Bengang Steel Plates Co., Ltd.
Semi-Annual Report 2020
August, 2020
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.
Gao Lie, Chairman of the Company, Shen Qiang, the principal in charge of the accounting, and ZhaoZhonghua, Chief of Accounting Affairs, make the pledge for the authenticity, accuracy and integrityof the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this report wasexamined.
The prospective statements contained in this semi-annual report do not constitute any substantialcommitment to the investors. Investors should pay attention to the risks attached to investmentdecisions. This report is prepared in both of Chinese and English. The Chinese version shall prevailwhen there are any controversial statements in the two versions.
The Company planned not to distribute cash dividend or bonus shares, and not to convert capitalreserve into share capital.
Table of Contents
Ⅰ. Important Notice, Table of Contents, and Definitions ..................................................................... 2
Ⅱ. Company Profile and Main Financial Index ................................................................................... 5
III. Summary of Company Business .................................................................................................... 8
IV. Management Discussion and Analysis ........................................................................................ 10
V. Important Events ........................................................................................................................... 17
VI. Status of Share Capital Changes and Shareholders ..................................................................... 45
VII. Status of Preferred Shares .......................................................................................................... 48
VIII. Status of Convertible Corporate Bonds..................................................................................... 49
IX. Status of Directors, Supervisors, and Senior Executives ............................................................. 50
X. Relevant Information about Corporate Bonds .............................................................................. 51
XI. Financial Report ........................................................................................................................... 52
XII. Documents available for inspection ......................................................................................... 195
Definition
Terms to be defined Refers to Content of DefinitionBengang Bancai, Bengang Steel, theCompany, the Listed Company
Refers to Bengang Steel Plates Co., Ltd.Bengang Group Refers to Bengang Group Co., Ltd.Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.Liaoning Provincial State-assetAdministration
Refers to
Liaoning State-owned Asset Supervisory andManagement CommitteeSSE Refers to Shenzhen Stock ExchangeBengang Posco Refers to Bengang Posco Cold-rolled Sheet Co., Ltd.
Ⅱ. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761、200761Stock exchange for listing Shenzhen Stock ExchangeCompany name in Chinese 本钢板材股份有限公司
本钢板材
| Abbreviation of Company name in Chinese |
| Company name in English (If any) |
BENGANG STEEL PLATES CO., LTD.
BSPLegal representative Gao Lie
II. Contact Information
Abbreviation of Companyname in English (If any)
| Secretary of the Board | Representative of Stock Affairs |
NameGao DeshengChen LiwenAddress
No.16, Renmin Road, Pingshan District,Benxi City, Liaoning Province
District, Benxi City, Liaoning
| Province |
Tel024-47827003 024-47828980Fax024-47827004 024-47827004
| bgbcdm@163.com | bgbcdm@126.com |
III. Other Information
1.Contact Information of the Company
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 2018 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 2019 for details
IV. Summary of Accounting data and Financial indexWhether the Company makes retroactive adjustment or restatement of the accounting data of the previous year
□ Yes √ No
Unit: Yuan
This reporting period
Same period in previous
year
reporting period over the
| previous year |
Operating income 22,184,537,260.05
24,102,595,167.14
-7.96%
Net profit attributable to the shareholdersof the listed company
254,644,204.33
453,209,615.76
-43.81%
Net profit attributable to the shareholdersof listed company after deducting non-recurring gain/loss
239,885,472.54
481,928,450.94
-50.22%
Net cash flows generated by operatingactivities
-151,475,707.08
984,787,005.67
-115.38%
Basic earnings per share 0.07
0.12
-41.67%
Diluted earnings per share 0.07
0.12
-41.67%
ROE 1.30%
2.35%
-1.05%
At the end of this reporting
period
At the end of previous
reporting period
| Increase or decrease at the |
end of this reporting period
Total assets 62,710,402,910.64
| over the previous year | ||
60,731,425,193.90
3.26%
Net assets attributable to shareholders ofthe listed company
19,764,576,963.53
19,487,665,261.17
1.42%
V. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□Applicable √ Not applicable
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
VI. Items and Amount of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: yuan
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets |
(including the write-
-19,733,108.62
| off part for which assets impairment provision is made) |
profits and loss(except such
| government subsidy closely |
related to the company’s normal business operation,，meeting the regulation of national policy and enjoyedconstantly in certain quota or quantity according to a
38,587,332.40
| certain standard) |
838,001.32
| Other non-operating revenue and expenditure other than above items |
| Less: Impact of income tax | 4,923,056.28 | |
| Impact of non-controlling interests (after tax) | 10,437.03 | |
| Total | 14,758,731.79 | -- |
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. Summary of Company Business
I. The Company's main business during the reporting period
During the reporting period, the company's main business activities include steel smelting, rolling processing, powergeneration, coal chemical industry, special steel profiles, railways, import and export trade, scientific research, andproduct sales. The introduction of world advanced equipment technology has enabled the implementation of equipmentupgrades for the steel industry. The Company has built a fine steel base, formed more than 60 varieties, more than 7500series of product specifications, high value-added and high-tech product ratio reached more than 80%, automotive surfacepanels, household appliances, oil pipeline steel, container board Shipboard and other leading products are widely used inautomobiles, home appliances, petrochemicals, aerospace, machinery manufacturing, energy transportation, constructionand decoration, and metal products, and are exported to more than 60 countries and regions.
During the reporting period, the company made historic breakthroughs in product development and technological progress."Development and serialized development of hot stamping steel with the highest strength and extra-thick specifications"won the first prize of the industry. The company successfully developed 15 grades of new products. E4340 steel isproduced by continuous casting instead of die casting, which is a domestic initiative. The company’s low-yield-strength-ratio, thin-gauge, high-grade pipeline steel X70 provides a guarantee for its full penetration into the petroleum engineeringmarket in India and the Middle East. BMW certification progressed smoothly. The Board Inspection and Testing Centeractively strives for the right to formulate national and industry standards, and the two national standards have passed theapproval of the National Standardization Committee.The grade of large bar produced by the special steel plant has been
increased from the national standard group III to the national standard group I, and the surface quality qualification ratehas been increased from 60% to over 96%.
During the reporting period, the main performance driving factors were: innovative management model, managementcontinued to be refined and efficient, and through strengthening the top-level design, the three major regulations of"production, equipment, and safety" were unified and standardized. The plate storage and transportation center firmlyestablishes the concept of "Management of materials is management of funds", adds "materials without dynamic increasein storage" data statistics, and accurately divides the material storage age structure. The board measurement and controlcenter provides scientific data support for the company's decision-making through special measurement supervision andinspection and weighing equipment transformation.
No significant change occurred during the reporting period.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changesConstruction in progress
The balance as of 30 June 2020 is RMB 256,930.87 thousand and it hasincreased by 40.1% compared to the beginning of the period, which is mainly
period.Accounts receivable financing
As of 30 June 2020, the ending balance of accounts receivable financing is
| due to the new construction of the company's construction projects in the current |
| 438,212.29 thousand, and it has increased by 80.37% compared to the beginning |
of the period, which is mainly due to the increase in receiving notes receivable.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core CompetitivenessIn the first half of 2020, Bengang Steel Plate Co., Ltd. and Wafangdian Bearing Co., Ltd., the Institute of Metal Researchof the Chinese Academy of Sciences, Huazhong University of Science and Technology, Shenyang Institute of Automation,Chinese Academy of Sciences, Shanghai Jiaotong University, Jiangnan University and other units jointly applied for onekey special item of the national key research and development plan "Manufacturing Basic Technology and KeyComponents" for 2020. The company and Northeastern University jointly applied for 2 NSFC-Liaoning joint fundprojects of the Liaoning Provincial Department of Science and Technology, and received financial support of RMB512,000. The company applied for 14 key enterprise technological innovation plans of the Liaoning ProvincialDepartment of Industry and Information Technology in 2020.
In order to comprehensively improve the level of technological innovation and product quality, and promote low-cost andgreen manufacturing technology, the company issued 40 company-level technology projects in 2020, and completed 29projects in the first half of the year. In the first half of the year, six brands have passed the certification of ShenlongAutomobile, and the hot-pressed steel PHS2000 has passed the certification of Great Wall Motor and AIWAYS. In thefirst half of the year, 15 brands of new products were successfully developed, and 8 of them were supplied in smallquantities.
In the first half of the year, a total of 86 patents were accepted by the State Intellectual Property Office, including 40invention patents and 46 utility models. 46 patents were authorized by the State Intellectual Property Office, including 6invention patents and 40 utility models. "Bengang Steel Plate Co., Ltd." was identified as one of the 14 units of "the firstbatch of high-value patent cultivation centers in Liaoning Province". The company won the first prize and the third prizesof the 2020 Metallurgical Science and Technology Awards. The highest strength hot stamping forming steel won the firstprize of metallurgical science and technology for the first time which achieved a historic breakthrough of the company.
IV. Management Discussion and Analysis
I. GeneralIn the first half of 2020, the company's overall performance was generally outstanding, production and management hada new improvement, and the reform tasks were solidly promoted. The main indicators achieved steady growth, including:
5.11 million tons of pig iron, an increase of 352.8 thousand tons, an increase of 7.41%; crude steel of 5.13 million tons,
an increase of 259.8 thousand tons, an increase of 5.33%; hot rolled sheet of 5.87 million tons, a decrease of 232.1thousand tons, a decrease of 3.8%; cold rolled sheet of 2.78 million tons, a decrease of 120.1 thousand tons, a decreaseof 4.14%; special steel of 0.36 million tons, an increase of 130 thousand tons, an increase of 57.62%.
During the reporting period, the company took "Overall Every Control and Clear" as the starting point, carefully organizedspecial research, and took multiple measures to reduce costs. The output of some varieties and the records of daily andmonthly production were continuously refreshed. A series of indicators have reached the best level in history. The qualityof development has been significantly improved.Through the establishment of an all-round benchmarking managementsystem, the coke ratio of plates into the furnace was 381kg in the first half of the year, which is the best level in history.The No. 7 caster of the plate steelmaking plant has realized the online narrowing function and the online width adjustmentof the chamfering mold, reaching the domestic advanced level. The 2# pickling mill and silicon steel pickling mill set thebest operating record in history. The plate scrap mill matched the material type reasonably, and the number of straightbatching hoppers created the highest records in a single day and a single month, respectively.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.Year-on-year changes in major financial data:
Unit: YuanThis reporting period
Same period in
previous year
Reason for changeOperating Income 22,184,537,260.05
| Increase or decrease in this reporting period over the previous year | ||
24,102,595,167.14
-7.96%
Operating Cost 20,440,246,362.67
22,067,612,729.65
-7.37%
Selling anddistribution expenses
642,393,218.78
574,445,199.14
11.83%
General andadministrativeexpenses
380,828,316.41
446,767,811.77
-14.76%
Financial expenses 355,036,640.40
403,465,706.42
-12.00%
Income tax expense 9,237,815.08
25,962,181.73
-64.42%
Due to the decrease ofdeferred income tax
| expenses during the |
Research &DevelopmentExpenses
20,202,985.20
| current period. | ||
15,408,472.28
31.12%
Due to the increase ofinput in research anddevelopment.Net cash flowsgenerated fromoperating activities
-151,475,707.08
984,787,005.67
-115.38%
Due to the increase of
| cash paid for operating |
activities.Net cash flowgenerated frominvestment activities
-706,681,059.07
-545,199,197.41
29.62%
Net cash flowgenerated fromfinancing activities
-1,164,534,893.48
-451,444,368.47
157.96%
Due to the increase of
net repayment.Net increase in cashand cash equivalents
-2,023,822,325.06
36,373,947.54
-5,663.93%
Due to the increase of
| cash paid for operating |
activities and the
increase of net
repayment.Whether the Company’s profit composition or source of profit during the reporting period changed significantly
□ Applicable √ Not applicable
The Company’s profit composition or source of profit during the reporting period did not change significantly.
Breakdown of operating income:
Unit: Yuan
This reporting period Same period in previous yearIncrease ordecrease in thisreporting periodover the previous
year
Amount
Proportion in thetotal operating
income
Amount
Proportion in thetotal operating
incomeTotal 22,184,537,260.05
100%
24,102,595,167.14
100%
-7.96%
By industriesIndustry 22,184,537,260.05
100.00%
24,102,595,167.14
100.00%
-7.96%
By productsSteel plate 20,241,192,221.39
91.24%
22,258,028,765.53
92.35%
-9.06%
Billet Steel 310,652.98
0.00%
Others 1,943,034,385.68
8.76%
1,844,566,401.61
7.65%
5.34%
By regionNortheast 7,575,795,193.58
34.15%
7,127,354,821.85
29.57%
6.29%
North China 2,351,380,897.12
10.60%
2,740,664,946.06
11.37%
-14.20%
East China 8,731,546,106.40
39.36%
9,115,871,237.78
37.82%
-4.22%
Northwest 50,847,000.22
0.23%
52,280,532.42
0.22%
-2.74%
Central south 857,102,813.02
3.86%
999,070,769.35
4.15%
-14.21%
Export 2,617,865,249.71
11.80%
4,067,352,859.68
16.88%
-35.64%
Industry, product or region that accounts for more than 10% of the company's operating income or operating profit
√ Applicable □ Not applicable
The composition of main business:
Unit: Yuan Operating Income Operating Cost Gross margin
| Operating income change over same period in previous |
year
Operating cost
year
Gross margin
| change over same period in previous | change over same period in previous |
yearBy industriesIndustry 22,184,537,260.05
20,440,246,362.67
7.86%
-1.76%
-1.79%
0.01%
By productsSteel plate 20,241,192,221.39
18,683,363,849.79
7.70%
-9.06%
-8.97%
-0.09%
Billet Steel 310,652.98
276,553.12
10.98%
Others 1,943,034,385.68
1,756,605,959.76
9.59%
5.34%
13.81%
-2.91%
By regionsNortheast 7,575,795,193.58
6,934,504,300.57
8.46%
6.29%
7.75%
0.78%
North China 2,351,380,897.12
2,150,410,930.83
8.55%
-14.20%
-14.78%
0.62%
East China 8,731,546,106.40
8,055,274,330.13
7.75%
-4.22%
-3.93%
-0.28%
Northwest 50,847,000.22
47,433,648.74
6.71%
-2.74%
-2.63%
-0.11%
Central south 857,102,813.02
801,137,376.55
6.53%
-14.21%
-13.71%
-0.54%
Export 2,617,865,249.71
2,451,485,775.85
6.36%
-35.64%
-34.57%
-1.53%
Subtotal 22,184,537,260.05
20,440,246,362.67
7.86%
-7.96%
-7.37%
0.01%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company'smain business statistics caliber has changed during the reporting period
□ Applicable √ Not applicable
Notes to data changed more than 30% over the last period
□ Applicable √ Not applicable
III. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: YuanAmount
Proportion in total
profit
Explanation of cause Sustainable (yes or no)Income oninvestment
29,304.00
0.01%
Assets disposalgains
-15,321,598.62
-5.77%
NoNon-operatingincome
1,140,364.12
0.43%
NoNon-operatingexpenses
20,035,471.42
7.54%
No
IV. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
| At the end of this reporting period | At the end of the Same period in previous year |
ProportionNotes to significant changes
Amount
Proportion in thetotalassets
Amount
Proportion in thetotalassets
Cash at bank andon hand
16,788,479,305.93
| change | ||
26.77%
18,415,844,397.77
30.32%
-3.55%
Accountsreceivable
234,795,887.35
0.37%
235,696,265.66
0.39%
-0.02%
Inventories 9,586,039,375.52
15.29%
7,700,397,685.61
12.68%
2.61%
Long-term equityinvestments
2,672,302.70
0.00%
2,642,998.70
0.00%
0.00%
Fixed assets 24,952,427,383.86
39.79%
26,123,375,492.40
43.01%
-3.22%
Construction inprogress
2,569,308,708.27
4.10%
1,833,853,572.58
3.02%
1.08%
Short-term loans 12,506,705,000.00
19.94%
13,151,478,000.00
21.66%
-1.72%
Long-term loans 3,810,463,934.18
6.08%
4,849,675,910.73
7.99%
-1.91%
2. Assets and Liabilities Measured at Fair Value
√Applicable □ Not applicable
Unit: yuan
Item
Beginning
balance
Profit and
loss fromchanges infair value inthe current
| period |
Accumulated
fair valuechangesrecognised in
equity
Impairment
current period
Purchaseamountduring thecurrent period
Sales amountduring thecurrent period
Otherchanges
Endingbalance
| Financial assets | ||||||||
| 3.Other debt investments | 2,429,542,461.88 | 1,952,579,488.09 | 4,382,121,949.97 | |||||
| 4.Other equity |
instrument
1,041,824,829
.00
| investments |
200,000.00
1,042,024,8
29.00
| Subtotal of |
financial
3,471,367,290
.88
| assets |
1,952,779,4
88.09
5,423,946,7
78.97
Total
| 3,471,367,290.88 | 1,952,779,488.09 | 5,423,946,778.97 | ||||||
| Financial liabilities |
0.00
0.00
3. Restricted Assets by the End of the Period
Items
Book value at the end of this
reporting period
Reason of restrictionCash at bank and on hand 5,370,886,642.41
Deposit for notes and L/C
Accounts receivable financing 759,753,834.45
| Deposit for notes and L/C |
| Pledge |
d for acceptance billsOther equity instrument investment 1,037,735,849.00
ledged for loansTotal 7,168,376,325.86
| P |
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Financial assets measured at fair value
□ Applicable √ Not applicable
5. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There is no investment in securities during the reporting period.
(2) Investment in Derivatives
□ Applicable √ Not applicable
There is no investment in derivatives during the reporting period.VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
CompanyName
Company
type
Mainbusiness
Registeredcapital
Total assets Net assets Turnover
Operating
profit
Net ProfitBengangPuxiangCoolRolling
Subsidiary
Processing
| Steel Sheet | and sales of |
steel
1,920,000,000.00
5,768,553,041
.57
2,009,690,896
.59
3,720,975,482
.91
10,280,800.
7,704,734.61
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companiesNone.
VIII. Structured Entities controlled by the Company
□ Applicable √ Not applicable
IX. Forecast of operating performance for January to September 2020Warning and reason for that forecast of the cumulative net profit from the beginning of the year to the end of the nextreporting period might be a loss or due to significant change compared to the previous year
□ Applicable √ Not applicable
X. Risks and countermeasures for the Company
1. Marketing risk
Risks: The market demand of the steel industry is uncertain, and there will still be risks of market fluctuations in thefuture, such as policy orientation and changes in supply and demand. In addition, COVID-19 has spread globally, causingdamage to the global industrial chain, or triggering turbulence in the international steel market, which may adverselyaffect the company's user demand, raw material supply, and steel product exports.Countermeasures: The company should pay close attention to the international and domestic situation and adjust itsbusiness strategy in a timely manner based on the actual situation. The company should improve its ability to purchaseresources in the international market to ensure a stable supply of raw materials and fuels, strengthen sales-side marketresearch and judgment, adjust production in a timely manner, and ensure smooth product sales and timely delivery oforders. The company should accelerate independent innovation, improve product quality, and enhance their marketcompetitiveness.
2. Environmental protection risk
Risks: As the country pays more and more attention to environmental protection issues in the iron and steel industry, itwill further strengthen the environmental protection supervision of relevant enterprises, and the environmental protectionstandards will continue to increase. Iron and steel enterprises are facing greater environmental pressure.Countermeasures: The company will continue to improve the level of environmental management, increase internalenvironmental protection supervision and inspection, and strengthen the implementation of environmental responsibilities.The company will strengthen the efficient recycling of energy, keep environmental protection facilities in good operation,and focus on the control of wastewater, waste gas and waste residues generated in the production process, andcomprehensive control of pollution. The company will continue to increase investment in environmental protection,realize clean production, make the enterprise harmonious and unify with nature and society, and realize sustainabledevelopment.
3. Raw fuel cost fluctuation risk
Risks: The bulk raw fuels such as iron ore and coal required for steel production account for a relatively large part of thecost. Fluctuations in the price of raw materials and fuels in the future may have a greater impact on the company'soperating costs and affect the company's profitability to a certain extent.Countermeasures: The company will further strengthen procurement management, keep abreast of raw and fuel marketinformation, adjust procurement strategies in a timely manner, and reduce procurement costs.While taking advantage ofits own mines, the company should establish stable supply channels, strengthen cooperation with suppliers, and improveits ability to respond to fluctuations in raw material and fuel prices.
V. Important Events
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 session Meeting type
Investors’participation ratio
Date of convening Date of disclosure Disclosure indexThe annual generalmeeting of 2019
Annual generalmeeting
76.79%
21 May 2020 22 May 2020
Announcement No.:
2020-030
2. Temporary general meeting Request by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□ Applicable √ Not applicable
The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capitalduring the reporting period.III. 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
Commitments
Commitment
party
Type ofcommitment
Contents
Commitment
time
Commitment
period
Performance
Commitment of shares
reform
| Commitment of shares |
| Commitment made in the acquisition report or the |
equity change report
Commitment made
asset restructuring
| during |
| Commitment made during initial public offering or |
refinancing
Companydirectors,seniormanagement
Othercommitment
all directors and sen
| ior management of the Company have made the following commitments |
May 22, 2019 Long term
fulfillment
interests of the C
| ompany 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 consum
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 a
company's
| compensation measures, |
and vote
jurisdiction, make eve
| ry effort to promote the |
Company’
the Company’
| s implementation of the return measures, and to |
review the Company’
shareholders’
| general meetings and vote in |
Company’
| s public issuance of convertible corporate bonds are |
complete
When othe
| r 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
Company's interests.
| the company's operation and management activities beyond its authority and not to infringe on the | ||
| Benxi Steel & Iron (Group) Co., Ltd. and |
Bengang
Ltd.
OtherCommitment
T
| Group Co., | he 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
qualification
| certification of raw material suppliers, customs import and export qualification |
July 24,2019 Long term
fulfillment
than
| 5 years from the date of issuance of this commitment, the main import and export business of Benxi Steel Plate will still be represented by Bengang International Trade until Bengang Steel Plates can be independently developed Import and |
export business, a
se
| lling the products of Beiying Iron and Steel Group, and never sells |
third-
Guangzho
| u Free Trade Zone Bengang Sales Co., Ltd., are currently no longer actually engaged in any business activities, as follows: (1 ) Shanghai Bengang Iron & Steel Sales Co., Ltd. filed for bankruptcy in 2014, and the Shanghai Changning District |
People's Court
bankruptcy
| administrator. After communication with the |
bankruptcy
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 Iro
and liquidat
| ion, Shanghai Bengang Iron & Steel Materials Co., Ltd. was unable to convene a shareholders' meeting to cancel the company and establish a liquidation group according to law. Therefore, the cancellation has not yet been completed. After the aforementioned bankruptcy and liquidation procedures of Shanghai Bengang Iron & Steel Sales Co., Ltd. are completed, the relevant procedures for cancellation of Shanghai Bengang Iron & Steel Materials Co., Ltd. will be processed immediately. (3) Guangzhou Free Trade |
Zone
properties under t
| he name of Jiedong County Trading Corporation. However, due to serious |
Corporation were re-
| sealed. As of February 4, 2022. Except for participating in the |
litigation activities f
Zone Beng
| ang Sales Co., Ltd. will be handled |
immediately.
Co., Ltd.
OtherCommitment
| Benxi Steel & Iron (Group) | The Group's horizontal competition with Benxi Steel Plates and the measures and commitments to avoid |
inter-industry
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 s
July 24,2019 Long term
| ubsidiaries at home and abroad, and do not directly or indirectly operate any business that competes with Bengang Steel Plates and its subsidiaries. Businesses that may constitute | The company |
has compl
production
| line, and the |
industrycompetition
beencompletelyresolved.Othercommitments
| continue to be |
fulfilled
any other enterprise that
| competes with or may compete with products or businesses produced by Bengang Steel Plates and its subsidiaries. 2. If Bengang Steel Plates and its subsidiaries further expand their business scope, the Group and other enterprises controlled by the Group |
wi
Beng
| ang Steel Plates as follows: (1) Stop business that may or may compete with Bengang Steel Plates and its subsidiaries; (2) Will compete The business is incorporated into Bengang Steel Plates and its subsidiaries in a legal and compliant manner; |
(3) Competi
Bengang Steel
| Plates’ operations, the Group shall immediately notify Bengang Steel Plates of |
the abo
will endeavor
| to give the business opportunity to |
Bengang Steel
or indirect los
| ses 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
Ltd.
OtherCommitment
| Group Co., | In order to regulate and |
reduce the Company ’
Ltd. and Bengang Gr
| oup 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 B
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-
of Bengang Steel
| Plates’ |
busines
July 24,2019 Long term
| s, asset integrity and personnel Independence and financial independence to avoid and reduce unnecessary related transactions; the Group | Under normal |
fulfillment
contr
| olled companies promise not to use loans or occupy or misappropriate the funds of Bengang Steel Plates and its subsidiaries to repay debts, substitute funds or otherwise, nor We ask Bengang Steel Plates and its subsidiaries to provide |
illegal guarantees fo
implement the decision-
| making authority, |
decision-making
decision-
| making system, give full play to the role of the board of |
supervis
Group and
| other companies under control will not require or accept Bengang Steel Sheets to give preferential treatment to third parties in any fair market transaction Conditions to protect other shareholders of Benxi Steel Plates and the interests of Benxi Steel |
Pl
shareholder.
| If any violation of the above commitments occurs, the Group therefore bear all the losses caused to |
Bengang Steel Plates.
commitment
| Stock option incentive |
| Other commitments to the company's minority |
shareholders
Whether Commitmentfulfilled on time or not
Yes
IV. Appointment and Dismiss of Certified Accountant’s Firm
Is 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
IX. Media questioning
□ Applicable √ Not applicable
There is no media questioning issues during the reporting period.
X. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.XI. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XII. Implementation Situation of Stock Incentive Plan of the Company, Employee StockOwnership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no stock incentive plan, employee stock ownership plan or other employee incentives that have beenimplemented.XIII. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
Relatedparties
Relationship
relatedpartytransacti
ons
C
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Purchase ofgoodsandservices
Accountspayablefor repair
Onagreement
Relatedagreementprice
15,947.
0.32%
50,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Purchase ofgoodsandservices
Landlease fee
Onagreement
Relatedagreementprice
3,261.1
.
%
No
Executeaccording totheagreement
No
2019/4/
BengangCold-rolledStainlessSteel
| Dandong |
Samecontroller
Purchase ofgoodsandservices
Products
Onagreement
Relatedagreementprice
7.95
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
Relatedparties
Relation
ship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Labor cost
| Co., Ltd. | ||
Onagreement
Relatedagreementprice
361.1
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
280,270
.14
5.70%
650,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
87.47
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
14,869.
0.30%
40,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Processing fee
Onagreement
Relatedagreementprice
23.81
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Real-estateDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterials
Onagreement
Relatedagreementprice
0.00%
10,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Machinery
| Manufact |
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
2,296.7
0.05%
25,000
No
Executeaccording totheagreement
Yes
2019/4/
Relatedparties
Relationship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
Ltd.BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
330.54
| ure Co., | ||
0.01%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
19.75
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
7,490.5
0.15%
50,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
3,660.0
0.07%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
367.31
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
87.94
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelop
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
2,568.9
| ment Co., |
0.05%
No
Executeaccording totheagreement
Yes
2019/4/
Relatedparties
Relationship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
5,906.0
| Ltd. | ||
0.12%
30,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
790.53
0.02%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
188.69
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
0.01%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
128.19
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
2992.87
0.06%
35000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron
| (Group) |
Samecontroller
Purchase ofgoods
Accountspayablefor repair
Onagreement
Relatedagree
| and | ment |
2,673.0
0.05%
No
Executeaccording to
No
2019/4/
Relatedparties
Relation
ship
relatedpartytransacti
ons
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
ion andRepairingCo., Ltd.
| Construct | services | price | agreeme |
ntBengangElectronics and GasCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
6,886.4
0.14%
20,000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BengangElectronics and GasCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
1168.35
0.02%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiHigh-
DrillingToolsManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
6.22
| tech |
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Labour
fee
Onagreement
Relatedagreementprice
22.45
| protection |
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterialand food
Onagreement
Relatedagreementprice
107.92
0.00%
1800
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
LiaoningMetallurgyTechnician College
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
117.57
0.00%
1,500
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BengangGroupInternational
andTradingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Agencyfee
Onagreement
Relatedagreementprice
3,067.8
| Economic |
0.06%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BengangGroupInternatio
Samecontroller
Purchase ofgoods
Portsurcharges
Onagreement
Relatedagree
5,381.2
0.11%
25,000
No
Execute
accordi
ng to
No
2019/4/
Relatedparties
Relation
ship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
andTradingCo., Ltd.
| nal Economic | and |
services
price
| ment | the |
agreementBenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
285.13
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
1,368.2
0.03%
10,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Heatingcosts
Onagreement
Relatedagreementprice
18.98
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)
| Designing |
Institute
Samecontroller
Purchase ofgoodsandservices
Designfees
Onagreement
Relatedagreementprice
28.77
0.00%
2,000
No
Executeaccording totheagreement
No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
466,858
.50
9.49%
1,550,0
No
Executeaccording totheagreement
Yes
2019/4/
Relatedparties
Relationship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ureBenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
21,856.
0.44%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
166.79
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Labor cost
Onagreement
Relatedagreementprice
2,016.3
0.04%
No
Executeaccording totheagreement
No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
897.66
0.02%
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialand spareparts
Onagreement
Relatedagreementprice
5,120.0
0.10%
15,000
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialand spareparts
Onagreement
Relatedagreementprice
43.48
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairand laborcost
Onagreement
Relatedagreementprice
509.57
0.01%
8,000
No
Executeaccording totheagreement
No
2019/4/
BengangGroupCo., Ltd.
Controller
Purchase ofgoodsandservices
Houserental fee
Onagreement
Relatedagreementprice
37.61
0.00%
20000
No
Executeaccording totheagreement
No
2019/4/
Bengang
Controll
Purchas
| Group | e of |
Property
On
| managem | agreeme |
Relate
| d |
0.00%
No
Execute
No
2019/4/
Relatedparties
Relationship
relatedpartytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransacti
ons
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Co., Ltd. | er | goods |
andservices
| ent fee | nt | agree |
mentprice
theagreement
| ng to | 24 |
BengangElectronics and GasCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
38.1
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
135,340
.23
2.57%
300,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
1271.42
0.02%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
6,882.6
0.13%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Real-estateDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
6.25
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
20.39
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagree
| (Group) | ment |
1014.55
0.02%
No
Executeaccording to
Yes
2019/4/
Relatedparties
Relation
ship
relatedpartytransactionsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Priceofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
yManufacture Co.,Ltd.
| Machiner | price | agreeme |
ntBenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
1216.43
0.02%
8000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
139.52
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
335.07
0.01%
10,000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
15.12
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
33,585.
0.64%
100,000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
512.75
0.01%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
| Benxi | Same | Sales of | Freight | On | Relate |
497.33
0.01%
No
No
| Execute | 2019/4/ |
Relatedparties
Relationship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
Iron(Group)MiningCo., Ltd.
| Steel & | controll |
er
andservices
| goods | revenue | agreeme |
nt
agreementprice
| d | accordi |
ng totheagreement
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
2,264.6
| 24 | ||
0.04%
8,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
682.22
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Freightrevenue
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
409.62
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
912.1
0.02%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Industrial
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementary
| Develop | materials |
Onagreement
Relatedagreementprice
936.7
0.02%
5000
No
Executeaccording totheagreeme
Yes
2019/4/
Relatedparties
Relationship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
Ltd.
| ment Co., | & spare |
parts
BenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
11.69
| nt | ||
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
66.6
0.00%
8,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
105.91
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
13,364.
