valuecontinuously from March to June, the cumulative energy consumption of the blast furnace process completed 388.5kgce/t, of whichthe No. 3 blast furnace reached the benchmark value in 3 months, and the cumulative energy consumption of the converter process
completed -29.5kgce/t, reaching the benchmark value from June.The cumulative energy consumption of the coking process of Jingtang Co. completed 100.9kgce/t, which was stable and better thanthe benchmark level; the cumulative energy consumption of the 3# blast furnace process completed 358.2kgce/t, which was betterthan the benchmark value in 5 months; the cumulative energy consumption of the converter process completed -29.3kgce/t, whichwas better than the benchmark value in 4 months.II. Analysis of core competitiveness
1. Market-leading technology
The Company, Jingtang Co., Zhixin Co., Cold-R Co. are high-tech enterprises, R&D investment of RMB 1.868 billion during thereporting period, accounts for 3.26% of the operating revenue. Technological innovation is guided by benefit and demand, relying onthe research and development system of "one institute and multiple centers", making technical research projects, expert workstationsand platforms for external cooperation. The cultivation of new products, new technologies and new technological processes isaccelerating.New Product development: 23SQGD085LS and 15SQF1250 oriented electrical steel products are the world's first. Compared withconventional products, 23SQGD085LS product reduces the excitation power by 25%, meeting the special requirements of "twonetworks" high-quality transformers with low no-load loss and low reactive power, which can further improve the safety of thepower grid and support the needs of low-carbon development of the power grid. 15SQF1250 is a future-oriented medium frequencyoriented electrical steel new product, is the world's thinnest oriented electrical steel products, compared with the traditional deepprocessing ultra-thin strip 0.15mm the highest grade, the performance level increased by 7 grades, to reach the world's leading level,to meet the power industry under complex conditions of large capacity, high energy efficiency, high safety, low noise requirements.It provides the key core materials for the new DC convergence technology of wind power, photovoltaic and other new energy powergeneration, and meets the development requirements of AC/DC flexible interchange of the future power grid. Focus on solving the"stuck neck" problem, continue to promote the "alternative import" localization of 26 projects, the first half of the supply of nearly40,000 tons.Patents: The Company has obtained 330 patents, including 137 invention patents, 192 utility model patents, and 1 design patent.Standards: As a standard industry benchmark, the Company has participated in the development of 60 standards at all levels,including leading the development of 24.Science and technology awards: The Company organized the application of Hebei Province science and technology awards 3,which has successively passed the formal review and network review, is about to enter the evaluation stage. At the same time, theCompany declared 2 metallurgical industry science and technology awards, which has completed the jury review.
2. High-end products
The company's electrical steel production of 848,200 tons, an increase of about 18%, of which high-end products accounted for 63%,an increase of 1 percentage point. Among them, the output of high magnetic induction oriented electrical steel was 135,500 tons, anincrease of about 39%, and 0.20mm and below ultra-thin specifications of high magnetic induction oriented electrical steel continuedto maintain the first position in domestic sales. The company continued to optimize the structure of non-oriented electrical steelproducts, and the output of high-grade non-oriented electrical steel products was 400,900.00 tons, an increase of about 14%. Amongthem, the production of high-grade non-oriented electrical steel products for new energy vehicles increased by about 59%year-on-year, which stabilized the supply of 8 of the top 10 car companies in the global sales of new energy vehicles.The company's automotive plate production of 1,946,800 tons, an increase of about 8%. The product structure was further optimized,and the output of galvanized, high-strength and outer plate increased by 18%, 18% and 21%, respectively. Ultra-high strength andaluminized silicon products increased by 11% and 71%, respectively. The user structure was further upgraded, and the share of coreOems increased steadily; Shipments to Japanese customers increased by 7% year-on-year; The supply of new energy users increasedby 85% year-on-year.The company's tin (chromium) plate production of 329,700 tons, an increase of about 11%. This increases the company's efforts todevelop overseas markets, the product is mainly made of high-sulfur resistance food cans to supply the Latin American market;Orders for functional beverage cans increased by 29% year-on-year, and orders for high-end varieties further increased.The company's key product features, differentiation promotion has also made new progress. Record deliveries of 9Ni steel for MarineLNG fuel tanks. High steel grade hydrogen pipeline steel mass production, the product in the first hydrogen doped pipeline in Chinato achieve 10,000-ton demonstration application. Photovoltaic bracket with weathering steel to achieve 490-800MPa level fullcoverage; The product achieves 420MPa level product batch supply. Enamelled steel (SRT550) was successfully applied to the28,500 square meter very large tank project in Dominica, Spain.
3. Green and low-carbon
The company actively promotes low-carbon management and LCA management around national low-carbon requirements andcustomer carbon reduction needs. To carry out the construction of low-carbon management system, combined with the company'slow-carbon practice, the company has formulated low-carbon action plans and planning implementation plans.The blast furnace of Jingtang Company with 55% proportion of pellets runs stably, and the smelting experiment of 35% proportion ofpellets is carried out steadily in Qiangang Company, and the carbon reduction at source is steadily promoted. Carry out experimentson low-carbon products, improve the carbon reduction capacity of technology, and achieve mass production of low-carbonautomotive plate coating products with comprehensive carbon emissions reduced by more than 30% by using the continuous castingprocess of 40% scrap ratio; For the first time in the industry, the production of a full range of GA low-carbon products such as IFsteel, low-carbon aluminum sedated steel and ultra-high strength steel and the trial production of client molding have been carried out,and the comprehensive application evaluation from the inner plate to the outer plate of the automobile has been completed, reachingthe same quality as the conventional process. Hot continuous rolling steel sheet and steel strip products were successfully released onthe EPD platform of the steel industry, and 4 categories of oriented electrical steel, pipeline steel, non-oriented electrical steel fornew energy vehicles, hot rolled high-strength steel sheet and steel strip for automobiles were selected into the "Green Design Product
List" of the Ministry of Industry and Information Technology. During the reporting period, Zhixin Electromagnetic's high-endoriented and non-oriented electrical steel products were applied to transformers, new energy vehicles, industrial motors, and homeappliances industries, which could reduce downstream carbon dioxide emissions by about 2 million tons by improving energyefficiency and motor efficiency.
4. Intelligent manufacturing
The company has a cross-regional, multi-base, unified production and marketing integration collaborative management platform, andthe evaluation level of the integration of the two has reached the "innovation breakthrough stage". The digitization rate of thecompany's production equipment exceeds 90%, the "one-button control" process reaches 50, the application of 129 sets of "industrialrobots", and the unmanned intelligent reservoir area is 15. During the reporting period, the company focused on promoting digitaltransformation and intelligent manufacturing around "iron integration" and "Shunleng Lighthouse Factory construction". After thecompany completed the construction of the "Integrated iron Management Information System" project, the basic data monitoring,collection and analysis of pellet, sintering and blast furnace areas were realized, which effectively reduced the cost of iron andprovided important support for improving the integrated collaborative management and control of iron pre-production areas. Duringthe reporting period, the company's "iron water temperature drop control" system was officially launched to achieve visual trackingof torpedo tanks, on-demand iron production, torpedo tank life cycle management and other functions, which helped improve theefficiency of molten iron logistics, and achieved a daily increase in the number of torpedo tank turnover compared with the previousyear and a further decrease in iron water temperature of about 8%.
5. Supply chain security
The company is the only platform for the development and integration of the steel and upstream iron ore resources industry ofShougang Group, the controlling shareholder, and the supply of iron ore, coke and coal resources for production is guaranteed. Interms of iron ore, Shougang Group has an annual production capacity of 4 million tons of iron fine iron ore in China, Xingshan ironore, foreign holding iron fine iron ore with an annual production capacity of 20 million tons of Peru iron ore, under construction ofthe Macheng iron ore reserves, low cost, environmental protection and efficient transportation, iron fine iron powder annualproduction capacity of 7 million tons, after the company's iron ore resources security capacity will be further improved. In terms ofcoke, the coke of Qiangang Co. is mainly supplied by Qian 'an Zhonghua Coal Chemical Co., Ltd., a joint venture between Shougangand Kailuan, and the coke of Jingtang Co. is supplied by Tangshan Shougang Jingtang Xishan Coking Co., Ltd., a joint venturebetween Beijing Tang Company and Shanxi Coking Coal. The supply of coke resources is guaranteed. In terms of coal, the companyhas signed long-term association resources with large state-owned coal groups, and Shougang Fushan Resources Group Co., Ltd.which is a share of Shougang Group also provides some high-quality coking coal resources to the company, and the coal supplyguarantee is strong.
6、"Technology + Service" marketing
The company takes the customer as the center to deepen the "technology + service" marketing strategy, and build Shougang serviceto enhance brand value. The company has continuously improved the service system, improved the service efficiency, andstrengthened the construction of the new energy vehicle service team, which meets the customer's requirements for quality, delivery,research and development, and service, resulting in the continuous strengthening of technical marketing capabilities. The Companyhas increased its EVI service capabilities year by year, and the EVI supply increased by approximately 19% year over year during thereporting period. Establish a product advantage analysis model, strengthen product research and development, improvemanufacturing capabilities, promote key products to maintain competitive advantages, strategic products to expand the leading edge.The company formed a marketing center as the core, 5 regional steel trade subsidiaries and 11 processing center combination ofcentralized, rapid response, efficient operation of the marketing management network, which effectively guaranteed the stability ofdownstream customers, while consolidating and enhancing the industry chain leading enterprises and high-quality small andmedium-sized customers combined channel structure. The company cultivates the comparative advantage of industrial chaincooperation, and carries out all-round, multi-level and high-quality cooperation with key customers in the industry, which furtherenhances the depth of cooperation, improves the viscosity of cooperation, and maintains the market share.
7. Talent thriving enterprise
The company has further promoted the strategy of strong talent and built a multi-level training system for all staff. Qianshun Baseand Zhixin Co. have established a full-life career development system of "Voyage" for high-potential talents, and organized trainingprograms such as Deep Blue Special training camp, Future Artisan Youth training camp and TTT internal trainer to strengthen talentempowerment. Jingtang Co. constructs the "four horizontal and three vertical" full staff training system, and solidly promotes the"blue project" to build a platform for the growth of cadres and talents. During the reporting period, 1 person was awarded theNational May 1 Labor Medal, 1 person was awarded the third "Beijing Great Craftsman", and 1 person was awarded the "NationalCraftsman of Machinery, metallurgy and building Materials Industry".The company has improved the talent promotion evaluation mechanism and smooth the career development path of talents. Therefore,the company formulated the "Shougang Stock 2023 Three talent team incentive mechanism Implementation Plan", which furthersubdivides the job family and job category, improves the accuracy of evaluation, thus strengthening the performance orientation,practical orientation and strengthening the training and development of high-level position personnel. Finally, the proportion ofhigh-tech and high-skilled talents in the company has steadily increased.
III. Main business analysis
SummaryRefer to relevant contents of “I. Main business of the Company during the reporting period”.Changes in the financial data
Unit：RMB Yuan
| Amount of the current period | Amount of the prior period | Year-on-year | Reasons |
| Changes | ||||
| Operating income | 57,368,096,029.37 | 63,194,115,447.56 | -9.22% | |
| Operating cost | 54,320,153,167.23 | 58,297,262,097.99 | -6.82% | |
| Sale expenses | 108,676,549.88 | 110,681,490.14 | -1.81% | |
| Administrative expenses | 579,477,011.71 | 589,064,385.23 | -1.63% | |
| Financial expenses | 770,889,994.30 | 894,145,156.20 | -13.78% | |
| Income tax expenses | 93,166,930.51 | 366,144,984.98 | -74.55% | It is mainly caused by the decrease of taxable income. |
| R&D Investment | 1,868,781,554.78 | 3,651,308,942.31 | -48.82% | Mainly, the research and development projects of this year will be carried out successively in the second half of the year according to the arrangement. |
| Net cash flow generated by business operation | 355,551,077.60 | 2,417,964,155.29 | -85.30% | It is mainly caused by the high level of raw fuel operation of suppliers, resulting in a substantial increase in cash paid for goods and services. |
| Net cash flow generated by Investment | -1,296,355,964.90 | -1,137,710,502.32 | -13.94% | |
| Net cash flow generated by financing | -373,104,745.76 | -2,916,354,643.50 | 87.21% | It is mainly due to the increase in investment from minority shareholders absorbed by the subsidiary and the decrease in repayment of bank loans during the period. |
| Net increasing of cash and cash equivalents | -1,313,909,633.06 | -1,636,100,990.53 | 19.69% |
Major changes in profit composition or sources during the report period
□ Applicable √ Non applicable
The profit composition or sources of the Company have remained largely unchanged during the report period.
Component of operating revenue
Unit: RMB Yuan
| Current period | Prior period | Increase/decrease | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating revenue | 57,368,096,029.37 | 100% | 63,194,115,447.56 | 100% | -9.22% |
| According to industries | |||||
| Metallurgy | 57,368,096,029.37 | 100.00% | 63,194,115,447.56 | 100.00% | -9.22% |
| According to products | |||||
| Billet | 137,297,135.04 | 0.24% | 302,806,719.26 | 0.48% | -54.66% |
| Hot-rolled steel | 24,421,717,115.92 | 42.57% | 26,182,194,086.24 | 41.43% | -6.72% |
| Cold-rolled steel | 23,064,792,967.98 | 40.20% | 27,084,614,994.85 | 42.86% | -14.84% |
| Metallic soft magnetic material | 6,976,487,451.49 | 12.16% | 6,497,901,339.57 | 10.28% | 7.37% |
| Other steels | 998,828,157.40 | 1.74% | 1,212,459,321.71 | 1.92% | -17.62% |
| Other business | 1,768,973,201.54 | 3.08% | 1,914,138,985.93 | 3.03% | -7.58% |
| According to regions | |||||
| North China | 20,185,444,818.01 | 35.19% | 22,741,321,643.12 | 35.99% | -11.24% |
| Northeast China | 1,415,574,393.06 | 2.47% | 1,549,861,970.51 | 2.45% | -8.66% |
| East China | 16,566,019,818.33 | 28.88% | 18,474,324,546.46 | 29.23% | -10.33% |
| Mid-South China | 7,476,690,712.67 | 13.03% | 8,251,345,045.82 | 13.06% | -9.39% |
| South China | 5,550,606,810.75 | 9.68% | 6,186,370,946.79 | 9.79% | -10.28% |
| Southwest China | 1,395,468,272.81 | 2.43% | 1,560,928,967.74 | 2.47% | -10.60% |
| Northwest China | 127,111,951.10 | 0.22% | 138,827,907.08 | 0.22% | -8.44% |
| Export | 4,651,179,252.64 | 8.11% | 4,291,134,420.04 | 6.79% | 8.39% |
Situation of industry, product and district occupying the company’s operating revenue and operating profits with profit over 10%
√ Applicable □ Non applicable
Unit: RMB Yuan
| Operating revenue | Costs of sales | Gross margin | Year-on-year change of operating revenue | Year-on-year change of costs of | Year-on-year change of gross |
| sales | margin | |||||
| According to industries | ||||||
| Metallurgy | 55,599,122,827.83 | 52,725,471,888.88 | 5.17% | -9.27% | -6.98% | -2.33% |
| According to products | ||||||
| Billet | 137,297,135.04 | 134,524,608.66 | 2.02% | -54.66% | -47.55% | -13.28% |
| Hot-rolled steel | 24,421,717,115.92 | 23,123,065,070.53 | 5.32% | -6.72% | -5.49% | -1.24% |
| Cold-rolled steel | 23,064,792,967.98 | 22,041,998,760.18 | 4.43% | -14.84% | -13.14% | -1.88% |
| Metallic soft magnetic material | 6,976,487,451.49 | 6,540,864,298.44 | 6.24% | 7.37% | 17.93% | -8.41% |
| Other steels | 998,828,157.40 | 885,019,151.07 | 11.39% | -17.62% | -15.02% | -2.72% |
| According to regions | ||||||
| North China | 18,416,471,616.47 | 17,603,447,258.41 | 4.41% | -11.57% | -9.41% | -2.29% |
| Northeast China | 1,415,574,393.06 | 1,406,777,554.82 | 0.62% | -8.66% | -7.59% | -1.16% |
| East China | 16,566,019,818.33 | 15,650,232,369.37 | 5.53% | -10.33% | -8.31% | -2.08% |
| Mid-South China | 7,476,690,712.67 | 7,056,814,329.93 | 5.62% | -9.39% | -9.16% | -0.24% |
| South China | 5,550,606,810.75 | 5,150,939,156.61 | 7.20% | -10.28% | -9.25% | -1.05% |
| Southwest China | 1,395,468,272.81 | 1,309,519,511.26 | 6.16% | -10.60% | -7.49% | -3.16% |
| Northwest China | 127,111,951.10 | 125,235,120.17 | 1.48% | -8.44% | -8.90% | 0.50% |
| Export | 4,651,179,252.64 | 4,422,506,588.31 | 4.92% | 8.39% | 20.72% | -9.71% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest on year’s scope of period-end.
□Applicable √ Non applicable
IV. Non-principal business analysis
□ Applicable √ Non applicable
V. Assets and liabilities
1. Significant changes in the composition of assets
Unit: RMB Yuan
| 30 June 2023 | 31 December 2022 | Proportion changes | Notes | |||
| Amount | Proportion | Amount | Proportion | |||
| Cash and Cash equivalents | 7,498,105,524.69 | 5.30% | 9,470,472,522.05 | 6.61% | -1.31% | |
| Accounts receivable | 1,561,766,163.98 | 1.10% | 1,450,008,897.10 | 1.01% | 0.09% | |
| Inventories | 12,216,145,045.92 | 8.63% | 11,960,246,748.15 | 8.35% | 0.28% | |
| Long-term equity investments | 2,566,256,714.59 | 1.81% | 2,724,285,925.35 | 1.90% | -0.09% | |
| Fixed assets | 90,739,924,821.37 | 64.08% | 93,331,072,969.17 | 65.19% | -1.11% | |
| Construction in progress | 5,710,993,798.69 | 4.03% | 7,673,649,852.77 | 5.36% | -1.33% | |
| Right-of-use assets | 74,922,597.56 | 0.05% | 83,107,359.45 | 0.06% | -0.01% | |
| Short-term borrowings | 28,483,601,889.04 | 20.12% | 29,580,006,103.39 | 20.66% | -0.54% | |
| Contract liabilities | 5,043,291,760.66 | 3.56% | 4,508,016,725.74 | 3.15% | 0.41% | |
| Long-term borrowings | 10,914,950,000.00 | 7.71% | 10,594,350,000.00 | 7.40% | 0.31% | |
| Lease liabilities | 63,956,202.06 | 0.05% | 72,439,836.79 | 0.05% | 0.00% | |
2. Major overseas assets
□Applicable √ Non applicable
3. Assets and liabilities measured at fair value
√ Applicable □ Non applicable
Unit: RMB Yuan
| Item | Opening balance | Fair value changes in the period | Accumulated fair value changes in equity | Impairment accrual in the period | Amount of purchase in the period | Amount of sales in the period | Other changes | Closing balance |
| Financial assets | ||||||||
| Other equity instruments investments | 232,766,133.81 | 276,593,703.74 | 509,359,837.55 | |||||
| Other non-current financial assets | 79,234,007.60 | 0.00 | 79,234,007.60 | |||||
| Financing receivables | 3,489,134,871.56 | 6,325,120,221.92 | ||||||
| Total | 3,801,135,012.97 | 0.00 | 276,593,703.74 | 0.00 | 0.00 | 0.00 | 0.00 | 6,913,714,067.07 |
| Financial liabilities | 0.00 | 0.00 | ||||||
Other changesWhether the measurement attributes of the company's main assets have changed significantly during the reporting period.
□ Yes √ No
4. Major restricted assets at the end of the reporting period
| Item | Carrying amount at 30 June 2023 | Restriction reason |
| Cash and Cash equivalents | 482,089,076.86 | All kinds of deposits |
| Notes receivable | 87,759,217.36 | Pledged notes |
| Accounts receivable | 44,772,339.34 | Pledged notes |
| Total | 614,620,633.56 |
VI. Investment analysis
1. Overall situation
√ Applicable □ Non applicable
| Invested amount during the reporting period (RMB Yuan) | Investment amount during the previous reporting period (RMB Yuan) | Change |
| 1,401,733,364.15 | 2,252,874,010.20 | -37.78% |
2. Significant equity investment during the reporting period
□ Applicable √ Non applicable
3. Significant non-equity investment during the reporting period
√ Applicable □ Non applicable
Unit: RMB Yuan
| Project name | Investment method | Fixed asset investment or not (Y/N) | Related industries | Investment amount during the reporting period | Actual investment amount up to the end of reporting period | Capital source | Project schedule | Anticipated benefits | Realized income up to the end of reporting period | Reasons for non-achievement of planned schedule and anticipated income | Date of disclosure (if any) | Index of disclosure (if any) |
| Zhixin Co. Oriented phase II project | Self-built | Y | Iron and steel | 0.00 | 1,314,052,905.22 | Self-raised | 88.23% | 391,380,000.00 | 0.00 | The devices of the project are being installed | ||
| Zhixin Co. High-end heat treatment engineering project | Self-built | Y | Iron and steel | 453,152,107.98 | 636,883,710.86 | Self-raised | 36.93% | 436,810,000.00 | 0.00 | The project is undergoing civil construction | ||
| Total | -- | -- | -- | 453,152,107.98 | 1,950,936,616.08 | -- | -- | 828,190,000.00 | 0.00 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
□ Applicable √ Non applicable
The Company has no securities investment during the reporting period.
(2) Derivatives investment
□ Applicable √ Non applicable
The Company has no derivatives investment during the reporting period.
5. Use of raised funds
√ Applicable □ Non applicable
(1) Overall use of raised funds
√ Applicable □ Non applicable
Unit: RMB’0,000
| Year for fund-rai sing | Method of fund-raising | Total raised funds | Total raised funds that have been used in the current period | Total raised funds that have been used accumulatively | Total raised funds with altered purposes during the Reporting Period | Total accumulative raised funds with altered purposes | Proportion of total accumulative raised funds with altered purposes | Total raised funds that have not been used yet | Use and ownership change of unused raised funds | Raised funds that have been left unused for over two years |
| 2022 | Non-public offering | 29,120 | 3,246.3 | 25,098.63 | 0 | 0 | 0.00% | 3,696.13 | Deposit in Jingtang Co. fund raising special account | 0 |
| Total | -- | 29,120 | 3,246.3 | 25,098.63 | 0 | 0 | 0.00% | 3,696.13 | -- | 0 |
| Explanation of the overall use of raised funds | ||||||||||
| In 2022, the total amount of supporting funds raised by the Company through non-public issuance of ordinary shares is RMB 291,199,983.58, and after deducting the underwriting fees of the lead underwriter, the special account of the Company for raising funds received subscription funds of RMB 287,603,983.82; After deducting the fees of independent financial advisers and other related fees for the restructuring, the net capital raised is RMB 273,368,221.41. As of 30 June 2023, the company has used the raised funds of RMB 250,986,264.39, among which, a. the Company has used RMB 151,603,440.25 to supplement working capital and repay debts; and b. transferred RMB 136,149,157.84 to the special account of Jingtang Co. for the comprehensive transformation project of energy saving and consumption reduction of the front railway system, of which, RMB 99,382,824.14 has been used. As of 30 June 2023, the accumulated interest income generated by the raised funds is RMB 343,568.22, the balance of the special account for the raised funds of the Company is RMB 0.00, and the balance of the special account for the raised funds of Jingtang Co. is RMB 36,961,287.65. | ||||||||||
(2) Committed projects of raised funds
√ Applicable □ Non applicable
Unit: RMB’0,000
| Committed investment projects and investment of excessive raised funds | Whether projects have been altered (including partial alternation) | Total committe d investme nt with raised funds | Adjusted total investme nt amount (1) | The investme nt amount during the Reporting Period | Accumul ative investme nt amount as of the end of the Reporting Period (2) | Invest ment progre ss as of the end of the Report ing Period (3) = (2)/(1) | Date when the projec ts are ready for their intend ed use | Benef its recor ded durin g the Repor ting Perio d | Whet her the estim ated benefi ts are reach ed | Whet her there are mater ial chang es in the proje ct feasib ility | |
| Committed investment projects | |||||||||||
| Jingtang Co. railway front system energy saving and consumption reduction comprehensive transformation project | No | 125,000 | 13,614.92 | 3,246.3 | 9,938.28 | 73.00% | Not applicable | No | |||
| Supplementary liquidity | No | 125,000 | 15,160.34 | 0 | 15,160.34 | 100.00% | Not applicable | No | |||
| Subtotal of committed investment projects | -- | 250,000 | 28,775.26 | 3,246.3 | 25,098.62 | -- | -- | 0 | -- | -- | |
| Investment of excessive raised funds | |||||||||||
| None | |||||||||||
| Total | -- | 250,000 | 28,775.26 | 3,246.3 | 25,098.62 | -- | -- | 0 | -- | -- | |
| Explain the circumstances and reasons for failing to achieve the planned progress and estimated income by item (including the reasons why "Reach the estimated benefit" is selected as "Not applicable") | Not applicable | ||||||||||
| Explanations of the material changes in the project feasibility | Not applicable | ||||||||||
| Amount, use, and use progress of excessive raised funds | Not applicable | ||||||||||
| Change of the implementation location of the investment project raised funds | Not applicable | ||||||||||
| Adjustment of implementation methods of investment projects with raised funds | Not applicable | ||||||||||
| Advance investment and replacement of investment projects with raised funds | Not applicable | ||||||||||
| Temporary replenishment of working capital with the idle raised funds | Not applicable | ||||||||||
| Surplus raised funds for project impleme ntation and reasons for the surplus | Not applicable | ||||||||||
| Use and destination of unutilized raised funds | It is mainly used for the cost of oxygen enrichment and oxygen production equipment before the new pressure swing adsorption machine of the iron front system energy saving and consumption reduction comprehensive renovation project, which is deposited in the special account of Jingtang Co. for raising funds. | ||||||||||
| Problems in the use of raised funds and disclosure, or other cases | Not applicable |
(3) Altered projects of raised funds
□ Applicable √ Non applicable
The Company has no altered projects of raised funds in the reporting period.
VII. Material disposal of assets and equity
1. Material disposal of assets
□ Applicable √ Non applicable
The Company has no disposal of assets during the reporting period.
2. Material disposal of equity
□ Applicable √ Non applicable
VIII. Analysis of main holding companies and stock-jointly companies
√ Applicable □ Non applicable
Main subsidiaries and stock-jointly companies that have an impact on the company's net profit of over 10%.
Unit: RMB Yuan
| Company Name | Type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Subsidiary | Iron and steel smelting, steel rolling, other metal smelting and calendering processing and marketing; Production and sale of sinter, pellet, coke and chemical products; Power generation and supply; Production and sales of secondary and multiple energy and resource reuse products | 35,821,676,294.00 | 77,936,070,714.91 | 35,590,575,383.81 | 34,562,573,418.57 | 153,024,916.13 | 120,338,896.99 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Subsidiary | Cold-rolled electrical steel strip manufacturing; Metallurgical special equipment manufacturing; Motor manufacturing; Manufacturing of transmission, distribution and control equipment; Energy-saving technology promotion services; New material technology promotion services; Business management consulting services; Industrial design services; Product quality inspection services; Building materials, non-metallic minerals and products, metal materials, metal products, chemical products (excluding dangerous chemicals) wholesale and retail | 11,001,137,201.36 | 21,045,965,268.27 | 13,880,886,140.91 | 7,253,294,653.45 | 247,133,456.12 | 211,419,481.66 |
| Beijing Shougang Cold Rolling Co., Ltd. | Subsidiary | Production of cold rolled sheet, hot dip galvanized steel coil; General freight; Design and sales of cold-rolled sheet, hot-dip galvanized steel coil; Warehousing services; Technical development, technical consultation | 2,600,000,000.00 | 5,869,037,167.20 | -1,056,925,279.55 | 5,133,807,057.85 | 1,089,593.59 | 1,023,195.52 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Subsidiary | Investment management; Project investment; Asset management; Warehousing services; Market research; Technology development; Sale of steel | 1,136,798,235.00 | 20,290,248,903.42 | 12,173,925,133.19 | 485,715,805.45 | 72,441,937.92 | 63,237,265.06 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Subsidiary | Technology development, technology consulting, technology transfer, technology services; Business management consulting; Economic information consulting; Sales of machinery and equipment, steel; Rental of machinery and equipment (except motor vehicles); Import and export of goods; Technology import and export; Agent import and export | 750,000,000.00 | 886,239,096.69 | 886,238,664.90 | 0.00 | 7,093,138.50 | 7,092,706.71 |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Subsidiary | Metallurgical technology development and consulting services; Environmental protection technology promotion services; Business management consulting services; Security consulting services; Computer application software development; Special equipment for environmental protection, steel slag, water slag, slag, dust removal ash, desulfurization ash, steel, chemical products (excluding hazardous chemicals) wholesale, retail; Domestic advertising design, production, agency, release; Non-owned house leasing services, etc. (within the scope authorized by the owner of the house) | 1,900,000.00 | 211,079,353.59 | -82,015,806.09 | 19,007,560.91 | 3,359,539.79 | 3,359,539.79 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Joint stock | Coking; Coke oven gas, tar, crude benzene, sulfur, ammonium sulfate, ammonium thiocyanate, primary coal chemical products manufacturing; Waste heat utilization; Hardware products, building materials, mining special equipment and spare parts, construction machinery spare parts, rubber products, plastic products, lubricating grease, pig iron, ferroalloy, iron concentrate powder, pellet iron ore, sintered iron ore, iron ore, limestone, quartzite, dolomite, furnace charge, bentonite, coke, coke powder, billet, chemical products (excluding licensed chemical products), coal wholesale, zero Sell; Coking technical consultation and service | 992,400,000.00 | 4,206,826,582.33 | 1,523,700,609.13 | 4,114,928,997.89 | -258,679,755.26 | -259,578,672.13 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint stock |
Coke, coal tar, benzene, sulfuric acid,ammonium sulfate, gas, CDQ coke waste heatpower generation, steam production and sales;Technical consulting services; Labor service(excluding labor dispatch).
| 2,000,000,000.00 | 3,578,464,565.18 | 2,212,267,132.18 | 6,192,335,209.86 | 31,093,408.05 | 8,705,677.85 |
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Non applicable
Description of the main holding and participating companies
Not Applicable
IX. Structured entity controlled by the Company
□ Applicable √ Non applicable
X. Risks facing the Company and countermeasuresDuring the reporting period, there were no significant changes in the main businesses, performance drivers and operatingenvironment of the Company and its major holding subsidiaries. The Company will continue to face changes in various risk factorssuch as policy and industry risks, low-carbon environmental protection risks, industry competition risks, marketing risks, affiliatedtransaction risks, etc. The Company will take active measures to deal with these risks, as detailed in the 2022 annual report.
Section IV. Corporate Governance
I. General shareholders’ meetings and extraordinary shareholders’ general meeting duringthe reporting period
1. Information on the general shareholders meeting
| Sessions | Type | Investor participation ratio | Date | Date of Disclosure | Conference resolution |
| 2022 Annual General Meeting | Annual General Shareholders Meeting | 84.22% | 30 June 2023 | 1 July 2023 | Please refer to the company announcement on the disclosure date of the meeting resolution |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Change in shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
There was no changes in the directors, supervisors and senior management of the Company during the reporting period, as detailed inthe 2022 Annual Report.III. Porposal for profit distribution and transfer of capital reserve to share capital
□ Applicable √ Not applicable
The Company planed not to distribute cash dividends, bonus shares or increase share capital with provident fund in half year.
Ⅳ. Implementation of the equity incentive plan, employee shareholding plan or otheremployee incentive measures of the Company.
√ Applicable □ Not applicable
1. Equity incentive
In 2021, the company implemented equity incentives for 386 directors, executive officers and other personnel, as detailed in therelevant announcement issued by the company on November 13, 2021.On April 19, 2023, the Company held the eighth session of the second board of Directors meeting, the eighth session of the secondBoard of Supervisors meeting, and the 2022 annual general meeting of shareholders on June 30, 2023, respectively, deliberated andpassed the "Beijing Shougang Co., Ltd. on the purchase and cancellation of some restricted Shares of the 2021 Restricted StockIncentive Plan and other matters." Because the company's 2022 annual performance assessment indicators do not meet thecompany-level performance assessment conditions of the lifting restriction conditions of the first lifting restriction period stipulatedin the Beijing Shougang Co., Ltd. 2021 Restricted Stock Incentive Plan (Draft Revision), and 15 incentive objects do not meet theincentive conditions due to organizational or personal reasons, The Company will repurchase and cancel a total of 23,418,884restricted shares that have been granted but have not yet been lifted. Participate in the relevant announcement issued by the companyon April 21, 2023.
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
Section V. Environment and Social Responsibility
I. Major environmental protection mattersWhether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection department
√ Yes □ No
Environmental protection related policies and industry standardsThe policies and industry standards related to environmental protection implemented by the Company and its subsidiaries mainlyinclude: Environmental Protection Law of the People's Republic of China, Cleaner Production Promotion Law of the People'sRepublic of China, Air Pollution Prevention and Control Law of the People's Republic of China, Water Pollution Prevention andControl Law of the People's Republic of China, Environmental Pollution Prevention and Control Law of the People's Republic ofChina by Solid Waste, Noise Pollution Prevention and Control Law of the People's Republic of China, Soil Pollution Prevention andControl Law, Environmental Impact Assessment Law of the People's Republic of China, Regulations on the Administration ofPollutant Emission Permits, Regulations of Hebei Province on Ecological and Environmental Protection, Ultra-Low EmissionStandards of Air Pollutants for the Iron and Steel Industry, Regulations of Tangshan City on Ecological and Environmental Protection,etc.Administrative license for environmental protectionDuring the reporting period, Qiangang Co. successively completed the transformation project of steel slag production line pressingball line drying equipment and the EIA approval work of nine general decline project, which ensured the compliance ofenvironmental protection projects in accordance with the law. In February 2023, the second series of pellets, two 360 flat sinteringmachines and their affiliated facilities were transferred from the Mining company's discharge permit to the Qian Steel Company'sdischarge permit, valid until July 2028.Jingtang Co. adheres to the principle of attaching equal importance to production development and environmental protection, so itcarries out environmental impact assessment of construction projects strictly in accordance with the Environmental ImpactAssessment Law of the People's Republic of China. In the process of project implementation, Jingtang Co. carries out constructionstrictly in accordance with the EIA approval, and all construction projects are supporting the construction of environmental protectionfacilities, environmental protection approval procedures are complete, which meets the requirements of "three simultaneous"management of environmental protection. In August 2017, Jingtang Co. obtained a new version of the sewage discharge permitissued by Tangshan Environmental Protection Bureau, which enabled the construction of the second-phase one-step project toproceed smoothly. In April 2019, Jingtang Co. completed the change of sewage discharge permit and obtained relevant certificates,and incorporated the sewage discharge outlet of the second-phase one-step project into standardized management. In August 2020,Jingtang Co. completed the extension of the sewage discharge permit, with the validity period extended to August 2025. In February2023, the permit was renewed again, this time extending until February 2028.In strict accordance with the Environmental Impact Assessment Law of the People's Republic of China, Regulations on PollutantEmission Permit Management and other laws and regulations, according to the requirements of pollutant emission permit and EIAmanagement, Zhixin Co. continues to improve the post- emission permit management work, and continues to do a good job in EIAand acceptance. In February 2023, Zhixin Co. handled the re-application of pollution permit, handled the change of pollution permitin May 2023, and the valid period was extended to February 2028. In March 2023, the environmental acceptance procedures for thecompletion acceptance of the Zhixin Electromagnetic new energy automotive electrical steel project will be completed, and theenvironmental acceptance procedures for the completion acceptance of the environmental protection ability improvement project ofthe Zhixin electromagnetic wastewater station will be completed in April 2023.In October 2017, Cold-R Co. obtained the first pollutant emission permit for key enterprises in Shunyi District, Beijing. In September2020, Cold-R Co. submitted an application for the renewal of the sewage permit in accordance with relevant regulations, and inOctober 2022, the application passed the government review, which extended the validity of the permit to October 2025.
Industrial discharge standards and details of the discharge of pollutants involved in production and business activities
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| Qiangang Co. | Water pollutant | COD (Chemical Oxygen Demand) | Direct | 1 | Wastewater discharge port | 5.62mg/L | 50mg/L | 1.217 | 648.399 | No |
| Qiangang Co. | Water pollutant | Ammonia Nitrogen | Direct | 1 | Wastewater discharge port | 0.16mg/L | 5mg/L | 0.0366 | 64.899 | No |
| Qiangang Co. | Air pollutants | Sulfur Dioxide | Organized | 32 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 9.54mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 24mg/m?, power generation < 22mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, power generation < 35mg/m? | 507.4 | 732.99 | No |
| Qiangang Co. | Air pollutants | Nitrogen Oxides | Organized | 32 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, CCPP combustion exhaust gas, blast furnace hot blast furnace outlet, steel rolling heating furnace outlet, white ash kiln roof, sleeve kiln roof | Sintering, pelletizing < 38mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 34mg/m?, power generation < 33mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, power generation < 100mg/m? | 580.46 | 1516.2 | No |
| Qiangang Co. | Air pollutants | Particulate Matter | Organized | 133 | Power station boiler chimney, sintering machine head flue gas outlet, pellet roasting flue gas outlet, blast furnace iron field dust removal, blast furnace silo dust removal, steelmaking converter secondary dust removal, converter primary dust removal, CCPP combustion exhaust gas, hot rolling heating furnace exhaust gas, environmental dust removal, material transfer exhaust gas | Sintering, pelleting < 3.5mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln, other environment < 7.5mg/m?, power generation < 4mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, power generation < 5mg/m? | 853.46 | 1151.46 | No |
| Jingtang Co. | Air pollutants | Sulfur Dioxide | Organized | 50 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# | Sintering, pelletizing < 15mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 25mg/m?, coke oven flue gas < 15mg/m?, coal-fired power generation < 10mg/m? | Sintering, pelletizing < 35mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 30mg/m?, coal-fired power generation < 35mg/m? | 305.9 | 1448.11 | No |
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | ||||||||||
| Jingtang Co. | Air pollutants | Nitrogen Oxides | Organized | 46 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | Sintering < 25mg/m?, pelletizing < 30mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 50mg/m?, coke oven flue gas < 45mg/m?, coal-fired power generation < 30mg/m? | Sintering, pelletizing < 50mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 150mg/m?, coke oven flue gas < 130mg/m?, coal-fired power generation < 50mg/m? | 684 | 2958.36 | No |
| Jingtang Co. | Air pollutants | Particulate Matter | Organized | 219 | Boiler chimney of power station of thermoelectric branch plant, flue gas outlet of sintering machine head, flue gas outlet of pellet roasting, primary flue gas dust removal 1#, primary flue gas dust removal 2#, secondary flue gas dust removal 2#, secondary flue gas dust removal on silo of 1# and 2# blast furnace, secondary dust removal from 1# | Sintering, pelletizing < 5mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 8mg/m?, coke oven flue gas < 8mg/m?, coal-fired power generation < 5mg/m? | Sintering, pelletizing < 10mg/m?, blast furnace hot blast furnace, rolling steel heating furnace, lime kiln < 10mg/m?, coke oven flue gas < 10mg/m?, coal-fired power generation < 10mg/m? | 914.8 | 2106.12 | No |
| Name of Company or Subsidiary | Types of major pollutants and characteristic contaminants | Names of major pollutants and characteristic contaminants | Way of Discharge | No. of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Emissions exceed the standard |
| decarbonization converter, secondary dust removal from 2# decarbonization converter, coke oven chimney 3 emissions Port, coke pushing machine ground station discharge port, coke dust removal 3 discharge port, dry extinguishing dust removal 3 discharge port, dry extinguishing dust removal 4 discharge port, 7# converter secondary dust removal, CCPP combustion exhaust gas, 6# converter secondary dust removal, etc | ||||||||||
| Zhixin Co. | Air pollutants | Sulfur Dioxide | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <30mg/m3 | 30mg/m3 | 2.815 | 45 | No |
| Zhixin Co. | Air pollutants | Nitrogen Oxides | Organized | 50 | Continuous annealing furnace, regular annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace | <100mg/m3 | 100mg/m3 | 21.204 | 131.649 | No |
| Zhixin Co. | Air pollutants | Particulate Matter | Organized | 69 | Acid regeneration, continuous annealing furnace, constant annealing furnace, decarbonization annealing furnace, ring furnace, hot drawing furnace, scoring | Acid regeneration < 30 mg/m3, heat treatment furnace, score < 10 mg/m3 | Heat treatment furnace, pull straightening machine, finishing and shot blasting: 10 mg/m3, acid regeneration: 30 mg/m3 | 10.178 | 19 | No |
| Cold-R Co. | Water pollutant | COD | Organized | 1 | Wastewater stations | 1.39-24.12 mg/m3 | 30mg/m3 | 6.4516 | 67.5 | No |
| Cold-R Co. | Water pollutant | Ammonia Nitrogen | Organized | 1 | Wastewater stations | 0.01-0.86mg/m3 | 1.5(2.5) mg/m3 | 0.0848 | 3.937 | No |
| Cold-R Co. | Air pollutants | Sulfur Dioxide | Organized | 8 | Around the plant | 3 mg/m3 | Furnace and dust removal chamber: 20 mg/m3； boiler room: 10 mg/m3 | 1.9401 | 18 | No |
| Cold-R Co. | Air pollutants | Nitrogen Oxides | Organized | 8 | Around the plant | Furnace and dust removal chamber: 1-97 mg/m3； boiler room: 1-79 mg/m3 | Furnace and dust removal chamber: 100 mg/m3； boiler room: 80 mg/m3 | 31.0166 | 148.184 | No |
| Cold-R Co. | Air pollutants | Particulate Matter | Organized | 10 | Around the plant | Furnace and dust removal chamber: 1-9 mg/m3； boiler room: 1-4.43 mg/m3 | Furnace and dust removal chamber:10 mg/m3； boiler room: 5 mg/m3 | 9.7469 | 18.75 | No |
Treatment of pollutantsEach production process of Qiangang Co. is equipped with perfect environmental protection facilities, which will be regularlymonitored by qualified testing departments. The test results prove that all dust removal facilities achieve ultra-low emission and theemission concentration of bag dust collector reaches less than 10 mg/m?. The key pollution sources of Qiangang Co. are equippedwith 57 sets of online monitoring systems, including 1 set of online monitoring system for water pollution, which are all connectedwith the ecological environment department. The online monitoring system is compared and monitored quarterly by a qualifiedmonitoring company, which ensures that the data is true and reliable. Qiangang Co. attaches great importance to saving waterresources and reducing wastewater discharge, so it has invested in the construction of two sewage treatment plants, and theconstruction of deep water desalting station, which adopts the international advanced membrane treatment process, can all thewastewater generated in the production process after treatment and recycling, so the water recycling rate of Qiangang Co. reaches
98.4%.
