Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Bengang Steel Plates Co., Ltd.
Semi-Annual Report 2021
August, 2021
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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, the person in charge of the company, Lin Dong, the person in charge of accounting work,and Cong Yajuan, the person in charge of the accounting organization (accounting officer), herebyconfirm that the financial report in this semi-annual report is true, accurate and complete.
All directors have attended the board meeting for reviewing this report.
This report involves forward-looking statements such as future plans and does not constitute asubstantial commitment of the company to investors. Investors are advised to pay attention toinvestment risks. This report is prepared in Chinese and English respectively. In the event ofdiscrepancies in the interpretation of Chinese and foreign texts, the Chinese text shall prevail.
The company has described the existing risks and countermeasures in detail in this report, please referto the content of Section 3-10 "Risks Faced by the Company and Countermeasures". "China SecuritiesJournal", "Securities Times", "Hong Kong Commercial Daily" and Juchao Information Network(www.cninfo.com.cn) are selected as the company's information disclosure media. All information ofthe company is subject to the information published in the above-mentioned designated media.Investors are kindly requested to pay attention to investment risks.
The company’s profit distribution plan approved by the board of directors this time is as follows:
Based on 3,885,060,605, a cash dividend of RMB 5 (tax included) will be distributed to allshareholders for every 10 shares, and 0 shares of bonus shares (tax included) will be distributed. Thereis no conversion of reserves into share capital.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Table of Contents
Ⅰ. Important Notice, Table of Contents, and Definitions ..................................................................... 2
Ⅱ. Company Profile and Main Financial Index ................................................................................... 6
III. Management Discussion and Analysis .......................................................................................... 9
IV. Corporate Governance ................................................................................................................. 17
V. Environment and Social Responsibilities...................................................................................... 18
VI. Important Events .......................................................................................................................... 22
VII. Status of Share Capital Changes and Shareholders .................................................................... 54
VIII. Status of Preferred Shares ......................................................................................................... 54
IX. Status of Bonds ............................................................................................................................ 55
X. Financial Report ............................................................................................................................ 58
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Reference File Directory
1. Financial statements containing the signatures and seals of legal representative, chief
financial officer, and chief accountant;
2. The originals of all company documents and announcements publicly disclosed during the
reporting period;
3. Semi-annual reports published in other securities markets.
Definition
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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 024-47828980
Fax024-47827004 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 2020 for details.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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 2020 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 38,588,128,212.14
22,184,537,260.05
73.94%
Net profit attributable to the shareholdersof the listed company
2,208,798,167.91
254,644,204.33
767.41%
Net profit attributable to the shareholdersof listed company after deducting non-recurring gain/loss
2,199,142,563.30
239,885,472.54
816.75%
Net cash flows generated by operatingactivities
1,524,916,220.03
-151,475,707.08
1,106.71%
| Basic earnings per share | 0.57 | 0.07 | 714.29% |
Diluted earnings per share 0.57
0.07
714.29%
ROE 9.98%
1.30%
8.68%
At the end of this reporting
period
At the end of previous
reporting period
end of this reporting period
| over the previous year |
Total assets 64,752,065,169.98
65,007,470,749.20
-0.39%
Net assets attributable to shareholders ofthe listed company
23,246,599,850.13
21,018,296,389.10
10.60%
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
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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-
-22,272,050.41
| 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
32,659,483.34
| certain standard) |
2,555,535.73
| Other non-operating revenue and expenditure other than above items |
| Less: Impact of income tax | 3,235,742.17 | |
| Impact of non-controlling interests (after tax) | 51,621.88 | |
| Total | 9,655,604.61 | -- |
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.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
III. Management Discussion and Analysis
I. The Company's main business during the reporting period
(1) The company's main business during the reporting period
1. Industry development
The company's industry is the steel industry. In the first half of 2021, the domestic economy is recovering steadily,economic development is showing rapid growth, the steel industry is operating well, the production and sales ofenterprises are booming, efficiency is improved, and new progress has been made in green development, intelligentmanufacturing, and technological innovation. However, the current domestic and international environment is stillcomplicated, with many uncertain and unstable factors. On the one hand, in accordance with the policy guidance of“controlling production capacity, suppressing output, and adjusting exports”, the steel industry must improve the dynamicadaptability of domestic steel product supply and demand. , To avoid large fluctuations in steel prices, and to prevent thepressure and risks of steel costs caused by the large fluctuations in the prices of bulk raw materials and fuels; on the otherhand, due to many factors such as seasonal cycles, environmental constraints, and resource bottlenecks, the demand forsteel is relatively weakened. China has entered a new development stage of building a modern socialist country in an all-round way. The iron and steel industry is an important support for building a modern and powerful country and animportant field for achieving green and low-carbon development. The goal of achieving carbon neutrality in the past hasput forward new requirements for the development of the iron and steel industry, and has also stimulated new momentumfor the high-quality development of the iron and steel industry. China's steel industry will face a series of changes in thedomestic steel demand structure, steel product supply structure, steel production process structure, and steel productionresource structure.
2. Main business, main products and their uses
During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing, powergeneration, coal chemical industry, special steel profiles, railways, import and export trade, scientific research, productsales, etc. The introduction of world advanced equipment and technology to implement equipment upgrades for the mainiron and steel industry , Basically built a high-quality steel base, formed more than 60 varieties, more than 7,500specifications of product series, the proportion of high value-added and high-tech products reached more than 80%,automotive surface panels, home appliance panels, petroleum pipeline steel, container panels Leading products such as,shipboard, etc. are widely used in the fields of automobiles, home appliances, petrochemicals, aerospace, machinerymanufacturing, energy and transportation, building decoration and metal products, and are exported to more than 60countries and regions. During the reporting period, the company's main business did not undergo major changes.
3. Business model
Procurement model: The company's procurement model includes domestic procurement and foreign procurement.Domestic material procurement is carried out through centralized procurement, unified bidding, price comparison, andnegotiation. The procurement of foreign materials is carried out through long-term cooperative procurement, directprocurement, open and invited bidding, price inquiry, price competition, negotiation and procurement, and is mainlyrepresented by Benxi Iron and Steel International Trade Corporation.Sales model: The company’s sales are divided into domestic sales and foreign sales. Domestic sales mainly adopt thedirect sales model. Large customers are sold directly by the company, and other small and medium customers are soldthrough various regional sales subsidiaries. The strong marketing network accumulated in international trade is exportedby its agency company, and the agency fee of Benxi Iron and Steel International Trade Co., Ltd. is paid.
4. Main performance drivers
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
The main performance drivers during the reporting period: During the reporting period, the steel market prices remainedhigh as a whole, the prices of raw materials such as iron ore and coke rose simultaneously, and the pressure onenvironmental protection continued to increase. The "5+1" work pattern and the "1+4" key tasks have steadily promotedthe three system reforms, continued to promote the reform and innovation of the management mechanism, andimplemented the "general factory system" to continuously improve management efficiency and benefits. Build atechnological innovation system, create innovative platforms such as the "Liaoning Bengang Iron and Steel IndustryIndustry-University-Research Alliance", and implement the "R&D personnel delisting system for scientific andtechnological projects" to achieve precise incentives. Continue to carry out in-depth benchmarking exchanges, adhere tothe direction of market-oriented reforms, and continuously promote the high-quality development of diversified industries.
(2) Analysis of the operating conditions during the reporting period
During the reporting period, the company took "efficiency as the center" as the starting point, and carried out in-depthwork of "refining and strengthening listed companies, and promoting high-quality development". Business process,undertaking related business work, improving the company's standardized operation level, focusing on epidemicprevention and control on the one hand, and stabilizing and high output on the other hand, achieving both epidemicprevention and control and production and operation, and achieving stable economic development. The output of somevarieties and the records of daily and monthly output have been continuously refreshed. A series of indicators have reachedthe best level in history, and the quality of enterprise development has been significantly improved. In the first half of2021, the company’s main operating indicators have achieved steady growth, including: pig iron of 5.1601 million tons,a year-on-year increase of 49,300 tons, an increase of 0.96%; crude steel 5,565,400 tons, an increase of 433,000 tons, anincrease of 8.44%; hot-rolled plates 7.0511 million Tons, a year-on-year increase of 1,183,200 tons, an increase of 20.16%;a cold-rolled sheet of 3,134,100 tons, a year-on-year increase of 357,000 tons, an increase of 12.86%; a special steel389,000 tons, an increase of 33,400 tons, an increase of 9.39%. Reviewing the work in the first half of the year, it ismainly reflected in the following aspects:
1. Production and operation work. Strictly pay attention to ensuring the supply of materials in the ironmaking process and
the stable operation of the blast furnace, focusing on the timely coordination of the ironmaking plant to rationally adjustthe structure of the blast furnace acidic material according to the changes in pig iron production, and scientificallymatching pellets and lump on the basis of ensuring the blast furnace is running smoothly. The amount of ore will makeevery effort to create conditions for the annual repair of the polo ball. Completed the allocation of plates from BeiyingXinyu pelletizing group, which effectively made up the company's pelletizing gap and ensured high-yield demand.Coordinate the ironmaking process to do a good job in the homogenization of raw materials into the furnace, strengthentechnical operations to stabilize furnace conditions, and gradually increase the output of pig iron. Focus on organizing theironmaking plant to steadily advance the strengthening process of the new 5# blast furnace; do a good job of specialprotection for the hearth of the new 1# blast furnace to ensure safe and stable operation.
2. Safety management work. In accordance with national laws and regulations, industry standards, combined with the
actual situation of the company, reorganize and revise the company's relevant safety system. 29 related systems have beenrevised and issued. Carry out safety work surveys to learn more about the current safety management status, managementideas and existing problems of each unit, and better supervise, guide, and serve the safety management work of eachgrass-roots unit.
3. Management innovation. Won the title of "Excellent Board of Directors" and "Most Innovative Secretary of the Board"
of the 16th "Golden Round Table Award". The "Golden Round Table Award" is jointly organized by the China Associationof Listed Companies and the "Board of Directors" magazine. It has been successfully held for fifteen times. An importantevaluation benchmark for the governance level of China's listed companies, it is recognized by the industry as the firstaward in the field of China's listed company board of directors. Bengang Steel Plates won this award, which has promotedthe brand value of Benxi Steel Plates, established a positive image in the capital market, and boosted investor confidence.
4. Scientific and technological innovation work. During the reporting period, 31 new product developments were
completed. The hot-rolled automotive structural steel represented by "automotive beam" and "box steel" has achieved fullcoverage of the strength level serialization. Through the "point-to-point" personalized and precise market development,the "one material, multiple households" and the "one material, multiple households" have been developed. Thetransformation of “multi-materials”; breakthrough in the cold-rolled 1630 production line design capability, andsuccessfully developed the domestic leading level of 1180 strength duplex steel; the product certification work was carriedout in an orderly manner, and 4 items and 6 grades were certified in the first half of the year.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
5. Party building and group work. Comprehensively do a good job in party history learning and education, and
coordinate with the third tour steering group to carry out party history learning and education supervision work to 14units, and form the first stage of guidance summary report. A total of 10 issues of Bengang Steel Plate Party HistoryLearning and Education Week briefings have been compiled and distributed. Organize the party committee of thegrassroots unit to carry out the recommendation work of celebrating the 100th anniversary of the founding of the party.Guide the party committee of grassroots units to carry out a series of activities to celebrate the 100th anniversary of thefounding of the party and commendation work within the party.II. Analysis on Core CompetitivenessThe company adheres to the innovation-driven and "quality plus service" development model, with the strategic goal ofbuilding an internationally competitive high-quality plate base, a domestic first-class special steel base and acomprehensive service provider, and exerts a strategic leading role, focusing on improving quality and efficiency, In termsof product upgrades, technological innovation, green and intelligent manufacturing, we will innovate management ideas,enhance the core competitiveness of enterprises, and promote the realization of high-quality, green and intelligentdevelopment of enterprises.
1. Manufacturing capacity. Focus on economic benefits, firmly grasp market opportunities, actively build a "5+1" work
pattern, promote "1plus 4" key tasks, and implement the production and operation thinking of "the upper process is subjectto the next process, and the entire process is subject to the market" ——Re-established the assessment mechanism,implemented simulated market profit assessment, and all employees moved around the market, and the profit awarenessand corporate profitability continued to improve. Various departments and units interact with each other, focus on theprocess of iron and steel, and rationally match the production line and resource production organization principles of thesteel post process, so that the production process and operation are continuously standardized and refined, and the quality,efficiency and production scale are fully realized. The maximization of production, promotes the entire production chaintowards high-end manufacturing.
2. Equipment transformation and upgrading. In 2021, the company issued a fixed asset investment plan of 3.85 billion
yuan. A new round of major projects represented by special steel electric furnace upgrade and transformation, specialsteel rolling mill transformation, CCPP power generation project, 220KVA substation project, Taizi River Bridgetransformation, 1700mm production line improvement department, coke oven flue gas desulfurization and denitrification,and other key projects have been implemented. Large-scale technological transformation, ultra-low emissiontransformation. At present, the 1700mm production line is complete, the CCPP power generation project, and the 220KVAsubstation project will be put into production one after another; the special steel electric furnace upgrade project, 70% ofthe project construction progress has been completed in 2021.
3. New product development capabilities. 36 new products are planned to be developed throughout the year, 31 of which
have been developed, and 86% of the annual plan has been completed, an increase of 94% year-on-year; the contractvolume of new products is 64,000 tons, an increase of 120% year-on-year; The best level in the same period. The hot-rolled automotive structural steel represented by "automotive beam" and "box steel" has achieved full coverage of thestrength level serialization. Through the "point-to-point" personalized and precise market development, the "one material,multiple households" and the "one material, multiple households" have been developed. The transformation of “multi-materials”; breakthrough in the cold-rolled 1630 production line design capability, and successfully developed thedomestic leading level of 1180 strength duplex steel; the product certification work was carried out in an orderly manner,and 4 items and 6 grades were certified in the first half of the year.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
4. Technological innovation ability. In terms of scientific and technological cooperation, with Northeastern University,
China Industrial Internet Research Institute and other units, jointly apply for the "2021 Industrial Technology Basic PublicService Platform Project" of the Ministry of Industry and Information Technology, with the project name "Green and LowCarbon Public Service Platform for Key Raw Material Industries"; apply for Liaoning Provincial Department of Scienceand Technology "2022 National Natural Science Foundation Regional Innovation and Development Joint FundApplication Guidelines" 3 projects, the project name "Multi-modal data mining and design of advanced steel materialintelligent manufacturing process", "New generation series of hot-formed steel anti-high temperature Key oxidationtechnology and dynamic mechanics mechanism of integrated door knocker", "New technology and theoretical basis forsmelting of ultra-pure and high-homogeneous bearing steel"; applied for the "Special Fund for Central Leading LocalScientific and Technological Development" project of the Science and Technology Department of Liaoning Province, theproject name is "Liaoning Province" "Advanced high-strength automotive steel professional technology innovation centercapacity building", the project has been approved, and it is expected to receive government funding of 300,000 yuan. Interms of scientific and technological achievements, it has won 2 metallurgical science and technology awards. In termsof intellectual property rights, 84 patents were accepted by the National Bureau; 48 patents were authorized by theNational Bureau, including 10 inventions and 38 utility models. Participated in the drafting of 1 national standard, 1industry standard, and 75 enterprise standards.
5. Green development capability. In accordance with the national and Liaoning Province’s policy requirements for the
steel industry and local ultra-low emissions, the company has the courage to assume social responsibilities, relying onprofessional planning and research institutions, has compiled environmental protection improvement plans and annualimplementation plans, and sorted out more than 40 ultra-low emissions projects. All are included in the investment plan.Construction or preliminary work is underway. Through clean production of water, three wastes treatment, environmentalprotection management and other all-round green improvements, the community will realize environmental quality,promote the integration of industry and city, and strive to achieve ultra-low emissions by the end of 2023. The companyhas become an "ecological steel factory" that develops harmoniously with the city. At present, the two dust collectors forthe second sintering product of the iron smelting plant have completed the transformation to meet the emission standards;the use of surplus gas CCPP power generation project is expected to be completed and put into operation in August.
6. Intelligent manufacturing capabilities. The company vigorously promotes the construction of intelligent manufacturing
related projects such as informatization and intelligence. In 2021, it has issued investment to carry out centralized controland intelligent manufacturing of iron, burning, coking, special steel process and raw material management, energymanagement, etc., and promotes the improvement of the basic information platform , Intelligent transformation in thefields of manufacturing management, intelligent equipment in cold rolling area, and upgrading and transformation ofrailway transportation dispatching and commanding information system. Keep up with the pace of enterprise developmentin the era of big data and achieve high-quality development.III. Analysis on Main BusinessPlease refer to the relevant content of "I. Main Business Engaged in the Reporting Period".Year-on-year changes in major financial data.
Unit: Yuan
| Current Period | Previous Period | Change | Reason |
operating income 38,588,128,212.14
22,184,537,260.05
73.94%
| The increase of sales is |
mainly caused by theincrease of the selling
Operating cost 34,592,825,792.72
| prices. | ||
20,440,246,362.67
69.24%
| The increase of Cost |
of goods sold ismainly due to theincrease of purchase
| price of raw materials | ||
| Selling and distribution expenses |
59,652,669.72
642,393,218.78
-90.71%
| General and |
administrative
388,678,843.23
| expenses |
380,828,316.41
2.06%
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Financial expenses | 336,355,698.84 | 355,036,640.40 | -5.26% |
Income tax expenses 746,977,590.45
9,237,815.08
7,986.09%
| The profit before tax is increased. | |||
| Research and |
development
869,601,179.00
| investment |
697,727,326.00
24.63%
1,524,916,220.03
| Net cash flows from operating activities |
-151,475,707.08
-1,106.71%
| Due to increase of profit before tax | ||||
| Net cash flows from investing activities |
-2,747,214,027.23
-706,681,059.07
288.75%
| Due to the increase of investment | |||
| Net cash flows from financing activities |
-3,533,315,813.10
-1,164,534,893.48
203.41%
| Due to increase of repayment of loans |
Net increase in cashand cash equivalents
-4,771,963,480.21
-2,023,822,325.06
135.79%
| Due to the repayment |
of loans and increaseof investment and
Significant changes in the company's profit composition or source of profit during the reporting period
□ Applicable √ Not applicable
There was no major change in the company's profit composition or source of profit during the reporting period.Operating income composition
decrease of payables.Current period
| Current period | Previous period | Change over previous period | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating | |||||
income
38,588,128,212.14
100%
22,184,537,260.05
100%
73.94%
| By industries | |||||
| Industry | 38,588,128,212.14 | 100.00% | 22,184,537,260.05 | 100.00% | 73.94% |
| By products | |||||
| Steel plate | 35,798,649,027.39 | 92.77% | 20,241,192,221.39 | 92.35% | 76.86% |
| Steel Billet | 310,652.98 | -100.00% | |||
| Others | 2,789,479,184.75 | 7.23% | 1,943,034,385.68 | 7.65% | 43.56% |
| By region | |||||
| Northeast | 13,764,490,687.62 | 35.67% | 7,575,795,193.58 | 29.57% | 81.69% |
| North China | 4,282,969,762.68 | 11.10% | 2,351,380,897.12 | 11.37% | 82.15% |
| East China | 15,059,297,569.71 | 39.03% | 8,731,546,106.40 | 37.82% | 72.47% |
| Northwest | 82,611,121.25 | 0.21% | 50,847,000.22 | 0.22% | 62.47% |
| Southwest | 1,475,476,779.53 | 3.82% | 857,102,813.02 | 4.15% | 72.15% |
| Central south | 3,923,282,291.35 | 10.17% | 2,617,865,249.71 | 16.88% | 49.87% |
Industry, Product and Regions Accounting for the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Unit: Yuan
Operating
income
Operating costs Gross margin
income change
| over last year | Operating costs |
change
| over last year | Gross margin |
change
| over last year | |
| By industries | |
Industry
| 38,588,128,212.14 | 34,592,825,792.72 |
10.35%
73.94%
69.24%
2.49%
| By products | ||
Steel plate
| 35,798,649,027.39 | 32,161,592,894.30 |
10.16%
76.86%
72.14%
2.46%
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Steel Billet |
Others
| 2,789,479,184.75 | 2,430,950,949.27 |
12.85%
43.56%
38.39%
3.26%
| By regions | ||
Northeast
| 13,764,490,687.62 | 12,304,736,134.48 |
10.61%
81.69%
77.44%
2.15%
North China
| 4,282,969,762.68 | 3,816,908,998.18 |
10.88%
82.15%
77.50%
2.33%
East China
| 15,059,297,569.71 | 13,492,931,637.18 |
10.40%
72.47%
67.50%
2.65%
| Northwest | 82,611,121.26 | 77,065,449.11 | 6.71% | 62.47% | 62.47% | 0.00% |
Southwest
| 1,475,476,779.53 | 1,379,133,959.61 |
6.53%
72.15%
72.15%
0.00%
Central south
| 3,923,282,291.35 | 3,522,049,614.16 |
10.23%
49.87%
43.67%
3.87%
Export
| 13,764,490,687.62 | 12,304,736,134.48 |
10.61%
81.69%
77.44%
2.15%
Total
| 38,588,128,212.14 | 34,592,825,792.72 |
10.35%
73.94%
69.24%
2.49%
When the statistical caliber of the company's main business data is adjusted during the reporting period, the company'smain business data adjusted according to the caliber at the end of the reporting period in the most recent period
□ Applicable √ Not applicable
Explanation of the reason why the relevant data has changed by more than 30% year-on-year
□ Applicable √ Not applicable
IV. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: YuanAmount
Proportion in total
profit
Explanation of cause Sustainable (yes or no)Income oninvestment
1,835,124.19
0.06%
Due to investment inassociate
NoAssets disposalgains
6,629,442.12
0.22%
Due to impairment ofinventory
No
income
3,273,128.46
| Non-operating |
0.11%
| Due to disposal of non- |
current assets
NoNon-operatingexpenses
22,989,643.14
0.77%
Due to scrap of assets No
V. 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 |
Proportionchange
Notes to significant changesAmount
Proportion in the
totalassets
Amount
Proportio
n in the
totalassetsCash at bank andon hand
9,510,700,502.67
14.69%
13,126,666,915.26
20.19%
-5.50%
| Accounts |
225,510,568.92
0.35%
245,217,182.66
0.38%
-0.03%
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Contract assets
| receivable | ||||
0.00%
Inventories 8,663,345,615.68
13.38%
9,040,065,342.65
13.91%
-0.53%
Long-term equityinvestments
3,024,013.88
0.00%
2,742,064.73
0.00%
0.00%
Fixed assets 25,137,148,377.89
38.82%
26,284,567,956.44
40.43%
-1.61%
progress
2,878,339,506.26
| Construction in |
4.45%
1,839,933,715.58
2.83%
1.62%
Right-of-useassets
1,510,538,778.93
2.33%
2.33%
Short-term loans 7,495,419,000.00
11.58%
10,067,731,000.00
15.49%
-3.91%
Contractliabilities
6,182,094,798.39
9.55%
4,458,671,819.90
6.86%
2.69%
Long-term loans 4,309,786,941.97
6.66%
3,502,934,427.65
5.39%
1.27%
Lease liabilities 1,549,600,900.45
2.39%
2.39%
2. Main overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
4. Restricted Assets by the End of the Period
Items
Book value at the end of thisreporting period
Reason of restrictionCash at bank and on hand 5,053,246,387.76
Deposit for notes and L/C
Accounts receivable financing 22,991,847.39
| Deposit for notes and L/C |
| Pledged for acceptance bills |
Other equity instrument investment 1,037,735,849.00
ledged for loansFixed assets 94,790,118.09
| P |
| M |
ortgaged for loansIntangible assets 37,116,386.66
ortgaged for loansTotal 6,245,880,588.90
| M |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
VI. Analysis of investment status
1. Overall situation
□ Applicable √ Not applicable
2. Major equity investments obtained during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investment in progress during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Securities investment
□ Applicable √ Not applicable
There was no securities investment in the company during the reporting period.
(2) Investment in derivatives
□ Applicable √ Not applicable
There was no derivative investment in the company during the reporting period.
VII. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
2. Substantial Equity Sold
□ Applicable √ Not applicable
VIII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company
Name
Companytype
Mainbusiness
Registeredcapital
Total assets Net assets Turnover
Operating
profit
Net ProfitBengang
Subsidiary
Processing
| Puxiang | and sales of |
1,920,000,0002,866,363,9842,088,899,1515,691,380,55683,685,739.62,979,247.98
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
RollingSteel SheetCo., Ltd.
| Cool | steel | .00 | .10 | .71 | .81 | 48 |
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companiesNone.IX. Structured Entities controlled by the Company
□ Applicable √ Not applicable
X. Risks and countermeasures for the Company
1. The risk of raw material price fluctuations
Risk: The company's main raw materials, iron ore, coal, etc., fluctuate greatly. In particular, iron ore prices continued torise during the reporting period, which had a greater impact on the company's profitability.Response measures: In terms of bulk raw material procurement, do a good job in market analysis and judgment, increasethe inventory through low-cost bulk material purchases, and strive to reduce procurement costs; adjust the inventorystructure to improve inventory turnover; solidly carry out cost reduction and efficiency enhancement work, and activelypromote the enterprise Competitiveness: Set research index projects for the weak links and bottlenecks that affect theindex level, clarify the research goals, measures, time nodes, and responsible persons, and solidly advance the indexresearch.
2. Risks of prevention and control of the new crown pneumonia epidemic
Risk: Since the outbreak of the novel coronavirus pneumonia in early 2020, the prevention and control of the epidemichas been continuing nationwide. With a series of strong epidemic prevention and control measures adopted bygovernments at all levels, domestic epidemic prevention and control has been effectively controlled, and various economicactivities have gradually resumed, but overseas epidemics are still continuing and facing greater uncertainty. The companywill effectively implement the government's requirements for epidemic prevention and control, and strengthen supportfor epidemic prevention and control, so as to reduce the impact of the epidemic on the company's normal production andoperation activities.Response measures: Establish various strict and normalized epidemic prevention and control mechanisms, strengthen thepublicity of all employees' health knowledge related to the epidemic, and highlight the supervision and inspection ofinternal epidemic prevention and control.
3. Environmental risks
Risk: The country promotes carbon peaking and carbon neutrality. The steel industry is one of the important areas in mycountry to achieve emission reduction and carbon reduction. The industry faces more requirements for carbon emissionrestriction mechanisms and low-carbon development, making the company face greater environmental pressure .Countermeasures: Optimize the production process and further improve the recycling rate of various energy sources. Payattention to various national environmental protection policies, improve corporate environmental protection standards,and make them meet and appropriately exceed national standards. Strengthen the self-supervision and inspection of thecompany's various pollution sources and strengthen the environmental protection awareness of all employees. Acceleratethe construction progress of the identified environmental protection projects to ensure that the national environmentalprotection requirements are met.
4. Market risk
Risks: The competition in the steel industry is fierce, and the industry concentration is accelerating, driven by nationalpolicies and the market. At the same time, due to the continued overseas epidemic, the export business is facing morechallenges, and the company is facing fierce market competition risks.Response measures: increase the development of new products, increase investment in technology research anddevelopment, optimize product structure, and increase the market share of core products; comprehensively improvemanagement, improve management energy efficiency, reduce operating costs, and increase profitability; improve themarketing service system and continue to optimize The company’s marketing strategy to enhance brand influence.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
IV. Corporate Governance
I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholdersheld during the Reporting Period
1. General meeting of shareholders during the reporting period
Meeting session Meeting type
participation ratio
Date of convening Date of disclosure Disclosure indexThe annual generalmeeting of 2020
Annual generalmeeting
80.56%
| Investors’ |
27 May 2021 28 May 2021
Announcement No.:
2021-028
2. Temporary general meeting Request by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Change of Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
| Name | Position | Type of change | Date | Reason |
| Cao Aimin | Director, Vice Chairman | Departure | 2021/5/27 | Position adjustment |
| Shen Qiang | Director, General Manager | Departure | 2021/5/27 | Position adjustment |
| Huang Xinghua | Director | Departure | 2021/5/27 | Position adjustment |
| Zhao Xinan | Independent Director | Term of office expires | 2021/5/27 | Term of office expires |
| Jiag Guangwei | Vice Chairman | Election | 2021/5/27 | Position adjustment |
| Han Mei | Vice Chairman | Appointment and dismissal | 2021/5/27 | Position adjustment |
| Lin Dong | Director, General Manager | Election | 2021/5/27 | Position adjustment |
| Wang Donghui | Director | Election | 2021/5/27 | Position adjustment |
| Zhong Tianli | Independent Director | Election | 2021/5/27 | Nomination |
Cheng Bin
Committee
Election 2021/5/27 Position adjustment
| Chairman of Supervisory | ||||
| Li Lin | Supervisor | Departure | 2021/5/27 | Position adjustment |
| Zhao Zhonghua | Supervisor | Appointment and dismissal | 2021/5/27 | Position adjustment |
| Bao Mingwei | Deputy General Manager | Dismissal | 2021/4/26 | Position Change |
| Wang Fengmin | Deputy General Manager | Dismissal | 2021/4/26 | Position Change |
| Huo Gang | Deputy General Manager | Dismissal | 2021/4/26 | Position Change |
| Chen Xin | Deputy General Manager | Appointment | 2021/4/26 | Position adjustment |
| Yang Xiaofang | Deputy General Manager | Appointment | 2021/4/26 | Position adjustment |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Cong Yajuan | Director of Finance | Appointment | 2021/4/26 | Position adjustment |
III. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
√ Applicable □ Not applicable
| Number of bonus shares for every 10 shares (shares) | |
| Dividend per 10 shares (yuan) (tax included) | 5 |
| The base of the share capital of the distribution plan (shares) |
3,885,060,605
| Cash dividend amount (yuan) (tax included) | 0.00 |
| Cash dividend amount in other ways (such as share repurchase) (yuan) |
0.00
| Total cash dividends (including other methods) (yuan) |
1,942,530,302.5
| Distributable profit (yuan) | 4,862,062,857.99 |
| The ratio of total cash dividends (including other methods) to total profit distribution |
39.95%
| Cash dividend of the current period | |
| If the company's development stage is not easy to distinguish but there is a major capital expenditure arrangement, | |
when the profit is distributed, the proportion of cash dividends in this profit distribution should be at least 20%.
| Notes to the profit distribution or capital reserve transfer plan |
| On August 26, 2021, the 20th meeting of the 8th Board of Directors of the company passed the 2021 interim dividend |
distribution plan. It is planned to use the total share capital of 3,885,060,605 shares at the end of June 2021
yuan in cash dividends will be distributed. In this distribution, the capital public reserve will not be converted into s
| hare |
capital. After the company’s profit distribution plan is announced and before its implementation, if the company’
s sharecapital changes, adjustments will be made in accordance with the principle that the total amount of the distribution doesnot change.
