Bengang Steel Plates Co. Ltd.Semi-Annual Report 2021

August 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.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) hereby

confirm 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 a

substantial commitment of the company to investors. Investors are advised to pay attention to

investment risks. This report is prepared in Chinese and English respectively. In the event of

discrepancies 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 refer

to the content of Section 3-10 "Risks Faced by the Company and Countermeasures". "China Securities

Journal" "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 of

the 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 3885060605 a cash dividend of RMB 5 (tax included) will be distributed to all

shareholders for every 10 shares and 0 shares of bonus shares (tax included) will be distributed. There

is no conversion of reserves into share capital.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 ........................... 17

V. Environment and Social Responsibilities.......... 18

VI. Important Events ............................... 22

VII. Status of Share Capital Changes and Sharehold.. 54

VIII. Status of Preferred Shares ................... 54

IX. Status of Bonds ................................ 55

X. Financial Report ................................ 58

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

Terms to be defined Refers to Content of Definition

Bengang Bancai Bengang Steel the

Company 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-asset Refers to Liaoning State-owned Asset Supervisory and Administration Management Committee

SSE Refers to Shenzhen Stock Exchange

Bengang Posco Refers to Bengang Posco Cold-rolled Sheet Co. Ltd.Ⅱ. Company Profile and Main Financial Index

I. Company Information

Stock abbreviation Bengang Bancai Bengangban B Stock Code 000761、200761Stock exchange for listing Shenzhen Stock Exchange

Company name in Chinese 本钢板材股份有限公司

Abbreviation of Company

name in Chinese 本钢板材

Company name in English

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

name in English (If any) BSP

Legal representative Gao Lie

II. Contact Information

Secretary of the Board Representative of Stock Affairs

Name Gao Desheng Chen Liwen

Address No.16 Renmin Road Pingshan District

No.16 Renmin Road Pingshan

Benxi City Liaoning Province District Benxi City Liaoning Province

Tel 024-47827003 024-47828980

Fax 024-47827004 024-47827004

Email 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 publishing

semi-annual report and lodging address of semi-annual report of the Company have not changed during the reporting

period. Please refer to Annual Report 2020 for details.2. Place for information disclosure

Whether the information disclosure and place for consulting have changed

□ Applicable √ Not applicable

Name of newspaper selected by the Company for information release website appointed by CSRC for publishing

semi-annual report and lodging address of semi-annual report of the Company have not changed during the reporting

period. Please refer to Annual Report 2020 for details

IV. Summary of Accounting Data and Financial Index

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

□ Yes √ No

Unit: Yuan

This reporting period Same period in previous

Increase or decrease in this

year reporting period over the previous year

Operating income 38588128212.14 22184537260.05 73.94%

Net profit attributable to the shareholders

of the listed company 2208798167.91 254644204.33 767.41%

Net profit attributable to the shareholders

of listed company after deducting non- 2199142563.30 239885472.54 816.75%

recurring gain/loss

Net cash flows generated by operating

activities 1524916220.03 -151475707.08 1106.71%

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 At the end of previous Increase or decrease at the period reporting period end of this reporting period over the previous year

Total assets 64752065169.98 65007470749.20 -0.39%

Net assets attributable to shareholders of

the listed company 23246599850.13 21018296389.10 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

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-off part for which assets impairment -22272050.41

provision is made)

Details of government subsidies recorded into current

profits and loss(except such government subsidy closely

related to the company’s normal business operation， 32659483.34meeting the regulation of national policy and enjoyed

constantly in certain quota or quantity according to a

certain standard)

Other non-operating revenue and expenditure other than

above items 2555535.73

Less: Impact of income tax 3235742.17

Impact of non-controlling interests (after tax) 51621.88

Total 9655604.61 --

Explanation for defining non-recurring gains and losses items according to the "Public Offering of Securities Information

Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses" and reasons for defining non-recurring gains

and losses items listed in the document as recurring items.□ Applicable√ Not applicable

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

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

(1) 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 of

enterprises are booming efficiency is improved and new progress has been made in green development intelligent

manufacturing and technological innovation. However the current domestic and international environment is still

complicated 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 dynamic

adaptability of domestic steel product supply and demand. To avoid large fluctuations in steel prices and to prevent the

pressure and risks of steel costs caused by the large fluctuations in the prices of bulk raw materials and fuels; on the other

hand due to many factors such as seasonal cycles environmental constraints and resource bottlenecks the demand for

steel 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 an

important field for achieving green and low-carbon development. The goal of achieving carbon neutrality in the past 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 iron and steel industry. China's steel industry will face a series of changes in the

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

resource 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 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 Basically 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%

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 machinery

manufacturing energy and transportation building decoration and metal products and are exported to more than 60

countries and regions. During the reporting period the company's main business did not undergo major changes.3. Business model

Procurement model: The company's procurement model includes domestic procurement and foreign procurement.Domestic material procurement is carried out through centralized procurement unified bidding price comparison and

negotiation. The procurement of foreign materials is carried out through long-term cooperative procurement direct

procurement open and invited bidding price inquiry price competition negotiation and procurement and is mainly

represented 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 the

direct sales model. Large customers are sold directly by the company and other small and medium customers are sold

through various regional sales subsidiaries. The strong marketing network accumulated in international trade is exported

by its agency company and the agency fee of Benxi Iron and Steel International Trade Co. Ltd. is paid.4. Main performance drivers

The main performance drivers during the reporting period: During the reporting period the steel market prices remained

high as a whole the prices of raw materials such as iron ore and coke rose simultaneously and the pressure on

environmental protection continued to increase. The "5+1" work pattern and the "1+4" key tasks have steadily promoted

the three system reforms continued to promote the reform and innovation of the management mechanism and

implemented the "general factory system" to continuously improve management efficiency and benefits. Build a

technological innovation system create innovative platforms such as the "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. Continue to carry out in-depth benchmarking exchanges adhere to

the 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-depth

work 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 epidemic

prevention and control on the one hand and stabilizing and high output on the other hand achieving both epidemic

prevention and control and production and operation and achieving stable economic development. The output of some

varieties and the records of daily and monthly output have been continuously refreshed. A series of indicators have reached

the best level in history and the quality of enterprise development has been significantly improved. In the first half of

2021 the company’s main operating indicators have achieved steady growth including: pig iron of 5.1601 million tons

a year-on-year increase of 49300 tons an increase of 0.96%; crude steel 5565400 tons an increase of 433000 tons an

increase of 8.44%; hot-rolled plates 7.0511 million Tons a year-on-year increase of 1183200 tons an increase of 20.16%;

a cold-rolled sheet of 3134100 tons a year-on-year increase of 357000 tons an increase of 12.86%; a special steel

389000 tons an increase of 33400 tons an increase of 9.39%. Reviewing the work in the first half of the year it is

mainly 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 adjust

the structure of the blast furnace acidic material according to the changes in pig iron production and scientifically

matching pellets and lump on the basis of ensuring the blast furnace is running smoothly. The amount of ore will make

every effort to create conditions for the annual repair of the polo ball. Completed the allocation of plates from Beiying

Xinyu 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 strengthen

technical operations to stabilize furnace conditions and gradually increase the output of pig iron. Focus on organizing the

ironmaking plant to steadily advance the strengthening process of the new 5# blast furnace; do a good job of special

protection 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 been

revised and issued. Carry out safety work surveys to learn more about the current safety management status management

ideas and existing problems of each unit and better supervise guide and serve the safety management work of each

grass-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 Association

of Listed Companies and the "Board of Directors" magazine. It has been successfully held for fifteen times. An important

evaluation benchmark for the governance level of China's listed companies it is recognized by the industry as the first

award in the field of China's listed company board of directors. Bengang Steel Plates won this award which has promoted

the 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 full

coverage 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. The

transformation of “multi-materials”; breakthrough in the cold-rolled 1630 production line design capability and

successfully developed the domestic 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.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 14

units and form the first stage of guidance summary report. A total of 10 issues of Bengang Steel Plate Party History

Learning and Education Week briefings have been compiled and distributed. Organize the party committee of the

grassroots 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 the

founding of the party and commendation work within the party.II. Analysis on Core Competitiveness

The company adheres to the innovation-driven and "quality plus 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 the realization of high-quality green and intelligent

development 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 subject

to 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 awareness

and corporate profitability continued to improve. Various departments and units interact with each other focus on the

process 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 are continuously standardized and refined and the quality

efficiency and production scale are fully realized. The maximization of production promotes the entire production chain

towards 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 special

steel rolling mill transformation CCPP power generation project 220KVA substation project Taizi River Bridge

transformation 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 emission

transformation. At present the 1700mm production line is complete the CCPP power generation project and the 220KVA

substation project will be put into production one after another; the special steel electric furnace upgrade project 70% of

the 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 contract

volume of new products is 64000 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 the

strength level serialization. Through the "point-to-point" personalized and precise market development the "one materialmultiple 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 the

domestic 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.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 Public

Service Platform Project" of the Ministry of Industry and Information Technology with the project name "Green and Low

Carbon Public Service Platform for Key Raw Material Industries"; apply for Liaoning Provincial Department of Science

and Technology "2022 National Natural Science Foundation Regional Innovation and Development Joint Fund

Application Guidelines" 3 projects the project name "Multi-modal data mining and design of advanced steel material

intelligent manufacturing process" "New generation series of hot-formed steel anti-high temperature Key oxidation

technology and dynamic mechanics mechanism of integrated door knocker" "New technology and theoretical basis for

smelting of ultra-pure and high-homogeneous bearing steel"; applied for the "Special Fund for Central Leading Local

Scientific and Technological Development" project of the Science and Technology Department of Liaoning Province the

project name is "Liaoning Province" "Advanced high-strength automotive steel professional technology innovation center

capacity building" the project has been approved and it is expected to receive government funding of 300000 yuan. In

terms of scientific and technological achievements it has won 2 metallurgical science and technology awards. In terms

of intellectual property rights 84 patents were accepted by the National Bureau; 48 patents were authorized by the

National Bureau including 10 inventions and 38 utility models. Participated in the drafting of 1 national standard 1

industry 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 on

professional planning and research institutions has compiled environmental protection improvement plans and annual

implementation 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 environmental

protection 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 company

has become an "ecological steel factory" that develops harmoniously with the city. At present the two dust collectors for

the 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 control

and intelligent manufacturing of iron burning coking special steel process and raw material management energy

management etc. and promotes the improvement of the basic information platform Intelligent transformation in the

fields of manufacturing management intelligent equipment in cold rolling area and upgrading and transformation of

railway transportation dispatching and commanding information system. Keep up with the pace of enterprise development

in the era of big data and achieve high-quality development.III. Analysis on Main Business

Please 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

The increase of sales is

operating income 38588128212.14 22184537260.05 73.94% mainly caused by the increase of the selling

prices.The increase of Cost

of goods sold is

Operating cost 34592825792.72 20440246362.67 69.24% mainly due to the

increase of purchase

price of raw materials

Selling and

distribution expenses 59652669.72 642393218.78 -90.71%

General and

administrative 388678843.23 380828316.41 2.06%

expenses

Financial expenses 336355698.84 355036640.40 -5.26%

Income tax expenses 746977590.45 9237815.08 7986.09% The profit before tax is increased.Research and

development 869601179.00 697727326.00 24.63%

investment

Net cash flows from 1524916220.03 -151475707.08 -1106.71% Due to increase of operating activities profit before tax

Net cash flows from Due to the increase of

investing activities -2747214027.23 -706681059.07 288.75% investment

Net cash flows from

financing activities -3533315813.10 -1164534893.48 203.41%

Due to increase of

repayment of loans

Due to the repayment

Net increase in cash -4771963480.21 -2023822325.06 135.79% of loans and increase and cash equivalents of investment and

decrease of payables.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

Current period Previous period Change over Amount Proportion Amount Proportion previous period

Total operating

38588128212.14 100% 22184537260.05 100% 73.94%

income

By industries

Industry 38588128212.14 100.00% 22184537260.05 100.00% 73.94%

By products

Steel plate 35798649027.39 92.77% 20241192221.39 92.35% 76.86%

Steel Billet 310652.98 -100.00%

Others 2789479184.75 7.23% 1943034385.68 7.65% 43.56%

By region

Northeast 13764490687.62 35.67% 7575795193.58 29.57% 81.69%

North China 4282969762.68 11.10% 2351380897.12 11.37% 82.15%

East China 15059297569.71 39.03% 8731546106.40 37.82% 72.47%

Northwest 82611121.25 0.21% 50847000.22 0.22% 62.47%

Southwest 1475476779.53 3.82% 857102813.02 4.15% 72.15%

Central south 3923282291.35 10.17% 2617865249.71 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 Operating Operating costs Gross margin income Operating costs Gross margin income change change over last change over last over last year year year

By industries

Industry 38588128212. 34592825792.14 72 10.35% 73.94% 69.24% 2.49%

By products

Steel plate 35798649027. 32161592894.39 30 10.16% 76.86% 72.14% 2.46%

Steel Billet

Others 2789479184.7 2430950949.25 7 12.85% 43.56% 38.39% 3.26%

By regions

Northeast 13764490687. 12304736134.62 48 10.61% 81.69% 77.44% 2.15%

North China 4282969762.6 3816908998.18 8 10.88% 82.15% 77.50% 2.33%

East China 15059297569. 13492931637.71 18 10.40% 72.47% 67.50% 2.65%

Northwest 82611121.26 77065449.11 6.71% 62.47% 62.47% 0.00%

Southwest 1475476779.5 1379133959.63 1 6.53% 72.15% 72.15% 0.00%

Central south 3923282291.3 3522049614.15 6 10.23% 49.87% 43.67% 3.87%

Export 13764490687. 12304736134.62 48 10.61% 81.69% 77.44% 2.15%

Total 38588128212. 34592825792.14 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's

main 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: Yuan

Amount Proportion in total profit Explanation of cause Sustainable (yes or no)

Income on

investment 1835124.19 0.06%

Due to investment in

associate No

Assets disposal

gains 6629442.12 0.22%

Due to impairment of

inventory No

Non-operating 3273128.46 0.11% Due to disposal of non-income current assets No

Non-operating

expenses 22989643.14 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 At the end of the Same period

period in previous year

Proportio Proportio Proportion

Amount n in the Amount n in the change

Notes to significant changes

total total

assets assets

Cash at bank and

on hand 9510700502.67 14.69% 13126666915.26 20.19% -5.50%

Accounts 225510568.92 0.35% 245217182.66 0.38% -0.03%

receivable

Contract assets 0.00%

Inventories 8663345615.68 13.38% 9040065342.65 13.91% -0.53%

Long-term equity

investments 3024013.88 0.00% 2742064.73 0.00% 0.00%

Fixed assets 25137148377.89 38.82% 26284567956.44 40.43% -1.61%

Construction in

progress 2878339506.26 4.45% 1839933715.58 2.83% 1.62%

Right-of-use

assets 1510538778.93 2.33% 2.33%

Short-term loans 7495419000.00 11.58% 10067731000.00 15.49% -3.91%

Contract

liabilities 6182094798.39 9.55% 4458671819.90 6.86% 2.69%

Long-term loans 4309786941.97 6.66% 3502934427.65 5.39% 1.27%

Lease liabilities 1549600900.45 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 this reporting period Reason of restriction

Cash at bank and on hand 5053246387.76 Deposit for notes and L/C

Accounts receivable financing 22991847.39 Pledged for acceptance bills

Other equity instrument investment 1037735849.00 Pledged for loans

Fixed assets 94790118.09 Mortgaged for loans

Intangible assets 37116386.66 Mortgaged for loans

Total 6245880588.90

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 Company Main Registered

Name type business capital Total assets Net assets Turnover

Operating

profit Net Profit

Bengang Subsidiary Processing 62979247.98

Puxiang and sales of 1920000000 2866363984 2088899151 5691380556 83685739.Cool steel .00 .10 .71 .81 48

Rolling

Steel Sheet

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

□ Applicable √ Not applicable

Illustration of main joint-stock companies

None.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 to

rise 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 increase

the inventory through low-cost bulk material purchases and strive to reduce procurement costs; adjust the inventory

structure to improve inventory turnover; solidly carry out cost reduction and efficiency enhancement work and actively

promote the enterprise Competitiveness: Set research index projects for the weak links and bottlenecks that affect the

index level clarify the research goals measures time nodes and responsible persons and solidly advance the index

research.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 epidemic

has been continuing nationwide. With a series of strong epidemic prevention and control measures adopted by

governments at all levels domestic epidemic prevention and control has been effectively controlled and various economic

activities have gradually resumed but overseas epidemics are still continuing and facing greater uncertainty. The company

will effectively implement the government's requirements for epidemic prevention and control and strengthen support

for epidemic prevention and control so as to reduce the impact of the epidemic on the company's normal production and

operation activities.Response measures: Establish various strict and normalized epidemic prevention and control mechanisms strengthen the

publicity of all employees' health knowledge related to the epidemic and highlight the supervision and inspection of

internal 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 my

country to achieve emission reduction and carbon reduction. The industry faces more requirements for carbon emission

restriction 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. Pay

attention 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 the

company's various pollution sources and strengthen the environmental protection awareness of all employees. Accelerate

the construction progress of the identified environmental protection projects to ensure that the national environmental

protection requirements are met.4. Market risk

Risks: The competition in the steel industry is fierce and the industry concentration is accelerating driven by national

policies and the market. At the same time due to the continued overseas epidemic the export business is facing more

challenges and the company is facing fierce market competition risks.Response measures: increase the development of new products increase investment in technology research and

development optimize product structure and increase the market share of core products; comprehensively improve

management improve management energy efficiency reduce operating costs and increase profitability; improve the

marketing service system and continue to optimize The company’s marketing strategy to enhance brand influence.IV. Corporate Governance

I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholders

held during the Reporting Period

1. General meeting of shareholders during the reporting period

Meeting session Meeting type Investors’ participation ratio Date of convening Date of disclosure Disclosure index

The annual general Annual general

meeting of 2020 meeting 80.56% 27 May 2021 28 May 2021

Announcement No.:

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

Chairman of Supervisory

Cheng Bin Election 2021/5/27 Position adjustment

Committee

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 adjustment18

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) 0

Dividend per 10 shares (yuan) (tax included) 5

The base of the share capital of the distribution

plan (shares) 3885060605

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) 1942530302.5

Distributable profit (yuan) 4862062857.99

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 3885060605 shares at the end of June 2021 as the base

and distribute cash dividends to all shareholders for every 10 shares. 5 yuan (including tax) a total of 1942530302.5

yuan in cash dividends will be distributed. In this distribution the capital public reserve will not be converted into share

capital. After the company’s profit distribution plan is announced and before its implementation if the company’s share

capital changes adjustments will be made in accordance with the principle that the total amount of the distribution does

not change.IV. Implementation of the company’s equity incentive plan employee stock ownership plan or

other employee incentive measures

□ Applicable √ Not applicable

During the reporting period the company had no equity incentive plan employee stock ownership plan or other

employee incentive measures and their implementation.V. Environment and Social Responsibilities

I. Major environmental issues

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

environmental protection department

√ Yes □ No

Main The

pollutants Discharge number of The distribution Emission The Total Approved Surpass the Name and specific modes discharge of discharge concentra emission emission total emission

pollutants hatch hatch tion standard emission standard

Raw material

dumper transfer

station

receiving ore

tank pre-batch;

coke oven

adding coal

pushing coke

dry quenching;

ironmaking

tapping field

furnace roof Raw

fuel solvent materials

granulation ore 14-23; Raw

coke tank; Sintering materials

sintering head 8-40; 25;

machine Tail; Ironmaki Sintering

iron and steel ng 7-35; 30-50;

water Steelmaki Ironmaking

pretreatment ng 20-50; 25;

ferroalloy Special Steelmaking steel 7- 20-50; 439tons of

The total

Bengang quantity is

Steel Plates Particulate

Continuous feeding north-

and 183 south infusion 15; Special

Smoke and

Matter Coking steel 20; dust;

not

confirmed None Co. Ltd. intermittent station tundish 6702tons of

primary dust 5-50; Coking 10-Power 50; dust

by the

removal government

secondary dust generatio power

removal n 3-30; generation

refining dust Cold 5-30;

removal; special rolling; cold rolling

steel electric 6-18 ; 20-30; hot

furnace refining hot rolling 20-

furnace electric rolling 6- 30;

slag furnace; 15.power

generation

boiler

desulfurization

and

denitrification;

cold rolling acid

regeneration

Pickling

drawing

straightening

welding

machine

smoothing

annealing

roasting; hot

rolling heating

furnace.Sintering

head 12-

40;

Sintering head; Power Sintering

Power generatio head 200;

generation n boiler Power The total

Bengang Continuous boiler; Coke 5-70; generation quantity is

Steel Plates SO? and 64 oven chimney; Coke 35-200; 2570 tons not None

Co. Ltd. intermittent cold rolling oven 30- Coke oven confirmed

roasting 100; Cold 30-100; by the

annealing; hot rolling Cold rolling government

rolling furnace. 80-100; 100; Hot

Hot rolling 150.rolling

118-128.Sintering

head 100-

230;

Coke Sintering

Sintering head; oven head 300;

power 150- Coke oven The total

Bengang Continuous generation 268;Powe chimney quantity is

Steel Plates Oxides of and 57 boiler; cold r 150; Power not

Co. Ltd. nitrogen intermittent rolling roasting generatio generation

5278 tons confirmed None

annealing; hot n 30-140; 100-200; by the

rolling furnace. Cold Cold rolling government

furnace. rolling 300; Hot

69-172; rolling 300.Hot

rolling

105-124.Construction and operation of pollution prevention facilities

The company has a total of 183 sets of environmental pollution prevention and control facilities and each process is

equipped with dust removal desulfurization and denitrification and online facilities in accordance with pollutant emission

standards. Sintering machine head wet desulfurization coke oven chimney dry desulfurization and denitrification power

generation wet desulfurization and SCR denitrification etc. The dust collector for rough rolling and finishing rolling of

the 2300mm production line of the hot rolling mill is designed to be used in the production of stainless steel and the

environmental protection facilities are normally put into use.Environmental impact assessment of construction projects and other environmental protection administrative permits

Completed the environmental impact assessment registration and filing of 7 projects including the coke oven flue gas

desulfurization and denitrification transformation project of the Benxi Iron and Steel General Iron Plant; the company’s

220KV substation project environmental impact assessment report was submitted for approval. The environmental

protection acceptance work of 5 projects including the No. 7 coke oven desulfurization and denitration project and the

No. 5 blast furnace capacity replacement project of the Benxi Iron and Steel General Iron Plant was carried out.Emergency plan for environmental emergencies

The 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)" and

the "Emergency Plan for Environmental Incidents of Enterprises and Institutions" Management Measures (for Trial

Implementation) and other current laws and regulations to carry out environmental emergency management work. During

the 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 management

requires evaluation and filing. At the same time all units of the plate company formulate drill plans in accordance with

the plan and carry out corresponding plan drills.Environmental self-monitoring program

During the reporting period pollution source monitoring points: 317 flue gas 20 wastewater monitoring points 44 noise

points at the plant boundary 35 atmospheric dust reduction points and 94 unorganized monitoring points which are

divided into weekly and monthly according to the monitoring plan. Quarterly half-yearly and annual frequency

monitoring 210 monitoring data for atmospheric dust fall; completion of routine monitoring tasks for atmospheric

unorganized 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 1580 and the

monitoring stations reported a total of 5637 monitoring data forming monthly reports quarterly reports and separate

monitoring reports for various factories and mines.Administrative penalties due to environmental issues during the reporting period

Impact on the

Name of company Penalty reasons Violation Penalty results production and

Company

circumstances operation of listed rectification

companies 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 in

accordance 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 operation

of pollution prevention facilities environmental impact assessment of construction projects and other environmental

protection administrative permits emergency plans for environmental emergencies environmental self-monitoring plans

and other environmental information that should be disclosed.Other environmental related information

II. Social responsibility situation

During the reporting period the company implemented the spirit of the relevant documents in accordance with corporate

social responsibility while pursuing corporate economic benefits and protecting the interests of shareholders while

actively protecting the legal rights and interests of creditors and all employees treating suppliers customers and

consumers with integrity and actively engaged in Public welfare undertakings such as environmental protection and

community 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-Fulfillment

Commitments 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 Type of Contents Commitment Commitment party commitment time period Performance

Commitment of shares

reform

Commitment made in the

acquisition report or the

equity change report

Commitment made during

asset restructuring

According to the

relevant regulations of

the China Securities

Regulatory Commission

all directors and senior

management of the

Company have made the

following commitments

to the Company’s

fulfillment of the diluted

immediate return

measures: 1. I promise to

perform my duties

faithfully and diligently

and safeguard the

legitimate rights and

interests of the Company

and all shareholders . 2. I

promise not to deliver

benefits to other units or

individuals without

compensation or under

unfair conditions nor to

use other means to

damage the Company's

interests. 3. I promise to

restrict the position-

related consumption

Company behavior of company Commitment made during directors Other directors and senior initial public offering or Under normal senior commitment management personnel. May 22 2019 Long term refinancing fulfillment management 4. I promise not to use

the Company’s assets to

do investment and

consumption activities

that are not related to the

performance of my

duties. 5. Within the

scope of my

responsibilities and

authority I promise to

make every effort to

promote the company's

board of directors or the

remuneration system

established by the

remuneration and

appraisal committee to

be linked to the

implementation of the

company's

compensation measures

and vote in favor of the

relevant proposals

reviewed by the

company's board of

directors and general

meeting (If I have voting

rights). 6. If the company

intends to implement

equity incentives I

promise to within my

own responsibilities and

jurisdiction make every

effort to promote the

Company’s proposed

equity incentive exercise

conditions to be linked to

the Company’s

implementation of the

return measures and to

review the Company’s

board of directors and

shareholders’ general

meetings and vote in

favor of the relevant

proposals reviewed by

the company's board of

directors and general

meeting (If I have voting

rights). 7. If the future

issuance of this

commitment and the

implementation of the

Company’s public

issuance of convertible

corporate bonds are

completed if the China

Securities Regulatory

Commission makes

other new regulatory

provisions on the

measures for filling

returns and their

commitments and the

above commitments

cannot meet the

requirements of the

China Securities

Regulatory Commission

When other regulations

are stipulated a

commitment will be

issued in accordance

with the latest

regulations of the China

Securities Regulatory

Commission. The

company's controlling

shareholder Benxi Iron

and Steel (Group) Co.Ltd. promised not to

interfere with the

company's operation and

management activities

beyond its authority and

not to infringe on the

Company's interests.The sales companies of

Benxi Steel & Bengang International

Iron (Group) Trade Co.Ltd. and

Co. Ltd. and Other Bengang Steel plates in Under normal Bengang Commitment the same region July 242019 Long term fulfillment

Group Co. guarantee independent

Ltd. personnel independent

business independent

finance and independent

assets and are

guaranteed not to be in

the same registration

place or in the same

office; The filing of

foreign economic and

trade operators taking

into account the need to

gradually improve the

qualification

certification of raw

material suppliers

customs import and

export qualification

certification etc. In the

short term the actual

conditions and

capabilities for

independent import and

export business are still

lacking. In order to

ensure the normal

business development of

Benxi Steel Plate the

Group 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 independently

developed Import and

export business and

during this period

Bengang International

Trade will provide the

necessary support for the

establishment and

improvement of

Bengang's import and

export business. In

addition the sales

company under Bengang

International Trade is

only responsible for

selling the products of

Beiying Iron and Steel

Group and never sells

third-party steel

products. 3. The three

sales companies under

the Group Shanghai

Bengang Iron and Steel

Sales Co. Ltd. Shanghai

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 )

Shanghai Bengang Iron

& Steel Sales Co. Ltd.filed for bankruptcy in

2014 and the Shanghai

Changning District

People's Court issued an

announcement to

appoint Guohao Lawyer

(Shanghai) Office as the

bankruptcy

administrator. After

communication with the

bankruptcy

administrator it is

expected that the

bankruptcy and

liquidation of Shanghai

Bengang Iron and Steel

Sales Co. Ltd. will be

completed by the end of

2020. Upon completion

of the aforementioned

bankruptcy liquidation

procedures the relevant

procedures for

cancellation of Shanghai

Bengang Iron and Steel

Sales Co. Ltd. will be

handled immediately. (2)

Shanghai Bengang Iron

& Steel Materials Co.Ltd. is a holding

subsidiary of Shanghai

Bengang Iron & Steel

Sales Co. Ltd. and its

business license has been

revoked. As the

shareholder Shanghai

Bengang Iron & Steel

Sales Co. Ltd. is in the

process of bankruptcy

and liquidation

Shanghai Bengang Iron

& Steel Materials Co.Ltd. was unable to

convene a shareholders'

meeting to cancel the

company and establish a

liquidation group

according to law.Therefore the

cancellation has not yet

been completed. After

the aforementioned

bankruptcy and

liquidation procedures of

Shanghai Bengang Iron

& Steel Sales Co. Ltd.are completed the

relevant procedures for

cancellation of Shanghai

Bengang Iron & Steel

Materials Co. Ltd. will

be processed

immediately. (3)

Guangzhou Free Trade

Zone Bengang Sales Co.Ltd. has a contract

arrears dispute with

Jiedong County Trading

Corporation. According

to the Civil Judgment

((1999) Ben Jing No.

