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本钢板B:2024年半年度报告(英文版) 下载公告
公告日期:2024-08-29

Bengang Steel Plates Co., Ltd.

Semi-Annual Report 2024

August, 2024

Ⅰ. Important Notice, Table of Contents, and Definitions

The Board of Directors, the Supervisory Committee and the Directors, members of the SupervisoryCommittee and senior management of the Company guarantee that there are no misrepresentationsor misleading statements, or material omission in this report, and individually and collectively acceptfull responsibility for the authenticity, accuracy and integrity of the information contained in thisreport.

Huang Zuowei, the person in charge of the company, Zheng Zhengli, the person in charge ofaccounting work, and Sun Yanbin, the person in charge of the accounting organization (accountingofficer), hereby confirm that the financial report in this semi-annual report is true, accurate andcomplete.

All directors have attended the board meeting for reviewing this report.

This report involves forward-looking statements such as future plans and does not constitute asubstantial commitment of the company to investors. Investors are advised to pay attention toinvestment risks. This report is prepared in Chinese and English respectively. In the event ofdiscrepancies in the interpretation of Chinese and foreign texts, the Chinese text shall prevail.

The Company has described the existing risks and countermeasures in detail in this report, pleaserefer to the content of Section 3-10 "Risks Faced by the Company and Countermeasures". "ChinaSecurities Journal", "Securities Times", "Hong Kong Commercial Daily" and Juchao InformationNetwork (www.cninfo.com.cn) are selected as the company's information disclosure media. Allinformation of the company is subject to the information published in the above-mentioneddesignated media. Investors are kindly requested to pay attention to investment risks.

The Company plans not to pay cash dividends, issue bonus shares, or increase capital by convertingreserves.

Table of Contents

Ⅰ. Important Notice, Table of Contents, and Definitions ..................................................................... 2

Ⅱ. Company Profile and Main Financial Index ................................................................................... 6

III. Management Discussion and Analysis .......................................................................................... 9

IV. Corporate Governance ................................................................................................................. 24

V. Environment and Social Responsibilities...................................................................................... 26

VI. Important Events .......................................................................................................................... 31

VII. Status of Share Capital Changes and Shareholders .................................................................... 65

VIII. Status of Preferred Shares ......................................................................................................... 65

IX. Status of Bonds ............................................................................................................................ 66

X. Financial Report ............................................................................................................................ 70

Reference File Directory

1. Financial statements containing the signatures and seals of legal representative, chieffinancial officer, and chief accountant;

2. The originals of all company documents and announcements publicly disclosed during thereporting period;

3. Semi-annual reports published in other securities markets.

Definition

Terms to be definedRefers toContent of Definition
Bengang Bancai, the Company, the Listed CompanyRefers toBengang Steel Plates Co., Ltd.
Angang GroupRefers toAnshan Iron and Steel Group Co., Ltd.
Bengang GroupRefers toBengang Group Co., Ltd.
Bengang Steel Co., Bengang Co.Refers toBenxi Steel & Iron (Group) Co., Ltd.
SSERefers toShenzhen Stock Exchange
Liaoning Provincial State-asset AdministrationRefers toLiaoning State-owned Asset Supervisory and Management Committee
Bengang PoscoRefers toBengang Posco Cold-rolled Sheet Co., Ltd.
Angang Finance Co.Refers toAnsteel Group Finance Co., Ltd.
AngangRefers toAnshan Iron and Steel Co., Ltd.
Vanadium TitaniumRefers toPangang Group Vanadium Titanium Resources Co., Ltd.

Ⅱ. Company Profile and Main Financial Index

I. Company Information

Stock abbreviationBengang Bancai, Bengangban BStock Code000761、200761
Stock exchange for listingShenzhen Stock Exchange
Company name in Chinese本钢板材股份有限公司
Abbreviation of Company name in Chinese本钢板材
Company name in English (If any)BENGANG STEEL PLATES CO., LTD.
Abbreviation of Company name in English (If any)BSP
Legal representativeHuang Zuowei

II. Contact Information

Secretary of the BoardRepresentative of Stock Affairs
NameZheng ZhengliChen Liwen
AddressNo1-1 Gangtie Road, Pingshan District, Benxi City, Liaoning ProvinceNo1-1 Gangtie Road, Pingshan District, Benxi City, Liaoning Province
Tel024-47827003024-47828980
Fax024-47827004024-47827004
Emailzhengzhengli76@126.combgbc000761@126.com

III. Other Information

1.Contact Information of the Company

Whether the registered address, office address, postal code, company website and email address have changed

□ Applicable √ Not applicable

The company's registered address, office address, postal code, company website, email address, and etc. have notchanged during the reporting period. Please refer to Annual Report 2023 for details.

2. Place for information disclosure

Whether the information disclosure and place for consulting have changed

□ Applicable √ Not applicable

Name of newspaper selected by the Company for information release, website appointed by CSRC for publishingsemi-annual report and lodging address of semi-annual report of the Company have not changed during the reportingperiod. Please refer to Annual Report 2023 for details

3. Other related information

Whether other related information have changed

□ Applicable √ Not applicable

IV. Summary of Accounting Data and Financial Index

Whether the Company makes retroactive adjustment or restatement of the accounting data of the previous year

□ Yes √ No

This reporting periodSame period in previous yearIncrease or decrease in this reporting period over the previous year
Operating income28,364,539,286.8030,567,409,205.03-7.21%
Net profit attributable to the shareholders of the listed company-1,550,950,137.71-1,004,945,623.68-54.33%
Net profit attributable to the shareholders of listed company after deducting non-recurring gain/loss-1,621,652,605.92-1,007,279,338.85-60.99%
Net cash flows generated by operating activities1,095,091,396.544,662,637,281.81-76.51%
Basic earnings per share-0.3775-0.2446-54.33%
Diluted earnings per share-0.3775-0.1558-142.30%
ROE-9.55%-5.49%-4.06%
At the end of this reporting periodAt the end of previous reporting periodIncrease or decrease at the end of this reporting period over the previous year
Total assets45,631,488,543.5446,181,979,851.06-1.19%
Net assets attributable to shareholders of the listed company15,462,920,341.5617,009,969,496.07-9.09%

V. Differences between Domestic and Foreign Accounting Standards

1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chineseaccounting standards.

□Applicable √ Not applicable

There is no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chineseaccounting standards during the reporting period.

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chineseaccounting standards.

□ Applicable √ Not applicable

There is no differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards during the reporting period.VI. Items and Amount of Non-recurring Gains and Losses

√ Applicable □ Not applicable

Unit: yuan

ItemsAmountNotes
Profit or loss from disposal of non-current assets (including the write-off part for which assets impairment provision is made)-13,712,227.48
Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation,,meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard)84,071,493.95
Other non-operating revenue and expenditure other than above items5,115,874.05
Less: Impact of income tax4,003,960.33
Impact of non-controlling interests (after tax)768,711.98
Total70,702,468.21--

Details of other profit and loss items that meet the definition of non-recurring profit and loss:

□ Applicable√ Not applicable

Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities InformationDisclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for defining non-recurring gainsand losses items listed in the document as recurring items.

□ Applicable√ Not applicable

There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.

III. Management Discussion and Analysis

I. The Company's main business during the reporting period

1. Industry development

In the first half of 2024, the domestic steel industry still presents a "three highs and three lows" pattern of "high output,high cost, high inventory, low demand, low price, and low efficiency", and the overall market is in the bottoming stage.Orders and demand are weak, supply is stronger than demand, and the price of raw materials and fuels is running at ahigh level. The actual downward shift of the cost center of gravity is smaller than the downward shift of steel prices. Theoverall steel price is weak, and the overall steel market is in a contradiction between strong expectations and weak reality.

2. Main business, main products and their uses

During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing, powergeneration, coal chemical industry, special steel profiles, railways, import and export trade, scientific research, productsales, etc. Basically built a high-quality steel base, formed more than 60 varieties, more than 7,500 specifications ofproduct series, the proportion of high value-added and high-tech products reached more than 80%, automotive surfacepanels, home appliance panels, petroleum pipeline steel, container panels Leading products such as, shipboard, etc. arewidely used in the fields of automobiles, home appliances, petrochemicals, aerospace, machinery manufacturing, energyand transportation, building decoration and metal products, and are exported to more than 60 countries and regions.During the reporting period, the company's main business did not undergo major changes.

3. Business model

Procurement model: The company's procurement model includes domestic procurement and foreign procurement.Domestic material procurement is carried out through centralized procurement, unified bidding, price comparison, andnegotiation. The procurement of foreign materials is carried out through long-term cooperative procurement, directprocurement, open and invited bidding, price inquiry, price competition, negotiation and procurement, and is mainlyrepresented by Benxi Iron and Steel International Trade Corporation.Sales model: The company’s sales are divided into domestic sales and foreign sales. Domestic sales mainly adopt thedirect sales model. Large customers are sold directly by the company, and other small and medium customers are soldthrough various regional sales subsidiaries. The strong marketing network accumulated in international trade is exportedby its agency company, and the agency fee of Benxi Iron and Steel International Trade Co., Ltd. is paid.

4. Main performance drivers

During the reporting period, Bengang Plate closely followed the work deployment of Angang Group to "focus on fivekey points and promote three new breakthroughs", fully implemented the overall work requirements of Bengang "onestability, two controls, three improvements, and create five new situations", maintained the strategic focus on automotivesteel, insisted on accelerating breakthroughs in risk prevention and control, structural adjustment, systematic costreduction, efficiency improvement, and people's livelihood, highlighted the key breakthroughs in lean management,deepening reform, scientific and technological innovation, and digital plates, and took extreme efficiency improvementas the key to deepen "accounting management", strengthen production and sales coordination, and strive to promotetransformation and upgrading.The company's main operating indicators were achieved: pig iron output was 5.3473 million tons, an increase of 318thousand tons year-on-year; crude steel output was 5.7217 million tons, an increase of 52.9 thousand tons year-on-year;steel output was 8.5029 million tons, an increase of 365,900 tons year-on-year. Looking back on the work in the first halfof the year, it is mainly reflected in the following aspects:

(1) With the "Automobile Steel Strategy" in place, the sales of automotive steel hit a record high. Adhere to theefficiency-centered approach, strengthen the strategic focus of automotive steel in leading development, strengthenthe chain, supplement the chain, extend the chain, and actively cultivate a robust industrial chain ecosystem. Thesales of automotive steel reached 1.38 million tons, an increase of 115.1 thousand tons year-on-year, a year-on-yearincrease of 9.09%; the sales of OEMs reached 176.7 thousand tons, an increase of 91.6 thousand tons year-on-year,a year-on-year increase of 107.64%, a record high; the sales of automotive outer panels reached 71 thousand tons, ayear-on-year increase of 146%. Actively carry out OEM certification, pass 19 users and 44 brand certifications, andare carrying out BMW certification.

(2) We strive for "extreme efficiency" and make operations more efficient. We insist on being user-centric, adjusting theproduct structure as the core, focusing on "production with orders and marginal output", strengthening productionand sales coordination, improving the cold-hot ratio and cold-plating ratio, promoting the cold rolling efficiency andthe utilization rate of new production lines, optimizing the adjustment index, and fully promoting efficientdevelopment. The production end broke the monthly production record 11 times, and the capacity utilization rate ofhigh-efficiency galvanizing lines increased significantly. Among them, the 5# galvanizing line reached 110.4%, anincrease of 4.85% over the previous year, and the 3# galvanizing line reached 113.7%, an increase of 4.63% over theprevious year. The delivery rate of automobile OEMs has been 100% for four consecutive months.

(3) The company made efforts to "create A level in environmental protection and extreme energy efficiency" and make

the green background more distinct. The company will accelerate the ultra-low emission transformation, continue tocarry out the construction of garden-style factories, and actively plan energy structure changes and processoptimization and innovation. The company will promote the implementation of 65 ultra-low emission transformationprojects, all of which are planned to be completed and put into production by the end of the year; the comprehensiveenergy consumption per ton of steel is 564.67kgce/t, reaching the advanced level of the industry; the company hassuccessfully pioneered the low-carbon "semi-steel" process path, and automotive steel products can achieve acomprehensive carbon reduction of more than 30% compared with the long process.

(4) Focusing on "digital empowerment and technological innovation", the driving force for development continues toincrease. Plan the benchmark demonstration of the 5# galvanizing line and the 2300 line dark factory, increase modelcooperation and research and development, plan the construction of digital projects, and it is expected that the digitalprojects will create 17.14 million yuan in benefits throughout the year, and the 3D job replacement rate will increaseto 67%. Adhere to the dominant position of scientific and technological innovation, create original leadingtechnologies and products, and accelerate the development of a series of products such as 2GPa hot-formed steel newcoating products, cold-rolled complex phase steel, and electro-galvanized deep stamping steel; carry out 4 ton levelnew product projects and 3 main product cost reduction projects of 1%. It is expected that the new products willachieve a revenue of 2.821 billion yuan and a technological innovation of 0.25 billion yuan throughout the year.

(5) The company will make efforts to "market-oriented reform and lean management" to effectively enhance the vitality

of development. The company will further promote the reform of the three systems, promote the long-term market-oriented exit mechanism for employees, promote the competitive employment, the adjustment of the last-ranked andthe exit system for incompetent managers; further promote the integration of institutions and the optimization ofresponsibilities; improve the classification assessment mechanism, expand the "four-to" concept, strengthen the jobperformance management of all employees, and improve the performance assessment mechanism. The company willadhere to "benchmarking + lean", focus on the combination of lean operation and centralized and consistentmanagement, and the integration of lean site and five systems, and promote the integration of lean management intothe whole process and chain of production and operation management.

(6) Adhere to the bottom line thinking and strictly observe the red line of safety and environmental protection. Carry out"four no's and two direct" safety inspections on a regular basis; strengthen the safety supervision of relevant parties,strictly control the "five checkpoints", and implement the "four unifications". Strengthen environmental protectionmanagement, increase the intensity of environmental protection assessment, and strictly implement the "threesimultaneous" requirements.

II. Analysis on Core Competitiveness

The company adheres to the innovation-driven and "quality plus service" development model, with the strategic goal ofbuilding an internationally competitive high-quality plate base, a domestic first-class special steel base and acomprehensive service provider, and exerts a strategic leading role, focusing on improving quality and efficiency, In termsof product upgrades, technological innovation, green and intelligent manufacturing, we will innovate management ideas,enhance the core competitiveness of enterprises, and promote the realization of high-quality, green and intelligentdevelopment of enterprises.

1. Manufacturing capacity. Adhere to the efficiency-centered approach, firmly establish the strategic determination ofautomotive steel to lead development, strengthen the chain, supplement the chain, extend the chain, and activelycultivate a stable industrial chain ecosystem. With the increase of key products represented by automotive steel asthe main line, strengthen the application of profit analysis system results, optimize resource allocation, increase thedevelopment and promotion of cold-rolled wide-width automotive plates, electro-galvanized automotive outer plates,and high-level pickled automotive plates, create new "core brand" efficiency, and continuously improve theproportion of high value-added products and differentiated profitability. The steelmaking process is mainly based onstable operation, achieving both cost reduction and quality improvement. The key technical and economic indicatorsof electric furnaces have reached the international leading level; the steel rolling process, while ensuring stable quality,improves the unit operation rate and machine hour output, and strives to improve the efficiency of the productionline. With the ultimate cost reduction and carbon reduction ideas, the company optimizes the process to organize low-carbon and emission-reducing automotive steel production, and achieves domestic leading levels.

2. Equipment transformation and upgrading. In 2024, the company issued a fixed asset investment plan of 1.945 billionyuan. A new round of large-scale technical transformation and ultra-low emission transformation represented by keyprojects such as the transformation project of the main body of the first cold rolling mill of the cold rolling mill, thedust removal transformation of the refining area of the plate steelmaking plant, the dust removal transformation ofthe continuous casting and finishing areas of the plate steelmaking plant, the environmental governance of the firstand second mixing systems of the sintering machine of the plate ironmaking plant, the transformation of the finishingdust removal system of the plate 2300 production line, the dust removal project of the finishing mill of the platespecial steel hot rolling bar line, and the transformation of the coking wastewater of the plate ironmaking plant havebeen implemented. At present, the transformation project of the main body of the first cold rolling mill of the coldrolling mill of the cold rolling mill has been put into operation.

3. New product development capabilities. The company has successfully developed 42 new product grades, all of whichhave been sold on the market. In response to the national new energy development strategy, the company has fullyutilized the advantages of "sales, research and production" integration and successfully developed 700MPa high-strength photovoltaic bracket steel GF700, which has extremely high pressure resistance and wind resistance whilemeeting the requirements of photovoltaic bracket forming and production. The company has explored emergingmarkets and developed 500MPa grade pile pipe steel HK490, achieving the first stable supply of hot-rolled productsexported to the Japanese market by Bengang. Aiming at the international market, we have developed and exportedmolycop grinding ball steel S650A, using large square billet continuous casting and terminal reduction processes toimprove density and reduce carbon segregation. The company has completed the first batch of 400 tons of productionunder the contract, and all indicators are qualified.

4. Technological innovation ability. In order to strengthen the cooperation between schools and enterprises, the companyhas signed 8 foreign technical cooperation projects with Dalian University of Technology, Northeastern Universityand others to promote the transplantation of mature scientific and technological achievements of universities andinstitutes to enterprises. In terms of standards, the company participated in the revision of 1 international standard,presided over the revision of 2 national standards, and drafted 30 enterprise standards. In terms of intellectual propertyrights, the company has accepted 81 patents, including 30 inventions and 6 overseas patents; 38 patents have beenauthorized, including 11 invention patents. In terms of scientific and technological achievements, the companyparticipated in the project "Development and Application of Key Common Technologies for Electromagnetic Controlof Large Metal Billets Preparation" and won the second prize of the National Science and Technology Progress Award,"Development and Application of High-Performance and Low-Cost Cold-Rolled Galvanized Dual-Phase Steel SeriesProducts" won the second prize of Metallurgical Science and Technology Progress, and "Car Body Lightweight HotStamping Steel Series Products" won the third prize of Liaoning State-Owned Enterprises "Spark" Innovation andCreativity Competition.

5. Green development capability. In accordance with the strict policy requirements of the country and Liaoning Provincefor the steel industry and local ultra-low emissions, the company strives to achieve ultra-low emissions by the end of2025 and build the company into an "ecological steel plant" that is deeply integrated and harmonious with urbandevelopment. In 2024, the company's ultra-low emission projects have made significant progress, with a total of 73key projects implemented. In terms of transportation, the company has completely phased out the original transportvehicles below the National 3 emission standards and successfully replaced them with new energy trams or vehiclesthat meet the National 5 and above emission standards, laying a solid foundation for building a green logistics system.In terms of green steel market development, the company successfully carried out semi-steel experiments andsuccessfully opened up the process path to expand the green steel product line and enhance market competitiveness.At the same time, the company has established an LCA (life cycle assessment) carbon data platform to fully preparefor future EPD (environmental product declaration) certification work, demonstrating the company's leading positionand forward-looking vision in the field of green manufacturing.

6. Intelligent manufacturing capabilities. In 2024, the company will focus on promoting the construction of smartfactories in the cold rolling three-cold area and hot rolling 2300 smart factories. Focusing on the core developmentstrategy of plate automotive steel, the company will promote digital transformation. Through school-enterprisecooperation, the company will upgrade the intelligent model of the main production line. According to the 14th Five-Year Plan, the completion rate of the four-in-one transformation of the main production line will increase by 9%, thereplacement rate of 3D positions will increase by 11%, the centralization rate of the operation room will increase by9%, and the automation rate of the production line will increase by 5%.III. Analysis on Main BusinessPlease refer to the relevant content of "I. Main Business Engaged in the Reporting Period".Year-on-year changes in major financial data.

Unit: Yuan

Current PeriodPrevious PeriodChangeReason
Operating income28,364,539,286.8030,567,409,205.03-7.21%
Operating cost29,177,241,820.2730,714,640,963.91-5.01%
Selling and distribution expenses78,868,443.1369,901,883.2412.83%
General and administrative expenses351,694,254.72339,569,021.493.57%
Financial expenses135,182,892.48161,557,765.87-16.33%
Income tax expenses34,100,570.6733,191,710.842.74%
Research and development investment970,755,841.00969,879,939.000.09%
Net cash flows from operating activities1,095,091,396.544,662,637,281.81-76.51%Due to increase in cash payments
Net cash flows from investing activities-508,521,987.15-893,054,682.05-43.06%Due to the decrease of expenditure on asset purchase and construction
Net cash flows from financing activities-611,953,198.81-1,961,254,120.62-68.80%Due to increase of new borrowings
Net increase in cash and cash equivalents-2,505,569.001,838,873,251.94-100.14%Due to increase in cash payments

Significant changes in the company's profit composition or source of profit during the reporting period

□ Applicable √ Not applicable

There was no major change in the company's profit composition or source of profit during the reporting period.Operating income composition

Unit: Yuan

Current periodPrevious periodChange over previous period
AmountProportionAmountProportion
Total operating income28,364,539,286.80100%30,567,409,205.03100%-7.21%
By industries
Industry28,364,539,286.80100.00%30,567,409,205.03100.00%-7.21%
By products
Steel plate27,720,971,567.8997.73%29,094,813,444.0795.18%-4.72%
Others643,567,718.912.27%1,472,595,760.964.82%-56.30%
By region
Domestic23,404,921,383.5382.51%27,000,481,311.5988.33%-13.32%
Abroad4,959,617,903.2717.49%3,566,927,893.4411.67%39.04%

Industry, Product and Regions Accounting for the Company’s Operating Income or Profit over 10%

√ Applicable □ Not applicable

Unit: Yuan

Operating incomeOperating costsGross marginOperating income change over last yearOperating costs change over last yearGross margin change over last year
By industries
Industry28,364,539,286.8029,177,241,820.27-2.87%-7.21%-4.93%-2.46%
By products
Steel plate27,720,971,567.8928,521,627,207.05-2.89%-4.72%-2.50%-2.35%
Others643,567,718.91655,614,613.22-1.87%-56.30%-55.14%-2.62%
By regions
Domestic23,404,921,383.5324,171,627,813.37-3.28%-13.32%-10.93%-2.78%
Abroad4,959,617,903.275,005,614,006.90-0.93%39.04%39.89%-0.61%

When the statistical caliber of the company's main business data is adjusted during the reporting period, the company'smain business data adjusted according to the caliber at the end of the reporting period in the most recent period

□ Applicable √ Not applicable

IV. Analysis of Non-core Business

√ Applicable □ Not applicable

Unit: Yuan

AmountProportion in total profitExplanation of causeSustainable (yes or no)
Income on investment-31,605,308.282.15%Due to bank bill discountNo
Assets disposal gains-14,313,228.280.97%Due to impairment of inventoryNo
Non-operating income8,976,877.17-0.61%Due to the gain from scarp of non-current assetsNo
Non-operating expenses27,576,186.51-1.87%Due to scrap of assetsNo

V. Assets and Liabilities

1. Significant Change of Assets Components

Unit: Yuan

At the end of this reporting periodAt the end of the Same period in previous yearProportion changeNotes to significant changes
AmountProportion in the total assetsAmountProportion in the total assets
Cash at bank and on hand1,992,324,226.634.37%2,194,654,161.344.75%-0.38%
Accounts receivable1,327,038,676.852.91%1,328,532,598.472.88%0.03%
Inventories7,854,274,573.9517.21%7,708,372,894.8116.69%0.52%
Long-term equity investments46,910,346.410.10%46,910,346.410.10%0.00%
Fixed assets24,878,573,917.5754.52%25,028,192,964.6754.19%0.33%
Construction in progress4,156,908,135.689.11%4,308,404,147.319.33%-0.22%
Right-of-use assets1,566,663,478.213.43%1,319,616,179.372.86%0.57%
Short-term loans495,730,592.001.09%328,000,000.000.71%0.38%
Contract liabilities2,925,386,458.146.41%3,303,108,592.387.15%-0.74%
Long-term loans2,319,589,918.005.08%1,723,726,700.803.73%1.35%
Lease liabilities1,578,684,995.293.46%1,342,427,252.452.91%0.55%

2. Main overseas assets

□ Applicable √ Not applicable

3. Assets and liabilities measured at fair value

√ Applicable □ Not applicable

Unit: yuan

ItemBeginning balanceProfit and loss from changes in fair value in the current periodAccumulated fair value changes recognized in equityImpairment accrued in the current periodPurchase amount during the current periodSales amount during the current periodOther changesEnding balance
Financial assets
4.Other equity instrument investments974,463,039.83-81,576,482.17974,463,039.83
Subtotal of financial assets974,463,039.83-81,576,482.17974,463,039.83
Total974,463,039.83-81,576,482.17974,463,039.83
Financial liabilities0.000.00

Other changes

Whether there are significant changes in the measurement attributes of the company's main assets during the reporting period

□ Applicable √ Not applicable

4. Restricted Assets by the End of the Period

Items30 Jun, 2024
Gross carrying amountBook valueReason of restrictionSituation
Cash at bank and on hand810,054,824.11810,054,824.11Deposit for notes and L/C
Notes receivables383,067,330.50383,067,330.50Pledged
Total1,193,122,154.611,193,122,154.61

VI. Analysis of investment status

1. Overall situation

□ Applicable √ Not applicable

2. Major equity investments obtained during the reporting period

□ Applicable √ Not applicable

3. Significant non-equity investment in progress during the reporting period

□ Applicable √ Not applicable

4. Financial asset investment

(1) Securities investment

□ Applicable √ Not applicable

There was no securities investment in the company during the reporting period.

(2) Investment in derivatives

□ Applicable √ Not applicable

There was no derivative investment in the company during the reporting period.

5. Use of Raised Funds

√ Applicable □ Not applicable

(1) Use of Raised Funds

√Applicable □ Not applicable

Unit: 10 thousand yuan

YearWay of raising fundsTotal amount of raised fundsNet value of raised fundsUsed amount of raised fund this yearThe total used amount of funds raisedThe total amount of funds raised for change of purpose during the reporting periodCumulative total amount of funds raised for change of purposeCumulative proportion of total raised funds for changes of purposesThe total amount of funds raised not usedThe purpose and destination of the raised funds not yet usedAmount of funds raised after being idle for more than two years
2020Issue of convertible bonds680,000675,920556.29476,787.84199,132.16Deposit101,479
Total--680,000675,920556.29476,787.84000.00%199,132.16--101,479
Description of the overall use of raised funds

Temporarily Supplement Working Capital".As of June 30, 2024, the company used idle funds raised from the public issuance of convertible corporate bonds to temporarily supplement thebalance of RMB1,961,200,000.00 in working capital.

(5) Cash management using idle raised funds

The company does not use idle raised funds for cash management.

(6) Use of surplus raised funds

The company does not use the surplus funds from the raised funds investment projects for other raised funds investment projects or non-raisedfunds investment projects.

(7) Utilization of excess funds

The company does not have any situation of over-using raised funds.

(8) Purpose and destination of unused raised funds

As of June 30, 2024, except for the advance investment and replacement of investment projects with raised funds and the temporary supplementof working capital with idle raised funds as described in “(III) Advance investment and replacement of investment projects with raised funds”and “(IV) Temporary supplement of working capital with idle raised funds”, the remaining raised funds will be temporarily deposited in thespecial account for raised funds.

(9) Other uses of raised funds

The company does not have any other use of raised funds.

(2) Fundraising commitments

√Applicable □ Not applicable

Unit: 10 thousand yuan

Committed investment projects and over-raised fundsWhether the project has been changed (including partial changes)Raised funds promised total investmentTotal amount of investment after adjustment (1)Amount invested during the reporting periodAccumulated investment amount as of the end of the period (2)Investment progress as of the end of the period (3)=(2)/(1)Date of the project reaches the expected usable statusBenefits achieved during the reporting periodWhether the expected benefits are achievedWhether the project feasibility has changed significantly
Committed invested projects
High grade, high magnetic induction non-oriented silicon steel projectNo101,620101,62001410.14%Not applicableNo
Steelmaking Plant No. 8 Casting Machine ProjectNo33,50033,500443.920,132.360.10%31.10.2020-28,201.2NoNo
Capacity Replacement Project of No. 5 Blast Furnace in Ironmaking PlantNo96,00096,00015.6680,182.683.52%30.11.2020-21,501.16NoNo
Special Steel Electric Furnace Upgrade ProjectNo141,600141,6000123,025.386.88%Not applicableNo
CCPP power generation projectNo83,30083,30038.2942,873.1151.47%31.12.202214,370.15YesNo
Steelmaking plant No. 4-6 converter environmental protection renovation projectNo19,90019,90058.4410,433.5352.43%31.12.2020Not applicableNo
Repayment of bank loansNo200,000200,0000200,000100.00%Not applicableNo
Subtotal--675,920675,920556.29476,787.84-----35,332.21----
Over-raised funds
Not applicable
Total--675,920675,920556.29476,787.84-----35,332.21----
Situation and cause of failure to meet planned progress or projected earnings (disclosed by project) (Reasons for selecting “Not applicable” for “whether the expected benefits have been achieved”)High-grade, high-magnetic-induction non-oriented silicon steel engineering projects are greatly affected by market factors. The company adjust our development strategies and continuously track market changes.
Description of major changes in project feasibilityNone.
Amount, use and progress of usage of over-raised fundsNot applicable
Change in the implementation location of the raised funds investment projectNot applicable
Adjustment of implementation methods of fund-raising investment projectsNot applicable
The initial investment and replacement of the fundraising investment projectApplicable
Refer to the Contents in Special Report III 3
Temporary replenishment of working capital with idle raised fundsApplicable
Refer to the Contents in Special Report III 4
The amount and reason for the rest of raised fund in the project implementationNot applicable
Use and destination of raised funds that have not been usedUnused raised funds are deposited in the special account for raised funds.
Problems or otherNone.

situations in the useand disclosure of raisedfunds

(3) The situation for raised funds change project

□ Applicable √ Not applicable

During the reporting period, the company did not have any changes in the fundraising project.

VII. Significant Assets and Equity Sold in Reporting Period

1. Significant Assets Sold

□ Applicable √ Not applicable

2. Substantial Equity Sold

□ Applicable √ Not applicable

VIII. Analysis on Main Subsidiaries and Share Participating Companies

√ Applicable □ Not applicable

Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company

Unit: Yuan

Company NameCompany typeMain businessRegistered capitalTotal assetsNet assetsTurnoverOperating profitNet Profit
Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.SubsidiaryProcessing and sales of steel1,920,000,005,495,628,297.352,482,555,227.534,625,594,944.57208,259,632.58175,927,445.95

Acquirement and disposal of subsidiaries during the reporting period

□ Applicable √ Not applicable

Illustration of main joint-stock companiesIX. Structured Entities controlled by the Company

□ Applicable √ Not applicable

X. Risks and countermeasures for the Company

1. Environmental protection risks

Under the constraints of the national "carbon peak" and "carbon neutrality" goals, environmental protection departmentshave increased their supervision of pollution control in the steel industry. Steel companies' environmental protectioninvestment and operating costs have increased, and the environmental challenges they face have increased.Response measures: First, establish and improve a green, low-carbon and circular production and operation system, thatis, through energy-saving and environmental protection equipment upgrades and the promotion and application of

advanced technologies, further improve resource and energy utilization efficiency, promote ultra-low emissiontransformation and comprehensive pollutant control, and continuously reduce carbon emission intensity; second, activelycarry out product ecological design and life cycle evaluation to create green and low-carbon products; third, strengthenthe operation and maintenance and standardized operation control of existing environmental protection equipment andfacilities, and focus on strengthening the monitoring of air pollution sources; fourth, strengthen the control of raw fuelprocurement quality to achieve emission reduction at the source.

2. Market risks

In 2024, the domestic economic recovery has not progressed as expected, there is still uncertainty in the growth ofdownstream demand, and the risk of overcapacity caused by the continued growth in supply still exists. The steel industryis in a period of transition from incremental development to stock optimization. It will continue to face the challenge ofsupply and demand imbalance at present and for a long time in the future, and market competition will become moreintense.Response measures: Deepen "predictive" operations, strengthen market analysis and judgment, accurately control themarket rhythm, and dynamically adjust marketing strategies; increase market development efforts, strengthen regionalmarket collaboration, deepen strategic long-term cooperation, and optimize resource flow allocation; continue to optimizeproduct structure, continuously increase the proportion of unique, leading, and key products, steadily improve productquality, and minimize costs; deeply cultivate the terminal market, effectively improve customer precision services andsatisfaction levels, and continuously enhance product market competitiveness.

3. The risk of raw material price and supply

The global iron ore supply monopoly is unlikely to change in the short term. Iron ore is highly dependent on foreigncountries, coking coal and other resources are scarce, and the independent controllable capacity of the steel industry chainsupply chain is relatively weak; geopolitical conflicts are intensifying, supply chain security is fragile, and the risk of safesupply is increasing. The financial attributes of ore, coal and coke black resources are enhanced, and domestic and foreignhot money speculation is frequent; energy-saving and emission reduction policies continue to deepen, upstream coal andcoke enterprises have limited production capacity, and various internal and external factors have led to frequentfluctuations in raw material prices, and enterprises are under great pressure to reduce costs and increase efficiency.Response measures: Strengthen the analysis and judgment of raw material supply and market demand, build a rawmaterial procurement model, scientifically control procurement opportunities, and adjust procurement strategies in atimely manner; strengthen strategic cooperation in raw material supply, consolidate and expand domestic raw materialprocurement channels, deeply aggregate raw material resources, accelerate the formation of domestic and foreign supplychain security structures, and enhance the price advantages of scale procurement; optimize the production charge structure,adjust the raw material procurement structure, strengthen benchmarking and potential tapping, optimize the coal and oreblending structure, further reduce production costs, reasonably control raw material inventories, effectively reduce theadverse effects of raw material price fluctuations, and minimize raw material costs.

XI. Implementation of the "Dual Improvement of Quality and Return" Action Plan

Whether the company has disclosed the announcement of the "double improvement of quality and return" action plan

□ Yes √ No

IV. Corporate Governance

I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholdersheld during the Reporting Period

1. General meeting of shareholders during the reporting period

Meeting sessionMeeting typeInvestors’ participation ratioDate of conveningDate of disclosureDisclosure index
The annual general meeting of 2023Annual general meeting77.10%23 May 202424 May 2024Announcement of Resolutions of 2023 Annual General Meeting of Shareholders

2. Temporary general meeting Request by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable

II. Change of Directors, Supervisors and Senior Executives

√Applicable □ Not applicable

NamePositionType of changeDateReason
Jiang ZhenyuEmployee SupervisorResignation22 Mar 2024Voluntary resignation
Mao XiuruEmployee SupervisorElected22 Mar 2024Elected
Liu YansongDeputy General ManagerDismissal1 Apr 2024Job Change

III. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period

□ Applicable √ Not applicable

The company plans not to distribute cash dividends, issue bonus shares, or increase capital from the accumulation fundin the first half of the year.

IV. Implementation of the company’s equity incentive plan, employee stock ownership plan orother employee incentive measures

□ Applicable √ Not applicable

During the reporting period, the company had no equity incentive plan, employee stock ownership plan or otheremployee incentive measures and their implementation.