IV. Implementation of the company’s equity incentive plan, employee stock ownership plan orother employee incentive measures
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan or otheremployee incentive measures and their implementation.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
V. Environment and Social Responsibilities
I. Major environmental issuesWhether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection department
√ Yes □ No
Name
pollutants
| and specific pollutants |
Discharge
modes
discharge
| hatch |
The distribution
of discharge
hatch
Emissionconcentration
Theemissionstandard
Totalemission
Approvedtotalemission
Surpass theemissionstandard
BengangSteel PlatesCo., Ltd.
ParticulateMatter
Continuousandintermittent
dumper, transferstation,receiving oretank, pre-batch;coke ovenadding coal,pushing cokedry quenching;ironmakingtapping field,furnace roof,fuel, solvent,granulation, orecoke tank;sintering head,machine Tail;iron and steelwaterpretreatment,ferroalloyfeeding, north-south infusionstation, tundish,primary dustremoval,secondary dustremoval,refining dustremoval; specialsteel electric
| furnace, refining |
furnace, electricslag furnace;powergenerationboilerdesulfurizationanddenitrification;cold rolling acidregeneration,Pickling,drawing
Rawmaterials14-23;Sintering8-40;Ironmaking 7-35;Steelmaking 20-50;Specialsteel 7-15;Coking5-50;Powergeneration 3-30;Coldrolling;6-18 ;hotrolling 6-15.
Rawmaterials25;Sintering30-50;Ironmaking25;
| straightening, | Steelmaking |
20-50;Specialsteel 20;Coking 10-50;powergeneration5-30;cold rolling20-30; hotrolling 20-30;
439tons ofSmoke anddust;6702tons ofdust
The totalquantity isnotconfirmedby thegovernment
None
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
machine,smoothing,annealing,roasting; hotrolling heating
| furnace. |
BengangSteel PlatesCo., Ltd.
SO?
Continuousandintermittent
Sintering head;Powergenerationboiler; Cokeoven chimney;cold rollingroasting,annealing; hotrolling furnace.
head 12-40;Powergeneration boiler5-70;Cokeoven 30-
| ; Cold |
rolling80-100;Hotrolling
Sinteringhead 200;Powergeneration35-200;Coke oven30-100;Cold rolling100; Hotrolling 150.
2570 tons
The totalquantity isnotconfirmedby thegovernment
None
BengangSteel PlatesCo., Ltd.
Oxides ofnitrogen
Continuousandintermittent
Sintering head;powergenerationboiler; coldrolling roasting,annealing; hotrolling furnace.furnace.
| 118-128. |
| Sintering |
head 100-230;Cokeoven150-268;Powergeneration 30-140;Coldrolling69-172;Hotrolling
Sinteringhead 300;Coke ovenchimney150; Powergeneration100-200;Cold rolling300; Hotrolling 300.
5278 tons
The totalquantity isnotconfirmedby thegovernment
None
Construction and operation of pollution prevention facilitiesThe company has a total of 183 sets of environmental pollution prevention and control facilities, and each process isequipped with dust removal, desulfurization and denitrification, and online facilities in accordance with pollutant emissionstandards. Sintering machine head wet desulfurization, coke oven chimney dry desulfurization and denitrification, powergeneration wet desulfurization and SCR denitrification, etc. The dust collector for rough rolling and finishing rolling ofthe 2300mm production line of the hot rolling mill is designed to be used in the production of stainless steel, and theenvironmental protection facilities are normally put into use.Environmental impact assessment of construction projects and other environmental protection administrative permitsCompleted the environmental impact assessment registration and filing of 7 projects including the coke oven flue gasdesulfurization and denitrification transformation project of the Benxi Iron and Steel General Iron Plant; the company’s220KV substation project environmental impact assessment report was submitted for approval. The environmentalprotection acceptance work of 5 projects including the No. 7 coke oven desulfurization and denitration project and theNo. 5 blast furnace capacity replacement project of the Benxi Iron and Steel General Iron Plant was carried out.Emergency plan for environmental emergenciesThe company and its 13 subsidiaries strictly follow the "Emergency Response Law of the People's Republic of China",the "Notice on Issuing the "Guidelines for Risk Assessment of Environmental Emergencies for Enterprises (Trial)", andthe "Emergency Plan for Environmental Incidents of Enterprises and Institutions" Management Measures (for TrialImplementation) and other current laws and regulations to carry out environmental emergency management work. Duringthe reporting period, a third party was entrusted to revise the emergency response plan for environmental emergencies,and the risk assessment and emergency resource investigation work should be carried out again. Bureau managementrequires evaluation and filing. At the same time, all units of the plate company formulate drill plans in accordance withthe plan and carry out corresponding plan drills.Environmental self-monitoring program
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
During the reporting period, pollution source monitoring points: 317 flue gas, 20 wastewater monitoring points, 44 noisepoints at the plant boundary, 35 atmospheric dust reduction points, and 94 unorganized monitoring points, which aredivided into weekly and monthly according to the monitoring plan. , Quarterly, half-yearly, and annual frequencymonitoring, 210 monitoring data for atmospheric dust fall; completion of routine monitoring tasks for atmosphericunorganized and flue gas, 1143 monitoring data for half a year; 688 monitoring data for plant boundary noise monitoring;wastewater The monitoring obtained 2014 monitoring data; various temporary monitoring data were 1,580, and themonitoring stations reported a total of 5,637 monitoring data, forming monthly reports, quarterly reports, and separatemonitoring reports for various factories and mines.
Administrative penalties due to environmental issues during the reporting periodName of company Penalty reasons
Violationcircumstances
Penalty results
production andoperation of listed
| companies |
Companyrectification
measures
| None | None | None | None | None | None |
Other environmental information that should be disclosed.During the reporting period, the environmental information disclosure of the company's 12 units was completed inaccordance with the list of key pollutant emission companies issued by the Municipal Environmental Protection Bureau.The content of the announcement includes basic information, pollution discharge information, construction and operationof pollution prevention facilities, environmental impact assessment of construction projects and other environmentalprotection administrative permits, emergency plans for environmental emergencies, environmental self-monitoring plans,and other environmental information that should be disclosed.Other environmental related informationII. Social responsibility situationDuring the reporting period, the company implemented the spirit of the relevant documents in accordance with corporatesocial responsibility, while pursuing corporate economic benefits and protecting the interests of shareholders, whileactively protecting the legal rights and interests of creditors and all employees, treating suppliers, customers andconsumers with integrity, and actively engaged in Public welfare undertakings such as environmental protection andcommunity construction. In business activities, we consciously follow the principles of voluntariness, fairness,compensation for equal value, honesty and credibility, consciously abide by social ethics and professional ethics,consciously accept the supervision of the government and the public, and actively perform corporate social responsibilities.
VI. Important Events
I. The Fulfilled Commitments During the Reporting Period and Under-FulfillmentCommitments by the End of the Period Made by Actual Controller, Acquirer, Director,Supervisor, Senior Management Personnel and other Related Parties.
√ Applicable □ Not applicable
Commitments
Commitment
party
Type ofcommitment
Contents
Commitment
time
Commitment
period
Performance
reform
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
equity change report
| Commitment made in the acquisition report or the |
| Commitment made during |
asset restructuring
refinancing
Companydirectors,seniormanagement
Othercommitment
| Commitment made during initial public offering or | According to the relevant regulations of the China Securities Regulatory Commission, |
all
to the Company’
| s fulfillment of the diluted immediate return measures: 1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and |
i
restrict the position-
| related consumption behavior of company directors and senior management personnel. 4. I promise not to use |
the Company’
r
| esponsibilities and authority, I promise to make every effort to promote the company's board of directors or the remuneration system established by the remuneration and appraisal committee to be linked to the implementation of the |
company'scompensation me
May 22, 2019 Long term
| asures, and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 6. If the company intends to implement equity incentives, I | Under normal |
fulfillment
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
juris
| diction, make every effort to promote the |
Company’
the Company’
| s implementation of the return measures, and to |
review the Company’
shareholders’
| general |
meetings and vot
Company’
| s public issuance of convertible |
corporate b
Regulatory Com
| mission When other regulations are stipulated, a commitment will be issued in accordance with the latest regulations of the China Securities Regulatory Commission. The company's controlling shareholder, Benxi Iron and Steel (Group) Co., |
Ltd., promised not
Company's interests.
| to interfere with 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 |
July 24,2019 Long term
fulfillment
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
qualification
| certification of raw material suppliers, |
cust
Gro
| up agrees that within the period of not more than 5 years from the date of issuance of this commitment, the main import and export business of Benxi Steel Plate will still be represented by Bengang International Trade until Bengang Steel Plates can |
be inde
company under Benga
| ng International Trade is only responsible for selling the products of Beiying Iron and Steel Group, and never sells |
third-
Bengang
| Iron and Steel Materials Co., Ltd., and Guangzhou Free Trade Zone Bengang Sales Co., Ltd., are currently no longer actually engaged in any business activities, as follows: (1 ) |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
2014, an
| d the Shanghai Changning District People's Court issued an announcement to appoint Guohao Lawyer (Shanghai) Office as the |
bankruptcy
bankruptcy
| administrator, it is expected that the bankruptcy and |
liquidation of
Sales Co., Ltd. will
| be handled immediately. (2) Shanghai Bengang Iron & Steel Materials Co., Ltd. is a holding subsidiary of Shanghai Bengang Iron & Steel Sales Co., Ltd., and its business license has been revoked. As the shareholder Shanghai Bengang Iron & Steel |
Sales Co.,
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 pro
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Sales Co., Ltd. a
| pplied to the court to seal 62 properties under the name of Jiedong County Trading Corporation. However, due to serious local protection, property rights and other factors, the content of the judgment has not been enforceable. Later, after |
applying again f
Corporation were re-
| sealed. As of February 4, |
2022. Except
procedures for t
| he cancellation of Guangzhou Free Trade Zone Bengang Sales Co., Ltd. will be handled |
immediately.
Co., Ltd.
OtherCommitment
| Benxi Steel & Iron (Group) | The Group's horizontal competition with Benxi |
Steel P
inter-industry
| competition 1. During the period when the Group is the controlling shareholder of Bengang Steel Plates, in addition to the matters listed in Article 1 of this Commitment Letter, the |
Group and o
July 24,2019 Long term
| ther enterprises controlled by the Group other than Bengang Steel Plates no | The company has completed the acquisition of the 2300mm hot rolling mill |
production
industrycompetition
| problem has |
beencompletelyresolved.Othercommitments
fulfilled
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
directly o
| r indirectly operate any business that competes with Bengang Steel Plates and its subsidiaries. Businesses that may constitute competition, nor are they involved in investing in any other enterprise that competes with or may compete with products |
or busine
Bengang
| Steel Plates and its subsidiaries; they may compete with Bengang Steel Plates and its subsidiaries If the company's expanded business produces competition, it will withdraw from the competition with Bengang Steel Plates as follows: (1) Stop |
business that m
unrelated third parti
| es. 3. If the Group has any business opportunities to engage in or participate in the competition with |
Bengang Steel Plates’
reasonable peri
| od specified in the notice, Bengang Steel Plates If |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
will endeavor
| to give the business opportunity to Bengang Steel Plates on terms not less than that provided to any |
in
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 ’
following commitments:
| "Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectively referred to as the "Group"), as a direct controlling shareholder and an indirect controlling shareholder of Bengang |
Steel Plates
(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
July 24,2019 Long term
| independent legal person status of Bengang | Under normal |
fulfillment
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
decision-
| making of Bengang Steel Plates, ensure the independence |
of Bengang Steel Plates’
fi
| nancial independence to avoid and reduce unnecessary related transactions; the Group will strictly control related transactions with Bengang Steel Plates and its subsidiaries. 2. The Group and other controlled companies promise not to use loans |
or occupy o
control. 3
| . The Group and other controlled companies and Bengang Steel Plates will minimize related transactions. It is indeed necessary and unavoidable to carry out in the related party transactions, strictly |
implement the decision-
decision-making
| procedures, avoidance system and other contents stipulated in Bengang's "Articles of Association" and related party transaction |
decision-
and earnestly fulfill
| the obligation of information disclosure To ensure that transactions are conducted in accordance with the open, fair, and fair principles of market transactions and normal commercial terms, the |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
will not require or a
| ccept 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 Plates from damage. 4. The Group guarantees |
that the a
commitments occurs, th
| e 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
YesII.. Non-operating capital occupation of listed companies by controlling shareholders and otherrelated parties
□ Applicable √ Not applicable
During the reporting period, there was no non-operating capital occupation of the listed company by controllingshareholders and other related parties.III. Violation of external guarantees
□ Applicable √ Not applicable
During the reporting period, the company had no violations of external guarantees.
IV. Appointment and Dismissal of Certified Accountant’s Firm
Is the semi-annual financial report audited?
□ Yes √ No
The semi-annual report has not been audited.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
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. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.X. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
Relatedparties
Relation
ship
related
partytransacti
ons
C
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
approve
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
| The |
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ureBenxiSteel &Iron
| price of | ||
| Parent |
company
purchase ofgoods
Repairexpense
Perrelatedparty
Agreement
14,746
| Per |
0.00%
40,000
No
Executeperagreeme
No
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relationship
relatedpartytransacti
onsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
Co., Ltd.
| (Group) | and |
services
nt price
| agreeme | nt |
BenxiSteel &Iron(Group)Co., Ltd.
Parentcompany
purchase ofgoodsandservices
Landleasingfee
Perrelatedpartyagreement price
PerAgreement
3,261.1
.
%
No
Executeperagreement
Yes
2021/4/
BengangCold-rolledStainlessSteelDandongCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Products
Perrelatedpartyagreement price
PerAgreement
63.05
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Labor cost
Perrelatedpartyagreement price
PerAgreement
388.19
0.00%
900,000
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
333,109
.30
0.10%
No
Executeperagreement
Yes
2021/4/
Steel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Freight
Perrelatedpartyagreement price
PerAgreement
665.9
| Benxi |
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
24,576.
0.01%
40,000
No
Executeperagreement
Yes
2021/4/
| Benxi |
Steel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Processing fee
Perrelatedpartyagreement price
PerAgreement
5.08
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron
Underthesame
purchase ofgoods
Spareparts
Perrelatedparty
| Per |
Agreement
1,491.7
0.00%
10,000
No
Executeperagreeme
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransacti
ons
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransacti
ons
Price
ofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
MachineryManufacture Co.,Ltd.
| (Group) | controll |
er
services
| and | agreeme |
nt price
| nt | ||
| Benxi |
Steel &Iron(Group)MachineryManufacture Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
292.32
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Spareparts
Perrelatedpartyagreement price
PerAgreement
198.76
0.00%
50,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Projectfee
Perrelatedpartyagreement price
PerAgreement
14,057.
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
4,168.2
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
375.59
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Freight
Perrelatedpartyagreement price
PerAgreement
87.45
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &
Underthe
| Iron | same |
purchase of
Spareparts
Perrelated
| goods | party |
PerAgreement
2,693.6
0.00%
30,000
No
Executeper
| agreeme |
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relationship
related
partytransactionsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosureIndex
ofdisclos
ure
IndustrialDevelopment Co.,Ltd.
| (Group) | controll |
er
services
| and | agreeme |
nt price
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
1,567.1
| nt | ||
0.00%
No
Executeperagreement
Yes
2021/4/
Steel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
18.9
| Benxi |
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Freight
Perrelatedpartyagreement price
PerAgreement
191.68
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Projectfee
Perrelatedpartyagreement price
PerAgreement
360.29
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
62.83
0.00%
20,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Projectfee
Perrelatedpartyagreement price
PerAgreement
370.74
0.00%
No
Executeperagreement
No
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousand)
Proportion ofsimilartransactions
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ureBenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairexpense
Perrelatedpartyagreement price
PerAgreement
255.59
0.00%
No
Executeperagreement
No
2021/4/
BengangElectronics and GasCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
7,365.3
0.00%
20,000
No
Executeperagreement
Yes
2021/4/
BengangElectronics and GasCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
220.68
0.00%
No
Executeperagreement
No
2021/4/
BenxiHigh-
DrillingToolsManufacture Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Spareparts
Perrelatedpartyagreement price
PerAgreement
7.96
| tech |
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiNewCareerDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
#N/A
Perrelatedpartyagreement price
PerAgreement
3.01
0.00%
21,500
No
Executeperagreement
No
2021/4/
BenxiNewCareerDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterialand food
Perrelatedpartyagreement price
PerAgreement
113.4
0.00%
No
Executeperagreement
Yes
2021/4/
MetallurgyTechnician College
| Liaoning | Under |
thesamecontroller
e ofgoodsandservices
Spareparts
| purchas | Per |
relatedpartyagreement price
PerAgreement
126.16
0.00%
1,000
No
Executeperagreement
Yes
2021/4/
BengangGroupInternational
| Economic |
andTradingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
846,115
.86
0.24%
1,750,0
No
Executeperagreement
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransacti
onsC
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ureBengangGroupInternational
andTradingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Agencyfee
Perrelatedpartyagreement price
PerAgreement
3,648.1
| Economic |
0.00%
No
Executeperagreement
No
2021/4/
BengangGroupInternational
andTradingCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Portsurcharges
| Economic |
Perrelatedpartyagreement price
PerAgreement
10,544.
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Spareparts
Perrelatedpartyagreement price
PerAgreement
93.14
0.00%
4,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Projectfee
Perrelatedpartyagreement price
PerAgreement
236.53
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Heatingcosts
Perrelatedpartyagreement price
PerAgreement
9.18
0.00%
No
Executeperagreement
Yes
2021/4/
| Benxi |
Steel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
2.02
0.00%
No
Executeperagreement
Yes
2021/4/
Benxi Under purchasDesign Per Per
40.96
0.00%
NoExecuteNo2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relationship
related
partytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
Iron(Group)
| Designing |
Institute
samecontroller
| the | e of |
goodsandservices
| fees | related |
partyagreement price
ment
| Agree | per |
agreement
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Perrelatedpartyagreement price
PerAgreement
140,619
.89
| 28 | ||
0.04%
350,000
No
Executeperagreement
Yes
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
24,890.
0.01%
No
Executeperagreement
Yes
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Freight
Perrelatedpartyagreement price
PerAgreement
226.54
0.00%
No
Executeperagreement
No
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Labor cost
Perrelatedpartyagreement price
PerAgreement
4,041.8
0.00%
No
Executeperagreement
No
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Spareparts
Perrelatedpartyagreement price
PerAgreement
1,154.8
0.00%
No
Executeperagreement
Yes
2021/4/
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialand spareparts
Perrelatedpartyagreement price
PerAgreement
3,481.5
0.00%
10,000
No
Executeperagreement
Yes
2021/4/
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
66.93
0.00%
No
Executeperagreement
No
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
relatedpartytransactions
C
| Type of | ontent of |
relatedpartytransactio
ns
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousand)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ureLiaoningHengtaiHeavyMachinery Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Rawmaterialand spareparts
Perrelatedpartyagreement price
PerAgreement
70.79
0.00%
1,000
No
Executeperagreement
Yes
2021/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Underthesamecontroller
purchase ofgoodsandservices
Repairservices
Perrelatedpartyagreement price
PerAgreement
425.44
0.00%
No
Executeperagreement
No
2021/4/
BengangGroupCo., Ltd.
acutalcontroller
purchase ofgoodsandservices
Labor cost
Perrelatedpartyagreement price
PerAgreement
8,793.3
0.00%
20,000
No
Executeperagreement
No
2021/4/
BengangGroupCo., Ltd.
acutalcontroller
e ofgoodsandservices
Houserental fee
| purchas | Per |
relatedpartyagreement price
PerAgreement
37.61
0.00%
No
Executeperagreement
Yes
2021/4/
BengangElectronics and GasCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
39.46
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
166,327
.67
0.04%
240,000
No
Executeperagreement
Yes
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Products
Perrelatedpartyagreement price
PerAgreement
1,150.4
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
6,461.2
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)
Underthesamecontroll
Sale ofgoodsandrenderin
| Real- | g of |
Energy &Power
Perrelatedpartyagreeme
PerAgreement
0.94
0.00%
No
Executeperagreement
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
Development Co.,Ltd.
| estate | er | services | nt price |
BenxiSteel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
0.46
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Products
Perrelatedpartyagreement price
PerAgreement
445.96
0.00%
5,000
No
Executeperagreement
Yes
2021/4/
Steel &Iron(Group)MachineryManufacture Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
1,086.2
| Benxi |
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
16.41
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
377.58
0.00%
8,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Construct
| ion Co., |
Underthesamecontroller
Sale ofgoodsandrendering of
Rawmaterial&supplementary
Perrelatedpartyagreement price
PerAgreement
171.46
| materials |
0.00%
No
Executeperagreement
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransacti
ons
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Ltd. | services | & spare |
partsBenxiSteel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &
Power
Perrelatedpartyagreement price
PerAgreement
33,426.
0.01%
100,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Raw
material
&
suppleme
ntary
materials
& spare
parts
Perrelatedpartyagreement price
PerAgreement
5,312.6
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Freight
revenue
Perrelatedpartyagreement price
PerAgreement
339.29
0.00%
No
Executeperagreement
No
2021/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &
Power
Perrelatedpartyagreement price
PerAgreement
3,649.4
0.00%
5,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Raw
material
&
suppleme
ntary
materials
& spare
parts
Perrelatedpartyagreement price
PerAgreement
893.57
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &
Power
Perrelatedpartyagreement price
PerAgreement
413.68
0.00%
3,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)
| Industrial |
Underthesamecontroller
Sale ofgoodsandrenderin
Products
Perrelatedpartyagreement price
PerAgreement
501.34
| g of |
0.00%
No
Executeperagreement
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransactions
Date ofdisclosu
reIndex
ofdisclos
ure
ment Co.,Ltd.
| Develop | services |
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
660.84
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
5.23
0.00%
No
Executeperagreement
Yes
2021/4/
| Benxi |
Steel &Iron(Group)Construction andRepairingCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
59.55
0.00%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
103.98
0.00%
30,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
22,587.
0.01%
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)Co., Ltd.
Parentcompany
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
263.06
0.00%
2,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &
| Iron |
Parentcompany
Sale ofgoods
Rawmaterial
| and | & |
Perrelated
PerAgreement
346.98
| party |
0.00%
No
Executeper
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransacti
ons
C
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Price
ofrelatedpartytransactions
| principle | Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
Co., Ltd.
| (Group) | renderin |
g ofservices
ntarymaterials& spareparts
| suppleme | agreeme |
nt price
BenxiNewCareerDevelopment Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
11.63
| nt | ||
0.00%
No
Executeperagreement
Yes
2021/4/
DalianBoluoleSteelTube Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Products
Perrelatedpartyagreement price
PerAgreement
655.6
0.00%
2,000
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)GeneralHospital
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
No
Executeperagreement
Yes
2021/4/
BenxiSteel &Iron(Group)ZhengtaiConstructionMaterialsCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
1.31
0.00%
No
Executeperagreement
Yes
2021/4/
LiaoningHengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
35.59
0.00%
2,000
No
Executeperagreement
Yes
2021/4/
BengangCold-rolledStainlessSteelDandongCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Products
Perrelatedpartyagreement price
PerAgreement
295.41
0.00%
3,000
No
Executeperagreement
Yes
2021/4/
SuzhouBengangIndustrialCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrenderin
| g of |
Products
Perrelatedpartyagreement price
PerAgreement
38,315.
0.01%
55,000
No
Executeperagreement
Yes
2021/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Relatedparties
Relation
ship
related
partytransactionsC
| Type of | ontent of |
relatedpartytransactions
Pricing
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| principle | Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarket
| price of |
similartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
BengangGroupFinanceCo., Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
0.65
| services | ||
0.00%
No
Executeperagreement
Yes
2021/4/
BengangGroupCo., Ltd.
acutalcontroller
Sale ofgoodsandrendering ofservices
Energy &Power
Perrelatedpartyagreement price
PerAgreement
61.46
0.00%
2,000
No
Executeperagreement
Yes
2021/4/
BengangGroupCo., Ltd.
acutalcontroller
Sale ofgoodsandrendering ofservices
Rawmaterial&supplementarymaterials& spareparts
Perrelatedpartyagreement price
PerAgreement
240,324
.13
0.06%
No
Executeperagreement
Yes
2021/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Underthesamecontroller
Sale ofgoodsandrendering ofservices
Products
Perrelatedpartyagreement price
PerAgreement
17.43
0.00%
No
Executeperagreement
Yes
2021/4/
Total -- --
1,979,7
04.39
--3,725,8
-- -- -- -- --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 ofroutine related-party transactions，bytype to occur in the current period(ifany)
N/AReason 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
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
There were no related credits and debts during the reporting period.
5. Deals with related financial companies and financial companies controlled by the company
√ Applicable □ Not applicable
Deposit businessRelated party Relationship
limit（10
| thousand |
）
D
| eposit interest |
rate range
Beginningbalance（10thousand）
Transaction（10thousand）
Ending balance
（10thousand）
| Bengang Group Finance Co., Ltd. | Under the same controller |
1,100,000.00
3.0%-3.5% 1,332,199.78
8,587,031.95
857,465.16
Loan Business
Related party Relationship
Loan limit（10thousand）
Loan interest
rate range
balance（10
| thousand |
）
| Transaction |
（10
）
| Ending balance |
（10
）
Credit or other financial services
Related party Relationship Business type
（
| 10 thousand |
）
| Actual amount |
（
）
| Bengang Group Finance Co., Ltd. | Under the same controller |
250,000.00
27,000.00
6. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XII. Major Contracts and Performance
1. Trusteeship, contracting, and leasing matters
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
(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
Unit: ten thousand
Type Source of Fund
Transaction
amount
Unexpired
balance
Amount not
| recovered after the |
due date
financial product that
| has not been recovered after the due date | |||||
| Bank financing product | Equity fund | 50,000 | 50,000 | 0 | 0 |
| Bank financing product | Equity fund | 10,000 | 10,000 | 0 | 0 |
| Bank financing product | Equity fund | 10,000 | 10,000 | 0 | 0 |
| Bank financing product | Equity fund | 20,000 | 20,000 | 0 | 0 |
| Bank financing product | Equity fund | 10,000 | 10,000 | 0 | 0 |
| Bank financing product | Equity fund | 50,000 | 50,000 | 0 | 0 |
| Bank financing product | Equity fund | 10,000 | 10,000 | 0 | 0 |
| Bank financing product | Equity fund | 100,000 | 0 | 0 | 0 |
| Bank financing product | Equity fund | 200,000 | 0 | 0 | 0 |
| Total | 460,000 | 160,000 | 0 | 0 | |
The specific situation of high-risk entrusted finance with a large single amount or low security, poor liquidity, and nocapital protection
□ Applicable √ Not applicable
Entrusted finance is expected to be unable to recover the principal or there are other situations that may cause impairment
□ Applicable √ Not applicable
4. Routine Operation Major Contracts
□ Applicable √ Not applicable
5. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
XIII. Other Major Events
√ Applicable □ Not applicable
On April 15, 2021, the company received a notice from the indirect controlling shareholder Bengang Group Co., Ltd. thatit was informed that Ansteel Group Co., Ltd. is planning to reorganize the Bengang Group, which may lead to changes inthe company's control rights. The reorganization is still in the planning stage, and the approval of relevant departments isstill required after the plan is finalized. For details, please refer to the "Indicative Announcement on the StrategicRestructuring of the Indirect Controlling Shareholder Bengang Group Co., Ltd." published on the designated informationdisclosure media by the company on April 15, 2021.
On August 18, 2021, the State-owned Assets Supervision and Administration Commission of the State Council and thePeople's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co., Ltd. will reorganizeBengang Group Co., Ltd., and the Liaoning Provincial State-owned Assets Supervision and Administration Commissionwill transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessaryprocedures, and there is still uncertainty about whether the relevant approval can be obtained and whether the transfer canbe implemented smoothly. For details, please refer to the Announcement on the Approval of the State-owned AssetsSupervision and Administration Commission of the State Council and the People's Government of Liaoning Province onthe free transfer of 51% equity of Bengang Group, the indirect controlling shareholder, published on the designatedinformation disclosure media by the company on August 19, 2021 ".
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of the People's Governmentof Liaoning Province, indirect controlling shareholder of the company and with 80% of the Bengang Group’s share, andAnstel Group Co., Ltd., which is 100% owned by the State-owned Assets Supervision and Administration Commissionof the State Council signed the agreement: "Agreement on the Gratuitous Transfer of State-owned Equity of BengangGroup Co., Ltd. between the State-owned Assets Supervision and Administration Commission of the People'sGovernment of Liaoning Province and Ansteel Group Co., Ltd.". According to the agreement, the State-owned AssetsSupervision and Administration Commission of Liaoning Province will transfer its 51% equity in Bengang Group toAnsteel Group for free. After the completion of this transfer, Ansteel Group will become the controlling shareholder ofBengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group, Benxi Ironand Steel (Group) Co., Ltd. and Ansteel Group Capital Holding Co., Ltd. The direct controlling shareholder of thecompany remains unchanged, still Benxi Iron & Steel (Group) Co., Ltd., and the actual controller of the company ischanged to the State-owned Assets Supervision and Administration Commission of the State Council. For details, pleaserefer to the company's relevant announcement published on the designated information disclosure media on August 21,2021.