116) Guangzhou Free

Trade Zone Bengang

Sales Co. Ltd. applied 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 from

Guangzhou Free Trade

Zone Bengang Sales Co.Ltd. the Intermediate

People's Court of Benxi

City Liaoning Province

issued an execution

ruling again and 62

properties of Jiedong

County Trading

Corporation were re-

sealed. As of February 4

2022. Except for

participating in the

litigation activities for

the purpose of realizing

creditor's rights

Guangzhou Free Trade

Zone Bengang Sales Co.Ltd has not carried out

other business activities.After the litigation is

completed the relevant

procedures for the

cancellation of

Guangzhou Free Trade

Zone Bengang Sales Co.Ltd. will be handled

immediately.The Group's horizontal The company

competition with Benxi has completed

Steel Plates and the the acquisition

measures and of the

commitments to avoid 2300mm hot

inter-industry rolling mill

competition 1. During production

Benxi Steel & the period when the line and the

Iron (Group) Other Group is the controlling Commitment July 242019 Long term

industry

Co. Ltd. shareholder of Bengang competition

Steel Plates in addition problem has

to the matters listed in been

Article 1 of this completely

Commitment Letter the resolved.Group and other Other

enterprises controlled by commitments

the Group other than continue to be

Bengang Steel Plates no fulfilled

longer produce or

develop any products

that compete or may

compete with the

products produced by

Bengang Steel Plates and

its subsidiaries at home

and abroad and do not

directly or indirectly

operate any business that

competes with 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 businesses produced

by Bengang Steel Plates

and its subsidiaries. 2. If

Bengang Steel Plates and

its subsidiaries further

expand their business

scope the Group and

other enterprises

controlled by the Group

will not compete with the

expanded business of

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 may or may

compete with Bengang

Steel Plates and its

subsidiaries; (2) Will

compete The business is

incorporated into

Bengang Steel Plates and

its subsidiaries in a legal

and compliant manner;

(3) Competitive business

is transferred to

unrelated third parties. 3.If the Group has any

business opportunities to

engage in or participate

in the competition with

Bengang Steel Plates’

operations the Group

shall immediately notify

Bengang Steel Plates of

the above commercial

opportunities. Within a

reasonable period

specified in the notice

Bengang Steel Plates If

an affirmative answer is

made to take advantage

of the business

opportunity the Group

will endeavor to give the

business opportunity to

Bengang Steel Plates on

terms not less than that

provided to any

independent third party.4. If the above

commitments are

violated the Group is

willing to bear all the

responsibilities arising

therefrom and fully

compensate or

compensate for all direct

or indirect losses caused

to Bengang Steel Plates.5. This letter of

commitment continues

to be effective during the

period of the Group as

the controlling

shareholder of Bengang

Steel Plates and cannot

be changed or withdrawn

In order to regulate and

reduce the Company ’s

transactions with

controlling shareholders

and other related parties

and to protect the

interests of the Company

and small and medium

shareholders Benxi Iron

and Steel (Group) Co.Ltd. and Bengang Group

Co. Ltd. have issued the

following commitments:

"Benxi Iron and Steel

(Group) Co. Ltd. and

Bengang Group Co.Benxi Steel & Ltd. (hereinafter

Iron (Group) collectively referred to

Co. Ltd. and Other as the "Group") as a Bengang Commitment July 242019 Long term

Under normal

direct controlling fulfillment

Group Co. shareholder and an

Ltd. indirect controlling

shareholder of Bengang

Steel Plates Co. Ltd.(hereinafter referred to

as "Bengang Steel

Plates") in order to

protect the interests of

Bengang Steel Plates and

other shareholders of

Bengang Steel Plates

regulate The Group's

related transaction with

Bengang Steel Plates

hereby promises: 1. The

Group will fully respect

the independent legal

person status of Bengang

Steel Plates ensure the

independent operation

and independent

decision-making of

Bengang Steel Plates

ensure the independence

of Bengang Steel Plates’

business asset integrity

and personnel

Independence and

financial 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 or

misappropriate the funds

of Bengang Steel Plates

and its subsidiaries to

repay debts substitute

funds or otherwise nor

We ask Bengang Steel

Plates and its

subsidiaries to provide

illegal guarantees for the

Group and other

companies under its

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-

making authority

decision-making

procedures avoidance

system and other

contents stipulated in

Bengang's "Articles of

Association" and related

party transaction

decision-making system

give full play to the role

of the board of

supervisors and

independent directors

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

Group and other

companies under control

will not require or accept

Bengang Steel Sheets to

give preferential

treatment to third parties

in any fair market

transaction Conditions to

protect other

shareholders of Benxi

Steel Plates and the

interests of Benxi Steel

Plates from damage. 4.The Group guarantees

that the above

commitments are

continuously effective

and irrevocable as long

as Bengang Steel Plates

is listed on the domestic

stock exchange and the

Group acts as its direct

and indirect controlling

shareholder. If any

violation of the above

commitments occurs the

Group therefore bear all

the losses caused to

Bengang Steel Plates.Stock option incentive

commitment

Other commitments to the

company's minority

shareholders

Whether Commitment

fulfilled on time or not Yes

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

related parties

□ Applicable √ Not applicable

During the reporting period there was no non-operating capital occupation of the listed company by controlling

shareholders 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.V. Illustrations of the Board of Directors and Supervisory Committee on the Modified Audit

Report Issued by the CPAs

□ Applicable √ Not applicable

VI. Illustrations of the Board of Directors on the Modified Audit Report Issued by the CPAs

for 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 Arbitrations

Significant 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

Amount The

Pricing Price of approve Whethe Means d of AvailablType of Content of principle of related Proporti r exceed e

Related Relation related related of relate party on of

trading the paymen market Date of Index

parties ship party party related d transacti similar

limit of approve t of price of disclosu of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in party 10 limited transacti transacti

ure

ons ctions thousan thousan (Y/N) d) ons

ons

d)

Benxi Parent purchas Per Per Execute

Steel & compan

Repair 2021/4/

e of related Agree 14746 0.00% 40000 No per No

Iron y

expense 28

goods party ment agreeme

Amount The

Pricing Price of approved Whethe

Means Availabl

Type of Content of principle of related Proporti r exceed of e

Related Relation related related of relate party on of

trading

limit of the

paymen

t of market Date of

Index

parties ship party party related d transacti similar approve price of disclosu

of

transacti transactio party party ons (in transacti transactions (in d

related

party similar re

disclos

ons ns transacti transa 10 ons 10 limited transacti transacti

ure

ons ctions thousan thousan (Y/N) d) ons

ons

d)

(Group) and agreeme nt

Co. Ltd. services nt price

Benxi purchas Per 0

Steel & Parent e of Land related Per . Execute

Iron compan goods leasing party Agree 3261.1 per 2021/4/

(Group) y and fee agreeme ment 5

0 N o Yes

0 agreeme 28

Co. Ltd. services nt price % nt

Bengang

Cold- Under purchas Per

rolled the e of related Per Execute

Stainless same goods Products party Agree 63.05 0.00% 30 No per Yes 2021/4/

Steel controll and agreeme ment agreeme 28

Dandong er services nt price nt

Co. Ltd.Benxi

Steel & Under purchas Per

Iron the e of related Per

Execute

(Group) same goods Labor cost party Agree 388.19 0.00% 900000 No

per No 2021/4/

Mining controll and agreeme ment

agreeme 28

Co. Ltd. er services nt price

nt

Benxi Raw

Steel & Under purchas material Per Execute

Iron the e of related Per

(Group) same goods

and 333109 per 2021/4/

controll and suppleme

party Agree .30 0.10% N o agreeme Yes 28

Mining ntary agreeme ment

Co. Ltd. er services material nt price

nt

Benxi

Steel & Under purchas Per the e of related Per Execute Iron

(Group) same goods Freight party Agree 665.9 0.00% N o

per No 2021/4/

Mining controll and agreeme ment

agreeme 28

er services nt price nt Co. Ltd.Benxi

Steel &

Iron Under purchas

Raw

material Per Execute

(Group) the e of related Per same goods and party Agree 24576. 0.01% 40000 No per Yes 2021/4/Metallurg

y controll and

suppleme

ntary agreeme ment

01 agreeme 28

Residues er services material nt price

nt

Co. Ltd.Benxi

Steel &

Iron

(Group) Under purchas Per Execute

Steel & the e of Processin related Per per 2021/4/

Iron same goods g fee party Agree 5.08 0.00% 70 No agreeme No 28

Process controll and agreeme ment

and er services nt price

nt

Logistics

Co. Ltd.Benxi Under purchas Spare Per Per Execute

Steel & the e of parts related Agree

1491.7

1 0.00% 10000 No

2021/4/

per Yes 28

Iron same goods party ment agreeme

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d of

related related of relate party on of trading

r exceed e

Related Relation the

paymen market Date of Index

parties ship party party related d transacti similar

limit of approve t of price of disclosu of

transacti transactio party party ons (in transacti transacti d related ons (in party similar re

disclos

ons ns transacti transa 10 ons limited ure

ons ctions thousan 10 (Y/N) transacti

transacti

thousan ons ons d) d)

(Group) controll and agreeme nt

Machiner er services nt price

y

Manufact

ure Co.Ltd.Benxi

Steel &

Iron Under purchas Per

(Group) the e of Repair related Per

Execute

Machiner same goods services party Agree 292.32 0.00% N o

per 2021/4/

y controll and agreeme ment agreeme

No 28

Manufact er services nt price nt

ure Co.Ltd.Benxi

Steel & Under purchas Per

Iron the e of related Per Execute

(Group) same goods Spare per 2021/4/

Construct controll and parts

party Agree 198.76 0.00% 50000 No

agreeme ment agreeme

Yes 28

ion Co. er services nt price nt

Ltd.Benxi

Steel & Under purchas Per

Iron the e of related Per Execute

(Group) same goods Project party Agree 14057. 0.00% N o per No 2021/4/

Construct controll and fee agreeme ment 74 agreeme 28

ion Co. er services nt price nt

Ltd.Benxi

Steel & Under purchas Per

Iron the e of Execute

(Group) same goods Repair

related Per 4168.2 per 2021/4/

Construct controll and services

party Agree 0.00% N o No

agreeme ment 6 agreeme 28

ion Co. er services nt price nt

Ltd.Benxi

Steel & Under purchas Raw Per

Iron the e of material and related Per

Execute

(Group) same goods per 2021/4/

Construct controll and suppleme

party Agree 375.59 0.00% N o Yes

ntary agreeme ment

agreeme 28

ion Co. er services nt price nt

Ltd. material

Benxi

Steel & Under purchas Per

Iron the e of related Per Execute

(Group) same goods Freight party Agree 87.45 0.00% N o per 2021/4/

Construct controll and agreeme ment agreeme

No 28

ion Co. er services nt price nt

Ltd.Benxi Under purchas Spare Per Per Execute

Steel & the e of parts related Agree

2693.6

4 0.00% 30000 No

2021/4/

per Yes 28

Iron same goods party ment agreeme

Amount The

Pricing Price of approved Whethe

Means

of AvailablType of Content of principle of related Proporti r exceed e

Related Relation related related of relate party on of

trading the paymen market Date of Index

parties ship party party related d transacti similar

limit of approve t of price of disclosu of

transacti transactio party party ons (in transacti transactions (in d

related

party similar re

disclos

ons ns transacti transa 10 ons limited transacti ure

ons ctions thousan 10 (Y/N) transactithousan ons ons d) d)

(Group) controll and agreeme nt

Industrial er services nt price

Develop

ment Co.Ltd.Benxi

Steel &

Iron Under purchas

Raw Per

(Group) the e of

material

and related Per

Execute

Industrial same goods party Agree

1567.1 0.00% N o per Yes 2021/4/

Develop controll and

suppleme agreeme ment 3 agreeme 28

ment Co. er services

ntary

material nt price

nt

Ltd.Benxi

Steel &

Iron Under purchas Per

(Group) the e of related Per

Execute

Industrial same goods

Repair

services party Agree 18.9 0.00% N o

per No 2021/4/

Develop controll and agreeme ment

agreeme 28

er services nt price nt ment Co.Ltd.Benxi

Steel &

Iron Under purchas Per the e of related Per Execute (Group)

Industrial same goods Freight party Agree 191.68 0.00% N o

per No 2021/4/

Develop controll and agreeme ment

agreeme 28

nt

ment Co. er services nt price

Ltd.Benxi

Steel &

Iron Under purchas Per the e of related Per Execute (Group) Project

Industrial same goods fee party Agree 360.29 0.00% N o

per

agreeme No

2021/4/

controll and agreeme ment 28

Develop

ment Co. er services nt price

nt

Ltd.Benxi Raw

Steel & material

Iron Under purchas & Per

(Group) the e of suppleme related Per

Execute

per 2021/4/

Construct same goods ntary party Agree 62.83 0.00% 20000 No Yes

ion and controll and materials agreeme ment

agreeme 28

nt

Repairing er services & spare nt price

Co. Ltd. parts

Benxi

Steel &

Iron Under purchas Per

(Group) the e of

Execute

same goods Project

related Per

Construct party Agree 370.74 0.00% N o

per No 2021/4/

ion and controll and

fee agreeme ment agreeme 28

Repairing er services nt price

nt

Co. Ltd.Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d of

related related of relate party on of trading

r exceed e

the paymen market Date of Index Related Relation

parties ship party party related d transacti similar

limit of approve t of price of disclosu of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in limited party 10 transacti transacti

ure

ons ctions thousan thousan (Y/N) ons d) ons d)

Benxi

Steel &

Iron Under purchas Per the e of related Per Execute (Group)

Construct same goods

Repair

expense party Agree 255.59 0.00% N o

per

agreeme No

2021/4/

ion and controll and agreeme ment28

Repairing er services nt price

nt

Co. Ltd.Raw

Bengang Under purchasthe e of material

Per

related Per Execute Electronic

s and Gas same goods

and party Agree 7365.3 0.00% 20000 No per Yes 2021/4/

Co. Ltd. controll and

suppleme agreeme ment 7 agreeme 28

er services ntary material nt price

nt

Bengang Under purchas Per Execute

Electronic the e of Repair related Per

s and Gas same goods services party Agree 220.68 0.00% N o

per No 2021/4/

Co. Ltd. controll and agreeme ment

agreeme 28

er services nt price nt

Benxi

High-tech Under purchas Per

Drilling the e of related Per Execute

Tools same goods Spare parts party Agree 7.96 0.00% 50 No

per 2021/4/

Manufact controll and agreeme ment agreeme

Yes 28

ure Co. er services nt price nt

Ltd.Benxi

New Under purchas Per Execute

Career the e of related Per per 2021/4/

Develop same goods #N/A party Agree 3.01 0.00% 21500 No No

ment Co. controll and agreeme ment

agreeme 28

er services nt price nt Ltd.Benxi Raw

New Under purchas material Per the e of and related Per Execute Career same goods suppleme party Agree 113.4 0.00% N o per Yes 2021/4/Develop

ment Co. controll and ntary agreeme ment

agreeme 28

Ltd. er services material nt price

nt

and food

Liaoning Under purchas Per

Metallurg the e of related Per Execute

y same goods Spare party Agree 126.16 0.00% 1000 No per Yes 2021/4/

Technicia controll and parts agreeme ment agreeme 28

n College er services nt price nt

Bengang

Group

Internatio Under purchas

Raw

the e of material

Per

nal related Per

Execute

Economic same goods

and 846115 17500 per 2021/4/

controll and suppleme

party Agree .86 0.24% 00 No agreeme ment agreeme

Yes 28

and

Trading er services

ntary

material nt price

nt

Co. Ltd.Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d trading r exceed

of

paymen e Index

Related Relation related related of relate party on of the market Date of

parties ship party party related d transacti similar

limit of t of

transacti approve related price of disclosu

of

transacti transactio party party ons (in transacti d similar re disclos

ons ns transacti transa 10 ons ons (in 10 limited

party

transacti transacti

ure

ons ctions thousan thousan (Y/N) ons d) ons d)

Bengang

Group

Internatio Under purchas Per the e of related Per Execute nal Agency 3648.1

Economic same goods fee party Agree 0 0.00% N o

per 2021/4/

controll and agreeme ment agreeme

No 28

and er services nt price nt Trading

Co. Ltd.Bengang

Group

Internatio Under purchas Per

nal the e of Port related Per

Execute

Economic same goods surcharges party Agree

10544. 0.00% N o per Yes 2021/4/

and controll and agreeme ment

71 agreeme 28

Trading er services nt price

nt

Co. Ltd.Benxi

Steel &

Iron Under purchas Per

(Group) the e of Spare related Per

Execute

Informati same goods per 2021/4/

on and controll and parts

party Agree 93.14 0.00% 4000 No agreeme Yes agreeme ment 28

Automati er services nt price nt

c Tech

Co. Ltd.Benxi

Steel &

Iron Under purchas Per

(Group) the e of related Per Execute

Informati same goods Project party Agree 236.53 0.00% N o per No 2021/4/

on and controll and fee agreeme ment agreeme 28

Automati er services nt price nt

c Tech

Co. Ltd.Benxi

Steel &

Iron Under purchas Per

(Group) the e of Heating related Per

Execute

Thermal same goods costs party Agree 9.18 0.00% 200 No

per Yes 2021/4/

Power controll and agreeme ment agreeme 28

Develop er services nt price nt

ment Co.Ltd.Benxi

Steel &

Iron Under purchas Raw Per

(Group) the e of material Execute

Thermal same goods and

related Per

party Agree 2.02 0.00% N o per Yes 2021/4/

Power controll and suppleme agreeme 28

Develop er services ntary

agreeme ment

nt price nt

ment Co. material

Ltd.Benxi Under purchas Design Per Per 40.96 0.00% 200 No Execute No 2021/4/

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d r exceed of e

Related Relation related related of relate party on of

trading paymen

limit of the t of market Date of

Index

parties ship party party related d transacti similar approve price of disclosu

of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in limited party transacti ure

ons ctions thousan 10 transacti

d) thousan

(Y/N) ons ons

d)

Steel & the e of fees related Agree per 28

Iron same goods party ment agreeme

(Group) controll and agreeme nt

Designing er services nt price

Institute

Benxi Under purchas Raw Beiying the e of material

Per

related Per Execute Steel & same goods and party Agree 140619Iron suppleme .89 0.04% 350000 No

per

agreeme Yes

2021/4/

(Group) controll and ntary agreeme ment28

nt

Co. Ltd. er services material nt price

Benxi

Beiying Under purchas Per

Steel & the e of

Execute

same goods Energy &

related Per

party Agree 24890. 0.01% N o per 2021/4/Iron controll and Power agreeme ment 63 agreeme

Yes 28

(Group)

Co. Ltd. er services nt price

nt

Benxi

Beiying Under purchas Per the e of related Per Execute Steel &

Iron same goods Freight party Agree 226.54 0.00% N o

per

agreeme No

2021/4/28

(Group) controll and agreeme ment

Co. Ltd. er services nt price

nt

Benxi

Beiying Under purchas Per

Steel & the e of related Per

Execute

Iron same goods Labor cost party Agree

4041.8 0.00% N o per No 2021/4/

(Group) controll and agreeme ment

5 agreeme 28

Co. Ltd. er services nt price

nt

Benxi

Beiying Under purchas Per

Steel & the e of Spare related Per

Execute

1154.8 per 2021/4/

Iron same goods party Agree 0.00% N o Yes

(Group) controll and

parts agreeme ment 3 agreeme 28

Co. Ltd. er services nt price

nt

Liaoning

Hengtong

Metallurg Under purchas Raw Per ical the e of material related Per

Execute

Equipmen same goods and spare party Agree

3481.5 0.00% 10000 No per Yes 2021/4/

t controll and parts agreeme ment

3 agreeme 28

Manufact er services nt price nt

ure Co.Ltd.Liaoning

Hengtong

Metallurg Under purchas Per

ical the e of Execute

Equipmen same goods Repair

related Per per 2021/4/

t controll and services

party Agree 66.93 0.00% N o No

agreeme ment agreeme 28

Manufact er services nt price nt

ure Co.Ltd.Amount The

Pricing Price of approve Whethe Means d of AvailablType of Content of principle of related Proporti r exceed

related related of relate party on of trading the paymen

e Index

Related Relation market Date of

parties ship party party related d transacti similar

limit of approve t of price of disclosu of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in 10 limited

party ure

ons ctions thousan (Y/N) transacti

transacti

d) thousan ons

ons

d)

Liaoning

Hengtai Under purchas Per

Heavy the e of

Raw Execute

same goods material

related Per

party Agree 70.79 0.00% 1000 No per 2021/4/Machiner and spare agreeme Yes 28

y Co. controll and agreeme ment

Ltd. er services

parts nt price nt

Liaoning

Hengtai Under purchas Per

Heavy the e of related Per

Execute

same goods Repair party Agree 425.44 0.00% N o per 2021/4/Machiner controll and services agreeme ment agreeme

No 28

y Co. nt

Ltd. er services nt price

purchas Per

Bengang acutal e of related Per Execute

Group controll goods Labor cost party Agree 8793.3 0.00% 20000 No per No 2021/4/

Co. Ltd. er and agreeme ment 4 agreeme 28

services nt price nt

purchas Per

Bengang acutal e of related Per Execute

Group controll goods House party Agree 37.61 0.00% N o per Yes 2021/4/

Co. Ltd. er and rental fee agreeme ment agreeme 28

services nt price nt

Sale of

Bengang Under goods Per Execute

Electronic the and Energy & related Per per 2021/4/

s and Gas same controll renderin Power

party Agree 39.46 0.00% 100 No

agreeme ment agreeme

Yes 28

Co. Ltd. er g of nt services nt price

Raw

Benxi Under Sale of material Beiying Per

Steel & the

goods &

and suppleme related Per

Execute

same 166327 per 2021/4/Iron controll renderin ntary

party Agree .67 0.04% 240000 No agreeme Yes 28

(Group) er g of materials

agreeme ment nt

Co. Ltd. services & spare nt price

parts

Benxi

Beiying Under

Sale of Per

Steel & the

goods related Per Execute and

Iron same renderin Products party Agree

1150.4 0.00% N o per Yes 2021/4/

(Group) controll g of agreeme ment

9 agreeme 28

nt

Co. Ltd. er services nt price

Benxi Sale of

Beiying Under the goods

Per Execute

Steel & same and Energy &

related Per 6461.2 per 2021/4/

Iron controll renderin Power

party Agree 3 0.00% N o agreeme ment agreeme

Yes 28

(Group) g of nt

Co. Ltd. er services nt price

Benxi Under Sale of Per Execute Steel & the goods Energy &

Per per 2021/4/

Iron same and

related

Power Agree 0.94 0.00% N o Yes

(Group) renderin party ment

agreeme 28

Real- controll g of agreeme

nt

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d of

related related of relate party on of trading

r exceed paymen e

Related Relation limit of the t of market Date of

Index

parties ship party party related d transacti similar approve price of disclosu

of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in limited party transacti ure

ons ctions thousan 10 (Y/N) transacti ons

d) thousan ons d)

estate er services nt price

Develop

ment Co.Ltd.Benxi

Steel &

Iron Sale of

(Group) Under goods Per Execute

Steel & the related Per

Iron same

and Energy &

renderin Power party Agree 0.46 0.00% 30 No

per Yes 2021/4/

Process controll

agreeme 28

er g of

agreeme ment

and services nt price

nt

Logistics

Co. Ltd.Benxi

Steel &

Iron Under Sale of Per

(Group) the goods and related Per

Execute

Machiner same renderin Products party Agree 445.96 0.00% 5000 No

per 2021/4/

y controll agreeme ment agreeme

Yes 28

Manufact er g of services nt price

nt

ure Co.Ltd.Benxi

Steel &

Iron Under Sale of Per

(Group) the goods related Per Execute

Machiner same and Energy & party Agree 1086.2 0.00% N o per Yes 2021/4/

y controll renderin Power

g of agreeme ment

0 agreeme 28

Manufact er nt price nt

ure Co. services

Ltd.Benxi

Steel & Raw

Iron Under Sale of material Per

(Group) the goods & Execute

Machiner same and suppleme

related Per

renderin ntary party Agree 16.41 0.00% N o

per Yes 2021/4/

y controll g of materials agreeme ment

agreeme 28

Manufact er nt price nt

ure Co. services & spare

Ltd. parts

Benxi

Steel & Under Sale of Per

Iron the goods related Per Execute

(Group) same and Energy & renderin Power party Agree 377.58 0.00% 8000 No

per Yes 2021/4/

Construct controll g of agreeme ment

agreeme 28

ion Co. er nt

Ltd. services

nt price

Benxi Under Sale of Raw Per Steel & the Execute

Iron goods

material related Per

same & party Agree 171.46 0.00% N o per 2021/4/

(Group) and controll suppleme agreeme ment agreeme

Yes 28

Construct renderiner g of ntary nt price

nt

ion Co. materials

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d of

related related of relate party on of trading

r exceed

the paymen

e

Related Relation market Date of

Index

parties ship party party related d transacti similar

limit of t of of

transacti transactio party party ons (in transacti transacti

approve

d related

price of disclosu

similar re disclos

ons ns transacti transa 10 ons ons (in limited party transacti ure

ons ctions thousan 10 transacti

d) thousan

(Y/N) ons ons

d)

Ltd. services & spare

parts

Benxi Sale of

Steel & Under goods Per

Iron the and Energy & related Per

Execute

33426. per 2021/4/

(Group) same renderin Power party Agree 0.01% 100000 No Yes

Mining controll g of agreeme ment

91 agreeme 28

Co. Ltd. er

nt

services nt price

Raw

Benxi Under Sale of material Steel & the goods &

Per Execute

Iron same and suppleme

related Per 5312.6 per 2021/4/

(Group) controll renderin ntary

party Agree 0.00% N o Yes

Mining agreeme ment

2 agreeme 28

Co. Ltd. er

g of materials nt

services & spare nt price

parts

Benxi Under Sale of Steel & the goods

Per Execute

Iron same and Freight

related Per

(Group) party Agree 339.29 0.00% N o

per No 2021/4/

Mining controll

renderin revenue

g of agreeme ment

agreeme 28

er nt price nt Co. Ltd. services

Benxi

Steel &

Iron Under Sale of Per

(Group) the goods related Per Execute

Thermal same and Energy & renderin Power party Agree

3649.4

8 0.00% 5000 No

per 2021/4/

Power controll agreeme ment agreeme

Yes 28

Develop er g of nt price nt

ment Co. services

Ltd.Benxi

Steel & Raw

Iron Under Sale of material

(Group) the goods &

Per

related Per Execute

Thermal same and suppleme per 2021/4/

Power controll renderin ntary

party Agree 893.57 0.00% N o Yes

g of materials agreeme ment

agreeme 28

Develop er nt price nt

ment Co. services & spare

Ltd. parts

Benxi

Steel & Sale of

Iron Under goods Per Execute

(Group) the related Per same and Energy & party Agree 413.68 0.00% 3000 No per Industrial renderin Power Yes