V. Environment and Social Responsibilities

I. Major environmental issues

Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection department

√ Yes □ No

Policies and industrial standards in environmental protection

Implement the Environmental Protection Law of the People’s Republic of China, Environmental Impact Assessment Law of thePeople’s Republic of China,Water Pollution Prevention and Control Law of the People’s Republic of China,Atmospheric PollutionPrevention and Control Law of the People’s Republic of China, Soil Pollution Prevention and Control Law of the People’s Republicof China,Law of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Waste and otherrelated ecological environment policy, Water Pollutant emission Standard for Iron and Steel Industry (GB13456-2012), PollutantDismission Standard for Coking Chemical Industry (GB 16171-2012), Air Pollutant emission Standard for Sintering and SinteringPellets in Iron and Steel Industry (GB28662-2012), Air Pollutant emission Standard for Iron-making Industry (GB28663-2012), AirPollutant Emission Standard for Steel Rolling Industry (GB28665-2012), Air Pollutant Emission Standard for Thermal Power Plants(GB13223-2011) and other related industry standards.Environmental permitsThe company involves 12 pollutant discharge units, 10 of which are key pollutant discharge units. They obtained the license for thefirst time in December 2018, and in December 2021, they applied for an extension to December 2026 according to the licensemanagement requirements. In 2022, two units had their change application extended to December 2027, and in 2023, one unit had itschange application extended to February 2028. Two units are subject to registration management, and they obtained the fixed pollutionsource pollution discharge registration receipt in March 2020, which is valid until 2025; in 2024, two units re-applied and wereapproved, and the validity period is until February 2029 and April 2029 respectively. All units strictly implement the environmentalprotection facilities to meet the standards and operate stably, strictly control the emission of pollutants, and the plate companydischarges pollutants within the scope of the license every year. All units submit quarterly implementation reports and annual reportsonline as required.Specific details of industry discharge standards and the discharges of pollutants involved in production and operational activities

NameType of Main pollutants and specific pollutantsMain pollutants and specific pollutantsDischarge modesThe number of discharge hatchThe distribution of discharge hatchEmission concentrationThe emission standardTotal emissionApproved total emissionSurpass the emission standard
Bengang Steel Plates Co., Ltd.Waste water pollutantsCODContinuous1Energy general plant sewage treatment plant145023.2 TonsThe total quantity is not confirmed by the governmentNone
Bengang Steel Plates Co., Ltd.Waste water pollutantsAmmonia nitrogenContinuous1Energy general plant sewage treatment plant0.3180.9 TonsThe total quantity is not confirmed by the governmentNone
Bengang Steel Plates Co., Ltd.Waste gas pollutantsParticulate MatterContinuous and intermittent191Raw material dumper, transfer station, oreRaw materials 12-15;Raw materials 25;406 tons of Smoke andThe total quantity is notNone
receiving trough, pre-batch; iron-making tapping yard, furnace top, fuel, solvent, whole grain, ore coke trough, sintering machine head dust removal, machine tail dust removal; steelmaking molten steel pretreatment, north-south backflow station, tundish, primary dust removal, secondary dust removal, refining dust removal; special steel electric furnace, refining furnace; coking coal adding, coke pushing, dry quenching, chimney desulfurization and denitrification; power generation boiler dust removal, desulfurization and denitrification; cold rolling acid regeneration, pickling, straightening, welding machine, leveling, annealing, roasting; hot rolling heating furnace.sintering 1.36-28; ironmaking 0.76-8; steelmaking 0.6-10; special steel 0.7-10; coking 0.7-7; power generation 0.2-7; cold rolling 6-18; hot rolling 2-6.sintering 50-30; ironmaking 25; steelmaking 20-50; special steel 20; coking 10-50; power generation 10-30; cold rolling 20; hot rolling 20-30.dust; 5240 tons of dustconfirmed by the government
Bengang Steel Plates Co., Ltd.Waste gas pollutantsSulfur dioxideContinuous and intermittent65Sintering machine head; coke oven chimney; power boiler desulfurization; cold rolling roasting and annealing; hot rolling heating furnace.Sintering machine head 13-40; coke oven chimney 7-17; power generation 2-21; cold rolling 11-25; hotSintering machine head 200; coke oven 50-100; power generation 100-200; cold rolling 100; hot rolling 1501263 tonsThe total quantity is not confirmed by the governmentNone
rolling 3-44.
Bengang Steel Plates Co., Ltd.Waste gas pollutantsNitrogen oxidesContinuous and intermittent58Sintering machine head; coking chimney; power generation boiler; cold rolling roasting; annealing; hot rolling heating furnace.Sintering machine head 25-77; coking chimney 77-177; power generation 20-60; cold rolling 84-94; hot rolling 10-100.Sintering head 300; coking chimney 150-500; power generation 100-200; cold rolling 200; hot rolling 300.3546 tonsThe total quantity is not confirmed by the governmentNone

Pollutants treatmentIn 2024 company as a whole enterprise development and environmental protection, invest 1.84 billion yuan comprehensively promoteultra-low emissions transformation work, the source reduction, process control, terminal control of combining technology, isimplementing the original plate iron factory in dust removal system transformation, plate steel mills, steelmaking area dust removaltransformation, sintering head electric transformation, plate hot rolling mill production line heat treatment transformation, plateresources service branch scrap yard transformation 65 ultra-low emissions transformation project, the project can be put into operationat the end of 2024. Vigorously promote the plate company clean transportation work. More than 1,000 materials were managed undervehicle emission standards, 3,320 national VI vehicles and 60 electric heavy trucks were introduced, old vehicles and non-road mobilemachinery that did not meet ultra-low requirements were phased out, and facilities such as power changing stations, charging piles,hydrogenation stations and other facilities were laid out on the main transportation routes to broaden the application scenarios of newenergy vehicle services. Build and complete the corresponding transformation of the property holding, metering and other relatedsystems. So far, involving the bulk materials and products the six and above vehicle controls are under control state, according to therequirements required for clean transportation function has all realize stable operation, the factory transport vehicles and the roadmobile machinery are meet the requirements of ultra-low emissions of clean transportation public, clean transportation + electric cardratio increased from 68% to 81.75% (including: clean transportation 77.07%), reached the plank company ultra-low emissions cleantransportation. The plate company carries out the whole process and the whole process of ultra-low emission transformation oforganized emission, unorganized emission and clean transportation, which can realize the emission concentration of air pollutants tomeet the requirements of ultra-low emission standards, and the environmental protection control ability of the enterprise has beensignificantly improved.Environmental-related emergency response plansCompany and its subsidiary in strict accordance with the Emergency Response Law of the People's Republic of China, about theprinting <Enterprise Environmental Emergency Risk Assessment Guide (trial) notice, the enterprise environmental emergency planfor the record management measures (try out)" and other current laws and regulations to carry out environmental emergencymanagement, complete emergency environmental emergency plan revision, to carry out risk assessment and emergency resourcesinvestigation, has according to the city bureau management assessment, for the record. At the same time, each unit of the plate companyshall formulate the 2024 drill plan according to the pre-plan, and carry out the corresponding pre-plan drill work.Investment in environmental governance and protection and the payment of environmental protection tax

1. In the first half of 2024, the operation cost of environmental protection facilities was 513 million yuan, and the environmentalprotection tax was 13.99 million yuan.

2. In 2024,1.84 billion yuan will be invested to comprehensively upgrade ultra-low emissions.Environmental self-monitoring programDuring the reporting period, the monitoring points of pollution sources were 279 flue gas monitoring points, 13 waste water monitoringpoints, 19 factory boundary noise monitoring points and 12 atmospheric dust control points.

(1) There are 279 flue gas monitoring points: 203 organized monitoring points and 76 unorganized monitoring points, which are dividedinto weekly, monthly, quarterly, half-annual and annual frequency according to the monitoring plan, and the routine monitoring taskof disorganized and organized atmospheric flue gas is completed. A total of 352 monitoring data were obtained in the first half of theyear.

(2) 13 wastewater monitoring points: the monitoring was divided into weekly, monthly and quarterly frequency according to themonitoring plan, and 632 monitoring data were obtained in the first half of the year.

(3) 19 noise monitoring points at the factory boundary: the monitoring was divided into quarterly frequency according to the monitoringplan, and 58 monitoring data were obtained in the first half of the year.

(4) 12 atmospheric dust removal points: the monitoring was divided into quarterly frequency according to the monitoring plan, and 62monitoring data were obtained in the first half of the year.Administrative penalties due to environmental issues during the reporting period

Name of companyPenalty reasonsViolation circumstancesPenalty resultsImpact on the production and operation of listed companiesCompany rectification measures
NoneNoneNoneNoneNoneNone

Other environmental information that should be disclosed.No.

Emission reduction actions in the reporting period and the effect? Applicable □ Not applicableThrough technology upgrading, equipment upgrading, energy conservation and emission reduction measures, energy consumption perunit of output value has decreased, unit carbon emissions have been reduced year by year, and enterprises have achieved fruitful resultsin green and low-carbon development. Give full play to the synergistic advantages of smelting facilities, process structure, energystructure and material technology, put forward three low-carbon metallurgical technology paths, and implement them in stages to meetcustomer needs. High quality scrap steel is melted into "semi-steel" molten steel through electric furnace, which is mixed into 50%molten iron from blast furnace to electric furnace, and then transported together for converter smelting, and then rolling. Taking theproduction of hot-dip galvanized products as an example, the long production process reduces carbon by 34% to 26% to the terminalproduct. Considering the whole process of green electricity deduction, to the terminal product reduced by 38%. Published theenvironmental product declaration of hot dip galvanized IF steel, cold rolled IF steel, hot rolled pickling low carbon stamping steel,and the third party EPD certification. Through the development of photovoltaic power generation projects, the construction area of 310,000 m2 in three cold rolling, sewage treatment center, 2250 hot rolling and office building, storage and transportation center andbuilding 40,000 parking lot, with an average annual power generation of 15,081,000 kWh, and an estimated investment of 59 millionyuan. The electric furnace project of Bensteel Plate Special Steel Division has introduced the new technology and equipment ofJapanese Steel Plantech (SPCO), which is the first set of Japanese SPCO ecological electric furnace (ECOARC electric furnace) inChina. It adopts continuous waste steel preheating and flat melting tank smelting technology, which represents the internationaladvanced level of electric furnace technology. The whole process of 0.43t low carbon leading level, and use the green electricityresources of Bensteel to achieve nearly "zero carbon" production line.Other environmental protection-related informationNone.II. Social responsibility situation

The company strictly implements the principle of precise policy implementation and providing all possible assistance, adheres to theworking belief of "never letting a single employee fall behind", establishes a long-term mechanism to do practical and good things foremployees, and effectively solves problems for employees in need. The company visited and comforted 12 employees in need anddistributed 19,000 yuan in consolation money. The company also completed the update and entry of the electronic files of the NationalTrade Union Assistance Management Platform, and the electronic files are consistent with the paper files, and the data is accurate,realizing the institutionalization, standardization and networking of assistance work for employees in need.The company actively selects outstanding cadres to participate in rural revitalization work, and currently there are 2 people serving asfirst secretaries in the village. The village cadres focus on serving and guaranteeing the three-year action plan for new breakthroughsin comprehensive revitalization, based on the actual situation of the villages they are stationed in, do a good job in one-on-one assistanceand condolences visits, promote the implementation of assistance industry projects, actively promote e-commerce training projects,promote the high-quality development of digital e-commerce, increase the publicity of assistance industries, and complete the povertyalleviation and prevention of poverty recurrence work in the first half of 2024.

The company continues to provide growth points for the rural collective economy by directly purchasing agricultural and sidelineproducts for employee welfare and dispatching them to rural areas, effectively increasing per capita income. It has been rated as anadvanced unit for targeted poverty alleviation work in Liaoning Province for many years in a row.

VI. Important Events

I. The Fulfilled Commitments During the Reporting Period and Under-FulfillmentCommitments by the End of the Period Made by Actual Controller, Acquirer, Director,Supervisor, Senior Management Personnel and other Related Parties.

√ Applicable □ Not applicable

CommitmentsCommitment partyType of commitmentContentsCommitment timeCommitment periodPerformance
Commitments made in acquisition reports or equity change reportsAnshan Iron and Steel Group Co., Ltd.Other commitmentn order to maintain the independence of Bengang Plates, Ansteel Group promises as follows: 1. Ansteel Group guarantees to keep separate from Bengang Plates in terms of assets, personnel, finance, institutions and business, and strictly abide by the relevant regulations of the China Securities Regulatory Commission on the independence of listed companies, and will not use its controlling position to interfere with the standardized operation of Bengang Plates, interfere with the business decisions of Bengang Plates, or damage the legitimate rights and interests of Bengang Plates and other shareholders. Ansteel Group and its controlled subsidiaries guarantee not to illegally occupy the funds of Bengang Plates and its controlled subsidiaries in any way. 2. The above commitments will remain valid during the period when Ansteel Group has control over Bengang Plates. If Ansteel Group fails to fulfill the above commitments and causes losses to Bengang Plates, Ansteel Group will bear the corresponding compensation liability.Aug 20, 2021Long termUnder normal fulfillment
Anshan Iron and Steel Group Co.,Other commitmentTo avoid horizontal competition, Ansteel Group undertakes asAug 20, 2021Long termUnder normal fulfillment
Ltd.follows: (1) With regard to the overlap of some businesses between Ansteel Group and Bengang Plates after the completion of this acquisition, in accordance with the requirements of current laws, regulations and relevant policies, Ansteel Group will, within 5 years from the date of this letter of commitment, and strive to achieve the same within a shorter period of time, in accordance with the requirements of relevant securities regulatory authorities, and on the premise of complying with the laws, regulations and relevant regulatory rules applicable at that time, and in line with the principle of benefiting the development of Bengang Plates and safeguarding the interests of shareholders, especially the interests of small and medium-sized shareholders, steadily promote the integration of related businesses to resolve horizontal competition by comprehensively using a variety of methods such as asset restructuring, business adjustments, and entrusted management. The above solutions include but are not limited to: 1) Asset restructuring: adopt different methods permitted by relevant laws and regulations such as cash consideration or issuance of shares to purchase assets, asset replacement, asset transfer or other feasible restructuring methods, gradually sort out and reorganize the assets of Ansteel Group and Bengang Plate with overlapping businesses, and eliminate the overlap of some businesses; 2) Business adjustment: sort out the business
Plates, Ansteel Group will make every effort to give Bengang Plates priority development rights and priority acquisition rights for such opportunities, ensure that the price of the relevant transaction is fair and reasonable, and will use the business practices followed in normal commercial transactions with independent third parties as the basis for pricing; (4) Ansteel Group guarantees to strictly abide by laws, regulations and the provisions of the Articles of Association of Bengang Plates Co., Ltd. and its relevant management systems, and will not use its position as an indirect controlling shareholder of Bengang Plates to seek improper interests, thereby damaging the rights and interests of other shareholders of Bengang Plates; (5) The above commitments made by Ansteel Group are valid during the period when Ansteel Group controls Bengang Plates. If the rights and interests of Bengang Plates are damaged due to the violation of the above commitments, Ansteel Group is willing to bear the corresponding liability for damages.
Anshan Iron and Steel Group Co., Ltd.Other commitmentIn order to standardize and reduce the related-party transactions between Ansteel Group and listed companies, Ansteel Group has made the following commitments: 1. Ansteel Group will ensure that Bensteel Plates has independent business and complete assets, and has independent and complete production, supply, sales and other supporting systems. 2. Ansteel Group and other enterprises controlled byAug 20, 2021Long termUnder normal fulfillment
accordance with the law.
Commitment made during initial public offering or refinancingCompany directors, senior managementOther commitmentAccording to the relevant regulations of the China Securities Regulatory Commission, all directors and senior management of the Company have made the following commitments to the Company’s fulfillment of the diluted immediate return measures: 1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and interests of the Company and all shareholders . 2. I promise not to deliver benefits to other units or individuals without compensation or under unfair conditions, nor to use other means to damage the Company's interests. 3. I promise to restrict the position-related consumption behavior of company directors and senior management personnel. 4. I promise not to use the Company’s assets to do investment and consumption activities that are not related to the performance of my duties. 5. Within the scope of my responsibilities and authority, I promise to make every effort to promote the company's board of directors or the remuneration system established by the remuneration and appraisal committee to be linked to the implementation of the company's compensation measures, and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 6. If the company intends to implement equity incentives, I promise to, within my own responsibilities and jurisdiction, make every effort to promote theMay 22, 2019Long termUnder normal fulfillment
Company’s proposed equity incentive exercise conditions to be linked to the Company’s implementation of the return measures, and to review the Company’s board of directors and shareholders’ general meetings and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 7. If the future issuance of this commitment and the implementation of the Company’s public issuance of convertible corporate bonds are completed, if the China Securities Regulatory Commission makes other new regulatory provisions on the measures for filling returns and their commitments, and the above commitments cannot meet the requirements of the China Securities Regulatory Commission When other regulations are stipulated, a commitment will be issued in accordance with the latest regulations of the China Securities Regulatory Commission. The company's controlling shareholder, Benxi Iron and Steel (Group) Co., Ltd., promised not to interfere with the company's operation and management activities beyond its authority and not to infringe on the Company's interests.
Benxi Steel & Iron (Group) Co., Ltd. and Bengang Group Co., Ltd.Other CommitmentThe sales companies of Bengang International Trade Co., Ltd. and Bengang Steel plates in the same region guarantee independent personnel, independent business, independent finance, and independent assets, and are guaranteed not to be in the same registration place or in the sameJuly 24,2019Long termUnder normal fulfillment
Changning District People's Court issued an announcement to appoint Guohao Lawyer (Shanghai) Office as the bankruptcy administrator. After communication with the bankruptcy administrator, it is expected that the bankruptcy and liquidation of Shanghai Bengang Iron and Steel Sales Co., Ltd. will be completed by the end of 2020. Upon completion of the aforementioned bankruptcy liquidation procedures, the relevant procedures for cancellation of Shanghai Bengang Iron and Steel Sales Co., Ltd. will be handled immediately. (2) Shanghai Bengang Iron & Steel Materials Co., Ltd. is a holding subsidiary of Shanghai Bengang Iron & Steel Sales Co., Ltd., and was deregistered in November 2020. (3) Guangzhou Free Trade Zone Bengang Sales Co., Ltd. was deregistered in July 2022.
Benxi Steel & Iron (Group) Co., Ltd.Other CommitmentThe Group's horizontal competition with Benxi Steel Plates and the measures and commitments to avoid inter-industry competition 1. During the period when the Group is the controlling shareholder of Bengang Steel Plates, in addition to the matters listed in Article 1 of this Commitment Letter, the Group and other enterprises controlled by the Group other than Bengang Steel Plates no longer produce or develop any products that compete or may compete with the products produced by Bengang Steel Plates and its subsidiaries at home and abroad, and do not directly or indirectly operate any business that competes with BengangJuly 24,2019Long termUnder normal fulfillment
commitments are violated, the Group is willing to bear all the responsibilities arising therefrom, and fully compensate or compensate for all direct or indirect losses caused to Bengang Steel Plates. 5. This letter of commitment continues to be effective during the period of the Group as the controlling shareholder of Bengang Steel Plates and cannot be changed or withdrawn
Benxi Steel & Iron (Group) Co., Ltd. and Bengang Group Co., Ltd.Other CommitmentIn order to regulate and reduce the Company’s transactions with controlling shareholders and other related parties, and to protect the interests of the Company and small and medium shareholders, Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. have issued the following commitments: "Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectively referred to as the "Group"), as a direct controlling shareholder and an indirect controlling shareholder of Bengang Steel Plates Co., Ltd. (hereinafter referred to as "Bengang Steel Plates"), in order to protect the interests of Bengang Steel Plates and other shareholders of Bengang Steel Plates, regulate The Group's related transaction with Bengang Steel Plates hereby promises: 1. The Group will fully respect the independent legal person status of Bengang Steel Plates, ensure the independent operation and independent decision-making of Bengang Steel Plates, ensure the independence of Bengang Steel Plates’ business, asset integrity and personnel Independence and financial independenceJuly 24,2019Long termUnder normal fulfillment
interests of Benxi Steel Plates from damage. 4. The Group guarantees that the above commitments are continuously effective and irrevocable as long as Bengang Steel Plates is listed on the domestic stock exchange and the Group acts as its direct and indirect controlling shareholder. If any violation of the above commitments occurs, the Group therefore bear all the losses caused to Bengang Steel Plates.
Whether Commitment fulfilled on time or notYes

II.. Non-operating capital occupation of listed companies by controlling shareholders and otherrelated parties

□ Applicable √ Not applicable

During the reporting period, there was no non-operating capital occupation of the listed company by controllingshareholders and other related parties.III. Violation of external guarantees

□ Applicable √ Not applicable

During the reporting period, the company had no violations of external guarantees.

IV. Appointment and Dismissal of Certified Accountant’s FirmIs the semi-annual financial report audited?

□ Yes √ No

The semi-annual report has not been audited.

V. Illustrations of the Board of Directors and Supervisory Committee on the Modified AuditReport Issued by the CPAs

□ Applicable √ Not applicable

VI. Illustrations of the Board of Directors on the Modified Audit Report Issued by the CPAsfor Previous Reporting Period

□ Applicable √ Not applicable

Ⅶ. Bankrupt and Reforming Events

□ Applicable √ Not applicable

There was no bankrupt and reforming event during the reporting period.

VIII. Lawsuits and ArbitrationsSignificant lawsuits and arbitrations

□ Applicable √ Not applicable

There is no Significant lawsuits and arbitrations during the reporting period.

Other Lawsuits and Arbitrations

√ Applicable □ Not applicable

Basic information of litigation (arbitration)Amount involved (ten thousand yuan)Whether a provisional liability is formedProgress in litigation (arbitration)Results and effects of the litigation (arbitration) trialExecution of the litigation (arbitration) judgmentDisclosure dateDisclosure index
Summary of matters that the company does not meet the disclosure standards of material litigation (arbitration)6,084.17NoIn the trialTo be concludedIn accordance with the law

IX. Punishment and Rectification

√ Applicable □ Not applicable

NameTypeCauseType of investigation and punishmentConclusion (if any)Disclosure dateDisclosure index
Bengang plate, Gao Lie, Shen Qiang, Zhao ZhonghuaOtherBefore 2019, the company failed to promptly settle the port and transit consumption of raw materials procured on behalf of others, resulting in inaccurate disclosure of the amounts of relevant report items in the current period;The CSRC adopts administrative supervision measuresIssue a warning letter, and record it in the integrity file of the securities and futures marketMay 18,2024Announcement on receipt of the Warning Letter of Liaoning Securities Regulatory Bureau (No.: 2024-022)

at the sametime, there wasalso a lack ofindependencein theprocurementbusiness andirregularmanagement ofaccountingfiles.

X. Credit Status of the Company and its Controlling Shareholders and Actual Controllers

□ Applicable √ Not applicable

XI. Major Related Party Transactions

1. Related party transactions relevant to daily operations

√ Applicable □ Not applicable

Related partyRelationshipTransactions typeRelated party transaction contentPricing principles of related party transactionsRelated party transaction priceAmount of Affiliated Transaction (ten thousand Yuan)Proportion of the amount of similar transactionsApproved transaction amount (ten thousand yuan)Whether the approved quota is exceededSettlement method of related party transactionsThe market price of similar transactions availableDisclosure dateDisclosure index
Benxi Beiying Iron and Steel (Group) Co., LTDAlso belong to Bengang GroupPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price603,611.1854.70%1,493,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Mining Co., LTDThe same parent companyPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price376,154.3434.09%750,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and SteelThe same parentPurchasing goods /Procurement of majorprotocolRelated Agree26,837.982.43%30,000NoAccording to theYesDec 02, 20232023-068
(Group) Industrial Development Co., LTDcompanyprovide servicesraw materialsment Priceagreement
Benxi Iron and Steel (Group) Co., LTDparent companyPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price5,335.120.48%30,000NoAccording to the agreementYesDec 02, 20232023-068
Angang Group International Economic and Trade Co., LTDAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price10,730.560.97%30,000NoAccording to the agreementYesDec 02, 20232023-068
Anshan Iron and Steel Group Co., LtdAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price30,471.112.76%50,600NoAccording to the agreementYesDec 02, 20232023-068
Ansteel Group Zhongyuan Industrial Development Co., LTDAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of major raw materialsprotocolRelated Agreement Price48,342.364.38%160,000NoAccording to the agreementYesDec 02, 20232023-068
Other subsidiaries of Angang GroupAlso belong to Angang Iron andPurchasing goods / provideProcurement of major raw materialsprotocolRelated Agreement Price2,060.840.19%5,000NoAccording to the agreementYesDec 02, 20232023-068
Steel Groupservices
Benxi Beiying Iron and Steel (Group) Co., LTDAlso belong to bengang GroupPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price0.00%2,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Machinery Manufacturing Co., LTDThe same parent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price6,254.9122.35%10,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Equipment Engineering Co., LTDThe same parent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price1,540.735.50%16,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Construction Co., LtdThe same parent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price81.860.29%12,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Information AutoThe same parent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price701.692.51%8,000NoAccording to the agreementYesDec 02, 20232023-068
mation Co., LTD
Benxi Iron and Steel (Group) Industrial Development Co., LTDThe same parent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price1.70.01%4,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Co., LTDparent companyPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price10,658.1138.08%26,000NoAccording to the agreementYesDec 02, 20232023-068
Ansteel Group Zhongyuan Industrial Development Co., LTDAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price517.111.85%1,500NoAccording to the agreementYesDec 02, 20232023-068
Anshan Iron and Steel Group Co., LtdAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price6,454.4423.06%11,500NoAccording to the agreementYesDec 02, 20232023-068
Other subsidiaries of Angang GroupAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesProcurement of auxiliary materialsprotocolRelated Agreement Price1,781.036.36%4,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi BeiyingAlso belong toPurchasing goodsPurchase energprotocolRelated Agree31,661.9599.96%60,000NoAccording to theYesDec 02, 20232023-068
Iron and Steel (Group) Co., LTDbengang Group/ provide servicesy powerment Priceagreement
Other subsidiaries of Angang GroupAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesPurchase energy powerprotocolRelated Agreement Price11.80.04%YesAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Construction Co., LtdThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price10,354.518.03%40,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Beiying Iron and Steel (Group) Co., LTDAlso belong to Bengang GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price5,309.624.12%12,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Equipment Engineering Co., LTDThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price31,102.424.11%35,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Mining Co., LTDThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price0.00%3,000NoAccording to the agreementYesDec 02, 20232023-068
Bensteel Group International Economic and Trade Co., LTDAlso belong to Bengang GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price4,072.963.16%10,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Information Automation Co., LTDThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price10,478.538.12%20,000NoAccording to the agreementYesDec 02, 20232023-068
North Hengda Logistics Co., LtdAlso belong to Bengang GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price1,120.090.87%10,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Machinery Manufacturing Co., LTDThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price1,070.250.83%7,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Industrial DevelopmentThe same parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price380.280.29%800NoAccording to the agreementYesDec 02, 20232023-068
Co., LTD
Benxi Iron and Steel (Group) Co., LTDparent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price14,011.9610.86%34,400NoAccording to the agreementYesDec 02, 20232023-068
Ben Steel Group Co., LtdControlling shareholder of the parent companyPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price10,248.947.95%36,200NoAccording to the agreementYesDec 02, 20232023-068
Angang Group Engineering Technology Development Co., LTDAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price5,363.814.16%12,000NoAccording to the agreementYesDec 02, 20232023-068
Anshan Iron and Steel Group Co., LtdAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price34,746.4626.94%26,000NoAccording to the agreementYesDec 02, 20232023-068
Other subsidiaries of Angang GroupAlso belong to Angang Iron and Steel GroupPurchasing goods / provide servicesAccept supportive servicesprotocolRelated Agreement Price734.250.57%3,000NoAccording to the agreementYesDec 02, 20232023-068
North Hengda Logistics Co., LtdAlso belong to Bengang GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price172,205.2644.13%420,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Beiying Iron and Steel (Group) Co., LTDAlso belong to Bengang GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price22,264.055.70%50,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Mining Co., LTDThe same parent companySelling goods / providing servicesSelling goodsprotocolRelated Agreement Price14,334.913.67%90,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Construction Co., LtdThe same parent companySelling goods / providing servicesSelling goodsprotocolRelated Agreement Price144.310.04%500NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Machinery Manufacturing Co., LTDThe same parent companySelling goods / providing servicesSelling goodsprotocolRelated Agreement Price943.660.24%1,300NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Industrial Development Co., LTDThe same parent companySelling goods / providing servicesSelling goodsprotocolRelated Agreement Price8,121.772.08%14,000NoAccording to the agreementYesDec 02, 20232023-068
Benxi Iron and Steel (Group) Co., LTDparent companySelling goods / providing servicesSelling goodsprotocolRelated Agreement Price5,760.191.48%24,200NoAccording to the agreementYesDec 02, 20232023-068
Anshan Iron and Steel Group Co., LtdAlso belong to Angang Iron and Steel GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price140,168.5935.92%331,900NoAccording to the agreementYesDec 02, 20232023-068
Ansteel Group Zhongyuan Industrial Development Co., LTDAlso belong to Angang Iron and Steel GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price3,735.370.96%14,500NoAccording to the agreementYesDec 02, 20232023-068
Angang Group International Economic and Trade Co., LTDAlso belong to Angang Iron and Steel GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price19,862.225.09%30,000NoAccording to the agreementYesDec 02, 20232023-068
Panzhihua Steel Group Co., LtdAlso belong to Angang Iron and Steel GroupSelling goods / providing servicesSelling goodsprotocolRelated Agreement Price1,219.370.31%2,600NoAccording to the agreementYesDec 02, 20232023-068
Other subsidiaries of Angang GroupAlso belong to Angang Iron andSelling goods / providingSelling goodsprotocolRelated Agreement Price1,500.50.38%4,000NoAccording to the agreementYesDec 02, 20232023-068
Steel Groupservices
Benxi Iron and Steel (Group) Mining Co., LTDThe same parent companySelling goods / providing servicesProvide supportive servicesprotocolRelated Agreement Price410.8373.37%3,700NoAccording to the agreementYesDec 02, 20232023-068
Other subsidiaries of Angang GroupAlso belong to Angang Iron and Steel GroupSelling goods / providing servicesProvide supportive servicesprotocolRelated Agreement Price149.1326.63%300NoAccording to the agreementYesDec 02, 20232023-068
Total----1,683,023.06--3,940,000----------
Details of any sales return of a large amountNo applicable
Actual performance of the estimated total amount of daily related transactions to occur in the current period during the reporting period by category(if any)No applicable
Reason for any significant difference between the transaction price and the Market price for reference (if applicable)No applicable

2. Related transactions relevant to asset acquisition or sold

□ Applicable √ Not applicable

There was no related transaction relevant to asset acquisition or sold during the reporting period.

3. Related transactions relevant to joint investments

□ Applicable √ Not applicable

There was no related transaction relevant to joint investments during the reporting period.

4. Credits and liabilities with related parties

□ Applicable √ Not applicable

There were no related credits and debts during the reporting period.

5. Deals with related financial companies and financial companies controlled by the company

√ Applicable □ Not applicable

Deposit business

Related partyRelationshipMaximum daily deposit limit (ten thousand)Deposit interest rate rangeBeginning balance (10 thousand)Current periodEnding balance (10 thousand)
Total deposit amount of the current period (10 thousand)Total withdrawal amount of this period (10 thousand)
Angang Steel Group Finance Co., LTDAlso belong to Anshan Iron and Steel Group450,0001.35%39,137.765,388,504.115,349,987.2877,654.58

Loan Business

Related partyRelationshipLoan limit(10 thousand)Loan interest rate rangeBeginning balance(10 thousand)Current periodEnding balance(10 thousand)
Total loan amount of the current period (10 thousand)Total repayment amount of the current period (10 thousand)

Credit or other financial services

Related partyRelationshipBusiness typeAmount(10 thousand)Actual amount(10 thousand)
Angang Steel Group Finance Co., LTDAlso belong to Anshan Iron and Steel GroupOther financial operations32,962.5713,111.58

6. Other significant related transactions

□ Applicable √ Not applicable

There was no other significant related transaction during the reporting period.

7. Material Contracts and Performance Thereof

□ Applicable ? Not applicable

The company has no other material related party transactions during the reporting period.

XII. Major Contracts and Performance

1. Trusteeship, contracting, and leasing matters

(1) Trusteeship

□ Applicable √ Not applicable

There was no trusteeship during the reporting period.

(2) Contracting

□ Applicable √ Not applicable

There was no contracting during the reporting period.

(3) Lease

√Applicable □ Not applicable

Description of leaseThe Company as the lessor:

Name of lesseeType of leased assetsLease income recognized in this periodLeasing income recognized in the previous period
Benxi Iron and Steel (Group) Equipment Engineering Co., LTDPlant and auxiliary equipment670,802.00

The Company as the lessee:

Name of lessorType of leased assetsCurrent periodPrevious period
Rental fees for short-term leasVariable lease payments not included in the measurement of leaseRent paidInterest expense on lease liabilities assumedIncreased access assetsRental fees for short-term leasVariable lease payments not included in the measurement of leaseRent paidInterest expense on lease liabilities assumedIncreased access assets
es and low-value assetsliabilitieses and low-value assetsliabilities
Benxi Iron and Steel (Group) Co., LTDLand use right 7,669,068.17 square meters, land use right 42,920.00 square meters27,638,772.0619,500,054.0027,627,809.2619,750,096.20
Benxi Iron and Steel (Group) Co., LTD2300 hot rolling mill production line, related real estate8,049,080.523,870,344.348,049,080.533,736,932.14
Benxi Beiying Iron and Steel (Group)1780 hot rolling mill production line,7,175,818.862,980,721.707,557,730.912,877,975.14
Co., LTDrelated property
Ben Steel Group Co., LtdLand use right is 728,282.30 square meters4,972,711.561,224,959.404,972,711.541,315,378.20
Ansteel Group Energy Saving Technology Service Co., LTDmachinery equipment12,063,482.04-

For the company's profit and loss of the company to more than 10% of the total profit of the reporting period

□ Applicable ? Not applicable

During the reporting period of the company, there is no leasing project that the profit and loss of the company reaches more than 10%of the total profit of the company during the reporting period.

2. Major Guarantee

□ Applicable √ Not applicable

There was no guarantee during the reporting period.

3. Entrusted Finance

□ Applicable √ Not applicable

There was no entrusted finance during the reporting period.

4. Other Major Contracts

□ Applicable √ Not applicable

There was no other major contract during the reporting period.XIII. Other Major Events

√ Applicable □ Not applicable

On June 20, 2023, the company disclosed the "Major Asset Replacement and Related Transaction Plan" to carry out assetreplacement with Benxi Iron and Steel Company, intending to acquire 100% equity of Benxi Iron and Steel (Group)Mining Co., Ltd., and intending to dispose of all assets and liabilities of the listed company except for retained assets andliabilities. The difference between the assets to be acquired and the assets to be disposed of shall be made up by one partyto the other in cash. At present, the company is conducting further demonstration and communication and negotiation onthe transaction plan. After the relevant matters are determined, the company will convene the board of directors again fordeliberation.

XIV. Major Events of Subsidiaries

□ Applicable √ Not applicable

VII. Status of Share Capital Changes and Shareholders

I. Share Capital Changes

1. Share capital changes

Unit: Share

Before the changeIncrease/decrease(+,-)After the Change
QuantityPercentageIssuing of new shareBonus sharesCapitalization of common reserve fundOthersSubtotalQuantityPercentage
I. Restricted Shares
2. State-own Legal-person Shareholding
3. Other domestic shareholdings
Including: Domestic legal person holding
Domestic person holding
II. Non-restricted Shares4,108,219,302100.00%1,7711,7714,108,221,073100.00%
1. Common shares in RMB3,708,219,30290.26%1,7711,7713,708,221,07390.26%
2. Foreign shares in domestic market400,000,0009.74%400,000,0009.74%
2. Foreign shares in oversea market
4.Others
III. Total shares4,108,219,302100.00%1,7711,7714,108,221,073100.00%

Reason of share capital changes

√Applicable □Not applicable

During the reporting period, the company's publicly issued convertible corporate bonds were convertedinto 70 shares, and the company's total share capital increased by 1,771 shares.Approval of share capital changes

□ Applicable √ Not applicable

Status of registration process of transferred shares

□ Applicable √ Not applicable

Progress of Share Repurchase

□ Applicable √ Not applicable

Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding

□ Applicable √ Not applicable

Influences of share capital changes on financial indices such as basic earnings per share, diluted earningsper share, and net asset per share attributed to common shareholders

□ Applicable √ Not applicable

Other information the Company deems necessary to be disclosed or required by the authority

□ Applicable √ Not applicable

2. Changes of Restricted Shares

□Applicable √Not applicable

II. Securities Issuance and Listing

√Applicable □Not applicable

III. Total Number of shareholders and shareholding

Unit: Shares

Total number of common shareholders at the end of the reporting period47,365The total number of preferred shareholders voting rights restored at the end of the reporting period (See Notes 8)0
Shareholding of shareholders holding more than 5% or top 10 shareholders
Name of the shareholderNature of shareholderHolding PercentageNumber of shares held at period-endChanges in reporting periodRestricted shares heldUn-restricted shares heldNumber of pledged or frozen shares
StatusNumber
Benxi Steel & Iron (Group) Co., Ltd.State-owned legal person58.65%2,409,628,094002,409,628,094Pledged110,000,000
Frozen102,100,000
Bengang Group Co., Ltd.State-owned legal person17.95%737,371,53200737,371,532Not applicable0
Guan HuiDomestic natural person0.71%29,081,200351,200029,081,200Not applicable0
Zhang WenyouDomestic natural person0.47%19,168,16718,200019,168,167Not applicable0
Gao TaoDomestic natural person0.38%15,440,000-8,310,000015,440,000Not applicable0
Lyu RuijunDomestic natural person0.29%12,000,00512,000,005012,000,005Not applicable0
Basic Pension Insurance Fund Combination 804Others0.29%11,823,6001,538,500011,823,600Not applicable0
Ma YonghuaDomestic natural person0.24%10,022,45710,022,457010,022,457Not applicable0
Hong Kong Securities Clearing Company LimitedForeign legal person0.24%9,964,534-4,264,21509,964,534Not applicable0
Zhou WeiDomestic natural person0.22%8,995,300-1,00008,995,300Not applicable0
Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if any) (See Notes 3)None
Notes to relationship or ‘action in concert’ among the top 10 shareholders.Benxi Iron and Steel (Group) Co., Ltd. has a related relationship with Benxi Iron and Steel Group Co., Ltd., and is a concerted action person stipulated in the "Administrative Measures for the Acquisition of Listed Companies". It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as described by Rules of Information Disclosing Regarding Changing of Shareholding Status of Listed Companies existing among the above shareholders.
Explanation of the above-mentioned shareholders' entrusted/entrusted voting rights and waiver of voting rightsThe above shareholders are not involved in the entrustment, entrusted voting rights, or abstention of voting rights.
Special instructions for the existence of special repurchase accounts among theNone
top 10 shareholders (if any) (see Note 11)
Shareholding of top 10 unrestricted shareholders
Name of the shareholderUn-restricted shares held at the end of the reporting periodCategory of shares
Category of sharesQuantity
Benxi Steel & Iron (Group) Co., Ltd.2,409,628,094Common shares in RMB2,409,628,094
Bengang Group Co., Ltd.737,371,532Common shares in RMB737,371,532
Guan Hui29,081,200Common shares in RMB29,081,200
Zhang Wenyou19,168,167Common shares in RMB19,168,167
Gao Tao15,440,000Foreign shares in domestic exchange15,440,000
Lyu Ruijun12,000,005Foreign shares in domestic exchange12,000,005
Basic Pension Insurance Fund Combination 80411,823,600Common shares in RMB11,823,600
Ma Yonghua10,022,457Foreign shares in domestic exchange10,022,457
Hong Kong Securities Clearing Company Limited9,964,534Common shares in RMB9,964,534
Zhou Wei8,995,300Common shares in RMB8,995,300
Notes to relationship or ‘action in concert’ among the top 10 non-restricted shareholders, and among the top 10 non-restricted shareholders and top 10 shareholdersBenxi Iron and Steel (Group) Co., Ltd. has a related relationship with Benxi Iron and Steel Group Co., Ltd., and is a concerted action person stipulated in the "Administrative Measures for the Acquisition of Listed Companies". It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as described by Rules of Information Disclosing Regarding Changing of Shareholding Status of Listed Companies existing among the above shareholders.
Shareholders among the top 10 participating in securities margin trading (if any) (see Note 4)Guan Hui holds 1,081,200 shares of the Company's stock through an investor general account and 28,000,000 shares of the Company's stock through an investor credit securities account. Zhang Wenyou holds 19,168,167 shares of the Company's stock through an investor credit securities account. Zhou Wei holds 163,500 shares of the Company's stock through an investor general account and 8,831,800 shares of the Company's stock through an investor credit securities account.

Shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10shareholders of unrestricted tradable shares participating in the refinancing business and lendingshares

□ Applicable √ Not Applicable

The top 10 shareholders and the top 10 shareholders of unrestricted tradable shares have changedcompared with the previous period due to lending/repayment of refinancing

□ Applicable √ Not Applicable

Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement dealing in reporting period

□ Yes √ No

Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-backagreement dealing in reporting period.

IV. Change of controlling shareholder or actual controller

□ Applicable √ Not Applicable

There was no change in the shareholding status of the company's directors, supervisors and seniormanagement during the reporting period. Please refer to the 2023 annual report for details.

V. Change of controlling shareholder or actual controller

Change of controlling shareholder during the reporting period

□ Applicable √ Not applicable

There was no change of holding shareholder in the report period.

Change of actual controller during the reporting period

□ Applicable √ Not applicable

There was no change of substantial controller in the report period.

