本钢板B:2021年年度报告（英文版）

Bengang Steel Plates Co. Ltd. Annual Report 2021

Bengang Steel Plates Co. Ltd.Annual Report 2021

March 2022

1Bengang Steel Plates Co. Ltd. Annual Report 2021

Ⅰ. Important Notice Table of Contents and Definitions

The Board of Directors the Supervisory Committee and the Directors members of the

Supervisory Committee and senior management of the Company guarantee that there

are no misrepresentations or misleading statements or material omission in this report

and individually and collectively accept full responsibility for the authenticity accuracy

and integrity of the information contained in this report.Huo Gang Legal representative Wang Donghui Chief financial officer and Li

Xiaowei Chief accountant (the person in charge of the accounting) make the pledge

for the authenticity accuracy and integrity of the attached financial statements.All the members of the Board of Directors attended the board meeting on which this

report was examined.The prospective statements contained in this annual report do not constitute any

substantial commitment to the investors. Investors should pay attention to the risks

attached to investment decisions. This report is prepared in both of Chinese and English.The Chinese version shall prevail when there are any controversial statements in the

two versions.The company has described the existing risks and countermeasures in detail in thisreport. Please refer to Section 3-11 “Prospects for the Future Development of theCompany”. “China Securities Journal” “Securities Times” “Hong Kong CommercialDaily” and Juchao Information Network (www.cninfo.com.cn) are the company's

selected information disclosure media. All information of the company is based on the

information published in the above-mentioned designated media. Investors are advised

to pay attention to investment risks.The company’s profit distribution plan is approved by the board of directors. Taking

4108191379 shares as the base a cash dividend of 6.0 yuan (tax included) will be

distributed to all shareholders for every 10 shares and stock dividend is 0 (tax included).The capital reserve will not be converted into share capital.

2Bengang Steel Plates Co. Ltd. Annual Report 2021

Table of Contents

Ⅰ. IMPORTANT NOTICE TABLE OF CONTENTS AND DEFINITI... 2

II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ........ 6

III. MANAGEMENT DISCUSSION AND ANALYSIS ............. 9

Ⅳ. CORPORATE GOVERNANCE ............................ 29

V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY ......... 49

VI. IMPORTANT EVENTS ............................... 53

Ⅶ. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDER.. 85

Ⅷ. STATUS OF PREFERRED SHARES ...................... 91

Ⅸ. STATUS OF CONVERTIBLE CORPORATE BONDS ........... 92

Ⅹ. FINANCIAL REPORT ................................ 95

3Bengang Steel Plates Co. Ltd. Annual Report 2021

Reference File Directory

1. Financial statements signed and sealed by Legal representative Chief financial

officer Chief accountant (the person in charge of the accounting.

2. The original audit report with the seal of the accounting firm and the signature and

seal of the certified public accountant.

3. The originals of all company documents and announcements publicly disclosed

during the reporting period.

4. Annual reports published in other securities markets.

4Bengang Steel Plates Co. Ltd. Annual Report 2021

Definition

Terms to be defined Refers to Definition

Bengang Bancai Bengang Steel the Company the

Refers to Bengang Steel Plates Co. Ltd.Listed Company

Ansteel Group Refers to Ansteel Group Co. Ltd.Bengang Group Refers to Bengang Group Co. Ltd.Benxi Steel & Iron CO. Bengang Co. Refers to Benxi Steel & Iron (Group) Co. Ltd.Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee

SSE Refers to Shenzhen Stock Exchange

Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co. Ltd.

5Bengang Steel Plates Co. Ltd. Annual Report 2021

II. Company Profile and Main Financial Index

I. Company Information

Stock abbreviation Bengang Bancai Bengangban B Stock Code 000761 200761

Stock exchange for listing Shenzhen Stock Exchange

Company name in Chinese 本钢板材股份有限公司

Abbreviation of Company name in本钢板材

Chinese

Company name in English (If any) BENGANG STEEL PLATES CO. LTD.Abbreviation of Company name in

BSP

English (If any)

Legal representative Huo Gang

Registration Address No.16 Renmin Road Pingshan District Benxi City Liaoning Province

Post Code of registration Address 117000

Changes in the company's registered

None

address history

Office address No.16 Renmin Road Pingshan District Benxi City Liaoning Province

Post Code of office address 117000

Web Address None

Email bgbcdm@163.com

II. Contact Information

Secretary of Board of Directors Representative of Securities Affairs

Name Gao Desheng Chen Liwen

No.16 Renmin Road Pingshan District No.16 Renmin Road Pingshan District

Address

Benxi City Liaoning Province Benxi City Liaoning Province

Tel 024-47827003 024-47828980

Fax 024-47827004 024-47827004

Email bgbcdm@163.com bgbcclw@126.com

III. Information Disclosure and Place for Consulting

Press media for information disclosure China Securities Journal Securities Times Hong Kong Commercial Daily

Web address for the annual report as

http://www.cninfo.com.cn

assigned by CSRC

Place for inquiry of the annual report Secretary Office of the Board Bengang Steel Plate Co. Ltd.IV. Change of Business Registration

Organization Code 91210000242690243E

Changes of principal business

No change

activities since listing (if any)

On August 20 2021 the State-owned Assets Supervision and Administration

Changes of the controlling Commission of the Liaoning Provincial People's Government which is the formershareholder in the past (if any) a ctual controller of the company signed the “Free Transfer Agreement on the State-owned Equity of Bengang Group Co. Ltd.” with Ansteel Group Co. Ltd. Liaoning

6Bengang Steel Plates Co. Ltd. Annual Report 2021

State-owned Assets Supervision and Administration Commission transfered its 51%

stake of Bengang Group Co. Ltd. to Ansteel Group for free.On October 12 2021 the industrial and commercial registration of change was

completed and Ansteel Group Co. Ltd. became the indirect controlling shareholder

of the company. The direct controlling shareholder of the company remains

unchanged which is still Benxi Iron and Steel (Group) Co. Ltd.V. Other Information

Accountants’ firm engaged by the Company:

Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP

Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East Huangpu Shanghai

Signing name of accountants Li Yongjiang Li Guiying

Sponsor engaged by the Company to conduct sustained supervision during the reporting period

√ Applicable □ Not applicable

Name of the sponsor Address of the sponsor Name of the sponsor Sustained supervision

institution institution representative period

Guotai Junan Securities No. 768 Nanjing West Road August 5th 2020 to

Yuan Yechen Yang Keyi

Co. Ltd. Jingan District Shanghai December 31st 2021

Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting

period

□ Applicable √ Not applicable

VI. Main Accounting Data and Financial Index

Whether the company needs to retrospectively adjust or restate accounting data for previous years

□ Yes √ No

Changes over

202120202019

last year

Operating income（RMB） 77912144981.46 48684792685.58 60.03% 52741353582.28

Net profit attributable to the

shareholders of the listed 2500582902.58 384252740.78 550.77% 555646971.40

company（RMB）

Net profit after deducting of

non-recurring gain/loss

attributable to the 2517758656.14 381469784.99 560.02% 549528817.13

shareholders of listed

company（RMB）

Net Cash flow generated by

413473454.04-2039000213.29120.28%6977824041.16

business operation（RMB）

Basic earnings per share

0.600.10500.00%0.143

(RMB/Share)

Diluted earnings per share

0.500.10400.00%0.143

(RMB/Share)

Weighted average net assets

11.88%1.90%9.98%2.88%

yield

Changes over

202120202019

last year

Gross assets（RMB） 55147123275.30 65007470749.20 -15.17% 60731425193.90

7Bengang Steel Plates Co. Ltd. Annual Report 2021

Net assets attributable to

shareholders of the listed 22500969014.30 21018296389.10 7.05% 19487665261.17

company（RMB）

The lower of the company’s net profit before and after deduction of non-recurring gains and losses in the most recent

three fiscal years is negative and the audit report of the most recent year shows that the company’s ability to continue

operations is uncertain

□ Yes √ No

The lower of the net profit before and after deducting non-recurring gains and losses is negative

□ Yes √ No

VII. Differences between Domestic and Foreign Accounting Standards

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

and Chinese accounting standards.□ Applicable √ Not applicable

There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese

accounting standards during the reporting period.