0.25%
30000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Freightrevenue
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
No
2019/4/
Benxi
Parent
| Steel & | Compan |
Sales of
Energy &Power
On
| goods | agreeme |
Relate
430.55
| d |
0.01%
2000
No
Execute
Yes
2019/4/
Relatedparties
Relation
ship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
(Group)Co., Ltd.
| Iron | y | and |
services
| nt | agree |
mentprice
theagreementBenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
308.79
| ng to | ||
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
381.86
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
DalianBoluoleSteelTube Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
279.34
0.01%
1,000
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningBengangSteel &IronTradingCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)GeneralHospital
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
1.06
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)ZhengtaiConstructionMaterialsCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
3.2
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtongMetallurgicalEquipmentManufact
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
| ure Co., |
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
Relatedparties
Relationship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
493.65
| Ltd. | ||
0.01%
5000
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BengangCold-rolledStainlessSteelDandongCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
736.33
0.01%
50000
No
Executeaccording totheagreement
Yes
2019/4/
SuzhouBengangIndustrialCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
19,082.
0.36%
65,000
No
Executeaccording totheagreement
Yes
2019/4/
BengangGroupFinanceCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
0.65
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BengangGroupCo., Ltd.
Controller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
8.82
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
Total -- --
1,082,0
38.51
--
3,140,5
-- -- -- -- --Details of any sales return of a largeamount
N/AGive the actual situation during thereporting period where a forecast hadbeen made for the total amounts of
routine related-party transactions
，
| by |
N/A
Relatedparties
Relation
ship
relatedpartytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransactions
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelatedpartytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
re
Index
ofdisclos
ure
any)Reason for any significant differencebetween the transaction price and theMarket price for reference (ifapplicable)
N/A
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. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XIV. Non-operating capital occupation of listed companies by controlling shareholders andtheir related parties
□ Applicable √ Not applicable
There was no non-operating capital occupation of listed companies by controlling shareholders and their related partiesduring the reporting period.
XV. 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
There was no lease 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 other entrusted finance during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVI. Social Responsibilities
1. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection department.Yes
Name
Mainpollutantsand s
pollutants
Dischargemodes
| pecific | The number of discharge |
hatch
Thedistribution
hatch
Emissionconcentratio
n
Theemissionstandard
Totalemission
Approved
totalemission
Surpass the
emissionstandardBengangSteel PlatesCo., Ltd.
COD Continuous 1
Energyintegralfactorysewagetreatmentplant.
Sewage 24 Sewage 50 110 tons
| of discharge | ||
| Unapproved |
by thegovernment
None
BengangSteel PlatesCo., Ltd.
NH3-N Continuous 1
Energyintegralfactorysewagetreatmentplant.
0.82 8 5.4 tons
| Unapproved |
by thegovernment
NoneBengangSteel PlatesCo., Ltd.
ParticulateMatter
Continuousandintermittent
Rawmaterial
| dumper, |
Rawmaterials
Rawmaterial 25;
| 14-23; | Sintering |
6286 tons
by thegovernment
station,mine pit,pre-mixing;ironmakingiron andsteel field,furnace top,fuel,solvent,
| whole grain, |
ore coketank,sinteringhead dustremoval,desulfurizati
tail dustremoval;
| steelmaking |
waterpretreatment, iron alloyfeeding ,North-
invertedirrigationstations,primarydustremoval,secondarydustremoval,
| refining and |
dustremoval;
furnace,refiningfurnace;
| coking coal, |
pushingcoke, dryquenching,chimneydesulfurization anddenitrification; powerboiler dustremoval,desulfurization anddenitrification; cold-rolling acidregeneration, pickling,pullingstraightening, weldingmachine,leveling,annealing,
| roasting; | Sintering 8- |
40;Ironmaking7-35;
7-27;Specialsteel 7-15;Coking 20-30; Powergeneration5-10; Coldrolling; 6-18 Hotrolling 6-15.
| 50-30; |
Ironmaking25;
20-50;Specialsteel 20;Coking 20-50; Powergeneration30; Coldrolling 20;Hot rolling20.
heatingfurnace.
BengangSteel PlatesCo., Ltd.
SO?
Continuousandintermittent
Ironmakingsintering
| hot-rolling |
| head; power |
generationboiler; coldrollingroasting,annealing;hot rollingfurnace.
Sinteringmachinehead 12-40;powergeneration10-70; coldrolling 80-74-141; hotrolling 95-147.
Sinteringhead 200;powergeneration100-200;cold rolling150; hotrolling 150.
3033.86tons
by thegovernment
BengangSteel PlatesCo., Ltd.
Oxides ofnitrogen
Continuousandintermittent
Ironmakingsintering
| Unapproved | ||
| head; power |
generationboiler; coldrollingroasting,annealing;hot rollingfurnace.furnace.
Sinteringhead 110-230; powergeneration50-140;cold rolling69-172; hotrolling 105-124.
Sinteringhead 300;powergeneration100-200;cold rolling300; hotrolling 300.
6181.68tons
by thegovernment
Construction and operation of pollution prevention facility:
The Company has 178 sets of environmental pollution prevention and control facilities, and each process is equipped withdust removal, desulfurization and denitrification, and online facilities in accordance with pollutant emission standards.Wet desulfurization of sintering machine head, dry desulfurization and denitrification of coke oven chimney, wetdesulfurization and SCR denitrification of power generation, etc., and environmental protection facilities have been putinto use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of ConstructionProjects:
1. The energy integral factory's reclaimed water treatment and reuse project obtained environmental assessment
approval documents: (Ben-Huan -Biao-Zi [2020] No. 03, March 31, 2020)
2. The special steel rolling mill renovation project of the Company (Phase II and Phase III) obtained the environmental
assessment approval document: (Ben-Huan-Jian-Biao-Zi [2020] No. 05, April 20, 2020);
Emergency plan for emergency environmental incidents:
The Company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, andcarried out related work such as risk assessment and investigation of emergency resources in accordance with the "Lawof the People's Republic of China on Incident Responses", "Notice on Printing and Distributing the Guidelines for RiskAssessment of Enterprises' Environmental Emergencies (Trial)", and "Emergency Preparedness for Environmental
Incidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial). Atthe same time, all units formulate drill plans, carry out and complete corresponding drills in accordance with the plan,and will continue to gradually carry out the remaining emergency plan drills in the second half of the year.
Environmental self-monitoring project.
In 2020, the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.The monitoring points of Benxi Steel pollution sources: 168 flue gas, 10 wastewater monitoring points, 13 noise pointsat the boundary of the plant, 27 atmospheric dust fall points, and newly added unorganized monitoring. The number ofpoints is 71. From the Company’s factory to mines, the monitoring is divided into weekly, monthly, seasonal, semi-annualand annual frequency monitoring. 27 steel dust points were distributed in the Company’s area, and 162 monitoring datawere obtained; routine monitoring tasks for flue gas were completed, and 424 monitoring data was achieved throughoutthe half yea; 13 noise monitoring points at the boundary of the plant, acquiring 208 monitoring data; 10 wastewatermonitoring points, acquiring 1945 monitoring data; 111 temporary monitoring data, and a total of 2850 monitoring datareported by the monitoring station. Monthly, quarterly reports and separate monitoring reports for each mine are reported.
Other environmental information that should be disclosed:
None
Other environmental protection related information:
None
2. Performing corporation social responsibility of targeted poverty alleviation
During the current reporting period, there has been no accurate poverty alleviation work, and there is no follow-upaccurate poverty alleviation plan.
XVII. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.XVIII. Major Issues of Subsidiaries
□ Applicable √ Not applicable
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change
，
| -) |
After the ChangeQuantity
PercentageIssuingof newshare
Bonusshares
ation of
| common |
reserve
Others Subtotal Quantity
Percentage
| fund | ||
| II. Non-restricted Shares |
3,875,371,532
100.00%
3,875,371,532
100.00%
| 1. Common shares in RMB |
3,475,371,532
89.68%
3,475,371,532
89.68%
| 2. Foreign shares in domestic market |
400,000,000
10.32%
400,000,000
10.32%
III. Total shares3,875,371,532
100.00%
3,875,371,532
100.00%
Causation of share capital changes
□Applicable √Not applicable
Approval of share capital changes
□ Applicable √ Not applicable
Status of registration process of transferred shares
□ Applicable √ Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, andnet 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: SharesTotal number of
at the end of thereporting period
54,074
| common shareholders |
The total number ofpreferred shareholdersvoting rights restored at
period (See Notes 8)
| the end of the reporting |
Shareholding of shareholders holding more than 5% or top 10 shareholdersName of theshareholder
Nature ofshareholder
Holding
(%)
Number ofshares held at
period-end
Changes in
reporting
period
Restrictedshares held
Un-restricted
shares held
Number of pledged orfrozen sharesStatus NumberBenxi Steel & Iron(Group) Co., Ltd.
State-ownedlegal person
62.11%
| Percentage |
2,407,002,394
25,897,300
2,407,002,394
Pledged 712,545,000
Frozen 102,100,000
CCB Principal AssetManagement – ICBC– CR Trust – CRTrust · Xing ShengNo. 5 Collective FundTrust Plan
Others
4.77%
184,842,883
184,842,883
Bei Xin Rui FengFund – ChinaMerchants Bank – BeiXin Rui Feng FundFeng Qing No. 229Asset ManagementPlan
Others
4.77%
184,842,883
184,842,883
China Life AMPFund– ICBC – ChinaLife AMP – Hua XinTrust TargetedAdditional SharesIssuance No. 10 AssetManagement Plan
Others
4.77%
184,842,883
184,842,883
Liaoning ProvincialTransportationInvestment GroupCo., Ltd.
State-ownedlegal person
4.74%
183,785,283
-934,100
183,785,283
Fang Lei Domestic
natural person
0.36%
14,126,600
| 1,086,890 |
14,126,600
Fang Huaiyue Domestic
natural person
0.24%
9,205,501
| 7,718,901 |
9,205,501
Zhang Peng Domestic
natural person
0.21%
8,287,900
| 8,287,900 |
8,287,900
VANGUARDEMERGINGMARKETS STOCKINDEX FUND
Overseas legalperson
0.21%
8,157,311
8,157,311
Chen Jinhong Domestic
natural person
0.18%
7,120,375
| 244,000 |
7,120,375
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 inconcert’ among the top 10 shareholders.
It is unknown to the Company whether there is any related connection
Listed Companies existing among the above shareholders.Shareholding of top 10 unrestricted shareholdersName of the shareholder
Un-restricted shares held atthe end of the reporting period
or ‘Action in Concert’ asdescribed by Rules of Information Disclosing Regarding Changing of Shareholding Status of
Category of sharesCategory of shares QuantityBenxi Steel & Iron (Group) Co., Ltd. 2,407,002,394
Common shares in RMB2,407,002,394
| CCB Principal Asset Management – ICBC – CR |
Trust – CR Trust · Xing Sheng No. 5 Collective
184,842,883
| Fund Trust Plan |
Common shares in RMB 184,842,883
| Bei Xin Rui Feng Fund – China Merchants |
Bank – Bei Xin Rui Feng Fund Feng Qing No.
184,842,883
| 229 Asset Management Plan |
Common shares in RMB 184,842,883
| China Life AMP Fund– ICBC – China Life |
AMP – Hua Xin Trust Targeted Additional
184,842,883
| Shares Issuance No. 10 Asset Management Plan |
Common shares in RMB184,842,883
| Liaoning Provincial Transportation Investment Group Co., Ltd. |
183,785,283
Common shares in RMB183,785,283
Fang Lei 14,126,600
Common shares in RMB14,126,600
Fang Huaiyue 9,205,501
Common shares in RMB 9,205,501
Zhang Peng 8,287,900
Common shares in RMB 8,287,900
VANGUARD EMERGING MARKETSSTOCK INDEX FUND
8,157,311
Foreign shares in domestic exchange 8,157,311
Chen Jinhong 7,120,375
Common shares in RMB 7,120,375
Notes to relationship or ‘action in concert’among the top 10 non-restricted shareholders,and among the top 10 non-restrictedshareholders and top 10 shareholders
action-in-concert parties by the Information
| Disclosure Regulations for Change of |
Shareholding in PLC.
shareholders, neither being regarded as action-in-
| concert parties by the Information |
Disclosure Regulations for Change of Shareholding in PLC.
of any relationship among the top 10 shareholders, neither being regarded as action-in-
| concert parties by the Information Disclosure Regulations for Change of Shareholding in |
PLC.Shareholders among the top 10 participating insecurities margin trading (if any) (see Note 4)
through ordinary account and holds 239,000,000 shares of the Company’s st
| ock through |
credit security account totaling 2,407,002,394 shares. Fang
shares of the Company’s stock through credit security account. Zhang Pe
| ng holds |
8,287,900through credit security account.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreementdealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing inreporting period.
IV. Change of controlling shareholder or actual controllerChange 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.
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There were no preferred shares during the reporting period.
VIII. Status of Convertible Corporate Bonds
□ Applicable √ Not applicable
There were no convertible corporate bonds during the reporting period.
IX. Status of Directors, Supervisors, and Senior Executives
I. Change in Shares held by Directors, Supervisors and Senior Executives
□ Applicable √ Not applicable
The company’s directors, supervisors and senior executives did not change their shareholdings during the reporting period. For details,please refer to the 2019 annual report.II. Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date ReasonZhong Tianli Independent Director
end of the term
May 21h,2020 Term expiredYuan Zhizhu Independent Director Elected May 21
h,2020 Elected
X. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange orany matured corporate bonds which the listed company failed to pay in full at the approval date of thesemi-annual reportNo
XI. Financial ReportI. Audit reportWhether 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
| Assets | 30 June 2020 | 31 December 2019 |
| Current assets | ||
| Cash at bank and on hand | 16,788,479,305.93 | 18,415,844,397.77 |
| Settlement provisions | ||
| Capital lent | ||
| Financial assets held for trading | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 234,795,887.35 | 235,696,265.66 |
| Accounts receivable financing | 4,382,121,949.97 | 2,429,542,461.88 |
| Prepayments | 1,283,589,312.47 | 1,291,047,458.11 |
| Premium receivable | ||
| Reinsurance accounts receivable | ||
| Receivable deposit for reinsurance contract | ||
| Other receivables | 158,407,131.71 | 172,807,036.77 |
| Redemptory financial assets for sale | ||
| Inventories | 9,586,039,375.52 | 7,700,397,685.61 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 284,207,048.62 | 312,904,824.09 |
| Total current assets | 32,717,640,011.57 | 30,558,240,129.89 |
| Non-current assets | ||
| Loan and advances issued | ||
| Debt Investments | ||
| Available-for-sale financial assets | ||
| Other debt investments | ||
| Held-to-maturity investment |
| Assets | 30 June 2020 | 31 December 2019 |
| Long-term receivables | ||
| Long-term equity investments | 2,672,302.70 | 2,642,998.70 |
| Other equity instrument investments | 1,042,024,829.00 | 1,041,824,829.00 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 24,952,427,383.86 | 26,123,375,492.40 |
| Construction in progress | 2,569,308,708.27 | 1,833,853,572.58 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Intangible assets | 268,216,337.94 | 271,500,023.34 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 194,873,971.63 | 191,485,595.49 |
| Other non-current assets | 963,239,365.67 | 708,502,552.50 |
| Total non-current assets | 29,992,762,899.07 | 30,173,185,064.01 |
| Total assets | 62,710,402,910.64 | 60,731,425,193.90 |
| Liabilities and equities | 30 June 2020 | 31 December 2019 |
| Current Liabilities | ||
| Short-term loans | 12,506,705,000.00 | 13,151,478,000.00 |
| Loan from central bank | ||
| Loan from other banks | ||
| Financial liability held for trading | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 14,234,728,488.05 | 11,828,514,676.95 |
| Accounts payable | 4,076,415,267.57 | 4,527,513,030.27 |
| Advance from customers | 4,429,821,526.79 | |
| Contract liabilities | 4,658,022,515.99 | |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receipt from vicariously traded securities | ||
| Receipt from vicariously underwriting securities | ||
| Employee benefits payable | 41,172,677.24 | 23,698,174.56 |
| Current tax liabilities | 21,947,711.98 | 284,825,814.80 |
| Other payables | 644,059,870.61 | 662,701,744.97 |
| Handling charges and commission payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,201,524,980.80 | 234,474,657.99 |
| Other current liabilities | ||
| Total current liabilities | 37,384,576,512.24 | 35,143,027,626.33 |
| Non-current liabilities | ||
| Provision for insurance contract | ||
| Long-term loans | 3,810,463,934.18 | 4,849,675,910.73 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Long-term payables | 1,050,748,776.34 | 516,939,408.14 |
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 172,691,452.54 | 208,955,407.30 |
| Deferred tax liabilities | ||
| Other non-current liabilities |
| Assets | 30 June 2020 | 31 December 2019 |
| Total non-current liabilities | 5,033,904,163.06 | 5,575,570,726.17 |
| Total liabilities | 42,418,480,675.30 | 40,718,598,352.50 |
| Shareholders' equity: | ||
| Share capital | 3,875,371,532.00 | 3,875,371,532.00 |
| Other equity instruments | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 12,343,209,847.29 | 12,343,209,847.29 |
| Less: treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 22,480,185.44 | 212,687.41 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| General risk reserve | ||
| Undistributed profits | 2,562,409,868.95 | 2,307,765,664.62 |
| Total equity attributable to equity holders of the parent company | 19,764,576,963.53 | 19,487,665,261.17 |
| Non-controlling interests | 527,345,271.81 | 525,161,580.23 |
| Total shareholder's equity | 20,291,922,235.34 | 20,012,826,841.40 |
| Total of liabilities and owners’ equity | 62,710,402,910.64 | 60,731,425,193.90 |
Legal Representative: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua
2. BALANCE SHEET OF THE PARENT COMPANY
Unit: Yuan
| Assets | 30 June 2020 | 31 December 2019 |
| Current assets | ||
| Cash at bank and on hand | 15,366,186,440.19 | 16,982,227,928.89 |
| Financial assets held for trading | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 373,473,831.10 | 388,997,108.46 |
| Accounts receivable financing | 3,997,787,483.35 | 2,193,319,842.60 |
| Prepayments | 1,180,298,578.04 | 1,184,632,345.13 |
| Other receivables | 257,932,409.77 | 266,663,235.81 |
| Inventories | 8,140,296,769.10 | 6,114,582,832.33 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 233,073,377.39 | 191,249,460.42 |
| Total current assets | 29,549,048,888.94 | 27,321,672,753.64 |
| Non-current assets | ||
| Debt investments | ||
| Available-for-sale financial assets | ||
| Other debt investments | ||
| Held-to-maturity investment | ||
| Long-term receivables |
| Assets | 30 June 2020 | 31 December 2019 |
| Long-term equity investments | 2,016,281,902.16 | 2,016,281,902.16 |
| Other equity instrument investments | 1,041,624,829.00 | 1,041,624,829.00 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 23,390,496,921.43 | 24,447,763,305.12 |
| Construction in progress | 2,540,492,204.43 | 1,813,889,136.42 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Intangible assets | 143,816,972.04 | 145,470,040.68 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 96,728,691.51 | 93,555,276.54 |
| Other non-current assets | 962,009,985.58 | 696,351,867.38 |
| Total non-current assets | 30,191,451,506.15 | 30,254,936,357.30 |
| Total assets | 59,740,500,395.09 | 57,576,609,110.94 |
| Liabilities and shareholders' equities | 30 June 2020 | 31 December 2019 |
| Current liabilities | ||
| Short-term loans | 11,606,705,000.00 | 11,851,478,000.00 |
| Financial liability held for trading | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 12,332,093,817.33 | 10,225,969,445.22 |
| Accounts payable | 4,685,781,414.11 | 4,909,389,629.86 |
| Advance from customers | 5,597,707,687.22 | |
| Contract liabilities | 5,736,618,018.47 | |
| Employee benefits payable | 39,903,242.02 | 21,872,906.71 |
| Current tax liabilities | 4,507,444.81 | 274,181,048.14 |
| Other payables | 360,650,090.66 | 384,125,032.59 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,201,524,980.80 | 234,474,657.99 |
| Other current liabilities | ||
| Total current liabilities | 35,967,784,008.20 | 33,499,198,407.73 |
| Non-current liabilities | ||
| Long term loans | 3,810,463,934.18 | 4,849,675,910.73 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Long-term payables | 1,050,748,776.34 | 516,939,408.14 |
| Long-term employee benefits payable | ||
| Estimated liabilities |
| Assets | 30 June 2020 | 31 December 2019 |
| Deferred income | 172,691,452.54 | 208,955,407.30 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 5,033,904,163.06 | 5,575,570,726.17 |
| Total liabilities | 41,001,688,171.26 | 39,074,769,133.90 |
| Shareholder’s equity: | ||
| Share capital | 3,875,371,532.00 | 3,875,371,532.00 |
| Other equity instruments | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,923,058,165.17 | 11,923,058,165.17 |
| Less: Treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 19,768,253.55 | 53,330.99 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| Undistributed Profits | 1,959,508,743.26 | 1,742,251,419.03 |
| Total shareholder's equity | 18,738,812,223.83 | 18,501,839,977.04 |
| Total liabilities and shareholder’s equity | 59,740,500,395.09 | 57,576,609,110.94 |
3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unit: Yuan
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
| 1. Total operating income | 22,184,537,260.05 | 24,102,595,167.14 |
| Including: Operating income | 22,184,537,260.05 | 24,102,595,167.14 |
| Interest income | ||
| Premium earned | ||
| Income from handling charges and commission | ||
| 2. Total operating cost | 21,927,105,960.14 | 23,621,825,282.23 |
| Including: Operating cost | 20,440,246,362.67 | 22,067,612,729.65 |
| Interest expense | ||
| Expenditure for handling charges and commission | ||
| Surrender value | ||
| Net expenditure for compensation | ||
| Net provision for insurance contract appropriated | ||
| Bonus payment for policy | ||
| Reinsurance premium | ||
| Tax and surcharges | 88,398,436.68 | 114,125,362.97 |
| Selling and distribution expenses | 642,393,218.78 | 574,445,199.14 |
| General and administrative expenses | 380,828,316.41 | 446,767,811.77 |
| Research and development expenses | 20,202,985.20 | 15,408,472.28 |
| Financial expenses | 355,036,640.40 | 403,465,706.42 |
| Including: Interest expense | 439,861,353.93 | 586,490,262.69 |
| Interest income | 154,882,284.33 | 127,083,779.58 |
| Add: Other income | 38,587,332.40 | 41,695,000.00 |
| Income on investment（“-” for loss） | 29,304.00 | 25,907.49 |
| Including: Income from associates and joint ventures | 29,304.00 | 25,907.49 |
| 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） | 3,487,783.42 | 3,751,513.83 |
| Asset impairment loss （“-” for loss） |
-15,321,598.62 -
| Assets disposal gains（“-” for loss） | 325,651.61 | 2,418,704.34 |
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
| 3. Operational profit（“-” for loss） | 284,539,772.72 | 528,661,010.57 |
| Add: Non-operating income | 1,140,364.12 | 8,210,182.24 |
| Less: Non-operating expenses | 20,035,471.42 | 57,974,322.05 |
| 4. Total profit (“-” for loss) | 265,644,665.42 | 478,896,870.76 |
| Less: Income tax expenses | 9,237,815.08 | 25,962,181.73 |
| 5. Net profit（“-” for loss） | 256,406,850.34 | 452,934,689.03 |
| 1.Classification by continuing operating | ||
| 1.Net profit from continuing operation（“-” for loss） | ||
| 2.Net profit from discontinued operation（“-” for loss） | ||
| 2.Classification by ownership | ||
| 1. Net profit attributable to the owners of parent company （“-” for loss） | 254,644,204.33 | 453,209,615.76 |
| 2. Net profit attributable to non-controlling shareholders （“-” for loss） | 1,762,646.01 | -274,926.73 |
| 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 investee can be reclassified |
into profit or loss
| 2）Changes in fair value of other debt investments | ||
| 3）Gains and losses from changes in fair value available for sale financial assets | ||
| 4）Amount of financial assets reclassified into other comprehensive income |
financial assets
| 5）Held-to-maturity investments reclassified to gains and losses of available for sale | ||
| 6）Credit impairment provision of other debt investments | ||
| 7）The effective portion of cash flow hedges and losses | ||
| 8) Translation differences in foreign currency financial statements | ||
| 9）Other | ||
| Other comprehensive income attributable to non-controlling shareholders’ equity after tax | ||
| 7. Total comprehensive income | 256,406,850.34 | 452,934,689.03 |
| Total comprehensive income attributable to the owner of the parent company | 254,644,204.33 | 453,209,615.76 |
| Total comprehensive income attributable to non-controlling shareholders | 1,762,646.01 | -274,926.73 |
| 8. Earnings per share | ||
| 1）Basic earnings per share (Yuan/share) | 0.07 | 0.12 |
| 2）Diluted earnings per share (Yuan/share) | 0.07 | 0.12 |
The current business combination under common control, the net profits of the combined party before achieved:
Yuan, net profit of previous period of the combined party realized: Yuan.