2021/4/

Develop controll g of agreeme ment

agreeme 28

nt

ment Co. er services nt price

Ltd.Benxi Under Sale of Per

the Execute Steel & goods related Per

Iron same and Products party Agree 501.34 0.00% N o

per Yes 2021/4/

(Group) controll renderin agreeme ment

agreeme 28

er nt price nt Industrial g of

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d r exceed of e

Related Relation related related of relate party on of

trading paymen

limit of the t of market Date of

Index

parties ship party party related d transacti similar approve price of disclosu

of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in limited party transacti ure

ons ctions thousan 10 (Y/N) transacti

d) thousan ons

ons

d)

Develop services

ment Co.Ltd.Benxi Raw

Steel &

Iron Under

Sale of material

goods & Per Execute

(Group) the same and suppleme

related Per

Industrial renderin ntary party Agree 660.84 0.00% N o

per Yes 2021/4/

Develop controll g of materials agreeme ment

agreeme 28

ment Co. er services & spare nt price

nt

Ltd. parts

Benxi

Steel &

Iron Under Sale of goods Per (Group) the related Per Execute

Informati same and Energy & party Agree 5.23 0.00% 20 No per Yes 2021/4/

on and controll renderin Power g of agreeme ment

agreeme 28

Automati er nt price nt

c Tech services

Co. Ltd.Benxi

Steel &

Iron Under

Sale of Per

(Group) the

goods Execute

same and Energy &

related Per

Construct renderin Power party Agree 59.55 0.00% 500 No

per 2021/4/

controll agreeme ment agreeme

Yes 28

ion and g of

Repairing er services nt price

nt

Co. Ltd.Benxi

Steel & Sale of

Iron Under Per

(Group) the

goods Execute

same and Energy &

related Per

party Agree 103.98 0.00% 30000 No per Yes 2021/4/Metallurg renderin Power agreeme 28

y controll agreeme ment

Residues er

g of nt

services nt price

Co. Ltd.Benxi Raw

Steel &

Iron Under

Sale of material

the goods &

Per

(Group) and suppleme related Per

Execute

same party Agree 22587. 0.01% N o per Yes 2021/4/Metallurg

y controll

renderin ntary agreeme ment 81 agreeme 28

er g of materials nt Residues services & spare nt price

Co. Ltd. parts

Benxi Sale of Per

Steel & Parent goods Execute

Iron compan and Energy &

related Per

party Agree 263.06 0.00% 2000 No per Yes 2021/4/

(Group) y renderin Power g of agreeme ment

agreeme 28

Co. Ltd. nt price nt services

Benxi Parent Sale of Raw Per Per Execute

compan 2021/4/Steel & goods material related Agree 346.98 0.00% N o per Yes

Iron y28

and & party ment agreeme

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d trading r exceed

of

paymen e

Related Relation related related of relate party on of limit of the t of market Date of

Index

parties ship party party related d transacti similar approve price of disclosu

of

transacti transactio party party ons (in transacti transacti d related similar re disclos

ons ns transacti transa 10 ons ons (in 10 limited

party ure

ons ctions thousan (Y/N) transacti

transacti

d) thousan ons

ons

d)

(Group) renderin suppleme agreeme nt

Co. Ltd. g of ntary nt price

services materials

& spare

parts

Benxi

New Under

Sale of

goods Per the related Per Execute Career same and Energy & per 2021/4/Develop renderin Power party Agree 11.63 0.00% 50 No Yes

ment Co. controll g of agreeme ment

agreeme 28

er nt price nt Ltd. services

Dalian Under Sale of

Boluole the goods

Per

related Per Execute

Steel same and per 2021/4/

Tube Co. controll renderin

Products party Agree 655.6 0.00% 2000 No Yes

g of agreeme ment

agreeme 28

Ltd. er services nt price

nt

Benxi Sale of

Steel & Under Per

Iron the

goods Execute

same and Energy &

related Per

(Group) renderin Power party Agree N o

per Yes 2021/4/

General controll g of agreeme ment

agreeme 28

er nt price nt Hospital services

Benxi

Steel &

Iron Under Sale of Per

(Group) the goods related Per Execute

Zhengtai same and Energy & party Agree 1.31 0.00% N o per Yes 2021/4/

Construct controll renderin Power agreeme ment agreeme 28

ion er g of services nt price

nt

Materials

Co. Ltd.Liaoning

Hengtong Raw

Metallurg Under Sale of material

ical the goods &

Per Execute

Equipmen same and suppleme

related Per

renderin ntary party Agree 35.59 0.00% 2000 No

per Yes 2021/4/

t controll agreeme 28

Manufact er g of materials

agreeme ment nt

ure Co. services & spare

nt price

Ltd. parts

Bengang

Cold- Under Sale of

rolled the goods

Per

and related Per

Execute

Stainless same renderin Products party Agree 295.41 0.00% 3000 No

per

agreeme Yes

2021/4/

Steel controll agreeme ment 28

Dandong er g of services nt price

nt

Co. Ltd.Suzhou Under Sale of Per Execute

Bengang the goods related Per 38315. per 2021/4/

Industrial same and Products party Agree 0.01% 55000 No Yes

Co. Ltd. controll renderin agreeme ment

21 agreeme 28

er g of nt price

nt

Amount The

Pricing Price of approve Whethe Means Availabl

Type of Content of principle of related Proporti d of

related related of relate party on of trading

r exceed paymen e

Related Relation limit of the t of market Date of

Index

of

parties ship party party related d transacti similar transacti approve related price of disclosutransacti transactio party party ons (in transacti ons (in d party similar re

disclos

ons ns transacti transa 10 ons 10 limited transacti transacti

ure

ons ctions thousan (Y/N) ons

d) thousan ons d)

services

Sale of

Bengang Under goods Per Execute

Group the same and Energy &

related Per

party Agree 0.65 0.00% 2 No per Yes 2021/4/Finance

Co. Ltd. controll

renderin Power agreeme ment agreeme 28

er g of services nt price

nt

Sale of Per

Bengang acutal goods Execute

Group controll and Energy &

related Per per 2021/4/

Co. Ltd. er renderin Power

party Agree 61.46 0.00% 2000 No Yes

g of agreeme ment

agreeme 28

nt

services nt price

Raw

Sale of material Per

Bengang acutal goods & Execute

Group controll and suppleme

related Per

party Agree 240324 0.06% N o per Yes 2021/4/

Co. Ltd. er renderin ntary .13 agreeme 28 g of materials agreeme ment nt

services & spare nt price

parts

Liaoning

Hengtai Under

Sale of

goods Per Execute

Heavy the same and

related Per

Machiner renderin Products party Agree 17.43 0.00% 50 No

per Yes 2021/4/

y Co. controll agreeme ment

agreeme 28

g of nt

Ltd. er services nt price

Total -- -- 19797 -- 3725804.39 02 -- -- -- -- --

Details of any sales return of a large

amount N/A

Give the actual situation during the

reporting period where a forecast had

been made for the total amounts of N/A

routine related-party transactions，bytype to occur in the current period(if

any)

Reason for any significant difference

between the transaction price and the N/A

Market price for reference (if

applicable)

2. Related transactions relevant to asset acquisition or sold

□ Applicable √ Not applicable

There was no related transaction relevant to asset acquisition or sold during the reporting period.3. Related transactions relevant to joint investments

□ Applicable √ Not applicable

There was no related transaction relevant to joint investments during the reporting period.4. Credits and liabilities with related parties

□ Applicable √ Not applicable

There were no related credits and debts during the reporting period.5. Deals with related financial companies and financial companies controlled by the company

√ Applicable □ Not applicable

Deposit business

Maximum

daily deposit Beginning Transaction Ending balanceRelated party Relationship Deposit interest limit 10 rate range balance（10 （10 （10 （thousand thousand） thousand） thousand） ）

Bengang Group Under the same

Finance Co. Ltd. controller 1100000.00 3.0%-3.5% 1332199.78 8587031.95 857465.16

Loan Business

Beginning Transaction Ending balanceRelated party Relationship Loan limit（10 Loan interest balance（10 （10 （10thousand） rate range thousand） thousand） thousand）

Credit or other financial servicesRelated party Relationship Business type Amount（10 Actual amount（10thousand） thousand）

Bengang Group Under the same

Finance Co. Ltd. controller 250000.00 27000.00

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.(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

Transaction Unexpired Amount not

Impairment accrued for

Type Source of Fund amount balance recovered after the

financial product that

due date has not been recovered after the due date

Bank financing product Equity fund 50000 50000 0 0

Bank financing product Equity fund 10000 10000 0 0

Bank financing product Equity fund 10000 10000 0 0

Bank financing product Equity fund 20000 20000 0 0

Bank financing product Equity fund 10000 10000 0 0

Bank financing product Equity fund 50000 50000 0 0

Bank financing product Equity fund 10000 10000 0 0

Bank financing product Equity fund 100000 0 0 0

Bank financing product Equity fund 200000 0 0 0

Total 460000 160000 0 0

The specific situation of high-risk entrusted finance with a large single amount or low security poor liquidity and no

capital 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.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. that

it was informed that Ansteel Group Co. Ltd. is planning to reorganize the Bengang Group which may lead to changes in

the company's control rights. The reorganization is still in the planning stage and the approval of relevant departments is

still required after the plan is finalized. For details please refer to the "Indicative Announcement on the Strategic

Restructuring of the Indirect Controlling Shareholder Bengang Group Co. Ltd." published on the designated information

disclosure 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 the

People's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co. Ltd. will reorganize

Bengang Group Co. Ltd. and the Liaoning Provincial State-owned Assets Supervision and Administration Commission

will transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessary

procedures and there is still uncertainty about whether the relevant approval can be obtained and whether the transfer can

be implemented smoothly. For details please refer to the Announcement on the Approval of the State-owned Assets

Supervision and Administration Commission of the State Council and the People's Government of Liaoning Province on

the free transfer of 51% equity of Bengang Group the indirect controlling shareholder published on the designated

information 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 Government

of Liaoning Province indirect controlling shareholder of the company and with 80% of the Bengang Group’s share and

Anstel Group Co. Ltd. which is 100% owned by the State-owned Assets Supervision and Administration Commission

of the State Council signed the agreement: "Agreement on the Gratuitous Transfer of State-owned Equity of Bengang

Group Co. Ltd. between the State-owned Assets Supervision and Administration Commission of the People's

Government of Liaoning Province and Ansteel Group Co. Ltd.". According to the agreement the State-owned Assets

Supervision and Administration Commission of Liaoning Province will transfer its 51% equity in Bengang Group to

Ansteel Group for free. After the completion of this transfer Ansteel Group will become the controlling shareholder of

Bengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group Benxi Iron

and Steel (Group) Co. Ltd. and Ansteel Group Capital Holding Co. Ltd. The direct controlling shareholder of the

company remains unchanged still Benxi Iron & Steel (Group) Co. Ltd. and the actual controller of the company is

changed to the State-owned Assets Supervision and Administration Commission of the State Council. For details please

refer 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

VI. Status of Share Capital Changes and Shareholders

I. Share Capital Changes

1. Share capital changes

Unit: Share

Before the change Increase/decrease(+，-) After the ChangeCapitaliz

ation of

Percenta Issuing of Bonus Percenta

Quantity common Others Subtotal Quantity

ge new share shares ge

reserve

fund

I. Restricted Shares

2. State-own Legal-person

Shareholding

3. Other domestic

shareholdings

Including: Domestic legal

person holding

Domestic

person holding

II. Non-restricted Shares 3875371532 100.00% 9689073 9689073 3885060605 100.00%

1. Common shares in

3475371532 89.68% 9689073 9689073 3485060605 89.70%

RMB

2. Foreign shares in

400000000 10.32% 400000000 10.30%

domestic market

2. Foreign shares in

oversea market

4.Others

III. Total shares 3875371532 100.00% 9689073 9689073 3885060605 100.00%

Reason of share capital changes

√Applicable □Not applicable

During the reporting period the Company's publicly issued convertible corporate bonds were converted

into shares of 487432 shares and the company's total share capital increased by 9689073 shares.Approval of share capital changes

□ Applicable √ Not applicable

Status of registration process of transferred shares

□ Applicable √ Not applicable

Progress of Share Repurchase

□ Applicable √ Not applicable

Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding

□ Applicable √ Not applicable

Influences of share capital changes on financial indices such as basic earnings per share diluted earnings

per 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 of

Stock and Issue price Approved Termination

Issue Date for Disclosure Disclosure

other Issue date (interest quantity for of

quantity listing index Date

derivatives rate) trading transaction

securities

Stock

Convertible Bond Warrant bond and Corporate bond

Bengang

29th June 68000000 4th August 68000000 28th June

Convertible 100

2020 00 2020 00 2026

Bond

Other derivatives securities

III. Total Number of shareholders and shareholding

Unit: Shares

The total number of

Total number of

preferred shareholders

common shareholders 0

58435 voting rights restored at

at the end of the

the end of the reporting

reporting period

period (See Notes 8)

Shareholding of shareholders holding more than 5% or top 10 shareholders

Number of Changes in Number of pledged or

Name of the Nature of Holding Restricted Un-restricted

shares held at reporting frozen shares

shareholder shareholder Percentage shares held shares held

period-end period Status Number

Benxi Steel & Iron State-owned Pledged 1577545000

62.02% 2409628094 2409628094

(Group) Co. Ltd. legal person Frozen 108326179

CCB Principal Asset

Management – ICBC

– CR Trust – CR

Others 4.76% 184842883 184842883

Trust · Xing Sheng

No. 5 Collective Fund

Trust Plan

Bei Xin Rui Feng

Fund – China

Merchants Bank – Bei

Xin Rui Feng Fund Others 4.76% 184842883 184842883

Feng Qing No. 229

Asset Management

Plan

China Life AMP

Fund– ICBC – China

Life AMP – Hua Xin

Trust Targeted Others 4.76% 184842883 184842883

Additional Shares

Issuance No. 10 Asset

Management Plan

Liaoning Provincial

Transportation State-owned

3.82% 148528983 -1941900 148528983

Investment Group legal person

Co. Ltd.MORGAN STANLEY

Foreign legal

& CO. 0.37% 14366619 14366619 14366619

person

INTERNATIONAL

PLC

Huatai Securities Co. State-owned

0.30% 11541080 11541080 11541080

Ltd. legal person

CITIC Securities Co. State-owned

0.24% 9490396 9490396 9490396

Ltd. legal person

China Resources

Yuanta Fund-Huatai

Securities-China

Resources Yuanta

Others 0.23% 8990023 8990023 8990023

Fund Runhong

Prosperity Collective

Asset Management

Plan

Domestic

Lu Ruijun 0.21% 8000000 8000000 8000000

natural person

Strategy investors or general legal

person becomes top 10 shareholders due None

to rights issued (if any) (See Notes 3)

It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as

Notes to relationship or ‘action in

described by Rules of Information Disclosing Regarding Changing of Shareholding Status of

concert’ among the top 10 shareholders.Listed Companies existing among the above shareholders.Explanation of the above-mentioned

The above shareholders are not involved in the entrustment entrusted voting rights or abstention

shareholders' entrusted/entrusted voting

of voting rights.rights and waiver of voting rights

Special instructions for the existence of

special repurchase accounts among the Benxi Iron and Steel (Group) Co. Ltd. holds 467545000 shares of the company through pledge

top 10 shareholders (if any) (see Note repurchase.11)

Shareholding of top 10 unrestricted shareholders

Un-restricted shares held at Category of shares

Name of the shareholder

the end of the reporting period Category of shares Quantity

Benxi Steel & Iron (Group) Co. Ltd. 2409628094 Common shares in RMB 2409628094

CCB Principal Asset Management – ICBC – CR

Trust – CR Trust · Xing Sheng No. 5 Collective 184842883 Common shares in RMB 184842883

Fund Trust Plan

Bei Xin Rui Feng Fund – China Merchants

Bank – Bei Xin Rui Feng Fund Feng Qing No. 184842883 Common shares in RMB 184842883

229 Asset Management Plan

China Life AMP Fund– ICBC – China Life

184842883 Common shares in RMB 184842883

AMP – Hua Xin Trust Targeted Additional

Shares Issuance No. 10 Asset Management Plan

Liaoning Provincial Transportation Investment

148528983 Common shares in RMB 148528983

Group Co. Ltd.MORGAN STANLEY & CO.14366619 Common shares in RMB 14366619

INTERNATIONAL PLC

Huatai Securities Co. Ltd. 11541080 Common shares in RMB 11541080

CITIC Securities Co. Ltd. 9490396 Common shares in RMB 9490396

China Resources Yuanta Fund-Huatai

Securities-China Resources Yuanta Fund

8990023 Foreign shares in domestic exchange 8990023

Runhong Prosperity Collective Asset

Management Plan

Lu Ruijun 8000000 Common shares in RMB 8000000

Benxi Steel & Iron (Group) Co. Ltd. the holding shareholder has no relationship with

any of the other shareholders among the top 10 shareholders neither being regarded as

action-in-concert parties by the Information Disclosure Regulations for Change of

Notes to relationship or ‘action in concert’

Shareholding in PLC. The Company is not aware of any relationship among the other

among the top 10 non-restricted shareholders

shareholders neither being regarded as action-in-concert parties by the Information

and among the top 10 non-restricted

Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware

shareholders and top 10 shareholders

of any relationship among the top 10 shareholders neither being regarded as action-in-

concert parties by the Information Disclosure Regulations for Change of Shareholding in

PLC.China Resources Yuanta Fund-Huatai Securities-China Resources Yuanta Fund Runhong

Shareholders among the top 10 participating in Prosperity Collective Asset Management Plan holds 8990023 shares of the company

securities margin trading (if any) (see Note 4) through investor credit securities accounts; Lu Ruijun holds 8000000 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-back

agreement dealing in reporting period.IV. Change of controlling shareholder or actual controller

√Applicable □Not applicable

Number Number Number Number Number of Number of Number of

Status of

Name Position of shares of of shares of shares restricted restricted restricted

office

held at additional sold out held at stocks stocks stocks granted

the shares in the the end of granted at granted in at the end of

beginning held in current the period the the current the period

of the the period (shares) beginning period (shares)

period current (shares) of the (shares)

(shares) period period

(shares) (shares)

Chairman

Gao Lie of the Incumbent

board

Jiag Vice

Incumbent

Guangwei Chairman

Vice

Han Mei Incumbent

Chairman

Director

Lin Dong general Incumbent

manager

Wang

Director Incumbent

Donghui

Zhang Independe

Incumbent

Suxun nt director

Yuan Independe

Incumbent

Zhizhu nt director

Zhong Independe

Incumbent

Tianli nt director

Chairman

of the

Cheng Bin Incumbent

Supervisor

y Board

Li Xiaowei Supervisor Incumbent

Zhao

Supervisor Incumbent

Zhonghua

Zhang

Supervisor Incumbent

Yanlong

Zhao

Supervisor Incumbent

Xingtao

Deputy

Chen Xin General Incumbent

Manager

Deputy

Yang

General Incumbent

Xiaofang

Manager

Chief

Cong

Accountan Incumbent

Yajuan

t

Gao Board

Incumbent

Desheng secretary

Vice

Cao Aimin Departure

Chairman

Director

Shen

general Departure

Qiang

manager

Huang

Director Departure

Xinghua

Zhao Independe

Departure

Xinan nt director

Li Lin Supervisor Departure

Deputy

Bao

General Departure

Mingwei

Manager

Deputy

Wang

General Departure

Fengmin

Manager

Deputy

Huo Gang General Departure

Manager

合计 -- -- 0 0 0 0 0 0 0

V. Change of controlling shareholder or actual controller

Change of controlling shareholder during the reporting period

□ Applicable √ Not applicable

There was no change of holding shareholder in the report period.Change of actual controller during the reporting period

□ Applicable √ Not applicable

There was no change of substantial controller in the report period.VIII. Status of Preferred Shares

□ Applicable √ Not applicable

There were no preferred shares during the reporting period.IX. Status of Bonds

√ Applicable □ Not applicable

I. Enterprise bonds

□ Applicable √ Not applicable

During the reporting period the company did not have Enterprise bonds.II. Corporate bonds

□ Applicable √ Not applicable

During the reporting period the company did not have corporate bonds.III. Debt financing tools for non-financial companies

□ Applicable √ Not applicable

During the reporting period the company did not have non-financial corporate debt financing

instruments.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

Proportion Proportion

Cumulative Cumulative Amount of

Name of of converted of

Start date of Total issue Total issue conversion conversion shares not

Convertible shares to the unconverted

conversion quantity amount amount quantity(sha converted

Bond total issue amount to

(Yuan) res) (Yuan)

quantity the total

issue

amount

Bengang

4th Jan 68000000 48743200. 67512568

Convertible 68000000 487432 0.72% 99.28%

2021 00.00 00 00.00

Bond

3. The top ten holders of convertible bonds

Number of Percentage

convertible Amount of of

Nature of bonds held convertible bonds convertible

No. Convertible bond holders convertible bond at the end of held at the end of bonds held at

holders the reporting the reporting the end of

period period (yuan) the reporting

(sheets) period

State-owned legal

1 Benxi Iron and Steel (Group) Co. Ltd. 5097390 509739000.00 7.55%

person

The Hongkong and Shanghai Banking

2 Foreign legal person 3432943 343294300.00 5.08%

Corporation Limited

Shanghai Pudong Development Bank

3 Co. Ltd.-Yifangda Yuxiang Return Others 2646781 264678100.00 3.92%

Bond Securities Investment Fund

4 UBS AG Foreign legal person 2509838 250983800.00 3.72%

China Huaneng Group Corporation

5 Enterprise Annuity Plan-Industrial and Others 1226287 122628700.00 1.82%

Commercial Bank of China Co. Ltd.Basic Pension Insurance Fund 107

6 Others 1107844 110784400.00 1.64%

Portfolio

Agricultural Bank of China Co. Ltd.-

7 Wells Fargo Convertible Bond Others 1007060 100706000.00 1.49%

Securities Investment Fund

National Social Security Fund 210

8 Others 990795 99079500.00 1.47%

Combination

CITIC Securities Trust Fu Hualing

Fixed-income Pension Products-

9 Others 966630 96663000.00 1.43%

Industrial and Commercial Bank of

China Co. Ltd.E Fund-Minsheng Bank-Bank of

10 Others 888048 88804800.00 1.32%

Hangzhou Co. Ltd.4. Significant changes in the guarantor’s profitability asset status and credit status

□ Applicable √ Not applicable

5. At the end of the reporting period the company's liabilities changes in credit standing and cash

arrangements for debt repayment in future years

Not applicable

V. The loss in the scope of consolidated statements during the reporting period

exceeded 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 two

years as of the end of the reporting period

Unit: ten thousand yuan

Item Changes over ending

30 June 2021 31 December 2020

balance of last year

Current 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%

Changes over previous

Current period Previous period

period

Net profit after deducting

non-recurring gains and 2199142563.3 239885472.54 816.75%

losses

EBITDA total debt ratio 11.48% 4.41% 7.07%

Interest Interest Coverage

6.26 1.6 291.25%

ratio

Cash Interest Coverage ratio -1.88 0.68 -376.47%

EBITDA Interest Coverage

8.32 4.3 93.49%

ratio

Loan repayment rate 100.00% 100.00% 0.00%

Interest repayment rate 100.00% 100.00% 0.00%

X. Financial Report

I. Audit report

Whether the semi-annual report is audited

□ Yes √ No

The semi-annual report is not audited.II. Financial 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 9510700502.67 13126666915.26

Settlement provisions

Capital lent

Financial assets held for trading

Derivative financial assets

Notes receivable

Accounts receivable 225510568.92 245217182.66

Accounts receivable financing 5143627467.44 4189977871.92

Prepayments 2027008212.85 2108044777.65

Premium receivable

Reinsurance accounts receivable

Receivable deposit for reinsurance contract

Other receivables 160180391.22 142101351.27

Including: Interest receivables 51637650.49 33685359.01

Dividend receivables

Redemptory financial assets for sale

Inventories 8663345615.68 9040065342.65

Contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 7138313168.95 5523646836.01

Total current assets 32868685927.73 34375720277.42

Non-current assets

Loan and advances issued

Debt Investments

Other debt investments

Long-term receivables

Items 30 June 2021 31 December 2020

Long-term equity investments 3024013.88 2742064.73

Other equity instrument investments 1042024829.00 1042024829.00

Other non-current financial assets

Investment property

Fixed assets 25137148377.89 26284567956.44

Construction in progress 2878339506.26 1839933715.58

Productive biological assets

Oil and gas assets

Right-of-use assets 1510538778.93

Intangible assets 261648967.14 264932652.54

Development expenditure

Goodwill

Long-term deferred expenses

Deferred tax assets 199553629.68 201708932.84

Other non-current assets 851101139.47 995840320.65

Total non-current assets 31883379242.25 30631750471.78

Total assets 64752065169.98 65007470749.20

Liabilities and equities

Current Liabilities

Short-term loans 7495419000.00 10067731000.00

Loan from central bank

Loan from other banks

Financial liability held for trading

Derivative financial liabilities

Notes payable 6114692166.66 9814149348.42

Accounts payable 5505623541.96 5914228256.82

Advance from customers

Contract liabilities 6182094798.39 4458671819.90

Financial assets sold for repurchase

Deposits from customers and interbank

Receipt from vicariously traded securities

Receipt from vicariously underwriting securities

Employee benefits payable 33208964.92 25749485.25

Current tax liabilities 350870891.00 55302080.96

Other payables 712159087.35 709448301.92

Including：Interest payablesDividend payables 38753715.32

Handling charges and commission payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year 137878355.58 1308030361.43

Other current liabilities 803672323.79 579627336.58

Total current liabilities 27335619129.65 32932937991.28

Non-current liabilities

Provision for insurance contract

Long-term loans 4309786941.97 3502934427.65

Bonds payable 5732396546.29 5752229339.52

Including: Preferred stock

Perpetual bond

Lease liabilities 1549600900.45

Long-term payables 1907492831.36 1114232362.74

Long-term employee benefits payable

Estimated liabilities

Deferred income 123466469.89 154451833.23

Items 30 June 2021 31 December 2020

Deferred tax liabilities

Other non-current liabilities

Total non-current liabilities 13622743689.96 10523847963.14

Total liabilities 40958362819.61 43456785954.42

Shareholders' equity:

Share capital 3885060605.00 3875371532.00

Other equity instruments 1138070880.42 1146290662.42

Including: Preferred stock

Perpetual bond

Capital reserves 12381969365.52 12343209847.29

Less: treasury shares

Other comprehensive income

Special reserves 18330611.35 300412.14

Surplus reserves 961105529.85 961105529.85

General risk reserve

Undistributed profits 4862062857.99 2692018405.40

Total equity attributable to equity holders of the parent

company 23246599850.13 21018296389.10

Non-controlling interests 547102500.24 532388405.68

Total shareholder's equity 23793702350.37 21550684794.78

Total of liabilities and owners’ equity 64752065169.98 65007470749.20

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 9010915677.50 11808618300.87