VIII. Status of Preferred Shares

□ Applicable √ Not applicable

There were no preferred shares during the reporting period.

IX. Status of Bonds

√ Applicable □ Not applicable

I. Enterprise bonds

□ Applicable √ Not applicable

During the reporting period, the company did not have Enterprise bonds.

II. Corporate bonds

□ Applicable √ Not applicable

During the reporting period, the company did not have corporate bonds.

III. Debt financing tools for non-financial companies

□ Applicable √ Not applicable

During the reporting period, the company did not have non-financial corporate debt financinginstruments.

IV. Convertible corporate bonds

√ Applicable □ Not applicable

1. Previous adjustments to the conversion price

1. The initial conversion price of "Bengang Convertible Bonds" is 5.03 yuan per share.

2. As the company implemented the 2020 equity distribution plan, the conversion price of "BengangConvertible Bonds" was adjusted to RMB 5.02 per share on July 19, 2021.

3. As the company implemented the 2021 mid-term equity distribution plan, the conversion price of"Bengang Convertible Bonds" was adjusted to RMB 4.55 per share on August 13, 2021.

4. As the company implemented the 2021 equity distribution plan, the conversion price of "BengangConvertible Bonds" was adjusted to RMB 3.95 per share on August 13, 2021.

2. Cumulative share conversion

√ Applicable □ Not applicable

Name of Convertible BondStart date and end date of conversionTotal issue quantityTotal issue amountCumulative conversion amount (Yuan)Cumulative conversion quantity(shares)Proportion of converted shares to the total issue quantityAmount of shares not converted (Yuan)Proportion of unconverted amount to the total issue amount
Bengang Convertible Bond4th Jan 2021 – 28th Jun 202668,000,0006,800,000,000.001,168,982,900.00232,849,5416.01%5,631,017,100.0082.81%

3. The top ten holders of convertible bonds

No.Convertible bond holdersNature of convertible bond holdersNumber of convertible bonds held at the end of the reporting period (sheets)Amount of convertible bonds held at the end of the reporting period (yuan)Percentage of convertible bonds held at the end of the reporting period
1E Fund Security Return Fixed Income Pension Product-Construction Bank of China LimitedOthers2,444,591244,459,100.004.34%
2Industrial and Commercial Bank of China Limited - Bosera Credit Bond Investment FundOthers1,382,219138,221,900.002.45%
3Huaxia Fund Extended Life No.9 Fixed Income Pension Product-Merchants Bank Co.Others1,293,068129,306,800.002.30%
4China Merchants Bank Co., Ltd - Franklin Guohai Hengrui Bond FundOthers1,206,531120,653,100.002.14%
5Pacific Securities Co.Domestic non State-owned legal person1,169,036116,903,600.002.08%
6China Construction Bank Corporation - Xingquan Hengxin Bond Securities Investment FundOthers1,059,488105,948,800.001.88%
7National Social Security Fund portfolio 207Others943,57894,357,800.001.68%
8China National Petroleum Corporation Corporate Pension Plan-Industrial and Commercial Bank of China Ltd.Others866,39986,639,900.001.54%
9Pacific Capital Management - China Merchants Bank - Pacific Premier Tranche Treasure ProductOthers855,35585,535,500.001.52%
10China Merchants Bank Co., Ltd - Bosera CSI Convertible and Exchangeable Bond Traded Open-ended Index FundOthers739,30073,930,000.001.31%

4. Significant changes in the guarantor’s profitability, asset status, and credit status

□ Applicable √ Not applicable

5. At the end of the reporting period, the company's liabilities, changes in credit standing, and casharrangements for debt repayment in future yearsAs of the end of the reporting period, based on the company's major accounting data and financialindicators for the past two years, the company's convertible bond credit rating for this year has notchanged.

V. The loss in the scope of consolidated statements during the reporting periodexceeded 10% of the net assets at the end of the previous year

□ Applicable √ Not applicable

VI. The company’s main accounting data and financial indicators for the past twoyears as of the end of the reporting periodUnit: ten thousand yuan

Item30 June 202431 December 2023Changes over ending balance of last year
Current ratio0.670.70-4.29%
Debt-to-asset ratio64.72%61.89%2.83%
Quick ratio0.240.27-11.11%
Current periodPrevious periodChanges over previous period
Net profit after deducting non-recurring gains and losses-162,165.26-103,833.2956.17%
EBITDA total debt ratio-2.04%1.99%-4.03%
Interest Coverage ratio-5.54-3.0581.64%
Cash Interest Coverage ratio4.7420.09-76.41%
EBITDA Interest Coverage ratio-1.792.33-176.82%
Loan repayment rate100.00%100.00%0.00%
Interest repayment rate100.00%100.00%0.00%

X. Financial Report

I. Audit report

Whether the semi-annual report is audited

□ Yes √ No

The semi-annual report is not audited.II. Financial StatementsStatement in Notes are carried in RMB Yuan

1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Prepared by: Bengang Steel Plates Co., Ltd.

Unit: Yuan

Items30 Jun, 202431 Dec, 2023
Current assets
Cash at bank and on hand1,992,324,226.632,194,654,161.34
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable783,400,896.20453,560,095.49
Accounts receivable1,327,038,676.851,328,532,598.47
Accounts receivable financing191,450,087.40806,822,622.43
Prepayments567,363,480.87674,872,999.29
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables243,424,884.42318,793,157.58
Redemptory financial assets for sale
Inventories7,854,274,573.957,708,372,894.81
Including: data assets
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets142,442,422.36157,789,976.90
Total current assets13,101,719,248.6813,643,398,506.31
Non-current assets
Loan and advances issued
Debt Investments
Other debt investments
Long-term receivables
Long-term equity investments46,910,346.4146,910,346.41
Items30 Jun, 202431 Dec, 2023
Other equity instrument investments974,463,039.83974,463,039.83
Other non-current financial assets
Investment property
Fixed assets24,878,573,917.5725,028,192,964.67
Construction in progress4,156,908,135.684,308,404,147.31
Productive biological assets
Oil and gas assets
Right-of-use assets1,566,663,478.211,319,616,179.37
Intangible assets252,638,185.50256,020,436.13
Including: data assets
Development expenditure
Including: data assets
Goodwill
Long-term deferred expenses
Deferred tax assets531,708,321.88467,040,631.42
Other non-current assets121,903,869.78137,933,599.61
Total non-current assets32,529,769,294.8632,538,581,344.75
Total assets45,631,488,543.5446,181,979,851.06
Current Liabilities
Short-term loans495,730,592.00328,000,000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable11,559,857,567.6210,364,993,998.89
Accounts payable2,476,396,054.142,809,435,260.77
Advance from customers
Contract liabilities2,925,386,458.143,303,108,592.38
Financial assets sold for repurchase
Deposits from customers and interbank
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Employee benefits payable1,083,065.321,175,970.83
Current tax liabilities41,045,519.9355,402,959.11
Other payables1,291,824,477.571,659,284,531.06
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year474,487,295.43685,881,691.76
Other current liabilities334,009,488.97392,122,093.59
Total current liabilities19,599,820,519.1219,599,405,098.39
Non-current liabilities
Provision for insurance contract
Long-term loans2,319,589,918.001,723,726,700.80
Bonds payable5,522,410,434.465,451,381,676.38
Including: Preferred stock
Perpetual bond
Lease liabilities1,578,684,995.291,342,427,252.45
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Deferred income121,815,955.18136,084,955.18
Deferred tax liabilities391,676,209.87329,914,385.19
Other non-current liabilities
Items30 Jun, 202431 Dec, 2023
Total non-current liabilities9,934,177,512.808,983,534,970.00
Total liabilities29,533,998,031.9228,582,940,068.39
Shareholders' equity:
Share capital4,108,221,073.004,108,219,302.00
Other equity instruments947,856,709.19947,858,134.16
Including: Preferred stock
Perpetual bond
Capital reserves13,272,231,048.8513,272,225,870.92
Less: treasury shares
Other comprehensive income-50,371,341.88-50,371,341.88
Special reserves3,950,302.3954,843.15
Surplus reserves1,195,116,522.371,195,116,522.37
General risk reserve
Undistributed profits-4,014,083,972.36-2,463,133,834.65
Total equity attributable to equity holders of the parent company15,462,920,341.5617,009,969,496.07
Non-controlling interests634,570,170.06589,070,286.60
Total shareholder's equity16,097,490,511.6217,599,039,782.67
Total of liabilities and owners’ equity45,631,488,543.5446,181,979,851.06

Legal Representative: Huang Zuowei Person in charge of accounting: Zheng Zhengli Accounting Dept. Leader: Sun Yanbin

2. STATEMENT OF FINANCIAL POSITION OF THE PARENT COMPANY

Unit: Yuan

Items30 Jun, 202431 Dec, 2023
Current assets
Cash at bank and on hand1,565,219,400.332,084,382,077.60
Financial assets held for trading
Derivative financial assets
Notes receivable1,091,748,486.31613,514,613.02
Accounts receivable1,515,826,559.561,243,326,802.56
Accounts receivable financing161,969,807.22693,239,068.68
Prepayments557,269,854.41664,669,952.97
Other receivables392,648,388.05604,535,173.18
Inventories7,019,383,657.056,726,641,809.04
Including: data assets
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets100,948,491.3382,661,697.57
Total current assets12,405,014,644.2612,712,971,194.62
Non-current assets
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments2,269,191,936.652,269,191,936.65
Other equity instrument investments974,463,039.83974,463,039.83
Items30 Jun, 202431 Dec, 2023
Other non-current financial assets
Investment property
Fixed assets23,937,849,640.9124,052,882,215.31
Construction in progress4,116,101,211.844,275,801,115.73
Productive biological assets
Oil and gas assets
Right-of-use assets1,566,663,478.211,319,616,179.37
Intangible assets168,116,690.33170,176,158.95
Including: data assets
Development expenditure
Including: data assets
Goodwill
Long-term deferred expenses
Deferred tax assets530,831,227.91465,645,459.77
Other non-current assets114,992,260.13131,159,433.56
Total non-current assets33,678,209,485.8133,658,935,539.17
Total assets46,083,224,130.0746,371,906,733.79
Current liabilities
Short-term loans495,730,592.00328,000,000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable10,233,187,014.8010,361,392,779.12
Accounts payable3,192,743,487.973,190,842,780.56
Prepayments
Contract liabilities5,932,847,092.824,903,008,138.37
Employee benefits payable
Current tax liabilities21,221,921.2430,105,183.40
Other payables1,321,397,394.391,656,804,114.53
Liabilities held for sale
Non-current liabilities due within one year474,487,295.43685,881,691.76
Other current liabilities47,486,240.6479,447,326.71
Total current liabilities21,719,101,039.2921,235,482,014.45
Non-current liabilities
Long term loans2,319,589,918.001,723,726,700.80
Bonds payable5,522,410,434.465,451,381,676.38
Including: Preferred stock
Perpetual bond
Lease liabilities1,578,684,995.291,342,427,252.45
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Items30 Jun, 202431 Dec, 2023
Deferred income121,815,955.18136,084,955.18
Deferred tax liabilities391,676,209.87329,914,385.19
Other non-current liabilities
Total non-current liabilities9,934,177,512.808,983,534,970.00
Total liabilities31,653,278,552.0930,219,016,984.45
Shareholder’s equity:
Share capital4,108,221,073.004,108,219,302.00
Other equity instruments947,856,709.19947,858,134.16
Including: Preferred stock
Perpetual bond
Capital reserves12,852,079,366.7312,852,074,188.80
Less: Treasury shares
Other comprehensive income-50,371,341.88-50,371,341.88
Special reserves1,690,365.353,681.16
Surplus reserves1,195,116,522.371,195,116,522.37
Undistributed Profits-4,624,647,116.78-2,900,010,737.27
Total shareholder's equity14,429,945,577.9816,152,889,749.34
Total liabilities and shareholder’s equity46,083,224,130.0746,371,906,733.79

3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unit: Yuan

ItemsCurrent periodPrevious period
1. Total operating income28,364,539,286.8030,567,409,205.03
Including: Operating income28,364,539,286.8030,567,409,205.03
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost29,882,450,076.1831,417,700,991.35
Including: Operating cost29,177,241,820.2730,714,640,963.91
Interest expense
Expenditure for handling charges and commission
Surrender value
Net expenditure for compensation
Net provision for insurance contract appropriated
Bonus payment for policy
Reinsurance premium
Tax and surcharges102,496,404.9599,040,677.75
Selling and distribution expenses78,868,443.1369,901,883.24
General and administrative expenses351,694,254.72339,569,021.49
Research and development expenses36,966,260.6332,990,679.09
Financial expenses135,182,892.48161,557,765.87
Including: Interest expense192,939,391.68234,419,462.35
Interest income19,612,598.5627,351,519.21
Add: Other income84,071,493.953,518,092.14
Income on investment(“-” for loss)-31,605,308.28-2,541,506.30
Including: Income from associates and joint ventures-439,659.58
Income from derecognition of financial assets measured at amortized cost
Exchange gains(“-” for loss)
Net exposure hedge income(“-” for loss)
Gains from change of fair value (“-” for loss)
Credit impairment loss (“-” for loss)16,164,459.46-17,450,773.47
Asset impairment loss (“-” for loss)-14,313,228.28-84,458,260.66
ItemsCurrent periodPrevious period
Assets disposal gains(“-” for loss)10,002,955.91
3. Operational profit(“-” for loss)-1,453,590,416.62-951,224,234.61
Add: Non-operating income8,976,877.1751,584,548.03
Less: Non-operating expenses27,576,186.5150,585,327.13
4. Total profit (“-” for loss)-1,472,189,725.96-950,225,013.71
Less: Income tax expenses34,100,570.6733,191,710.84
5. Net profit(“-” for loss)-1,506,290,296.63-983,416,724.55
1.Classification by continuing operating
1.Net profit from continuing operation(“-” for loss)-1,506,290,296.63-983,416,724.55
2.Net profit from discontinued operation(“-” for loss)
2.Classification by ownership
1. Net profit attributable to the owners of parent company (“-” for loss)-1,550,950,137.71-1,004,945,623.68
2. Net profit attributable to non-controlling shareholders (“-” for loss)44,659,841.0821,528,899.13
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items that will not be reclassified into gains/losses
1) Re-measurement of defined benefit plans of changes in net debt or net assets
2) Other comprehensive income under the equity method cannot be reclassified into profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other comprehensive income under the equity method which can be reclassified into profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive income
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income-1,506,290,296.63-983,416,724.55
Total comprehensive income attributable to the owner of the parent company-1,550,950,137.71-1,004,945,623.68
Total comprehensive income attributable to non-controlling shareholders44,659,841.0821,528,899.13
8. Earnings per share
1)Basic earnings per share-0.3775-0.2446
2)Diluted earnings per share-0.3775-0.1558

In the current period of business combination under common control, the net profit realized by the merged partybefore the merger is: yuan, and the net profit realized by the merged party in the previous period is: yuanLegal Representative: Huang Zuowei Person in charge of accounting: Zheng Zhengli Accounting Dept. Leader: Sun Yanbin

4. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY

Unit: Yuan

ItemsCurrent periodPrevious period
1. Total operating income28,760,149,571.9530,351,590,885.27
Less: Operating cost29,834,240,304.5930,725,796,931.13
Tax and surcharges78,312,309.3670,444,069.04
Selling and distribution expenses72,861,508.2172,626,552.38
General and administrative expenses340,794,236.88320,165,443.13
Research and development expenses36,966,260.6332,990,679.09
Financial expenses151,347,791.22168,567,801.72
Including: Interest expense192,939,391.68233,021,988.80
Interest income16,562,599.7418,139,148.26
Add: Other income58,511,958.862,943,726.56
Income on investment(“-” for loss)-31,605,308.28-2,247,043.73
Including: Income from associates and joint ventures-439,659.58
Income from derecognition of financial assets measured at amortized cost
Net exposure hedge income(“-” for loss)
Gains from change of fair value (“-” for loss)
ItemsCurrent periodPrevious period
Credit impairment loss(“-” for loss)13,580,897.44-11,635,010.35
Assets impairment loss(“-” for loss)-14,313,228.28-84,458,260.66
Assets disposal gains(“-” for loss)10,000,000.00
2. Operational profit(“-” for loss)-1,718,198,519.20-1,134,397,179.40
Add: Non-operating income8,866,515.9851,556,172.07
Less: Non-operating expenses27,207,319.9250,585,327.13
3. Total profit (“-” for loss)-1,736,539,323.14-1,133,426,334.46
Less: Income tax expenses-11,902,943.63-31,989,066.39
4. Net profit(“-” for loss)-1,724,636,379.51-1,101,437,268.07
1.Net profit from continuing operation (“-” for loss)-1,724,636,379.51-1,101,437,268.07
2.Net profit from discontinued operation (“-” for loss)
5.Other comprehensive income
1.Other comprehensive income items that will not be reclassified into gains/losses
1) Re-measurement of defined benefit plans of changes
2) Other comprehensive income under the equity method cannot be reclassified into profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other comprehensive income under the equity method investee can be reclassified into profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive income
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
6. Total comprehensive income-1,724,636,379.51-1,101,437,268.07
7. Earnings per share
1)Basic earnings per share
2)Diluted earnings per share

5. CONSOLIDATED STATEMENT OF CASH FLOWS

Unit: Yuan

ItemsCurrent periodPrevious period
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services29,518,326,412.2428,113,350,099.51
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest, handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received77,037,466.40152,957,619.94
Other cash received relating to operating activities76,804,297.2166,147,192.05
Subtotal of cash inflows from operating activities29,672,168,175.8528,332,454,911.50
Cash paid for goods and services27,126,140,952.2322,042,504,737.63
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Net increase in capital lent
ItemsCurrent periodPrevious period
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees1,033,443,300.271,233,151,555.08
Cash paid for all types of taxes251,370,035.13216,708,235.51
Other cash paid relating to operating activities166,122,491.68177,453,101.47
Subtotal of cash outflows from operating activities28,577,076,779.3123,669,817,629.69
Net cash flows from operating activities1,095,091,396.544,662,637,281.81
2. Cash flows from investing activities
Cash received from disposal of investments1,843,800.00
Cash received from return on investments896,200.00
Net cash received from disposal of fixed assets, intangible assets and other long-term assets4,854.3731,053,599.66
Net cash received from disposal of subsidiary and other operating units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities4,854.3733,793,599.66
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets508,526,841.52926,848,281.71
Cash paid for acquisition of investments
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities508,526,841.52926,848,281.71
Net cash flows from investing activities-508,521,987.15-893,054,682.05
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings1,095,000,000.00300,000,000.00
Other proceeds relating to financing activities1,841,743,458.53299,914,718.38
Subtotal of cash inflows from financing activities2,936,743,458.53599,914,718.38
Cash repayments of borrowings1,657,310,516.001,691,272,090.32
Cash payments for distribution of dividends, profit or interest expenses213,951,632.57174,775,117.17
Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries
Other cash payments relating to financing activities1,677,434,508.77695,121,631.51
Subtotal of cash outflows from financing activities3,548,696,657.342,561,168,839.00
Net cash flows from financing activities-611,953,198.81-1,961,254,120.62
4. Effect of foreign exchange rate changes on cash and cash equivalents22,878,220.4230,544,772.80
5. Net increase in cash and cash equivalents-2,505,569.001,838,873,251.94
Add: Cash and cash equivalents at the beginning of the period1,184,774,971.521,296,662,683.20
6. Cash and cash equivalents at the ending of the period1,182,269,402.523,135,535,935.14

6. CASH FLOW STATEMENT OF THE PARENT COMPANY

Unit: Yuan

ItemsCurrent periodPrevious period
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services29,388,810,509.1427,625,067,518.78
Tax rebate received73,839,161.75144,310,086.64
Other cash received relating to operating activities65,515,228.7855,780,538.64
Subtotal of cash inflows from operating activities29,528,164,899.6727,825,158,144.06
Cash paid for goods and services27,619,248,120.7822,087,125,206.72
Cash paid to and on behalf of employees957,610,316.321,169,170,038.27
Cash paid for all types of taxes160,249,664.8664,558,833.83
Other cash paid relating to operating activities150,081,370.56159,109,487.43
Subtotal of cash outflows from operating activities28,887,189,472.5223,479,963,566.25
Net cash flows from operating activities640,975,427.154,345,194,577.81
ItemsCurrent periodPrevious period
2. Cash flows from investing activities
Cash received from disposal of investments
Cash received from return on investments137,000,000.00
Net cash received from disposal of fixed assets, intangible assets and other long-term assets31,053,599.66
Net cash received from disposal of subsidiary and other operating units
Other cash received relating to investing activities17,624,754.20
Subtotal of cash inflows from investing activities137,000,000.0048,678,353.86
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets508,204,963.64925,373,942.02
Cash paid for acquisition of investments
Net cash paid for acquisition of subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows paid for investing activities508,204,963.64925,373,942.02
Net cash flows from investing activities-371,204,963.64-876,695,588.16
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings1,095,000,000.00300,000,000.00
Other cash received relating to financing activities1,841,743,458.53299,914,718.38
Subtotal of cash inflows from financing activities2,936,743,458.53599,914,718.38
Cash repayments of borrowings1,657,310,516.001,691,272,090.32
Cash payments for distribution of dividends, profit or interest213,951,632.57174,775,117.17
Other cash payments relating to financing activities1,677,434,508.77678,225,192.33
Subtotal of cash outflows from financing activities3,548,696,657.342,544,272,399.82
Net cash flows from financing activities-611,953,198.81-1,944,357,681.44
4. Effect of foreign exchange rate changes on cash and cash equivalents22,844,423.7428,934,107.60
5. Net increase in cash and cash equivalents-319,338,311.561,553,075,415.81
Add: Cash and cash equivalents at the beginning of the period1,074,502,887.78420,642,596.45
6. Ending balance of cash and cash equivalents755,164,576.221,973,718,012.26

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unit: Yuan

ItemsCurrent period
Owner's equity attributable to parent companyNon-controlling interestTotal of owner's equity
Share capitalOther equity instrumentsCapital reservesLess: Treasury sharesOther comprehensive incomeSpecial reservesSurplus reservesGeneral risk reserveUndistributed profitSubtotal
Preference sharesPerpetual bondOthers
1. Ending balance of last year4,108,219,302.00947,858,134.1613,272,225,870.92-50,371,341.8854,843.151,195,116,522.37-2,463,133,834.6517,009,969,496.07589,070,286.6017,599,039,782.67
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year4,108,219,302.00947,858,134.1613,272,225,870.92-50,371,341.8854,843.151,195,116,522.37-2,463,133,834.6517,009,969,496.07589,070,286.6017,599,039,782.67
3. Changes in current year (“-” for decrease)1,771.00-1,424.975,177.933,895,459.24-1,550,950,137.71-1,547,049,154.5145,499,883.46-1,501,549,271.05
1) Total comprehensive income-1,550,950,137.71-1,550,950,137.7144,659,841.08-1,506,290,296.63
2) Capital increase and decrease by shareholders1,771.00-1,424.975,177.935,523.965,523.96
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments1,771.00-1,424.975,177.935,523.965,523.96
(3) Share-based payment attributable to owners' equity
(4) Others
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into Retained Earnings
(5) Other comprehensive income transferred into Retained Earnings
(6) Others
5) Special reserves3,895,459.243,895,459.24840,042.384,735,501.62
(1) Provision of special reserves36,054,579.2736,054,579.272,591,073.0938,645,652.36
(2) Use of special reserves32,159,120.0332,159,120.03-1,751,030.7130,408,089.32
6) Others
4. Ending balance of current year4,108,221,073.00947,856,709.1913,272,231,048.85-50,371,341.883,950,302.391,195,116,522.37-4,014,083,972.3615,462,920,341.56634,570,170.0616,097,490,511.62
ItemsPrevious period
Owner's equity attributable to parent companyNon-controlling interestTotal of owner's equity
Share capitalOther equity instrumentsCapital reservesLess: Treasury sharesOther comprehensive incomeSpecial reservesSurplus reservesGeneral risk reserveUndistributed profitSubtotal
Preference sharesPerpetual bondOthers
1. Ending balance of last year4,108,212,217.00947,863,834.0213,272,205,160.21-15,904,760.022,217,913.771,195,116,522.37-720,559,670.7318,789,151,216.62584,587,863.7619,373,739,080.38
Add: Change of accounting policies
Correction of errors for last period
Business consolidation under common control
Others
2. Beginning balance of current year4,108,212,217.00947,863,834.0213,272,205,160.21-15,904,760.022,217,913.771,195,116,522.37-720,559,670.7318,789,151,216.62584,587,863.7619,373,739,080.38
3. Changes in current year (“-” for decrease)2,530.00-2,035.667,397.0426,792,439.12-1,004,945,623.68-978,145,293.1823,881,110.18-954,264,183.00
1) Total comprehensive income-1,004,945,623.68-1,004,945,623.6821,528,899.13-983,416,724.55
2) Capital increase and decrease by shareholders2,530.00-2,035.667,397.047,891.387,891.38
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to owners' equity
(4) Others2,530.00-2,035.667,397.047,891.387,891.38
3) Profit distribution
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into Retained Earnings
(5) Other comprehensive income transferred into Retained Earnings
(6) Others
5) Special reserves26,792,439.1226,792,439.122,352,211.0529,144,650.17
(1) Provision of special reserves34,099,757.8134,099,757.812,472,551.7536,572,309.56
(2) Use of special reserves7,307,318.697,307,318.69-120,340.707,186,977.99
6) Others
4. Ending balance of current year4,108,214,747.00947,861,798.3613,272,212,557.25-15,904,760.0229,010,352.891,195,116,522.37-1,725,505,294.4117,811,005,923.44608,468,973.9418,419,474,897.38

8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY

Unit: Yuan

ItemsCurrent period
Share capitalOther equity instrumentsCapital reservesLess: Treasury sharesOther comprehensive incomeSpecial reservesSurplus reservesUndistributed profitsTotal shareholder’s equity
Preference sharesPerpetual bondOthers
1. Ending balance of last year4,108,219,302.00947,858,134.1612,852,074,188.80-50,371,341.883,681.161,195,116,522.37-2,900,010,737.2716,152,889,749.34
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year4,108,219,302.00947,858,134.1612,852,074,188.80-50,371,341.883,681.161,195,116,522.37-2,900,010,737.2716,152,889,749.34
3. Changes in current year (“-” for decrease)1,771.00-1,424.975,177.931,686,684.19-1,724,636,379.51-1,722,944,171.36
1) Total comprehensive income-1,724,636,379.51-1,724,636,379.51
2) Capital increase and decrease by shareholders1,771.00-1,424.975,177.935,523.96
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments1,771.00-1,424.975,177.935,523.96
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into Retained Earnings
(5) Other comprehensive income transferred into retained earnings
(6) Others
5) Special reserves1,686,684.191,686,684.19
(1) Provision of special reserves28,658,400.0028,658,400.00
(2) Use of special reserves26,971,715.8126,971,715.81
6) Others
4. Ending balance of current year4,108,221,073.00947,856,709.1912,852,079,366.73-50,371,341.881,690,365.351,195,116,522.37-4,624,647,116.7814,429,945,577.98
ItemsPrevious period
Share capitalOther equity instrumentsCapital reservesLess: Treasury sharesOther comprehensive incomeSpecial reservesSurplus reservesUndistributed profitsTotal shareholder’s equity
Preference sharesPerpetual bondOthers
1. Ending balance of last year4,108,212,217.00947,863,834.0212,852,053,478.09-15,904,760.0258,212.151,195,116,522.37-1,296,333,684.6717,791,065,818.94
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year4,108,212,217.00947,863,834.0212,852,053,478.09-15,904,760.0258,212.151,195,116,522.37-1,296,333,684.6717,791,065,818.94
3. Changes in current year (“-” for decrease)2,530.00-2,035.667,397.0419,773,600.54-1,101,437,268.07-1,081,655,776.15
1) Total comprehensive income-1,101,437,268.07-1,101,437,268.07
2) Capital increase and decrease by shareholders2,530.00-2,035.667,397.047,891.38
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments2,530.00-2,035.667,397.047,891.38
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders
(3) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital (or stock)
(2) Surplus reserves transferred into paid-in capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans transferred into Retained Earnings
(5) Other comprehensive income transferred into retained earnings
(6) Others
5) Special reserves19,773,600.5419,773,600.54
(1) Provision of special reserves26,797,787.8526,797,787.85
(2) Use of special reserves7,024,187.317,024,187.31
6) Others
4. Ending balance of current year4,108,214,747.00947,861,798.3612,852,060,875.13-15,904,760.0219,831,812.691,195,116,522.37-2,397,770,952.7416,709,410,042.79

III. Basic Information of the Company

(1) Company profile

Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “theCompany”), as approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Government on27 March 1997, was incorporated as a joint stock limited company through public share offerof domestic listed foreign currency denominated shares (B shares) in the People’s Republic ofChina (the “PRC”) on 27 June 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“BengangGroup”), through reorganization of operations, assets and liabilities of its plants, namely, SteelSmelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant.

As approved by China Securities Regulatory Commission (hereinafter referred to as “theCSRC”), the Company issued 400,000,000 B-shares at HKD 2.38 each in Shenzhen StockExchange on 10 June 1997. On 3 November 1997, the Company issued another 120,000,000A-shares (Renminbi common Shares) at RMB 5.40 each, and listed in Shenzhen StockExchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.

On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding shareequity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co.,Ltd. about Share Equity Relocation issued by Liaoning Provincial Government State-ownedAsset Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legal person shares paid the consideration to the current shareholders to obtain thecurrent option for the 40,800,000 shares of the total 616,000,000 shares it was holding.Shareholding positions have been registered with China Securities Depository & ClearingCorporation Ltd. Shenzhen Office. However, the total amount of capital shares of BengangSteel Plates Co., Ltd. was not changed through the share equity relocation action.

According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by ChinaSecurities Regulatory Commission on 30 June 2006, the Company was approved to place 2billion Renminbi common shares particularly to Bengang Group and the proceeds would beused to purchase the related assets of the Group. On the same day, Bengang Group receivedcircular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities RegulatoryCommittee, and were exempted for the liability of undertaking the purchase offer. The liabilitywas caused by subscribing of the 2 billion new shares and the total shareholding was thusincreased to 2.5752 billion shares (accounting for 82.12% of the total capital shares of theCompany). On 28 August 2006, as approved by China Securities Depository & ClearingCorporation Ltd. Shenzhen Office, the registration and conditional placing procedures of the 2billion new shares were completed. On 28 September 2006, the privately placed shares were

approved by Shenzhen Stock Exchange to be placed in the stock market. The placing price wasRMB4.6733 per share.

Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang SteelPlate Co., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares) tono more than 10 issuers. The non-public offering was completed on 9 February 2018, and739,371,532 shares were actually issued. The placing price was RMB5.41 per share.

On August 20, 2021, the State-owned Assets Supervision and Administration Commission ofthe People's Government of Liaoning Province (hereinafter referred to as Liaoning SASAC)and Anshan Iron and Steel Group Co., Ltd. (hereinafter referred to as Ansteel Group) signedthe "Agreement on the Gratuitous Transfer of State-owned Equity in Bengang Group Co., Ltd.between the State-owned Assets Supervision and Administration Commission of the People'sGovernment of Liaoning Province and Ansteel Group Co., Ltd." According to the agreement,Liaoning SASAC will transfer its 51% equity in Bengang Group Co., Ltd. (hereinafter referredto as Bengang Group) to Anshan Iron and Steel Group for free. After the completion of thisfree transfer, Ansteel Group became the controlling shareholder of Bengang Group, andAnsteel Group indirectly hold 81.07% of the total share capital of Bengang Steel Plates.

As at 30 June 2024, the capital shares were totaled to 4,108,221,073.00 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, LiaoningProvince.The Company’s legal representative: Huang Zuowei.

The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.and the actual controller is Anshan Iron and Steel Group Co., Ltd..

Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processingindustry and is mainly involved in producing and trading of ferrous metal products.

The financial statements have been approved for reporting by the board of directors of theCompany on 27 June 2024.IV. Basis of preparation

(1) Basis of preparation

The financial statements have been prepared in accordance with “Accounting Standards forBusiness Enterprises – Basic Standard” and relevant specific standards, application materials,

interpretations (together hereinafter referred to as “Accounting Standards for BusinessEnterprises”) issued by the Ministry of Finance, and “Information Disclosure Rules forCompanies of securities for public issuance No. 15 – General Regulations for FinancialStatements” issued by the China Securities Regulatory Commission.

(2) Going concern

The financial statements have been prepared on a going concern basis.

V. Significant accounting policies and accounting estimates

The following disclosed content covers the specific accounting policies and accountingestimates that are adopted by the Company based on the actual production and operationcharacteristics. Please see Note (10) Financial instruments, (11) Inventory, (14) Fixed assets,

(17) Intangible assets, (23) Revenue under “3. Significant accounting policies and

accounting estimates” for details.

(1) Statement of compliance with China Accounting Standards for Business EnterprisesThe financial statements present truly and completely the financial position, operation resultsand cash flows of the Company during the reporting period in accordance with ChinaAccounting Standards for Business Enterprises.

(2) Accounting year

The Accounting year is from 1 January to 31 December.

(3) Operating period

The operating period is twelve months.

(4) Functional currency

The Company’s functional currency is RMB.

(5) The accounting treatment for Business combination under/not under common controlBusiness combination under common controlThe assets and liabilities that the Company acquired in a business combination shall bemeasured on the basis of their carrying amount of acquiree’s assets, liabilities (as well as thegoodwill arising from the business combination) in the consolidated financial statement of theultimate controller on the combining date. As for the balance between the carrying amount ofthe net assets obtained by the Company and the carrying amount of the consideration paid byit (or the total par value of the shares issued), capital reserve needs to be adjusted. If the capitalreserve is not sufficient, any excess shall be adjusted against retained earnings.

Business combination not under common control

The Company shall, on the acquisition date, measure the assets given and liabilities incurredor assumed by an enterprise for a business combination in light of their fair values, and shallrecord the balances between them and their carrying amounts into the profits and losses at thecurrent period. The Company shall recognize the positive balance between the combinationcosts and the fair value of the identifiable net assets it obtains from the acquiree as goodwill.The Company shall treat the negative balance between the combination costs and the fair valueof the identifiable net assets it obtains from the acquiree into the profits and losses of the currentperiod.

The intermediary costs and relevant fees for the business combination paid by the acquirer,including the expenses for audit, assessment and legal services, shall be recorded into theprofits and losses at the current period. The transaction expenses for the issuance of equitysecurities for the business combination shall be recorded into the initial recognition amount ofequity securities. All identifiable assets, liabilities and contingent liabilities of the acquiree thatmeet the recognition criteria acquired in the merger are measured at fair value on the acquisitiondate.

Directly related expenses incurred for a business combination are recorded in the currentperiod's profit or loss when incurred; transaction costs of equity securities or debt securitiesissued for a business combination are included in the initial recognition amount of the equitysecurities or debt securities.

(6) Scope of consolidation and Consolidation of Financial Statements

1. Scope of consolidation

The scope of consolidation of consolidated financial statements is determined based on controland the scope of consolidation includes the Company and all its subsidiaries. Control meansthat the Company has power over the investee, enjoys variable returns through participation inthe relevant activities of the investee, and has the ability to use the power over the investee toinfluence the amount of its returns.

2. Procedure of consolidation

When preparing consolidated financial statements, the parent shall consider the entire group asan accounting entity, adopt uniform accounting policies to prepare the consolidated financialstatements which reflect the overall financial position, operating results and cash flows of thegroup. The impact of internal transactions between the Company and its subsidiaries andbetween subsidiaries shall be offset. If internal transactions indicate that relevant assets havesuffered impairment losses, such losses shall be fully recognized. The accounting policy andaccounting period of the subsidiaries within the consolidation scope shall be in accordance

with those of the Company. If not, it is necessary to make the adjustment according to theCompany’s accounting policies and accounting period when preparing the consolidatedfinancial statements.

The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributableto the non-controlling shareholders shall be presented separately in the shareholders’ equity ofthe consolidated balance sheet and under the item of net profit of the consolidated statement ofcomprehensive income and under the item of total comprehensive income. Where lossesassumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,the excess shall be charged against the minority’s interests.

(1) Increasing new subsidiaries and businesses

If the Company has a new subsidiary due to business combination under common controlduring the reporting period, it shall adjust the beginning balance in the consolidated statementof financial position when preparing consolidated statement of financial position. The revenue,expenses and profits of the subsidiaries from the acquisition date to the end of the reportingperiod are included in the Company’s consolidated statement of comprehensive income. Thecash flow of the subsidiaries from the acquisition date to the end of the reporting period isincluded in the Company’s consolidated statement of cash flows. And meanwhile theCompany shall adjust the relevant items of the comparative financial statements as if thereporting entity for the purpose of consolidation has been in existence since the date theultimate controlling party first obtained control.

When the Company becomes capable of exercising control over an investee under commoncontrol due to additional investment or other reasons, adjustment shall be made as if thereporting entity after the combination has been in existence since the date the ultimatecontrolling party first obtained control. The investment income recognized between date ofpreviously obtaining equity investment and the date the acquiree and acquirer are undercommon control, which is later, and the combining date, other comprehensive income andother changes of net assets arising from the equity investment previously held beforeobtaining the control the acquiree shall be adjusted against the prior retained earnings of thecomparative financial statements and the current profit or loss respectively.

If it is not under common control, it will be included in the consolidated financial statements

from the date of acquisition based on the fair value of each identifiable asset, liability andcontingent liability determined on the date of acquisition.

When the Company becomes capable of exercising control over an investee not under

common control due to additional investment or other reasons, the acquirer shall remeasureits previously held equity interest in the acquiree to its fair value at the acquisition date. Thedifference between the fair value and the carrying amount shall be recognized as investmentincome for the period when the acquisition takes place. When the previously held equityinvestment is accounted for under the equity method, any other comprehensive incomepreviously recognized in relation to the acquiree’s equity changes shall be transferred to profitor loss for the current period when the acquisition takes place.

(2) Disposing subsidiaries or businesses

1. General treatment

When the Company loses control over an investee due to partial disposal or other reasons, theacquirer shall re-measure the remaining equity interests in the acquiree to its fair value at theacquisition date. The difference, between sums of consideration received for disposal equityshares and fair value of the remaining shares, and sums of share of net assets of the subsidiarycalculated continuously from the acquisition date or the combination date based on theprevious shareholding proportion and goodwill, shall be recognized as investment income forthe period when the Company loses control over acquiree. When the previously held equityinvestment is accounted for under the equity method, any other comprehensive incomepreviously recognized in relation to the acquiree’s equity changes, and other equity changesrather than changes from net profit, other comprehensive income and profit distribution, shallbe transferred to investment income for the current period when the Company loses controlover acquiree.