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

overseas and Chinese accounting standards.□ Applicable √ Not applicable

There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and

Chinese accounting standards during the reporting period.VIII. Main Financial Index by Quarters

Unit: Yuan

First quarter Second quarter Third quarter Fourth quarter

Operation income 15252265770.99 23335862441.15 22839272300.53 16484744468.79

Net profit attributable to the

shareholders of the listed 686599759.65 1522198408.26 1568670728.28 -1276885993.61

company

Net profit after deducting

non-recurring gain/loss

attributable to the 678208256.33 1520934306.97 1564674812.54 -1246058719.70

shareholders of listed

company

Net cash flows generated

-966470265.232491386485.2618904467.35-1130347233.34

by operating activities

Whether significant variances exist between the above financial index or the index with its sum and the financial

index of the quarterly report as well as semi-annual report index disclosed by the Company

□ Yes √ No

IX. Items and Amount of Non-recurring Profits and Losses

√ Applicable □ Not applicable

Unit: Yuan

Item 2021 2020 2019 Notes

Gains and losses on disposal of non-current

-60100706.71-92695525.95-77292030.26

assets (including the write off part of the

8Bengang Steel Plates Co. Ltd. Annual Report 2021

provision for impairment)

Government subsidy attributable to profit

and loss of current period (except such

government subsidy closely related to the

company's normal business operation 66345976.64 81193591.56 83914522.47

meeting the regulation of national policy

and enjoyed constantly in certain quota or

quantity according to a certain standard)

Profit or loss from investment or

2436869.330.00605795.19

assets entrusted to others

Gains and losses of debt restructuring 32800.02 50640.00

Profits excluded effective hedging business

related to the company's normal business

operations from holding transactional

financial assets derivative financial assets

transactional financial liabilities fair value

changes in derivative financial liabilities -37205991.34 13500000.00

and disposal of transactional financial

assets and derivative financial assets

financial liabilities held for trading

derivative financial liabilities and other

debt investments

Other non-operating income and expenses

5176371.411592660.62779757.58

other than above

Other profit and loss items that meet the

2084.65

definition of non-recurring gains and losses

Less: impact of income tax -5969319.73 786094.20 1818703.48

impact of minority equity (after tax) -202407.38 54476.26 123911.88

Total -17175753.56 2782955.79 6118154.27 --

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

□ Applicable√ Not applicable

There exists no situation of other profit and loss items that meet the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on

Information Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as recurring

profit and loss items.□ Applicable√ Not applicable

The company does not define the non-recurring profit and loss items listed in the "Explanatory Announcement No.

1 on Information Disclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as

recurring profit and loss items.

9Bengang Steel Plates Co. Ltd. Annual Report 2021

III. Management Discussion and Analysis

I. Industry situation of the company during the reporting period

The industry to which the company belongs is the steel industry. The steel industry is a significant basic industry of

country's national economy a significant support for building a modern and powerful country and a significant field

for realizing green and low-carbon development.The national economy continued recovery in 2021 and provided a good environment for the development of the

steel industry. With the continuous improvement of the new development pattern of "dual circulation" at domestic

and abroad the supply-side reform and demand-side management have formed a higher level of dynamic balance.The steel industry actively responds to changes in domestic and foreign demand situations strives to overcome the

impact of Various factors such as a high price of raw materials and fuels and a sharp rise in environmental protection

costs. The industry is generally operating well and in line with policy guidance and market expectations. In the first

half of the year the steel industry worked hard to meet the strong demand for steel market brought about by the rapid

growth of downstream industries fully released production capacity and formed a booming situation in both of

production and sales. In the second half of the year with the implementation of production restriction measures and

the slowdown in demand growth in downstream industries the steel industry timely controlled production capacity.Throughout the year country's steel supply and demand were basically balanced and making outstanding

contributions to meeting the steel demand of downstream industries and ensuring the sustained recovery of the

national economy.The year 2022 is a crucial year for the country to implement the "14th Five-Year Plan" and it is also a crucial year

for the steel industry to achieve high-quality development. From the perspective of the overall external environment

at the end of 2021 the shock wave of the new coronavirus variant strain Omicron swept the world adding more

variables to the world economic situation. Under the background of the national "dual carbon" goal the steel industry

has entered a critical period of high-quality development. Green and low-carbon intelligent manufacturing etc. have

brought more severe challenges and disruptive changes and market uncertainty has further increased. At the same

time China's economy has a solid foundation and strong resilience and will remain a long-term improvement

fundamental in the future. The National Development and Reform Commission and the Ministry of Industry and

Information Technology issued the "Implementation Plan on Reinvigorating the Operation of the Industrial Economy

and Promoting the High-quality Development of the Industry" which proposed policies and measures such as

"vigorously increasing the effective supply of the bulk raw material market" "tapping the demand potential and

expanding the market space of the industrial economy" which is conducive to guiding Market expectations and

create new opportunities for the development of iron and steel enterprises.Currently China has entered a critical stage of comprehensive and high-quality development. The country has clearly

put forward the goal of striving to achieve carbon peaking by 2030 and carbon neutrality by 2060 which has put

forward new requirements for the development of the iron and steel industry and has also stimulated new momentum

for the high-quality development of the steel industry. The steel industry is facing a series of changes in the domestic

steel demand structure steel product supply structure steel production process structure and steel production

resource structure.II. The main business of the company during the reporting period

1. Main business main products and their uses

During the reporting period the company’s main businesses include iron and steel smelting rolling processing

power generation coal chemical industry special steel profiles railways import and export trade scientific research

product sales etc. The introduction of world advanced equipment and technology to implement equipment upgrades

for the main iron and steel industry and have built a high-quality steel base formed more than 60 varieties more

than 7500 specifications of product series the proportion of high value-added and high-tech products reached more

than 80%. The leading products for automotive surface panels home appliance panels petroleum pipeline steel

container panels shipboard etc. are widely used in the fields of automobiles home appliances petrochemicals

aerospace machinery manufacturing energy and transportation building decoration and metal products and are

exported to more than 60 countries and regions.

2. 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

10Bengang Steel Plates Co. Ltd. Annual Report 2021

and consultation. The procurement of foreign materials is carried out through long-term cooperative procurement

direct procurement open and invitational bidding inquiry and price comparison competitive negotiation

negotiation procurement etc. which mainly act by Bengang Steel Group International Economic and Trade Co. Ltd.Sales model: The company's sales are divided into domestic sales and export sales. Domestic sales mainly adopt the

direct sales model. The company sells directly to large customers and other small and medium customers sell to

them through regional sales subsidiaries. Export sales mainly act through the strong marketing network accumulated

in international trade by Bengang Steel Group International Economic and Trade Co. Ltd. which act as agent of the

export sales and charge the agency fee.

3. Key drivers of performance

The company seized the favorable opportunity of the reorganization between Ansteel Group Co. Ltd. and Bengang

steel Group Co. Ltd. deeply carried out the three-year action of state-owned enterprise reform and three system

reforms with the goal of achieving "five promotions and two reductions" and earnestly implemented the "5+1"

work pattern and "1+4" important mission.Implement the "General Plant System" continuously improve management efficiency and benefits build a

technological innovation system create innovative platforms such as "Liaoning Bengang Iron and Steel Industry

Industry-University-Research Alliance" and implement the "R&D personnel delisting system for scientific and

technological projects" to achieve precise incentives. Continuing to carry out in-depth benchmarking exchanges

adhere to the direction of market-oriented reform and continuously promote the high-quality development of

diversified industries various tasks have achieved relatively gratifying business performance.During the reporting period the company's main business and business model remained unchanged.III. Analysis on Core Competitiveness

The company adheres to the innovation-driven and "quality + service" development model with the strategic goal

of building an internationally competitive high-quality plate base a domestic first-class special steel base and a

comprehensive service provider and exerts a strategic leading role focusing on improving quality and efficiency In

terms of product upgrades technological innovation green and intelligent manufacturing we will innovate

management ideas enhance the core competitiveness of enterprises and promote enterprises to achieve high-quality

green and intelligent development.