Jingtang Co. has desulfurization denitrification and other waste gas treatment facilities, which can be highly efficient treatment of allkinds of waste gas, but also built complete dust removal facilities, the measures using bag dust removal, plastic burning plate dustremoval, electric dust removal and other ways to remove particulate matter; Coke oven flue gas is removed by moving bed calciumdesulfurization +SCR denitration process. The sintering and pellet were removed by circulating fluidized bed desulfurization andSCR denitration process. Desulfurization of self-built power plant adopts seawater desulfurization +SCR denitration process toremove, and dense coherent tower desulfurization +SCR denitration process to blast furnace hot blast furnace. Jingtang Co. hascomplete wastewater treatment facilities, including coking phenol cyanide sewage treatment system, continuous casting wastewatertreatment system, hot rolling, cold rolling, medium thickness plate, steel rolling wastewater treatment system and comprehensivesewage treatment station, etc. At the same time, the production wastewater generated by steelmaking and other processes is treatedinto the comprehensive sewage treatment station for treatment, so as to achieve coupling zero discharge of wastewater. Jingtang Co.has complete solid waste treatment facilities, including the construction of rotary hearth furnace - zinc resource recycling project,slag fine grinding cement production line, etc., to achieve comprehensive utilization of solid waste. During the reporting period, allthe above environmental protection facilities ran well, and all processes in the whole process reached ultra-low emission standards.Zhixin Co. continues to promote the emission reduction of pollutants, in accordance with the "green project" transformation plan, inMay 2023 to complete the source management project CA5 denitrification transformation, effectively reduce nitrogen oxideemissions. Continue to carry out environmental protection capacity improvement projects, all meet the ultra-low emission standardsof Hebei Province, in order to eliminate the odor of waste water station odor removal projects have completed acceptance work,Zhixin electromagnetic independent control and management measures through the construction of efficient car wash and continue toimprove the automatic function, effectively reduce the atmospheric dust pollution in the plant.During the reporting period, the pollution prevention and control facilities of Cold-R Co. maintained efficient operation, and allcombustion exhaust gas was generated by using clean fuel natural gas through low nitrogen burners, which minimized theconcentration of pollutants. The dust generated in the production of Cold-R Co. is disposed of by coated bag dust collector, and thefiltration effect reaches 99.99%. The wastewater generated by the cold rolling company is treated by physical, chemical, biochemicaland membrane processes and discharged after treatment. The emission concentration of all pollutants of Cold-R Co. maintains theleading level in China, and the emissions are far lower than the permitted emissions.Contingency planNo ecological and environmental emergencies occurred in the Company and its holding subsidiaries in first half of 2023.In accordance with the Environmental Protection Law of the People's Republic of China and other laws, regulations, rules andnormative documents, Qiangang Co. has formulated the Emergency Plan for Environmental Emergencies. On this basis, QiangangCo. also formulated three special plans respectively: Atmospheric Special Emergency Plan for Environmental Emergencies, WaterSpecial Emergency Plan for Environmental Emergencies and Hazardous Waste Special Emergency Plan for EnvironmentalEmergencies, which further improved the emergency disposal capacity of air pollution, water pollution and hazardous wasteemergencies.Jingtang Co. identified gas storage cabinets, pipelines, benzene storage tanks, acid storage tanks, liquid ammonia storage tanks andother dangerous chemicals and toxic and harmful substances production and storage areas as emergency rescue dangerous targets.According to the requirements of Shougang Jingtang United Iron&Steel Co., Ltd. 's Emergency Treatment Plan for EnvironmentalEmergencies (Fourth Edition), in first half of 2023, Jingtang Co. carried out 8 emergency drills such as oil leakage emergency drill,oily sludge leakage emergency drill and radiation accident emergency drill, which ensures that Jingtang Co. can effectively carry outrescue in accordance with the requirements of the Plan. At the same time, the emergency drills also improve the skills and actualcombat ability of preventing and dealing with sudden environmental pollution accidents.In accordance with the requirements of laws and regulations, Zhixin Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies, which mainly consists of atmospheric special plan, water special plan, hazardous waste disposal, riskassessment, emergency resource investigation, on-site disposal plan and other plans. In first half of 2023, Zhixin Co. mainlyconducted drills for acid leakage, gas leakage and other risk points. Through the drill, Zhixin Co. found problems and rectifies themin time, which enhanced the company's ability to deal with environmental emergencies.In accordance with the requirements of laws and regulations, Cold-R Co. has prepared and put on record the Emergency Plan forEnvironmental Emergencies. According to the plan, Cold-R Co. organizes drills in each workshop every year according to therequirements of the plan, through which problems are found and rectifies in time, which enhances Cold-R Co.'s ability to deal withenvironmental emergencies.Environmental protection input and environmental protection taxDuring the reporting period, Qiangang Co. continued to implement flue gas desulfurization treatment of blast furnace hot blastfurnace, increase desulfurization facilities of hot rolling heating furnace, and continue to improve 5 projects, and completed aninvestment of RMB 210 million in the year. In first half of 2023, Qiangang Co. paid RMB 4.6733 million of environmentalprotection tax, with a reduction of RMB 2.6050 million.
Jingtang Company promoted the implementation of No. 1 and No. 3 blast furnace shutdown air release gas purification project andother four key environmental protection projects in depth, have been completed as planned. In first half of 2023, RMB 12.805 millionof environmental protection tax was paid, with a reduction of RMB 4.781 million.Zhixin Co. effectively reduced pollutant emissions by increasing environmental protection treatment facilities, completed investmentof RMB 9.7 million in first half of 2023 and paid for environmental protection tax, with a reduction of RMB 72,800.Cold-R Co. actively promoted environmental management and protection work, with an investment of RMB 27.3896 million. In firsthalf of 2023, RMB 437,000 was paid for environmental protection tax, with a reduction of RMB 10,300.Environmental self-monitoring programmeIn accordance with the relevant provisions of the "Measures for Self-Monitoring and Information Disclosure of National KeyMonitoring Enterprises (Trial)" and "Measures for Supervisory Monitoring and information Disclosure of National Key MonitoringEnterprises (Trial)", Qiangang Co. has established and improved the monitoring and information disclosure system of pollutionsources, formulated the "2023 Pollutant Emission Monitoring Plan", and strictly implemented it. In the first half of 2023, allenvironmental monitoring is entrusted to qualified third-party institutions for monitoring, and actively organize and coordinate theself-monitoring work, strengthen the management of online monitoring operation and maintenance units, complete the monthlymonitoring task, achieve the monitoring completion rate of 100% in the first half of 2023, and fully complete the national pollutionsource monitoring information disclosure work, the standard rate of 100%.The environmental monitoring system of Jingtang Co. is composed of automatic monitoring and manual monitoring. The manualmonitoring system is commissioned by a third-party testing institution to carry out environmental monitoring of waste gas, wastewater, noise and other projects of factory pollution sources regularly according to the "2023 Key monitoring enterpriseself-monitoring Plan" to form monitoring data and reports. In the first half of 2023, the monitoring plan was completed, and allenvironmental control indicators reached normal standards.Zhixin Co. adheres to green development, strictly adheres to the bottom line of environmental protection, and fully implements themain responsibility of corporate environmental protection. In the first half of 2023, we will achieve zero environmental pollution,100% synchronous operation of environmental protection facilities, and 100% smooth passage of environmental protectioninspections. In accordance with relevant laws and regulations, develop self-monitoring plans and strictly implement them, entrust allqualified third-party institutions to monitor, and actively organize self-monitoring work, and carry out self-monitoring 38 times in thefirst half of 2023, with a 100% compliance rate.Cold-R Co. shall develop its own monitoring plan in accordance with laws and regulations and emission permit requirements, andentrust qualified third-party institutions to monitor pollutants weekly, monthly and quarterly, and upload the data to thegovernment-designated information disclosure system. In the first half of 2023, all emission targets of pollution sources met thestandards.Administrative penalties imposed due to environmental problems during the reporting periodDuring the reporting period, neither the Company nor its holding subsidiaries were punished by regulatory authorities in respect ofenvironmental protection. At the same time, the Company urges the shareholding companies to abide by the EnvironmentalProtection Law of the People's Republic of China and other laws, regulations, rules and normative documents.Other environmental information that shall be disclosedOn the basis of adhering to the work of environmental protection, Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co. monitorand manage the national pollution source information and sharing platform and the website of the government environmentalprotection department, as well as establish the information publication platform by themselves. This propagates and displaysenvironmental protection information such as enterprise environmental protection projects, operation of environmental protectionfacilities, name and emissions of main pollution sources, monitoring methods, name of monitoring indicators, comprehensiveutilization of solid waste and so on. This is one of the ways that the company takes the initiative to accept social supervision.Measures taken to reduce its carbon emissions during the reporting period and their effectiveness
√ Applicable □ Not applicable
In order to accelerate the implementation of national industrial policies in enterprises, scientifically and normally promote the"carbon management" activities of Shougang shares, further improve and optimize the "low-carbon Action Plan of Shougang Shares"and "low-carbon Development Organization Implementation Plan of Shougang Shares" in the first half of 2023, and actively carryout low-carbon management and LCA management around the national low-carbon requirements and customer carbon reductionneeds. During the reporting period, completed two EPD releases of hot strip steel sheet and steel strip products; Organized theconstruction of special lines for low-carbon products, carried out comprehensive technology low-carbon tests, and the test productshave covered all varieties from mild steel to ultra-high strength steel, and the comprehensive carbon emissions of the test productshave been reduced by more than 30%; Carry out low-carbon hot metal accounting and certification related work, improve the lowcarbon line No. 2 blast furnace system data collection; The practical tool of "Low carbon smelting process condition calculationmodel" is developed to calculate the carbon reduction effect under various low carbon metallurgical process conditions, whichprovides a powerful calculation tool for subsequent low carbon metallurgical planning and decision-making.Focusing on the landing of the "double carbon" strategy, actively promote the clean development of the energy structure, continue tostrengthen the basic capacity building of carbon management, vigorously promote the green upgrading of low-carbon processes,steadily layout revolutionary deep decarbonization technology, and simultaneously promote the process of carbon reduction andsource carbon reduction, the first half of 2023 through the State grid green electricity direct procurement system to achieve about 220million direct purchase of green electricity. Docking with customers' carbon reduction needs, solidly promote the construction ofLCA system, carry out CBAM carbon inventory and verification, and carry out the carbon footprint accounting and verification ofDD12 and 355MC brands. Continue to promote the research and development of green products, complete the LCA report ofmedium and thick plate pipeline steel X80 grade, complete the submission of provincial green product declaration materials, and
create a green manufacturing brand image.Zhixin company focuses on the implementation of the "double carbon" strategy and actively promotes the clean development ofenergy structure. Continue to strengthen the basic capacity building of carbon management, promote the transformation of the burnerand SCR of the continuous production line, vigorously promote the green upgrading of low-carbon processes, and steadily layout therevolutionary deep decarbonization technology; Simultaneously promote the process of carbon reduction and source carbon reduction,actively promote the use of green electricity and photovoltaic construction, has built the project in the first half of 2023 photovoltaicpower generation 2,594,800kwh, new Zhixin electromagnetic high-end heat treatment plant installation of photovoltaic powergeneration system project, and signed a contract in June 2023. Docking the carbon reduction needs of customers, steadily promotethe construction of LCA system, complete the green design product declaration of oriented electrical steel and non-oriented electricalsteel for new energy vehicles and obtain national recognition, and create a green manufacturing brand image.Cold-R Co. adheres to the concept of green development and integrates carbon reduction into the whole process of development andinto all links of production and operation. By adjusting the product structure in first half of 2023, Cold-R Co. increased theproportion of high value-added products and further reduced energy consumption, meanwhile, the carbon emissions decreased by
5.6% year-on-year through such as market procurement of green electricity and photovoltaic power generation and other measures.Other environmental protection related informationIn order to develop circular economy and low-carbon economy, build resource-saving, environment-friendly and low-carbon orientedenterprises, and achieve sound and rapid development of the company, the Company started the preparation of environmentalresponsibility report at the end of 2016, covering the preparation scope of Qiangang Co., Jingtang Co., Zhixin Co. and Cold-R Co.and other subsidiaries. In June 2023, the Company's website (http://www.sggf.com.cn) released the 2022 Annual EnvironmentalResponsibility Report of Beijing Shougang Co., Ltd.II.Social responsibility1, according to the Central Committee of the Communist Party of China "Opinions on the continuous selection of the first villageSecretary and the work team to key villages" and the deployment of the Beijing Municipal Party Committee OrganizationDepartment and the Beijing SASAC, combined with the organization Department of the Party Committee of Shougang Group Co.,LTD., Shougang Shares and Jingtang Company each selected a staff member to serve as the first secretary of the collective economicweak village in Beijing. During the reporting period, under the leadership of the local Party committee and government, the two staffmembers conscientiously performed their duties and contributed to the implementation of the rural revitalization strategy.
2. Actively fulfill social responsibilities, expand the achievements of poverty alleviation, implement consumption poverty alleviation,and help rural revitalization. In the first half of 2023, RMB 2.807 million yuan of agricultural materials for poverty alleviation in thecounterpart help area was purchased.
Section VI. Significant EventsI.Commitments made by the company's actual controller, shareholders, related parties,acquirers and the company and other committed parties have been fulfilled during thereporting period and have not been fulfilled by the end of the reporting period
√ Applicable □ Not applicable
| Commitment | Commitment party | Type | Contents | Commitment date | Commitment term | Implementation |
| Commitment in assets restructuring | Shougang Group Co., Ltd. | 1.According to the iron and steel industry development plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron and steel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of Shougang Group's iron and steel and upstream iron ore resources business in China 2. As for the other companies of Shougang Group engaged in iron and steel production business, if the profits could be achieved for three consecutive years through optimizing and adjusting the product structure and actively implementing national industrial policies and environmental protection requirements, and the overall situation of the industry does not appear large fluctuation, Shougang Group will activate the manners in line with the interests of shareholders of listed companies, including but not limited to acquisition, merger, reorganization, etc. to invest relevant high-quality assets in Shougang Co. in accordance with the requirements of securities laws, regulations and industrial policies, and will complete the investment within 36 months after start-up. | 27 Dec. 2018 | Refer to contents of commitment | Implementing. In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. | |
| Shougang Group Co., Ltd. | When the market improves in the future, Shougang Mining Corporation achieves stable profits for two consecutive years, and the overall situation of the industry is not fluctuated greatly, Shougang Corporation will start the injection of Shougang Mining Corporation in Shougang Co. and complete it within 36 months. Before Shougang Mining Corporation joined in Shougang Co., Shougang Group will urge Shougang Mining Corporation to conduct necessary related party transactions with Shougang Co. in accordance with fair and reasonable market price, strictly conform to the requirements of laws and regulations, normative documents, the articles of association of Shougang Co. and related transaction management system, and perform the corresponding review, approval and information disclosure procedures for the necessary related transactions between Shougang Co. and Shougang Mining Corporation. | 20 Apr. 2017 | Refer to contents of commitment | Implementing. | ||
| Shougang Group Co., Ltd. | The company will not damage the independence of Shougang Co. due to the increase of the proportion of shares held by Shougang Co. after the completion of the reorganization. The company will maintain "the five-aspect separation principle", which means assets, personnel, financial affairs, institution and business should be independent of Shougang Co., strictly conform to relevant provisions of the CSRC on the independence of listed companies, not illegally utilize Shougang Co. to provide guarantees, not illegally occupy the assets of Shougang Co. and keep and maintain the independence of Shougang Co. | 20 Jul. 2012 | After the completion of assets reorganization (completion date: 25 April 2014) | Implementing of the long-term commitment. | ||
| Shougang Group Co., Ltd. | Shougang Group is the largest shareholder and controlling shareholder of Shougang. On July 17, 2012, Shougang Group issued the "Letter of Commitment of Shougang Corporation on Reducing and Standardizing Related Party Transactions" (i.e. the commitments listed above, hereinafter referred to as the "original letter of commitment"), and promised that after the completion of major asset replacement purchase of assets by issuing shares between Shougang Co., and Shougang Group [hereinafter referred to as "the previous major asset restructuring (completed on April 25, 2014)", Shougang Group will take relevant measures including joining Shougang Mining Company into Shougang Co., to reduce and standardize related party transactions with Shougang Co. In order to reduce and standardize the related party transactions after the major asset replacement and related party transactions of Shougang Co. and safeguard the legitimate rights and interests of Shougang Co. and its public shareholders, the company promises to continue to fulfill the contents of the original commitment letter after the major asset replacement, and further promises as follows: 1. The company will perform its obligations as the controlling shareholder of Shougang Co. in good faith, try to avoid and reduce the related transactions with Shougang Co. (including the enterprises it controls); as for the related transactions, which are unavoidable or occur for reasonable reasons between the company and other enterprises under the control of the company, and Shougang Co. and the enterprises it controls, the company will not require or accept the more favorable conditions provided by Shougang Co. than the conditions to an independent third party in any fair market transaction. The company and other enterprises under the control of the company will sign a standardized related party transaction agreement with | 29 Sep. 2015 | During and after the assets replacement | Implementing |
| Shougang Co. in accordance with the law, follow the market principles of openness, fairness and justice, in accordance with fair and reasonable market price, conform to relevant provisions of laws, regulations and normative documents in the decision-making procedures of related transactions and disclose information in accordance with the law. 2. The company and other enterprises controlled by the company will not obtain any improper benefits or make Shougang Co. bear any improper obligations through related party transactions with Shougang Co. or the enterprises controlled by Shougang Co. 3. The company will be liable for the losses to Shougang Co. and the enterprise controlled by Shougang Co. due to the related party transactions with them in violation of the above commitments. | |||||
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Co.) to complete relevant matters: 1. The company promises to urge Jingtang Co. not to actually carry out port operation business of general bulk cargo berth project (552-meter shoreline wharf project) without obtaining formal or temporary port operation license. 2. The company promises to urge Port Co. not to actually carry out port operation business of general wharf project (1600-meter shoreline wharf project) without obtaining formal or temporary port operation license. | 29 Sep. 2015 | Refer to contents of commitment | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Company) to complete relevant matters: 1. Shougang Group promises to urge Jingtang Co. to complete the overall acceptance procedures of supporting wharf project (1240-meter shoreline wharf project) and obtain the formal port operation license before 31 December 2022, and carry out port operation business in accordance with the requirements of relevant competent departments. 2. Shougang Group promises to urge Jingtang Co. to complete the application of ownership certificate of all self-built houses of Jingtang Co. before 31 December 2022. | 23 Dec. 2022 | Refer to contents of commitment | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% of the equity of Jingtang Co. by Shougang Co., the company made the following commitments in urging Jingtang Co. and its holding subsidiary, Port Company, to complete the relevant matters of obtaining land use right certificate: The company promises to urge Jingtang Co. to obtain state-owned land use right certificate of all the land used before 31 December 2023, including but not limited to the land used by Jingtang Co. Phase I project, Jingtang Co. supporting wharf project (1240-meter shoreline wharf project), general bulk cargo berth project (552-meter shoreline wharf project) and Jingtang Co. Phase II project. | 21 May 2021 | 31 Dec. 2023 | Implementing | |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | The shares of the listed company acquired by the Fund as a result of the purchase of assets through the issuance of shares shall not be transferred within 36 months from the date of the completion of the issuance of shares. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. | 21 May. 2021 | 20 May. 2024 | Implementing | |
| Shougang Group Co., Ltd. | 1. The shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date when the shares are issued. However, transfers permitted by applicable law are not subject to this restriction. Within six months after completion of the transaction, if the closing price of the shares of the listed company for 20 consecutive trading days is lower than the issuing price of the shares, or the closing price at the end of six months after the completion of this transaction is lower than the issue price of this share, the locking period of shares obtained by the company through this transaction will be automatically extended for six months on the basis of the above locking period. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authority, the company shall adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authority. | 20 Dec.2021 | 19 Apr. 2025 | Implementing | |
| Shougang Group Co., Ltd. | The Asset Appraisal Report evaluates partial of intellectual property rights of Jingtang Co. and Shanxi Coking Co., Ltd. (hereinafter referred to as "performance commitment assets") based on future earnings expectations. The appraisal value of 1,346 patent rights, 190 proprietary technologies, 32 software copyrights and other assets of Jingtang Co. is RMB 242.8 million, and the appraisal value of 57 patent rights assets of Shanxi Coking Co., Ltd. is RMB 40 million. In accordance with the forecast income sharing of the performance committed assets, if the purchase of assets by issuing shares is completed before 31 December 2022, Shougang Group commitments | 20 Dec.2021 | 31 Dec. 2024 | Implementing. The commitments for 2022 have been fulfilled |
| that, in 2022, 2023 and 2024, the total income sharing of performance commitment assets in the current period shall be no less than RMB 90.9182 million, RMB 79.414 million and RMB 61.5618 million respectively. If the above performance commitments are not met, please refer to "Performance Commitments and Impairment Compensation Arrangements" in Beijing Shougang Co., Ltd. 's Report on Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions issued by the Company for detailed compensation methods and arrangements. | |||
| Completed on time | Yes | ||
| If the commitment is overdue and not completed, it shall specify the specific reasons for the failure to complete the performance and the next step of the work plan | Not applicable | ||
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party during the reporting period.
III. External guarantees against the rules and regulations
□ Applicable √ Not applicable
No external guarantee provided by the Company which against the rules and regulations during the reporting period.
IV. Engagement and disengagement of CPAs firmWhether the semi-annual financial report has been audited
□ Yes √ No
The semi-annual financial report of the Company has not been audited.V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by boardof directors and supervisory board
□ Applicable √ Not applicable
VI. Notes for the related information of “non-standard audit reports” last year by board ofdirectors
□ Applicable √ Not applicable
VII. Insolvency or restructuring related matters
□ Applicable √ Not applicable
No insolvency or restructuring related matters during the reporting period
VIII. Litigation or arbitration
Material litigation or arbitration cases
□ Applicable √ Not applicable
No material litigation or arbitration cases during the reporting period.Other litigation or arbitration cases
□ Applicable √ Not applicable
IX. Punishment or rectification
□ Applicable √ Not applicable
X. Integrity of the Company and its controlling shareholders and actual controllers duringthe reporting period
□ Applicable √ Not applicable
XI. Material related party transactions
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Transaction price | Related transaction price (RMB’0,000) | Proportion in similar transactions | Approved transaction quota (RMB’0,000) | Whether it exceeds the approved quota(Y/N) | Related transaction settlement methods | Available market prices for similar transactions | Date of disclosure | Disclosure index |
| Shougang Group and its subsidiaries | Parent company | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 2,251,793 | 4,758,480 | N | Cash at bank and on hand | Market price | 7 December 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", Juchao Information Network (http://www.cninfo.com.cn) | |
| Shougang Group and its | Parent company | Related sales | Steel, solid waste, power | Market price | Market price | 129,125 | 375,508 | N | Cash at bank and on hand | Market price | 7 December 2022 | Ditto |
| subsidiaries | energy, etc | ||||||||||||
| Other related parties | Joint venture and associates | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 1,287,623 | 2,978,818 | N | Cash at bank and on hand | Market price | 7 December 2022 | Ditto | |
| Other related parties | Joint venture and associates | Related sales | Steel, power energy, etc | Market price | Market price | 191,831 | 393,643 | N | Cash at bank and on hand | Market price | 7 December 2022 | Ditto | |
| Total | -- | -- | 3,860,372 | -- | 8,506,449 | -- | -- | -- | -- | -- | |||
| Details of large sales returns | No | ||||||||||||
| The Company classifies the daily related transactions by category and estimates the transaction amount that will take place in the current period, and discloses the actual transaction amount (if any) | The Company's daily related transactions are expected to occur in accordance with the total amount, after deliberation and approval by the 15th Board of Directors of the seventh session of the Company on December 6, 2022, and submitted to the fourth extraordinary shareholders' meeting of the Company in 2022 for deliberation and approval on December 23, 2022. The total amount of transactions approved by the shareholders' meeting was 85,064.49 million yuan, and RMB 38,603.72 million yuan occurred in the current period, which did not exceed the approved limit. For details about related parties and related transactions, see Section X, Item 12. | ||||||||||||
| The reason for the material difference between the transaction price and the market reference price (if applicable) | Not Applicable | ||||||||||||
2. Related party transactions by assets or equity acquisition and sold
□ Applicable √ Not applicable
No related party transactions by assets or equity acquisition and sold during the reporting period.
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No related party transactions in respect of jointly investment during the reporting period.
4. Related creditor's rights and debts
√ Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□ Applicable √ Not applicable
No related creditor's rights and debts during the reporting period
5. Transactions with related financial companies
√ Applicable □ Not applicable
Deposit
| Related party | Relationship with the Company | Maximum daily deposit limit (RMB’0,000) | Range of deposit interest rate | Opening balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total deposit amount of current period (RMB’0,000) | Total withdrawal amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same ultimate controlling party | 1,600,000 | 1.49%-1.9% | 878,266.33 | 7,606,367.47 | 7,747,785.77 | 736,848.02 |
Loan
| Related party | Relationship with the Company | Amount (RMB’0,000) | Loan interest rate range | Opening balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total loan amount of current period (RMB’0,000) | Total repayment amount of current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same ultimate controlling party | 3,200,000 | 2.35%-3.85% | 1,801,689.43 | 1,071,469.51 | 1,334,419.75 | 1,538,739.18 |
Credit granting or other financial services
| Related party | Relationship with the Company | Business types | Total amount(RMB’0,000) | Actual amount(RMB’0,000) |
| Shougang Group Finance Co., Ltd. | Under the control of the same ultimate controlling party | Credit | 3,200,000 | 1,538,739.18 |
6. Transactions between financial companies controlled by the company and related parties
□ Applicable √ Not applicable
7. Other significant related party transactions
□ Applicable √ Not applicable
No other significant related party transaction of the Company during the reporting period.
XII. Material contracts and implementation
1. Entrustment, contract and leasing
(1) Entrustment
□ Applicable √ Not applicable
No entrustment during the reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing during the reporting period.
2. Material guarantees
√ Applicable □ Not applicable
Unit: RMB0,000
| External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 10 June 2023 | 21,000 | 20 September 2022 | 21,000 | Guarantee of joint and several liability | One year | No | Yes | ||
| Ningbo Shougang Zhejin Steel Co., Ltd. | 10 June 2023 | 4,400 | 29 August 2022 | 4,400 | Guarantee of joint and several liability | One year | No | Yes | ||
| Total external guarantees approved during the reporting period | 25,400 | Total amount of actual external guarantees during the reporting period | 25,400 | |||||||
| Total external guarantees approved at the end of the reporting period | 25,400 | Total balance of actual external guarantee as at the end of the reporting period | 25,400 | |||||||
| Guarantees between the Company and its subsidiaries | ||||||||||
| Name of obligee | Date of the related announcement disclosing the guarantee amount | Amount of guarantee | Guarantee date | Guarantee provided | Type of guarantee | Collateral (if any) | Counterguarantee (if any) | Term | Fulfilled or not | Guarantee to related parties or not |
| Shanghai Shougang Steel & Iron Trading Co., Ltd. | 10 June 2023 | 16,050 | 17 January 2023 | 16,050 | Guarantee of joint and several liability | One year | No | Yes | ||
| Total amount of guarantee provided for subsidiaries approved during the reporting period | 16,050 | Total amount of guarantee provided for subsidiaries during the reporting period | 16,050 | |||||||
| Total amount of guarantee provided for subsidiaries approved as at the end of the reporting period | 16,050 | Total balance of guarantee provided for subsidiaries as at the end of the reporting period | 16,050 | |||||||
| Guarantees between subsidiaries (i.e. the sum of the above two items) | ||||||||||
| Total amount of guarantee approved during the reporting period | 41,450 | Total amount of actual guarantee during the reporting period | 41,450 | |||||||
| Total amount of guarantee approved as at the end of the reporting period | 41,450 | Total balance of actual guarantee as at the end of the reporting period | 41,450 | |||||||
| The percentage of total amount of guarantee provided to the net assets of the Company | 0.84% | |||||||||
| Including: | ||||||||||
| Balance of guarantees provided to shareholders, actual controllers, and their related parties | ||||||||||
| Debt guarantee balance provided directly or indirectly for guaranteed objects with an asset liability ratio exceeding 70% | 41,450 | |||||||||
| The amount of the total guarantee amount exceeding 50% of net assets | 0 |
| The total amount of the above three guarantees | 41,450 |
| Explanation of situations where there is a guarantee liability or evidence indicating the possibility of assuming joint and several liability for the unexpired guarantee contract during the reporting period (if any) | |
| Explanation of providing external guarantees in violation of prescribed procedures (if any) |
3. Entrusted financing
□ Applicable √ Not applicable
No entrusted financing during the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contract during the reporting period.XIII. Explanation of other significant matters
□ Applicable √ Not applicable
No other significant matters that need to be explained during the reporting period.
XIV. Significant matters of subsidiaries of the Company
√ Applicable □ Not applicable
1. In December 2022, the Company signed the Capital Increase Agreement on Shougang Zhixin Qian 'an Electromagnetic MaterialsCo., Ltd. with Zhixin Co., original shareholders of Zhixin Co. and all investors who participated in the capital increase, and allinvestors who participated in the capital increase jointly invested 2 billion yuan to become strategic investors of Zhixin Co. OnJanuary 28, 2023, Zhixin Co. completed the registration procedures for industrial and commercial changes of this capital increase,and obtained a new business license, and the Company's holding of Zhixin Co. shares changed to 68.0293%.
2. According to the resolution of the first interim meeting of the Board of Directors of Shougang in 2023, the holding subsidiary ofthe company, Beijing Shougang New Energy Automotive Material Technology Co., Ltd. (hereinafter referred to as "Beijing NewEnergy"), will be separated. After the completion of the separation, Beijing New Energy as a surviving company, its shareholderschanged to Shougang Group Co., Ltd and Qian 'an Beijing-Ji Equity Investment Fund (limited partnership), and a new BeijingShougang New Energy Materials Technology Co., Ltd. (hereinafter referred to as "New Energy Materials") was established, whoseshareholders are Shougang shares and Beijing Shouxin Jinyuan Management Consulting Center (limited partnership). As of April 25,2023, the registration procedures for the industrial and commercial change of the existing division have been completed, and BeijingNew Energy and New energy materials have obtained their respective business licenses.
Section VII. Movements in share capital and shareholdersI. Share movement
1. Share movement
Unit: share
| Before change | Increase (/decrease) during the year | After change | |||||||
| Amount | Ratio | New shares issued | Bonus issue | Converted from reserves | Others | Subtotal | Amount | Ratio | |
| I. Restricted shares | 1,806,563,829 | 23.10% | 1,806,563,829 | 23.10% | |||||
| 1. State ownership | |||||||||
| 2. State-owned corporation shares | 1,741,662,029 | 22.27% | 1,741,662,029 | 22.27% | |||||
| 3. Shares held by other domestic investors | 64,901,800 | 0.83% | 64,901,800 | 0.83% | |||||
| Of which: Shares held by domestic legal persons | |||||||||
| Shares held by domestic natural persons | 64,901,800 | 0.83% | 64,901,800 | 0.83% | |||||
| 4.Foreign ownership | |||||||||
| Of which: Shares held by overseas legal persons | |||||||||
| Shares held by overseas natural persons | |||||||||
| II. Non-restricted shares | 6,013,305,341 | 76.90% | 6,013,305,341 | 76.90% | |||||
| 1. RMB ordinary shares | 6,013,305,341 | 76.90% | 6,013,305,341 | 76.90% | |||||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4.Others | |||||||||
| III. Total number of shares | 7,819,869,170 | 100.00% | 7,819,869,170 | 100.00% | |||||
Reasons of shares movements
□ Applicable √ Not applicable
Approval of share movements
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Progress of the implementation of share repurchase
□ Applicable √ Not applicable
Progress of the implementation of reducing and repurchasing shares by means of centralized bidding
□ Applicable √ Not applicable
Influences of shares movements on basic EPS, diluted EPS, net assets per share attributable to common shareholders of the companyand other financial indicators for both the latest year and the latest period
□ Applicable √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Movements of restricted shares
√ Applicable □ Not applicable
Unit: share
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Shougang Group Co., Ltd. | 1,247,703,723 | 0 | 0 | 1,247,703,723 | Reasons for restricted sales of 232,286,354 shares: The commitment made by Shougang Group when the Company was first restructured. For details, please refer to the company's announcements in "China Securities Journal" "Securities Times" "Shanghai Securities News", CNINFO (http://www.cninfo.com.cn)on 28 September 2019. Reasons for restricted sales of other shares: Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | The restriction can be lifted after the performance of the commitment; 19 April 2025 |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 493,958,306 | 0 | 0 | 493,958,306 | For details, please refer to the relevant announcement issued by the Company on 20 May 2021. Share lock up commitment made as the counterparty to the company's issuance of shares to purchase assets. | 20 May 2024 |
| Shougang Directors, senior executives and other equity incentive objects (386 persons in total) | 64,901,800 | 0 | 0 | 64,901,800 | In accordance with relevant regulations, the Company's 2021 restricted stock incentive plan will arrange the lock-up period of the restricted stock grants. For details, please refer to the relevant announcement issued by the Company on 13 November 2021. | Due to the fact that the Company's performance assessment indicators for 2022 do not meet the company-level performance assessment conditions of the conditions for lifting the restriction during the first lifting period, all restricted shares shall not be lifted during the first lifting period, and the Company will carry out buyback cancellation. The subsequent two release periods (i.e. 36 months and 48 months from the date of completion of grant registration) are scheduled in accordance with the incentive plan. |
| Total | 1,806,563,829 | 0 | 0 | 1,806,563,829 | -- | -- |
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders and shareholding
Unit: Share
| Total common stock shareholders in reporting period-end | 98,345 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note 8) | 0 |
| Shareholders holding above 5% or top 10 shareholders | |||
| Name of shareholder | Nature of shareholder | Shareholding ratio (%) | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of unrestricted shares held | Shares pledged or frozen | |||
| Status | Amount | |||||||||
| Shougang Group | State-owned corporation | 56.53 | 4,420,769,800 | 1,247,703,723 | 3,173,066,077 | |||||
| Baowu Group | State-owned corporation | 10.15 | 793,408,440 | 793,408,440 | ||||||
| Beijing Jingtou Investment Holding Co., Ltd. | 9.48 | 740,940,679 | 740,940,679 | |||||||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 6.32 | 493,958,306 | 493,958,306 | 0 | ||||||
| Sunshine Life Insurance Co., Ltd. - Traditional insurance products | 0.98 | 76,692,529 | 76,692,529 | |||||||
| National Social Security Fund - Eight combinations | 0.86 | 67,547,683 | 67,547,683 | |||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | 0.72 | 56,159,243 | 56,159,243 | |||||||
| Liu Wei | 0.71 | 55,500,000 | 55,500,000 | |||||||
| Beijing Yizhen Technology Development Co., Ltd. | 0.61 | 47,580,500 | 47,580,500 | |||||||
| Hong Kong Securities Clearing Company Limited | 0.52 | 40,643,754 | 40,643,754 | |||||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (reference to note 3) | Not applicable | |||||||||
| Related or acting-in-concert parties among the shareholders above | Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. In addition, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | |||||||||
| Above shareholders involved in entrusting / being entrusted with voting rights and giving up voting rights | Not applicable | |||||||||
| Special account for share repurchases (if any) among the top 10 shareholders(reference to note 11) | Not applicable | |||||||||
| Shareholding of the top 10 shareholders unrestricted shares held | ||||||||||
| Name of shareholders | Amount of unrestricted shares held at period-end | Type of shares | ||||||||
| Type | Amount | |||||||||
| Shougang Group | 3,173,066,077 | |||||||||
| Baowu Group | 793,408,440 | |||||||||
| Beijing Jingtou Investment Holding Co., Ltd. | 740,940,679 | |||||||||
| Sunshine Life Insurance Co., Ltd.- Traditional insurance products | 76,692,529 | |||||||||
| National Social Security Fund - eight combinations | 67,547,683 | |||||||||
| Sunshine Life Insurance Co., Ltd. - Dividend insurance products | 56,159,243 | |||||||||
| Liu Wei | 55,500,000 | |||||||||
| Beijing Yizhen Technology Development Co., Ltd. | 47,580,500 | |||||||||
| Hong Kong Securities Clearing Company Limited | 40,643,754 | |||||||||
| Shanxi Coking Coal Group Finance Co., Ltd. | 32,155,928 | |||||||||
| Connected associated relationship or acting in concert among the top 10 shareholders holding tradable shares without selling restrictions, and between the top 10 shareholders holding tradable shares without selling restrictions and the top 10 shareholders | Shougang Group holds 0.68% of Baosteel Co., Baowu Group Co., Ltd. and its persons acting in concert hold 62.30%of Baosteel Co. In addition, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; The relationship between other shareholders or the relationship of cooperators is unknown. | |||||||||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (reference to note 4) | Not applicable |
Whether top ten common stock shareholders or top ten common stock shareholders with unrestricted shares have a buy-backagreement dealing during the reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with unrestricted shares of the Company have nobuy-back agreement dealing during the reporting period.
IV. Changes in the shareholding of directors, supervisors and senior management
□ Applicable √ Not applicable
There was no change in the shareholding status of the company's directors, supervisors and senior management during the reportingperiod, as detailed in the 2022 annual report.
V. Change of controlling shareholder or actual controller
Change of controlling shareholder in reporting period
□ Applicable √ Not applicable
The controlling shareholder of the company has not changed during the reporting period.Actual controller changes during reporting period
□ Applicable √ Not applicable
The actual controller of the company has not changed during the reporting period.
Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares issued by the Company during the reporting period.
Section IX. Bonds
√ Applicable □ Not applicable
Ⅰ. Enterprise bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.
II. Corporate Bonds
√ Applicable □ Not applicable
1. Basic information on Corporate Bonds
Unit: RMB 0’000
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2020 Public Offering of corporate bonds to Professional Investors (Phase I) | 20 Shouqian 01 | 149236 | 15 Sep. 2020 | 17 Sep. 2020 | 17 Sep. 2025 | 250,000.00 | 3.98% | Interest is calculated on an annual basis, not compound. The interest is paid once a year, and the principal is repaid once it is due. The last installment of interest is paid together with the repayment of the principal. | Shenzhen Stock Exchange |
| Investor eligibility arrangement (if any) | Public offering for professional investors | ||||||||
| Applicable trading mechanism | Bidding, quotation, inquiry and agreement trading methods | ||||||||
| Whether there are delisting risks (if any) and counter-measures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
√ Applicable □ Not applicable
The bond (20 Shouqian 01) has a five-year maturity with an issuer option to adjust the coupon rate at the end of the third year and aninvestor recall option. It has not yet reached the exercise period.
3. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
4. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
III. Non-financial corporate debt financing instruments
√ Applicable □ Not applicable
1.Basic information of non-financial corporate debt financing instruments
Unit: RMB 0’000
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Outstanding amount of the bonds | Interest rate | Payment method | Trading venue |
| Beijing Shougang Co., Ltd.2023 Ultra-short-term financing note (Phase I) | 23Shouganggufen SCP001 | 012381548 | 14 April 2023 | 17 April 2023 | 20 October 2023 | 100,000.00 | 2.37% | Repayment of principal and interest once due | National inter-bank bond market |
| Investor eligibility arrangement (if any) | Institutional investors in the national inter-bank bond market (except purchasers prohibited by national laws and regulations) | ||||||||
| Applicable trading mechanism | Non-financial enterprise debt financing instrument trading system | ||||||||
| Whether there are delisting risks (if any) and countermeasures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Triggering and execution of issuer’s or investor’s option clause or investor protection clause
□ Applicable √ Not applicable
3. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
4. Implementation of and changes in guarantee, debt repayment plan and other repayment guarantee measures during thereporting period and their impacts on the rights and interests of bond investors
□ Applicable √ Not applicable
IV. Convertible bonds
□ Applicable √ Not applicable
The Company has no convertible bonds during the reporting period.V. The loss in the scope of the consolidated financial statements during the reportingperiodexceeding 10% of the net assets as at the end of the prior year
□ Applicable √ Not applicable
VI. Major accounting data and financial indicators of the Company over the past two years asat the end of the reporting period
Unit: RMB0’000
| Items | As at the end of the reporting period | As at the end of the prior year | Increase/decrease as at the end of the reporting period as compared to the end of the prior year |
| Current ratio | 0.49 | 0.45 | 8.89% |
| Gearing ratio | 62.72% | 65.03% | -2.31% |
| Quick ratio | 0.32 | 0.3 | 6.67% |
| The reporting period | The corresponding period of the prior year | Increase/decrease of the reporting period as compared to corresponding period of the prior year | |
| Net profit after extraordinary gains or losses | 38,507.8 | 175,267.38 | -78.03% |
| Proportion of EBITDA to total debts | 5.96% | 7.36% | -1.40% |
| Interest coverage ratio | 1.71 | 3.48 | -50.86% |
| Cash interest coverage ratio | 1.22 | 4.24 | -71.23% |
| EBITDA interest coverage ratio | 6.68 | 7.48 | -10.70% |
| Loans payment ratio | 100.00% | 100.00% | 0.00% |
| Interest payment ratio | 100.00% | 100.00% | 0.00% |
Section X. Financial ReportI. Audit reportHas the semi-annual report been audited?