Financial assets held for trading

Derivative financial assets

Notes receivable

Accounts receivable 248701019.49 289865462.20

Accounts receivable financing 4967026780.38 4143431412.08

Prepayments 2062013838.67 2117204935.75

Other receivables 241659108.07 228180190.02

Including: Interest receivables 46266951.12 23028942.73

Dividend receivables

Inventories 6254749916.24 7420499172.20

Contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 7000000000.00 5437282088.94

Total current assets 29785066340.35 31445081562.06

Non-current assets

Debt investments

Other debt investments

Items 30 June 2021 31 December 2020

Long-term receivables

Long-term equity investments 2016281902.16 2016281902.16

Other equity instrument investments 1041624829.00 1041624829.00

Other non-current financial assets

Investment property

Fixed assets 23745957631.09 24755665765.30

Construction in progress 2834878491.65 1798639941.58

Productive biological assets

Oil and gas assets

Right-of-use assets 1510538778.93

Intangible assets 140510834.76 142163903.40

Development expenditure

Goodwill

Long-term deferred expenses

Deferred tax assets 96325403.07 98480706.23

Other non-current assets 851101139.47 988475426.53

Total non-current assets 32237219010.13 30841332474.20

Total assets 62022285350.48 62286414036.26

Current liabilities

Short-term loans 7195419000.00 9107731000.00

Financial liability held for trading

Derivative financial liabilities

Notes payable 5816080763.35 8348607405.21

Accounts payable 5528443992.45 6280468684.34

Advance from customers

Contract liabilities 5829654787.35 5324357761.83

Employee benefits payable 32760446.39 23981010.53

Current tax liabilities 332417391.02 42514891.31

Other payables 367238464.60 368374954.61

Including：Interest payablesDividend payables 38753715.32

Liabilities held for sale

Non-current liabilities due within one year 137878355.58 1308030361.43

Other current liabilities 757855122.36 692166509.04

Total current liabilities 25997748323.10 31496232578.30

Non-current liabilities

Long term loans 4309786941.97 3502934427.65

Bonds payable 5732396546.29 5752229339.52

Including: Preferred stock

Perpetual bond

Lease liabilities 1549600900.45

Items 30 June 2021 31 December 2020

Long-term payables 1900392952.74 1108412163.50

Long-term employee benefits payable

Estimated liabilities

Deferred income 123466469.89 154451833.23

Deferred tax liabilities

Other non-current liabilities

Total non-current liabilities 13615643811.34 10518027763.90

Total liabilities 39613392134.44 42014260342.20

Shareholder’s equity:

Share capital 3885060605.00 3875371532.00

Other equity instruments 1138070880.42 1146290662.42

Including: Preferred stock

Perpetual bond

Capital reserves 11961817683.40 11923058165.17

Less: Treasury shares

Other comprehensive income

Special reserves 15912566.72 120972.62

Surplus reserves 961105529.85 961105529.85

Undistributed Profits 4446925950.65 2366206832.00

Total shareholder's equity 22408893216.04 20272153694.06

Total liabilities and shareholder’s equity 62022285350.48 62286414036.26

3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unit: Yuan

Items Jan – Jun 2021 Jan – Jun 2020

1. Total operating income 38588128212.14 22184537260.05

Including: Operating income 38588128212.14 22184537260.05

Interest income

Premium earned

Income from handling charges and commission

2. Total operating cost 35641572522.11 21927105960.14

Including: Operating cost 34592825792.72 20440246362.67

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 241555494.92 88398436.68

Selling and distribution expenses 59652669.72 642393218.78

General and administrative expenses 388678843.23 380828316.41

Research and development expenses 22504022.68 20202985.20

Financial expenses 336355698.84 355036640.40

Including: Interest expense 554219518.90 439861353.93

Interest income 222276204.79 154882284.33

Add: Other income 32659483.34 38587332.40

Income on investment（“-” for loss） 1835124.19 29304.00

Including: Income from associates and joint ventures 281949.15 29304.00

Income from derecognition of financial assets measured at amortized

cost

Exchange gains（“-” for loss）

Net exposure hedge income（“-” for loss）

Items Jan – Jun 2021 Jan – Jun 2020

Gains from change of fair value （“-” for loss）

Credit impairment loss （“-” for loss） 2049977.83 3487783.42

Asset impairment loss （“-” for loss） 6629442.12 -15321598.62

Assets disposal gains（“-” for loss） 130675.05 325651.61

3. Operational profit（“-” for loss） 2989860392.56 284539772.72

Add: Non-operating income 3273128.46 1140364.12

Less: Non-operating expenses 22989643.14 20035471.42

4. Total profit (“-” for loss) 2970143877.88 265644665.42

Less: Income tax expenses 746977590.45 9237815.08

5. Net profit（“-” for loss） 2223166287.43 256406850.34

1.Classification by continuing operating

1.Net profit from continuing operation（“-” for loss） 2223166287.43 256406850.34

2.Net profit from discontinued operation（“-” for loss）

2.Classification by ownership

1. Net profit attributable to the owners of parent company （“-” for loss） 2208798167.91 254644204.33

2. Net profit attributable to non-controlling shareholders （“-” for loss） 14368119.52 1762646.01

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 2223166287.43 256406850.34

Total comprehensive income attributable to the owner of the parent company 2208798167.91 254644204.33

Total comprehensive income attributable to non-controlling shareholders 14368119.52 1762646.01

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 party

before 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 39081201858.29 21759781682.12

Less: Operating cost 35285590888.70 20379148281.27

Tax and surcharges 213178320.80 74240782.35

Selling and distribution expenses 55267199.05 386932932.93

General and administrative expenses 360747887.96 354627152.28

Research and development expenses 22504022.68 20202985.20

Financial expenses 327299367.65 337504255.84

Including: Interest expense 304352578.12 410264451.89

Interest income 210228568.88 141297649.84

Add: Other income 32210883.34 38002345.53

Income on investment（“-” for loss） 1553175.04

Including: Income from associates and joint ventures

Items Jan – Jun 2021 Jan – Jun 2020

Income from derecognition of financial assets

measured at amortized cost

Net exposure hedge income（“-” for loss）

Gains from change of fair value （“-” for loss）

Credit impairment loss（“-” for loss） 2049977.83 2627938.73

Assets impairment loss（“-” for loss） 6571234.79 -15321598.62

Assets disposal gains（“-” for loss） 130675.05 325651.61

2. Operational profit（“-” for loss） 2859130117.50 232759629.50

Add: Non-operating income 1295851.57 811659.87

Less: Non-operating expenses 22989643.14 19487380.11

3. Total profit (“-” for loss) 2837436325.93 214083909.26

Less: Income tax expenses 717963491.96 -3173414.97

4. Net profit（“-” for loss） 2119472833.97 217257324.23

1.Net profit from continuing operation (“-” for loss) 2119472833.97 217257324.23

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

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

4）Amount of financial assets reclassified into other comprehensive

income

6）Credit impairment provision of other debt investments

7）The effective portion of cash flow hedges and losses

8) Translation differences in foreign currency financial statements

9）Other

6. Total comprehensive income 2119472833.97 217257324.23

7. Earnings per share

1）Basic earnings per share (Yuan/share)

2）Diluted earnings per share (Yuan/share)

5. CONSOLIDATED STATEMENT OF CASH FLOWS

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 27681479863.67 15423965198.05

Net increase of customers' deposit and interbank deposit

Net increase of loan from central bank

Net increase of loans from other financial institutions

Cash received for premium of original insurance contract

Net cash received for reinsurance business

Net increase of deposit and investment of the insured

Cash from receiving interest handling charge and commission

Items Jan – Jun 2021 Jan – Jun 2020

Net increase of loans from borrowing funds

Net increase of fund for repurchase business

Net cash received from traded securities

Tax rebate received 40128927.12 310509228.43

Other cash received relating to operating activities 239319537.30 174016797.00

Subtotal of cash inflows from operating activities 27960928328.09 15908491223.48

Cash paid for goods and services 24177763290.52 14428717102.76

Net increase of customer's loan and advances

Net increase of deposit in central bank and interbank deposit

Cash for payment of compensation for original insurance contract

Net increase in capital lent

Cash for payment of interest handling charge and commission

Cash for payment of policy bonus

Cash paid to and on behalf of employees 972651151.35 884844841.18

Cash paid for all types of taxes 1082217676.19 520116275.37

Other cash paid relating to operating activities 203379990.00 226288711.25

Subtotal of cash outflows from operating activities 26436012108.06 16059966930.56

Net cash flows from operating activities 1524916220.03 -151475707.08

2. Cash flows from investing activities

Cash received from disposal of investments 3000000000.00

Cash received from return on investments 1553175.04

Net cash received from disposal of fixed assets intangible assets and other long-term assets

Net cash received from disposal of subsidiary and other operating units

Other cash paid relating to investing activities

Subtotal of cash inflows from investing activities 3001553175.04

Cash paid for acquisition of fixed assets intangible assets and other long-term assets 1148767202.27 706681059.07

Cash paid for acquisition of investments 4600000000.00

Net increase of mortgage loan

Net cash received from subsidiary and other operating unit

Other cash paid relating to investing activities

Subtotal of cash outflows from investing activities 5748767202.27 706681059.07

Net cash flows from investing activities -2747214027.23 -706681059.07

3. Cash flows from financing activities

Proceeds from investment

Including: Proceeds from investment of non-controlling shareholders of subsidiary

Proceeds from borrowings 1512381000.00 4987194000.00

Other proceeds relating to financing activities

Subtotal of cash inflows from financing activities 1512381000.00 4987194000.00

Cash repayments of borrowings 4477892475.61 5671544896.99

Cash payments for distribution of dividends profit or interest expenses 567804337.49 480183996.49

Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries

Other cash payments relating to financing activities

Subtotal of cash outflows from financing activities 5045696813.10 6151728893.48

Net cash flows from financing activities -3533315813.10 -1164534893.48

4. Effect of foreign exchange rate changes on cash and cash equivalents -16349859.91 -1130665.43

5. Net increase in cash and cash equivalents -4771963480.21 -2023822325.06

Add: Cash and cash equivalents at the beginning of the period 9229417595.12 13441414988.58

Items Jan – Jun 2021 Jan – Jun 2020

6. Cash and cash equivalents at the ending of the period 4457454114.91 11417592663.52

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 27601858925.93 15003373098.45

Tax rebate received 15393055.96 260246235.34

Other cash received relating to operating activities 230589337.92 163299247.34

Subtotal of cash inflows from operating activities 27847841319.81 15426918581.13

Cash paid for goods and services 24802523270.32 14323769183.95

Cash paid to and on behalf of employees 926763546.78 840886166.89

Cash paid for all types of taxes 984236622.57 465606411.99

Other cash paid relating to operating activities 139392329.61 159126577.28

Subtotal of cash outflows from operating activities 26852915769.28 15789388340.11

Net cash flows from operating activities 994925550.53 -362469758.98

2. Cash flows from investing activities

Cash received from disposal of investments 3000000000.00

Cash received from return on investments 1553175.04

Net cash received from disposal of fixed assets intangible

assets and other long-term assets

Net cash received from disposal of subsidiary and other

operating units

Other cash received relating to investing activities

Subtotal of cash inflows from investing activities 3001553175.04

Cash paid for acquisition of fixed assets intangible assets

1131314182.16 696005001.44

and other long-term assets

Cash paid for acquisition of investments 4600000000.00

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 5731314182.16 696005001.44

Net cash flows from investing activities -2729761007.12 -696005001.44

3. Cash flows from financing activities

Proceeds from investment

Cash received from borrowings 1412381000.00 4747194000.00

Other cash received relating to financing activities

Subtotal of cash inflows from financing activities 1412381000.00 4747194000.00

Cash repayments of borrowings 3722892475.61 5051544896.99

Cash payments for distribution of dividends profit or

544896337.46 433692125.89

interest

Other cash payments relating to financing activities

Subtotal of cash outflows from financing activities 4267788813.07 5485237022.88

Net cash flows from financing activities -2855407813.07 -738043022.88

Items Jan – Jun 2021 Jan – Jun 2020

4. Effect of foreign exchange rate changes on cash and

-16347695.55 -1134392.87

cash equivalents

5. Net increase in cash and cash equivalents -4606590965.21 -1797652176.17

Add: Cash and cash equivalents at the beginning of the

8897859003.60 13029616298.47

period

6. Ending balance of cash and cash equivalents 4291268038.39 11231964122.30

7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unit: Yuan

Jan – Jun 2021

Owner's equity attributable to parent company Non-controlling Total of owner's

Items interest equity

Other equity instruments Less: Other

Share capital Special

General

Preferenc Perpetual Capital reserves Treasury comprehensive Surplus reserves risk

Undistributed Others Subtotal

e shares bond Others shares income

reserves reserve profit

1. Ending balance of last year 3875371532.00 1146290662.42 12343209847.29 300412.14 961105529.85 2692018405.40 21018296389.10 532388405.68 21550684794.78

Add: Change of accounting policies

Correction of errors for last period

Business consolidation under common control

Others

2. Beginning balance of current year 3875371532.00 1146290662.42 12343209847.29 300412.14 961105529.85 2692018405.40 21018296389.10 532388405.68 21550684794.78

3. Changes in current year (“-” for decrease) 9689073.00 -8219782.00 38759518.23 18030199.21 2170044452.59 2228303461.03 14714094.56 2243017555.59

1) Total comprehensive income 2208798167.91 2208798167.91 14368119.52 2223166287.43

2) Capital increase and decrease by 9689073.00 -8219782.00 38759518.23 40228809.23 40228809.23

shareholders

(1) Common share invested by shareholders

(2) Capital input by the holder of other equity 9689073.00 -8219782.00 38759518.23 40228809.23 40228809.23

instruments

(3) Share-based payment attributable to

owners' equity

(4) Others

3) Profit distribution -38753715.32 -38753715.32 -38753715.32

(1) Appropriation to surplus reserves

(2) Appropriation to general risk reserve

(3) Profit distribution to shareholders -38753715.32 -38753715.32 -38753715.32

(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 18030199.21 18030199.21 345975.04 18376174.25

(1) Provision of special reserves 24398347.80 24398347.80 345975.04 24744322.84

(2) Use of special reserves 6368148.59 6368148.59 6368148.59

6) Others

4. Ending balance of current year 3885060605.00 1138070880.42 12381969365.52 18330611.35 961105529.85 4862062857.99 23246599850.13 547102500.24 23793702350.37

Jan – Jun 2020

Owner's equity attributable to parent company Non-controlling Total of owner's

Items interest equity

Other equity instruments Less: Other Special General

Undistributed

Share capital Preferenc Perpetual Capital reserves Treasury comprehensive Others Subtotal Others shares income reserves

Surplus reserves risk

e shares bond reserve

profit

1. Ending balance of last year 3875371532.00 12343209847.29 212687.41 961105529.85 2307765664.62 19487665261.17 525161580.23 20012826841.40

Add: Change of accounting policies

Correction of errors for last period

Business consolidation under common control

Others

2. Beginning balance of current year 3875371532.00 12343209847.29 212687.41 961105529.85 2307765664.62 19487665261.17 525161580.23 20012826841.40

3. Changes in current year (“-” for decrease) 1146290662.42 87724.73 384252740.78 1530631127.93 7226825.45 1537857953.38

1) Total comprehensive income 384252740.78 384252740.78 7226825.45 391479566.23

2) Capital increase and decrease by

shareholders 1146290662.42 1146290662.42 1146290662.42

(1) Common share invested by shareholders

(2) Capital input by the holder of other equity

instruments 1146290662.42 1146290662.42 1146290662.42

(3) Share-based payment attributable to

owners' equity

(4) Others

3) Profit distribution

(1) Appropriation to surplus reserves

(2) Appropriation to general risk reserve

(3) Profit distribution to shareholders

(4) Others

4) Transfers within shareholders' equity

(1) Capital reserves transferred into paid-in

capital (or stock)

(2) Surplus reserves transferred into paid-in

capital (or stock)

(3) Surplus reserves to recover loss

(4) Net changes of defined contribution plans

transferred into Retained Earnings

(5) Other comprehensive income transferred

into Retained Earnings

(6) Others

5) Special reserves 87724.73 87724.73 87724.73

(1) Provision of special reserves 54000536.58 54000536.58 54000536.58

(2) Use of special reserves 53912811.85 53912811.85 53912811.85

6) Others

4. Ending balance of current year 3875371532.00 1146290662.42 12343209847.29 300412.14 961105529.85 2692018405.40 21018296389.10 532388405.68 21550684794.78

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

Unit: Yuan

Jan – Jun 2021

Other equity instruments

Items Less: Other

Share capital Capital reserves Treasury comprehens Special Surplus reserves Undistributed Total shareholder’s Preferen Perpetual Others Others reserves profits equity

ce shares bond shares ive income

1. Ending balance of last year 3875371532.00 1146290662.42 11923058165.17 120972.62 961105529.85 2366206832.00 20272153694.06

Add: Change of accounting policies

Correction of errors for last period

Others

2. Beginning balance of current year 3875371532.00 1146290662.42 11923058165.17 120972.62 961105529.85 2366206832.00 20272153694.06

3. Changes in current year (“-” for decrease) 9689073.00 -8219782.00 38759518.23 15791594.10 2080719118.65 2136739521.98

1) Total comprehensive income 2119472833.97 2119472833.97

2) Capital increase and decrease by shareholders 9689073.00 -8219782.00 38759518.23 40228809.23

(1) Common share invested by shareholders

(2) Capital input by the holder of other equity instruments 9689073.00 -8219782.00 38759518.23 40228809.23

(3) Share-based payment attributable to shareholders' equity

(4) Others

3) Profit distribution -38753715.32 -38753715.32

(1) Appropriation of surplus reserves

(2) Profit distribution to shareholders -38753715.32 -38753715.32

(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 15791594.10 15791594.10

(1) Provision of special reserves 21981008.86 21981008.86

(2) Use of special reserves 6189414.76 6189414.76

6) Others

4. Ending balance of current year 3885060605.00 1138070880.42 11961817683.40 15912566.72 961105529.85 4446925950.65 22408893216.04

Jan – Jun 2020

Other equity instruments Less: Other

Items Special Undistributed Total shareholder’s

Share capital Preference Perpetual Capital reserves Treasury comprehens Surplus reserves Others

Others reserves profits equity

shares bond shares ive income

1. Ending balance of last year 3875371532.00 11923058165.17 53330.99 961105529.85 1742251419.03 18501839977.04

Add: Change of accounting policies

Correction of errors for last period

Others

2. Beginning balance of current year 3875371532.00 11923058165.17 53330.99 961105529.85 1742251419.03 18501839977.04

3. Changes in current year (“-” for decrease) 1146290662.42 67641.63 623955412.97 1770313717.02

1) Total comprehensive income 623955412.97 623955412.97

2) Capital increase and decrease by shareholders 1146290662.42 1146290662.42

(1) Common share invested by shareholders

(2) Capital input by the holder of other equity instruments 1146290662.42 1146290662.42

(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

(5) Other comprehensive income transferred into retained

earnings

(6) Others

5) Special reserves 67641.63 67641.63

(1) Provision of special reserves 47926472.22 47926472.22

(2) Use of special reserves 47858830.59 47858830.59

6) Others

4. Ending balance of current year 3875371532.00 1146290662.42 11923058165.17 120972.62 961105529.85 2366206832.00 20272153694.06

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 by

Liaoning People’s Government on 27 March 1997 was incorporated as a joint stock limited company through public

share 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 of

operations assets and liabilities of its plants namely Steel Smelting Plant Primary Rolling Plant and Continuous Hot

Rolling Plant.As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”) the Company issued

400000000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997 the

Company issued another 120000000 A-shares (Renminbi common Shares) at RMB 5.40 each and listed in Shenzhen

Stock Exchange since 15 January 1998. The capital shares were totaled to 1136000000 shares.On 14 March 2006 according to the resolutions of the Shareholders’ Meeting regarding share equity relocation the

Share Equity Relocation Scheme Response to Bengang Steel Plate Co. Ltd. about Share Equity Relocation issued by

Liaoning Provincial Government State-owned Asset Administrative Committee Bengang Group – the only holder of

non-negotiable state-owned legal person shares paid the consideration to the current shareholders to obtain the current

option for the 40800000 shares of the total 616000000 shares it was holding. Shareholding positions have been

registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office. However the total amount

of capital shares of Bengang Steel Plates Co. Ltd. was not changed through the share equity relocation action.According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China Securities Regulatory

Commission on 30 June 2006 the Company was approved to place 2 billion Renminbi common shares particularly to

Bengang Group and the proceeds would be used to purchase the related assets of the Group. On the same day Bengang

Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee and

were exempted for the liability of undertaking the purchase offer. The liability was caused by subscribing of the 2 billion

new shares and the total shareholding was thus increased to 2.5752 billion shares (accounting for 82.12% of the total

capital shares of the Company). On 28 August 2006 as approved by China Securities Depository & Clearing Corporation

Ltd. 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 stock

market. The placing price was RMB4.6733 per share.Approved by the China Securities Regulatory Commission [2017] No. 1476 Bengang Steel Plate Co. Ltd. privately

placed no more than 739371534 RMB ordinary shares (A shares) to no more than 10 issuers. The non-public offering

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

was completed on 9 February 2018 and 739371532 shares were actually issued. The placing price was RMB5.41 per

share.As at 30 June 2021 the capital shares were totaled to 3885060605 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 controller

is 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 involved

in producing and trading of ferrous metal products. Consolidation scope

The financial statements have been approved for reporting by the board of directors of the Company on 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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 the

next 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 the

Company 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 the

Company 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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 control

The assets and liabilities that the Company acquired in a business combination shall be measured on the basis of their

carrying amount of aquiree’s assets liabilities (as well as the goodwill arising from the business combination) in the

consolidated financial statement of the ultimate controller on the combining date. As for the balance between the carrying

amount of the net assets obtained by the Company and the carrying amount of the consideration paid by it (or the total

par value of the shares issued) capital reserve needs to be adjusted. If the capital reserve is not sufficient any excess

shall be adjusted against retained earnings.Business combination not under common control

The Company shall on the acquisition date measure the assets given and liabilities incurred or assumed by an enterprise

for a business combination in light of their fair values and shall record the balances between them and their carrying

amounts into the profits and losses at the current period. The Company shall recognize the positive balance between the

combination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill. The Company

shall treat the negative balance between the combination costs and the fair value of the identifiable net assets it obtains

from 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 for

audit assessment and legal services shall be recorded into the profits and losses at the current period. The transaction

expenses for the issuance of equity securities for the business combination shall be recorded into the initial recognition

amount 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 of

consolidation 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 parent

and its subsidiaries and using other related information. When preparing consolidated financial statements the parent

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

shall consider the entire group as an accounting entity adopt uniform accounting policies and apply the requirements of

Accounting Standard for Business Enterprises related to recognition measurement and presentation. The consolidated

financial 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 accordance

with those of the Company. If not it is necessary to make the adjustment according to the Company’s accounting policies

and accounting period when preparing the consolidated financial statements. For subsidiaries through acquisition that

are now under common control the financial statements are adjusted according to fair value of identifiable net assets on

the acquisition date. For subsidiaries through acquisition that are under common control the assets liabilities (as well

as the goodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to book value

of 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-controlling

shareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the

item of net profit of the consolidated statement of comprehensive income and under the item of total comprehensive

income. 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 consolidated

statement of financial position. The revenue expenses and profits of the subsidiaries from the acquisition date to the

end of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cash

flow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’s

consolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparative

financial statements as if the reporting entity for the purpose of consolidation has been in existence since the date the

ultimate controlling party first obtained control.When the Company becomes capable of exercising control over an investee under common control due to additional

investment or other reasons adjustment shall be made as if the reporting entity after the combination has been in

existence since the date the ultimate controlling party first obtained control. The investment income recognized between

date of previously obtaining equity investment and the date the acquiree and acquirer are under common control which

is later and the combining date other comprehensive income and other changes of net assets arising from the equity

investment previously-held before obtaining the control the acquiree shall be adjusted against the prior retained earnings

of the comparative financial statements and the current profit or loss respectively.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

If it is now under common control the Company shall not adjust the beginning balance in the consolidated statement

of financial position when preparing consolidated statement of financial position. The revenue expenses and profits of

the subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’s

consolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the end

of 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 to

additional investment or other reasons the acquirer shall remeasure its previously held equity interest in the acquiree

to its fair value at the acquisition date. The difference between the fair value and the carrying amount shall be recognized

as investment income for the period when the acquisition takes place. When the previously-held equity investment is

accounted for under the equity method any other comprehensive income previously recognized in relation to the

acquiree’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 subsidiary

from the beginning of the reporting period to disposal date are included in the Company’s consolidated statement of

comprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal date is

included 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-measure

the remaining equity interests in the acquiree to its fair value at the acquisition date. The difference between sums of

consideration received for disposal equity shares and fair value of the remaining shares and sums of share of net assets

of the subsidiary calculated continuously from the acquisition date or the combination date based on the previous

shareholding proportion and goodwill shall be recognized as investment income for the period when the Company

loses control over acquiree. When the previously-held equity investment is accounted for under the equity method any

other comprehensive income previously recognized in relation to the acquiree’s equity changes and other equity

changes rather than changes from net profit other comprehensive income and profit distribution shall be transferred to

investment income for the current period when the Company loses control over acquiree. Other comprehensive income

arising from re-measurement of defined benefit plan is excluded. When the Company loses control over a subsidiary

due to the increase of capital from other investors and thus the shareholding ratio of the Company declines accounting

treatment 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

stages in determining whether to account for the multiple transactions as a single transaction the Company shall

consider all of the terms and conditions of the transactions and their economic effects. One or more of the following

may 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 when

considered together with other arrangements.If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of

the subsidiary these multiple transactions shall be accounted for as a single transaction. In the consolidated financial

statements the difference between the consideration received and the corresponding proportion of the subsidiary’s net

assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred

to 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 a

bundled transaction apply the treatment of disposing partial long-term equity investments in a subsidiary without loss

of control prior to the loss of control. After the loss of control apply the treatment of disposing the subsidiary in

common 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 difference

between the increase in the cost of long-term investments as a result of acquisition of non-controlling interests and the

share of net assets of the subsidiary calculated continuously from the acquisition date or the combination date based

on the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium) in the

consolidated financial statements. If the balance of the capital reserve is not sufficient any excess shall be adjusted

against retained earnings.

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

When the Company disposes of a portion of the long-term equity investments in a subsidiary without loss of control

the difference between the amount of the consideration received and the corresponding portion of the nest assets of

the subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of the

long-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in the

consolidated financial statements. If the balance of the capital reserve is not sufficient any excess shall be adjusted

against retained earnings.

(7) Classification of joint venture arrangements and accounting treatment

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 arrangement

and 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 performs

accounting 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's

share;

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's

share.For the accounting policy of the Company's investment in joint ventures please refer to Note (13) Long-term Equity

Investment 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 unrestricted

deposit. And the term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly

liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk

of change in value.

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

1. Foreign currency transaction

Foreign currency transactions are translated into RMB at the current rate at the day of transactions.The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The balance

of exchange arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange

rate at the time of initial recognition or prior to the balance sheet date except those arising from the raising of special

foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized according to the borrowing

costs capitalization principle shall be recorded into the profits and losses at the current period.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 balance

sheet date. Among the owner's equity items except the ones as "undistributed profits" others shall be translated at the

spot exchange rate at the time when they are incurred. The income and expense items in the income statement shall be

translated using an exchange rate that is determined in a systematic and reasonable manner and approximates the spot

exchange rate on the transaction date.When disposing an overseas business the Company shall shift the balance which is presented under the items of the

owner's equities in the statement of financial position and arises from the translation of foreign currency financial

statements related to this oversea business into the disposal profits and losses of the current period. If the overseas

business is disposed of partially the Company shall calculate the balance arising from the translation of foreign currency

statements of the part of disposal based on the disposal rate and shall shift them into the profits and losses of the current

period.