1. Manufacturing capabilities. Innovate management ideas strengthen professional management and control of the

entire chain and continuously improve corporate management efficiency. All departments and units interact with

each other continue to implement the concept of priority on output adhere to the iron system as the core focus on

the process connection of iron and steel and rationally match the production line and resource production

organization principles of the steel post process so that the production process and operation Continuously

standardize and refine make every effort to maximize quality efficiency and production scale and promote the

entire production chain toward high-end manufacturing.

2. Equipment transformation and upgrading. In 2021 the company issued a fixed asset investment plan of 3.85

billion yuan. Implemented a new round of large-scale technological transformation and ultra-low emission

transformation projects represented by key projects such as special steel electric furnace upgrading special steel

rolling mill renovation CCPP power generation project 220KVA substation project Taizi River bridge renovation

1700mm production line improvement and coke oven flue gas desulfurization and denitrification. At present the

1700mm production line has been improved the CCPP power generation project and the 220KVA substation project

will be put into operation one after another. The special steel electric furnace upgrade and transformation project will

be commissioned and put a set of electric furnaces and supporting refining equipment continuous casting equipment

into production at the end of August 2022.

3. New product development capabilities. So far 49 grades have been developed. Except for the pre-researched cold-

rolled dual-phase steel DP1180 other new products have been sold in the market. Realized the full coverage of

strength grade series of hot-rolled automobile structural steel represented by "automobile beam" and "steel for box

body". Successfully developed dual-phase steel of 1180 strength level and hot-dip galvanized composite phase steel

CR980T/700Y-MP which are leading domestically. Developed hot-rolled anti-oxidation coating-free hot-formed

steel CF-PHS1500 to achieve the world's first launch reaching the international leading level.

4. Technological innovation ability. In terms of scientific and technological cooperation to undertake meetings of

the Expert Committee of the Metals establish the strategic docking between Bengang group and China Iron and

Steel Research Group strengthen cooperation with Northeastern University and other universities and research

institutes and invite national academicians and authoritative experts to discuss the latest technological progress and

industry development trends. To direct and to promote the high-quality development of Benxi Iron and Steel Group.In terms of scientific and technological achievements it has won 4 metallurgical science and technology awards and

3 scientific and technological progress awards in Liaoning Province. Among them "the research and development

of hot stamping steel with the highest strength and extra-thick specifications and its serial development" won the

first prize in the metallurgical industry. The industry's highest award. In terms of intellectual property rights 3

11Bengang Steel Plates Co. Ltd. Annual Report 2021

national standards and 11 corporate standards were drafted; 211 patents were accepted by the National Bureau a

year-on-year increase of 21.2%; 108 patents were authorized by the National Bureau including 16 inventions and

92 utility models. Bengang Steel Plate Co. Ltd. won the Quality Award from the Governor of Liaoning Province

and was identified as "the first batch of high-value patent cultivation centers in Liaoning Province."

5. Green development capability. In combination with the steel industry and local ultra-low emission policy

requirements the company has the courage to assume social responsibilities relying on professional planning and

research institutions to prepare an environmental protection improvement plan and an annual implementation plan.A total of more than 40 ultra-low emission projects have been teased out all of which have been included in the

investment plan and are under construction or preliminary work. Through all-round green improvement such as

cleaner production level three waste management environmental protection management the company achieve

community-based environmental quality promote the integration of industry and city strive to achieve ultra-low

emission by the end of 2023 and build the company into an "ecological steel" that develops harmoniously with the

city. At present the two dust collectors of the second sintering product of the iron smelting plant have completed the

transformation to meet the emission standards. The CCPP power generation project using surplus gas is expected to

be completed and put into operation in the first quarter of 2022.

6. Intelligent manufacturing capabilities. The company has vigorously promoted the construction of intelligent

manufacturing related projects such as informatization and intelligence. In 2021 investment has been made to carry

out centralized control and intelligent manufacturing of iron burning coke special steel processes raw material

management energy management etc. Carry out the improvement of the basic information platform production and

manufacturing management intelligent equipment for cold rolling areas and the upgrading and transformation of

railway transportation dispatching and commanding information systems Intelligent transformation in other fields.keep up with the pace of enterprise development in the era of big data and achieve high-quality development.IV. Management Discussion and Analysis

1. General

During the reporting period the company has always adhered to the new development concept promoted

efficient development and fully implemented the spirit of General Secretary Xi Jinping's instructions on

Northeast Revitalization and Liaoning Revitalization. It has carried out a series of fruitful work with the

core of "refining and strengthening listed companies and promoting high-quality development"

overcoming the influence of unfavorable factors such as market shocks and achieving a high starting

point for the "14th Five-Year Plan". The annual sales revenue was 77.912 billion yuan a year-on-year

increase of 60%; the profit was 3.435 billion yuan a year-on-year increase of 724%; pig iron completed

9.838 million tons a year-on-year decrease of 2.3%; crude steel completed 10.438 million tons a year-

on-year increase of 1.24%; Plates completed 13.217 million tons an increase of 8.02% year-on-year;

cold-rolled sheets completed 6.1078 million tons an increase of 8.1% year-on-year; special steel products

completed 622000 tons a year-on-year decrease of 13.7%. Reviewing the work of the year it is mainly

reflected in the following aspects:

1. Strengthen process linkage to make production operation more efficient

Among them the steel plant has established a high-efficiency production model and the monthly output

has exceeded 1 million tons which is the best level in history. The hot continuous rolling mill has

continuously set new production records and the production capacity has reached the level of 10 million

tons. The cold rolling plant took multiple measures to break through the "bottleneck" of production. Each

unit has set a record of 40 times of production capacity and some units have exceeded the designed

capacity by 120%. The steel rolling output of special steel mills has shown a good trend of increasing

month by month and the daily output has increased by 165 tons year-on-year. The scrap steel plant

recovered 63000 tons of non-production scrap ensuring high production and consumption reduction.

2. Strict process control and more precise cost control

Established the management and control concept of "low cost to win high efficiency" and various cost

reduction measures have achieved remarkable results. The financial system refines capital management

and saves interest expenses; the production system strictly controls the port transportation consumption

ratio to reduce the cost of raw material loss; the equipment system strengthens the repair of spare parts

by outsourcing and reduces the purchase cost of new products; the energy system increases the

proportion of self-generated electricity and avoids peak production direct purchase of electricity and

other measures to effectively reduce electricity costs.

3. Implement the innovation-driven strategy and achieve new results in the field of scientific and

12Bengang Steel Plates Co. Ltd. Annual Report 2021

technological research and development

Adhere to the concept of "strengthening the enterprise with science and technology" carry out scientific

research and research and development of new products make every effort to achieve technological

leadership promote varieties and create benefits and effectively improve the enterprise's ability to resist

risks. Throughout the year 20 grades of cold series products 15 grades of thermal series products and

14 grades of special steel products were developed. Successfully developed domestic leading 1180-

strength dual-phase steel and high-performance 50BW470 high-efficiency silicon steel for Ningde Tebo

as well as ultra-deep-drawn electro-galvanized automotive outer panels for Iran's Saipa Automobile. For

the first time it cooperated with foreign R&D institutions - General Automobile Research Institute of

North America and Northeastern University to develop "coating-free hot-formed steel" breaking through

barriers to technical cooperation breaking through patent monopoly and completing industrialization

tests. In the whole year 100 scientific research projects were established an increase of 69.5% year-on-

year and the planned implementation rate reached over 90%. Successfully jointly applied for the "13th

Five-Year" National Key R&D Program "Genetic Engineering and Artificial Intelligence Design of

Aviation Key Materials" and was approved. The linkage of "sales research and production" was achieved

and 20 certification and delisting projects were completed throughout the year with a total of 47 brands.Mercedes-Benz certification has made a breakthrough. Users of pickling products have completed

stamping certification and assembly and are conducting road tests in Germany and Turkey. At the same

time it has passed the Japanese JIS certification which provides a strong guarantee for the consolidation

of overseas markets.