XIV. Major Events of Subsidiaries
□ Applicable √ Not applicable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
VI. Status of Share Capital Changes and ShareholdersI. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the ChangeQuantity
PercentageIssuing ofnew share
shares
Capitalization of
reserve
fund
Others Subtotal Quantity
PercentageI. Restricted Shares
| common | |||
2. State-own Legal-person
Shareholding
3. Other domestic
shareholdings
Including: Domestic legalperson holding
Domesticperson holding
II. Non-restricted Shares 3,875,371,532
100.00%
9,689,073
9,689,073
3,885,060,605
100.00%
1. Common shares in
RMB
3,475,371,532
89.68%
9,689,073
9,689,073
3,485,060,605
| 89.70% |
2. Foreign shares in
domestic market
400,000,000
10.32%
400,000,000
| 10.30% |
2. Foreign shares in
oversea market
4.Others
III. Total shares 3,875,371,532
100.00%
9,689,073
9,689,073 3,885,060,605
100.00%
Reason of share capital changes
√Applicable □Not applicable
During the reporting period, the Company's publicly issued convertible corporate bonds were convertedinto shares of 487,432 shares, and the company's total share capital increased by 9,689,073 shares.Approval of share capital changes
□ Applicable √ Not applicable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Status of registration process of transferred shares
□ Applicable √ Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earningsper share, and net asset per share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
□Applicable √Not applicable
II. Securities Issuance and Listing
√Applicable □Not applicable
Name ofStock andotherderivativessecurities
Issue date
Issue price
(interest
rate)
Issuequantity
Date for
listing
Approvedquantity for
trading
T
oftransaction
Disclosureindex
Disclosure
DateStockConvertible Bond, Warrant bond and Corporate bondBengangConvertibleBond
29th June2020
6,800,000,0
ermination
4th August2020
6,800,000,0
28th June2026
Other derivatives securities
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
III. Total Number of shareholders and shareholding
Unit: Shares
Total number of
at the end of thereporting period
58,435
| 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 or
frozen sharesStatus NumberBenxi Steel & Iron(Group) Co., Ltd.
State-ownedlegal person
62.02%
| Percentage |
2,409,628,094
2,409,628,094
Pledged 1,577,545,000
Frozen 108,326,179
CCB Principal AssetManagement – ICBC– CR Trust – CRTrust · Xing ShengNo. 5 Collective FundTrust Plan
Others
4.76%
184,842,883
184,842,883
Bei Xin Rui FengFund – ChinaMerchants Bank –
| Bei |
Xin Rui Feng FundFeng Qing No. 229Asset ManagementPlan
Others
4.76%
184,842,883
184,842,883
China Life AMPFund– ICBC – ChinaLife AMP – Hua XinTrust TargetedAdditional SharesIssuance No. 10 AssetManagement Plan
Others
4.76%
184,842,883
184,842,883
Liaoning ProvincialTransportationInvestment GroupCo., Ltd.
State-ownedlegal person
3.82%
148,528,983
-1,941,900
148,528,983
& CO.INTERNATIONAL
Foreign legalperson
0.37%
| MORGAN STANLEY |
14,366,619
| 14,366,619 |
14,366,619
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
PLCHuatai Securities Co.,Ltd.
State-ownedlegal person
0.30%
11,541,080
| 11,541,080 |
11,541,080
CITIC Securities Co.,Ltd.
State-ownedlegal person
0.24%
9,490,396
| 9,490,396 |
9,490,396
China ResourcesYuanta Fund-HuataiSecurities-ChinaResources YuantaFund RunhongProsperity CollectiveAsset ManagementPlan
Others
0.23%
8,990,023
| 8,990,023 |
8,990,023
Lu Ruijun
Domesticnatural person
0.21%
8,000,000
| 8,000,000 |
8,000,000
Strategy investors or general legal
| person becomes top 10 shareholders due |
to rights issued (if any) (See Notes 3)
NoneNotes to relationship or ‘action inconcert’ among the top 10 shareholders.
It is unknown to the Company whether there is any related connection or ‘Action in Concert’
Listed Companies existing among the above shareholders.Explanation of the above-mentionedshareholders' entrusted/entrusted votingrights and waiver of voting rights
| as described by Rules of Information Disclosing Regarding Changing of Shareholding Status of |
| The above shareholders are not involved in the entrustment, entrusted voting rights, or abstention |
of voting rights.Special instructions for the existence ofspecial repurchase accounts among thetop 10 shareholders (if any) (see Note11)
repurchase.Shareholding of top 10 unrestricted shareholdersName of the shareholder
Un-restricted shares held atthe end of the reporting period
Benxi Iron and Steel (Group) Co., Ltd. holds 467,545,000 shares of the company through pledge
Category of sharesCategory of shares QuantityBenxi Steel & Iron (Group) Co., Ltd. 2,409,628,094
Common shares in RMB2,409,628,094
CCB Principal Asset Management – ICBC –
| CR |
Trust – CR Trust · Xing Sheng No. 5 CollectiveFund Trust Plan
184,842,883
Common shares in RMB184,842,883
Bei Xin Rui Feng Fund – China MerchantsBank – Bei Xin Rui Feng Fund Feng Qing No.229 Asset Management Plan
184,842,883
Common shares in RMB184,842,883
China Life AMP Fund– ICBC – China LifeAMP – Hua Xin Trust Targeted Additional
184,842,883
Common shares in RMB 184,842,883
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Shares Issuance No. 10 Asset Management PlanLiaoning Provincial Transportation InvestmentGroup Co., Ltd.
148,528,983
Common shares in RMB 148,528,983
MORGAN STANLEY & CO.INTERNATIONAL PLC
14,366,619
Common shares in RMB14,366,619
Huatai Securities Co., Ltd. 11,541,080
Common shares in RMB11,541,080
CITIC Securities Co., Ltd. 9,490,396
Common shares in RMB9,490,396
China Resources Yuanta Fund-HuataiSecurities-China Resources Yuanta FundRunhong Prosperity Collective AssetManagement Plan
8,990,023
Foreign shares in domestic exchange8,990,023
Lu Ruijun 8,000,000
Common shares in RMB8,000,000
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
any of the ot
| her shareholders among the top 10 shareholders, neither being regarded as |
action-in-
Shareholding in PLC.
| The Company is not aware of any relationship among the other |
shareholders, neither being regarded as action-in-
Disclosure Regulations for Change of Shareholding in PLC.
| The Company is not aware |
of any relationship among the top 10 shareholders, neither being regarded as action-in-concert parties by
PLC.Shareholders among the top 10 participating insecurities margin trading (if any) (see Note 4)
China Resources Yuanta Fund-Huatai Securities-China Resources Yuanta Fund Runhong
| the Information Disclosure Regulations for Change of Shareholding in |
| Prosperity Collective Asset Management Plan holds 8,990,023 shares of the company through investor credit securities accounts; Lu Ruijun holds 8,000,000 shares of the |
company through investor credit securities accounts.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-backagreement dealing in reporting period.
IV. Change of controlling shareholder or actual controller
√Applicable □Not applicable
Name Position
Status ofoffice
Numberof sharesheld at
Numberof
Numberof sharessold out
Numberof sharesheld at
Number of
restricted
stocks
Number of
restricted
stocks
Number of
restrictedstocks granted
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
the
of theperiod(shares)
sharesheld inthecurrentperiod(shares)
in thecurrentperiod(shares)
| beginning | the end of the period |
(shares)
granted atthebeginningof theperiod(shares)
granted inthe current
period(shares)
at the end of
the period
(shares)
Gao Lie
Chairmanof theboard
Incumbent
JiagGuangwei
ViceChairman
Incumbent
Han Mei
ViceChairman
Incumbent
Lin Dong
Director,generalmanager
Incumbent
WangDonghui
Director Incumbent
ZhangSuxun
Independent director
Incumbent
YuanZhizhu
Independent director
Incumbent
ZhongTianli
Independent director
Incumbent
Cheng Bin
Chairmanof theSupervisory Board
Incumbent
Li Xiaowei
Supervisor Incumbent
ZhaoZhonghua
Supervisor Incumbent
ZhangYanlong
Supervisor Incumbent
ZhaoXingtao
Supervisor Incumbent
Chen Xin
DeputyGeneralManager
Incumbent
YangXiaofang
DeputyGeneralManager
Incumbent
CongYajuan
ChiefAccountant
Incumbent
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
GaoDesheng
Boardsecretary
Incumbent
Cao Aimin
ViceChairman
Departure
ShenQiang
Director,generalmanager
Departure
HuangXinghua
Director Departure
ZhaoXinan
Independent director
Departure
Li Lin Supervisor Departure
BaoMingwei
DeputyGeneralManager
Departure
WangFengmin
DeputyGeneralManager
Departure
Huo Gang
DeputyGeneralManager
Departure
合计 -- --
V. Change of controlling shareholder or actual controller
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
There was no change of holding shareholder in the report period.
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There was no change of substantial controller in the report period.
VIII. Status of Preferred Shares
□ Applicable √ Not applicable
There were no preferred shares during the reporting period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
IX. Status of Bonds
√ Applicable □ Not applicable
I. Enterprise bonds
□ Applicable √ Not applicable
During the reporting period, the company did not have Enterprise bonds.
II. Corporate bonds
□ Applicable √ Not applicable
During the reporting period, the company did not have corporate bonds.
III. Debt financing tools for non-financial companies
□ Applicable √ Not applicable
During the reporting period, the company did not have non-financial corporate debt financinginstruments.
IV. Convertible corporate bonds
√ Applicable □ Not applicable
1. Previous adjustments to the conversion price
1. The initial conversion price of "Bengang Convertible Bonds" is 5.03 yuan per share.
2. As the company implemented the 2020 equity distribution plan, the conversion price of "Bengang
Convertible Bonds" was adjusted to RMB 5.02 per share on July 19, 2021.
2. Cumulative share conversion
√ Applicable □ Not applicable
Name ofC
Bond
S
| onvertible | tart date of |
conversion
Total issue
quantity
Total issue
amount
Cumulativeconversion
amount(Yuan)
Cumulativeconversionquantity(shares)
Proportion
total issuequantity
Amount ofshares notconverted
(Yuan)
Proportion
of
| of converted shares to the | unconverted |
amount to
the total
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
issueamountBengangConvertibleBond
4th Jan2021
68,000,000
6,800,000,0
00.00
48,743,200.
487,432
0.72%
6,751,256,8
00.00
99.28%
3. The top ten holders of convertible bonds
No. Convertible bond holders
Nature ofconvertible bondholders
Number ofconvertiblebonds held
at the end ofthe reporting
period(sheets)
Amount ofconvertible bondsheld at the end ofthe reportingperiod (yuan)
Percentageofconvertible
| at the end of the reporting | bonds held at |
the end of
period
Benxi Iron and Steel (Group) Co., Ltd.
State-owned legalperson
5,097,390
| the reporting | ||
509,739,000.00
7.55%
The Hongkong and Shanghai BankingCorporation Limited
Foreign legal person
3,432,943
343,294,300.00
5.08%
Shanghai Pudong Development BankCo., Ltd.-Yifangda Yuxiang ReturnBond Securities Investment Fund
Others 2,646,781
264,678,100.00
3.92%
UBS AG Foreign legal person
2,509,838
250,983,800.00
3.72%
China Huaneng Group CorporationEnterprise Annuity Plan-Industrial andCommercial Bank of China Co., Ltd.
Others 1,226,287
122,628,700.00
1.82%
Basic Pension Insurance Fund 107Portfolio
Others 1,107,844
110,784,400.00
1.64%
Agricultural Bank of China Co., Ltd.-Wells Fargo Convertible BondSecurities Investment Fund
Others 1,007,060
100,706,000.00
1.49%
National Social Security Fund 210Combination
Others 990,795
99,079,500.00
1.47%
CITIC Securities Trust Fu HualingFixed-income Pension Products-Industrial and Commercial Bank ofChina Co., Ltd.
Others 966,630
96,663,000.00
1.43%
E Fund-Minsheng Bank-Bank ofHangzhou Co., Ltd.
Others 888,048
88,804,800.00
1.32%
4. Significant changes in the guarantor’s profitability, asset status, and credit status
□ Applicable √ Not applicable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
5. At the end of the reporting period, the company's liabilities, changes in credit standing, and cash
arrangements for debt repayment in future yearsNot applicable
V. The loss in the scope of consolidated statements during the reporting periodexceeded 10% of the net assets at the end of the previous year
□ Applicable √ Not applicable
VI. The company’s main accounting data and financial indicators for the past twoyears as of the end of the reporting periodUnit: ten thousand yuan
Item
30 June 2021 31 December 2020
Changes over endingbalance of last yearCurrent ratio 1.20%
1.04%
0.16%
Debt-to-asset ratio 63.25%
66.85%
-3.60%
Quick ratio 0.89%
0.77%
0.12%
Current period Previous period
Changes over previous
periodNet profit after deductingnon-recurring gains andlosses
2,199,142,563.3
239,885,472.54
816.75%
EBITDA total debt ratio 11.48%
4.41%
7.07%
Interest Interest Coverageratio
6.26
1.6
291.25%
Cash Interest Coverage ratio -1.88
0.68
-376.47%
EBITDA Interest Coverageratio
8.32
4.3
93.49%
Loan repayment rate 100.00%
100.00%
0.00%
Interest repayment rate 100.00%
100.00%
0.00%
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
X. Financial ReportI. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The semi-annual report is not audited.
II. Financial Statements
Statement in Notes are carried in RMB Yuan
1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Prepared by: Bengang Steel Plates Co., Ltd.
Unit: Yuan
| Items | 30 June 2021 | 31 December 2020 |
| Current assets | ||
| Cash at bank and on hand | 9,510,700,502.67 | 13,126,666,915.26 |
| Settlement provisions | ||
| Capital lent | ||
| Financial assets held for trading | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 225,510,568.92 | 245,217,182.66 |
| Accounts receivable financing |
5,143,627,467.44 4,189,977,871.92
| Prepayments | 2,027,008,212.85 | 2,108,044,777.65 |
| Premium receivable | ||
| Reinsurance accounts receivable | ||
| Receivable deposit for reinsurance contract | ||
| Other receivables | 160,180,391.22 | 142,101,351.27 |
| Including: Interest receivables | 51,637,650.49 | 33,685,359.01 |
| Dividend receivables | ||
| Redemptory financial assets for sale | ||
| Inventories | 8,663,345,615.68 | 9,040,065,342.65 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 7,138,313,168.95 | 5,523,646,836.01 |
| Total current assets | 32,868,685,927.73 | 34,375,720,277.42 |
| Non-current assets | ||
| Loan and advances issued | ||
| Debt Investments | ||
| Other debt investments | ||
| Long-term receivables |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | 30 June 2021 | 31 December 2020 |
| Long-term equity investments | 3,024,013.88 | 2,742,064.73 |
| Other equity instrument investments | 1,042,024,829.00 | 1,042,024,829.00 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 25,137,148,377.89 | 26,284,567,956.44 |
| Construction in progress | 2,878,339,506.26 | 1,839,933,715.58 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,510,538,778.93 | |
| Intangible assets | 261,648,967.14 | 264,932,652.54 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 199,553,629.68 | 201,708,932.84 |
| Other non-current assets | 851,101,139.47 | 995,840,320.65 |
| Total non-current assets | 31,883,379,242.25 | 30,631,750,471.78 |
| Total assets | 64,752,065,169.98 | 65,007,470,749.20 |
| Liabilities and equities | ||
| Current Liabilities | ||
| Short-term loans | 7,495,419,000.00 | 10,067,731,000.00 |
| Loan from central bank | ||
| Loan from other banks | ||
| Financial liability held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 6,114,692,166.66 | 9,814,149,348.42 |
| Accounts payable | 5,505,623,541.96 | 5,914,228,256.82 |
| Advance from customers | ||
| Contract liabilities | 6,182,094,798.39 | 4,458,671,819.90 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receipt from vicariously traded securities | ||
| Receipt from vicariously underwriting securities | ||
| Employee benefits payable | 33,208,964.92 | 25,749,485.25 |
| Current tax liabilities | 350,870,891.00 | 55,302,080.96 |
| Other payables | 712,159,087.35 | 709,448,301.92 |
| Including：Interest payables | ||
| Dividend payables | 38,753,715.32 | |
| Handling charges and commission payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 137,878,355.58 | 1,308,030,361.43 |
| Other current liabilities | 803,672,323.79 | 579,627,336.58 |
| Total current liabilities | 27,335,619,129.65 | 32,932,937,991.28 |
| Non-current liabilities | ||
| Provision for insurance contract | ||
| Long-term loans | 4,309,786,941.97 | 3,502,934,427.65 |
| Bonds payable | 5,732,396,546.29 | 5,752,229,339.52 |
| Including: Preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 1,549,600,900.45 | |
| Long-term payables | 1,907,492,831.36 | 1,114,232,362.74 |
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 123,466,469.89 | 154,451,833.23 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | 30 June 2021 | 31 December 2020 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 13,622,743,689.96 | 10,523,847,963.14 |
| Total liabilities | 40,958,362,819.61 | 43,456,785,954.42 |
| Shareholders' equity: | ||
| Share capital | 3,885,060,605.00 | 3,875,371,532.00 |
| Other equity instruments | 1,138,070,880.42 | 1,146,290,662.42 |
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 12,381,969,365.52 | 12,343,209,847.29 |
| Less: treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 18,330,611.35 | 300,412.14 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| General risk reserve | ||
| Undistributed profits | 4,862,062,857.99 | 2,692,018,405.40 |
| Total equity attributable to equity holders of the parent company |
23,246,599,850.13 21,018,296,389.10
| Non-controlling interests | 547,102,500.24 | 532,388,405.68 |
| Total shareholder's equity | 23,793,702,350.37 | 21,550,684,794.78 |
| Total of liabilities and owners’ equity | 64,752,065,169.98 | 65,007,470,749.20 |
Legal Representative: Gao Lie Person in charge of accounting: Lin Dong Accounting Dept. Leader: Cong Yajuan
2. STATEMENT OF FINANCIAL POSITION OF THE PARENT COMPANY
Unit: Yuan
| Items | 30 June 2021 | 31 December 2020 |
| Current assets | ||
| Cash at bank and on hand | 9,010,915,677.50 | 11,808,618,300.87 |
| Financial assets held for trading | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 248,701,019.49 | 289,865,462.20 |
| Accounts receivable financing | 4,967,026,780.38 | 4,143,431,412.08 |
| Prepayments | 2,062,013,838.67 | 2,117,204,935.75 |
| Other receivables | 241,659,108.07 | 228,180,190.02 |
| Including: Interest receivables | 46,266,951.12 | 23,028,942.73 |
| Dividend receivables | ||
| Inventories | 6,254,749,916.24 | 7,420,499,172.20 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 7,000,000,000.00 | 5,437,282,088.94 |
| Total current assets | 29,785,066,340.35 | 31,445,081,562.06 |
| Non-current assets | ||
| Debt investments | ||
| Other debt investments |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | 30 June 2021 | 31 December 2020 |
| Long-term receivables | ||
| 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 | 23,745,957,631.09 | 24,755,665,765.30 |
| Construction in progress | 2,834,878,491.65 | 1,798,639,941.58 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,510,538,778.93 | |
| Intangible assets | 140,510,834.76 | 142,163,903.40 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 96,325,403.07 | 98,480,706.23 |
| Other non-current assets | 851,101,139.47 | 988,475,426.53 |
| Total non-current assets | 32,237,219,010.13 | 30,841,332,474.20 |
| Total assets | 62,022,285,350.48 | 62,286,414,036.26 |
| Current liabilities | ||
| Short-term loans | 7,195,419,000.00 | 9,107,731,000.00 |
| Financial liability held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 5,816,080,763.35 | 8,348,607,405.21 |
| Accounts payable | 5,528,443,992.45 | 6,280,468,684.34 |
| Advance from customers | ||
| Contract liabilities | 5,829,654,787.35 | 5,324,357,761.83 |
| Employee benefits payable | 32,760,446.39 | 23,981,010.53 |
| Current tax liabilities | 332,417,391.02 | 42,514,891.31 |
| Other payables | 367,238,464.60 | 368,374,954.61 |
Including：Interest payables
| Dividend payables | 38,753,715.32 | |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 137,878,355.58 | 1,308,030,361.43 |
| Other current liabilities | 757,855,122.36 | 692,166,509.04 |
| Total current liabilities | 25,997,748,323.10 | 31,496,232,578.30 |
| Non-current liabilities | ||
| Long term loans | 4,309,786,941.97 | 3,502,934,427.65 |
| Bonds payable | 5,732,396,546.29 | 5,752,229,339.52 |
| Including: Preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 1,549,600,900.45 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | 30 June 2021 | 31 December 2020 |
| Long-term payables | 1,900,392,952.74 | 1,108,412,163.50 |
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 123,466,469.89 | 154,451,833.23 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 13,615,643,811.34 | 10,518,027,763.90 |
| Total liabilities | 39,613,392,134.44 | 42,014,260,342.20 |
| Shareholder’s equity: | ||
| Share capital | 3,885,060,605.00 | 3,875,371,532.00 |
| Other equity instruments | 1,138,070,880.42 | 1,146,290,662.42 |
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,961,817,683.40 | 11,923,058,165.17 |
| Less: Treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 15,912,566.72 | 120,972.62 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| Undistributed Profits | 4,446,925,950.65 | 2,366,206,832.00 |
| Total shareholder's equity | 22,408,893,216.04 | 20,272,153,694.06 |
| Total liabilities and shareholder’s equity | 62,022,285,350.48 | 62,286,414,036.26 |
3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unit: Yuan
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
| 1. Total operating income | 38,588,128,212.14 | 22,184,537,260.05 |
| Including: Operating income | 38,588,128,212.14 | 22,184,537,260.05 |
| Interest income | ||
| Premium earned | ||
| Income from handling charges and commission | ||
| 2. Total operating cost | 35,641,572,522.11 | 21,927,105,960.14 |
| Including: Operating cost | 34,592,825,792.72 | 20,440,246,362.67 |
| 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 | 241,555,494.92 | 88,398,436.68 |
| Selling and distribution expenses | 59,652,669.72 | 642,393,218.78 |
| General and administrative expenses | 388,678,843.23 | 380,828,316.41 |
| Research and development expenses | 22,504,022.68 | 20,202,985.20 |
| Financial expenses | 336,355,698.84 | 355,036,640.40 |
| Including: Interest expense | 554,219,518.90 | 439,861,353.93 |
| Interest income | 222,276,204.79 | 154,882,284.33 |
| Add: Other income | 32,659,483.34 | 38,587,332.40 |
| Income on investment（“-” for loss） | 1,835,124.19 | 29,304.00 |
| Including: Income from associates and joint ventures | 281,949.15 | 29,304.00 |
| Income from derecognition of financial assets measured at amortized |
cost
| Exchange gains（“-” for loss） | ||
| Net exposure hedge income（“-” for loss） |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
| Gains from change of fair value （“-” for loss） | ||
| Credit impairment loss （“-” for loss） | 2,049,977.83 | 3,487,783.42 |
| Asset impairment loss （“-” for loss） | 6,629,442.12 | -15,321,598.62 |
| Assets disposal gains（“-” for loss） | 130,675.05 | 325,651.61 |
| 3. Operational profit（“-” for loss） | 2,989,860,392.56 | 284,539,772.72 |
| Add: Non-operating income | 3,273,128.46 | 1,140,364.12 |
| Less: Non-operating expenses | 22,989,643.14 | 20,035,471.42 |
| 4. Total profit (“-” for loss) | 2,970,143,877.88 | 265,644,665.42 |
| Less: Income tax expenses | 746,977,590.45 | 9,237,815.08 |
| 5. Net profit（“-” for loss） | 2,223,166,287.43 | 256,406,850.34 |
| 1.Classification by continuing operating | ||
| 1.Net profit from continuing operation（“-” for loss） | 2,223,166,287.43 | 256,406,850.34 |
| 2.Net profit from discontinued operation（“-” for loss） | ||
| 2.Classification by ownership | ||
| 1. Net profit attributable to the owners of parent company （“-” for loss） | 2,208,798,167.91 | 254,644,204.33 |
| 2. Net profit attributable to non-controlling shareholders （“-” for loss） | 14,368,119.52 | 1,762,646.01 |
| 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 | ||
| 5）Others | ||
| 2.Other comprehensive income that will be reclassified into profit or loss. | ||
| 1）Other comprehensive income under the equity method investee can be reclassified |
into profit or loss
| 2）Changes in fair value of other debt investments | ||
| 3）Amount of financial assets reclassified into other comprehensive income | ||
| 4）Credit impairment provision of other debt investments | ||
| 5）The effective portion of cash flow hedges and losses | ||
| 6) Translation differences in foreign currency financial statements | ||
| 7）Other | ||
| Other comprehensive income attributable to non-controlling shareholders’ equity after tax | ||
| 7. Total comprehensive income | 2,223,166,287.43 | 256,406,850.34 |
| Total comprehensive income attributable to the owner of the parent company | 2,208,798,167.91 | 254,644,204.33 |
| Total comprehensive income attributable to non-controlling shareholders | 14,368,119.52 | 1,762,646.01 |
| 8. Earnings per share | ||
| 1）Basic earnings per share (Yuan/share) | 0.57 | 0.07 |
| 2）Diluted earnings per share (Yuan/share) | 0.57 | 0.07 |
In the current period of business combination under common control, the net profit realized by the merged partybefore the merger is: yuan, and the net profit realized by the merged party in the previous period is: yuan
Legal Representative: Gao Lie Person in charge of accounting: Lin Dong Accounting Dept. Leader: Cong Yajuan
4. STATEMENT OF COMPREHENSIVE INCOME OF THE PARENT COMPANY
Unit: Yuan
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
| 1. Total operating income | 39,081,201,858.29 | 21,759,781,682.12 |
| Less: Operating cost | 35,285,590,888.70 | 20,379,148,281.27 |
| Tax and surcharges | 213,178,320.80 | 74,240,782.35 |
| Selling and distribution expenses | 55,267,199.05 | 386,932,932.93 |
| General and administrative expenses | 360,747,887.96 | 354,627,152.28 |
| Research and development expenses | 22,504,022.68 | 20,202,985.20 |
| Financial expenses | 327,299,367.65 | 337,504,255.84 |
| Including: Interest expense | 304,352,578.12 | 410,264,451.89 |
| Interest income | 210,228,568.88 | 141,297,649.84 |
| Add: Other income | 32,210,883.34 | 38,002,345.53 |
| Income on investment |
（
）
| 1,553,175.04 | ||
| Including: Income from associates and joint ventures |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
Income from derecognition of financial assets
| measured at amortized cost |
| Net exposure hedge income |
（
）
| Gains from change of fair value （“-” for loss） | ||
| Credit impairment loss |
（
）
| 2,049,977.83 | 2,627,938.73 | |
| Assets impairment loss（“-” for loss） | 6,571,234.79 | -15,321,598.62 |
| Assets disposal gains |
（
）
| 130,675.05 | 325,651.61 | |
| 2. Operational profit（“-” for loss） | 2,859,130,117.50 | 232,759,629.50 |
| Add: Non-operating income | 1,295,851.57 | 811,659.87 |
| Less: Non-operating expenses | 22,989,643.14 | 19,487,380.11 |
| 3. Total profit (“-” for loss) | 2,837,436,325.93 | 214,083,909.26 |
| Less: Income tax expenses | 717,963,491.96 | -3,173,414.97 |
| 4. Net profit |
（
）
| 2,119,472,833.97 | 217,257,324.23 | |
| 1.Net profit from continuing operation (“-” for loss) | 2,119,472,833.97 | 217,257,324.23 |
| 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 | ||
| 5）Others |
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 |
）
| Changes in fair value of other debt investments | ||
| 4）Amount of financial assets reclassified into other comprehensive income |
）
| 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 | 2,119,472,833.97 | 217,257,324.23 |
| 7. Earnings per share | ||
| 1 |
）
(Yuan/share)
| 2）Diluted earnings per share |
(Yuan/share)
5. CONSOLIDATED STATEMENT OF CASH FLOWS
Unit: YuanItems Jan – Jun 2021 Jan – Jun 2020
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 27,681,479,863.67 15,423,965,198.05Net 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
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020Net increase of loans from borrowing fundsNet increase of fund for repurchase businessNet cash received from traded securitiesTax rebate received 40,128,927.12 310,509,228.43Other cash received relating to operating activities 239,319,537.30 174,016,797.00Subtotal of cash inflows from operating activities27,960,928,328.09 15,908,491,223.48Cash paid for goods and services 24,177,763,290.52 14,428,717,102.76Net 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 employees 972,651,151.35 884,844,841.18Cash paid for all types of taxes 1,082,217,676.19 520,116,275.37Other cash paid relating to operating activities 203,379,990.00 226,288,711.25Subtotal of cash outflows from operating activities26,436,012,108.06 16,059,966,930.56Net cash flows from operating activities 1,524,916,220.03 -151,475,707.08
2. Cash flows from investing activities
Cash received from disposal of investments 3,000,000,000.00Cash received from return on investments 1,553,175.04Net 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 activities3,001,553,175.04
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 1,148,767,202.27 | 706,681,059.07 |
Cash paid for acquisition of investments 4,600,000,000.00Net increase of mortgage loanNet cash received from subsidiary and other operating unitOther cash paid relating to investing activitiesSubtotal of cash outflows from investing activities
| 5,748,767,202.27 | 706,681,059.07 |
Net cash flows from investing activities -2,747,214,027.23 -706,681,059.07
3. Cash flows from financing activities
Proceeds from investmentIncluding: Proceeds from investment of non-controlling shareholders of subsidiaryProceeds from borrowings 1,512,381,000.00 4,987,194,000.00Other proceeds relating to financing activitiesSubtotal of cash inflows from financing activities1,512,381,000.00 4,987,194,000.00Cash repayments of borrowings 4,477,892,475.61 5,671,544,896.99Cash payments for distribution of dividends, profit, or interest expenses 567,804,337.49 480,183,996.49Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiariesOther cash payments relating to financing activitiesSubtotal of cash outflows from financing activities5,045,696,813.10 6,151,728,893.48Net cash flows from financing activities -3,533,315,813.10 -1,164,534,893.48
4. Effect of foreign exchange rate changes on cash and cash equivalents -16,349,859.91 -1,130,665.43
5. Net increase in cash and cash equivalents -4,771,963,480.21 -2,023,822,325.06Add: Cash and cash equivalents at the beginning of the period9,229,417,595.12 13,441,414,988.58
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items Jan – Jun 2021 Jan – Jun 2020
6. Cash and cash equivalents at the ending of the period 4,457,454,114.91 11,417,592,663.52
6. CASH FLOW STATEMENT OF THE PARENT COMPANY
Unit: Yuan
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
| 1. Cash flow from operating activities | ||
| Cash received from sale of goods or rendering of services | 27,601,858,925.93 | 15,003,373,098.45 |
| Tax rebate received | 15,393,055.96 | 260,246,235.34 |
| Other cash received relating to operating activities | 230,589,337.92 | 163,299,247.34 |
| Subtotal of cash inflows from operating activities | 27,847,841,319.81 | 15,426,918,581.13 |
| Cash paid for goods and services | 24,802,523,270.32 | 14,323,769,183.95 |
| Cash paid to and on behalf of employees | 926,763,546.78 | 840,886,166.89 |
| Cash paid for all types of taxes | 984,236,622.57 | 465,606,411.99 |
| Other cash paid relating to operating activities | 139,392,329.61 | 159,126,577.28 |
| Subtotal of cash outflows from operating activities | 26,852,915,769.28 | 15,789,388,340.11 |
| Net cash flows from operating activities | 994,925,550.53 | -362,469,758.98 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 3,000,000,000.00 | |
| Cash received from return on investments | 1,553,175.04 |
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 | 3,001,553,175.04 |
Cash paid for acquisition of fixed assets, intangible assets
1,131,314,182.16 696,005,001.44
| and other long-term assets | ||
| Cash paid for acquisition of investments | 4,600,000,000.00 |
Net cash paid for acquisition of subsidiary and other
| operating unit |
| Other cash paid relating to investing activities | ||
| Subtotal of cash outflows paid for investing activities | 5,731,314,182.16 | 696,005,001.44 |
| Net cash flows from investing activities | -2,729,761,007.12 | -696,005,001.44 |
| 3. Cash flows from financing activities | ||
| Proceeds from investment | ||
| Cash received from borrowings | 1,412,381,000.00 | 4,747,194,000.00 |
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | 1,412,381,000.00 | 4,747,194,000.00 |
| Cash repayments of borrowings | 3,722,892,475.61 | 5,051,544,896.99 |
Cash payments for distribution of dividends, profit or
544,896,337.46 433,692,125.89
| interest | ||
| Other cash payments relating to financing activities | ||
| Subtotal of cash outflows from financing activities | 4,267,788,813.07 | 5,485,237,022.88 |
| Net cash flows from financing activities | -2,855,407,813.07 | -738,043,022.88 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