□ Yes √No
The Company's semi-annual financial report has not been audited.II. Financial statement
The unit of the financial statements in the financial notes is: RMB yuan.
| Consolidated and Parent Company Statement of Financial Position | ||||
| Beijing Shougang Co., Ltd. as at 30 June 2023 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 30 June 2023 | 31 December 2022 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: | |||||
| Cash and Cash equivalents | V. 1 | 7,498,105,524.69 | 1,571,549,526.78 | 9,470,472,522.05 | 1,973,471,254.47 |
| Notes receivable | V. 2 | 5,185,604,148.01 | 857,624,790.52 | 6,691,086,020.85 | 898,640,149.83 |
| Accounts receivable | V. 3 | 1,561,766,163.98 | 1,705,831,150.96 | 1,450,008,897.10 | 1,396,660,925.53 |
| Financing receivables | V. 4 | 6,325,120,221.92 | 1,815,794,055.75 | 3,489,134,871.56 | 835,526,685.55 |
| Prepayments | V. 5 | 1,869,313,064.06 | 446,306,027.66 | 636,469,216.98 | 326,340,746.62 |
| Other receivables | V. 6 | 15,739,741.91 | 1,174,163,351.39 | 13,168,697.56 | 1,163,994,995.68 |
| Including: Interest receivable | |||||
| Dividends receivable | 200,000.00 | 200,000.00 | 9,713,244.06 | ||
| Inventories | V. 7 | 12,216,145,045.92 | 1,700,913,629.27 | 11,960,246,748.15 | 1,904,197,806.47 |
| Other current assets | V. 8 | 764,033,804.92 | 463,658,893.96 | 1,025,942,949.49 | 565,959,166.92 |
| Total current assets | 35,435,827,715.41 | 9,735,841,426.29 | 34,736,529,923.74 | 9,064,791,731.07 | |
| Non-current assets: | |||||
| Long-term equity investments | V. 9 | 2,566,256,714.59 | 37,575,948,825.12 | 2,724,285,925.35 | 37,687,890,460.88 |
| Other equity instruments investments | V. 10 | 509,359,837.55 | 509,359,837.55 | 232,766,133.81 | 232,766,133.81 |
| Other non-current financial assets | V. 11 | 79,234,007.60 | 79,234,007.60 | 79,234,007.60 | 79,234,007.60 |
| Investment properties | |||||
| Fixed assets | V. 12 | 90,739,924,821.37 | 18,692,108,948.71 | 93,331,072,969.17 | 19,254,378,866.41 |
| Construction in progress | V. 13 | 5,710,993,798.69 | 1,744,349,537.15 | 7,673,649,852.77 | 1,490,601,326.57 |
| Right-of-use assets | V. 14 | 74,922,597.56 | 22,512,036.92 | 83,107,359.45 | 27,014,444.30 |
| Intangible assets | V. 15 | 6,097,009,376.18 | 1,681,798,822.29 | 3,906,907,128.11 | 1,702,786,981.19 |
| Development expenditures | |||||
| Goodwill | |||||
| Long-term prepaid expenses | V. 16 | 3,718,028.18 | 3,535,748.04 | ||
| Deferred tax assets | V. 17 | 379,679,792.68 | 203,566,412.45 | 402,355,955.31 | 205,022,924.46 |
| Other non-current assets | |||||
| Total non-current assets | 106,161,098,974.40 | 60,508,878,427.79 | 108,436,915,079.61 | 60,679,695,145.22 | |
| Total assets | 141,596,926,689.81 | 70,244,719,854.08 | 143,173,445,003.35 | 69,744,486,876.29 | |
| Current liabilities: | |||||
| Short-term borrowings | V. 18 | 28,483,601,889.04 | 9,970,323,284.20 | 29,580,006,103.39 | 10,586,336,291.69 |
| Notes payable | V. 19 | 4,340,700,000.00 | 482,900,000.00 | 7,261,510,000.00 | 989,500,000.00 |
| Accounts payable | V. 20 | 21,841,975,227.62 | 10,040,371,537.44 | 19,810,594,484.05 | 9,833,463,235.41 |
| Receipts in advance | |||||
| Contract liabilities | V. 21 | 5,043,291,760.66 | 768,556,762.97 | 4,508,016,725.74 | 521,402,199.01 |
| Payroll and employee benefits | V. 22 | 615,825,783.26 | 197,517,444.05 | 620,796,429.60 | 207,863,353.07 |
| Taxes payable | V. 23 | 384,155,495.50 | 81,510,481.69 | 172,300,416.40 | 22,570,197.17 |
| Other payables | V. 24 | 981,016,774.08 | 319,624,614.14 | 2,761,819,276.69 | 1,100,551,048.35 |
| Including: Interest payable | |||||
| Dividend payable | 11,440,046.38 | ||||
| Liabilities classified as held for sale | |||||
| Current portion of non-current liabilities | V. 25 | 4,662,647,767.10 | 3,945,256,557.52 | 4,038,768,022.60 | 3,419,903,869.77 |
| Other current liabilities | V. 26 | 6,221,185,107.68 | 1,981,769,230.88 | 8,088,749,910.74 | 1,927,653,981.82 |
| Total current liabilities | 72,574,399,804.94 | 27,787,829,912.89 | 76,842,561,369.21 | 28,609,244,176.29 | |
| Non-current liabilities: | |||||
| Long-term borrowings | V. 27 | 10,914,950,000.00 | 1,987,720,000.00 | 10,594,350,000.00 | 1,267,120,000.00 |
| Bonds payable | V. 28 | ||||
| Lease liabilities | V. 29 | 63,956,202.06 | 14,649,576.83 | 72,439,836.79 | 19,284,063.32 |
| Long-term payable | V. 30 | 2,300,000.00 | 2,300,000.00 | 2,300,000.00 | 2,300,000.00 |
| Long-term payroll and employee benefits | V. 31 | 80,255,894.60 | 80,255,894.60 | 82,565,651.02 | 82,565,651.02 |
| Provisions | |||||
| Deferred income | V. 32 | 467,972,852.62 | 82,841,384.92 | 472,861,881.90 | 85,269,577.62 |
| Deferred tax liabilities | V. 17 | 546,572,519.43 | 398,089,302.53 | 502,268,362.26 | 365,393,047.63 |
| Other non-current liabilities | V. 33 | 4,164,819,920.40 | 4,532,018,467.20 | ||
| Total non-current liabilities | 16,240,827,389.11 | 2,565,856,158.88 | 16,258,804,199.17 | 1,821,932,339.59 | |
| Total liabilities | 88,815,227,194.05 | 30,353,686,071.77 | 93,101,365,568.38 | 30,431,176,515.88 | |
| Shareholders’equity： | |||||
| Share capital | V. 34 | 7,819,869,170.00 | 7,819,869,170.00 | 7,819,869,170.00 | 7,819,869,170.00 |
| Capital reserve | V. 35 | 30,149,085,572.33 | 22,200,783,194.58 | 29,644,048,551.50 | 22,176,353,536.77 |
| Less: treasury shares | V. 36 | 210,930,850.00 | 210,930,850.00 | 210,930,850.00 | 210,930,850.00 |
| Other comprehensive income | V. 37 | 393,356,423.11 | 393,356,423.11 | 158,251,774.94 | 158,251,774.94 |
| Special reserve | V. 38 | 39,898,757.98 | 2,255,199.14 | 31,852,310.79 | |
| Surplus reserve | V. 39 | 1,908,883,208.67 | 1,908,883,208.67 | 1,908,883,208.67 | 1,908,883,208.67 |
| Retained earnings | V. 40 | 9,006,056,094.41 | 7,776,817,436.81 | 8,595,698,699.52 | 7,460,883,520.03 |
| Equity attributable to shareholders of the Company | 49,106,218,376.50 | 39,891,033,782.31 | 47,947,672,865.42 | 39,313,310,360.41 | |
| Non-controlling interests | 3,675,481,119.26 | 2,124,406,569.55 | |||
| Total shareholders' equity | 52,781,699,495.76 | 39,891,033,782.31 | 50,072,079,434.97 | 39,313,310,360.41 | |
| Total liabilities and shareholders' equity | 141,596,926,689.81 | 70,244,719,854.08 | 143,173,445,003.35 | 69,744,486,876.29 |
| Consolidated and Parent Company Income Statement | |||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2023 | |||||
| Unit: RMB Yuan | |||||
| Item | Notes | Amount of the current period | Amount of the prior period | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Operating revenue | V. 41 | 57,368,096,029.37 | 19,873,152,144.53 | 63,194,115,447.56 | 21,084,411,087.65 |
| Less: Cost of sales | V. 41 | 54,320,153,167.23 | 19,017,870,812.88 | 58,297,262,097.99 | 20,322,512,831.66 |
| Taxes and surcharges | V. 42 | 383,925,331.08 | 86,621,033.52 | 456,719,481.10 | 116,182,277.23 |
| Selling expenses | V. 43 | 108,676,549.88 | 62,830,702.50 | 110,681,490.14 | 71,598,311.64 |
| General and administrative expenses | V. 44 | 579,477,011.71 | 231,356,983.91 | 589,064,385.23 | 244,437,111.75 |
| R&D expenses | V. 45 | 196,136,003.69 | 53,338,549.19 | 328,517,365.88 | 111,510,633.39 |
| Financial expenses | V. 46 | 770,889,994.30 | 239,745,298.74 | 894,145,156.20 | 242,528,674.14 |
| Including: Interest expense | 792,670,794.80 | 246,351,625.84 | 952,442,895.30 | 261,192,881.28 | |
| Interest income | 54,953,200.51 | 8,762,865.98 | 59,554,515.51 | 10,954,720.09 | |
| Add: Other income | V. 47 | 28,554,859.98 | 5,239,871.25 | 20,821,000.27 | 6,768,885.19 |
| Investment income/ (loss) | V. 48 | -147,517,069.99 | 214,093,601.73 | -20,652,118.80 | 204,417,656.82 |
| Including: Share of profits or loss of associates and joint ventures | -161,991,793.90 | -126,412,070.01 | -28,953,471.03 | -18,896,580.08 | |
| Gain/ (loss) on the changes in fair value | V. 49 | ||||
| Credit impairment losses | V. 50 | 6,485,743.85 | 8,123,531.49 | 7,605,686.77 | -2,331,366.56 |
| Assets impairment losses | V. 51 | -329,243,536.55 | -98,534,797.49 | -105,263,662.32 | -13,433,886.77 |
| Gain/ (loss) from disposal of assets | V. 52 | 169,700.65 | 169,700.65 | -200,808.44 | -631,771.10 |
| II. Operating profit/ (loss) | 567,287,669.42 | 310,480,671.42 | 2,420,035,568.50 | 170,430,765.42 | |
| Add: Non-operating income | V. 53 | 3,781,142.35 | 1,090,746.71 | 2,243,343.70 | 820,332.73 |
| Less: Non-operating expenses | V. 54 | 5,028,830.28 | 2,973,790.01 | 14,787,420.23 | 4,914,061.55 |
| III. Profit/ (loss) before tax | 566,039,981.49 | 308,597,628.12 | 2,407,491,491.97 | 166,337,036.60 | |
| Less: Income tax expense | V. 55 | 93,166,930.51 | -7,336,288.66 | 366,144,984.98 | 248,547.24 |
| IV. Net profit / (loss) | 472,873,050.98 | 315,933,916.78 | 2,041,346,506.99 | 166,088,489.36 | |
| (1) Categorized by operation continuity: | |||||
| Including: Net profit/ (loss) from continuing operations | 472,873,050.98 | 315,933,916.78 | 2,041,346,506.99 | 166,088,489.36 | |
| Net profit/ (loss) from discontinuing operations | |||||
| (2) Categorized by ownership: | |||||
| Including: Net profit/ (loss) attributable to shareholders of the Company | 410,357,394.89 | 1,795,307,073.34 | |||
| Net profit/ (loss) attributable to non-controlling interests | 62,515,656.09 | 246,039,433.65 | |||
| V. Other comprehensive income, net of tax | 235,104,648.17 | 235,104,648.17 | -14,214,734.41 | -14,214,734.41 | |
| Other comprehensive income, net of tax, attributable to shareholders of the company | 235,104,648.17 | 235,104,648.17 | -14,214,734.41 | -14,214,734.41 | |
| (1) Other comprehensive income that will not be reclassified to profit or loss | 235,104,648.17 | 235,104,648.17 | -14,214,734.41 | -14,214,734.41 | |
| Changes in fair value of other equity instrument investments | 235,104,648.17 | 235,104,648.17 | -14,214,734.41 | -14,214,734.41 | |
| (2) Other comprehensive income to be reclassified to profit or loss | |||||
| Other comprehensive income, net of tax, attributable to non-controlling interests | |||||
| VI. Total comprehensive income | 707,977,699.15 | 551,038,564.95 | 2,027,131,772.58 | 151,873,754.95 | |
| Total comprehensive income attributable to shareholders of the company | 645,462,043.06 | 1,781,092,338.93 | |||
| Total comprehensive income attributable to non-controlling interests | 62,515,656.09 | 246,039,433.65 | |||
| VII. Earnings per share | |||||
| (1) Basic earnings per share | 0.0548 | 0.2490 | |||
| (2) Diluted earnings per share | 0.0548 | 0.2490 | |||
| Consolidated and Parent Company Statement of Cash Flows | |||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2023 | |||||
| Unit: RMB Yuan | |||||
| Items | Note | Amount of the current period | Amount of the prior period | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Cash flows from operating activities | |||||
| Cash receipts from the sale of goods and the rendering of services | 28,962,980,003.28 | 9,679,107,598.01 | 28,616,896,674.28 | 8,191,770,992.14 | |
| Tax refunds received | 123,551,111.37 | 9,607,663.70 | 168,408,484.31 | 65,355,674.44 | |
| Cash received relating to other operating activities | V. 56 | 687,592,386.53 | 514,982,646.71 | 759,202,921.56 | 158,382,493.60 |
| Sub-total of cash inflows | 29,774,123,501.18 | 10,203,697,908.42 | 29,544,508,080.15 | 8,415,509,160.18 | |
| Cash paid for purchase of goods and services | 25,895,251,722.23 | 9,067,851,562.92 | 22,742,324,109.98 | 6,366,773,107.57 | |
| Cash paid to and on behalf of employee | 2,168,428,268.90 | 719,475,070.66 | 2,279,498,146.94 | 753,281,596.21 | |
| Cash paid for taxes | 1,105,119,465.38 | 264,420,582.68 | 1,908,611,908.27 | 263,897,447.95 | |
| Cash paid relating to other operating activities | V. 56 | 249,772,967.07 | 102,245,689.70 | 196,109,759.67 | 66,860,594.07 |
| Sub-total of cash outflows | 29,418,572,423.58 | 10,153,992,905.96 | 27,126,543,924.86 | 7,450,812,745.80 | |
| Net cash flows from operating activities | 355,551,077.60 | 49,705,002.46 | 2,417,964,155.29 | 964,696,414.38 | |
| II. Cash flows from investing activities | |||||
| Cash received from disposal of investments | |||||
| Cash received from investment income | 8,312,132.80 | 350,362,170.08 | 38,792,068.99 | 2,862,470.89 | |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 1,980,659.88 | 1,844,496.26 | 47,116,791.47 | ||
| Cash received from disposal of subsidiaries and other business units | |||||
| Cash received relating to other investing activities | V. 56 | 55,091,892.43 | 8,718,636.69 | 59,811,342.73 | 10,935,336.61 |
| Sub-total of cash inflows | 65,384,685.11 | 360,925,303.03 | 145,720,203.19 | 13,797,807.50 | |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 702,577,750.33 | 22,552,482.40 | 1,280,730,705.51 | 105,134,696.73 | |
| Cash paid for investments | 659,162,899.68 | 650,162,899.68 | 2,700,000.00 | ||
| Net cash paid for acquisition of a subsidiary and other operating units | |||||
| Cash paid relating to other investing activities | |||||
| Sub-total of cash outflows | 1,361,740,650.01 | 672,715,382.08 | 1,283,430,705.51 | 105,134,696.73 | |
| Net cash flows from investing activities | -1,296,355,964.90 | -311,790,079.05 | -1,137,710,502.32 | -91,336,889.23 | |
| III. Cash flows from financing activities | |||||
| Cash received from investment | 1,009,212,271.64 | 287,603,983.82 | 287,603,983.82 | ||
| Including: Cash receipts from capital contributions from non-controlling interests of subsidiaries | 1,009,212,271.64 | ||||
| Proceeds from borrowings | 18,992,121,200.88 | 6,277,121,200.88 | 20,693,851,539.41 | 8,390,251,539.41 | |
| Proceeds from issuing bonds | 1,000,000,000.00 | 1,000,000,000.00 | |||
| Cash receipts relating to other financing activities | |||||
| Sub-total of cash inflows | 21,001,333,472.52 | 7,277,121,200.88 | 20,981,455,523.23 | 8,677,855,523.23 | |
| Repayments for debts | 20,178,290,000.00 | 6,685,690,000.00 | 22,816,523,215.18 | 8,671,363,215.18 | |
| Cash payments for distribution of dividends or profit and interest expenses | 885,433,446.60 | 216,927,189.79 | 923,822,373.95 | 267,457,236.21 | |
| Including: Dividends or profits paid to non-controlling shareholders of subsidiaries | |||||
| Cash payments relating to other financing activities | V. 56 | 310,714,771.68 | 5,385,080.44 | 157,464,577.60 | 52,530,543.73 |
| Sub-total of cash outflows | 21,374,438,218.28 | 6,908,002,270.23 | 23,897,810,166.73 | 8,991,350,995.12 | |
| Net cash flows from financing activities | -373,104,745.76 | 369,118,930.65 | -2,916,354,643.50 | -313,495,471.89 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | |||||
| V. Net increase in cash and cash equivalents | -1,313,909,633.06 | 107,033,854.06 | -1,636,100,990.53 | 559,864,053.26 | |
| Add: Cash and cash equivalents as at the beginning of year | 8,329,215,003.68 | 1,464,146,635.34 | 8,535,871,373.08 | 1,022,866,541.00 | |
| VI. Cash and cash equivalent as at the end of year | 7,015,305,370.62 | 1,571,180,489.40 | 6,899,770,382.55 | 1,582,730,594.26 | |
| Consolidated Statement of Changes in Equity | |||||||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2023 | |||||||||
| Unit: RMB Yuan | |||||||||
| Item | Amount of the current period | ||||||||
| Equity attributable to shareholders of the parent company | Non-controlling interests | Total shareholders’ equity | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||
| I. Balance at the end of previous year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 |
| Add: Changes in accounting policies | |||||||||
| Corrections of prior period errors | |||||||||
| Business combination under common control | |||||||||
| Others | |||||||||
| II. Balance at the beginning of the year | 7,819,869,170.00 | 29,644,048,551.50 | 210,930,850.00 | 158,251,774.94 | 31,852,310.79 | 1,908,883,208.67 | 8,595,698,699.52 | 2,124,406,569.55 | 50,072,079,434.97 |
| III. Increase/(decrease) during the period | 505,037,020.83 | 235,104,648.17 | 8,046,447.19 | 410,357,394.89 | 1,551,074,549.71 | 2,709,620,060.79 | |||
| (1)Total comprehensive income | 235,104,648.17 | 410,357,394.89 | 62,515,656.09 | 707,977,699.15 | |||||
| (2)Shareholders' contributions and reduction | 496,706,556.73 | 1,612,933,798.87 | 2,109,640,355.60 | ||||||
| (i) Shareholders’ contributions in ordinary share | 477,100,023.33 | 1,612,933,798.87 | 2,090,033,822.20 | ||||||
| (ii) Amount of share-based payments recognized in equity | 19,606,533.40 | 19,606,533.40 | |||||||
| (iii) Others | |||||||||
| (3) Profit distribution | -126,180,896.77 | -126,180,896.77 | |||||||
| (i) Transfer to surplus reserve | |||||||||
| (ii) Distribution to shareholders | -126,180,896.77 | -126,180,896.77 | |||||||
| (iii) Others | -34,120,631.40 | ||||||||
| (4) Transfer within equity | |||||||||
| (i) Capital reserves converted to share capital | |||||||||
| (ii) Surplus reserves converted to share capital | |||||||||
| (iii) Loss made up by surplus reserves | |||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||
| (v) Others | |||||||||
| (5) Special reserve | 8,330,464.10 | 8,046,447.19 | 1,805,991.52 | 18,182,902.81 | |||||
| (i) Additions | 8,330,464.10 | 8,046,447.19 | 1,805,991.52 | 18,182,902.81 | |||||
| (ii) Utilisation | |||||||||
| (6) Others | |||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 30,149,085,572.33 | 210,930,850.00 | 393,356,423.11 | 39,898,757.98 | 1,908,883,208.67 | 9,006,056,094.41 | 3,675,481,119.26 | 52,781,699,495.76 |
| Consolidated Statement of Changes in Equity | |||||||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2022 | |||||||||
| Unit: RMB Yuan | |||||||||
| Item | Amount of the prior period | ||||||||
| Equity attributable to shareholders of the parent company | Non-controlling interests | Total shareholders’ equity | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||
| I. Balance at the end of previous year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 |
| Add: Changes in accounting policies | |||||||||
| Corrections of prior period errors | |||||||||
| Business combination under common control | |||||||||
| Others | |||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 24,861,776,641.72 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,348,614,099.26 | 48,996,157,297.40 |
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 4,799,342,378.64 | -14,214,734.41 | 7,679,916.40 | 1,761,186,441.94 | -5,350,288,538.65 | 2,273,249,223.92 | ||
| (1)Total comprehensive income | -14,214,734.41 | 1,795,307,073.34 | 246,039,433.65 | 2,027,131,772.58 | |||||
| (2)Shareholders' contributions and reduction | 1,069,543,760.00 | 4,791,525,313.14 | -5,601,857,595.00 | 259,211,478.14 | |||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 4,755,696,587.97 | -5,601,857,595.00 | 223,382,752.97 | |||||
| (ii) Amount of share-based payments recognized in equity | 35,828,725.17 | 35,828,725.17 | |||||||
| (iii) Others | |||||||||
| (3) Profit distribution | -34,120,631.40 | -34,120,631.40 | |||||||
| (i) Transfer to surplus reserve | |||||||||
| (ii) Distribution to shareholders | |||||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | |||||||
| (4) Transfer within equity | |||||||||
| (i) Capital reserves converted to share capital | |||||||||
| (ii) Surplus reserves converted to share capital | |||||||||
| (iii) Loss made up by surplus reserves | |||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||
| (v) Others | |||||||||
| (5) Special reserve | 7,817,065.50 | 7,679,916.40 | 5,529,622.70 | 21,026,604.60 | |||||
| (i) Additions | 7,817,065.50 | 7,679,916.40 | 5,529,622.70 | 21,026,604.60 | |||||
| (ii) Utilisation | |||||||||
| (6) Others | |||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 29,661,119,020.36 | 210,930,850.00 | 171,351,476.18 | 28,734,288.18 | 1,908,883,208.67 | 9,892,054,647.32 | 1,998,325,560.61 | 51,269,406,521.32 |
| Parent Company Statement of Changes in Shareholders’ Equity | ||||||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2023 | ||||||||
| Unit: RMB Yuan | ||||||||
| Item | Amount of the current period | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |
| I. Balance at the end of previous year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | |
| Add: Changes in accounting policies | ||||||||
| Corrections of prior period errors | ||||||||
| Business combination under common control | ||||||||
| Others | ||||||||
| II. Balance at the beginning of the year | 7,819,869,170.00 | 22,176,353,536.77 | 210,930,850.00 | 158,251,774.94 | 1,908,883,208.67 | 7,460,883,520.03 | 39,313,310,360.41 | |
| III. Increase/(decrease) during the period | 24,429,657.81 | 235,104,648.17 | 2,255,199.14 | 315,933,916.78 | 577,723,421.90 | |||
| (1) Total comprehensive income | 235,104,648.17 | 315,933,916.78 | 551,038,564.95 | |||||
| (2) Shareholders' contributions and reduction | 23,286,765.84 | 23,286,765.84 | ||||||
| (i) Shareholders’ contributions in ordinary share | ||||||||
| (ii) Amount of share-based payments recognized in equity | 23,286,765.84 | 23,286,765.84 | ||||||
| (iii) Others | ||||||||
| (3) Profit distribution | ||||||||
| (i) Transfer to surplus reserve | ||||||||
| (ii) Distribution to shareholders | ||||||||
| (iii) Others | ||||||||
| (4) Transfer within equity | ||||||||
| (i) Capital reserves converted to share capital | ||||||||
| (ii) Surplus reserves converted to share capital | ||||||||
| (iii) Loss made up by surplus reserves | ||||||||
| (iv) Other comprehensive income transferred to retained earnings | ||||||||
| (v) Others | ||||||||
| (5) Special reserve | 1,142,891.97 | 2,255,199.14 | 3,398,091.11 | |||||
| (i) Additions | 1,142,891.97 | 2,255,199.14 | 3,398,091.11 | |||||
| (ii) Utilisation | ||||||||
| (6) Others | ||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 22,200,783,194.58 | 210,930,850.00 | 393,356,423.11 | 2,255,199.14 | 1,908,883,208.67 | 7,776,817,436.81 | 39,891,033,782.31 |
| Parent Company Statement of Changes in Shareholders’ Equity | ||||||||
| Beijing Shougang Co., Ltd. for the year ended 30 June 2022 | ||||||||
| Unit: RMB Yuan | ||||||||
| Item | Amount of the prior period | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |
| I. Balance at the end of previous year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | |
| Add: Changes in accounting policies | ||||||||
| Corrections of prior period errors | ||||||||
| Business combination under common control | ||||||||
| Others | ||||||||
| II. Balance at the beginning of the year | 6,750,325,410.00 | 17,070,281,351.14 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,613,554,570.19 | |
| III. Increase/(decrease) during the period | 1,069,543,760.00 | 5,123,853,239.92 | - | -14,214,734.41 | 835,587.07 | 131,967,857.96 | 6,311,985,710.54 | |
| (1) Total comprehensive income | -14,214,734.41 | 166,088,489.36 | 151,873,754.95 | |||||
| (2) Shareholders' contributions and reduction | 1,069,543,760.00 | 5,123,034,014.50 | - | 6,192,577,774.50 | ||||
| (i) Shareholders’ contributions in ordinary share | 1,069,543,760.00 | 5,080,043,062.18 | 6,149,586,822.18 | |||||
| (ii) Amount of share-based payments recognized in equity | 18,056,494.08 | 18,056,494.08 | ||||||
| (iii) Others | 24,934,458.24 | 24934458.24 | ||||||
| (3) Profit distribution | -34,120,631.40 | -34,120,631.40 | ||||||
| (i) Transfer to surplus reserve | ||||||||
| (ii) Distribution to shareholders | ||||||||
| (iii) Others | -34,120,631.40 | -34,120,631.40 | ||||||
| (4) Transfer within equity | ||||||||
| (i) Capital reserves converted to share capital | ||||||||
| (ii) Surplus reserves converted to share capital | ||||||||
| (iii) Loss made up by surplus reserves | ||||||||
| (iv) Other comprehensive income transferred to retained earnings | ||||||||
| (v) Others | ||||||||
| (5) Special reserve | 819,225.42 | 835,587.07 | 1,654,812.49 | |||||
| (i) Additions | 819,225.42 | 835,587.07 | 1,654,812.49 | |||||
| (ii) Utilisation | ||||||||
| (6) Others | ||||||||
| IV. Balance at the end of the year | 7,819,869,170.00 | 22,194,134,591.06 | 210,930,850.00 | 171,351,476.18 | 835,587.07 | 1,908,883,208.67 | 9,041,397,097.75 | 40,925,540,280.73 |
Notes to the Financial StatementsI. General Information of the Company
1. Company profile
Beijing Shougang Company Limited (hereinafter referred to as the Company) is a joint stocklimited company established by means of raising, which is approved by Beijing Municipal People'sGovernment Jingzhenghan [1998] No. 34 and exclusively initiated by Shougang Group Co., Ltd.With the approval of zjxz [1999] No. 91 document issued by China Securities RegulatoryCommission, the Company was the first to issue 350,000.00 thousand ordinary shares (A shares) tothe public in Shenzhen Stock Exchange from 21 to 27 September, 1999 by the combination of legalperson placement and online issuance, with par value of RMB 1 per share and issue price of RMB
5.15 per share, with the stock code of 000959. The Company registered with approval of BeijingAdministration for Industry and Commerce on 15 October, 1999. The Company holds the businesslicense with unified social credit code of 1100001028663 (1-1), with the registered capital of RMB2,310,000,000.00.The Company issued the convertible corporate bonds worthed RMB 2,000,000 thousand on 16December, 2003 upon the approval of zjfxz [2003] No. 107 document issued by China SecuritiesRegulatory Commission. On 31 December, 2003, the convertible bond was listed and traded inShenzhen Stock Exchange. The bond is abbreviated as “Shougang Convertible Bond” with the bondcode of “125959”. The convertible bonds were converted into shares since June 16, 2004, and metthe redemption conditions until 26 February 2007. Accordingly, the board of directors of thecompany issued the redemption announcement. As of 6 April, 2007, the date of convertible bondredemption, the total amount of Shougang convertible bonds was RMB1,950,217,500.00, whichwas converted into the Company's shares, with an accumulated increase of RMB 656,526,057.00 inshare capital. The Company obtained a new business license of legal entity on November 20, 2008,with the registration number 110000000286633 (1-1), and the registered capital changed to RMB2,966,526,057.00.On 16 January, 2013, the Company's material assets reorganization was reviewed by thereorganization committee of CSRC and passed unconditionally. On 29 January, 2014, ChinaSecurities Regulatory Commission issued “Reply on approving material assets reorganization ofBeijing Shougang Co., Ltd. and shares issuance to Shougang Group to purchase assets”. As of 25April, 2014, the implementation of material assets reorganization of the Company has beencompleted. In the material assets reorganization, the private placement to Shougang Group was2,322,863,543 shares, with par value of RMB 1 each and issue price of RMB 4.29 each. TheCompany obtained the new business license of legal entity after capital increment on 9 July, 2014,with the registration number of 110000000286633, and the registered capital changed to RMB5,289,389,600.On 21 April 2021, the event of "Share Issuing to Beijing Jingtou Investment Holding Co., Ltd. etc.for Assets Purchase and Fundraising" has been approved by the CSRC (CSRC Permit No. [2021]1400). According to the approval, the Company issued 1,234,898,985.00 shares to Beijing JingtouInvestment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) foracquiring 19.1823% shares of Shougang Jingtang United Iron & Steel Co., Ltd. (hereinafter referredto as the Jingtang Co.) on 23 April 2021. On 17 June 2021, the Company issued 161,135,025 sharesto 8 investors at the price of RMB 5.11 per share, and RMB 823,399,977.75 were collected. Afterthis issuing, the registered capital of the Company is RMB 6,685,423,610.00.
On 9 December 2021, by the approval of 2021 First Extraordinary General Meeting and StateOwned Assets Supervision and Administration Commission (hereinafter referred to as “SASAC”),the Company has completed the 2021 restricted stock incentive plan. There were 64,901,800.00shares issued to 386 directors, senior management, key technicians and management backbone withthe issue price of RMB 3.25 per share. Aftere this offering, the registered capital of the Companychanges to RMB 6,750,325,410.00.On March 18, 2022, the Company obtained the Reply on the Approval for Beijing Shougang Co.,Ltd. 's to Issue Shares to Shougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds(CSRC License [2022] No. 553) issued by China Securities Regulatory Commission. On March 31,2022, the Company issued 1,015,417,369 shares to Shougang Group Co., Ltd. to purchase 49.00%equity of Beijing Shougang Steel Trade Investment Management Co., Ltd. held by Shougangaccording to the approval document. On May 20, 2022, the Company issued 54,126,391 shares toeight investors at an issue price of RMB5.38 per share and the total amount of raised funds isRMB291,199,983.58. After this offering, the registered capital of the Company changes to RMB7,819,869,170.00.The Company obtained the new business license of legal entity on 22 December, 2016 after theintegration of five certificates, with the unified social credit code 911100007002343182.The statutory address is Shijingshan Road, Shijingshan District, Beijing.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and the board of supervisors. At present, the Company sets upserval functional departments, for instance, secretary office of the board of directors, the planningand financing department, the manufacturing department, the marketing center, the purchasingcenter, the human resources department, the equipment department, the energy department, theenvironmental protection department, the quality inspection department, the office, etc, as well asthe subordinate factories such as Shougang Qian'an Iron&Steel Co., Ltd. and auxiliary productiondepartment, like the technical center. The company has six subsidiaries: Shougang Jingtang UnitedIron&Steel Co., Ltd., Beijing Shougang Cold Rolling Co., Ltd., Qian'an Shougang MetallurgicalTechnology Co., Ltd., Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., BeijingShougang New Energy Material Technology Co., Ltd., and Beijing Shougang Steel TradeInvestment Management Co., Ltd.The business scope of the Company includes iron and steel smelting, steel calendaring processing,copper smelting and calendaring processing and sales; manufacturing and sales of sinter, coke andchemical products; blast furnace residual pressure power generation and production and sales of gas;processing and sales of industrial waste; sales of metal materials, coke, chemical products,mechanical and electrical equipment, building materials, general equipment, hardware, furnitureand decorative materials; equipment leasing (excluding automobiles); telecommunications services;insurance agency services; insurance broker services; loading, unloading and handling services;software development; advertising design and agency; warehousing services; technologydevelopment, technical consultation, technology transfer, technical service and technical training;investment and investment management.This financial statement and its accompanying notes were approved by the third extraordinarymeeting of the board of directors of the company for the year 2023 on 10 August, 2023.
2. Scope of consolidated financial statements
The scope of the consolidated financial statements is determined on the control basic, the scope
includes six subsidiaries, which are Shougang Jingtang United Iron&Steel Co., Ltd., BeijingShougang Cold Rolling Co., Ltd., Qian'an Shougang Metallurgical Technology Co., Ltd., ShougangZhixin Qian'an Electromagnetic Materials Co., Ltd., Beijing Shougang New Energy MaterialTechnology Co., Ltd., and Beijing Shougang Steel Trade Investment Management Co., Ltd.The details refer to Note VI. Changes in the scope of consolidation and VII. Interests in otherentities.II. Basis of preparationThe financial statements are prepared in accordance with the latest “China Accounting Standardsfor Business Enterprises” and other issued application guidance, interpretations and other relatedregulations (collectively known as the “CASBE”) issued by the Ministry of Finance of the PRC(MOF). Additionally, the Company discloses relevant financial information in accordance withrequirements in the “Preparation Convention of Information Disclosure by Companies OfferingSecurities to the Public No.15—General Rules on Financial Reporting” (2014 revised) issued by theChina Securities Regulatory Commission.The financial statements are prepared on a going concern basis.The Company adopts the accrual basis of accounting. The financial statements have been preparedunder the historical cost convention, except for certain financial instruments. If the assets areimpaired, corresponding provisions for impairment shall be made in accordance with relatedregulations.III. Significant accounting policies and estimatesThe Company has determined the accounting policies and accounting estimates based on thecharacteristics of the operation, especially those related to depreciation of fixed assets, amortizationof intangible assets, capitalization conditions of R&D expenses and revenue recognition policies,the detailed accounting policies refer to Note III. 14, Note III. 18, Note III. 19 and Note III. 25.
1. Statement of compliance with the CAS
The financial statements have been prepared in accordance with CAS, and present truly andcompletely the financial position of the consolidated and the Company as at 30 June 2023, and thefinancial performance and cash flows from January to June 2023.
2. Accounting period
The accounting year of the Company is from 1 January to 31 Decemeber of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as functional currency.The financial statements of the Company have been prepared in RMB.
5. Accounting treatments for business combination involving entities under common control andbusiness combination involving entities not under common control.
(1) Business combination involving entities under common control
For the business combination involving entities under common control, the assets and liabilities thatare obtained in the business combination shall be measured at original carrying amounts at thecombination date as recorded by the party being combined. The difference between the carryingamount of the net assets obtained and the carrying amount of consideration paid for the combinationshall be adjusted to capital reserve (equity premium), if the capital reserve (equity premium) is notsufficient to absorb the difference, any excess shall be adjusted to retained earnings.Business combinations involving entities under common control through multiple transactions toachieve in stagesIn the separate financial statements, the initial investment cost is calculated based on theshareholding portion of net assets of the consolidated party in the carrying amount of the ultimatecontrolling party’s consolidated financial statement at the acquisition date. The difference betweenthe initial investment cost and the sum of the carrying amount of the original investment cost andthe carrying amount of consideration paid for the combination is adjusted to the capital reserve(equity premium), if the capital reserve is not sufficient to absorb the difference, the excess shall beadjusted to retained earning.In the consolidated financial statements, the assets and liabilities obtained at the combination shallbe measured at the carrying value as recorded by the ultimate controlling party at the acquisitiondate. The difference between the sum of the carrying value from original shareholding portion andthe new consideration incurred at the acquisition date and the carrying value of net assets obtainedat acquisition date shall be adjusted to capital reserve (equity premium), if the balance of capitalreserve is not sufficient to absorb the differences, any excess is adjusted to retained earnings. Thelong-term investment held by combining party before acquisition of control, the profit or loss,comprehensive income and other change of shareholder’s equity recongnized at the closer date ofthe acquisition date and combination date under common control shall separately offset the openingbalance of retained earnings and profit or loss during comparative statements.
(2) Business combinations involving entities not under common controlFor business combinations involving entities not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. The acquirer shallrecognize the acquiree’s identifiable asset, liabilities and contingent liabilities that satisfy therecognition criteria at fair values at the date of acquisition.The excess of combination costs and the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets is recognized as goodwill, which is measured at cost less any accumulatedimpairment losses subsequently. If the acquirer’s interest in the net fair value of the acquiree’sidentifiable net assets exceeds the combination costs, the acquirer shall reassess the measurementand recognize any excess remaining in profit or loss after reassessment.Business combinations involving entities not under common control through multiple transactionsto achieve in stagesIn the separate financial statements, the initial investment cost is the sum of the carrying amount ofthe equity investment held by the entity prior to the acquisition date and the additional investmentcost at the acquisition date. The disposal accounting policy of other comprehensive income relatedwith equity investment prior to the purchase date recognized under equity method shall be
compliance with the method when the acquire disposes the related assets or liabilities.Shareholder’s equity due to the changes of other shareholder’s equity other than the changes of netprofit, other comprehensive income and profit distribution shall be transferred to profit or lose forcurrent period when disposed. If the equity investment held by the entity prior to the acquisitiondate is measured at fair value, the cumulative change in fair value recognized in othercomprehensive income shall be transferred to retained earnings for current period under costaccounting method.In the consolidated financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity held prior to acquisition date; the equity ofthe acquiree held prior to acquisition date shall be re-measured at the fair value at acquisition date,the difference between the fair value and book value shall be recognized as investment gain or lossfor the current period. Other comprehensive income and changes of other shareholder’s equityrelated with acquiree’s equity held prior to acquisition date shall be transferred to profit or loss forcurrent period at acquisition date, besides the other comprehensive income incurred by the changesof net assets or net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overheads for the business combination, including the expenses of audit, legal services,valuation advisory, and other related administrative expenses, are recorded in profit or loss for thecurrent period when expenditure incurred. The transaction costs of equity or debt securities issuedas the considerations of business combination are included in the initial recognition amount of theequity or debt securities.
6. Method of preparing consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the control basis. Control existswhen the Company has power over the investee, rights to variable returns from involvement withrelated activities of investee and has the ability to affect its returns through its power over theinvestee. A subsidiary is an entity that is controlled by the Company (including separable parts of anenterprise or investee and structured entities controlled by the Company, etc).
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the Company in accordance with other relevant information. Inpreparing the consolidated financial statements, the Company and its subsidiaries are required toapply consistent accounting policy and accounting period, intra-group transactions and balancesshall be offset.The subsidiary acquired through a business combination involving entities under common controlin the reporting period shall be included in the scope of the consolidation from the beginning of thecombination date, the subsidiary’s income, expenses and profits should be included in theconsolidated results of operations and cash flows from the acquisition date respectively.The subsidiary acquired through a business combination involving entities not under common
control in the reporting period, the subsidiary’s income, expenses and profits are included in theconsolidated results of operations, and cash flows are included in the consolidated cash flowstatement from the acquisition date to the end of the reporting date.The portion of the subsidiary’s equity that is not attributable to the Company is treated asnon-controlling interests and separately presented in the consolidated balance sheet withinshareholders’ equity. The portion of a subsidiary’s profit or loss that is attributable tonon-controlling interests presented in the consolidated income statement of net profit or loss as “netprofit attributable to non-controlling interests”. Where the amout of losses of a subsidiaryattributable to the non-controlling shareholders in the current period exceeds the share of theopening balance of owner’s equity of the subsidiary, the excess shall offset non-controllinginterests.
(3) Purchase of the minority equity in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minorityequity and the share of the net assets that the subsidiaries have to continue to calculate from the dateof purchase or the date of consolidation in proportion to the new shareholding ratio is adjusted tothe capital reserve (equity premium), if the capital reserve is not sufficient, any excess is adjusted toretained earning. The difference between disposal of partial equity investment without losingcontrol over its subsidiary and the disposal of long-term equity investment corresponding to theshare of the net assets of the subsidiaries from the date of purchase or the date of consolidation is aswell.
(4) Loss of control of subsidiaries
If the control right is lost due to disposal of partial equity investment or other reasons, theremaining equity shall be re-measured according to its fair value on the date of losing control. Thedifference between the summary of consideration obtained from the disposal of the equity and thefair value of the remaining equity, less the difference between the share of the original assets andthe share of the net assets that have been continuously calculated from the date of purchase from thedate of the original shareholding, is included in the current period profit or loss and; if there is agoodwill for the subsidiary, the amount of the goodwill also shall be deducted.The other comprehensive income related to the original subsidiary’s equity investment shall betransferred to current period profit and loss when control is lost, except for the other comprehensiveincome arising from the movement of net liabilities or assets investee’s re-measurement of definedbenefit plan.
(5) Treatment of step disposal until the loss of control of subsidiaries
By stepping through multiple transactions to dispose of the equity investment in the subsidiary untilit loses control, if the clauses, conditions and economic impacts of the transaction satisfy one ormore of the following criteria, the Company will consider the transactions as a package transactionfor the accounting treatment:
①The transactions are entered simultaneously or in consideration of the mutual influence;
②Only the transactions as a whole can achieve one complete business outcome;
③The occurrence of a transaction is depending on the occurance of at least one of othertransactions;
④The transaction alone is not economical, however, it becomes economical to consider the othertransactions together.In the separate financial statements, by stepping through multiple transactions to dispose of theequity investment in the subsidiary until it loses control, when it is not a package transaction,carrying forward the book value of each disposal of equity relative to the corresponding long-termequity investment, and the difference between the considerations and the book value of the disposalof long-term equity investment is recognized in the current period investment income or loss. Whenit is a package transaction, the price difference between the disposal price and the disposalinvestment before the loss of control is recognized as other comprehensive income in theconsolidated financial statements, and is transferred to the current period profit or loss of controlwhen the control is lost.In the consolidated financial statements, the measurement of the remaining equity and treatment ofthe loss of disposal is in accordance to “Treatment of loss of control of subsidiaries” as describedabove. The difference between the disposal consideration and the related share of net assets of thesubsidiaries, which has been continuously calculated since the purchase date corresponding to theequity disposal should be treated as follows:
①When it is a package transaction, the difference shall be recognized as the other comprehensiveincome and transferred to the current period profit or loss of control when the control is lost
②When it is not a package transaction, the difference shall be recorded to capital reserve (sharepremium) as equity transaction and could not be transferred to the current period profit or loss ofcontrol when the control is lost.
7. Joint arrangement and joint operations
Joint arrangement refers to an arrangement under the joint control of two or more entities. The jointarrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
Joint operation is a joint arrangement whereby the Company have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items in relation to its interest in a joint operation inaccordance with CAS:
A. its solely-held assets, and its share of any assets held jointly;B. its solely-assumed liabilities, and its share of any liabilities incurred jointly;C. its revenue from the sale of its share of the output arising from the joint operation;D. its share of the revenue from the sale of the output by the joint operation;E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a type of joint arrangement whereby the Company that has joint control of thearrangement has rights to the net assets of the joint venture.
The Company conducts accounting treatment for the investment of joint ventures in accordancewith the provisions of equity method accounting related to long-term equity investment.
8. Cash and cash equivalents
Cash represents the cash on hand and deposits which are readily available for payment. Cashequivalents represent the Company’s short-term highly liquid investments which are readilyconvertible into known amounts of cash and subject to an insignificant risk of changes in value.
9. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
The Company recognises a financial asset or a financial liability when, and only when, it becomes aparty to the contractual provisions of the instrument.A financial asset will be derecognized when it satisfies one or more of the following conditions:
① The contractual rights to receive cash flows from the financial asset expire;
② The financial asset has been transferred, and it satisfies the following conditions forderecognition.The financial liability (or part of it) is derecognized when its contractual rights (or part of it) expire.If the Company (as a debtor) makes an agreement with the creditor to replace the current financialliability with assuming a new financial liability, and contractual provisions are different insubstance, the current financial liability shall be derecognized and a new financial liability shall berecognized.All financial assets purchased or sold in regular way are recognised or derecognised on the tradingdate when the Company commits to purchase or sell the asset.
(2) Classification and measurement of financial assets
The Company classifies its financial assets, based on the entity's business model for managing thefinancial assets and the contractual cash flow characteristics of the financial assets, as financialassets at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets measured at amortized costThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured atamortized cost:
? The financial asset is held whose objective is to collect contractual cash flows;? The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.After initial recognition, this type of financial asset using effective interest rate method to be
measured at amortized cost. The gain or loss generated by the financial assets measured atamortized cost and not part of any hedging relationship shall be accounted in the profit or loss forthe year when the financial assets are derecognized, amortized by effective interest method orrecognized impairment.Financial assets measured at fair value through other comprehensive incomeThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured at fairvalue through other comprehensive income:
? The financial asset is held within a business model whose objective will be achieved by bothcollecting contractual cash flows and trading financial assets;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After initial recognition, the financial assets are subsequently measured at fair value. Interest,impairment loss/gain and exchange loss/gain calculated by the effective interest rate method arerecognised in profit or loss, while other profit or loss shall be recognised in other comprehensiveincome. When derecognized, the accumulated profit or loss previously recognised in othercomprehensive gains shall be transferred to current profit or loss.Financial assets measured at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair valuethrough other comprehensive income, the Company classifies all other financial assets as financialassets measured at fair value through profit or loss. In order to eliminate and significantly reduceaccounting mismatches, the Company irrevocably designates some financial assets that should bemeasured at amortized cost or at fair value through other comprehensive income as financial assetsat fair value through profit or loss during the initial recognition.After initial recognition, the financial assets are subsequently measured at fair value, and the profitor loss (including interest and dividend income) generated shall be recognised in current profit orloss, unless the financial assets are part of the hedging relationship.The business model of managing financial assets refers to how the Company manages financialassets to generate cash flow. The business model determines if the source of cash flow for financialassets managed by the Company is collecting contract cash flow, selling financial assets or both ofthem. The Company determines the business model of financial assets management on the basis ofobjective facts and the specific business goals of financial assets management decided by keymanagers.The Company evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and the interest, which is based on the amount of unpaid principal. Among them,principal refers to the fair value of financial assets at initial recognition; interest includes theconsideration of time value of money, credit risk related to the unpaid principal in a specific period,and other basic credit risks, costs and profits. Additionally, the Company evaluates the terms andconditions of the contracts that may alter time distribution or amount of cash flow in financial assetcontracts to determine whether they satisfy the requirements of the aboving contract cash flow’scharacteristics.
Only when the Company changes its business model of managing financial assets, all the financialassets affected shall be reclassified on the first day of the first reporting period after the businessmodel alteration, otherwise, financial assets shall not be reclassified after initial recognition.A financial asset is measured at its fair value at initial recognition. For financial assets measured atfair value thorugh profit or loss, the relevant transaction costs are charged to profit or loss; for otherfinancial assets, the relevant transaction costs are recognized as initial investment costs. For thetrade receivables arising from the sale of goods or services provided do not contain or take intoaccount significant financing components, the initial investment costs shall be the consideration,which the Company is entitled to receive with the expectation.
(3) Classification and measurement of financial liabilities
The Company classifies its financial liabilities at initial recognition as financial liabilities measuredat fair value through profit or loss and financial liabilities at amortized cost. With respect tofinancial liabilities not classified as at fair value through profit or loss, transactions costs arecharged to initial recognition cost.Financial liabilities measured at fair value through profit or lossFinancial liabilities at fair value through profit or loss, including financial liabilities held for tradingand those are designated as at fair value through profit or loss at initial recognition. For thesefinancial liabilities, they are subsequently measured at fair value and gains or lossess from thechange of fair value and related dividend and interest expense are recognized in profit or loss for theyear.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod, the gains and losses arising from derecognition or amortization is recognised in profit orloss for the year.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that satisfies one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse conditions, contractual obligation to exchange financial assets orfinancial liabilities with other entity.
③ The contract that will or may be settled in the entity’s own equity instruments and is anon-derivative for which the entity is or may be obliged to deliver a variable number of the entity’sown equity instruments.
④ The derivative contract that will or may be settled in the entity’s own equity instruments otherthan by the exchange of a fixed number of the entity’s own equity instruments for a fixed amount ofcash or other financial assets.Equity instrument is the contract that evidences the residual equity in the assets of an entity afterdeducting all of its liabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash
or other financial assets, the contractual obligation satisfies the definition of financial liability.If the financial instrument must or could be settled by the Company’s own equity instrument, theCompany should consider whether the Company’s equity instrument as the settlement instrument isa substitute of cash or other financial assets or the residual equity in the assets of an entity afterdeducting all of its liabilities. If it is the former one, the financial instrument is the Company’sfinancial liability; if it is the latter one, the tool is the equity instrument of the Company.
(4) Fair value of financial instruments
For the determination method of fair value of financial assets and financial liabilities, please refer toNote III.10.