4. Consolidate the construction of the management system and the level of enterprise management has

climbed to a new level

Based on the construction of six management systems of safety quality energy environmental protection

integration of industrialization and informatization and measurement we constantly improve various

management systems so as to ensure that there is a basis for doing things and there is evidence for

investigations so as to achieve closed-loop management. Adhere to safety first and build a "red line"

awareness. Quickly implement the safety management requirements of "three managements and three

musts" "five cleanups and five eliminations" and "four cannot be relaxed for a moment" and

responsibilities are consolidated layer by layer. Vigorously promote consistent management and

strengthen process compliance. Carry out research on energy conservation and consumption reduction

realize green and low-carbon operation and make energy management more refined and professional.The investment in metering equipment was increased and the integration and commissioning of the

energy metering network was completed laying the foundation for precise control of energy consumption.Continue to explore new paths for legal management of environmental protection work establish and

improve daily management and control and emergency management systems and measures fully

promote the construction of key low-carbon energy conservation projects and promote green and low-

carbon development of enterprises. Implement the new development concept and build a digital and

intelligent enterprise. Taking solving practical production problems as the focus sticking to the main

direction of intelligence taking the cold rolling production line with a high degree of automation as a

pilot vigorously promoting the application of innovative technologies such as unmanned driving and

industrial robots and effectively promoting the improvement of labor productivity.

5. Actively promote the deepening of reform and make new progress in corporate governance

In accordance with the goal of "becoming better and stronger to promote the high-quality development

of listed companies" the key reform work has been determined which has pointed out the direction for

deepening the reform of Bengang Bancai and solving the problems of enterprise development. Reshape

the organizational structure achieve lean and efficient management establish an authorization system

improve decision-making efficiency and control decision-making risks; strengthen performance

management and promote precise incentives. In accordance with the principle of "complete undertaking

comprehensive decomposition step-by-step pressure and differentiated design" the company's operator

performance and organizational performance indicators will be decomposed and implemented step by

step giving full play to the motivational role of performance appraisal realizing the company's benefits

and employees' benefits. Promote management innovation improve management efficiency establish a

management mechanism centered on efficiency and follow the principle of process compliance and

continue to improve management effectiveness and efficiency.

6. Highlight the leading role of party building and show new achievements in group organization work

Thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of

China and all previous plenary sessions of the 19th National Congress of the Communist Party of China

as well as the spirit of the National Party Building Work Conference of State-owned Enterprises give

13Bengang Steel Plates Co. Ltd. Annual Report 2021

full play to the fighting fortress of the party organization and the vanguard and exemplary role of party

members strengthen cadre evaluation and echelon construction and establish a leadership management

and evaluation system by adopting a multi-dimensional work performance evaluation method and

solidly carry out the selection and recruitment of leading cadres. Adhere to the tracking and training of

young cadres build a platform for talent growth in multiple directions and create conditions for

outstanding talents to stand out. Comprehensively and strictly manage the party to advance in depth and

create a clean and upright business environment; implement the study of the party's history and solve the

people's worries and actively do practical things and solve problems for the workers and the masses.

7. Multi-measures are taken at the same time and the organization is closely organized and the epidemic

prevention and control has become normalized

Strictly implement the various epidemic prevention policies of Bengang Group comprehensively

consolidate the foundation of epidemic prevention and control and ensure that the thinking is not loose

and the standards are not lowered. Adhere to daily information control and supervision of epidemic

prevention measures and do a solid job in the reception of foreign personnel and the management of

personnel going out as well as disinfection and personal protection in public places. Establish an

emergency response liaison mechanism with the Municipal Health Commission and the hospital

implement measures such as consultation on vaccination matters and rapid response to emergencies. At

present 9 batches of vaccines have been organized for centralized vaccination and the vaccination ratio

has reached 98% which has built a strong anti-epidemic barrier.

2. Income and Cost

(1) Breakdown of Operating Income

Unit: Yuan

2021 2020 Change over

Amount Proportion Amount Proportion last year

Total operating income 77912144981.46 100% 48684792685.58 100% 60.03%

By industries

Industry 77912144981.46 100.00% 48684792685.58 100.00% 60.03%

By products

Steel plate 69992675798.60 89.84% 45321849577.55 93.09% 54.43%

Others 7919469182.86 10.16% 3362943108.03 6.91% 135.49%

By regions

Northeast 31503298043.72 40.43% 20420940894.42 41.95% 54.27%

North China 3199355088.45 4.11% 1608496520.50 3.30% 98.90%

East China 33516981788.40 43.02% 21783663312.31 44.74% 53.86%

Northwest 68888026.23 0.09% 48736790.89 0.10% 41.35%

Southwest 135459678.97 0.17% 241981145.95 0.50% -44.02%

Central south 3152641431.89 4.05% 25508604.19 0.05% 12259.13%

Export 6335520923.80 8.13% 4555465417.32 9.36% 39.08%

By sales model

Sales in domestic 71576624057.66 91.87% 44129327268.26 90.64% 1.23%

market

Sales in export market 6335520923.80 8.13% 4555465417.32 9.36% -1.23%

(2) 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 Operating Operating costs Gross margin

14Bengang Steel Plates Co. Ltd. Annual Report 2021

margin income change change over last change over

over last year year last year

By industries

Industry 77912144981.46 71891598336.96 7.73% 60.03% 54.96% 3.02%

By products

Steel plate 69992675798.60 64770421744.20 7.46% 54.43% 49.51% 3.05%

Others 7919469182.86 7121176592.76 10.08% 135.49% 131.98% 1.36%

By regions

Northeast 31503298043.72 28935779253.16 8.15% 54.27% 49.04% 3.22%

North China 3199355088.45 2932208938.56 8.35% 98.90% 92.03% 3.28%

East China 33516981788.40 31078317077.55 7.28% 53.86% 49.47% 2.73%

Northwest 68888026.23 63948754.75 7.17% 41.35% 37.41% 2.66%

Southwest 135459678.97 126180690.96 6.85% -44.02% -45.55% 2.62%

Central south 3152641431.89 2884036381.89 8.52% 12259.13% 11820.00% 3.37%

Export 6335520923.80 5871127240.09 7.33% 39.08% 34.77% 2.96%

By sales model

Sales in

71576624057.6666020471096.877.76%62.20%57.06%3.02%

domestic market

Sales in export

6335520923.805871127240.097.33%39.08%34.77%2.96%

market

Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the

Company's main business statistics caliber has changed during the reporting period

□ Applicable √ Not applicable

(3) Whether the Company’s Physical Sales Income Exceeded Service Income

√ Yes □ No

Change over last

Industry classification Item Unit 2021 20120

year

Sales ton 13883661.11 12968385.12 7.06%

Production ton 13996055.15 12940697.06 8.16%

Inventory ton 601916.23 489522.19 22.96%

Steel rolling processing

industry

Sales

Production

Inventory

The main reasons that the relevant data changed more than 30%

□ Applicable √ Not applicable

(4) Performance of Significant Sales and Purchase Contract Signed-up in this Reporting