Legal Representative: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua
4. INCOME STATEMENT OF THE PARENT COMPANY
Unit: Yuan
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
| 1. Total operating income | 21,759,781,682.12 | 23,447,215,857.93 |
| Less: Operating cost | 20,379,148,281.27 | 21,757,289,997.18 |
| Tax and surcharges | 74,240,782.35 | 84,467,404.41 |
| Selling and distribution expenses | 386,932,932.93 | 335,094,548.06 |
| General and administrative expenses | 354,627,152.28 | 419,337,998.35 |
| Research and development expenses | 20,202,985.20 | 15,408,472.28 |
| Financial expenses | 337,504,255.84 | 388,071,914.59 |
| Including: Interest expense | 410,264,451.89 | 558,095,343.66 |
| Interest income | 141,297,649.84 | 114,189,626.94 |
| Add: Other income | 38,002,345.53 | 41,695,000.00 |
| Income on investment |
（
）
| Including: Income from associates and joint ventures |
Income from derecognition of financial assets
| measured at amortized cost | ||
| Net exposure hedge income（“-” for loss） |
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
| Gains from change of fair value |
（
）
| Credit impairment loss |
（
）
| 2,627,938.73 | 3,751,513.83 | |
| Assets impairment loss（“-” for loss） | -15,321,598.62 | - |
| Assets disposal gains |
（
）
| 325,651.61 | 2,465,706.59 | |
| 2. Operational profit（“-” for loss） | 232,759,629.50 | 495,457,743.48 |
| Add: Non-operating income | 811,659.87 | 8,138,040.75 |
| Less: Non-operating expenses | 19,487,380.11 | 57,935,182.17 |
| 3. Total profit (“-” for loss) | 214,083,909.26 | 445,660,602.06 |
| Less: Income tax expenses | -3,173,414.97 | 15,309,062.75 |
| 4. Net profit |
（
）
| 217,257,324.23 | 430,351,539.31 | |
| 1.Net profit from continuing operation (“-” for loss) | ||
| 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 |
）
| Changes in fair value of company's credit risk |
2.Other comprehensive income that will be reclassified into profit or
| loss. |
| 1 |
）
| Other comprehensive income under the equity method investee can be reclassified into profit or loss |
| 2 |
）
| Changes in fair value of other debt investments | ||
| 3 |
）
| Gains and losses from changes in fair value available for sale financial assets |
| 4）Amount of financial assets reclassified into other comprehensive income |
）
| Held-to-maturity investments reclassified to gains and losses of available for sale financial assets |
| 6）Credit impairment provision of other debt investments | ||
| 7 |
）
| The effective portion of cash flow hedges and losses | ||
| 8) Translation differences in foreign currency financial statements | ||
| 9 |
）
| Other | ||
| 6. Total comprehensive income | 217,257,324.23 | 430,351,539.31 |
| 7. Earnings per share | ||
| 1）Basic earnings per share |
(Yuan/share)
| 2 |
）
(Yuan/share)
5. CONSOLIDATED STATEMENT OF CASH FLOWS
Unit: Yuan
Items Jan – Jun 2020 Jan – Jun 2019
1.Cash flow from operating activitiesCash received from sale of goods or rendering of services15,423,965,198.05 16,357,053,782.81
Net increase of customers' deposit and interbank depositNet increase of loan from central bankNet increase of loans from other financial institutionsCash received for premium of original insurance contractNet cash received for reinsurance businessNet increase of deposit and investment of the insuredCash from receiving interest, handling charge and commission
Items Jan – Jun 2020 Jan – Jun 2019
Net increase of loans from borrowing fundsNet increase of fund for repurchase businessNet cash received from traded securitiesTax rebate received310,509,228.43 247,667,635.74Other cash received relating to operating activities174,016,797.00 144,904,624.34Subtotal of cash inflows from operating activities15,908,491,223.48 16,749,626,042.89
Cash paid for goods and services14,428,717,102.76 13,876,838,386.74Net increase of customer's loan and advancesNet increase of deposit in central bank and interbank depositCash for payment of compensation for original insurance contractNet increase in capital lentCash for payment of interest, handling charge and commissionCash for payment of policy bonusCash paid to and on behalf of employees884,844,841.18 987,603,117.25
Cash paid for all types of taxes520,116,275.37 653,208,180.03
Other cash paid relating to operating activities226,288,711.25 247,189,353.20
Subtotal of cash outflows from operating activities16,059,966,930.56 15,764,839,037.22
Net cash flows from operating activities-151,475,707.08 984,787,005.67
2. Cash flows from investing activitiesCash received from disposal of investmentsCash received from return on investmentsNet cash received from disposal of fixed assets, intangible assets and other long-term assetsNet cash received from disposal of subsidiary and other operating unitsOther cash paid relating to investing activitiesSubtotal of cash inflows from investing activities
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 706,681,059.07 | 545,199,197.41 |
Cash paid for acquisition of investmentsNet increase of mortgage loanNet cash received from subsidiary and other operating unitOther cash paid relating to investing activitiesSubtotal of cash outflows from investing activities706,681,059.07 545,199,197.41
Net cash flows from investing activities-706,681,059.07 -545,199,197.41
3. Cash flows from financing activitiesProceeds from investmentIncluding: Proceeds from investment of non-controlling shareholders of subsidiaryProceeds from borrowings4,987,194,000.00 5,828,037,190.72Other proceeds relating to financing activitiesSubtotal of cash inflows from financing activities4,987,194,000.00 5,828,037,190.72Cash repayments of borrowings5,671,544,896.99 5,653,303,509.62
Cash payments for distribution of dividends, profit or interest expenses480,183,996.49 626,178,049.57
Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiariesOther cash payments relating to financing activitiesSubtotal of cash outflows from financing activities6,151,728,893.48 6,279,481,559.19
Net cash flows from financing activities-1,164,534,893.48 -451,444,368.47
4. Effect of foreign exchange rate changes on cash and cash equivalents
-1,130,665.43 48,230,507.75
5. Net increase in cash and cash equivalents
-2,023,822,325.06 36,373,947.54
Add: Cash and cash equivalents at the beginning of the period13,441,414,988.58 11,752,548,621.97
Items Jan – Jun 2020 Jan – Jun 2019
6. Cash and cash equivalents at the ending of the period
11,417,592,663.52 11,788,922,569.51
6. CASH FLOW STATEMENT OF THE PARENT COMPANY
Unit: Yuan
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
| 1. Cash flow from operating activities | ||
| Cash received from sale of goods or rendering of services | 15,003,373,098.45 | 15,970,406,775.11 |
| Tax rebate received | 260,246,235.34 | 219,614,786.86 |
| Other cash received relating to operating activities | 163,299,247.34 | 140,536,583.70 |
| Subtotal of cash inflows from operating activities | 15,426,918,581.13 | 16,330,558,145.67 |
| Cash paid for goods and services | 14,323,769,183.95 | 13,842,821,616.84 |
| Cash paid to and on behalf of employees | 840,886,166.89 | 928,568,022.64 |
| Cash paid for all types of taxes | 465,606,411.99 | 576,260,568.31 |
| Other cash paid relating to operating activities | 159,126,577.28 | 165,446,890.35 |
| Subtotal of cash outflows from operating activities | 15,789,388,340.11 | 15,513,097,098.14 |
| Net cash flows from operating activities | -362,469,758.98 | 817,461,047.53 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | ||
| Cash received from return on investments |
Net cash received from disposal of fixed assets, intangible
Net cash received from disposal of subsidiary and other
| assets and other long-term assets |
| operating units |
| Other cash received relating to investing activities | ||
| Subtotal of cash inflows from investing activities |
Cash paid for acquisition of fixed assets, intangible assets
696,005,001.44 539,451,276.57
| and other long-term assets | ||
| 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 activities | 696,005,001.44 | 539,451,276.57 |
| Net cash flows from investing activities | -696,005,001.44 | -539,451,276.57 |
| 3. Cash flows from financing activities | ||
| Proceeds from investment | ||
| Cash received from borrowings | 4,747,194,000.00 | 4,902,327,190.72 |
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | 4,747,194,000.00 | 4,902,327,190.72 |
| Cash repayments of borrowings | 5,051,544,896.99 | 4,713,373,509.62 |
Cash payments for distribution of dividends, profit or
433,692,125.89 589,497,122.29
| interest | ||
| Other cash payments relating to financing activities | ||
| Subtotal of cash outflows from financing activities | 5,485,237,022.88 | 5,302,870,631.91 |
| Net cash flows from financing activities | -738,043,022.88 | -400,543,441.19 |
| Items | Jan – Jun 2020 | Jan – Jun 2019 |
4. Effect of foreign exchange rate changes on cash and
-1,134,392.87 48,222,621.42
| cash equivalents | ||
| 5. Net increase in cash and cash equivalents | -1,797,652,176.17 | -74,311,048.81 |
Add: Cash and cash equivalents at the beginning of the
13,029,616,298.47 10,807,824,843.20
| period | ||
| 6. Ending balance of cash and cash equivalents | 11,231,964,122.30 | 10,733,513,794.39 |
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unit: YuanItems
| Jan – Jun 2020 | |
| Owner's equity attributable to parent company | |
Non-controlling
interest
Total of owner'sequityShare capital
Capital reserves
| Other equity instruments | Less: | |
Treasuryshares
comprehensive
income
Specialreserves
Surplus reserves
| Other | General |
riskreserve
Undistributed
profit
Subtotal
Preference shares
| Preference shares | Perpetual bond |
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 12,343,209,847.29 | 212,687.41 | 961,105,529.85 | 2,307,765,664.62 | 19,487,665,261.17 | 525,161,580.23 | 20,012,826,841.40 | ||||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 212,687.41 | 961,105,529.85 | 2,307,765,664.62 | 19,487,665,261.17 | 525,161,580.23 | 20,012,826,841.40 | ||||||
| 3. Changes in current year (“-” for decrease) | 22,267,498.03 | 254,644,204.33 | 276,911,702.36 | 2,183,691.58 | 279,095,393.94 | |||||||||
| 1) Total comprehensive income | 254,644,204.33 | 254,644,204.33 | 1,762,646.01 | 256,406,850.34 | ||||||||||
| 2) Capital increase and decrease by shareholders |
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments |
| (3) Share-based payment attributable to owners' equity | ||||||||||||||
| (4) Others | ||||||||||||||
| 3) Profit distribution | ||||||||||||||
| (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)
capital (or stock)
| (2) Surplus reserves transferred into paid-in | ||||||||||||||
| (3) Surplus reserves to recover loss | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings |
into Retained Earnings
| (5) Other comprehensive income transferred | ||||||||||||||
| (6) Others | ||||||||||||||
| 5) Special reserves | 22,267,498.03 | 22,267,498.03 | 421,045.57 | 22,688,543.60 | ||||||||||
| (1) Provision of special reserves | 26,575,861.58 | 26,575,861.58 | 421,045.57 | 26,996,907.15 | ||||||||||
| (2) Use of special reserves | 4,308,363.55 | 4,308,363.55 | 4,308,363.55 | |||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 22,480,185.44 | 961,105,529.85 | 2,562,409,868.95 | 19,764,576,963.53 | 527,345,271.81 | 20,291,922,235.34 |
Items
| Jan – Jun 2019 | |
| Owner's equity attributable to parent company | |
Non-controllinginterest
Total of owner'sequityShare capital
Capital reserves
| Other equity instruments | Less: | |
Treasuryshares
comprehensive income
Specialreserves
Surplus reserves
| Other | General |
riskreserve
Undistributed profit
Subtotal
Preferenc
e shares
| Preferenc | Perpetual |
bond
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 12,343,209,847.29 | 683,937.71 | 961,105,529.85 | 1,945,887,269.82 | 19,126,258,116.67 | 533,146,339.49 | 19,659,404,456.16 | ||||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 683,937.71 | 961,105,529.85 | 1,945,887,269.82 | 19,126,258,116.67 | 533,146,339.49 | 19,659,404,456.16 | ||||||
| 3. Changes in current year (“-” for decrease) | -471,250.30 | 361,878,394.80 | 361,407,144.50 | -7,984,759.26 | 353,422,385.24 | |||||||||
| 1) Total comprehensive income | 555,646,971.40 | 555,646,971.40 | 1,213,517.58 | 556,860,488.98 | ||||||||||
| 2) Capital increase and decrease by shareholders | ||||||||||||||
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments | ||||||||||||||
| (3) Share-based payment attributable to owners' equity | ||||||||||||||
| (4) Others | ||||||||||||||
| 3) Profit distribution | -193,768,576.60 | -193,768,576.60 | -9,198,305.14 | -202,966,881.74 | ||||||||||
| (1) Appropriation to surplus reserves | ||||||||||||||
| (2) Appropriation to general risk reserve | ||||||||||||||
| (3) Profit distribution to shareholders | -193,768,576.60 | -193,768,576.60 | -9,198,305.14 | -202,966,881.74 | ||||||||||
| (4) Others | ||||||||||||||
| 4) Transfers within shareholders' equity | ||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (3) Surplus reserves to recover loss | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | ||||||||||||||
| (5) Others | ||||||||||||||
| 5) Special reserves | -471,250.30 | -471,250.30 | 28.30 | -471,222.00 | ||||||||||
| (1) Provision of special reserves | 47,843,133.40 | 47,843,133.40 | 28.30 | 47,843,161.70 | ||||||||||
| (2) Use of special reserves | 48,314,383.70 | 48,314,383.70 | 48,314,383.70 | |||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 212,687.41 | 961,105,529.85 | 2,307,765,664.62 | 19,487,665,261.17 | 525,161,580.23 | 20,012,826,841.40 |
8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY
Unit: Yuan
Items
Share capital
| Jan – Jun 2020 | ||
| Other equity instruments | ||
Capital reserves
Treasury
shares
| Less: | Other |
comprehensive income
Specialreserves
Surplus reserves
Undistributedprofits
Total shareholder’sequity
| Preference shares | Perpetual bond |
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 11,923,058,165.17 | 53,330.99 | 961,105,529.85 | 1,742,251,419.03 | 18,501,839,977.04 | |||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 53,330.99 | 961,105,529.85 | 1,742,251,419.03 | 18,501,839,977.04 | |||||
| 3. Changes in current year (“-” for decrease) | 19,714,922.56 | 217,257,324.23 | 236,972,246.79 | ||||||||
| 1) Total comprehensive income | 217,257,324.23 | 217,257,324.23 | |||||||||
| 2) Capital increase and decrease by shareholders | |||||||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to shareholders' equity | |||||||||||
| (4) Others | |||||||||||
| 3) Profit distribution | |||||||||||
| (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 reserves | 19,714,922.56 | 19,714,922.56 | |||||||||
| (1) Provision of special reserves | 23,963,236.11 | 23,963,236.11 | |||||||||
| (2) Use of special reserves | 4,248,313.55 | 4,248,313.55 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 19,768,253.55 | 961,105,529.85 | 1,959,508,743.26 | 18,738,812,223.83 |
Items
Share capital
| Jan – Jun 2019 | ||
| Other equity instruments | ||
Capital reserves
Less:
Treasury
Othercomprehens
| shares | ive income |
Specialreserves
Surplus reserves
Undistributedprofits
Total shareholder’sequityPreference
Perpetual
| shares | bond |
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 11,923,058,165.17 | 525,218.48 | 961,105,529.85 | 1,401,183,955.66 | 18,161,244,401.16 | |||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 525,218.48 | 961,105,529.85 | 1,401,183,955.66 | 18,161,244,401.16 | |||||
| 3. Changes in current year (“-” for decrease) | -471,887.49 | 341,067,463.37 | 340,595,575.88 |
Items
Share capital
| Jan – Jun 2019 | ||
| Other equity instruments | ||
Capital reserves
Less:
Treasury
Othercomprehens
| shares | ive income |
Specialreserves
Surplus reserves
Undistributedprofits
Total shareholder’sequityPreference
Perpetual
| shares | bond |
Others
| 1) Total comprehensive income | 534,836,039.97 | 534,836,039.97 | |||||||||
| 2) Capital increase and decrease by shareholders | |||||||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to shareholders' equity | |||||||||||
| (4) Others | |||||||||||
| 3) Profit distribution | -193,768,576.60 | -193,768,576.60 | |||||||||
| (1) Appropriation of surplus reserves | |||||||||||
| (2) Profit distribution to shareholders | -193,768,576.60 | -193,768,576.60 | |||||||||
| (3) Others | |||||||||||
| 4) Transfers within shareholders' equity | |||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | |||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||
| (3) Surplus reserves to recover loss | |||||||||||
| (4) Net changes of defined contribution plans transferred |
into Retained Earnings
| (5) Others | |||||||||||
| 5) Special reserves | -471,887.49 | -471,887.49 | |||||||||
| (1) Provision of special reserves | 45,445,975.41 | 45,445,975.41 | |||||||||
| (2) Use of special reserves | 45,917,862.90 | 45,917,862.90 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 53,330.99 | 961,105,529.85 | 1,742,251,419.03 | 18,501,839,977.04 |
III. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”), as approved in Liao-Zheng (1997) No. 57by Liaoning People’s Government on 27 March 1997, was incorporated as a joint stock limited company throughpublic share offer of 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. (“Bengang Group”), throughreorganization of operations, assets and liabilities of its plants, namely, Steel Smelting Plant, Primary Rolling Plantand Continuous Hot Rolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”), the Companyissued 400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997,the Company issued another 120,000,000 A-shares (Renminbi common Shares) at RMB 5.40 each, and listed inShenzhen Stock Exchange since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation, theShare Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation issuedby Liaoning Provincial Government State-owned Asset Administrative Committee, Bengang Group – the only holderof 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 havebeen registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the totalamount of capital shares of Bengang Steel 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 China Securities RegulatoryCommission on 30 June 2006, the Company was approved to place 2 billion Renminbi common shares particularlyto Bengang Group and the proceeds would be used to purchase the related assets of the Group. On the same day,Bengang Group received circular 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 liability was caused bysubscribing of the 2 billion new shares and the total shareholding was thus increased to 2.5752 billion shares(accounting for 82.12% of the total capital shares of the Company). On 28 August 2006, as approved by ChinaSecurities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and conditional placingprocedures of the 2 billion new shares were completed. On 28 September 2006, the privately placed shares wereapproved by Shenzhen Stock Exchange to be placed in the stock market. The placing price was RMB4.6733 per share.Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel Plate Co., Ltd. privatelyplaced no more than 739,371,534 RMB ordinary shares (A shares) to no more than 10 issuers. The non-public offeringwas completed on 9 February 2018, and 739,371,532 shares were actually issued. The placing price was RMB5.41per share.
As at 30 June 2020, the capital shares were totaled to 3,875,371,532 shares.
The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, Liaoning Province.The Company’s legal representative: Gao Lie.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd. and the actualcontroller is the State-owned Assets Supervision and Administration Commission of the State Council of Liaoningprovince.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry and is mainlyinvolved in producing and trading of ferrous metal products. Consolidation scope
The financial statements have been approved for reporting by the board of directors of the Company on 24 August2020.
(2) Consolidation scope
As at 30 June 2020, subsidiaries included in the Company’s consolidated financial statements are as follows:
The scope of the consolidated financial statements in this period has not changed compared with the previous period.
| Name of the subsidiaries |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. |
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. |
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. |
| Dalian Benruitong Automobile Material Technology Co., Ltd. |
| Changchun Bengang Steel & Iron Sales Co., Ltd. |
| Harbin Bengang Economic and Trading Co., Ltd. |
| Nanjing Bengang Materials Sales Co., Ltd. |
| Wuxi Bengang Steel & Iron Sales Co., Ltd. |
| Xiamen Bengang Steel & Iron Sales Co., Ltd. |
| Yantai Bengang Steel & Iron Sales Co., Ltd. |
| Tianjin Bengang Steel & Iron Trading Co., Ltd. |
| Bengang Posco Cold-rolled Sheet Co., Ltd. |
| Benxi Bengang Steel Sales Co., Ltd |
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. |
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. |
| Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. |
IV. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and events in accordance with“Accounting Standards for Business Enterprises – Basic Standard” and relevant specific standards, application materials,interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issued by theMinistry of Finance, and “Information Disclosure Rules for Companies of securities for public issuance No. 15 – GeneralRegulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to continue to operate in thenext twelve months from the end of reporting period.
V. Significant accounting policies and accounting estimatesNotes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accounting estimates that are adopted by theCompany based on the actual production and operation characteristics. Please see Note (10) Financial instruments, (11)Inventory, (16) Fixed assets, (19) Intangible assets, (25) Revenue under“3. Significant accounting policies andaccounting estimates” for details.
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results and cash flows of theCompany during the reporting period in accordance with China Accounting 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 control
Business combination under common controlThe assets and liabilities that the Company acquired in a business combination shall be measured on the basis of theircarrying amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in theconsolidated financial statement of the ultimate controller on the combining date. As for the balance between the carryingamount of the net assets obtained by the Company and the carrying amount of the consideration paid by it (or the total
par value of the shares issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excessshall be adjusted against retained earnings.
Business combination not under common controlThe Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprisefor a business combination in light of their fair values, and shall record the balances between them and their carryingamounts into the profits and losses at the current period. The Company shall recognize the positive balance between thecombination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill. The Companyshall treat the negative balance between the combination costs and the fair value of the identifiable net assets it obtainsfrom the acquiree into the profits and losses of the current period.
The intermediary costs and relevant fees for the business combination paid by the acquirer, including the expenses foraudit, assessment and legal services, shall be recorded into the profits and losses at the current period. The transactionexpenses for the issuance of equity securities for the business combination shall be recorded into the initial recognitionamount of equity securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control. All the subsidies(including separable sections of the investees controlled by the Company) have been consolidated into the scope ofconsolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial statements of the parentand its subsidiaries, and using other related information. When preparing consolidated financial statements, the parentshall consider the entire group as an accounting entity, adopt uniform accounting policies and apply the requirements ofAccounting Standard for Business Enterprises related to recognition, measurement and presentation. The consolidatedfinancial statements shall reflect the overall financial position, operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be in accordancewith those of the Company. If not, it is necessary to make the adjustment according to the Company’s accounting policiesand accounting period when preparing the consolidated financial statements. For subsidiaries through acquisition thatare now under common control, the financial statements are adjusted according to fair value of identifiable net assets onthe acquisition date. For subsidiaries through acquisition that are under common control, the assets, liabilities (as wellas the goodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to book valueof net assets in the financial statements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controllingshareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the
item of net profit of the consolidated statement of comprehensive income and under the item of total comprehensiveincome. Where losses assumed 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 control during the reporting period,it shall adjust the beginning balance in the consolidated statement of financial position when preparing consolidatedstatement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to theend of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cashflow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’sconsolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparativefinancial statements as if the reporting 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 common control due to additionalinvestment or other reasons, adjustment shall be made as if the reporting entity after the combination has been inexistence since the date the ultimate controlling party first obtained control. The investment income recognized betweendate of previously obtaining equity investment and the date the acquiree and acquirer are under common control, whichis later, and the combining date, other comprehensive income and other changes of net assets arising from the equityinvestment previously-held before obtaining the control the acquiree shall be adjusted against the prior retained earningsof the comparative financial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in the consolidated statementof financial position when preparing consolidated statement of financial position. The revenue, expenses and profits ofthe subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’sconsolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the endof the reporting period is included in the Company’s consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under common control due toadditional investment or other reasons, the acquirer shall remeasure its previously held equity interest in the acquireeto its fair value at the acquisition date. The difference between the fair value and the carrying amount shall be recognizedas investment income for the period when the acquisition takes place. When the previously-held equity investment isaccounted for under the equity method, any other comprehensive income previously recognized in relation to theacquiree’s equity changes shall be transferred to profit or loss for the current period when the acquisition takes place.Other comprehensive income arising from remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses and profits of the subsidiaryfrom the beginning of the reporting period to disposal date are included in the Company’s consolidated statement ofcomprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal date isincluded in the Company’s consolidated statement of cash flows.
When the Company loses control over an investee due to partial disposal or other reasons, the acquirer shall re-measurethe remaining equity interests in the acquiree to its fair value at the acquisition date. The difference, between sums ofconsideration received for disposal equity shares and fair value of the remaining shares, and sums of share of net assetsof the subsidiary calculated continuously from the acquisition date or the combination date based on the previousshareholding proportion and goodwill, shall be recognized as investment income for the period when the Companyloses control over acquiree. When the previously-held equity investment is accounted for under the equity method, anyother comprehensive income previously recognized in relation to the acquiree’s equity changes, and other equitychanges rather than changes from net profit, other comprehensive income and profit distribution, shall be transferred toinvestment income for the current period when the Company loses control over acquiree. Other comprehensive incomearising from re-measurement of defined benefit plan is excluded. When the Company loses control over a subsidiarydue to the increase of capital from other investors and thus the shareholding ratio of the Company declines, accountingtreatment shall be in accordance with the above-mentioned principles.
2. Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its subsidiary instages, in determining whether to account for the multiple transactions as a single transaction, the Company shallconsider all of the terms and conditions of the transactions and their economic effects. One or more of the followingmay indicate 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 one other arrangement; and(d) One arrangement considered on its own is not economically justified, but it is economically justified whenconsidered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control ofthe subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financialstatements, the difference between the consideration received and the corresponding proportion of the subsidiary’s netassets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferredto the profit or loss when the Company eventually loses control of the subsidiary.If each of the multiple transactions which eventually results in loss of control of the subsidiary do not form part of abundled transaction, apply the treatment of disposing partial long-term equity investments in a subsidiary without lossof control prior to the loss of control. After the loss of control, apply the treatment of disposing the subsidiary incommon cases.
(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholders
Where the Company has acquired a subsidiary’s equity interest held by non-controlling shareholders, the differencebetween the increase in the cost of long-term investments as a result of acquisition of non-controlling interests and theshare of net assets of the subsidiary calculated continuously from the acquisition date or the combination date basedon the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium) in theconsolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjustedagainst 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 subsidiary without loss of control,the difference between the amount of the consideration received and the corresponding portion of the nest assets ofthe subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of thelong-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in theconsolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjustedagainst 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 assets related to the arrangementand assumes the liabilities related to the arrangement, it is a joint operation.
The Company confirms the following items related to the share of interest in the joint operation and performsaccounting treatment in accordance with the relevant enterprise accounting standards:
a. Confirm the assets held by the company separately, and confirm the assets held jointly by the Company's share;b. Recognize the liabilities assumed by the Company separately and the liabilities jointly assumed by the company'sshare;c. Recognize the income generated by the sale of the Company’s share of common operating output;d. Recognize the revenue generated from the sale of joint operations based on the Company's share;e. Confirm the expenses incurred separately and the expenses incurred in the joint operation according to the Company'sshare.For the accounting policy of the Company's investment in joint ventures, please refer to Note (13) Long-term EquityInvestment under“3. Significant accounting policies and accounting estimates”
(8) Recognition of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the unrestricteddeposit. And the term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly
liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant riskof 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 of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The balanceof exchange arising from the difference between the spot exchange rate on the balance sheet date and the spot exchangerate at the time of initial recognition 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 capitalized according to the borrowingcosts capitalization principle, shall be recorded into the profits and losses 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 spot exchange rate on the balancesheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall be translated at thespot exchange rate at the time when they are incurred. The income and expense items in the income statement shall betranslated using an exchange rate that is determined in a systematic and reasonable manner and approximates the spotexchange rate on the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is presented under the items of theowner's equities in the statement of financial position and arises from the translation of foreign currency financialstatements related to this oversea business, into the disposal profits and losses of the current period. If the overseasbusiness is disposed of partially, the Company shall calculate the balance arising from the translation of foreign currencystatements of the part of disposal based on the disposal rate and shall shift them into the profits and losses of the currentperiod.
(10) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The Company shall classify financial assets on the basis of both the entity’s business model for managing the financialassets and the contractual cash flow characteristics of the financial asset as: financial assets measured at amortised cost,financial assets measured at fair value through other comprehensive income (debt instrument) and financial assetsmeasured at fair value through profit or loss at initial measurement.
A financial asset shall be measured at amortised cost if both of the following conditions are met. The financial asset isheld within a business model whose objective is to hold financial assets in order to collect contractual cash flows and thecontractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principaland interest on the principal amount outstanding.
A financial asset shall be measured at fair value through other comprehensive income if both of the following conditionsare met. The financial asset is held within a business model whose objective is achieved by both collecting contractualcash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding. Other financial assets otherthan these are classified as financial assets measured at fair value through profit or loss.
The Company may make an election at initial recognition for non-trading equity instrument investments whether it isdesignated as a financial asset (equity instrument) that is measured at fair value through other comprehensive income.At the initial recognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can bedesignated as financial assets measured at fair value through profit or loss. According to the above conditions, thecompany does not have such designated financial assets.
The Company shall classify financial liabilities as financial liabilities measured at amortised cost and financial liabilitiesmeasured at fair value through profit or loss at initial measurement.
The Company may, at initial recognition, designate a financial liability as measured at fair value through profit or lossbecause 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 its performance is evaluatedon a fair value basis, in accordance with a documented risk management or investment strategy, and informationabout the group is provided internally on that basis to the entity’s key management personnel;(c) the financial liability contains embedded derivatives that need to be separated.According to the above conditions, the Company does not have such designated financial assets.
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-termreceivables, debt investments, etc. At initial recognition, the Company shall measure a financial asset at its fair value
plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset. The Companyshall measure account receivables at their transaction price if the account receivables do not contain a significantfinancing component and accounts receivables that the company has decided not to consider for a financing componentof 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 and. the carrying value shall berecognized 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 receivablesfinancing, other debt investments, etc. At initial recognition, the Company shall measure a financial asset at its fair valueplus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. The financial assetsare subsequently measured at fair value. Changes in fair value are included in other comprehensive income except forinterest calculated using the effective interest method, impairment losses or gains and exchange gains and losses. Whenthe financial assets are derecognized, the accumulated gain or loss previously recognized in other comprehensive incomeis transferred from other comprehensive 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). include other equity instrumentinvestments, etc. At initial recognition, the Company shall measure a financial asset at its fair value plus transaction coststhat are directly attributable to the acquisition or issue of the financial asset. The financial assets are subsequentlymeasured at fair value. Changes in fair value are included in other comprehensive income. The dividends obtained arerecognised in profit and loss.
When the financial assets are derecognized, the accumulated gain or loss previously. recognised in other comprehensiveincome is transferred from other comprehensive income and 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, othernon-current financial assets, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in
profit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the. initially recorded amount isrecognized as investment income, and the gains and losses from changes in fair value are adjusted.
(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 value at initial recognition. Transaction costs are recognised inprofit or loss. Changes in fair value are included in profit or loss.
When the financial liabilities are derecognized, the difference between the fair value and the. initially recorded amountis recognized as investment income, and the gains and losses from changes 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, otherpayables, 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 aredirectly attributable to the acquisition or issue of the financial asset.Interests calculated by using the effective interest method during the holding period shall be. recognized in profit or loss.
When the financial liabilities are derecognized, the difference between the price obtained and. the carrying value shallbe recognised in profit and loss.
3. Recognition and measurement of financial assets transfer
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset tothe transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to theownership 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 in these Standards for stoppingthe recognition of a financial asset, the Company shall follow the principle of the substance over form. Transfer of anentire financial asset can be divided into partial financial assets transfer and entire financial asset transfer. If the transfer
of an entire financial asset satisfies the conditions for de-recognition, the difference between the amounts of the following2 items shall be recorded 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 the changes of the fair value
originally recorded in the owners' equities (in the event that the financial asset involved in the transfer is a financialasset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of the transferredfinancial asset shall, between the portion whose recognition has been stopped and the portion whose recognition hasnot been stopped (under such circumstance, the service asset retained shall be deemed as a portion of financial assetwhose recognition has not been stopped), be apportioned according to their respective relative fair value, and thedifference between the amounts of the following 2 items shall be included into the profits and losses of the currentperiod :
(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 the portion of the accumulative
amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portionwhose recognition has been stopped (in the event that the financial asset involved in the transfer is a financial assetAvailable-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue to be recognizedas financial assets and the consideration received shall be recognized 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 may the recognition of thefinancial liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilitiesby way of any new financial liability, and if the contractual stipulations regarding the new financial liability issubstantially different from that regarding the existing financial liability, it shall terminate the recognition of the existingfinancial liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to part or all of the contractual stipulations of the existing financialliability, it shall terminated the recognition of the existing financial liability or part of it, and at the same time recognizethe financial liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company shall include into the profitsand losses of the current period the difference between the carrying amount which has been terminated from recognitionand the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilitiesit has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase, the carryingamount of the whole financial liabilities in light of the comparatively fair value of the part that continues to berecognized and the part whose recognition 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 assetsit has transferred out and the new financial liabilities it has assumed) shall be recorded into the profits and losses of thecurrent 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 quoted prices in the activemarkets. If active markets for the financial instruments do not exist, valuation techniques shall be applied for themeasurement. The Company uses valuation techniques appropriate in the circumstances and for which sufficient dataare available to measure fair value. The Company chooses relevant observable inputs for identical or similar assets orliabilities. Only when relevant observable inputs are unavailable or should the Company use unobservable inputs forthe asset or liability.
6. Impairment provision of the financial assets
The Company considers all reasonable and relevant information, including forward-looking information, to recognizethe expected credit loss on financial assets measured at amortized cost, and financial assets measured at fair value throughother comprehensive income (debt instruments) on the individual or portfolio basis. The measurement of expected creditloss depends on whether there is a significant increase in credit risk of financial assets since the initial recognition.
If the credit risk of the financial instrument has increased significantly since the initial confirmation, the Company shallmeasure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses. If thecredit risk on a financial instrument has not increased significantly since initial recognition, the Company shall measurethe loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. The increase orreversal amount of loss allowance thus formed shall be included in the current profits and losses as impairment losses orgains.
Generally, the Company believes that the credit risk of the financial instrument has significantly increased over 30 daysafter the due date, unless there is solid evidence that the credit risk of the financial instrument has not increasedsignificantly since initial recognition.
If the credit risk of a financial instrument at the reporting date is relatively low, the Company considers that the creditrisk of the financial instrument has not increased significantly since the initial recognition.
If there is objective evidence indicating that a certain financial asset has been impaired, the Company shall recogniseprovision for impairment of the financial asset individually.
For account receivables, whether a significant financing component is contained or not, the Company shall alwaysmeasure the loss allowance at an amount equal to lifetime expected credit losses.
For those accounts receivable, lease receivables, long-term receivables formed by the company through the sale of goodsor rendering of services, notes receivable, accounts receivable financing, and other receivables which contains significantfinancing component, the Company chooses to use the general financial asset impairment method, that is, according towhether the credit risk has increased significantly or not since the initial recognition to measure the expected credit lossat an amount equal to 12-month expected credit losses (stage one) or at an amount equal to the lifetime expected creditlosses (stage two and stage three).
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, turnover materials, finished goods, work in process, issue commodity,materials for consigned processing, etc.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to make provision for the
inventory impairment lossThe net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct selling in thedaily business activity shall be calculated by deducting the estimated sale expense and relevant taxes from the estimatedsale price of inventories; The net realizable value of inventories for further processing in the daily business activity shallbe calculated by deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimatedsale price of inventories; The net realizable value of inventories held for the execution of sales contracts or labor contractsshall be calculated on the ground of the contract price. If the Company holds more inventories than the quantitiessubscribed in the sales contract, the net realizable value of the excessive part of the inventories shall be calculated on theground of the general sales price.
The Company shall make provision for loss on decline in value of inventories on the ground of each item of inventoriesat the year end. For inventories with large quantity and relatively low unit prices, the provision for loss on decline in
value of inventories shall be made on the ground of the categories of inventories. For the inventories related to the seriesof products manufactured and sold in the same area, and of which the final use or purpose is identical or similar thereto,and if it is difficult to measure them by separating them from other items, the provision for loss on decline in value ofinventories shall be made on a combination basis.
Unless clear evidence shows that the market price is exceptionally fluctuating, the net realizable value of inventory isbased on the market price at the balance sheet date.
The net realizable value of inventory at the year-end is based on the market price at the balance sheet date. Specifically,if the inventory held for the execution of the sales contract or labor contract, and the sales contract order quantity is equalto the quantity of inventory held by the enterprise, the contract price of the finished product or commodity is used as thebasis for calculating the net realizable value; The quantity of inventory is more than the quantity ordered by the salescontract, and the net realizable value of the excess inventory is based on the general sales price of the finished productor commodity; if the quantity of inventory held by the enterprise is less than the quantity ordered by the sales contract,the actual Contract-related inventory uses the price specified in the sales contract as the basis for calculating the netrealizable value.
4. Inventory system
The Company uses perpetual inventory system.
5. 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.
(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 the statement of financialposition as a contract asset or a contract liability, depending on the relationship between the Company’s performanceand the customer’s payment. If the Company have the rights to receive consideration (the right is conditioned onfactors other than the passage of time) by transferring goods or services to a customer, the entity shall present thecontract as a contract asset. Contract assets and contract liabilities under the same contract are disclosed in net amount.An entity shall present any unconditional rights to consideration (only the passage of time is required) separately as areceivable.
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. Impairmentprovision of the financial assets under “3. Significant accounting policies and accounting estimates”
(13) Assets hold for sales
The Company classifies non-current assets or disposal asset groups when the assets meet the following criterion intoholding categories for sale simultaneously:
(1) According to the practice of selling such assets or disposal asset groups in similar transactions, they can be sold
immediately under current conditions;
(2) The sale of assets is highly probable, as the company has already made a resolution on a sale plan and obtained a
certain purchase commitment, and the transaction is expected to be completed within one year. The relevant regulationsthat the assets can be sold have been approved by relevant authorities or regulatory authorities of the Company.