(5) Impairment of financial assets
The Company performs impairment assessment and recognizes loss allowance for the followingfinancial assets based on the expected credit losses.? Financial assets measured at amortized cost;? Debt investment and trade receivables measured at fair value through other comprehensiveincome;? Contract assets as defined in Accounting Standards for Enterprises No.14- Revenues;? Lease receivables;? Financial guarantee contracts (expect for the contracts measured at fair value through profit or
loss, financial assets transformation not qualify for derecognition and continuing involvementof transferred financial assets).Measurement of expected credit lossThe expected credit loss refers to the weighted average of the credit loss of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractualcash flows receivable from the contracts and all cash flows expected to be received, that is, thepresent value of all cash shortages.The Company considers the reasonable and basis information about past events, current situationand forecast of future economic situation, calculates the probability weighted amount of the presentvalue of the difference between the receivable cash flow of the contract and the expected cash flowwith the risk of default as the weight, and confirms the expected credit loss.The Company separately measures the expected credit losses of financial instruments at differentstages. The credit risk on a financial instrument has not increased significantly since initialrecognition, which is in Stage I. The Company measures the loss provision in accordance withexpected credit losses for the next 12 months. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which isin Stage II. The Company measures the loss provision in accordance with the expected credit lossesfor the whole lifetime of the financial instrument. If the financial instrument has occurred creditimpairment since initial recognition, which is in Stage III, and the Company measures the lossprovision in accordance with the expected credit losses for the whole lifetime of the financialinstrument.
For the financial instruments with lower credit risk at the balance sheet date, the Company assumesthat the credit risk has not increased significantly since the initial recognition, and measures the lossprovision in accordance with expected credit losses for the next 12 months.The whole lifetime expected credit loss, refers to the expected credit loss caused by all possibledefaults during the whole expected lifetime. The 12-month expected credit losses, refer to theexpected credit loss caused by all possible defaults during the next 12 months after balance sheetdate (if the expected duration of financial instrument is less than 12 months, then for the expectedduration), which is part of the whole lifetime expected credit losses.When measuring the expected credit loss, the maximum maturity period that the Company needs toconsider is the maximum contract maturity period (including the consideration of option of renewal)the enterprise facing credit risk.For financial instruments in Stage I, Stage II and with lower credit risk, the Company calculatesinterest income on the basis of the book balances without deduction of impairment provisions andwith effective interest rates. For financial instruments in Stage III, the Company calculates interestincome on the basis of the book balances minus the impairment provision and with effective interestrate.Notes receivable, Accounts receivable, and Contract assetsFor notes receivable, accounts receivable and contract assets, whether or not there are significantfinancing elements, the Company always measures the loss provision in accordance with the wholelifetime expected credit losses.If the expected credit loss information of the the independent financial asset cannot be evaluated bya reasonable cost, the Company divides and combines notes receivable and accounts receivableaccording to the characteristics of credit risk. On the basis of the combination, the Companycalculates the expected credit losses. The basis of determining combination is as follows:
A. Notes receivable? Combination 1: Bank acceptances? Combination 2: Bank acceptances with lower credit rating and Commercial acceptancesB. Accounts receivable: Accounts of receivable-tradeOther receivablesAccording to the characteristics of credit risk, the Company divides other receivables into servalcombinations. On the basis of the combination, the Company calculates the expected credit losses.The basis of determining the combination is as follows:
? Other receivables Combination 1: Imprest and deposit, etc.? Other receivables Combination 2: Other current accountFor the other receivables combination, the Company calculates the expected credit losses throughthe exposure on default and the next 12-month or the whole lifetime expected credit loss rate.Debt investments and other debt investments
For debt investments and other debt investments, the Company calculates the expected credit lossesthrough the exposure on default and the next 12-month or the whole lifetime expected credit lossrate, according to the nature of the investment, the types of counterparty and risk exposure.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet date with the default risk oninitial recognition date, the Company determines the relative change of default risk of financialinstruments during the expected lifetime of financial instruments to evaluate whether the credit riskof financial instruments has increased significantly since the initial recognition.When determining whether credit risk has increased significantly since the initial recognition, theCompany considers reasonable and valid information, including forward-looking information,which can be obtained without unnecessary additional costs or efforts. Information considered bythe Company includes:
? The debtor cannot pay principal and interest on the expiration date of the contract;? Serious deterioration of external or internal credit ratings (if any) of financial instruments thathave occurred or are expected to occur;? Serious deterioration of the debtor’s operating results that have occurred or are expected tooccur;? Changes in the existing or anticipated technological, market, economic or legal environment
will have the significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Company evaluates whether credit risk hasincreased significantly on the basis of an independent financial instrument or a combination offinancial instruments. When assessing on the basis of the combination of financial instruments, theCompany can classify financial instruments based on common credit risk characteristics, such asoverdue information and credit risk rating.If the delay exceeds 30 days, the Company determines that the credit risk of financial instrumentshas increased significantly.Financial assets that have occured credit impairmentOn the balance sheet date, the Company assesses whether credit impairment has occurred infinancial assets measured at amortized cost and debt investments measured at fair value throughother comprehensive income. When one or more events adversely affect the expected future cashflow of the financial assets occur, the financial assets transfer to the financial assets with creditimpairment. Evidence of credit impairment of financial assets includes the following observableinformation:
? Issuer or debtor suffer from significant financial difficulties;? Debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;? In consideration of economic situationand contract related to the financial difficulties of the
debtor, the Company grants concessions to the debtor that will not be made under any other
circumstances.
? Debtor is probable to go bankrupt or undergo other financial restructuring.? Financial difficulties of issuer or debtor lead to the disappearance of financial assets active
market.Presentation of expected credit loss reserveIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Company recalculates the expected credit loss on each balance sheet date. Theincrease or reversal of the loss provision resulting therefrom is recognised as an impairment loss orgain in the current profit or loss.For financial assets measured at amortized cost, loss provisionoffsets the carrying amount of the financial assets presentated on the balance sheet; for debtinvestments measured at fair value through other comprehensive income, the Company recognizesits loss provision through other comprehensive income and does not offset the financial assets’carrying amount.Write offIf the Company no longer reasonably expects that the financial assets contract cash flow can berecovered fully or partially, the financial assets book balance will be reduced directly. Suchreduction constitutes derecognition of the financial assets. The situation usually occurs when theCompany determines that the debtor has no assets or income to generate sufficient cash flows topay the amount to be reduced. However, in accordance with the Company’s procedures forrecovering due payment, the financial assets reduced may still be affected by enforcement activities.If the reduced financial assets can be recovered later, the returns as impairment losses shall berecorded in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another entity (thetransferee) other than the issuer of financial assets.A financial asset is derecognised when the Company has transferred substantially all the risks andrewards of the asset to the transferee. A financial asset is not derecognised when the Companyretains substantially all the risks and rewards of the financial asset.When the Company has neither transferred nor retained substantially all the risks and rewards of thefinancial asset, it either (i) derecognises the financial asset and recognises the assets and liabilitiescreated in the transfer when it has not retained control of the asset; or (ii) continues to recognise thetransferred asset to the extent of the Company’s continuing involvement, in which case, theCompany also recognises an associated liability.
(7) Offsetting of financial assets and financial liabilities
When the Company has currently enforceable legal rights to offset the recognized financial assetsand financial liabilities, and there is an intention to settle on a net basis or to realize the financialassets and settle the financial liabilities, the financial assets and financial liabilities shall bepresented in balance sheet with the amount after offsets. Besides, the financial assets and financialliabilities shall be presented separately in balance sheet and are not allowed to be offset.
10. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.The Company measures related assets or liabilities at fair value and assumes that selling assets ortransferring liabilities in an orderly transaction in the principal market of related assets or liabilities;in the absence of a principal market, the Company assumes the transaction in the mostadvantageous market. Principal market (or the most advantageous market) is the market that theCompany can enter into on measurement date. The Company adopts the presumptions used bymarket participants in achieving the maximum economic value of pricing the assets or liabilities.For financial assets or financial liabilities in the active market, the Company uses the quoted pricein active market as fair value. Otherwise, the Company uses valuation technique to determine thefair value.Fair value measurement of non-financial assets considers market participants’ ability to generateeconomic benefits by using the assets in its highest and best use or by selling it to another marketparticipant that would use the asset in its highest and best use.The Company adopts the valuation techniques that are appropriate under current circumstances andfor which sufficient data and other supporting information are available to measure fair value,giving priority to the use of relevant observable inputs, and using unobservable inputs only if theobservable inputs are unavailable or not feasible to obtain.All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level inputthat is significant to the fair value measurement as a whole: Level 1 inputs are quoted (unadjusted)market prices in active markets for identical assets or liabilities; Level 2 inputs are observableinputs for related assets or liabilities, either directly or indirectly other than the inputs within Level1; Level 3 inputs are unobservable inputs for related assets or liabilities.For assets and liabilities that are recognized in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between levels in the hierarchy byreassessing categorization at the end of each reporting period.
11. Inventories
(1) Classification
Inventories of the Company include raw materials, finished goods, lower-valued consumables andself-made semi-finished goods
(2) Mesurement method of cost of delivered inventories
Inventories are quoted at actual costs when acquired. Raw materials, finished goods and self-madesemi-finished goods are determined on the weighted average basis.
(3) Basis for determining the net realisable value and method for inventories provisionNet realisable value is the estimated selling price deducted by the estimated costs to completion, theestimated selling expenses and related taxes. The net realisable value is measured on the basis ofobtained verified evidences and considerations for the purpose of holding inventories and the effectof post balance sheet events.
At the end of each reporting period, if the cost is in excess of net realisable value, provision forinventories is recognized in profit or loss. The Company usually recognizes provision according tothe independent inventory item. When the circumstances that previously caused inventories to bewritten down below cost no longer exist, the original amount of the write-down is reversed.
(4) Inventory system
Inventories are accounted for using the perpetual inventory system.
(5) Amortization method for consumables and packaging
Low-valued consumables are charged with the one-off amortization method and multi-stageamortization method at consumption.
12. Assets classified as held for sale and discontinued operations
(1) Classification and measurement of non-current assets or disposal groups held for sale
The Company classifies the non-current asset or disposal group as held for sale when the carryingamount of the non-current asset or disposal group will be recovered through sale (includingexchange transactions of non-monetary assets with commercial substance) rather than throughcontinuing use.Above mentioned non-current assets not include investment properties subsequently measured withthe fair value model, biological assets measured at fair value less cost of sales, assets arising fromemployee benefits, financial assets, deferred tax assets and contractual rights under insurancecontracts.The disposal group is the group of assets to be disposed of, by sale or otherwise, together as a wholein a single transaction, and liabilities directly associated with those assets that will be transferred inthe transaction. Under certain circumstances, disposal group included goodwill acquired in thebusiness combination.The non-current asset or disposal group is classified as held for sale when all the following criteriaare satisfied: According to the trading routine of selling such asset or disposal group in similartransactions, the non-current asset or disposal group is available for immediate sale in currentcircumstance; the sale is highly probable to occur, that is, the Company has made a resolution on asale plan and obtained the assured purchase agreement. The sale is expected to be completed withinone year. If the control of the subsidiary is lost due to the sale of investment on the subsidiary andthe investment intended to be sold satisfies all conditions for the classification of assets held for sale,the Company classifies all the investment in that subsidiary as held for sale in separate financialstatements, and classifies all the assets and liabilities of that subsidiary as held for sale inconsolidated financial statements no matter whether the Company will keep part of the equityinvestment.Excess of the carrying amount over the fair value less costs to sell is recognized as assetsimpairment losses in the initial recognition or remeasurement on balance sheet date of non-current
asset or disposal group. The carrying amount of goodwill allocated to the disposal group shall bededucted firstly by the impairment loss recognized for the disposal group, and then the carryingamount of each non-current asset in the disposal group shall be proportionately deducted inaccordance with the proportion of the carrying value of the non-current assets in the disposal group.If net amount of fair value of the non-current asset or disposal group less costs to sell increases, theamount of the write-down will be recovered but not in excess of the cumulative impairment lossthat has been recognised after classified as held for sale. The reverse amount is recorded in thecurrent profit or loss. Additionally, the reduced carrying amount of goodwill could not be recovered.The Company does not depreciate (or amortise) the non-current assets classified as held for sale orassets of the disposal group classified as held for sale. Interest and other expenses attributable to theliabilities of the disposal group classified as held for sale continue to be recognised. If aninvestment or a part of the investment in an associate or a joint venture is classified as held for sale,equity method is not used for the part classified as held for sale, while equity method is used for therest part (the part not classified as held for sale) continuely. When the Company does not havematerial impact on an associate or a joint venture due to the sale transaction, equity method will bediscontinued.Where a non-current asset or disposal group is classified as held for sale but no longer meets theconditions for holding for sale classification, the Company discontinues its classification as held forsale and counts it according to the lower of:
① The carrying amount of the asset and disposal group before classification as held for sale,adjusted for any depreciation, amortisation or impairment recognised under the assumption that theasset or disposal group has not been classified as held for sale;
② Recoverable amount
(2) Discontinued operations
Discontinued operation refers to the separately identifiable component that has been disposed orbeen classified as held for sale and satisfies one of the follwing conditions:
① It represents am independent major business line or a separate geographical area of operations;
② It is part of a single co-ordinated plan to dispose of an independent major business or a separategeographical area of operations;
③ It is a subsidiary acquired exclusively with a view to resale.
(3) Presentation
The Comapany presents the non-current assets classified as held for sale and the assets of disposalgroup classified as held for sale as “Assets classified as held for sale” in balance sheet. Theliabilities of disposal group classified as held for sale is presented as “Liabilities classified as heldfor sale” in balance sheet.
The Company presents profit or loss from discontinued operations separately from profit or lossfrom continuing operations in income statement. Impairment loss and reversal amount and anydisposal gain or loss of the non-current asset or disposal group classified as held for sale that doesnot satisfy the definition of a discontinued operation is presented in profit or loss from continuingoperations. Any impairment loss and reversal amount belongs to discontinued operations, anddisposal gain or loss is presented in profit or loss from discontinued operations.The disposal group which is planned to cease use rather than for sale, and satisfies the conditions ofcomponents of discontinued operation, the Company presents it as discontinued operation from thedate of cessation.For the discontinued operation presented in the current period, former profit or loss of continuingoperations will be presented as discontinued operations for comparative accounting period in thecurrent financial statements. If the discontinued operations no longer satisfy the conditions to beclassified as held for sale, former profit or loss of discontinued operations will be presented ascontinuing operations for comparative accounting period in the current financial statements.
13. Long-term equity investments
Long-term equity investments consist of equity investments in subsidiaries, joint ventures andassociates. An associate is an enterprise over which the Company has significant influence.
(1) Recognition of initial investment cost
Long-term equity investment from the business combination: For a long-term equity investmentacquired through a business combination under common control, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of theowners’ equity of the party being absorbed in the consolidated financial statements of the ultimatecontrolling party at combination date. For business combination involving entities not undercommon control, the initial investment cost of long-term equity should be the cost of acquisition.Long-term equity investment from other methods：for a long-term equity investment acquired bypaying cash, the initial investment cost shall be the actual purchase price paid; for those acquired bythe issue of equity securities, the initial investment cost shall be the fair value of the equitysecurities issued.
(2) Subsequent measurement and recognition of profit or loss
The cost method is applied for the investment of subsidiaries unless the investment satisfies theconditions of held for sale; the equity method is applied for the investment of joint ventures andassociates.When the cost method is adopted in long-term equity investments, except for cash dividends orprofit distributions declared but not yet distributed in the purchase price or consideration ofobtaining the investment, profits or cash dividends declared to be distributed by the investee shouldbe recognised as investment income in the current period.When the equity method is adopted in long-term equity investments, the initial cost of aninvestment in excess of the share of investee’s fair value on identifiable net assets remainsunchanged; the initial cost of the investment that falls short of the share of investee’s fair value onidentifiable net assets shall be adjusted, for the difference which had been charged to current profitor loss.
When the equity method is adopted, the Company recognises its share of the investee’s profit orloss, as well as its share of the investee’s other comprehensive income, as investment income or lossand other comprehensive income, and adjusts the carrying amount of the investment accordingly;the investor’s share of profit distributions or cash dividends declared by the investee is deductedfrom the carrying amount of the investment. For the changes of equity in an investee other thanprofit or loss, the investor adjusts the carrying amount of the investment and recognised it in capitalreserve (other capital reserves). The recognition of the investee’s results should be based on the fairvalues of the individual identifiable assets of the investee according to the Company’s accountingpolicies and accounting period. Additionally, the recognition should be based on the adjusted net profitof the investee.If the Company has significant influences or can implement joint control over investees due toadditional investment, the initial investment cost is recognized as the sum of the fair value of theoriginal portion of equity investment and the additional investment cost under equity method on thetransformation date. The accumulated fair value changes accounted in other comprehensive incomeof non tradable equity instrument investment which is initially classified as fair value through othercomprehensive income are transferred to retained earnings while accounting by equity methodinstead.If the Company loses control of an investee with joint control or significant influence retained afterpartial disposal of its shares, the remaining equity after disposal should be accounted in accordancewith the rules “CASBE 22-Recognition and Measurement of Financial Instruments” and thedifference between the fair value on the day of losing control and the book value is recognised inprofit or loss. For the other comprehensive income recognized by equity investment under theequity method, the basis of the accounting treatment is the same as that on disposal of related assetsor liabilities by the investee, the amount recognised in the equity on the changes in other equitymovements should be all charged to the profit or loss for the year.If the Company loses control of an investee after partial disposal of its shares, the remaining equityafter disposal has joint control or significant influence over the investee, the equity method shall beadopted and the remaining equity shall be deemed to be recognized under equity method since theacquisition date; if the remaining equity has no joint control or significant influence over theinvestee, the remaining equity after disposal should be accounted in accordance with therules“CASBE 22-Recognition and Measurement of Financial Instruments” and the differencebetween the fair value on the day of losing control and the book value is recognised in profit or loss.If the shareholding ratio of the Company is reduced due to the increase of investments of otherinvestors and thus the control is lost, but the joint control or significant influence can be exerted onthe investee, the Company should recognize the incremental shares of net assets according to thenew investments. The difference between the original book value of the long-term equityinvestment corresponding to the decrease in the shareholding ratio should be included in the currentprofit or loss; then, the equity shall be deemed to be recognized under equity method since theinvestment date and adjusted according to the new shareholding ratio.Unrealised profit or loss resulting from transactions between the Company and its associates orjoint ventures shall be calculated according to the proportion of its shareholding, which isattributable to the Company, and then to be recognized in investment income after offset. Whileunrealised profit or loss resulting from transactions between the Company and investee belongs toimpairment loss of transferred assets cannot be offset.
(3) Basis of determining the existence of joint control or significant influence over an investee
Joint control is the agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require unanimous consent of the parties sharing control. Indetermining whether there is a joint control, the first judge is determining whether the relevantarrangement is controlled collectively by all the participants involved or the group of theparticipants involved and then to determine whether the decisions related to the basic operatingactivities should require the unanimous consent of the participants involved. If all participants or thegroup of the participants involved must act consistently to determine the relevant arrangement, it isconsidered that all participants or the group of the participants control the arrangement. If two ormore participants in the collectively control of certain arrangement, it shall not be considered asjoint control. Protection of rights shall not be considered in determining whether there is jointcontrol.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control over those policies. When determining whether thereis the significant influence over the investee, the voting rights held by the investors or the otherentites and the effect of potential voting rights if it can be converted into the equity of investee,including the effect of current convertible warrants, security option and convertible bonds.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including20% ) or more but less than 50% of the voting shares, it has significant impact on the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and has no significant influence; when theCompany owns 20% (excluding) or less of the voting shares, it is not considered to have significantimpacts on the investee in general, unless there is clear evidence to show that in this case theCompany can participate in the production and business decisions of the investee so as to have thesignificant influence.
(4) Held-for-sale equity investments
Accounting treatment for the entity investment, or a portion of an equity investment, in associatesor joint ventures that is classified as held for sale refers to Note III, 12.Any remaining equity investment that has not been classified as held for sale shall be accountedunder the equity method.When the equity investment in associates or joint ventures previously classified as held for sale andno longer satisfies the conditions to be classified as held for sale, it will be adjusted under equitymethod retrospectively as from the date of classification as held for sale.
(5) Method of impairment testing and impairment provision
For investment in subsidiaries, associates and joint ventures, refers to Note III, 20 for the method ofasset impairment provision.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, usein supply of services, rental or for administrative purposes with useful lives over one accountingyear.
Fixed assets are recognised when it is probable that the related future economic benefits will flowinto the company, and the cost can be measured reliably.Fixed assets of the Company are initially measured at actual costs in acquisition.The subsequent expenditure related to fixed assets is included in cost of the fixed assets when therelevant economic benefits are likely to flow into the Company and its cost can be measuredreliably; routine repair expenditure of fixed assets that do not meet the conditions for capitalizationis included in the profit and loss or the cost of relevant assets according to the beneficiaries when itoccurs. The book value of the replaced part shall be derecognized.
(2) Depreciation of fixed assets
Depreciation of the fixed assets is calculated on the straight-line basis. The fixed asset isdepreciated since the state of intended use and no longer depreciated when recognition is terminatedor being classified as non-current assets held for sale. Without considering impairment provision,the estimated useful lifetime, estimated residual values, and the annual depreciation rates of eachcategory of fixed assets are as follows:
| Category | Estimated useful life | Estimated residual value | Annual depreciation rate |
| Pant and buildings | 25-43 years | 5% | 3.80-2.21% |
| Machinery and equipment | 12-28 years | 5% | 7.92-3.39% |
| Vehicles | 10 years | 5% | 9.50% |
| Electronic equipment | 10 years | 5% | 9.50% |
| Industrial furnace | 13 years | 5% | 7.31% |
| Metallurgical equipment | 19 years | 5% | 5.00% |
| Others | 14-22 years | 5% | 6.79-4.32% |
The fixed assets that have been withdrawn for impairment provision shall also be deducted from theaccumulative amount of impairment provision to recognize depreciation rate.
(3) Impaitment test and impairment provision of fixed assets refer to Note III, 20.
(4) Useful lives, residual values and the depreciation method are reviewed by the Company at least ateach financial year end.Useful lives are adjusted if the expected useful lives are different from the original estimates; theestimated net residual values are adjusted if they are different from the original estimates.
(5) Disposal of fixed assets
The fixed assets are derecognied when the fixed assets are diposed or when it is not expected togenerate economic benefits through use or disposal of the fixed assets. The amount of the disposalincome from the sale, transfer, scrapping or damage of fixed assets after deducting its book valueand relevant taxes shall be included in the current profit and loss.
15. Construction in progress
Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowedfunds during the period of construction.Construction in progress is reclassified to the appropriate category of fixed assets when completedand ready for use.Impairment provision of construction in progress refers to Note III. 20.
16. Materials for construction of fixed assets
The materials for construction of fixed assets of the Company refers to the material prepared forconstruction in progress, including engineering materials, equipments not yet installed and toolsprepared for production, etc.Purchase measured at cost, the recipients transfer to construction in progree, and the remainingtransfer to inventory after the completion of construction.Impairment provision of materials for construction of fixed assets refers to Note III, 20.Closing balance of materials for construction of fixed assets is presented in “Construction inprogress” in balance sheet.
17. Borrowing costs
(1) Principles of capitalising borrowing costs
All the borrowing costs that are directly attributable to construction or production of all qualifyingassets are capitalized and recorded in relevant assets costs. Other borrowing costs are treated as anexpense and recorded in the profit or loss. The capitalization of borrowing costs commences when:
① Expenditures for the assets are incurred, including paying cash, transferring non-cash assets orundertaking interest-bearing debt for acquisition or construction of the assets, which could becapitalized;
② Borrowing costs are incurred; or
③ The acquisition and construction activities that are necessary to bring the assets to get ready forthe intended use or sale have commenced.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs ceases when the asset being acquired or constructed issubstantially ready for its intended use or sale and borrowing costs incurred thereafter are treated asan expense to be recorded in the profit or loss.Capitalization of borrowing costs is suspended during extended periods in which the acquisition orconstruction of a fixed asset is interrupted abnormally and the interruption lasts for more than threemonths until the acquisition or construction is resumed; borrowing costs in normal interruptionperiod continue to be capitalized.
(3) Calculation of capitalization rate and amount of borrowing costs.
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowingcosts incurred during the current period deducted by any temporary interest or investment income;for general borrowings, the borrowing costs eligible for capitalization are determined by applying acapitalization rate to the weighted average of capital expenditure that exceeds the specificborrowings. The capitalization rate is calculated based on the weighted average interest rate ofgeneral borrowings.During the capitalization period, exchange differences on foreign currency specific borrowings shallbe capitalized; exchange differences on foreign currency general borrowings shall be recognized ascurrent profit or loss.
18. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets include land use rights, software and etc.Intangible assets are measured at cost initially and its useful lifetime shall be analyzed andrecognized when obtained. An intangible asset with finite useful lifetime shall be amortized over theexpected useful life using method which can reflect the expected recognition of economic benefitsrelated to the assets when the intangible asset is available for use; an intangible asset whoseexpected recognition cannot be reliably determined is amortized at straight-line amortizationmethod; an intangible asset with indefinite useful lifetime shall not be amortized.The amortization method of intangible assets with limited service life is as follows:
Intangible assets with finite useful lives are amortized over the useful lives on the straight-line basisaccording to the category, expected useful lifetime and estimated residual value. The annualamortization rates of each category of intangible assets are as follows:
| Category | Useful lifetime | Amortisation method | Annual amortization rate |
| Software | 5-10 years | Straight line method | 10.00-20.00% |
| Land use rights | 40-50 years | Straight line method | 2.00-2.50% |
The Company reviews the useful lives and amortization method of intangible assets with finiteuseful lifetime, adjusts original estimated amount and processes according to the accountingestimate change if there are any differences with original estimated, at least at the end of eachreporting period.The Company estimates an intangible asset can no longer bring future economic benefits at thebalance sheet date, and then the carrying amount of the intangible asset should be reversed to thecurrent profit or loss.For the impairment provision of intangible assets, refers to Note III, 20.
19. Development expenditure
Expenditure on internal research and development projects is classified into expenditure on theresearch stage and expenditure on the development stage.Expenditure on the research stage is recognised in the profit or loss when incurred.Expenditure on the development stage is capitalized only when: the technical feasibility ofcompleting the intangible asset so that it is available for use or sale; the intention to complete theintangible asset is to use or sell it; the method of generating economic benefits by the intangibleassets, including that the intangible asset can be proved that the output or the intangible asset itselfhas market or, if it is to be used internally, the usefulness of the intangible asset also need to beproved; the availability of adequate technical, financial and other resources to complete thedevelopment and the ability to use or sell the intangible asset; the expenditure attributable to thedevelopment stage can be measured reliably. Otherwise, it shall be presented in the profit or loss.The research and development projects of the Company will enter into the development stage aftermeeting the above conditions and passing through the studies of technical feasibility and economicfeasibility, and the projects approval.Capitalized expenditure on the development stage is presented as “Development expenditures” inthe balance sheet and shall be transferred to intangible assets when the project is completed to itsintended use state.
20. Impairment of assets
The impairment for the long-term equity investments, fixed assets, construction in progress,right-of-use asset, intangible assets, etc. (excluding inventories, investment property measured atfair value model, deferred income tax assets and financial assets) of subsidiaries, associates andjoint ventures are determined as follows:
The Company assesses whether any indicator of impairment exists as of the end of each reportingperiod, and, if yes, performs impairment test by estimation of the asset’s recoverable amount. Forgoodwill acquired in business combinations, intangible assets with indefinite lives and intangibleassets without intended use state, an annual impairment test is performed no matter whether there isany indicator of impairment.An asset’s recoverable amount is calculated as the higher of the asset’s fair value less costs to selland the present value of estimated future cash flows generated from the use of assets. Therecoverable amount is calculated on individual basis unless it is not applicable, in which case therecoverable amount is determined for the asset group to which the asset belongs. An asset group isrecognized based on whether the cash inflows generated by the asset group are largely independentto those of other assets or asset groups.When the recoverable amount of an asset or an asset group is less than its carrying amount, thecarrying amount is reduced to its recoverable amount. The reduction amount is charged to profit orloss and an impairment allowance is provided.In terms of impairment test of the goodwill, the carrying amount of the goodwill arising frombusiness combination shall be allocated to the related asset group in accordance with a reasonable
basis at acquisition date. Those that are difficult to be allocated to relevant assets shall be allocatedto relevant assets groups. Relevant assets or assets groups refer to those that can benefit from thesynergies of business combination and are not larger than the Company’s recognized reportingsegment.When there is an indication that the goodwill related asset and asset group are prone to impair, theCompany should execute impairment test for the asset and asset group excluding goodwill,calculate the recoverable amount and recognize the corresponding impairment loss. The Companyshould execute impairment test for the asset or asset group including goodwill and compare therecoverable amount with carrying amount, provision for impairment of assets shall be recognizedwhen the recoverable amount of assets is lower than its carrying amount.Impairment losses cannot be reversed in subsequent accounting periods after recognition.
21. Long-term prepaid expenses
The long-term prepaid expenses of the Company are recorded as the actual cost and evenlyamortized on straight-line basis over the expected beneficial period. For the long-term prepaidexpense items that cannot benefit the later accounting period, the amortized value is recognized inthe profit or loss.
22. Payroll and employee benefits payable
(1) The scope of employee benefits payable
Payroll and employee benefits payable are all forms of consideration given by an entity in exchangefor service rendered by employees or the termination of employment, including short-termemployee benefits, post-employment benefits, termination benefits and other long-term employeebenefits. The benefits that the Company provides to the spouses, children and dependents ofemployees, the late employees’ family and other beneficiaries also shall be deemed as payroll andemployee benefits payable.According to liquidity, employment benefits are presented separately as “Payroll and employeebenefits payable” and “Long-term payroll and employee benefits payable” in the balance sheet.
(2) Short-term employee benefits payable
A liability when an employee has provided service in exchange for employee benefits, such aswages, bonuses, social security contributions (including medical insurance, injury insurance,maternity insurance, etc.) and house funding to be paid is recognized as the current profit or loss orcosts of related assets.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plan and defined benefit plan. Definedcontribution plan is the post-employment benefit plan under which the Company pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions.Defined benefit plan is the post-employment benefit plan other than defined contribution plan.Defined contribution planDefined contribution plan includes basic pension insurance, unemployment insurance, etc.
During the accounting period of service provided by the employee, the Company shall recognise thecontribution payable according to the defined contribution plan as the liability and record thecorresponding amount in the current profit or loss or the cost of the relevant asset.
(4) Termination benefits
The Company is required to recognize termination benefits with a corresponding charge to profit orloss at the earlier of when the entity can no longer withdraw an offer of those benefits and when itrecognizes any related restructuring costs.For implementing the internal retirement plan, the economic compensation before the officialretirement date belongs to termination benefits. From the date of ceasing service to the normalretirement date, the wages of the internally retired employees and the social insurance premiums tobe paid are included in the current profit or loss one time. Economic compensation after the officialretirement date (such as normal pension) should be treated as post-employment benefits.
23. Provisions
If the contingent considerations or contingent liabilities satisfy the following conditionssimultaneously, a provision will be recognized by the Company:
(1) The obligation is a present obligation assumed by the Company; and
(2) It is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation; and
(3) A reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the presentobligation, after considering risks, uncertainties, present value, etc. If the impact of time value ofmoney is significant, the best estimate is determined as its present value of future cash outflow.Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the currentbest estimate.If the settlement of provision is fully or partially compensated by a third party or the others, and thecompensated amount can be definitely received, then the provision can be recognised as assetseparately. The compensated amount shall not be greater than the carrying amount of the recognizedliability.
24. Share-based payments and equity instruments
(1) Category of share-based payments
The Company’s share-based payment is either equity-settled share-based payment or cash-settledshare-based payment.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by theCompany, the fair value is determined at the quoted price in the active market. For options andother equity instruments with no active market, option pricing model shall be used to estimate the
fair value of the equity instruments. The following factors shall be taken into account using optionpricing models: A. the exercise price of the option; B. the validity period of the option; C. thecurrent market price of the share; D. the expected volatility of the share price; E. predicted dividendof the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimateOn each balance sheet date within the vesting period, the estimated number of equity instrumentsexpected to vest is revised based on the best estimate made by the Company according to the latestavailable subsequent information as to changes in the number of employees with exercisable rights.On the vesting date, the final estimated number of equity instruments expected to vest should equalthe actual number of equity instruments expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based paymentEquity-settled share-based payment shall be measured at the fair value of the equity instrumentsgranted to employees. If the right may be exercised immediately after the grant, the fair value ofequity instrument shall, on the date of the grant, be included in the relevant costs or expenses, andthe capital reserve shall be increased accordingly. If the right can not be exercised until the vestingperiod comes to an end or until the specified performance conditions are met, then on each balancesheet date within the vesting period, the services obtained in the current period shall, based on thebest estimate of the number of vested equity instruments, be included in the relevant costs orexpenses and the capital reserve at the fair value of the equity instrument on the date of the grant.After the vesting date, the Company make no adjustment to the relevant costs or expenses as well asthe total amount of the owner’s equities which have been confirmed.Cash-settled share-based payment shall be measured in accordance with the fair value of liabilitycalculated and recognised based on the shares or other equity instruments undertaken by theCompany. If the right may be exercised immediately after the grant, the fair value of the liabilityundertaken by the Company shall, on the date of the grant, be included in the relevant costs orexpenses, and the liabilities shall be increased accordingly. If the right may not be exercised untilthe vesting period comes to an end or until the specified performance conditions are met, on eachbalance sheet date within the vesting period, the services obtained in the current period shall, basedon the best estimate of the information about the exercisable right, be included in the relevant costsor expenses and the corresponding liabilities at the fair value of the liability undertaken by theCompany. On each balance sheet date and on each account date prior to the settlement of therelevant liabilities, the Company re-measures the fair value of the liabilities and include the changesin the current profits and losses.When there are changes in Company’s share-based payment plans, if the modification increases thefair value of the equity instruments granted, corresponding recognition of service increase inaccordance with the increase in the fair value of the equity instruments; if the modificationincreases the number of equity instruments granted, the increase in fair value of the equityinstruments is recognised as a corresponding increase in service achieved. Increase in the fair valueof equity instruments refer to the difference between the fair values of the modified date. If themodification reduces the total fair value of shares paid or not conductive to the use of otheremployees share-based payment plans to modify the terms and conditions of service, it willcontinue to be accounted for in the accounting treatment as if the change had not occurred, unlessthe Company cancelled some or all of the equity instruments granted.During the vesting period, if the cancelled equity instruments (except for failure to meet theconditions of the non-market vesting conditions) granted by the Company to cancel the equity
instruments granted amount treated as accelerated vesting of the remaining period should berecognised immediately in profit or loss, while recognising capital reserves. If employees or otherparties can choose to meet non-vesting conditions but they are not met in the vesting period, theCompany will treat them as cancelled equity instruments granted.
25. Revenue
(1) General principle
Revenue is recognized when the Company has satisfied its performance obligations in the contract,that is, when the customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations, the Company determines thestand-alone selling price at contract inception of the distinct good or service underlying eachperformance obligation in the contract and allocates the transaction price in proportion to thosestand-alone selling prices. The Company recognises as revenue the amount of the transaction pricethat is allocated to each performance obligation.The Company satisfies a performance obligation over time if one of the following criteria is met; orotherwise, a performance obligation is satisfied at a point in time:
① The customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs;
② The customer can control the asset created or enhanced during the Company’s performance;
③ The Company’s performance does not create an asset with an alternative use to it and theCompany has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time, the Company recognises revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. When theoutcome of that performance obligation cannot be measured reasonably, but the Company expectsto recover the costs incurred in satisfying the performance obligation, the Company recognisesrevenue only to the extent of the costs incurred until such time that it can reasonably measure theoutcome of the performance obligation.For performance obligation satisfied at a point in time, the Company recognises revenue at the pointin time at which the customer obtains control of relevant goods or services. To determine whether acustomer has obtained control of goods or services, the Company considers the followingindicators:
① The Company has a present right to payment for the goods or services, as the customer obtainsthe current payment obligation for the goods.
② The Company has transferred the legal title of the goods, as the customer has obtained the legaltitle of the goods.
③ The Company has transferred physical possession of the goods to the customer, as the customerhas obtained the physical possession of the goods.
④ The Company has transferred the significant risks and rewards of legal title of the goods to thecustomer, as the customer has obtained the significant risks and rewards of legal title of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has obtained control of goods.A contract asset is the Company’s right to consideration in exchange for goods or services that it hastransferred to a customer when that right is conditional on factors other than the passage of time.The Company recognises loss allowances for expected credit loss on contract assets. TheCompany’s right to consideration that is unconditional (only the passage of time is required) shallbe presented as accounts receivable. The Company’s obligation to transfer goods or services to acustomer for which the Company has received consideration (or an amount of consideration is due)from the customer shall be presented as the contract liability.The Company offsets the contract assets and contract liabilities under the same contract andpresents the net amount. If the net amount is the debit balance, it is presented under “contractassets” or “other non-current assets” according to its liquidity; if the net amount is the creditbalance, it is presented under “contract liabilities” or “other non-current liabilities” according to itsliquidity.
(2) Specific recognition methods
The specific revenue recognition methods of the company are as follows:
Contracts for the sale of goodsContracts for the sale of goods between the Company and its customers usually only involves theperformance obligations of the transferring of the goods. The Company generally recognizesrevenue based on the following considerations, taking into account the timing of control transfer.This includes obtaining the current collection rights of the goods, the transfer of the main risks andrewards of the ownership of the goods, the transfer of the legal ownership of the goods, the transferof the physical assets of the goods, and the acceptance of the goods by the customer.Contracts for rendering of servicesThe service contract between the Company and its customers usually includes performanceobligations for labor services, technical consulting or technical services. As a result of thesatisfaction of the performance obligation the Company, the customers obtain and consume theeconomic benefits of the service while the Company provides the service simultaneously. TheCompany is entitled to recover from the accumulative performance of the contract that has beencompleted to date, except when progress of the performance cannot be reasonably determined. TheCompany determines the progress of the performance of the services provided in accordance withthe input method. When the progress of the performance cannot be reasonably determined, and thecosts incurred by the Company are expected to be compensated, the revenue will be recognizedbased on the amount of costs incurred, until the progress of the performance can be reasonablydetermined.
26. Contract cost
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs tofulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain acontract with a customer that it would not have incurred if the contract had not been obtained e.g.
an incremental sales commission. The Company recognises as an asset the incremental costs ofobtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining acontract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or otheraccounting standards, the Company recognises an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipatedcontract, including direct labour, direct materials, allocations of overheads (or similar costs), coststhat are explicitly chargeable to the customer and other costs that are incurred only because theCompany entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or incontinuing to satisfy) performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for thecosts to fulfill a contract (the “assets related to contract costs”) are amortised on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assets relateand recognised in profit or loss for the current period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amountof an asset related to contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less
② The costs that relate directly to providing those goods or services that have not yet beenrecognised as expenses.The contract performance cost recognized as an asset shall be shown in the "Inventories" item withan amortization period of no more than one year or one normal operating cycle at the time of initialrecognition, while the amortization period exceeding one year or one normal operating cycle at thetime of initial recognition shall be shown in the item of "Other non-current assets".The contract acquisition cost recognized as an asset shall be listed in the item of "Other currentassets" when the amortization period does not exceed one year or one normal operating cycle at thetime of initial recognition, and listed in the item of "other non-current assets" when the amortizationperiod exceeds one year or one normal operating cycle at the time of initial recognition.
27. Government grants
Government grants are recognized in profit or loss, when they are highly probable to be receivedand all conditions are fulfilled.If a government grant is in form of monetary asset, it is measured at the amount received orreceivable. If a government grant is in form of nonmonetary asset, it is measured at fair value of theasset. If the fair value cannot be reliably determined, it is measured at the nominal amount as RMB1.
Asset-related government grants are recognized when the government document designates that thegovernment grants are used for constructing or forming long-term assets. Otherwise, thegovernment grants should be income-related.If the government document is inexplicit, the Company should recognize the part corresponding toassets value of government grants as asset-related government grants if the conditions are to formlong-term assets and the remaining part as income-related grants. As for indistinguishablegovernment grants, the whole should be recognized as income-related grants.Asset-related government grants can be accounted by offsetting the carrying amout of related assetsor being recognized as deferred income, and amortized systematically and reasonably to profit orloss over the useful life of the related asset. If the income-related grant is a compensation for relatedincurred expenses or losses, the grant shall be recognized in the current pofit or loss or offset relatedcosts immediately; if the grant is a compensation for related expensesor losses in future period, thegrant is recognized as deferred income and should be recognized in profit or loss for the periodwhen the expenses or losses are incurred. For the government grant measured at the nominalamount, it should be recognized in profit or loss immediately for the period. The Company adopts aconsistent approach to the same or similar government grants.The government grants related to daily activities shall be recognized in other income or offsetrelated expenses. Otherwise, it shall be recognized in non-operating income and expenses.When the recognized government grants need to be returned, the carrying amount of the assets shallbe adjusted if the carrying amount of related assets is written down during the initial recognition; ifthere is the balance of related deferred income, the book balance of related deferred income shall bewritten off, and the excess part shall be recognized in the current profit or loss; for the othercircumstances, the government grants shall be recognized in the current profit or loss directly.
28. Deferred tax assets and deferred tax liabilities
Income tax comprises current tax and deferred tax, and is normally recognized as income taxexpense in profit or loss, except for goodwill generated in a business combination or relateddeferred tax items that have been recognized directly in equity.Based on the differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base, the Company adopts the liability method for the provision ofdeferred tax.A deferred tax liability is recognized in respect of all taxable temporary differences except thosearising from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in atransaction which is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for the temporary differences associated with subsidiaries, joint ventures and associates: theCompany is able to control the timing of the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future.A deferred tax asset is recognized in respect of all deductible temporary differences to the extentthat it is probable that taxable profit will be available against which the deductible temporarydifference will be utilized except those arising from the initial recognition of an asset or liability in
a transaction which:
(1) The transaction is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for deductible temporary differences associated with subsidiaries, joint ventures andassociates: a deferred tax asset is recognized to the extent that it is probable that the temporarydifference will reverse in the foreseeable future, and taxable profit will be available against whichthe temporary difference can be utilized.At the end of each reporting period, deferred tax assets and liabilities are measured at the tax ratesthat are expected to apply to the period when the asset is realized or the liability is settled, takinginto account the income tax effect of expected asset realization or liability settlement at the end ofeach reporting period.The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and isreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow the related tax benefit to be utilized. Any such reduction is reversed to the extent that itbecomes probable that sufficient taxable profits will be available.
29. Lease
(1) Identification of lease
On the commencement date of the contract, as the lessee or lessor, the Company evaluates whetherthe customer in the contract has the right to obtain almost all the economic benefits arising from theuse of the identified assets during the use period, and has the right to dominate the use of theidentified assets during the use period. If one party in the contract transfers the right to control theuse of one or more identified assets within a certain period in exchange for consideration, theCompany recognizes the contract as lease or includes lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilitiesfor all leases, except for short-term lease and low-value asset lease with simplified approach.For the right-of-use assets, refers to Note III.30.Lease liabilities are initially measured according to the present value of the unpaid lease paymentsat the beginning of the lease term calculated by the embedded interest rate of the lease. Where theembedded interest rate cannot be determined, the incremental loan interest rate shall be used as thediscount rate. Lease payments includes: fixed payments and in-substance fixed payments, andwhere the lease incentives exists, the lease payment is the payment amount less any lease incentivesreceivable; variable lease payments depending on index or ratio; the exercise price of a purchaseoption if the lessee is reasonably certain to exercise that option; payments for terminating the lease,if the lease term reflects the lessee exercising that option of terminating; and amounts expected tobe payable by the lessee under residual value guarantees. Subsequently, the interest expense on thelease liability for each period during the lease term is calculated using a constant periodic rate ofinterest and is recognised in current profit or loss. The variable lease payments that are not includedin the measurement of the lease liability are recognised in profit or loss when actually incurred.Short-term lease
Short-term leases refer to leases with a lease term of less than 12 months from the commencementdate, except for those with a purchase option.Lease payments of short-term leases are recognised in the cost of related assets or current profit orloss on a straight-line basis over the lease term.For short-term leasing, the Company selects the following types of assets that meet the conditionsfor short-term leasing based on the category of leased assets and adopts the simplified processingmethod mentioned above.Low-value asset leaseLow-value asset lease refers to the lease with lower value when the single leased asset is abrand-new asset.Lease payments of low-value asset lease are recognised in the cost of related assets or current profitor loss on a straight-line basis over the lease term.For a low-value asset lease, the Company chooses to adopt the above simplified approach accordingto the specific conditions of each lease.Lease modificationThe Company accounts for a lease modification as a separate lease when the modification occursand the following conditions are met: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where the lease modification is not accounted for as a separate lease, on the effective date of thelease modification, the Company will reallocate the consideration of the contract after themodification, redefine the lease term, and remeasure the lease liability based on the present value ofthe lease payments after the modification and the revised discount rate.If a lease modification results in reduction in the scope of the lease or a shortening of the lease term,the Company reduces the carrying amount of the right-of-use asset accordingly and includes theprofit or loss related to the partial or complete termination of the lease is included in the currentprofits and losses.Other lease modifications result in a remeasurement of the lease liability, the Company adjusts thecarrying amount of the right-of-use asset accordingly.