Period

□ Applicable √ Not applicable

(5) Breakdown of Operating Cost

Industry classification

Unit: Yuan

Industry 2021 2020 Change over

Item

classification Amount Proportion Amount Proportion last year

15Bengang Steel Plates Co. Ltd. Annual Report 2021

Steel rolling

Raw material 37341970406.79 51.94% 23138475447.81 49.88% 2.06%

processing industry

Steel rolling Supplementary

2839512165.813.95%2089395547.624.50%-0.55%

processing industry materials

Steel rolling Spare parts and 785960965.25 1.09% 737780144.94 1.59% -0.50%

processing industry tools

Steel rolling 22184848601.81 30.86% 12727140058.39 27.43% 3.43%

Fuel

processing industry

Steel rolling 3182838986.67 4.43% 2687362561.57 5.79% -1.36%

Energy

processing industry

Steel rolling Salary and 2582531198.03 3.59% 1980205516.91 4.27% -0.68%

processing industry benefits

Steel rolling 2333028229.90 3.25% 2191070638.31 4.72% -1.47%

Depreciation

processing industry

Steel rolling 640907782.70 0.89% 840750647.04 1.81% -0.92%

Others

processing industry

Steel rolling 71891598336.96 100.00% 46392180562.59 100.00% 0.00%

Total

processing industry

Instruction:

None

(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period

√ Yes □ No

In this period the wholly-owned subsidiary Xiamen Bengang Iron & Steel Sales Co. Ltd. was cancelled.

(7) Relevant Information of Significant Changes or Adjustment of the Business Product or

Service in the Reporting Period

□ Applicable √ Not applicable

(8) Information of Main Customers and Main Suppliers

Information of the Company’s main customers

Total sales amount of the top five customers (Yuan) 17086188258.07

Total sales amount of the top five customers accounted for the proportion of total

21.93%

annual sales

The proportion of the total sales of the related parties in the top five customers 7.17%

Information of the top 5 customers

No. Name Amount (Yuan) Proportion

1 Benxi Beiying Steel & Iron (Group) Co. Ltd. 5584776929.07 7.17%

2 Ouyeel Cloud Trade Co. Ltd. 3913604189.08 5.02%

3 Shanghai Ouyeel Supply Chain Co. Ltd. 2637122244.90 3.38%

4 Xiamen Jian Fa Metal Co. Ltd. 2554449548.71 3.28%

5 Ningbo AUX Trade Co. Ltd. 2396235346.31 3.08%

Total -- 17086188258.07 21.93%

Other information of principal customers

□ Applicable √ Not applicable

Information of the Company’s main suppliers

Total purchase amount of the top five suppliers (Yuan) 33829243762.16

Total purchase amount of the top five suppliers accounted for the proportion of

47.06%

total purchase

The proportion of the total purchase of the related parties in the top five suppliers 40.82%

16Bengang Steel Plates Co. Ltd. Annual Report 2021

Information of the top 5 suppliers

No. Name Amount (Yuan) Proportion

Bengang Group International Economic and

117309186976.5024.08%

Trading Co. Ltd.

2 Benxi Steel & Iron (Group) Mining Co. Ltd. 7936735203.17 11.04%

3 Benxi Beiying Steel & Iron (Group) Co. Ltd. 4095327573.23 5.70%

4 Heilongjiang Dragon Coal Group Co. Ltd. 2294033830.68 3.19%

Liaoning Electric Power Co. Ltd. Benxi Electric

52193960178.583.05%

Power Supply Company

Total -- 33829243762.16 47.06%

Other information of principal suppliers

□ Applicable √ Not applicable

3. Expenses

Unit: Yuan

Change over Notes to significant

20212020

last year change

Increase in salary and

Selling and distribution expenses 141394565.57 97279280.21 45.35% import and export

agency fees

Increase in salary

General and administrative expenses 1187239442.10 792826294.81 49.75%

heating costs etc.Increase in foreign

Financial expenses 536593635.06 364775155.62 47.10%

exchange losses

Increase in R&D

Research and development expenses 56401594.44 37989623.28 48.47%

investment

4. Research and Development Input

√ Applicable □ Not applicable

Main R&D project Expected impact on the future

Project purpose Project Progress intended goal

name development of the company

In the first half of the

The pass rate of high- year a total of

grade cold-rolled outer 1724.2 tons of mid-

sheet in 2020 is 70.6%. to-high-end cold-

The current main defects rolled automotive

and proportions are: outer sheets were

12.78% roll printing produced with a pass

Stable and

6.79% inclusions 2.27% rate of 73.8% an

improved quality of The mass production pass rate The annual profit is more than

oblique printing 1.9% increase of 6.9% over

high-grade cold- reaches 80%. 1.5 million yuan.scratches 1.72% rubber the same period in

rolled outer sheet

roll printing rust 1.32% 2020. In April it

other 2.66%. Special reached 95.1%

research is needed to creating the best level

reduce the downgrade in history and

rate and further improve ensuring the stable

product quality. supply of

downstream users.In today's increasingly Improve Bengang's auto steel It made up for the blank of

homogeneous products material selection data system Bengang and systematically

Bengang the pursuit of The project and the database contains combined EVI with database

Automotive Body- differentiated competition objectives have been 100% of auto steel grades. All establishment and application

in-White Solution is the key for enterprises completed. body-in-white body materials technology testing for the first

to get out of low-level are Benxi Steel's automotive time which led to the overall

homogeneous steel products and high- improvement of Bengang's

17Bengang Steel Plates Co. Ltd. Annual Report 2021

competition. Therefore it strength and ultra-high- application technology.is necessary to carry out strength automotive steels

EVI work to enhance the account for more than 65%.influence of enterprises.Using narrow The end hardenability meets

In 2020 the output of

hardenability belt the technical requirements the

gearbox gear steel

control technology J9 value of the key control

FAS3420(R)H is more

Research and non-metallic point is not less than 80% of

than 1000 tons

Development of inclusion control the 4HC bandwidth; the

(accounting for only 3%

Steel FAS3420(R)H technology in oxygen content is not more

of gear steel) and the The annual profit is more than

for 12-speed vulcanized steel and than 18ppm and the

technical quality level is 2 million yuan.Transmission Gears band structure control proportion below 12ppm is not

relatively low. The grades

of Heavy-Duty technology in heat more than 80%; Other

have been stably

Vehicles treatment state the indicators such as inclusions

controlled and the quality

product quality and low magnification

of steel has reached the

basically meets the structures meet the technical

domestic advanced level.needs of users. requirements.The size of the continuous

casting billet in the

converter process of

Benxi Steel is

350×470mm and it can

only produce the national

standard high carbon

bearing steel with the To achieve stable production

specification ≤ Ф The product grade of of national standard materials

Research on Process Bengang's bearing steel has

85mm. Specifications>Ф below Φ150mm the central

Technology of been improved and the

85mm steel center porosity level is less than or

Large Size High The end project goal specifications of the high-

porosity level is too high equal to 1.0 and the residual

Carbon Chromium has been completed. quality national standard

and even shrinkage holes shrinkage hole level is 0.Bearing Steel material of Bengang's bearing

exist which cannot be Ultrasonic flaw detection

GCr15 steel have been further

produced normally. At meets the requirements of

expanded.present the bearing GB/T 4162 standard B level.industry has a large

demand for Ф 90 ～Ф

150mm national standard

materials so it is

necessary to study large-

scale bearing steel to meet

the market demand.Due to the existence of

defects such as zinc slag

zinc ash and roll printing

Production it cannot meet the

technology requirements of

Completed 2 user

integration of cold- automobile OEMs.hot-dip galvanized To achieve stable supply the The annual profit is more than

rolled hot-dip Through the research on

outer plate pass rate is more than 70%. 2.8 million yuan.galvanized the key technology of hot-

certification.automobile surface dip galvanized surface

sheet plate the stable supply of

medium and high-end

automobile OEMs is

realized.Information of research and development personnel by the company

2021 2020 Change over last year

Number of Research and

179817323.81%

Development staff

Proportion of number of

Research and Development 9.53% 10.34% -0.81%

staff

Educational structure of

——————

research and development staff

Bachelor 1233 1208 2.07%

18Bengang Steel Plates Co. Ltd. Annual Report 2021

Master's degree 162 151 7.28%

Age composition of research

——————

and development staff

Under the age of 30 109 132 -17.40%

30 to 40 years old 586 487 20.30%

Information of research and development input by the company

2021 2020 Change over last year

Amount of Research and

Development Investment (In 2343822000.00 1541651000.00 52.03%

RMB)