| Items | Jan – Jun 2021 | Jan – Jun 2020 |
4. Effect of foreign exchange rate changes on cash and
-16,347,695.55 -1,134,392.87
| cash equivalents | ||
| 5. Net increase in cash and cash equivalents | -4,606,590,965.21 | -1,797,652,176.17 |
Add: Cash and cash equivalents at the beginning of the
8,897,859,003.60 13,029,616,298.47
| period | ||
| 6. Ending balance of cash and cash equivalents | 4,291,268,038.39 | 11,231,964,122.30 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unit: YuanItems
| Jan – Jun 2021 | |
Owner's equity attributable to parent company
interest
| Non-controlling | Total of owner's |
equityShare capital
Capital reserves
| Other equity instruments | Less: | |
Treasury
| shares | Other |
comprehensive
Specialreserves
Surplus reserves
| income | General |
risk
Undistributedprofit
| reserve |
Others
Subtotal
Preference shares
| Preference shares | Perpetual bond |
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | ||||||
| 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 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | ||||||
| 3. Changes in current year (“-” for decrease) | 9,689,073.00 | -8,219,782.00 | 38,759,518.23 | 18,030,199.21 | 2,170,044,452.59 | 2,228,303,461.03 | 14,714,094.56 | 2,243,017,555.59 | |||||||
| 1) Total comprehensive income | 2,208,798,167.91 | 2,208,798,167.91 | 14,368,119.52 | 2,223,166,287.43 | |||||||||||
| 2) Capital increase and decrease by |
shareholders
9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23 40,228,809.23
| (1) Common share invested by shareholders | |||||||||||||||
| (2) Capital input by the holder of other equity instruments |
9,689,073.00 -8,219,782.00 38,759,518.23 40,228,809.23 40,228,809.23
owners' equity
| (3) Share-based payment attributable to | |||||||||||||||
| (4) Others | |||||||||||||||
| 3) Profit distribution | -38,753,715.32 | -38,753,715.32 | -38,753,715.32 | ||||||||||||
| (1) Appropriation to surplus reserves | |||||||||||||||
| (2) Appropriation to general risk reserve | |||||||||||||||
| (3) Profit distribution to shareholders | -38,753,715.32 | -38,753,715.32 | -38,753,715.32 | ||||||||||||
| (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 | 18,030,199.21 | 18,030,199.21 | 345,975.04 | 18,376,174.25 | |||||||||||
| (1) Provision of special reserves | 24,398,347.80 | 24,398,347.80 | 345,975.04 | 24,744,322.84 | |||||||||||
| (2) Use of special reserves | 6,368,148.59 | 6,368,148.59 | 6,368,148.59 | ||||||||||||
| 6) Others | |||||||||||||||
| 4. Ending balance of current year | 3,885,060,605.00 | 1,138,070,880.42 | 12,381,969,365.52 | 18,330,611.35 | 961,105,529.85 | 4,862,062,857.99 | 23,246,599,850.13 | 547,102,500.24 | 23,793,702,350.37 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items
| Jan – Jun 2020 |
Owner's equity attributable to parent company
| Non-controlling |
interest
equityShare capital
| Total of owner's | ||
| Other equity instruments |
Capital reserves
Treasuryshares
| Less: | Other |
comprehensiveincome
Specialreserves
Surplus reserves
riskreserve
Undistributed
profit
| General |
Others
Subtotal
Preferenc
e shares
| Preferenc | 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) | 1,146,290,662.42 | 87,724.73 | 384,252,740.78 | 1,530,631,127.93 | 7,226,825.45 | 1,537,857,953.38 | |||||||||
| 1) Total comprehensive income | 384,252,740.78 | 384,252,740.78 | 7,226,825.45 | 391,479,566.23 | |||||||||||
| 2) Capital increase and decrease by shareholders |
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
| (1) Common share invested by shareholders | |||||||||||||||
| (2) Capital input by the holder of other equity |
instruments
1,146,290,662.42 1,146,290,662.42 1,146,290,662.42
owners' equity
| (3) Share-based payment attributable to | |||||||||||||||
| (4) Others | |||||||||||||||
| 3) Profit distribution | |||||||||||||||
| (1) Appropriation to surplus reserves | |||||||||||||||
| (2) Appropriation to general risk reserve | |||||||||||||||
| (3) Profit distribution to shareholders | |||||||||||||||
| (4) Others | |||||||||||||||
| 4) Transfers within shareholders' equity | |||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) |
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||||||
| (3) Surplus reserves to recover loss | |||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings |
| (5) Other comprehensive income transferred into Retained Earnings | |||||||||||||||
| (6) Others | |||||||||||||||
| 5) Special reserves | 87,724.73 | 87,724.73 | 87,724.73 | ||||||||||||
| (1) Provision of special reserves | 54,000,536.58 | 54,000,536.58 | 54,000,536.58 | ||||||||||||
| (2) Use of special reserves | 53,912,811.85 | 53,912,811.85 | 53,912,811.85 | ||||||||||||
| 6) Others | |||||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY
Unit: YuanItems
| Jan – Jun 2021 |
Share capital
Capital reserves
| Other equity instruments | Less: | |
Treasury
shares
comprehensive income
Specialreserves
Surplus reserves
Undistributed
profits
| Other |
Others
Total shareholder’s
equity
ce shares
| Preferen | Perpetual |
bond
Others
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | |||||
| Add: Change of accounting policies | ||||||||||||
| Correction of errors for last period | ||||||||||||
| Others | ||||||||||||
| 2. Beginning balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | |||||
| 3. Changes in current year (“-” for decrease) | 9,689,073.00 | -8,219,782.00 | 38,759,518.23 | 15,791,594.10 | 2,080,719,118.65 | 2,136,739,521.98 | ||||||
| 1) Total comprehensive income | 2,119,472,833.97 | 2,119,472,833.97 | ||||||||||
| 2) Capital increase and decrease by shareholders | 9,689,073.00 | -8,219,782.00 | 38,759,518.23 | 40,228,809.23 | ||||||||
| (1) Common share invested by shareholders | ||||||||||||
| (2) Capital input by the holder of other equity instruments | 9,689,073.00 | -8,219,782.00 | 38,759,518.23 | 40,228,809.23 | ||||||||
| (3) Share-based payment attributable to shareholders' equity | ||||||||||||
| (4) Others | ||||||||||||
| 3) Profit distribution | -38,753,715.32 | -38,753,715.32 | ||||||||||
| (1) Appropriation of surplus reserves | ||||||||||||
| (2) Profit distribution to shareholders | -38,753,715.32 | -38,753,715.32 | ||||||||||
| (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 | 15,791,594.10 | 15,791,594.10 | ||||||||||
| (1) Provision of special reserves | 21,981,008.86 | 21,981,008.86 | ||||||||||
| (2) Use of special reserves | 6,189,414.76 | 6,189,414.76 | ||||||||||
| 6) Others | ||||||||||||
| 4. Ending balance of current year | 3,885,060,605.00 | 1,138,070,880.42 | 11,961,817,683.40 | 15,912,566.72 | 961,105,529.85 | 4,446,925,950.65 | 22,408,893,216.04 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2021
Items
| Jan – Jun 2020 |
Share capital
Capital reserves
Less:
Treasury
| Other equity instruments | shares | |
Othercomprehens
Specialreserves
Surplus reserves
Undistributedprofits
Others
Total shareholder’sequityPreference
ive incomeshares
Perpetual
| shares | 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) | 1,146,290,662.42 | 67,641.63 | 623,955,412.97 | 1,770,313,717.02 | ||||||||
| 1) Total comprehensive income | 623,955,412.97 | 623,955,412.97 | ||||||||||
| 2) Capital increase and decrease by shareholders | 1,146,290,662.42 | 1,146,290,662.42 | ||||||||||
| (1) Common share invested by shareholders | ||||||||||||
| (2) Capital input by the holder of other equity instruments | 1,146,290,662.42 | 1,146,290,662.42 | ||||||||||
| (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 |
earnings
| (5) Other comprehensive income transferred into retained | ||||||||||||
| (6) Others | ||||||||||||
| 5) Special reserves | 67,641.63 | 67,641.63 | ||||||||||
| (1) Provision of special reserves | 47,926,472.22 | 47,926,472.22 | ||||||||||
| (2) Use of special reserves | 47,858,830.59 | 47,858,830.59 | ||||||||||
| 6) Others | ||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 |
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. 57 byLiaoning People’s Government on 27 March 1997, was incorporated as a joint stock limited company through publicshare offer of domestic listed foreign currency denominated shares (B shares) in the People’s Republic of China (the“PRC”) on 27 June 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Bengang Group”), through reorganization ofoperations, assets and liabilities of its plants, namely, Steel Smelting Plant, Primary Rolling Plant and Continuous HotRolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”), the Company issued400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997, theCompany issued another 120,000,000 A-shares (Renminbi common Shares) at RMB 5.40 each, and listed in ShenzhenStock 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 issued byLiaoning Provincial Government State-owned Asset Administrative Committee, Bengang Group – the only holder ofnon-negotiable state-owned legal person shares paid the consideration to the current shareholders to obtain the currentoption for the 40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have beenregistered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the total amountof 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 particularly toBengang Group and the proceeds would be used to purchase the related assets of the Group. On the same day, BengangGroup received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, andwere exempted for the liability of undertaking the purchase offer. The liability was caused by subscribing of the 2 billionnew shares and the total shareholding was thus increased to 2.5752 billion shares (accounting for 82.12% of the totalcapital shares of the Company). On 28 August 2006, as approved by China Securities Depository & Clearing CorporationLtd. Shenzhen Office, the registration and conditional placing procedures of the 2 billion new shares were completed.On 28 September 2006, the privately placed shares were approved by Shenzhen Stock Exchange to be placed in the stockmarket. 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 offering
was completed on 9 February 2018, and 739,371,532 shares were actually issued. The placing price was RMB5.41 pershare.
As at 30 June 2021, the capital shares were totaled to 3,885,060,605 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: No.16 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 actual controlleris the State-owned Assets Supervision and Administration Commission of the State Council of Liaoning province.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry and is mainly involvedin 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 25 August 2021.
(2) Consolidation scope
As at 30 June 2021, subsidiaries included in the Company’s consolidated financial statements are as follows:
| 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. |
| Name of the subsidiaries |
| Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. |
The scope of the consolidated financial statements in this period has not changed compared with the previous period.
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 estimates
Notes 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, (15) Fixed assets, (18) Intangible assets, (24) 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 totalpar 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 parent
shall 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 theitem 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 in
stages, 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 highlyliquid 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 evaluated
on 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 valueplus 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 inprofit 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 transferof 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 contracts
shall 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 invalue 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 on
factors 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) 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 an
investee 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 profit
distributions 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’sidentifiable 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.
(14) 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.
(15) 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 | 10-45 years | 0 | 2.22-10.00 |
| Machinery | straight line method | 10-28 years | 3.00 | 3.46-9.70 |
| Transportation and other equipment |
straight line method 8-22 years 3.00 4.41-12.13
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.
(16) 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 theproject 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.
(17) 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.
(18) 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.
(19) 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 difficult
to 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 therecoverable 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.
(20) 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.
(21) 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 performanceand the 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.
(22) 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 becalculated 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.
(23) 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.
(24) 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 customerwould 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.
(25) 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.
(26) 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 in
Other 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.
(27) 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.
(28) Leases
Accounting policy from January 1, 2021
Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period oftime to obtain consideration.On the starting date of the contract, the company assesses whether the contract is a lease or contains a lease. If thecontract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, thecontract is, or contains, a lease.For a contract that contains a lease component and one or more additional lease or non-lease components, a lease shallallocate the consideration in the contract to each lease component on the basis of the relative stand-alone price of thelease component and the aggregate stand-alone price of the non-lease components.
1. The company as the lessee
(1) Right-of-use assets
On the start date of the lease term, the company recognizes the right-of-use asset for leases other than short-term leasesand low-value asset leases. Right-of-use assets are initially measured at cost.This cost includes:
? The initial measurement amount of the lease liability;
? If there is a lease incentive for the lease payment paid on or before the start of the lease term, the relevant amount of
the lease incentive already enjoyed shall be deducted;
? The initial direct expenses incurred by the company;
? The company expects to incur costs for dismantling and removing leased assets, restoring the site where leased
assets are located, or restoring leased assets to the state agreed upon in the lease terms, but does not include the costsincurred for the production of inventory.
The company depreciates the right-of-use assets with reference to the relevant depreciation policies of "3. (15) Fixedassets" in this note. If it can be reasonably determined that the ownership of the leased asset will be obtained at the endof the lease term, the company shall depreciate the leased asset during the remaining useful life; otherwise, the leasedasset will be depreciated during the shorter period of the lease term and the remaining useful life of the leased asset .The company determines whether the right-of-use asset has been impaired in accordance with the principles describedin "3. (19) Long-term asset impairment" in this note, and conducts accounting treatment for the identified impairmentloss.
(2) Lease liabilities
At the beginning of the lease term, the company recognizes lease liabilities for leases other than short-term leases and
leases of low-value assets. Lease liabilities are initially measured based on the present value of the payments that arenot paid at that date. Lease payments include:
1) Fixed payment (including in-substance fixed payment), less any lease incentives receivable;
2) Variable lease payments that depend on an index or a ratio;
3) Amounts expected to be payable by the lease under residual value guarantees;
4) The exercise price of the purchase option if the lease is reasonably certain to exercise that option;
5) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate
the lease;The company uses the interest rate implicit in the lease as the discount rate, but if the interest rate implicit in the leasecannot be reasonably determined, the company's incremental borrowing interest rate is used as the discount rate.The company calculates the interest expense of the lease liability during each period of the lease term according to afixed periodic interest rate, and includes it in the current profit and loss or the cost of related assets.Variable lease payments that are not included in the measurement of lease liabilities are included in the current profitand loss or the cost of related assets when they occur.After the start of the lease term, if the following circumstances occur, the company re-measures the lease liability andadjusts the corresponding right-of-use asset. If the book value of the right-of-use asset has been reduced to zero, but thelease liability still needs to be further reduced, the difference shall be included in the current profit and loss:
? When the evaluation result or actual exercise situation of the purchase option, renewal option or termination optionchanges, the company remeasures the lease liability based on the present value calculated by the lease payment after thechange and the revised discount rate;? When the actual fixed payment changes, the expected payable amount of the guarantee residual value changes, or theindex or ratio used to determine the lease payment changes, the company calculates the present value based on thechanged lease payment and the original discount rate to remeasure the lease liability. However, if changes in leasepayments originate from changes in floating interest rates, the revised discount rate is used to calculate the presentvalue.
(3) Short-term leases and low-value asset leases
The company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value assetleases, and calculates the relevant lease payments in the current profit and loss or related asset costs on a straight-linebasis during each period of the lease term. Short-term lease refers to a lease that does not include purchase options fora lease period not exceeding 12 months at the beginning of the lease period. Low-value asset leasing refers to a leasewith a lower value when a single leased asset is a new asset. If the company subleases or expects to sublease the leasedassets, the original lease is not a low-value asset lease.
(4) Lease modifications
The lease shall account for a lease modification as a separate lease if both:
? The modification increases the scope of the lease by adding the right to use one or more underlying assets; and
? the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in
scope and any appropriate adjustment to that stand-alone price to reflect the circumstances of the particular contract.
For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification alessee shall allocate the consideration in the modified contract, determine the lease term of the modified lease andremeasure the lease liabilities by discounting the revised lease payments using a revised discount rate.For a lease modification that is not accounted for as a separate lease, the lessee shall account for the remeasurement ofthe lease liabilities by decreasing the carrying amount of the right-of-use assets to reflect the partial or full terminationof the lease for lease modifications that decrease the scope of the lease. The lessee shall recognize in profit or loss anygain or loss relating to the partial or full termination of the lease; or by making a corresponding adjustment to the right-of-asset for all other lease modifications.
2. The company as the lessor
On the commencement date of the lease, the company divides the lease into finance lease and operating lease. Financelease refers to a lease in which almost all the risks and rewards related to the ownership of the leased asset aretransferred regardless of whether the ownership is ultimately transferred. Operating leases refer to leases other thanfinancial leases. When the company acts as a sublease lessor, it classifies subleases based on the right-of-use assetsgenerated from the original lease.
(1) Accounting treatment of operating leases
The lease receipts of operating leases are recognized as rental income in each period of the lease term according to thestraight-line method. The company capitalizes the initial direct costs incurred related to operating leases, and allocatesthem to the current profit and loss on the same basis as the recognition of rental income during the lease term. Variablelease payments that are not included in the lease receipts are included in the current profit and loss when they actuallyoccur.
(2) Accounting treatment of finance leasing
On the start date of the lease, the company recognizes the finance lease receivables for the finance lease and terminatesthe recognition of the finance lease assets. When the company initially measures the finance lease receivables, the netlease investment is taken as the entry value of the financial lease receivables. The net lease investment is the sum of theunguaranteed residual value and the present value of the lease payment not yet received at the beginning of the lease
term, discounted at the interest rate implicit in the lease.The company calculates and recognizes the interest income for each period of the lease term based on a fixed periodicinterest rate. The derecognition and impairment of finance lease receivables shall be accounted for in accordance with"3. (10) Financial Instruments" in this Note.Variable lease payments that are not included in the measurement of the net lease investment are included in the currentprofit or loss when they actually occur.A lessor shall account for a modification to a finance lease as a separate lease if both:
? The modification increases the scope of the lease by adding the right to use one or more underlying assets;? The consideration for the lease increases by an amount commensurate with the stand-alone price for the increase inscope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.For a modification to a finance lease that is not accounted for as a separate lease, a lessor shall account for themodification as follows:
? if the lease would have been classified as an operating lease had the modification been in effect at the inception date,the lessor shall account for the lease modification as a new lease from the effective date of the modification; and measurethe carrying amount of the underlying assets as the net investment in the lease immediately before the effective date ofthe lease modification.? If the change takes effect on the lease start date, the lease will be classified as a financial lease, and the company willperform accounting treatment in accordance with the policy of “3. (10) Financial Instruments” in this Note on themodification or re-negotiation of the contract.
3. Sale and leaseback transaction
The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale inaccordance with the principles described in "3. (24) Revenue" of this Note.
(1) As the lessee
If the transfer of an asset in the sale and leaseback transaction is a sale, the company as the lessee measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right-of-use retained by the lessee and recognize only the amount of any gain or loss that relates to the rights transferred to thelessor. if the asset transfer in the sale and leaseback transaction does not belong to the sale, the company as the lesseecontinues to recognize the transferred assets and at the same time recognize a financial liability equal to the transferproceeds. For the accounting treatment of financial liabilities, please refer to "3. (10) Financial Instruments" in this note.
(2) As a lessor
If the asset transfer in the sale and leaseback transaction is a sale, the company acts as the lessor to account for the
purchase of the asset, and the asset lease is accounted for in accordance with the aforementioned "2. The company asthe lessor" policy; in the sale and leaseback transaction If the transfer of assets is not a sale, the company as the lessordoes not recognize the transferred assets, but recognizes a financial asset equal to the transfer proceeds. For theaccounting treatment of financial assets, please refer to "3. (10) Financial Instruments" in this note.
Accounting policy before January 1, 2021
1. Accounting treatment of operating leases
(1) The lease fee paid by the company for rented assets shall be apportioned on a straight-line basis during the entire
lease period without deducting the rent-free period and included in the current expenses. The initial direct expensesrelated to the lease transaction paid by the company shall be included in the current expenses.
When the asset lessor bears the lease-related expenses that should be borne by the company, the company deducts thispart of the expenses from the total rent, and the deducted rent expenses are amortized during the lease term and includedin the current expenses.
(2) The lease fee collected by the company for renting assets shall be apportioned according to the straight-line method
during the entire lease period without deducting the rent-free period and recognized as lease-related income. The initialdirect expenses paid by the company related to the lease transaction shall be included in the current expenses; if theamount is large, it shall be capitalized and included in the current income in installments based on the same basis as thelease-related income recognition during the entire lease period.When the company bears the lease-related expenses that should be borne by the lessee, the company deducts this partof the expenses from the total rental income, and distributes the deducted rental expenses during the lease term.
2. Accounting treatment of finance lease
(1) Finance lease assets: On the start date of the lease, the company takes the lower of the fair value of the leased asset
and the present value of the minimum lease payment as the entry value of the leased asset, and the minimum leasepayment as the long-term payable Entered value, and the difference is regarded as unrecognized financing expenses.The company uses the effective interest method to amortize unrecognized financing expenses during the asset leaseperiod and include them in financial expenses. The initial direct costs incurred by the company are included in thevalue of the leased assets.
(2) Assets leased out by financing: On the lease start date, the company recognizes the difference between the sum of
the receivable financing lease payments and the unguaranteed residual value and its present value as unrealizedfinancing income, and it is recognized as unrealized financing income during each period when the rent is received inthe future. Rental income. The initial direct expenses incurred by the company related to the lease transaction are
included in the initial measurement of the financial lease receivables, and the amount of income recognized during thelease period is reduced.
(29) 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.
(30) 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 conditionsmay 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 the
inventory 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 fairvalue 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.
(31) Change of significant accounting policy and accounting estimate
1. Change of major accounting policy during the current reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 21-Leases" (revised in 2018)
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 21-Leases" (referred to as the"New Lease Standards") in 2018. The company will implement the new lease standard from January 1, 2021. Accordingto the revised standards, the company chooses not to reassess whether it is a lease or contains a lease on the date of thefirst implementation for the contracts that already existed before the first implementation date.? The company as the lessee
The company chose to adjust the amount of retained earnings and other related items in the financial statements at thebeginning of the year when the new lease standards were first implemented based on the cumulative impact of the firstimplementation of the new lease standards, and did not adjust the comparable period information.For operating leases that existed before the first implementation date, the company measures the lease liability basedon the present value of the remaining lease payments discounted by the Japanese company’s incremental borrowinginterest rate for the first implementation on the first implementation day, and chooses one from the following twomethods according to each lease to measuring right-of-use assets:
-The amount equal to the lease liability, with necessary adjustments based on the prepaid rent.For operating leases before the first execution date, the company applies the above methods and chooses one or moreof the following simplified treatments according to each lease:
1) Leases completed within 12 months after the first implementation date will be treated as short-term leases;
2) When measuring lease liabilities, leases with similar characteristics use the same discount rate;
3) The measurement of the right-of-use asset does not include the initial direct costs;
4) If there is an option to renew the lease or to terminate the lease, the lease term shall be determined according to the
actual exercise of the option before the first execution date and other latest conditions;
5) As an alternative to the impairment test of the right-of-use asset, assess whether the contract containing the lease is
a loss-making contract before the first execution date in accordance with "3. (23) Estimated liabilities" of this NoteAdjust the amount of loss reserves for the right-of-use asset;
6) Lease changes that occur before the first implementation date will not be adjusted retrospectively, and will be
accounted for in accordance with the new lease standard according to the final arrangement of the lease change.When measuring lease liabilities, the company uses the lessee’s incremental borrowing rate on January 1, 2021 todiscount the lease payment.The unpaid minimum lease payments for major operating leases disclosed in the consolidated
2,530,278,897.76The present value discounted by the company's incremental borrowing interest rate as of January 1,
| financial statements on December 31, 2020 |
| 2021 |
1,541,868,510.81
| Lease liabilities under the new lease standard on January 1, 2021 | 1,541,868,510.81 |
| The difference between the above discounted present value and the lease liability | 0.00 |
For financial leases that existed before the first implementation date, the company measures the right-of-use assetsand lease liabilities based on the original book values of the financial leased assets and the financial lease payables onthe first implementation date.? The company as the lessorFor sub-leases that are classified as operating leases before the first implementation date and continue after the firstimplementation date, the company will reassess them based on the remaining contract duration and terms of the originallease and sub-lease on the first implementation date, and classify them in accordance with the new lease standards. Ifit is reclassified as a finance lease, the company treats it as a new finance lease for accounting treatment.Except for sub-lease, the company does not need to adjust its lease as a lessor in accordance with the new leasestandard. The company conducts accounting treatment in accordance with the new lease standard from the date offirst implementation.? The main impacts of the company’s implementation of the new lease standards on the financial statements are asfollows:
Change of accounting policycontent and reason
Affected items
C
| January 1, 2021 | |
| onsolidated Financial statement | |
Parent company financial
T
| statement | ||
| he adjustment to |
operating lease
before the first adoption date
| by the company as the lessee |
Authorization
| Right of use assets | 1,541,868,510.81 | 1,541,868,510.81 |
| Lease liabilities | 1,502,969,848.79 | 1,502,969,848.79 |
Non-current liabilities
38,898,662.02 38,898,662.02
2. Change of accounting estimation
None.