(14) 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 only when decisions aboutthe relevant activities require the unanimous consent of the parties sharing control. If the Company and other joint venturehave joint control of the investee and have rights to the net assets of the investee, the investee is a joint venture of theCompany.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but notcontrol or join control of those policies. If the Company could exert significant influence over the investee, the investeeis 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, if the consideration of the combination is satisfied by paying cash,transfer of non-cash assets or assumption of liabilities and issue of equity securities, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity of theparty being absorbed in the consolidated financial statements of the ultimate controlling party at combination date. Whenan investor becomes capable of exercising control over an investee under common control due to additional investmentor other reasons, the initial investment cost 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 ultimate controlling party atcombination date. The difference between the initial investment cost and the carrying amount of the previously-heldequity investment, together with the additional investment cost for new shares at combination date, shall be adjusted tothe capital reserve. If the balance of capital reserve is not sufficient, 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 investmentshall be the acquisition cost at the acquisition date. When an investor becomes capable of exercising control over aninvestee due to additional investment or other reasons, the initial investment cost under the cost method shall be thecarrying amount of previously-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 be the purchase cost whichis actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair valueof the equity securities issued.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received andsurrendered can be reliably measured, the fair value of the assets surrendered shall be used as the basis for determiningthe cost of the assets received, unless there is any exact evidence showing that the fair value of the assets received ismore reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed above, the carryingvalue and relevant payable taxes of the assets surrendered shall be the initial cost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fairvalues.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long term investment in subsidiary company. Under the cost method, aninvesting enterprise shall, in accordance with the attributable 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 using the equity method. Wherethe initial investment cost of a long-term equity investment exceeds tan investor’s interest in the fair values of aninvestee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Wherethe initial cost is less than the investor’s interest in the fair values of the investee’s identifiable net assets at the acquisitiondate, the difference shall be credited to profit or loss for the current period.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s othercomprehensive income, as investment income or losses and other comprehensive income, and adjust the carrying amountof the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profitdistributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of theinvestee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensiveincome or profit distribution, and the carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustmentsaccording to the Company’s accounting principles and operating period based on the fair values of the investee’s
identifiable net assets at the acquisition date. During the holding period, if the investee makes consolidated financialstatements, the Company shall calculate its share based on the investee’s net profit, other comprehensive income and theamount of other owners' equity attribute to the investee in the consolidated financial statements.
The unrealized profits or losses resulting from transactions between the investor and its associate or joint venture shallbe eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or lossesshall be recognized. Any losses resulting from transactions between the investor and investee which are attributable toasset impairment shall be recognized in full. If the transaction of investment or sale of assets among the Company andassociate and joint venture and the assets is a business, it shall apply the treatment mentioned in Note 3 (5) “Theaccounting treatment for Business combination under/now under common control” and Note 3 (6) “Consolidation ofFinancial Statements”.
When the Company recognizes the losses of invested enterprise, it shall follow the following sequence: First of all, offsetthe book value of long term equity investment. If the book value of long-term equity is insufficient to dilute, the investingenterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equity investmentand other long-term rights and interests which substantially form the net investment made to the invested entity arereduced to zero. If the company still has the obligation to undertake extra losses per contract, and then estimated liabilitiesshall be recognized into current profit and loss accordingly to the estimated obligation.
(3) Disposal of long-term equity investment
When disposing long-term equity investment, the difference between the proceeds actually received and the carryingamount shall be recognized in profit or loss for the current period.
When the previously-held equity investment is accounted for under the equity method, any other comprehensive incomepreviously recognized shall be accounted for on the same basis as would have been required if the investee had directlydisposed of the related assets or liabilities. Those owner's equity recognized other than the change of net profits or loss,other comprehensive income, profit distribution of the invested entity shall be transferred proportionally into profit orloss of current period, other comprehensive income arising from the re-measurement of defined benefit plan is excluded.
When an investor can no longer exercise joint control of or significant influence over an investee due to partial disposalof equity investment or other reasons, the remaining equity investment shall be accounted for in accordance with financialinstruments recognition and measurement standard. The difference between the fair value and the carrying amount at thedate of the loss of join control or significant influence shall be charged to profit or loss for the current period. When thepreviously-held equity investment is accounted for under the equity method, any other comprehensive income previouslyrecognized shall be accounted for on the same basis as would have been required if the investee had directly disposed ofthe related assets or liabilities for the current period upon discontinuation of the equity method. Those owner's equityrecognized other than the change of net profits or loss, other comprehensive income, profit distribution of the investedentity shall be transferred into profit or loss of current period in full when the Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal of equity investment or dueto decrease of shareholding ratio because of additional investment by other investors, and with the retained interest, stillhas joint control of, or significant influence over, the investee, when preparing the individual financial statements, theinvestor shall change to the equity method and adjust the remaining equity investment as if the equity method had beenapplied from the date of the first acquisition. If the investor cannot exercise joint control of or significant influence overthe investee after partial disposal of equity investment, the remaining equity investment shall be accounted for inaccordance with financial instruments recognition and measurement standards, and the difference between the fair valueand carrying amount at the date of the loss of control shall be charged to profit or loss for the current period.
When the equity investment disposed is acquired through business combination due to additional investment or otherreasons, in stand-alone financial statement, the remaining equity investment shall adopt cost method or equity method,any other comprehensive income and other owner’s interests previously recognized of the previously-held equityinvestment under the equity method shall be transferred proportionally. For those remaining equity investmentsaccounted for in accordance with financial instruments recognition and measurement standard after disposal, othercomprehensive income and other owner’s interests previously recognized shall be transferred to profit or loss in full.
(15) Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation, or both, includingleased land use rights, land use rights held and prepared for transfer after appreciation, and leased buildings ( Buildingsthat are leased after completion of self-construction or development activities and buildings that are being used for rentalin the future during construction or development).
The company uses the cost model to measure the existing investment property. For investment property measuredaccording to the cost model - the rental building adopts the same depreciation policy as the fixed assets of the company,and the land use right for rental is amortized according to the same amortization policy as the intangible assets.
(16) 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 excess of one fiscal year. No fixed asset may be recognizedunless it simultaneously meets the conditions 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.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is determined according to the categoryof assets, the useful life and the expected residual rate. If the components of the fixed assets have different useful livesor provide the economic benefits in a different way, then different depreciation rate or method shall be applied and thedepreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonably certain that theownership of the leased assets will be acquired upon expiry of lease, or over the shorter of lease term and useful life if itis not reasonably certain that the ownership of the leased assets will be acquired upon expiry of lease.Details of classification, depreciation period, residual value rate and annual depreciation rate are as follows:
Category Depreciation method
Depreciation
Residual Value Rate
| Period | (%) |
Depreciation Rate
| (%) | ||||
| Plants and Buildings | straight line method | 8-40 years | 0.00 | 2.50-12.50 |
| Machinery | straight line method | 4-18 years | 3.00 | 5.39-24.25 |
| Transportation and other equipment |
straight line method 5-18 years 3.00 5.39-19.40
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the
leased asset at the date when the option becomes exercisable;
(3) The lease term covers the major part of the use life of the leased asset; and
(4) The present value of the minimum lease payments on the lease beginning date amounts to substantially all of the fair
value of the leased asset on the lease beginning date.
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the presentvalue of the minimum lease payments on the lease beginning date as the initial book value, recognize the amount of theminimum lease payments as the initial book value of long-term account payable, and treat the difference between therecorded amount of the leased asset and the long-term account payable as unrecognized financing charges.
(17) Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred forbringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it hasreached its working condition for its intended use. In case the final project accounts have not been completed or approved,the asset shall be transferred to fixed assets at an estimated value by considering project budget, cost or actual cost of the
project and etc., and the deprecation of the said fixed assets shall be provided in accordance with the Company’saccounting policy since it has reached its working condition for its intended use. After the project accounts have beenapproved, the estimated values shall be adjusted based on the actual cost, but those provided deprecation shall not beadjusted.
(18) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings,ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction orproduction of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Otherborrowing costs shall be recognized 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 real estate, inventories and other assets, of whichthe acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(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 production activities for preparing assets eligible forcapitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended use
or sale have already started.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of theborrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, thecapitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed separately and isready for use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready foruse or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirelycompleted, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruptionperiod lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is anecessary step for making the qualified asset under acquisition and construction or production ready for the intended useor sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shallbe recognized as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition andconstruction or production of the asset restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank orinvestment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specificallyborrowed loan, those incurred before a qualified asset under acquisition, construction or production is ready for theintended use or sale shall be 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 the general borrowing bymultiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus thegeneral borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculatedand determined in light of the weighted average interest rate of the general borrowing.
(19) 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 and other necessary disbursementswhich may be directly attributable to bringing the intangible asset to the conditions for the expected purpose. If thepayment for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the costof the intangible asset shall be determined on the basis of the present value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial recognition is basedon its fair value, and the difference between the debt restructured and the fair value of the intangible assets are recognizedin the current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the fair value of the assetsobtained or surrendered can be reliably measured, the initial recognition of the asset obtained is based on the fair valueof the asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable. Forintangible assets obtained through non-monetary transactions which do not meet the above criteria, the initial recognitionis based on the book value of the assets surrendered and the relevant taxes payable. No gain or loss will be recognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period whenthe intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of theintangible asset, it shall be regarded as an intangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
| Item | Estimated useful life | Criteria |
| Land use right | 50 years | Land use right certificate |
The Company shall review the useful lives and amortization methods of intangible assets with limited useful lives ateach year end.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall be classified into researchexpenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and understandnew scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge is applied intocertain projects or designs for the manufacturing of new or substantially improved material, device and product beforecommercial manufacturing and use.
(20) Impairment of long-term assets
For long-term assets such as long-term equity investments, Investment property under the cost model, fixed assets,construction in progress, intangible assets with limited useful lives etc., the Company shall perform impairment tests atthe period end if there is clear indication of impairment. If the recoverable amounts of long-term assets are less than theircarrying amounts, the carrying amounts of the assets shall be written down to their recoverable amounts. The write-downs are recognized as impairment losses and charged to current profit and loss. The recoverable amounts of long-termassets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to bederived from the assets. The Company shall estimate its recoverable amount on an individual basis. Where it is difficultto do so, it shall determine the recoverable amount of the assets on the basis of the asset group to which the asset belongs.The term "assets group” refers to a minimum combination of assets by which the cash flows could be generatedindependently
The goodwill, intangible assets with uncertain useful life and intangible assets not meeting the expected condition foruse the shall be subject to an impairment test at least at the end of each year.
When the Company makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying valueof the business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Whereit is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. When apportioning the carryingvalue of the business reputation to the relevant asset groups or combinations of asset groups, it shall be apportioned onthe basis of the proportion of the fair value of each asset group or combination of asset groups to the total fair value ofthe relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair value reliably, it shallbe apportioned on the basis of the proportion of the carrying value of each asset group or combination of asset groups tothe total carrying value of the relevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containing businessreputation, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, theCompany shall first make an impairment test on the asset groups or combinations of asset groups not containing businessreputation, calculate the recoverable amount, compare it with the relevant carrying value and recognize the correspondingimpairment loss. Then the Company shall make an impairment test of the asset groups or combinations of asset groupscontaining business reputation, and compare the carrying value of these asset groups or combinations of asset groups(including the carrying value of the business reputation apportioned thereto) with the recoverable amount. Where the
recoverable amount of the relevant assets or combinations of the asset groups is lower than the carrying value thereof, itshall recognize the impairment loss of the business reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periods once recognized.
(21) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by current and subsequent accountingperiod, which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly.
(22) Contract liability
When either party to a contract has performed, the Company shall present the contract in the statement of financialposition as a contract asset or a contract liability, depending on the relationship between the Company’s performance andthe customer’s payment. If a customer pays consideration, or the Company has a right to an amount of considerationbefore the Company transfers a good or service to the customer, the Company shall present the contract as a contractliability. Contract assets and contract liabilities under the same contract are disclosed in net amount.
(23) 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 to the profit or loss or cost of an asset for the currentperiod.
Payments made by an enterprise of social security contributions for employees, payments of housing funds, and unionrunning costs employee education costs provided in accordance with relevant requirements shall, in the accounting periodin which employees provide services, be calculated according to prescribed bases and percentages in determining theamount of employee benefits.
The employee benefits which are non-monetary benefits shall be measured at fair value if it could be measured reliably.
2. Accounting treatment of post-employment benefits
The Company shall recognize, in the accounting period in which an employee provides service, pension fund andunemployment fund for employees as a liability according to the local government regulations. The amount shall be
calculated according to local prescribed bases 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.
In addition to basic pension fund, the company has also established an enterprise annuity payment system (supplementarypension fund) / enterprise annuity plan in accordance with the relevant policies of the national enterprise annuity system.The company pays a local social insurance institution's contribution / annuity plan according to a certain percentage ofthe total wages of employees, and the corresponding expenditure is included in the current profit and loss or related assetcosts.
3. Accounting treatment of termination benefits
The Company shall recognize an employee benefits liability for termination benefits, with a corresponding charge to theprofit or loss for the current period, at the earlier of the following dates: when the Company cannot unilaterally withdrawthe offer of termination benefits because of an employment termination plan or a curtailment proposal; or when theCompany recognizes costs or expenses related to a restructuring that involves the payment of termination benefits.
(24) Estimated liabilities
1. Recognition criteria of estimated liabilities
The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring) shall be recognized as anestimated liability when the 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 of performance of the obligation;
and
(3) The amount of the obligation can be measured in a reliable way.
2. Measurement of estimated liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for theperformance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value ofmoney, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the bestestimate shall be determined after discounting the 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 this range are equally likely tooccur, the best estimate shall be determined in accordance with the average estimate within the range, that is, the averageof the upper and lower limit.
If there is not a sequent range for the necessary expenses and if the outcomes within this range are not equally likely tooccur, 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 most likely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated and determined 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 an enterprise is expected to becompensated by a third party, the compensation shall be separately recognized as an asset only when it is virtually certainthat the reimbursement will be obtained. The amount recognized for the reimbursement shall not exceed the book valueof the estimated debts.
(25) Revenue
The company shall recognise revenue when (or as) the company satisfies a performance obligation when (or as) thecustomer obtains control of a promised good or service. Control of a promised good or service refers to the ability todirect the use of, and obtain substantially all of the remaining benefits from it.
If the contract contains two or more performance obligations, the company shall allocate the transaction price to eachindividual performance obligation based on the relative proportion of the stand-alone selling price of the goods orservices promised by each individual performance obligation on the date of the contract. The company measures revenuebased on the transaction price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the company expects to be entitled in exchange fortransferring promised goods or services to a customer, excluding amounts collected on behalf of third parties or amountsexpected to be returned to customers. The company shall consider the terms of the contract and its customary businesspractices to determine the transaction price. When determining the transaction price, the company shall consider theeffects of all of the following: variable consideration, the existence of a significant financing component in the contract,non-cash consideration, and consideration payable to a customer. The company determines the transaction price thatincludes variable consideration at 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 a significant financingcomponent in the contract, the company shall recognise revenue at an amount that reflects the price that a customer
would have paid for the promised goods or services if the customer had paid cash for those goods or services when (oras) they transfer to the customer, and use the effective interest method to amortize the difference between the transactionprice and the contract consideration during the contract period. If the interval between the transfer of control and thepayment by the customer does not exceed one year, the financing component will not be considered.
The company transfers control of a good or service over time and, therefore, satisfies a performance obligation andrecognises revenue over time, if one of the following criteria is met. Otherwise, the company satisfies the performanceobligation at a point in time.(a) the customer simultaneously receives and consumes the benefits provided by the company’s performance as thecompany performs;(b) the company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced;or(c) the company’s performance does not create an asset with an alternative use to the company and the company has anenforceable right to payment for performance completed to date.The company shall recognise revenue over time by measuring the progress towards complete satisfaction of thatperformance obligation, except where the performance progress cannot be reasonably determined. The companyconsiders the nature of the goods or services and adopts the output method or the input method to determine the progressof performance. Where the performance 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 thecosts incurred until such time that it can reasonably measure the outcome of the performance obligation.For performance obligations satisfied at a certain point in time, the company shall recognises revenue at the point whenthe customer obtains control of the relevant goods or services. To determine the point in time at which a customer obtainscontrol 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 the customer is presently obligedto pay for that;(b) The company has transferred the legal title of the goods to the customer, that is, the customer has the legal title to thegoods;(c) The company has transferred physical possession of the goods to the customer, that is, the customer has takenpossession of the goods;(d) The company has transferred the significant risks and rewards of ownership of the goods to the customer, that is, thecustomer has the significant risks and rewards of ownership of the goods;(e) The customer has accepted the promised goods or services.
(26) 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 another Standard, for example,Inventories, Property, Plant and Equipment or Intangible Assets, the company shall recognise an asset from the costsincurred to fulfil a contract only if those costs meet 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 satisfying performance obligations in thefuture; and(c) the costs are expected to be recovered.
The company shall recognise as an asset the incremental costs of obtaining a contract with a customer if the companyexpects to recover those costs.
An asset recognised in accordance with contract costs shall be amortised in consistent with the transfer to the customerof the goods or services to which the asset relates. The company may recognise the incremental costs of obtaining acontract as an expense when incurred if the amortisation 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 carrying amount of an asset relatedto contract assets exceeds:
(a) the remaining amount of consideration that the company expects to receive in exchange for the goods or services towhich the asset relates; less(b) the costs that relate directly to providing those goods or services and that have not been recognised as expenses.
The company shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised whenthe impairment conditions no longer exist or have improved. The increased carrying amount of the asset shall not exceedthe carrying amount that if no impairment loss had been recognised previously.
(27) Government Subsidies
1. Types
A government subsidy means the monetary or non-monetary assets obtained free of charge by the Company from thegovernment. Government subsidies consist of the government subsidies pertinent to assets and government subsidiespertinent to income.
Government subsidies related to assets are government subsidies whose primary condition is that an entity qualifying forthem should purchase, construct or otherwise acquire long-term assets. The government subsidies related to incomesrefers to government subsidies other than those related to assets.
The standard of the Company recognizing the government subsidies related to assets is: an entity qualifying for themshould purchase, construct or otherwise acquire long-term assets.
The standard of the Company recognizing the government subsidies related to income is: In addition to governmentsubsidies related to assets, government subsidies that have been clearly targeted for subsidies.
2. Recognition
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount of the assetsor recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss overthe periods during the useful lives of the relevant assets.
The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred income andtransferred to current profit or loss. Government subsidies to compensate expenses or losses already incurred shall berecognized in current profit and loss.
3. Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount of the assetsor recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss ona systematic basis over the periods during the useful lives of the relevant assets (Subsidies related to daily activitiesshould be recorded in Other Income. Subsidies that unrelated to daily activities should be recorded in Non-operatingIncome).
The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred income andtransferred to current profit or loss (Subsidies related to daily activities should be recorded in Other Income. Subsidiesthat unrelated to daily activities should be recorded in Non-operating Income) in the period during which the expensescompensation is recognized or deduct relevant cost or loss. Government subsidies to compensate expenses or lossesalready incurred shall be recognized in current profit and loss (Subsidies related to daily activities should be recorded inOther Income. Subsidies unrelated to daily activities should be recorded in Non-operating Income) or deduct relevantcost or loss.
The policy discount loans obtained by the company are divided into the following two situations and are separatelyaccounted for:
(a) The government allocates discounted funds to the loan bank, and the loan bank provides loans to the company at apolicy preferential interest rate. The preferential interest rate is used to calculate the relevant borrowing costs.
(b) If the government directly allocates the discounted funds to the company, the company will offset the relevantborrowing costs with the corresponding discounts, directly accounted for the current profit or loss or recognized asdeferred income.
(28) Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax assets arising from a deductible temporary difference to the extentof the amount of the taxable income which it is most likely to be obtained and which can be deducted from the deductibletemporary difference. As for any 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 of future taxable income tobe offset by the deductible loss or tax deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain limited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognition of goodwill;initial recognition of an asset or liability in a transaction or event that is not a business combination and at the time ofthe transaction, affects neither accounting profit nor taxable profit (tax loss).
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entity has a legally enforceableright to set off current tax assets against current tax liabilities; and (b) the deferred tax assets and the deferred tax liabilitiesrelate to income taxes levied by the same taxation authority on either:(i) the same taxable entity; or (ii) different taxableentities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle theliabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets areexpected to be settled or recovered.
(29) Leases
1. Accounting treatment of operating lease
(1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using the
straight-line method over each period of the lease term. The initial direct costs paid by the Company shall be recordedinto the profits and losses of the current period
If the lessor has shouldered any expense related to the lease which shall have been borne by the Company, the Companyshall deduct these expenses from the total rental expense and the remaining rental expense shall be allocated to eachperiod during the lease term
(2) The rents collected from operating leases shall be recorded in the profits and losses of the current period by using the
straight-line method over each period of the whole lease term in which free lease period is included. The initial directcosts paid by the Company shall be recorded into the profits and losses of the current period. The initial direct costs shallbe capitalized if it is material, and be allocated to each period as per the basis for rental revenue recognition.If the Company has shouldered any expense related to the lease which shall have been borne by the lessee, the companyshall deduct these expenses from the total rental revenue and the remaining rental revenue shall be allocated to eachperiod during the lease term.
2. Accounting treatment of financial leasing
(1) Leased in asset
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the present valueof the minimum lease payments on the lease beginning date as the initial book value, recognize the amount of theminimum lease payments as the initial book value of long-term account payable, and treat the balance between therecorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The lesseeshall adopt the effective interest rate method to calculate and recognize the financing charge in the current period. Theunrecognized financing charge shall be amortized to each period during the lease term. Initial direct costs incurred bythe Company shall be recorded in the value of the leased asset.
(2) Leased out asset
On the lease beginning date, a lessee shall record the balance between the sum of finance lease receivables plusunguaranteed residual value and the present value of the sum as unrealized financing income, and record rental as revenuewhen received for each period in the future. Initial direct costs incurred by the Company related to the leased asset shallbe recorded in the initial measurement of the finance lease receivables, and reduce the amount of revenue recognizedduring the lease term.
(30) Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for sale by the Company, and can bedistinguished separately in operating and preparing financial statements when one of the following conditions is met:
The component stands for an independent main business or a major business area;The component is a part of disposal plan of an independent main business or a major business area;The component is a subsidiary which is acquired only for sale again.
(31) Major accounting estimates and judgments
When preparing financial statements, the Company's management needs to use estimates and assumptions, which willaffect the application of accounting policies and the amount of assets, liabilities, income and expenses. Actual conditions
may differ from these estimates. The management of the company continuously evaluates the judgment of keyassumptions and uncertainties involved in the estimation, and the impact of changes in accounting estimates will berecognized 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 the expected credit loss rate, anddetermines the expected credit loss rate based on the default probability and the default loss rate. When determining theexpected credit loss rate, the company 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 include the risk of economic downturn, the expected increasein unemployment rate, changes in the external market environment, technological environment and customer conditions.The Company regularly monitors and reviews assumptions related to the calculation of expected credit losses.
(2) Inventory Impairment
As mentioned in note (11) Inventory under “3 Significant accounting policies and accounting estimates”, the Companyregularly estimates the net realizable value of the inventory, and recognizes the difference in inventory cost higher thanthe net realizable value. When estimating the net realizable value of inventory, the Company considers the purpose ofholding the inventory and uses the available information as the basis for estimation, including the market price of theinventory and the Company's past operating costs. The actual selling price, completion cost, sales expenses and taxes ofthe inventory may change according to changes in market sales conditions, production technology, or the actual use ofthe inventory. Therefore, the amount of inventory depreciation reserve may change according to the above reasons.Adjustments to the inventory impairment will affect the current profit and loss.
(3) Impairment of other assets except inventory and financial assets
As mentioned in note (20) Long-term Asset Impairment under “3 Significant accounting policies and accountingestimates”, the company performs an impairment assessment on assets other than inventory and financial assets on thebalance sheet date to determine whether the recoverable amount of the asset has fallen to a lower level than its bookvalue. If the situation shows that the book value of the long-term assets may not be fully recovered, the relevant assetswill be deemed to be impaired and the impairment loss will be recognized accordingly.
The recoverable amount is the higher of the net value of the fair value of the asset (or asset group) minus the disposalexpenses and the present value of the asset (or asset group) 's expected future cash flow. Because the Company can notreliably obtain the public market price of assets (or asset groups), and can not reliably and accurately estimate the fair
value of assets. Therefore, the Company regards the present value of the expected future cash flow as the recoverableamount. When estimating the present value of future cash flows, it is necessary to make a significant judgment on theoutput, selling price, related operating costs of the products produced by the asset (or asset group), and the discount rateused in calculating the present value. The Company will use all available relevant information when estimating therecoverable amount, including the prediction of output, selling price and related operating costs based on reasonable andsupportable assumptions.
(4) Depreciation and amortization of assets such as fixed assets and intangible assets
As described in note (16) Fixed Assets and note (19) Intangible Assets under “3 Significant accounting policies andaccounting estimates”, the company shall accrue depreciation for the fixed assets and amortization for intangible assetswithin the useful life after considering their residual value. The company regularly reviews the useful life of relatedassets to determine the amount of depreciation and amortization expenses to be included in each reporting period. Theuseful life of assets is determined by the company based on past experience with similar assets and in combination withanticipated technological changes. If the previous estimates change significantly, the depreciation and amortizationexpenses 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 the unrecovered tax losses anddeductible temporary differences, the relevant deferred tax assets are calculated and confirmed on the basis of theapplicable income tax rate during the period when the asset is expected to be recovered and the amount of taxable incomeis limited to deductible tax losses and deductible temporary differences likely to be obtained by the Company. TheCompany needs to use judgment to estimate the time and amount of future taxable income, and make reasonableestimates and judgments on the future applicable income tax rate according to the current tax policy and other relatedpolicies to determine the deferred 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 the management's estimate, thedifference will have an impact on the amount of deferred tax assets.
(32) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during the current reporting period
Implementation of the "Accounting Standards for Business Enterprises No. 14 - Revenue" (revised in 2017)
(hereinafter referred to as the "New Revenue Standards")The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017. Therevised standard stipulates that the initial implementation of the standard should adjust the amount of retained earningsand other related items in the financial statements at the beginning of the year based on the cumulative impact, and noadjustments should be made to comparable period information.
The company implements the new revenue standard from January 1, 2020. According to the standard, the companyonly adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financialstatements for the cumulative impact of contracts that have not been completed on the date of first implementation,and the comparative financial statements do not adjust. The major impact of the implementation of the regulation areas follows:
Change of accounting policy contentand reason
Affected items
Consolidated Financial
| January 1, 2020 | |
| statement | |
Parent company
Reclassify advance from customers to
| financial statement | |||
| contract liabilities. | Advance from customers | -4,429,821,526.79 | -5,597,707,687.22 |
| Contract liabilities | 4,429,821,526.79 | 5,597,707,687.22 |
Compared with the previous revenue standards, the impact of the implementation of the new revenue standards on therelevant items for the period from January to June in 2020 is as follows:
Affected items
| June 30, 2020 | ||
| Consolidated Financial statement | Parent company financial statement | |
| Contract liabilities | 4,658,022,515.99 | 5,736,618,018.47 |
| Advance from customers | -4,658,022,515.99 | -5,736,618,018.47 |
There is no impact to the items in the comprehensive income statement.
2. Change of accounting estimation
(1) The company’s principle for determining the applicable point of time for changes in accounting estimates:
According to Article 19 of the "Accounting Standards for Business Enterprises No. 4 - Fixed Assets", the enterpriseshould review the useful life, estimated net residual value and depreciation method of fixed assets at least at the endof each year. If the estimated useful life is different from the original estimate, the useful life of the fixed asset shallbe adjusted.
(2) Major change of accounting estimate during the current reporting period
Change of accounting estimation
Approval procedure
Date of
| content and reason | application |
Affected items and amountContent: The company adjusted theuseful life of some of the fixed
On January 31, 2020, theeighth meeting of the
| assets since January 1, 2020. | company's eighth board of |
January 1, 2020
Accumulative depreciation: RMB -206,452,050.12;
Change of accounting estimation
Approval procedure
Date of
| content and reason | application |
Affected items and amountReason: At the end of 2019, thecompany evaluated the actualcondition and depreciation period offixed assets, and believed that thecompany’s production equipmenthad a relatively high level ofequipment and technical content,and maintained good conditions.The company’s cumulativeinvestment in equipmentmaintenance costs from 2010 to2019 was RMB 11.959 billion. Tomake the depreciation period offixed assets closer to the actualservice life, it is necessary to adjust
directors reviewed andapproved the "Proposal onAdjusting the Useful Life ofCertain Fixed Assets"
206,452,050.12.
3. Adjustments of the beginning balance due to the first implementation of new revenue standards:
Consolidated statement of financial position:
Items
Ending balance ofthe previous year
Beginning balanceof the current year
the useful life of some fixed assets.Adjustment
Reclassification Remeasurement TotalAdvance fromcustomers
4,429,821,526.79 -4,429,821,526.79 -4,429,821,526.79Contract
Adjustmentliabilities
4,429,821,526.79 4,429,821,526.79 4,429,821,526.79
Statement of financial position of the parent company
VI. Taxes
1. Major type of taxes and corresponding tax rates
| Tax | Taxation Method | Tax Rate (%) |
Value-added Tax (VAT)
The balance of output VAT calculated based onproduct sales and taxable services revenue inaccordance with the tax laws after subtracting the
6, 9, 13
| deductible input VAT of the period | ||
| City maintenance and construction tax | Based on VAT and business tax actually paid | 7, 5 |
| Educational surcharges | Based on VAT and business tax actually paid | 3, 2 |
| Enterprise income tax | Based on taxable profit | 25 |
Notes to whether there is different income tax rate
Tax payer Income tax rate
VII. Notes to the consolidated financial statements
(1) Cash at bank and on hand
| Items | 30 June 2020 | 31 December 2019 |
| Cash on hand | 7,110.40 | 5,588.98 |
| Cash at bank | 11,417,585,553.12 | 13,441,409,399.60 |
| Other monetary funds | 5,370,886,642.41 | 4,974,429,409.19 |
| Total | 16,788,479,305.93 | 18,415,844,397.77 |
| Total amount deposited abroad |
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
| Items | 30 June 2020 | 31 December 2019 |
| Margin for bank acceptance bill | 4,947,574,509.41 | 4,803,950,250.12 |
| Margin for letter of credit | 419,360,000.00 | 166,527,026.07 |
Items
Ending balance of
Beginning balance
| the previous year | of the current year | Adjustment | ||
| Reclassification | Remeasurement | Total | ||
Advance from
5,597,707,687.22 -5,597,707,687.22 -5,597,707,687.22Contract
| customers |
| liabilities |
5,597,707,687.22 5,597,707,687.22 5,597,707,687.22
| Items | 30 June 2020 | 31 December 2019 |
| Loan margin | 3,330,000.00 | 3,330,000.00 |
| Others | 622,133.00 | 622,133.00 |
| Total | 5,370,886,642.41 | 4,974,429,409.19 |
(2) Accounts receivable
1. Accounts receivable disclosed by aging
| Items | 30 June 2020 | 31 December 2019 |
| Within 1 year (inclusive) | 186,365,796.17 | 187,728,755.63 |
| 1-2 years (inclusive) | 32,428,477.61 | 31,659,160.02 |
| 2-3 years (inclusive) | 24,358,369.27 | 24,710,744.49 |
| Over 3 years | 174,707,324.46 | 177,928,572.30 |
| Total | 417,859,967.51 | 422,027,232.44 |
| Less: Provision for bad debts | 183,064,080.16 | 186,330,966.78 |
| Total | 234,795,887.35 | 235,696,265.66 |
2. Accounts receivable disclosed by category
Items
| 30 June 2020 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage
Amount
| (%) | Bad debts ratio (%) | |||
| Tested for impairment individually |
47,762,337.18 11.43 47,762,337.18 100.00
370,097,630.33 88.57 135,301,742.98 36.56 234,795,887.35Include:
Tested for impairment byportfolioPortfolio 1: Aging portfolio
| Portfolio 1: Aging portfolio | 370,097,630.33 | 88.57 | 135,301,742.98 | 36.56 | 234,795,887.35 |
| Total | 417,859,967.51 | 100.00 | 183,064,080.16 | 234,795,887.35 |
Items
| 31 December 2019 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage
Amount
| (%) | Bad debts ratio (%) | |||
| Individually significant and tested for impairment individually |
47,762,337.18 11.32 47,762,337.18 100.00
374,264,895.26 88.68 138,568,629.60 37.01 235,696,265.66Other insignificant items but
| Accounts receivable tested for impairment by portfolio |
| tested for impairment individually |
| Total | 422,027,232.44 | 100.00 | 186,330,966.78 | 235,696,265.66 |
Accounts receivables tested for impairment individually
Company
Gross carrying
| 30 June 2020 | |
| amount | |
Provision for bad
Bad debts ratio
| debts | (%) |
Reason
| Metallurgical Furnace Material Co., Ltd |
47,762,337.18 47,762,337.18 100.00 Halt operation
| Total | 47,762,337.18 | 47,762,337.18 |
Accounts receivable tested for impairment by aging portfolio:
Items
| 30 June 2020 | |||
| Gross carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year (inclusive) | 186,365,796.17 | 1,863,657.96 | 1.00 |
| 1-2 years (inclusive) | 32,428,477.61 | 1,621,423.88 | 5.00 |
| 2-3 years (inclusive) | 24,358,369.27 | 4,871,673.85 | 20.00 |
| Over 3 years | 126,944,987.28 | 126,944,987.28 | 100.00 |
| Total | 370,097,630.33 | 135,301,742.98 | |
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 3,266,886.60.