Proportion of Research and

Development investment to 3.01% 3.17% -0.16%

operating income

Amount of capitalized Research

0.000.000.00%

and Development investment

Proportion of capitalized

Research and Development

investment accounted to total 0.00% 0.00% 0.00%

Research and Development

investment

Illustrations of significant change in the composition of the company's Research and Development personnel

□ Applicable √ Not applicable

Illustrations of the prominent change in proportion of research and development input occupying the operating

income over same period last year

□ Applicable √ Not applicable

Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness

□ Applicable √ Not applicable

5. Cash Flow

Unit: Yuan

Item 2021 2020 Change over last year

Subtotal of cash inflows from

56328587878.3040062379161.4040.60%

operating activities

Subtotal of cash outflows from

55915114424.2642101379374.6932.81%

operating activities

Net cash flows from operating

413473454.04-2039000213.29120.28%

activities

Subtotal of cash inflows from

11402720358.7214037738.7781129.04%

investing activities

Subtotal of cash outflows from

7504976365.566213928829.6220.78%

investing activities

Net cash flows from investing

3897743993.16-6199891090.85162.87%

activities

Subtotal of cash inflows from

8162945228.0822997390314.56-64.50%

financing activities

Subtotal of cash outflows from

15363346740.6918941067286.47-18.89%

financing activities

Net cash flows from financing

-7200401512.614056323028.09-277.51%

activities

Net increase in cash and cash

-2930318531.64-4211997393.46-30.43%

equivalents

Illustrations of key factors of significant changes over same period last year

√ Applicable □ Not applicable

(1) The subtotal of cash inflows from operating activities increased by 40.6% over the previous period which was

mainly due to the increase in the sales price of steel products and the substantial increase in income.

19Bengang Steel Plates Co. Ltd. Annual Report 2021

(2) The net cash flow from operating activities increased by 120.28% over the previous period which was mainly

due to the increase in the sales price of steel and the substantial increase in income.

(3) The subtotal of cash inflows from investing activities increased by 81129.04% over the previous period which

was mainly due to the maturity and recovery of large-denomination time deposits.

(4) The net cash flow from investing activities increased by 162.87% compared with the previous period which was

mainly due to the maturity and recovery of large term deposits.

(5) The subtotal of cash inflows from financing activities decreased by 64.5% compared with the previous period

which was mainly due to the decrease in borrowings in the current period.

(6) The net cash flow from financing activities decreased by 277.51% compared with the previous period which

was mainly due to the decrease in borrowings and the payment of dividends in the current period.

(7) The net increase in cash and cash equivalents decreased by 30.43% over the previous period which was due to

the decrease in borrowings and the payment of dividends in the current period.Illustrations of significant difference between cash flow from operating activities and net profit during the reporting

period

□ Applicable √ Not applicable

Ⅴ. Analysis of Non-core Business

√ Applicable □ Not applicable

Unit: yuan

Proportion of Whether it is

Amount Reason for formation

total profit sustainable or not

Due to investment income

Investment income -120519309.82 -3.51% from disposal of financial No

assets held for trading

Due to the increase in the

Asset impairment -113671335.02 -3.31% provision for inventory No

impairment

Non-operating Due to the income from

7783225.80 0.23% No

income disposal of non-current assets

Due to the disposal of assets in

Operating expenses 64272629.43 1.87% No

the current period

Ⅵ. Assets and Liabilities

1. Significant Change of Assets Components

Unit: Yuan

Ending balance of 2021 Beginning balance of 2021

Notes to

Proportion in Proportion in

Proportion

significant

Amount the total assets Amount the total assets change change

(%)(%)

Cash at bank and on The company

8831095737.8516.01%13126666915.2620.58%-4.57%

hand repays the loan

Accounts receivable 256850782.71 0.47% 245217182.66 0.38% 0.09%

Inventories 10190166138.98 18.48% 9040065342.65 14.17% 4.31%

Long-term equity

2981784.070.01%2742064.730.00%0.01%

investment

Fixed assets 25480674048.94 46.20% 26284567956.44 41.21% 4.99%

Construction in

2434182101.134.41%1839933715.582.88%1.53%

process

Right-of-use assets 1440365248.31 2.61% 1500739782.73 2.35% 0.26%

The company

Short-term loans 4053088140.00 7.35% 10067731000.00 15.78% -8.43%

repays the loan

20Bengang Steel Plates Co. Ltd. Annual Report 2021

Contract liabilities 4708188093.78 8.54% 4458671819.90 6.99% 1.55%

Long-term loans 4222821771.74 7.66% 3502934427.65 5.49% 2.17%

Lease liabilities 1424667169.15 2.58% 1463444635.94 2.29% 0.29%

High proportion of abroad assets

□ Applicable √ Not applicable

2. Assets and Liabilities Measured at Fair Value

□ Applicable √ Not applicable

3. Restricted Assets by the End of the Period

Items Ending balance Reason

Cash at bank and on hand 2531996674.37 Deposit for notes and letter of credit

Notes receivable that the company

has endorsed and not yet matured

Notes Receivable 1133932188.36

on the balance sheet date were not

derecognition at the end of period

Other equity instrument investments 1037735849.00 Pledged for loans

Fixed assets 89963211.93 Mortgage for fund borrowing

Intangible assets 36188476.93 Mortgage for fund borrowing

Total 4829816400.59

Ⅶ. Investment

1. General

□ Applicable √ Not applicable

2. Acquiring Significant Equity Investment in the Reporting Period

□ Applicable √ Not applicable

3. Undergoing Significant Non-Equity Investment in the Reporting Period

□ Applicable √ Not applicable

4. Investment of Financial Assets

(1) Investment in Securities

□ Applicable √ Not applicable

There was no investment in securities during the reporting period.

(2) Investment in Derivatives

□Applicable √ Not applicable

There was no investment in derivatives during the reporting period.

5. Use of Raised Funds

√ Applicable □ Not applicable

21Bengang Steel Plates Co. Ltd. Annual Report 2021

(1) Use of Raised Funds

√Applicable □ Not applicable

Unit: 10 thousand yuan

The total Cumulativ The

Cumulativ Amount of

amount of e purpose

Used The total e total The total funds

funds raised proportion and

Method of Total amount of used amount of amount of raised after

for change of total destination

Year raising amount of raised amount of funds funds being idle

of purpose raised of the

funds raised funds fund this funds raised for raised not for more

during the funds for raised

period raised change of used than two

reporting changes of funds not

purpose years

period purposes yet used

Private

placement 39657999 6447399 3342063 62373695

2018 Deposit

to raise 88.19 2.52 034.97 3.22

funds

Issue of

67592000114772436106843148515

2020 convertibl Deposit

00418.83085.61914.39

e bonds

10724999121219869527473772252

Total -- 0 0 0.00% -- 0

988.19411.35120.58867.61

Description of the overall use of raised funds

1.Status of use of funds for investment projects with raised funds

For the actual use of the company's raised funds in 2021 please refer to the attached table for the use of the raised funds and the

commitment projects of the raised funds.

2.Status of changes in the implementation location and implementation method of the projects invested by raised funds

During the reporting period there is no situation of change the investment projects of raised funds or their implementation locations

and implementation methods.