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease when the terms of the leasetransfer substantially all the risks and rewards of asset ownership to the lessee. All leases other thanfinancial leases are classified as operating leases.Finance leaseUnder finance lease, the Company accounts for finance lease receivables at the beginning of thelease term at the net lease investment, which is the sum of the unsecured residual value and thepresent value of the lease receipts outstanding at the commencement date of the lease, discounted at
the interest rate implicit in the lease. The Company as lessor calculates and recognises interestincome for each period of the lease term based on a fixed periodic interest rate. Variable leasepayments acquired by the Company as lessor that are not included in the net measurement of leaseinvestments are included in profit or loss for the period when actually incurred.Derecognition and impairment of finance lease receivables are accounted for in accordance with therequirements under the Accounting Standard for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments and the Accounting Standards for Business Enterprises No.23 – Transfer of Financial Assets.Operating leaseLease payments under operating lease are recognised in profit or loss on a straight-line basis overthe lease term. Initial direct costs incurred in relation to operating leases are capitalised andamortised over the lease term on the same basis as rental income and recognised in profit or loss forthe according period. The variable lease payments obtained in relation to operating leases that arenot included in the lease payments are recognised in profit or loss in the period when actuallyincurred.Lease modificationWhere the operating lease is modified, the Company accounts for the modification as a new leasefrom the effective date of the modification. The amount of lease receipts received in advance orreceivable in respect of the lease prior to the modification is treated as a receipt under the new lease.Where a finance lease is modified and the following conditions are met, the Company accounts forthe modification as a separate lease: ① the lease modification expands the scope of lease byadding the right to use one or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.Where a finance lease is modified and not accounted for as a separate lease, the Company accountsfor the modified lease in the following circumstances: ① If the modification effectives on thelease commencement date, the lease will be classified as an operating lease, the Company accountsas a new lease from the effective date of the lease modification, and the net amount of the leaseinvestment before the effective date of the lease modification shall be taken as the book value of theleased asset; ② If the modification effectives on the lease commencement date, the lease will beclassified as a finance lease, and the Company conducts accounting treatment in accordance withthe Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement ofFinancial Instruments on modifying or renegotiating contracts.
30. Use-right assets
(1) Recognition conditions of use-right assets
Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during thelease term.On the commencement date of the lease term, the use-right assets shall be initially measured at cost.The cost includes: the initial measurement amount of the lease liability; The lease payment made onor before the commencement date of the lease term, if there is a lease incentive, shall be deductedfrom the amount related to the lease incentive already enjoyed; Initial direct expenses incurred by
the Company as the lessee; The costs expected to be incurred by the Company, as the lessee, todismantle and remove the leased assets, restore the leased assets to the site where they are locatedor restore the leased assets to the state specified in the lease terms. As the lessee, the Company shallrecognize and measure the costs of demolition and restoration in accordance with the rules“CASBE13- Contingencies”. Subsequent adjustments are made for any remeasurement of lease liabilities.
(2) Depreciation method of use-right assets
The Company uses the straight-line method of depreciation. If the Company, as the lessee, canreasonably determine the ownership of the leased asset at the end of the lease term, depreciationshall be calculated and withdrawn during the remaining service life of the leased asset. Where it isnot reasonably certain that the ownership of the leased asset can be acquired at the end of the leaseterm, depreciation shall be calculated and withdrawn during the period during which the lease termand the remaining service life of the leased asset are shorter.
(3) For the impairment test method and impairment provision method of use-right assets, please refer toNote III. 20.
31. Safety fund and maintenance fee
According to the relevant provisions of CQ [2012] No. 16 document issued by Ministry of Finance,National Development and Reform Commission, State Administration of Work Safety, the actualoperating income of metallurgical and transportation enterprises in the preceding year is the basisfor the provision of safety fund and maintenance fee of the Company, and the method of excessretirement shall be adopted for the provision.Safety funds and maintenance fees are included in the cost of relevant products or recognized in thecurrent profit or loss for the related products, and credited to the special reserve at the same time.When safety funds and maintenance fees are utilized in compliance with relevant regulations, if thecosts incurred can be categorized as expenditure, the costs incurred should be charged against thespecial reserve; if the reserve is used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the projects reach the status ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount and the fixedassets will not be depreciated in the future.
32. Restricted stock
In the equity incentive plan, the Company grants restricted stock to the incentivied. The incentiviedfirst subscribe for the stock. If the unlocking conditions specified in the equity incentive plan arenot met, the Company repurchases the stock at the price agreed in advance. Where the restrictedstock issued to the employees has gone through registration and other capital increase procedures inaccordance with relevant provisions, the Company shall, on the grant date, confirm the share capitaland capital reserve (capital premium) according to the subscription payment received from theemployees, also recognize treasury shares and other payables with respect to repurchaseobligations.
33. Significant accounting judgments and estimates
The Company provides continuous assessment of the reasonable expectations of future events, thecritical accounting estimates and key assumptions based on the historical experience and other
factors. The critical accounting estimates and key assumptions that are likely to lead to significantadjustment risks of the carrying amount of assets and liabilities for the next accounting period arelisted as follows:
Classification of financial assetsThe major judgments of the Company involved in determining the classification of financial assetsincludes the analysis of business models and the characteristics of contract cash flows, etc.At the level of financial assets portfolio, the Company determines the business model for managingfinancial assets, taking into account factors such as methods of evaluating and reporting financialassets performance to key managers, the risks of affecting financial assets performance and riskmanagement methods, and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Company has the following judgments: whether the principal’s time distributionor amount may change during the lifetime for early repayment and other reasons; whether theinterest only includes the time value of money, credit risk, other basic lending risks and theconsideration with cost and profit. For example, whether the advance payment only reflects theunpaid principals and interests based on the unpaid principal, and reasonable compensation paid forthe early termination of the contract.Measurement of expected credit loss of account receivablesThe Company calculates the expected credit losses of accounts receivable through default riskexposure and expected credit losses rate, and determines the expected credit losses rate on the basisof default probability and default loss rate. In determining the expected credit losses rate, theCompany uses the experience of internal historical credit loss, and adjusts the historical data withcurrent situation and forward-looking information. In considering forward-looking information, theindicators include the risks of economic downturn, external market environment, technologicalenvironment and changes of customer conditions. The Company monitors and reviews regularly theassumptions related to the calculation of expected credit losses.Deferred tax assetsDeferred tax assets are recognized to the extent that it is probable that taxable profit will beavailable against which the deductible temporary difference and unused tax credit can be utilized.Significant management judgement is required to determine the amount of deferred tax assets thatcan be recognized, based upon the likely timing and level of future taxable profits together with taxplanning strategies.Determination of unlisted equity investment fair valueThe fair value of unlisted equity investment is the estimated future cash flow discounted by thecurrent discount rate of the project with similar terms and risk characteristics. The valuationrequires the Company to estimate the expected future cash flow and discount rate and is thereforeuncertain. Under limited circumstances, if the information used to determine the fair value isinsufficient, or the possible estimates of the fair value are widely distributed, and the cost representsthe best estimate of the fair value within the range, the cost could represent the appropriate estimateof the fair value within the distribution range.
34. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
The Company did not have any change in significant accounting policies during the year.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.IV. Tax
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| Value-added tax | Taxable Revenue | 13/9/6 |
| City construction and maintenance tax | Turnover tax payable | 7/5 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
| Income tax | Taxable Income | 25 |
2. Tax preferential benefits and approvals
On 25 October 2021, the Company obtained the high-tech enterprise certificate issued by Beijing
Municipal Science and Technology Commission with the certificate number of GR202111003103
and the certificate is valid for three years.
On 14 September 2021, Beijing Shougang Cold Rolling Co., Ltd., a subsidiary of the Company
obtained the high-tech enterprise certificate issued by Beijing Municipal Science and Technology
Commission with the certificate number of GR202111000699 and the certificate is valid for three
years.
On 18 September 2021, Shougang Jingtang United Iron & Steel Co., Ltd., a subsidiary of the
Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202113000808 and the certificate is valid for three
years.
On 18 October 2022, Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., a subsidiary of
the Company, obtained the high-tech enterprise certificate issued by Hebei Science and Technology
Commission with the certificate number of GR202213001060 and the certificate is valid for three
years.
In accordance to relevant regulations, above companies enjoy a preferential income tax rate at 15%
in 2021.
Since 1 January 2019, according to Cai Shui [2019] No.13 “Notice of the State Administration of
Taxation on implementing policy of tax reduction for small and low-profit enterprises”, for the part
of annual taxable income less than RMB 1 million of small and low-profit enterprises, tax reduction
of 25% shall be included, and then income tax shall be paid at 20%. Since 1 January 2021 to 31
December 2022, according to Cai Shui [2021] No.12 “Announcement on the implementation of
preferential income tax policies for small and micro enterprises and individual industrial and
commercial households”, for the part of annual taxable income less than RMB 1 million of smalland low-profit enterprises, the enterprise income tax is reduced by half on the base of thepreferential policies of Cai Shui [2019] No.13. Wuhan Shougang Automobile Material Co., Ltd., thesub-subsidiary of the Company, satisfies the requirements of small and low-profit enterprisedeclaration and its income taxes have been declared as the policy of small and low-profit enterprise.V. Notes to consolidated financial statements
1. Cash and Cash equivalents
| Item | 2023.06.30 | 2022.12.31 |
| Cash on hand | 21,492.00 | 23,581.90 |
| Bank deposits | 7,015,994,943.09 | 8,330,041,178.17 |
| Including: financial companies deposited | 6,962,224,236.16 | 7,693,973,274.02 |
| Other monetary assets | 482,089,089.60 | 1,140,407,761.98 |
| Including: financial companies deposited | 406,255,993.08 | 1,088,690,000.00 |
| Total | 7,498,105,524.69 | 9,470,472,522.05 |
Others: (1) As at 30 June 2023, except for RMB 432,089,076.86 of security deposit, RMB50,000,000.00 of fixed term deposit, the Company has no balance of cash and cash equivalents thatare pledged, guaranteed or blocked frozen or overseas balances that restricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 711,077.21. This part of interestdoes not belong to "cash and cash equivalents."
2. Notes receivable
| Item | 2023.06.30 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 1,316,683,619.71 | 1,316,683.62 | 1,315,366,936.09 |
| Commercial acceptance notes | 3,874,111,323.25 | 3,874,111.33 | 3,870,237,211.92 |
| Total | 5,190,794,942.96 | 5,190,794.95 | 5,185,604,148.01 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 1,096,900,639.55 | 1,096,900.64 | 1,095,803,738.91 |
| Commercial acceptance notes | 5,600,883,165.11 | 5,600,883.17 | 5,595,282,281.94 |
| Total | 6,697,783,804.66 | 6,697,783.81 | 6,691,086,020.85 |
(1) The pledged notes receivable of the Company at the end of the year
| Item | Amount pledged at 30 June 2023 |
| Commercial acceptance notes | 6,521,200.88 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as at 30 June 2023 | Amount not-derecognized as at 30 June 2023 |
| Bank acceptance notes | -- | 1,055,722,923.23 |
| Commercial acceptance notes | -- | 2,996,516,194.06 |
| Total | -- | 4,052,239,117.29 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as at 30 June 2023 |
| Commercial acceptance notes | 5,015,492.69 |
(4) Classified by bad debt provision method
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 5,190,794,942.96 | 100.00 | 5,190,794.95 | 0.10 | 5,185,604,148.01 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 5,190,794,942.96 | 100.00 | 5,190,794.95 | 0.10 | 5,185,604,148.01 |
| Total | 5,190,794,942.96 | 100.00 | 5,190,794.95 | 0.10 | 5,185,604,148.01 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
| Total | 6,697,783,804.66 | 100.00 | 6,697,783.81 | 0.10 | 6,691,086,020.85 |
(5) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 6,697,783.81 |
| Provision | -- |
| Recovery or reversal | 1,506,988.86 |
| Closing balance | 5,190,794.95 |
(6) There is no notes receivable written off during the reporting period.
3. Accounts receivable
(1) Disclosed by the ageing
| Ageing | 2023.06.30 | 2022.12.31 |
| Within 1 year | 1,610,135,174.77 | 1,492,629,056.11 |
| 1 – 2 years | 12,094,822.12 | 13,542,310.43 |
| 2 – 3 years | 2,139,564.93 | 3,980,837.55 |
| Over 3 years | 5,682,043.12 | 13,036,557.92 |
| Subtotal | 1,630,051,604.94 | 1,523,188,762.01 |
| Less: provision for bad debts | 68,285,440.96 | 73,179,864.91 |
| Total | 1,561,766,163.98 | 1,450,008,897.10 |
(2) Disclosed by bad debt provision
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 5,682,043.12 | 0.35 | 5,682,043.12 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,624,369,561.82 | 99.65 | 62,603,397.84 | 3.85 | 1,561,766,163.98 |
| Total | 1,630,051,604.94 | 100.00 | 68,285,440.96 | 4.19 | 1,561,766,163.98 |
Disclosed by bad debt provision (continued):
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 13,036,557.92 | 0.86 | 13,036,557.92 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,510,152,204.09 | 99.14 | 60,143,306.99 | 3.98 | 1,450,008,897.10 |
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Total | 1,523,188,762.01 | 100.00 | 73,179,864.91 | 4.80 | 1,450,008,897.10 |
Assessed bad debt provision individually:
| Accounts receivable (by debtor) | 2023.06.30 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 666,550.43 | 666,550.43 | 100.00 | Long aging |
| Overdue recourse notes | 5,015,492.69 | 5,015,492.69 | 100.00 | Overdue recourse notes |
| Total | 5,682,043.12 | 5,682,043.12 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 7,362,963.07 | 7,362,963.07 | 100.00 | Long aging |
| Overdue recourse notes | 5,673,594.85 | 5,673,594.85 | 100.00 | Overdue recourse notes |
| Total | 13,036,557.92 | 13,036,557.92 | 100.00 | |
Assessed bad debt provision in portfolios:
| Item | 2023.06.30 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,610,135,174.77 | 57,409,446.40 | 3.57 |
| 1 – 2 years | 12,094,822.12 | 3,601,271.33 | 29.78 |
| 2 – 3 years | 2,139,564.93 | 1,592,680.11 | 74.44 |
| Over 3 years | -- | -- | -- |
| Total | 1,624,369,561.82 | 62,603,397.84 | 3.85 |
Continued:
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,492,629,056.11 | 53,147,749.56 | 3.56 |
| 1 – 2 years | 13,542,310.43 | 4,032,265.53 | 29.78 |
| 2 – 3 years | 3,980,837.55 | 2,963,291.90 | 74.44 |
| Over 3 years | -- | -- | -- |
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Total | 1,510,152,204.09 | 60,143,306.99 | 3.98 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 73,179,864.91 |
| Provision | -- |
| Recovery or reversal | 4,894,423.95 |
| Closing balance | 68,285,440.96 |
(4) There is no accounts receivable write-off during reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 618,447,749.89, accounts for 37.94% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 22,020,618.31.
| Company Name | Closing balance | Percentage of total accounts receivable (%) | Closing balance of bad debt provision |
| Shougang Casey Steel Co., Ltd. | 105,527,619.05 | 6.47 | 3,756,783.24 |
| BYD (Shenzhen)Supply Chain Management Co., Ltd. | 206,512,171.53 | 12.67 | 7,351,833.31 |
| Great Wall Motor Company Limited | 99,659,549.16 | 6.11 | 3,549,000.11 |
| BMW Brilliance AUTOMOTIVE Ltd. | 81,947,125.54 | 5.03 | 2,918,410.93 |
| China First Automobile Co., Ltd. | 124,801,284.61 | 7.66 | 4,444,590.72 |
| Total | 618,447,749.89 | 37.94 | 22,020,618.31 |
4. Financing receivable
| Item | 2023.06.30 | 2022.12.31 |
| Notes receivable | 6,325,120,221.92 | 3,489,134,871.56 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 6,325,120,221.92 | 3,489,134,871.56 |
The Company discounts and endorses most bank acceptance notes in accordance with routine fundmanagement, therefore the bank acceptance notes are classified as financial assets at fair valuethrough other comprehensive income.
(1) Classified by bad debt provision method
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 6,326,385,499.03 | 100.00 | 1,265,277.11 | 0.02 | 6,325,120,221.92 |
| Portfolio 1 | 6,326,385,499.03 | 100.00 | 1,265,277.11 | 0.02 | 6,325,120,221.92 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 6,326,385,499.03 | 100.00 | 1,265,277.11 | 0.02 | 6,325,120,221.92 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 1 | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 3,489,832,838.11 | 100.00 | 697,966.55 | 0.02 | 3,489,134,871.56 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 697,966.55 |
| Provision | 567,310.56 |
| Recovery or reversal | -- |
| Written-off | -- |
| Closing balance | 1,265,277.11 |
(3) The pledged notes receivable of the Company at the end of the year
| Item | Pledged amount at 30 June 2023 |
| Bank acceptance notes | 81,238,016.48 |
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized at 30 June 2023 | Amount not-derecognized at 30 June 2023 |
| Bank acceptance notes | 31,912,298,420.72 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 31,912,298,420.72 | -- |
5. Prepayments
(1) Disclosed by the ageing of prepayments
| Ageing | 2023.06.30 | 2022.12.31 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 1,868,500,434.79 | 99.96 | 630,526,142.92 | 99.07 |
| 1 – 2 years | 70,000.00 | 0.00 | 4,353,052.19 | 0.68 |
| 2 – 3 years | 12,000.00 | 0.00 | 859,392.60 | 0.14 |
| Over 3 years | 730,629.27 | 0.04 | 730,629.27 | 0.11 |
| Total | 1,869,313,064.06 | 100.00 | 636,469,216.98 | 100.00 |
(2) As at 30 June 2023, there is no material prepayment with an aging of over 1 year.
(3) The top five prepayments classified by debtors are as follows:
During the year, the total amount of the top five prepayments classified by debtors at the end of theperiod is RMB 1,447,543,803.49, accounts for 77.43% of the total amount of prepayments at the endof the period.
| Company Name | 2023.06.30 | Percentage of total prepayments (%) |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 250,891,785.89 | 13.42 |
| Shougang Group Co., Ltd. | 910,421,696.63 | 48.70 |
| Glencore China Ltd | 33,271,464.88 | 1.78 |
| Tianjin Jintie Xincheng Freight Forwarding Co., Ltd. | 74,631,038.39 | 3.99 |
| Beijing Hegang Steel Trade Co., Ltd. | 178,327,817.70 | 9.54 |
| Total | 1,447,543,803.49 | 77.43 |
6. Other receivables
| Item | 2023.06.30 | 2022.12.31 |
| Dividends receivable | 200,000.00 | 200,000.00 |
| Other receivables | 15,539,741.91 | 12,968,697.56 |
| Total | 15,739,741.91 | 13,168,697.56 |
(1) Dividends receivable
| Item | 2023.06.30 | 2022.12.31 |
| Guangzhou Jinghai Shipping Co., Ltd. | 200,000.00 | 200,000.00 |
| Less: bad debt provision | -- | -- |
| Total | 200,000.00 | 200,000.00 |
(2) Other receivables
①Disclosed by the ageing of other receivables
| Ageing | 2023.06.30 | 2022.12.31 |
| Within 1 year | 13,275,910.21 | 9,880,237.95 |
| 1 – 2 years | 2,687,241.66 | 3,309,333.81 |
| 2 – 3 years | 62,326.00 | 143,721.00 |
| 3 – 4 years | 595,903.89 | 1,074,861.94 |
| 4 – 5 years | 757,707.90 | 813,907.90 |
| Over 5 years | 4,905,632.01 | 5,143,256.32 |
| Subtotal | 22,284,721.67 | 20,365,318.92 |
| Less: provision for bad debts | 6,744,979.76 | 7,396,621.36 |
| Total | 15,539,741.91 | 12,968,697.56 |
②Disclosed by nature of other receivables
| Item | 2023.06.30 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 1,538,817.44 | 561,432.72 | 977,384.72 |
| Deposits | 13,132,898.20 | 935,921.86 | 12,196,976.34 |
| Due from other companies | 5,307,956.43 | 2,942,575.58 | 2,365,380.85 |
| Court debit | 2,305,049.60 | 2,305,049.60 | -- |
| Total | 22,284,721.67 | 6,744,979.76 | 15,539,741.91 |
Continued:
| Item | 2022.12.31 | ||
| Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 1,550,710.10 | 483,358.60 | 1,067,351.50 |
| Deposits | 11,399,556.26 | 864,254.76 | 10,535,301.50 |
| Due from other companies | 5,110,002.96 | 3,743,958.40 | 1,366,044.56 |
| Court debit | 2,305,049.60 | 2,305,049.60 | -- |
| Total | 20,365,318.92 | 7,396,621.36 | 12,968,697.56 |
③Provision for bad debts
As at 30 June 2023, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 13,275,910.21 | 5.00 | 663,795.53 | 12,612,114.68 | |
| Petty cash and deposits | 11,391,319.09 | 5.00 | 569,565.93 | 10,821,753.16 | |
| Due from other companies | 1,884,591.12 | 5.00 | 94,229.60 | 1,790,361.52 | |
| Total | 13,275,910.21 | 5.00 | 663,795.53 | 12,612,114.68 |
As at 30 June 2023, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 3,605,870.50 | 18.81 | 678,243.27 | 2,927,627.23 | |
| Petty cash and deposits | 2,808,595.55 | 16.24 | 455,987.64 | 2,352,607.91 | |
| Due from other companies | 797,274.95 | 27.88 | 222,255.63 | 575,019.32 | |
| Total | 3,605,870.50 | 18.81 | 678,243.27 | 2,927,627.23 |
As at 30 June 2023，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 471,801.00 | 100.00 | 471,801.00 | -- | |
| Due from other companies over 5 years | 2,626,090.36 | 100.00 | 2,626,090.36 | -- | |
| Total | 5,402,940.96 | 100.00 | 5,402,940.96 | -- |
As at 31 December 2022, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 | |
| Petty cash and deposits | 9,046,161.66 | 5.00 | 452,308.08 | 8,593,853.58 |
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Due from other companies | 834,076.29 | 5.00 | 41,703.80 | 792,372.49 | |
| Total | 9,880,237.95 | 5.00 | 494,011.88 | 9,386,226.07 |
As at 31 December 2022, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 | |
| Petty cash and deposits | 3,532,303.64 | 14.82 | 523,504.28 | 3,008,799.36 | |
| Due from other companies | 795,659.01 | 27.90 | 221,986.88 | 573,672.13 | |
| Total | 4,327,962.65 | 17.22 | 745,491.16 | 3,582,471.49 |
As at 31 December 2022，Phase III bad debts provision:
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 370,720.00 | 100.00 | 370,720.00 | -- | |
| Due from other companies over 5 years | 3,481,348.72 | 100.00 | 3,481,348.72 | -- | |
| Total | 6,157,118.32 | 100.00 | 6,157,118.32 | -- |
④Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 1 January 2023 | 494,011.88 | 745,491.16 | 6,157,118.32 | 7,396,621.36 |
| Changes during the year | ||||
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| -- Back to Phase I | -- | -- | -- | -- |
| Provision | 169,783.65 | -- | -- | 169,783.65 |
| Reversal | -- | 67,247.89 | 754,177.36 | 821,425.25 |
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 30 June 2023 | 663,795.53 | 678,243.27 | 5,402,940.96 | 6,744,979.76 |
⑤There is no write-off of provision for bad debts during reporting period.
⑥The top five other receivables classified by debtors are as follows:
| Company Name | Nature | Closing balance | Ageing | Percentage of total other receivable (%) | Closing balance of bad debt provision |
| BMW Brilliance Automotive Ltd. | Security fund | 6,000,000.00 | Within 1 year | 26.92 | 300,000.00 |
| Lawsuit of Henan Taihang Vibrating Machinery Co., Ltd. | Court debit | 2,305,049.60 | over 5 years | 10.34 | 2,305,049.60 |
| Beijing Guodian Engineering Bidding Co., Ltd. | Security fund | 1,580,044.00 | Within 1 year | 7.09 | 79,002.20 |
| Petty cash | Petty cash | 1,538,817.44 | 1-5 years | 6.91 | 561,432.72 |
| Due from other companies over 5 years | Due from other companies | 2,626,090.36 | over 5 years | 11.78 | 2,626,090.36 |
| Total | 14,050,001.40 | 63.04 | 5,871,574.88 |
7. Inventories
(1) Classification of inventories
| Item | 2023.06.30 | ||
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 2,800,043,212.87 | 42,207,819.20 | 2,757,835,393.67 |
| Finished goods | 5,448,703,247.77 | 196,592,681.92 | 5,252,110,565.85 |
| Consumables | 652,012,956.73 | -- | 652,012,956.73 |
| Self-made semi-finished goods | 3,554,186,129.67 | -- | 3,554,186,129.67 |
| Total | 12,454,945,547.04 | 238,800,501.12 | 12,216,145,045.92 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Raw materials | 2,887,646,758.41 | 42,207,819.20 | 2,845,438,939.21 |
| Finished goods | 5,232,868,448.19 | 300,694,621.62 | 4,932,173,826.57 |
| Consumables | 605,976,815.09 | -- | 605,976,815.09 |
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Self-made semi-finished goods | 3,576,657,167.28 | -- | 3,576,657,167.28 |
| Total | 12,303,149,188.97 | 342,902,440.82 | 11,960,246,748.15 |
(2) Impairment provision for inventories or performance costs
| Item | 2023.01.01 | Increase | Decrease | 2023.06.30 | ||
| Provision | Others | Reversal or Write-off | Others | |||
| Raw materials | 42,207,819.20 | -- | -- | -- | -- | 42,207,819.20 |
| Finished goods | 300,694,621.62 | 329,243,536.55 | -- | 433,345,476.25 | -- | 196,592,681.92 |
| Total | 342,902,440.82 | 329,243,536.55 | -- | 433,345,476.25 | -- | 238,800,501.12 |
8. Other current assets
| Item | 2023.06.30 | 2022.12.31 |
| Input value added tax | 1,456,128.07 | 2,814,012.14 |
| Input value added tax to be certified | 580,373,314.84 | 655,944,515.37 |
| Prepaid income tax | -- | 200,264,001.14 |
| Prepaid other taxes | 3,486.62 | -- |
| Entrusted Loans | 182,160,558.22 | 166,880,103.67 |
| Carbon emission rights assets | 40,317.17 | 40,317.17 |
| Total | 764,033,804.92 | 1,025,942,949.49 |
9. Long-term equity investments
| Company Name | 2023.01.01 | Movements during the year | 2023.06.30 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | ||||
| ①Joint ventures | |||||||||||
| Tangshan Guoxing Industrial Co., Ltd. | 38,183,246.94 | -- | -- | 3,304,892.38 | -- | 22,891.98 | -- | -- | -- | 41,511,031.30 | -- |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 9,640,303.21 | -- | -- | -6,327,579.29 | -- | -- | -- | -- | -- | 3,312,723.92 | -- |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,098,143,631.04 | -- | -- | 4,352,838.92 | -- | 3,637,096.12 | -- | -- | -- | 1,106,133,566.08 | -- |
| Subtotal | 1,145,967,181.19 | -- | -- | 1,330,152.01 | -- | 3,659,988.10 | -- | -- | -- | 1,150,957,321.30 | -- |
| ②Associates | |||||||||||
| Tangshan Tangcao Railway Co., Ltd. | 312,745,653.19 | -- | -- | -34,510,577.64 | -- | 58,411.47 | -- | -- | -- | 278,293,487.02 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 67,466,999.44 | -- | -- | -2,223,895.43 | -- | -- | -- | -- | -- | 65,243,104.01 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 891,510,510.32 | -- | -- | -129,331,594.55 | -- | 1,142,891.97 | -- | -- | -- | 763,321,807.74 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 122,430,402.99 | -- | -- | 80,036.00 | -- | -- | -- | -- | -- | 122,510,438.99 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 16,830,558.74 | -- | -- | 2,787,741.21 | -- | -- | -- | -- | -- | 19,618,299.95 | -- |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 20,211,004.90 | -- | -- | -530,220.21 | -- | 47,164.52 | -- | -- | -- | 19,727,949.21 | -- |
| Company Name | 2023.01.01 | Movements during the year | 2023.06.30 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | ||||
| Guangzhou Jinghai Shipping Co., Ltd. | 28,866,411.30 | -- | -- | -408,831.40 | -- | -- | 200,000.00 | -- | -- | 28,257,579.90 | -- |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 58,000,726.24 | -- | -- | 710,439.39 | -- | -- | 700,000.00 | -- | -- | 58,011,165.63 | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 16,693,129.11 | -- | -- | -1,607,969.05 | -- | -45,872.92 | -- | -- | -- | 15,039,287.14 | -- |
| Hebei Jingji Industry & Trading Co., Ltd. | 7,828,779.08 | -- | -- | 1,661,178.44 | -- | -- | -- | -- | -- | 9,489,957.52 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 35,734,568.85 | -- | -- | 51,747.33 | -- | -- | -- | -- | -- | 35,786,316.18 | -- |
| Subtotal | 1,578,318,744.16 | -- | -- | -163,321,945.91 | -- | 1,202,595.04 | 900,000.00 | -- | -- | 1,415,299,393.29 | -- |
| Total | 2,724,285,925.35 | -- | -- | -161,991,793.90 | -- | 4,862,583.14 | 900,000.00 | -- | -- | 2,566,256,714.59 | -- |
10. Other equity instrument investments
| Item | 2023.06.30 | 2022.12.31 |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 473,270,672.00 | 197,880,464.00 |
| Minmetals Special Steel (Dongguan) Co., Ltd. | 4,268,422.64 | 4,103,981.86 |
| Qian'an Shoujia Construction Material Co., Ltd. | 6,446,615.23 | 5,456,139.10 |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 19,011,317.67 | 19,084,152.28 |
| Minmetals Tianwei Steel Co., Ltd. | 6,362,810.01 | 6,241,396.57 |
| Total | 509,359,837.55 | 232,766,133.81 |
Continued:
| Item | Dividend recognized during the year | Accumulated gain | Accumulated loss | Other comprehensive income transferred to retained earnings | Reasons |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 3,937,360.00 | 463,569,472.00 | -- | -- | |
| Minmetals Special Steel (Dongguan) Co., Ltd. | -- | -- | 731,577.36 | -- | |
| Qian'an Shoujia Construction Material Co., Ltd. | -- | -- | 16,419,759.77 | -- | |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 3,474,772.80 | 17,211,317.67 | -- | -- | |
| Minmetals Tianwei Steel Co., Ltd. | -- | -- | 857,189.99 | -- | |
| Total | 7,412,132.80 | 480,780,789.67 | 18,008,527.12 | -- |
11. Other non-current financial assets
| Item | 2023.06.30 | 2022.12.31 |
| Financial assets measured at fair value and recorded into current profit and loss | 79,234,007.60 | 79,234,007.60 |
Continued:
| Item | 2023.06.30 | 2022.12.31 |
| Beijing Shouxin Jin'an Equity Investment Partnership (Limited Partnership) | 79,234,007.60 | 79,234,007.60 |
Note: The fair value and investment of Beijing Shouxin Jin'an Equity Investment Partnership(Limited Partnership) refer to Note Ⅶ. 3 and Note Ⅸ.
12. Fixed assets
| Item | 2023.06.30 | 2022.12.31 |
| Fixed assets | 90,739,924,821.37 | 93,331,072,969.17 |
| Fixed assets to be disposed | -- | -- |
| Total | 90,739,924,821.37 | 93,331,072,969.17 |
Fixed assets
①Details of fixed assets
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| Cost： | ||||||||
| 1. At 1 January 2023 | 38,934,539,623.18 | 47,546,349,011.50 | 2,818,452,661.79 | 10,305,684,242.67 | 1,328,119,282.41 | 62,465,727,447.79 | 1,126,504,291.87 | 164,525,376,561.21 |
| 2. Increase | -386,416,227.78 | 4,307,241,861.11 | 805,108,154.30 | 862,073,181.98 | 142,370,597.99 | -4,489,295,391.44 | 14,135,219.29 | 1,255,217,395.45 |
| (1) Purchase | 76,305,827.05 | 22,969,721.20 | 2,561,890.54 | 32,142,360.00 | -- | 39,315,989.00 | 3,073,136.12 | 176,368,923.91 |
| (2) Transferred from construction in progress | -462,722,054.83 | 4,284,272,139.91 | 802,546,263.76 | 829,930,821.98 | 142,370,597.99 | -4,528,611,380.44 | 11,062,083.17 | 1,078,848,471.54 |
| 3. Decrease | 4,136,866.36 | 17,330,056.88 | 13,703,944.41 | 2,006,984.48 | -- | -- | 804,459.94 | 37,982,312.07 |
| Disposal or retirement | 4,136,866.36 | 17,330,056.88 | 13,703,944.41 | 2,006,984.48 | -- | -- | 804,459.94 | 37,982,312.07 |
| 4. At 30 June 2023 | 38,543,986,529.04 | 51,836,260,815.73 | 3,609,856,871.68 | 11,165,750,440.17 | 1,470,489,880.40 | 57,976,432,056.35 | 1,139,835,051.22 | 165,742,611,644.59 |
| Accumulated depreciation: | ||||||||
| 1. At 1 January 2023 | 12,252,168,847.57 | 19,574,553,859.62 | 1,998,285,554.89 | 6,561,030,235.99 | 644,940,661.15 | 29,673,771,570.40 | 489,552,862.42 | 71,194,303,592.04 |
| 2. Increase | 434,723,075.67 | 3,331,481,941.12 | 541,084,534.04 | 918,425,350.14 | 64,418,526.03 | -1,497,341,480.63 | 49,581,056.99 | 3,842,373,003.36 |
| (1) Depreciation | 574,421,054.78 | 1,203,822,721.68 | 81,165,405.43 | 300,455,515.43 | 35,778,138.70 | 1,603,850,180.82 | 42,879,986.52 | 3,842,373,003.36 |
| (2) Other increases | -139,697,979.11 | 2,127,659,219.44 | 459,919,128.61 | 617,969,834.71 | 28,640,387.33 | -3,101,191,661.45 | 6,701,070.47 | -- |
| 3. Decrease | 2,263,598.20 | 16,085,946.79 | 12,969,454.13 | 1,906,635.27 | -- | -- | 764,137.79 | 33,989,772.18 |
| (1) Disposal or retirement | 2,263,598.20 | 16,085,946.79 | 12,969,454.13 | 1,906,635.27 | -- | -- | 764,137.79 | 33,989,772.18 |
| 4. At 30 June 2023 | 12,684,628,325.04 | 22,889,949,853.95 | 2,526,400,634.80 | 7,477,548,950.86 | 709,359,187.18 | 28,176,430,089.77 | 538,369,781.62 | 75,002,686,823.22 |
| Impaiment | ||||||||
| 1. At 1 January 2023 | -- | -- | -- | -- | -- | -- | -- | -- |
| Item | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| 2. Increase | -- | -- | -- | -- | -- | -- | -- | -- |
| 3. Decrease | -- | -- | -- | -- | -- | -- | -- | -- |
| 4. At 30 June 2023 | -- | -- | -- | -- | -- | -- | -- | -- |
| Carrying value | ||||||||
| 1. 30 June 2023 | 25,859,358,204.00 | 28,946,310,961.78 | 1,083,456,236.88 | 3,688,201,489.31 | 761,130,693.22 | 29,800,001,966.58 | 601,465,269.60 | 90,739,924,821.37 |
| 2. 1 January 2023 | 26,682,370,775.61 | 27,971,795,151.88 | 820,167,106.90 | 3,744,654,006.68 | 683,178,621.26 | 32,791,955,877.39 | 636,951,429.45 | 93,331,072,969.17 |
Note: As at 30 June 2023, there is no mortgaged or guaranteed fixed assets.
②As at 30 June 2023, there is no temporarily idle fixed assets.
③As at 30 June 2023, fixed assets leased through operating leases are as follows:
| Item | Carrying value |
| Plant and buildings | 84,254,394.05 |
④Fixed assets pending certificates of ownership
| Item | Carrying value | Reasons for pending certificates |
| Property of Beijing Shougang Cold Rolling Co., Ltd. | 34,888,371.00 | Property certificate is in the process |
| Property of Shougang Jingtang United Iron & Steel Co., Ltd. | 7,966,323,665.38 | To be handled after completing the relevant procedures of the occupied phase I project land |
| Property of Beijing Shougang Steel Trading Investment Management Co., Ltd. | 175,126,409.33 | Property certificate is in the process |
13. Construction in progress
| Item | 2023.06.30 | 2022.12.31 |
| Construction in progress | 5,642,648,505.80 | 7,598,541,035.50 |
| Construction materials | 68,345,292.89 | 75,108,817.27 |
| Total | 5,710,993,798.69 | 7,673,649,852.77 |
(1) Construction in progress
①Details of construction in progress
| Item | 2023.06.30 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang Co. Phase-I project | 364,239,395.76 | -- | 364,239,395.76 |
| Zhixin Co. Oriented phase II project | 1,278,700,467.21 | -- | 1,278,700,467.21 |
| Zhixin Co. High-end heat treatment engineering project | 636,883,710.86 | -- | 636,883,710.86 |
| Other projects | 3,362,824,931.97 | -- | 3,362,824,931.97 |
| Total | 5,642,648,505.80 | -- | 5,642,648,505.80 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Provision for impairment | Carrying value | |
| Jingtang Co. Phase-I project | 3,076,233,760.72 | -- | 3,076,233,760.72 |
| New energy automotive electrical steel project | 37,653,248.54 | -- | 37,653,248.54 |
| Zhixin Co. Oriented phase II project | 1,314,052,905.22 | -- | 1,314,052,905.22 |
| Zhixin Co. High-end heat treatment engineering project | 183,731,602.88 | -- | 183,731,602.88 |
| Other projects | 2,986,869,518.14 | -- | 2,986,869,518.14 |
| Total | 7,598,541,035.50 | -- | 7,598,541,035.50 |
②The major construction projects in progress are as follows:
| Project name | 2023.01.01 | Additions | Transferred to fixed assets | Other deduction | Accumulated interest capitalization | Capitalized Interest during reporting year | % of interest capitalization | 2023.06.30 |
| Zhixin Co. Oriented phase II project | 1,314,052,905.22 | -- | -- | 35,352,438.01 | -- | -- | -- | 1,278,700,467.21 |
| Zhixin Co. High-end heat treatment engineering project | 183,731,602.88 | 453,152,107.98 | -- | -- | -- | -- | -- | 636,883,710.86 |
| Total | 1,497,784,508.10 | 453,152,107.98 | -- | 35,352,438.01 | -- | -- | -- | 1,915,584,178.07 |
The major construction projects in progress are as follows (continued): (Unit: RMB hundredmillion)
| Project name | Budget | The propotion of projects investment account for budget % | Progress (%) | Source of fund |
| Zhixin Co. Oriented phase II project | 16.83 | 88.23 | The devices of the project are being installed | Selfraised |
| Zhixin Co. High-end heat treatment engineering project | 19.49 | 36.93 | The project is undergoing civil construction | Selfraised |
③As at 30 June 2023, there is no provision for impairment of construction in progress.
(2) Construction materials
| Item | 2023.06.30 | 2022.12.31 |
| Specific materials | 2,845,648.30 | 12,234,976.71 |
| Specific equipments | 65,499,644.59 | 62,873,840.56 |
| Subtotal | 68,345,292.89 | 75,108,817.27 |
| Provision for impairment of construction materials | -- | -- |
| Total | 68,345,292.89 | 75,108,817.27 |
14. Right-of-use assets
| Item | Plant and buildings | Land use rights | Motor vechiles | Total |
| Cost： | ||||
| 1. At 1 January 2023 | 115,976,725.63 | 311,888.26 | 474,802.94 | 116,763,416.83 |
| 2. Increase during the period | 133,048.52 | -- | -- | 133,048.52 |
| Adjustment of lease liabilities | 133,048.52 | -- | -- | 133,048.52 |
| Item | Plant and buildings | Land use rights | Motor vechiles | Total |
| 3. Decrease during the period | 155,885.58 | -- | -- | 155,885.58 |
| 4. At 30 June 2023 | 115,953,888.57 | 311,888.26 | 474,802.94 | 116,740,579.77 |
| Accumulated depreciation | ||||
| 1. At 1 January 2023 | 33,214,718.55 | 111,721.20 | 329,617.63 | 33,656,057.38 |
| 2. Increase during the period | 8,181,111.07 | 27,930.30 | 108,769.04 | 8,317,810.41 |
| (1) Provision | 8,181,111.07 | 27,930.30 | 108,769.04 | 8,317,810.41 |
| 3. Decrease during the period | 155,885.58 | -- | -- | 155,885.58 |
| 4. At 30 June 2023 | 41,239,944.04 | 139,651.50 | 438,386.67 | 41,817,982.21 |
| Impaiment | ||||
| 1. At 1 January 2023 | -- | -- | -- | -- |
| 2. Increase during the period | -- | -- | -- | -- |
| 3. Decrease during the period | -- | -- | -- | -- |
| 4. At 30 June 2023 | -- | -- | -- | -- |
| Carrying value | ||||
| 1. 30 June 2023 | 74,713,944.53 | 172,236.76 | 36,416.27 | 74,922,597.56 |
| 2. 1 January 2023 | 82,762,007.08 | 200,167.06 | 145,185.31 | 83,107,359.45 |
Note: The Company recognizes lease expenses related to short-term leases and leases of low valueassets as shown in Note XIV, 2.
15. Intangible assets
Details of intangible assets
| Item | Software | Land use rights | Total |
| Cost | |||
| 1. At 1 January 2023 | 497,475,518.39 | 4,591,445,210.91 | 5,088,920,729.30 |
| 2. Increase | 16,806,990.57 | 2,265,471,459.74 | 2,282,278,450.31 |
| (1) Purchase | 16,806,990.57 | 2,265,471,459.74 | 2,282,278,450.31 |
| 3. Decrease | -- | -- | -- |
| 4. At 30 June 2023 | 514,282,508.96 | 6,856,916,670.65 | 7,371,199,179.61 |
| Accumulated amortization | |||
| 1. At 1 January 2023 | 201,774,900.38 | 980,238,700.81 | 1,182,013,601.19 |
| 2. Increase | 20,909,784.45 | 71,266,417.79 | 92,176,202.24 |
| Provision | 20,909,784.45 | 71,266,417.79 | 92,176,202.24 |
| 3. Decrease | -- | -- | -- |
| 4. At 30 June 2023 | 222,684,684.83 | 1,051,505,118.60 | 1,274,189,803.43 |
| Item | Software | Land use rights | Total |
| Impairment | |||
| 1. At 1 January 2023 | -- | -- | -- |
| 2. Increase | -- | -- | -- |
| 3. Decrease | -- | -- | -- |
| 4. At 30 June 2023 | -- | -- | -- |
| Carrying value | |||
| 1. 30 June 2023 | 291,597,824.13 | 5,805,411,552.05 | 6,097,009,376.18 |
| 2. 1 January 2023 | 295,700,618.01 | 3,611,206,510.10 | 3,906,907,128.11 |
Notes for land use rights without completed property rights certificates
| Item | Carrying value | Reason for not completing the property rights certificate |
| Land of Shougang Qiangang | 61,973,257.95 | In processing |
16. Long-term prepaid expenses
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 | |
| Amortization | Others | ||||
| Renovation costs | 3,535,748.04 | 552,675.52 | 370,395.38 | -- | 3,718,028.18 |
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities without offsetting
| Item | 2022.12.31 | 2022.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Deferred tax assets： | ||||
| Asset impairment provision | 407,072,431.06 | 64,481,762.97 | 505,555,574.09 | 79,322,751.40 |
| The actual payment amount of payroll payable less than the withdrawal amount | 12,112,937.93 | 1,816,940.69 | 11,804,882.71 | 1,770,732.41 |
| Defferred income | 374,418,442.92 | 56,537,491.08 | 376,219,302.71 | 56,819,612.63 |
| Asset amortization difference | 28,499,905.20 | 4,274,985.78 | 5,629,387.82 | 844,408.16 |
| Unrealized internal transaction | 134,056,941.98 | 20,108,541.29 | 269,210,907.64 | 40,381,636.15 |
| Joint commissioning cost | 302,576,074.82 | 45,386,411.22 | 311,745,046.78 | 46,761,757.02 |
| Differences in amortization of right-of-use assets | 78,173,854.44 | 17,156,738.09 | 3,523,175.04 | 755,873.27 |
| Equity Incentive | 4,818,482.88 | 743,462.46 | 6,855,496.85 | 1,052,157.60 |
| Deferred income assets for loss provision | 1,127,823,060.67 | 169,173,459.10 | 1,164,313,511.12 | 174,647,026.67 |
| Subtotal | 2,469,552,131.90 | 379,679,792.68 | 2,654,857,284.76 | 402,355,955.31 |
| Item | 2022.12.31 | 2022.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Deferred tax liabilities： | ||||
| Joint commissioning cost | 1,040,821,323.00 | 156,123,198.45 | 1,085,461,580.60 | 162,819,237.09 |
| Changes in fair value of in other equity instruments investments | 462,772,262.55 | 69,415,839.44 | 186,178,558.81 | 27,926,783.87 |
| New-E Co. disposal subsidiary Electrical Steel Co. investment income | 83,212,329.87 | 20,803,082.47 | 83,212,329.87 | 20,803,082.47 |
| Fourth quarter equipment additional deduction | 1,892,876,172.32 | 283,931,425.84 | 1,938,128,392.15 | 290,719,258.83 |
| Variance in amortization of lease assets | 74,200,707.69 | 16,298,973.23 | -- | -- |
| Subtotal | 3,553,882,795.43 | 546,572,519.43 | 3,292,980,861.43 | 502,268,362.26 |
(2) Details of unrecognized deferred tax assets from deductible temporary differences anddeductible tax losses:
| Item | 2023.06.30 | 2022.12.31 |
| Deductible temporary differences | 43,608,883.90 | 56,162,050.68 |
| Deductible tax losses | 1,830,270,085.53 | 2,051,259,102.58 |
| Total | 1,873,878,969.43 | 2,107,421,153.26 |
(3) Unrecognized deferred tax liabilities from deductible tax losses will expire in the followingyears:
| Years | 2023.06.30 | 2022.12.31 | Note |
| 2022 | —— | —— | |
| 2023 | 28,607,141.76 | 33,894,110.96 | |
| 2024 | 35,927,468.91 | 34,063,776.18 | |
| 2025 | 18,586,868.98 | 18,967,253.01 | |
| 2026 | 13,437,096.04 | 14,769,965.09 | |
| 2027 | 1,721,450,069.81 | 1,949,563,997.34 | |
| 2028 | 12,261,440.03 | -- | |
| Total | 1,830,270,085.53 | 2,051,259,102.58 |
18. Short-term loans
Classification of short-term loans
| Item | 2023.06.30 | 2022.12.31 |
| Pledged loans | 6,521,200.88 | 1,090,000.00 |
| Guaranteed loans | 4,909,697,916.68 | 6,907,003,333.35 |
| Credit loans | 23,567,382,771.48 | 22,671,912,770.04 |
| Total | 28,483,601,889.04 | 29,580,006,103.39 |
Note: The loan of RMB 6,521,200.88 is pledged by a discounted but unmatured andnon-terminatingly recognized note with a carrying value of RMB 6,521,200.88.