3. Adjustments of the beginning balance due to the first implementation of new lease standards
Consolidated statement of financial position:
Items
Endingbalance of the
due within one yearprevious year
Beginningbalance of the
| previous year | current year | Adjustment |
Reclassification Remeasurement TotalRight of use assets 1,541,868,510.81 1,541,868,510.81 1,541,868,510.81
Lease liabilities 1,502,969,848.79 1,502,969,848.79 1,502,969,848.79Non-current liabilities
38,898,662.02 38,898,662.02 38,898,662.02
Statement of financial position of the parent company
Items
Ending balance of
due within one yearthe previous year
Beginning balance
| the previous year | of the current year | Adjustment | ||
| Reclassification | Remeasurement | Total | ||
Right of use
1,541,868,510.81 1,541,868,510.81 1,541,868,510.81Lease liabilities 1,502,969,848.79 1,502,969,848.79 1,502,969,848.79
VI. Taxes
(1) Major type of taxes and corresponding tax rates
| 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, 10, 13
| deductible input VAT of the period | ||
| City maintenance and construction tax | Based on VAT and business tax actually paid | 7, 5 |
| Enterprise income tax | Based on taxable profit | 25 |
XII. Notes to the consolidated financial statements
(1) Cash at bank and on hand
| Items | 30 June 2021 | 31 December 2020 |
| Cash on hand | 6,271.10 | 3,026.68 |
| Cash at bank | 4,457,447,843.81 | 9,229,414,568.44 |
| Other monetary funds | 5,053,246,387.76 | 3,897,249,320.14 |
| Total | 9,510,700,502.67 | 13,126,666,915.26 |
| Total amount deposited abroad |
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
Non-currentliabilities due
38,898,662.02 38,898,662.02 38,898,662.02
| Items | 30 June 2021 | 31 December 2020 |
| Margin for bank acceptance bill | 4,161,606,387.76 | 3,306,509,320.14 |
| Margin for letter of credit | 338,900,000.00 | 78,000,000.00 |
Fixed deposit or notice deposit
552,000,000.00 512,000,000.00
| used for guarantee | ||
| Loan margin | 740,000.00 | 740,000.00 |
| Others | ||
| Total | 5,053,246,387.76 | 3,897,249,320.14 |
(2) Accounts receivable
1. Accounts receivable disclosed by aging
| Items | 30 June 2021 | 31 December 2020 |
| Within 1 year (inclusive) | 226,242,229.74 | 245,084,695.28 |
| 1-2 years (inclusive) | 57,104,726.32 | 57,537,987.36 |
| 2-3 years (inclusive) | 250,933,831.67 | 251,762,129.07 |
| Over 3 years | 177,992,483.25 | 179,465,975.74 |
| Total | 712,273,270.97 | 733,850,787.45 |
| Less: Provision for bad debts | 486,762,702.05 | 488,633,604.79 |
| Total | 225,510,568.92 | 245,217,182.66 |
2. Accounts receivable disclosed by category
Items
| 30 June 2021 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage
Amount
| (%) | Bad debts ratio (%) | |||
| Tested for impairment individually |
352,985,418.30 49.56 352,985,418.30 100.00
359,287,852.67 50.44 133,777,283.75 37.23 225,510,568.92Include:
Tested for impairment byportfolioPortfolio 1: Aging portfolio
| Portfolio 1: Aging portfolio | 359,287,852.67 | 50.44 | 133,777,283.75 | 37.23 | 225,510,568.92 |
Items
| 30 June 2021 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage
Amount
| (%) | Bad debts ratio (%) | ||||
| Total | 712,273,270.97 | 100.00 | 488,633,604.79 | 225,510,568.92 |
Items
| 31 December 2020 | ||
| Gross carrying amount | Provision for bad debts | |
Book valueAmount
Percentage
Amount
| (%) | Bad debts ratio (%) | |||
| Individually significant and tested for impairment individually |
352,985,418.30 48.1 352,985,418.30 100
380,865,369.15 51.9 135,648,186.49 35.62 245,217,182.66Include:
Other insignificant items but
Accounts receivable testedfor impairment by portfoliotested for impairmentindividually
380,865,369.15 51.9 135,648,186.49 35.62 245,217,182.66
| tested for impairment individually | |||||
| Total | 733,850,787.45 | 100 | 488,633,604.79 | 245,217,182.66 |
Accounts receivables tested for impairment individuallyCompany
| 30 June 2021 | |||
| Gross carrying amount | Provision for bad debts | Bad debts ratio (%) | |
Reason
305,223,081.12 305,223,081.12 100.00
Bankruptcy
| Brilliance Automotive Group Holdings Co., Ltd. | reorganization | |
| Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd |
47,762,337.18 47,762,337.18 100.00
operationceased
| Total | 352,985,418.30 | 352,985,418.30 |
Accounts receivable tested for impairment by aging portfolio:
Items
| 30 June 2021 | |||
| Gross carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year (inclusive) | 221,398,097.73 | 2,213,980.98 | 1.00 |
| 1-2 years (inclusive) | 1,987,650.73 | 198,765.07 | 10.00 |
| 2-3 years (inclusive) | 5,671,958.15 | 1,134,391.63 | 20.00 |
| Over 3 years | 130,230,146.07 | 130,230,146.07 | 100.00 |
| Total | 359,287,852.67 | 133,777,283.75 | |
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 1,870,902.74.
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
| 30 June 2021 | ||
| Percentage of total Accounts receivable (%) | ||
Provision for
| bad debts | |||
| The first | 305,223,081.12 | 42.85 | 305,223,081.12 |
| The second | 90,812,279.39 | 12.75 | 908,122.79 |
| The third | 52,940,642.68 | 7.43 | 529,406.43 |
| The fourth | 47,762,337.18 | 6.71 | 47,762,337.18 |
| The fifth | 23,016,558.21 | 3.23 | 230,165.58 |
| Total | 519,754,898.58 | 72.97 | 354,653,113.10 |
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
involved
None
(3) Accounts receivable financing
1. Accounts receivable financing by category
| Item | 30 June 2021 | 31 December 2020 |
| Notes Receivable | 5,143,627,467.44 | 4,189,977,871.92 |
| Including: Bank acceptance bill | 4,727,663,597.31 | 1,875,594,439.85 |
| Commercial acceptance bill | 415,963,870.13 | 2,314,383,432.07 |
| Total | 5,143,627,467.44 | 4,189,977,871.92 |
Note: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair valuethrough other comprehensive income.
2. The pledged acceptance bill at the end of the period
| Items | 30 June 2021 |
| Bank acceptance bill | 16,991,847.39 |
| Commercial acceptance bill | 6,000,000.00 |
| Total | 22,991,847.39 |
3. 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 | 23,332,790,273.96 | |
| Commercial acceptance bill | 573,182,722.67 | |
| Total | 23,332,790,273.96 | 573,182,722.67 |
4. 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 2021 | 31 December 2020 | |||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year (inclusive) | 2,015,400,779.69 | 99.43 | 2,096,232,640.14 | 99.44 |
| 1-2 years (inclusive) | 11,607,433.17 | 0.57 | 11,812,137.51 | 0.56 |
| 2-3 years (inclusive) | ||||
| Over 3 years | ||||
Aging
| 30 June 2021 | 31 December 2020 | |||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Total | 2,027,008,212.86 | 100.00 | 2,108,044,777.65 | 100.00 |
Notes: As of June 30, 2021, 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 | 1,371,730,593.76 | 67.67 |
| The Second | 112,823,353.80 | 5.57 |
| The Third | 82,441,146.14 | 4.07 |
| The Fourth | 59,475,880.47 | 2.93 |
| The Fifth | 53,435,651.36 | 2.64 |
| Total | 1,679,906,625.53 | 82.88 |
(5) Other receivables
| Items | 30 June 2021 | 31 December 2020 |
| Interest receivables | 51,637,650.49 | 33,685,359.01 |
| Dividend receivables | ||
| Other receivables | 108,542,740.73 | 108,415,992.26 |
| Total | 160,180,391.22 | 142,101,351.27 |
1．Interest receivable
(1) Interest receivable disclosed by category
| Items | 30 June 2021 | 31 December 2020 |
| Deposit interest | 51,637,650.49 | 33,685,359.01 |
| Subtotal | 51,637,650.49 | 33,685,359.01 |
| Less: provision for bad debts | ||
| Total | 51,637,650.49 | 33,685,359.01 |
(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 2021 | 31 December 2020 |
| Within 1 year (inclusive) | 53,547,523.88 | 53,420,775.41 |
| 1-2 years (inclusive) | 42,323,476.43 | 42,323,476.43 |
| 2-3 years (inclusive) | 12,988,305.06 | 12,988,305.06 |
| Over 3 years | 68,088,848.67 | 68,267,923.76 |
| Total | 176,948,154.04 | 177,000,480.66 |
| Less: Provision for bad debts | 68,405,413.31 | 68,584,488.40 |
| Total | 108,542,740.73 | 108,415,992.26 |
(2) Information of provision for bad debts
debts
| Provision for bad | Stage one | Stage two | Stage three |
Total12-month expectedcredit losses
losses(credit impairment has not
| occurred) | lifetime expected credit |
losses
| (credit impairment has already occurred) | ||||
| Beginning balance | 352376.05 | 9,566,849.71 | 58,665,262.64 | 68,584,488.4 |
Transfer into
| second stage |
Transfer into third
| stage |
Transfer back to
| second stage |
Transfer back to
| first stage |
Provision during
| the current period |
Write-back during
| the current period |
179,075.09
179,075.09Reversal during the
| current period |
debts
| Provision for bad | Stage one | Stage two | Stage three |
Total12-month expectedcredit losses
losses(credit impairment has not
| occurred) | lifetime expected credit |
losses
Write-off during the
| (credit impairment has already occurred) | ||
| current period |
| Other changes | ||||
| Ending balance | 352,376.05 | 9,387,774.62 | 58,665,262.64 | 68,405,413.31 |
Changes in the gross carrying amount of other receivables are as follows:
debts
| Provision for bad | Stage one | Stage two | Stage three |
Total12-
credit losses
| month expected | lifetime expected |
credit losses(credit impairment has
| not occurred) | lifetime expected credit |
losses
| (credit impairment has already occurred) | ||||
| Beginning balance | 97,730,535.73 | 20,604,580.70 | 58,665,364.23 | 177,000,480.66 |
Transfer into second
Transfer into third
| stage |
| stage |
Transfer back to
Transfer back to first
| second stage |
| stage |
| Increase | 160,729,544.48 | 2,719,095.30 | 163,448,639.77 | |
| Decrease | 181,359,715.57 | 2,050,596.28 | 90,654.55 | 183,500,966.40 |
| Other changes | ||||
| Ending balance | 77,100,364.64 | 21,273,079.72 | 58,574,709.68 | 156,948,154.04 |
(3) There is no other receivables written off in the current period.
(4) Other receivables disclosed by nature
| Nature | 30 June 2021 | 31 December 2020 |
| Current Account | 167,883,799.30 | 167,775,115.62 |
| Others | 9,064,354.74 | 9,225,365.04 |
| Total | 176,948,154.04 | 177,000,480.66 |
(5) 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 | 5,926,131.29 | within 1 year | 3.35 | |
| The Second | Accounts | 4,706,815.40 | within 1 year | 2.66 | 47,068.15 |
| The Third | Accounts | 3,359,795.18 | within 1 year | 1.90 |
The Fourth Accounts 3,125,550.76
within 1 year to
1.77 2,538,389.24
| over 3 years | |||||
| The Fifth | Accounts | 2,394,571.41 | within 1 year | 1.35 | |
| Total | 19,512,864.04 | 11.03 | 2,585,457.39 |
(6) There is no other receivables relates to government subsidies at the end of the reporting period.
(7) There is no other receivables derecognized due to the transfer of financial assets at the end of the reporting period.
(8) 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 2021 | 31 December 2020 | |
| Gross carrying amount | ||
Impairment Book value
Impairment Book value
Rawmaterialand main
| Gross carrying amount | ||
| material |
4,267,026,164.99 26,986,533.69 4,240,039,631.30 4,535,270,857.67 26,986,533.69 4,508,284,323.98
Items
| 30 June 2021 | 31 December 2020 | |
| Gross carrying amount | ||
Impairment Book value
Impairment Book value
Work inprocess andself-madesemi-finished
| Gross carrying amount | ||
| product |
1,730,031,748.42 1,730,031,748.42 1,732,705,334.71 1,946,088.69 1,730,759,246.02
Finished
2,693,274,235.96 2,693,274,235.96 2,805,646,918.75 4,625,146.10 2,801,021,772.65
| products | ||||||
| Total | 8,690,332,149.37 | 26,986,533.69 | 8,663,345,615.68 | 9,073,623,111.13 | 33,557,768.48 | 9,040,065,342.65 |
2. Impairment of inventory
Category
20201 January 2021
| 31 December | Increase | Decrease | |
30 June 2021Provision Others
Write-back
OthersRaw material and
| or write-off | ||
| main material |
26,986,533.69 26,986,533.69 26,986,533.69Work in process andself-made semi-
1,946,088.69 1,946,088.69 1,946,088.69
| finished product | |||||||
| Finished products | 4,625,146.10 | 4,625,146.10 | 4,625,146.10 | ||||
| Total | 33,557,768.48 | 33,557,768.48 | 6,571,234.79 | 26,986,533.69 |
(7) Other current assets
| Items | 30 June 2021 | 31 December 2020 |
| Prepaid tax | 183,320,437.20 | |
| VAT input tax | 138,313,168.95 | 86,091,954.53 |
| Term Deposit | 7,000,000,000.00 | 5,254,234,444.28 |
| Total | 7,138,313,168.95 | 5,523,646,836.01 |
(8) Long-term equity investment
Investees
December2020
| Increase/decrease | 30 June |
2021
TotalImpairmentAdditionofInvestment
ReductionofInvestment
investment
| recognized under the equity method |
OtherComprehensiveIncome
OtherEquityChanges
| Adjustment | Declaration of Cash Dividends or Profit |
Provision
Others
．
| Joint Venture | |||||||||||
| Subtotal | |||||||||||
| 2 |
．
| Associated Enterprise |
Zhejiang Bengang JingruiSteel Processing Co.,
2,742,064.73 281,949.15 3,024,013.88
| Ltd.. | |||||||||||
| Subtotal | 2,742,064.73 | 281,949.15 | 3,024,013.88 | ||||||||
| Total | 2,742,064.73 | 281,949.15 | 3,024,013.88 |
(9) Other equity instrument investment
| Items | 30 June 2021 | 31 December 2020 |
| 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 | 200,000.00 |
| Total | 1,042,024,829.00 | 1,042,024,829.00 |
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 2021 | 31 December 2020 |
| Fixed assets | 25,137,148,377.89 | 26,284,567,956.44 |
| Disposal of fixed assets | ||
| Total | 25,137,148,377.89 | 26,284,567,956.44 |
2. Details of fixed assets
Items Buildings Machinery
Transportation
Total
| equipment and others | ||
| 1 |
．
| Gross carrying amount | ||||
| (1) 31 December 2020 | 12,992,173,762.87 | 48,920,259,525.40 | 912,920,312.85 | 62,825,353,601.12 |
| (2) Increase in current period | 2,072,031.87 | 17,602,680.61 | 21,571,760.13 | 41,246,472.61 |
| Including: Purchase | 5,095,357.71 | 1,550,536.37 | 6,645,894.08 |
Items Buildings Machinery
Transportation
TotalTransferred
| equipment and others | ||
| from construction in progress |
2,072,031.87 12,507,322.90 20,021,223.76 34,600,578.53
| Merging | ||||
| (3) Decrease in current period | 21,486,289.18 | 85,651,353.05 | 13,196,686.98 | 120,334,329.21 |
| Including: Disposal | 21,486,289.18 | 85,651,353.05 | 13,196,686.98 | 120,334,329.21 |
| Others | ||||
| (4) 30 June 2021 | 12,972,759,505.56 | 48,852,210,852.96 | 921,295,386.00 | 62,746,265,744.52 |
2．Total accumulated
| depreciation |
| (1) 31 December 2020 | 6,133,288,869.64 | 29,679,421,087.16 | 629,132,131.82 | 36,441,842,088.62 |
| (2) Increase in current period | 156,696,842.77 | 916,015,124.86 | 92,683,049.51 | 1,165,395,017.14 |
| Including: Provision | 156,696,842.77 | 916,015,124.86 | 92,683,049.51 | 1,165,395,017.14 |
| (3) Decrease in current period | 7,104,196.69 | 77,399,251.84 | 12,559,846.66 | 97,063,295.19 |
| Including: Disposal | 7,104,196.69 | 77,399,251.84 | 12,559,846.66 | 97,063,295.19 |
| (4) 30 June 2021 | 6,282,881,515.72 | 30,518,036,960.18 | 709,255,334.67 | 37,510,173,810.57 |
| 3 |
．
| Total impairment | ||||
| (1) 31 December 2020 | 36,963,620.92 | 61,979,935.14 | 98,943,556.06 | |
| (2) Increase in current period | ||||
| Including: Provision | ||||
| Others | ||||
| (3) Decrease in current period | ||||
| Including: Disposal | ||||
| (4) 30 June 2021 | 36,963,620.92 | 61,979,935.14 | 98,943,556.06 |
4．Total net book value of
| Fixed assets |
| (1) 30 June 2021 | 6,652,914,368.92 | 18,272,193,957.64 | 212,040,051.33 | 25,137,148,377.89 |
| (2) 31 December 2020 | 6,821,921,272.31 | 19,178,858,503.10 | 283,788,181.03 | 26,284,567,956.44 |
3. Fixed assets idled temporarily
| Items | Gross carrying amount | Accumulated depreciation | Impairment | Book value |
| Buildings | 94,707,444.27 | 59,005,241.87 | 35,702,202.40 | |
| Machinery | 539,534,736.81 | 474,959,225.20 | 63,241,353.66 | 1,334,157.95 |
Transportation
1,042,125.89 1,042,125.89
| equipment and others | ||||
| Total | 635,284,306.97 | 535,006,592.96 | 98,943,556.06 | 1,334,157.95 |
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 1,907,492,831.36, all of which were leased from the related party Liaoning Hengyi FinancialLeasing Co., Ltd.
5. Fixed assets leased out by operating lease
| Items | Book value |
| Buildings | 6,755,257.55 |
| Total | 6,755,257.55 |
6. Fixed assets without property rights certificates at the end of the period
| Items | Book value | Reason |
| Buildings | 1,145,596,922.34 | To be handled |
(11) Construction in progress
1. Construction in progress and Construction materials
| Items | 30 June 2021 | 31 December 2020 |
| Construction in progress | 2,875,627,953.81 | 1,837,160,389.66 |
| Project materials | 2,711,552.45 | 2,773,325.92 |
| Total | 2,878,339,506.26 | 1,839,933,715.58 |
2. Details of construction in progress
Items
| 30 June 2021 | 31 December 2020 |
Gross carrying amount
impairment
Book value Gross carrying amount Total impairment Book value
| Total | ||
| Special Steel Electric Furnace Capacity Replacement Project |
586,967,067.58 586,967,067.58 358,101,195.01 358,101,195.01
| CCPP power generation project | 618,341,552.04 | 618,341,552.04 | 300,907,874.71 | 300,907,874.71 | ||
| Special steel rolling mill renovation project | 221,971,351.85 | 221,971,351.85 | 151,433,585.06 | 151,433,585.06 | ||
| Advanced Treatment and Reuse Project of Reclaimed Water in General Energy Plant |
107,261,475.47 107,261,475.47 98,563,871.96 98,563,871.96
| 360 square meter sintering machine | 106,378,428.49 | 106,378,428.49 | 82,878,409.99 | 82,878,409.99 | ||
| No. 7 blast furnace dry dust removal and energy-saving transformation of TRT power generation |
71,310,841.86 71,310,841.86 70,402,228.77 70,402,228.77
66,322,604.36 66,322,604.36 66,322,604.36 66,322,604.36
| Environmental protection overhaul project of No. 6 blast furnace | ||||||
| 360 square meter sintering machine waste heat utilization | 56,547,049.50 | 56,547,049.50 | 56,547,049.50 | 56,547,049.50 | ||
| One-tower desulfurization revamp in the coking plant | 45,127,284.61 | 45,127,284.61 | 31,893,853.65 | 31,893,853.65 | ||
| The overall improvement of Benxi Steel's manufacturing management |
32,540,243.11 32,540,243.11 29,824,289.00 29,824,289.00
28,794,085.23 28,794,085.23 28,774,283.25 28,774,283.25
| Flue gas desulfurization and denitrification of No. 7 coke oven in the plate coking plant |
| Energy General Plant No. 1 Converter Gas Tank System Transformation Project |
46,420,310.06 46,420,310.06 24008553.86 24008553.86
| Cold rolled high-strength steel renovation project | 62,631,294.36 | 62,631,294.36 | 23961023.15 | 23961023.15 | ||
| 220kV Substation Project of General Energy Plant | 85,045,639.28 | 85,045,639.28 | 23,302,571.03 | 23,302,571.03 | ||
| Chemical Coke Oven Gas Project |
–
21,840,791.70 21,840,791.70 21,840,791.70 21,840,791.70
| Bengang transferred to Liaoning Coal | ||||||
| 5#Blast furnace relocation overhaul | 30,605,158.49 | 30,605,158.49 | ||||
| 1700 Hot Rolling Improvement | 10,197,720.39 | 10,197,720.39 | ||||
| Environmental protection transformation of No. 4-6 converter |
7,583,100.51 7,583,100.51
3,642,180.47 3,642,180.47
| 1# converter energy saving and environmental protection transformation | ||||||
| Newly built 8# single-strand slab caster project | 33,160,739.55 | 33,160,739.55 | ||||
| 5#-7# Oxygen Generator Nitrogen-increasing and Energy-saving Modification |
877,876.11 877,876.11
Items
| 30 June 2021 | 31 December 2020 |
Gross carrying amount
impairment
Book value Gross carrying amount Total impairment Book value
| Total | ||
| Transformation of No. 2 Casting Machine in Steelmaking Plant |
4,652,919.13 4,652,919.13
| Other | 627,408,239.66 | 627,408,239.66 | 468,398,204.66 | 468,398,204.66 | ||
| Total |
2,875,627,953.81 2,875,627,953.81 1,837,160,389.66 1,837,160,389.66
3. Changes in important construction projects in the current period
Items Budget 31 December 2020
Increase duringcurrent period
Transferredto fixed assetduringcurrentperiod
Otherdecreaseduringcurrentperiod
30 June 2021
Projectcumulativeinvestmentaccounted forthe proportionof the budget
Projectprogress(%)
Accumulatedamount of
interestcapitalization
Including：
Interestcapitalization
amount incurrent period
Interestcapitalizatio
n rate in
currentperiod (%)
Sourcesof funds
| (%) | ||
| Special Steel |
Electric FurnaceCapacityReplacement
161,761.00 358,101,195.01 228,865,872.57 586,967,067.58 36.00% 40%Capital raised
| Project |
| CCPP power |
generation
106,000.00 300,907,874.71 317,433,677.33 618,341,552.04 58.00% 60% 9,433,121.11 3,074,117.80 4.35%Capital raised
Special steelrolling millrenovationproject
59,607.00 151,433,585.06 70,537,766.79 221,971,351.85 37.00% 40% 5,076,881.26 1,170,984.20 4.35% Others
project
Advanced
Treatment andReuse Project ofReclaimedWater inGeneral Energy
| Plant |
17,000.00 98,563,871.96 8,697,603.51 107,261,475.47 63.00% 65%others
furnace dry dustremoval andenergy-saving
| transformation |
9,332.00 70,402,228.77 908,613.09 71,310,841.86 76.00% 75% 361,850.63 67,870.57 4.35%others
Items Budget 31 December 2020
Increase duringcurrent period
Transferredto fixed assetduringcurrentperiod
Otherdecreaseduringcurrentperiod
30 June 2021
Projectcumulativeinvestmentaccounted forthe proportionof the budget(%)
Projectprogress(%)
Accumulatedamount ofinterestcapitalization
Including：
Interestcapitalization
amount incurrent period
Interestcapitalizatio
n rate in
currentperiod (%)
Sourcesof funds
generation
| of TRT power |
| Environmental |
protectionoverhaul projectof No. 6 blast
25,225.00 66,322,604.36 66,322,604.36 75.00% 75%others
| furnace |
| One-tower |
desulfurizationrevamp in the
7,000.00 31,893,853.65 13,233,430.96 45,127,284.61 64.00% 65%others
| coking plant |
| 5#Blast furnace |
relocation
124,086.50 30,605,158.49 30,605,158.49 66.00% 70% 36,576,844.35 5,166,620.30 4.35%Capital raised
| overhaul |
| 1700 Hot |
Rolling
25,000.00 10,197,720.39 10,197,720.39 71.00% 75%others
| Improvement |
| Environmental |
protectiontransformationof No. 4-6
27,000.00 7,583,100.51 7,583,100.51 61.00% 95% 3,729,352.38 929,554.12 4.35%Capital raised
| converter |
| 1# converter |
energy savingand
21,800.00 3,642,180.47 3,642,180.47 65.00% 70% 2,220,278.55 449,519.92 4.35%others
Items Budget 31 December 2020
Increase duringcurrent period
Transferredto fixed assetduringcurrentperiod
Otherdecreaseduringcurrentperiod
30 June 2021
Projectcumulativeinvestmentaccounted forthe proportionof the budget(%)
Projectprogress(%)
Accumulatedamount of
interestcapitalization
Including：
Interestcapitalization
amount incurrent period
Interestcapitalizatio
n rate in
currentperiod (%)
Sourcesof funds
| protection transformation |
| Newly built 8# |
single-strandslab caster
64,341.00 33,160,739.55 33,160,739.55 59.00% 60%others
| project |
| 5#-7# Oxygen |
GeneratorNitrogen-increasing andEnergy-saving
4,726.10 877,876.11 877,876.11 83.00% 85%others
| Modification |
| Transformation |
of No. 2 Casting
Machine inSteelmaking
10,090.00 4,652,919.13 4,652,919.13 87.00% 90% 387,012.00 102,460.41 4.35%others
| Plant | ||||||
| Total | 662,968.60 | 1,077,625,213.52 | 730,396,658.90 | 1,808,021,872.42 |
| 57,785,340.28 | 10,961,127.32 |
4. There is no impairment of construction in progress during the current period.
5. Construction materials
Items
| 30 June 2021 | 31 December 2020 |
Gross carrying
Impairment Book value
Gross carrying
| amount | amount |
Impairment Book valueConstruction
2,711,552.45 2,711,552.45 2,773,325.92 2,773,325.92
| materials | ||||||
| Total | 2,711,552.45 | 2,711,552.45 | 2,773,325.92 | 2,773,325.92 |
(12) Right of use assets
| Items | Book value | Reason |
| Right of use assets | 1,510,538,778.93 | |
| Total | 1,510,538,778.93 |
(13) Intangible assets
1. Details of intangible assets
| Items | Land use right | Software | Total |
| 1 |
．
| Total of original value | |||
| (1) 31 December 2020 | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| (2) Increase |
| Including: Purchase |
| Internal R&D |
| Increase in Mergers |
| (3) Decrease |
| Including: Disposal |
| Others |
| (4) 30 June 2021 | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| 2 |
．
| Total of Accumulated Amortization |
| (1) 31 December 2020 | 62,257,844.20 | 148,702.65 | 62,406,546.85 |
| Items | Land use right | Software | Total |
| (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 2021 | 65,528,132.14 | 162,100.11 | 65,690,232.25 |
| 3 |
．
| Total of Impairment |
| (1) 31 December 2020 | |||
| (2) Increase |
| Including: Provision |
| Others |
| (3) Decrease |
| Including: Disposal |
| Others |
| (4) 30 June 2021 |
| 4. Total of Net value |
| (1) 31 December 2020 | 261,500,665.70 | 148,301.44 | 261,648,967.14 |
| (2) 30 June 2021 | 264,770,953.64 | 161,698.90 | 264,932,652.54 |
2. Land use right without Certificate of Land use right at the end of the period.
None.
(14) Deferred tax asset and deferred tax liability
1. Deferred tax assets before taking into consideration of the balance offsetting
Items
| 30 June 2021 | 31 December 2020 | |
| Deductible temporary differences | Deferred tax asset | |
Deductible temporary
| differences | Deferred tax asset | |||
| Impairment | 389,810,760.81 | 97,452,690.20 | 398,431,973.43 | 99,607,993.35 |
| Internal unrealized profit | 74,424,898.88 | 18,606,224.72 | 74,424,898.92 | 18,606,224.73 |
Items
| 30 June 2021 | 31 December 2020 | |
| Deductible temporary differences | Deferred tax asset | |
Deductible temporary
| differences | Deferred tax asset |
Differences of depreciation
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
| and amortization | ||||
| Total | 798,214,518.72 | 199,553,629.68 | 806,835,731.38 | 201,708,932.84 |
2. Unrecognized deferred tax assets
| Items | 30 June 2021 | 31 December 2020 |
| Deductible temporary differences | 305,702,137.30 | 305,702,137.30 |
| Deductible losses | 54,629,940.42 | |
| Total | 305,702,137.30 | 360,332,077.72 |
3. The deductible loss of unrecognized deferred tax assets due in the following period
| Items | 30 June 2021 | 31 December 2020 | Notes |
| Year 2021 | 10,945,961.04 | ||
| Year 2022 | 1,001,166.72 | ||
| Year 2023 | 14,114,953.21 | ||
| Year 2024 | 17,910,573.13 | ||
| Year 2025 | 10,657,286.32 | ||
| Total | 54,629,940.42 |
(15) Other non-current assets
Items
| 30 June 2021 | 31 December 2020 | |
| Gross carrying amount | ||
Impair
Book value
| ment | Gross carrying amount |
Impair
Book valuePrepaymentfor long-term
| ment | ||
| assets |
851,101,139.47
851,101,139.47 995,840,320.65
995,840,320.65
| Total | 851,101,139.47 | 851,101,139.47 | 995,840,320.65 | 995,840,320.65 |
(16) Short-term loans
1. Classification of short-term loans
| Items | 30 June 2021 | 31 December 2020 |
| Pledge loans | ||
| Mortgage loans | ||
| Guaranteed loans | 7,285,419,000.00 | 9,687,731,000.00 |
| Credit loans | 210,000,000.00 | 380,000,000.00 |
| Total | 7,495,419,000.00 | 10,067,731,000.00 |
2. There is no short-term loans that were overdue at the end of the reporting period
(17) Notes payables
| Items | 30 June 2021 | 31 December 2020 |
| Bank acceptance bill | 4,140,752,366.66 | 7,747,043,186.29 |
| Domestic letter of credit | 635,939,800.00 | 857,106,162.13 |
| Domestic letter of credit | 1,338,000,000.00 | 1,210,000,000.00 |
| Total | 6,114,692,166.66 | 9,814,149,348.42 |
Notes: There are no outstanding notes payable at the end of this period.