3.Status of preliminary investment and replacement of raised funds for investment projects

(1) Status of preliminary investment and replacement of funds raised from non-public offering of stocksAt the 14th meeting of the 7th Board of Directors and the 10th meeting of the 7th Board of Supervisors of the Company “t About theuse of raised funds to replace pre-invested raised funds for investment projects “was reviewed and approved. Before the raised fundsarrive in the account in order to ensure the smooth implementation of the raised investment projects the company uses self-raised

funds for project construction. As of February 28 2018 the pre-invested amount of self-raised funds replaced by raised funds was

RMB 1822749211.07 including RMB 1484133089.39 for the cold-rolled high-strength steel reconstruction project and RMB

338616121.68 for the hot-dip galvanizing production line project of the third cold rolling plant.

During the period from March 1 2018 to February 28 2019 the company paid RMB 88296207.56 for the construction of projects

with self-raised funds of which RMB 86709830.40 was invested in the cold-rolled high-strength steel reconstruction project and

the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 1586377.16 yuan (not yet replaced from the

special account of raised funds). The company has transferred 86709830.40 yuan from the fundraising account to the general deposit

account in 2020.During the period from March 1 2019 to May 31 2021 the company paid RMB 62608242.01 for the construction of the project

with self-raised funds of which RMB 50391999.49 was invested in the cold-rolled high-strength steel reconstruction project and

the third cold-rolling plant was hot-dip galvanized. The zinc production line project is 12216242.52 yuan. The company has

transferred the above amount from the fundraising account to the general deposit account in 2021.

(2) Status of preliminary investment and replacement of funds raised from public issuance of convertible corporate bonds

After the 13th meeting of the 8th Board of Directors and the 11th meeting of the 8th Board of Supervisors of the Company the

"Proposal on Using Raised Funds to Replacing Pre-invested Raised Funds for Investment Projects and Self-raised Funds for which

Issuance Fees Have Been Paid" was reviewed and approved. The company used the raised funds to replace the self-raised funds

that had been invested in the investment projects with raised funds and had paid the issuance fees and the total replacement amount

was 366180860.17 yuan. There is no disguised change in the use of the raised funds in this replacement and it does not affect the

normal progress of the investment projects with the raised funds. The replacement time is less than 6 months from the time when

the raised funds arrive in the account which is in line with the relevant laws and regulations.Before the raised funds arrive in the account the company has used self-raised funds to pre-invest in the raised investment projects

according to the progress of the project. As of May 31 2020 the pre-invested amount of self-raised funds replaced by raised funds

22Bengang Steel Plates Co. Ltd. Annual Report 2021

was 365630860.17 yuan including 76278945.59 yuan for the No. 8 casting machine project of the steelmaking plant

119043290.09 yuan for the No. 5 blast furnace capacity replacement project in the ironmaking plant and special The steel electric

furnace upgrade and reconstruction project is 59948807.90 yuan the CCPP power generation project is 95098084.16 yuan and

the steel plant No. 4-6 converter environmental protection renovation project is 15261732.43 yuan. As of July 6 2020 the above-

mentioned issuance fee of RMB 55000.00 paid by the company's own funds will be replaced with the raised funds.During the period from March 1 2019 to May 31 2021 the company used self-raised funds to pay the raised funds to invest in the

project construction amount of RMB 1082356809.47. The No. 5 casting machine project is 55364729.08 yuan the No. 5 blast

furnace capacity replacement project in the iron plant is 628049033.12 yuan the special steel electric furnace upgrading project is

253298156.22 yuan the CCPP power generation project is 115353050.36 yuan and the No. 4-6 converter environmental protection

renovation project in the steel plant Item 30111840.69 yuan. The company has transferred the above amount from the fundraising

account to the general deposit account in 2021.

4. Status of temporary replenishment of working capital with idle raised funds

During the reporting period according to the construction progress of the company's raised funds investment projects and the use

plan of the raised funds part of the funds raised by the company's non-public offering was temporarily idle. In accordance with the

provisions of the "Administrative Measures for the Raised Funds of Listed Companies in Shenzhen Stock Exchange" and other

normative documents in line with the principle of following the principle of maximizing the interests of shareholders and on the

premise of ensuring the capital needs of the raised funds investment projects and the normal progress of the raised funds investment

projects in order to improve the use efficiency of raised funds will further reduce the company's financial costs reduce financial

expenditures and protect the interests of investors. The company plans to use idle raised funds to temporarily supplement working

capital. The use period shall not exceed 12 months from the date of deliberation and approval by the board of directors. Liquidity

will save the company financial expenses.

(1) Temporary replenishment of working capital with funds raised from non-public offering of stocks

1) In March 2018 the funds raised by the non-public offering of shares temporarily supplemented the working capital

In 2018 the company used 530000000.00 yuan of idle raised funds to temporarily supplement working capital and the period of

use shall not exceed 12 months from the date of approval by the board of directors (March 13 2018). As of March 11 2019 the

company has returned all the above-mentioned idle raised funds of RMB 530000000.00 used to temporarily supplement working

capital to the company's special account for raised funds.

2) In March 2019 the funds raised from the non-public offering of shares temporarily supplemented working capital

In 2019 the company used idle raised funds of RMB 742000000.00 to temporarily supplement working capital and the period of

use shall not exceed 12 months from the date of approval by the board of directors (March 21 2019). As of March 23 2020 the

company has returned all the above-mentioned idle raised funds of RMB 742000000.00 used to temporarily supplement working

capital to the company's special account for raised funds.

3) In March 2020 the funds raised by the non-public offering of stocks temporarily supplement the working capital

The company used idle raised funds of RMB666000000.00 (RMB370000000.00 for the cold-rolled high-strength steel

reconstruction project and RMB296000000.00 for the hot-dip galvanizing production line project of the third cold rolling plant) to

temporarily supplement the working capital. It was reviewed and approved at the ninth meeting and the eighth meeting of the eighth

supervisory committee. The independent directors of the company issued a clear agreement and the replenishment of working capital

should not exceed 12 months.The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working

capital and issued "Guotai Junan Securities Co. Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to

Temporarily Supplement Working Capital".As of July 27 2020 the company has returned all the above-mentioned idle raised funds of RMB 666000000.00 used to temporarily

supplement working capital to the company's special account for raised funds.

4) In July 2020 the funds raised by the non-public offering of stocks temporarily supplement the working capital

The company used idle raised funds of 666000000.00 yuan (370000000.00 yuan for the cold-rolled high-strength steel renovation

project and 296000000.00 yuan for the hot-dip galvanizing production line project of the third cold rolling plant) to temporarily

supplement the working capital. The fourth meeting and the 12th meeting of the 8th Supervisory Committee have reviewed and

approved and the independent directors of the company have issued a clear agreement and the time for replenishing working capital

should not exceed 12 months.The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working

capital and issued "Guotai Junan Securities Co. Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to

Temporarily Supplement Working Capital".As of July 27 2021 the company has returned all the above-mentioned idle raised funds of RMB 666000000.00 used to temporarily

supplement working capital to the company's special account for raised funds.

(5) In July 2021 the funds raised from the non-public offering of stocks will temporarily supplement working capital

The company used idle raised funds of 604000000.00 yuan (320000000.00 yuan for the cold-rolled high-strength steel

reconstruction project and 284000000.00 yuan for the hot-dip galvanizing production line project of the third cold rolling plant) to

23Bengang Steel Plates Co. Ltd. Annual Report 2021

temporarily supplement the working capital. The 19th meeting and the 17th meeting of the 8th Supervisory Committee reviewed and

approved and the independent directors of the company have expressed their clear consent and the replenishment of working capital

shall not exceed 12 months.The sponsor of the company's non-public offering agreed to the company's use of idle raised funds to temporarily supplement working

capital and issued "Guotai Junan Securities Co. Ltd.'s Verification Opinions on the Company's Use of Idle Raised Funds to

Temporarily Supplement Working Capital".As of December 31 2021 the company used the idle funds raised from non-public issuance of stocks to temporarily supplement the

balance of working capital of RMB 604000000.00.