4. No accounts receivable has been written off during the current period.
5. Top five debtors at the end of period
Company
Gross carrying amount
Percentage of total Accounts
| 30 June 2020 | ||
| receivable (%) | ||
Provision for
| bad debts | |||
| The first | 51,186,799.05 | 12.25 | 589,234.48 |
| The second | 47,762,337.18 | 11.43 | 47,762,337.18 |
| The third | 14,246,791.47 | 3.41 | |
| The fourth | 13,192,766.29 | 3.16 | |
| The fifth | 11,524,466.74 | 2.76 | 130,131.74 |
| Total | 137,913,160.74 | 33.01 | 48,481,703.40 |
6. Accounts receivable derecognized due to the transfer of financial assets
None
7. The amount of assets and liabilities formed by transferring accounts receivable and continuing to be
involvedNone
(3) Accounts receivable financing
1. Accounts receivable financing by category
| Item | 30 June 2020 | 31 December 2019 |
| Notes Receivable | 4,072,660,868.85 | 2,117,763,147.67 |
| Including: Bank acceptance bill | 4,059,350,868.85 | 2,108,970,139.40 |
| Commercial acceptance bill | 13,310,000.00 | 8,793,008.27 |
| Accounts receivable | 309,461,081.12 | 311,779,314.21 |
| Total | 4,382,121,949.97 | 2,429,542,461.88 |
Note: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair valuethrough other comprehensive income.
2. Provision for impairment of accounts receivable financing
None
3. The pledged acceptance bill at the end of the period
| Items | 30 June 2020 |
| Bank acceptance bill | 759,753,834.45 |
| Commercial acceptance bill | |
| Total | 759,753,834.45 |
4. The amount of notes receivable endorsed over but not yet matured at the end of the period
| Items | Derecognized ending balance | Unrecognized ending balance |
| Bank acceptance bill | 4,879,438,530.74 | |
| Commercial acceptance bill | ||
| Total | 4,879,438,530.74 |
5. No notes receivable has been transferred into accounts receivable due to inability of drawer to meet
acceptance bill at the end of the period
(4) Prepayments
1. Prepayments disclosed by aging
Aging
| 30 June 2020 | 31 December 2019 | |||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year (inclusive) | 1,277,487,430.52 | 99.52 | 1,284,678,069.97 | 99.51 |
| 1-2 years (inclusive) | 6,011,981.75 | 0.48 | 6,279,487.94 | 0.49 |
| 2-3 years (inclusive) | 53,900.20 | 53,900.20 | ||
| Over 3 years | 36,000.00 | 36,000.00 | ||
| Total | 1,283,589,312.47 | 100.00 | 1,291,047,458.11 | 100.00 |
Notes: As of June 30, 2020, there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the end of the period
| Name of the company | Amount | Percentage (%) |
| The First | 813,856,225.94 | 63.40 |
| The Second | 75,732,564.05 | 5.90 |
| The Third | 35,489,495.22 | 2.76 |
| The Fourth | 27,512,085.89 | 2.14 |
| The Fifth | 22,368,060.00 | 1.74 |
| Total | 974,958,431.09 | 75.96 |
(5) Other receivables
| Items | 30 June 2020 | 31 December 2019 |
| Interest receivables | 32,395,784.72 | 20,504,422.47 |
| Dividend receivables | ||
| Other receivables | 126,011,346.99 | 152,302,614.30 |
| Total | 158,407,131.71 | 172,807,036.77 |
1．Interest receivable
(1) Interest receivable disclosed by category
| Items | 30 June 2020 | 31 December 2019 |
| Deposit interest | 32,395,784.72 | 20,504,422.47 |
| Subtotal | 32,395,784.72 | 20,504,422.47 |
| Less: provision for bad debts | ||
| Total | 32,395,784.72 | 20,504,422.47 |
(2) The company has no significant overdue interest and provision for bad debts.
2．Other receivables
(1) Other receivables disclosed by aging
| Items | 30 June 2020 | 31 December 2019 |
| Within 1 year (inclusive) | 108,817,588.26 | 135,162,016.85 |
| 1-2 years (inclusive) | 15,087,613.32 | 15,306,496.22 |
| 2-3 years (inclusive) | 3,530,561.08 | 3,479,413.70 |
| Over 3 years | 65,222,052.19 | 65,222,052.19 |
| Total | 192,657,814.85 | 219,169,978.96 |
| Less: Provision for bad debts | 66,646,467.86 | 66,867,364.66 |
| Total | 126,011,346.99 | 152,302,614.30 |
(2) Information of provision for bad debts
Provision for baddebts
| Stage one | Stage two | Stage three |
Total12-monthexpected credit
losses
lifetime expected credit
losses(credit impairment has not
lifetime expected credit
losses(credit impairment has
| occurred) | already occurred) | |||
| Beginning balance | 9,494,109.69 | 57,373,254.97 | 66,867,364.66 |
Provision, transferin, transfer back,transfer out during
| the current period |
-220,896.80
-220,896.80
Write-back during
| the current period |
Write-off during the
| current period | ||||
| Other changes | ||||
| Ending balance | 9,273,212.89 | 57,373,254.97 | 66,646,467.86 |
Changes in the gross carrying amount of other receivables are as follows:
Provision for baddebts
| Stage one | Stage two | Stage three |
Total12-month expected
credit losses
lifetime expectedcredit losses(credit impairment
lifetime expected credit
losses(credit impairment has
| has not occurred) | already occurred) | |||
| Beginning balance | 137,511,976.11 | 24,284,747.88 | 57,373,254.97 | 219,169,978.96 |
| Increase | ||||
| Decrease | 26,291,267.31 | 220,896.80 | 26,512,164.11 | |
| Other changes | ||||
| Ending balance | 111,220,708.80 | 24,063,851.08 | 57,373,254.97 | 192,657,814.85 |
(3) Other receivables disclosed by nature
| Nature | 30 June 2020 | 31 December 2019 |
| Accounts | 183,332,767.17 | 209,700,618.22 |
| Others | 9,325,047.68 | 9,469,360.74 |
| Total | 192,657,814.85 | 219,169,978.96 |
(4) Top five debtors at the end of the period
Company Nature or content Amount Aging
Percentage of total other
Provision for bad
| receivables (%) | debts | ||||
| The First | Accounts | 9,648,111.00 | within 1 year | 5.01 | |
| The Second | Accounts | 9,505,576.53 | within 1 year | 4.93 | |
| The Third | Accounts | 6,804,946.27 | 2-3 years | 3.53 | |
| The Fourth | Accounts | 3,756,448.28 | 1-2 years | 1.95 | 2,000.00 |
The Fifth Accounts 2,661,194.04
within 1 year to
1.38 2,465,166.01
| over 3 years | |||||
| Total | 32,376,276.12 | 16.81 | 2,467,166.01 |
(5) There is no other receivables relates to government subsidies at the end of the reporting period.
(6) There is no other receivables derecognized due to the transfer of financial assets at the end of the reporting period.
(7) There is no transfer of other receivables and continued involvement in the amount of assets and liabilities formed at
the end of the reporting period.
(6) Inventories
1. Inventories disclosed by category
Items
| 30 June 2020 | 31 December 2019 |
Gross carrying
Impairment Book value
Gross carrying
| amount | amount |
Impairment Book value
Raw materialand main
3,486,744,568.70 26,986,533.69 3,459,758,035.01 3,737,655,945.87 26,986,533.69 3,710,669,412.18Work inprocess andself-madesemi-finished
| material |
| product |
1,455,369,031.61 32,278,622.48 1,423,090,409.13 1,302,249,713.48 25,995,508.16 1,276,254,205.32
Finished
4,729,490,890.24 26,299,958.86 4,703,190,931.38 2,730,735,542.67 17,261,474.56 2,713,474,068.11
| products | ||||||
| Total | 9,671,604,490.55 | 85,565,115.03 | 9,586,039,375.52 | 7,770,641,202.02 | 70,243,516.41 | 7,700,397,685.61 |
2. Impairment of inventory
Category31 December 2019
| Increase | Decrease |
30 June 2020
Provision Others
Write-back or
OthersRaw material and main
| write-off | ||
| material |
26,986,533.69 26,986,533.69Work in process andself-made semi-finished
25,995,508.16 32,278,622.48 25,995,508.16 32,278,622.48
| product | ||||||
| Finished products | 17,261,474.56 | 26,299,958.86 | 17,261,474.56 | 26,299,958.86 | ||
| Total | 70,243,516.41 | 58,578,581.34 | 43,256,982.72 | 85,565,115.03 |
(7) Other current assets
| Items | 30 June 2020 | 31 December 2019 |
| Prepaid enterprise income tax | 182,484,352.23 | 182,484,616.27 |
| VAT input tax | 101,722,696.39 | 130,420,207.82 |
| Total | 284,207,048.62 | 312,904,824.09 |
(8) Long-term equity investment
Investees
December
2019
30 June
2020
TotalImpairmentAddInvestment
ReduceInvestment
Income or loss on
investmentrecognized under
| Increase/decrease | ||
| the equity method | ||
OtherComprehensiveIncome
OtherEquityChanges
| Adjustment | Declaration of |
CashDividends or
Provision
Others
| Profit | ||
| 1 |
．
| Joint Venture | |||||||||||
| Subtotal | |||||||||||
| 2 |
．
| Associated Enterprise |
Zhejiang Bengang Jingrui
2,642,998.70 29,304.00 2,672,302.70
| Steel Processing Co., Ltd.. | |||||||||||
| Subtotal | 2,642,998.70 | 29,304.00 | 2,672,302.70 | ||||||||
| Total | 2,642,998.70 | 29,304.00 | 2,672,302.70 |
(9) Other equity instrument investment
| Items | 30 June 2020 | 31 December 2019 |
| Suzhou Bengang Industrial Co., Ltd. | 3,888,980.00 | 3,888,980.00 |
| Sinosteel Shanghai Steel Processing Co., Ltd. | ||
| Northeast Special Steel Group Co., Ltd. | 1,037,735,849.00 | 1,037,735,849.00 |
| Guangzhou Benpu Auto Board Sales Co., Ltd. | 200,000.00 | 200,000.00 |
| Wuhan Bengang Yuanhong Trading Co., Ltd | 200,000.00 | |
| Total | 1,042,024,829.00 | 1,041,824,829.00 |
Notes:
The item "Other equity instrument investment" reflects the ending book value of the non-trading equity instrumentinvestment designated by the company as measured at fair value at fair value through other comprehensive incomeon the balance sheet date.The company holds 15% equity in Sinosteel Shanghai Steel Processing Co., Ltd.The 10% equity of Northeast Special Steel Group Co., Ltd. held by the company has been pledged to Bank ofDalian Co., Ltd., Shenyang branch.
(10) Fixed assets
1. Fixed assets and Disposal of fixed assets
| Items | 30 June 2020 | 31 December 2019 |
| Fixed assets | 24,952,427,383.86 | 26,123,375,492.40 |
| Disposal of fixed assets | ||
| Total | 24,952,427,383.86 | 26,123,375,492.40 |
2. Details of fixed assets
Items Buildings Machinery
Transportationequipment and
Total
| others | ||
| 1 |
．
| Gross carrying amount | ||||
| (1) 31 December 2019 | 12,321,783,218.79 | 47,625,624,131.28 | 908,284,781.31 | 60,855,692,131.38 |
| (2) Increase in current period | 8,162,112.36 | 22,887,140.10 | 19,679,682.35 | 50,728,934.81 |
| Including: Purchase |
Transferred
8,162,112.36 22,887,140.10 19,679,682.35 50,728,934.81
Items Buildings Machinery
Transportationequipment and
Total
| others | ||||
| Merging | ||||
| Others | ||||
| (3) Decrease in current period | 6,057,064.23 | 70,745,410.85 | 10,856,244.37 | 87,658,719.45 |
| Including: Disposal | 6,057,064.23 | 70,745,410.85 | 10,856,244.37 | 87,658,719.45 |
| Others | ||||
| (4) 30 June 2020 | 12,323,888,266.92 | 47,577,765,860.53 | 917,108,219.29 | 60,818,762,346.74 |
2．Total accumulated
| depreciation | ||||
| (1) 31 December 2019 | 5,843,160,062.67 | 28,243,587,548.42 | 604,346,279.82 | 34,691,093,890.91 |
| (2) Increase in current period | 148,749,130.68 | 959,941,877.91 | 92,572,359.88 | 1,201,263,368.47 |
| Including: Provision | 148,749,130.68 | 959,941,877.91 | 92,572,359.88 | 1,201,263,368.47 |
| Others | ||||
| (3) Decrease in current period | 2,826,190.62 | 51,865,091.34 | 12,553,762.61 | 67,245,044.57 |
| Including: Disposal | 2,826,190.62 | 51,865,091.34 | 12,553,762.61 | 67,245,044.57 |
| Others | ||||
| (4) 30 June 2020 | 5,989,083,002.73 | 29,151,664,334.99 | 684,364,877.09 | 35,825,112,214.81 |
| 3 |
．
| Total impairment | ||||
| (1) 31 December 2019 | 38,596,028.99 | 2,626,719.08 | 41,222,748.07 | |
| (2) Increase in current period | ||||
| Including: Provision | ||||
| Others | ||||
| (3) Decrease in current period | ||||
| Including: Disposal | ||||
| Others | ||||
| (4) 30 June 2020 | 38,596,028.99 | 2,626,719.08 | 41,222,748.07 |
4．Total net book value of
| Fixed assets | ||||
| (1) 30 June 2020 | 6,296,209,235.20 | 18,423,474,806.46 | 232,743,342.20 | 24,952,427,383.86 |
| (2) 31 December 2019 | 6,440,027,127.13 | 19,379,409,863.78 | 303,938,501.49 | 26,123,375,492.40 |
3. Fixed assets idled temporarily
| Items | Gross carrying amount | Accumulated depreciation | Impairment | Book value |
| Buildings | 93,833,538.80 | 58,818,849.47 | 35,014,689.33 | |
| Machinery | 1,224,688.89 | 1,149,022.46 | 75,666.43 |
Transportation
1,042,125.89 1,042,125.89
| equipment and others | ||||
| Total | 96,100,353.58 | 61,009,997.82 | 35,090,355.76 |
4. Fixed assets leased in through financial leasing
As of the end of the current reporting period, the original value of the fixed assets leased in through financialleasing was RMB 1,050,748,776.34, all of which were leased from the related party Liaoning Hengyi FinancialLeasing Co., Ltd. For details, please refer to note (5) 2. Lease under note 10.
5. Fixed assets leased out by operating lease
| Items | Book value |
| Buildings | 8,479,821.37 |
| Machinery | |
| Total | 8,479,821.37 |
6. Fixed assets without property rights certificates at the end of the period
| Items | Book value | Reason |
| Buildings | 1,070,014,263.61 | To be handled |
(11) Construction in progress
1. Construction in progress and Construction materials
| Items | 30 June 2020 | 31 December 2019 |
| Construction in progress | 2,560,710,384.30 | 1,820,264,689.19 |
| Project materials | 8,598,323.97 | 13,588,883.39 |
| Total | 2,569,308,708.27 | 1,833,853,572.58 |
2. Details of construction in progress
Items
| 30 June 2020 | 31 December 2019 |
Gross carrying amount
impairment
Book value Gross carrying amount Total impairment Book value
| Total | ||
| Energy-saving renovation project of No. 5 blast furnace in ironworks |
756,972,673.01 756,972,673.01 491,069,345.30 491,069,345.30
| Special steel mill renovation project | 135,994,865.49 | 135,994,865.49 | 126,479,522.35 | 126,479,522.35 | ||
| 1# converter energy saving and environmental protection transformation |
132,515,955.85 132,515,955.85 148,803,402.52 148,803,402.52
| Steelmaking Plant No. 8 Casting Machine Project | 193,625,008.01 | 193,625,008.01 | 100,460,943.24 | 100,460,943.24 | ||
| Reconstruction project of three power plant workshop | 3,861,154.59 | 3,861,154.59 | ||||
| Transformation of No. 2 Casting Machine in Steelmaking Plant |
82,682,564.04 82,682,564.04 81,419,913.88 81,419,913.88
| CCPP power generation project | 115,133,501.01 | 115,133,501.01 | 85,320,752.59 | 85,320,752.59 | ||
| Environmental protection renovation project of No. 4-6 converter |
95,177,941.15 95,177,941.15 69,541,903.74 69,541,903.74
| Special Steel Electric Furnace Upgrade Project | 88,959,809.91 | 88,959,809.91 | 62,311,284.01 | 62,311,284.01 | ||
| 360 square meter sintering machine | 73,248,631.59 | 73,248,631.59 | 60,930,506.79 | 60,930,506.79 | ||
| 360 square meter sintering machine waste heat utilization | 56,547,049.50 | 56,547,049.50 | 55,089,094.50 | 55,089,094.50 | ||
| No. 7 blast furnace dry dust removal and energy-saving transformation of TRT power generation |
70,288,456.71 70,288,456.71 40,993,916.95 40,993,916.95
| 1700 Hot Rolling Improvement | 88,288,386.41 | 88,288,386.41 | 39,806,201.09 | 39,806,201.09 | ||
| Coking plant gas deamination and sulfur ammonia maintenance project |
48,543.69 48,543.69
38,600,796.92 38,600,796.92 34,339,392.96 34,339,392.96
| 5#-7# Oxygen Generator Nitrogen Increasing and Energy Saving Renovation | ||||||
| 6#Blast furnace environmental protection overhaul project | 65,177,829.19 | 65,177,829.19 | 30,937,257.41 | 30,937,257.41 | ||
| Two sets of dust collectors for the second sintered finished product in ironworks |
1,255,783.76 1,255,783.76 29,954,354.78 29,954,354.78
27,358.49 27,358.49
| Power plant 4-5# coke oven dry quenching waste heat steam utilization project |
| Plate transfer to Liaoning Coal Chemical Coke Oven Gas Project |
21,840,791.70 21,840,791.70 21,840,791.70 21,840,791.70
22,104,039.00 22,104,039.00 20,685,421.72 20,685,421.72
| Overall improvement of Benxi Steel's manufacturing management | ||||||
| 8#9# Coke oven wastewater advanced treatment | 20,335,268.74 | 20,335,268.74 | 20,335,268.74 | 20,335,268.74 | ||
| Others | 498,023,975.54 | 498,023,975.54 | 299,945,414.92 | 299,945,414.92 | ||
| Total |
2,560,710,384.30 2,560,710,384.30 1,820,264,689.19 1,820,264,689.19
3. Changes in important construction projects in the current period
Items Budget 31 December 2019
Increase duringcurrent period
Transferredto fixed asset
duringcurrentperiod
Otherdecreaseduringcurrentperiod
30 June 2020
Projectcumulativeinvestmentaccounted forthe proportionof the budget
(%)
Projectprogress
(%)
Accumulated
amount of
interestcapitalization
Including：
Interestcapitalization
amount incurrent period
Interestcapitalization rate incurrentperiod (%)
Sources
offunds
renovationproject of No. 5blast furnace in
| ironworks |
1,500,000,000.00 491,069,345.30 265,985,896.52 82,568.81 756,972,673.01 50% 50% 22,681,832.49 4,299,372.31 4.35
Self-raised&
Other
mill renovation
| project |
596,070,000.00 126,479,522.35 9,515,343.14 135,994,865.49 24% 25% 2,780,476.54 798,549.83 4.35
Self-raised&
Other
energy savingandenvironmentalprotection
| transformation |
218,000,000.00 148,803,402.52 -16,287,446.67 132,515,955.85 61% 70% 1,244,218.10 295,400.00 4.35
Self-raised&
Other
Plant No. 8Casting
| Machine Project |
643,410,000.00 100,460,943.24 93,164,064.77 193,625,008.01 30% 40%
Self-raised&
Other
high-strengthsteel renovation
| project |
6,134,980,000.00 34,614,140.91 2,037,588.85 32,576,552.06 96% 100% 857,867,059.71
Self-raised&
Other
project of threepower plant
| workshop |
593,990,000.00 3,861,154.59 3,861,154.59 99% 98% 34,827,795.34
Self-raised&
Other
of No. 2 CastingMachine inSteelmaking
| Plant |
100,900,000.00 81,419,913.88 1,262,650.16 82,682,564.04 82% 85% 129,125.71
Self-raised&
Other
Items Budget 31 December 2019
Increase duringcurrent period
Transferredto fixed asset
duringcurrentperiod
Otherdecreaseduringcurrentperiod
30 June 2020
Projectcumulativeinvestmentaccounted forthe proportionof the budget
Projectprogress
(%)
Accumulated
amount of
interestcapitalization
Including：
Interestcapitalization
amount incurrent period
Interestcapitalization rate incurrentperiod (%)
Sources
offunds
| (%) | ||
| CCPP power |
generation
1,060,000,000.00 85,320,752.59 29,812,748.42 115,133,501.01 11% 10% 2,587,646.72 60,479.95 4.35
Self-raised&Other
| project |
| Environmental |
protectionrenovationproject of No. 4-
270,000,000.00 69,541,903.74 25,636,037.41 95,177,941.15 35% 40% 1,800,233.51 548,620.48 4.35
Self-raised&
Other
| 6 converter |
| Special Steel |
Electric Furnace
1,617,610,000.00 62,311,284.01 26,648,525.90 88,959,809.91 5% 10%
Self-raised&
Other
| Upgrade Project |
| 360 square |
meter sintering
1,284,032,000.00 60,930,506.79 12,318,124.80 73,248,631.59 98% 90%
Self-raised&
Other
| machine | ||||||||||||
| Total | 14,018,992,000.00 | 1,226,337,574.42 | 486,531,239.95 | 2,120,157.66 | 1,710,748,656.71 | 923,918,388.12 | 6,002,422.57 |
4. There is no impairment of construction in progress during the current period.
5. Construction materials
Items
| 30 June 2020 | 31 December 2019 |
Gross carrying
Impairment Book value
Gross carrying
| amount | amount |
Impairment Book valueConstruction
8,598,323.97 8,598,323.97 13,588,883.39 13,588,883.39
| materials | ||||||
| Total | 8,598,323.97 | 8,598,323.97 | 13,588,883.39 | 13,588,883.39 |
(12) Intangible assets
1. Details of intangible assets
| Items | Land use right | Software | Total |
| 1 |
．
| Total of original value | |||
| (1) 31 December 2019 | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| (2) Increase | |||
| Including: Purchase |
| Internal R&D | |||
| Increase in Mergers |
| Others | |||
| (3) Decrease |
| Including: Disposal | |||
| Others |
| (4) 30 June 2020 | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| 2 |
．
| Total of Accumulated Amortization |
| (1) 31 December 2019 | 55,717,267.98 | 121,908.07 | 55,839,176.05 |
| (2) Increase | 3,270,287.94 | 13,397.46 | 3,283,685.40 |
| Including: Provision | 3,270,287.94 | 13,397.46 | 3,283,685.40 |
| Others |
| (3) Decrease | |||
| Including: Disposal |
| Others | |||
| (4) 30 June 2020 | 58,987,555.92 | 135,305.53 | 59,122,861.45 |
| 3 |
．
| Total of Impairment |
| Items | Land use right | Software | Total |
| (1) 31 December 2019 | |||
| (2) Increase |
| Including: Provision | |||
| Others |
| (3) Decrease | |||
| Including: Disposal |
| Others | |||
| (4) 30 June 2020 |
| 4. Total of Net value | |||
| (1) 31 December 2019 | 268,041,241.92 | 175,096.02 | 268,216,337.94 |
| (2) 30 June 2020 | 271,311,529.86 | 188,493.48 | 271,500,023.34 |
2. Land use right without Certificate of Land use right at the end of the period.
None.
(13) Deferred tax asset and deferred tax liability
1. Deferred tax assets before taking into consideration of the balance offsetting
Items
| 30 June 2020 | 31 December 2019 |
Deductible temporary
Deferred tax
| differences | asset |
Deductible temporary
Deferred tax
| differences | asset | |||
| Impairment | 390,913,104.12 | 97,728,276.03 | 378,651,125.80 | 94,662,781.44 |
| Internal unrealized profit | 54,603,923.36 | 13,650,980.84 | 53,312,397.14 | 13,328,099.29 |
Differences of depreciation
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
| and amortization | ||||
| Total | 779,495,886.51 | 194,873,971.63 | 765,942,381.97 | 191,485,595.49 |
2. There is no deferred tax liabilities before taking into consideration the offsetting of balances at the end of
the period.
3. At the end of the reporting period, there are no deferred tax assets or liabilities listed as net value after
offsetting.
4. Unrecognized deferred tax assets
| Items | 30 June 2020 | 31 December 2019 |
| Deductible losses | 388,187,521.59 | 653,832,187.01 |
| Impairment of assets | 410,479.98 | 428,163.12 |
| Total | 388,598,001.57 | 654,260,350.13 |
5. The deductible loss of unrecognized deferred tax assets due in the following period
| Items | 30 June 2020 | 31 December 2019 | Notes |
| Year 2020 | 341,870,529.25 | 607,515,194.67 | |
| Year 2021 | 10,981,383.41 | 10,981,383.41 | |
| Year 2022 | 1,000,766.72 | 1,000,766.72 | |
| Year 2023 | 16,327,268.19 | 16,327,268.19 | |
| Year 2024 | 18,007,574.02 | 18,007,574.02 | |
| Total | 388,187,521.59 | 653,832,187.01 |
(14) Other non-current assets
Items
| 30 June 2020 | 31 December 2019 |
Gross carrying
Impair
| amount | ment |
Book value
Gross carrying
Impair
| amount | ment |
Book valuePrepaymentfor long-term
963,239,365.67 963,239,365.67 708,502,552.50 708,502,552.50
| assets | ||||||
| Total | 963,239,365.67 | 963,239,365.67 | 708,502,552.50 | 708,502,552.50 |
Notes: The prepayment for long-term assets at the end of the period are prepaid for equipment and construction
funds, of which RMB 841,113,071.18 was the financial lease deposit paid to Liaoning Hengyi FinancialLeasing Co., Ltd.
(15) Short-term loans
1. Classification of short-term loans
| Items | 30 June 2020 | 31 December 2019 |
| Pledge loans | ||
| Mortgage loans | ||
| Guaranteed loans | 12,086,705,000.00 | 12,731,478,000.00 |
| Credit loans | 420,000,000.00 | 420,000,000.00 |
| Items | 30 June 2020 | 31 December 2019 |
| Total | 12,506,705,000.00 | 13,151,478,000.00 |
2. There is no short-term loans that were overdue at the end of the reporting period
(16) Notes payables
| Items | 30 June 2020 | 31 December 2019 |
| Bank acceptance bill | 752,290,000.00 | 8,897,442,732.91 |
| Domestic letter of credit | 10,603,620,199.39 | 1,174,963,839.77 |
| Domestic letter of credit | 2,878,818,288.66 | 1,756,108,104.27 |
| Total | 14,234,728,488.05 | 11,828,514,676.95 |
Notes: There are no outstanding notes payable at the end of this period.
(17) Accounts payable
1. Accounts payable disclosed by category
| Items | 30 June 2020 | 31 December 2019 |
| Accounts payable for goods | 3,122,246,744.39 | 3,481,176,373.75 |
| Accounts payable for labor | 49,716,139.71 | 56,959,052.87 |
| Accounts payable for project and equipment | 457,345,653.91 | 581,909,120.17 |
| Repair expense | 349,444,971.43 | 407,468,483.48 |
| Total | 3,978,753,509.44 | 4,527,513,030.27 |
2. Significant accounts payable aging over one year
| Items | Ending balance | Amount aging over one year |
| Company 1 | 50,416,440.77 | 45,906,440.77 |
| Company 2 | 93,653,173.71 | 27,685,592.96 |
| Company 3 | 14,200,763.99 | 14,200,763.99 |
| Company 4 | 14,200,000.00 | 14,200,000.00 |
| Company 5 | 32,153,162.29 | 11,977,425.94 |
| Company 6 | 15,810,625.07 | 12,040,944.48 |
| Total | 220,434,165.83 | 126,011,168.14 |
Notes: The above significant accounts payable aged over one year have not yet reached the settlement conditions.
(18) Advance from customers
| Items | 30 June 2020 | 31 December 2019 |
| Advance for goods | 4,429,821,526.79 | |
| Total | 4,429,821,526.79 |
(19) Contract liabilities
| Items | 30 June 2020 | 31 December 2019 |
| Advance for goods | 4,658,022,515.99 | |
| Total | 4,658,022,515.99 |
(20) Employee benefits payable
1. Employee benefits payable
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
(1) Short-term employee
22,208,442.94 947,883,058.17 929,828,911.45 40,262,589.66
(2) Post-employment
benefits - defined
| benefits |
| contribution plans |
62,312.32 79,852,867.66 79,517,956.70 397,223.28
| (3) Termination benefits | 1,427,419.30 | 914,555.00 | 512,864.30 |
(4) Other benefits due
| within one year | ||||
| Total | 23,698,174.56 | 1,027,735,925.83 | 1,010,261,423.15 | 41,172,677.24 |
2. Short-term employee benefits
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
(1) Salary, bonus,
12,974,335.94 682,125,744.78 667,433,631.49 27,666,449.23
| allowance and subsidy | ||||
| (2) Employee welfare | 42,088,821.33 | 42,088,821.33 | ||
| (3) Social Insurance | 756,616.34 | 151,522,095.49 | 148,532,398.75 | 3,746,313.08 |
Including: Medical
106,650.30 54,080,133.64 54,133,936.64 52,847.30Work injury
| insurance |
| insurance |
649,966.04 15,341,554.21 12,632,965.43 3,358,554.82Maternity
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
| (4) Housing | 6,855,601.00 | 56,644,301.00 | 56,644,301.00 | 6,855,601.00 |
(5) Union funds and staff
1,621,889.66 15,502,095.57 15,129,758.88 1,994,226.35
(6) Short-term
| education fee |
| compensated absences |
(7) Short-term profit -
| sharing scheme | ||||
| Total | 22,208,442.94 | 947,883,058.17 | 929,828,911.45 | 40,262,589.66 |
3. Defined contribution plans
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
| Basic pension fund | 60,423.10 | 77,455,966.53 | 77,127,366.80 | 389,022.83 |
| Unemployment insurance | 1,889.22 | 2,396,901.13 | 2,390,589.90 | 8,200.45 |
| Total | 62,312.32 | 79,852,867.66 | 79,517,956.70 | 397,223.28 |
(21) Current tax liabilities
| Items | 30 June 2020 | 31 December 2019 |
| Value-added tax | 6,341,821.09 | 246,921,117.21 |
| Corporate income tax | 5,326,863.20 | 6,250,204.39 |
| City maintenance and construction tax | 523,353.68 | 11,416,274.65 |
| House property tax | 3,676,391.46 | 3,445,290.84 |
| Educational surcharges | 421,669.65 | 8,146,826.78 |
| Land use right tax | 1,128,142.41 | 1,128,141.09 |
| Environmental tax | 251,080.35 | 5,264,008.42 |
| Others | 4,278,390.14 | 2,253,951.42 |
| Total | 21,947,711.98 | 284,825,814.80 |
(22) Other payables
| Items | 30 June 2020 | 31 December 2019 |
| Interest payables | 20,582,111.30 | 10,818,986.30 |
| Dividends payables | ||
| Other payables | 623,477,759.31 | 651,882,758.67 |
| Total | 644,059,870.61 | 662,701,744.97 |
1. Interest Payable
| Items | 30 June 2020 | 31 December 2019 |
| Loan interests | 20,582,111.30 | 10,818,986.30 |
| Total | 20,582,111.30 | 10,818,986.30 |
At the end of the reporting period, there is no significant overdue interest
2. Other payables
(1) Other payables disclosed by nature
| Items | 30 June 2020 | 31 December 2019 |
| Deposit | 1,975,288.77 | 1,933,435.69 |
| Margin | 84,938,221.01 | 86,166,961.89 |
| Accounts | 431,828,769.92 | 454,536,559.31 |
| Others | 104,735,479.61 | 109,245,801.78 |
| Total | 623,477,759.31 | 651,882,758.67 |
(2) There is no significant other payables aged over one year at the end of the reporting period.