2. Disposing subsidiaries by multiple transactions

Where the Company loses control of a subsidiary in multiple transactions in which itdisposes of its subsidiary in stages, in determining whether to account for the multipletransactions as a single transaction, the Company shall consider all of the terms andconditions of the transactions and their economic effects. One or more of the following mayindicate that the Company shall account for the multiple arrangements as a single transaction:

(a) Arrangements are entered into at the same time or in contemplation of each other;(b) Arrangements work together to achieve an overall commercial effect;(c) The occurrence of one arrangement is dependent on the occurrence of at least oneother arrangement; and(d) One arrangement considered on its own is not economically justified, but it iseconomically justified when considered together with other arrangements.

If each of the multiple transactions forms part of a bundled transaction which eventuallyresults in loss of control of the subsidiary, these multiple transactions shall be accounted for

as a single transaction. In the consolidated financial statements, the difference between theconsideration received and the corresponding proportion of the subsidiary’s net assets ineach transaction prior to the loss of control shall be recognized in other comprehensiveincome and transferred to the profit or loss when the Company eventually loses control ofthe subsidiary.

If each of the multiple transactions which eventually results in loss of control of thesubsidiary do not form part of a bundled transaction, apply the treatment of disposing partiallong-term equity investments in a subsidiary without loss of control prior to the loss ofcontrol. After the loss of control, apply the treatment of disposing the subsidiary in commoncases.

(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholdersWhere the Company has acquired a subsidiary’s equity interest held by non-controllingshareholders, the difference between the increase in the cost of long-term investments as aresult of acquisition of non-controlling interests and the share of net assets of the subsidiarycalculated continuously from the acquisition date or the combination date based on the newshareholding proportion shall be adjusted to the capital reserve( capital premium or sharepremium) in the consolidated financial statements. If the balance of the capital reserve is notsufficient, any excess shall be adjusted against retained earnings.

(4) Disposing portion of equity investments in subsidiaries without losing control

When the Company disposes of a portion of the long-term equity investments in a subsidiarywithout loss of control, the difference between the amount of the consideration received andthe corresponding portion of the nest assets of the subsidiary calculated continuously fromthe acquisition date or the combination date related to the disposal of the long-term equityinvestments shall be adjusted to the capital reserve (capital premium or share premium) inthe consolidated financial statements. If the balance of the capital reserve is not sufficient,any excess shall be adjusted against retained earnings.

(7) Classification of joint venture arrangements and accounting treatment

Joint venture arrangements are divided into joint operations and joint ventures.

When the Company is a joint venture party of a joint venture arrangement and have the assetsrelated to the arrangement and assumes the liabilities related to the arrangement, it is a jointoperation.

The Company confirms the following items related to the share of interest in the jointoperation and performs accounting treatment in accordance with the relevant enterpriseaccounting standards:

a. Confirm the assets held by the company separately, and confirm the assets held jointly bythe Company's share;

b. Recognize the liabilities assumed by the Company separately and the liabilities jointlyassumed by the company's share;c. Recognize the income generated by the sale of the Company’s share of common operatingoutput;d. Recognize the revenue generated from the sale of joint operations based on the Company'sshare;e. Confirm the expenses incurred separately and the expenses incurred in the joint operationaccording to the Company's share.

The Company's investment in joint ventures is accounted for using the equity method. Fordetails, see Note (13) Long-term equity investments under “3. Significant accountingpolicies and accounting estimates”.

(8) Recognition of cash and cash equivalents

The term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cashequivalents” refers to short-term (maturing within three months from acquisition) and highlyliquid investments that are readily convertible to known amounts of cash and which are subjectto an insignificant risk of change in value.

(9) Foreign currency transaction and translation of foreign currency financial statements

1. Foreign currency transaction

Foreign currency transactions are translated into RMB at the current rate at the day oftransactions.

The foreign currency monetary items shall be translated at the spot exchange rate on thebalance sheet date. The balance of exchange arising from the difference between the spotexchange rate on the balance sheet date and the spot exchange rate at the time of initialrecognition or prior to the balance sheet date, except those arising from the raising of specialforeign debt for the purchase or construction of capitalizable assets thus shall be capitalizedaccording to the borrowing costs capitalization principle, shall be recorded into the profits andlosses at the current period.

2. Translation of foreign currency financial statements

The asset and liability items in the statement of financial position shall be translated at a spotexchange rate on the balance sheet date. Among the owner's equity items, except the ones as"undistributed profits", others shall be translated at the spot exchange rate at the time whenthey are incurred. The income and expense items in the income statement shall be translatedusing an exchange rate that is determined in a systematic and reasonable manner andapproximates the spot exchange rate on the transaction date.

When disposing an overseas business, the Company shall shift the balance, which is presentedunder the items of the owner's equities in the statement of financial position and arises from

the translation of foreign currency financial statements related to this oversea business, into thedisposal profits and losses of the current period.

(10) Financial instruments

The Company recognizes a financial asset, financial liability or equity instrument when itbecomes a party to a financial instrument contract.

1. Classification of financial instruments

The Company shall classify financial assets on the basis of both the entity’s business model formanaging the financial assets and the contractual cash flow characteristics of the financial assetas: financial assets measured at amortised cost, financial assets measured at fair value throughother comprehensive income and financial assets measured at fair value through profit or lossat initial measurement.

A financial asset which is not designated as a financial asset measured at fair value throughprofit or loss shall be measured at amortised cost if both of the following conditions are met.- The financial asset is held within a business model whose objective is to hold financialassets in order to collect contractual cash flows.- The contractual terms of the financial asset give rise on specified dates to cash flows thatare solely payments of principal and interest on the principal amount outstanding.

A financial asset shall be measured at fair value through other comprehensive income if bothof the following conditions are met.- The financial asset is held within a business model whose objective is achieved by bothcollecting contractual cash flows and selling financial assets.- The contractual terms of the financial asset give rise on specified dates to cash flows thatare solely payments of principal and interest on the principal amount outstanding.

The Company may make an election at initial recognition for non-trading equity instrumentinvestments whether it is designated as a financial asset (equity instrument) that is measured atfair value through other comprehensive income. The designation is made on the basis of asingle investment, and the related investment meets the definition of an equity instrument fromthe issuer's perspective.

Other financial assets other than these are classified as financial assets measured at fair valuethrough profit or loss. At the initial recognition, in order to eliminate or significantly reduce

accounting mismatches, financial assets that should be classified as measured at amortizedvalue or financial assets measured at fair value through other comprehensive income can bedesignated as financial assets measured at fair value through profit or loss.

The Company shall classify financial liabilities as financial liabilities measured at amortisedcost and financial liabilities measured at fair value through profit or loss at initial measurement.

The Company may, at initial recognition, designate a financial liability as measured at fair valuethrough profit or loss because either:

(a) it eliminates or significantly reduces an accounting mismatch;(b) a group of financial liabilities or financial assets and financial liabilities is managed and itsperformance is evaluated on a fair value basis, in accordance with a documented riskmanagement or investment strategy, and information about the group is provided internallyon that basis to the entity’s key management personnel;(c) the financial liability contains embedded derivatives that need to be separated.

2. Recognition and measurement of financial instruments

(1) Financial assets measured at amortised cost

Financial assets measured at amortized cost include notes receivables, accounts receivables,other receivables, long-term receivables, debt investments, etc. At initial recognition, theCompany shall measure a financial asset at its fair value plus or minus transaction costs thatare directly attributable to the acquisition or issue of the financial asset. The Company shallmeasure account receivables at their transaction price if the account receivables do not containa significant financing component and accounts receivables that the company has decided notto consider for a financing component of no more than one year.

Interests calculated by using the effective interest method during the holding period shall be.recognized in profit or loss.

When recovering or disposing the receivables, the difference between the price obtained andthe carrying value shall be recognized in current profit or loss.

(2) Financial assets measured at fair value through other comprehensive income (debt

instruments)Financial assets measured at fair value through other comprehensive income (debt instruments)include receivables financing, other debt investments, etc. At initial recognition, the Companyshall measure a financial asset at its fair value plus transaction costs that are directly attributableto the acquisition or issuance of the financial asset. The financial assets are subsequentlymeasured at fair value. Changes in fair value are included in other comprehensive incomeexcept for interest calculated using the effective interest method, impairment losses or gainsand exchange gains and losses. When the financial assets are derecognized, the accumulatedgain or loss previously recognized in other comprehensive income is transferred from othercomprehensive income and recognized in profit or loss.

(3) Financial assets at fair value through other comprehensive income (equity

instruments)Financial assets at fair value through other comprehensive income (equity instruments). includeother equity instrument investments, etc. At initial recognition, the Company shall measure afinancial asset at its fair value plus transaction costs that are directly attributable to theacquisition or issue of the financial asset. The financial assets are subsequently measured atfair value. Changes in fair value are included in other comprehensive income. The dividendsobtained are recognised in profit and loss.

When the financial assets are derecognized, the accumulated gain or loss previously.recognised in other comprehensive income is transferred from other comprehensive incomeand recognised in retained earnings.

(4) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include transactional financial assets,derivative financial assets, other non-current financial assets, etc. The Company shall measurethe financial assets at fair value at initial recognition. Transaction costs are recognised in profitor loss. Changes in fair value are included in profit or loss.

(5) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include current financial liabilities,derivative financial liabilities, etc. The Company shall measure the financial assets at fair valueat initial recognition. Transaction costs are recognised in profit or loss. Changes in fair valueare included in profit or loss.

When the financial liabilities are derecognized, the difference between the fair value and the.initially recorded amount is recognized as investment income, and the gains and losses fromchanges in fair value are adjusted.

(6) Financial liabilities measured at amortised cost

Financial liabilities measured at amortised cost include short-term borrowings, notes. payables,accounts payables, other payables, long-term borrowings, bonds payables, long-term payables.At initial recognition, the Company shall measure a financial liability at its fair value plus.transaction costs that are directly attributable to the acquisition or issue of the financial asset.

Interests calculated by using the effective interest method during the holding period shall berecognized in profit or loss.

When the financial liabilities are derecognized, the difference between the price obtained and.the carrying value shall be recognised in profit and loss.

3. Termination of recognition of financial assets and financial assets transfer

When one of the following conditions is met, the company terminates the recognition offinancial assets.- Termination of contractual rights to receive cash flows from financial assets;- The financial assets have been transferred, and almost all the risks and rewards in theownership of the financial assets have been transferred to the transferee;- The financial assets have been transferred. Although the company has neither transferrednor retained almost all the risks and rewards of the ownership of the financial assets, it hasnot retained control of the financial assets.

If the Company modifies or renegotiates a contract with its counterparty and the modificationconstitutes a substantial modification, the original financial asset will be derecognized and anew financial asset will be recognized in accordance with the modified terms.

If it retained nearly all of the risks and rewards related to the ownership of the financial asset,it shall not stop recognizing the financial asset.

To judge whether the transfer of a financial asset can satisfy the conditions as prescribed inthese Standards for stopping the recognition of a financial asset, the Company shall follow theprinciple of the substance over form.Transfer of an entire financial asset can be divided into partial financial assets transfer andentire financial asset transfer. If the transfer of an entire financial asset satisfies the conditionsfor de-recognition, the difference between the amounts of the following 2 items shall berecorded in the profits and losses of the current period:

(1) The book value of the transferred financial asset; and

(2) The sum of consideration received from the transfer, and the accumulative amount of thechanges of the fair value originally recorded in the owners' equities (in the event that thefinancial asset involved in the transfer is a financial asset Available-for-sale).

If the transfer of partial financial asset satisfies the conditions to derecognize, the entire bookvalue of the transferred financial asset shall, between the portion whose recognition has beenstopped and the portion whose recognition has not been stopped (under such circumstance,the service asset retained shall be deemed as a portion of financial asset whose recognitionhas not been stopped), be apportioned according to their respective relative fair value, andthe difference between the amounts of the following 2 items shall be included into the profitsand losses of the current period :

(1) The book value of the portion whose recognition has been stopped; and

(2) The sum of consideration of the portion whose recognition has been stopped, and theportion of the accumulative amount of the changes in the fair value originally recorded in theowner's equities which is corresponding to the portion whose recognition has been stopped(in the event that the financial asset involved in the transfer is a financial asset Available-for-sale).

If the transfer of financial assets does not satisfy the conditions to stop the recognition, itshall continue to be recognized as financial assets and the consideration received shall berecognized as financial liabilities.

4. Termination of recognition of financial liabilities

Only when the prevailing obligations of a financial liability are relieved in all or in part maythe recognition of the financial liability be terminated in all or partly. Where the Company(debtor) enters into an agreement with a creditor so as to substitute the existing financialliabilities by way of any new financial liability, and if the contractual stipulation regardingthe new financial liability is substantially different from that regarding the existing financialliability, it shall terminate the recognition of the existing financial liability, and shall at thesame time recognize the new financial liability.

Where the Company makes substantial revisions to part or all of the contractual stipulationsof the existing financial liability, it shall terminated the recognition of the existing financialliability or part of it, and at the same time recognize the financial liability after revising thecontractual stipulations as a new financial liability.

Where the recognition of a financial liability is totally or partially terminated, the Companyshall include into the profits and losses of the current period the difference between thecarrying amount which has been terminated from recognition and the considerations it haspaid (including the non-cash assets it has transferred out and the new financial liabilities ithas assumed).

Where the Company buys back part of its financial liabilities, it shall distribute, on the dateof repurchase, the carrying amount of the whole financial liabilities in light of thecomparatively fair value of the part that continues to be recognized and the part whoserecognition has already been terminated. The gap between the carrying amount which isdistributed to the part whose recognition has terminated and the considerations it has paid(including the noncash assets it has transferred out and the new financial liabilities it hasassumed) shall be recorded into the profits and losses of the current period.

5. Determination of the fair value of the financial assets (liabilities)

If active markets for the financial instruments exist, the fair value shall be measured by quotedprices in the active markets. If active markets for the financial instruments do not exist,valuation techniques shall be applied for the measurement. The Company uses valuationtechniques appropriate in the circumstances and for which sufficient data are available tomeasure fair value. The Company chooses relevant observable inputs for identical or similarassets or liabilities. Only when relevant observable inputs are unavailable or should theCompany use unobservable inputs for the asset or liability.

6. Impairment provision of the financial assets

The Company recognize the expected credit loss on financial assets measured at amortized cost,financial assets measured at fair value through other comprehensive income (debt instruments) ,financial guarantee contract, and so on, on the individual or portfolio basis.The Company considers all reasonable and relevant information, including past events, currentconditions, and forecasts of future economic conditions, and uses the risk of default as theweight to calculate the probability-weighted amount of present value of difference between thecash flow receivable from the contract and the cash flow expected to be received to confirmthe expected credit loss.

For account receivables and contract assets recognized according to Accounting Standards forBusiness Enterprises No. 14 Revenue, whether a significant financing component is containedor not, the Company shall always measure the loss allowance at an amount equal to lifetimeexpected credit losses.

For lease receivables recognized according to Accounting Standards for Business EnterprisesNo. 21 Lease, the Company shall always measure the loss allowance at an amount equal tolifetime expected credit losses.For other financial instruments, the Company shall assess changes in the credit risk of therelevant financial instruments since initial recognition at each balance sheet date.

The company compares the risk of default on the balance sheet date of financial instrumentswith the risk of default on the date of initial recognition to determine the relative change in therisk of default during the expected life of the financial instrument to assess whether there is asignificant increase in credit risk of financial assets since the initial recognition. Generally, the

Company believes that the credit risk of the financial instrument has significantly increasedover 30 days after the due date, unless there is solid evidence that the credit risk of the financialinstrument has not increased significantly since initial recognition.

If the credit risk of a financial instrument at the reporting date is relatively low, the Companyconsiders that the credit risk of the financial instrument has not increased significantly sincethe initial recognition.

If the credit risk of the financial instrument has increased significantly since the initialconfirmation, the Company shall measure the loss allowance for a financial instrument at anamount equal to the lifetime expected credit losses. If the credit risk on a financial instrumenthas not increased significantly since initial recognition, the Company shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses.The increase or reversal amount of loss allowance thus formed shall be included in the currentprofits and losses as impairment losses or gains. For financial assets at fair value through othercomprehensive income (debt instruments), loss provisions are recognised in othercomprehensive income and impairment losses or gains are recognised in profit or loss at thecurrent period without reducing the carrying amount of the financial asset in the balance sheet.

(11) Inventory

1. Inventory classification

Inventories include material in transit, raw material, turnover materials, finished goods, workin process, issue commodity, materials for consigned processing, etc.

Inventory is initially measured at cost. Inventory cost includes purchase cost, processing costand other expenditures incurred to bring inventory to its current location and state.

2. Valuation method for inventory dispatched

The weighted average method is used to confirm the actual cost of the inventories dispatched.

3. Inventory system

The Company uses perpetual inventory system.

4. Amortization of low-valued consumables and packing materials

(1) Low-valued consumables shall be amortized in full amount on issuance.

(2) Packing materials shall be amortized in full amount on issuance.

5. The basis for confirming the net realizable value of inventories and the methods tomake provision for the inventory impairment lossOn the balance sheet date, inventories shall be measured at the lower of cost and net realizablevalue. When the cost of inventories is higher than its net realizable value, provision forinventory impairment loss shall be made. The net realizable value refers to the amount of the

estimated selling price of the inventory minus the estimated costs that will occur at the time ofcompletion, estimated selling expenses, and relevant taxes in daily activities.

The net realizable value of inventories (finished products, stock commodity, material, etc.)held for direct selling in the daily business activity shall be calculated by deducting theestimated sale expense and relevant taxes from the estimated sale price of inventories; The netrealizable value of inventories for further processing in the daily business activity shall becalculated by deducting the estimated cost of completion, estimated sale expense and relevanttaxes from the estimated sale price of inventories; The net realizable value of inventories heldfor the execution of sales contracts or labor contracts shall be calculated on the ground of thecontract price. If the Company holds more inventories than the quantities subscribed in thesales contract, the net realizable value of the excessive part of the inventories shall be calculatedon the ground of the general sales price.

After the inventory impairment is withdrawn, if the factors that previously affected the write-down of the inventory value have disappeared, causing the net realizable value of the inventoryto be higher than its book value, it shall be reversed within the amount of the inventoryimpairment that has been withdrawn, and the reverted amount shall be included in the currentprofit and loss.

(12) Contract asset

1. Recognition methods and criteria of contract assets

When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If theCompany have the rights to receive consideration (the right is conditioned on factors otherthan the passage of time) by transferring goods or services to a customer, the entity shallpresent the contract as a contract asset. Contract assets and contract liabilities under the samecontract are disclosed in net amount. An entity shall present any unconditional rights toconsideration (only the passage of time is required) separately as a receivable.

2. Expected credit loss of contract assets

For the accounting policy of the expected credit loss of contract assets, please refer to Note

(10) 6. Impairment provision of the financial assets under “3. Significant accounting policiesand accounting estimates”

(13) Long-term equity investment

1. Criteria of joint control and significant influence

Joint control is the contractually agreed sharing of control of an arrangement, which exists onlywhen decisions about the relevant activities require the unanimous consent of the partiessharing control. If the Company and other joint venture have joint control of the investee andhave rights to the net assets of the investee, the investee is a joint venture of the Company.

Significant influence is the power to participate in the financial and operating policy decisionsof the investee but not control or join control of those policies. If the Company could exertsignificant influence over the investee, the investee is the associate of the Company.

2. The initial cost of long-term equity investment from business acquisition

(1) Long-term equity investment from business acquisition

For a business combination under common control, the initial investment cost of the long-termequity investment shall be the absorbing party’s share of the carrying amount of the owner’sequity of the party being absorbed in the consolidated financial statements of the ultimatecontrolling party at combination date. The difference between the initial investment cost andthe carrying amount of the previously held equity investment, together with the additionalinvestment cost for new shares at combination date, shall be adjusted to the capital reserve. Ifthe balance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings.When an investor becomes capable of exercising control over an investee due to additionalinvestment or other reasons, the difference between the initial investment cost recognized inaccordance with the above principles and the sum of the book value of the long-term equityinvestment before the merger plus the book value of the cost for the further shares acquired onthe merger date, shall be adjusted to the capital reserve. If the balance of capital reserve is notsufficient, any excess shall be adjusted to retained earnings.

For a business combination not under common control, the initial investment cost of the long-term equity investment shall be the acquisition cost at the acquisition date. When an investorbecomes capable of exercising control over an investee due to additional investment or otherreasons, the initial investment cost under the cost method shall be the carrying amount ofpreviously held equity investment together with the additional investment cost.

(2) The initial cost of the long-term equity investment other than from business acquisition

The initial cost of a long-term equity investment obtained by making payment in cash shall bethe purchase cost which is actually paid.

The initial cost of a long-term equity investment obtained on the basis of issuing equitysecurities shall be the fair value of the equity securities issued.

3. Subsequent measurement and profit or loss recognition

(1) Cost method

The Company adopts cost method for the long term investment in subsidiary company unlessthe investment qualifies as held for sale. An investing enterprise shall, in accordance with theattributable share of the net profits or losses of the invested entity, recognize the investment

profits or losses except the dividend declared but unpaid, which is included in the paymentwhen acquiring the investment.

(2) Equity method

A long-term equity investment in an associate or a joint venture shall be accounted for usingthe equity method. Where the initial investment cost of a long-term equity investment exceedsinvestor’s interest in the fair values of an investee’s identifiable net assets at the acquisitiondate, no adjustment shall be made to the initial investment cost. Where the initial cost is lessthan the investor’s interest in the fair values of the investee’s identifiable net assets at theacquisition date, the difference shall be credited to profit or loss for the current period, and thecost of long-term equity investment shall be adjusted accordingly.

The Company shall recognize its share of the investee’s net profits or losses, as well as its shareof the investee’s other comprehensive income, as investment income or losses and othercomprehensive income, and adjust the carrying amount of the investment accordingly. Thecarrying amount of the investment shall be reduced by the portion of any profit distributions orcash dividends declared by the investee that is attributable to the investor. The investor’s shareof the investee’s owners’ equity changes, other than those arising from the investee’s net profitor loss, other comprehensive income or profit distribution, and the carrying amount of the long-term equity investment shall be adjusted accordingly.

During the holding period, if the investee makes consolidated financial statements, theCompany shall calculate its share based on the investee’s net profit, other comprehensiveincome and the amount of other owners' equity attribute to the investee in the consolidatedfinancial statements. The investor shall recognize its share of the investee’s net profits or lossesafter making appropriate adjustments according to the Company’s accounting principles andoperating period based on the fair values of the investee’s identifiable net assets.

The unrealized profits or losses resulting from transactions between the investor and itsassociate or joint venture shall be eliminated in proportion to the investor’s equity interest inthe investee, based on which investment income or losses shall be recognized, except thetransaction of investment or sale of assets is a business. Any losses resulting from transactionsbetween the investor and investee which are attributable to asset impairment shall berecognized in full.

The company’s net losses incurred by joint ventures or associates, in addition to assumingadditional loss obligations, are limited to the book value of long-term equity investments andother long-term equity that essentially constitutes net investment in joint ventures or associates.

If a joint venture or associated enterprise realizes net profits in the future, the company resumesrecognizing its share of profits after the share of profits makes up for the share of unrecognizedlosses.

(3) Disposal of long-term equity investment

When disposing long-term equity investment, the difference between the proceeds actuallyreceived and the carrying amount shall be recognized in profit or loss for the current period.

Partial disposal of long-term equity investments accounted for by the equity method, and theremaining equity is still accounted for by the equity method, the other comprehensive incomerecognized by the original equity method shall be carried forward according to the same basisas the direct disposal of related assets or liabilities by the investee. All other changes in theinterests of the holders are carried forward to the current profit and loss on a pro rata basis.

When an investor can no longer exercise joint control of or significant influence over aninvestee due to disposal of equity investment or other reasons, any other comprehensive incomepreviously recognized shall be accounted for on the same basis as would have been required ifthe investee had directly disposed of the related assets or liabilities for the current period upondiscontinuation of the equity method. Other owner's equity change shall be transferred intoprofit or loss of current period in full when the Company cease to adopt the equity method.

When an investor can no longer control the investee due to partial disposal, when the individualfinancial statements are prepared, the remaining equity can exercise joint control or significantinfluence on the investee, the equity method shall be used to account for the remaining equity.It is deemed that the equity method is adopted for adjustment since the acquisition, and theother comprehensive income recognized before the control of the investee is obtained is carriedforward on the same basis as the direct disposal of related assets or liabilities by the investee,because the equity method is used for accounting. The confirmed changes in other owners’equity are carried forward to the current profit and loss on a pro rata basis. If the remainingequity cannot exercise joint control or exert significant influence on the investee, it shall berecognized as a financial asset, and the difference between its fair value and book value on thedate when control is lost shall be included in the current profit and loss, and othercomprehensive income and other owner’s interests previously recognized shall be transferredto profit or loss in full.

If the equity investment of a subsidiary is disposed through multiple transactions until it losescontrol, which is a package transaction, each transaction shall be accounted as a transactionthat disposes of the equity investment of the subsidiary and loses control. Each transaction

before the loss of control, the difference between the disposal price and the book value of thecorresponding disposed part of long-term equity investment is firstly recognized as othercomprehensive income in individual financial statements, and then transferred to the currentprofit and loss when the control is lost. If it is not a package transaction, each transaction shallbe accounted separately.

(14) Fixed assets

1. Recognition of Fixed assets

The term "fixed assets" refers to the tangible assets held for the sake of producing commodities,rendering labor service, renting or business management and of which useful life is in excessof one fiscal year. No fixed asset may be recognized unless it simultaneously meets theconditions as follows:

(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and

(2) The cost of the fixed asset can be measured reliably.

Fixed assets are initially measured at cost (and considering the impact of expected dismantlingcost factors).

Subsequent expenditures related to fixed assets are included in the cost of fixed assets whenthe related economic benefits are likely to flow in and their costs can be reliably measured; thebook value of the replaced part is derecognized; all other subsequent expenditures are incurredshall be included in the current profit and loss.

2. Fixed assets depreciation

Fixed assets are depreciated under the straight line method. The depreciation rate is determinedaccording to the category of assets, the useful life and the expected residual rate. If thecomponents of the fixed assets have different useful lives or provide the economic benefits ina different way, then different depreciation rate or method shall be applied and the depreciationof the components shall be calculated separately.

Details of classification, depreciation period, residual value rate and annual depreciation rateare as follows:

CategoryDepreciation methodDepreciation PeriodResidual Value Rate (%)Depreciation Rate (%)
Plants and Buildingsstraight line method40 years5.002.38
Machinerystraight line method17-24 years5.003.96-5.59
Transportation and other equipmentstraight line method5-12 years5.007.92-19.00

4. Disposal of fixed assets

When a fixed asset is disposed, or it is expected that no economic benefits will be generatedthrough use or disposal, the recognition of fixed asset shall be de terminated. The amount ofdisposal income of fixed assets raising from sell, transfer, scrapping or damage shall beincluded in the current profit and loss after deducting its book value and related taxes.

(15) Construction in progress

Construction in progress is measured at the actual cost incurred. The actual cost includesconstruction costs, installation costs, borrowing costs that meet the capitalization conditions,and other necessary expenditures incurred before the construction in progress reaches itsintended use status. Construction in progress is transferred to fixed asset when it has reachedits working condition for its intended use and depreciation will be accrued from the next month.

(16) Borrowing costs

1. Principle of the recognition of capitalized borrowing costs

Where the borrowing costs incurred to an enterprise can be directly attributable to theacquisition and construction or production of assets eligible for capitalization, it shall becapitalized and recorded into the costs of relevant assets. Other borrowing costs shall berecognized as expenses on the basis of the actual amount incurred, and shall be recorded intothe current profits and losses.

Assets eligible for capitalization refer to the fixed assets, investment property, inventories andother assets, of which the acquisition and construction or production may take quite a long timeto get ready for its intended use or for sale.

2. The capitalization period of borrowing costs

The capitalization period shall refer to the period from the commencement to the cessation ofcapitalization of the borrowing costs, excluding the period of suspension of capitalization ofthe borrowing costs.

The borrowing costs shall not be capitalized unless they simultaneously meet the followingrequirements:

(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest bearing debts paid for the acquisition and construction or productionactivities for preparing assets eligible for capitalization;

(2) The borrowing costs has already incurred; and

(3) The acquisition and construction or production activities which are necessary to prepare theasset for its intended use or sale have already started.

When the qualified asset under acquisition and construction or production is ready for theintended use or sale, the capitalization of the borrowing costs shall be ceased.

3. The suspension of capitalization of borrowing costs

Where the acquisition and construction or production of a qualified asset is interruptedabnormally and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs shall be suspended. If the interruption is a necessary step for making thequalified asset under acquisition and construction or production ready for the intended use orsale, the capitalization of the borrowing costs shall continue. The borrowing costs incurredduring such period shall be recognized as expenses, and shall be recorded into the profits andlosses of the current period, till the acquisition and construction or production of the assetrestarts.

4. Method of calculating the capitalization rate and capitalized amount of borrowing costsFor interest expense (minus the income of interests earned on the unused borrowing loans as adeposit in the bank or investment income earned on the loan as a temporary investment) andthe ancillary expense incurred to a specifically borrowed loan, those incurred before a qualifiedasset under acquisition, construction or production is ready for the intended use or sale shallbe capitalized at the incurred amount when they are incurred, and shall be recorded into thecosts of the asset eligible for capitalization.

The Company shall calculate and determine the to-be-capitalized amount of interests on thegeneral borrowing by multiplying the weighted average asset disbursement of the part of theaccumulative asset disbursements minus the general borrowing by the capitalization rate of thegeneral borrowing used. The capitalization rate shall be calculated and determined in light ofthe weighted average interest rate of the general borrowing.

During the capitalization period, the exchange difference between the principal and interest ofthe foreign currency special loan is capitalized and included in the cost of the assets that meetthe capitalization conditions. Exchange differences arising from the principal and interest offoreign currency borrowings other than foreign currency special borrowings are included inthe current profits and losses.

(17) Intangible Assets

1. Measurement of Intangible Assets

(1) Initial measurement is based on cost upon acquisition

The cost of an intangible asset on acquisition include the purchase price, relevant taxes andother necessary disbursements which may be directly attributable to bringing the intangibleasset to the conditions for the expected purpose.

(2) Subsequent Measurement

The Company shall analyze and judge the beneficial period of intangible assets uponacquisition.

Intangible assets with finite beneficial period shall be amortized under the straight-line methodduring the period when the intangible asset can bring economic benefits to the enterprise. If itis unable to estimate the beneficial period of the intangible asset, it shall be regarded as anintangible asset with uncertain service life and shall not be amortized.

2. Estimated useful lives of intangible assets with limited useful lives

ItemEstimated useful lifeCriteria
Land use right50 yearsLand use right certificate

3. Classification criteria for internal research phase and development phase

The expenditures for its internal research and development projects of an enterprise shall beclassified into research expenditures and development expenditures.

Research phase refers to the phase of creative and planned investigation to acquire and studyto acquire and understand new scientific or technological knowledge.

Development phase refers to the phase during which the result of research phase or otherknowledge is applied into certain projects or designs for the manufacturing of new orsubstantially improved material, device and product before commercial manufacturing and use.

4. Criteria of capitalization of development phase expenditures

Expenditures incurred during the research phase are recognized in profit or loss for the periodwhen incurred. Expenditures incurred during the research phase shall be capitalized if theymeet the following conditions at the same time. If the expenditures incurred during thedevelopment phase do not meet the following conditions, they shall be included in the currentperiod's profit and loss.

(1) It is technically feasible to complete the intangible asset so that it can be used or sold.

(2) The Company intent to complete the intangible asset and use or sell it.

(3) The way intangible assets generate economic benefits, including being able to prove thatthere is a market for the products produced by using the intangible assets or the intangibleassets themselves has market. If the intangible assets will be used internally, it should beable to prove that the intangible assets will be useful.

(4) The company has sufficient technical, financial and other resources to complete the

development of the intangible asset and is able to use or sell the intangible asset.

(5) The expenditure attributable to the development phase of the intangible asset can be

measured reliably.If it is impossible to distinguish between expenditures in the research phase and expendituresin the development phase, all research and development expenditures incurred shall beincluded in the current period's profit and loss.

(18) Impairment of long-term assetsFor long-term assets such as long-term equity investments, investment property under the costmodel, fixed assets, construction in progress, right-of-use assets, intangible assets with limiteduseful lives and oil gas assets etc., the Company shall perform impairment tests at the periodend if there is clear indication of impairment. If the recoverable amounts of long-term assetsare less than their carrying amounts, the carrying amounts of the assets shall be written downto their recoverable amounts. The write-downs are recognized as impairment losses andcharged to current profit and loss. The recoverable amounts of long-term assets are the higherof their fair values less costs to sell and the present values of the future cash flows expected tobe derived from the assets. The Company shall estimate its recoverable amount on an individualbasis. Where it is difficult to do so, it shall determine the recoverable amount of the assets onthe basis of the asset group to which the asset belongs. The term "assets group” refers to aminimum combination of assets by which the cash flows could be generated independently

The goodwill, intangible assets with uncertain useful life and intangible assets not meeting theexpected condition for use the shall be subject to an impairment test at least at the end of eachyear.

When the Company makes an impairment test of assets, it shall, as of the purchasing day,apportion the carrying value of the business reputation formed by merger of enterprises to therelevant asset groups by a reasonable method. Where it is difficult to do so, it shall beapportioned to the relevant combinations of asset groups. A related group of assets orcombination of asset groups is an asset group or combination of asset groups that can benefitfrom the synergy effect of a business combination.

When making an impairment test on the relevant asset groups or combination of asset groupscontaining business reputation, if any evidence shows that the impairment of asset groups orcombinations of asset groups is possible, the Company shall first make an impairment test onthe asset groups or combinations of asset groups not containing business reputation, calculatethe recoverable amount, compare it with the relevant carrying value and recognize thecorresponding impairment loss. Then the Company shall make an impairment test of the assetgroups or combinations of asset groups containing business reputation, and compare thecarrying value of these asset groups or combinations of asset groups (including the carryingvalue of the business reputation apportioned thereto) with the recoverable amount. Where therecoverable amount of the relevant assets or combinations of the asset groups is lower than thecarrying value thereof, it shall recognize the impairment loss of the business reputation.

Impairment losses on long-term assets shall not be reversed in subsequent accounting periodsonce recognized.

(19) Long-term deferred expense

The long-term deferred expense refers to the expenses incurred but shall be borne by currentand subsequent accounting period, which is more than one year.

The long-term deferred expense shall be amortized over its beneficiary period evenly

(20) Contract liability

When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If a customerpays consideration, or the Company has a right to an amount of consideration before theCompany transfers a good or service to the customer, the Company shall present the contractas a contract liability. Contract assets and contract liabilities under the same contract aredisclosed in net amount.

(21) Employee benefits

1. Accounting treatment for short employee benefit

The Company shall recognise, in the accounting period in which an employee provides service,actually occurred short-term employee benefits as a liability, with a corresponding charge tothe profit or loss or cost of an asset for the current period.

Payments made by an enterprise of social security contributions for employees, payments ofhousing funds, and union running costs employee education costs provided in accordance with

relevant requirements shall, in the accounting period in which employees provide services, becalculated according to prescribed bases and percentages in determining the amount ofemployee benefits.

The employee welfare expenses incurred by the company are included in the current profit andloss or related asset costs based on the actual amount when they actually occur. Among them,non-monetary benefits are measured at fair value.

2. Accounting treatment of post-employment benefits

(1) Defined contribution plan

The Company shall recognize, in the accounting period in which an employee providesservice, pension fund and unemployment fund for employees as a liability according to thelocal government regulations. The amount shall be calculated according to local prescribedbases and percentages in determining the amount of employee benefits, with acorresponding charge to the profit or loss or cost of an asset for the current period. Inaddition, the Company also participates in the enterprise annuity plan/supplementarypension insurance fund approved by relevant state departments. The Company pays acertain proportion of the total salary of employees to the annuity plan/local social insuranceagency, and the corresponding expenses are included in the current profit and loss orrelated asset cost.

(2) Defined benefit plan

None

3. Accounting treatment of termination benefits

The Company shall recognize an employee benefits liability for termination benefits, with acorresponding charge to the profit or loss for the current period, at the earlier of the followingdates: when the Company cannot unilaterally withdraw the offer of termination benefitsbecause of an employment termination plan or a curtailment proposal; or when the Companyrecognizes costs or expenses related to a restructuring that involves the payment of terminationbenefits.

(22) Estimated liabilities

The obligation pertinent to a contingency shall be recognized as an estimated liability whenthe following conditions are satisfied simultaneously:

(1) That obligation is a current obligation of the enterprise;

(2) It is likely to cause any economic benefit to flow out of the enterprise as a result ofperformance of the obligation; and

(3) The amount of the obligation can be measured in a reliable way.

The estimated debts shall be initially measured in accordance with the best estimate of thenecessary expenses for the performance of the current obligation.

To determine the best estimate, an enterprise shall take into full consideration of the risks,uncertainty, time value of money, and other factors pertinent to the Contingencies. If the timevalue of money is of great significance, the best estimate shall be determined after discountingthe relevant future outflow of cash.

The best estimate shall be conducted in accordance with the following situations, respectively:

If there is a continuous range for the necessary expenses and if all the outcomes within thisrange are equally likely to occur, the best estimate shall be determined in accordance with theaverage estimate within the range, that is, the average of the upper and lower limit.

If there is not a sequent range for the necessary expenses and if the outcomes within this rangeare not equally likely to occur, the best estimate shall be determined as follows:

(1) If the Contingencies concern a single item, it shall be determined in the light of the mostlikely outcome.

(2) If the Contingencies concern two or more items, the best estimate shall be calculated anddetermined in accordance with all possible outcomes and the relevant probabilities.

When all or some of the expenses necessary for the liquidation of an estimated debts of anenterprise is expected to be compensated by a third party, the compensation shall be separatelyrecognized as an asset only when it is virtually certain that the reimbursement will be obtained.The amount recognized for the reimbursement shall not exceed the book value of the estimateddebts.

The company reviews the book value of the estimated liabilities on the balance sheet date. Ifthere is conclusive evidence that the book value does not reflect the current best estimate, thebook value will be adjusted according to the current best estimate.