2. Temporary replenishment of working capital with funds raised from public issuance of convertible corporate bonds

(1) Public issuance of convertible corporate bonds in July 2020 to raise funds to temporarily supplement working capital

The company used idle raised funds of RMB4180000000.00 (RMB1010000000.00 yuan for the high-grade high magnetic

induction non-oriented silicon steel project RMB220000000.00 for the No. 8 casting machine project of the steelmaking plant

RMB800000000.00 for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant and

RMB1300000000.00 for special steel electric furnace upgrade and reconstruction project RMB700000000.00 for CCPP power

generation project RMB150000000.00 for steel plant No. 4-6 converter environmental protection renovation project) Temporarily

supplementing working capital matters was approved on the 14th meeting of the 8th Board of Directors of the company held on

July 28 2020 It was reviewed and approved at the 12th meeting of the 8th Supervisory Committee and the independent directors

of the company have issued a clear agreement and the replenishment of working capital shall not exceed 12 months.The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds to

temporarily supplement working capital and issued the "Guotai Junan Securities Co. Ltd.'s Verification Opinions on the Company's

Use of Idle Raised Funds to Temporarily Supplement Working Capital".As of July 27 2021 the company has returned all the above-mentioned idle raised funds of RMB 4180000000.00 used to

temporarily supplement working capital to the company's special account for raised funds.

(2) The public offering of convertible corporate bonds in July 2021 to raise funds to temporarily supplement working capital

The company used idle raised funds of 3030000000.00 yuan (1010000000.00 yuan for the high-grade high magnetic induction

non-oriented silicon steel project 150000000.00 yuan for the No. 8 casting machine project of the steelmaking plant

160000000.00 yuan for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant and special

steel electric furnace upgrade and reconstruction project. 1000000000.00 yuan CCPP power generation project 590000000.00

yuan steel plant No. 4-6 converter environmental protection renovation project 120000000.00 yuan) Temporary replenishment of

working capital The nineteenth meeting of the eighth board of directors of the company held on July 28 2021 It was reviewed and

approved at the 17th meeting of the 8th Supervisory Committee and the independent directors of the company have issued a clear

agreement and the time for replenishing working capital should not exceed 12 months.The sponsor of the company's public offering of convertible corporate bonds agreed that the company will use idle raised funds to

temporarily supplement working capital and issued the "Guotai Junan Securities Co. Ltd.'s Verification Opinions on the Company's

Use of Idle Raised Funds to Temporarily Supplement Working Capital".As of December 31 2021 the company used the idle funds raised from the public issuance of convertible corporate bonds to

temporarily supplement the balance of working capital of RMB 3030000000.00.

5. Cash management with idle raised funds

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

6. Use of surplus raised funds

The Company does not use the surplus funds of raised fund investment projects for other raised fund investment projects or non-

raised fund investment projects.

7. Use of over-raised funds

The company does not use over-raised funds.

8. Purpose and whereabouts of unused raised funds

As of December 31 2021 in addition to the above-mentioned "(3) Preliminary investment and replacement of raised funds

investment projects" "(4) Temporary replenishment of working capital with idle raised funds" the company has raised funds. In

addition to replacing and temporarily supplementing working capital with idle raised funds the remaining raised funds are

temporarily deposited in a special account for raised funds.

9. Other information on the use of raised funds

There was no other situations about the use of raised funds of the company.

24Bengang Steel Plates Co. Ltd. Annual Report 2021

(2) Fundraising commitments

√Applicable □ Not applicable

Whether Total Cumulativ Has the

Amount Investment Benefits

the item committe e Item Whether project

Adjusted invested progress realized

Commitment to has been d investment reaches the feasibilit

total during by the end during

investment projects and changed investme amount by scheduled expected y

investme the of the the

over-raised funds (includin nt of the end of availability benefit is changed

nt (1) reporting period (3) reporting

g some raised the period date achieved significa

period = (2)/ (1) period

changes) funds (2) ntly

Commitment to Investment Projects

Cold-rolled high-

December

strength steel No 226580 226580 5225.78 192692.07 85.04% 55318.42 No No

312017

renovation project

Hot-dip galvanizing

production line project December

No 70000 70000 1221.62 41514.24 59.31% 18241.1 Yes No

of the third cold rolling 31 2018

plant

Not Not

Repay bank loan No 100000 100000 0 100000 No

applicable applicable

High grade high

magnetic induction

Not

non-oriented silicon No 101620 101620 18 141 0.14% No

applicable

steel engineering

project

Steel Plant No. 8

October 31

Casting Machine No 33500 33500 6483.67 16348.11 48.80% 55967.04 Yes No

2020

Project

No. 5 blast furnace

November

capacity replacement No 96000 96000 63370.81 76693.55 79.89% 52879.53 Yes No

302020

project in ironworks

Special Steel Electric

Not

Furnace Upgrade and No 141600 141600 30018.62 41721.96 29.46% No

applicable

Reconstruction Project

CCPP power Not

No 83300 83300 11870.16 21440.31 25.74% No

generation project applicable

Environmental

protection renovation

December Not

project of converter No 19900 19900 3011.18 4723.48 23.74% No

31 2020 applicable

No. 4-6 in steelmaking

plant

Not

Repay bank loan No 200000 200000 0 200000 100.00% No

applicable

Subtotal of Committed 121219.8 182406.0

--10725001072500695274.72--------

Investment Projects 4 9

Over-raised funds are invested in

Not

None No

applicable

121219.8182406.0

Total -- 1072500 1072500 695274.72 -- -- -- --

Situations and reasons The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project

for not reaching the and the hot-dip galvanizing production line project of the third cold rolling plant have basically reached their

planned progress or production capacity. During the reporting period other projects did not meet the planned progress or expected

expected benefits (by income.specific projects)

Status of description of material changes in project feasibility None

Not applicable

Status of amount purpose and progress of use of over-raised funds

25Bengang Steel Plates Co. Ltd. Annual Report 2021

Not applicable

Status of changes in Implementation Locations of Raised Funds

Investment Projects

Not applicable

A Status of adjustment of the Implementation Method of Raised

Funds for Investment Projects

Status of preliminary investment and replacement of raised funds for Applicable

investment projects For details please refer to the special report III. (3)

Status of temporary replenishment of working capital with idle Applicable

raised funds For details please refer to the special report III. (4)

Applicable

Reasons and amount for the balance of raised funds in project

implementation There was no balance of raised funds for project implementation

this year.Use and whereabouts of unused raised funds For details please refer to the special report III. (8)

Problems or other situations in the use and disclosure of raised funds There is no problem or otherwise

(3) The situation for raised funds change project

□ Applicable √ Not applicable

During the reporting period the company did not have any changes in the fundraising project.Ⅷ. Significant Assets and Equity Sold in Reporting Period

1. Significant Assets Sold

□ Applicable √ Not applicable

There was no significant asset sold during the reporting period.

2. Substantial Equity Sold

□ Applicable √ Not applicable

Ⅸ. Analysis on Main Subsidiaries and Share Participating Companies

√ Applicable □ Not applicable

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

Unit: Yuan

Company Main Registered Operating Operating

Company Name Total assets Net assets Net Profit

type business capital income profit

Bengang

Processing

Puxiang Cool 4104855060 2167667196 1152919371 296055419.5 143131193.3

Subsidiary and sales 1920000000

Rolling Steel .02 .95 5.01 9 9

of steel

Sheet Co. Ltd.Acquirement and disposal of subsidiaries during the reporting period

□ Applicable √ Not applicable

Illustration of main joint-stock companies

None

Ⅹ. Structure Entities controlled by the Company

□ Applicable √ Not applicable

26Bengang Steel Plates Co. Ltd. Annual Report 2021

XI. Prospect for Future Development of the Company

(1) The development trend of the industry and the market competition pattern the company faces

The year 2022 is a crucial year for the country to implement the "14th Five-Year Plan" and it is also a crucial year