(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 financial

assets 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 assets

measured 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 is

held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the

contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding.A financial asset shall be measured at fair value through other comprehensive income if both of the following conditions

are met. The financial asset is held within a business model whose objective is achieved by both collecting contractual

cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash

flows that are solely payments of principal and interest on the principal amount outstanding. Other financial assets other

than these are classified as financial assets measured at fair value through profit or loss.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The Company may make an election at initial recognition for non-trading equity instrument investments whether it is

designated 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 be

designated as financial assets measured at fair value through profit or loss. According to the above conditions the

company does not have such designated financial assets.The Company shall classify financial liabilities as financial liabilities measured at amortised cost and financial liabilities

measured at fair value through profit or loss at initial measurement.The Company may at initial recognition designate a financial liability as measured at fair value through profit or loss

because either:

(a) it eliminates or significantly reduces an accounting mismatch;

(b) a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated

on a fair value basis in accordance with a documented risk management or investment strategy and information

about 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-term

receivables debt investments etc. At initial recognition the Company shall measure a financial asset at its fair value

plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset. The Company

shall measure account receivables at their transaction price if the account receivables do not contain a significant

financing component and accounts receivables that the company has decided not to consider for a financing component

of no more than one year.Interests calculated by using the effective interest method during the holding period shall be. recognized in profit or loss.When recovering or disposing the receivables the difference between the price obtained and. the carrying value shall be

recognized in current profit or loss.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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

Financial assets measured at fair value through other comprehensive income (debt instruments) include receivables

financing other debt investments etc. At initial recognition the Company shall measure a financial asset at its fair value

plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. The financial assets

are subsequently measured at fair value. Changes in fair value are included in other comprehensive income except for

interest calculated using the effective interest method impairment losses or gains and exchange gains and losses. When

the financial assets are derecognized the accumulated gain or loss previously recognized in other comprehensive income

is 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 instrument

investments etc. At initial recognition the Company shall measure a financial asset at its fair value plus transaction costs

that are directly attributable to the acquisition or issue of the financial asset. The financial assets are subsequently

measured at fair value. Changes in fair value are included in other comprehensive income. The dividends obtained are

recognised in profit and loss.When the financial assets are derecognized the accumulated gain or loss previously. recognised in other comprehensive

income is transferred from other comprehensive 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 other

non-current financial assets etc.The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in

profit or loss. Changes in fair value are included in profit or loss.When the financial assets are derecognized the difference between the fair value and the. initially recorded amount is

recognized 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

etc.The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised in

profit or loss. Changes in fair value are included in profit or loss.When the financial liabilities are derecognized the difference between the fair value and the. initially recorded amount

is 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 other

payables long-term borrowings bonds payables long-term payables.At initial recognition the Company shall measure a financial liability at its fair value plus. transaction costs that are

directly attributable to the acquisition or issue of the financial asset.Interests calculated by using the effective interest method during the holding period shall be. recognized in profit or loss.When the financial liabilities are derecognized the difference between the price obtained and. the carrying value shall

be recognised in profit and loss.3. 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 to

the transferee it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to the

ownership of the financial asset it shall not stop recognizing the financial asset.To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for stopping

the recognition of a financial asset the Company shall follow the principle of the substance over form. Transfer of an

entire financial asset can be divided into partial financial assets transfer and entire financial asset transfer. If the transfer

of an entire financial asset satisfies the conditions for de-recognition the difference between the amounts of the following

2 items shall be recorded in the profits and losses of the current period:

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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 financial

asset Available-for-sale).If the transfer of partial financial asset satisfies the conditions to derecognize the entire book value of the transferred

financial asset shall between the portion whose recognition has been stopped and the portion whose recognition has

not been stopped (under such circumstance the service asset retained shall be deemed as a portion of financial asset

whose recognition has not been stopped) be apportioned according to their respective relative fair value and the

difference between the amounts of the following 2 items shall be included into the profits and losses of the current

period :

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

(2) The sum of consideration of the portion whose recognition has been stopped and 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 portion

whose recognition has been stopped (in the event that the financial asset involved in the transfer is a financial asset

Available-for-sale).If the transfer of financial assets does not satisfy the conditions to stop the recognition it shall continue to be recognized

as 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 the

financial liability be terminated in all or partly.Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities

by way of any new financial liability and if the contractual stipulations regarding the new financial liability is

substantially different from that regarding the existing financial liability it shall terminate the recognition of the existing

financial 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 financial

liability it shall terminated the recognition of the existing financial liability or part of it and at the same time recognize

the financial liability after revising the contractual stipulations as a new financial liability.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Where the recognition of a financial liability is totally or partially terminated the Company shall include into the profits

and losses of the current period the difference between the carrying amount which has been terminated from recognition

and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities

it has assumed).Where the Company buys back part of its financial liabilities it shall distribute on the date of repurchase the carrying

amount of the whole financial liabilities in light of the comparatively fair value of the part that continues to be

recognized and the part whose recognition has already been terminated. The gap between the carrying amount which is

distributed to the part whose recognition has terminated and the considerations it has paid (including the noncash assets

it has transferred out and the new financial liabilities it has assumed) shall be recorded into the profits and losses of the

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

If active markets for the financial instruments exist the fair value shall be measured by quoted prices in the active

markets. If active markets for the financial instruments do not exist valuation techniques shall be applied for the

measurement. The Company uses valuation techniques appropriate in the circumstances and for which sufficient data

are available to measure fair value. The Company chooses relevant observable inputs for identical or similar assets or

liabilities. Only when relevant observable inputs are unavailable or should the Company use unobservable inputs for

the asset or liability.6. Impairment provision of the financial assets

The Company considers all reasonable and relevant information including forward-looking information to recognize

the expected credit loss on financial assets measured at amortized cost and financial assets measured at fair value through

other comprehensive income (debt instruments) on the individual or portfolio basis. The measurement of expected credit

loss 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 shall

measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses. If the

credit risk on a financial instrument has not increased significantly since initial recognition the Company shall measure

the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. The increase or

reversal amount of loss allowance thus formed shall be included in the current profits and losses as impairment losses or

gains.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Generally the Company believes that the credit risk of the financial instrument has significantly increased over 30 days

after the due date unless there is solid evidence that the credit risk of the financial instrument has not increased

significantly since initial recognition.If the credit risk of a financial instrument at the reporting date is relatively low the Company considers that the credit

risk 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 recognise

provision for impairment of the financial asset individually.For account receivables whether a significant financing component is contained or not the Company shall always

measure 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 goods

or rendering of services notes receivable accounts receivable financing and other receivables which contains significant

financing component the Company chooses to use the general financial asset impairment method that is according to

whether the credit risk has increased significantly or not since the initial recognition to measure the expected credit loss

at an amount equal to 12-month expected credit losses (stage one) or at an amount equal to the lifetime expected credit

losses (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 loss

The net realizable value of inventories (finished products stock commodity material etc.) held for direct selling in the

daily business activity shall be calculated by deducting the estimated sale expense and relevant taxes from the estimated

sale price of inventories; The net realizable value of inventories for further processing in the daily business activity shall

be calculated by deducting the estimated cost of completion estimated sale expense and relevant taxes from the estimated

sale price of inventories; The net realizable value of inventories held for the execution of sales contracts or labor contracts

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

shall be calculated on the ground of the contract price. If the Company holds more inventories than the quantities

subscribed in the sales contract the net realizable value of the excessive part of the inventories shall be calculated on the

ground 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 inventories

at the year end. For inventories with large quantity and relatively low unit prices the provision for loss on decline in

value of inventories shall be made on the ground of the categories of inventories. For the inventories related to the series

of 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 of

inventories shall be made on a combination basis.Unless clear evidence shows that the market price is exceptionally fluctuating the net realizable value of inventory is

based 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 equal

to the quantity of inventory held by the enterprise the contract price of the finished product or commodity is used as the

basis for calculating the net realizable value; The quantity of inventory is more than the quantity ordered by the sales

contract and the net realizable value of the excess inventory is based on the general sales price of the finished product

or 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 net

realizable 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 financial

position as a contract asset or a contract liability depending on the relationship between the Company’s performance

and the customer’s payment. If the Company have the rights to receive consideration (the right is conditioned on

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

factors other than the passage of time) by transferring goods or services to a customer the entity shall present the

contract 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 a

receivable.2. Expected credit loss of contract assets

For the accounting policy of the expected credit loss of contract assets please refer to Note (10) 6. Impairment

provision of the financial assets under “3. Significant accounting 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 about

the relevant activities require the unanimous consent of the parties sharing control. If the Company and other joint venture

have joint control of the investee and have rights to the net assets of the investee the investee is a joint venture of the

Company.Significant influence is the power to participate in the financial and operating policy decisions of the investee but not

control or join control of those policies. If the Company could exert significant influence over the investee the investee

is the associate of the Company.2. The initial cost of long-term equity investment from business acquisition

(1) Long-term equity investment from business acquisition

For a business combination under common control 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 the

long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity of the

party being absorbed in the consolidated financial statements of the ultimate controlling party at combination date. When

an investor becomes capable of exercising control over an investee under common control due to additional investment

or other reasons the initial investment cost shall be the absorbing party’s share of the carrying amount of the owner’s

equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at

combination date. The difference between the initial investment cost and the carrying amount of the previously-held

equity investment together with the additional investment cost for new shares at combination date shall be adjusted to

the 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 investment

shall be the acquisition cost at the acquisition date. When an investor becomes capable of exercising control over an

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

investee due to additional investment or other reasons the initial investment cost under the cost method shall be the

carrying 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 which

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

of the equity securities issued.If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received and

surrendered can be reliably measured the fair value of the assets surrendered shall be used as the basis for determining

the cost of the assets received unless there is any exact evidence showing that the fair value of the assets received is

more reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed above the carrying

value 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 fair

values.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 an

investing 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 payment

when 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. Where

the initial investment cost of a long-term equity investment exceeds tan investor’s interest in the fair values of an

investee’s identifiable net assets at the acquisition date no adjustment shall be made to the initial investment cost. Where

the initial cost is less than the investor’s interest in the fair values of the investee’s identifiable net assets at the acquisition

date 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 other

comprehensive income as investment income or losses and other comprehensive income and adjust the carrying amount

of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profit

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of the

investee’s owners’ equity changes other than those arising from the investee’s net profit or loss other comprehensive

income 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 adjustments

according to the Company’s accounting principles and operating period based on the fair values of the investee’s

identifiable net assets at the acquisition date. During the holding period if the investee makes consolidated financial

statements the Company shall calculate its share based on the investee’s net profit other comprehensive income and the

amount 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 shall

be eliminated in proportion to the investor’s equity interest in the investee based on which investment income or losses

shall be recognized. Any losses resulting from transactions between the investor and investee which are attributable to

asset 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 offset

the book value of long term equity investment. If the book value of long-term equity is insufficient to dilute the investing

enterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment

and other long-term rights and interests which substantially form the net investment made to the invested entity are

reduced to zero. If the company still has the obligation to undertake extra losses per contract and then estimated liabilities

shall 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 carrying

amount 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 income

previously recognized shall be accounted for on the same basis as would have been required if the investee had directly

disposed 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 or

loss of current period other comprehensive income arising from the re-measurement of defined benefit plan is excluded.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

When an investor can no longer exercise joint control of or significant influence over an investee due to partial disposal

of equity investment or other reasons the remaining equity investment shall be accounted for in accordance with financial

instruments recognition and measurement standard. The difference between the fair value and the carrying amount at the

date of the loss of join control or significant influence shall be charged to profit or loss for the current period. When the

previously-held equity investment is accounted for under the equity method any other comprehensive income previously

recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of

the related assets or liabilities for the current period upon discontinuation of the equity method. 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 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 due

to decrease of shareholding ratio because of additional investment by other investors and with the retained interest still

has joint control of or significant influence over the investee when preparing the individual financial statements the

investor shall change to the equity method and adjust the remaining equity investment as if the equity method had been

applied from the date of the first acquisition. If the investor cannot exercise joint control of or significant influence over

the investee after partial disposal of equity investment the remaining equity investment shall be accounted for in

accordance with financial instruments recognition and measurement standards and the difference between the fair value

and 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 other

reasons 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 equity

investment under the equity method shall be transferred proportionally. For those remaining equity investments

accounted for in accordance with financial instruments recognition and measurement standard after disposal other

comprehensive 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 including

leased land use rights land use rights held and prepared for transfer after appreciation and leased buildings ( Buildings

that are leased after completion of self-construction or development activities and buildings that are being used for rental

in the future during construction or development).Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The company uses the cost model to measure the existing investment property. For investment property measured

according 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 recognized

unless 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 category

of assets the useful life and the expected residual rate. If the components of the fixed assets have different useful lives

or provide the economic benefits in a different way then different depreciation rate or method shall be applied and the

depreciation 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 the

ownership of the leased assets will be acquired upon expiry of lease or over the shorter of lease term and useful life if it

is 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:

Depreciation Residual Value Rate Depreciation Rate

Category Depreciation method

Period (%) (%)

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

straight line method 8-22 years 3.00 4.41-12.13

other equipment

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;

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 present

value of the minimum lease payments on the lease beginning date as the initial book value recognize the amount of the

minimum lease payments as the initial book value of long-term account payable and treat the difference between the

recorded 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 for

bringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it has

reached its working condition for its intended use. In case the final project accounts have not been completed or approved

the asset shall be transferred to fixed assets at an estimated value by considering project budget cost or actual cost of the

project and etc. and the deprecation of the said fixed assets shall be provided in accordance with the Company’s

accounting policy since it has reached its working condition for its intended use. After the project accounts have been

approved the estimated values shall be adjusted based on the actual cost but those provided deprecation shall not be

adjusted.

(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 or

production of assets eligible for capitalization it shall be capitalized and recorded into the costs of relevant assets. Other

borrowing costs shall be recognized as expenses on the basis of the actual amount incurred and shall be recorded into

the current profits and losses.Assets eligible for capitalization refer to the fixed assets investment real estate inventories and other assets of which

the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 for

capitalization;

(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 the

borrowing 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 the

capitalization of the borrowing costs shall be ceased.Where each part of a qualified asset under acquisition and construction or production is completed separately and is

ready 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 for

use or sale during the continuing construction of other parts but it cannot be used or sold until the asset is entirely

completed 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 interruption

period lasts for more than 3 months the capitalization of the borrowing costs shall be suspended. If the interruption is a

necessary step for making the qualified asset under acquisition and construction or production ready for the intended use

or sale the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall

be recognized as expenses and shall be recorded into the profits and losses of the current period till the acquisition and

construction or production of the asset restarts.4. Method of calculating the capitalization rate and capitalized amount of borrowing costs

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank or

investment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specifically

borrowed loan those incurred before a qualified asset under acquisition construction or production is ready for the

intended use or sale shall be capitalized at the incurred amount when they are incurred and shall be recorded into the

costs of the asset eligible for capitalization.The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by

multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the

general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated

and 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 disbursements

which may be directly attributable to bringing the intangible asset to the conditions for the expected purpose. If the

payment for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature the cost

of 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 based

on its fair value and the difference between the debt restructured and the fair value of the intangible assets are recognized

in the current profit and loss.For intangible assets obtained from non-monetary transactions with commercial substance and the fair value of the assets

obtained or surrendered can be reliably measured the initial recognition of the asset obtained is based on the fair value

of the asset surrendered unless there is strong evidence that the fair value of the asset obtained is more reliable. For

intangible assets obtained through non-monetary transactions which do not meet the above criteria the initial recognition

is 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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period when

the intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of the

intangible 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 at

each 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 research

expenditures and development expenditures.Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and understand

new scientific or technological knowledge.Development phase refers to the phase during which the result of research phase or other knowledge is applied into

certain projects or designs for the manufacturing of new or substantially improved material device and product before

commercial 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 at

the period end if there is clear indication of impairment. If the recoverable amounts of long-term assets are less than their

carrying 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-term

assets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to be

derived from the assets. The Company shall estimate its recoverable amount on an individual basis. Where it is difficult

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 generated

independently

The goodwill intangible assets with uncertain useful life and intangible assets not meeting the expected condition for

use 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 value

of the business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Where

it is difficult to do so it shall be apportioned to the relevant combinations of asset groups. When apportioning the carrying

value of the business reputation to the relevant asset groups or combinations of asset groups it shall be apportioned on

the basis of the proportion of the fair value of each asset group or combination of asset groups to the total fair value of

the relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair value reliably it shall

be apportioned on the basis of the proportion of the carrying value of each asset group or combination of asset groups to

the 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 business

reputation if any evidence shows that the impairment of asset groups or combinations of asset groups is possible the

Company shall first make an impairment test on the asset groups or combinations of asset groups not containing business

reputation calculate the recoverable amount compare it with the relevant carrying value and recognize the corresponding

impairment loss. Then the Company shall make an impairment test of the asset groups or combinations of asset groups

containing business reputation and compare the carrying value of these asset groups or combinations of asset groups

(including the carrying value of the business reputation apportioned thereto) with the recoverable amount. Where the

recoverable amount of the relevant assets or combinations of the asset groups is lower than the carrying value thereof it

shall 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 accounting

period which is more than one year.The long-term deferred expense shall be amortized over its beneficiary period evenly.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(21) Contract liability

When either party to a contract has performed the Company shall present the contract in the statement of financial

position as a contract asset or a contract liability depending on the relationship between the Company’s performance

and the customer’s payment. If a customer pays consideration or the Company has a right to an amount of consideration

before the Company transfers a good or service to the customer the Company shall present the contract as a contract

liability. 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 current

period.Payments made by an enterprise of social security contributions for employees payments of housing funds and union

running costs employee education costs provided in accordance with relevant requirements shall in the accounting period

in which employees provide services be calculated according to prescribed bases and percentages in determining the

amount 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 and

unemployment fund for employees as a liability according to the local government regulations. The amount shall be

calculated according to local prescribed bases and percentages in determining the amount of employee benefits with a

corresponding 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 (supplementary

pension 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 of

the total wages of employees and the corresponding expenditure is included in the current profit and loss or related asset

costs.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

3. Accounting treatment of termination benefits

The Company shall recognize an employee benefits liability for termination benefits with a corresponding charge to the

profit or loss for the current period at the earlier of the following dates: when the Company cannot unilaterally withdraw

the offer of termination benefits because of an employment termination plan or a curtailment proposal; or when the

Company 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 an

estimated 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 the

performance of the current obligation.To determine the best estimate an enterprise shall take into full consideration of the risks uncertainty time value of

money and other factors pertinent to the Contingencies. If the time value of money is of great significance the best

estimate 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 to

occur the best estimate shall be determined in accordance with the average estimate within the range that is the average

of the upper and lower limit.If there is not a sequent range for the necessary expenses and if the outcomes within this range are not equally likely to

occur the best estimate shall be determined as follows:

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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 be

compensated by a third party the compensation shall be separately recognized as an asset only when it is virtually certain

that the reimbursement will be obtained. The amount recognized for the reimbursement shall not exceed the book value

of the estimated debts.

(24) Revenue

The company shall recognise revenue when (or as) the company satisfies a performance obligation when (or as) the

customer obtains control of a promised good or service. Control of a promised good or service refers to the ability to

direct 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 each

individual performance obligation based on the relative proportion of the stand-alone selling price of the goods or

services promised by each individual performance obligation on the date of the contract. The company measures revenue

based 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 for

transferring promised goods or services to a customer excluding amounts collected on behalf of third parties or amounts

expected to be returned to customers. The company shall consider the terms of the contract and its customary business

practices to determine the transaction price. When determining the transaction price the company shall consider the

effects 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 that

includes variable consideration at an amount that does not exceed the amount of accumulated recognized revenue that is

unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a significant financing

component in the contract the company shall recognise revenue at an amount that reflects the price that a customer

would have paid for the promised goods or services if the customer had paid cash for those goods or services when (or

as) they transfer to the customer and use the effective interest method to amortize the difference between the transaction

price and the contract consideration during the contract period. If the interval between the transfer of control and the

payment by the customer does not exceed one year the financing component will not be considered.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The company transfers control of a good or service over time and therefore satisfies a performance obligation and

recognises revenue over time if one of the following criteria is met. Otherwise the company satisfies the performance

obligation at a point in time.(a) the customer simultaneously receives and consumes the benefits provided by the company’s performance as the

company 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 an

enforceable right to payment for performance completed to date.The company shall recognise revenue over time by measuring the progress towards complete satisfaction of that

performance obligation except where the performance progress cannot be reasonably determined. The company

considers the nature of the goods or services and adopts the output method or the input method to determine the progress

of performance. Where the performance progress cannot be reasonable determined but the company expects to recover

the costs incurred in satisfying the performance obligation the company shall recognise revenue only to the extent of the

costs incurred until such time that it can reasonably 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 when

the customer obtains control of the relevant goods or services. To determine the point in time at which a customer obtains

control of a promised goods or services the company shall consider requirements as follows:

(a) The company has a present right to payment for the promised goods or services and the customer is presently obliged

to 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 the

goods;

(c) The company has transferred physical possession of the goods to the customer that is the customer has taken

possession of the goods;

(d) The company has transferred the significant risks and rewards of ownership of the goods to the customer that is the

customer 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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 costs

incurred 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 the

future; and

(c) the costs are expected to be recovered.The company shall recognise as an asset the incremental costs of obtaining a contract with a customer if the company

expects to recover those costs.An asset recognised in accordance with contract costs shall be amortised in consistent with the transfer to the customer

of the goods or services to which the asset relates. The company may recognise the incremental costs of obtaining a

contract 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 related

to contract assets exceeds:

(a) the remaining amount of consideration that the company expects to receive in exchange for the goods or services to

which the asset relates; less

(b) the costs that relate directly to providing those goods or services and that have not been recognised as expenses.The company shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised when

the impairment conditions no longer exist or have improved. The increased carrying amount of the asset shall not exceed

the 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 the

government. Government subsidies consist of the government subsidies pertinent to assets and government subsidies

pertinent to income.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Government subsidies related to assets are government subsidies whose primary condition is that an entity qualifying for

them should purchase construct or otherwise acquire long-term assets. The government subsidies related to incomes

refers 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 them

should purchase construct or otherwise acquire long-term assets.The standard of the Company recognizing the government subsidies related to income is: In addition to government

subsidies related to assets government subsidies that have 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 assets

or recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss over

the 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 and

transferred to current profit or loss. Government subsidies to compensate expenses or losses already incurred shall be

recognized 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 assets

or recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss on

a systematic basis over the periods during the useful lives of the relevant assets (Subsidies related to daily activities

should be recorded in Other Income. Subsidies that unrelated to daily activities should be recorded in Non-operating

Income).The government subsidies related to incomes to compensate future expenses shall be recognized as deferred income and

transferred to current profit or loss (Subsidies related to daily activities should be recorded in Other Income. Subsidies

that unrelated to daily activities should be recorded in Non-operating Income) in the period during which the expenses

compensation is recognized or deduct relevant cost or loss. Government subsidies to compensate expenses or losses

already incurred shall be recognized in current profit and loss (Subsidies related to daily activities should be recorded in

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Other Income. Subsidies unrelated to daily activities should be recorded in Non-operating Income) or deduct relevant

cost or loss.The policy discount loans obtained by the company are divided into the following two situations and are separately

accounted for:

(a) The government allocates discounted funds to the loan bank and the loan bank provides loans to the company at a

policy 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 relevant

borrowing costs with the corresponding discounts directly accounted for the current profit or loss or recognized as

deferred 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 extent

of the amount of the taxable income which it is most likely to be obtained and which can be deducted from the deductible

temporary difference. As for any deductible loss or tax deduction that can be carried forward to the next year the

corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to

be offset by the deductible loss or tax deduction to be likely obtained.All taxable temporary differences shall be recognized as deferred tax liabilities with 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 of

the 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 enforceable

right to set off current tax assets against current tax liabilities; and (b) the deferred tax assets and the deferred tax liabilities

relate to income taxes levied by the same taxation authority on either:(i) the same taxable entity; or (ii) different taxable

entities which intend either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the

liabilities simultaneously in each future period in which significant amounts of deferred tax liabilities or assets are

expected to be settled or recovered.

(28) Leases

Accounting policy from January 1 2021

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period of

time to obtain consideration.On the starting date of the contract the company assesses whether the contract is a lease or contains a lease. If the

contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration the

contract is or contains a lease.For a contract that contains a lease component and one or more additional lease or non-lease components a lease shall

allocate the consideration in the contract to each lease component on the basis of the relative stand-alone price of the

lease component and the aggregate stand-alone price of the non-lease components.1. The company as the lessee

(1) Right-of-use assets

On the start date of the lease term the company recognizes the right-of-use asset for leases other than short-term leases

and 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 costs

incurred for the production of inventory.The company depreciates the right-of-use assets with reference to the relevant depreciation policies of "3. (15) Fixed

assets" in this note. If it can be reasonably determined that the ownership of the leased asset will be obtained at the end

of the lease term the company shall depreciate the leased asset during the remaining useful life; otherwise the leased

asset will be depreciated during the shorter period of the lease term 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 described

in "3. (19) Long-term asset impairment" in this note and conducts accounting treatment for the identified impairment

loss.

(2) Lease liabilities

At the beginning of the lease term the company recognizes lease liabilities for leases other than short-term leases and

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

leases of low-value assets. Lease liabilities are initially measured based on the present value of the payments that are

not 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 lease

cannot 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 a

fixed 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 profit

and loss or the cost of related assets when they occur.After the start of the lease term if the following circumstances occur the company re-measures the lease liability and

adjusts the corresponding right-of-use asset. If the book value of the right-of-use asset has been reduced to zero but the

lease 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 option

changes the company remeasures the lease liability based on the present value calculated by the lease payment after the

change and the revised discount rate;

· When the actual fixed payment changes the expected payable amount of the guarantee residual value changes or the

index or ratio used to determine the lease payment changes the company calculates the present value based on the

changed lease payment and the original discount rate to remeasure the lease liability. However if changes in lease

payments originate from changes in floating interest rates the revised discount rate is used to calculate the present

value.

(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 asset

leases and calculates the relevant lease payments in the current profit and loss or related asset costs on a straight-line

basis during each period of the lease term. Short-term lease refers to a lease that does not include purchase options for

a lease period not exceeding 12 months at the beginning of the lease period. Low-value asset leasing refers to a lease

with a lower value when a single leased asset is a new asset. If the company subleases or expects to sublease the leased

assets the original lease is not a low-value asset lease.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 a

lessee shall allocate the consideration in the modified contract determine the lease term of the modified lease and

remeasure 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 of

the lease liabilities by decreasing the carrying amount of the right-of-use assets to reflect the partial or full termination

of the lease for lease modifications that decrease the scope of the lease. The lessee shall recognize in profit or loss any

gain 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. Finance

lease refers to a lease in which almost all the risks and rewards related to the ownership of the leased asset are

transferred regardless of whether the ownership is ultimately transferred. Operating leases refer to leases other than

financial leases. When the company acts as a sublease lessor it classifies subleases based on the right-of-use assets

generated 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 the

straight-line method. The company capitalizes the initial direct costs incurred related to operating leases and allocates

them to the current profit and loss on the same basis as the recognition of rental income during the lease term. Variable

lease payments that are not included in the lease receipts are included in the current profit and loss when they actually

occur.