(18) Accounts payable
1. Accounts payable disclosed by category
| Items | 30 June 2021 | 31 December 2020 |
| Accounts payable for goods | 4,822,988,701.75 | 5,122,416,750.84 |
| Accounts payable for labor | 15,842,004.02 | 18,697,483.74 |
| Accounts payable for project and equipment | 443,173,947.38 | 513,842,739.32 |
| Repair expense | 223,618,888.81 | 259,271,282.92 |
| Total | 5,505,623,541.96 | 5,914,228,256.82 |
2. Significant accounts payable aging over one year
| Items | Ending balance | Amount aging over one year |
| Company 1 | 36,218,300.00 | 36,218,300.00 |
| Company 2 | 35,081,745.24 | 30,361,745.24 |
| Company 3 | 23,579,692.14 | 23,379,692.14 |
| Company 4 | 15,810,625.07 | 15,810,625.07 |
| Company 5 | 14,200,000.00 | 14,200,000.00 |
| Company 6 | 14,126,435.78 | 12,651,035.78 |
| Total | 139,016,798.23 |
Notes: The above significant accounts payable aged over one year have not yet reached the settlement conditions.
(19) Contract liabilities
| Items | 30 June 2021 | 31 December 2020 |
| Payment received in advance | 6,182,094,798.39 | 4,458,671,819.90 |
| Total | 6,182,094,798.39 | 4,458,671,819.90 |
As of June 30, 2021, the value-added tax received in advance when the payment is received in advance is RMB
803,672,323.79 and is shown as other current liabilities
(20) Employee benefits payable
1. Employee benefits payable
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 |
(1) Short-term employee
25,748,902.30 937,619,306.42 930,159,243.80 33,208,964.92
(2) Post-employment
benefits - defined
| benefits |
| contribution plans |
582.95 104,179,630.07 104,180,213.02
| (3) Termination benefits |
(4) Other benefits due
| within one year |
| Total | 25,749,485.25 | 1,041,798,936.49 | 1,034,339,456.82 | 33,208,964.92 |
2. Short-term employee benefits
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 |
(1) Salary, bonus,
16,591,117.11 761,247,064.95 754,888,309.88 22,949,872.18
| allowance and subsidy | ||||
| (2) Employee welfare | 30,254,179.78 | 30,254,179.78 | ||
| (3) Social Insurance | 653,712.74 | 68,075,443.50 | 68,075,507.09 | 653,649.15 |
Including: Medical
3,683.11 52,218,853.23 52,218,853.23 3,683.11Work injury
| insurance |
| insurance |
650,029.63 15,846,547.47 15,846,547.47 650,029.63Maternity
| insurance |
10,042.80 10,042.80
| (4) Housing | 6,859,195.00 | 62,336,339.00 | 62,332,739.00 | 6,862,795.00 |
(5) Union funds and staff
1,644,877.45 15,706,279.19 14,608,508.05 2,742,648.59
(6) Short-term
| education fee |
| compensated absences |
(7) Short-term profit -
| sharing scheme |
| Total | 25,748,902.30 | 937,619,306.42 | 930,159,243.80 | 33,208,964.92 |
3. Defined contribution plans
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 |
| Basic pension fund | 565.28 | 100,645,692.28 | 100,646,257.56 | |
| Unemployment insurance | 17.67 | 3,533,937.79 | 3,533,955.46 | |
| Total | 582.95 | 104,179,630.07 | 104,180,213.02 |
(21) Current tax liabilities
| Items | 30 June 2021 | 31 December 2020 |
| Value-added tax | 133,075,994.19 | 22,541,925.74 |
| Corporate income tax | 180,745,973.41 | 9,589,798.62 |
| City maintenance and construction tax | 16,511,584.41 | 4,490,656.56 |
| House property tax | 3,823,901.19 | 3,661,600.13 |
| Items | 30 June 2021 | 31 December 2020 |
| Educational surcharges | 11,842,865.16 | 3,211,296.48 |
| Land use right tax | 1,180,402.66 | 1,180,402.66 |
| Environmental tax | 775,068.53 | 8,398,902.77 |
| Others | 2,915,101.45 | 2,227,498.00 |
| Total | 350,870,891.00 | 55,302,080.96 |
(22) Other payables
| Items | 30 June 2021 | 31 December 2020 |
| Interest payables | ||
| Dividends payables | 38,753,715.32 | |
| Other payables | 673,405,372.03 | 709,448,301.92 |
| Total | 712,159,087.35 | 709,448,301.92 |
1. Interest Payable
| Items | 30 June 2021 | 31 December 2020 |
| Loan interests | 38,753,715.32 | |
| Total | 38,753,715.32 |
2. Other payables
(1) Other payables disclosed by nature
| Items | 30 June 2021 | 31 December 2020 |
| Deposit | 2,074,097.73 | 1,713,563.89 |
| Margin | 111,559,681.36 | 98,316,454.89 |
| Accounts | 487,437,063.26 | 525,775,209.97 |
| Others | 72,334,529.68 | 83,643,073.17 |
| Total | 673,405,372.03 | 709,448,301.92 |
(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 2021 | 31 December 2020 |
| Long-term loans due within one year | 71,011,323.08 | 1,287,630,361.43 |
| Bond payables due within one year | 27,200,000.00 | 20,400,000.00 |
| Long-term payables due within one year | 39,667,032.50 | 38,898,662.02 |
| Total | 137,878,355.58 | 1,346,929,023.45 |
Notes:
Among the long-term loans due within one year, RMB71,011,323.08 is guaranteed loan.
(24) Other current liabilites
| Items | 30 June 2021 | 31 December 2020 |
| Output VAT to be recognized | 803,672,323.79 | 579,627,336.58 |
| Total | 803,672,323.79 | 579,627,336.58 |
(25) Long-term loans
| Items | 30 June 2021 | 31 December 2020 |
| Pledged loans | 622,600,000.00 | 622,600,000.00 |
| Mortgage loan | ||
| Guaranteed loans | 962,934,418.16 | 798,714,362.65 |
| Credit loans | 2,724,252,523.81 | 2,081,620,065.00 |
| Total | 4,309,786,941.97 | 3,502,934,427.65 |
(26) Bond payables
(1) Bonds payables disclosed by category
| Items | 30 June 2021 | 31 December 2020 |
| Convertible Bond | 5,732,396,546.29 | 5,752,229,339.52 |
| Total | 5,732,396,546.29 | 5,752,229,339.52 |
(1) Changes in Bonds payables ( Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Items Book value
Issue
| date | Term to maturity |
Issuance amount
Balance at the end of
Current issue
Interest accrued at
| the previous year | face value |
Premium and discount
Repayment in this
| amortization | period |
Balance at the end of
Convertible Bond(Bond
the current yearcode:127018)
6,800,000,000.00
Jun 29, 2
6 years 6,800,000,000.005,752,229,339.52
| code:127018) |
47,600,000.00 26,884,660.81
40,548,132.42 5,732,396,546.29
| Total | 6,800,000,000.00 | 6,800,000,000.00 | 5,752,229,339.52 | 47,600,000.00 | 26,884,660.81 | 40,548,132.42 | 5,732,396,546.29 |
Description:
Approved by the China Securities Regulatory Commission "Zheng Jian Xu Ke [2020] No. 46", the Company publicly issued 68 million convertible corporate bonds on June 29,2020, each with a face value of 100 yuan and a total issuance of RMB 6.8 billion. The term to maturity is 6 years from June 29, 2020 to June 28, 2026. The bond coupon rate is
0.6% in the first year, 0.8% in the second year, 1.5% in the third year, 2.9% in the fourth year, 3.8% in the fifth year, and 5.0% in the sixth year. The interest payment method is
once a year, and the starting date of interest calculation is the first day of issuance of the convertible bond, that is, June 29, 2020. The interest payment date of each year is thefirst day of the issuance of convertible bonds (June 29, 2020) on the day of each full year. If that day is a legal holiday or a rest day, it will be postponed to the next working day,and no interest will be paid during the postponement period. Every two adjacent interest payment dates constitute an interest calculation year.In the initial measurement of the convertible corporate bonds issued by the Company this time, the fair value of the corresponding liability component after deducting the allocatedissuance expenses is RMB 5,612,624,636.40, which is included in the bonds payable; the fair value of the corresponding equity component after deducting the allocated issuancecost of the Company is RMB 1,146,290,662.42, which is included in other equity instruments. In the subsequent measurement, the liability part is measured and adjusted by
amortized cost using the effective interest rate method.
(2) Description of the conditions and time for conversion of convertible corporate bonds
Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds will be listed on the Shenzhen StockExchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of the convertible corporate bonds issuedthis time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) to the maturity date of the convertible corporate bonds,that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB 5.03 per share. The conversion price of the convertible bonds isadjusted to RMB 5.02 per share on July 19,2021.
(3) Notes to other financial instruments classified as financial liabilities
None.
(27) Lease liabilities
| Items | 30 June 2021 | 31 December 2020 |
| Special payables | 1,549,600,900.45 | |
| Total | 1,549,600,900.45 |
(28) Long-term payables
| Items | 30 June 2021 | 31 December 2020 |
| Long-term payables | 1,907,492,831.36 | 1,114,232,362.74 |
| Special payables | ||
| Total | 1,907,492,831.36 | 1,114,232,362.74 |
Long-term payables
| Items | 30 June 2021 | 31 December 2020 |
| Financing lease payments | 1,907,492,831.36 | 1,114,232,362.74 |
| In which: Unrealized financing expenses | 1,190,601,171.64 | 779,232,152.85 |
| Total | 1,907,492,831.36 | 1,114,232,362.74 |
Notes: At the end of the reporting period, the amount of unrealized financing expenses payable for financing leases
is RMB1,190,601,171.64;The minimum financing lease payment to be paid after the balance sheet date is RMB 1,907,492,831.36:
The company needs to pay interest on time, the principal is a one-off payment after the lease contractexpires, and the lease contract that has not been executed has an expiry date of more than 3 years.
(29) Deferred income
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 | Reason |
Government
154,451,833.23 1,225,520.00 32,210,883.34 123,466,469.89
| subsidy | |||||
| Total | 154,451,833.23 | 1,225,520.00 | 32,210,883.34 | 123,466,469.89 |
Projects of government subsidies:
Items 31 December 2020 Increase
operatingincome
Transfer to other
income
| Transfer to non- | Offsetting |
cost orexpenses
Otherdecrease
30 June 2021
Related to assets orincome
temperature and high-pressure service conditions”Project national support funds
30,677.74
| “Steel for high-strength pipelines under low- |
30,677.74 Income
| 2018 Municipal Skill Master Workstation Fee |
66,616.34
66,616.34 Income
| Advanced Treatment Project of Carbon Fiber |
Wastewater in Dongfeng Plant Area of Plate CokingPlant
9,500,000.00
950,000.00
8550000 Assets
fired Boiler in High-pressure Workshop of BengangPower Plant
3,600,000.00
| Desulfurization and Denitrification Project of Coal- |
300000
3,300,000.00 Assets
the third generation of automobiles
2,320,000.00
| Research and development of high-strength steel for |
290,000.00
2,030,000.00 Assets
desulfurization project in power plant
9,600,000.00
| 7 sets of 130 tons combustion boiler flue gas |
2,400,000.00
7,200,000.00 Assets
project
4,000,000.00
| Power plant three power plant cogeneration reform |
1,000,000.00
3,000,000.00 Assets
management center for industrial enterprises
2,320,000.00
| Demonstration project of construction of energy |
1,160,000.00
1,160,000.00 Assets
forming steel PHS1500A
165,152.27
| Research and development of anti-oxidation hot |
165,152.27 Income
| Automatic air quality monitoring system |
35,000.00
35,000.00
0 Assets
Items 31 December 2020 Increase
operatingincome
Transfer to otherincome
| Transfer to non- | Offsetting |
cost orexpenses
Otherdecrease
30 June 2021
Related to assets or
income
project
100,000,000.00
| Cold-rolled high-strength steel reconstruction |
25,000,000.00
75000000 Assets
21.89
| Liaoning Artisan Subsidy |
21.89 Income
| Construction of professional technology innovation |
platform for automobile steel industry
200,000.00
200000 Assets
| Research on the Influence Mechanism and Control |
of Rare Earth Oxide Sulfide on Automobile SteelPlasticity
184,364.99
24,876.50
159,488.49 Income
applicable technology (progress in productiontechnology of high-grade electro-galvanized sheet)
2,000,000.00
| Introduce special funds for overseas advanced |
1,000,000.00
1,000,000.00 Assets
180,000.00
| 2019 Municipal Skills Master Workstation Cost |
21006.84
158993.16 Income
(Special Steel Electric Furnace Upgrade Project)
20,000,000.00
| 2020 Ecological Civilization Construction Project |
20,000,000.00 Assets
| Liaoning Province "Hundred, Thousand, Thousand, |
Thousand Talents Project" funding project in 2018
250,000.00
30,000.00
220,000.00 Income
of Rare Earth Oxide Sulfide on Automobile SteelPlasticity
| Research on the Influence Mechanism and Control |
925520
925,520.00 Income
| Provincial master station subsidy |
300,000.00
300,000.00 IncomeTotal154,451,833.23 1,225,520.00
32,210,883.34
123,466,469.89
(30) Share capital
Items 31 December 2020
30 June 2021Issuing of new
| Increase/decrease (+ , - ) | |
| share | |
Bonus shares
Others Subtotal
| Transferred from reserves | |||||||
| Capital shares | 3,875,371,532.00 | 9,689,073.00 | 9,689,073.00 | 3,885,060,605.00 |
(31) Other equity instruments
1. Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
The Company’s other equity instruments at the end of the period are the equity part of convertible corporate bonds. For details, please refer to “Note 5 (26) Bonds payable”.
2. Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Notes:
Other equity instruments' changes in the current period, explanations of the reasons for the changes, and the basis for related accounting treatments:
As of June 30, 2021, convertible corporate bonds have been partially converted into shares, and the number of shares converted is 487,432
Items
| 20201231 | Increase | Decrease | 20210630 | |||||
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
| Convertible corporate bonds | 68,000,000.00 | 1,146,290,662.42 | 487,432 | 8,219,782.00 | 67,512,568 | 1,138,070,880.42 | ||
| Total | 68,000,000.00 | 1,146,290,662.42 | 487,432 | 8,219,782.00 | 67,512,568 | 1,138,070,880.42 | ||
(32) Capital reserves
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 |
Capital premium over par
12,227,292,378.47 12,227,292,378.47
| value | ||||
| Other capital reserves | 115,917,468.82 | 38,759,518.23 | 154,676,987.05 | |
| Total | 12,343,209,847.29 | 38,759,518.23 | 12,381,969,365.52 |
(33) Special Reserves
| Items | 31 December 2020 | Increase | Decrease | 30 June 2021 |
Safety production
300,412.14 24,398,347.80 6,368,148.59 18,330,611.35
| cost | ||||
| Total | 300,412.14 | 24,398,347.80 | 6,368,148.59 | 18,330,611.35 |
(34) Surplus Reserves
Items
1 January 2021 Increase Decrease 30 June 2021Statutory surplus
| 31 December 2020 | |
| reserves |
961,105,529.85 961,105,529.85
961,105,529.85
| Total | 961,105,529.85 | 961,105,529.85 | 961,105,529.85 |
(35) Undistributed Profits
| Items | Current period | Previous period |
Before adjustments: undistributed profits at last
2,692,018,405.40 2,307,765,664.62Adjustments of the beginning distributed profits
| year-end |
| (increase + / decease -) |
After adjustments: undistributed profit at this year-
2,692,018,405.40 2,307,765,664.62Add: undistributed profit belonging to parent
| beginning |
| company |
2,208,798,167.91 384,252,740.78
| Less: Statutory surplus reserves | ||
| Discretionary reserves |
| Items | Current period | Previous period |
| General risk reserves | ||
| Common shares dividend payable | 38,753,715.32 |
Common shares dividend transferred to paid-in
| capital |
| Ending balance of undistributed profits | 4,862,062,857.99 | 2,692,018,405.40 |
(36) Operating income and operating cost
Items
| Current period | Previous period | ||
| Revenue | Cost | Revenue | Cost |
Principal
35,798,649,027.39 32,161,874,843.45 20,470,526,587.62 18,886,384,469.92
| business | ||||
| Other business | 2,789,479,184.75 | 2,430,950,949.27 | 1,714,010,672.43 | 1,553,861,892.75 |
| Total | 38,588,128,212.14 | 34,592,825,792.72 | 22,184,537,260.05 | 20,440,246,362.67 |
Details for operating income:
| Item | Principal business | Other business |
| Classified by business area | 35,798,649,027.39 | 2,789,479,184.75 |
| Including |
：
| Domestic | 31,875,366,736.04 | 2,789,479,184.75 |
| Abroad | 3,923,282,291.35 | |
| Classified by the time of commodity transfer | 35,798,649,027.39 | 2,789,479,184.75 |
| Including: recognize at a certain point in time | 35,798,649,027.39 | 2,789,479,184.75 |
| recognize over a certain period of time | ||
| Total | 35,798,649,027.39 | 2,789,479,184.75 |
(37) Tax and surcharges
| Items | Current period | Previous period |
| City maintenance and construction tax | 76,391,993.56 | 13,467,815.13 |
| Educational surcharge | 54,742,060.36 | 9,674,693.55 |
| Housing property tax | 40,482,761.79 | 40,089,186.70 |
| Land use right tax | 6,848,481.27 | 6,457,679.78 |
| Items | Current period | Previous period |
| Stamp duty and others | 10,152,512.38 | 5,619,563.86 |
| Environmental tax | 52,930,399.36 | 12,962,357.84 |
| others | 7,286.20 | 127,139.82 |
| Total | 241,555,494.92 | 88,398,436.68 |
(38) Selling and distribution expenses
| Items | Current period | Previous period |
| Freight | 532,184,917.51 | |
| Port surcharges | 53,812,369.10 | |
| Import and export agency fee | 36,480,975.97 | 30,678,165.54 |
| Salary and benefits | 15,027,843.69 | 12,735,597.76 |
| Others | 3,787,047.04 | 9,404,066.26 |
| Package fee | 4,356,803.02 | 3,578,102.61 |
| Total | 59,652,669.72 | 642,393,218.78 |
(39) General and administrative expenses
| Items | Current period | Previous period |
| Salary and benefits | 174,030,589.62 | 134,676,282.75 |
| Repair expense | 107,230,408.76 | 102,044,859.99 |
| Land use right fee | 32,611,483.62 | 32,611,483.62 |
| Depreciation | 19,687,001.55 | 18,573,834.52 |
| Heating fee | 16,329,843.40 | 18,050,334.83 |
| Water resources fee | 4,078,271.50 | 12,470,097.22 |
| Environment protection fee | 4,145,377.97 | 4,414,545.30 |
| Others | 30,565,866.81 | 57,986,878.18 |
| Total | 388,678,843.23 | 380,828,316.41 |
(40) Research and development expenses
| Items | Current period | Previous period |
| Depreciation, materials and compensation, etc. | 22,504,022.68 | 20,202,985.20 |
| Total | 22,504,022.68 | 20,202,985.20 |
(41) Financial expenses
| Items | Current period | Previous period |
| Interest expenditure | 554,219,518.90 | 439,861,353.93 |
| Less: Interest income | 222,276,204.79 | 154,882,284.33 |
| Exchange loss | -15,432,430.80 | 45,932,418.60 |
| Others | 19,844,815.53 | 24,125,152.20 |
| Total | 336,355,698.84 | 355,036,640.40 |
(42) Other income
| Items | Current period | Previous period |
| Government subsidy | 32,210,883.34 | 37,894,126.40 |
| Others | 448,600.00 | 693,206.00 |
| Total | 32,659,483.34 | 38,587,332.40 |
(43) Income on investment
| Items | Current period | Previous period |
Income on disposal of long-term equity investment by
281,949.15 29,304.00
| equity method | ||
| Investment income from disposal of trading financial assets | ||
| Dividend from holding other equity instruments | ||
| Income on bank short-term financial products | 1,553,175.04 | |
| Total | 1,835,124.19 | 29,304.00 |
(44) Credit impairment loss
| Items | Current period | Previous period |
| Loss from bad debts of account receivable | 1,870,902.74 | 3,266,886.62 |
| Loss from bad debts of receivable financing | ||
| Loss from bad debts of other receivables | 179,075.09 | 220,896.80 |
| Total | 2,049,977.83 | 3,487,783.42 |
(45) Asset impairment loss
| Items | Current period | Previous period |
| Inventory impairment loss | 6,629,442.12 | -15,321,598.62 |
| Impairment of fixed assets | ||
| Total | 6,629,442.12 | -15,321,598.62 |
(46) Assets disposal gains
Items Current period Previous period
The amount recognized in
| non-recurring profit | ||
| Disposal gains or losses |
arising from disposal of fixed
130,675.05 325,651.61 130,675.05
| assets not classified for sale | |||
| Total | 130,675.05 | 325,651.61 | 130,675.05 |
(47) Non-operating income
Items Current period Previous period
recognized in non-
| recurring profit |
Non-
717,592.73 302,362.80 717,592.73
| current assets scrapped gains | |||
| Debt restructuring gain | 32,800.02 | ||
| Others | 2,555,535.73 | 805,201.30 | 2,555,535.73 |
| Total | 3,273,128.46 | 1,140,364.12 | 3,273,128.46 |
(48) Non-operating expense
Items Current period Previous period
recognized in non-
| recurring profit |
Non-current assets scrapped
22,989,643.14 20,035,471.42 22,989,643.14
| loss | |||
| Total | 22,989,643.14 | 20,035,471.42 | 22,989,643.14 |
(49) Income tax expense
1. Income tax expense
| Items | Current period | Previous period |
| Income tax payable for the current year | 744,822,287.29 | 12,626,191.22 |
| Adjustment of deferred income tax | 2,155,303.16 | -3,388,376.14 |
| Total | 746,977,590.45 | 9,237,815.08 |
2. Accounting profit and income tax expense adjustment process
| Items | Current period |
| Total profit | 2,970,143,877.88 |
| Income tax expense calculate according to the official or applicable tax rate | 742,535,969.47 |
| 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 undeductible costs, expenses or losses |
Effect of use of deductible losses of unrecognized deferred tax asset of prior
4,441,620.98Effect of deductible temporary differences or deductible losses of
| period |
| unrecognized deferred tax asset of current period |
Changes in the balance of deferred income tax assets and liabilities at thebeginning of the period due to additional deductible expenses and tax rate
| adjustments required by the tax law | |
| Income tax expenses | 746,977,590.45 |
(50) 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:
| Items | Current period | Previous period |
Consolidated net profit attributable to ordinary
2,208,798,167.91 254,644,204.33
| Items | Current period | Previous period |
The weighted average number of common shares
3,885,060,605.00 3,875,371,532.00
| issued by the company | ||
| Basic earnings per share | 0.57 | 0.07 |
Including: basic earnings per share for continuing
0.57 0.07
| 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):
Since convertible bonds have caused anti-dilution, diluted earnings per share are disclosedin accordance with basic earnings per share.
(51) 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 | 14,619,093.59 | 16,851,204.08 |
| Interest income | 222,276,204.79 | 154,882,284.33 |
| Special subsidy income | 1,225,520.00 | 1,626,919.00 |
| Non-operating income | 1,068,391.65 | 503,009.25 |
| Others | 130,327.27 | 153,380.34 |
| Total | 239,319,537.30 | 174,016,797.00 |
2. Cash paid related to other operating activities
| Items | Current period | Previous period |
| Current accounts, advance for another | 179,844,208.53 | 199,605,380.27 |
| Sales expenses | 4,351,842.16 | 4,545,479.59 |
| Administrative expenses | 15,765,954.58 | 18,446,185.30 |
| Bank charges | 2,980,552.81 | 3,331,343.25 |
| Items | Current period | Previous period |
| Others | 437,431.93 | 360,322.84 |
| Total | 203,379,990.00 | 226,288,711.25 |
(52) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
| Items | Current period | Previous period |
1. A reconciliation of net profit to cash flows from
| operating activities: | ||
| Net profit | 2,223,166,287.43 | 256,406,850.34 |
| Add: Credit impairment loss | 2,049,977.83 | 3,487,783.42 |
| Asset impairment loss | 6,629,442.12 | -15,321,598.62 |
| Depreciation of fixed assets and so on | 1,165,395,017.14 | 1,201,263,368.47 |
| Amortization of right of use assets | 31,329,731.88 | |
| Amortization of oil assets | ||
| Amortization of intangible assets | 3,283,685.40 | 3,283,685.40 |
| Long-term deferred expenses |
Losses proceeds from disposal of PPE, intangibleassets and other long-term assets (Earnings
－
| ”) |
22,272,050.41 19,733,108.62Scrapped losses from fixed assets (Earnings
－
| ”) |
| Change in fair value loss (Earnings marked“ |
－
| ”) | ||
| Financial expenses (Earnings marked“ |
－
| ”) | 336,355,698.84 | 355,036,640.40 |
| Investment losses (Earnings marked“ |
－
| ”) |
Deferred tax assets reduction (Addition
－
| ”) |
-2,155,303.16 -3,388,376.14Deferred tax liabilities increased (Reduction
－
| ”) |
| Reduction of inventory (Addition marked“ |
－
| ”) | 376,719,726.97 | -1,885,641,689.91 |
Operating receivable items reduction (Addition
－
| ”) |
102,664,138.59 -1,938,821,059.08
| Items | Current period | Previous period |
Operating payable items increase (Less marked"－
-2,742,794,233.42 1,852,485,580.02
| ") | ||
| Other | ||
| Net cash flows generated from operating activities | 1,524,916,220.03 | -151,475,707.08 |
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 | 4,457,454,114.91 | 11,417,592,663.52 |
| Less: Beginning balance of cash | 9,229,417,595.12 | 13,441,414,988.58 |
| Add: Ending balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| The net increase in cash and cash equivalents | -4,771,963,480.21 | -2,023,822,325.06 |
2. The structure of cash and cash equivalents
| Items | 30 June 2021 | 31 December 2020 |
| 1. Cash | 4,457,454,114.91 | 11,417,592,663.52 |
| Including: Cash on hand | 6,271.10 | 7,110.40 |
| Bank deposits available on demand | 4,457,447,843.81 | 11,417,585,553.12 |
| Other monetary funds available on demand |
| Central bank deposits available on demand | ||
| Balances with other financial institutions |
| Loans to other financial institutions | ||
| 2. Cash equivalents |
| Including: Investment of securities due within 3 months | ||
| 3. Ending balance of cash and cash equivalents | 4,457,454,114.91 | 11,417,592,663.52 |
| Items | 30 June 2021 | 31 December 2020 |
Including: Cash and cash equivalents limited to use by
the parent company of other subsidiary in the
(53) Assets of which ownership or right to use are restricted
groupItems
| Items | 30 June 2021 | Reason |
| Cash at bank and on hand | 5,053,246,387.76 | Deposit for notes and letter of credit |
Accounts receivable
22,991,847.39
Pledged for acceptance bill and short term
| financing | loan |
Other equity instrument
1,037,735,849.00 Pledged for loans
| investments | ||
| Fixed assets | 94,790,118.09 | Mortgaged for loans |
| Intangible assets | 37,116,386.66 | Mortgaged for loans |
| Total | 6,245,880,588.90 |
(54) 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 | 7,190,592.52 | ||
| Including: USD | 1,011,332.92 | 6.4601 | 6,533,311.80 |
| EUR | 55,902.49 | 7.6862 | 429,677.72 |
| HKD | 273,528.43 | 0.8321 | 227,603.01 |
| Short-term loans | 1,227,419,000.00 | ||
| Including: USD | 190,000,000.00 | 6.4601 | 1,227,419,000.00 |
Non-current liabilities due
37,881,323.08
| within one year | |||
| Including: JPY | 23,176,000.00 | 0.0658 | 1,524,980.80 |
| EUR | 4,730,080.18 | 7.6862 | 36,356,342.28 |
Items
Ending balance in
Exchange rate at the
| foreign currency | end of the period | Ending balance translated to RMB | |
| Long-term loans | 386,965,986.45 | ||
| Including: USD | 14,200,000.00 | 6.4601 | 77,320,065.00 |
| EUR | 37,635,016.95 | 7.6862 | 302,021,017.45 |
| JPY | 115,880,000.00 | 0.0658 | 7,624,904.00 |
2. The Company has no overseas operating entities.
(55) Government subsidy
1. Related to assets
Items Amount
| Balance sheet presentation items | The amount included in the current profit and loss or offset the loss of related costs | ||
| Current period | Previous period | Items | |
Advanced Treatment Project of Carbon FiberWastewater in Dongfeng Plant Area of Plate
8,550,000.00 Deferred income 950,000.00 Other incomeDesulfurization and Denitrification Project ofCoal-fired Boiler in High-pressure Workshop
| Coking Plant |
| of Bengang Power Plant |
3,300,000.00 Deferred income 300,000.00 300,000.00 Other incomeResearch and development of high-strength
2,030,000.00 Deferred income 290,000.00 Other income7 sets of 130 tons combustion boiler flue gas
| steel for the third generation of automobiles |
| desulfurization project in power plant |
7,200,000.00 Deferred income 2,400,000.00 2,400,000.00 Other incomePower plant three power plant cogeneration
3,000,000.00 Deferred income 1,000,000.00 1,000,000.00 Other incomeIndustrial enterprise energy management
| reform project |
| center construction demonstration project |
1,160,000.00 Deferred income 1,160,000.00 1,160,000.00 Other income
| Automatic air quality monitoring system | - | Deferred income | 35,000.00 | 35,000.00 | Other income |
Cold-rolled high-strength steel reconstruction
75,000,000.00 Deferred income 25,000,000.00 25,000,000.00 Other income
Items Amount
| Balance sheet presentation items | The amount included in the current profit and loss or offset the loss of related costs | ||
| Current period | Previous period | Items | |
Construction of a professional technologyinnovation platform for the automotive steel
200,000.00 Deferred income 300,000.00 Other incomeIntroduce special funds for overseas advancedapplicable technology (progress in productiontechnology of high-grade electro-galvanized
| industry |
| sheet) |
1,000,000.00 Deferred income 1,000,000.00 1,000,000.00 Other income2020 Ecological Civilization ConstructionProject (Special Steel Electric Furnace
20,000,000.00 Deferred income Other incomeBengang Automotive Sheet Engineering
| Upgrade Project) |
| Laboratory Project |
Deferred income 160,206.60 Other incomeEnergy saving and environmental protection
Deferred income 580,000.00 Other incomeProduction line of high-grade electro-
| project for sintering machine in ironworks |
| galvanized sheet for automobile |
Deferred income 4,104,000.00 Other income
| Total | 121,440,000.00 | 32,135,000.00 | 36,039,206.60 |
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 |
“Steel for high-strength pipelines under low-temperature and high-pressure service conditions”
30,677.74 93,575.00 Other income
| Project national support funds |
| 2018 Municipal Skill Master Workstation Fee |
| 66,616.34 | 120,423.00 | Other income |
Research and development of anti-oxidation hot
165,152.27 Other income
| forming steel PHS1500A | ||||
| Liaoning artisan subsidy | 21.89 | 14,002.80 | Other income |
Research on the Influence Mechanism and Control ofRare Earth Oxide Sulfide on Automobile Steel
159,488.49 24,876.50 Other income
| Plasticity | ||||
| 2019 Municipal Skills Master Workstation Cost | 158,993.16 | 21,006.84 | Other income |
Liaoning Province "Hundred, Thousand, Thousand,
220,000.00 30,000.00
Other incomeResearch on the Influence Mechanism and Control ofRare Earth Oxide Sulfide on Automobile Steel
| Thousand Talents Project" funding project in 2018 |
| Plasticity |
925,520.00
Other income
| Provincial master station subsidy | 300,000.00 | Other income | ||
| Others | 693,206.00 | 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 | ||
| Total | 2,026,469.89 | 75,883.34 | 921,206.80 | |
3. Return of government subsidies during the reporting period
NoneVIII. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Name of the subsidiaries Principal place of business Registered address Notes of business
Acquiring method
| Shareholding ratio | ||||||
| Direct | Indirect | |||||
| Xiamen Bengang Steel & Iron Sales Co., Ltd. | Xiamen | Xiamen | Sales | 100.00 | Business combination und | |
| Wuxi Bengang Steel & Iron Sales Co., Ltd. | Wuxi | Wuxi | Sales | 100.00 | Business combination und | |
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | Tianjin | Tianjin | Sales | 100.00 | Business combination und | |
| Nanjing Bengang Materials Sales Co., Ltd. | Nanjing | Nanjing | Sales | 100.00 | Business combination und | |
| Yantai Bengang Steel & Iron Sales Co., Ltd. | Yantai | Yantai | Sales | 100.00 | Business combination und | |
| Harbin Bengang Economic and Trading Co., Ltd. | Harbin | Harbin | Sales | 100.00 | Business combination und | |
Name of the subsidiaries Principal place of business Registered address Notes of business
Acquiring method
| Shareholding ratio | ||||||
| Direct | Indirect | |||||
| Changchun Bengang Steel & Iron Sales Co., Ltd. | Changchun | Changchun | Sales | 100.00 | Business combination und | |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | Guangzhou | Guangzhou | Sales | 100.00 | Establishment | |
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. | Shanghai | Shanghai | Sales | 100.00 | Establishment | |
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. | Liaoyang | Liaoyang | Manufacturing | 100.00 | Establishment | |
| Dalian Benruitong Automobile Material Technology Co., Ltd. | Dalian | Dalian | Manufacturing | 65.00 | Establishment | |
| Bengang Posco Cold-rolled Sheet Co., Ltd. | Benxi | Benxi | Manufacturing | 75.00 | Business combination und | |
| Benxi Bengang Steel Sales Co., Ltd | Benxi | Benxi | Sales | 100.00 | Establishment | |
Shenyang Bengang Metallurgical Science and Technology Co.,
Shenyang
| Ltd. | Shenyang |
Sales 100.00
Establishment
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. | Chongqing | Chongqing | Sales | 100.00 | Establishment |
Bengang Baojin (Shenyang) auto new material technology Co.,
Shenyang
| Ltd. | Shenyang |
Manufacturing 85.00
| Business combination und |
The proportion of shares held in subsidiaries is different from the proportion of voting rights: the company does not have such matters.