(23) Revenue

(1) The general principle of revenue recognition and measurement

The company shall recognise revenue when (or as) the company satisfies a performanceobligation when (or as) the customer obtains control of a promised good or service. Control ofa promised good or service refers to the ability to direct the use of, and obtain substantially allof the remaining benefits from it.

If the contract contains two or more performance obligations, the company shall allocate thetransaction price to each individual performance obligation based on the relative proportion ofthe stand-alone selling price of the goods or services promised by each individual performanceobligation on the date of the contract. The company measures revenue based on the transactionprice allocated to each individual performance obligation.

The transaction price is the amount of consideration to which the company expects to beentitled in exchange for transferring promised goods or services to a customer, excludingamounts collected on behalf of third parties or amounts expected to be returned to customers.The company shall consider the terms of the contract and its customary business practices todetermine the transaction price. When determining the transaction price, the company shallconsider the effects of all of the following: variable consideration, the existence of a significantfinancing component in the contract, non-cash consideration, and consideration payable to acustomer. The company determines the transaction price that includes variable considerationat an amount that does not exceed the amount of accumulated recognized revenue that isunlikely to be materially reversed when the relevant uncertainty is eliminated. If there is asignificant financing component in the contract, the company shall recognise revenue at anamount that reflects the price that a customer would have paid for the promised goods orservices if the customer had paid cash for those goods or services when (or as) they transfer tothe customer, and use the effective interest method to amortize the difference between thetransaction price and the contract consideration during the contract period.

The company transfers control of a good or service over time and, therefore, satisfies aperformance obligation and recognises revenue over time, if one of the following criteria ismet. Otherwise, the company satisfies the performance obligation at a point in time.(a) the customer simultaneously receives and consumes the benefits provided by the company’sperformance as the company performs;(b) the company’s performance creates or enhances an asset that the customer controls as theasset is created or enhanced; or(c) the company’s performance does not create an asset with an alternative use to the companyand the company has an enforceable right to payment for performance completed to date.The company shall recognise revenue over time by measuring the progress towards completesatisfaction of that performance obligation, except where the performance progress cannot bereasonably determined. The company considers the nature of the goods or services and adoptsthe output method or the input method to determine the progress of performance. Where theperformance progress cannot be reasonable determined, but the company expects to recoverthe costs incurred in satisfying the performance obligation, the company shall recognise

revenue only to the extent of the costs incurred until such time that it can reasonably measurethe outcome of the performance obligation.For performance obligations satisfied at a certain point in time, the company shall recognisesrevenue at the point when the customer obtains control of the relevant goods or services. Todetermine the point in time at which a customer obtains control of a promised goods or services,the company shall consider requirements as follows:

(a) The company has a present right to payment for the promised goods or services and thecustomer is presently obliged to pay for that;(b) The company has transferred the legal title of the goods to the customer, that is, thecustomer has the legal title to the goods;(c) The company has transferred physical possession of the goods to the customer, that is, thecustomer has taken possession of the goods;(d) The company has transferred the significant risks and rewards of ownership of the goodsto the customer, that is, the customer has the significant risks and rewards of ownership of thegoods;(e) The customer has accepted the promised goods or services.

The Company determines whether it is the principal or agent when engaging in a transactionbased on whether it has control over the goods or services before transferring them to thecustomer. If the Company is able to control the goods or services before transferring them tothe customer, the Company is the principal and recognizes revenue based on the totalconsideration received or receivable; otherwise, the Company is the agent and recognizesrevenue based on the amount of commissions or fees it expects to be entitled to receive.

(2) The specific criteria of revenue recognition and measurement

Commodity sales contracts between companies and customers usually only includeperformance obligations for the transfer of steel and other commodities. This type ofperformance obligation is a performance obligation performed at a certain point in time. TheCompany recognizes revenue when the customer obtains control of the relevant goods orservices. When judging whether the customer has obtained control of goods or services, thecompany considers the following signs:

The company obtains the current right of collection of receivables, the legal ownership of thegoods is transferred to the customer, the physical assets of the goods are transferred to thecustomer, the company transfers the main risks and rewards of the ownership of the goods tothe customer, and the customer has accepted the goods.

(24) Contract costs

Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.

If the costs incurred in fulfilling a contract with a customer are not within the scope of anotherStandard, for example, Inventories, Property, Plant and Equipment or Intangible Assets, thecompany shall recognise an asset from the costs incurred to fulfil a contract only if those costsmeet all of the following criteria:

(a) the costs relate directly to a contract or to an expected contract;(b) the costs generate or enhance resources of the Company that will be used in satisfyingperformance obligations in the future; and(c) the costs are expected to be recovered.The company shall recognise as an asset the incremental costs of obtaining a contract with acustomer if the company expects to recover those costs.

An asset recognised in accordance with contract costs shall be amortised in consistent with thetransfer to the customer of the goods or services to which the asset relates. The company mayrecognise the incremental costs of obtaining a contract as an expense when incurred if theamortisation period of the asset is one year or less.

The company shall recognise an impairment loss in profit or loss to the extent that the carryingamount of an asset related to contract assets exceeds:

(a) the remaining amount of consideration that the company expects to receive in exchange forthe goods or services to which the asset relates; less(b) the costs that relate directly to providing those goods or services and that have not beenrecognised as expenses.

The company shall recognise in profit or loss a reversal of some or all of an impairment losspreviously recognised when the impairment conditions no longer exist or have improved. Theincreased carrying amount of the asset shall not exceed the carrying amount that if noimpairment loss had been recognised previously.

(25) Government Subsidies

1. Types

A government subsidy means the monetary or non-monetary assets obtained free of chargeby the Company from the government. Government subsidies consist of the governmentsubsidies pertinent to assets and government subsidies pertinent to income.

Government subsidies related to assets are government subsidies whose primarycondition is that an entity qualifying for them should purchase, construct or otherwiseacquire long-term assets. The government subsidies related to incomes refers togovernment subsidies other than those related to assets.

The standard of the Company recognizing the government subsidies related to assets is:

an entity qualifying for them should purchase, construct or otherwise acquire long-termassets.

The standard of the Company recognizing the government subsidies related to income is:

In addition to government subsidies related to assets, government subsidies that have beenclearly targeted for subsidies.

2. Recognition

Government grants are recognized when the Company is able to meet the conditionsattached to them and is able to receive them.

3. Accounting treatment

Government subsidies related to assets shall be recognized by deducting the subsidies atthe caring amount of the assets or recognized as deferred income. Subsidies thatrecognized as deferred income shall be recognized in profit or loss on a systematic basisover the periods during the useful lives of the relevant assets (Subsidies related to dailyactivities should be recorded in Other Income. Subsidies that unrelated to daily activitiesshould be recorded in Non-operating Income).

The government subsidies related to incomes to compensate future expenses, shall berecognized as deferred income and transferred to current profit or loss (Subsidies relatedto daily activities should be recorded in Other Income. Subsidies that unrelated to dailyactivities should be recorded in Non-operating Income) in the period during which theexpenses compensation is recognized or deduct relevant cost or loss. Governmentsubsidies to compensate expenses or losses already incurred shall be recognized in currentprofit and loss (Subsidies related to daily activities should be recorded in Other Income.Subsidies unrelated to daily activities should be recorded in Non-operating Income) ordeduct relevant cost or loss.

The policy discount loans obtained by the company are divided into the following twosituations and are separately accounted for:

(a) The government allocates discounted funds to the loan bank, and the loan bankprovides loans to the company at a policy preferential interest rate. The preferentialinterest rate is used to calculate the relevant borrowing costs.(b) If the government directly allocates the discounted funds to the company, the companywill offset the relevant borrowing costs with the corresponding discounts, directlyaccounted for the current profit or loss or recognized as deferred income.

(26) Deferred tax assets and deferred tax liabilities

Income tax includes current income tax and deferred income tax. Except for income taxarising from business combinations and transactions or events directly recorded in owners'equity (including other comprehensive income), the Company records current income tax anddeferred income tax in current profit or loss.Deferred tax assets and deferred tax liabilities are calculated based on the difference betweenthe tax bases of assets and liabilities and their carrying amounts (temporary differences).Income tax includes current income tax and deferred income tax. Except for income taxarising from business mergers and transactions or events that are directly included in owner's

equity (including other comprehensive income), the company will include current income taxand deferred income tax in current profit and loss.

Deferred income tax assets and deferred income tax liabilities are calculated and confirmedbased on the difference (temporary difference) between the tax base of assets and liabilitiesand their book value.

An enterprise shall recognize the deferred income tax assets arising from a deductibletemporary difference to the extent of the amount of the taxable income which it is most likelyto be obtained and which can be deducted from the deductible temporary difference. As forany deductible loss or tax deduction that can be carried forward to the next year, thecorresponding deferred income tax assets shall be determined to the extent that the amount offuture taxable income to be offset by the deductible loss or tax deduction to be likely obtained.

All taxable temporary differences shall be recognized as deferred tax liabilities with certainlimited exceptions.

Exceptions when deferred tax assets and deferred tax liabilities are not recognized include:

- Initial recognition of goodwill;- A transaction or event that is neither a business combination nor affects accounting profitand taxable income (or deductible loss) when it occurs, and the assets and liabilitiesinitially recognized do not result in equal taxable temporary differences and deductibletemporary differences.For taxable temporary differences related to investments in subsidiaries, associates and jointventures, deferred income tax liabilities are recognized, unless the company can control thetiming of the reversal of the temporary differences and the temporary differences are likelynot to be transferred back in the foreseeable future. For deductible temporary differencesrelated to investments in subsidiaries, associates and joint ventures, when the temporarydifferences are likely to be reversed in the foreseeable future and are likely to be used todeduct the taxable income of deductible temporary differences in the future, income tax assetsare recognized.On the balance sheet date, deferred income tax assets and deferred income tax liabilities aremeasured at the applicable tax rate during the period when the relevant assets are expected tobe recovered or the relevant liabilities are expected to be recovered in accordance with theprovisions of the tax law.On the balance sheet date, the company reviews the book value of deferred income tax assets.If it is probable that sufficient taxable income cannot be obtained in the future to offset thebenefits of deferred income tax assets, the book value of the deferred income tax assets shallbe written down. When it is possible to obtain sufficient taxable income, the reduced amountshall be reversed.When the Company has the statutory right to offset and intend to offset or obtain assets andpay off liabilities at the same time, the current income tax assets and current income taxliabilities are presented at the net amount after offsetting.

An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) theentity has a legally enforceable right to set off current tax assets against current tax liabilities;and (b) deferred income tax assets and deferred income tax liabilities are related to incometaxes levied by the same tax collection and administration department on the same taxpayeror to different taxpayers, but in each future period of significant deferred income tax assetsand liabilities reversal, the taxpayers involved intend to settle the current income tax assetsand liabilities on a net basis or to acquire assets and settle liabilities at the same time.

(27) Leases

Lease refers to a contract in which the lessor transfers the right to use the asset to the lesseewithin a certain period of time to obtain consideration.On the starting date of the contract, the company assesses whether the contract is a lease orcontains a lease. If the contract conveys the right to control the use of an identified asset for aperiod of time in exchange for consideration, the contract is, or contains, a lease.For a contract that contains a lease component and one or more additional lease or non-leasecomponents, a lease shall allocate the consideration in the contract to each lease componenton the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

1. The company as the lessee

(1) Right-of-use assets

On the start date of the lease term, the company recognizes the right-of-use asset for leasesother than short-term leases and low-value asset leases. Right-of-use assets are initiallymeasured at cost.This cost includes:

The initial measurement amount of the lease liability;If there is a lease incentive for the lease payment paid on or before the start of the lease term,the relevant amount of the lease incentive already enjoyed shall be deducted;The initial direct expenses incurred by the company;The company expects to incur costs for dismantling and removing leased assets, restoringthe site where leased assets are located, or restoring leased assets to the state agreed upon inthe lease terms, but does not include the costs incurred for the production of inventory.

The company uses the straight-line method to depreciate the right-of-use assets. If it can bereasonably determined that the ownership of the leased asset will be obtained at the end of thelease term, the company shall depreciate the leased asset during the remaining useful life;otherwise, the leased asset will be depreciated during the shorter period of the lease term andthe remaining useful life of the leased asset .The company determines whether the right-of-use asset has been impaired in accordance withthe principles described in "3. (18) Long-term asset impairment" in this note, and conductsaccounting treatment for the identified impairment loss.

(2) Lease liabilities

At the beginning of the lease term, the company recognizes lease liabilities for leases other

than short-term leases and leases of low-value assets. Lease liabilities are initially measuredbased on the present value of the payments that are not paid at that date. Lease paymentsinclude:

1) Fixed payment (including in-substance fixed payment), less any lease incentives receivable;

2) Variable lease payments that depend on an index or a ratio;

3) Amounts expected to be payable by the lease under residual value guarantees;

4) The exercise price of the purchase option if the lease is reasonably certain to exercise thatoption;

5) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercisingan option to terminate the lease;The company uses the interest rate implicit in the lease as the discount rate, but if the interestrate implicit in the lease cannot be reasonably determined, the company's incrementalborrowing interest rate is used as the discount rate.The company calculates the interest expense of the lease liability during each period of thelease term according to a fixed periodic interest rate, and includes it in the current profit andloss or the cost of related assets.Variable lease payments that are not included in the measurement of lease liabilities areincluded in the current profit and loss or the cost of related assets when they occur.After the start of the lease term, if the following circumstances occur, the company re-measuresthe lease liability and adjusts the corresponding right-of-use asset. If the book value of theright-of-use asset has been reduced to zero, but the lease liability still needs to be furtherreduced, the difference shall be included in the current profit and loss:

? When the evaluation result or actual exercise situation of the purchase option, renewal optionor termination option changes, the company remeasures the lease liability based on the presentvalue calculated by the lease payment after the change and the revised discount rate;? When the actual fixed payment changes, the expected payable amount of the guaranteeresidual value changes, or the index or ratio used to determine the lease payment changes, thecompany calculates the present value based on the changed lease payment and the originaldiscount rate to remeasure the lease liability. However, if changes in lease payments originatefrom changes in floating interest rates, the revised discount rate is used to calculate the presentvalue.

(3) Short-term leases and low-value asset leases

The company chooses not to recognize right-of-use assets and lease liabilities for short-termleases and low-value asset leases, and calculates the relevant lease payments in the current

profit and loss or related asset costs on a straight-line basis during each period of the lease term.Short-term lease refers to a lease that does not include purchase options for a lease period notexceeding 12 months at the beginning of the lease period. Low-value asset leasing refers to alease with a lower value when a single leased asset is a new asset. If the company subleases orexpects to sublease the leased assets, the original lease is not a low-value asset lease.

(4) Lease modifications

The lease shall account for a lease modification as a separate lease if both:

The modification increases the scope of the lease by adding the right to use one or moreunderlying assets; andthe consideration for the lease increases by an amount commensurate with the stand-aloneprice for the increase in scope and any appropriate adjustment to that stand-alone price toreflect the circumstances of the particular contract.

For a lease modification that is not accounted for as a separate lease, at the effective date of thelease modification a lessee shall allocate the consideration in the modified contract, determinethe lease term of the modified lease and remeasure the lease liabilities by discounting therevised lease payments using a revised discount rate.For a lease modification that is not accounted for as a separate lease, the lessee shall accountfor the remeasurement of the lease liabilities by decreasing the carrying amount of the right-of-use assets to reflect the partial or full termination of the lease for lease modifications thatdecrease the scope of the lease. The lessee shall recognize in profit or loss any gain or lossrelating to the partial or full termination of the lease; or by making a corresponding adjustmentto the right-of-asset for all other lease modifications.

2. The company as the lessor

On the commencement date of the lease, the company divides the lease into finance lease andoperating lease. Finance lease refers to a lease in which almost all the risks and rewards relatedto the ownership of the leased asset are transferred regardless of whether the ownership isultimately transferred. Operating leases refer to leases other than financial leases. When thecompany acts as a sublease lessor, it classifies subleases based on the right-of-use assetsgenerated from the original lease.

(1) Accounting treatment of operating leases

The lease receipts of operating leases are recognized as rental income in each period of thelease term according to the straight-line method. The company capitalizes the initial direct

costs incurred related to operating leases, and allocates them to the current profit and loss onthe same basis as the recognition of rental income during the lease term. Variable leasepayments that are not included in the lease receipts are included in the current profit and losswhen they actually occur.

(2) Accounting treatment of finance leasing

On the start date of the lease, the company recognizes the finance lease receivables for thefinance lease and terminates the recognition of the finance lease assets. When the companyinitially measures the finance lease receivables, the net lease investment is taken as the entryvalue of the financial lease receivables. The net lease investment is the sum of the unguaranteedresidual value and the present value of the lease payment not yet received at the beginning ofthe lease term, discounted at the interest rate implicit in the lease.The company calculates and recognizes the interest income for each period of the lease termbased on a fixed periodic interest rate. The derecognition and impairment of finance leasereceivables shall be accounted for in accordance with "3. (10) Financial Instruments" in thisNote.Variable lease payments that are not included in the measurement of the net lease investmentare included in the current profit or loss when they actually occur.A lessor shall account for a modification to a finance lease as a separate lease if both:

? The modification increases the scope of the lease by adding the right to use one or moreunderlying assets;? The consideration for the lease increases by an amount commensurate with the stand-aloneprice for the increase in scope and any appropriate adjustments to that stand-alone price toreflect the circumstances of the particular contract.For a modification to a finance lease that is not accounted for as a separate lease, a lessor shallaccount for the modification as follows:

? If the lease would have been classified as an operating lease had the modification been ineffect at the inception date, the lessor shall account for the lease modification as a new leasefrom the effective date of the modification; and measure the carrying amount of the underlyingassets as the net investment in the lease immediately before the effective date of the leasemodification.? If the change takes effect on the lease start date, the lease will be classified as a financiallease, and the company will perform accounting treatment in accordance with the policy of “3.

(10) Financial Instruments” in this Note on the modification or re-negotiation of the contract.

3. Sale and leaseback transaction

The company evaluates and determines whether the asset transfer in the sale and leasebacktransaction is a sale in accordance with the principles described in "3. (23) Revenue" of thisNote.

(1) As the lessee

If the transfer of an asset in the sale and leaseback transaction is a sale, the company as thelessee measures the right-of-use asset arising from the leaseback at the proportion of theprevious carrying amount of the asset that relates to the right-of-use retained by the lessee andrecognize only the amount of any gain or loss that relates to the rights transferred to the lessor.For details on the subsequent measurement of right-of-use assets and lease liabilities and leasechanges after the commencement date of the lease term, please refer to Note III. (27) Leases 1.The Company as Lessee. When subsequently measuring the lease liabilities arising from a saleand leaseback, the Company determines the lease payments or the modified lease payments ina manner that does not result in the recognition of gains or losses related to the right of useacquired through the leaseback.If the asset transfer in the sale and leaseback transaction does not belong to the sale, thecompany as the lessee continues to recognize the transferred assets and at the same timerecognize a financial liability equal to the transfer proceeds. For the accounting treatment offinancial liabilities, please refer to "3. (10) Financial Instruments" in this note.

(2) As a lessor

If the asset transfer in the sale and leaseback transaction is a sale, the company acts as the lessorto account for the purchase of the asset, and the asset lease is accounted for in accordance withthe aforementioned "2. The company as the lessor" policy; in the sale and leaseback transactionIf the transfer of assets is not a sale, the company as the lessor does not recognize the transferredassets, but recognizes a financial asset equal to the transfer proceeds. For the accountingtreatment of financial assets, please refer to "3. (10) Financial Instruments" in this note.

(28) Debt restructuring

1. The company as the creditor

The Company terminates the recognition of claims when the contractual right to collect cashflows from the claims terminates. If debt is restructured by using assets to pay off debts or byconverting debts into equity instruments, the company will recognize the relevant assets whenthey meet their definition and recognition conditions.If debt restructuring is carried out by repaying debts with assets, the transferred non-financialassets shall be measured at cost at initial recognition. The cost of inventories includes the fair

value of waived claims and other costs directly attributable to the asset incurred in bringing theasset to its present location and condition, such as taxes, transportation, handling charges,insurance, etc. The cost of an investment in an associate or joint venture includes the fair valueof waived claims and other costs such as taxes directly attributable to the asset. The cost ofinvestment property includes the fair value of claims relinquished and other costs such as taxesdirectly attributable to the asset. The cost of fixed assets includes the fair value of waivedclaims and other costs directly attributable to the asset incurred before the asset is ready for itsintended use, such as taxes, transportation costs, handling charges, installation costs,professional service fees, etc. The cost of biological assets includes the fair value of waivedclaims and other costs directly attributable to the asset, such as taxes, transportation costs,insurance premiums, etc. The cost of an intangible asset includes the fair value of claimswaived and other costs, such as taxes, that are directly attributable to bringing the asset to itsintended use. If a debt restructuring by converting debt into equity instruments results in thecreditor converting its claims into equity investments in associates or joint ventures, theCompany measures its initial investment cost at the fair value of the claims waived and othercosts such as taxes directly attributable to the asset. The difference between the fair value andthe book value of the waived claims is included in the current profit and loss. If the debtrestructuring is carried out by modifying other terms, the Company shall recognize andmeasure the restructured claims in accordance with "III. (10) Financial Instruments" of thisNote.When multiple assets are used to settle debts or for debt restructuring, the Company shall firstrecognize and measure the financial assets acquired and the restructured claims in accordancewith Note III. (10) Financial Instruments. It shall then allocate the net amount of the fair valueof the waived claims after deducting the recognized amounts of the acquired financial assetsand the restructured claims in accordance with the fair value ratio of the various assets otherthan the acquired financial assets, and on this basis, determine the cost of each asset separatelyin accordance with the above method. The difference between the fair value and the carryingamount of the waived claim should be included in the current profit and loss.

2. The company as the debtor

The Company derecognizes a debt when the present obligation for the debt is discharged.If debt restructuring is carried out by settling debts with assets, the Company shall terminatethe recognition when the relevant assets and the debts settled meet the conditions fortermination of recognition, and the difference between the book value of the debts settled and

the book value of the transferred assets shall be included in the current profit and loss.In case of debt restructuring by converting debt into equity instruments, the Company shallderecognize the debts paid when they meet the derecognition conditions. Equity instrumentshall be measured at fair value at initial recognition. If the fair value of an equity instrumentcannot be measured reliably, it is measured at the fair value of the debt settled. The differencebetween the carrying amount of the debt settled and the amount recognized as an equityinstrument should be recognized in the current period's profit or loss.If debt restructuring is carried out by modifying other terms, the Company shall recognize andmeasure the restructured debt in accordance with “III. (10) Financial Instruments” of this Note.If multiple assets are used to repay debts or a combination is used to restructure debt, thecompany shall confirm and measure equity instruments and restructured debts in accordancewith the aforementioned methods. The difference between the carrying amount of the debtsettled and the sum of the carrying amount of the transferred assets and the recognized amountof the equity instruments and restructured debts is included in the current period's profit andloss.

(29) Major accounting estimates and judgments

When preparing financial statements, the Company's management needs to use estimates andassumptions, which will affect the application of accounting policies and the amount of assets,liabilities, income and expenses. Actual conditions may differ from these estimates. Themanagement of the company continuously evaluates the judgment of key assumptions anduncertainties involved in the estimation, and the impact of changes in accounting estimateswill be recognized in the current and future periods.

The main uncertainties in the estimated amount are as follows:

1. Measurement of expected credit losses

The company calculates the expected credit loss through the default risk exposure and theexpected credit loss rate, and determines the expected credit loss rate based on the defaultprobability and the default loss rate. When determining the expected credit loss rate, thecompany uses internal historical credit loss experience and other data, and adjusts thehistorical data in combination with current conditions and forward-looking information.When considering forward-looking information, the indicators used by the Company includethe risk of economic downturn, the expected increase in unemployment rate, changes in theexternal market environment, technological environment and customer conditions. The

Company regularly monitors and reviews assumptions related to the calculation of expectedcredit losses.

2. Inventory Impairment

As mentioned in note 3 (11) Inventory under “3 Significant accounting policies andaccounting estimates”, the Company regularly estimates the net realizable value of theinventory, and recognizes the difference in inventory cost higher than the net realizable value.When estimating the net realizable value of inventory, the Company considers the purposeof holding the inventory and uses the available information as the basis for estimation,including the market price of the inventory and the Company's past operating costs. Theactual selling price, completion cost, sales expenses and taxes of the inventory may changeaccording to changes in market sales conditions, production technology, or the actual use ofthe inventory. Therefore, the amount of inventory depreciation reserve may change accordingto the above reasons. Adjustments to the inventory impairment will affect the current profitand loss.

3. Impairment of other assets except inventory and financial assets

As mentioned in note 3 (18) Long-term Asset Impairment, the company performs animpairment assessment on assets other than inventory and financial assets on the balancesheet date to determine whether the recoverable amount of the asset has fallen to a lowerlevel than its book value. If the situation shows that the book value of the long-term assetsmay not be fully recovered, the relevant assets will be deemed to be impaired and theimpairment loss will be recognized accordingly.

The recoverable amount is the higher of the net value of the fair value of the asset (or assetgroup) minus the disposal expenses and the present value of the asset (or asset group) 'sexpected future cash flow. Because the Company cannot reliably obtain the public marketprice of assets (or asset groups), and cannot reliably and accurately estimate the fair value ofassets. Therefore, the Company regards the present value of the expected future cash flow asthe recoverable amount. When estimating the present value of future cash flows, it isnecessary to make a significant judgment on the output, selling price, related operating costsof the products produced by the asset (or asset group), and the discount rate used incalculating the present value. The Company will use all available relevant information whenestimating the recoverable amount, including the prediction of output, selling price andrelated operating costs based on reasonable and supportable assumptions.

4. Depreciation and amortization of assets such as fixed assets and intangible assets

As described in note 3 (14) Fixed Assets and note 3 (17) Intangible Assets, the company shallaccrue depreciation for the fixed assets and amortization for intangible assets within theuseful life after considering their residual value. The company regularly reviews the usefullife of related assets to determine the amount of depreciation and amortization expenses tobe included in each reporting period. The useful life of assets is determined by the companybased on past experience with similar assets and in combination with anticipatedtechnological changes. If the previous estimates change significantly, the depreciation andamortization expenses will be adjusted in the future.

5. Deferred tax assets

When it is estimated that sufficient taxable income can be obtained in the future to use theunrecovered tax losses and deductible temporary differences, the relevant deferred tax assetsare calculated and confirmed on the basis of the applicable income tax rate during the periodwhen the asset is expected to be recovered and the amount of taxable income is limited todeductible tax losses and deductible temporary differences likely to be obtained by theCompany. The Company needs to use judgment to estimate the time and amount of futuretaxable income, and make reasonable estimates and judgments on the future applicableincome tax rate according to the current tax policy and other related policies to determine thedeferred tax assets that should be recognized. If the time and amount of profits actuallygenerated in the future period or the actual applicable income tax rate are different from themanagement's estimate, the difference will have an impact on the amount of deferred taxassets.

(30) Change of significant accounting policy and accounting estimate

1. Change of major accounting policy during this reporting period

(1) Implementation of Interpretation of Enterprise Accounting Standards No. 17The Ministry of Finance issued the "Interpretation of the Enterprise Accounting StandardsNo. 17 " (Accounting [2023] No. 21, hereinafter referred to as "Interpretation No. 17") onOctober 25, 2023. The Company will implement the "Classification of Current Liabilitiesand Non-Current Liabilities", "Disclosure of Supplier Financing Arrangements" and"Accounting Treatment of Sale and Leaseback Transactions" from January 1, 2024. Theaforementioned regulations have no significant impact on the Company's financial reports.

2. Change of accounting estimate during the reporting period

There is no significant changes in accounting estimates during the reporting period.

VI. Taxes

(1) Major type of taxes and corresponding tax rates

TaxTaxation MethodTax Rate
Value-added Tax (VAT)The balance of output VAT calculated based on product sales and taxable services revenue in accordance with the tax laws after subtracting the deductible input VAT of the period6%, 9%, 13%
City maintenance and construction taxBased on VAT and business tax actually paid5%, 7%
Enterprise income taxSee the table below for details

Notes to taxpayers with different corporate income tax rates:

Name of the taxpayersIncome tax rate (5%)
Bengang Steel Plates Co., Ltd25
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.25
Benxi Bengang Steel Sales Co., Ltd.25
Bengang Posco Cold-rolled Sheet Co., Ltd.15
Tianjin Bengang Steel & Iron Trading Co., Ltd.25
Changchun Bengang Steel & Iron Sales Co., Ltd.25
Yantai Bengang Steel & Iron Sales Co., Ltd.25
Guangzhou Bengang Steel & Iron Trading Co., Ltd.25
Dalian Benruitong Automobile Material Technology Co., Ltd.25
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.25

(2) Tax Preference

1. Benxi Posco Cold-Rolled Sheet Co., Ltd., the subsidiary of the Company has obtained theHigh-tech Enterprise Certificate, certificate number: GR202321001624; valid fromDecember 20, 2023 to December 20, 2026. Benxi Steel Posco Cold-Rolled Sheet Co., Ltd.pays corporate income tax at a reduced tax rate of 15%.

2. On December 30, 2021, the Ministry of Finance and the State Administration of Taxationissued the "Announcement on Improving the Value-Added Tax Policy for ComprehensiveUtilization of Resources" (Announcement No. 40 of the Ministry of Finance and the StateAdministration of Taxation in 2021). The announcement will take effect on March 1, 2022.The original "Notice of the Ministry of Finance and the State Administration of Taxation onIssuing the "Catalogue of Value-Added Tax Preferential Policies for ComprehensiveUtilization of Resources Products and Services" (Finance and Taxation [2015] No. 78) willbe abolished at the same time except for "technical standards and related conditions". Theelectricity and heat produced and sold by the Energy Development Branch of Benxi Iron andSteel Co., Ltd., a branch of the Company, are items listed in the "Catalogue of Value-Added

Tax Preferential Terms for Comprehensive Resource Utilization Products and Services" andenjoy the value-added tax refund policy.

VII. Notes to the consolidated financial statements

(1) Cash at bank and on hand

Items2024/06/302023/12/31
Cash on hand
Cash at bank1,182,269,402.521,184,774,971.52
Other monetary funds810,054,824.111,009,879,189.82
Total1,992,324,226.632,194,654,161.34
Including:Total amount deposited abroad

Notes: As at 30 June 2024, bank acceptance deposit of RMB 810,054,824.11 was not recognized as cashand cash equivalents in the cash flow statement.

(2) Notes receivable

1. Notes receivable disclosed by category

Items2024/06/302023/12/31
Bank acceptance bill398,864,911.20367,402,376.67
Commercial acceptance bill384,535,985.0086,157,718.82
Total783,400,896.20453,560,095.49

2. Notes receivable disclosed by bad debt accrual method

Items2024/06/302023/12/31
Carrying amountProvision for bad debtsBook valueCarrying amountProvision for bad debtsBook value
AmountPercentage (%)AmountBad debts ratio (%)AmountPercentage (%)AmountBad debts ratio (%)
Provision for bad debts individually
Provision for bad debts based on portfolio of credit risk characteristics783,400,896.20100.00783,400,896.20453,560,095.49100.00453,560,095.49
Total783,400,896.20100.00783,400,896.20453,560,095.49100.00453,560,095.49

Provision for bad debts based on portfolio of credit risk characteristicsPortfolio items:

Items2024/06/30
Notes receivableProvision for bad debtsBad debts ratio (%)
Bank acceptance bill398,864,911.20
Commercial acceptance bill384,535,985.00
Total783,400,896.20

3. The pledged acceptance bill at the year-end

ItemsNotes receivable pledged at the end of period
Bank acceptance bill383,067,330.50
Total383,067,330.50

4. The amount of notes receivable endorsed over or discounted but not yet matured at the year-end

ItemsAmount terminated at the end of the periodAmount was not terminated at the end of the period
Bank acceptance bill7,259,929,534.6611,363,054.21
Commercial acceptance bill9,435,985.00
Total7,259,929,534.6620,799,039.21

(3) Accounts receivable

1. Accounts receivable disclosed by aging

Items2024/06/302023/12/31
Within 1 year (inclusive)1,070,054,692.281,047,842,246.01
1-2 years (inclusive)98,498,849.30322,945,580.33
2-3 years (inclusive)208,590,086.46647,190.77
3-4 years (inclusive)561,144.955,690,114.98
4-5 years (inclusive)5,592,931.88300,882,005.30
over 5 years373,852,067.3398,724,184.94
Total1,757,149,772.201,776,731,322.33
Items2024/06/302023/12/31
Less: Provision for bad debts430,111,095.35448,198,723.86
Total1,327,038,676.851,328,532,598.47

2. Accounts receivable disclosed by the bad debt accrual method

Items2024/06/302023/12/31
Gross carrying amountProvision for bad debtsBook valueGross carrying amountProvision for bad debtsBook value
AmountPercentage (%)AmountBad debts ratio (%)AmountPercentage (%)AmountPercentage (%)
Tested for impairment individually354,309,554.4220.16354,309,554.42100.00353,419,325.8019.89353,419,325.80100.00
Tested for impairment by portfolio1,402,840,217.7879.8475,801,540.935.401,327,038,676.851,423,311,996.5380.1194,779,398.066.661,328,532,598.47
Include:
Portfolio 1: Aging portfolio1,402,840,217.7879.8475,801,540.935.401,327,038,676.851,423,311,996.5380.1194,779,398.066.661,328,532,598.47
Total1,757,149,772.20100.00430,111,095.351,327,038,676.851,776,731,322.33100.00448,198,723.861,328,532,598.47

Significant accounts receivables tested for impairment individually:

Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd48,196,244.6848,196,244.68100.00Discontinued48,196,244.6848,196,244.68
Brilliance Automotive Group Holdings Co., Ltd.306,113,309.74306,113,309.74100.00Bankruptcy305,223,081.12305,223,081.12
Total354,309,554.42354,309,554.42353,419,325.80353,419,325.80

Provision for bad debts based on portfolio of credit risk characteristicsProvision for bad debts by portfolio: Aging analysis

Items2024/06/30
Account ReceivableProvision for bad debtsBad debt ratio(%)
Within 1 year (inclusive)1,244,814,190.6012,448,141.921.00
1-2 years (inclusive)95,955,967.709,595,596.7710.00
2-3 years (inclusive)10,390,321.552,078,064.3120.00
3-4 years (inclusive)561,144.95561,144.95100.00
4-5 years (inclusive)748,799.87748,799.87100.00
over 5 years50,369,793.1150,369,793.11100.00
Total1,402,840,217.7875,801,540.93

3. The provision for bad debts accrued, reversed or recovered in the current period

Items2023/12/31Changes during the current period2024/06/30
AccruedReversed or recoveredWrite-off or Write-backOther changes
Provision for bad debts448,198,723.867,005,291.0625,092,919.57430,111,095.35
Total448,198,723.867,005,291.0625,092,919.57430,111,095.35

Significant amount of bad debt provision recovered or reversed during the period:

CompanyReversed or recoveredReasonRecovered methodBasis for determining the original bad debt provision and its reasonableness
Brilliance Automotive Group Holdings Co., Ltd.25,092,919.57repay the debtbank depositDebt restructuring agreements

4. Top five debtors and contract assets at the end of the period

CompanyAccounts receivable as at 2024/06/30Contract assets at 2024/06/30TotalPercentage(%)Provision for bad debts
Bengang Group International Economy and Trade Co., Ltd.893,836,130.28893,836,130.2850.878,938,361.30
Brilliance Auto Group Holding Co., Ltd.306,113,309.74306,113,309.7417.42306,113,309.74
Shenzhen CIMC Tongchuang Supply Chain Co.119,995,203.37119,995,203.376.831,199,952.03
CompanyAccounts receivable as at 2024/06/30Contract assets at 2024/06/30TotalPercentage(%)Provision for bad debts
Liaoning North Coal Chemical Industry (Group) Co., Ltd.90,698,309.1990,698,309.195.164,789,690.91
Benxi Steel Refractory Material Co., Ltd.48,417,907.7948,417,907.792.764,085,640.54
Total1,459,060,860.371,459,060,860.3783.04325,126,954.52

(4) Accounts receivable financing

1. Accounts receivable financing by category

Items2024/06/302023/12/31
Notes Receivable191,450,087.40806,822,622.43
Total191,450,087.40806,822,622.43

(5) Prepayments

1. Prepayments disclosed by aging

Aging2024/06/302023/12/31
AmountPercentage (%)AmountPercentage (%)
Within 1 year (inclusive)498,392,587.6587.84647,043,310.2795.88
1-2 years (inclusive)49,149,774.878.6622,062,469.173.27
2-3 years (inclusive)16,643,813.882.933,389,343.940.50
Over 3 years3,177,304.470.562,377,875.910.35
Total567,363,480.8799.99674,872,999.29100.00

Notes: As of June 30, 2024, there were no outstanding prepayments over 1 year.