19. Notes payable
| Item | 2023.06.30 | 2022.12.31 |
| Commercial acceptance notes | 4,106,700,000.00 | 7,141,510,000.00 |
| Bank acceptances | 234,000,000.00 | 120,000,000.00 |
| Total | 4,340,700,000.00 | 7,261,510,000.00 |
20. Accounts payable
| Item | 2023.06.30 | 2022.12.31 |
| Payables for goods | 19,607,497,316.90 | 17,215,600,362.40 |
| Payables for construction | 2,234,477,910.72 | 2,594,994,121.65 |
| Total | 21,841,975,227.62 | 19,810,594,484.05 |
Among which, the material trade payables aged over 1 year was as follows:
| Company name | 2023.06.30 | Reason for non-settlement |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | In the execution |
| Beijing Shougang Special Steel Co., Ltd. | 94,949,940.33 | In the execution |
| Ansteel Construction Group Corp.,ltd. | 18,878,181.68 | In the execution |
| Ceri Phoenix Industrial Furnace Co., Ltd. | 11,891,531.00 | In the execution |
| Chongqing CISDI Thermal & Environmental Engineering Co., Ltd. | 20,496,817.59 | In the execution |
| Total | 203,906,897.24 |
21. Contract liabilities
| Item | 2023.06.30 | 2022.12.31 |
| Advance from product sales | 5,043,291,760.66 | 4,508,016,725.74 |
| Less: contractual liabilities included in other non-current liabilities | -- | -- |
| Total | 5,043,291,760.66 | 4,508,016,725.74 |
22. Payroll and employee benefits payable
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Short-term employee benefits | 593,137,177.24 | 1,971,501,908.56 | 1,991,407,481.50 | 573,231,604.30 |
| Post-employment benefits (defined contribution plans) | 21,769,252.36 | 259,324,736.18 | 244,389,809.58 | 36,704,178.96 |
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Termination benefits | -- | 37,489,195.95 | 37,489,195.95 | -- |
| Other retirement benefits due within one year | 5,890,000.00 | -- | -- | 5,890,000.00 |
| Total | 620,796,429.60 | 2,268,315,840.69 | 2,273,286,487.03 | 615,825,783.26 |
(1) Short-term employee benefits
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Salaries, bonuses and subsidies | 145,764,214.16 | 1,383,437,754.26 | 1,453,025,895.37 | 76,176,073.05 |
| Welfare | -- | 143,793,184.58 | 143,793,184.58 | -- |
| Social insurance | 176,331,327.06 | 183,951,188.06 | 157,171,959.62 | 203,110,555.50 |
| Including: 1.Medical insurance | 176,123,301.26 | 163,469,938.62 | 137,469,607.94 | 202,123,631.94 |
| 2.Work-related injury insurance | 206,530.65 | 20,436,657.40 | 19,658,005.87 | 985,182.18 |
| 3.Maternity insurance | 1,495.15 | 44,592.04 | 44,345.81 | 1,741.38 |
| Housing fund | 52,099.00 | 186,026,343.36 | 186,027,148.36 | 51,294.00 |
| Labor union fee and employee education fee employee education fee | 270,989,537.02 | 49,877,949.00 | 26,974,844.27 | 293,892,641.75 |
| Equity incentive | -- | 23,286,765.84 | 23,286,765.84 | -- |
| Short-term profit-sharing plan | -- | -- | -- | -- |
| Non-monetary benefits | -- | -- | -- | -- |
| Other short-term employee benefits | -- | 1,128,723.46 | 1,127,683.46 | 1,040.00 |
| Total | 593,137,177.24 | 1,971,501,908.56 | 1,991,407,481.50 | 573,231,604.30 |
(2) Defined contribution plans
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Post-employment benefits | -- | -- | -- | -- |
| Including: 1.Pension insurance | 9,654,550.87 | 250,073,626.25 | 235,526,098.21 | 24,202,078.91 |
| 2.Unemployment insurance | 12,114,701.49 | 9,251,109.93 | 8,863,711.37 | 12,502,100.05 |
| Total | 21,769,252.36 | 259,324,736.18 | 244,389,809.58 | 36,704,178.96 |
(3) Termination benefits
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Compensation for employee resettlement | -- | 37,489,195.95 | 37,489,195.95 | -- |
23. Taxes payable
| Item | 2023.06.30 | 2022.12.31 |
| Value-added tax | 283,331,050.47 | 112,823,148.09 |
| Item | 2023.06.30 | 2022.12.31 |
| City construction and maintenance tax | 2,137,646.76 | 939,514.85 |
| Corporate income tax | 56,389,506.38 | 6,615,902.30 |
| Land use tax | 293,068.03 | 440,536.03 |
| Real estate tax | 892,734.40 | 1,014,521.32 |
| Education surcharge | 1,547,997.84 | 681,006.31 |
| Resouorce tax | 4,647,712.80 | 4,912,568.40 |
| Stamp duty | 23,833,007.47 | 33,470,591.03 |
| Individual income tax | 1,237,785.18 | 2,812,207.41 |
| Environment protection tax | 9,760,160.00 | 8,567,976.00 |
| Other taxes | 84,826.17 | 22,444.66 |
| Total | 384,155,495.50 | 172,300,416.40 |
24. Other payables
| Item | 2023.06.30 | 2022.12.31 |
| Dividends payable | -- | 11,440,046.38 |
| Other payables | 981,016,774.08 | 2,750,379,230.31 |
| Total | 981,016,774.08 | 2,761,819,276.69 |
(1) Dividends payable
| Item | 2023.06.30 | 2022.12.31 |
| Shougang Group Co., Ltd. | -- | 2,806,049.55 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | -- | 6,475,498.15 |
| Qian'an Jingji Equity Investment Fund (Limited Partnership) | -- | 2,158,498.68 |
| Total | -- | 11,440,046.38 |
(2) Other payables
| Item | 2023.06.30 | 2022.12.31 |
| Deposits | 6,345,115.23 | 6,137,315.23 |
| Guarantee | 27,467,019.09 | 35,705,705.74 |
| Due from Shougang Group | 56,575,231.05 | 56,575,231.05 |
| Due from Shougang Mining Corp. | 12,202,944.99 | 796,194,091.55 |
| Restricted stock repurchase obligations | 210,930,850.00 | 210,930,850.00 |
| Zhixin Co's second round of financing | -- | 990,787,728.36 |
| Due from other companies | 667,495,613.72 | 654,048,308.38 |
| Item | 2023.06.30 | 2022.12.31 |
| Total | 981,016,774.08 | 2,750,379,230.31 |
25. Current portion of non-current liabilities
| Item | 2023.06.30 | 2022.12.31 |
| Long-term loans due within one year | 2,069,108,695.94 | 1,480,490,424.42 |
| Bonds payable due within one year | 2,578,218,055.63 | 2,528,468,055.61 |
| Long-term payables due within one year | -- | 15,781,907.85 |
| Lease liabilities due within one year | 15,321,015.53 | 14,027,634.72 |
| Total | 4,662,647,767.10 | 4,038,768,022.60 |
(1) Long-term loans due within one year
| Item | 2023.06.30 | 2022.12.31 |
| Guaranteed loans | 710,869,444.44 | 613,355,833.34 |
| Credit loans | 1,358,239,251.50 | 867,134,591.08 |
| Total | 2,069,108,695.94 | 1,480,490,424.42 |
(2) Bonds payable due within one year
| Item | 2023.06.30 | 2022.12.31 |
| 20 shouqian 01 (Accrued interest) | 2,578,218,055.63 | 2,528,468,055.61 |
(3) Long-term payables due within one year
| Item | 2023.06.30 | 2022.12.31 |
| Finance lease payables | -- | 15,781,907.85 |
26. Other current liabilities
| Item | 2023.06.30 | 2022.12.31 |
| Short-term bonds payable | 1,004,869,863.06 | 1,006,213,698.66 |
| Tax to be exported | 829,487,851.56 | 724,801,203.37 |
| Backed notes | 4,045,717,916.41 | 6,357,735,008.71 |
| Corporate bonds issued by Shougang | 341,109,476.65 | -- |
| Total | 6,221,185,107.68 | 8,088,749,910.74 |
Short-term bonds payable:
| Bond name | Nominal value | Issue date | Maturity of bond | Issue amount |
| SCP2 | 1,000,000,000.00 | 2022/8/19 | 248 days | 1,000,000,000.00 |
| SCP3 | 1,000,000,000.00 | 2023/4/17 | 186 days | 1,000,000,000.00 |
| Bond name | Nominal value | Issue date | Maturity of bond | Issue amount |
| Subtotal | 2,000,000,000.00 | 2,000,000,000.00 |
Short-term Bonds Payable (continued):
| Bond name | 2023.1.1 | Issued during current period | Interest accrued per nominal value | Amortization of premium and discount | Repaid in the current period | 2023.06.30 |
| SCP1 | 1,006,213,698.66 | -- | 5,201,095.86 | -- | 1,011,414,794.52 | -- |
| SCP2 | -- | 1,000,000,000.00 | 4,869,863.06 | -- | -- | 1,004,869,863.06 |
| Total | 1,006,213,698.66 | 1,000,000,000.00 | 10,070,958.92 | -- | 1,011,414,794.52 | 1,004,869,863.06 |
27. Long-term loans
| Item | 2023.06.30 | Range of interest rate | 2022.12.31 | Range of interest rate |
| Guaranteed loans | 9,110,869,444.44 | 4.65% | 9,413,355,833.34 | 4.65% |
| Credit loans | 3,873,189,251.50 | 2.85%-3.85% | 2,661,484,591.08 | 2.85%-3.85% |
| Subtotal | 12,984,058,695.94 | 12,074,840,424.42 | ||
| Less: Long-term loans due within one year | 2,069,108,695.94 | 2.85%-4.65% | 1,480,490,424.42 | 2.85%-4.65% |
| Total | 10,914,950,000.00 | 10,594,350,000.00 |
28. Bonds payable
| Item | 2023.06.30 | 2022.12.31 |
| Common bond | -- | -- |
Increase or decrease in bonds payable
| Bond name | Par value | Issue date | Term to maturity | Amount on offer |
| 20 shouqian 01 | 2,500,000,000.00 | 2020/9/15 | 5 years | 2,500,000,000.00 |
Bonds payable (continued):
| Bond name | 2023.1.1 | Current year issuance | Accrued interest by par value | Amortisation of discount | Current year repayment | 2023.06.30 |
| 20 shouqian 01 | 2,528,468,055.61 | -- | 49,750,000.02 | -- | -- | 2,578,218,055.63 |
| Less: Long-term loans due within one year | 2,528,468,055.61 | -- | -- | -- | -- | 2,578,218,055.63 |
| Total | -- | -- | -- | -- | -- | -- |
29. Lease liabilities
| Item | 2023.06.30 | 2022.12.31 |
| Lease liabilities | 79,277,217.59 | 86,467,471.51 |
| Less: lease liabilities due within one year | 15,321,015.53 | 14,027,634.72 |
| Total | 63,956,202.06 | 72,439,836.79 |
Note: The amount of interest expense of lease liabilities in the first half of 2023 is RMB1,960,102.79, which is included in financial expense - interest costs.
30. Long-term payables
| Item | 2023.06.30 | 2022.12.31 |
| Long-term payables | -- | -- |
| Special payables | 2,300,000.00 | 2,300,000.00 |
| Total | 2,300,000.00 | 2,300,000.00 |
(1) Long-term payables
| Item | 2023.06.30 | 2022.12.31 |
| Finance lease payables | -- | 15,781,907.85 |
| Less: Long-term payables due within one year | -- | 15,781,907.85 |
| Total | -- | -- |
(2) Special payables
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 | Reason |
| Research and development funds | 2,300,000.00 | -- | -- | 2,300,000.00 |
31. Long-term employee benefits payables
| Item | 2023.06.30 | 2022.12.31 |
| Termination benefits | 22,117,269.87 | 23,239,569.30 |
| Other long-term benefits | 64,028,624.73 | 65,216,081.72 |
| Subtotal | 86,145,894.60 | 88,455,651.02 |
| Less: Long-term Employee benefits payables due within one year | 5,890,000.00 | 5,890,000.00 |
| Total | 80,255,894.60 | 82,565,651.02 |
32. Deferred revenue
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 | Reason |
| Government grant | 472,861,881.90 | 11,132,200.00 | 16,021,229.28 | 467,972,852.62 |
Note: The government grants which recognized as deferred revenue refer to Note V. 59 governmentgrants.
33. Other non-current liabilities
| Item | 2023.06.30 | 2022.12.31 |
| Shougang Group advance payment for construction | 4,164,819,920.40 | 4,532,018,467.20 |
34. Share capital
| Item | 2023.1.1 | Changes in current (+/-) | 2023.06.30 | ||||
| Shares issued | Bonus issue | Shares transferred from reserves | Others | Subtotal | |||
| Total amount of shares | 7,819,869,170.00 | -- | -- | -- | -- | -- | 7,819,869,170.00 |
35. Capital reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Share premium | 29,595,169,702.75 | -- | -- | 29,595,169,702.75 |
| Other capital reserve | 48,878,848.75 | 505,037,020.83 | -- | 553,915,869.58 |
| Total | 29,644,048,551.50 | 505,037,020.83 | -- | 30,149,085,572.33 |
Note: the movement of other capital reserve is the change in other equity of joint venturesrecognized by the Company in accordance with shareholding ratio and equity incentiveamortization expense.
36. Treasury shares
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Restricted stock incentive plan | 210,930,850.00 | -- | -- | 210,930,850.00 |
37. Other comprehensive income
Other comprehensive income attributable to the parent company in the balance sheet:
| Item | 2023.1.1 | During the period | 2023.06.30 | |
| Attributable to the parent company after tax | Less: Transferred from other comprehensive income in prior periods to retained earnings during the period | |||
| I. Other comprehensive income which cannot be reclassified into profits or losses | 158,251,774.94 | 235,104,648.17 | -- | 393,356,423.11 |
| Changes in fair value of other equity instrument investments | 158,251,774.94 | 235,104,648.17 | -- | 393,356,423.11 |
| II. Other comprehensive income to be reclassified into profits or losses | -- | -- | -- | -- |
| Total other comprehensive incomes | 158,251,774.94 | 235,104,648.17 | -- | 393,356,423.11 |
Other comprehensive income attributable to the parent company in the income statement:
| Item | During the period | ||||
| Incurred before income tax for the | Less: Transferred from other | Less: Income tax expenses | Less: Attributable to minority | Attributable to parent company | |
| period | comprehensive income in prior periods to profit or loss during the period | shareholders after tax | after tax | ||
| I. Other comprehensive income which cannot be reclassified into profits or losses | 276,593,703.74 | -- | 41,489,055.57 | -- | 235,104,648.17 |
| Changes in fair value of other equity instrument investments | 276,593,703.74 | -- | 41,489,055.57 | -- | 235,104,648.17 |
| II. Other comprehensive income to be reclassified into profits or losses | -- | -- | -- | -- | -- |
| Total other comprehensive incomes | 276,593,703.74 | -- | 41,489,055.57 | -- | 235,104,648.17 |
Note: The net-of-tax amount of other comprehensive income for the period is RMB 235,104,648.17,Among which, the net-of-tax amount of other comprehensive income attributable to the parentcompany is RMB 235,104,648.17; and net-of-tax amount of other comprehensive incomeattributable to minority shareholders is RMB 0.00.
38. Special reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Safety fund | 31,852,310.79 | 71,629,935.51 | 63,583,488.32 | 39,898,757.98 |
39. Surplus reserve
| Item | 2023.1.1 | Increase | Decrease | 2023.06.30 |
| Statutory reserve | 1,908,883,208.67 | -- | -- | 1,908,883,208.67 |
| Discretionary surplus reserve | -- | -- | -- | -- |
| Total | 1,908,883,208.67 | -- | -- | 1,908,883,208.67 |
40. Retained earnings
| Item | Current period | Prior period | Appropriation/ Distribution ratio |
| Retained earnings at previous year before adjustment | 8,595,698,699.52 | 8,130,868,205.38 | -- |
| Adjustment of total retained earnings at previous year (Increase in “+”, decrease in “-”) | -- | -- | -- |
| Retained earnings at previous year after adjustment | 8,595,698,699.52 | 8,130,868,205.38 | |
| Add: Net profit attributable to shareholders of the company | 410,357,394.89 | 1,795,307,073.34 | -- |
| Less: Transfer to statutory surplus reserve | -- | -- | |
| Transfer to discretionary surplus reserve | -- | -- | |
| Common Stock dividends payable | -- | -- |
| Dividends payable to other equity holders | -- | 34,120,631.40 | |
| Retained earnings at current year | 9,006,056,094.41 | 9,892,054,647.32 | |
| Including: Surplus reserve attributable to shareholders of the company extracted by subsidiaries | -- | -- |
41. Revenue and cost of sales
(1) Revenue and cost of sales
| Item | Current period | Prior period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 55,599,122,827.83 | 52,725,471,888.88 | 61,279,976,461.63 | 56,684,778,266.42 |
| Other business | 1,768,973,201.54 | 1,594,681,278.35 | 1,914,138,985.93 | 1,612,483,831.57 |
| Total | 57,368,096,029.37 | 54,320,153,167.23 | 63,194,115,447.56 | 58,297,262,097.99 |
(2) Revenue and cost of sales presented as products
| Item | Current period | Prior period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 137,297,135.04 | 134,524,608.66 | 302,806,719.26 | 256,485,057.73 |
| Hot-rolled steel | 24,421,717,115.92 | 23,123,065,070.53 | 26,182,194,086.24 | 24,465,345,607.23 |
| Cold-rolled steel | 30,041,280,419.47 | 28,582,863,058.62 | 33,582,516,334.42 | 30,921,535,017.99 |
| Other steels | 998,828,157.40 | 885,019,151.07 | 1,212,459,321.71 | 1,041,412,583.47 |
| Subtotal | 55,599,122,827.83 | 52,725,471,888.88 | 61,279,976,461.63 | 56,684,778,266.42 |
| Other business | ||||
| Power | 735,603,333.93 | 794,413,867.32 | 751,215,118.93 | 735,503,944.60 |
| Solid waste | 637,465,489.28 | 560,603,496.48 | 742,703,360.89 | 656,634,462.05 |
| Others | 395,904,378.33 | 239,663,914.55 | 420,220,506.11 | 220,345,424.92 |
| Subtotal | 1,768,973,201.54 | 1,594,681,278.35 | 1,914,138,985.93 | 1,612,483,831.57 |
| Total | 57,368,096,029.37 | 54,320,153,167.23 | 63,194,115,447.56 | 58,297,262,097.99 |
(3) Breakdown of revenue information
| Item | Current period |
| Revenue from main business | 55,599,122,827.83 |
| Including: recognised at a certain point in time | 55,599,122,827.83 |
| recognised during a certain period of time | -- |
| Revenue from other business | 1,768,973,201.54 |
| Total | 57,368,096,029.37 |
As of 30 June 2023, the amount of revenue corresponding to the performance obligations thatthe company has signed but not yet fulfilled is RMB 4,954.9508 million. The Company expectsto recognize all the revenue in 2023.
42. Taxes and surcharges
| Item | Current period | Prior period |
| Environmental protection tax | 18,343,720.18 | 15,908,172.94 |
| Urban maintenance and construction tax | 40,652,211.96 | 77,967,892.43 |
| Education surcharge | 29,679,818.99 | 56,726,117.52 |
| Resources duty | 20,832,075.60 | 20,250,120.20 |
| Property tax | 99,488,568.55 | 98,695,510.19 |
| Land usage tax | 111,002,226.40 | 110,812,386.29 |
| Vehicle and vessel usage tax | 40,334.86 | 42,404.04 |
| Stamp duty | 63,765,765.74 | 76,282,142.98 |
| Other taxes | 120,608.80 | 34,734.51 |
| Total | 383,925,331.08 | 456,719,481.10 |
Note: The provision and payment standards of taxes and surcharges refer to Note IV. Taxation.
43. Selling and distribution expenses
| Item | Current period | Prior period |
| Staff costs | 79,951,366.28 | 93,930,363.62 |
| Depreciation and amortization | 50,936.58 | 56,094.74 |
| Other regualr expenses | 28,674,247.02 | 16,695,031.78 |
| Total | 108,676,549.88 | 110,681,490.14 |
44. General and administrative expenses
| Item | Current period | Prior period |
| Staff costs | 310,695,125.00 | 326,037,150.47 |
| Depreciation and amortization | 171,588,633.63 | 161,324,338.37 |
| Other regular expenses | 97,193,253.08 | 101,702,896.39 |
| Total | 579,477,011.71 | 589,064,385.23 |
45. Research and development expenses
| Item | Current period | Prior period |
| Staff costs | 158,852,822.87 | 311,623,960.32 |
| Other regular expenses | 37,283,180.82 | 16,893,405.56 |
| Total | 196,136,003.69 | 328,517,365.88 |
46. Financial expenses
| Item | Current period | Prior period |
| Interest costs | 792,670,794.80 | 962,553,311.97 |
| Including: Interest expenses on lease liabilities | 1,960,102.79 | 2,690,554.84 |
| Less: interest capitalized | -- | 10,110,416.67 |
| Interest expenses | 792,670,794.80 | 952,442,895.30 |
| Less:interest income | 54,953,200.51 | 59,554,515.51 |
| Discount on notes acceptance | 41,324,051.62 | 10,534,443.56 |
| Exchange losses and gains | -5,170,055.53 | -11,231,904.59 |
| Bank charges and others | -2,981,596.08 | 1,954,237.44 |
| Total | 770,889,994.30 | 894,145,156.20 |
47. Other income
| Item | Current period | Prior period |
| Related to assets | 15,981,229.28 | 9,688,324.41 |
| Related to income | 10,854,823.68 | 8,716,309.36 |
| Value added tax deduction | 148,220.60 | 271,465.97 |
| Tax refund | 1,570,586.42 | 2,144,900.53 |
| Total | 28,554,859.98 | 20,821,000.27 |
Note: (1) The details of government grants refer to Note V. 59 Government grants.
(2) The specific reasons for government grants recognized as recurring gains or losses, please referto Note XVI. 1.
48. Investment income
| Item | Current period | Prior period |
| Investment income from long-term equity investments under the equity method | -161,991,793.90 | -28,953,471.03 |
| Investment income on disposal of long-term equity investments | -- | -- |
| Dividend from other equity instruments investments | 7,412,132.80 | 2,812,400.00 |
| Interest income from entrusted loans | 5,922,896.67 | 5,488,952.23 |
| Others | 1,139,694.44 | -- |
| Total | -147,517,069.99 | -20,652,118.80 |
49. Gains from changes in fair value
| Sources of gains from changes in fair value | Current period | Prior period |
| Other non-current financial assets: designated as measured | -- | -- |
at fair value and whose changes are recorded in currentprofit or loss
50. Credit impairment losses (loss in “-”)
| Item | Current period | Prior period |
| Provision for bad debts of notes receivable | 1,506,988.86 | -223,343.36 |
| Provision for bad debts of accounts receivable | 4,894,423.95 | 7,238,831.57 |
| Provision for bad debts of financing receivable | -567,310.56 | -630,726.77 |
| Provision for bad debts of other receivables | 651,641.60 | 1,220,925.33 |
| Total | 6,485,743.85 | 7,605,686.77 |
51. Impairment losses on assets (loss in “-”)
| Item | Current period | Prior period |
| Provision for invertory impairment | -329,243,536.55 | -105,263,662.32 |
52. Gains on disposal of assets
| Item | Current period | Prior period |
| Gains from disposal of fixed assets (loss in “-”) | 169,700.65 | -200,808.44 |
| Gains from disposal of intangible assets (loss in “-”) | -- | -- |
| Total | 169,700.65 | -200,808.44 |
53. Non-operating income
| Item | Current period | Prior period | Recognised as non-recurring gains or losses in 2023 |
| Gains on disposal of assets s | 740,746.71 | 1,253,691.98 | 740,746.71 |
| Compensation payments | 831,077.04 | 42,466.00 | 831,077.04 |
| Others | 2,209,318.60 | 947,185.72 | 2,209,318.60 |
| Total | 3,781,142.35 | 2,243,343.70 | 3,781,142.35 |
54. Non-operating expenses
| Item | Current period | Prior period | Recognised as non-recurring gains or losses in 2023 |
| Losses on disposal of assets | 3,145,406.85 | 13,808,806.33 | 3,145,406.85 |
| Compensation and penalty | 1,493,322.32 | -- | 1,493,322.32 |
| Others | 390,101.11 | -- | 390,101.11 |
| Donation | -- | 978,613.90 | -- |
| Total | 5,028,830.28 | 14,787,420.23 | 5,028,830.28 |
55. Income tax expenses
(1) Details of income tax expenses
| Item | Current period | Prior period |
| Current tax in accordance with tax laws and related regulations | 52,297,204.81 | 380,151,992.76 |
| Deffered income tax expenses | 40,869,725.70 | -14,007,007.78 |
| Total | 93,166,930.51 | 366,144,984.98 |
(2) Reconciliation between income tax expenses and profit before income tax is as follows:
| Item | Current period | Prior period |
| Profit before tax | 566,039,981.49 | 2,407,491,491.97 |
| Tax at the applicable tax rate of 15% | 84,905,997.22 | 361,123,723.80 |
| Taxation effect of different tax rates of subsidiaries | 4,330,222.62 | 4,988,095.44 |
| Adjustment of income tax in the prior year | 5,707,925.74 | -21,330.95 |
| Share of profit or loss of joint ventures and associates under the equity method | 24,310,774.48 | 4,823,143.55 |
| Income not subject to tax（expressed in“-”） | -1,111,819.92 | -421,860.00 |
| Non-deductible costs, expenses and losses | -1,024,312.98 | 1,375,729.75 |
| Taxation effect of the change in the applicable tax rate on the beginning disclosure of the deffered income tax | -- | -- |
| Taxation effect of utilizing previous unrecognized tax losses and deductible temporary differences (expressed in “-”) | -24,468,624.78 | -13,115,011.55 |
| Taxation effect of unrecognized tax losses and deductible temporary differences | 2,034,667.84 | 7,392,494.94 |
| Taxation effect of research and development expenses (expressed in “-”) | -1,517,899.71 | -- |
| Others | -- | -- |
| Income tax expenses | 93,166,930.51 | 366,144,984.98 |
56. Notes to cash flow statement
(1) Proceeds from other operating activities
| Item | Current period | Prior period |
| Government grants received | 23,557,610.10 | 52,635,019.89 |
| Security deposit received | 113,500.00 | 2,914,958.17 |
| Other non-operating income received | 2,584,035.20 | 989,651.72 |
| Other receivables received | 3,018,568.85 | -- |
| Restricted funds received | 658,318,672.38 | 702,663,291.78 |
| Total | 687,592,386.53 | 759,202,921.56 |
(2) Payments for other operating activities
| Item | Current period | Prior period |
| Expenses paid | 239,443,701.70 | 192,888,072.40 |
| Non-operating expenses paid | 1,883,423.43 | 978,660.73 |
| Other payable paid | -- | 2,243,026.54 |
| Restricted funds paid | 8,445,841.94 | -- |
| Total | 249,772,967.07 | 196,109,759.67 |
(3) Proceeds from other investing activities
| Item | Current period | Prior period |
| Interest income | 55,091,892.43 | 59,811,342.73 |
(4) Payment for other financing activities
| Item | Current period | Prior period |
| Financial commissions | 544,051.79 | 614,594.34 |
| Paying back the borrowings from Shougang Group | 300,000,000.00 | 146,870,077.89 |
| Lease payments | 9,283,405.23 | 9,374,237.24 |
| Non-public offering fees paid | -- | 605,668.13 |
| Cash retained by the continuing company | 887,314.66 | -- |
| Total | 310,714,771.68 | 157,464,577.60 |
57. Supplements to statement of cash flows
(1) Supplementary information
| Supplementary information | Current period | Prior period |
| 1. Reconciliation of net profit to net cash flows from operating activities: | ||
| Net profit | 472,873,050.98 | 2,041,346,506.99 |
| Add: Impairment losses on assets | 329,243,536.55 | 105,263,662.32 |
| Credit impairment losses | -6,485,743.85 | -7,605,686.77 |
| Depreciation of fixed assets | 3,842,373,003.36 | 3,802,519,336.62 |
| Depreciation of right-of-use assets | 8,317,810.41 | 8,523,888.66 |
| Amortization of intangible assets | 92,176,202.24 | 68,968,045.19 |
| Amortizaiton of long-term deffered expenses | 370,395.38 | 270,513.76 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gains as in “-”) | -169,700.65 | 200,808.44 |
| Losses on written-off fixed assets (Gains as in “-”) | 2,404,660.14 | 12,555,114.35 |
| Losses on fair value changes (Gain as in “-”) | -- | -- |
| Financial expenses (Income as in “-”) | 770,889,994.30 | 894,145,156.20 |
| Supplementary information | Current period | Prior period |
| Investment losses (Income as in “-”) | 147,517,069.99 | 20,652,118.80 |
| Decrease in deferred tax assets (Increase as in “-”) | 19,037,317.48 | -7,310,969.14 |
| Increase in deferred tax liabilities (Decrease as in “-”) | 6,453,946.75 | -6,696,038.64 |
| Decrease in inventories (Increase as in “-”) | -580,497,435.31 | -1,530,410,940.95 |
| Decrease in receivables from operating activities (Increase as in “-”) | -3,395,064,493.78 | -2,026,306,571.42 |
| Increase in payables from operating activities (Decrease as in “-”) | -2,046,430,080.78 | -1,713,810,484.02 |
| Others | 692,541,544.39 | 755,659,694.90 |
| Net cash flow from operating activities | 355,551,077.60 | 2,417,964,155.29 |
| 2. Significant non-cash payments for investing and financing activities: | ||
| Conversion of debt into capital | -- | -- |
| Convertible bonds due within one year | -- | -- |
| Newly added right-of-use assets in the current period | -- | -- |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 7,015,305,370.62 | 6,899,770,382.55 |
| Less: Opening balance of cash | 8,329,215,003.68 | 8,535,871,373.08 |
| Add: Closing balance of cash equivalents | -- | -- |
| Less: Opening balance of cash equivalents | -- | -- |
| Net increase in cash and cash equivalents | -1,313,909,633.06 | -1,636,100,990.53 |
Note: The amount of endorsement and transfer of acceptance notes received from goods sales of theCompany is RMB 34,429,184,800.
(2) Components of cash and cash equivalents
| Item | 2023.06.30 | 2022.12.31 |
| 1. Cash | 7,015,305,370.62 | 8,329,215,003.68 |
| Including: Cash on hand | 21,492.00 | 23,581.90 |
| Balances in banks without restriction | 7,015,283,865.88 | 8,329,191,409.04 |
| Other monetary funds without restriction | 12.74 | 12.74 |
| 2. Cash equivalents | -- | -- |
| Including: bonds investment due within three months | -- | -- |
| 3. Closing balance of cash and cash equivalents | 7,015,305,370.62 | 8,329,215,003.68 |
| Including: restricted cash and cash equivalents from the parent company or its subsidiaries | -- | -- |
58. Assets with restricted ownership or use rights
| Item | 2023.06.30 | Restricted reasons |
| Cash and cash balances | 482,089,076.86 | Security deposits, fixed term deposits |
| Notes receivable | 87,759,217.36 | Pledge billing |
| Accounts receivable | 44,772,339.34 | Pledge billing |
| Total | 614,620,633.56 |
59. Government grants
(1) Government grants recognized as deferred income and subsequently measured via gross method.
| Item | Type | 2023.1.1 | Increase | Transfer to profit or loss | Other changes | 2023.06.30 | Item recognized in income statement | Related to assets/ Related to income |
| Discount funds for imported equipments | Financial appropriation | 12,106,230.11 | -- | 614,555.28 | -- | 11,491,674.83 | Other income | Related to assets |
| Government grants for engineering informationization project (Qian'an Iron and Steel, Cold-R Co.) | Financial appropriation | 275,000.28 | -- | 49,999.98 | -- | 225,000.30 | Other income | Related to assets |
| Government grants for energy central project from the Ministry of Industry and Information Technology of the People’s Republic of China | Financial appropriation | 1,999,999.88 | -- | 500,000.00 | -- | 1,499,999.88 | Other income | Related to assets |
| Special government grants from the Finance Bureau of Qian'an | Financial appropriation | 4,139,130.42 | -- | 121,739.16 | -- | 4,017,391.26 | Other income | Related to assets |
| Government grants for hot-rolled steel strip TMCP project | Financial appropriation | 1,263,157.88 | -- | 52,631.58 | -- | 1,210,526.30 | Other income | Related to assets |
| Government grants for dedusting system upgrading project (Qian'an Iron and Steel) | Financial appropriation | 24,473,684.32 | -- | 815,789.46 | -- | 23,657,894.86 | Other income | Related to assets |
| Government grants for advanced sewage treatment | Financial appropriation | 4,819,629.56 | -- | 171,111.12 | -- | 4,648,518.44 | Other income | Related to assets |
| Special government grants for denitration engineering from the Hebei Provincial Finance Department | Financial appropriation | 490,000.00 | -- | 122,500.00 | -- | 367,500.00 | Other income | Related to assets |
| Government grants for online environmental monitoring project from the Finance Bureau of Caofeidian | Financial appropriation | 2,500,000.00 | -- | 250,000.00 | -- | 2,250,000.00 | Other income | Related to assets |
| The steelmaking technology and facilities demonstration project through carbon dioxide-oxygen mixed injection, funded by University of Science and Technology Beijing | Financial appropriation | 3,719,298.24 | -- | 105,263.16 | -- | 3,614,035.08 | Other income | Related to assets |
| National funds for the national 863 project | Financial appropriation | 556,400.00 | -- | 139,100.00 | -- | 417,300.00 | Other income | Related to assets |
| Government grants for Phase II seawater dsalination project | Financial appropriation | 16,842,105.32 | -- | 526,315.78 | -- | 16,315,789.54 | Other income | Related to assets |
| Government grants for cold-rolled intelligent manufacturing project | Financial appropriation | 21,224,552.64 | 2,030,000.00 | 1,490,657.00 | -- | 21,763,895.64 | Other income | Related to assets |
| Government grants for the desulfurization of pelletizing flue gas | Financial appropriation | 20,805,473.66 | -- | 743,052.64 | -- | 20,062,421.02 | Other income | Related to assets |
| Environmental protection government grants for closing limestone yards | Financial appropriation | 1,600,000.00 | -- | 40,000.00 | -- | 1,560,000.00 | Other income | Related to assets |
| Government grants for energy-saving incentive for No.3 hydrogen generator | Financial appropriation | 950,305.21 | -- | 33,939.48 | -- | 916,365.73 | Other income | Related to assets |
| Government grants for cold rolling operation department aluminized silicon high strength steel automotive plate renovation project | Financial appropriation | 2,873,684.17 | -- | 95,789.48 | -- | 2,777,894.69 | Other income | Related to assets |
| Government grants for cold rolling operation department high strength steel 18 roll single stand project | Financial appropriation | 11,450,943.40 | -- | 336,792.44 | -- | 11,114,150.96 | Other income | Related to assets |
| Item | Type | 2023.1.1 | Increase | Transfer to profit or loss | Other changes | 2023.06.30 | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for the operation-control system of production-marketing integration | Financial appropriation | 19,772,121.20 | -- | 1,235,757.60 | -- | 18,536,363.60 | Other income | Related to assets |
| Government grants for the specialized production line project of Zinc-plated high-strengthen auto sheet | Financial appropriation | 84,210,526.36 | -- | 2,631,578.94 | -- | 81,578,947.42 | Other income | Related to assets |
| Government grants for reforming of sinter desulfurization and denitrification | Financial appropriation | 24,210,526.34 | -- | 789,473.68 | -- | 23,421,052.66 | Other income | Related to assets |
| Government grants for thin slab casting and rolling engineering | Financial appropriation | 5,179,642.86 | 187,500.00 | 142,857.14 | -- | 5,224,285.72 | Other income | Related to assets |
| Government grants for reform project of reducing oxynitride concentration in emissed flue gas from annealing furnace | Financial appropriation | 5,830,263.31 | -- | 165,789.42 | -- | 5,664,473.89 | Other income | Related to assets |
| Government grants for industrial mechanism model base | Financial appropriation | 4,800,000.00 | -- | -- | -- | 4,800,000.00 | Other income | Related to assets |
| Government grants for 10,000 tons/d desalination project | Financial appropriation | 7,963,157.91 | -- | 234,210.52 | -- | 7,728,947.39 | Other income | Related to assets |
| Government grants for sintering waste heat power generation project | Financial appropriation | 19,336,283.19 | -- | 537,118.96 | -- | 18,799,164.23 | Other income | Related to assets |
| Government grants for comprehensive optimization and upgrading project of hot blast furnace system in Phase I of ironmaking Operation Department | Financial appropriation | 23,683,382.96 | -- | 657,871.74 | -- | 23,025,511.22 | Other income | Related to assets |
| Government grants for energy conservation and emission reduction optimization and improvement projects | Financial appropriation | 13,429,293.94 | 1,500,000.00 | 382,854.87 | -- | 14,546,439.07 | Other income | Related to assets |
| Government grants for Zinc containing solid waste disposal project | Financial appropriation | 4,878,640.78 | -- | 145,631.06 | -- | 4,733,009.72 | Other income | Related to assets |
| Government grants for high-tech industry development projects | Financial appropriation | 7,000,000.00 | -- | -- | -- | 7,000,000.00 | Other income | Related to assets |
| Government grants for new energy automotive electrical steel project | Financial appropriation | 78,890,971.68 | 7,000,000.00 | 2,178,973.92 | -- | 83,711,997.76 | Other income | Related to assets |
| Government grants for high performance oriented silicon steel project | Financial appropriation | 19,640,000.00 | -- | -- | -- | 19,640,000.00 | Other income | Related to assets |
| Other government grants related to assets | Financial appropriation | 21,907,476.28 | 14,700.00 | 669,874.87 | -- | 21,252,301.41 | Other income | Related to assets |
| Other government grants related to income | Financial appropriation | 40,000.00 | 400,000.00 | 40,000.00 | -- | 400,000.00 | Other income | Related to income |
| Total | 472,861,881.90 | 11,132,200.00 | 16,021,229.28 | -- | 467,972,852.62 |
(2) Government grants directly recorded as profit or loss for the current period and measured via gross method.
| Item | Type | Amount recognised in profit or loss in current period | Amount recognised in profit or lossin prior period | Item recognized in income statement | Related to assets/ Related to income |
| Government grants for steady post | Financial appropriation | 159,769.69 | 3,803,072.64 | Other income | Related to income |
| Other government grants related to income | Financial appropriation | 10,695,053.99 | 4,913,236.72 | Other income | Related to income |
| Total | 10,854,823.68 | 8,716,309.36 |
VI. Changes in the scope of consolidationOn April 25, 2023, the Company's subsidiary, Beijing Shougang New EnergyAutomotive Material Technology Co., Ltd., was split into Beijing Shougang NewEnergy Automotive Material Technology Co., Ltd. (the "Surviving Company") andBeijing Shougang New Energy Material Technology Co., Ltd. (the "New Company")on a continuing basis.The registered capital and paid-in capital of Beijing Shougang New EnergyAutomotive Material Technology Co., Ltd. before the division were both 980 millionyuan, of which 45.9% was held by Beijing Shougang Co., Ltd. (" Shougang Shares ")and 30.6% was held by Beijing Shougang Xinjinyuan Management Consulting Center(Limited Partnership) (" Shougang Xinjinyuan "). Shougang Group Co., Ltd. ("Shougang Group ") holds 13.3%, and Qian 'an Beijing-Hebei Equity Investment Fund(Limited Partnership) (" Qian 'an Fund ") holds 10.2%.After the division, the registered capital and paid-in capital of Beijing Shougang NewEnergy Automobile Material Technology Co., Ltd. (surviving company) are RMB 230million, and the shareholders are Shougang Group (holding 56.5217%) and Qian 'anFund (holding 43.4783%); The registered capital and share capital of BeijingShougang New Energy Material Technology Co., Ltd. (newly established company)are both RMB 750 million , and the shareholders are Shougang Shares (60%) andShouxin Jinyuan (40%).After this division, the Company will continue to merge Beijing Shougang NewEnergy Material Technology Co., LTD. (a new company) with the shareholding ratioof 60%.VII. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Company
| Subsidiary | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | |||||
| Shougang Jingtang United Iron & Steel Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Production and sales | 70.18 | 29.82 | Business combination under common control |
| Beijing Shougang Cold Rolling Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 70.28 | -- | Establish or investment, etc. |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Consulting service | 100.00 | -- | Business combination under common control |
| Subsidiary | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | |||||
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Production and sales | 68.03 | 6.15 | Establish or investment, etc. |
| Beijing Shougang New Energy Material Technology Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 60 | -- | Establish or investment, etc. |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 100.00 | -- | Business combination under common control |
(2) Significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | Proportion of minority shareholders (%) | Net profit/ (loss) attributable to non-controlling interests in reporting period | Dividends declared and distributed to non-controlling interests in reporting period | Non-controlling interests at the end of reporting period |
| Beijing Shougang Cold Rolling Co., Ltd. | 29.72 | 304,093.71 | -- | -315,256,525.16 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 25.82 | 53,828,968.42 | 125,600,566.77 | 3,596,332,377.60 |
(3) Major financial information of significant non-wholly owned subsidiaries
Unit：RMB
| Subsidiary | 2023.06.30 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,134,974,093.87 | 3,734,063,073.33 | 5,869,037,167.20 | 2,722,985,473.09 | 4,202,976,973.66 | 6,925,962,446.75 |
| Shougang Zhixin Qian'an Electromagnetic Materials | 5,606,099,101.37 | 15,439,866,166.90 | 21,045,965,268.27 | 6,830,760,323.39 | 334,318,803.97 | 7,165,079,127.36 |
Co., Ltd.