Basis for holding half or less of the voting rights but still controlling the investee, and holding more than half of the voting rights but not controlling the investee: The company doesnot have such matters.
For important structured entities included in the scope of consolidation, the basis for control: The company does not have such matters.
2. Significant but not wholly-owned subsidiaries
Name of the subsidiaries
Proportion ofnon
(%)
| -controlling interests | Profits and losses |
attributing to non-controllingshareholders
to distribute to non-controllingshareholders
Endingbalance of non-controlling interests
Bengang Posco Cold-rolled Sheet Co., Ltd. 25.00% 15,744,812.00
| Dividend declared |
522,224,787.93
The minority shareholder’s shareholding ratio is different from the voting rights ratio: the company does not have suchmatters.
3. Financial information of significant but not wholly-owned subsidiaries
Name of thesubsidiaries
Current assets
| 30 June 2021 | ||
| Non-current | ||
assets
Total assets Current liabilities
liabilities
Total liabilities
| Non-current | ||
| Bengang Posco Cold- |
rolled Sheet Co., Ltd.
1,611,242,660.77 1,255,121,323.33 2,866,363,984.10 777,464,832.39 777,464,832.39
subsidiaries
31 December 2020
| Name of the |
| Name of the |
subsidiaries
Current assets
assets
Total assets Current liabilities
| Non-current | Non-current |
liabilities
Total liabilities
rolled Sheet Co., Ltd.
3,799,519,376.39 1,384,600,108.47 5,184,119,484.86 3,159,583,481.30 3,159,583,481.30
Name of the subsidiaries
Bengang Posco Cold-
Current period
Operating income Net profit
| Current period | ||
| Total comprehensive | ||
income
operating activities
| Net cash flows from | ||
| Bengang Posco Cold-rolled Sheet Co., |
Ltd.
5,691,380,556.81 62,979,247.98 62,979,247.98 -138,708,467.08
| Name of the subsidiaries | Previous period |
Operating income Net profit
comprehensiveincome
Net cash flows from operating
activities
| Total | ||
| Bengang Posco Cold-rolled Sheet Co., |
Ltd.
3,483,712,504.36 12,484,509.92 12,484,509.92 389,115,477.57
4. Significant restrictions on the use of corporate group assets and the settlement of corporate group debts
None.
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 2021/Current period | 31 December 2020/Previous period |
| Joint ventures: | ||
| Total book value of investment: | 3,024,013.88 | 2,742,064.73 |
The total amount of the following items calculated
| according to the shareholding ratio |
| —Net profit | 281,949.15 | 374,119.86 |
| —Other comprehensive income | ||
| —Total comprehensive income | 281,949.15 | 374,119.86 |
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 statements
None.
IX. Risks Associated with Financial InstrumentsThe company faces various financial risks in its operation: credit risk, market risk and liquidity risk. The company'sboard of directors is fully responsible for the determination of risk management objectives and policies, and assumesultimate responsibility for the risk management objectives and policies. However, the board of directors has authorizedthe company's planning and development department to design and implement procedures that ensure the effectiveimplementation of risk management objectives and policies. The board of directors reviews the effectiveness of theimplemented procedures and the rationality of risk management objectives and policies through reports submitted by theplanning and development department. The company's internal auditors also audit risk management policies andprocedures, and report relevant findings to the audit committee.The overall goal of the company's risk management is to formulate a risk management policy that minimizes risks withoutexcessively affecting the company's competitiveness and resilience.
(1) Credit risk
Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the counterparties. The Companyis exposed to credit risk arising from customers’ failure to discharge an obligation in sales on credit. Before signing anew contract, the company will evaluate the credit risk of the new customer, including the external credit rating and insome cases the bank credit certificate (when this information is available). The company has set a credit sales limit foreach customer, which is the maximum amount without additional approval.
The Company ensures that the company's overall credit risk is within a controllable range through regular monitoring ofexisting customer credit ratings and regular review of accounts receivable aging analysis. In the monitoring of credit risk
of customers, the Company sorts customers into groups by their credit characteristics. Those customers which are ratedas “high risk” will be put in the restricted client list. The Company can only sell to these customers on credit withadditional approval; otherwise the Company must ask for a corresponding deposit in advance.
(2) Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flows due to 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 rate changes. The Company’sexposure to currency risk is primarily arising from variable-rate bank balances and variable-rate borrowings. Currently,the Company does not have a specific policy to manage its interest rate risk. The management will carefully choosefinancing methods, and combine fixed interest rate with variable interest rate, short-term obligations with long-termobligations. By using effective interest rate risk management methods, the Company closely monitors interest rate riskand will consider interest-rate swaps to acquire an expected structure of interest rates shall the need arise.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes. The Company hasbeen constantly working on the adjustment of the organizational framework of risk management and optimization ofdebt structures to lower the currency risk.
The currency risk facing the Company originates from the assets and liabilities measured by US dollars and Euro. Theending balance of foreign currency financial assets and foreign currency financial liabilities after converted in RMB isshown as below:
(In 10 Thousand)
Items
| 30 June 2021 | |||||
| USD | Euro | HKD | Japanese Yen | Total | |
| Assets | 653.33 | 42.97 | 22.76 | 719.06 | |
| Liabilities | 130,473.91 | 33,837.74 | 914.99 | 165,226.63 | |
Items
| 31 December 2020 | |||||
| USD | Euro | HKD | Japanese Yen | Total | |
| Assets | 46,968.50 | 40.73 | 23.02 | 47,032.25 | |
Items
| 31 December 2020 | |||||
| USD | Euro | HKD | Japanese Yen | Total | |
| Liabilities | 134,771.81 | 37,793.88 | 1,025.89 | 173,591.58 | |
On June 30, 2021, with all other variables remaining unchanged, if the relevant currency appreciates or depreciatesagainst the RMB by 5%, the company will increase or decrease its net profit by RMB 82.2538 million. Managementbelieves that 5% reasonably reflects a reasonable range of possible changes in the relevant currency against RMB in thenext year.
(3) Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of settlement in a manner ofdelivering cash or other financial assets. The Company’s policy is to maintain sufficient cash to meet maturingobligations. Liquidity risk is centralized controlled by the Company’s finance department. Through the monitoring ofunrestricted cash and cash equivalents, 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 to meet obligations in allpredicted reasonable circumstances.
The following table details the Company’s mature date of residual contract value of underivative financial liabilities torepay according to the contract terms. The table has been drawn up based on the undiscounted cash flows of financialliabilities based on the earliest date on which the Company can be required to pay. The table includes both interest andprincipal cash flows.
(In 10 Thousand Yuan)Items
| 30 June 2021 | |
| Within 1 year | |
1-2 years 2-5 years
Total
| Over 5 years | |||
| Trade and other payables | 1,421,297.62 |
| 94,375.48 | 1,515,673.10 | ||||
| Loans and interests | 850,110.65 | 22,466.81 | 307,758.00 | 2,746.22 | 1,183,081.68 |
| Total | 2,271,408.27 | 22,466.81 | 307,758.00 | 97,121.71 | 2,698,754.78 |
(In 10 Thousand Yuan)
Items
| 31 December 2020 | |
| Within 1 year | |
1-2 years 2-5 years
Total
| Over 5 years | |||
| Trade and other payables | 1,643,593.66 |
| 111,423.24 | 1,755,016.90 | ||||
| Loans and interests | 1,137,576.14 | 25,647.04 | 321,586.21 | 3,060.20 | 1,487,869.59 |
| Total | 2,781,169.80 | 25,647.04 | 321,586.21 | 114,483.44 | 3,242,886.49 |
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 that can be obtained on themeasurement date in an active market.The input value of the second level is the input value of the related assets or liabilities that is directly or indirectlyobservable except the input value of the first level.The third level of input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement result belongs is determined by the lowest level to which the input valuethat 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 period
first level
Fair value measurement inthe second level
Fair value measurement inthe third level
Total
1. Continuous
| Fair value measurement in the | |
| fair value |
measurement
◆Financial assets held for trading
(1) Financial assets measured at fair
value and whose changes are includedin the current profit and loss
(a) Investment in debt instruments
(b) Investment in equity instruments
Item
Fair value at the end of the period
first level
Fair value measurement inthe second level
Fair value measurement inthe third level
Total(c) Derivative financial assets
| Fair value measurement in the | ||
(d) Others
(2) Designated as a financial asset
measured at fair value and its changesare included in the current profit andloss
(1) Investment in debt instruments
(2) Others
◆ Accounts receivable financing5,143,627,467.44
◆ Other debt investments
| 5,143,627,46 | |
◆
instruments
1,042,024,829.00
| Investment in other equity | 1,042,024,82 |
◆ Other non-current financial assets
(1) Financial assets measured at fair
value and whose changes are includedin the current profit and loss
(a) Investment in debt instruments
(b) Investment in equity instruments
(c) Derivative financial assets
(d) Others
(2) Designated as a financial asset
measured at fair value and its changesare included in the current profit andloss
(a) Investment in debt instruments
Item
Fair value at the end of the period
first level
Fair value measurement inthe second level
Fair value measurement inthe third level
Total(b) Others
| Fair value measurement in the | ||
Total assets continuously measuredat fair value
6,185,652,296.44
| 6,185,652,29 |
◆Financial liabilites
trading
| held for |
Including:
Issued trading bonds
Derivative financial liabilities
Others
◆Designated as a financial liabilitymeasured at fair value and its changesincluded in the current profit and loss
Total liabilities continuouslymeasured at fair value
2. Non-
measurement
| continuous fair value |
(1) Assets held for sale
| Total assets not measured |
continuously at fair value
| For example: Liabilities held for |
sale
| Total liabilities not measured |
Item
Fair value at the end of the period
first level
Fair value measurement inthe second level
Fair value measurement inthe third level
Total
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 mainly unlisted equity investmentsheld by the company. The company adopted valuation techniques for fair value measurement, mainly using valuationtechniques of listed company comparison method, referring to stock prices of similar securities and considering liquiditydiscounts.
(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 determining the 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
Notes of Business
Registered
| Place of Registry | capital | Share proportion (%) | Voting rights (%) | ||
| Benxi Steel & Iron (Group) Co., Ltd. | Benxi | Manufacturing | 62.92 | 62.02 | 62.02 |
Note: The ultimate controlling party of the Company is the State-owned Assets Supervision and Administration Commissionof 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. |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Same parent company |
Benxi Beiying Steel & Iron (Group) Co., Ltd. (Hereinafter referred to as
Belongs to Bengang Group Co., Ltd.
| "Beiying Steel") | |
| Bengang Electronics and Gas Co., Ltd. | Associate of parent company |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same parent company |
| Name of Other related parties | Relationship |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Designing Institute | Same parent company |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. | Same parent company |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | Belongs to Bengang Group Co., Ltd. |
| Benxi New Career Development Co., Ltd. | Same parent company |
| Dalian 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 company |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Same parent company |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Same parent company |
| Liaoning Metallurgy Technician College | Same parent company |
| Liaoning Metallurgy Vocational Technical College | Same parent company |
| Suzhou Bengang Industrial Co., Ltd. | Shareholding company |
| Benxi Steel & Iron (Group) Medical Services Department | Associate of parent company |
| Bengang 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
transactions
Current period Previous period
| The content of related party | |||
| Benxi Steel & Iron (Group) Co., Ltd. | Repair expense | 14,746.00 | 15,947.21 |
| Benxi Steel & Iron (Group) Co., Ltd. | Land lease fee | 3,261.15 | 3261.15 |
| Bengang Cold-rolled Stainless Steel Dandong Co., |
Ltd.
Products 63.05 7.95
Name
transactions
Current period Previous period
| The content of related party | |||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Labor cost | 388.19 | 361.1 |
Benxi Steel & Iron (Group) Mining Co., Ltd.
supplementary material
333,109.30 280,270.14
| Raw material and | |||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight | 665.90 | 87.47 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., |
Ltd.
supplementary material
24,576.01 14,869.84
| Raw material and | |
| Benxi Steel & Iron (Group) Steel & Iron Process and |
Logistics Co., Ltd.
Processing fee 5.08 23.81
Co., Ltd.
Spare parts 1491.71 2,296.73
| Benxi Steel & Iron (Group) Machinery Manufacture |
| Benxi Steel & Iron (Group) Machinery Manufacture |
Co., Ltd.
Repair services 292.32 330.54
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Spare parts | 198.76 | 19.75 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Project fee | 14,057.74 | 7490.59 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Repair services | 4,168.26 | 3,660.09 |
Benxi Steel & Iron (Group) Construction Co., Ltd.
supplementary material
375.59 367.31
| Raw material and | |||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Freight | 87.45 | 87.94 |
| Benxi Steel & Iron (Group) Industrial Development |
Co., Ltd.
Spare parts 2693.64 2568.9
Co., Ltd.
| Benxi Steel & Iron (Group) Industrial Development | Raw material and |
supplementary material
1,567.13 5,906.02
Co., Ltd.
Repair services 18.90 790.53
| Benxi Steel & Iron (Group) Industrial Development |
| Benxi Steel & Iron (Group) Industrial Development |
Co., Ltd.
Freight 191.68 188.69
Co., Ltd.
Project fee 360.29 332
| Benxi Steel & Iron (Group) Industrial Development |
| Benxi Steel & Iron (Group) Construction and |
Repairing Co., Ltd.
materials & spare parts
62.83 128.19
| Raw material & supplementary | |
| Benxi Steel & Iron (Group) Construction and |
Repairing Co., Ltd.
Project fee 370.74 2,992.87
Repairing Co., Ltd.
Repair expense 255.59 2,673.04Bengang Electronics and Gas Co., Ltd.
| Benxi Steel & Iron (Group) Construction and | |
| Raw material and |
supplementary material
7,365.37 6,886.40
| Bengang Electronics and Gas Co., Ltd. | Repair services | 220.68 | 1,168.35 |
| Benxi High-tech Drilling Tools Manufacture Co., |
Ltd.
Spare parts 7.96 6.22
| Benxi New Career Development Co., Ltd. | #N/A | 3.01 | 22.45 |
Name
transactions
Current period Previous periodBenxi New Career Development Co., Ltd.
| The content of related party |
| Raw material and |
supplementary material andfood
113.40 107.92
| Liaoning Metallurgy Technician College | Spare parts | 126.16 | 117.57 |
| Bengang Group International Economic and Trading |
Co., Ltd.
supplementary material
846115.86 0
| Raw material and | |
| Bengang Group International Economic and Trading |
Co., Ltd.
Agency fee 3648.1 3067.82
Co., Ltd.
Port surcharges 10,544.71 5381.24
| Bengang Group International Economic and Trading |
| Benxi Steel & Iron (Group) Information and |
Automatic Tech Co., Ltd.
Spare parts 93.14 285.13
Automatic Tech Co., Ltd.
Project fee 236.53 1,368.24
| Benxi Steel & Iron (Group) Information and |
| Benxi Steel & Iron (Group) Thermal Power |
Development Co., Ltd.
Heating costs 9.18 18.98
Development Co., Ltd.
| Benxi Steel & Iron (Group) Thermal Power | Raw material and |
supplementary material
2.02 55.00
| Benxi Steel & Iron (Group) Designing Institute | Design fees | 40.96 | 28.77 |
Benxi Beiying Steel & Iron (Group) Co., Ltd.
supplementary material
140619.89 466858.5
| Raw material and | |||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 24890.63 | 21856.41 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Freight | 226.54 | 166.79 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Labor cost | 4,041.85 | 2,016.35 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Spare parts | 1,154.83 | 897.66 |
| Liaoning Hengtong Metallurgical Equipment |
Manufacture Co., Ltd.
Raw material and spare parts 3481.53 5120.05
Manufacture Co., Ltd.
Repair services 66.93 0.00
| Liaoning Hengtong Metallurgical Equipment | |||
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Raw material and spare parts | 70.79 | 43.48 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Repair services | 425.44 | 509.57 |
| Bengang Group Co., Ltd. | Labor cost | 8793.34 | 0 |
| Bengang Group Co., Ltd. | House Rental fee | 37.61 | 37.61 |
| Total | 1,455,343.77 | 860,682.37 |
Company as the seller
(In 10 Thousand Yuan)
Name
transactions
Current period Previous period
| The content of related party | |||
| Bengang Electronics and Gas Co., Ltd. | Energy & Power | 39.46 | 38.10 |
Benxi Beiying Steel & Iron (Group) Co., Ltd.
materials & spare parts
166,327.67 135,340.23
| Raw material & supplementary | |||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Products | 1,150.49 | 1,271.42 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 6,461.23 | 6,882.65 |
| Benxi Steel & Iron (Group) Real-estate Development |
Co., Ltd.
Energy & Power 0.94 6.25
Logistics Co., Ltd.
Energy & Power 0.46 20.39
| Benxi Steel & Iron (Group) Steel & Iron Process and |
| Benxi Steel & Iron (Group) Machinery Manufacture |
Co., Ltd.
Products 445.96 1,014.55
Co., Ltd.
Energy & Power 1,086.20 1,216.43
| Benxi Steel & Iron (Group) Machinery Manufacture |
| Benxi Steel & Iron (Group) Machinery Manufacture |
Co., Ltd.
materials & spare parts
16.41 139.52
| Raw material & supplementary | |||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Energy & Power | 377.58 | 335.07 |
Benxi Steel & Iron (Group) Construction Co., Ltd.
materials & spare parts
171.46 15.12
| Raw material & supplementary | |||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Energy & Power | 33,426.91 | 33,585.45 |
Benxi Steel & Iron (Group) Mining Co., Ltd.
materials & spare parts
5,312.62 512.75
| Raw material & supplementary | |||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight revenue | 339.29 | 497.33 |
| Benxi Steel & Iron (Group) Thermal Power |
Development Co., Ltd.
Energy & Power 3,649.48 2,264.65
Development Co., Ltd.
| Benxi Steel & Iron (Group) Thermal Power | Raw material & supplementary |
materials & spare parts
893.57 682.22
Co., Ltd.
Energy & Power 413.68 409.62
| Benxi Steel & Iron (Group) Industrial Development |
| Benxi Steel & Iron (Group) Industrial Development |
Co., Ltd.
Products 501.34 912.10
Co., Ltd.
| Benxi Steel & Iron (Group) Industrial Development | Raw material & supplementary |
materials & spare parts
660.84 936.70
Automatic Tech Co., Ltd.
Energy & Power 5.23 11.69
| Benxi Steel & Iron (Group) Information and |
| Benxi Steel & Iron (Group) Construction and |
Repairing Co., Ltd.
Energy & Power 59.55 66.60
Ltd.
Energy & Power 103.98 105.91
| Benxi Steel & Iron (Group) Metallurgy Residues Co., |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., |
Ltd.
materials & spare parts
22,587.81 13,364.82
Name
transactions
Current period Previous period
| The content of related party | |||
| Benxi Steel & Iron (Group) Co., Ltd. | Energy & Power | 263.06 | 430.55 |
Benxi Steel & Iron (Group) Co., Ltd.
materials & spare parts
346.98 308.79
| Raw material & supplementary | |||
| Benxi New Career Development Co., Ltd. | Energy & Power | 11.63 | 381.86 |
| Dalian Boluole Steel Tube Co., Ltd. | Products | 655.60 | 279.34 |
| Benxi Steel & Iron (Group) General Hospital | Energy & Power | - | 1.06 |
| Benxi Steel & Iron (Group) Zhengtai Construction |
Materials Co., Ltd.
Energy & Power 1.31 3.20
Manufacture Co., Ltd.
| Liaoning Hengtong Metallurgical Equipment | Raw material & supplementary |
materials & spare parts
35.59 493.65
Ltd.
Products 295.41 736.33
| Bengang Cold-rolled Stainless Steel Dandong Co., | |||
| Suzhou Bengang Industrial Co., Ltd. | Products | 38,315.21 | 19,082.32 |
| Bengang Group Finance Co., Ltd. | Energy & Power | 0.65 | 0.65 |
| Bengang Group Co., Ltd. | Energy & Power | 61.46 | 8.82 |
Bengang Group Co., Ltd.
materials & spare parts
240,324.13 221,356.12
| Raw material & supplementary | |||
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Products | 17.43 | - |
524,360.62 442,712.26
Notes:
The pricing policy is based on the transaction content and pricing principles specified in the "Raw Material and Service SupplyAgreement" and "Land Use Right Leasing Contract" and supplementary agreements entered into between the Company andBengang Group and Benxi Steel and Iron (Group) Co., Ltd. The main pricing principle is that if there is a market price, themarket price will be used. If there is no market price, then the full cost plus the national additional tax plus a reasonable profitwill be used as the pricing standard.
2. Lease information of related parties
Company as the lessor
Lessee
category
| Lease capital | Lease income of current |
period
period
| Lease income of previous | ||
| Benxi Steel & Iron (Group) Steel & Iron Process |
and Logistics Co., Ltd.
machinery
250,000.00 250,000.00
Company as the lessee
Lessor Lease capital category
current period
| (Without tax) | Lease charges of |
previous period
Benxi Steel & Iron (Group) Co., Ltd.
Land use right7,669,068.17 square meterLand use right
| (Without tax) | ||
| 42,920.00 square meter |
28,691,677.66 28,691,677.66
Benxi Steel & Iron (Group) Co., Ltd.
8,355,712.17 8,355,712.17Benxi Beiying Steel & Iron (Group) Co., Ltd.
| 2300 Hot rolling product line, related real estate |
| 1780 Hot rolling product line, related real estate |
7,789,338.83 5,002,327.68Bengang Group Co., Ltd.
Land use right
4,972,711.54 4,972,711.56
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 fromBengang Group, with a monthly rent of 0.594 yuan per square meter. The leased land is 7,669,068.17 square meters and theannual rent is 54,665.10 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 auxiliary facilities occupied by the 2300 hot rolling millproduction line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary facilities is untilDecember 31, 2038.
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 land from Bengang Group and Bengang Steel and Iron (Group)Co., Ltd., with leased areas of 42,920.00 square meters, and 728,282.30 square meters, respectively. The lease term is 20years, the rental price is 1.138 yuan per square meter per month.
Finance lease:
During the reporting period, the company leased machinery and equipment from Liaoning Hengyi Finance Leasing Co., Ltd.in the form of finance lease. From January to June 2021, the purchase amount is RMB 667,085,164.5, and the amount ofinterest and commission is RMB 11,763,370.53 (The aforementioned amounts are tax included.)
3. Information of Guarantee among related parties
(1) Company as the warrantee
Guarantee of loans:
Warrantor Amount of guarantee
Guarantee
| Starting date of | Ending date of |
Guarantee
guarantee
| been fulfilled | ||||
| Bengang Group Co., Ltd. | CNY 15,000,000,000.00 | 2020/8/13 | 2022/8/12 | No |
| Bengang Group Co., Ltd. | CNY 500,000,000.00 | 2020/6/19 | 2021/6/18 | No |
| Bengang Group Co., Ltd. | CNY 310,000,000.00 | 2020/5/26 | 2021/5/25 | No |
| Bengang Group Co., Ltd. | CNY 670,000,000.00 | 2020/5/26 | 2021/5/25 | No |
| Bengang Group Co., Ltd. | CNY 400,000,000.00 | 2020/10/20 | 2021/10/19 | No |
| Bengang Group Co., Ltd. | CNY 1,280,000,000.00 | 2020/11/5 | 2021/11/4 | No |
| Bengang Group Co., Ltd. | CNY 400,000,000.00 | 2020/10/28 | 2021/10/27 | No |
| Bengang Group Co., Ltd. | CNY 1,800,000,000.00 | 2020/12/1 | 2021/12/1 | No |
| Bengang Group Co., Ltd. | CNY 6,024,000,000.00 | 2020/3/17 | 2021/3/17 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | CNY 5,024,000,000.00 | 2020/11/4 | 2021/11/4 | No |
| Bengang Steel Plates Co., Ltd | CNY 250,000.00 | 2020/5/25 | 2021/5/25 | No |
| Bengang Steel Plates Co., Ltd | CNY 490,000.00 | 2020/8/20 | 2021/8/20 | No |
| Bengang Steel Plates Co., Ltd | CNY 200,000,000.00 | 2020/12/24 | 2021/12/24 | No |
Bengang Group Co., Ltd. and Benxi
CNY 70,000,000.00 2016/3/30 2025/3/20 NoBengang Group Co., Ltd. and Benxi
| Steel & Iron (Group) Co., Ltd. |
| Steel & Iron (Group) Co., Ltd. |
CNY 430,000,000.00 2017/2/27 2025/2/20 No
| Bengang Group Co., Ltd. | CNY 622,600,000.00 | 2017/12/15 | 2024/8/20 | No |
| Bengang Group Co., Ltd. | CNY 87,280,000.00 | 2018/3/26 | 2024/6/21 | No |
| Bengang Group Co., Ltd. | CNY 24,620,000.00 | 2017/11/15 | 2021/12/21 | No |
| Bengang Group Co., Ltd. | CNY 30,560,000.00 | 2015/6/25 | 2021/9/21 | No |
| Bengang Group Co., Ltd. | CNY 24,000,000.00 | 2015/12/9 | 2022/3/21 | No |
| Bengang Group Co., Ltd. | EUR 166,579.87 | 2015/6/25 | 2025/9/30 | No |
| Bengang Group Co., Ltd. | EUR 5,691,165.00 | 2015/8/20 | 2025/9/30 | No |
| Bengang Group Co., Ltd. | EUR 407,161.22 | 2015/6/25 | 2026/4/30 | No |
| Bengang Group Co., Ltd. | EUR 4,984,751.64 | 2015/12/28 | 2026/4/30 | No |
Warrantor Amount of guarantee
Guarantee
| Starting date of | Ending date of |
Guarantee
guarantee
| been fulfilled | ||||
| Bengang Group Co., Ltd. | EUR 2,077,667.88 | 2016/12/14 | 2026/4/30 | No |
| Bengang Group Co., Ltd. | EUR 6,162.48 | 2015/6/25 | 2026/4/30 | No |
| Bengang Group Co., Ltd. | EUR 4,069.11 | 2015/12/28 | 2026/4/30 | No |
| Bengang Group Co., Ltd. | EUR 779,734.95 | 2017/6/30 | 2025/10/31 | No |
| Bengang Group Co., Ltd. | EUR 2,733,223.28 | 2016/6/27 | 2020/4/30 | No |
| Bengang Group Co., Ltd. | EUR 334,941.21 | 2015/6/25 | 2025/6/30 | No |
| Bengang Group Co., Ltd. | EUR 9,577,728.02 | 2015/6/25 | 2025/6/30 | No |
| Bengang Group Co., Ltd. | EUR 294,013.70 | 2015/12/28 | 2025/6/30 | No |
| Bengang Group Co., Ltd. | EUR 7,585,942.33 | 2015/6/25 | 2025/10/31 | No |
| Bengang Group Co., Ltd. | EUR 3,271,319.20 | 2015/12/28 | 2025/10/31 | No |
| Bengang Group Co., Ltd. | EUR 8,390,619.39 | 2015/6/25 | 2025/8/31 | No |
| Bengang Group Co., Ltd. | EUR 180,800.00 | 2015/12/28 | 2025/8/31 | No |
| Bengang Group Co., Ltd. | EUR 609,296.41 | 2015/6/25 | 2025/8/31 | No |
| Bengang Group Co., Ltd. | JPY 162,232,000.00 | 1997/10/10 | 2027/9/10 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | CNY 12,000,000,000.00 | 2019/3/16 | 2021/9/3 | No |
| Bengang Group Co., Ltd. | CNY 740,000,000.00 | 2021/1/8 | 2022/1/8 | No |
4. Assets sale and debt restructuring with related party
Name of related party Content of transaction
| Transaction in current period | Transaction in previous period | ||
| Benxi Steel & Iron (Group) Co., Ltd. |
Purchase of 2300 hot rolling mill production line
3,004,988,590.00
| Benxi Beiying Iron and Steel (Group) Co., Ltd. |
Purchase of 1780 hot rolling mill production line
684,727,905.00
5. 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 | 1,332,199.78 | 8,587,031.95 | 9,061,766.57 | 857,465.16 |
1. The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 186,359 thousand from January to
June in 2021. As at 30 June 2021, the interest receivable from Bengang Group Finance Co., Ltd. is RMB51,637.7 thousand.