(23) Non-current liabilities due within one year
| Items | 30 June 2020 | 31 December 2019 |
| Long-term loans due within one year | 1,201,524,980.80 | 234,474,657.99 |
| Bond payables due within one year | ||
| Long-term payables due within one year |
| Total | 1,201,524,980.80 | 234,474,657.99 |
Notes:
Among the long-term loans due within one year, RMB 1,200,000,000.00 is credit loan and RMB 1,524,980.80 isguaranteed loan.
(24) Long-term loans
| Items | 30 June 2020 | 31 December 2019 |
| Pledged loans | 622,600,000.00 | 622,600,000.00 |
| Mortgage loan | ||
| Guaranteed loans | 1,313,560,767.82 | 1,106,159,800.73 |
| Credit loans | 1,874,303,166.36 | 3,120,916,110.00 |
| Total | 3,810,463,934.18 | 4,849,675,910.73 |
(25) Long-term payables
| Items | 30 June 2020 | 31 December 2019 |
| Long-term payables | 1,050,748,776.34 | 516,939,408.14 |
| Special payables |
| Total | 1,050,748,776.34 | 516,939,408.14 |
Long-term payables
| Items | 30 June 2020 | 31 December 2019 |
| Financing lease payments | 1,050,748,776.34 | 516,939,408.14 |
| Total | 1,050,748,776.34 | 516,939,408.14 |
Notes: At the end of the reporting period, the amount of unrealized financing expenses payable for financing leases
was RMB 824,818,755.27.The company needs to pay interest on time, the principal is a one-time payment after the lease contractexpires, and expiry date of each lease contract that has not been completely executed is more than 3 years.
(26) Deferred income
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 | Reason |
Government
208,955,407.30 1,626,919.00 37,890,873.76 172,691,452.54
| subsidy | |||||
| Total | 208,955,407.30 | 1,626,919.00 | 37,890,873.76 | 172,691,452.54 |
Projects of government subsidies:
Items 31 December 2019 Increase
operating income
| Transfer to non- | Other |
decrease
30 June 2020 Related to assets or income
| <High-strength pipeline steel under low-temperature and high- |
pressure service conditions> project national support funds
121,000.00 93,575.00 27,425.00 Related to income
(Special Steel, Steelmaking, and Energy General Plant 80,000each)
187,039.34 120,423.00 66,616.34 Related to income
| Municipal Skills Master Workstation Expenses in 2018 |
| Carbon Fiber Wastewater Advanced Treatment Project in |
Dongfeng Plant Area of Plate Coking Plant
9,500,000.00 9,500,000.00 Related to assets
high-pressure workshop of Bengang Power Plant
4,200,000.00 300,000.00 3,900,000.00 Related to assets
| Coal-fired boiler desulfurization and denitrification project in |
| Bengang Group Co., Ltd. Automotive Sheet Engineering |
Laboratory Engineering Construction Fund
1,000,000.00 1,000,000.00 Related to assets
Project
1,000,000.00 160,206.60 839,793.40 Related to assets
| Benxi Iron and Steel Automotive Sheet Engineering Laboratory |
| Research and development of the third-generation high- |
strength steel for automobiles
2,900,000.00 2,900,000.00 Related to assets
boilers in power plant
14,400,000.00 2,400,000.00 12,000,000.00 Related to assets
| Flue gas desulfurization project of 7 130-ton combustion |
| Project fund for cogeneration transformation project of power |
plant's three-electric workshop
6,000,000.00 1,000,000.00 5,000,000.00 Related to assets
center for industrial enterprises
4,640,000.00 1,160,000.00 3,480,000.00 Related to assets
| Demonstration project of construction of energy management |
| Research and development of anti-oxidation hot forming steel |
PHS1500A
250,000.00 0.10 249,999.90 Related to income
105,000.00 35,000.00 70,000.00 Related to assets
| Air quality automatic monitoring system |
| Cold rolled high-strength steel renovation project |
150,000,000.00 25,000,000.00 125,000,000.00 Related to assets
Items 31 December 2019 Increase
operating income
| Transfer to non- | Other |
decrease
30 June 2020 Related to assets or income
| Energy saving and environmental protection project of |
sintering machine in ironworks
1,160,000.00 580,000.00 580,000.00 Related to assets
100,002.97 14,002.80 86,000.17 Related to income
| Liaoning craftsman subsidy |
| Construction of a new platform for professional technology in |
the automotive steel industry
1,000,000.00 300,000.00 700,000.00 Related to assets
Oxysulfide on Plasticity of Automobile Steel
184,364.99 -3,252.74 187,617.73 Related to income
| Study on the Effect Mechanism and Control of Rare Earth |
| Introduce special funds for overseas advanced applicable |
technologies (progress in production technology of high-endelectro-galvanized sheet)
4,000,000.00 1,000,000.00 3,000,000.00 Related to assets
automobiles
8,208,000.00 4,104,000.00 4,104,000.00 Related to assets
| High-grade electro-galvanized sheet production line project for |
| Compensation for closing city construction service center |
1,626,919.00 1,626,919.00 Related to incomeTotal 208,955,407.30 1,626,919.00 37,890,873.76 172,691,452.54
(27) Share capital
Items
31 December
2019
30 June 2020Issuingof new
| Increase/decrease (+ , - ) | |
| share | |
Bonusshares
Transferredfrom
Others
| reserves |
SubtotalCapital
3,875,371,532.00 3,875,371,532.00
(28) Capital reserves
sharesItems
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
Capital premium over par
12,227,292,378.47 12,227,292,378.47
| value | ||
| Other capital reserves |
115,917,468.82 115,917,468.82
| Total |
12,343,209,847.29 12,343,209,847.29
(29) Special Reserves
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
Safety production
212,687.41 26,575,861.58 4,308,363.55 22,480,185.44
| cost | ||||
| Total | 212,687.41 | 26,575,861.58 | 4,308,363.55 | 22,480,185.44 |
(30) Surplus Reserves
| Items | 31 December 2019 | Increase | Decrease | 30 June 2020 |
Statutory surplus
961,105,529.85 961,105,529.85
| reserves |
| Total |
961,105,529.85 961,105,529.85
(31) Undistributed Profits
| Items | Current period | Previous period |
Before adjustments: undistributed profits at last
2,307,765,664.62 1,945,887,269.82Adjustments of the beginning distributed profits
| year-end |
| (increase + / decease -) |
| Items | Current period | Previous period |
After adjustments: undistributed profit at this year-
2,307,765,664.62 1,945,887,269.82Add: undistributed profit belonging to parent
| beginning |
| company |
254,644,204.33 555,646,971.40
| Less: Statutory surplus reserves |
| Discretionary reserves |
| General risk reserves |
| Common shares dividend payable |
193,768,576.60Common shares dividend transferred to paid-in
| capital |
| Ending balance of undistributed profits |
2,562,409,868.95 2,307,765,664.62
(32) Operating income and operating cost
Items
| Current period | Previous period | ||
| Revenue | Cost | Revenue | Cost |
Principal
20,470,526,587.62 18,886,384,469.92 22,581,458,005.55 20,807,089,888.18
| business |
| Other business |
1,714,010,672.43 1,553,861,892.75 1,521,137,161.59 1,260,522,841.47
22,184,537,260.05 20,440,246,362.67 24,102,595,167.14 22,067,612,729.65
Details for operating income:
TotalItems
| Items | Current period | Previous period |
| Principal business | 20,470,526,587.62 | 22,581,458,005.55 |
| Including |
：
| Domestic | 17,852,661,337.91 | 18,514,105,145.87 |
| Abroad | 2,617,865,249.71 | 4,067,352,859.68 |
| Other business | 1,714,010,672.43 | 1,521,137,161.59 |
| Including |
：
| Domestic | 1,714,010,672.43 | 1,521,137,161.59 |
| Abroad |
| Total | 22,184,537,260.05 | 24,102,595,167.14 |
(33) Tax and surcharges
| Items | Current period | Previous period |
| City maintenance and construction tax |
13,467,815.13 27,561,420.89
| Items | Current period | Previous period |
| Educational surcharge |
9,674,693.55 19,877,089.62
40,089,186.70 38,778,891.04
| Housing property tax |
| Land use right tax |
6,457,679.78 6,538,299.88
5,619,563.86 6,387,222.58
| Stamp duty and others |
| Environmental tax |
12,962,357.84 14,961,858.43
127,139.82 20,580.53
| others |
| Total |
88,398,436.68 114,125,362.97
(34) Selling and distribution expenses
| Items | Current period | Previous period |
| Freight |
532,184,917.51 456,217,341.94
53,812,369.10 52,405,847.32
| Port surcharges |
| Import and export agency fee |
30,678,165.54 34,174,633.61
12,735,597.76 13,553,533.82
| Salary and benefits |
| Others |
9,404,066.26 13,751,821.86
3,578,102.61 4,342,020.59
| Package fee |
| Total |
642,393,218.78 574,445,199.14
(35) General and administrative expenses
| Items | Current period | Previous period |
| Salary and benefits |
110,662,138.91 122,383,642.39
102,044,859.99 142,464,599.50
| Repair expense |
| Land use right fee |
32,611,483.62 27,345,714.30
58,119,763.89 62,667,766.52
| Others |
| Depreciation |
18,573,834.52 24,216,703.47
18,957,667.84 23,532,872.66
| Social insurance fee |
| Heating fee |
18,050,334.83 22,391,441.18
12,470,097.22 11,993,951.74
| Water resources fee |
| Housing fund |
5,056,476.00 4,737,351.00
2,975,850.60 2,970,897.50
| Amortization |
| Entertainment fee |
369,545.17 1,070,316.75
661,452.72 643,214.78
| Rental fee |
| Shipping fee |
274,811.10 349,339.98
| Items | Current period | Previous period |
| Total |
380,828,316.41 446,767,811.77
(36) Research and development expenses
| Items | Current period | Previous period |
| Depreciation, materials and compensation, etc. |
20,202,985.20 15,408,472.28
20,202,985.20 15,408,472.28
(37) Financial expenses
TotalItems
| Items | Current period | Previous period |
| Interest expenditure |
439,861,353.93 586,490,262.69
154,882,284.33 127,083,779.58
| Less: Interest income |
| Exchange loss |
45,932,418.60 -71,095,752.13
24,125,152.20 15,154,975.44
| Others |
| Total |
355,036,640.40 403,465,706.42
(38) Other income
| Items | Current period | Previous period |
| Government subsidy | 37,894,126.40 | 41,695,000.00 |
| Others | 693,206.00 |
| Total | 38,587,332.40 | 41,695,000.00 |
Government subsidies included in other income:
| Items | Current period | Previous period | Related to assets or income |
Steel for high-strength pipelines under low-temperature and high-pressure serviceconditions>Project State Support Fund
93,575.00 52,000.00 income2018 municipal skill master workstation costs 120,423.00 incomeCoal-fired boiler desulfurization and denitrification project in high-pressure workshop ofBengang Power Plant
300,000.00 300,000.00 assetsBenxi Iron and Steel Automotive Sheet Engineering Laboratory Project 160,206.60 assetsFlue gas desulfurization project of 7 130-ton combustion boilers in power plant 2,400,000.00 2,400,000.00 assetsProject fund for cogeneration transformation project of power plant's three-electric workshop 1,000,000.00 1,000,000.00 assetsDemonstration project for the construction of energy management center for industrialenterprises
1,160,000.00 1,160,000.00 assetsAir quality automatic monitoring system 35,000.00 35,000.00 assetsCold rolled high-strength steel renovation project 25,000,000.00 25,000,000.00 assetsEnergy saving and environmental protection project of sintering machine in ironworks 580,000.00 580,000.00 assetsLiaoning craftsman subsidy 14,002.80 incomeConstruction of a new platform for professional technology in the automotive steel industry 300,000.00 incomeSpecial funds for introducing overseas advanced and applicable technologies 1,000,000.00 1,442,000.00 assetsHigh-grade electro-galvanized sheet production line project for automobiles 4,104,000.00 4,104,000.00 assets
| Items | Current period | Previous period | Related to assets or income |
Compensation for closing city construction service center 1,626,919.00 incomeMES project special funds 860,000.00 assetsEnvironmental pollution control project 1,810,000.00 assetsEnvironmental governance project and regional watershed environmental protectioncomprehensive prevention and control project
170,000.00 assetsSintering machine waste heat utilization project and desulfurization renovation project 2,102,000.00 assetsIronworks 360 Sintering Machine Flue Gas Desulfurization Project 100,000.00 assetsEnvironmental protection special fund 580,000.00 assetsOthers 693,206.00 income
38,587,332.40 41,695,000.00
| Total |
(39) Income on investment
| Items | Current period | Previous period |
Income on disposal of long-term equity investment by
29,304.00 25,907.49
| equity method |
| Income on bank short-term financial products |
| Others |
| Total |
29,304.00 25,907.49
(40) Credit impairment loss
| Items | Current period | Previous period |
| Loss from bad debts of note receivable |
| Loss from bad debts of account receivable |
3,266,886.62 3,389,912.79
| Loss from bad debts of receivable financing |
| Loss from bad debts of other receivables |
220,896.80 361,601.04
| Loss from bad debts of debt investment |
| Loss from bad debts of other debt investment |
| Loss from bad debts of long-term receivables |
| Total |
3,487,783.42 3,751,513.83
(41) Asset impairment loss
| Items | Current period | Previous period |
| Bad debt loss |
-15,321,598.62
| Inventory impairment loss |
| Impairment of fixed assets |
-15,321,598.62
(42) Assets disposal gains
Items Current period
Previous
Totalperiod
The amount recognized in
| period | non-recurring profit | ||
| Disposal gains or losses |
arising from disposal of fixed
325,651.61 2,418,704.34 325,651.61
| assets not classified for sale |
| Total |
325,651.61 2,418,704.34 325,651.61
(43) Non-operating income
Items Current period Previous period
The amountrecognized in non-
Non-current assets
| recurring profit | ||
| scrapped gains |
302,362.80 7,955,444.40 302,362.80
805,201.30 204,097.84 805,201.30
| Others |
| Debt restructuring gain |
32,800.02 50,640.00 32,800.02
1,140,364.12 8,210,182.24 1,140,364.12
(44) Non-operating expense
Items Current period Previous period
The amountrecognized in non-
Totalrecurring profit
Non-current assets scrapped
| recurring profit | ||
| loss |
20,035,471.42 57,974,322.05 20,035,471.42
20,035,471.42 57,974,322.05 20,035,471.42
(45) Income tax expense
1. Income tax expense
TotalItems
| Items | Current period | Previous period |
| Income tax payable for the current year |
12,626,191.22 9,415,176.70
-3,388,376.14 16,547,005.03
| Adjustment of deferred income tax |
| Total |
9,237,815.08 25,962,181.73
2. Accounting profit and income tax expense adjustment process
| Items | Current period |
| Total profit |
265,644,665.42
66,411,166.35
| Income tax expense calculate according to the official or applicable tax rate |
| Effect of different tax rates applied by subsidiaries |
| Effect of adjustment of the income tax expense of prior period | |
| Effect of non-taxable income |
Effect of use of deductible losses of unrecognized deferred tax asset of prior
| Effect of undeductible costs, expenses or losses |
| period |
-54,648,936.33
| Items | Current period |
Effect of deductible temporary differences or deductible losses of
Changes in the balance of deferred income tax assets and liabilities at thebeginning of the period due to additional deductible expenses and tax rate
| unrecognized deferred tax asset of current period |
| adjustments required by the tax law |
9,237,815.08
(46) Earning per share
1. Basic earnings per share
The basic earnings per share is calculated by dividing the consolidated net profit attributableto the common stock shareholders of the parent company by the weighted average numberof common stocks issued by the company:
Income tax expensesItems
| Items | Current period | Previous period |
Consolidated net profit attributable to ordinary
254,644,204.33 453,209,615.76The weighted average number of common shares
| shareholders of parent company |
| issued by the company |
3,875,371,532.00 3,813,757,237.67
| Basic earnings per share | 0.07 | 0.12 |
Including: basic earnings per share for continuing
0.07 0.12
| operations |
| Basic earnings per share for discontinued operations |
2. Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributableto the common shareholders of the parent company (diluted) by the weighted averagenumber of ordinary shares issued by the company (diluted):
| Items | Current period | Previous period |
Consolidated net profit attributable to ordinary
254,644,204.33 453,209,615.76The weighted average number of common shares
| shareholders of parent company (diluted) |
| issued by the company (diluted) |
3,875,371,532.00 3,813,757,237.67
| Items | Current period | Previous period |
| Basic earnings per share | 0.07 | 0.12 |
Including: basic earnings per share for continuing
0.07 0.12
| operations | ||
| Basic earnings per share discontinued |
(47) Notes of statement of cash flows
1. Cash received related to other operating activities
| Items | Current period | Previous period |
| Withdraw of current accounts, advance for another | 16,851,204.08 | 17,151,876.47 |
| Interest income | 154,882,284.33 | 127,083,779.58 |
| Special subsidy income | 1,626,919.00 | 428,000.00 |
| Non-operating income | 503,009.25 | 117,870.10 |
| Others | 153,380.34 | 123,098.19 |
| Total | 174,016,797.00 | 144,904,624.34 |
2. Cash paid related to other operating activities
| Items | Current period | Previous period |
| Current accounts, advance for another |
199,605,380.27 221,234,925.29
4,545,479.59 4,449,939.39
| Sales expenses |
| Administrative expenses |
18,446,185.30 17,883,394.86
3,331,343.25 3,255,172.22
| Bank charges |
| Others |
360,322.84 365,921.44
226,288,711.25 247,189,353.20
(48) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
TotalItems
| Items | Current period | Previous period |
1. A reconciliation of net profit to cash flows from
| operating activities: | ||
| Net profit | 256,406,850.34 | 452,934,689.03 |
| Add: Credit impairment loss | 3,487,783.42 | 3,751,513.83 |
| Asset impairment loss | -15,321,598.62 | |
| Depreciation of fixed assets and so on | 1,201,263,368.47 | 1,199,864,248.72 |
| Items | Current period | Previous period |
| Amortization of intangible assets | 3,283,685.40 | 3,278,732.29 |
| Long-term deferred expenses |
Losses proceeds from disposal of PPE, intangibleassets and other long-term assets (Earnings
－
| ”) |
19,733,108.62
57,974,322.05
Scrapped losses from fixed assets (Earnings
－
| ”) |
| Change in fair value loss (Earnings marked“ |
－
| ”) |
－
| ”) | 355,036,640.40 | 403,465,706.42 |
| Investment losses (Earnings marked“ |
－
| ”) |
Deferred tax assets reduction (Addition
－
| ”) |
-3,388,376.14 15,928,033.89Deferred tax liabilities increased (Reduction
－
| ”) |
－
| ”) | -1,885,641,689.91 | -1,289,831,911.07 |
Operating receivable items reduction (Addition
－
| ”) |
-1,938,821,059.08 -908,736,317.08Operating payable items increase (Less marked"－
1,852,485,580.02 1,046,157,987.59
| ") | ||
| Other | ||
| Net cash flows generated from operating activities | -151,475,707.08 | 984,787,005.67 |
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 cash | 11,417,592,663.52 | 11,788,922,569.51 |
| Less: Beginning balance of cash | 13,441,414,988.58 | 11,752,548,621.97 |
| Add: Ending balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| The net increase in cash and cash equivalents | -2,023,822,325.06 | 36,373,947.54 |
2. The structure of cash and cash equivalents
| Items | 30 June 2020 | 31 December 2019 |
| 1. Cash |
11,417,592,663.52 13,441,414,988.58
7,110.40 5,588.98
| Including: Cash on hand |
| Bank deposits available on demand |
11,417,585,553.12 13,441,409,399.60
| 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 |
11,417,592,663.52 13,441,414,988.58Including: Cash and cash equivalents limited to use by
the parent company of other subsidiary in the
| 3. Ending balance of cash and cash equivalents |
| group |
(49) Assets of which ownership or right to use are restricted
| Items | 30 June 2020 | Reason |
| Cash at bank and on hand |
5,370,886,642.41
| Deposit for notes and letter of credit |
Accounts receivable
759,753,834.45
| financing |
Pledged for acceptance bill and short term
Other equity instrument
| loan | ||
| investments |
1,037,735,849.00
Pledged for loans
7,168,376,325.86
| Total |
(50) Foreign currency monetary items
1. Foreign currency monetary items
Items
Ending balance in
Exchange rate at the
| foreign currency | end of the period |
Ending balance
| translated to RMB | |||
| Cash at bank and on hand | 62,843,510.18 | ||
| Including: USD | 8,723,365.02 | 7.0795 | 61,757,062.66 |
| EUR | 105,097.02 | 7.9610 | 836,677.38 |
| HKD | 273,451.00 | 0.9134 | 249,770.14 |
Items
Ending balance in
Exchange rate at the
| foreign currency | end of the period |
Ending balance
| translated to RMB | |||
| Short-term loans | 1,345,105,000.00 | ||
| Including: USD | 190,000,000.00 | 7.0795 | 1,345,105,000.00 |
Non-current liabilities due
1,524,980.80
| within one year | |||
| Including: JPY | 23,176,000.00 | 0.0658 | 1,524,980.80 |
| Long-term loans |
556,295,833.99
| Including: USD | 18,900,000.00 | 7.0795 | 133,802,550.00 |
| EUR | 51,825,261.75 | 7.9610 | 412,580,908.79 |
| JPY | 150,644,000.00 | 0.0658 | 9,912,375.20 |
2. The Company has no overseas operating entities.
(51) Government subsidy
1. Related to assets
Items Amount
Balance sheetpresentation
The amount included in the current profit and loss or offset the loss of
| items | related costs | ||
| Current period | Previous period | Items | |
Coal-fired boiler desulfurization anddenitrification project in high-pressureworkshop of Bengang Power Plant
3,900,000.00
Deferred income
300,000.00 300,000.00 Other incomeBenxi Iron and Steel Automotive SheetEngineering Laboratory Project
1,000,000.00
Deferred income
160,206.60 Other incomeFlue gas desulfurization project of 7 130-ton combustion boilers in power plant
12,000,000.00
Deferred income
2,400,000.00 2,400,000.00 Other incomeProject fund for cogenerationtransformation project of power plant'sthree-electric workshop
5,000,000.00
Deferred income
1,000,000.00 1,000,000.00 Other incomeDemonstration project of construction ofenergy management center for industrialenterprises
3,480,000.00
Deferred income
1,160,000.00 1,160,000.00 Other incomeAir quality automatic monitoring system 70,000.00
35,000.00 35,000.00 Other income
Items Amount
Balance sheetpresentation
The amount included in the current profit and loss or offset the loss of
| items | related costs | ||
| Current period | Previous period | Items | |
Cold rolled high-strength steel renovationproject
125,000,000.00
Deferred income
25,000,000.00 25,000,000.00 Other incomeEnergy saving and environmentalprotection project of sintering machine inironworks
580,000.00
Deferred income
580,000.00 580,000.00 Other incomeConstruction of a new platform forprofessional technology in the automotivesteel industry
700,000.00
Deferred income
300,000.00 Other incomeSpecial funds for introducing overseasadvanced and applicable technologies
3,000,000.00
Deferred income
1,000,000.00 1,442,000.00 Other incomeHigh-grade electro-galvanized sheetproduction line project for automobiles
4,104,000.00
Deferred income
4,104,000.00 4,104,000.00 Other incomeMES project special funds
| Deferred income |
860,000.00 Other incomeEnvironmental pollution control project
| Deferred income |
1,810,000.00 Other incomeEnvironmental governance project andregional watershed environmental
Deferred income
170,000.00 Other income
Items Amount
Balance sheetpresentation
The amount included in the current profit and loss or offset the loss of
| items | related costs | ||
| Current period | Previous period | Items | |
protection comprehensive prevention andcontrol projectSintering machine waste heat utilizationproject and desulfurization renovationproject
Deferred income
2,102,000.00 Other incomeIronworks 360 Sintering Machine FlueGas Desulfurization Project
Deferred income
100,000.00 Other incomeEnvironmental protection special fund
| Deferred income |
580,000.00 Other income
| Total | 158,834,000.00 | 36,039,206.60 | 41,643,000.00 |
2. Related to income
Items Amount
| The amount included in the current profit and loss or offset the loss of related costs | ||
| Current period | Previous period | Items |
<High-strength pipeline steel under low-temperature and high-pressure serviceconditions> project national support funds
27,425.003,575.00
52,000.00
Other income2018 municipal skill master workstation costs 66,616.34
120,423.00
Other income
Items Amount
| The amount included in the current profit and loss or offset the loss of related costs | ||
| Current period | Previous period | Items |
Liaoning craftsman subsidy 86,000.17
14,002.80
Other incomeother
| 693,206.00 |
Other income
| Total |
180,041.51 921,206.80 52,000.00
3. Return of government subsidies during the reporting period
None
VIII. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Name of the subsidiaries
Principal
Registeredaddress
| place of business | Notes of |
business
Acquiring methodDirect Indirect
Shareholding ratioXiamen Bengang Steel & Iron
Sales Co., Ltd.
| Xiamen Bengang Steel & Iron | Xiamen |
Sales 100.00
| Xiamen | Business combination under common control |
Wuxi Bengang Steel & Iron SalesCo., Ltd.
| Wuxi | Wuxi |
Sales 100.00
| Business combination under common control | ||
| Tianjin Bengang Steel & Iron |
Trading Co., Ltd.
| Tianjin | Tianjin |
Sales 100.00
Nanjing Bengang Materials SalesCo., Ltd.
| Business combination under common control | ||
| Nanjing |
Sales 100.00
| Nanjing | Business combination under common control |
Yantai Bengang Steel & Iron SalesCo., Ltd.
| Yantai | Yantai |
Sales 100.00
Harbin Bengang
| Business combination under common control | ||
| Economic and |
Trading Co., Ltd.
| Harbin | Harbin |
Sales 100.00
Changchun Bengang Steel & IronSales Co., Ltd.
| Business combination under common control | ||
| Changchun |
Sales 100.00
| Changchun | Business combination under common control |
Guangzhou Bengang Steel & IronTrading Co., Ltd.
| Guangzhou | Guangzhou |
Sales 100.00 EstablishmentShanghai Bengang MetallurgyScience and Technology Co., Ltd.
| Shanghai | Shanghai |
Sales 100.00 EstablishmentBengang
Pellet Co., Ltd.
| Steel Plates Liaoyang | Liaoyang |
Manufact
| Liaoyang | uring |
100.00 Establishment
Material Technology Co., Ltd.
| Dalian Benruitong Automobile | Dalian |
Manufact
| Dalian | uring |
65.00 Establishment
Bengang Posco Cold-rolled SheetCo., Ltd.
Benxi
Manufact
| Benxi | uring |
75.00
| Business combination under common control |
Benxi Bengang Steel Sales Co.,Ltd
| Benxi | Benxi |
Sales 100.00 Establishment
Name of the subsidiaries
Principal
Registeredaddress
| place of business | Notes of |
business
Acquiring methodDirect IndirectShenyang Bengang MetallurgicalScience and Technology Co., Ltd.
Shenyang
Shareholding ratioShenyang
Sales 100.00
| Shenyang |
EstablishmentChongqing Liaoben Steel & IronTrading Co., Ltd.
Chongqing
Sales 100.00
| Chongqing |
EstablishmentBengang Baojin (Shenyang) autonew material technology Co., Ltd.
Shenyang
Manufact
| Shenyang | uring |
85.00
| Business combination under common control |
The proportion of shares held in subsidiaries is different from the proportion of voting rights: thecompany does not have such matters.
Basis for holding half or less of the voting rights but still controlling the investee, and holdingmore than half of the voting rights but not controlling the investee: The company does not havesuch matters.
For important structured entities included in the scope of consolidation, the basis for control: Thecompany does not have such matters.
2. Significant but not wholly-owned subsidiaries
Name of the subsidiaries
Proportion
non-controllinginterests (%)
Profits and losses
| of | attributing to |
non-controllingshareholders
Dividend
non-controllingshareholders
Endingbalance of non-controllinginterests
Bengang Posco Cold-rolled SheetCo., Ltd.
25.00 3,121,127.48
| declared to distribute to |
499,174,786.40
The minority shareholder’s shareholding ratio is different from the voting rights ratio: thecompany does not have such matters.
3. Financial information of significant but not wholly-owned subsidiaries
Name of thesubsidiaries
Currentassets
Non-currentassets
Total assets
Currentliabilities
| 30 June 2020 | ||
| Non-current liabilities | ||
Total liabilities
Cold-rolled SheetCo., Ltd.
3,576,435,100.80 1,409,255,518.34 4,985,690,619.14
| Bengang Posco |
2,988,991,473.55
2,988,991,473.55
Name of the
subsidiaries
31 December 2019Name of thesubsidiaries
Currentassets
Non-currentassets
Total assets
Currentliabilities
| Name of the | ||
| Non- |
current
Total liabilities
| liabilities | ||
| Bengang Posco |
Cold-rolled SheetCo., Ltd.
4,305,831,723.982
1,509,417,518.88
5,815,249,242.86 3,832,718,789.47
3,832,718,789.47
Name of the subsidiaries
Current period
Operatingincome
Net profit
| Current period | ||
| Total | ||
comprehensive
income
Net cash flows fromoperating activities
Sheet Co., Ltd.
3,483,712,504.36
| Bengang Posco Cold-rolled |
12,484,509.92
12,484,509.92
389,115,477.57
Name of the subsidiaries
Previous period
Operatingincome
Net profit
| Previous period | ||
| Total | ||
comprehensive
income
Net cash flows fromoperating activities
Sheet Co., Ltd.
3,720,975,482.91 7,704,734.61 7,704,734.61 1,318,506,299.45
4. Significant restrictions on the use of corporate group assets and the settlement of
corporate group debtsNone.
5. Financial support or other support provided to structured entities included in the scope
of consolidated financial statementsNone.
(2) The share of owner's equity in the subsidiary changes and the subsidiary still controls
the transaction
None.
(3) Equity in joint venture or associates
1. Summary of financial information of important joint ventures and associates
The company has no important joint ventures or associates.
2. Summary of financial information of unimportant joint ventures and associates
Items 30 June 2020/Current period 31 December 2019/Previous periodJoint ventures:
Total book value of investment: 2,672,302.70 2,642,998.70The total amount of the following itemscalculated according to the shareholdingratio
—Net profit 29,304.00 452,582.71—Other comprehensive income
—Total comprehensive income 29,304.00 452,582.71
3. Explanation of significant restrictions on the ability of joint ventures or associates to
transfer funds to the companyNone.
4. Excess losses incurred by joint ventures or associates
None.
5. Unconfirmed commitments related to joint venture investment
None.
6. Contingent liabilities related to investment in joint ventures or associates
None.
(4) Important joint operations
None.
(5) Equity in structured entities not included in the scope of consolidated financial
statementsNone.