(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 terminates

the recognition of the finance lease assets. When the company initially measures the finance lease receivables the net

lease investment is taken as the entry value of the financial lease receivables. The net lease investment is the sum of the

unguaranteed residual value and the present value of the lease payment not yet received at the beginning of the lease

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 periodic

interest 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 current

profit or loss when they actually occur.A lessor shall account for a modification to a finance lease as a separate lease if both:

· The modification increases the scope of the lease by adding the right to use one or more underlying assets;

· The consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in

scope 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 the

modification 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 measure

the carrying amount of the underlying assets as the net investment in the lease immediately before the effective date of

the lease modification.· If the change takes effect on the lease start date the lease will be classified as a financial lease and the company will

perform accounting treatment in accordance with the policy of “3. (10) Financial Instruments” in this Note on the

modification or re-negotiation of the contract.3. Sale and leaseback transaction

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in

accordance 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 the

lessor. if the asset transfer in the sale and leaseback transaction does not belong to the sale the company as the lessee

continues to recognize the transferred assets and at the same time recognize a financial liability equal to the transfer

proceeds. 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

purchase of the asset and the asset lease is accounted for in accordance with the aforementioned "2. The company as

the lessor" policy; in the sale and leaseback transaction If the transfer of assets is not a sale the company as the lessor

does not recognize the transferred assets but recognizes a financial asset equal to the transfer proceeds. For the

accounting 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 expenses

related 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 this

part of the expenses from the total rent and the deducted rent expenses are amortized during the lease term and included

in 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 initial

direct expenses paid by the company related to the lease transaction shall be included in the current expenses; if the

amount is large it shall be capitalized and included in the current income in installments based on the same basis as the

lease-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 part

of 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 lease

payment 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 lease

period and include them in financial expenses. The initial direct costs incurred by the company are included in the

value 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 unrealized

financing income and it is recognized as unrealized financing income during each period when the rent is received in

the future. Rental income. The initial direct expenses incurred by the company related to the lease transaction are

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

included in the initial measurement of the financial lease receivables and the amount of income recognized during the

lease 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 be

distinguished 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 will

affect the application of accounting policies and the amount of assets liabilities income and expenses. Actual conditions

may differ from these estimates. The management of the company continuously evaluates the judgment of key

assumptions and uncertainties involved in the estimation and the impact of changes in accounting estimates will be

recognized in the current and future periods.The main uncertainties in the estimated amount are as follows:

(1) Measurement of expected credit losses

The company calculates the expected credit loss through the default risk exposure and the expected credit loss rate and

determines the expected credit loss rate based on the default probability and the default loss rate. When determining the

expected credit loss rate the company uses internal historical credit loss experience and other data and adjusts the

historical 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 increase

in 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 Company

regularly estimates the net realizable value of the inventory and recognizes the difference in inventory cost higher than

the net realizable value. When estimating the net realizable value of inventory the Company considers the purpose of

holding the inventory and uses the available information as the basis for estimation including the market price of the

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

inventory and the Company's past operating costs. The actual selling price completion cost sales expenses and taxes of

the inventory may change according to changes in market sales conditions production technology or the actual use of

the 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 assetsAs 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 the

balance sheet date to determine whether the recoverable amount of the asset has fallen to a lower level than its book

value. If the situation shows that the book value of the long-term assets may not be fully recovered the relevant assets

will 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 disposal

expenses and the present value of the asset (or asset group) 's expected future cash flow. Because the Company can not

reliably obtain the public market price of assets (or asset groups) and can not reliably and accurately estimate the fair

value of assets. Therefore the Company regards the present value of the expected future cash flow as the recoverable

amount. When estimating the present value of future cash flows it is necessary to make a significant judgment on the

output selling price related operating costs of the products produced by the asset (or asset group) and the discount rate

used in calculating the present value. The Company will use all available relevant information when estimating the

recoverable amount including the prediction of output selling price and related operating costs based on reasonable and

supportable assumptions.

(4) Depreciation and amortization of assets such as fixed assets and intangible assetsAs 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 assets

within the useful life after considering their residual value. The company regularly reviews the useful life of related

assets to determine the amount of depreciation and amortization expenses to be included in each reporting period. The

useful life of assets is determined by the company based on past experience with similar assets and in combination with

anticipated technological changes. If the previous estimates change significantly the depreciation and amortization

expenses will be adjusted in the future.

(5) Deferred tax assets

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

When it is estimated that sufficient taxable income can be obtained in the future to use the unrecovered tax losses and

deductible temporary differences the relevant deferred tax assets are calculated and confirmed on the basis of the

applicable income tax rate during the period when the asset is expected to be recovered and the amount of taxable income

is limited to deductible tax losses and deductible temporary differences likely to be obtained by the Company. The

Company needs to use judgment to estimate the time and amount of future taxable income and make reasonable

estimates and judgments on the future applicable income tax rate according to the current tax policy and other related

policies to determine the deferred tax assets that should be recognized. If the time and amount of profits actually

generated in the future period or the actual applicable income tax rate are different from the management's estimate the

difference 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. According

to the revised standards the company chooses not to reassess whether it is a lease or contains a lease on the date of the

first 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 the

beginning of the year when the new lease standards were first implemented based on the cumulative impact of the first

implementation 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 based

on the present value of the remaining lease payments discounted by the Japanese company’s incremental borrowing

interest rate for the first implementation on the first implementation day and chooses one from the following two

methods 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 more

of 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;

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 Note

Adjust 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 to

discount the lease payment.The unpaid minimum lease payments for major operating leases disclosed in the consolidated

2530278897.76

financial statements on December 31 2020

The present value discounted by the company's incremental borrowing interest rate as of January 1

1541868510.812021

Lease liabilities under the new lease standard on January 1 2021 1541868510.81

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 assets

and lease liabilities based on the original book values of the financial leased assets and the financial lease payables on

the first implementation date.· The company as the lessor

For sub-leases that are classified as operating leases before the first implementation date and continue after the first

implementation date the company will reassess them based on the remaining contract duration and terms of the original

lease and sub-lease on the first implementation date and classify them in accordance with the new lease standards. If

it 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 lease

standard. The company conducts accounting treatment in accordance with the new lease standard from the date of

first implementation.· The main impacts of the company’s implementation of the new lease standards on the financial statements are as

follows:

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

January 1 2021

Change of accounting policy

Affected items Consolidated Financial Parent company financial

content and reason

statement statement

The adjustment to Authorization Right of use assets 1541868510.81 1541868510.81

operating lease that existed Lease liabilities 1502969848.79 1502969848.79

before the first adoption date Non-current liabilities

38898662.02 38898662.02

by the company as the lessee due within one year

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:

Ending Beginning Adjustment

Items balance of the balance of the

Reclassification Remeasurement Total

previous year current year

Right of use assets 1541868510.81 1541868510.81 1541868510.81

Lease liabilities 1502969848.79 1502969848.79 1502969848.79

Non-current liabilities

38898662.02 38898662.02 38898662.02

due within one year

Statement of financial position of the parent company

Ending balance of Beginning balance Adjustment

Items

the previous year of the current year Reclassification Remeasurement Total

Right of use

1541868510.81 1541868510.81 1541868510.81

assets

Lease liabilities 1502969848.79 1502969848.79 1502969848.79

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Non-current

liabilities due 38898662.02 38898662.02 38898662.02

within one year

VI. Taxes

(1) Major type of taxes and corresponding tax rates

Taxation Method Tax Rate (%)

The balance of output VAT calculated based on

product sales and taxable services revenue in

Value-added Tax (VAT) 6 10 13

accordance with the tax laws after subtracting the

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 6271.10 3026.68

Cash at bank 4457447843.81 9229414568.44

Other monetary funds 5053246387.76 3897249320.14

Total 9510700502.67 13126666915.26

Total amount deposited abroad

The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 30 June 2021 31 December 2020

Margin for bank acceptance bill 4161606387.76 3306509320.14

Margin for letter of credit 338900000.00 78000000.00

Fixed deposit or notice deposit

552000000.00 512000000.00

used for guarantee

Loan margin 740000.00 740000.00

Others

Total 5053246387.76 3897249320.14

(2) Accounts receivable

1. Accounts receivable disclosed by aging

Items 30 June 2021 31 December 2020

Within 1 year (inclusive) 226242229.74 245084695.28

1-2 years (inclusive) 57104726.32 57537987.36

2-3 years (inclusive) 250933831.67 251762129.07

Over 3 years 177992483.25 179465975.74

Total 712273270.97 733850787.45

Less: Provision for bad debts 486762702.05 488633604.79

Total 225510568.92 245217182.66

2. Accounts receivable disclosed by category

30 June 2021

Gross carrying amount Provision for bad debts

Items

Percentage Bad debts Book value

Amount Amount

(%) ratio (%)

Tested for impairment

352985418.30 49.56 352985418.30 100.00

individually

Tested for impairment by

359287852.67 50.44 133777283.75 37.23 225510568.92

portfolio

Include:

Portfolio 1: Aging portfolio 359287852.67 50.44 133777283.75 37.23 225510568.92

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021

Gross carrying amount Provision for bad debts

Items

Percentage Bad debts Book value

Amount Amount

(%) ratio (%)

Total 712273270.97 100.00 488633604.79 225510568.92

31 December 2020

Gross carrying amount Provision for bad debts

Items

Percentage Bad debts Book value

Amount Amount

(%) ratio (%)

Individually significant and

tested for impairment 352985418.30 48.1 352985418.30 100

individually

Accounts receivable tested

380865369.15 51.9 135648186.49 35.62 245217182.66

for impairment by portfolio

Include:

Other insignificant items but

tested for impairment 380865369.15 51.9 135648186.49 35.62 245217182.66

individually

Total 733850787.45 100 488633604.79 245217182.66

Accounts receivables tested for impairment individually

30 June 2021

Company Gross carrying Provision for bad Bad debts ratio

Reason

amount debts (%)

Brilliance Automotive Group Bankruptcy

305223081.12 305223081.12 100.00

Holdings Co. Ltd. reorganization

Benxi Nanfen Xinhe

operation

Metallurgical Furnace Material 47762337.18 47762337.18 100.00

ceased

Co. Ltd

Total 352985418.30 352985418.30

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Accounts receivable tested for impairment by aging portfolio:

30 June 2021

Items

Gross carrying amount Provision for bad debts Bad debts ratio (%)

Within 1 year (inclusive) 221398097.73 2213980.98 1.00

1-2 years (inclusive) 1987650.73 198765.07 10.00

2-3 years (inclusive) 5671958.15 1134391.63 20.00

Over 3 years 130230146.07 130230146.07 100.00

Total 359287852.67 133777283.75

3. Information of provision reversal or recovery of bad debts of current period.The reversal of bad debts of current period is RMB 1870902.74.4. No accounts receivable has been written off during the current period.5. Top five debtors at the end of period

30 June 2021

Company Percentage of total Accounts Provision for

Gross carrying amount

receivable (%) bad debts

The first 305223081.12 42.85 305223081.12

The second 90812279.39 12.75 908122.79

The third 52940642.68 7.43 529406.43

The fourth 47762337.18 6.71 47762337.18

The fifth 23016558.21 3.23 230165.58

Total 519754898.58 72.97 354653113.10

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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Item 30 June 2021 31 December 2020

Notes Receivable 5143627467.44 4189977871.92

Including: Bank acceptance bill 4727663597.31 1875594439.85

Commercial acceptance bill 415963870.13 2314383432.07

Total 5143627467.44 4189977871.92

Note: 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 30 June 2021

Bank acceptance bill 16991847.39

Commercial acceptance bill 6000000.00

Total 22991847.39

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 23332790273.96

Commercial acceptance bill 573182722.67

Total 23332790273.96 573182722.67

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

30 June 2021 31 December 2020

Aging

Amount Percentage (%) Amount Percentage (%)

Within 1 year (inclusive) 2015400779.69 99.43 2096232640.14 99.44

1-2 years (inclusive) 11607433.17 0.57 11812137.51 0.56

2-3 years (inclusive)

Over 3 years

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Aging

Amount Percentage (%) Amount Percentage (%)

Total 2027008212.86 100.00 2108044777.65 100.00

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 1371730593.76 67.67

The Second 112823353.80 5.57

The Third 82441146.14 4.07

The Fourth 59475880.47 2.93

The Fifth 53435651.36 2.64

Total 1679906625.53 82.88

(5) Other receivables

Items 30 June 2021 31 December 2020

Interest receivables 51637650.49 33685359.01

Dividend receivables

Other receivables 108542740.73 108415992.26

Total 160180391.22 142101351.27

1．Interest receivable

(1) Interest receivable disclosed by category

Items 30 June 2021 31 December 2020

Deposit interest 51637650.49 33685359.01

Subtotal 51637650.49 33685359.01

Less: provision for bad debts

Total 51637650.49 33685359.01

(2) The company has no significant overdue interest and provision for bad debts.

2．Other receivables

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(1) Other receivables disclosed by aging

Items 30 June 2021 31 December 2020

Within 1 year (inclusive) 53547523.88 53420775.41

1-2 years (inclusive) 42323476.43 42323476.43

2-3 years (inclusive) 12988305.06 12988305.06

Over 3 years 68088848.67 68267923.76

Total 176948154.04 177000480.66

Less: Provision for bad debts 68405413.31 68584488.40

Total 108542740.73 108415992.26

(2) Information of provision for bad debts

Stage one Stage two Stage three

lifetime expected credit lifetime expected credit

Provision for bad

12-month expected losses losses Total

debts

credit losses (credit impairment has not (credit impairment has

occurred) already occurred)

Beginning balance 352376.05 9566849.71 58665262.64 68584488.4

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

179075.09 179075.09

the current period

Reversal during the

current period

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Stage one Stage two Stage three

lifetime expected credit lifetime expected credit

Provision for bad

12-month expected losses losses Total

debts

credit losses (credit impairment has not (credit impairment has

occurred) already occurred)

Write-off during the

current period

Other changes

Ending balance 352376.05 9387774.62 58665262.64 68405413.31

Changes in the gross carrying amount of other receivables are as follows:

Stage one Stage two Stage three

lifetime expected lifetime expected credit

Provision for bad

12-month expected credit losses losses Total

debts

credit losses (credit impairment has (credit impairment has

not occurred) already occurred)

Beginning balance 97730535.73 20604580.70 58665364.23 177000480.66

Transfer into second

stage

Transfer into third

stage

Transfer back to

second stage

Transfer back to first

stage

Increase 160729544.48 2719095.30 163448639.77

Decrease 181359715.57 2050596.28 90654.55 183500966.40

Other changes

Ending balance 77100364.64 21273079.72 58574709.68 156948154.04

(3) There is no other receivables written off in the current period.

(4) Other receivables disclosed by nature

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Nature 30 June 2021 31 December 2020

Current Account 167883799.30 167775115.62

Others 9064354.74 9225365.04

Total 176948154.04 177000480.66

(5) Top five debtors at the end of the period

Percentage of total other Provision for bad

Company Nature or content Amount Aging

receivables (%) debts

The First Accounts 5926131.29 within 1 year 3.35

The Second Accounts 4706815.40 within 1 year 2.66 47068.15

The Third Accounts 3359795.18 within 1 year 1.90

within 1 year to

The Fourth Accounts 3125550.76 1.77 2538389.24

over 3 years

The Fifth Accounts 2394571.41 within 1 year 1.35

Total 19512864.04 11.03 2585457.39

(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

30 June 2021 31 December 2020

Items Gross carrying Gross carrying

Impairment Book value Impairment Book value

amount amount

Raw

material

4267026164.99 26986533.69 4240039631.30 4535270857.67 26986533.69 4508284323.98

and main

material

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Items Gross carrying Gross carrying

Impairment Book value Impairment Book value

amount amount

Work in

process and

self-made

1730031748.42 1730031748.42 1732705334.71 1946088.69 1730759246.02

semi-

finished

product

Finished

2693274235.96 2693274235.96 2805646918.75 4625146.10 2801021772.65

products

Total 8690332149.37 26986533.69 8663345615.68 9073623111.13 33557768.48 9040065342.65

2. Impairment of inventory

31 December Increase Decrease

Category 2020 1 January 2021 Write-back 30 June 2021

Provision Others Others

or write-off

Raw material and

26986533.69 26986533.69 26986533.69

main material

Work in process and

self-made semi- 1946088.69 1946088.69 1946088.69

finished product

Finished products 4625146.10 4625146.10 4625146.10

Total 33557768.48 33557768.48 6571234.79 26986533.69

(7) Other current assets

Items 30 June 2021 31 December 2020

Prepaid tax 183320437.20

VAT input tax 138313168.95 86091954.53

Term Deposit 7000000000.00 5254234444.28

Total 7138313168.95 5523646836.01

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(8) Long-term equity investment

Increase/decrease

31 Income or loss on Other Declaration of

Addition Reduction Other 30 June Total

Investees December investment Comprehensive Cash

of of Equity Others 2021 Impairment

2020 recognized under Income Dividends or Provision

Investment Investment Changes

the equity method Adjustment Profit

1．Joint Venture

Subtotal

2．Associated Enterprise

Zhejiang Bengang Jingrui

Steel Processing Co. 2742064.73 281949.15 3024013.88

Ltd..Subtotal 2742064.73 281949.15 3024013.88

Total 2742064.73 281949.15 3024013.88

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(9) Other equity instrument investment

Items 30 June 2021 31 December 2020

Suzhou Bengang Industrial Co. Ltd. 3888980.00 3888980.00

Sinosteel Shanghai Steel Processing Co. Ltd.Northeast Special Steel Group Co. Ltd. 1037735849.00 1037735849.00

Guangzhou Benpu Auto Board Sales Co. Ltd. 200000.00 200000.00

Wuhan Bengang Yuanhong Trading Co. Ltd 200000.00 200000.00

Total 1042024829.00 1042024829.00

Notes:

The item "Other equity instrument investment" reflects the ending book value of the non-trading equity instrument

investment designated by the company as measured at fair value at fair value through other comprehensive income

on 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 of

Dalian Co. Ltd. Shenyang branch.

(10) Fixed assets

1. Fixed assets and Disposal of fixed assets

Items 30 June 2021 31 December 2020

Fixed assets 25137148377.89 26284567956.44

Disposal of fixed assets

Total 25137148377.89 26284567956.44

2. Details of fixed assets

Transportation

Items Buildings Machinery equipment and Total

others

1．Gross carrying amount

(1) 31 December 2020 12992173762.87 48920259525.40 912920312.85 62825353601.12

(2) Increase in current period 2072031.87 17602680.61 21571760.13 41246472.61

Including: Purchase 5095357.71 1550536.37 6645894.08

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Transportation

Items Buildings Machinery equipment and Total

others

Transferred

2072031.87 12507322.90 20021223.76 34600578.53

from construction in progress

Merging

(3) Decrease in current period 21486289.18 85651353.05 13196686.98 120334329.21

Including: Disposal 21486289.18 85651353.05 13196686.98 120334329.21

Others

(4) 30 June 2021 12972759505.56 48852210852.96 921295386.00 62746265744.52

2．Total accumulated

depreciation

(1) 31 December 2020 6133288869.64 29679421087.16 629132131.82 36441842088.62

(2) Increase in current period 156696842.77 916015124.86 92683049.51 1165395017.14

Including: Provision 156696842.77 916015124.86 92683049.51 1165395017.14

(3) Decrease in current period 7104196.69 77399251.84 12559846.66 97063295.19

Including: Disposal 7104196.69 77399251.84 12559846.66 97063295.19

(4) 30 June 2021 6282881515.72 30518036960.18 709255334.67 37510173810.57

3．Total impairment

(1) 31 December 2020 36963620.92 61979935.14 98943556.06

(2) Increase in current period

Including: Provision

Others

(3) Decrease in current period

Including: Disposal

(4) 30 June 2021 36963620.92 61979935.14 98943556.06

4．Total net book value of

Fixed assets

(1) 30 June 2021 6652914368.92 18272193957.64 212040051.33 25137148377.89

(2) 31 December 2020 6821921272.31 19178858503.10 283788181.03 26284567956.44

3. Fixed assets idled temporarily

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Gross carrying amount Accumulated depreciation Impairment Book value

Buildings 94707444.27 59005241.87 35702202.40

Machinery 539534736.81 474959225.20 63241353.66 1334157.95

Transportation

1042125.89 1042125.89

equipment and others

Total 635284306.97 535006592.96 98943556.06 1334157.95

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 financial

leasing was RMB 1907492831.36 all of which were leased from the related party Liaoning Hengyi Financial

Leasing Co. Ltd.5. Fixed assets leased out by operating lease

Items Book value

Buildings 6755257.55

Total 6755257.55

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

Items Book value Reason

Buildings 1145596922.34 To be handled

(11) Construction in progress

1. Construction in progress and Construction materials

Items 30 June 2021 31 December 2020

Construction in progress 2875627953.81 1837160389.66

Project materials 2711552.45 2773325.92

Total 2878339506.26 1839933715.58

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

2. Details of construction in progress

30 June 2021 31 December 2020

Items Total

Gross carrying amount Book value Gross carrying amount Total impairment Book value

impairment

Special Steel Electric Furnace Capacity Replacement

Project 586967067.58 586967067.58 358101195.01 358101195.01

CCPP power generation project 618341552.04 618341552.04 300907874.71 300907874.71

Special steel rolling mill renovation project 221971351.85 221971351.85 151433585.06 151433585.06

Advanced Treatment and Reuse Project of Reclaimed

Water in General Energy Plant 107261475.47 107261475.47 98563871.96 98563871.96

360 square meter sintering machine 106378428.49 106378428.49 82878409.99 82878409.99

No. 7 blast furnace dry dust removal and energy-saving

transformation of TRT power generation 71310841.86 71310841.86 70402228.77 70402228.77

Environmental protection overhaul project of No. 6 blast

furnace 66322604.36 66322604.36 66322604.36 66322604.36

360 square meter sintering machine waste heat utilization 56547049.50 56547049.50 56547049.50 56547049.50

One-tower desulfurization revamp in the coking plant 45127284.61 45127284.61 31893853.65 31893853.65

The overall improvement of Benxi Steel's manufacturing

management 32540243.11 32540243.11 29824289.00 29824289.00

Flue gas desulfurization and denitrification of No. 7 coke

oven in the plate coking plant 28794085.23 28794085.23 28774283.25 28774283.25

Energy General Plant No. 1 Converter Gas Tank System

Transformation Project 46420310.06 46420310.06 24008553.86 24008553.86

Cold rolled high-strength steel renovation project 62631294.36 62631294.36 23961023.15 23961023.15

220kV Substation Project of General Energy Plant 85045639.28 85045639.28 23302571.03 23302571.03

Chemical Coke Oven Gas Project – Bengang transferred

to Liaoning Coal 21840791.70 21840791.70 21840791.70 21840791.70

5#Blast furnace relocation overhaul 30605158.49 30605158.49

1700 Hot Rolling Improvement 10197720.39 10197720.39

Environmental protection transformation of No. 4-6

converter 7583100.51 7583100.51

1# converter energy saving and environmental protection

transformation 3642180.47 3642180.47

Newly built 8# single-strand slab caster project 33160739.55 33160739.55

5#-7# Oxygen Generator Nitrogen-increasing and Energy-

saving Modification 877876.11 877876.11

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Items Total

Gross carrying amount Book value Gross carrying amount Total impairment Book value

impairment

Transformation of No. 2 Casting Machine in Steelmaking

Plant 4652919.13 4652919.13

Other 627408239.66 627408239.66 468398204.66 468398204.66

Total 2875627953.81 2875627953.81 1837160389.66 1837160389.66

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

3. Changes in important construction projects in the current period

Project

Transferred Other cumulative Including： InterestAccumulated

to fixed asset decrease investment Interest capitalizatio

Increase during Project amount of

Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources

current period progress interest of funds

current current the proportion amount in current

(%) capitalization

period period of the budget current period period (%)

(%)

Special Steel

Electric Furnace

Capacity 161761.00 358101195.01 228865872.57 586967067.58 36.00% 40% Capital raised

Replacement

Project

CCPP power

generation 106000.00 300907874.71 317433677.33 618341552.04 58.00% 60% 9433121.11 3074117.80 4.35% Capital raised

project

Special steel

rolling mill

renovation 59607.00 151433585.06 70537766.79 221971351.85 37.00% 40% 5076881.26 1170984.20 4.35% O t h e r s

project

Advanced

Treatment and

Reuse Project of

Reclaimed 17000.00 98563871.96 8697603.51 107261475.47 63.00% 65% o thers

Water in

General Energy

Plant

No. 7 blast

furnace dry dust

removal and 9332.00 70402228.77 908613.09 71310841.86 76.00% 75% 361850.63 67870.57 4.35% others

energy-saving

transformation

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Project

Transferred Other cumulative Including： InterestAccumulated

to fixed asset decrease investment Interest capitalizatio

Increase during Project amount of

Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources

current period progress interest of funds

current current the proportion amount in current

(%) capitalization

period period of the budget current period period (%)

(%)

of TRT power

generation

Environmental

protection

overhaul project 25225.00 66322604.36 66322604.36 75.00% 75% o thers

of No. 6 blast

furnace

One-tower

desulfurization

revamp in the 7000.00 31893853.65 13233430.96 45127284.61 64.00% 65% o thers

coking plant

5#Blast furnace

relocation 124086.50 30605158.49 30605158.49 66.00% 70% 36576844.35 5166620.30 4.35% Capital raised

overhaul

1700 Hot

Rolling 25000.00 10197720.39 10197720.39 71.00% 75% o thers

Improvement

Environmental

protection

transformation 27000.00 7583100.51 7583100.51 61.00% 95% 3729352.38 929554.12 4.35% Capital raised

of No. 4-6

converter

1# converter

energy saving

and 21800.00 3642180.47 3642180.47 65.00% 70% 2220278.55 449519.92 4.35% others

environmental

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Project

Transferred Other cumulative Including： InterestAccumulated

to fixed asset decrease investment Interest capitalizatio

Increase during Project amount of

Items Budget 31 December 2020 during during 30 June 2021 accounted for capitalization n rate in Sources

current period progress interest of funds

current current the proportion amount in current

(%) capitalization

period period of the budget current period period (%)

(%)

protection

transformation

Newly built 8#

single-strand

slab caster 64341.00 33160739.55 33160739.55 59.00% 60% o thers

project

5#-7# Oxygen

Generator

Nitrogen-

increasing and 4726.10 877876.11 877876.11 83.00% 85% o thers

Energy-saving

Modification

Transformation

of No. 2 Casting

Machine in 10090.00 4652919.13 4652919.13 87.00% 90% 387012.00 102460.41 4.35% others

Steelmaking

Plant

Total 662968.60 1077625213.52 730396658.90 1808021872.42 57785340.28 10961127.32

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

4. There is no impairment of construction in progress during the current period.5. Construction materials

30 June 2021 31 December 2020

Items Gross carrying Gross carrying

Impairment Book value Impairment Book value

amount amount

Construction

2711552.45 2711552.45 2773325.92 2773325.92

materials

Total 2711552.45 2711552.45 2773325.92 2773325.92

(12) Right of use assets

Items Book value Reason

Right of use assets 1510538778.93

Total 1510538778.93

(13) Intangible assets

1. Details of intangible assets

Items Land use right Software Total

1．Total of original value

(1) 31 December 2020 327028797.84 310401.55 327339199.39

(2) Increase

Including: Purchase

Internal R&D

Increase in Mergers

(3) Decrease

Including: Disposal

Others

(4) 30 June 2021 327028797.84 310401.55 327339199.39

2．Total of Accumulated Amortization

(1) 31 December 2020 62257844.20 148702.65 62406546.85

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Land use right Software Total

(2) Increase 3270287.94 13397.46 3283685.40

Including: Provision 3270287.94 13397.46 3283685.40

Others

(3) Decrease

Including: Disposal

Others

(4) 30 June 2021 65528132.14 162100.11 65690232.25

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 261500665.70 148301.44 261648967.14