2. Top five prepaid companies at the end of the period

Name of the company2024/06/30Percentage (%)
Shanxi Coking Coal Group Co., Ltd.134,314,004.3623.67
Shanxi Coking Coal Energy Group Co., Ltd.63,103,944.7211.12
China Railway Shenyang Group Co., Ltd. Shenyang Freight Center57,110,096.0910.07
Shanxi Jiao Hua Co., Ltd.47,665,209.928.40
Shanxi Coking Coal Group Co., Ltd.45,016,096.887.93
Total347,209,351.9761.19

(6) Other receivables

Items2024/06/302023/12/31
Interest receivables
Dividend receivables
Other receivables243,424,884.42318,793,157.58
Total243,424,884.42318,793,157.58

1. Other receivables

(1) Other receivables disclosed by aging

Items2024/06/302023/12/31
Within 1 year (inclusive)211,555,998.22288,095,370.24
1-2 years (inclusive)9,012,745.0935,231,832.41
2-3 years (inclusive)35,141,930.926,078,775.88
3-4 years (inclusive)1,045,234.493,125,628.24
4-5 years (inclusive)3,125,628.24229,028.24
over 5 years60,704,095.7661,270,101.82
Subtotal320,585,632.72394,030,736.83
Less: Provision for bad debts77,160,748.3075,237,579.25
Total243,424,884.42318,793,157.58

(2) Disclosed by bad debt accrual method

Items2024/06/302023/12/31
Carrying amountProvision for bad debtsBook valueCarrying amountProvision for bad debtsBook value
AmountPercentage (%)AmountBad debts ratio (%)AmountPercentage (%)AmountBad debts ratio (%)
Provision for bad debts individually18,245,545.945.6918,245,545.94100.0018,245,545.944.6318,245,545.94100.00
Provision for bad debts based on portfolio302,340,086.7894.3158,915,202.3619.49243,424,884.42375,785,190.8995.3756,992,033.3115.17318,793,157.58
Include:
Aging portfolio302,003,576.7958,915,202.36243,088,374.43375,513,463.1956,992,033.31318,521,429.88
other portfolio336,509.99336,509.99271,727.70271,727.70
Total320,585,632.72100.0077,160,748.30243,424,884.42394,030,736.83100.0075,237,579.25318,793,157.58

Significant other receivables tested for impairment individually:

Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Benxi Iron and Steel (Group) No. 3 Architectural Engineering Co., Ltd.12,504,978.5912,504,978.59100.00Bankruptcy liquidation12,504,978.5912,504,978.59
Benxi Iron and Steel (Group) No. 1 Architectural Engineering Co., Ltd.3,247,307.073,247,307.07100.00Bankruptcy liquidation3,247,307.073,247,307.07
Xuzhou Jinshanqiao Development Zone Metal Material Corporation5,670.775,670.77100.00Irrecoverable payment5,670.775,670.77
Xuzhou Railway Material Factory6,567.206,567.20100.00Irrecoverable payment6,567.206,567.20
Harbin Xuda Company10,644.7210,644.72100.00Irrecoverable payment10,644.7210,644.72
Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Jining Economy and Trade Joint Development Corporation12,831.8112,831.81100.00Irrecoverable payment12,831.8112,831.81
Zhangdian Iron and Steel Headquarter Factory15,167.7815,167.78100.00Irrecoverable payment15,167.7815,167.78
Zibo Zhouchun Welfare Spring Factory15,666.5915,666.59100.00Irrecoverable payment15,666.5915,666.59
Weifang Head Office of Constructive Materials25,179.8425,179.84100.00Irrecoverable payment25,179.8425,179.84
Jiaozhou Zhenxing Metal Product Plant (Weifang)411,891.80411,891.80100.00Irrecoverable payment411,891.80411,891.80
Historical debts242,845.73242,845.73100.00Irrecoverable payment242,845.73242,845.73
Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Jiaozhou Zhenxing Metal Product Plant32,989.1232,989.12100.00Irrecoverable payment32,989.1232,989.12
Tai'an Taishan Metal Constructive Material Company41,145.7541,145.75100.00Irrecoverable payment41,145.7541,145.75
Xuzhou Guanghuan Steel Pipeline Company49,016.7349,016.73100.00Irrecoverable payment49,016.7349,016.73
Guan County Cold Rolling Plate and Strip Headquarter Factory52,602.2552,602.25100.00Irrecoverable payment52,602.2552,602.25
Weifang Nonggao Industry and Trade Center68,000.0068,000.00100.00Irrecoverable payment68,000.0068,000.00
Benxi Fangyuan Provition80,000.0080,000.00100.00Irrecoverable payment80,000.0080,000.00
Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Management Agent
Weifang Sanfeng Steel Pipeline Co., Ltd.81,657.4681,657.46100.00Irrecoverable payment81,657.4681,657.46
Qingdao Liduo Economy and Trade Co., Ltd.133,163.36133,163.36100.00Irrecoverable payment133,163.36133,163.36
Weifang Mingxin Trading and Supply Company197,900.80197,900.80100.00Irrecoverable payment197,900.80197,900.80
Gao Pengquan204,294.00204,294.00100.00Irrecoverable payment204,294.00204,294.00
Zhangdian Jinkun Steel Plate Management Agent231,910.95231,910.95100.00Irrecoverable payment231,910.95231,910.95
Harbin Band Steel Factory403,559.70403,559.70100.00Irrecoverable payment403,559.70403,559.70
Bengang Group International6,617.526,617.52100.00Irrecoverable payment6,617.526,617.52
Company2024/06/302023/12/31
Carrying amountProvision for bad debtsBad debts ratio (%)ReasonCarrying amountProvision for bad debts
Economy and Trade Co., Ltd.
Changchun Kanghong Metal Material Co., Ltd.85,277.5085,277.50100.00Irrecoverable payment85,277.5085,277.50
China Railway Shenyang Bureau Group Co., Ltd. Benxi Freight Center53,712.4253,712.42100.00Irrecoverable payment53,712.4253,712.42
FAW Jiefang Automobile Co., Ltd. Procurement Department24,648.7324,648.73100.00Irrecoverable payment24,648.7324,648.73
Jilin Province Jinghai Material Distribution Co., Ltd297.75297.75100.00Irrecoverable payment297.75297.75
Total18,245,545.9418,245,545.9418,245,545.9418,245,545.94

Provision for bad debt by portfolio of credit risk characteristics:

Portfolio accrual item: Aging portfolio

Items2024/06/30
AmountProvision for bad debtsPercentage(%)
Within 1 year (inclusive)211,219,488.232,112,194.881.00
1-2 year (inclusive)6,519,484.81651,948.4810.00
2-3 year (inclusive)35,141,930.927,028,386.1720.00
3-4 year (inclusive)400,236.49400,236.49100.00
4-5 year (inclusive)3,125,628.243,125,628.24100.00
Aver 5 years45,596,808.1045,596,808.10100.00
Total302,003,576.7958,915,202.36

(3) Information of provision for bad debts

Provision for bad debtsStage oneStage twoStage threeTotal
12-month expected credit losseslifetime expected credit losses (credit impairment has not occurred)lifetime expected credit losses (credit impairment has already occurred)
Beginning balance2,864,723.854,609,838.8267,763,016.5875,237,579.25
Beginning balance during current period-651,948.48251,711.99400,236.49
--Transfer to the second stage-651,948.48651,948.48
--Transfer to the third stage-400,236.49400,236.49
--Write-back to the second stage
--Write-back to the first stage
Accrual for the current period-100,580.492,818,783.84-795,034.301,923,169.05
Reversal during the current period
Write-back of the current period
Write-off during the current period
Other changes
Ending balance1,460,246.407,932,046.6467,768,455.2677,160,748.30

(4) Information of provision, reversal or recovery of bad debts of current period

Items2023/12/31Changes during the current period2024/06/30
AccrualReversal or recoveredWrite-back or write-offOthers
Bad debt provision for other receivables75,237,579.251,923,169.0577,160,748.30
Total75,237,579.251,923,169.0577,160,748.30

(5) Other receivables disclosed by nature

Nature2024/06/302023/12/31
Compensation for the “Living Showbelt” project199,177,700.00212,242,400.00
Current Account117,082,895.23176,055,536.99
Others4,325,037.495,732,799.84
Total320,585,632.72394,030,736.83

(6) Top five other receivable by pooling owing party at the end of the reporting period

CompanyNature or contentAmountAgingPercentage of total other receivables (%)Provision for bad debts at 2024/06/30
Benxi Xihu District GovernmentCompensation for the “Living Showbelt” project199,177,700.00within 1 year62.131,991,777.00
Benxi Iron and Steel (Group) Third construction Engineering Co., LtdCurrent Account12,504,978.593-4 years, over 3 years3.9012,504,978.59
Benxi Iron and Steel (Group) Co., Ltd.Current Account5,476,979.64within 1 year, 1-2 years, over 5 years1.714,156,527.72
CompanyNature or contentAmountAgingPercentage of total other receivables (%)Provision for bad debts at 2024/06/30
Liaoning Hengtai Heavy Machinery Co., Ltd..Current Account3,510,967.391-2 years1.10351,096.74
Benxi Dongfeng Lake Steel Resources Utilization Co.Current Account3,478,250.072-3 years1.08695,650.01
Total224,148,875.6969.9219,700,030.06

(7) Inventories

1. Inventories disclosed by category

Items2024/06/302023/12/31
Gross carrying amountImpairmentBook valueGross carrying amountImpairmentBook value
Raw material and main material4,404,132,619.4156,931,870.404,347,200,749.014,596,538,313.4556,931,870.404,539,606,443.05
Work in process and self-made semi-finished product2,080,826,080.5912,076,074.972,068,750,005.621,627,187,498.3512,076,074.971,615,111,423.38
Finished products1,457,805,042.3819,481,223.061,438,323,819.321,558,823,023.165,167,994.781,553,655,028.38
Total7,942,763,742.3888,489,168.437,854,274,573.957,782,548,834.9674,175,940.157,708,372,894.81

2. Impairment of inventory and contract assets

Category2023/12/31IncreaseDecrease2024/06/30
ProvisionOthersWrite-back or write-offOthers
Raw material and main material56,931,870.4056,931,870.40
Category2023/12/31IncreaseDecrease2024/06/30
ProvisionOthersWrite-back or write-offOthers
Work in process and self-made semi-finished products12,076,074.9712,076,074.97
Finished products5,167,994.7814,313,228.2819,481,223.06
Total74,175,940.1514,313,228.2888,489,168.43

(8) Other current assets

Items2024/06/302023/12/31
VAT input tax108,735,472.4988,281,138.57
Prepaid tax362,947.4617,220,232.46
others33,344,002.4152,288,605.87
Total142,442,422.36157,789,976.90

(9) Long-term equity investment

1. long-term equity investment

Investees2023/12/31Impairment provision as of 2023/12/31Increase/decrease2024/06/30Impairment provision as of 2024/06/30
Addition of InvestmentReduction of InvestmentIncome or loss on investment recognized under the equity methodOther Comprehensive Income AdjustmentOther Equity ChangesDeclaration of Cash Dividends or ProfitProvisionOthers
1.Joint Venture
2.Associated Enterprise
Bensteel Baojin (Shenyang) New Automotive46,910,346.4146,910,346.41
Investees2023/12/31Impairment provision as of 2023/12/31Increase/decrease2024/06/30Impairment provision as of 2024/06/30
Addition of InvestmentReduction of InvestmentIncome or loss on investment recognized under the equity methodOther Comprehensive Income AdjustmentOther Equity ChangesDeclaration of Cash Dividends or ProfitProvisionOthers
Materials Technology Co.
Subtotal46,910,346.4146,910,346.41
Total46,910,346.4146,910,346.41

(10) Other equity instrument investment

1. The information of other equity instrument investment

Items2024/06/302023/12/31Gains recognized in other comprehensive incomeLosses recognized in other comprehensive incomeAccumulated gains in other comprehensive incomeAccumulated losses in other comprehensive incomeDividend incomeReasons for designation as at fair value through other comprehensive income
Suzhou Longben Metal Materials Co. Ltd.3,930,341.273,930,341.2741,361.27
Sinosteel Shanghai Steel Processing Co., Ltd.14,414,693.00
Northeast Special Steel Group Co., Ltd.970,532,698.56970,532,698.5667,203,150.44
Total974,463,039.83974,463,039.8341,361.2781,617,843.44

(11) Fixed assets

1. Fixed assets and Disposal of fixed assets

Items2024/06/302023/12/31
Fixed assets24,878,573,917.5725,028,192,964.67
Disposal of fixed assets
Total24,878,573,917.5725,028,192,964.67

2. Details of fixed assets

ItemsBuildingsMachineryTransportation equipment and othersFurniture and office equipmentTotal
1.Gross carrying amount
(1)31 December 202313,031,421,747.3551,512,912,760.03399,037,323.55198,681,621.2165,142,053,452.14
(2)Increase in current period57,782,406.88628,914,174.755,662,053.1014,119,753.29706,478,388.02
Including: Purchase286,053.10286,053.10
Transferred from construction in progress57,657,024.07628,821,321.685,376,000.0014,119,753.29705,974,099.04
Others125,382.8192,853.07218,235.88
(3)Decrease in current period30,976,158.83188,875,074.3410,056,358.13558,524.79230,466,116.09
—Including: Disposal or scrapped30,976,158.83188,875,074.3410,056,358.13558,524.79230,466,116.09
(4)30 June 202413,058,227,995.4051,952,951,860.44394,643,018.52212,242,849.7165,618,065,724.07
2.Total accumulated depreciation
(1)31 December 20236,637,762,628.3432,928,064,766.56323,798,847.36112,924,985.3940,002,551,227.65
(2)Increase in current period106,370,818.07705,687,704.825,428,986.4011,923,234.34829,410,743.63
ItemsBuildingsMachineryTransportation equipment and othersFurniture and office equipmentTotal
—Including: Provision106,370,818.07705,687,704.825,428,986.4011,923,234.34829,410,743.63
(3)Decrease in current period22,269,734.47171,386,048.999,558,370.01557,362.97203,771,516.44
—Including: Disposal or scrapped22,269,734.47171,386,048.999,558,370.01557,362.97203,771,516.44
(4)30 June 20246,721,863,711.9433,462,366,422.39319,669,463.75124,290,856.7640,628,190,454.84
3.Total impairment
(1)31 December 202383,249,262.0828,059,997.74111,309,259.82
(2)Increase in current period
—Including: Provision
(3)Decrease in current period7,908.167,908.16
—Including: Disposal or scrapped7,908.167,908.16
(4)30 June 202483,249,262.0828,052,089.58111,301,351.66
4.Total net book value of fixed assets
(1)30 June 20246,253,115,021.3818,462,533,348.4774,973,554.7787,951,992.9524,878,573,917.57
(2)31 December 20236,310,409,856.9318,556,787,995.7375,238,476.1985,756,635.8225,028,192,964.67

3. Fixed assets idled temporarily

ItemsGross carrying amountAccumulated depreciationImpairmentBook valueNote
Buildings111,291,120.7566,768,763.5641,943,853.742,578,503.45
Machinery3,034,473.012,388,968.6475,666.43569,837.94
Total114,325,593.7669,157,732.2042,019,520.173,148,341.39

4. Fixed assets leased out by operating lease

ItemsBook value

Buildings

Buildings895,879.23

5. Fixed assets without property rights certificates at the end of the period

ItemsBook valueReason
Buildings2,426,004,556.93In process

(12) Construction in progress

1. Construction in progress and Construction materials

Items2024/06/302023/12/31
Gross carrying amountTotal impairmentBook valueGross carrying amountTotal impairmentBook value
Construction in progress4,156,908,135.684,156,908,135.684,307,646,942.374,307,646,942.37
Project materials757,204.94757,204.94
Total4,156,908,135.684,156,908,135.684,308,404,147.314,308,404,147.31

2. Details of construction in progress

Items2024/06/302023/12/31
Gross carrying amountTotal impairmentBook valueGross carrying amountTotal impairmentBook value
Special Steel Electric Furnace Capacity Replacement Project1,025,492,952.411,025,492,952.411,195,585,747.241,195,585,747.24
Cold Rolling Transformation Project641,990,141.86641,990,141.86578,301,217.76578,301,217.76
Environmental Protection Renovation of Sheet Raw Material Plant460,227,181.39460,227,181.39452,296,692.77452,296,692.77
Special Steel Rolling Mill Renovation Project284,742,386.90284,742,386.90367,831,655.88367,831,655.88
Environmental Protection Renovation in No. 2 Coal Storage Field of Plates Raw Material Plant257,297,346.28257,297,346.28256,434,251.91256,434,251.91
Integration Construction of Informatization System for Ansteel and Bengang Recombination112,748,748.06112,748,748.06
Blocking of ABC and DEF Stockyard in Plates Iron Making General Plant99,425,674.7199,425,674.7199,129,674.7199,129,674.71
Desulphurization Waste Liquor Acid Making Project in Plates Iron Making Plant78,717,673.8478,717,673.8478,562,923.8478,562,923.84
Plate No.1 Dry Quenching System Boosting Modification and Unit No.34 New Construction41,822,708.6341,822,708.6376,994,180.1476,994,180.14
Steelmaking 1#2#3#7#Converter New Three Times Dust Removal System88,529,471.7988,529,471.7976,798,979.9176,798,979.91
Items2024/06/302023/12/31
Gross carrying amountTotal impairmentBook valueGross carrying amountTotal impairmentBook value
Centralized Control Project before Ironmaking of Plates Iron Making General Plant84,842,706.0384,842,706.0361,969,240.0361,969,240.03
1780 Production Line Upgrading78,531,654.0278,531,654.0258,044,160.5458,044,160.54
Flue Gas Desulfurization and Denitrification Project of 4B and 5 Furnace Group in Bengang Plates and Iron Making General Plant54,693,576.0154,693,576.0154,553,821.0154,553,821.01
Plates Energy Centralized Control Project80,258,847.3480,258,847.3450,276,243.3650,276,243.36
Supporting Projects for Outward Transportation of Nanfen Pipeline Transported Mineral Concentrate in Bengang Plates and Iron Making General Plant40,637,546.5940,637,546.5937,857,546.5937,857,546.59
Improvement of Quality and Efficiency of 2300 Line in Hot Continuous Rolling Plant of Benxi Iron and Steel Co., Ltd. ( First Phase ) - Layer Cooling and Upgrading of Secondary System472,621.73472,621.7332,327,295.1232,327,295.12
Centralized Control Center before Ironmaking of Plates Iron Making General Plant32,015,183.1632,015,183.1631,573,183.1631,573,183.16
Capacity Replacement Project of No. 5 Blast Furnace of Bensteel Ironmaking Plant (Energy-saving and Environmental Protection Renovation of No. 5 Blast42,414,525.2542,414,525.2531,033,533.0631,033,533.06
Items2024/06/302023/12/31
Gross carrying amountTotal impairmentBook valueGross carrying amountTotal impairmentBook value
Furnace of Ironmaking Plant of Bensteel Plate)
Blocking Project for Second and Third Burning Mixing Warehouse Recycling Operation Area27,014,192.0027,014,192.0026,589,400.0026,589,400.00
New Construction of 40, 000 m3/h Nitrogen Compressors in Energy General Plant28,420,757.2428,420,757.2425,842,342.6125,842,342.61
Renovation of No. 5 RH Refining in Plates Steel Making General Plant25,772,677.7725,772,677.77
Outage for 2300 Line Heating Furnace in Plates Hot Continuous Rolling Plant15,281,054.8615,281,054.8622,388,923.7222,388,923.72
Capitalized Outage for Roads in Plates Plant17,004,500.0017,004,500.0022,004,500.0022,004,500.00
Bensteel Plate intelligent factory Project41,509,016.3941,509,016.3917,440,916.3917,440,916.39
Renovation of purification and desulphurisation system of coking process at the Sheet Ironmaking Plant34,205,496.1334,205,496.1323,436,618.1023,436,618.10
Cold rolling plant (three colding area) automotive plate quality improvement26,428,760.0026,428,760.007,010,000.007,010,000.00
Sheet Energy Control Centre Unit 33 Relocation Project16,164,547.5716,164,547.5715,353,930.7515,353,930.75
Optimisation and upgrading of logistics in the new Special Steel District16,118,806.0016,118,806.0011,706,800.0011,706,800.00
Items2024/06/302023/12/31
Gross carrying amountTotal impairmentBook valueGross carrying amountTotal impairmentBook value
Intelligent Eco-environmental Control System for Plate Company20,309,310.4020,309,310.403,700,000.003,700,000.00
220kV Substation Project of General Energy Plant18,442,406.1818,442,406.18951,966.34951,966.34
Bensteel's steel industry management and information technology overall enhancement supporting projects18,767,177.3618,767,177.3613,240,377.3613,240,377.36
Relocation and Improvement Project of Hot Repair Position in Plate Steel Mill (Phase II)23,628,350.0023,628,350.007,708,000.007,708,000.00
Others461,501,563.61461,501,563.61432,181,394.24432,181,394.24
Total4,156,908,135.684,156,908,135.684,307,646,942.374,307,646,942.37

3. Changes in important construction projects in the current period

ItemsBudget2023/12/31Increase during current periodTransferred to fixed asset during current periodOther decrease during current period2024/06/30Project cumulative investment accounted for the proportion of the budget (%)Project progress (%)Accumulated amount of interest capitalizationIncluding:Interest capitalization amount in current periodInterest capitalization rate in current period (%Sources of funds
Integration Construction of Informatization System for Ansteel and Bengang Recombination232,100,000.00112,748,748.0651,863,186.24164,611,934.30100.00100.007,233,001.66853,186.244.35Loan from financial institute
Renovation of No. 5 RH Refining in Plates Steel Making General Plant41,330,800.0025,772,677.7711,518,436.3237,291,114.0990.0096.00Others
Special Steel Electric Furnace Capacity Replacement Project1,732,481,000.001,195,585,747.2438,608,081.75208,700,876.581,025,492,952.4189.0095.0032,840,333.579,809,783.284.35Fund raising
Cold Rolling Transformation Project843,640,000.00578,301,217.7685,813,824.1122,124,900.00641,990,141.8785.0085.0029,357,282.8610,797,255.214.35Loan from financial institute
Plate No.1 Dry Quenching System Boosting Modification and93,270,000.0076,994,180.142,851,243.2738,022,714.7841,822,708.6386.0090.00Others
ItemsBudget2023/12/31Increase during current periodTransferred to fixed asset during current periodOther decrease during current period2024/06/30Project cumulative investment accounted for the proportion of the budget (%)Project progress (%)Accumulated amount of interest capitalizationIncluding:Interest capitalization amount in current periodInterest capitalization rate in current period (%Sources of funds
Unit No.34 New Construction
Plate energy management center 6#, 7# furnace plate exchange heat source efficiency improvement project26,500,000.0017,976,789.007,447,653.0025,424,442.0096.00100.00Others
Special Steel Rolling Mill Renovation Project734,730,000.00367,831,655.8821,926,248.51105,015,517.49284,742,386.9088.0093.0027,340,901.775,257,761.163.12Loan from financial institute
Improvement of Quality and Efficiency of 2300 Line in Hot Continuous Rolling Plant of Benxi Iron and Steel Co., Ltd. ( First Phase ) - Layer Cooling and Upgrading of Secondary System39,200,000.0032,327,295.1223,926.6131,878,600.00472,621.7383.0085.00Others
ItemsBudget2023/12/31Increase during current periodTransferred to fixed asset during current periodOther decrease during current period2024/06/30Project cumulative investment accounted for the proportion of the budget (%)Project progress (%)Accumulated amount of interest capitalizationIncluding:Interest capitalization amount in current periodInterest capitalization rate in current period (%Sources of funds
Special Steel Division Equipment Purchase Project11,162,885.6911,162,885.6911,162,885.69100.00100.00Others
Overhaul project of No.1 dry quenching coke of plate ironmaking plant12,000,000.0010,592,603.4231,960.008,410,423.852,214,139.5789.0090.00Others
Total2,418,130,914.39231,247,445.50652,643,408.781,996,734,951.1196,771,519.8626,717,985.89

(13) Right of use assets

1. Right of use assets

ItemsLand use rightBuildingsMachineryTotal
1. Gross carrying amount
(1) 31 December 20231,132,274,415.17368,465,367.561,500,739,782.73
(2) Increase in current period280,278,953.41280,278,953.41
—Addition
—Merging
—Revaluation
—Others280,278,953.41280,278,953.41
(3) Decrease in current period
—transfer to PPE
—Disposal
(4) 30 June 20241,132,274,415.17368,465,367.56280,278,953.411,781,018,736.14
2.Total accumulated depreciation
(1) 31 December 2023119,712,708.6861,410,894.68181,123,603.36
(2) Increase in current period19,952,118.1210,235,149.143,044,387.3133,231,654.57
—Provision19,952,118.1210,235,149.143,044,387.3133,231,654.57
(3) Decrease in current period
—Transfer to PPE
—Disposal
(4) 30 June 2024139,664,826.8071,646,043.823,044,387.31214,355,257.93
3.Total impairment
(1) 31 December 2023
(2) Increase in current period
ItemsLand use rightBuildingsMachineryTotal
—provision
(3) Decrease in current period
—Transfer to PPE
—Disposal
(4) 30 June 2024
4.Total net book value
(1) 30 June 2024992,609,588.37296,819,323.74277,234,566.101,566,663,478.21
(2) 31 December 20231,012,561,706.49307,054,472.881,319,616,179.37

(14) Intangible assets

1. Details of intangible assets

ItemsSoftwareLand use rightTotal
1.Total of original value
(1)31 December 2023267,948.72336,885,314.76337,153,263.48
(2)Increase
—Purchase
—Internal R&D
—Increase in Mergers
(3)Decrease
—Disposal
—Invalided and derecognized portion
(4)30 June 2024267,948.72336,885,314.76337,153,263.48
2.Total Accumulated Amortization
(1)31 December 2023186,634.5880,946,192.7781,132,827.35
(2)Increase13,397.453,368,853.183,382,250.63
—Provision13,397.453,368,853.183,382,250.63
ItemsSoftwareLand use rightTotal
(3)Decrease
—Disposal
—Invalided and derecognized portion
(4)30 June 2024200,032.0384,315,045.9584,515,077.98
3.Total of Impairment
(1)31 December 2023
(2)Increase
—Provision
(3)Decrease
—Disposal
—Invalided and derecognized portion
(4)30 June 2024
4.Total of Net book value
(1)30 June 202467,916.69252,570,268.81252,638,185.50
(2)31 December 202381,314.14255,939,121.99256,020,436.13

(15) Deferred tax asset and deferred tax liability

1. Deferred tax assets before taking into consideration of the balance offsetting

Items2024/06/302023/12/31
Deductible temporary differencesDeferred tax assetDeductible temporary differencesDeferred tax asset
Impairment400,948,822.34100,212,083.01403,698,019.09100,549,055.02
Fair value through other comprehensive income81,617,843.4420,404,460.8681,617,843.4420,404,460.86
Lease liability1,644,367,112.02411,091,778.011,384,348,462.17346,087,115.54
Total2,126,933,777.80531,708,321.881,869,664,324.70467,040,631.42

2. Deferred tax liabilities before taking into consideration of the balance offsetting

Items2024/06/302023/12/31
Taxable temporary differencesDeferred tax liabilitiesTaxable temporary differencesDeferred tax liabilities
Changes in fair value of other equity instrument investments41,361.2710,340.3241,361.2710,340.32
Right-of-use assets1,566,663,478.21391,665,869.551,319,616,179.47329,904,044.87
Total1,566,704,839.48391,676,209.871,319,657,540.74329,914,385.19

3. Unrecognized deferred tax assets

Items2024/06/302023/12/31
Deductible temporary differences306,113,541.40305,223,483.99
Deductible losses6,019,434,124.254,213,758,736.79
Total6,325,547,665.654,518,982,220.78

4. The deductible loss of unrecognized deferred tax assets due in the following period

Year30 June 202431 December 2023Notes
Year 202412,164,389.3512,164,389.35
Year 20258,257,832.988,257,832.98
Year 20266,799,314.776,799,314.77
Year 20271,919,832,999.811,919,832,999.81
Year 20282,367,541,315.762,266,704,199.88
Year 20291,704,838,271.58-
Total6,019,434,124.254,213,758,736.79

(16) Other non-current assets

Items2024/06/302023/12/31
Gross carrying amountImpairmentBook valueGross carrying amountImpairmentBook value
Prepayment for long-term assets121,903,869.78121,903,869.78137,933,599.61137,933,599.61
Total121,903,869.78121,903,869.78137,933,599.61137,933,599.61

(17) Assets with restrictions on ownership or use

Items2024/06/302023/12/31
Carrying amountBook valueType of restrictionStatusCarrying amountBook valueType of restrictionStatus
Cash at bank and on hand810,054,824.11810,054,824.11Margin for Notes receivable, Margin for letter of credit1,009,879,189.821,009,879,189.82Margin for Notes receivable、Margin for letter of credit
Notes receivable383,067,330.50383,067,330.50Pledged218,427,117.76218,427,117.76pledged
Total1,193,122,154.611,193,122,154.611,228,306,307.581,228,306,307.58

(18) Short-term loans

1. Classification of short-term loans

Items2024/06/302023/12/31
Pledge loans
Mortgage loans
Guaranteed loans
Credit loans495,000,000.00300,000,000.00
Discounted unexpired bills730,592.0028,000,000.00
Total495,730,592.00328,000,000.00

(19) Notes payable

Items2024/06/302023/12/31
Commercial acceptance bill512,109,059.19463,403,421.74
Bank acceptance bill9,506,031,958.098,601,590,577.15
letter of credit1,541,716,550.341,300,000,000.00
Total11,559,857,567.6210,364,993,998.89

There is no short-term loans that were overdue at the end of the reporting period.

(20) Accounts payable

1. Accounts payable disclosed by category

Items2024/06/302023/12/31
Within 1 year (inclusive)2,068,453,035.182,782,628,881.51
1-2 year (inclusive)386,521,195.699,101,689.71
2-3 year (inclusive)7,418,840.637,414,901.65
Over 3 year14,002,982.6410,289,787.90
Total2,476,396,054.142,809,435,260.77

2. Significant accounts payable aging over one year

Items2024/06/30Reasons
Henan Weihua Heavy Machinery Co., Ltd.6,829,683.84Not yet eligible for settlement
Dalian Huarui Heavy Industry Group Co. Ltd.5,870,242.00Not yet eligible for settlement
Total12,699,925.84

(21) Contract liabilities

1. Details of contract liabilities

Items2024/06/302023/12/31
Payment received in advance and labor costs2,925,386,458.143,302,218,364.90
Others890,227.48
Total2,925,386,458.143,303,108,592.38

(22) Employee benefits payable

1. Employee benefits payable

Items2023/12/31IncreaseDecrease2024/06/30
Short-term employee benefits1,175,970.83878,644,448.54878,737,354.051,083,065.32
Post-employment benefits - defined contribution plans134,124,608.30134,124,608.30
Termination benefits28,762,172.6528,762,172.65
Other benefits due within one year
Others
Total1,175,970.831,041,531,229.491,041,624,135.001,083,065.32

2. Short-term employee benefits

Items2023/12/31IncreaseDecrease2024/06/30
(1) Salary, bonus, allowance and subsidy623,422,824.80623,422,824.80
(2) Employee welfare82,505,854.7782,505,854.77
(3) Social Insurance74,570,098.5974,570,098.59
Including: Medical insurance55,241,262.9255,241,262.92
Work injury insurance17,024,055.6717,024,055.67
Maternity insurance2,304,780.002,304,780.00
(4) Housing81,980,838.0081,980,838.00
(5) Union funds and staff education fee1,175,970.8312,663,313.0912,756,218.601,083,065.32
(6) Short-term compensated absences
(7) Short-term profit - sharing scheme
(8) Other short-term benefits (Health care, labor insurance, temporary employment)3,501,519.293,501,519.29
Total1,175,970.83878,644,448.54878,737,354.051,083,065.32

3. Defined contribution plans

Items2023/12/31IncreaseDecrease2024/06/30
Basic pension fund104,790,953.08104,790,953.08
Unemployment insurance3,275,218.583,275,218.58
Annuity26,058,436.6426,058,436.64
Total134,124,608.30134,124,608.30

(23) Current tax liabilities

Items2024/06/302023/12/31
Value-added tax7,638,735.147,969,729.86
Corporate income tax11,854,155.7816,637,900.58
City maintenance and construction tax491,284.32526,991.99
House property tax4,202,867.373,997,351.10
Land use right tax1,088,809.991,088,809.99
Individual income tax1,092,281.462,427,153.14
Educational surcharges(including local Educational surcharges)350,917.37376,422.86
Others14,326,468.5022,378,599.59
Total41,045,519.9355,402,959.11

(24) Other payables

Items2024/06/302023/12/31
Interest payables
Dividends payables
Other payables1,291,824,477.571,659,284,531.06
Total1,291,824,477.571,659,284,531.06

1. Other payables

(1) Other payables disclosed by nature

Items2024/06/302023/12/31
Deposit639,292.00679,292.00
Margin335,475,533.08328,420,047.69
Accounts950,613,256.481,317,921,724.74
Others5,096,396.0112,263,466.63
Total1,291,824,477.571,659,284,531.06

(2) Significant other payables aged over one year

Items2024/06/30Reasons
Ansteel Group Engineering Technology Co. Ltd.22,549,189.37unsettled

(25) Non-current liabilities due within one year

Items2024/06/302023/12/31
Long-term loans due within one year408,685,967.20562,310,473.60
Bond payables due within one year81,650,008.44
Long-term payables due within one year
Leas liability due within one year65,801,328.2341,921,209.72
Total474,487,295.43685,881,691.76

(26) Other current liabilities

Items2024/06/302023/12/31
Output tax to be transferred334,009,488.97392,122,093.59
Total334,009,488.97392,122,093.59

(27) Long-term loans

Items2024/06/302023/12/31
Pledged loans
Mortgage loan
Guaranteed loans
Credit loans2,319,589,918.001,723,726,700.80
Total2,319,589,918.001,723,726,700.80

(28) Bonds payable

1. Bonds payable disclosed by category

Items2024/06/302023/12/31
Convertible Bond5,522,410,434.465,451,381,676.38
Total5,522,410,434.465,451,381,676.38

2. Changes in Bonds payables (Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)

3. Description of corporate convertible bond:

Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds were listed on theShenzhen Stock Exchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of theconvertible corporate bonds issued this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) tothe maturity date of the convertible corporate bonds, that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds isRMB 5.03 per share. From January 1, 2024 to June 30, 2024, an aggregate of RMB7,000.00 of the convertible bonds were converted into 1,771.00 commonstock. Among them:

In the first quarter of 2024, the Bengang convertible bonds were reduced by RMB7,000.00 (70 units) due to the conversion, and the number of shares convertedwas 1,771.00 shares, and the conversion price was RMB3.95 per share;As of June 30, 2024, the remaining amount of the face value of the convertible bonds was RMB 5,631,017,100.00 Yuan (56,310,171.00 sheets).

ItemsFace valueIssue dateTerm to maturityIssuance amountBalance at the end of the previous yearCurrent issueInterest accrued at face valuePremium and discount amortizationRepayment in this periodBalance at the end of the current periodDefault or not
BengangConvertible Bond (Bond code:127018)6,800,000,000.0029th June 20206 years6,800,000,000.005,451,381,676.38-81,650,255.4671,034,282.0481,655,779.425,522,410,434.46No
Total6,800,000,000.005,451,381,676.3881,650,255.4671,034,282.0481,655,779.425,522,410,434.46

(29) Lease liabilities

Items2024/06/302023/12/31
Lease payments2,480,710,302.862,098,254,018.65
Less: Unrealized financing expenses836,223,979.34713,905,556.48
Reclassified to non-current liabilities within one year65,801,328.2341,921,209.72
Total1,578,684,995.291,342,427,252.45

(30) Deferred income

Items2023/12/31IncreaseDecrease2024/06/30Reason
Government subsidy136,084,955.18100,000.0014,369,000.00121,815,955.18
Total136,084,955.18100,000.0014,369,000.00121,815,955.18
Items2023/12/31IncreaseTransfer to non-operating incomeTransfer to other incomeOffsetting cost or expensesOther changes2024/06/30Related to assets or income
Research and Development of High-strength Steel for the Third Generation of Automobiles580,000.00290,000.00290,000.00Assets
Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant1,800,000.00300,000.001,500,000.00Assets
Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant3,800,000.00950,000.002,850,000.00Assets
Second Sintering Finishing Dust Removal Ultra-low Emission Reconstruction Project820,000.00205,000.00615,000.00Assets
Converter Gas Recovery Efficiency Improvement Project for Plate Material Area9,680,000.001,210,000.008,470,000.00Assets
Central environmental protection award fund84,352,000.0010,544,000.0073,808,000.00Assets
2021 Intellectual Manufacturing Strong Province Special Fund3,840,000.00480,000.003,360,000.00Assets
2020 Ecological Civilization Construction Special Project (Special Steel Electric Furnace Upgrading Project)20,000,000.0020,000,000.00Assets
2021 Manufacturing Strong Province Special Fund Project8,100,000.00390,000.007,710,000.00Assets
Government grant for “Liaoning Revitalization Talent Plan”236,500.00236,500.00Assets
2022 Provincial Science and Technology Department Liaoning Provincial Natural Science Foundation Program Project Section28,400.0028,400.00Assets
Design of Rare Earth Steel Metallurgical Slag System and Research on Its Physicochemical Properties317,349.00317,349.00Assets
2021 Municipal Skilled Master Workstation Fee77,219.4577,219.45Income
Study on the Mechanism and Control of the Effect of Rare Earth Oxysulfides on the Plasticizability of Automotive Steel122,220.20122,220.20Income
2021 Benxi Experts and Talents Interaction with Enterprises Project5,000.005,000.00Income
2019 Municipal Master Skill Workstation Fee69,500.1969,500.19Income
2018 Municipal Master Skill Workstation Fee58,766.3458,766.34Income
Liaoning Province "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018220,000.00220,000.00Income
Provincial Science and Technology Department National Natural Science Foundation Committee334,000.00334,000.00Income
2019 Provincial Skilled Master Workstation Fee200,000.00200,000.00Income
2020 Provincial Skilled Master Workstation Fee100,000.00100,000.00Income
Fundamental Research on New Technology of Composite Iron Coke Low Carbon Ironmaking Furnace Charge168,000.00168,000.00Income
The Second Batch of 2021 Liaoning Funds on Central Government Guiding the Development of Local Science and Technology300,000.00300,000.00Income
2022 Digital Liaoning Intellectual Manufacturing Strong Province300,000.00300,000.00Income
Municipal Enterprise Operation Class Patent Navigation Project Funding Grant200,000.00200,000.00Income
Genetic Engineering and Artificial Intelligence Design of Aviation Critical Materials (Research Institute)376,000.00376,000.00Income
2022 Provincial Skilled Master Workstation Fee100,000.00100,000.00Income
Total136,084,955.18100,000.00-14,369,000.00--121,815,955.18

(31) Share capital

Items2023/12/31Increase/decrease (+ , - )2024/06/30
Issuing of new shareBonus sharesTransferred from reservesOthersSubtotal
Capital shares4,108,219,302.001,771.001,771.004,108,221,073.00

Note: The decrease was due to the convertible bonds issued by the Company were convertedinto 1,771.00 shares of common stock during the period, and the remaining balance of the facevalue of the Company's convertible bonds as of June 30, 2024 was RMB5,631,017,100.00 Yuan(56,310,171.00 units). For details, please refer to Note 5. (28) Bonds payable.

(32) Other equity instruments

1. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period

Items2023/12/31IncreaseDecrease2024/06/30
NumberBook valueNumberBook valueNumberBook valueNumberBook value
Convertible corporate bonds56,310,241.00947,858,134.16--70.001,424.9756,310,171.00947,856,709.19
Total56,310,241.00947,858,134.16--70.001,424.9756,310,171.00947,856,709.19

Notes: The decrease during the current period was due to convertible bonds issued by the Company have been partially converted into common stock for an aggregateof RMB7,000.00 (70 units), and the remaining balance of the face value of the convertible bonds as of June 30, 2024 was RMB5,631,017,100.00 Yuan (56,310,171.00sheets). For details, please refer to Note 5. (28) Bonds payable.