Continued (1):
| Subsidiary | 2022.12.31 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,317,199,255.15 | 3,836,449,761.31 | 6,153,649,016.46 | 2,646,502,899.97 | 4,570,607,323.65 | 7,217,110,223.62 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 5,760,507,592.72 | 15,459,717,661.10 | 21,220,225,253.82 | 7,660,663,373.94 | 1,401,952,326.63 | 9,062,615,700.57 |
Continued (2):
| Subsidiary | Current period | Prior period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 5,133,807,057.85 | 1,023,195.52 | 1,023,195.52 | 218,642,621.85 | 6,016,545,773.96 | 61,520,529.94 | 61,520,529.94 | 32,581,875.82 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 7,253,294,653.45 | 211,419,481.66 | 211,419,481.66 | 485,506,003.09 | 6,767,049,388.20 | 646,719,729.82 | 646,719,729.82 | 1,042,619,075.80 |
2. Interests in joint ventures and associates
(1) Significant joint ventures and associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| ①Jiont ventures | ||||||
| Tangshan Guoxing Industrial Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Manufacturing | 50.00 | Equity method | |
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Chemical | 50.00 | Equity method | |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Coking | 50.00 | Equity method | |
| ②Associates | ||||||
| Tangshan Tangcao Railway Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Transportation | 16.19 | Equity method | |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Building Material | 25.00 | Equity method | |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Coking | 49.82 | Equity method | |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing, PRC | Beijing, PRC | Investment | 20.00 | Equity method | |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Beijing, PRC | Beijing, PRC | Manufacturing | 45.00 | Equity method | |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Manufacturing | 40.00 | Equity method | |
| Guangzhou Jinghai Shipping Co., Ltd. | Guangzhou, PRC | Guangzhou, PRC | Transportation | 20.00 | Equity method | |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Qingdao, PRC | Qingdao, PRC | Manufacturing | 35.00 | Equity method | |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Manufacturing | 35.00 | Equity method | |
| Hebei Jingji Industry & Trading Co., Ltd. | Shijiazhuang, PRC | Shijiazhuang, PRC | Manufacturing | 35.71 | Equity method | |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Building Material | 35.00 | Equity method | |
(2) Primary financial information of significant joint ventures
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2023.06.30 | 2022.12.311 | 2023.06.30 | 2022.12.31 | 2023.06.30 | 2022.12.31 | |
| Current assets | 84,601,136.61 | 81,326,897.38 | 19,532,576.05 | 4,453,756.17 | 2,310,250,784.60 | 2,203,316,115.22 |
| Including： Cash and cash equivalents | 9,604,863.62 | 15,459,879.44 | 19,232,576.05 | 4,153,756.17 | 944,009,086.92 | 909,643,194.30 |
| Non-current assets | 71,766,473.82 | 76,981,144.98 | 598,368,186.00 | 595,492,113.45 | 1,268,213,780.58 | 1,384,560,026.25 |
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2023.06.30 | 2022.12.311 | 2023.06.30 | 2022.12.31 | 2023.06.30 | 2022.12.31 | |
| Total assets | 156,367,610.43 | 158,308,042.36 | 617,900,762.05 | 599,945,869.62 | 3,578,464,565.18 | 3,587,876,141.47 |
| Current liabilities | 66,808,454.65 | 75,404,455.29 | 611,275,314.21 | 580,665,263.21 | 1,359,522,433.00 | 1,384,913,879.38 |
| Non-current liabilities | 6,537,093.21 | 6,537,093.21 | -- | -- | 6,675,000.00 | 6,675,000.00 |
| Total liabilities | 73,345,547.86 | 81,941,548.50 | 611,275,314.21 | 580,665,263.21 | 1,366,197,433.00 | 1,391,588,879.38 |
| Net assets | 83,022,062.57 | 76,366,493.86 | 6,625,447.84 | 19,280,606.41 | 2,212,267,132.18 | 2,196,287,262.09 |
| Including: Non-controlling interests | -- | -- | -- | -- | ||
| Equity attributable to shareholders of the company | 83,022,062.57 | 76,366,493.86 | 6,625,447.84 | 19,280,606.41 | 2,212,267,132.18 | 2,196,287,262.09 |
| Net assets calculated by shareholding proportion | 41,511,031.30 | 38,183,246.94 | 3,312,723.92 | 9,640,303.21 | 1,106,133,566.08 | 1,098,143,631.04 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | -- | -- | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the joint venture | 41,511,031.30 | 38,183,246.94 | 3,312,723.92 | 9,640,303.21 | 1,106,133,566.08 | 1,098,143,631.04 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | |
| Operating revenue | 69,936,812.72 | 79,412,274.03 | -- | -- | 6,192,335,209.86 | 7,025,126,606.79 |
| Financial expenses | -7,983.14 | 159,412.06 | 12,636,372.10 | 11,588,169.37 | 10,483,064.19 | 16,444,053.05 |
| Income tax expense | 2,463,490.17 | 3,288,633.87 | -- | -- | 16,748,316.30 | -7,453,324.89 |
| Net profit | 6,609,784.74 | 6,837,122.31 | -12,655,158.57 | -11,607,339.67 | 8,705,677.85 | 45,903,466.36 |
| Item | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 6,609,784.74 | 6,837,122.31 | -12,655,158.57 | -11,607,339.67 | 8,705,677.85 | 45,903,466.36 |
| Dividends received from joint venture | -- | -- | -- | -- | -- | 23,000,000.00 |
(3) Primary financial information of significant associates
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2023.06.30 | 2022.12.311 | 2023.06.30 | 2022.12.31 | 2023.06.30 | 2022.12.31 | |
| Current assets | 16,119,048.38 | 37,615,636.69 | 81,848,474.01 | 77,330,625.86 | 1,799,242,859.81 | 2,071,780,230.13 |
| Non-current assets | 8,068,928,508.03 | 8,175,281,488.59 | 213,359,169.31 | 224,215,514.07 | 2,407,583,722.52 | 2,457,397,455.41 |
| Total assets | 8,085,047,556.41 | 8,212,897,125.28 | 295,207,643.32 | 301,546,139.93 | 4,206,826,582.33 | 4,529,177,685.54 |
| Current liabilities | 2,116,515,587.41 | 1,026,481,331.40 | 34,235,227.30 | 31,678,142.16 | 2,663,953,364.33 | 2,727,774,901.17 |
| Non-current liabilities | 4,249,609,875.00 | 5,254,694,650.00 | -- | -- | 19,172,608.87 | 20,417,377.09 |
| Total liabilities | 6,366,125,462.41 | 6,281,175,981.40 | 34,235,227.30 | 31,678,142.16 | 2,683,125,973.20 | 2,748,192,278.26 |
| Net assets | 1,718,922,094.00 | 1,931,721,143.88 | 260,972,416.02 | 269,867,997.77 | 1,523,700,609.13 | 1,780,985,407.28 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 1,718,922,094.00 | 1,931,721,143.88 | 260,972,416.02 | 269,867,997.77 | 1,523,700,609.13 | 1,780,985,407.28 |
| Net assets calculated by shareholding proportion | 278,293,487.02 | 312,745,653.19 | 65,243,104.01 | 67,466,999.44 | 759,174,387.53 | 887,363,090.11 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | -- | -- | 4,147,420.21 | 4,147,420.21 |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 278,293,487.02 | 312,745,653.19 | 65,243,104.01 | 67,466,999.44 | 763,321,807.74 | 891,510,510.32 |
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2023.06.30 | 2022.12.311 | 2023.06.30 | 2022.12.31 | 2023.06.30 | 2022.12.31 | |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2023.06.30 | 2022.12.311 | 2023.06.30 | 2022.12.31 | 2023.06.30 | 2022.12.31 | |
| Current assets | 458,842,530.68 | 63,963,941.09 | 70,854,290.53 | 59,655,006.56 | 44,050,648.00 | 32,667,291.24 |
| Non-current assets | 300,037,431.81 | 694,420,798.63 | 550,753.94 | 618,495.73 | 220,122,170.83 | 214,254,258.49 |
| Total assets | 758,879,962.49 | 758,384,739.72 | 71,405,044.47 | 60,273,502.29 | 264,172,818.83 | 246,921,549.73 |
| Current liabilities | 152,453,289.49 | 152,354,244.94 | 27,907,810.98 | 22,971,249.27 | 47,002,701.17 | 56,004,281.62 |
| Non-current liabilities | -- | -- | -- | -- | 114,923,500.00 | 88,818,500.00 |
| Total liabilities | 152,453,289.49 | 152,354,244.94 | 27,907,810.98 | 22,971,249.27 | 161,926,201.17 | 144,822,781.62 |
| Net assets | 606,426,673.00 | 606,030,494.78 | 43,497,233.49 | 37,302,253.02 | 102,246,617.66 | 102,098,768.11 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 606,426,673.00 | 606,030,494.78 | 43,497,233.49 | 37,302,253.02 | 102,246,617.66 | 102,098,768.11 |
| Net assets calculated by shareholding proportion | 122,510,438.99 | 122,430,402.99 | 19,573,755.08 | 16,786,013.86 | 35,786,316.18 | 35,734,568.85 |
| Adjustment | ||||||
| Including: Goodwill | -- | -- | 44,544.87 | 44,544.87 | -- | -- |
| Unrealized profit or loss of internal transaction | -- | -- | -- | -- | -- | -- |
| Impairment | -- | -- | -- | -- | -- | -- |
| Others | -- | -- | -- | -- | -- | -- |
| Carrying value of equity investment in the associates | 122,510,438.99 | 122,430,402.99 | 19,618,299.95 | 16,830,558.74 | 35,786,316.18 | 35,734,568.85 |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | |
| Operating revenue | 47,251,529.46 | 46,840,353.28 | 159,071,080.74 | 257,353,085.06 | 4,114,928,997.89 | 3,797,208,740.99 |
| Item | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | |
| Net profit | -213,159,837.20 | -216,098,611.44 | -8,895,581.75 | 14,598,703.92 | -259,578,672.13 | -48,127,352.30 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | -213,159,837.20 | -216,098,611.44 | -8,895,581.75 | 14,598,703.92 | -259,578,672.13 | -48,127,352.30 |
| Dividend received from associates | -- | -- | -- | 12,500,000.00 | -- | -- |
Continued:
| Item | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | |
| Operating income | 7,044,718.77 | 26,354,735.19 | 93,572,226.95 | 76,849,792.54 | 58,232,832.22 | 19,491,662.15 |
| Net profit | 396,178.22 | 15,844,055.54 | 6,194,980.47 | 3,131,409.36 | 147,849.55 | 1,349,356.27 |
| Net profit from discontinuing operation | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 396,178.22 | 15,844,055.54 | 6,194,980.47 | 3,131,409.36 | 147,849.55 | 1,349,356.27 |
| Dividend received from associates | -- | -- | -- | -- | -- | -- |
(4) Summary financial information of no significant joint ventures and associates
| Item | 2023.06.30 or Current period | 2022.12.31 or Prior period |
| Associates | ||
| Total carrying value of investment | 130,525,939.40 | 131,600,050.63 |
| Items calculated according to shareholding ratio | ||
| Net profit | -175,402.83 | 713,173.76 |
| Other comprehensive income | -- | -- |
| Total comprehensive income | -175,402.83 | 713,173.76 |
3. Interests in unconsolidated structured entities
(1) Basic information of unconsolidated structured entities
The unconsolidated structured entities are the Limited Partnership initiated by theCompany- Beijing Shouxin Jinyuan Management Consulting Center (LimitedPartnership) (Hereinafter referred to as Shouxin Jinyuan Fund or the Partnership) andBeijing Shouxin Jin'an Equity Investment Partnership (Limited Partnership)(Hereinafter referred to as Shouxin Jin'an Fund or the Partnership). In accordancewith the provisions of the limited partnership agreement, the Company has no controlover the Partnership.
①The purpose of establishing Shouxin Jinyuan Fund is combining the relevantpolicies of Beijing on the development of sophisticated industry with themarket-oriented operation of M&A investment, actively responding to the strategicgoal of Beijing to build a sophisticated industrial structure, promoting the upgradingand development of Beijing's sophisticated industry, contributing to the localeconomic development and industrial structure adjustment of Beijing, and creatingsatisfactory return on investment for investors.The total subscribed capital of all partners to Shouxin Jinyuan Fund is no less thanRMB 1 billion. The partners of the Fund are divided into general partner and limitedpartner, the contribution agreement is as follows: Beijing Shouyuan New EnergyInvestment Management Co., Ltd., the general partner, contributes RMB 10,000thousand; and among the limited partners, the Company agrees to contribute RMB200,000 thousand, and the other limited partners agrees to contribute RMB 790,000thousand in total.As at 30 June 2023, Shouxin Jinyuan Fund has conducted investment activities andthree external investment projects has been invested with the amount of RMB829,432.10 thousand. No financing activity has been conducted by the Fund.
② The purpose of establishing Shouxin Jin'an Fund is to focus on investment inshougang Group system of leading enterprises, to enlarge and strengthen shougangGroup new material industry. Taking Zhixin Electromagnetic, Beiye, Guigang andother advanced metal material enterprises as the platform, the company focuses onShougang Group's advantages in advanced electrical steel materials, cast superalloysand precision alloys, and high-performance special steel and other new metalmaterials.The total subscribed capital of all partners to Shouxin Jin'an Fund is no less thanRMB 2,070.5455 million. The partners of the Fund are divided into general partner
and limited partner, the contribution agreement is as follows: Beijing ShouyuanXinneng Investment Management Co., Ltd., the general partner, contributes RMB
20.7055 million; and among the limited partners, the Company agrees to contributeRMB 200,000 thousand, and the other limited partners agrees to contribute RMB1,849.84 million in total.As at 30 June 2023, Shouxin Jin'an Fund has completed fund raising and registered onThe Chinese Association of Securities Investment Funds and two external investmentprojects has been invested with the amount of RMB 230 million. No financingactivity has been conducted by the Fund.
(2) Carrying value and maximum loss exposure of interests related assets andliabilitiesAs at 30 June 2023, no assets and liabilities related to the interests in Shouxin JinyuanFund recognized are recognized in the financial statements of the Company except forthe partner contribution agreed in the partner agreement. The maximum loss exposureof the Company's interests in Shouxin Jinyuan Fund is RMB 105.8864 million. Themaximum loss exposure of the Company's interests in Shouxin Jin'an Fund is RMB
22.2164 million.
(3) The support provided to the unconsolidated structured entities
As at 30 June 2023, the Company had no intention to provide financial support orother support for Shouxin Jinyuan Fund and Shouxin Jin'an Fund.
(4) Additional information disclosure of unconsolidated structured entitiesAs at 30 June 2023, no additional information related to Shouxin Jinyuan Fund andShouxin Jin'an Fund should be disclosed by the Company.VIII. Financial instruments and risk managementThe major financial instruments of the Company include cash and cash equivalents,notes receivable, accounts receivable, financing receivables, other receivables, currentportion of non-current assets, other current assets, other equity instrument investments,other non-current financial assets, long-term receivables, notes payable, accountspayable, other payables, short-term borrowings, financial liabilities held for trading,current portion of non-current liabilities, long-term borrowings and bond payables,lease liabilities and long-term payables. The details of financial instruments aredisclosed in the respective notes. Risks relate to these financial instruments and riskmanagement policies used by the Company to minimize the risks are disclosed asbelow. Management of the Company manages and monitors the risk exposures toensure the risks are controlled in the limited range.
1. Objectives and policies of risk management
The objective of the Company in risk management is to obtain an appropriateequilibrium between risk and return, and also focuses on minimizing potential adverseeffects on the financial performance of the Company bring by the unpredictability of
financial risk. Based on the objectives of risk management, certain policies areestablished to recognize and analyze the risk. Also, in order to monitor the riskposition of the Company, internal control procedures are designed according toacceptable level of risk. Both the policies and internal control procedures arereviewed and revised regularly to adapt the changes of the market and businessactivities of the Company.The primary risks caused by the financial instruments of the Company are credit riskand liquidity risk.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would failto discharge its obligation under the terms of the financial instrument and cause afinancial loss to the Company.The Company manages the credit risk on portfolio basis. Credit risks are mainlycaused by cash and cash equivalents, notes receivable, accounts receivable, otherreceivables.The Company mainly deposits in financial institutions with good reputation and highcredit rating therefore no significant credit risk associated with cash and cashequivalents is expected.In addition, policies related to limit the credit risk exposure on notes receivable,accounts receivable and other receivables are established by the Company. TheCompany evaluates credit quality and sets credit limits on customers by taking intoaccount the financial position, credit records and other factors such as current marketconditions. The credit history of the customers is regularly monitored by the Company.In respect of customers with a poor credit history, the Company will use writtenpayment reminders, or shorten or cancel credit periods, to ensure the overall creditrisk of the Company is limited to a controllable extent.The highest credit risk exposure to the Company is limited to the carrying value ofeach financial instrument illustrated in the financial statements. The Company has notprovided any guarantee that might cause credit risk to the Company.Among the accounts receivable of the Company, the accounts receivable of the topfive customers accounted for 37.94% (2022: 52.28%); among the other receivables ofthe Company, the other receivables of the top five customers accounted for 63.04%(2022: 63.31%)
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet itsobligations associated with its financial liabilities that are settled by delivering cash orother financial assets.The Company maintains and monitors sufficient level of cash and cash equivalents asconsidered by the management while managing liquidity risk in order to meet
operational needs of the Company and reduce the effect of floating cash flow. Theusage of bank loan is monitored by the management of the Company and the loancovenants are ensured to be complied. Meanwhile, primary financial institutioncommits to provide sufficient reserve funds to satisfy the short term and long termfund requirement of the Company.
2. Capital management
The capital management policies are made to keep the continuous operation of theCompany, to enhance the return to shareholders, to benefit other related parties and tomaintain the best capital structure to minimize the cost of capital.To the maintenance or adjustment of the capital structure, the Company might adjustthe amount of dividends paid to shareholders, return capital to shareholders, issue newshares and other equity instruments, or make an asset disposal to reduce debtliabilities.The Company monitors the capital structure on the basis of leverage ratio (totalliabilities divided total assets). As at 30 June 2023, the leverage ratio of the Companyis 62.72% (31 December 2022: 65.03%).IX. Fair value
Fair value hierarchies are categorized into three levels as the lowest level input that issignificant to the entire fair value measurement.Level 1: inputs are quoted prices (unadjusted) in active markets for identical assetsand liabilities.Level 2: inputs are inputs other than quoted prices included within Level 1 that areobservable for the asset or liability, either directly or indirectly.Level 3: inputs are unobservable inputs for the asset or liability.
(1) Fair value of assets and liabilities measured at fair value
As at 31 December 2022, assets and liabilities measured at fair value are shown asfollows:
| Item | Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total |
| I. Recurring fair value measurement | ||||
| (1) Financing receivable | -- | -- | 6,325,120,221.92 | 6,325,120,221.92 |
| (2) Other equity instrument | 473,270,672.00 | -- | 36,089,165.55 | 509,359,837.55 |
| investment | ||||
| (3) Other non-current financial assets | -- | -- | 79,234,007.60 | 79,234,007.60 |
| Total assets measured at fair value on a recurring basis | 473,270,672.00 | -- | 6,440,443,395.07 | 6,913,714,067.07 |
(2) Fair values of items not measured at fair value
Financial assets and financial liabilities measured at amortized cost include: cash andcash equivalents, notes receivable, accounts receivable, other receivables, short-termborrowings, notes payable, accounts payable, other payables, long-term borrowingsdue within one year, long-term borrowings and bonds payable, etc.No additional details of financial assets and financial liabilities should be disclosedsince the difference between the fair value and carrying value of financial assets andfinancial liabilities of the Company is approximately equal.X. Related parties and related party transactions
1. Information about the parent company of the Company
| Parent company | Registration place | Business nature | Registered capital (RMB 0,000) | Shareholding percentage (%) | Percentage of voting rights (%) |
| Shougang Group Co., Ltd. | Beijing | Company with limited liability(wholly state-owned) | 2,875,502.50 | 56.53 | 56.53 |
The ultimate controlling party of the Company is State-owned Assets Supervision andAdministration Commission of People’s Government of Beijing Municipality.During the reporting period, the change of the registered capital of the parentcompany is as follows (Unit: RMB 0,000):
| Opening balance | Increase | Decrease | Closing balance |
| 2,875,502.50 | -- | -- | 2,875,502.50 |
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII, 1.
3. Information about joint ventures and associates of the Company
For information about joint ventures and associates of the Company, refer to Note VII,2.
Joint ventures and associates that have related transactions with the Company incurrent period or the prior period are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint ventures of the Company |
| Tangshan Guoxing Industrial Co., Ltd. | Joint ventures of the Company |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Joint ventures of the Company |
| Tangshan Tangcao Railway Co., Ltd. | Associates of the Company |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Associates of the Company |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Associates of the Company |
| Guangzhou Jinghai Shipping Co., Ltd. | Associates of the Company |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Associates of the Company |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Associates of the Company |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Associates of the Company |
| Hebei Jingji Industry & Trading Co., Ltd. | Associates of the Company |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Associates of the Company |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Associates of the Company |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Associates of the Company |
4. Information about other related parties
| Related party | Relationship with the Company |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company |
| Shougang Mining Corporation | Under the control of the same parent company |
| China Shougang International Trade&Engineering Corporation | Under the control of the same parent company |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Beijing Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Machinery Co., Ltd. | Under the control of the same parent company |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Qian'an First Real Packaging Service Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Equipment Structure Co., Ltd. | Under the control of the same parent company |
| Beijing Soly Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shouye Instruments&Meters Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Landscaping Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Under the control of the same parent company |
| Beijing Huaxia Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Catering Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujia Steel Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Ferroalloy Co., Ltd. | Under the control of the same parent company |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Yantai Shougang Mining 3D Co., Ltd. | Under the control of the same parent company |
| Tianjin Shougang Electric Equipment Co., Ltd. | Under the control of the same parent company |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Under the control of the same parent company |
| Beijing Shoucheng Packaging Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Materials Trading Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Futong Elevator Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Under the control of the same parent company |
| Tonghua Iron and Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Shougang Environmental Industry Co., Ltd. | Under the control of the same parent company |
| Beijing Teyu Plate Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Mining Construction Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Industrial Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Cultural Development Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Under the control of the same parent company |
| Shougang Casey Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Under the control of the same parent company |
| Qiangang Hotel. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Beijing Shougang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Under the control of the same parent company |
| Bohai International Conference Center Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Under the control of the same parent company |
| Shougang Guiyang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Under the control of the same parent company |
| Shougang Changzhi Steel&Iron Co., Ltd. | Under the control of the same parent company |
| Beijing Beiye Functional Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Metal Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Under the control of the same parent company |
| Guizhou Bohong Industrial Co., Ltd. | Under the control of the same parent company |
| Dachang Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Lanzatech Co., Ltd. | Under the control of the same parent company |
| South China International Leasing Co., Ltd | Under the control of the same parent company |
| Qinhuangdao Shougang Plate Mill Co., Ltd. | Under the control of the same parent company |
| Bejing Shougang International Travel Co., Ltd. | Under the control of the same parent company |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Under the control of the same parent company |
| Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Beijing Shougang Property Management Co., Ltd. | Under the control of the same parent company |
| Beijing Shouronghui Technology Development Co., Ltd. | Under the control of the same parent company |
| Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Tangshan Co., Ltd. | Under the control of the same parent company |
| Guizhou Shuigang Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Investment Co., Ltd. | Under the control of the same parent company |
| Shougang Commercial Factoring Co., Ltd. | Under the control of the same parent company |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Under the control of the same parent company |
| Guiyang Steel Mills I/E Corp. | Under the control of the same parent company |
| Beijing Shouyi Mining Hospital Co., Ltd. | Under the control of the same parent company |
| Peking University Shougang Hospital | Under the control of the same parent company |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gitane New Materials Co., Ltd. | Under the control of the same parent company |
| Jingxi Commercial Factoring Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Chengyun Holdings Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Shape Metal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Related party | Relationship with the Company |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shouyu Industry and Trade Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Industry Port Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| YASKAWA Shougang Robert Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Cmi Engineering (Beijing) Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Qian'an Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Sanhe Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shoujia Huanke (Qian'an) Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Hua Xia Bank Co.,Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingxi Shoutang Supply Chain Management Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Beijing Shoubang New Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingtang Port Shougang Terminal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Related party | Relationship with the Company |
| Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Directors, Supervisors, CFO and Board Secretary | Key management personnel |
5. Information about related party transactions
(1) Details of related purchase and sales
①Purchase of goods and receiving of services from related parties
| Related party | Nature of transaction | Current period | Prior period |
| Shougang Group Co., Ltd. | Raw material | 11,068,944,447.34 | 15,812,441,439.56 |
| Shougang Group Co., Ltd. | Fuel material | 33,920,747.42 | 850,771,562.07 |
| Shougang Group Co., Ltd. | Spare parts | -- | 288,719.70 |
| Shougang Group Co., Ltd. | Production service | 2,235,247.17 | 475,760.52 |
| Shougang Group Co., Ltd. | Fund usage charges | 35,745,338.87 | 34,969,724.91 |
| Shougang Group Finance Co., Ltd. | Fund usage charges | 201,948,042.69 | 153,237,793.51 |
| Shougang Mining Corporation | Raw material | 1,926,559,892.67 | 2,099,761,084.04 |
| Shougang Mining Corporation | Power energy | 33,142,695.62 | -- |
| Shougang Mining Corporation | Spare parts | 32,099,434.72 | 3,202,556.00 |
| Shougang Mining Corporation | Production service | 150,457,234.49 | 54,367,334.62 |
| Shougang Mining Corporation | Engineering equipment | 1,427,460.00 | 231,780.00 |
| Shougang Mining Corporation | Fund usage charges | 910,228.06 | -- |
| China Shougang International Trade&Engineering Corporation | Export cost | 34,538,588.30 | 30,613,231.65 |
| China Shougang International Trade&Engineering Corporation | Raw material | 5,139,000.00 | 1,733,274,763.68 |
| China Shougang International Trade&Engineering Corporation | Fuel material | -- | 96,591,728.29 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Fuel material | 3,552,528,494.93 | 3,254,253,797.34 |
| Qian'an Sinochem Coal Chemical | Power energy | 240,431,015.30 | 180,226,703.10 |
| Related party | Nature of transaction | Current period | Prior period |
| Industrial Co., Ltd. | |||
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Production service | -- | 1,458,000.00 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Engineering service | -- | 6,163,561.10 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 300,447,167.99 | 251,776,778.38 |
| Beijing Shougang Construction Group Co., Ltd. | Spare parts | 9,858,739.08 | 13,489,674.64 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering service | 236,173,424.69 | 136,295,065.42 |
| Beijing Shougang Gas Co., Ltd. | Spare parts | 3,200,799.01 | 3,354,070.98 |
| Beijing Shougang Gas Co., Ltd. | Production service | 33,977,201.66 | 27,586,525.02 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 50,768,925.53 | 53,595,767.15 |
| Beijing Shougang Gas Co., Ltd. | Auxiliary material | 3,120,360.38 | 4,682,391.45 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 141,704,854.15 | 139,713,525.44 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Spare parts | 7,205,892.14 | 1,208,517.00 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering service | 76,489,735.52 | 41,581,898.02 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering equipment | 30,712,548.34 | 65,611,045.55 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | 43,885,046.44 | 126,174,342.16 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 136,479,217.42 | 140,207,175.40 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering equipment | 13,802,749.16 | 16,345,148.79 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Fuel material | 36,602,521.60 | -- |
| Qinhuangdao Shougang Machinery Co., Ltd. | Spare parts | 24,998,009.60 | 24,611,795.80 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 55,531,690.93 | 89,270,254.32 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Auxiliary material | 67,370.00 | 144,724.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Engineering equipment | 814,000.00 | 165,000.00 |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Production service | 63,886,655.00 | 60,593,120.00 |
| Qian'an First Real Packaging | Production service | 144,432,292.06 | 178,122,270.58 |
| Related party | Nature of transaction | Current period | Prior period |
| Service Co., Ltd. | |||
| Qian'an First Real Packaging Service Co., Ltd. | Raw material | 1,195,811.49 | -- |
| Qian'an Shougang Equipment Structure Co., Ltd. | Spare parts | 7,552,701.68 | 8,846,318.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 36,483,912.17 | 37,679,377.37 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering equipment | -- | 145,631.07 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering service | -- | 519,211.73 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Raw material | 109,827,070.32 | 158,799,232.71 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Spare parts | 16,182,291.22 | 16,346,051.76 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Engineering equipment | 993,058.00 | 1,276,704.59 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 34,490,733.22 | 20,762,791.10 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Auxiliary material | 2,055,560.00 | 2,723,200.00 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering equipment | 19,094,172.47 | 777,099.03 |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Production service | 844,500.00 | 915,000.00 |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Spare parts | 772,337.55 | 224,551.00 |
| Beijing Shougang Landscaping Co., Ltd. | Life service | 17,849,883.43 | 13,080,973.10 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Spare parts | 9,102,312.33 | 9,632,190.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering equipment | 1,202,212.39 | -- |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering service | 125,194,942.99 | 458,858,687.48 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 5,122,720.55 | 194,900.00 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 35,310,117.57 | 33,397,531.26 |
| Beijing Huaxia Technology Co., Ltd. | Spare parts | 3,745,828.06 | 1,690,465.59 |
| Beijing Huaxia Technology Co., | Engineering | 2,075,133.00 | -- |
| Related party | Nature of transaction | Current period | Prior period |
| Ltd. | equipment | ||
| Beijing Shougang Catering Co., Ltd. | Life service | 5,952,307.96 | 6,597,640.95 |
| Beijing Shoujia Steel Construction Co., Ltd. | Production service | 16,574,840.79 | 22,160,417.70 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw material | 221,729,419.38 | 196,563,104.18 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw material | 180,609,531.71 | 182,687,593.53 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Production service | 40,350,564.25 | 30,168,667.91 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Auxiliary material | 7,228,477.02 | 1,902,399.75 |
| Qinhuangdao Shounai New Material Co., Ltd | Auxiliary material | 13,539,928.09 | 65,408,513.30 |
| Yantai Shougang Mining 3D Co., Ltd. | Spare parts | -- | 372,223.76 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Engineering equipment | 5,891,877.00 | 8,603,286.07 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Spare parts | 3,228,328.00 | 2,698,081.00 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Engineering service | 6,358,854.58 | 6,965,677.24 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Production service | 470,200.00 | 2,735,679.25 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 33,538,765.42 | 61,219,713.91 |
| Beijing Shougang Materials Trading Co., Ltd. | Fuel material | 547,672,053.69 | 225,712,360.18 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw material | 4,702,909,170.72 | 538,212,672.10 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 755,857,551.98 | 524,240,136.08 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Fuel material | 8,000,548,210.12 | 8,950,680,568.54 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 53,096,252.89 | -- |
| Beijing Shougang Futong Elevator Co., Ltd. | Spare parts | 74,060.00 | 154,110.00 |
| Beijing Shougang Futong Elevator Co., Ltd. | Production service | 459,500.00 | 400,800.00 |
| Tangshan Guoxing Industrial Co., | Production service | 57,556,793.88 | 77,793,837.74 |
| Related party | Nature of transaction | Current period | Prior period |
| Ltd. | |||
| Tangshan Guoxing Industrial Co., Ltd. | Engineering service | -- | 2,236,643.61 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Production service | 152,049,198.80 | 207,653,177.98 |
| Tonghua Iron and Steel Co., Ltd. | Steels | 3,802,885.87 | 133,941,619.60 |
| Shougang Environmental Industry Co., Ltd. | Production service | 1,646,709.62 | 1,915,094.29 |
| Beijing Shougang Mining Construction Co., Ltd. | Engineering service | 17,531,728.65 | 13,312,717.97 |
| Beijing Shougang Mining Construction Co., Ltd. | Production service | 458,486.00 | 1,630,972.26 |
| Beijing Shougang Industrial Group Co., Ltd. | Life service | 1,221,575.75 | 11,626,269.25 |
| Beijing Shougang Shape Metal Co., Ltd. | Raw material | 84,278.76 | 528,252.21 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Production service | 68,474,875.13 | 70,884,192.54 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Auxiliary material | 2,315,146.00 | 552,870.00 |
| Beijing Shougang Cultural Development Co., Ltd. | Production service | -- | 580,274.11 |
| Jingxi Commercial Factoring Co., Ltd | Raw material | 34,907,834.40 | -- |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Spare parts | 125,823.00 | 179,380.00 |
| Shougang Casey Steel Co., Ltd. | Production service | 43,364,760.22 | 52,927,482.03 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Life service | 42,874,283.75 | 41,904,796.94 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Spare parts | 677,418.00 | -- |
| Qiangang Hotel. | Production service | 9,778,036.37 | 9,481,071.36 |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Spare parts | 484,000.00 | 17,688.00 |
| Bohai International Conference Center Co., Ltd. | Life service | 661,300.00 | -- |
| Beijing Shougang Lanzatech Co., Ltd. | Power energy | 3,693,882.56 | 2,059,676.23 |
| Beijing Shougang Lanzatech Co., Ltd. | Engineering service | 49,809,259.88 | -- |
| Qian'an Shougang Xingkuang | Auxiliary material | 24,957,584.67 | 26,714,170.78 |
| Related party | Nature of transaction | Current period | Prior period |
| Industrial Co., Ltd. | |||
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Spare parts | 9,765,991.05 | 13,600,870.54 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 6,350,350.00 | 6,954,102.00 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 128,099,079.43 | 186,551,736.65 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Spare parts | 23,872,881.22 | 33,949,641.62 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Production service | 403,724.29 | 417,866.35 |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Engineering equipment | 675,290.00 | 781.13 |
| Beijing Shouyu Industry and Trade Co., Ltd. | Auxiliary material | 4,238,547.63 | 4,576,121.90 |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Spare parts | -- | 9,600.00 |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Production service | 99,978,846.49 | 15,505,687.69 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Production service | 251,375,939.87 | 201,482,854.02 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Production service | 1,265,257.35 | 1,695,986.90 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Raw material | 4,333,260.81 | -- |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Spare parts | 4,688,568.56 | 3,470,297.39 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Raw material | 342,039.82 | 2,995.58 |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Life service | 572,688.63 | 958,908.50 |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Production service | 28,746,408.58 | 207,398.66 |
| Cmi Engineering (Beijing) Co., Ltd. | Engineering equipment | 7,440,989.91 | 231,700.00 |
| South China International Leasing Co., Ltd | Fund usage charges | 373,598.24 | 375,329.71 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Fund usage charges | -- | 10,132,191.78 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Raw material | -- | 1,509,854.85 |
| Related party | Nature of transaction | Current period | Prior period |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Production service | 8,461,576.13 | 13,926,963.02 |
| Beijing Shougang Property Management Co., Ltd. | Production service | -- | 858,173.99 |
| Guiyang Steel Mills I/E Corp. | Production service | 2,970,042.21 | 8,416,379.32 |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Raw material | 326,252,685.09 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 2,918,833.30 | 1,018,184.09 |
| Beijing Shouyi Mining Hospital Co., Ltd. | Production service | 47,492.43 | 17,250.47 |
| Peking University Shougang Hospital | Production service | 87,000.00 | -- |
| Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | Raw material | 197,077,674.61 | 282,648,175.75 |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 1,192,452.83 | -- |
②Sale of goods and rendering of services to related parties
| Related party | Nature of transaction | Current period | Prior period |
| Shougang Mining Corporation | Steel | -- | 1,892,789.48 |
| Shougang Mining Corporation | Raw fuel material | 9,241,798.22 | 16,167,302.25 |
| Shougang Mining Corporation | Power energy | 343,444.78 | 65,118.20 |
| Shougang Mining Corporation | Production service | 8,937,128.86 | 8,550,486.22 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 115,838,012.89 | 141,819,751.69 |
| Shougang Casey Steel Co., Ltd. | Steel | 54,564,705.92 | 279,607,574.70 |
| Shougang Casey Steel Co., Ltd. | Production service | 620,236.80 | -- |
| Beijing Shougang Construction Group Co., Ltd. | Power energy | 945,464.96 | 1,987,180.90 |
| Beijing Shougang Construction Group Co., Ltd. | Steel | 1,717,553.21 | -- |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 296,607.92 | 1,693,846.18 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 65,271,726.53 | 50,568,488.85 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Steel | 344,920,644.23 | 28,771,158.06 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Power energy | 1,853,417.89 | 1,934,832.18 |
| Beijing Shougang | Production service | 795,431.19 | 1,535,761.47 |
| Related party | Nature of transaction | Current period | Prior period |
| Machinery&Electric Co., Ltd. | |||
| Beijing Shougang Ferroalloy Co., Ltd. | Power energy | 2,053,563.99 | 1,600,589.47 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw fuel material | 10,545,043.68 | 8,155,967.97 |
| Beijing Shougang Ferroalloy Co., Ltd. | Production service | 449,154.05 | 449,154.05 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 484,146,525.18 | 352,743,305.52 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 120,724,400.11 | 106,912,003.10 |
| Beijing Beiye Functional Materials Co., Ltd. | Billet | 1,714,757.18 | 6,404,612.46 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Raw fuel material | 1,356,766.61 | -- |
| Beijing Shoucheng Packaging Service Co., Ltd. | Steel | -- | 3,384,484.97 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Power energy | 140,070.48 | 192,071.90 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 957,448.40 | 938,610.78 |
| Qian'an First Real Packaging Service Co., Ltd. | Steel | 63,796,367.40 | 82,015,743.49 |
| Beijing Shouronghui Technology Development Co., Ltd. | Steel | 8,818,653.83 | 37,212,138.92 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Raw fuel material | 42,368,581.63 | 113,217,212.93 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Power energy | 66,415,506.75 | 67,283,007.37 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 13,424,107.22 | 13,336,395.41 |
| Beijing Shougang Metal Co., Ltd. | Steel | 841,013.59 | 25,015,735.61 |
| Beijing Shougang Metal Co., Ltd. | Power energy | 294,190.90 | 423,862.40 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Raw fuel material | 298,910,811.61 | 352,658,801.28 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Power energy | 268,162.33 | 265,138.97 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 238,869.63 | -- |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 256,293.58 | 221,876.15 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Steel | 1,836,050.94 | 1,252,437.21 |
| Related party | Nature of transaction | Current period | Prior period |
| Tangshan Guoxing Industrial Co., Ltd. | Power energy | 1,107,952.34 | 707,796.15 |
| Tangshan Guoxing Industrial Co., Ltd. | Raw fuel material | 677,577.93 | 243,642.67 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 855,983.08 | 1,259,047.62 |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Power energy | -- | 55,369.38 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Power energy | 374,939.81 | 370,582.77 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Power energy | 41,468.41 | -- |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 67,245.28 | 789,703.89 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 821,083.87 | 595,599.93 |
| Tonghua Iron and Steel Co., Ltd. | Production service | 50,000.00 | -- |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw fuel material | -- | 1,342,898.54 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Power energy | 2,320,570.00 | 2,419,158.00 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Interest income | 5,922,896.67 | 5,488,952.23 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Steel | 160,626,440.02 | 229,785,614.25 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Steel | 809,865,140.43 | 1,177,017,052.92 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Production service | 212.37 | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Steel | 22,516,403.45 | 26,416,151.05 |
| Qian'an Shoujia Construction Material Co., Ltd. | Power energy | 13,384,733.24 | 9,244,055.41 |
| Qian'an Shoujia Construction Material Co., Ltd. | Raw fuel material | 14,991,381.04 | 25,145,851.19 |
| Qian'an Shoujia Construction Material Co., Ltd. | Production service | 248,418.37 | 248,418.37 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Power energy | 29,150.09 | -- |
| Guizhou Bohong Industrial Co., Ltd. | Production service | 42,883.39 | 45,952.11 |
| Shougang Group Co., Ltd. | Production service | 104,880,000.00 | 138,060,000.00 |
| Beijing Shougang Landscaping Co., Ltd. | Power energy | 438.3 | 691.88 |
| Related party | Nature of transaction | Current period | Prior period |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 24,620,249.30 | 24,332,714.23 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Power energy | 14,446.67 | 19,027.65 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Steel | 23,282,150.23 | 40,593,541.40 |
| Shougang Group Finance Co., Ltd. | Interest income | 53,273,081.46 | 58,041,420.19 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Steel | 15,452,898.93 | 19,271,308.07 |
| Beijing Shougang Gas Tangshan Co., Ltd. | Production service | 282,857.16 | -- |
| Beijing Shougang Catering Co., Ltd. | Power energy | 169,813.86 | 292,663.17 |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Production service | -- | 34,181.68 |
| Guizhou Shuigang Logistics Co., Ltd. | Production service | 105,043.02 | 17,949.06 |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Production service | -- | 10,830.19 |