(2) 30 June 2021 264770953.64 161698.90 264932652.54

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

30 June 2021 31 December 2020

Items Deductible temporary Deferred tax Deductible temporary Deferred tax

differences asset differences asset

Impairment 389810760.81 97452690.20 398431973.43 99607993.35

Internal unrealized profit 74424898.88 18606224.72 74424898.92 18606224.73

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Items Deductible temporary Deferred tax Deductible temporary Deferred tax

differences asset differences asset

Differences of depreciation

333978859.03 83494714.76 333978859.03 83494714.76

and amortization

Total 798214518.72 199553629.68 806835731.38 201708932.84

2. Unrecognized deferred tax assets

Items 30 June 2021 31 December 2020

Deductible temporary differences 305702137.30 305702137.30

Deductible losses 54629940.42

Total 305702137.30 360332077.72

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

Items 30 June 2021 31 December 2020 Notes

Year 2021 10945961.04

Year 2022 1001166.72

Year 2023 14114953.21

Year 2024 17910573.13

Year 2025 10657286.32

Total 54629940.42

(15) Other non-current assets

30 June 2021 31 December 2020

Items Gross carrying Impair Gross carrying Impair

Book value Book value

amount ment amount ment

Prepayment

for long-term 851101139.47 851101139.47 995840320.65 995840320.65

assets

Total 851101139.47 851101139.47 995840320.65 995840320.65

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(16) Short-term loans

1. Classification of short-term loans

Items 30 June 2021 31 December 2020

Pledge loans

Mortgage loans

Guaranteed loans 7285419000.00 9687731000.00

Credit loans 210000000.00 380000000.00

Total 7495419000.00 10067731000.00

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 4140752366.66 7747043186.29

Domestic letter of credit 635939800.00 857106162.13

Domestic letter of credit 1338000000.00 1210000000.00

Total 6114692166.66 9814149348.42

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 4822988701.75 5122416750.84

Accounts payable for labor 15842004.02 18697483.74

Accounts payable for project and equipment 443173947.38 513842739.32

Repair expense 223618888.81 259271282.92

Total 5505623541.96 5914228256.82

2. Significant accounts payable aging over one year

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Ending balance Amount aging over one year

Company 1 36218300.00 36218300.00

Company 2 35081745.24 30361745.24

Company 3 23579692.14 23379692.14

Company 4 15810625.07 15810625.07

Company 5 14200000.00 14200000.00

Company 6 14126435.78 12651035.78

Total 139016798.23

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 6182094798.39 4458671819.90

Total 6182094798.39 4458671819.90

As of June 30 2021 the value-added tax received in advance when the payment is received in advance is RMB

803672323.79 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

25748902.30 937619306.42 930159243.80 33208964.92

benefits

(2) Post-employment

benefits - defined 582.95 104179630.07 104180213.02

contribution plans

(3) Termination benefits

(4) Other benefits due

within one year

Total 25749485.25 1041798936.49 1034339456.82 33208964.92

2. Short-term employee benefits

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 31 December 2020 Increase Decrease 30 June 2021

(1) Salary bonus

16591117.11 761247064.95 754888309.88 22949872.18

allowance and subsidy

(2) Employee welfare 30254179.78 30254179.78

(3) Social Insurance 653712.74 68075443.50 68075507.09 653649.15

Including: Medical

3683.11 52218853.23 52218853.23 3683.11

insurance

Work injury

650029.63 15846547.47 15846547.47 650029.63

insurance

Maternity

10042.80 10042.80

insurance

(4) Housing 6859195.00 62336339.00 62332739.00 6862795.00

(5) Union funds and staff

1644877.45 15706279.19 14608508.05 2742648.59

education fee

(6) Short-term

compensated absences

(7) Short-term profit -

sharing scheme

Total 25748902.30 937619306.42 930159243.80 33208964.92

3. Defined contribution plans

Items 31 December 2020 Increase Decrease 30 June 2021

Basic pension fund 565.28 100645692.28 100646257.56

Unemployment insurance 17.67 3533937.79 3533955.46

Total 582.95 104179630.07 104180213.02

(21) Current tax liabilities

Items 30 June 2021 31 December 2020

Value-added tax 133075994.19 22541925.74

Corporate income tax 180745973.41 9589798.62

City maintenance and construction tax 16511584.41 4490656.56

House property tax 3823901.19 3661600.13

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 30 June 2021 31 December 2020

Educational surcharges 11842865.16 3211296.48

Land use right tax 1180402.66 1180402.66

Environmental tax 775068.53 8398902.77

Others 2915101.45 2227498.00

Total 350870891.00 55302080.96

(22) Other payables

Items 30 June 2021 31 December 2020

Interest payables

Dividends payables 38753715.32

Other payables 673405372.03 709448301.92

Total 712159087.35 709448301.92

1. Interest Payable

Items 30 June 2021 31 December 2020

Loan interests 38753715.32

Total 38753715.32

2. Other payables

(1) Other payables disclosed by nature

Items 30 June 2021 31 December 2020

Deposit 2074097.73 1713563.89

Margin 111559681.36 98316454.89

Accounts 487437063.26 525775209.97

Others 72334529.68 83643073.17

Total 673405372.03 709448301.92

(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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 30 June 2021 31 December 2020

Long-term loans due within one year 71011323.08 1287630361.43

Bond payables due within one year 27200000.00 20400000.00

Long-term payables due within one year 39667032.50 38898662.02

Total 137878355.58 1346929023.45

Notes: Among the long-term loans due within one year RMB71011323.08 is guaranteed loan.

(24) Other current liabilites

Items 30 June 2021 31 December 2020

Output VAT to be recognized 803672323.79 579627336.58

Total 803672323.79 579627336.58

(25) Long-term loans

Items 30 June 2021 31 December 2020

Pledged loans 622600000.00 622600000.00

Mortgage loan

Guaranteed loans 962934418.16 798714362.65

Credit loans 2724252523.81 2081620065.00

Total 4309786941.97 3502934427.65

(26) Bond payables

(1) Bonds payables disclosed by category

Items 30 June 2021 31 December 2020

Convertible Bond 5732396546.29 5752229339.52

Total 5732396546.29 5752229339.52

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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

Issue Term to Balance at the end of Interest accrued at Premium and discount Repayment in this Balance at the end of

Items Book value Issuance amount Current issue

date maturity the previous year face value amortization period the current year

Convertible Bond

Jun 29 2

(Bond 6800000000.00 6 years 6800000000.00 5752229339.52 47600000.00 26884660.81 40548132.42 5732396546.29020

code:127018)

Total 6800000000.00 6800000000.00 5752229339.52 47600000.00 26884660.81 40548132.42 5732396546.29

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 the

first 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 allocated

issuance expenses is RMB 5612624636.40 which is included in the bonds payable; the fair value of the corresponding equity component after deducting the allocated issuance

cost of the Company is RMB 1146290662.42 which is included in other equity instruments. In the subsequent measurement the liability part is measured and adjusted by

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 Stock

Exchange on August 4 2020 and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of the convertible corporate bonds issued

this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3 2020) 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 is

adjusted to RMB 5.02 per share on July 192021.

(3) Notes to other financial instruments classified as financial liabilities

None.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(27) Lease liabilities

Items 30 June 2021 31 December 2020

Special payables 1549600900.45

Total 1549600900.45

(28) Long-term payables

Items 30 June 2021 31 December 2020

Long-term payables 1907492831.36 1114232362.74

Special payables

Total 1907492831.36 1114232362.74

Long-term payables

Items 30 June 2021 31 December 2020

Financing lease payments 1907492831.36 1114232362.74

In which: Unrealized financing expenses 1190601171.64 779232152.85

Total 1907492831.36 1114232362.74

Notes: At the end of the reporting period the amount of unrealized financing expenses payable for financing leases

is RMB1190601171.64;

The minimum financing lease payment to be paid after the balance sheet date is RMB 1907492831.36:

The company needs to pay interest on time the principal is a one-off payment after the lease contract

expires 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

154451833.23 1225520.00 32210883.34 123466469.89

subsidy

Total 154451833.23 1225520.00 32210883.34 123466469.89

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Projects of government subsidies:

Transfer to non- Offsetting

Transfer to other Other Related to assets or

Items 31 December 2020 Increase operating cost or 30 June 2021

income decrease income

income expenses“Steel for high-strength pipelines under low-temperature and high-pressure service conditions” 30677.74 30677.74 Income

Project national support funds

2018 Municipal Skill Master Workstation Fee 66616.34 66616.34 Income

Advanced Treatment Project of Carbon Fiber

Wastewater in Dongfeng Plant Area of Plate Coking 9500000.00 950000.00 8550000 Assets

Plant

Desulfurization and Denitrification Project of Coal-

fired Boiler in High-pressure Workshop of Bengang 3600000.00 300000 3300000.00 Assets

Power Plant

Research and development of high-strength steel for

the third generation of automobiles 2320000.00 290000.00 2030000.00 Assets

7 sets of 130 tons combustion boiler flue gas

desulfurization project in power plant 9600000.00 2400000.00 7200000.00 Assets

Power plant three power plant cogeneration reform

project 4000000.00 1000000.00 3000000.00 Assets

Demonstration project of construction of energy

management center for industrial enterprises 2320000.00 1160000.00 1160000.00 Assets

Research and development of anti-oxidation hot

forming steel PHS1500A 165152.27 165152.27 Income

Automatic air quality monitoring system 35000.00 35000.00 0 Assets

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Transfer to non- Offsetting

Transfer to other Other Related to assets or

Items 31 December 2020 Increase operating cost or 30 June 2021

income decrease income

income expenses

Cold-rolled high-strength steel reconstruction

project 100000000.00 25000000.00 75000000 Assets

Liaoning Artisan Subsidy 21.89 21.89 Income

Construction of professional technology innovation

platform for automobile steel industry 200000.00 200000 Assets

Research on the Influence Mechanism and Control

of Rare Earth Oxide Sulfide on Automobile Steel 184364.99 24876.50 159488.49 Income

Plasticity

Introduce special funds for overseas advanced

applicable technology (progress in production 2000000.00 1000000.00 1000000.00 Assets

technology of high-grade electro-galvanized sheet)

2019 Municipal Skills Master Workstation Cost 180000.00 21006.84 158993.16 Income

2020 Ecological Civilization Construction Project

(Special Steel Electric Furnace Upgrade Project) 20000000.00 20000000.00 Assets

Liaoning Province "Hundred Thousand Thousand

Thousand Talents Project" funding project in 2018 250000.00 30000.00 220000.00 Income

Research on the Influence Mechanism and Control

of Rare Earth Oxide Sulfide on Automobile Steel 925520 925520.00 Income

Plasticity

Provincial master station subsidy 300000.00 300000.00 Income

Total 154451833.23 1225520.00 32210883.34 123466469.89

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(30) Share capital

Increase/decrease (+ - )

Items 31 December 2020 Issuing of new Transferred from 30 June 2021

Bonus shares Others Subtotal

share reserves

Capital shares 3875371532.00 9689073.00 9689073.00 3885060605.00

(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:

20201231 Increase Decrease 20210630

Items

Number Book value Number Book value Number Book value Number Book value

Convertible corporate bonds 68000000.00 1146290662.42 487432 8219782.00 67512568 1138070880.42

Total 68000000.00 1146290662.42 487432 8219782.00 67512568 1138070880.42

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 487432

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(32) Capital reserves

Items 31 December 2020 Increase Decrease 30 June 2021

Capital premium over par

12227292378.47 12227292378.47

value

Other capital reserves 115917468.82 38759518.23 154676987.05

Total 12343209847.29 38759518.23 12381969365.52

(33) Special Reserves

Items 31 December 2020 Increase Decrease 30 June 2021

Safety production

300412.14 24398347.80 6368148.59 18330611.35

cost

Total 300412.14 24398347.80 6368148.59 18330611.35

(34) Surplus Reserves

31 December

Items 1 January 2021 Increase Decrease 30 June 20212020

Statutory surplus

961105529.85 961105529.85 961105529.85

reserves

Total 961105529.85 961105529.85 961105529.85

(35) Undistributed Profits

Items Current period Previous period

Before adjustments: undistributed profits at last

2692018405.40 2307765664.62

year-end

Adjustments of the beginning distributed profits

(increase + / decease -)

After adjustments: undistributed profit at this year-

2692018405.40 2307765664.62

beginning

Add: undistributed profit belonging to parent

2208798167.91 384252740.78

company

Less: Statutory surplus reserves

Discretionary reserves

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

General risk reserves

Common shares dividend payable 38753715.32

Common shares dividend transferred to paid-in

capital

Ending balance of undistributed profits 4862062857.99 2692018405.40

(36) Operating income and operating cost

Current period Previous period

Items

Revenue Cost Revenue Cost

Principal

35798649027.39 32161874843.45 20470526587.62 18886384469.92

business

Other business 2789479184.75 2430950949.27 1714010672.43 1553861892.75

Total 38588128212.14 34592825792.72 22184537260.05 20440246362.67

Details for operating income:

Item Principal business Other business

Classified by business area 35798649027.39 2789479184.75

Including：Domestic 31875366736.04 2789479184.75Abroad 3923282291.35

Classified by the time of commodity transfer 35798649027.39 2789479184.75

Including: recognize at a certain point in time 35798649027.39 2789479184.75

recognize over a certain period of time

Total 35798649027.39 2789479184.75

(37) Tax and surcharges

Items Current period Previous period

City maintenance and construction tax 76391993.56 13467815.13

Educational surcharge 54742060.36 9674693.55

Housing property tax 40482761.79 40089186.70

Land use right tax 6848481.27 6457679.78

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

Stamp duty and others 10152512.38 5619563.86

Environmental tax 52930399.36 12962357.84

others 7286.20 127139.82

Total 241555494.92 88398436.68

(38) Selling and distribution expenses

Items Current period Previous period

Freight 532184917.51

Port surcharges 53812369.10

Import and export agency fee 36480975.97 30678165.54

Salary and benefits 15027843.69 12735597.76

Others 3787047.04 9404066.26

Package fee 4356803.02 3578102.61

Total 59652669.72 642393218.78

(39) General and administrative expenses

Items Current period Previous period

Salary and benefits 174030589.62 134676282.75

Repair expense 107230408.76 102044859.99

Land use right fee 32611483.62 32611483.62

Depreciation 19687001.55 18573834.52

Heating fee 16329843.40 18050334.83

Water resources fee 4078271.50 12470097.22

Environment protection fee 4145377.97 4414545.30

Others 30565866.81 57986878.18

Total 388678843.23 380828316.41

(40) Research and development expenses

Items Current period Previous period

Depreciation materials and compensation etc. 22504022.68 20202985.20

Total 22504022.68 20202985.20

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(41) Financial expenses

Items Current period Previous period

Interest expenditure 554219518.90 439861353.93

Less: Interest income 222276204.79 154882284.33

Exchange loss -15432430.80 45932418.60

Others 19844815.53 24125152.20

Total 336355698.84 355036640.40

(42) Other income

Items Current period Previous period

Government subsidy 32210883.34 37894126.40

Others 448600.00 693206.00

Total 32659483.34 38587332.40

(43) Income on investment

Items Current period Previous period

Income on disposal of long-term equity investment by

281949.15 29304.00

equity method

Investment income from disposal of trading financial assets

Dividend from holding other equity instruments

Income on bank short-term financial products 1553175.04

Total 1835124.19 29304.00

(44) Credit impairment loss

Items Current period Previous period

Loss from bad debts of account receivable 1870902.74 3266886.62

Loss from bad debts of receivable financing

Loss from bad debts of other receivables 179075.09 220896.80

Total 2049977.83 3487783.42

(45) Asset impairment loss

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

Inventory impairment loss 6629442.12 -15321598.62

Impairment of fixed assets

Total 6629442.12 -15321598.62

(46) Assets disposal gains

The amount recognized in

Items Current period Previous period

non-recurring profit

Disposal gains or losses

arising from disposal of fixed 130675.05 325651.61 130675.05

assets not classified for sale

Total 130675.05 325651.61 130675.05

(47) Non-operating income

The amount

Items Current period Previous period recognized in non-

recurring profit

Non-current assets scrapped

717592.73 302362.80 717592.73

gains

Debt restructuring gain 32800.02

Others 2555535.73 805201.30 2555535.73

Total 3273128.46 1140364.12 3273128.46

(48) Non-operating expense

The amount

Items Current period Previous period recognized in non-

recurring profit

Non-current assets scrapped

22989643.14 20035471.42 22989643.14

loss

Total 22989643.14 20035471.42 22989643.14

(49) Income tax expense

1. Income tax expense

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

Income tax payable for the current year 744822287.29 12626191.22

Adjustment of deferred income tax 2155303.16 -3388376.14

Total 746977590.45 9237815.08

2. Accounting profit and income tax expense adjustment process

Items Current period

Total profit 2970143877.88

Income tax expense calculate according to the official or applicable tax rate 742535969.47

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

4441620.98

period

Effect of deductible temporary differences or deductible losses of

unrecognized deferred tax asset of current period

Changes in the balance of deferred income tax assets and liabilities at the

beginning of the period due to additional deductible expenses and tax rate

adjustments required by the tax law

Income tax expenses 746977590.45

(50) Earning per share

1. Basic earnings per share

The basic earnings per share is calculated by dividing the consolidated net profit attributable

to the common stock shareholders of the parent company by the weighted average number

of common stocks issued by the company:

Items Current period Previous period

Consolidated net profit attributable to ordinary

2208798167.91 254644204.33

shareholders of parent company

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

The weighted average number of common shares

3885060605.00 3875371532.00

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 attributable

to the common shareholders of the parent company (diluted) by the weighted average

number of ordinary shares issued by the company (diluted):

Since convertible bonds have caused anti-dilution diluted earnings per share are disclosed

in 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 14619093.59 16851204.08

Interest income 222276204.79 154882284.33

Special subsidy income 1225520.00 1626919.00

Non-operating income 1068391.65 503009.25

Others 130327.27 153380.34

Total 239319537.30 174016797.00

2. Cash paid related to other operating activities

Items Current period Previous period

Current accounts advance for another 179844208.53 199605380.27

Sales expenses 4351842.16 4545479.59

Administrative expenses 15765954.58 18446185.30

Bank charges 2980552.81 3331343.25

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

Others 437431.93 360322.84

Total 203379990.00 226288711.25

(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 2223166287.43 256406850.34

Add: Credit impairment loss 2049977.83 3487783.42

Asset impairment loss 6629442.12 -15321598.62

Depreciation of fixed assets and so on 1165395017.14 1201263368.47

Amortization of right of use assets 31329731.88

Amortization of oil assets

Amortization of intangible assets 3283685.40 3283685.40

Long-term deferred expenses

Losses proceeds from disposal of PPE intangible

assets and other long-term assets (Earnings 22272050.41 19733108.62

marked“－”)

Scrapped losses from fixed assets (Earnings

marked“－”)

Change in fair value loss (Earnings marked“－”)

Financial expenses (Earnings marked“－”) 336355698.84 355036640.40

Investment losses (Earnings marked“－”)

Deferred tax assets reduction (Addition

-2155303.16 -3388376.14

marked“－”)

Deferred tax liabilities increased (Reduction

marked“－”)

Reduction of inventory (Addition marked“－”) 376719726.97 -1885641689.91

Operating receivable items reduction (Addition

102664138.59 -1938821059.08

marked“－”)

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Current period Previous period

Operating payable items increase (Less marked"－

-2742794233.42 1852485580.02

")

Other

Net cash flows generated from operating activities 1524916220.03 -151475707.08

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 4457454114.91 11417592663.52

Less: Beginning balance of cash 9229417595.12 13441414988.58

Add: Ending balance of cash equivalents

Less: Opening balance of cash equivalents

The net increase in cash and cash equivalents -4771963480.21 -2023822325.06

2. The structure of cash and cash equivalents

Items 30 June 2021 31 December 2020

1. Cash 4457454114.91 11417592663.52

Including: Cash on hand 6271.10 7110.40

Bank deposits available on demand 4457447843.81 11417585553.12

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 4457454114.91 11417592663.52

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 30 June 2021 31 December 2020

Including: Cash and cash equivalents limited to use by

the parent company of other subsidiary in the

group

(53) Assets of which ownership or right to use are restricted

Items 30 June 2021 Reason

Cash at bank and on hand 5053246387.76 Deposit for notes and letter of credit

Accounts receivable Pledged for acceptance bill and short term

22991847.39

financing loan

Other equity instrument

1037735849.00 Pledged for loans

investments

Fixed assets 94790118.09 Mortgaged for loans

Intangible assets 37116386.66 Mortgaged for loans

Total 6245880588.90

(54) Foreign currency monetary items

1. Foreign currency monetary items

Ending balance in Exchange rate at the Ending balance

Items

foreign currency end of the period translated to RMB

Cash at bank and on hand 7190592.52

Including: USD 1011332.92 6.4601 6533311.80

EUR 55902.49 7.6862 429677.72

HKD 273528.43 0.8321 227603.01

Short-term loans 1227419000.00

Including: USD 190000000.00 6.4601 1227419000.00

Non-current liabilities due

37881323.08

within one year

Including: JPY 23176000.00 0.0658 1524980.80

EUR 4730080.18 7.6862 36356342.28

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Ending balance in Exchange rate at the Ending balance

Items

foreign currency end of the period translated to RMB

Long-term loans 386965986.45

Including: USD 14200000.00 6.4601 77320065.00

EUR 37635016.95 7.6862 302021017.45

JPY 115880000.00 0.0658 7624904.00

2. The Company has no overseas operating entities.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(55) Government subsidy

1. Related to assets

Balance sheet The amount included in the current profit and loss or offset the loss of related costs

Items Amount

presentation items Current period Previous period Items

Advanced Treatment Project of Carbon Fiber

Wastewater in Dongfeng Plant Area of Plate 8550000.00 Deferred income 950000.00 Other income

Coking Plant

Desulfurization and Denitrification Project of

Coal-fired Boiler in High-pressure Workshop 3300000.00 Deferred income 300000.00 300000.00 Other income

of Bengang Power Plant

Research and development of high-strength

2030000.00 Deferred income 290000.00 Other income

steel for the third generation of automobiles

7 sets of 130 tons combustion boiler flue gas

7200000.00 Deferred income 2400000.00 2400000.00 Other income

desulfurization project in power plant

Power plant three power plant cogeneration

3000000.00 Deferred income 1000000.00 1000000.00 Other income

reform project

Industrial enterprise energy management

1160000.00 Deferred income 1160000.00 1160000.00 Other income

center construction demonstration project

Automatic air quality monitoring system - Deferred income 35000.00 35000.00 Other income

Cold-rolled high-strength steel reconstruction

75000000.00 Deferred income 25000000.00 25000000.00 Other income

project

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Balance sheet The amount included in the current profit and loss or offset the loss of related costs

Items Amount

presentation items Current period Previous period Items

Construction of a professional technology

innovation platform for the automotive steel 200000.00 Deferred income 300000.00 Other income

industry

Introduce special funds for overseas advanced

applicable technology (progress in production

1000000.00 Deferred income 1000000.00 1000000.00 Other income

technology of high-grade electro-galvanized

sheet)

2020 Ecological Civilization Construction

Project (Special Steel Electric Furnace 20000000.00 Deferred income Other income

Upgrade Project)

Bengang Automotive Sheet Engineering

Deferred income 160206.60 Other income

Laboratory Project

Energy saving and environmental protection

Deferred income 580000.00 Other income

project for sintering machine in ironworks

Production line of high-grade electro-

Deferred income 4104000.00 Other income

galvanized sheet for automobile

Total 121440000.00 32135000.00 36039206.60

2. Related to income

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The amount included in the current profit and loss or offset the loss of related costs

Items Amount

Current period Previous period Items“Steel for high-strength pipelines under low-temperature and high-pressure service conditions” 30677.74 93575.00 Other income

Project national support funds

2018 Municipal Skill Master Workstation Fee 66616.34 120423.00 Other income

Research and development of anti-oxidation hot

165152.27 Other income

forming steel PHS1500A

Liaoning artisan subsidy 21.89 14002.80 Other income

Research on the Influence Mechanism and Control of

Rare Earth Oxide Sulfide on Automobile Steel 159488.49 24876.50 Other income

Plasticity

2019 Municipal Skills Master Workstation Cost 158993.16 21006.84 Other income

Liaoning Province "Hundred Thousand Thousand Other income

220000.00 30000.00

Thousand Talents Project" funding project in 2018

Research on the Influence Mechanism and Control of Other income

Rare Earth Oxide Sulfide on Automobile Steel 925520.00

Plasticity

Provincial master station subsidy 300000.00 Other income

Others 693206.00 Other income

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The amount included in the current profit and loss or offset the loss of related costs

Items Amount

Current period Previous period Items

Total 2026469.89 75883.34 921206.80

3. Return of government subsidies during the reporting period

None

VIII. Equity in other entities

(1) Equity in subsidiaries

1. Constitution of enterprise group

Shareholding ratio

Name of the subsidiaries Principal place of business Registered address Notes of business Acquiring method

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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Shareholding ratio

Name of the subsidiaries Principal place of business Registered address Notes of business Acquiring method

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 Shenyang Sales 100.00 Establishment

Ltd.Chongqing Liaoben Steel & Iron Trading Co. Ltd. Chongqing Chongqing Sales 100.00 Establishment

Bengang Baojin (Shenyang) auto new material technology Co.Shenyang Shenyang Manufacturing 85.00 Business combination und

Ltd.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 does

not have such matters.For important structured entities included in the scope of consolidation the basis for control: The company does not have such matters.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

2. Significant but not wholly-owned subsidiaries

Profits and losses Dividend declared

Proportion of non- Ending

attributing to non- to distribute to non-

Name of the subsidiaries controlling interests balance of non-

controlling controlling

(%) controlling interests

shareholders shareholders

Bengang Posco Cold-rolled Sheet Co. Ltd. 25.00% 15744812.00 522224787.93

The minority shareholder’s shareholding ratio is different from the voting rights ratio: the company does not have such

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

30 June 2021

Name of the

Non-current Non-current

subsidiaries Current assets Total assets Current liabilities Total liabilities

assets liabilities

Bengang Posco Cold-

1611242660.77 1255121323.33 2866363984.10 777464832.39 777464832.39

rolled Sheet Co. Ltd.Name of the

31 December 2020

subsidiaries

Name of the Non-current Non-current

Current assets Total assets Current liabilities Total liabilities

subsidiaries assets liabilities

Bengang Posco Cold-

3799519376.39 1384600108.47 5184119484.86 3159583481.30 3159583481.30

rolled Sheet Co. Ltd.Current period

Name of the subsidiaries Total comprehensive Net cash flows from

Operating income Net profit

income operating activities

Bengang Posco Cold-rolled Sheet Co.5691380556.81 62979247.98 62979247.98 -138708467.08

Ltd.Name of the subsidiaries Previous period

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Total

Net cash flows from operating

Operating income Net profit comprehensive

activities

income

Bengang Posco Cold-rolled Sheet Co.3483712504.36 12484509.92 12484509.92 389115477.57

Ltd.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 statements

None.