IX. Risks associated with financial instrumentsThe company faces various financial risks in its operation: credit risk, market risk and liquidityrisk. The company's board of directors is fully responsible for the determination of riskmanagement objectives and policies, and assumes ultimate responsibility for the riskmanagement objectives and policies. However, the board of directors has authorized thecompany's planning and development department to design and implement procedures thatensure the effective implementation of risk management objectives and policies. The board ofdirectors reviews the effectiveness of the implemented procedures and the rationality of riskmanagement objectives and policies through reports submitted by the planning anddevelopment department. The company's internal auditors also audit risk management policiesand procedures, and report relevant findings to the audit committee.The overall goal of the company's risk management is to formulate a risk management policythat minimizes risks without excessively affecting the company's competitiveness andresilience.
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by thecounterparties. The Company is exposed to credit risk arising from customers’ failure todischarge an obligation in sales on credit. Before signing a new contract, the company willevaluate the credit risk of the new customer, including the external credit rating and in somecases the bank credit certificate (when this information is available). The company has set acredit sales limit for each customer, which is the maximum amount without additional approval.
The Company ensures that the company's overall credit risk is within a controllable rangethrough regular monitoring of existing customer credit ratings and regular review of accountsreceivable aging analysis. In the monitoring of credit risk of customers, the Company sortscustomers into groups by their credit characteristics. Those customers which are rated as “highrisk” will be put in the restricted client list. The Company can only sell to these customers oncredit with additional approval; otherwise the Company must ask for a corresponding depositin advance.
(2) Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flows dueto market price changes, including currency risk, interest rate risk, and other price risk.
1. Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows due to market ratechanges. The Company’s exposure to currency risk is primarily arising from variable-rate bankbalances and variable-rate borrowings. Currently, the Company does not have a specific policyto manage its interest rate risk. The management will carefully choose financing methods, andcombine fixed interest rate with variable interest rate, short-term obligations with long-termobligations. By using effective interest rate risk management methods, the Company closelymonitors interest rate risk and will consider interest-rate swaps to acquire an expected structureof interest rates shall the need arise.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange ratechanges. The Company has been constantly working on the adjustment of the organizationalframework of risk management and optimization of debt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured byUS dollars and Euro. The ending balance of foreign currency financial assets and foreigncurrency financial liabilities after converted in RMB is shown as below:
(In 10 Thousand)Items
USD Euro HKD Japanese Yen
| 30 June 2020 | |
| Total | |
Assets
| 6,175.71 | 83.67 | 24.98 | 6,284.35 |
Liabilities
| 147,890.76 | 41,258.09 | 1,143.74 | 190,292.58 |
Items
USD Euro HKD Japanese Yen
| 31 December 2019 | |
| Total | |
Assets
| 8,990.85 | 1,109.84 | 22.90 | 10,123.59 |
Liabilities
| 147,372.23 | 45,006.35 | 1,188.28 | 193,566.86 |
On June 30, 2020, with all other variables remaining unchanged, if the relevant currencyappreciates or depreciates against the RMB by 5%, the company will increase or decrease itsnet profit by RMB 92,041 (on December 31, 2019: RMB 91,721,600). Management believesthat 5% reasonably reflects a reasonable range of possible changes in the relevant currency
against RMB in the next year.
(3) Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation ofsettlement in a manner of delivering cash or other financial assets. The Company’s policy is tomaintain sufficient cash to meet maturing obligations. Liquidity risk is centralized controlledby the Company’s finance department. Through the monitoring of unrestricted cash and cashequivalents, bank acceptance bills due in short time and the continues forecasting of cash flowin the next 12 months, the finance department ensures that the Company has sufficient cash tomeet obligations in all predicted reasonable circumstances.
The following table details the Company’s mature date of residual contract value ofunderivative financial liabilities to repay according to the contract terms. The table has beendrawn up based on the undiscounted cash flows of financial liabilities based on the earliest dateon which the Company can be required to pay. The table includes both interest and principalcash flows.
(In 10 Thousand Yuan)Items
| 30 June 2020 | |
| Within 1 year | |
1-2 years 2-5 years
Total
| Over 5 years | |||||
| Trade and other payables | 1,958,097.40 | 50,904.06 | 2,009,001.46 | ||
| Loans and interests | 1,186,571.99 | 281,545.02 | 144,198.26 | 19,401.64 | 1,631,716.89 |
| Total | 3,144,669.38 | 281,545.02 | 144,198.26 | 70,305.69 | 3,640,718.35 |
(In 10 Thousand Yuan)Items
| 31 December 2019 | |
| Within 1 year | |
1-2 years 2-5 years
Total
| Over 5 years | |||||
| Trade and other payables | 1,700,791.05 | 51,693.94 | 1,752,484.99 | ||
| Loans and interests | 1,339,677.16 | 328,523.94 | 133,765.16 | 22,678.49 | 1,824,644.75 |
| Total | 3,040,468.21 | 328,523.94 | 133,765.16 | 74,372.43 | 3,577,129.74 |
X. Disclosure of fair value
The 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 thatcan be obtained 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 isdirectly or 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 levelto which 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
Item
Fair value at the end of the periodFair value
the first level
Fair valuemeasurement in thesecond level
Fair valuemeasurement in thethird level
Total
| measurement in | |
| 1. Continuous fair value |
measurement
◆Financial assets held fortrading
(1) Financial assets measured
changes are included in thecurrent profit and loss
| at fair value and whose |
| (a) Investment in debt |
instruments
instruments
| (b) Investment in equity |
| (c) Derivative financial |
assets
(d) Others
Item
Fair value at the end of the period
Fair value
the first level
Fair valuemeasurement in thesecond level
Fair valuemeasurement in thethird level
Total
asset measured at fair valueand its changes are includedin the current profit and loss(1)
measurement inInvestment in debt
instruments
(2) Others
◆
Investment in debtAccounts receivable
financing
4,382,121,949.97 4,382,121,949.97◆ Other debt investments
◆
Accounts receivableInvestment in other
equity instruments
1,041,824,829.00 1,041,824,829.00◆ Other non-currentfinancial assets
(1) Financial assets measured
Investment in otherat fair value and whose
changes are included in thecurrent profit and loss
| at fair value and whose |
| (a) Investment in debt |
instruments
instruments
(c)
| (b) Investment in equity |
| Derivative financial |
assets
(d) Others
(2) Designated as a financial
asset measured at fair value
Item
Fair value at the end of the period
Fair value
the first level
Fair valuemeasurement in thesecond level
Fair valuemeasurement in thethird level
Totalin the current profit and loss
measurement in(a) Investment in debt
instruments
(b) Others
Total assets continuouslymeasured at fair value
5,423,946,778.97 5,423,946,778.97◆
(a) Investment in debtFinancial liabilites held
for trading
Including:
Issued trading bonds
Financial liabilites heldDerivative financial
liabilities
Others
◆Designated as a financialliability
Derivative financial
measured at fairvalue and its changes
included in the current profitand loss
measured at fairvalue and its changesTotal liabilitiescontinuously measured at
fair value
2. Non-
| Total liabilities continuously measured at |
| continuous fair |
value measurement
(1) Assets held for sale
Item
Fair value at the end of the period
Fair value
the first level
Fair valuemeasurement in thesecond level
Fair valuemeasurement in thethird level
Total
Total assets not measuredcontinuously at fair value
measurement inFor example: Liabilities
held for sale
| For example: Liabilities |
| Total liabilities not measured continuously at |
fair value
(2) The basis for determining the market value of the continuous and non-continuous first-
level fair value measurement projects
The company has no first level fair value measurement project.
(3) Continuous and non-continuous second-level fair value measurement items, using
valuation techniques and qualitative and quantitative information on important parameters
The company has no second level fair value measurement items.
(4) Continuous and non-continuous third-level fair value measurement items, using
valuation techniques and qualitative and quantitative information on important parameters
The other equity instruments that continue the third level of fair value measurement are mainlyunlisted equity investments held by the company. The company adopted valuation techniques forfair value measurement, mainly using valuation techniques of listed company comparison method,referring to stock prices of similar securities and considering liquidity discounts.
(5) For continuous fair value measurement projects, where conversion between various
levels occurs during the period, the reason for the conversion and the policy for determiningthe timing of conversion
During the current period, there was no conversion between various levels
(6) Changes in valuation techniques and reasons for changes during the period
No changes during the period.
(7) Fair value of financial assets and financial liabilities not measured at fair value
No
XI. Related party transactions
(1) Details of parent company
(In 100 Million Yuan)Name of parent company
| Place of Registry | Notes of Business |
Registered
Share
| capital | proportion (%) |
Voting
| rights (%) | |||||
| Benxi Steel (Group) Co., Ltd. | Benxi | Manufacturing | 62.92 | 62.11 | 62.11 |
Note: The ultimate controlling party of the Company is the State-owned Assets Supervision andAdministration Commission of Liaoning Province.
(2) Details of the subsidiaries
For details of subsidiaries of the Company please refer to Note 7 “Equity in other entities”.
(3) The company's joint ventures and associates
Name of joint ventures and associates RelationshipZhejiang Bengang Jingrui Steel Processing Co., Ltd. Associate
(4) Details of other related parties
| Name of Other related parties | Relationship |
Bengang Group Co., Ltd. (Hereinafter referred to as"Bengang Group")
Controlling shareholder of parent company.Bengang Group International Economic and Trading Co.,Ltd.
Belongs to Bengang Group Co., Ltd.
| Name of Other related parties | Relationship |
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. Same parent companyBenxi Beiying Steel & Iron (Group) Co., Ltd. (Hereinafterreferred to as "Beiying Steel")
Belongs to Bengang Group Co., Ltd.Bengang Electronics and Gas Co., Ltd. Associate of parent companyBenxi Steel & Iron (Group) Real-estate Development Co.,Ltd.
Same parent companyBenxi Steel & Iron (Group) Steel & Iron Process andLogistics Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) Machinery Manufacture Co.,Ltd.
Same parent companyBenxi Steel & Iron (Group) Construction Co., Ltd. Same parent companyBenxi Steel & Iron (Group) Mining Co., Ltd. Same parent companyBenxi Steel & Iron (Group) Thermal Power DevelopmentCo., Ltd.
Same parent companyBenxi Steel & Iron (Group) Designing Institute Same parent companyBenxi Steel & Iron (Group) Industrial Development Co.,Ltd.
Same parent companyBenxi Steel & Iron (Group) Information and AutomaticTech Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) Construction and RepairingCo., Ltd.
Same parent companyBenxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. Same parent companyBenxi Iron and Steel (Group) Engineering ConstructionSupervision Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) Zhengtai ConstructionMaterials Co., Ltd.
Same parent companyBenxi High-tech Drilling Tools Manufacture Co., Ltd. Belongs to Bengang Group Co., Ltd.Benxi New Career Development Co., Ltd. Same parent companyDalian Boluole Steel Tube Co., Ltd. Belongs to Benxi Steel and Iron (Group) Co., Ltd.Guangzhou Free Trade Zone Bengang Sales Co., Ltd. Belongs to Benxi Steel and Iron (Group) Co., Ltd.Benxi Steel & Iron (Group) General Hospital Belongs to Benxi Steel and Iron (Group) Co., Ltd.Liaoning Bengang Steel & Iron Trading Co., Ltd. Same parent companyLiaoning Hengtai Heavy Machinery Co., Ltd. Same parent company
| Name of Other related parties | Relationship |
Liaoning Hengtong Metallurgical Equipment ManufactureCo., Ltd.
Same parent companyLiaoning Metallurgy Technician College Same parent companyLiaoning Metallurgy Vocational Technical College Same parent companySuzhou Bengang Industrial Co., Ltd. Shareholding companyBenxi Steel & Iron (Group) Medical Services Department Associate of parent companyBengang Group Finance Co., Ltd. Belongs to Bengang Group Co., Ltd.Liaoning Hengyi Financial Leasing Co., Ltd. Belongs to Bengang Group Co., Ltd.
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)Name
party transactions
Current period Previous periodBenxi Steel & Iron (Group) Co., Ltd. Repair expense
15,947.21 14,299.69Benxi Steel & Iron (Group) Co., Ltd. Land lease fee
3,261.15 2,734.57Bengang Cold-rolled Stainless SteelDandong Co., Ltd.
Products
7.95 82.25
Benxi Steel & Iron (Group) Mining Co.,Ltd.
Labor cost
361.10 391.41
Benxi Steel & Iron (Group) Mining Co.,Ltd.
Raw material andsupplementary material
280,270.14 215,655.53Benxi Steel & Iron (Group) Mining Co.,Ltd.
Freight
87.47 85.36
Benxi Steel & Iron (Group) MetallurgyResidues Co., Ltd.
Raw material andsupplementary material
14,869.84 11,056.03Benxi Steel & Iron (Group) Steel & IronProcess and Logistics Co., Ltd.
Processing fee
23.81 84.61
Benxi Steel & Iron (Group) Real-estateDevelopment Co., Ltd.
Raw materials
3,418.04
Name
party transactions
Current period Previous periodBenxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Spare parts
2,296.73 3,341.85Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Repair services
330.54 370.37
Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Spare parts
19.75 424.68
Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Project fee
7,490.59 7,123.75Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Repair services
3,660.09 7,085.65Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Raw material andsupplementary material
367.31 332.06
Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Freight
87.94 152.48
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Spare parts
2,568.90 2,896.02Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Raw material andsupplementary material
5,906.02 6,106.81Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Repair services
790.53 940.92
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Freight
188.69 349.19
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Project fee
332.00 15.80
Benxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Raw material &supplementary materials
& spare parts
128.19 88.60
Name
party transactions
Current period Previous periodBenxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Project fee
2,992.87 453.18Benxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Repair expense
2,673.04 5,520.77Bengang Electronics and Gas Co., Ltd.
Raw material andsupplementary material
6,886.40 5,873.36Bengang Electronics and Gas Co., Ltd. Repair services
1,168.35 252.09Benxi High-tech Drilling ToolsManufacture Co., Ltd.
Spare parts
6.22 4.47
Benxi New Career Development Co., Ltd. Labor protection fee
22.45 47.20
Benxi New Career Development Co., Ltd.
Raw material andsupplementary material
and food
107.92 48.42
Liaoning Metallurgy Technician College Spare parts
117.57 699.54
Bengang Group International Economicand Trading Co., Ltd.
Agency fee
3,067.82 3,417.46Bengang Group International Economicand Trading Co., Ltd.
Port surcharges
5,381.24 5,240.58Benxi Steel & Iron (Group) Informationand Automatic Tech Co., Ltd.
Spare parts
285.13 226.21
Benxi Steel & Iron (Group) Informationand Automatic Tech Co., Ltd.
Project fee
1,368.24 2,191.45Benxi Steel & Iron (Group) ThermalPower Development Co., Ltd.
Heating costs
18.98 27.20
Benxi Steel & Iron (Group) ThermalPower Development Co., Ltd.
Raw material andsupplementary material
55.00 2.84
Name
party transactions
Current period Previous periodBenxi Steel & Iron (Group) DesigningInstitute
Design fees
28.77 29.24
Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Raw material andsupplementary material
466,858.50 591,426.43Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Energy & Power
21,856.41 31,906.75Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Freight
166.79 234.47
Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Labor cost
2,016.35 4,250.18Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Spare parts
897.66 758.28
Liaoning Hengtong MetallurgicalEquipment Manufacture Co., Ltd.
Raw material and spare
parts
5,120.05 4,493.46Liaoning Hengtai Heavy Machinery Co.,Ltd.
Raw material and spare
parts
43.48 171.84
Liaoning Hengtai Heavy Machinery Co.,Ltd.
Repair and labor cost
509.57 1,133.13
Bengang Group Co., Ltd. House renting fee
37.61 37.61
Company as the seller
(In 10 Thousand Yuan)
Name
The content of relatedThe content of related
party transactions
Current period Previous periodBengang Electronics and Gas Co., Ltd. Energy & Power
38.10 50.42
Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Raw material &supplementary materials& spare parts
135,340.23 60,230.78
Name
party transactions
Current period Previous periodBenxi Beiying Steel & Iron (Group) Co.,Ltd.
Products
1,271.42 792.19Benxi Beiying Steel & Iron (Group) Co.,Ltd.
Energy & Power
6,882.65 7,565.39Benxi Steel & Iron (Group) Real-estateDevelopment Co., Ltd.
Energy & Power
6.25 6.20
Benxi Steel & Iron (Group) Steel & IronProcess and Logistics Co., Ltd.
Energy & Power
20.39 27.47
Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Products
1,014.55 995.77Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Energy & Power
1,216.43 716.43Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Raw material &supplementary materials& spare parts
139.52 605.66
Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Energy & Power
335.07 19.45
Benxi Steel & Iron (Group) ConstructionCo., Ltd.
Raw material &supplementary materials& spare parts
15.12 108.13
Benxi Steel & Iron (Group) Mining Co.,Ltd.
Energy & Power
33,585.45 34,182.02Benxi Steel & Iron (Group) Mining Co.,Ltd.
Raw material &supplementary materials& spare parts
512.75 3,156.26
Benxi Steel & Iron (Group) Mining Co.,Ltd.
Freight revenue
497.33 487.08
Name
party transactions
Current period Previous periodBenxi Steel & Iron (Group) ThermalPower Development Co., Ltd.
Energy & Power
2,264.65 2,289.99Benxi Steel & Iron (Group) ThermalPower Development Co., Ltd.
Raw material &supplementary materials
& spare parts
682.22 994.94
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Energy & Power
409.62 407.66
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Products
912.10 12.46
Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Raw material &supplementary materials
& spare parts
936.70 717.36
Benxi Steel & Iron (Group) Informationand Automatic Tech Co., Ltd.
Energy & Power
11.69 7.68
Benxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Energy & Power
66.60 79.48
Benxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Raw material &supplementary materials& spare parts
-
The content of related
248.68
Benxi Steel & Iron (Group) MetallurgyResidues Co., Ltd.
Energy & Power
105.91 302.41
Benxi Steel & Iron (Group) MetallurgyResidues Co., Ltd.
Raw material &supplementary materials& spare parts
13,364.82 9,363.79Benxi Steel & Iron (Group) Co., Ltd. Energy & Power
430.55 147.07
Benxi Steel & Iron (Group) Co., Ltd.
Raw material &supplementary materials& spare parts
308.79 156.10
Name
party transactions
Current period Previous periodBenxi New Career Development Co., Ltd. Energy & Power
381.86 15.13
Dalian Boluole Steel Tube Co., Ltd. Products
279.34 188.32
Benxi Steel & Iron (Group) GeneralHospital
Energy & Power
1.06 3.09
Benxi Steel & Iron (Group) ZhengtaiConstruction Materials Co., Ltd.
Energy & Power
3.20 0.27
Liaoning Hengtong MetallurgicalEquipment Manufacture Co., Ltd.
Raw material &supplementary materials& spare parts
493.65 832.61
Bengang Cold-rolled Stainless SteelDandong Co., Ltd.
Raw material &supplementary materials& spare parts
736.33 24.14
Suzhou Bengang Industrial Co., Ltd. Products
19,082.32 16,362.43Bengang Group Finance Co., Ltd. Energy & Power
0.65 0.69
Bengang Group Co., Ltd. Energy & Power
8.82 7.79
Notes:
The pricing policy is based on the transaction content and pricing principles specified in the "RawMaterial and Service Supply Agreement" and "Land Use Right Leasing Contract" andsupplementary agreements entered into between the Company and Bengang Group and Benxi Steeland Iron (Group) Co., Ltd. The main pricing principle is that if there is a market price, the marketprice will be used. If there is no market price, then the full cost plus the national additional tax plusa reasonable profit will be used as the pricing standard.
2. Lease information of related parties
Company as the lessor
Lessee
The content of relatedLease capital
category
| Lease capital | Lease income of |
current period
previous period
| Lease income of | ||
| Benxi Steel & Iron (Group) Steel & |
Iron Process and Logistics Co., Ltd.
machinery
250,000.00 250,000.00
| Warehouse and | |
| Benxi Steel & Iron (Group) Machinery |
Manufacture Co., Ltd.
machinery
| Plants and |
245,000.00
Company as the lessee
Lessor Lease capital category
Lease charges ofcurrent period
Lease charges ofprevious period
| (Without tax) | (Without tax) |
Benxi Steel & Iron (Group) Co., Ltd.
Land use right7,669,068.17 sq.m.Land use right
8,049,080.52 123,426,656.64
Benxi Steel & Iron (Group) Co., Ltd.
| 42,920.00 sq.m. |
| 2300 Hot rolling product line, related real estate |
27,638,772.06 27,345,714.30Benxi Beiying Steel & Iron (Group) Co.,
| Ltd. | 1780 Hot rolling product line, related real estate |
5,002,327.68 59,013,278.16Bengang Group Co., Ltd.
Land use right
4,972,711.56
| 728,282.30 sq.m. |
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements
signed between the Company and Bengang Steel and Iron (Group) Co., Ltd. on April 7, 1997,December 30, 2005, the Company leases land from Bengang Group, with a monthly rent of 0.594yuan per square meter. The leased land is 7,669,068.17 square meters and the annual rent is54,665.10 thousand yuan.
2. On August 14, 2019, the company signed the "House Lease Agreement" with Bengang Steel and
Iron (Group) Co., Ltd. and Beiying Iron and Steel Company, and leased the houses and auxiliaryfacilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling millproduction line. The lease term of the houses and ancillary facilities is until December 31, 2038. Fordetails, please refer to note ‘11 – (1) - 1 – (2)’.
3. On July 15, 2019, the company signed "Land Lease Agreement" with Bengang Group and
Bengang Steel and Iron (Group) Co., Ltd. respectively, leased and used a total of 8 pieces of landfrom Bengang Group and Bengang Steel and Iron (Group) Co., Ltd., with leased areas of 42,920.00square meters, and 728,282.30 square meters, respectively. The lease term is 20 years, the rentalprice is 1.138 yuan per square meter per month. For details, please refer to note ‘11 – (1) - 1 – (3)’.
Financial leasing:
During the reporting period, the company leased machinery and equipment from Liaoning HengyiFinance Leasing Co., Ltd. in the form of financial leasing. From January to June 2020, the purchaseamount is RMB 509,841,317.15, and the amount of interest and commission is RMB 8,880,409.61(The aforementioned amounts are all include tax.)
3. Information of Guarantee among related parties
(1) Company as the warrantee
Guarantee of loans:
Warrantor
Amount ofguarantee
Starting date of
Guarantee
Ending dateof Guarantee
Has theguarantee
been
Bengang Group Co., Ltd.
| fulfilled | |||
| �183,237.83 | 2015/6/25 | 2025/9/30 |
NoBengang Group Co., Ltd.
| �6,162.48 | 2015/6/25 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �444,736.12 | 2015/6/25 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �372,157.59 | 2015/6/25 | 2025/6/30 |
NoBengang Group Co., Ltd.
| �10,641,920.02 | 2015/6/25 | 2025/6/30 |
NoBengang Group Co., Ltd.
| �719,075.68 | 2015/6/25 | 2025/10/31 |
NoBengang Group Co., Ltd.
| �7,625,460.88 | 2015/6/25 | 2025/10/31 |
NoBengang Group Co., Ltd.
| �609,296.41 | 2015/6/25 | 2025/8/31 |
NoBengang Group Co., Ltd.
| �9,290,610.97 | 2015/6/25 | 2025/8/31 |
NoBengang Group Co., Ltd.
| �6,260,281.50 | 2015/8/20 | 2025/9/30 |
NoBengang Group Co., Ltd.
| �198,880.00 | 2015/12/28 | 2025/8/31 |
NoBengang Group Co., Ltd.
| �3,598,451.12 | 2015/12/28 | 2025/10/31 |
NoBengang Group Co., Ltd.
| �326,681.92 | 2015/12/28 | 2025/6/30 |
NoBengang Group Co., Ltd.
| �5,438,280.80 | 2015/12/28 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �4,069.11 | 2015/12/28 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �2,981,698.20 | 2016/6/27 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �2,266,546.78 | 2016/12/14 | 2026/4/30 |
NoBengang Group Co., Ltd.
| �857,708.44 | 2017/6/30 | 2025/10/31 |
NoBengang Group Co., Ltd.
| $18,900,000 | 2016/12/27 | 2024/6/21 |
NoBengang Group Co., Ltd.
| ?75,990,000.00 | 2015/6/25 | 2021/9/21 |
NoBengang Group Co., Ltd.
| ?129,750,000.00 | 2016/12/27 | 2024/6/21 |
No
Warrantor
Amount ofguarantee
Starting date ofGuarantee
Ending dateof Guarantee
Has theguarantee
been
Bengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?75,000,000.00 2016/3/30 2025/3/20
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?475,000,000.00 2017/2/27 2025/2/20
NoBenxi Steel & Iron (Group)Co., Ltd.
?340,000,000.00 2019/12/17 2020/12/17
NoBenxi Steel & Iron (Group)Co., Ltd.
?31,000,000.00 2020/3/20 2021/3/20
NoBenxi Steel & Iron (Group)Co., Ltd.
?500,000,000.00 2019/11/19 2020/11/19
NoBenxi Steel & Iron (Group)Co., Ltd.
?480,000,000.00 2019/12/13 2020/12/13
NoBenxi Steel & Iron (Group)Co., Ltd.
?300,000,000.00 2019/12/13 2020/12/13
NoBenxi Steel & Iron (Group)Co., Ltd.
?147,000,000.00 2019/12/16 2020/12/16
NoBenxi Steel & Iron (Group)Co., Ltd.
$90,000,000.00 2020/3/17 2021/3/17
NoBenxi Steel & Iron (Group)Co., Ltd.
$100,000,000.00 2019/12/18 2020/12/18
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?200,000,000.00 2019/9/9 2020/9/8
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?150,000,000.00 2019/10/10 2020/10/8
No
Warrantor
Amount ofguarantee
Starting date of
Guarantee
Ending dateof Guarantee
Has theguaranteebeen
Bengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?200,000,000.00 2019/10/11 2020/10/9
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?200,000,000.00 2019/9/19 2020/9/17
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?200,000,000.00 2019/9/24 2020/9/23
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?178,000,000.00 2019/12/12 2020/12/12
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?100,000,000.00 2019/7/8 2020/7/7
NoBengang Group Co., Ltd.
fulfilled?1,200,000,000.00
| ?1,200,000,000.00 | 2020/4/30 | 2020/12/8 |
NoBengang Group Co., Ltd.
| ?490,000,000.00 | 2019/9/5 | 2020/9/5 |
NoBengang Group Co., Ltd.
| ?480,000,000.00 | 2020/1/20 | 2020/10/19 |
NoBengang Group Co., Ltd.
| ?800,000,000.00 | 2020/3/4 | 2020/9/3 |
NoBengang Group Co., Ltd.
| ?500,000,000.00 | 2020/6/19 | 2021/6/18 |
NoBengang Group Co., Ltd.
| ?310,000,000.00 | 2020/5/27 | 2021/5/25 |
NoBengang Group Co., Ltd.
| ?670,000,000.00 | 2020/5/27 | 2021/5/25 |
NoBengang Group Co., Ltd.;Benxi Beiying Steel & Iron(Group) Co., Ltd.
?480,000,000.00 2019/12/12 2020/11/3
NoBengang Group Co., Ltd.;Benxi Beiying Steel & Iron(Group) Co., Ltd.
?490,000,000.00 2019/12/12 2020/11/10
No
Warrantor
Amount ofguarantee
Starting date of
Guarantee
Ending dateof Guarantee
Has theguaranteebeen
Bengang Group Co., Ltd.;Benxi Beiying Steel & Iron(Group) Co., Ltd.
?320,000,000.00 2019/12/13 2020/12/3
NoBengang Group Co., Ltd.;Benxi Beiying Steel & Iron(Group) Co., Ltd.
?710,000,000.00 2019/12/16 2020/12/10
NoBengang Group Co., Ltd.
fulfilled?350,000,000.00
| ?350,000,000.00 | 2019/10/11 | 2020/9/10 |
NoBengang Group Co., Ltd.
| ?15,600,000.00 | 2020/1/16 | 2020/7/16 |
NoBenxi Steel & Iron (Group)Co., Ltd.
JPY 173,820,000 1997/10/10 2027/9/10
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?100,000,000.00 2020/1/9 2020/10/9
NoBengang Group Co., Ltd. andBenxi Steel & Iron (Group)Co., Ltd.
?100,000,000.00 2019/10/11 2020/10/9
NoBengang Group Co., Ltd.
| ?220,000,000.00 | 2019/9/25 | 2020/9/25 |
NoBengang Group Co., Ltd.
| ?340,000,000.00 | 2019/9/6 | 2020/9/6 |
NoBengang Group Co., Ltd.
| ?140,000,000.00 | 2020/1/17 | 2021/1/17 |
No
4. Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
(In 10 Thousand Yuan)
| Item | Beginning balance | Increase | Decrease | Ending balance | Notes |
| Deposits | 1,364,312.51 | 9,638,807.40 | 9,774,864.22 | 1,228,255.69 |
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 148,923
thousand from January to June in 2020. As at 30 June 2020, the interest receivablefrom Bengang Group Finance Co., Ltd. is RMB 32,395.8 thousand.
2. As at 30 June 2020, the restricted deposits in Bengang Group Finance Co., Ltd. is
RMB 1,886,440 thousand.
3. From January to June in 2020, the company and its subsidiaries did not borrow
money from financial companies.
4. Bengang Group Finance Co., Ltd. granted the company an unsecured credit line of
RMB 4.5 billion from January to June in 2020. As at 30 June 2020, the amount ofacceptance bill opened by Bengang Group Finance Co., Ltd. was RMB 2.71 billion,and the amount of the acceptance bill that had been opened and unpaid by BengangGroup Finance Co., Ltd. is RMB 3.099 billion, and the proportion of deposit is 98.61%.
5. From January to June in 2020, the Company did not apply for bill discounting to the
finance company.
(2) The company's loan and interest payment to Benxi Steel and Iron (Group) Co., Ltd.
(In 10 Thousand yuan).
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital lending | 7,500.00 | 7,500.00 | ||
| Total | 7,500.00 | 7,500.00 |
Notes: The interest accrued is RMB 1,763,125.00 during the current period, and as at 30 June2020, the interest that has not been paid is RMB 1,763,125.00.
(6) Receivables and payables of the related parties
1. Receivables of the Company
(in 10 thousand yuan)
Items Name Name
| 30 June 2020 | 31 December 2019 |
Grosscarrying
Provision
for bad
| amount | debts |
Grosscarrying
Provision
for bad
| amount | debts | ||||
| Accounts receivable |
and Trading Co., Ltd.
5,118.68 58.92 5,892.34 58.92
| Bengang Group International Economic |
| Benxi Steel & Iron |
(Group) Thermal PowerDevelopment Co., Ltd.
1,152.45 13.01 1,301.32 13.01
Items Name Name
| 30 June 2020 | 31 December 2019 |
Grosscarrying
Provision
for bad
| amount | debts |
Grosscarrying
Provision
for bad
| amount | debts |
Bengang Cold-rolledStainless Steel DandongCo., Ltd.
185.97 1.89 188.8 1.89
(Group) MachineryManufacture Co., Ltd.
6.68 0.08 7.7 0.08
Benxi Steel & Iron(Group) MetallurgyResidues Co., Ltd.
0.14
| Benxi Steel & Iron | ||
0.14
| Prepayments |
Benxi Beiying Steel &
81,385.62
| Iron (Group) Co., Ltd. |
93,762.24
Benxi Steel & Iron(Group) Machinery
| Manufacture Co., Ltd. |
3,548.95
3,559.63
| Other receivables |
375.64 0.2 432.77 0.2
| Bengang Group International Economic and Trading Co., Ltd. |
| Benxi Steel & Iron |
(Group) Real-estateDevelopment Co., Ltd.
266.12 246.52 270.17 246.52
(Group) MedicalServices Department;
94.46 85.27 94.75 85.27
| Benxi Steel & Iron |
| Benxi Steel & Iron (Group) Zhengtai |
Construction MaterialsCo., Ltd.