2. As at 30 June 2021, the restricted deposits in Bengang Group Finance Co., Ltd. is RMB 427,389.00 thousand.
3. From January to June in 2021, 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 2021. As at 30 June 2021, the amount of acceptance bill opened by Bengang Group FinanceCo., Ltd. was RMB 0.27 billion, and the amount of the acceptance bill that had been opened and unpaid byBengang Group Finance Co., Ltd. is RMB0.72 billion, and the proportion of deposit is 100%.
(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 1,753,437.50 during the current period, and as at 30 June 2021, the interest that has notbeen paid is RMB 1,753,437.50.
(6) Receivables and payables of the related parties
1. Receivables of the Company
(in 10 thousand yuan)Items Name Name
| 30 June 2021 | 31 December 2020 | ||
| Gross carrying amount | Provision for bad debts | Gross carrying amount | Provision for bad debts |
Accounts receivable
Benxi Beiying Steel & Iron
| financing | (Group) Co., Ltd. |
3,601.27 230,217.55Accounts receivable
Benxi Steel & Iron (Group) Co.,
| financing | Ltd. |
81.99Accounts receivablefinancing
1,400.00
Accounts receivable
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. |
| Bengang Group International Economic and Trading Co., Ltd. |
9,081.23 90.81 10,463.45 104.63
Items Name Name
| 30 June 2021 | 31 December 2020 | ||
| Gross carrying amount | Provision for bad debts | Gross carrying amount | Provision for bad debts |
Accounts receivable
2,301.66 23.02 2,692.94 26.93Accounts receivableBengang Cold-
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. |
| rolled Stainless Steel Dandong Co., Ltd. |
129.47 1.88 188.46 1.88Accounts receivableBenxi Steel & Iron (Group)
0.10Accounts receivableBenxi Steel & Iron (Group)Machinery Manufacture Co.,
| Metallurgy Residues Co., Ltd. |
| Ltd. |
PrepaymentsBengang Group International
137,173.06 114,662.12PrepaymentsBenxi Steel & Iron (Group)
| Economic and Trading Co., Ltd. |
| Machinery Manufacture Co., Ltd. |
6,470.61Prepayments
Other receivables
| Benxi Beiying Steel & Iron (Group) Co., Ltd. |
| Bengang Group International Economic and Trading Co., Ltd. |
592.61 601.21Other receivables
Real-
| estate Development Co., Ltd. |
312.56 253.84 278.31 253.84Other receivables
Zhengtai Construction Materials
| Co., Ltd. |
29.36 19.96 27.05 19.96Other receivablesLiaoning Metallurgy Technician
6.30 0.06 5.80 5.80Other receivables
| College |
| Benxi Steel & Iron (Group) Medical Services Department; |
Items Name Name
| 30 June 2021 | 31 December 2020 | ||
| Gross carrying amount | Provision for bad debts | Gross carrying amount | Provision for bad debts |
Other receivables
Other non-current assets
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. |
| Liaoning Hengyi Financial Leasing Co., Ltd. |
81,046.11 - 86,459.06 -
2. Payables of the Company
(in 10 thousand yuan)
| Items | Name | 30 June 2021 | 31 December 2020 |
Notes payable
Bengang Group International Economic and Trading
217,045.35 345,103.76
| Co., Ltd. | |||
| Notes payable | Benxi Steel & Iron (Group) Mining Co., Ltd. | 153,644.04 | 91,857.00 |
| Notes payable | Bengang Electronics and Gas Co., Ltd. | 6,414.33 |
Notes payable
Benxi Steel & Iron (Group) Industrial Development Co.,
2,036.01 5,253.76
| Ltd. | |||
| Notes payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 1,185.05 | 4,602.43 |
Notes payable
868.28
Notes payable
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. |
| Ltd. |
345.00 255.94
| Notes payable | Liaoning Metallurgy Technician College | 133.27 | |
| Notes payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 77.82 | 84.78 |
| Notes payable | Liaoning Metallurgy Vocational Technical College | 47.90 |
Notes payable
Benxi Steel & Iron (Group) Metallurgy Residues Co.,
144.11 16.62
Notes payable
Benxi Steel & Iron (Group) Information and Automatic
| Ltd. |
| Tech Co., Ltd. |
1,222.32Notes payable
106.53
| Benxi Steel & Iron (Group) Construction and Repairing Co Ltd. | |||
| Notes payable | Benxi Steel & Iron (Group) Construction Co., Ltd. | 658.19 |
| Items | Name | 30 June 2021 | 31 December 2020 |
| Notes payable | Benxi Steel & Iron (Group) Co., Ltd. | 15,691.17 |
Notes payable
633.49
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | |||
| Accounts payable | Benxi Steel & Iron (Group) Mining Co., Ltd. | 22,670.45 | 20,807.68 |
| Accounts payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 5,552.06 | 5,799.10 |
Accounts payable
Benxi Steel & Iron (Group) Construction and Repairing
6,166.19 5,182.75
| Co., Ltd. | |||
| Accounts payable | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 4,025.98 | 3,172.95 |
| Accounts payable | Benxi Steel & Iron (Group) Construction Co., Ltd. | 2,882.30 | 2,394.63 |
| Accounts payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 2,579.28 | 2,171.25 |
Accounts payable
Benxi Steel & Iron (Group) Information and Automatic
2,216.19 1,852.50Accounts payable
Benxi Steel & Iron (Group) Metallurgy Residues Co.,
| Tech Co., Ltd. |
| Ltd. |
1,907.79 1,645.14
| Accounts payable | Bengang Electronics and Gas Co., Ltd. | 1,869.76 | 1,500.74 |
| Accounts payable | Liaoning Metallurgy Technician College | 1,709.09 | 1,388.84 |
Accounts payable
1,464.80 1,297.91
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | |||
| Accounts payable | Bengang Group Co., Ltd. | 1,399.75 | 1,246.38 |
Accounts payable
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
1,046.84 964.33
| Ltd. | |||
| Accounts payable | Liaoning Metallurgy Vocational Technical College | 810.77 | 746.81 |
| Accounts payable | Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | 730.99 | 616.72 |
Accounts payable
Bengang Group International Economic and Trading
671.63 579.53
| Co., Ltd. | |||
| Accounts payable | Benxi New Career Development Co., Ltd. | 452.56 | 415.37 |
Accounts payable
Benxi Steel & Iron (Group) Industrial Development Co.,
438.57 385.20
Accounts payable
| Ltd. |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. |
212.64 178.73
| Items | Name | 30 June 2021 | 31 December 2020 |
Accounts payable
Benxi Iron and Steel (Group) Engineering Construction
83.12 65.51
Accounts payable
Benxi Steel & Iron (Group) Real-estate Development
| Supervision Co., Ltd. |
| Co., Ltd. |
74.05 61.52
| Accounts payable | Benxi High-tech Drilling Tools Manufacture Co., Ltd. | 45.85 | 38.60 |
Accounts payable
0.28 0.24
| Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. | |||
| Contract liabilities | Suzhou Bengang Industrial Co., Ltd. | 4,621.73 | 5,374.03 |
| Contract liabilities | Dalian Boluole Steel Tube Co., Ltd. | 120.02 | 181.60 |
Contract liabilities Benxi Steel & Iron (Group) Metallurgy Residues Co.,
182.45 161.66
Contract liabilities Benxi Steel & Iron (Group) Industrial Development Co.,
| Ltd. |
| Ltd. |
62.63 55.77
Contract liabilities
57.33 52.81
Contract liabilities
Bengang Group International Economic and Trading
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. |
| Co., Ltd. |
47.44 43.70
| Other payables | Benxi Steel & Iron (Group) Co., Ltd. | 15,082.08 | 13,013.80 |
Other payables
Benxi Steel & Iron (Group) Steel & Iron Process and
1,831.67 1,681.17Other payables
Bengang Group International Economic and Trading
| Logistics Co., Ltd. |
| Co., Ltd. |
1,454.91 1,277.85Other payables
668.32 561.73
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | |||
| Other payables | Benxi Steel & Iron (Group) Construction Co., Ltd. | 553.54 | 436.25 |
| Other payables | Guangzhou Free Trade Zone Bengang Sales Co., Ltd. | 321.91 | 267.44 |
| Other payables | Liaoning Hengyi Financial Leasing Co., Ltd. | 247.80 | 208.60 |
| Other payables | Benxi New Career Development Co., Ltd. | 236.40 | 197.61 |
Other payables
Benxi Steel & Iron (Group) Real-estate Development
166.51 143.59
| Items | Name | 30 June 2021 | 31 December 2020 |
Other payables
Benxi Steel & Iron (Group) Industrial Development Co.,
39.03 31.33
| Ltd. | |||
| Other payables | Liaoning Metallurgy Technician College | 1.65 | 1.34 |
Other payables
Benxi Steel & Iron (Group) Machinery Manufacture Co.,
1.14 1.01
| Ltd. | |||
| Other payables | Bengang Group Finance Co., Ltd. | 0.27 | 0.98 |
| Long-term payables | Liaoning Hengyi Financial Leasing Co., Ltd. | 190,749.28 | 111,423.24 |
11. 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, December 30, 2005, the Company leased land from Benxi Steel(Group). The monthly rent is 0.594 yuan per square meters, the leased land area is 7,669,068.17 square meters, andthe annual rent 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 facilities occupied by 2300 and 1780 hot rolling mill productionlines, and the lease term ends on December 31, 2038. The rental fee is based on the depreciation of the original rentvalue and the national additional tax, plus reasonable profit negotiation. The estimated annual rent is not more than20 million yuan and 18 million yuan respectively. The rental fee is settled and paid monthly. This related partytransaction has been reviewed and approved at the 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 the two companies. The lease areas are 42,920.00square meters and 728,282.30 square meters respectively, with a lease term of 20 years, and a rental price of 1.138yuan per square meter per 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 be adjusted according to thepricing basis stipulated in Article 2 of this agreement. This related party transaction has been reviewed and approvedat the third meeting of the eighth board of directors of the company.
2. Irrevocable letter of credit
As at June 30, 2021, the amount of irrevocable letter of credit that was not fulfilled is RMB 1.338 billion.
(2) Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit distribution
Profit or dividend tobe distributed
On April 26, 2021, the seventeenth meeting of the eighth board of directors of the company passedthe 2020 dividend distribution plan. It is planned to use the total share capital of 3,875,371,532shares at the end of 2020 as the base, and distribute a cash dividend of 0.1 yuan to all shareholdersfor every 10 shares (including tax), a total of 38,753,715.32 yuan of cash dividends will bedistributed. This distribution will not be converted from capital reserves to share capital. The aboveprofit distribution plan has been implemented on July 19.
On August 26, 2021, the 20th meeting of the 8th Board of Directors of the company passed the 2021interim dividend distribution plan. It is planned to use the total share capital of 3,885,060,605 sharesat the end of June 2021 as the base, and distribute cash dividends to all shareholders for every 10shares. 5 yuan (including tax), a total of 1,942,530,302.5 yuan in cash dividends will be distributed.In this distribution, the capital reserve will not be converted into share capital. After the company’sprofit distribution plan is announced and before its implementation, if the company’s share capitalchanges, adjustments will be made in accordance with the principle that the total amount of the
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
(5) Other subsequent events
Not applicable.
13. 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 small proportion of sales, andthe main production base is located in Liaoning area, segmented reporting 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 leasecooperation framework” with Liaoning Hengyi Financial Leasing Co., Ltd. with the amount of financial lease notexceeding RMB 5 billion per year. The Company obtains the fund through sales and lease back financial lease withinterest rate not above the benchmark interest rate of loan over the same period published by the People’s bank of Chinaand the interest rate will be adjusted with the changes of benchmark interest rate of loan published by the People’s bankof 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 2021, the total 2,409,628,094 shares were held by the controlling shareholder Benxi Steel & Iron (Group)Co., Ltd., of which 1,577,545,000 shares were pledged and 108,326,179 shares were frozen.
3. Major strategic restructuring of indirect controlling shareholders
The company received a notice from Bengang Group, the controlling shareholder of the parent company, and learnedthat Ansteel Group Co., Ltd. is planning to reorganize the Bengang Group, which may lead to changes in the company'scontrol. Obtain the approval of relevant departments.On August 18, 2021, the State-owned Assets Supervision and Administration Commission of the State Council and thePeople's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co., Ltd. will reorganizeBengang Group Co., Ltd., and the Liaoning Provincial State-owned Assets Supervision and Administration Commissionwill transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessaryprocedures, and there is still uncertainty about whether the relevant approval can be obtained and whether the transfercan be implemented smoothly.
On August 20, 2021, the State-owned Assets Supervision and Administration Commission of the People’s Governmentof Liaoning Province, which holds 80% of the company’s indirect controlling shareholder Bengang Group Co., Ltd., andthe State-owned Assets Supervision and Administration Commission of the State Council, which hold 100% share ofAnsteel Group Co., Ltd., made an agreement: "agreement on the Gratuitous Transfer of State-owned Equity of BengangGroup Co., Ltd. between the State-owned Assets Supervision and Administration Commission of the People'sGovernment of Liaoning Province and Ansteel Group Co., Ltd.". According to the agreement, the State-owned AssetsSupervision and Administration Commission of Liaoning Province will transfer its 51% stake in Bengang Group toAnsteel Group for free. After the completion of this transfer, Ansteel Group will become the controlling shareholder ofBengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group, Benxi Ironand Steel (Group) Co., Ltd. and Ansteel Group Capital Holding Co., Ltd. The direct controlling shareholder of thecompany remains unchanged, still Benxi Iron & Steel (Group) Co., Ltd., and the actual controller of the company ischanged to the State-owned Assets Supervision and Administration Commission of the State Council.
XII. Notes to the Financial Statements of Parent Company
(1) Accounts receivable
1. Accounts receivable disclosed by aging
| Items | 30 June 2021 | 31 December 2020 |
| Within 1 year (inclusive) | 242,295,140.93 | 283,561,303.90 |
| 1-2 years (inclusive) | 2,368,098.28 | 2,420,511.80 |
| 2-3 years (inclusive) | 6,457,890.55 | 6,500,255.55 |
| Over 3 years | 175,437,393.38 | 177,111,797.34 |
| Sub-total | 426,558,523.14 | 469,593,868.59 |
| Less: Provision for bad debts | 177,857,503.65 | 179,728,406.39 |
| Total: | 248,701,019.49 | 289,865,462.20 |
2. Accounts receivable disclosed by category
Items
| 30 June 2021 | ||
| Gross carrying amount | Provision for bad debts | Book value |
Amount Percentage (%) Amount
Individually significant
| Bad debts ratio (%) | ||
| and tested for impairment |
47,762,337.18 11.20 47,762,337.18 100
Items
| 30 June 2021 | ||
| Gross carrying amount | Provision for bad debts | Book value |
Amount Percentage (%) Amount
| Bad debts ratio (%) | ||
| individually | ||
| Accounts receivable tested for impairment by portfolio |
378,796,185.96 88.80 130,095,166.47 31.28 248,701,019.49
| Include: | |||||
| Portfolio 1: Aging | 225,673,278.40 | 52.90 | 130,095,166.47 | 53.71 | 95,578,111.93 |
| Portfolio 2: Related |
party within
153,122,907.56 35.90 153,122,907.56
| consolidation scope | |||||
| Total | 426,558,523.14 | 100.00 | 177,857,503.65 | 248,701,019.49 |
Items
| 31 December 2020 | ||
| Gross carrying amount | Provision for bad debts | Book value |
Amount
Percentage
Amount
| (%) | Bad debts ratio (%) |
Individually significant and
47,762,337.18 10.17 47,762,337.18 100Accounts receivable tested
| tested for impairment individually |
| for impairment by portfolio |
421,831,531.41 89.83 131,966,069.21 31.28 289,865,462.20
| Include: | |||||
| Portfolio 1: Aging | 245,720,903.60 | 52.33 | 131,966,069.21 | 53.71 | 113,754,834.39 |
Portfolio 2: Related party
176,110,627.81 37.5 176,110,627.81
| within consolidation scope | |||||
| Total | 469,593,868.59 | 100.00 | 179,728,406.39 | 289,865,462.20 |
Receivables individually insignificant but tested for impairment individually:
Items
Accounts receivable
Provision for bad
| 30 June 2021 | |||
| debts | Bad debts ratio（%） | ||
ReasonBenxi Nanfen Xinhe Metallurgical
47,762,337.18 47,762,337.18 100.00
Benxi Nanfen Xinhe has
| Co., Ltd. | ceased operation. | |||
| Total | 47,762,337.18 | 47,762,337.18 |
Accounts receivable tested for impairment by portfolioPortfolio tested by agingItems
| 30 June 2021 | |||
| Gross carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year | 89,172,233.37 | 891,722.33 | 1.00 |
| 1-2 years | 2,368,098.28 | 236,809.83 | 10.00 |
| 2-3 years | 6,457,890.55 | 1,291,578.11 | 20.00 |
| Over 3 years | 127,675,056.20 | 127,675,056.20 | 100.00 |
| Total | 225,673,278.40 | 130,095,166.47 | |
3. Information of provision, reversal or recovery of bad debts of current period.
The reversal of bad debts of current period is RMB 1,870,902.74.
4. No accounts receivable has been written off this year.
5. Top five debtors at the end of the period
Company
Amount
| 30 June 2021 | ||
| Percentage of total accounts receivable (%) | ||
Provision for
| bad debts | |||
| No.1 | 153,122,907.56 | 35.90 | |
| No.2 | 55,439,913.76 | 13.00 | 554,399.14 |
| No.3 | 47,762,337.18 | 11.20 | 47,762,337.18 |
| No.4 | 26,597,899.13 | 6.24 | 269,294.00 |
| No.5 | 8,719,094.48 | 2.04 | 9,008,967.00 |
| Total | 291,642,152.11 | 68.37 | 57,594,997.32 |
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 2021 | 31 December 2020 |
| Notes receivable | 4,967,026,780.38 | 4,143,431,412.08 |
| Include: Bank acceptance bill | 4,551,062,910.25 | 1,876,753,316.46 |
| Commercial acceptance bill | 415,963,870.13 | 2,266,678,095.62 |
| Total | 4,967,026,780.38 | 4,143,431,412.08 |
Notes: Accounts receivable financing reflects notes receivable and accounts receivable that are measured at fair value
through other comprehensive income.
2. The pledged acceptance bill at the end of the period
| Items | Pledged amount |
| Bank acceptance bill | 16,991,847.39 |
| Commercial acceptance bill | 6,000,000.00 |
| Total | 22,991,847.39 |
3.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 | 23,332,790,273.96 | |
| Commercial acceptance bill | 573,182,722.67 | |
| Total | 23,332,790,273.96 | 573,182,722.67 |
4. 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 2021 | 31 December 2020 |
| Interest receivables | 46,266,951.12 | 23,028,942.73 |
| Dividend receivables |
| Other receivables | 195,392,156.95 | 205,151,247.29 |
| Total | 241,659,108.07 | 228,180,190.02 |
1. Interest receivable
(1) Interest receivable disclosed by category
| Items | 30 June 2021 | 31 December 2020 |
| Deposit interest | 46,266,951.12 | 23,028,942.73 |
| Subtotal | 46,266,951.12 | 23,028,942.73 |
| Less: provision for bad debt | ||
| Total | 46,266,951.12 | 23,028,942.73 |
(2) There is no significant provision for overdue interest and bad debt provision.
2. Other receivables
(1) Other receivables disclosed by Aging
| Items | 30 June 2021 | 31 December 2020 |
| Within 1 year (inclusive) | 27,403,063.93 | 35,550,478.46 |
| 1-2 years (inclusive) | 40,528,700.32 | 42,319,451.22 |
| 2-3 years (inclusive) | 13,842,023.46 | 13,842,023.46 |
| Over 3 years | 180,717,695.14 | 180,717,695.14 |
| Sub-total | 262,491,482.85 | 272,429,648.28 |
| Less: Provision for bad debts | 67,099,325.90 | 67,278,400.99 |
| Total | 195,392,156.95 | 205,151,247.29 |
(2) Provision for bad debt provision
Provision for bad debts
| Stage one | Stage two | Stage three |
Total12-
credit losses
| month expected | Lifetime expected credit losses (no |
credit impairment)
credit losses (creditimpairment
| occurred) | ||||
| Beginning balance | 352,376.05 | 9,475,267.75 | 57,450,757.19 | 67,278,400.99 |
Beginning balance in current
| period | ||||
| --Transfer to Stage two | ||||
| --Transfer to Stage three | ||||
| --Reversal to Stage two | ||||
| --Reversal to Stage one | ||||
| Current period provision | ||||
| Current period reversal | ||||
| Current period write-back | 179,075.09 | 179,075.09 | ||
| Current period write-off | ||||
| Other change | ||||
| Ending balance | 352,376.05 | 9,296,192.66 | 57,450,757.19 | 67,099,325.90 |
Changes in the gross carrying amount of other receivables are as follows
amount
| Gross carrying | Stage one | Stage two | Stage three |
Total12-
losses
| month expected credit | Lifetime expected credit losses (no credit impairment) | Lifetime expected credit losses (credit impairment occurred) |
Ending balance
194,557,372.69 20,421,416.81 57,450,858.78 272,429,648.28Beginning
| of last year |
| balance |
194,557,372.69 20,421,416.81 57,450,858.78 272,429,648.28--Transfer to
| Stage two | ||||
| --Transfer to |
amount
| Gross carrying | Stage one | Stage two | Stage three |
Total12-
losses
| month expected credit | Lifetime expected credit losses (no credit impairment) | Lifetime expected credit losses (credit impairment occurred) |
--Reversal to
| Stage three |
| Stage two |
--Reversal to
| Stage one | ||||
| Increase | 57,173,194.63 | 6,006,395.62 | 137,227,870.96 | |
| Derecognition | 65,320,609.16 | 7,797,146.52 | 177,194,576.13 | |
| Other change | ||||
| Ending balance | 186,409,958.16 | 18,630,665.91 | 57,450,858.78 | 262,491,482.85 |
(3) There is no written-off of Other receivables in the current period.
(4) Other receivables disclosed by nature
| Nature | 30 June 2021 | 31 December 2020 |
| Receivable and payable | 255,494,499.52 | 264,617,899.56 |
| Other | 6,996,983.33 | 7,811,748.72 |
| Total | 262,491,482.85 | 272,429,648.28 |
(4) Top five debtors at the year-end
Company Nature or content Amount Aging
Percentage of total
P
| other receivables (%) | rovision for bad |
debtsThe First
5,492,200.00 Within 1 year 2.81 54,922.00The Second
| Receivable and payable |
| Receivable and payable |
3,125,550.76
1.60 2,538,389.24The Third
| Within 1 year and over 3 years | ||
| Receivable and payable |
2,261,360.00 over 3 years 1.16 2,261,360.00
Company Nature or content Amount Aging
Percentage of total
P
| other receivables (%) | rovision for bad |
debtsThe Fourth
2,123,692.31 2-3 years 1.09 424,738.46
The Fifth
| Receivable and payable |
| Receivable and |
payable
1,908,708.06
RMB353,222.31is 2-3 years andthe rest is over 3
0.98 1,626,130.21
| years | |||||
| Total | 14,911,511.13 | 7.63 | 6,905,539.91 |
(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 2021 | 31 December 2020 | |
| Gross carrying | ||
amount
Impairment Book value Gross carrying 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 |
| 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
Ending
balance
ent ofcurrentperiod
| Impairm | Ending |
balance ofimpairme
nt
Co., Ltd.
| Guangzhou Bengang Steel & Iron Trading | 30,000,000.00 |
30,000,000.00
| Shanghai Bengang Metallurgy Science and |
Technology Co., Ltd.
| 30,000,000.00 |
30,000,000.00
Ltd.
| Bengang Steel Plates Liaoyang Pellet Co., | 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
Wuxi Bengang Steel & Iron Sales Co., Ltd.
| 29,936,718.57 |
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
and Technology Co., Ltd.
30,000,000.00
| Shenyang Bengang Metallurgical Science |
30,000,000.00
Co., Ltd.
30,000,000.00
| Chongqing Liaoben Steel & Iron Trade |
30,000,000.00
New Materials Technology Co., Ltd.
76,000,000.00
| Bengang Baojin (Shenyang) Automobile |
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 | 35,825,208,026.61 | 32,386,871,142.30 | 19,591,244,860.47 | 18,369,564,255.82 |
| Other business | 3,255,993,831.68 | 2,898,719,746.40 | 2,168,536,821.65 | 2,009,584,025.45 |
| Total | 39,081,201,858.29 | 35,285,590,888.70 | 21,759,781,682.12 | 20,379,148,281.27 |
Details of operating income:
| Items | Principal Business | Other Business |
| Classified by business area | 35,825,208,026.61 | 3,255,993,831.68 |
| Items | Principal Business | Other Business |
| Including |
：
| Domestic | 32,477,047,388.32 | 3,255,993,831.68 |
| Abroad | 3,348,160,638.29 | |
| Classified by the time of commodity transfer | 35,825,208,026.61 | 3,255,993,831.68 |
| Including: recognize at a certain point in time | 35,825,208,026.61 | 3,255,993,831.68 |
| recognize over a certain period of time | ||
| Total | 35,825,208,026.61 | 3,255,993,831.68 |
(5) Income on investment
| Items | Current period | Previous period |
| Income from long-term equity investment (cost method) | ||
| Short term Bank financial product income | 1,553,175.04 | |
| Total | 1,553,175.04 |
XIII. Supplementary Information
(1) Details of non-recurring profit and loss
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets | -22,272,050.41 | |
| Tax refund, reduction or exemption of unauthorized approval or no formal approval document |
Government subsidy attributable to profit and loss of current period (except such governmentsubsidy closely related to the company's normal business operation, meeting the regulation ofnational policy and enjoyed constantly in certain quota or quantity according to a certain
32,659,483.34
| standard) | ||
| Fund occupation fee charged to non-financial enterprises included in current profit and loss |
The investment cost of an enterprise acquiring subsidiaries, associates and joint ventures is lessthan the income from the fair value of the identifiable 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 |
| Items | Amount | Notes |
| 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
Profits excluded effective hedging business related to the company's normal business operations,from holding transactional financial assets, derivative financial assets, transactional financialliabilities, fair value changes in derivative financial liabilities, and disposal of transactionalfinancial assets and derivative financial Investment income from assets, trading financial
| losses from contingencies are not related to the company's 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
Profit and loss affected due to the adjustments of requirements of taxation, accounting and other
| model for subsequent measurement |
| laws and regulations |
| Trustee income from trust operations | ||
| Other non-operating revenue and expenditure other than above items | 2,555,535.73 | |
| Other non-recurring profit and loss | ||
| Subtotal |
| Impact of income tax | 3,235,742.17 | |
| Impact of minority interests | 51,621.88 | |
| Total | 9,655,604.61 |
(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 | 9.98 | 0.569 | 0.569 |
Net profit attributable to ordinary shareholders after deducting
9.94 0.566 0.566
(3) Differences between Domestic and Foreign Accounting Standards
Not applicable.
Bengang Steel Plates Co., Ltd.
（Seal）25 August 2021