(33) Capital reserves

Items2023/12/31IncreaseDecrease2024/06/30
Capital premium over par value13,156,308,402.105,177.9313,156,313,580.03
Other capital reserves115,917,468.82115,917,468.82
Total13,272,225,870.925,177.9313,272,231,048.85

Notes: The increase was due to the conversion of A-share convertible bonds issued by theCompany into A-share common stock during the period, as described in Note 5, (28) Bondspayable.

(34) Other comprehensive income

Items2023/12/31Current period2024/06/30
Amounts before corporate income taxLess: amount recognized in OCI in the previous period transfer to PL in current periodLess: income taxIncome after tax attributable to owners of the CompanyIncome after tax attributable to non-controlling interestsLess: transfer to retain earnings
1.Items can not be reclassified into profit or loss.-50,371,341.88-50,371,341.88
including: Remeasurement of defined benefit plans of changes
Other comprehensive income under the equity method cannot be reclassified into profit or loss
Items2023/12/31Current period2024/06/30
Amounts before corporate income taxLess: amount recognized in OCI in the previous period transfer to PL in current periodLess: income taxIncome after tax attributable to owners of the CompanyIncome after tax attributable to non-controlling interestsLess: transfer to retain earnings
Changes in fair value of investments in other equity instruments-50,371,341.88-50,371,341.88
Changes in fair value of company's credit risk
2.Items can be reclassified into profit or loss
Total-50,371,341.88-50,371,341.88

(35) Special Reserves

Items2023/12/31IncreaseDecrease2024/06/30
Safety production cost54,843.1536,054,579.2732,159,120.033,950,302.39
Total54,843.1536,054,579.2732,159,120.033,950,302.39

(36) Surplus Reserves

Items2023/12/31IncreaseDecrease2024/06/30
Statutory surplus reserves1,195,116,522.371,195,116,522.37
Discretionary reserves
Reserve fund
Enterprise Development Fund (EDF)
Others
Total1,195,116,522.371,195,116,522.37

(37) Undistributed Profits

ItemsCurrent periodPrevious period
Before adjustments: undistributed profits at last year-end-2,463,133,834.65-720,559,670.73
Adjustments of the beginning distributed profits (increase + / decease -)
After adjustments: undistributed profit at this year-beginning-2,463,133,834.65-720,559,670.73
Add: undistributed profit belonging to parent company-1,550,950,137.71-1,742,574,163.92
Less: Statutory surplus reserves
Discretionary reserves
ItemsCurrent periodPrevious period
General risk reserves
Common shares dividend payable
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits-4,014,083,972.36-2,463,133,834.65

(38) Operating income and operating cost

1. Operating income and operating cost

ItemsCurrent periodPrevious period
RevenueCostRevenueCost
Principal business27,942,407,986.7428,743,063,625.9030,178,980,302.2130,346,840,599.33
Other business422,131,300.06434,178,194.37388,428,902.82367,800,364.58
Total28,364,539,286.8029,177,241,820.2730,567,409,205.0330,714,640,963.91

2. Details for operating income

ItemPrincipal business RevenuePrincipal business CostOther business RevenueOther business Cost

Classified by businessarea

Classified by business area

Including:Domestic

Including:Domestic22,982,790,083.4723,737,449,619.00422,131,300.06434,178,194.37

Abroad

Abroad4,959,617,903.275,005,614,006.90--

Classified by the timeof commodity transfer

Classified by the time of commodity transfer27,942,407,986.7428,743,063,625.90422,131,300.06434,178,194.37

Including: recognizeat a certain point intime

Including: recognize at a certain point in time

-Recognizeover a certain periodof time

-Recognize over a certain period of time27,942,407,986.7428,743,063,625.90420,272,981.66432,990,677.97
ItemPrincipal business RevenuePrincipal business CostOther business RevenueOther business Cost

Total

Total1,858,318.401,187,516.40

Item

Item27,942,407,986.7428,743,063,625.90422,131,300.06434,178,194.37

(39) Tax and surcharges

ItemsCurrent periodPrevious period
Environmental tax10,657,195.939,527,874.78
City maintenance and construction tax7,179,465.726,576,796.79
Educational surcharge5,141,768.244,800,732.70
Housing property tax42,403,396.6640,884,994.48
Land use right tax6,075,969.406,075,969.40
Vehicle and vessel tax24,659.44
Stamp duty30,999,838.6730,849,463.63
Others14,110.89324,845.97
Total102,496,404.9599,040,677.75

(40) Selling and marketing expenses

ItemsCurrent periodPrevious period
Import and export agency fee26,379,873.7621,131,652.66
Salary and benefits36,058,846.2737,771,652.79
Sales service fee10,571,474.171,382,736.23
Others5,858,248.939,615,841.56
Total78,868,443.1369,901,883.24

(41) General and administrative expenses

ItemsCurrent periodPrevious period
Salary and benefits222,695,719.15232,474,136.03
Repair expense3,878,241.83298,281.38
Depreciation25,488,252.6419,462,599.70
Professional service expenses10,565,726.996,665,914.90
ItemsCurrent periodPrevious period
IT systems fees21,186,116.6614,723,225.16
Safety production expenses13,231,852.9636,283,096.29
Others54,648,344.4929,661,768.03
Total351,694,254.72339,569,021.49

(42) Research and development expenses

ItemsCurrent periodPrevious period
Depreciation, materials and compensation, etc.36,966,260.6332,990,679.09
Total36,966,260.6332,990,679.09

(43) Financial expenses

Items2024/06/302023/12/31
Interest expenses192,939,391.68234,419,462.35
including: Interest expenses for lease liabilities
Less: Interest income19,612,598.5627,351,519.21
Exchange losses-43,562,831.57-49,493,753.99
Others5,418,930.933,983,576.72
Total135,182,892.48161,557,765.87

(44) Other income

ItemsCurrent periodPrevious period
Research and Development of High-strength Steel for the Third Generation of Automobiles290,000.00290,000.00
Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant300,000.00
ItemsCurrent periodPrevious period
Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant950,000.00950,000.00
Second Sintering Finishing Dust Removal Ultra-low Emission Reconstruction Project205,000.00
Plate factory area converter Gas Recovery and Efficiency Improvement Project1,210,000.00
Central Government Environmental Protection Award Fund10,544,000.00
2021 Intellectual Manufacturing Strong Province Special Fund480,000.00205,000.00
2021 Intellectual Manufacturing Strong Province Special Fund project390,000.00
Tax Rebates for Low-growth Businesses from Government724,200.00
2024 Special Incentive Funds for Business Stable development Measures (Q1)785,500.00
Air Pollution Prevention and Control Funds - Second Burn Finishing Dedusting Ultra Low Emission Retrofit Project300,000.00
2021 Benxi Pollution Control and Energy Saving and Carbon Reduction Special Project (Converter Gas Recovery Efficiency Improvement Project)44,117.65
2019 Municipal Skilled Master Workstation Fee81.08
Liaoning Province “One Million Talents Project” Funding Program in 202050,000.00
Additional tax relief for retired soldiers in 2022540,000.00
Withholding fee income389,899.87913,893.41
VAT tax relief67,802,894.08
Others225,000.00
Total84,071,493.953,518,092.14

(45) Investment income

ItemsCurrent periodPrevious period
Income on long-term equity investment by equity method-439,659.58
Income on disposal of financial assets holding for trading-294,462.57
ItemsCurrent periodPrevious period
Gains/loss from Available-for-sale financial assets during the holding period-2,502,067.50
Gain from debt restructuring694,683.35
Others-31,605,308.28
Total-31,605,308.28-2,541,506.30

(46) Credit impairment loss

ItemsCurrent periodPrevious period
Loss from bad debts of account receivable-18,087,628.51-18,426,234.94
Loss from bad debts of other receivables1,923,169.0535,877,008.41
Total-16,164,459.4617,450,773.47

(47) Asset impairment loss

ItemsCurrent periodPrevious period
Inventory and contract assets impairment loss14,313,228.2884,458,260.66
Total14,313,228.2884,458,260.66

(48) Assets disposal gains

ItemsCurrent periodPrevious periodThe amount recognized in non-recurring profit
Disposal gains or losses arising from disposal of fixed assets not classified for sale10,002,955.9110,002,955.91
Total10,002,955.9110,002,955.91

(49) Non-operating income

ItemsCurrent periodPrevious periodThe amount recognized in non-recurring profit
Non-current assets scrapped gains2,969,609.6417,095,345.192,969,609.64
Liquidated damages2,252,849.81980,399.632,252,849.81
Unpayable accounts payable (Debt liquidation income)2,447,931.60
Others3,754,417.7231,060,871.613,754,417.72
Total8,976,877.1751,584,548.038,976,877.17

(50) Non-operating expense

ItemsCurrent periodPrevious periodRecorded in the current period
Non-current assets scrapped loss26,684,793.0348,484,833.8926,684,793.03
Penalties and late fees819,442.122,072,844.13819,442.12
Others71,951.3627,649.1171,951.36
Total27,576,186.5150,585,327.1327,576,186.51

(51) Income tax expenses

1. Income tax expense

ItemsCurrent periodPrevious period
Income tax payable for the current year37,006,436.4546,665,568.90
Adjustment of deferred income tax-2,905,865.78-13,473,858.06
Total34,100,570.6733,191,710.84

2. Accounting profit and income tax expense adjustment process

ItemsCurrent period
Total profit-1,472,189,725.96
ItemsCurrent period
Income tax expense calculate according to the official or applicable tax rate-368,047,431.49
Effect of different tax rates applied by subsidiaries-20,834,895.35
Effect of adjustment of the income tax expense of prior period-7,776,343.01
Effect of non-taxable income-21,514.35
Effect of undeductible costs, expenses or losses16,939.75
Effect of use of deductible losses of unrecognized deferred tax asset of prior period-485,271.99
Effect of deductible temporary differences or deductible losses of unrecognized deferred tax asset of current period430,710,887.32
Others538,199.79
Total34,100,570.67

(52) Notes of statement of cash flows

1. Cash related to other operating activities

(1)Cash received related to other operating activities

ItemsCurrent periodPrevious period
Current accounts, advances received41,261,597.4836,965,273.21
Interest income19,128,419.0927,351,519.21
Special subsidy income10,475,771.68850,000.00
Non-operating income3,955,339.02-
Others1,983,169.94980,399.63
Total76,804,297.2166,147,192.05

(2)Cash paid related to other operating activities

ItemsCurrent periodPrevious period
Current accounts, advance for another60,227,872.0828,422,075.16
Administrative expenses46,701,363.64112,917,219.14
Sales expenses8,837,487.9232,130,230.45
Bank charges32,800,163.463,983,576.72
ItemsCurrent periodPrevious period
Others17,555,604.58-
Total166,122,491.68177,453,101.47

2. Other cash in relation to financing activities

(1)Other cash received in relation to financing activities

ItemCurrent periodPrevious period
Notes, letter of guarantee, and letter of credit margins1,841,743,458.53299,914,718.38
Total1,841,743,458.53299,914,718.38

(2)Other cash paid in relation to financing activities

ItemCurrent periodPrevious period
Notes, letter of guarantee, and letter of credit margins1,641,919,092.82673,351,795.82
Lease payments31,137,341.9218,485,374.02
Bank charges4,378,074.033,284,461.67
Total1,677,434,508.77695,121,631.51

(53) Supplementary details of statement of cash flows

1. Supplementary details for statement of cash flows

ItemsCurrent periodPrevious period
1. A reconciliation of net profit to cash flows from operating activities:
Net profit-1,506,290,296.63-983,416,724.55
Add: Credit impairment loss-16,164,459.4617,450,773.47
Asset impairment loss14,313,228.2884,458,260.66
Depreciation of fixed assets829,410,743.63823,089,855.07
Depreciation of right of use assets33,231,654.5730,187,267.26
Amortization of intangible assets3,382,250.633,039,005.87
Long-term deferred expenses
ItemsCurrent periodPrevious period
Losses proceeds from disposal of PPE, intangible assets and other long-term assets (Earnings marked“-”)-10,002,955.91
Scrapped losses from fixed assets (Earnings marked“-”)23,715,183.3931,389,488.70
Change in fair value loss (Earnings marked“-”)
Financial expenses (Earnings marked“-”)149,376,560.11184,925,708.36
Investment losses (Earnings marked“-”)31,605,308.282,541,506.30
Deferred tax assets reduction (Addition marked“-”)-64,667,690.46-11,622,984.29
Deferred tax liabilities increased (Reduction marked“-”)61,761,824.68
Reduction of inventory (Addition marked“-”)-160,214,907.42784,701,660.05
Operating receivable items reduction (Addition marked“-”)501,415,461.52-816,626,771.10
Operating payable items increase (Less marked"-")1,204,219,491.334,512,520,236.01
Others
Net cash flows generated from operating activities1,095,091,396.544,662,637,281.81
2. Payments of investing and financing activities not involving cash:
Liabilities transferred to capital
Convertible bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of cash1,182,269,402.523,135,535,935.14
Less: Beginning balance of cash1,184,774,971.521,296,662,683.20
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents-2,505,569.001,838,873,251.94

2. The structure of cash and cash equivalents

ItemsCurrent periodPrevious period
1. Cash1,182,269,402.521,184,774,971.52
Including: Cash on hand
Digital currencies available on demand
Bank deposits available on demand1,182,269,402.521,184,774,971.52
Other monetary funds available on demand
Central bank deposits available on demand
Balances with other financial institutions
Loans to other financial institutions
2. Cash equivalents
Including: Investment of securities due within 3 months
3. Ending balance of cash and cash equivalents1,182,269,402.521,184,774,971.52
Including: Cash and cash equivalents limited to use by the parent company of other subsidiary in the group

(54) Foreign currency monetary items

1. Foreign currency monetary items

ItemEnding balance in foreign currencyExchange rateEnding balance translated to RMB
Cash and cash equivalents355,889,274.38
Including: USD49,169,322.427.1268350,419,927.04
HKD5,992,491.880.91275,469,347.34
Non-current liabilities due within one year1,035,967.20
Including: JPY23,176,000.000.04471,035,967.20
Long-term loans2,589,918.00
Including: JPY57,940,000.000.04472,589,918.00

VIII. Equity in other entities

(1) Equity in subsidiaries

1. Constitution of enterprise group

Name of the subsidiaryRegistered capitalPrincipal place of businessRegistration placeNotes of businessShareholding ratioAcquisition method
DirectIndirect
Guangzhou Bengang Steel & Iron Trading Co., Ltd200,000,000.00GuangzhouGuangzhouSales100.00Establishment
Shanghai Bengang Metallurgy Science and Technology Co., Ltd229,936,718.57ShanghaiShanghaiSales100.00Establishment
Dalian Benruitong Automobile Material Technology Co., Ltd65,000,000.00DalianDalianManufacturing65.00Establishment
Bengang POSCO Cold-rolled Sheet Co., Ltd.1,019,781,571.10BenxiBenxiManufacturing75.00Business combination under common control
Changchun Bengang Steel & Iron Trading Co., Ltd.28,144,875.36ChangchunChangchunSales100.00Business combination under common control
Yantai Bengang Steel Sales Co., Ltd.219,100,329.41YantaiYantaiSales100.00Business combination under common control
Tianjin Bengang Steel Trading Co., Ltd.230,318,095.80TianjinTianjinSales100.00Business combination under common control
Benxi Bengang Steel & Iron Sales Co., Ltd.30,000,000.00BenxiBenxiSales100.00Establishment
Shenyang Bengang Metallurgy Science and Technology Co., Ltd200,000,000.00ShenyangShenyangSales100.00Establishment

2. Significant but not wholly-owned subsidiaries

Name of the subsidiariesProportion of non-controlling interests (%)Profits and losses attributing to non-controlling shareholdersDividend declared to distribute to non-controlling shareholdersEnding balance of non-controlling interests
Bengang Posco Cold-rolled Sheet Co., Ltd.25%43,980,460.30620,637,405.69

3. Financial information of significant but not wholly-owned subsidiaries

Name of the subsidiaries30 June 202431 December 2023
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
Bengang Posco Cold-rolled Sheet Co., Ltd.4,562,128,686.75933,499,610.605,495,628,297.353,013,073,069.823,013,073,069.823,314,945,506.13958,741,994.504,273,687,500.631,969,330,156.261,969,330,156.26
Name of the subsidiariesCurrent periodPrevious period
Operating incomeNet profitTotal comprehensive incomeNet cash flows from operating activitiesOperating incomeNet profitTotal comprehensive incomeNet cash flows from operating activities
Bengang Posco Cold-rolled Sheet Co., Ltd.4,625,594,944.57175,927,445.95175,927,445.95321,389,844.864,253,071,574.2169,847,227.2369,847,227.23171,658,194.18

(2) The shareholder's equity in the subsidiary has changed and still control the subsidiary's transactions

The Company does not exist such matters.

IX. Government grants

1. Liabilities relating to government grants

Item31 December 2023AdditionAmounts recognized in non-operating income during the current periodAmounts recognized in other income during the current periodAmounts derecognized in other expense during the current periodOffset costs or expenses during the current period30 June 2024Related to assets/income
Deferred income136,084,955.18100,000.00-14,369,000.00--121,815,955.18Assets/income

X. Risks associated with financial instruments

(1) Various types of risks arising from financial instruments

The Company's principal financial instruments include other equity instrumentsinvestments, borrowings, receivables, payables, etc. A detailed description of each financialinstrument is set out in note V. The risks associated with these financial instruments and therisk management policies adopted by the Company to mitigate these risks are describedbelow. The Company's management manages and monitors these exposures to ensure thatthese risks are contained within defined limits.The objective of the Company's risk management is to strike an appropriate balancebetween risk and return, minimize the negative impact of risk on the Company's operatingresults, and maximize the benefits of shareholders and other equity investors. Based on thisrisk management objective, the Company's basic risk management strategy is to determineand analyze the various risks faced by the company, establish an appropriate risk tolerancebottom line and risk management, and timely and reliable supervision of various risks, tocontrol the risks within the limited scope.

1. Credit risk

As at 30 June 2024, the maximum credit exposure that could give rise to theCompany's financial loss stems primarily from losses on the Company's financialassets arising from the failure of the other party to perform its obligations, including:

The carrying amount of the financial assets recognised in the consolidated balancesheet; For financial instruments measured at fair value, the carrying value reflects itsrisk exposure, but not its maximum risk exposure, which will change as fair valuechanges in the future.In order to reduce credit risk, the Company has established a special department todetermine credit limits, conduct credit approvals, and perform other monitoringprocedures to ensure that necessary measures are taken to recover overdue claims.In addition, the Company reviews the collection of each individual receivables ateach balance sheet date to ensure that adequate provisions are made for doubtfulaccounts that cannot be collected. As a result, the Company's management considersthat the Company's exposure to credit risk has been substantially reduced.The Company's working capital is held in financial institutions with higher creditratings and therefore the credit risk of its working capital is lower.

2. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financialobligations on the maturity date. The Company manages liquidity risk by ensuringthat it has sufficient liquidity to meet its obligations as they mature without causingunacceptable losses or damaging the reputation of the business. The Companyregularly analyzes the structure and maturity of its liabilities to ensure that it hassufficient funds. The Company's management monitors the use of bank borrowingsand ensures compliance with loan agreements. It also negotiates financing withfinancial institutions to maintain a certain credit line and reduce liquidity risk.

3. Market risk

Market risk of financial instruments refers to the risk that the fair value or future cashflows of financial instruments will fluctuate due to changes in market prices,including exchange rate risk, interest rate risk and other price risks.

(1) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financialinstrument will fluctuate due to changes in market interest rates.The interest rate risk faced by the Company mainly arises from floating interest ratebank deposits and floating interest rate loans, which expose the Company to cashflow interest rate risk. The Company has not yet established a policy to manage itsinterest rate risk, but management will carefully choose financing methods, acombination of fixed and floating interest rates, and a combination of short-term debtand long-term debt. Using effective interest rate risk management methods, theCompany will closely monitor interest rate risk, control the amount of floating rateborrowings, and use interest rate swaps when necessary to achieve the desiredinterest rate structure.

(2) Exchange rate risk

Exchange rate risk refers to the risk that the fair value or future cash flows offinancial instruments will fluctuate due to changes in foreign exchange rates.The Company's exposure to exchange rate risk is mainly related to US dollars, HongKong dollars, Japanese yen and euros. Except for the Company's purchase of a smallamount of raw materials and sales of finished products, which are settled in USdollars, Hong Kong dollars, Japanese yen and euros, the Company's other majorbusiness activities are settled in RMB. As at June 30, 2024, the assets or liabilities

described in the following table were all balances in US dollars, Hong Kong dollars,Japanese yen and Euros:

ItemsClosing balanceBalance at the end of previous year
US DollarsOther foreign currenciesTotalUS DollarsOther foreign currenciesTotal
Monetary funds49,169,322.425,992,491.8855,161,814.3081,951,964.906,400,196.4088,352,161.30
Non-current liabilities due within one year23,176,000.0023,176,000.0023,176,000.0023,176,000.00
Long-term borrowing57,940,000.0057,940,000.0069,528,000.0069,528,000.00
Total49,169,322.4287,108,491.88136,277,814.3081,951,964.9099,104,196.40181,056,161.30

XI. Disclosure of fair valueThe input value used in fair value measurement is divided into three levels:

The input value of the first level is the unadjusted quotation of the same asset or liability that can beobtained on the measurement date in an active market.The input value of the second level is the input value of the related assets or liabilities that is directlyor indirectly observable except the input value of the first level.The third level of input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement result belongs is determined by the lowest level towhich the input value that is important to the fair value measurement as a whole belongs.

(1) Fair value of assets and liabilities measured at fair value

ItemsFair value at the end of the period
Fair value measurement in the first levelFair value measurement in the second levelFair value measurement in the third levelTotal
1. Continuous fair value measurement
◆Accounts receivable financing191,450,087.40191,450,087.40
ItemsFair value at the end of the period
Fair value measurement in the first levelFair value measurement in the second levelFair value measurement in the third levelTotal
◆Investment in other equity instruments974,463,039.83974,463,039.83
Total assets continuously measured at fair value1,165,913,127.231,165,913,127.23

XII. Related party transactions

(1) Details of parent company

Name of parent companyPlace of RegistryNotes of BusinessRegistered capitalShare proportion (%)Voting rights (%)
Benxi Steel & Iron (Group) Co., Ltd.BenxiManufacturing8058.6558.65

The ultimate controlling party of the Company is:Angang Group Co., Ltd.

(2) Details of the subsidiaries

For details of subsidiaries of the Company please refer to Note 6 “Equity in other entities”.

(3) The company's joint ventures and associates

For details of joint ventures and associates of the Company please refer to Note 6 “Equity inother entities”.Other joint ventures or associates that had related-party transactions with the Company duringthe current period, or had balances resulting from related-party transactions with the Companyin prior periods, are described below:

Name of joint ventures and associatesRelationship
Bensteel Baojin (Shenyang) New Automotive Materials Technology Co., Ltd.Associate

(4) Details of other related parties

Name of Other related partiesRelationship
Bengang Group Co., Ltd.Controlling shareholder of parent company.
Benxi Iron and Steel (Group) Real Estate Development Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd.Same parent company
Benxi Iron and Steel (Group) International Trade Tengda Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Electromechanical Installation Engineering Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Inspection and Testing Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Construction Advanced Decoration Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Construction Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Mining Construction Engineering Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Mining Mineral Resources Development Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Mining Liaoyang Jiajiaobao Iron Mine Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Mining Liaoyang Ma'erling Pellet Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Mining Yanjia Valley Limestone Mine Co., Ltd.Same parent company
Name of Other related partiesRelationship
Benxi Iron and Steel (Group) Mining Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Road and Bridge Construction Engineering Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd.Same parent company
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Industrial Development Co., Ltd.Same parent company
Benxi Iron and Steel (Group) Information Automation Co., Ltd.Same parent company
Benxi New Industrial Development Co., Ltd.Same parent company
Liaoning Hengtai Heavy Machinery Co., Ltd.Same parent company
Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.Same parent company
Liaoning Slag Micropowder Co., Ltd.Same parent company
Liaoning Lide Internet of Things Co., Ltd.Same parent company
Liaoning Metallurgical Technician CollegeSame parent company
Liaoning Metallurgical Vocational Technical CollegeSame parent company
Liaoning Yitong Machinery Manufacturing Co., Ltd.Same parent company
Bengang Stainless Steel Cold Rolling Dandong Co., Ltd.Same parent company
Bengang Gaoyuan Industrial Development Co., Ltd.Same parent company
Benxi Aiko Hydraulic Sealing Co., Ltd.Same parent company
Benxi Dongfeng Lake Steel Resource Utilization Co., Ltd.Same parent company
Benxi Xihu Metallurgical Furnace Material Co., Ltd.Same parent company
Benxi Weir Surfacing Manufacturing Co., Ltd.Same parent company
Dalian Bolore Steel Pipe Co., Ltd.Same parent company
Bengang Electrical Co., Ltd.Associate of parent company
Northern Hengda Logistics Co., Ltd.Belongs to Bengang Group Co., Ltd.
Name of Other related partiesRelationship
Bengang Group International Economic and Trade Co., Ltd.Belongs to Bengang Group Co., Ltd.
Benxi Northern Iron Industry Co., Ltd.Belongs to Bengang Group Co., Ltd.
Benxi Beiying Iron and Steel (Group) Co., Ltd.Belongs to Bengang Group Co., Ltd.
Benxi Beiying Iron and Steel Group Import and Export Co., Ltd.Belongs to Bengang Group Co., Ltd.
Chengdu Xingyun Smart Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
DeLin Industrial Products Co., Ltd.Belongs to Angang Group Co., Ltd.
DeLin Landport Supply Chain Services Co., Ltd.Belongs to Angang Group Co., Ltd.
Guangzhou Angang Steel Processing Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang (Hangzhou) Automotive Materials Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang (Liaoning) Materials Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Electrical Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Scrap Resources (Anshan) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Processing & Distribution (Dalian) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Processing & Distribution (Changchun) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Processing & Distribution (Zhengzhou) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Distribution (Hefei) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Distribution (Wuhan) Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Rope Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Steel Company LimitedBelongs to Angang Group Co., Ltd.
Angang Chemical Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Beijing Research Institute Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group International Economic & Trade Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Energy-Saving Technology Services Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Mining Gongchangling Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Mining Co., Ltd.Belongs to Angang Group Co., Ltd.
Name of Other related partiesRelationship
Angang Group Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Automation Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Construction Group Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Metal Structure Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Mining Machinery Manufacturing Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Mining Automotive Transportation Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Green Resources Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Energy Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Industrial Group (Anshan) Equipment Operation & Maintenance Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Industrial Group Metallurgical Machinery Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Industrial Group Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Heavy Machinery Design & Research Institute Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Heavy Machinery Co., Ltd.Belongs to Angang Group Co., Ltd.
Anshan Angang International Travel Agency Co., Ltd.Belongs to Angang Group Co., Ltd.
Anshan Iron & Steel Metallurgical Furnace Material Technology Co., Ltd.Belongs to Angang Group Co., Ltd.
Anshan Jianbo Engineering Testing Co., Ltd.Belongs to Angang Group Co., Ltd.
Anzi (Tianjin) Financial Leasing Co., Ltd.Belongs to Angang Group Co., Ltd.
Pangang Group Chengdu Vanadium & Titanium Resources Development Co., Ltd.Belongs to Angang Group Co., Ltd.
Pangang Group Engineering Technology Consulting Co., Ltd.Belongs to Angang Group Co., Ltd.
Pangang Group Jiangyou Great Wall Special Steel Co., Ltd.Belongs to Angang Group Co., Ltd.
Shanxi Materials International Energy Co., Ltd.Belongs to Angang Group Co., Ltd.
Tianjin Angang Steel Processing & Distribution Co., Ltd.Belongs to Angang Group Co., Ltd.
Tianjin Angang International Northern Trade Co., Ltd.Belongs to Angang Group Co., Ltd.
Tianjin Bengang Sheet Metal Processing & Distribution Co., Ltd.Belongs to Angang Group Co., Ltd.
Name of Other related partiesRelationship
Changchun FAW Angang Steel Processing & Distribution Co., Ltd.Belongs to Angang Group Co., Ltd.
Angang Group Engineering Technology Co., Ltd.Associate of Angang Group

(5) Related Party Transactions

1. Related party transactions of purchasing goods and services

Company as the purchaser

NameThe content of related party transactionsCurrent periodAmount of transactions approvedWhether the transaction limit is exceededPrevious period
Benxi Beiying Iron & Steel (Group) Co., Ltd.Raw material6,036,111,840.2014,930,000,000.00NO6,177,881,267.18
Benxi Iron & Steel (Group) Mining Co., Ltd.Raw material3,761,543,430.277,500,000,000.00NO3,173,059,838.70
Benxi Iron & Steel (Group) Industrial Development Co., Ltd.Raw material268,379,808.18300,000,000.00NO9,559,452.37
Benxi Iron & Steel (Group) Co., Ltd.Raw material53,351,214.25300,000,000.00NO133,872,831.15
Angang Group International Economic & Trade Co., Ltd.Raw material107,305,564.26300,000,000.00NO
Anshan Iron & Steel Group Co., Ltd.Raw material304,711,056.15506,000,000.00NO200,416,836.36
Angang Group Diverse Industry Development Co., Ltd.Raw material483,423,623.301,600,000,000.00NO370,082,138.82
Other Subsidiaries of Angang GroupRaw material20,608,416.2950,000,000.00NO942,680.16
Benxi Beiying Iron & Steel (Group) Co., Ltd.Supplementary material20,000,000.00NO
Benxi Iron & Steel (Group) Machinery Manufacturing Co., Ltd.Supplementary material62,549,067.24100,000,000.00NO38,334,305.48
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.Supplementary material15,407,343.86160,000,000.00NO79,433,788.85
Benxi Iron & Steel (Group) Construction Co., Ltd.Supplementary material818,584.20120,000,000.00NO4,854,600.01
Benxi Iron & Steel (Group) Information Automation Co., Ltd.Supplementary material7,016,883.5480,000,000.00NO16,818,802.44
Benxi Iron & Steel (Group) Industrial Development Co., Ltd.Supplementary material17,015.0740,000,000.00NO2,120,094.92
Benxi Iron & Steel (Group) Co., Ltd.Supplementary material106,581,116.87260,000,000.00NO53,746,891.24
Angang Group Diverse Industry Development Co., Ltd.Supplementary material5,171,074.6015,000,000.00NO
NameThe content of related party transactionsCurrent periodAmount of transactions approvedWhether the transaction limit is exceededPrevious period
Anshan Iron & Steel Group Co., Ltd.Supplementary material64,544,420.24115,000,000.00NO61,671,860.93
Other Subsidiaries of Angang GroupSupplementary material17,810,333.7340,000,000.00NO78,844,487.60
Benxi Beiying Iron & Steel (Group) Co., Ltd.Procurement of energy power316,619,543.14600,000,000.00NO329,215,977.30
Other Subsidiaries of Angang GroupProcurement of energy power118,036.44YES208,218.19
Benxi Iron & Steel (Group) Construction Co., Ltd.Support services103,545,050.15400,000,000.00NO246,466,923.42
Benxi Iron & Steel (Group) Information Automation Co., Ltd.Support services53,096,184.97120,000,000.00NO8,215,028.90
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.Support services311,023,983.44350,000,000.00NO103,157,106.74
Benxi Steel (Group) Mining Co., Ltd.Support services30,000,000.00NO
Benxi Steel Group International Economic and Trade Co., Ltd.Support services40,729,648.83100,000,000.00NO32,464,379.89
Benxi Steel (Group) Information Automation Co., Ltd.Support services104,785,276.69200,000,000.00NO60,120,395.62
Northern Hengda Logistics Co., Ltd.Support services11,200,905.68100,000,000.00NO67,162,305.56
Benxi Steel (Group) Machinery Manufacturing Co., Ltd.Support services10,702,549.8370,000,000.00NO21,034,856.70
Benxi Steel (Group) Industry Development Co., Ltd.Support services3,802,809.238,000,000.00NO5,080,866.42
Benxi Steel (Group) Co., Ltd.Support services140,119,640.51344,000,000.00NO168,574,123.96
Bengang Group Co., Ltd.Support services102,489,358.33362,000,000.00NO
Ansteel Group Engineering Technology Development Co., Ltd.Support services53,638,063.99120,000,000.00NO118,731,759.13
Anshan Iron and Steel Group Co., Ltd.Support services347,464,633.47260,000,000.00YES319,392,000.92
Other subsidiaries of Ansteel GroupSupport services7,342,541.7530,000,000.00NO14,261,748.44

Company as the seller

NameThe content of related party transactionsCurrent periodPrevious period
Northern Hengda Logistics Co., Ltd.Products1,722,052,621.911,646,632,183.35
NameThe content of related party transactionsCurrent periodPrevious period
Benxi Beiying Steel (Group) Co., Ltd.Products222,640,542.68133,546,983.71
Benxi Steel (Group) Mining Co., Ltd.Products143,349,069.56468,447,521.17
Benxi Steel (Group) Construction Co., Ltd.Products1,443,062.143,761,171.44
Benxi Steel (Group) Machinery Manufacturing Co., Ltd.Products9,436,595.766,539,107.03
Benxi Steel (Group) Industrial Development Co., Ltd.Products81,217,653.2718,085,533.30
Benxi Steel (Group) Co., Ltd.Products57,601,879.59114,712,497.47
Anshan Iron and Steel Group Co., Ltd.Products1,401,685,867.84582,043,758.79
Ansteel Group Zhongyuan Industrial Development Co., Ltd.Products37,353,702.5879,515,461.22
Ansteel Group International Economic and Trade Co., Ltd.Products198,622,209.28
Panzhihua Iron and Steel Group Co., Ltd.Products12,193,696.161,542,012.35
Other Subsidiaries of Ansteel GroupProducts15,005,049.12126,692.04
Benxi Steel (Group) Mining Co., Ltd.Support services4,108,288.08
Other Subsidiaries of Ansteel GroupSupport services1,491,326.68100,754.71

2. Lease information of related parties

Company as the lessor

LesseeLease capital categoryLease income of current periodLease income of previous period
Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.Warehouse and machinery670,802.00

Company as the lessee

LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets
Benxi Steel & Iron (Group) Steel & Iron ProcessLand use right 7,669,068.17 square meter Land use right27,638,772.0619,500,054.0027,627,809.2619,750,096.20
LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets
and Logistics Co., Ltd.42,920.00 square meter
Benxi Steel & Iron (Group) Steel &2300 Hot rolling product line,8,049,080.523,870,344.348,049,080.533,736,932.14
LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets

IronProcessandLogisticsCo., Ltd.

Iron Process and Logistics Co., Ltd.related real estate
Benxi Beiying1780 Hot rolling7,175,818.862,980,721.707,557,730.912,877,975.14
LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets
Steel & Iron (Group) Co., Ltd.product line, related real estate
Bengang Group Co., Ltd.Land use right4,972,711.561,224,959.404,972,711.541,315,378.20
LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets

728,282.30square meter

728,282.30 square meter
Ansteel Group Energy-Saving Technologymachinery and equipment12,063,482.04119,211.50
LessorLease capital categoryCurrent periodPrevious period
Rental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assetsRental costs for short-term leases and leases of low-value assets with simplified treatmentVariable lease payments not included in the measurement of the lease liabilityLease chargesInterest expense on lease liabilities assumedIncreased right to use assets

ServicesCo., Ltd.

ServicesCo., Ltd.