18.26 12.3 24.6 12.3
Items Name Name
| 30 June 2020 | 31 December 2019 |
Grosscarrying
Provisionfor bad
| amount | debts |
Grosscarrying
Provisionfor bad
| amount | debts |
Liaoning MetallurgyTechnician College
14.15 4.58 14.2 4.58
Development Co., Ltd.
0.01
| Benxi Steel & Iron (Group) Industrial |
0.02
Other non-current
| assets |
Financial Leasing Co.,Ltd.
84,111.31
| Liaoning Hengyi |
58,419.72
| Notes receivable |
Iron (Group) Co., Ltd.
39,958.98
| Benxi Beiying Steel & |
41,739.59
Benxi Steel (Group) Co.,Ltd.
402.17
| Zhejiang Bengang |
Jingrui Steel ProcessingCo., Ltd.
2. Payables of the Company
(in 10 thousand yuan)
Items
| Items | Name | 30 June 2020 | 31 December 2019 |
| Accounts payables |
Bengang Group International Economic and
| Trading Co., Ltd. |
78,932.33 70,193.27
10,768.78 11,311.75
Benxi Steel & Iron (Group) Construction
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. |
| Co., Ltd. |
12,253.65 10,331.91
| Items | Name | 30 June 2020 | 31 December 2019 |
Benxi Steel & Iron (Group) Mining Co.,
9,365.32 8,524.77
Benxi Steel & Iron (Group) Information and
| Ltd. |
| Automatic Tech Co., Ltd. |
7,302.57 6,567.06
Benxi Steel & Iron (Group) Construction
4,430.36 4,443.69
Liaoning Hengtai Heavy Machinery Co.,
| and Repairing Co., Ltd. |
| Ltd. |
3,213.82 3,246.28
| Bengang Group Co., Ltd. | 3,139.46 | 3,148.91 |
Liaoning Hengtong Metallurgical
1,432.13 1,487.15
| Equipment Manufacture Co., Ltd. | |||
| Bengang Electronics and Gas Co., Ltd. | 998.36 | 1,149.26 |
Benxi Steel & Iron (Group) Machinery
1,012.81 1,143.65
| Manufacture Co., Ltd. |
| Benxi Steel & Iron (Group) Metallurg Residues Co., Ltd. |
1,197.39 1,033.48
| Liaoning Metallurgy Technician College | 629.17 | 724.86 |
Liaoning Metallurgy Vocational Technical
650.43 671.93
Bengang Cold-
| College |
| rolled Stainless Steel Dandong Co., Ltd. |
520.07 521.64
| Benxi New Career Development Co., Ltd. | 217.15 | 292.66 |
Benxi Steel & Iron (Group) Thermal Power
171.46 144.24
Benxi Steel & Iron (Group) Real-estate
| Development Co., Ltd. |
| Development Co., Ltd. |
54.38 62.65
Benxi High-
32.15 33.77
| tech Drilling Tools Manufacture Co., Ltd. |
| Benxi Iron and Steel (Group) Engineerin Construction Supervision Co., Ltd. |
15.68 16.28
Benxi Steel & Iron (Group) Medical
1.78 2.04
| Items | Name | 30 June 2020 | 31 December 2019 |
0.21 0.24
Advance fromcustomers
Benxi Steel & Iron (Group) ZhengtaiConstruction Materials Co., Ltd.
| Suzhou Bengang Industrial Co., Ltd. | 5,387.92 | 1,635.62 |
741.11 1,582.14
Benxi Steel & Iron (Group) Metallurgy
| Benxi Steel & Iron (Group) Steel & Iro Process and Logistics Co., Ltd. |
| Residues Co., Ltd. |
126.57
| Dalian Boluole Steel Tube Co., Ltd. | 99.58 | 85.93 |
Liaoning Hengtong Metallurgical
82.00
| Equipment Manufacture Co., Ltd. |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. |
23.36 35.79
| Other payables | |||
| Benxi Steel (Group) Co., Ltd. | 16,187.24 | 18,278.27 | |
Bengang Group International Economic and
1,411.25 1,432.74
| Trading Co., Ltd. | |
Benxi Steel & Iron (Group) Construction
456.69 526.14
| Co., Ltd. | |
Benxi Steel & Iron (Group) Thermal Power
423.69 437.69
| Development Co., Ltd. | |
Guangzhou Free Trade Zone Bengang Sales
266.64 267.44
| Co., Ltd. | |||
| Benxi New Career Development Co., Ltd. | 166.09 | 223.84 | |
Benxi Steel & Iron (Group) Real-estate
127.36 143.59
| Development Co., Ltd. | |
26.40 30.42
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | |
Benxi Beiying Steel & Iron (Group) Co.,
4.45 6.00
| Ltd. | |||
| Liaoning Metallurgy Technician College | 1.19 | 1.34 |
| Items | Name | 30 June 2020 | 31 December 2019 |
Benxi Steel & Iron (Group) Machinery
0.97 1.01
| Manufacture Co., Ltd. | |||
| Bengang Group Finance Co., Ltd. | 0.52 | 0.60 | |
Liaoning Hengyi Financial Leasing Co.,
0.35 0.39
| Ltd. | |||
| Long-term payables | |||
Liaoning Hengyi Financial Leasing Co.,
105,074.88
51,693.94
| Ltd. | |||
| Notes payables | |||
Benxi Beiying Steel & Iron (Group) Co.,
625,805.90 508,775.58
| Ltd. | |
Benxi Steel & Iron (Group) Mining Co.,
53,545.40 69,292.59
| Ltd. | |
691.00 3,203.52
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | |||
| Bengang Electronics and Gas Co., Ltd. | 6,116.16 | 2,285.78 | |
Liaoning Hengyi Financial Leasing Co.,
6,126.45 1,758.01
| Ltd. | |
Benxi Steel & Iron (Group) Real-estate
684.81
| Development Co., Ltd. | |||
| Liaoning Metallurgy Technician College | 195.91 | ||
Benxi Steel & Iron (Group) Information and
189.02 189.02
| Automatic Tech Co., Ltd. | |
Benxi Steel & Iron (Group) Machinery
254.75 186.51
| Manufacture Co., Ltd. | |
Bengang Cold-
71.84 71.84
| rolled Stainless Steel Dandong Co., Ltd. | |
Liaoning Metallurgy Vocational Technical
43.55
| College | |
Benxi Steel & Iron (Group) Construction
22.04 14.82
Benxi Steel & Iron (Group) Construction
| and Repairing Co., Ltd. |
| Co., Ltd. |
13.05
| Items | Name | 30 June 2020 | 31 December 2019 |
Benxi High-
5.71 5.71
XII. Commitments and Contingencies
(1) Commitments
1. Lease contracts in progress or to be performed and their financial impacts
(1) According to the "Land Use Right Leasing Contract" and subsequent supplementary
agreements signed by the company and Benxi Steel (Group) on April 7, 1997, December30, 2005, the Company leased land from Benxi Steel (Group). The monthly rent is 0.594yuan per square meters, the leased land area is 7,669,068.17 square meters, and the annualrent is 54,665,100 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 facilitiesoccupied by 2300 and 1780 hot rolling mill production lines, and the lease term ends onDecember 31, 2038. The rental fee is based on the depreciation of the original rent valueand the national additional tax, plus reasonable profit negotiation. The estimated annualrent is not more than 20 million yuan and 18 million yuan respectively. The rental fee issettled and paid monthly. This related party transaction has been reviewed and approved atthe fourth meeting of the eighth board of directors of the Company.
(3) On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group
and Benxi Steel (Group) respectively, and leased and used a total of 8 pieces of land of thetwo companies. 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 boardof directors of the company.
(4) As of June 30, 2020, the amount of financial lease contracts that the Company and
Liaoning Hengyi Financial Leasing Co., Ltd. had signed but had not yet started to executewas 2.108 billion yuan.
2. Irrevocable letter of credit
As at June 30, 2020, the amount of irrevocable letter of credit that was not fulfilled is
RMB 2.599 billion.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.XIII. Subsequent events
(1) Important non-adjustment matters
Impact of the COVID-19Since the outbreak of the COVID-19, the consumption, investment and exports in ourcountry have been affected to a certain extent. The Company pays close attention to theprogress of the epidemic. As of the date of this report, the situation of domestic epidemicprevention and control continues to improve, but the situation of overseas epidemicprevention and control is still grim. Iron ore imports, direct and indirect exports of productshave been affected to a certain extent. The Company will continually and actively evaluatethe development situation of the epidemic situation, scientifically respond to the challengesof the epidemic situation, and ensure the stability of production and operation.
(2) Profit distribution
Not applicable.
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
(5) Other subsequent events
Not applicable.
XIV. Other significant events
(1) Correction of previous accounting errors
None.
(2) Debt restructuring
None.
(3) Asset replacement
None.
(4) Termination of business
None.
(5) Segment information
Since the Company’s main product is steel with other products accounting for only a smallproportion of sales, and the main production base is located in Liaoning area, segmentedreporting is not applicable.
(6) Other material issues that will influence investors’ decisions
1. Financing Lease
For prioritizing the capital structure and exploring financing channel, the Company signed the“Financial lease cooperation framework” with Liaoning Hengyi Financial Leasing Co., Ltd.with the amount of financial lease not exceeding RMB 5 billion per year. The Company obtainsthe fund through sales and lease back financial lease with interest rate not above the benchmarkinterest rate of loan over the same period published by the People’s bank of China and theinterest rate will be adjusted with the changes of benchmark interest rate of loan published bythe People’s bank of China over the lease term. The lease security ratio is not higher than 30%of the lease principal amount.
2. Shares pledged by the Controlling Shareholders
As at 30 June 2020, the total 2,407,002,394 shares were held by the controlling shareholderBenxi Steel & Iron (Group) Co., Ltd., of which 712,545,000 shares were pledged and102,100,000 shares were frozen.
3. The controlling shareholder completes the increase in the company's shares
Benxi Steel (Group) Co., Ltd., the Company's controlling shareholder, plans to increase itsshareholding in the Company within 6 months from February 14, 2020. The total amount ofthis shareholding increasing plan is no more than RMB 100 million. As of August 12, 2020,Benxi Steel (Group)'s shareholding increase plan was completed. Benxi Steel (Group) hasaccumulatively increased its holdings of 28,523,000 shares of the Company, accounting for
0.66% of the Company's total share capital, and the total amount of additional holdings was
RMB 99.98 million.
4. Accounting estimates adjustment
On January 31, 2020, the eighth meeting of the eighth session of the company's board ofdirectors passed a resolution of the "Proposal on Adjusting the Depreciation Period of CertainFixed Assets."Reasons for changes in accounting estimates: According to Article 19 of the "AccountingStandards for Business Enterprises No. 4 - Fixed Assets", "Enterprises should review the usefullife, estimated net residual value and depreciation method of fixed assets at least at the end ofeach year. If there is a difference between the estimated amount and the original estimatedamount, the useful life of the fixed asset shall be adjusted". In order to fairly reflect thecompany's financial status and operating results, make the fixed asset depreciation life closerto its actual useful life, and adapt to the company's business development and fixed assetmanagement needs, the company assessed the use and useful life of fixed assets. After thecompany’s evaluation of the actual status and depreciation period of fixed assets, it isconcluded that the company’s production equipment has a high level of equipment andtechnical content, and the maintenance is in good condition. During the period from 2010 to2019, the company’s cumulative investment in equipment maintenance costs was 11.959billion yuan. In order to make the depreciation life of fixed assets closer to the actual service
life, it is necessary to adjust the depreciation life of some fixed assets of the company.Accounting estimates used before and after the change:
The company decided to adjust the useful life of some fixed assets from January 1, 2020. Thespecific adjustment plan is as follows:
Accounting estimates used before and after the change:
Fixed asset category
Original depreciation period
Adjusted depreciation period
| (years) | (years) | |
| 1. Mechanical equipment | 14 | 21 |
| 2. Power equipment | 18 | 19 |
| 3. Conduction equipment | 18 | 28 |
| 4. Transportation equipment | 6 | 12 |
5. Tools and other production
9 14
6. Non-production equipment and
| utensils |
| appliances |
| (1) Equipment and tools | 18 | 22 |
| (2) Copiers, word processors | 5 | 8 |
| 7. Houses and buildings | ||
| (1) Houses for production | 40 | 40 |
| (2) Corroded production houses | 25 | 25 |
(3) Production houses subject to
10 15
| strong corrosion | ||
| (4) Non-production houses | 30 | 45 |
| (5) Simple houses | 8 | 10 |
| (6) Buildings | 25 | 25 |
5. Issuance of convertible corporate bonds
The Company plans to publicly issue convertible corporate bonds that can be converted intocompany’s A shares. The total amount of convertible bonds issued this time will not exceedRMB 6.8 billion (inclusive RMB 6.8 billion). The specific amount of funds raised is to be
confirmed determined within the aforementioned quota by the Company's board of directorsor persons authorized by the board of directors under the authorization of the Company'sgeneral meeting of shareholders.
After deducting the issuance expenses, the proceeds will be fully invested in the followingprojects:
Unit: in 10 thousand yuan
| No. | Projects | Total Investment | Proposed investment |
1 High grade high magnetic induction non-
114,500.00 105,700.00
| oriented silicon steel project | |||
| 2 | Steelworks No. 8 Casting Machine Project | 39,500.00 | 33,500.00 |
3 Energy-saving renovation project of No. 5
150,000.00 96,000.004 Special Steel Electric Furnace Upgrading
| blast furnace in ironworks |
| Project |
160,000.00 141,600.00
| 5 | CCPP power generation project | 98,826.80 | 83,300.00 |
6 No. 4-No. 6 converter environmental
27,000.00 19,900.00
| protection renovation project | |||
| 7 | Repayment of bank loan | 200,000.00 | 200,000.00 |
| Total | 789,826.80 | 680,000.00 | |
The relevant proposal of the Company's public issuance of A-share convertible corporate bondswas reviewed and approved by the second meeting of the eighth board of directors of theCompany on May 22 2019, and was resolved by the Company's second extraordinary generalmeeting of shareholders on June 10, 2019.
In June 2019, the State-owned Assets Supervision and Administration Commission of thePeople ’s Government of Liaoning Province issued the "Response for the Public Issuance ofConvertible Corporate Bonds of Bengang Steel Plates Co., Ltd." (Liao-Guo-Zi-Chan-Quan[2019] No. 110), which approved the Company's application for public offering of no morethan RMB 6.8 billion (inclusive) convertible corporate bonds with a term of 6 years.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds(Revised Draft) was reviewed and approved by the sixth meeting of the eighth board ofdirectors on October 8, 2019.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds(Second Revision)" was reviewed and approved by the seventh meeting of the eighth board ofdirectors on October 28, 2019.
The "Proposal on the Company's Public Offering of A Share Convertible Corporate Bonds(Second Revision)" was passed by the resolution made by the fourth extraordinary generalmeeting of shareholders in 2019 on November 14, 2019.
On December 20, 2019, the Issuance Review Committee of the China Securities RegulatoryCommission (hereinafter referred to as the "China Securities Regulatory Commission")reviewed the company's application for public issuance of A-share convertible corporate bonds.According to the results of the meeting, the Company's public offering for A-share convertiblecorporate bonds was approved. On January 22, 2020, the Company received the “Response forApproving the Public Issuance of Convertible Corporate Bonds of Bengang Steel Plate Co.,Ltd.” issued by the China Securities Regulatory Commission (Zhongjian License [2020] No.
46) (hereinafter referred to as “Response”) ,which approved Company’s publicly issuance of
convertible corporate bonds with a total face value of RMB 6.8 billion to the public for a periodof 6 years. This approval is valid for 6 months from the date of approval of the issuance.
RMB 6.8 billion convertible bonds of the Company, each with a face value of RMB 100,totaling 68 million in quantity, are issued at face value.
14. Capital management
The main objectives of the company's capital management are as following:
- to ensure the Company's ability to continue to operate in order to provide returns toshareholders and other stakeholders continuously;- to price the products and services accordingly according to the risk level, so as to providesufficient returns to shareholders.The Company has set a capital amount proportional to the risk, and manages and adjusts thecapital structure according to changes in the economic environment and the risk characteristicsof the underlying assets. In order to maintain or adjust the capital structure, the Company mayadjust the amount of dividends paid to shareholders, return capital to shareholders, issue newshares or sell assets to reduce liabilities.The company monitors capital based on the adjusted liability / capital ratio.Liability/capital ratio after adjustment as of the balance sheet date is showed as follows:
| Items | 30 June 2020 | 31 December 2019 |
Shor-term loans 12,506,705,000.00 13,151,478,000.00Long-term loans due within oneyear
1,201,524,980.80 234,474,657.99Long-term loans 3,810,463,934.18 4,849,675,910.73Total amount of loans 17,518,693,914.98 18,235,628,568.72Minus: cash and cash equivalent 11,417,592,663.52 13,441,414,988.58Net value of liabilities 6,101,101,251.46 4,794,213,580.14Shareholder’s equity 20,291,922,235.34 20,012,826,841.40Liability/capital ratio afteradjustment
30.07% 23.96%
XV. Notes to the financial statements of parent company
(1) Accounts receivable
1. Accounts receivable disclosed by aging
| Items | 30 June 2020 | 31 December 2019 |
| Within 1 year (inclusive) | 326,463,297.85 | 339,851,051.52 |
| 1-2 years (inclusive) | 32,410,975.65 | 31,642,073.27 |
| 2-3 years (inclusive) | 24,355,924.19 | 24,708,264.04 |
| Items | 30 June 2020 | 31 December 2019 |
| Over 3 years | 170,785,391.75 | 175,744,519.91 |
| Sub-total | 554,015,589.45 | 571,945,908.74 |
Less: Provision for bad
180,541,758.35 182,948,800.28
| debts |
| Total: |
373,473,831.10
2. Accounts receivable disclosed by category
Items
388,997,108.4630 June 2020
| 30 June 2020 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage(%)
Amount
Baddebts
Individually
| ratio (%) | ||
| significant and tested for |
impairment
47,762,337.18 8.62 47,762,337.18 100.00
Accounts
| individually |
| receivable tested |
for impairment by
506,253,252.27 91.38 132,779,421.17 25.79 373,473,831.10
| portfolio | |||||
| Include: | |||||
| Portfolio 1: Aging | 253,577,229.31 | 45.77 | 132,779,421.17 | 52.36 |
withinconsolidation
| scope |
252,676,022.96 45.61
| Total | 554,015,589.45 | 100.00 | 180,541,758.35 | 373,473,831.10 |
Items
| 31 December 2019 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percenta
Amount
| ge (%) | Bad debts ratio (%) |
Individuallysignificant and tested
47,762,337.18 8.35 47,762,337.18 100.00
| for impairment individually |
| Accounts receivable tested for impairment by portfolio |
524,183,571.56 91.65 135,186,463.10 25.79 388,997,108.46
| Include: | |||||
| Portfolio 1: Aging | 268,981,818.03 | 47.03 | 135,186,463.10 | 50.26 | 133,795,354.93 |
| Portfolio 2: Related party within consolidation scope |
255,201,753.53 44.62 255,201,753.53
| Total | 571,945,908.74 | 100.00 | 182,948,800.28 | 388,997,108.46 |
Receivables individually insignificant but tested for impairment individually:
Items
30 June 2020Accountsreceivable
Provision forbad debts
Baddebtsratio
%
| ） |
Reason
Benxi Nanfen XinheMetallurgical Co., Ltd.
47,762,337.18 47,762,337.18 100.00
Benxi NanfenXinhe has haltoperation.Total 47,762,337.18 47,762,337.18
Accounts receivable tested for impairment by portfolioPortfolio tested by aging
Items
| 30 June 2020 | |||
| Gross carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year | 326,463,297.86 | 3,264,632.98 | 1.00 |
| 1-2 years | 32,410,975.65 | 1,620,548.78 | 5.00 |
| 2-3 years | 24,355,924.19 | 4,871,184.84 | 20.00 |
| Over 3 years | 123,023,054.57 | 123,023,054.57 | 100.00 |
| Total | 506,253,252.27 | 132,779,421.17 | |
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 2,407,041.93.
4. No accounts receivable has been written off this year.
5. Top five debtors at the end of the period
Company
Amount
Percentage of totalaccounts receivable
| 30 June 2020 | ||
| (%) | ||
Provision forbad debtsNo.1
| 51,186,799.05 | 12.25 | 589,234.48 |
No.2
| 47,762,337.18 | 11.43 | 47,762,337.18 |
No.3
| 14,246,791.47 | 3.41 |
No.4
| 13,192,766.29 | 3.16 |
No.5
| 11,524,466.74 | 2.76 | 130,131.74 |
Total
| 137,913,160.74 | 33.00 | 48,481,703.40 |
6. There is no account receivables be derecognized due to the transfer of financial
assets at the end of the period.
7. There is no account receivables be transferred and further involved in assets and
liabilities during the current period.
(2) Accounts receivable financing
1. Details of accounts receivable financing
Items 30 June 2020 31 December 2019Notes receivable 3,997,787,483.35 2,193,319,842.60Include: Bank acceptance bill 3,984,477,483.35 2,184,526,834.33Commercial acceptance bill 13,310,000.00 8,793,008.27
Total 3,997,787,483.35 2,193,319,842.60
Notes: Accounts receivable financing reflects notes receivable and accounts receivable that
are measured at fair value through other comprehensive income.
2. Provision for financing impairment of receivables
None.
3. The pledged acceptance bill at the end of the period
| Items | Pledged amount |
| Bank acceptance bill | 759,753,834.45 |
| Commercial acceptance bill |
| Total | 759,753,834.45 |
4.The amount of notes receivable endorsed over or discounted but not yet matured
at the end of the period
| Items | Derecognized amount | Not derecognized amount |
| Bank acceptance bill | 4,879,438,530.74 | |
| Commercial acceptance bill |
| Total | 4,879,438,530.74 |
5. There is no notes receivable has been transferred into accounts receivable due to
inability of drawer to meet acceptance bill at the year-end.
(3) Other receivables
| Items | 30 June 2020 | 31 December 2019 |
| Interest receivables |
31,655,295.18
| 19,658,230.77 | ||
| Dividend receivables |
| Other receivables |
226,277,114.59
| 247,005,005.04 | ||
| Total |
257,932,409.77
1. Interest receivable
(1) Interest receivable disclosed by category
| Items | 30 June 2020 | 31 December 2019 |
| Deposit interest |
31,655,295.18 19,658,230.77
31,655,295.18 19,658,230.77
| Subtotal |
| Less: provision for bad debt |
31,655,295.18 19,658,230.77
(2) There is no significant provision for overdue interest and bad debt provision.
2. Other receivables
(1) Other receivables disclosed by Aging
TotalItems
| Items | 30 June 2020 | 31 December 2019 |
| Within 1 year (inclusive) | 96,502,772.71 | 115,480,359.05 |
| 1-2 years (inclusive) | 16,100,882.51 | 15,711,856.93 |
| 2-3 years (inclusive) | 3,394,063.57 | 3,479,413.59 |
| Over 3 years | 175,449,847.41 | 177,724,723.88 |
| Sub-total | 291,447,566.20 | 312,396,353.45 |
| Less: Provision for bad debts |
65,170,451.61 65,391,348.41
226,277,114.59
| Total | 247,005,005.04 |
(2) Provision for bad debt provision
Provision for bad
debts
| Stage one | Stage two | Stage three |
Total12-monthexpectedcredit losses
Lifetime expectedcredit losses (nocredit impairment)
Lifetime expected
credit losses(credit impairment
| occurred) | ||||
| Beginning balance | 9,179,698.89 | 56,211,649.52 | 65,391,348.41 | |
| Current period |
provision, write-back, transfer-in.
-220,896.80
-220,896.80
| transfer-out |
| Current period reversal |
Provision for bad
debts
| Stage one | Stage two | Stage three |
Total12-monthexpectedcredit losses
Lifetime expectedcredit losses (nocredit impairment)
Lifetime expected
credit losses(credit impairment
| occurred) | ||
| Current period write-off |
| Other changes | ||||
| Ending balance | 8,958,802.09 | 56,211,649.52 | 65,170,451.61 |
Changes in the gross carrying amount of other receivables are as follows
Grosscarryingamount
| Stage one | Stage two | Stage three |
Total12-month expected
credit losses
Lifetime expectedcredit losses (nocredit impairment)
Lifetime expectedcredit losses (credit
impairment
Beginning
| occurred) | ||
| balance |
232,528,777.63 23,655,926.30 56,211,649.52 312,396,353.45Currentperiod
-
Currentperiod
| increase |
| decrease |
20,727,890.45 220,896.80 20,948,787.25Other
Ending
| change |
| balance |
211,800,887.18 23,435,029.50 56,211,649.52 291,447,566.20
(3) Other receivables disclosed by nature
| Nature | 30 June 2020 | 31 December 2019 |
| Receivable and payable | 283,339,342.69 | 304,483,575.55 |
| Nature | 30 June 2020 | 31 December 2019 |
| Other | 8,108,223.51 | 7,912,777.90 |
| Total | 291,447,566.20 | 312,396,353.45 |
(4) Top five debtors at the year-end
Company
Nature or
content
Amount Aging
Percentage of
total otherreceivables
Provision for
bad debts
The First
Receivable
| (%) | ||
| and payable |
9,648,111.00
3.31
The Second
Receivable
| Within 1 year | ||
| and payable |
9,505,576.53
3.26
The Third
Receivable
| Within 1 year | ||
| and payable |
6,804,946.27
2.33
The Fourth
Receivable
| Within 1 year | ||
| and payable |
3,756,448.28 1-2 years 1.29
2,000.00
The Fifth
Receivableand payable
2,661,194.04
0.91
2,465,166.01
| Within 1 year and over 3 years | ||||
| Total | 32,376,276.12 | 11.11 |
2,467,166.01
(5) There is no other receivables relates to government subsidies at the end of the
reporting period.
(6) There is no other receivables derecognized due to the transfer of financial assets at
the end of the reporting period.
(7) There is no transfer of other receivables and continued involvement in the amount
of assets and liabilities formed at the end of the reporting period.
(4) Long-term equity investment
Items
| 30 June 2020 | 31 December 2019 | |
| Gross carrying | ||
amount
Impairment Book value
amount
Impairment Book value
| Subsidiaries | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | ||
| Joint ventures | ||||||
| Total | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 |
Details of investment in subsidiaries
Name of entity Beginning balance Increase Decrease
Endingbalance
ment
ofcurren
tperiod
Endingbalance
ofimpair
ment
Trading Co., Ltd.
30,000,000.00
| Guangzhou Bengang Steel & Iron | 30,000,000.00 | |||||
| Shanghai Bengang Metallurgy |
Science and Technology Co., Ltd.
30,000,000.00
| 30,000,000.00 | ||||||
| Bengang Steel Plates Liaoyang |
Pellet Co., Ltd.
529,899,801.38
| 529,899,801.38 | ||||||
| Dalian Benruitong Automobile |
Material Technology Co., Ltd.
65,000,000.00
| 65,000,000.00 | ||||||
| Bengang Posco Cold-rolled Sheet |
Co., Ltd.
1,019,781,571.10
| 1,019,781,571.10 | ||||||
| Changchun Bengang Steel & Iron |
Sales Co., Ltd.
28,144,875.36
| 28,144,875.36 | ||||||
| Harbin Bengang Economic and |
Trading Co., Ltd.
29,923,398.23
| 29,923,398.23 | ||||||
| Nanjing Bengang Materials Sales |
Co., Ltd.
2,081,400.65
| 2,081,400.65 |
Co., Ltd.
29,936,718.57
| Wuxi Bengang Steel & Iron Sales | 29,936,718.57 | |||||
| Xiamen Bengang Steel & Iron |
Sales Co., Ltd.
1,095,711.66
| 1,095,711.66 | ||||||
| Yantai Bengang Steel & Iron |
Sales Co., Ltd.
49,100,329.41
| 49,100,329.41 | ||||||
| Tianjin Bengang Steel & Iron |
Trading Co., Ltd.
60,318,095.80
| 60,318,095.80 | ||||||
| Benxi Bengang Steel Sales Co., |
Ltd
5,000,000.00
5,000,000.00
Science and Technology Co., Ltd.
30,000,000.00
| Shenyang Bengang Metallurgical |
30,000,000.00
Trade Co., Ltd.
30,000,000.00
| Chongqing Liaoben Steel & Iron |
30,000,000.00
Automobile New MaterialsTechnology Co., Ltd.
76,000,000.00
| Bengang Baojin (Shenyang) |
76,000,000.00
| Total | 2,016,281,902.16 | 2,016,281,902.16 |
(5) Operating income and operating cost
Items
| Current period | Previous period | |||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 19,591,244,860.47 | 18,369,564,255.82 | 21,327,519,597.49 | 19,894,713,843.28 |
| Other business | 2,168,536,821.65 | 2,009,584,025.45 | 2,119,696,260.44 | 1,862,576,153.90 |
| Total | 21,759,781,682.12 | 20,379,148,281.27 | 23,447,215,857.93 | 21,757,289,997.18 |
Details of operating income:
Items Current period Previous periodPrincipal business 19,591,244,860.47 21,327,519,597.49Including: Domestic 17,433,565,833.49 18,051,675,852.17Overseas 2,157,679,026.98 3,275,843,745.32Other business 2,168,536,821.65 2,119,696,260.44Including: Domestic 2,168,536,821.65 2,119,696,260.44Overseas
Total 21,759,781,682.12 23,447,215,857.93
XVI. Supplementary information
(1) Details of non-recurring profit and loss
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets | -19,733,108.62 |
Tax refund, reduction or exemption of unauthorized approval or no formal
Government subsidy attributable to profit and loss of current period (exceptsuch government subsidy closely related to the company's normal businessoperation, meeting the regulation of national policy and enjoyed constantly
| approval document |
| in certain quota or quantity according to a certain standard) |
38,587,332.40
| Items | Amount | Notes |
Fund occupation fee charged to non-financial enterprises included in current
The investment cost of an enterprise acquiring subsidiaries, associates andjoint ventures is less than the income from the fair value of the identifiable
| profit and loss |
| net assets of the investee when obtaining the investment |
| Non-monetary asset exchange gains and losses | ||
| Profit or loss from investment or assets entrusted to others |
Provision for asset impairment due to unavoidable factors such as natural
| disasters |
| Profit or loss from debt restructuring |
Restructuring costs, such as the cost of relocating employees, integration
| costs, etc. |
| Profits and losses in excess of fair value from unfair transaction |
Subsidiary companies arising from business combinations under the same
| control |
Profits and losses from contingencies are not related to the company's
Profits excluded effective hedging business related to the company's normalbusiness operations, from holding transactional financial assets, derivativefinancial assets, transactional financial liabilities, fair value changes inderivative financial liabilities, and disposal of transactional financial assetsand derivative financial Investment income from assets, trading financial
| normal business operations |
| liabilities, derivative financial liabilities and other debt investments |
Reversal of impairment provision for individually tested impairment of
| receivables |
| Profits and losses from external entrusted loans |
Profits and losses from changes in fair value of investment real estate that
| use the fair value model for subsequent measurement |
Profit and loss affected due to the adjustments of requirements of taxation,
| accounting and other laws and regulations |
| Trustee income from trust operations |
| Other non-operating revenue and expenditure other than above items | 838,001.32 | |
| Other non-recurring profit and loss |
| Items | Amount | Notes |
| Subtotal | 19,692,225.10 | |
| Impact of income tax | 4,923,056.28 | |
| Impact of minority interests |
10,437.03
| Total | 14,758,731.79 |
(2) Net asset yield and earnings per share
Profit in the Reporting Period
Weighted average net
| assets yield (%) | Earnings per share (Yuan) | ||
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 1.30 | 0.07 | 0.12 |
Net profit attributable to ordinary shareholders
1.22 0.06 0.12
| after deducting non-recurring profit and loss |
(3) Differences between Domestic and Foreign Accounting Standards
Not applicable.