| Hebei Jingji Industry & Trading Co., Ltd. | Steel | 4,690,630.50 | 3,105,020.40 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Raw fuel material | 30,561,741.67 | -- |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 167,361.48 | -- |
| Shoujia Huanke (Qian'an) Co., Ltd | Raw fuel material | 17,684,714.70 | 11,675,057.67 |
| Beijing Shoujia Steel Construction Co., Ltd. | Power energy | 694,677.71 | 553,212.75 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 1,183.02 | -- |
| Beijing Shougang Lanzatech Co., Ltd. | Power energy | 67,702,085.08 | 67,033,212.67 |
| Beijing Shougang Lanzatech Co., Ltd. | Production service | 736,172.37 | |
| Tangshan Tangcao Railway Co., Ltd. | Production service | 161,886.78 | -- |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Raw fuel material | 510,865.44 | -- |
| Qinhuangdao Shounai New Material Co., Ltd | Raw fuel material | 31,225.06 | -- |
| Related party | Nature of transaction | Current period | Prior period |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Production service | 594.34 | -- |
| Beijing Shougang Chengyun Holdings Co., Ltd | Steel | 91,853,232.24 | -- |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | Steel | -- | 7,321,222.63 |
(2) Details of related party leases
① The Company as a lessor
| Lessee | Type of assets leased | Lease income recognized in current period | Lease income recognized in prior period |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Land use right | 493,140.39 | 412,268.42 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Land use right | 12,071,833.13 | 12,071,833.13 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Land use right | 1,190,380.97 | 1,190,380.97 |
| Beijing Shougang Lanzatech Co., Ltd. | Land use right | 82,666.67 | 82,666.67 |
② The Company as a lessee
| Lessor | Type of assets leased | Lease expenses recognized in current period | Lease expenses recognized in prior period |
| Beijing Shougang Construction Investment Co., Ltd. | Property | 5,028,278.14 | 5,028,278.14 |
| Shougang Group Co., Ltd. | Property | 1,753,757.51 | 1,711,281.61 |
| Beijing Shougang Special Steel Co., Ltd. | Property | -- | -- |
Interest expenses incurred on lease liabilities during the reporting period
| Lessor | Type of assets leased | Interest expenses of the current period | Interest expenses of the prior period |
| Shougang Group Co., Ltd. | Property and buildings | 726,524.57 | 751,069.25 |
| Beijing Shougang Construction Investment Co., Ltd. | Property and buildings | 631,884.02 | 832,385.74 |
(3) Details of related party guarantees
① The Company as a guarantor
| Guarantee | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 210,000,000.00 | 2021/11/25 | 2023/11/18 | Incomplete |
| Ningbo Shougang Zhejin Steel Co., Ltd. | 44,000,000.00 | 2023/2/15 | 2024/2/15 | Incomplete |
| Shanghai Shougang Steel & Iron Trading Co., Ltd. | 160,500,000.00 | 2022/12/14 | 2023/12/13 | Incomplete |
② The Company as a guarantee
| Guarantor | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang Group Co., Ltd. | 4,909,697,916.68 | 2021/8/13 | 2023/5/5 | Incomplete |
| Shougang Group Co., Ltd. | 9,110,869,444.44 | 2019/9/6 | 2031/9/3 | Incomplete |
(4) Details of related party funding
| Related party | Closing balance | Beginning date | Maturity date | Note |
| Shougang Group Co., Ltd. | 195,112,584.84 | 2020/3/25 | 2025/5/18 | Entrust loans |
| Shougang Group Finance Co., Ltd. | 11,082,283,378.61 | 2022/7/7 | 2024/6/16 | Short-term loans |
| Shougang Group Finance Co., Ltd. | 500,395,833.33 | 2022/11/4 | 2025/11/4 | Long-term loans |
| Shougang Group Finance Co., Ltd. | 3,609,600,000.00 | 2023/1/16 | 2023/12/27 | Notes payable |
| Related party | Closing balance | Beginning date | Maturity date | Note |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 300,294,216.36 | —— | —— | Other current assets |
(5) Remuneration of key management personnel
The Company has 15 key management personnel in current period, and 21 keymanagement personnel in prior period. The remuneration payment is as follows:
| Item | Current period (RMB 0,000) | Prior period (RMB 0,000) |
| Remuneration of key management personnel (excluding share payment) | 402.22 | 603.72 |
6. Receivables from and payables to related parties
(1) Receivables from related parties
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Bank deposits | Shougang Group Finance Co., Ltd. | 7,368,480,229.24 | -- | 8,782,663,274.02 | -- |
| Bank deposits | Hua Xia Bank Co.,Ltd. | 2,693,537.75 | -- | 6,713,364.79 | -- |
| Accounts receivable | Shougang Group Co., Ltd. | -- | -- | 57,479.37 | 2,047.03 |
| Accounts receivable | Shougang Casey Steel Co., Ltd. | 105,527,619.05 | 3,756,783.24 | 290,361,751.31 | 10,336,878.35 |
| Accounts receivable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 1,748,412.19 | 487,967.05 | 1,748,412.19 | 487,967.75 |
| Accounts receivable | Beijing Shougang Lanzatech Co., Ltd. | -- | -- | 34,418,648.92 | 1,225,303.90 |
| Accounts receivable | Qian'an Shoujia Construction Material Co., Ltd. | 53,221,363.06 | 1,974,825.21 | 56,221,363.06 | 2,002,230.58 |
| Accounts receivable | Sanhe Shoujia Construction Material Co., Ltd. | -- | -- | 8,775,968.24 | 8,214,183.99 |
| Accounts receivable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 1,438,064.93 | 1,070,495.53 | 1,438,064.93 | 1,070,495.53 |
| Accounts receivable | Tonghua Iron and Steel Co., Ltd. | 400,000.00 | 14,245.34 | 506,248.00 | 17,810.17 |
| Accounts receivable | Beijing Shougang International Engineering&Technology Co., Ltd. | 354,540.00 | 223,634.15 | 428,540.00 | 297,559.83 |
| Accounts receivable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 8,201,983.52 | 291,990.61 | 6,617,509.64 | 235,583.34 |
| Accounts receivable | Beijing Shougang Mining Construction Co., Ltd. | -- | -- | 9,958.00 | 349.19 |
| Accounts receivable | Tangshan Shougang Jingtang Xishan Coking | -- | -- | 734.5 | 218.7 |
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Co., Ltd. | |||||
| Accounts receivable | Beijing Shougang Machinery&Electric Co., Ltd. | 100,000.00 | 14,676.06 | 100,000.00 | 3,561.33 |
| Accounts receivable | Beijing Shouke Xingye Engineering Technology Co., Ltd. | 400,000.00 | 119,101.26 | 400,000.00 | 112,210.59 |
| Accounts receivable | Tangshan Tangcao Railway Co., Ltd. | 3,694,628.46 | 131,528.77 | 3,523,028.46 | 125,419.81 |
| Accounts receivable | Beijing Shougang Construction Group Co., Ltd. | -- | -- | 37,260.00 | 1,306.55 |
| Accounts receivable | Beijing Shougang Automation Information Technology Co., Ltd. | 471,150.00 | 140,286.39 | 771,150.00 | 27,041.00 |
| Accounts receivable | Jingtang Port Shougang Terminal Co., Ltd. | 177,403.20 | 6,315.55 | -- | -- |
| Accounts receivable | Guangzhou Jinghai Shipping Co., Ltd. | 13,106,921.61 | -- | -- | -- |
| Accounts receivable | Beijing Shoucheng Packaging Service Co., Ltd. | 336,403.98 | 11,980.47 | -- | -- |
| Accounts receivable | Beijing Shougang Shape Metal Co., Ltd. | 52,282.54 | 1,861.96 | -- | -- |
| Prepayments | Tonghua Iron and Steel Co., Ltd. | 15,957,236.47 | -- | 20,254,497.50 | -- |
| Prepayments | Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 250,891,785.89 | -- | 87,043,657.93 | -- |
| Prepayments | Tangshan Caofeidian Industry Port Co., Ltd. | -- | -- | 1,760,930.71 | -- |
| Prepayments | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 1,393,617.12 | -- | 4,996,705.97 | -- |
| Prepayments | Shougang Group Co., Ltd. | 910,421,696.63 | -- | 74,027,519.11 | -- |
| Prepayments | Cmi Engineering (Beijing) Co., Ltd. | -- | -- | 50,850.00 | -- |
| Prepayments | China Shougang International Trade&Engineering Corporation | 7,247,815.06 | -- | 7,633,348.80 | -- |
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Prepayments | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | -- | -- | 4,171,441.39 | -- |
| Prepayments | Shougang Changzhi Steel&Iron Co., Ltd. | 7,609.04 | -- | 7,609.04 | -- |
| Dividend receivable | Guangzhou Jinghai Shipping Co., Ltd. | 200,000.00 | -- | 200,000.00 | -- |
| Other current assets | Tangshan Zhonghong Carbon Chemical Co., Ltd. | 300,294,216.36 | 118,133,658.14 | 285,013,761.81 | 118,133,658.14 |
(2) Payables to related parties
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 |
| Accounts payable | Shougang Group Co., Ltd. | 611,122,119.38 | 655,732,407.11 |
| Accounts payable | Shougang Mining Corporation | 4,282,630,457.79 | 4,125,595,337.09 |
| Accounts payable | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 285,839,236.62 | 470,845,391.07 |
| Accounts payable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 2,283,598,733.85 | 1,859,004,046.73 |
| Accounts payable | Beijing Shoucheng Packaging Service Co., Ltd. | -- | 13,350,654.51 |
| Accounts payable | Beijing Shougang Automation Information Technology Co., Ltd. | 192,778,148.92 | 182,889,510.51 |
| Accounts payable | Beijing Shougang Construction Group Co., Ltd. | 537,392,157.34 | 618,622,996.56 |
| Accounts payable | Beijing Shoujian Equipment Maintenance Co., Ltd. | 30,131,534.47 | 25,594,363.58 |
| Accounts payable | Beijing Shougang Landscaping Co., Ltd. | 19,979,233.57 | 23,883,634.56 |
| Accounts payable | Beijing Shougang Catering Co., Ltd. | 1,294,140.81 | 1,327,588.66 |
| Accounts payable | Beijing Huaxia Technology Co., Ltd. | 7,003,905.42 | 5,762,815.76 |
| Accounts payable | Qinhuangdao Shougang Machinery Co., Ltd. | 65,898,841.91 | 64,415,151.43 |
| Accounts payable | Beijing Shougang Machinery&Electric Co., Ltd. | 126,109,195.02 | 162,405,176.47 |
| Accounts payable | Beijing Shouye Instruments&Meters Co., Ltd. | 14,969,828.46 | 13,442,009.63 |
| Accounts payable | Tianjin Shougang Electric Equipment Co., Ltd. | 7,887,602.99 | 9,099,757.38 |
| Accounts payable | Beijing Shougang Gas Co., Ltd. | 71,826,275.30 | 66,619,195.56 |
| Accounts payable | Beijing Shougang International Engineering&Technology Co., Ltd. | 254,019,444.70 | 310,818,935.04 |
| Accounts payable | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 15,403,891.85 | 15,100,355.24 |
| Accounts payable | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 207,702,766.72 | 158,972,406.25 |
| Accounts payable | Qian'an Shougang Equipment Structure Co., Ltd. | 75,939,831.02 | 85,360,764.98 |
| Accounts payable | Yantai Shougang Mining 3D Co., Ltd. | 93,301.72 | 313,811.63 |
| Accounts payable | Beijing Shoujian Hengji Construction Engineering Co., Ltd. | 1,445,062.82 | 1,602,115.93 |
| Accounts payable | Beijing Soly Technology Co., Ltd. | 228,488.43 | 210,904.43 |
| Accounts payable | Qian'an Shouxin Automation Information Technology Co., Ltd. | 24,251,856.38 | 25,515,132.74 |
| Accounts payable | Qian'an First Real Packaging Service Co., Ltd. | 143,013,704.30 | 96,388,811.17 |
| Accounts payable | Beijing Shoujia Steel Construction Co., Ltd. | 10,674,760.30 | 14,995,775.16 |
| Accounts payable | Beijing Shougang Ferroalloy Co., Ltd. | 131,980,532.62 | 73,607,022.86 |
| Accounts payable | Beijing Shougang Materials Trading Co., Ltd. | 3,012,881,194.41 | 426,891,995.64 |
| Accounts payable | Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | 57,690,426.64 |
| Accounts payable | Shougang Environmental Industry Co., Ltd. | 277,500.00 | 334,080.00 |
| Accounts payable | China Shougang International Trade&Engineering Corporation | 730,653,175.29 | 663,787,332.95 |
| Accounts payable | Beijing Chengxin Engineering Supervision Co., Ltd. | 7,957,308.86 | 6,127,851.86 |
| Accounts payable | Qinhuangdao Shounai New Material Co., Ltd | 23,069,319.66 | 61,808,291.36 |
| Accounts payable | Tangshan Guoxing Industrial Co., Ltd. | 50,405,198.32 | 40,465,093.70 |
| Accounts payable | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 136,332,682.88 | 138,903,339.92 |
| Accounts payable | Beijing Shougang Futong Elevator Co., Ltd. | 225,346.75 | 310,319.85 |
| Accounts payable | Beijing Teyu Plate Co., Ltd. | -- | 85,095,430.63 |
| Accounts payable | Jingxi Shoutang Supply Chain Management Co., Ltd | 926,863.54 | 9,289,106.10 |
| Accounts payable | Beijing Shougang Mining Construction Co., Ltd. | 6,975,969.73 | 3,354,289.89 |
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 |
| Accounts payable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 15,938,323.06 | 19,824,419.55 |
| Accounts payable | Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | 75,377.84 | 466,070.62 |
| Accounts payable | Beijing Shoushe Metallurgical Technology Co., Ltd. | -- | 14,002.60 |
| Accounts payable | Beijing Shougang Industrial Group Co., Ltd. | 15,325,916.09 | 24,377,193.66 |
| Accounts payable | Bejing Shougang International Travel Co., Ltd. | 8,688.00 | 8,688.00 |
| Accounts payable | Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | 1,646,329.23 | 3,664,099.23 |
| Accounts payable | Qiangang Hotel. | 6,739,595.28 | 8,662,628.97 |
| Accounts payable | Beijing Dingshengcheng Packaging Materials Co., Ltd. | 27,565,618.72 | 17,452,797.76 |
| Accounts payable | Beijing Shougang Special Steel Co., Ltd. | 94,949,940.33 | 94,949,940.33 |
| Accounts payable | Hebei Shougang Jingtang Machinery Co., Ltd. | 23,842,283.43 | 18,999,797.17 |
| Accounts payable | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | 7,326,808.55 | 7,330,595.55 |
| Accounts payable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 6,533,423.23 | 4,945,999.84 |
| Accounts payable | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 18,867,228.07 | 25,442,826.43 |
| Accounts payable | Beijing Shouyi Mining Hospital Co., Ltd. | -- | 1,958,389.00 |
| Accounts payable | Beijing Shouyu Industry and Trade Co., Ltd. | 5,734,439.62 | 7,177,859.06 |
| Accounts payable | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 15,696,768.02 | 14,973,290.67 |
| Accounts payable | YASKAWA Shougang Robert Co., Ltd. | -- | 235,384.79 |
| Accounts payable | Beijing Shoubang New Material Co., Ltd. | 1,925,907.54 | 2,927,759.28 |
| Accounts payable | Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | 646,001.04 | 1,845,155.82 |
| Accounts payable | Chaoyang Shougang Beifang Machinery Co., Ltd. | 893,561.07 | 931,110.35 |
| Accounts payable | Chengde Xintong Shoucheng Mining Co., Ltd. | -- | 851,714.56 |
| Accounts payable | Guangzhou Jinghai Shipping Co., Ltd. | 100,170,229.65 | 102,688,729.55 |
| Accounts payable | Tangshan Caofeidian Industry Port Co., Ltd. | 45,265,404.27 | 55,335,586.91 |
| Accounts payable | Shougang Guiyang Special Steel Co., Ltd. | 6,975,000.00 | 6,975,000.00 |
| Accounts payable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 930,220.49 | 149,948.85 |
| Accounts payable | Cmi Engineering (Beijing) Co., Ltd. | 1,356,712.00 | 552,200.00 |
| Accounts payable | Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | 200,408.00 | 200,408.00 |
| Accounts payable | Shougang (Qingdao) Steel Industry Co., Ltd. | 966,223.85 | 1,545,599.81 |
| Accounts payable | Qinhuangdao Shougang Racing Valley Co., Ltd | -- | 95,860.00 |
| Accounts payable | Beijing Shougang Park Comprehensive Service Co., Ltd. | 14,068.00 | 2,300.00 |
| Accounts payable | Beijing Shougang Environmental Engineering Technology Co., Ltd. | 1,109,886.20 | 1,109,886.20 |
| Accounts payable | Guiyang Steel Mills I/E Corp. | 2,805,808.03 | 4,161,841.55 |
| Accounts payable | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 4,982,477.71 | 5,274,968.79 |
| Accounts payable | Shougang Commercial Factoring Co., Ltd. | 19,360,574.68 | 17,148,576.40 |
| Accounts payable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 531,903.57 | 1,888,425.49 |
| Accounts payable | Tangshan Shougang Malanzhuang Iron Ore Co., Ltd. | 159,498,210.56 | 132,159,697.12 |
| Accounts payable | Beijing Shoutaizhongxin Science & Technology Co., Ltd | 4,857,604.28 | 6,185,421.93 |
| Accounts payable | Peking University Shougang Hospital | 21,892.66 | 3,088,704.96 |
| Accounts payable | Beijing Shougang Lanzatech Co., Ltd. | 13,705,740.13 | -- |
| Contract liabilities | Beijing Shoucheng Packaging Service Co., Ltd. | -- | 53,217.02 |
| Contract liabilities | Beijing Shougang Huaxia Engineering&Technology | 1,630,143.70 | 1,494,914.05 |
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 |
| Co., Ltd. | |||
| Contract liabilities | Beijing Beiye Functional Materials Co., Ltd. | 62,368.53 | 34,194.22 |
| Contract liabilities | Beijing Shougang Gitane New Materials Co., Ltd. | 45,093.66 | 45,093.66 |
| Contract liabilities | Beijing Shouronghui Technology Development Co., Ltd. | 1,752,834.01 | 6,564,678.23 |
| Contract liabilities | Beijing Shougang Machinery&Electric Co., Ltd. | 13,718,819.97 | 9,143,010.03 |
| Contract liabilities | Beijing Shougang Construction Group Co., Ltd. | 157,354.04 | 385,946.71 |
| Contract liabilities | Qinhuangdao Shougang Machinery Co., Ltd. | 787,562.83 | 1,031,671.69 |
| Contract liabilities | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Tangshan Guoxing Industrial Co., Ltd. | 436,549.63 | -- |
| Contract liabilities | Beijing Shougang Automation Information Technology Co., Ltd. | 3,504.15 | -- |
| Contract liabilities | Qian'an First Real Packaging Service Co., Ltd. | 2,958,850.05 | 2,164,319.43 |
| Contract liabilities | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 534,811.19 | 1,901,697.48 |
| Contract liabilities | Beijing Shougang Industrial Group Co., Ltd. | 23,723.72 | -- |
| Contract liabilities | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 214,144.17 | 341,185.21 |
| Contract liabilities | Qian'an Shougang Equipment Structure Co., Ltd. | 544,816.53 | 14,753.10 |
| Contract liabilities | Qinhuangdao Shougang Plate Mill Co., Ltd. | 13,028.81 | 13,028.81 |
| Contract liabilities | Qinhuangdao Shounai New Material Co., Ltd | 1,333,453.31 | 182,697.15 |
| Contract liabilities | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 1,378,893.98 | 1,378,893.98 |
| Contract liabilities | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shougang Materials Trading Co., Ltd. | 188,861.00 | 188,861.00 |
| Contract liabilities | Guizhou Bohong Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liabilities | Beijing Shougang Mining Construction Co., Ltd. | 52,088.04 | 52,088.04 |
| Contract liabilities | Tianjin Shougang Electric Equipment Co., Ltd. | 169.19 | 169.19 |
| Contract liabilities | Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | 805.61 | 805.61 |
| Contract liabilities | Dachang Shougang Machinery&Electric Co., Ltd. | 52,503.67 | 2,503.67 |
| Contract liabilities | Ningbo Shougang Zhejin Steel Co., Ltd. | 25,230,297.22 | 18,320,032.79 |
| Contract liabilities | Guangzhou Jinghai Shipping Co., Ltd. | -- | 810,846.20 |
| Contract liabilities | Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | 2,046.68 | 2,046.68 |
| Contract liabilities | Beijing Shougang Shape Metal Co., Ltd. | -- | 995,551.60 |
| Contract liabilities | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 3,912,228.96 | 7,184,262.58 |
| Contract liabilities | Shougang Casey Steel Co., Ltd. | 600,163.89 | 51,682.17 |
| Contract liabilities | Shougang (Qingdao) Steel Industry Co., Ltd. | 176,799,641.10 | 154,086,174.29 |
| Contract liabilities | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 6,997,214.33 | -- |
| Contract liabilities | Chaoyang Shougang Beifang Machinery Co., Ltd. | 114.02 | 114.02 |
| Contract liabilities | Beijing Shouyu Industry and Trade Co., Ltd. | 58,437.91 | 58,437.91 |
| Contract liabilities | Hebei Jingji Industry & Trading Co., Ltd. | 187,059.69 | 487,472.16 |
| Contract liabilities | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 52,466.00 | 50,000.00 |
| Contract liabilities | Beijing Shoujian Equipment Maintenance Co., Ltd. | 52,484.00 | 50,000.00 |
| Contract liabilities | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 150,984.95 | 111,022.04 |
| Contract liabilities | Shoujia Huanke (Qian'an) Co., Ltd | 200,000.00 | 200,000.00 |
| Item | Related party | As at 30 June 2023 | As at 31 December 2022 |
| Contract liabilities | Beijing Shoujia Steel Construction Co., Ltd. | 95,027.11 | 198,653.22 |
| Contract liabilities | Beijing Huaxia Technology Co., Ltd. | 50,848.96 | 50,000.00 |
| Contract liabilities | Beijing Jingxi Supply Chain Management Co., Ltd. | -- | 747,440.91 |
| Contract liabilities | Beijing Dingshengcheng Packaging Materials Co., Ltd. | 35,700.00 | -- |
| Contract liabilities | Beijing Shougang Lanzatech Co., Ltd. | 82,666.66 | -- |
| Contract liabilities | Beijing Shougang Gas Tangshan Co., Ltd. | 282,857.13 | -- |
| Contract liabilities | Beijing Shougang Chengyun Holdings Co., Ltd | 70,060.17 | -- |
| Other payables | Shougang Group Co., Ltd. | 56,575,231.05 | 56,575,231.05 |
| Other payables | Shougang Mining Corporation | 12,202,944.99 | 796,194,091.55 |
| Other payables | Beijing Shougang Construction Group Co., Ltd. | 3,450,000.00 | 3,450,000.00 |
| Other payables | Beijing Shougang Industrial Group Co., Ltd. | 3,865,587.23 | 3,865,587.23 |
| Other payables | Tangshan Guoxing Industrial Co., Ltd. | 4,450,973.55 | 4,450,973.55 |
| Other payables | Guangzhou Jinghai Shipping Co., Ltd. | 57,800.00 | -- |
| Other payables | Beijing Shougang Gas Co., Ltd. | 1,123,099.67 | 1,123,099.67 |
| Other payables | Hebei Shougang Jingtang Machinery Co., Ltd. | 2,776,577.52 | 2,776,577.52 |
| Other payables | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 341,400,000.00 | 341,400,000.00 |
| Other payables | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 2,910,814.91 | 2,910,814.91 |
| Other non-current liabilities | Shougang Group Co., Ltd. | 4,164,819,920.40 | 4,532,018,467.20 |
XI. Share-based payment
1. General information of share-based payment
| Total equity instruments of the Company granted during the period | None |
| Total exercised equity instruments of the Company during the period | |
| Total invalid equity instruments of the Company during the period | |
| Range of exercise prices and contractual remaining period for share options issued by the Company at the end of the period | |
| Range of exercise prices and remaining contractual maturity of other equity instruments issued by the Company at the end of the period |
2. Equity-settled share-based payment
| The method of determining the fair value of equity instrument on the grant date | The price of restricted stock shall be determined at the closing price on the grant date |
| Basis for determining the quantity of exercisable equity instruments | The actual unlocked quantity is determined according to the performance assessment |
| Reasons for significant difference between the current estimate and previous estimate | None |
| Accumulated amount of equity settled share-based payments recognized in capital reserve | 61,651,886.90 |
| The total amount of expenses recognized for equity settled share-based payments in this period | 23,286,765.84 |
Note: On 29 November 2021, approved by Beijing State Owned Assets Supervision andAdministration Commission, confirmed with no objection and recorded by China SecuritiesRegulatory Commission, Proposal on Beijing Shougang Co., Ltd.2021 Restricted Stock Incentive
Plan (Draft Amendment)and its Summary, Proposal of Beijing Shougang Co., Ltd.2021 RestrictedStock Incentive Plan Implementation Assessment Management Method (Revised), BeijingShougang Co., Ltd. 's Proposal on requesting the General Meeting of Shareholders to authorize theBoard of Directors to handle matters related to 2021 Restricted stock Incentive Plan wereconsidered and approved at the seventh meeting of the eleventh Board of Directors and the firstextraordinary General Meeting of the year 2021 of the Company. The grant date was 9 December2021 and a total of 64,901,800.00 restricted stock shares were granted to 386 incentive objects. Thegrant price of the restricted stock is RMB3.25 per share. After the completion of subscription of thisincentive plan, as a result of additional issuance of new shares, the Company's share capital (NoteⅤ,34) and capital reserve (Note Ⅴ,35) increased by RMB 64,901,800.00 and RMB 146,029,050.00respectively, and treasury shares increased by RMB 210,930,850.00. At the same time, equityincentive repurchase obligations are recognized in RMB 210,930,850.00 in other payables (Note Ⅴ,
24). The restriction period of restricted shares granted by the incentive plan shall be 24 months, 36months and 48 months respectively from the registration date of the corresponding partial equitygrant. The restricted shares granted under this incentive Plan shall not be transferred, used forsecurity or debt repayment during the restricted sale period.The Company has provided lock-up periods and unlock-up conditions for the stock granted to theincentive subjects by way of non-public offering, and the Company has fully recognized otherpayables - restricted stock repurchase obligations and treasury share in respect of the repurchaseobligations based on the subscription amounts received. If the unlocking conditions specified in thefinal Equity Incentive Plan are not met, the Company will repurchase the shares at the grant priceand write down the outstanding shares. The portion of restricted stock that meets the unlockingconditions is offset from the treasury share.The cost and expense recognized during the waiting period of this period is RMB 23,286,765.84,and the consolidated capital reserve is increased by RMB 19,606,533.40 according to theshareholding ratio of the subsidiaries.XII. Commitments and contingencies
1. Material commitments
As at 30 June 2023, the Company has no commitments that should be disclosed.
2. Contingencies
As at 30 June 2023, the Company has no pending litigation, external guarantees or othercontingencies that should be disclosed.XIII. Events after balance sheet dateAs at 30 June 2023, the Company has no undisclosed event that should be disclosed after thebalance sheet date.XIV. Other significant events
1. Segment information
According to internal organizational structure, management requirement and requirement of internalreporting system, the Company divides businesses into iron and steel segment. The segmentinformation is determined based on the financial information required by routine internalmanagement of the Company. The management periodically evaluates the operating results of the
segment to determine its allocation of resources and evaluate the performance of the segment.The segment information of the Company includes: iron and steel segment.The segment information is disclosed in accordance with the accounting policies and measurementbasis used in the reports of the management, which are in line with those adopted in financialstatements.
(1) Segment profit or loss, assets and liabilities
| Current period or end of current period | Iron and steel Segment | Offset | Total |
| Operating revenue | 57,368,096,029.37 | -- | 57,368,096,029.37 |
| Including: External revenue | 57,368,096,029.37 | -- | 57,368,096,029.37 |
| Inter-segment revenue | -- | -- | -- |
| Including: Main operating revenue | 55,599,122,827.83 | -- | 55,599,122,827.83 |
| Cost of sales | 54,320,153,167.23 | -- | 54,320,153,167.23 |
| Including: Main operating cost of sales | 52,725,471,888.88 | -- | 52,725,471,888.88 |
| Operating expenses | 1,268,214,896.36 | -- | 1,268,214,896.36 |
| Operating profit/(loss) | 567,287,669.42 | -- | 567,287,669.42 |
| Total assets | 141,596,926,689.81 | -- | 141,596,926,689.81 |
| Total liabilities | 88,815,227,194.05 | -- | 88,815,227,194.05 |
| Supplementary information: | |||
| 1.Capital expenditure | 702,577,750.33 | -- | 702,577,750.33 |
| 2.Depreciation and amortisation | 3,943,237,411.39 | -- | 3,943,237,411.39 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4. 4.Assets impairment losses | 322,757,792.70 | -- | 322,757,792.70 |
| Prior period or end of prior period | Iron and steel Segment | Offset | Total |
| Operating revenue | 63,194,115,447.56 | -- | 63,194,115,447.56 |
| Including: External revenue | 63,194,115,447.56 | -- | 63,194,115,447.56 |
| Inter-segment revenue | -- | -- | -- |
| Including: Main operating revenue | 61,279,976,461.63 | -- | 61,279,976,461.63 |
| Cost of sales | 58,297,262,097.99 | -- | 58,297,262,097.99 |
| Including: Main operating cost of sales | 56,684,778,266.42 | -- | 56,684,778,266.42 |
| Operating expenses | 1,484,982,722.35 | -- | 1,484,982,722.35 |
| Operating profit/(loss) | 2,420,035,568.50 | -- | 2,420,035,568.50 |
| Total assets | 143,173,445,003.35 | -- | 143,173,445,003.35 |
| Total liabilities | 93,101,365,568.38 | -- | 93,101,365,568.38 |
| Prior period or end of prior period | Iron and steel Segment | Offset | Total |
| Supplementary information: | |||
| 1.Capital expenditure | 1,280,730,705.51 | -- | 1,280,730,705.51 |
| 2.Depreciation and amortisation | 3,880,281,784.23 | -- | 3,880,281,784.23 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4.Assets impairment losses | 97,657,975.55 | -- | 97,657,975.55 |
(2) Other segment information
① External revenue of goods and services
| Item | Current period | Prior period |
| Iron and steel | 57,368,096,029.37 | 63,194,115,447.56 |
② Geographical information
No more details of geographical information should be disclosed as the production and sales of theCompany are all located in mainland China.
2. Lease
The Company as lesseeAdditional information on rental fees
①The Company simplifies the treatment of short-term leases and low-value leases, andunrecognized right-of-use assets and lease liabilities. The information of short-term leases,low-value leases and variable lease payments measured outside lease liabilities included in thecurrent profit and loss are as follows:
| Item | Current period |
| Short-term leases | 1,215,937.69 |
| Low-value leases | -- |
| Variable lease payments measured outside lease liabilities | -- |
The Company as lessorFormation of operating lease:
② lease revenue, and separately disclose income related to variable lease payments not included inlease receipts;
| Item | Current period |
| Lease revenue | 16,974,910.21 |
| Income related to variable lease payments not included in lease receipts | -- |
③ The amount of undiscounted lease receipts that will be received in each of the five consecutive
fiscal years after the balance sheet date and the total amount of undiscounted lease receipts that willbe received in the remaining fiscal years.
| Item | Closing balance |
| Within 1 year | 20,333,329.94 |
| 1 – 2 years | 5,205,802.28 |
| 2 – 3 years | 4,271,706.28 |
| Over 3 years | -- |
| Total | 29,810,838.50 |
XV. Notes to the financial statements of parent company
1. Notes receivable
| Item | 2023.06.30 | ||
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 858,483,273.79 | 858,483.27 | 857,624,790.52 |
| Total | 858,483,273.79 | 858,483.27 | 857,624,790.52 |
| Item | 2022.12.31 | ||
| Book balance | Bad debt provision | Net carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
| Total | 899,539,689.52 | 899,539.69 | 898,640,149.83 |
(1) The pledged notes receivable of the Company at the end of the year
| Item | Amount pledged as of 30 June 2023 |
| Commercial acceptances | 6,521,200.88 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of June 30, 2023 | Amount not-derecognized as of June 30, 2023 |
| Bank acceptances | -- | -- |
| Commercial acceptances | -- | 808,358,430.36 |
| Total | -- | 808,358,430.36 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of theyear
| Item | Amount transferred to accounts receivable as of June 30, 2023 |
| Item | Amount transferred to accounts receivable as of June 30, 2023 |
| Commercial acceptance notes | 2,000,000.00 |
(4) Classified by bad debt provision method
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 858,483,273.79 | 100.00 | 858,483.27 | 0.10 | 857,624,790.52 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 858,483,273.79 | 100.00 | 858,483.27 | 0.10 | 857,624,790.52 |
| Total | 858,483,273.79 | 100.00 | 858,483.27 | 0.10 | 857,624,790.52 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Group 1 | -- | -- | -- | -- | -- |
| Group 2 | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
| Total | 899,539,689.52 | 100.00 | 899,539.69 | 0.10 | 898,640,149.83 |
(5) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 899,539.69 |
| Provision | -41,056.42 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2022 | 858,483.27 |
(6) The Company has no notes receivable actually written off in reporting period.
2. Accounts receivable
(1) Disclosed by ageing of account receivables
| Ageing | 2023.06.30 | 2022.12.31 |
| Within 1 year | 1,708,247,806.47 | 1,398,579,212.14 |
| 1 – 2 years | -- | -- |
| 2 – 3 years | -- | 2,197,756.62 |
| Over 3 years | 2,000,000.00 | 8,578,211.62 |
| Subtotal | 1,710,247,806.47 | 1,409,355,180.38 |
| Less: provision for bad debts | 4,416,655.51 | 12,694,254.85 |
| Total | 1,705,831,150.96 | 1,396,660,925.53 |
(2) Disclosed by bad debt provision
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 2,000,000.00 | 0.11 | 2,000,000.00 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,708,247,806.47 | 99.89 | 2,416,655.51 | 0.14 | 1,705,831,150.96 |
| Portfolio of aging analysis | 65,627,677.14 | 3.84 | 2,416,655.51 | 3.68 | 63,211,021.63 |
| Portfolio of consolidation scope | 1,642,620,129.33 | 96.05 | -- | -- | 1,642,620,129.33 |
| Total | 1,710,247,806.47 | 100.00 | 4,416,655.51 | 0.26 | 1,705,831,150.96 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | 8,578,211.62 | 0.61 | 8,578,211.62 | 100.00 | -- |
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,400,776,968.76 | 99.39 | 4,116,043.23 | 0.29 | 1,396,660,925.53 |
| Portfolio of aging analysis | 71,836,571.46 | 5.10 | 4,116,043.23 | 5.73 | 67,720,528.23 |
| Portfolio of consolidation scope | 1,328,940,397.30 | 94.29 | -- | -- | 1,328,940,397.30 |
| Total | 1,409,355,180.38 | 100.00 | 12,694,254.85 | 0.90 | 1,396,660,925.53 |
Assessed bad debt provision individually：
| Accounts receivable (by debtor) | 2023.06.30 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | -- | -- | -- | -- |
| Recourse for overdue bills | 2,000,000.00 | 2,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 2,000,000.00 | 2,000,000.00 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2022.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 6,578,211.62 | 6,578,211.62 | 100.00 | Long aging |
| Recourse for overdue bills | 2,000,000.00 | 2,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 8,578,211.62 | 8,578,211.62 | 100.00 | |
Assessed bad debt provision in portfolios：
| Item | 2023.06.30 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,708,247,806.47 | 2,416,655.51 | 0.14 |
| 1 – 2 years | -- | -- | -- |
| 2 – 3 years | -- | -- | -- |
| Over 3 years | -- | -- | -- |
| Total | 1,708,247,806.47 | 2,416,655.51 | 0.14 |
Continued:
| Item | 2022.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,398,579,212.14 | 2,480,070.86 | 0.18 |
| 1 – 2 years | -- | -- | -- |
| 2 – 3 years | 2,197,756.62 | 1,635,972.37 | 74.44 |
| Over 3 years | -- | -- | -- |
| Total | 1,400,776,968.76 | 4,116,043.23 | 0.29 |
(3) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Item | Bad debt provision |
| Opening balance | 12,694,254.85 |
| Provision | -- |
| Recovery or reversal | 8,277,599.34 |
| Written-off | -- |
| As at 31 December 2022 | 4,416,655.51 |
(4) The Company has no accounts receivable write-off during the reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 1,700,813,464.53, accounting for 99.45% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 2,225,140.23.
| Company Name | Closing balance of accounts receivable | Percentage % | Closing balance of provision |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,605,328,052.61 | 93.87 | -- |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 35,235,362.16 | 2.06 | -- |
| Qian'an Shoujia Construction Material Co., Ltd. | 53,221,363.06 | 3.11 | 1,974,825.22 |
| Nantong Zhongji Energy Equipment Co., Ltd.. | 3,073,439.61 | 0.18 | 109,455.45 |
| Zhangjiagang CIMC Sanctum Cryogenic Equipment Co.,Ltd. | 3,955,247.09 | 0.23 | 140,859.56 |
| Total | 1,700,813,464.53 | 99.45 | 2,225,140.23 |
3. Financing receivables
| Item | 2023.06.30 | 2022.12.31 |
| Notes receivable | 1,815,794,055.75 | 835,526,685.55 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 1,815,794,055.75 | 835,526,685.55 |
(1) Classified by bad debt provision method
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | |||||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 1,816,157,287.21 | 100.00 | 363,231.46 | 0.02 | 1,815,794,055.75 |
| Category | 2023.06.30 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Portfolio 1 | 1,816,157,287.21 | 100.00 | 363,231.46 | 0.02 | 1,815,794,055.75 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 1,816,157,287.21 | 100.00 | 363,231.46 | 0.02 | 1,815,794,055.75 |
Continued:
| Category | 2022.12.31 | ||||
| Book balance | Bad debt provision | Net carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Assessed bad debt provision individually | |||||
| Assessed bad debt provision in portfolios based on credit risk characteristics | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 1 | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 835,693,824.31 | 100.00 | 167,138.76 | 0.02 | 835,526,685.55 |
(2) Provision, recovery or reversal of bad debt
| Item | Bad debt provision |
| Opening balance | 167,138.76 |
| Provision | 196,092.70 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2022 | 363,231.46 |
(3) The company has no pledged notes receivable at the end of the year
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized as of June 30, 2023 | Amount not-derecognized as of June 30, 2023 |
| Bank acceptance notes | 5,116,865,601.81 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 5,116,865,601.81 | -- |
4. Other receivables
| Item | 2023.06.30 | 2022.12.31 |
| Dividends receivable | -- | 9,713,244.06 |
| Other receivables | 1,174,163,351.39 | 1,154,281,751.62 |
| Total | 1,174,163,351.39 | 1,163,994,995.68 |
(1) Dividends receivable
| Item | 2023.06.30 | 2022.12.31 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | -- | 9,713,244.06 |
| Less: Bad debt provision | -- | -- |
| Total | -- | 9,713,244.06 |
(2) Other receivables
① Disclosed by the ageing of other receivables
| Ageing | 2023.06.30 | 2022.12.31 |
| Within 1 year | 1,174,201,613.03 | 1,154,320,981.69 |
| 1 – 2 years | -- | -- |
| 2 – 3 years | -- | -- |
| Over 3 years | -- | -- |
| Subtotal | 1,174,201,613.03 | 1,154,320,981.69 |
| Less: provision for bad debts | 38,261.64 | 39,230.07 |
| Total | 1,174,163,351.39 | 1,154,281,751.62 |
② Disclosed by nature of other receivables
| Item | 2023.06.30 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 251,232.86 | 12,561.64 | 238,671.22 |
| Deposits | 500,000.00 | 25,000.00 | 475,000.00 |
| Due from other companies | 14,000.00 | 700.00 | 13,300.00 |
| Due from intra-companies | 1,173,436,380.17 | -- | 1,173,436,380.17 |
| Total | 1,174,201,613.03 | 38,261.64 | 1,174,163,351.39 |
Continued:
| Item | 2022.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 282,590.68 | 14,129.53 | 268,461.15 |
| Item | 2022.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Deposits | 500,000.00 | 25,000.00 | 475,000.00 |
| Due from other companies | 2,010.86 | 100.54 | 1,910.32 |
| Due from intra-companies | 1,153,536,380.15 | -- | 1,153,536,380.15 |
| Total | 1,154,320,981.69 | 39,230.07 | 1,154,281,751.62 |
③ Provision for bad debts
As at year-end, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 1,174,201,613.03 | -- | 38,261.64 | 1,174,163,351.39 | |
| Petty cash and deposits | 751,232.86 | 5.00 | 37,561.64 | 713,671.22 | |
| Due from other companies | 14,000.00 | 5.00 | 700.00 | 13,300.00 | |
| Due from intra-companies | 1,173,436,380.17 | -- | -- | -- | |
| Total | 1,174,201,613.03 | -- | 38,261.64 | 1,174,163,351.39 |
As at year-end, the Company has no other receivables in Phase II.As at year-end, the Company has no other receivables in Phase III.As at 31 December 2022, bad debts provision for Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Assessed bad debt provision individually | -- | -- | -- | -- | |
| Assessed bad debt provision in portfolios | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 | |
| Petty cash and deposits | 782,590.68 | 5.00 | 39,129.53 | 743,461.15 | |
| Due from other companies | 2,010.86 | 5.00 | 100.54 | 1,910.32 | |
| Due from intra-companies | 1,153,536,380.15 | -- | -- | 1,153,536,380.15 | |
| Total | 1,154,320,981.69 | -- | 39,230.07 | 1,154,281,751.62 |
As at 31 December 2022, the Company has no other receivables in Phase II.As at 31 December 2022, the Company has no other receivables in Phase III.
④ Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| Opening balance | 39,230.07 | -- | -- | 39,230.07 |
| Changes during the year: | ||||
| -- Shift to Phase II | -- | -- | -- | -- |
| -- Shift to Phase III | -- | -- | -- | -- |
| -- Back to Phase II | -- | -- | -- | -- |
| -- Back to Phase I | -- | -- | -- | -- |
| Provision | -- | -- | -- | -- |
| Reversal | 968.43 | -- | -- | 968.43 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| Closing balance | 38,261.64 | -- | -- | 38,261.64 |
⑤ No write-off of provision for bad debts during the reporting period.
⑥ The top five other receivables classified by debtors are as follows:
| Company Name | Nature of transaction | Closing balance | Ageing | Percentage (%) | Closing balance of provisions |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Due from intra-companies | 1,167,436,380.17 | Within 1 year | 99.42 | -- |
| Shenyang Shougang Steel Processing and Distribution Co., Ltd. | Due from intra-companies | 6,000,000.00 | Within 1 year | 0.51 | -- |
| China Petroleum Materials Company Limited | Deposits | 500,000.00 | Within 1 year | 0.04 | 25,000.00 |
| Petty cash | Petty cash | 251,232.86 | Within 1 year | 0.02 | 12,561.64 |
| Total | 1,174,187,613.03 | 99.99 | 37,561.64 |
5. Long-term equity investments
| Item | 2023.06.30 | 2022.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Investments in subsidiaries | 36,634,711,962.26 | -- | 36,634,711,962.26 | 36,621,384,419.98 | -- | 36,621,384,419.98 |
| Investment in associates | 941,236,862.86 | -- | 941,236,862.86 | 1,066,506,040.90 | -- | 1,066,506,040.90 |
| Total | 37,575,948,825.12 | -- | 37,575,948,825.12 | 37,687,890,460.88 | -- | 37,687,890,460.88 |
(1) Investments in subsidiaries
| Subsidiaries | Opening balance | Increase | Decrease | Closing balance | Provision for impairment | Impairment at the end of the year |
| Shougang Jingtang United Iron & Steel Co., Ltd. | 16,308,208,739.58 | 10,655,175.96 | -- | 16,318,863,915.54 | -- | -- |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,832,315,853.00 | 584,425.40 | -- | 1,832,900,278.40 | -- | -- |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | 1,900,000.00 | -- | -- | 1,900,000.00 | -- | -- |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 7,486,106,290.71 | 1,006,003.44 | -- | 7,487,112,294.15 | -- | -- |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | 450,157,812.20 | 36,418.20 | -- | 450,194,230.40 | -- | -- |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 10,542,695,724.49 | 1,045,519.28 | -- | 10,543,741,243.77 | -- | -- |
| Total | 36,621,384,419.98 | 13,327,542.28 | -- | 36,634,711,962.26 | -- | -- |
Note: the long-term equity investments of RMB 13,327,542.28 was increased due to equityincentive during the reporting period.
(2) Investments in associates
| Associates | Opening balance | Changes during the year | Closing balance | Impairment at the end of the year | |||||||
| Increase | Decrease | Investment income under the equity method | Other comprehensive income | Other equity movement | Cash dividend | Provision for impairment | Others | ||||
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 891,510,510.32 | -- | -- | -129,331,594.55 | -- | 1,142,891.97 | -- | -- | -- | 763,321,807.74 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 122,430,402.99 | -- | -- | 80,036.00 | -- | -- | -- | -- | -- | 122,510,438.99 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 16,830,558.74 | -- | -- | 2,787,741.21 | -- | -- | -- | -- | -- | 19,618,299.95 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 35,734,568.85 | -- | -- | 51,747.33 | -- | -- | -- | -- | -- | 35,786,316.18 | -- |
| Total | 1,066,506,040.90 | -- | -- | -126,412,070.01 | -- | 1,142,891.97 | -- | -- | -- | 941,236,862.86 | -- |
6. Operating revenue and costs of sales
(1) Operating revenue and costs of sale
| Item | Current period | Prior period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 19,255,985,540.04 | 18,475,904,244.24 | 20,542,603,095.03 | 19,898,779,133.82 |
| Other business | 617,166,604.49 | 541,966,568.64 | 541,807,992.62 | 423,733,697.84 |
| Total | 19,873,152,144.53 | 19,017,870,812.88 | 21,084,411,087.65 | 20,322,512,831.66 |
(2) Operating revenue and operating costs of sale by product
| Product type | Current period | Prior period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 137,297,135.04 | 134,524,608.66 | 302,806,719.26 | 255,427,599.98 |
| Hot rolled | 18,765,347,188.22 | 18,004,030,284.51 | 19,875,237,278.37 | 19,290,178,373.75 |
| Cold rolled | 90,136,314.48 | 68,084,185.09 | -- | -- |
| Other steel products | 263,204,902.30 | 269,265,165.98 | 364,559,097.40 | 353,173,160.09 |
| Subtotal | 19,255,985,540.04 | 18,475,904,244.24 | 20,542,603,095.03 | 19,898,779,133.82 |
| Other business: | ||||
| Power | 354,823,601.91 | 401,754,301.78 | 294,902,506.73 | 329,556,855.25 |
| Solid waste | 40,318,807.89 | 38,195,413.28 | 4,482,609.21 | 3,532,508.82 |
| Others | 222,024,194.69 | 102,016,853.58 | 242,422,876.68 | 90,644,333.77 |
| Subtotal | 617,166,604.49 | 541,966,568.64 | 541,807,992.62 | 423,733,697.84 |
| Total | 19,873,152,144.53 | 19,017,870,812.88 | 21,084,411,087.65 | 20,322,512,831.66 |
(3) Breakdown of operating revenue
| Item | Current period |
| Main operating revenue | 19,255,985,540.04 |
| Including: recognized at a certain point | 19,255,985,540.04 |
| Recognized during a certain period of time | -- |
| Other revenue | 617,166,604.49 |
| Total | 19,873,152,144.53 |
7. Investment income
| Item | Current period | Prior period |
| Investment income from long-term investment under cost method | 330,895,603.66 | 220,454,893.31 |
| Investment income from long-term investment under equity method | -126,412,070.01 | -18,896,580.08 |
| Dividend from other equity instruments investments | 7,412,132.80 | 2,812,400.00 |
| Interest income from entrusted loans | 2,197,935.28 | 46,943.59 |
| Total | 214,093,601.73 | 204,417,656.82 |
XVI. Supplementary information
1. Non-recurring gains or losses
| Item | Current period | Note |
| Gains or losses on disposal of non-current assets | -2,234,959.49 |
| Item | Current period | Note |
| Government grants recognized in profit or loss during reporting period (excluding those close related to the Company’s normal business, conforming to the national policies and regulations and enjoying ongoing fixed amount or quantity according to certain standard) | 26,836,052.96 | |
| Current net profit or loss of subsidiary from the beginning of the period to the date of the combination under the same control | -- | |
| Gains or losses from external entrusted loans | 5,922,896.67 | |
| Non-operating income/(expenses) except the above | 1,156,972.21 | |
| Other items that conform to the definition of non-recurring profit or loss | -- | |
| Total non-recurring gains or losses | 31,680,962.35 | |
| Less: income tax effect on non-recurring gains or losses | 2,483,528.09 | |
| Net non-recurring gains or losses | 29,197,434.26 | |
| Less: non-recurring gains or losses attributable to non-controlling interests of the Company (after tax) | 3,918,049.35 | |
| Non-recurring gains or losses attributable to shareholders of the Company | 25,279,384.91 |
2. Return on net assets and earnings per share
| Profit of reporting period | Weighted average return on net assets % | Earnings per share | |
| Basic | Diluted | ||
| Net profit/ (loss) attributable to shareholders of the company | 0.84 | 0.0548 | 0.0548 |
| Net profit/ (loss) attributable to shareholders of the Company excluding non-recurring gains or losses | 0.79 | 0.0515 | 0.0515 |
Board of Directors of Beijing Shougang Company Limited10 August 2023