(6) Receivables and payables of the related parties

1. Receivables of the Company

ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Accounts receivableAngang Steel Company Limited629,660.826,296.61--
Accounts receivableAngang Engineering Technology Group Co., Ltd.22,834.85228.3530,509.40305.09
Accounts receivableAngang Construction Group Co., Ltd.--4,154.1641.54
Accounts receivableBenxi Steel Group International Economic & Trade Co., Ltd.893,836,130.288,938,361.30854,482,902.2829,419,309.19
Accounts receivableBengang Group Co., Ltd.6,007.3460.071,246.0912.46
Accounts receivableBenxi Beifang Iron Co., Ltd.8,222,949.2282,229.4952,161,339.98539,226.50
Accounts receivableBenxi Beiying Steel Group Co., Ltd.28,089,043.04280,890.43--
Accounts receivableBenxi Dongfenghu Steel Resource Utilization Co., Ltd.549,364.515,493.651,129,130.3311,291.30
Accounts receivableBenxi Steel Group Real Estate Development Co., Ltd.123,492.061,234.92269,832.53244,698.20
Accounts receivableBenxi Steel Group Construction Co., Ltd.5,628,612.94495,118.685,954,675.2910,700.06
Accounts receivableBenxi Steel Group Mine Construction Engineering Co., Ltd.601,622.1629,008.27662,998.2411,004.96
Accounts receivableBenxi Steel Group Mining Mineral Resources Development Co., Ltd.88,983.858,898.3988,983.85889.84
Accounts receivableBenxi Steel Group Mining Liaoyang Jiajiaopu Iron Mine Co., Ltd.72,885.60728.86303,609.003,036.09
ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Accounts receivableBenxi Steel Group Mining Liaoyang Ma'erling Pelletizing Co., Ltd.76,258.77762.591,602,237.3916,022.37
Accounts receivableBenxi Steel (Group) Mining Co., Ltd.28,746,100.01287,461.0043,742,238.95437,422.39
Accounts receivableBenxi Steel Group Thermal Development Co., Ltd.8,369,230.2383,692.3016,191,269.77142,065.08
Accounts receivableBenxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.11,517,761.37873,105.6011,642,752.56256,914.89
Accounts receivableBenxi Iron and Steel (Group) Industrial Development Co., Ltd.17,525,398.95175,253.9920,496,130.862,727.99
Accounts receivableBenxi Iron and Steel (Group) Information Automation Co., Ltd.10,377.61103.7814,700.00147.00
Accounts receivableBenxi Iron and Steel (Group) Co., Ltd.15,340,188.72498,892.0219,025,699.80681,571.55
Accounts receivableBenxi Xihu Metallurgical Furnace Charge Co., Ltd.37,834.35378.3413,216.40132.16
Accounts receivableBenxi Weld Phosphate Overlay Manufacturing Co., Ltd.189,911.4317,160.36191,720.2216,994.63
Accounts receivableBenxi New Business Development Co., Ltd.43,969.498,793.9049,497.4855.28
Accounts receivableLiaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.144,307.221,443.07162,404,481.011,637,032.46
Accounts receivableLiaoning Slag Micro Powder Co., Ltd.--12,848.00128.48
ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Accounts receivablePangang Group Jiangyou Great Wall Special Steel Co., Ltd.5,151,698.6251,516.99--
Accounts receivableAnsteel Energy Technology Co., Ltd.--283.532.84
Accounts receivableAnsteel Steel Material Processing and Distribution (Dalian) Co., Ltd.9,587,508.8795,875.0927,279,295.84272,792.96
Other receivablesAngang Steel Company Limited95,781.2750,581.8395,781.2746,061.89
Other receivablesAnsteel Group Corporation Limited6,706.00670.606,706.0067.06
Other receivablesBengang Group Co., Ltd.80,622.08806.227,305.5973.06
Other receivablesBenxi Dongfenghu Steel Resource Utilization Co., Ltd.3,478,250.07695,650.013,478,250.0723,340.75
Other receivablesBenxi Steel (Group) Machinery Manufacturing Co., Ltd.1,061,981.67212,396.331,061,981.67106,198.17
Other receivablesBenxi Steel Group Construction Co., Ltd.250,679.61250,679.61250,679.61250,679.61
Other receivablesBenxi Iron and Steel (Group) Industrial Development Co., Ltd.431,639.8786,327.97431,639.8743,163.99
Other receivablesBenxi Iron and Steel (Group) Co., Ltd.5,988,404.804,678,560.887,413,860.804,561,714.36
Other receivablesLiaoning Hengtai Heavy Machinery Co., Ltd.3,510,967.39351,096.743,545,583.4035,455.83
Other receivablesAnsteel Capital (Tianjin) Financial Leasing Co., Ltd.--8,064,427.9880,644.28
ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Other receivablesNorthern Hengda Logistics Co., Ltd.1,000.00-1,000.00-
Other receivablesBenxi Steel Group International Economic & Trade Co., Ltd.6,617.526,617.526,617.526,617.52
Other receivablesBenxi New Business Development Co., Ltd.2,280,942.732,280,942.732,280,942.732,280,942.73
PrepaymentsAngang Steel Company Limited702,645.58-882,482.46-
PrepaymentsAnsteel Group International Economic and Trade Co., Ltd.395,500.01-0.01-
PrepaymentsNorthern Hengda Logistics Co., Ltd.844,386.93-874,210.39-
PrepaymentsBenxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.3,197,081.91-3,162,173.15-
PrepaymentsBenxi Iron and Steel (Group) Information Automation Co., Ltd.575,313.17-1,075,365.83-
PrepaymentsBenxi New Business Development Co., Ltd.4,765,300.85-8,122,937.94-
PrepaymentsAngang Engineering Technology Group Co., Ltd.--6,774,166.05-
PrepaymentsBenxi Steel Group International Economic & Trade Co., Ltd.--10,176,164.50-
PrepaymentsBenxi Beiying Iron & Steel Group Import and Export Co., Ltd.--1,119,904.00-
ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
PrepaymentsBenxi Iron and Steel (Group) Industrial Development Co., Ltd.82.41---
Other non-current assetsAngang Engineering Technology Group Co., Ltd.14,084,299.22-14,517,451.17-
Other non-current assetsBenxi Steel Gaoyuan Industrial Development Co., Ltd.542,400.00-542,400.00-
Other non-current assetsBenxi Steel (Group) Machinery Manufacturing Co., Ltd.4,176.00-4,176.00-
Other non-current assetsBenxi Steel Group Construction Co., Ltd.10,094,076.34-22,094,076.34-
Other non-current assetsBenxi Steel Group Mine Construction Engineering Co., Ltd.3,155,429.08-3,155,429.08-
Other non-current assetsBenxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.19,639,834.36-22,915,336.04-
Other non-current assetsBenxi Iron and Steel (Group) Industrial Development Co., Ltd.833,139.38-833,139.38-
Other non-current assetsBenxi Iron and Steel (Group) Information Automation Co., Ltd.14,770,709.95-16,042,420.95-
Other non-current assetsLiaoning Hengtai Heavy Machinery Co., Ltd.37,496.00-263,473.40-
Other non-current assetsAngang Steel Company Limited--7,305.45-
ItemsName30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Other non-current assetsBenxi Steel (Group) Machinery Manufacturing Co., Ltd.--3,506,580.00-

2. Payables of the Company

ItemsName30 June 202431 December 2023
Notes payableAngang Electric Co., Ltd.63,861.90170,418.08
Notes payableAngang Scrap Resources (Anshan) Co., Ltd.93,887,524.6366,774,511.99
Notes payableAngang Steel Rope Co., Ltd.-263,044.11
Notes payableAngang Steel Company Limited594,771.45145,476.64
Notes payableAnsteel Group International Economic and Trade Co., Ltd.-38,512,770.27
Notes payableAngang Steel Company Limited57,905,049.626,637,769.40
Notes payableAnsteel Group International Economic and Trade Co., Ltd.301,455.97-
Notes payableAnsteel Energy Technology Co., Ltd.-132,150.38
Notes payableAngang Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd.2,594,377.993,063,464.44
Notes payableAngang Industrial Group Metallurgical Machinery Co., Ltd.6,921,702.312,198,235.32
Notes payableAngang Heavy Machinery Co., Ltd.3,451,927.09864,614.53
Notes payableAnshan Iron and Steel Metallurgical Furnace Material Technology Co., Ltd.8,561,439.305,954,131.61
Notes payableNorthern Hengda Logistics Co., Ltd.4,193,014.394,962,246.27
Notes payableBenxi Stainless Steel Cold Rolling Dandong Co., Ltd.-42,982.27
Notes payableBenxi Steel Gaoyuan Industrial Development Co., Ltd.718,720.401,125,249.71
Notes payableBenxi Steel Group International Economic & Trade Co., Ltd.49,695,126.6047,218,526.77
ItemsName30 June 202431 December 2023
Notes payableBengang Group Co., Ltd.4,688,315.284,688,315.28
Notes payableBenxi Aike Hydraulic Sealing Co., Ltd.2,375,563.521,646,773.75
Notes payableBenxi Beifang Iron Co., Ltd.3,038,178.834,486,925.32
Notes payableBenxi Beiying Steel & Iron (Group) Co., Ltd.-152,926,015.01
Notes payableBenxi Beiying Iron & Steel Group Import and Export Co., Ltd.-225,141.59
Notes payableBenxi Dongfenghu Steel Resource Utilization Co., Ltd.9,114,752.4511,255,094.10
Notes payableBenxi Steel (Group) Real Estate Development Co., Ltd.213,493.64130,815.00
Notes payableBenxi Steel (Group) International Trade Tenda Co., Ltd.69,861,530.9842,667,716.38
Notes payableBenxi Steel (Group) Machinery Manufacturing Co., Ltd.23,856,002.372,228,869.19
Notes payableBenxi Steel (Group) Construction Advanced Decoration Co., Ltd.264,705.62264,705.62
Notes payableBenxi Steel Group Construction Co., Ltd.14,334,617.9035,954,925.98
Notes payableBenxi Steel Group Mining Construction Engineering Co., Ltd.7,680,319.817,069,202.17
Notes payableBenxi Steel Group Mining Liaoyang Mailin Pellet Co., Ltd.22,954,939.7955,297,876.79
Notes payableBenxi Steel Group Mining Co., Ltd.92,350,907.7771,864,074.04
Notes payableBenxi Steel Group Thermal Power Development Co., Ltd.234,627.43281,092.78
Notes payableBenxi Steel Group Equipment Engineering Co., Ltd.20,637,252.9947,480,851.11
Notes payableBenxi Steel Group Industrial Development Co., Ltd.66,092,986.9499,026,848.37
Notes payableBenxi Steel Group Information Automation Co., Ltd.23,085,044.0418,762,233.66
Notes payableBenxi Steel Group Metallurgical Slag Co., Ltd.-250,593.53
Notes payableBenxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.35,105,246.1432,174,626.26
ItemsName30 June 202431 December 2023
Notes payableBenxi Jikong Electronic Instrument Industry Co., Ltd.28,802.83-
Notes payableBenxi Xihu Metallurgical Furnace Charge Co., Ltd.20,433,308.0625,620,902.35
Notes payableBenxi Weld Phosphate Overlay Manufacturing Co., Ltd.234,112.13234,112.13
Notes payableBenxi New Business Development Co., Ltd.3,357,637.093,357,637.09
Notes payableDalian Polaro Steel Pipe Co., Ltd.1,065,882.33-
Notes payableDalian DeLin Industry and Trade Co., Ltd.6,313,029.239,685,683.68
Notes payableLiaoning Hengtai Heavy Machinery Co., Ltd.14,195,131.5418,098,769.50
Notes payableLiaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.17,960,536.381,409,071.37
Notes payableLiaoning Lide IoT Co., Ltd.4,641,997.804,170,770.16
Notes payableLiaoning Yitong Mechanical Manufacturing Co., Ltd.5,429,310.752,127,118.28
Notes payablePanzhihua Iron and Steel Group Chengdu Vanadium & Titanium Resources Development Co., Ltd.7,080.77-
Notes payableShanxi Wuchan International Energy Co., Ltd.-91,859.97
Notes payableAngang Steel Processing and Distribution (Changchun) Co., Ltd.47,065.95208,377.96
Notes payableAngang Steel Processing and Distribution (Zhengzhou) Co., Ltd.36,055.30-
Notes payableBenxi Electrical Co., Ltd.469,417.412,903,896.45
Notes payableDeLin Port Logistics and Supply Chain Service Co., Ltd.-58,351.28
Notes payableLiaoning Metallurgical Vocational and Technical College48,048.0048,048.00
Notes payableAngang Engineering Technology Group Co., Ltd.-170,708.00
Notes payableBenxi Steel (Group) First Construction-108.90
Notes payableTianjin Benxi Steel Sheet Processing and Distribution Co., Ltd.959.747.25
ItemsName30 June 202431 December 2023
Contract liabilitiesAngang Steel Company Limited130,744.73130,744.73
Contract liabilitiesAngang Chemical Technology Co., Ltd.10,325,624.886,485,543.83
Contract liabilitiesAngang Mining Equipment Manufacturing Co., Ltd.1,708,332.16-
Contract liabilitiesAngang Green Resources Technology Co., Ltd.212,523.311,484,311.95
Contract liabilitiesAnsteel Energy Technology Co., Ltd.0.02283.55
Contract liabilitiesBenxi Steel (Group) Machinery Manufacturing Co., Ltd.-23,079.79
Contract liabilitiesNorthern Hengda Logistics Co., Ltd.48,069,790.9354,423,037.31
Contract liabilitiesBenxi Beiying Steel & Iron (Group) Co., Ltd.39,580,174.451,579,294.00
Contract liabilitiesBenxi Dongfenghu Steel Resource Utilization Co., Ltd.2,902,028.572,470,669.23
Contract liabilitiesBenxi Steel (Group) Machinery Manufacturing Co., Ltd.212,368.12177,026.55
Contract liabilitiesBenxi Iron and Steel (Group) Construction Co., Ltd. Construction Engineering Branch Company5,898.81-
Contract liabilitiesBenxi Steel (Group) Mining Liaoyang Jiajia Fortress Iron Mine Co., Ltd.55,491.00-
Contract liabilitiesBenxi Steel Group Mining Liaoyang Mailin Pellet Co., Ltd.13,846,575.06-
Contract liabilitiesBenxi Steel Group Mining Co., Ltd.8,075,928.554,862,723.19
Contract liabilitiesBenxi Steel Group Industrial Development Co., Ltd.6,225,258.111,587,538.32
Contract liabilitiesBenxi Steel Group Metallurgical Slag Co., Ltd.0.020.02
Contract liabilitiesBenxi Xihu Metallurgical Furnace Charge Co., Ltd.20,000.0020,000.00
Contract liabilitiesDalian Polaro Steel Pipe Co., Ltd.2,743,036.963,221,292.56
Contract liabilitiesDeLin Port Logistics and Supply Chain Service Co., Ltd.248,936,991.59188,703,584.97
Contract liabilitiesLiaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.609,189.713,588,934.12
ItemsName30 June 202431 December 2023
Contract liabilitiesLiaoning Metallurgical Vocational and Technical College0.010.01
Contract liabilitiesPangang Group Jiangyou Great Wall Special Steel Co., Ltd.-1,779,438.17
Contract liabilitiesFAW Angang Steel Processing and Distribution (Changchun) Co., Ltd.876,634.27589,358.32
Contract liabilitiesAngang (Hangzhou) Automotive Materials Technology Co., Ltd.269,633.16299,035.59
Contract liabilitiesAngang Steel Processing and Distribution (Changchun) Co., Ltd.2,890,251.955,370,495.95
Contract liabilitiesAngang Steel Distribution (Hefei) Co., Ltd.3,050,349.683,050,349.68
Contract liabilitiesAngang Steel Distribution (Wuhan) Co., Ltd.2,298,467.19-
Contract liabilitiesAnsteel Group International Economic and Trade Co., Ltd.2,484,903.58-
Contract liabilitiesBenxi Steel Group Construction Co., Ltd.-5,898.81
Contract liabilitiesBenxi Steel Group Thermal Power Development Co., Ltd.-4,487,918.73
Contract liabilitiesGuangzhou Ansteel Steel Processing Co., Ltd.-1,067.17
Contract liabilitiesTianjin Ansteel Steel Processing and Distribution Co., Ltd.132,666.06374,664.00
Other payablesAnsteel (Liaoning) Material Technology Co., Ltd.390,000.00390,000.00
Other payablesAnsteel Group Corporation Limited-1,635.00
Other payablesAnsteel Group Automation Co., Ltd.12,466,000.001,283,900.00
Other payablesAngang Construction Group Co., Ltd.3,597,472.946,676,229.55
Other payablesBenxi Steel (Group) Machinery Manufacturing Co., Ltd.9,288,998.0050,000.00
Other payablesAngang Heavy Machinery Co., Ltd.1,707,731.10409,930.10
Other payablesAnshan Ansteel International Travel Service Co., Ltd.-245,460.00
Other payablesAnshan Jianbo Engineering Testing Co., Ltd.252,280.00-
Other payablesNorthern Hengda Logistics Co., Ltd.-5,522,865.33
ItemsName30 June 202431 December 2023
Other payablesBenxi Steel Gaoyuan Industrial Development Co., Ltd.3,866,090.783,058,404.54
Other payablesBenxi Steel Group International Economic & Trade Co., Ltd.52,449,107.2444,960,728.47
Other payablesBengang Group Co., Ltd.903,375.93903,375.93
Other payablesBenxi Aike Hydraulic Sealing Co., Ltd.10,000.00142,790.82
Other payablesBenxi Beiying Steel & Iron (Group) Co., Ltd.36,739,332.7940,103,767.22
Other payablesBenxi Steel (Group) Engineering Construction Supervision Co., Ltd.1,497,272.081,999,087.29
Other payablesBenxi Steel (Group) Machinery Manufacturing Co., Ltd.9,605,712.59-
Other payablesBenxi Steel (Group) Inspection and Testing Co., Ltd.138,630.0075,000.00
Other payablesBenxi Steel (Group) Construction Advanced Decoration Co., Ltd.186,195.55265,274.55
Other payablesBenxi Steel Group Construction Co., Ltd.113,582,071.77186,939,097.90
Other payablesBenxi Steel Group Mining Construction Engineering Co., Ltd.16,367,149.6036,371,606.19
Other payablesBenxi Steel (Group) Road and Bridge Construction Engineering Co., Ltd.318.66318.66
Other payablesBenxi Steel Group Thermal Power Development Co., Ltd.2,563,792.722,070,400.72
Other payablesBenxi Steel Group Equipment Engineering Co., Ltd.34,655,017.52293,195,637.86
Other payablesBenxi Steel Group Industrial Development Co., Ltd.4,231,753.904,078,753.90
Other payablesBenxi Steel Group Information Automation Co., Ltd.72,479,369.4754,062,361.00
Other payablesBenxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd.26,154,744.6813,372,608.70
Other payablesBenxi New Business Development Co., Ltd.6,942,650.7715,131,176.03
Other payablesDalian DeLin Industry and Trade Co., Ltd.943,215.92943,215.92
Other payablesLiaoning Hengtai Heavy Machinery Co., Ltd.3,643,401.376,941,075.21
ItemsName30 June 202431 December 2023
Other payablesLiaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.-20,000.00
Other payablesLiaoning Metallurgical Technician College388,880.002,229,204.00
Other payablesLiaoning Metallurgical Vocational and Technical College362,298.00707,260.00
Other payablesLiaoning Yitong Mechanical Manufacturing Co., Ltd.10,000.0030,396.50
Other payablesAngang Engineering Technology Group Co., Ltd.146,627,077.45183,423,813.04
Other payablesBenxi Xihu Metallurgical Furnace Charge Co., Ltd.100,000.00200,000.00
Other payablesDalian Polaro Steel Pipe Co., Ltd.20,000.0020,000.00
Other payablesPangang Group Engineering & Technology Consulting Co., Ltd.463,291.391,001,991.58
Other payablesAngang Scrap Resources (Anshan) Co., Ltd.-500,000.00
Other payablesAnsteel Metal Structure Co., Ltd.10,000.0010,000.00
Other payablesAnshan Iron and Steel Metallurgical Furnace Material Technology Co., Ltd.50,000.0050,000.00
Other payablesBenxi Electrical Co., Ltd.5,768,826.245,768,826.24
Other payablesBenxi Dongfenghu Steel Resource Utilization Co., Ltd.210,000.00210,000.00

(7) Centralized fund management

1. The key elements of the centralized capital management arrangements in which the

Company participates and operates are as follows:

In December 2021, after negotiation with Anshan Iron & Steel Group Finance CompanyLimited (hereinafter referred to as Anshan Iron & Steel Finance Company), the “FinancialServices Agreement (Years 2022-2024)” was entered into in order to agree on the terms of therelevant financial business and the upper limit of the amount of the relevant transactionsbetween the Company and its subsidiaries and Anshan Iron & Steel Finance Company for theyears 2022, 2023 and 2024. The agreement stipulates that in the next twelve months, themaximum daily deposit balance of the Company and its holding subsidiaries with Anshan Iron& Steel Finance Company will be RMB4.5 billion, the maximum credit limit of loans, bills

and other forms of credit will be RMB5.0 billion, and the maximum entrusted loan to beprovided by Anshan Iron & Steel Finance Company to the Company will be RMB2.0 billion.

2. Funds pooled by the Company to the Group

Funds deposited directly into finance companies by the Company without being pooled intothe accounts of the Group's parent company

Items30 June 202431 December 2023
Gross carrying amountProvision for bad debtsGross carrying amountProvision for bad debts
Cash at bank and on hand776,545,793.41391,377,566.87
Total776,545,793.41391,377,566.87
include: funds restricted due to centralized management of funds

XIII. Commitments and Contingencies

(1) Commitments

1. Significant commitments existing at the balance sheet date

(1) According to the "Land Use Right Leasing Contract" and subsequent supplementaryagreements signed by the company and Benxi Steel (Group) on April 7, 1997, December 30,2005, the Company leased land from Benxi Steel (Group). The monthly rent is 0.594 yuan persquare meters, the leased land area is 7,669,068.17 square meters, and the annual rent is 54.665million yuan.

(2)On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel(Group) and Beiying Steel respectively, leasing the houses and auxiliary facilities occupied by2300 and 1780 hot rolling mill production lines, and the lease term ends on December 31, 2038.The rental fee is based on the depreciation of the original rent value and the national additionaltax, plus reasonable profit negotiation. The estimated annual rent is not more than 20 millionyuan and 18 million yuan respectively. The rental fee is settled and paid monthly. This relatedparty transaction has been reviewed and approved at the fourth meeting of the eighth board ofdirectors of the Company.

(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group andBenxi Steel (Group) respectively, and leased and used a total of 8 pieces of land of the twocompanies. The lease areas are 42,920.00 square meters and 728,282.30 square metersrespectively, with a lease term of 20 years, and a rental price of 1.138 yuan per square meterper month. After the agreement comes into effect, considering the national law and policyadjustments every five years, both parties should determine whether the rent needs to beadjusted according to the pricing basis stipulated in Article 2 of this agreement. This relatedparty transaction has been reviewed and approved at the third meeting of the eighth board ofdirectors of the company.

(4) As at 30 June, 2024, the amount of irrevocable letter of credit that was not fulfilled was

1.54 billion yuan.

(2) Contingencies

1. Significant contingencies existing at the balance sheet date

On July 20, 2024, the Company issued the “Progress Announcement of Bengang Steel PlatesCo., Ltd. on Major Asset Replacement and Connected Transaction”, in which the Companyproposed to carry out asset replacement with its controlling shareholder, Benxi Iron & Steel(Group) Co. The assets to be transferred to the Company are 100% equity interest in BenxiIron & Steel (Group) Mining Industry Limited Liability Company, and the assets to betransferred from the Company are all the assets and liabilities of the listed company except forthe retained assets and liabilities, and the difference between the assets to be transferred to theCompany and the assets to be transferred from the Company shall be made up by one party tothe other party in cash. At present, the scope of the specific subject assets, transaction price andother elements have not been finalized, the parties to the transaction have not yet signed anyagreement, the transaction program still needs to be further demonstration and communicationand negotiation, and need to perform the necessary decision-making and approval proceduresin accordance with the provisions of the relevant laws, regulations and the Articles ofAssociation of the Company, the relevant matters are still subject to significant uncertainties.XIV. Subsequent eventsAt the balance sheet date, no significant contingencies need to be disclosed.

XV. Other significant events

(1) Correction of previous accounting errors

1. Retrospective restatement

There were no corrections of prior period accounting errors using the retrospective

restatement method during the reporting period.

2. Prospective application

There were no corrections of prior period accounting errors using the future applicationmethod in the current reporting period.

(2) Segment information

Since the Company's main product is steel, other products account have a small proportion of sales,the main production base is in Liaoning, and the disclosure of the segment report is not applicable.

XVI. Notes to the financial statements of parent company

1. Accounts receivable

(1) Accounts receivable disclosed by aging

Items30 June 202431 December 2023
Within 1 year (inclusive)1,306,341,076.93719,865,861.39
1-2 years (inclusive)95,955,967.70561,695,759.42
2-3 years (inclusive)137,105,707.40647,190.77
3-4 years (inclusive)561,144.95845,982.97
4-5 years (inclusive)748,799.87503,056.19
Over 5 years98,544,000.8198,702,147.96
Sub-total1,639,256,697.661,382,259,998.70
Less: Provision for bad debts123,430,138.10138,933,196.14
Total:1,515,826,559.561,243,326,802.56

(2) Accounts receivable disclosed by category

Items30 June 202431 December 2023
Gross carrying amountProvision for bad debtsBook valueGross carrying amountProvision for bad debtsBook value
AmountPercentage (%)AmountBad debts ratio (%)AmountPercentage (%)AmountBad debts ratio (%)
Individually significant and tested for impairment individually48,196,244.682.9448,196,244.68100.0048,196,244.683.4948,196,244.68100.00
Accounts receivable tested for impairment by portfolio1,591,060,452.9897.0675,233,893.424.731,515,826,559.561,334,063,754.0296.5190,736,951.466.801,243,326,802.56
Include:
Aging1,348,257,128.6582.2575,233,893.425.581,273,023,235.231,021,248,997.5173.8890,736,951.468.88930,512,046.05
Related party within consolidation scope242,803,324.3314.81242,803,324.33312,814,756.5122.63312,814,756.51
Total1,639,256,697.66100.00123,430,138.101,515,826,559.561,382,259,998.70100.00138,933,196.141,243,326,802.56

Significant receivables tested for impairment individually:

Items30 June 202431 December 2023
Accounts receivableProvision for bad debtsBad debts ratio(%)ReasonAccounts receivableProvision for bad debts
Benxi Nanfen Xinhe Metallurgical Co., Ltd.48,196,244.6848,196,244.68100.00Benxi Nanfen Xinhe has ceased operation.48,196,244.6848,196,244.68
Total48,196,244.6848,196,244.6848,196,244.6848,196,244.68

Accounts receivable tested for impairment by portfolio:

Portfolio tested by aging

Items30 June 2024
Gross carrying amountProvision for bad debtsBad debts ratio (%)
Within 1 year (inclusive)1,190,253,138.4511,902,531.391.00
1-2 years (inclusive)95,955,967.709,595,596.7710.00
2-3 years (inclusive)10,390,321.552,078,064.3120.00
3-4 years (inclusive)561,144.95561,144.95100.00
4-5 years (inclusive)748,799.87748,799.87100.00
Over 5 years50,347,756.1350,347,756.13100.00
Total1,348,257,128.6575,233,893.42

(3) Information of provision, reversal or recovery of bad debts of current period.

Items31 December 2023Increase/decrease30 June 2024
Current period provisionReversalwrite-back/write-offOther changes
Provision for bad debts138,933,196.14-15,503,058.04123,430,138.10
Total138,933,196.14-15,503,058.04123,430,138.10

(4) Top five debtors at the year-end

CompanyClosing balance of accounts receivableClosing balance of contract assetsClosing balance of accounts receivable and contract assetsPercentage (%)Closing balance of provision for bad debts on accounts receivable and impairment of contract assets
Benxi Steel Group International Economic & Trade Co., Ltd.871,987,094.87871,987,094.8753.198,719,870.95
Shenzhen CIMC Tongchuang Supply Chain Co., Ltd.119,995,203.37119,995,203.377.321,199,952.03
Liaoning Northern Coal Chemical Industry (Group) Co., Ltd.90,698,309.1990,698,309.195.534,789,690.91
Benxi Steel Refractory Materials Co., Ltd.48,417,907.7948,417,907.792.954,085,640.54
Benxi Nanfen Xinhe Metallurgical Co., Ltd.48,196,244.6848,196,244.682.9448,196,244.68
Total1,179,294,759.901,179,294,759.9071.9466,991,399.11

2. Other receivables

Items30 June 202431 December 2023
Interest receivables
Dividend receivables123,000,000.00260,000,000.00
Other receivables269,648,388.05344,535,173.18
Total392,648,388.05604,535,173.18

1. Dividend receivables

(1) Detail of dividends receivable

Items30 June 202431 December 2023
Shenyang Bengang Metallurgical Technology Co., Ltd.30,000,000.00
Tianjin Bengang Steel Trade Co., Ltd.47,000,000.00
Shanghai Bengang Metallurgical Technology Co., Ltd.15,000,000.00
Items30 June 202431 December 2023
Yantai Bengang Steel Sales Co., Ltd.25,000,000.00
Changchun Bengang Steel Sales Co., Ltd.43,000,000.0043,000,000.00
Guangzhou Bengang Steel Trade Co., Ltd.80,000,000.00100,000,000.00
Sub-total123,000,000.00260,000,000.00
Less: Provision for bad debts
Total123,000,000.00260,000,000.00

2. Other receivables

(1) Other receivables disclosed by aging

Items30 June 202431 December 2023
Within 1 year (inclusive)210,695,374.33284,052,848.38
1-2 years (inclusive)6,310,326.7035,230,832.41
2-3 years (inclusive)35,141,930.9233,345,904.56
3-4 years (inclusive)28,312,363.173,125,628.24
4-5 years (inclusive)3,125,628.24229,028.24
Over 5 years60,182,062.6060,748,068.66
Sub-total343,767,685.96416,732,310.49
Less: Provision for bad debts74,119,297.9172,197,137.31
Total:269,648,388.05344,535,173.18

(2) Other receivables disclosed by bad debt provision

Items30 June 202431 December 2023
Gross carrying amountProvision for bad debtsBook valueGross carrying amountProvision for bad debtsBook value
AmountPercentage (%)AmountBad debts ratio (%)AmountPercentage (%)AmountBad debts ratio (%)
Individually significant and tested for impairment individually15,752,285.664.5815,752,285.66100.0015,752,285.663.7815,752,285.66100.00
Accounts receivable tested for impairment by portfolio328,015,400.3095.4258,367,012.2517.79269,648,388.05400,980,024.8396.2256,444,851.6514.08344,535,173.18
Include:
Portfolio 1: Aging300,748,271.6287.4958,367,012.2519.41242,381,259.37373,617,582.9789.6556,444,851.6515.11317,172,731.32
Portfolio 2: Related party within consolidation scope27,267,128.687.9327,267,128.6827,362,441.866.5727,362,441.86
Total343,767,685.96100.0074,119,297.91269,648,388.05416,732,310.49100.0072,197,137.31344,535,173.18

Significant other receivables tested for impairment individually:

Items30 June 202431 December 2023
Gross carrying amountProvision for bad debtsBad debts ratio (%)Basis of accrualGross carrying amountProvision for bad debts
Benxi Iron and Steel (Group) No. 3 Architectural Engineering Co., Ltd.12,504,978.5912,504,978.59100.00bankruptcy clearance12,504,978.5912,504,978.59
Benxi Iron and Steel (Group) No. 1 Architectural Engineering Co., Ltd.3,247,307.073,247,307.07100.00bankruptcy clearance3,247,307.073,247,307.07
Total15,752,285.6615,752,285.6615,752,285.6615,752,285.66

Accounts receivable tested for impairment by portfolio:

Portfolio tested by aging:

Items30 June 2024
Gross carrying amountProvision for bad debtsBad debts ratio (%)
Within 1 year (inclusive)210,695,374.332,106,953.7470.06
1-2 years (inclusive)6,310,326.70631,032.672.10
2-3 years (inclusive)35,141,930.927,028,386.1711.68
3-4 years (inclusive)400,236.49400,236.490.13
4-5 years (inclusive)3,125,628.243,125,628.241.04
Over 5 years45,074,774.9445,074,774.9414.99
Total300,748,271.6258,367,012.25

(3) Bad debt provision

Provision for bad debtsStage oneStage twoStage threeTotal
12-month expected credit lossesLifetime expected credit losses (no credit impairment)Lifetime expected credit losses (credit impairment occurred)
Beginning balance2,839,575.354,609,838.8264,747,723.1472,197,137.31
Beginning balance in current period-631,032.67230,796.18400,236.49
Provision for bad debtsStage oneStage twoStage threeTotal
12-month expected credit lossesLifetime expected credit losses (no credit impairment)Lifetime expected credit losses (credit impairment occurred)
--Transfer to Stage two-631,032.67631,032.67
--Transfer to Stage three-400,236.49400,236.49
--Reversal to Stage two
--Reversal to Stage one
Current period provision-101,588.942,818,783.84-795,034.301,922,160.60
Current period reversal
Current period write-back
Current period write-off
Other change
Ending balance1,475,921.077,890,215.0264,753,161.8274,119,297.91

(4) Provision for bad debts accrued, reversed or recovered in the current period

Items31 December 2023Increase/decrease30 June 2024
Current period provisionReversalwrite-back/write-offOther change
Provision for bad debts72,197,137.311,922,160.6074,119,297.91
Total72,197,137.311,922,160.6074,119,297.91

(5) Other receivables disclosed by nature

Nature30 June 202431 December 2023
Compensation for the “Living Showbelt” project199,177,700.00212,242,400.00
Receivable and payable140,321,527.47198,934,209.00
Other4,268,458.495,555,701.49
Total343,767,685.96416,732,310.49

(6) Top five debtors at the year-end

CompanyNature or contentAmountAgingPercentage of total other receivables (%)Provision for bad debts
Benxi Xihu District GovernmentCompensation for the “Living Showbelt” project199,177,700.00Within 1 year57.941,991,777.00
Benxi Iron and Steel (Group) Third construction Engineering Co., LtdReceivable and payable12,504,978.593-4 years, Over 5 years3.6412,504,978.59
Benxi Iron and Steel (Group) Co., Ltd.Receivable and payable5,476,979.64Within 1 year, 1-2 years, Over 5 years1.594,156,527.72
Liaoning Hengtai Heavy Machinery Co., Ltd.Receivable and payable3,510,967.391-2 years1.02351,096.74
Benxi Dongfenghu Steel Resource Utilization Co., Ltd.Receivable and payable3,478,250.072-3 years1.01695,650.01
Total224,148,875.6965.2019,700,030.06

3. Long-term equity investment

Items30 June 202431 December 2023
Gross carrying amountImpairmentBook valueGross carrying amountImpairmentBook value
Subsidiaries2,222,281,590.242,222,281,590.242,222,281,590.242,222,281,590.24
Joint ventures46,910,346.4146,910,346.4146,910,346.4146,910,346.41
Total2,269,191,936.652,269,191,936.652,269,191,936.652,269,191,936.65

(1) Details of investment in subsidiaries

Name of entityBeginning balanceBeginning balance of impairmentIncrease/decreaseEnding balanceEnding balance of impairment
IncreaseDecreaseImpairment of current periodOthers
Shanghai Bengang Metallurgical Technology Co., Ltd.229,936,718.57229,936,718.57
Benxi Beitai Steel Sales Co., Ltd.30,000,000.0030,000,000.00
Benxi POSCO Cold Rolled Sheet Co., Ltd.1,019,781,571.101,019,781,571.10
Tianjin Bengang Steel Trade Co., Ltd.230,318,095.80230,318,095.80
Changchun Bengang Steel Sales Co., Ltd.28,144,875.3628,144,875.36
Yantai Bengang Steel Sales Co., Ltd.219,100,329.41219,100,329.41
Guangzhou Bengang Steel Trade Co., Ltd.200,000,000.00200,000,000.00
Dalian Benruitong Automotive Materials Technology Co., Ltd.65,000,000.0065,000,000.00
Name of entityBeginning balanceBeginning balance of impairmentIncrease/decreaseEnding balanceEnding balance of impairment
IncreaseDecreaseImpairment of current periodOthers
Shenyang Bengang Metallurgical Technology Co., Ltd.200,000,000.00200,000,000.00
Total2,222,281,590.242,222,281,590.24

(2) Details of investment in joint Venture and associated

Name of entityBeginning balanceBeginning balance of impairmentIncrease/decreaseEnding balanceEnding balance of impairment
Addition of InvestmentReduction of InvestmentIncome or loss on investment recognized under the equity methodOther Comprehensive Income AdjustmentOther Equity ChangesDeclaration of Cash Dividends or ProfitProvisionOthers
1.Joint Venture
Name of entityBeginning balanceBeginning balance of impairmentIncrease/decreaseEnding balanceEnding balance of impairment
Addition of InvestmentReduction of InvestmentIncome or loss on investment recognized under the equity methodOther Comprehensive Income AdjustmentOther Equity ChangesDeclaration of Cash Dividends or ProfitProvisionOthers
2.Associated Enterprise
Bensteel Baojin (Shenyang) New Automotive Materials Technology Co., Ltd46,910,346.4146,910,346.41
Subtotal46,910,346.4146,910,346.41
Total46,910,346.4146,910,346.41

4. Operating Income and Operating Cost

(1) Operating income and operating cost

ItemsCurrent periodPrevious period
RevenueCostRevenueCost
Principal business28,086,225,442.0729,148,262,789.5529,752,956,987.4830,143,666,528.21
Other business673,924,129.88685,977,515.04598,633,897.79582,130,402.92
Total28,760,149,571.9529,834,240,304.5930,351,590,885.2730,725,796,931.13

(2) Breakdown of operating income and operating cost

ItemsPrincipal Business incomePrincipal Business costOther Business incomeOther Business cost

Classified by business area

Classified by business area

Including:Domestic

Including:Domestic23,542,489,047.6024,541,067,315.72673,924,129.88685,977,515.04

Abroad

Abroad4,543,736,394.474,607,195,473.83--

Total

Total28,086,225,442.0729,148,262,789.55673,924,129.88685,977,515.04

Classified by the time of commoditytransfer

Classified by the time of commodity transfer

Including: recognize at a certain point intime

Including: recognize at a certain point in time28,086,225,442.0729,148,262,789.55673,253,327.88685,977,515.04

recognize over a certainperiod of time

recognize over a certain period of time670,802.00

Total

Total28,086,225,442.0729,148,262,789.55673,924,129.88685,977,515.04

5. Income on investment

ItemsCurrent periodPrevious period
Income from long-term equity investment (equity method)-439,659.58
Investment income from disposal of financial assets held for trading-2,502,067.50
Investment income from debt restructuring694,683.35
Others-31,605,308.28
Total-31,605,308.28-2,247,043.73

XVII. Supplementary information

(1) Details of non-recurring profit and loss

ItemsAmountNotes
Gains and losses on disposal of non-current assets, including elimination of provision for impairment of assets-13,712,227.48
Government grants recognized in profit or loss for the current period, except for those government grants that are closely related to the Company's normal business operations, in line with national policies and in accordance with defined criteria, and that have a sustained impact on the Company's profit or loss84,071,493.95
Gains and losses from changes in the fair value of financial assets and liabilities held by non-financial corporations and gains and losses from the disposal of financial assets and liabilities, except for effective hedging operations related to the Company's normal business operations
Occupancy fees charged to non-financial corporations included in profit or loss for the period
Gains and losses on entrusted investments or management of assets
Gains and losses on external entrusted loans
Loss of assets due to force majeure factors, such as natural disasters
Reversal of provision for impairment of receivables individually tested for impairment
The cost of investments in subsidiaries, associates and joint ventures acquired by an enterprise is less than its share of the gain arising from the fair value of the investee's identifiable net assets at the time of investment acquisition
Net profit or loss for the period from the beginning of the period to the date of consolidation of subsidiaries resulting from a business combination under the same control
Gains and losses on exchange of non-monetary assets
Debt restructuring gains and losses
One-time costs incurred by the enterprise due to the fact that the relevant business activities are no longer continuing, such as expenses for relocating employees
ItemsAmountNotes
Profit and loss affected due to the adjustments of requirements of taxation, accounting and other laws and regulations
One-time share-based payment expense recognized for cancellation and modification of equity incentive plans
For cash-settled share-based payments, gains and losses arising from changes in the fair value of employee compensation payable after the date of exercise of options
Gains and losses arising from changes in the fair value of investment properties subsequently measured using the fair value model
Gains arising from transactions at significantly unfair prices
Gains and losses arising from contingencies unrelated to the Company's normal business operations
Trustee income from trust operations
Other non-operating revenue and expenditure other than above items5,115,874.05
Other non-recurring profit and loss
Subtotal75,475,140.52
Impact of income tax4,003,960.33
Impact of minority interests (after tax)768,711.98
Total70,702,468.21

(2) Net asset yield and earnings per share

Profit in the Reporting PeriodWeighted average net assets yield (%)Earnings per share
Basic EPSDiluted EPS
Net profit attributable to ordinary shareholders-9.55-0.3775-0.3775
Net profit attributable to ordinary shareholders after deducting non-recurring profit and loss-10.01-0.3947-0.3947

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