(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: 3024013.88 2742064.73

The total amount of the following items calculated

according to the shareholding ratio

—Net profit 281949.15 374119.86

—Other comprehensive income

—Total comprehensive income 281949.15 374119.86

3. Explanation of significant restrictions on the ability of joint ventures or associates to transfer funds to the

company

None.4. Excess losses incurred by joint ventures or associates

None.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 Instruments

The company faces various financial risks in its operation: credit risk market risk and liquidity risk. The company's

board of directors is fully responsible for the determination of risk management objectives and policies and assumes

ultimate responsibility for the risk management objectives and policies. However the board of directors has authorized

the company's planning and development department to design and implement procedures that ensure the effective

implementation of risk management objectives and policies. The board of directors reviews the effectiveness of the

implemented procedures and the rationality of risk management objectives and policies through reports submitted by the

planning and development department. The company's internal auditors also audit risk management policies and

procedures 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 without

excessively 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 Company

is exposed to credit risk arising from customers’ failure to discharge an obligation in sales on credit. Before signing a

new contract the company will evaluate the credit risk of the new customer including the external credit rating and in

some cases the bank credit certificate (when this information is available). The company has set a credit sales limit for

each customer which is the maximum amount without additional approval.The Company ensures that the company's overall credit risk is within a controllable range through regular monitoring of

existing customer credit ratings and regular review of accounts receivable aging analysis. In the monitoring of credit risk

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

of customers the Company sorts customers into groups by their credit characteristics. Those customers which are rated

as “high risk” will be put in the restricted client list. The Company can only sell to these customers on credit with

additional 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’s

exposure 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 choose

financing methods and combine fixed interest rate with variable interest rate short-term obligations with long-term

obligations. By using effective interest rate risk management methods the Company closely monitors interest rate risk

and 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 has

been constantly working on the adjustment of the organizational framework of risk management and optimization of

debt structures to lower the currency risk.The currency risk facing the Company originates from the assets and liabilities measured by US dollars and Euro. The

ending balance of foreign currency financial assets and foreign currency financial liabilities after converted in RMB is

shown as below:

(In 10 Thousand)

30 June 2021

Items

USD Euro HKD Japanese Yen Total

Assets 653.33 42.97 22.76 719.06

Liabilities 130473.91 33837.74 914.99 165226.63

31 December 2020

Items

USD Euro HKD Japanese Yen Total

Assets 46968.50 40.73 23.02 47032.25

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

31 December 2020

Items

USD Euro HKD Japanese Yen Total

Liabilities 134771.81 37793.88 1025.89 173591.58

On June 30 2021 with all other variables remaining unchanged if the relevant currency appreciates or depreciates

against the RMB by 5% the company will increase or decrease its net profit by RMB 82.2538 million. Management

believes that 5% reasonably reflects a reasonable range of possible changes in the relevant currency against RMB in the

next year.

(3) Liquidity risk

Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of settlement in a manner of

delivering cash or other financial assets. The Company’s policy is to maintain sufficient cash to meet maturing

obligations. Liquidity risk is centralized controlled by the Company’s finance department. Through the monitoring of

unrestricted cash and cash equivalents bank acceptance bills due in short time and the continues forecasting of cash flow

in the next 12 months the finance department ensures that the Company has sufficient cash to meet obligations in all

predicted reasonable circumstances.The following table details the Company’s mature date of residual contract value of underivative financial liabilities to

repay according to the contract terms. The table has been drawn up based on the undiscounted cash flows of financial

liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and

principal cash flows.(In 10 Thousand Yuan)

30 June 2021

Items Over 5

Within 1 year 1-2 years 2-5 years Total

years

Trade and other payables 1421297.62 94375.48 1515673.10

Loans and interests 850110.65 22466.81 307758.00 2746.22 1183081.68

Total 2271408.27 22466.81 307758.00 97121.71 2698754.78

(In 10 Thousand Yuan)

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

31 December 2020

Items Over 5

Within 1 year 1-2 years 2-5 years Total

years

Trade and other payables 1643593.66 111423.24 1755016.90

Loans and interests 1137576.14 25647.04 321586.21 3060.20 1487869.59

Total 2781169.80 25647.04 321586.21 114483.44 3242886.49

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 the

measurement date in an active market.The input value of the second level is the input value of the related assets or liabilities that is directly or indirectly

observable except the input value of the first level.The third level of input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement result belongs is determined by the lowest level to which the input value

that is important to the fair value measurement as a whole belongs.

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

Fair value at the end of the period

Fair value

Item Fair value measurement in Fair value measurement in

measurement in the Total

the second level the third level

first level

1. Continuous fair value

measurement

◆Financial assets held for trading

(1) Financial assets measured at fair

value and whose changes are included

in the current profit and loss

(a) Investment in debt instruments

(b) Investment in equity instruments

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Fair value at the end of the period

Fair value

Item Fair value measurement in Fair value measurement in

measurement in the Total

the second level the third level

first level

(c) Derivative financial assets

(d) Others

(2) Designated as a financial asset

measured at fair value and its changes

are included in the current profit and

loss

(1) Investment in debt instruments

(2) Others

◆ Accounts receivable financing 5143627467.44 514362746

◆ Other debt investments

◆ Investment in other equity

1042024829.00 104202482

instruments

◆ Other non-current financial assets

(1) Financial assets measured at fair

value and whose changes are included

in 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 changes

are included in the current profit and

loss

(a) Investment in debt instruments

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Fair value at the end of the period

Fair value

Item Fair value measurement in Fair value measurement in

measurement in the Total

the second level the third level

first level

(b) Others

Total assets continuously measured

6185652296.44 618565229

at fair value

◆ Financial liabilites held for

trading

Including:

Issued trading bonds

Derivative financial liabilities

Others

◆Designated as a financial liability

measured at fair value and its changes

included in the current profit and loss

Total liabilities continuously

measured at fair value

2. Non-continuous fair value

measurement

(1) Assets held for sale

Total assets not measured

continuously at fair value

For example: Liabilities held for

sale

Total liabilities not measured

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Fair value at the end of the period

Fair value

Item Fair value measurement in Fair value measurement in

measurement in the Total

the second level the third level

first level

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 investments

held by the company. The company adopted valuation techniques for fair value measurement mainly using valuation

techniques of listed company comparison method referring to stock prices of similar securities and considering liquidity

discounts.

(5) For continuous fair value measurement projects where conversion between various levels occurs during the

period the reason for the conversion and the policy for 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

No

XI. Related Party Transactions

(1) Details of parent company

(In 100 Million Yuan)

Place of Registered Share proportion Voting rights

Name of parent company Notes of Business

Registry capital (%) (%)

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 Commission

of Liaoning Province.

(2) Details of the subsidiaries

For details of subsidiaries of the Company please refer to Note 7 “Equity in other entities”.

(3) The company's joint ventures and associates

Name of joint ventures and associates Relationship

Zhejiang 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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)

The content of related party

Name Current period Previous period

transactions

Benxi Steel & Iron (Group) Co. Ltd. Repair expense 14746.00 15947.21

Benxi Steel & Iron (Group) Co. Ltd. Land lease fee 3261.15 3261.15

Bengang Cold-rolled Stainless Steel Dandong Co.Products 63.05 7.95

Ltd.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The content of related party

Name Current period Previous period

transactions

Benxi Steel & Iron (Group) Mining Co. Ltd. Labor cost 388.19 361.1

Raw material and

Benxi Steel & Iron (Group) Mining Co. Ltd. 333109.30 280270.14

supplementary material

Benxi Steel & Iron (Group) Mining Co. Ltd. Freight 665.90 87.47

Benxi Steel & Iron (Group) Metallurgy Residues Co. Raw material and

24576.01 14869.84

Ltd. supplementary material

Benxi Steel & Iron (Group) Steel & Iron Process and

Processing fee 5.08 23.81

Logistics Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture

Spare parts 1491.71 2296.73

Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture

Repair services 292.32 330.54

Co. Ltd.Benxi Steel & Iron (Group) Construction Co. Ltd. Spare parts 198.76 19.75

Benxi Steel & Iron (Group) Construction Co. Ltd. Project fee 14057.74 7490.59

Benxi Steel & Iron (Group) Construction Co. Ltd. Repair services 4168.26 3660.09

Raw material and

Benxi Steel & Iron (Group) Construction Co. Ltd. 375.59 367.31

supplementary material

Benxi Steel & Iron (Group) Construction Co. Ltd. Freight 87.45 87.94

Benxi Steel & Iron (Group) Industrial Development

Spare parts 2693.64 2568.9

Co. Ltd.Benxi Steel & Iron (Group) Industrial Development Raw material and

1567.13 5906.02

Co. Ltd. supplementary material

Benxi Steel & Iron (Group) Industrial Development

Repair services 18.90 790.53

Co. Ltd.Benxi Steel & Iron (Group) Industrial Development

Freight 191.68 188.69

Co. Ltd.Benxi Steel & Iron (Group) Industrial Development

Project fee 360.29 332

Co. Ltd.Benxi Steel & Iron (Group) Construction and Raw material & supplementary

62.83 128.19

Repairing Co. Ltd. materials & spare parts

Benxi Steel & Iron (Group) Construction and

Project fee 370.74 2992.87

Repairing Co. Ltd.Benxi Steel & Iron (Group) Construction and

Repair expense 255.59 2673.04

Repairing Co. Ltd.Raw material and

Bengang Electronics and Gas Co. Ltd. 7365.37 6886.40

supplementary material

Bengang Electronics and Gas Co. Ltd. Repair services 220.68 1168.35

Benxi High-tech Drilling Tools Manufacture Co.Spare parts 7.96 6.22

Ltd.Benxi New Career Development Co. Ltd. #N/A 3.01 22.45

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The content of related party

Name Current period Previous period

transactions

Raw material and

Benxi New Career Development Co. Ltd. supplementary material and 113.40 107.92

food

Liaoning Metallurgy Technician College Spare parts 126.16 117.57

Bengang Group International Economic and Trading Raw material and

846115.86 0

Co. Ltd. supplementary material

Bengang Group International Economic and Trading

Agency fee 3648.1 3067.82

Co. Ltd.Bengang Group International Economic and Trading

Port surcharges 10544.71 5381.24

Co. Ltd.Benxi Steel & Iron (Group) Information and

Spare parts 93.14 285.13

Automatic Tech Co. Ltd.Benxi Steel & Iron (Group) Information and

Project fee 236.53 1368.24

Automatic Tech Co. Ltd.Benxi Steel & Iron (Group) Thermal Power

Heating costs 9.18 18.98

Development Co. Ltd.Benxi Steel & Iron (Group) Thermal Power Raw material and

2.02 55.00

Development Co. Ltd. supplementary material

Benxi Steel & Iron (Group) Designing Institute Design fees 40.96 28.77

Raw material and

Benxi Beiying Steel & Iron (Group) Co. Ltd. 140619.89 466858.5

supplementary material

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 4041.85 2016.35

Benxi Beiying Steel & Iron (Group) Co. Ltd. Spare parts 1154.83 897.66

Liaoning Hengtong Metallurgical Equipment

Raw material and spare parts 3481.53 5120.05

Manufacture Co. Ltd.Liaoning Hengtong Metallurgical Equipment

Repair services 66.93 0.00

Manufacture Co. Ltd.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 1455343.77 860682.37

Company as the seller

(In 10 Thousand Yuan)

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The content of related party

Name Current period Previous period

transactions

Bengang Electronics and Gas Co. Ltd. Energy & Power 39.46 38.10

Raw material & supplementary

Benxi Beiying Steel & Iron (Group) Co. Ltd. 166327.67 135340.23

materials & spare parts

Benxi Beiying Steel & Iron (Group) Co. Ltd. Products 1150.49 1271.42

Benxi Beiying Steel & Iron (Group) Co. Ltd. Energy & Power 6461.23 6882.65

Benxi Steel & Iron (Group) Real-estate Development

Energy & Power 0.94 6.25

Co. Ltd.Benxi Steel & Iron (Group) Steel & Iron Process and

Energy & Power 0.46 20.39

Logistics Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture

Products 445.96 1014.55

Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture

Energy & Power 1086.20 1216.43

Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture Raw material & supplementary

16.41 139.52

Co. Ltd. materials & spare parts

Benxi Steel & Iron (Group) Construction Co. Ltd. Energy & Power 377.58 335.07

Raw material & supplementary

Benxi Steel & Iron (Group) Construction Co. Ltd. 171.46 15.12

materials & spare parts

Benxi Steel & Iron (Group) Mining Co. Ltd. Energy & Power 33426.91 33585.45

Raw material & supplementary

Benxi Steel & Iron (Group) Mining Co. Ltd. 5312.62 512.75

materials & spare parts

Benxi Steel & Iron (Group) Mining Co. Ltd. Freight revenue 339.29 497.33

Benxi Steel & Iron (Group) Thermal Power

Energy & Power 3649.48 2264.65

Development Co. Ltd.Benxi Steel & Iron (Group) Thermal Power Raw material & supplementary

893.57 682.22

Development Co. Ltd. materials & spare parts

Benxi Steel & Iron (Group) Industrial Development

Energy & Power 413.68 409.62

Co. Ltd.Benxi Steel & Iron (Group) Industrial Development

Products 501.34 912.10

Co. Ltd.Benxi Steel & Iron (Group) Industrial Development Raw material & supplementary

660.84 936.70

Co. Ltd. materials & spare parts

Benxi Steel & Iron (Group) Information and

Energy & Power 5.23 11.69

Automatic Tech Co. Ltd.Benxi Steel & Iron (Group) Construction and

Energy & Power 59.55 66.60

Repairing Co. Ltd.Benxi Steel & Iron (Group) Metallurgy Residues Co.Energy & Power 103.98 105.91

Ltd.Benxi Steel & Iron (Group) Metallurgy Residues Co. Raw material & supplementary

22587.81 13364.82

Ltd. materials & spare parts

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

The content of related party

Name Current period Previous period

transactions

Benxi Steel & Iron (Group) Co. Ltd. Energy & Power 263.06 430.55

Raw material & supplementary

Benxi Steel & Iron (Group) Co. Ltd. 346.98 308.79

materials & spare parts

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

Energy & Power 1.31 3.20

Materials Co. Ltd.Liaoning Hengtong Metallurgical Equipment Raw material & supplementary

35.59 493.65

Manufacture Co. Ltd. materials & spare parts

Bengang Cold-rolled Stainless Steel Dandong Co.Products 295.41 736.33

Ltd.Suzhou Bengang Industrial Co. Ltd. Products 38315.21 19082.32

Bengang Group Finance Co. Ltd. Energy & Power 0.65 0.65

Bengang Group Co. Ltd. Energy & Power 61.46 8.82

Raw material & supplementary

Bengang Group Co. Ltd. 240324.13 221356.12

materials & spare parts

Liaoning Hengtai Heavy Machinery Co. Ltd. Products 17.43 -

524360.62 442712.26

Notes:

The pricing policy is based on the transaction content and pricing principles specified in the "Raw Material and Service Supply

Agreement" and "Land Use Right Leasing Contract" and supplementary agreements entered into between the Company and

Bengang Group and Benxi Steel and Iron (Group) Co. Ltd. The main pricing principle is that if there is a market price the

market price will be used. If there is no market price then the full cost plus the national additional tax plus a reasonable profit

will be used as the pricing standard.2. Lease information of related parties

Company as the lessor

Lease capital Lease income of current Lease income of previous

Lessee

category period period

Benxi Steel & Iron (Group) Steel & Iron Process Warehouse and

250000.00 250000.00

and Logistics Co. Ltd. machinery

Company as the lessee

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Lease charges of Lease charges of

Lessor Lease capital category current period previous period

(Without tax) (Without tax)

Land use right

7669068.17 square meter

Benxi Steel & Iron (Group) Co. Ltd. 28691677.66 28691677.66

Land use right

42920.00 square meter

2300 Hot rolling product line

Benxi Steel & Iron (Group) Co. Ltd. 8355712.17 8355712.17

related real estate

1780 Hot rolling product line

Benxi Beiying Steel & Iron (Group) Co. Ltd. 7789338.83 5002327.68

related real estate

Land use right

Bengang Group Co. Ltd. 4972711.54 4972711.56

728282.30 square meter

Notes:

1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed between the

Company and Bengang Steel and Iron (Group) Co. Ltd. on April 7 1997 December 30 2005 the Company leases land from

Bengang Group with a monthly rent of 0.594 yuan per square meter. The leased land is 7669068.17 square meters and the

annual rent is 54665.10 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 mill

production line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary facilities is until

December 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 42920.00 square meters and 728282.30 square meters respectively. The lease term is 20

years 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 667085164.5 and the amount of

interest and commission is RMB 11763370.53 (The aforementioned amounts are tax included.)

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

3. Information of Guarantee among related parties

(1) Company as the warrantee

Guarantee of loans:

Has the

Starting date of Ending date of

Warrantor Amount of guarantee guarantee

Guarantee Guarantee

been fulfilled

Bengang Group Co. Ltd. CNY 15000000000.00 2020/8/13 2022/8/12 No

Bengang Group Co. Ltd. CNY 500000000.00 2020/6/19 2021/6/18 No

Bengang Group Co. Ltd. CNY 310000000.00 2020/5/26 2021/5/25 No

Bengang Group Co. Ltd. CNY 670000000.00 2020/5/26 2021/5/25 No

Bengang Group Co. Ltd. CNY 400000000.00 2020/10/20 2021/10/19 No

Bengang Group Co. Ltd. CNY 1280000000.00 2020/11/5 2021/11/4 No

Bengang Group Co. Ltd. CNY 400000000.00 2020/10/28 2021/10/27 No

Bengang Group Co. Ltd. CNY 1800000000.00 2020/12/1 2021/12/1 No

Bengang Group Co. Ltd. CNY 6024000000.00 2020/3/17 2021/3/17 No

Benxi Steel & Iron (Group) Co. Ltd. CNY 5024000000.00 2020/11/4 2021/11/4 No

Bengang Steel Plates Co. Ltd CNY 250000.00 2020/5/25 2021/5/25 No

Bengang Steel Plates Co. Ltd CNY 490000.00 2020/8/20 2021/8/20 No

Bengang Steel Plates Co. Ltd CNY 200000000.00 2020/12/24 2021/12/24 No

Bengang Group Co. Ltd. and Benxi

CNY 70000000.00 2016/3/30 2025/3/20 No

Steel & Iron (Group) Co. Ltd.Bengang Group Co. Ltd. and Benxi

CNY 430000000.00 2017/2/27 2025/2/20 No

Steel & Iron (Group) Co. Ltd.Bengang Group Co. Ltd. CNY 622600000.00 2017/12/15 2024/8/20 No

Bengang Group Co. Ltd. CNY 87280000.00 2018/3/26 2024/6/21 No

Bengang Group Co. Ltd. CNY 24620000.00 2017/11/15 2021/12/21 No

Bengang Group Co. Ltd. CNY 30560000.00 2015/6/25 2021/9/21 No

Bengang Group Co. Ltd. CNY 24000000.00 2015/12/9 2022/3/21 No

Bengang Group Co. Ltd. EUR 166579.87 2015/6/25 2025/9/30 No

Bengang Group Co. Ltd. EUR 5691165.00 2015/8/20 2025/9/30 No

Bengang Group Co. Ltd. EUR 407161.22 2015/6/25 2026/4/30 No

Bengang Group Co. Ltd. EUR 4984751.64 2015/12/28 2026/4/30 No

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Has the

Starting date of Ending date of

Warrantor Amount of guarantee guarantee

Guarantee Guarantee

been fulfilled

Bengang Group Co. Ltd. EUR 2077667.88 2016/12/14 2026/4/30 No

Bengang Group Co. Ltd. EUR 6162.48 2015/6/25 2026/4/30 No

Bengang Group Co. Ltd. EUR 4069.11 2015/12/28 2026/4/30 No

Bengang Group Co. Ltd. EUR 779734.95 2017/6/30 2025/10/31 No

Bengang Group Co. Ltd. EUR 2733223.28 2016/6/27 2020/4/30 No

Bengang Group Co. Ltd. EUR 334941.21 2015/6/25 2025/6/30 No

Bengang Group Co. Ltd. EUR 9577728.02 2015/6/25 2025/6/30 No

Bengang Group Co. Ltd. EUR 294013.70 2015/12/28 2025/6/30 No

Bengang Group Co. Ltd. EUR 7585942.33 2015/6/25 2025/10/31 No

Bengang Group Co. Ltd. EUR 3271319.20 2015/12/28 2025/10/31 No

Bengang Group Co. Ltd. EUR 8390619.39 2015/6/25 2025/8/31 No

Bengang Group Co. Ltd. EUR 180800.00 2015/12/28 2025/8/31 No

Bengang Group Co. Ltd. EUR 609296.41 2015/6/25 2025/8/31 No

Bengang Group Co. Ltd. JPY 162232000.00 1997/10/10 2027/9/10 No

Benxi Steel & Iron (Group) Co. Ltd. CNY 12000000000.00 2019/3/16 2021/9/3 No

Bengang Group Co. Ltd. CNY 740000000.00 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 Transaction in previous current period period

Benxi Steel & Iron (Group) Co.Ltd. Purchase of 2300 hot rolling mill production line 3004988590.00

Benxi Beiying Iron and Steel

(Group) Co. Ltd. Purchase of 1780 hot rolling mill production line 684727905.00

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 1332199.78 8587031.95 9061766.57 857465.16

1. The interests of deposits in Bengang Group Finance Co. Ltd. is RMB 186359 thousand from January to

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

June in 2021. As at 30 June 2021 the interest receivable from Bengang Group Finance Co. Ltd. is RMB

51637.7 thousand.2. As at 30 June 2021 the restricted deposits in Bengang Group Finance Co. Ltd. is RMB 427389.00 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 Finance

Co. Ltd. was RMB 0.27 billion and the amount of the acceptance bill that had been opened and unpaid by

Bengang 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 7500.00 7500.00

Total 7500.00 7500.00

Notes: The interest accrued is RMB 1753437.50 during the current period and as at 30 June 2021 the interest that has not

been paid is RMB 1753437.50.

(6) Receivables and payables of the related parties

1. Receivables of the Company

(in 10 thousand yuan)

30 June 2021 31 December 2020

Items Name Name Gross carrying Provision for Gross carrying Provision for

amount bad debts amount bad debts

Accounts receivable Benxi Beiying Steel & Iron

3601.27 230217.55

financing (Group) Co. Ltd.Accounts receivable Benxi Steel & Iron (Group) Co.81.99

financing Ltd.Accounts receivable Benxi Steel & Iron (Group)

financing Thermal Power Development 1400.00

Co. Ltd.Bengang Group International

Accounts receivable 9081.23 90.81 10463.45 104.63

Economic and Trading Co. Ltd.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Items Name Name Gross carrying Provision for Gross carrying Provision for

amount bad debts amount bad debts

Benxi Steel & Iron (Group)

Accounts receivable Thermal Power Development 2301.66 23.02 2692.94 26.93

Co. Ltd.Accounts receivable Bengang Cold-rolled Stainless

129.47 1.88 188.46 1.88

Steel Dandong Co. Ltd.Accounts receivable Benxi Steel & Iron (Group)

0.10

Metallurgy Residues Co. Ltd.Accounts receivable Benxi Steel & Iron (Group)

Machinery Manufacture Co.Ltd.Prepayments Bengang Group International

137173.06 114662.12

Economic and Trading Co. Ltd.Prepayments Benxi Steel & Iron (Group)

Machinery Manufacture Co. 6470.61

Ltd.Prepayments Benxi Beiying Steel & Iron

(Group) Co. Ltd.Other receivables Bengang Group International

592.61 601.21

Economic and Trading Co. Ltd.Other receivables Benxi Steel & Iron (Group)

Real-estate Development Co. 312.56 253.84 278.31 253.84

Ltd.Other receivables Benxi Steel & Iron (Group)

Zhengtai Construction Materials 29.36 19.96 27.05 19.96

Co. Ltd.Other receivables Liaoning Metallurgy Technician

6.30 0.06 5.80 5.80

College

Other receivables Benxi Steel & Iron (Group)

Medical Services Department;

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021 31 December 2020

Items Name Name Gross carrying Provision for Gross carrying Provision for

amount bad debts amount bad debts

Other receivables Benxi Steel & Iron (Group)

Industrial Development Co.Ltd.Liaoning Hengyi Financial

Other non-current assets 81046.11 - 86459.06 -

Leasing Co. Ltd.2. Payables of the Company

(in 10 thousand yuan)

Items Name 30 June 2021 31 December 2020

Bengang Group International Economic and Trading

Notes payable 217045.35 345103.76

Co. Ltd.Notes payable Benxi Steel & Iron (Group) Mining Co. Ltd. 153644.04 91857.00

Notes payable Bengang Electronics and Gas Co. Ltd. 6414.33

Benxi Steel & Iron (Group) Industrial Development Co.Notes payable 2036.01 5253.76

Ltd.Notes payable Liaoning Hengyi Financial Leasing Co. Ltd. 1185.05 4602.43

Liaoning Hengtong Metallurgical Equipment

Notes payable 868.28

Manufacture Co. Ltd.Benxi Steel & Iron (Group) Machinery Manufacture Co.Notes payable 345.00 255.94

Ltd.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

Benxi Steel & Iron (Group) Metallurgy Residues Co.Notes payable 144.11 16.62

Ltd.Benxi Steel & Iron (Group) Information and Automatic

Notes payable 1222.32

Tech Co. Ltd.Benxi Steel & Iron (Group) Construction and Repairing Co

Notes payable 106.53

Ltd.Notes payable Benxi Steel & Iron (Group) Construction Co. Ltd. 658.19

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Name 30 June 2021 31 December 2020

Notes payable Benxi Steel & Iron (Group) Co. Ltd. 15691.17

Liaoning Hengtong Metallurgical Equipment

Notes payable 633.49

Manufacture Co. Ltd.Accounts payable Benxi Steel & Iron (Group) Mining Co. Ltd. 22670.45 20807.68

Accounts payable Liaoning Hengyi Financial Leasing Co. Ltd. 5552.06 5799.10

Benxi Steel & Iron (Group) Construction and Repairing

Accounts payable 6166.19 5182.75

Co. Ltd.Accounts payable Benxi Beiying Steel & Iron (Group) Co. Ltd. 4025.98 3172.95

Accounts payable Benxi Steel & Iron (Group) Construction Co. Ltd. 2882.30 2394.63

Accounts payable Liaoning Hengtai Heavy Machinery Co. Ltd. 2579.28 2171.25

Benxi Steel & Iron (Group) Information and Automatic

Accounts payable 2216.19 1852.50

Tech Co. Ltd.Benxi Steel & Iron (Group) Metallurgy Residues Co.Accounts payable 1907.79 1645.14

Ltd.Accounts payable Bengang Electronics and Gas Co. Ltd. 1869.76 1500.74

Accounts payable Liaoning Metallurgy Technician College 1709.09 1388.84

Liaoning Hengtong Metallurgical Equipment

Accounts payable 1464.80 1297.91

Manufacture Co. Ltd.Accounts payable Bengang Group Co. Ltd. 1399.75 1246.38

Benxi Steel & Iron (Group) Machinery Manufacture Co.Accounts payable 1046.84 964.33

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

Bengang Group International Economic and Trading

Accounts payable 671.63 579.53

Co. Ltd.Accounts payable Benxi New Career Development Co. Ltd. 452.56 415.37

Benxi Steel & Iron (Group) Industrial Development Co.Accounts payable 438.57 385.20

Ltd.Benxi Steel & Iron (Group) Thermal Power

Accounts payable 212.64 178.73

Development Co. Ltd.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Name 30 June 2021 31 December 2020

Benxi Iron and Steel (Group) Engineering Construction

Accounts payable 83.12 65.51

Supervision Co. Ltd.Benxi Steel & Iron (Group) Real-estate Development

Accounts payable 74.05 61.52

Co. Ltd.Accounts payable Benxi High-tech Drilling Tools Manufacture Co. Ltd. 45.85 38.60

Benxi Steel & Iron (Group) Zhengtai Construction

Accounts payable 0.28 0.24

Materials Co. Ltd.Contract liabilities Suzhou Bengang Industrial Co. Ltd. 4621.73 5374.03

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

Ltd.Contract liabilities Benxi Steel & Iron (Group) Industrial Development Co.62.63 55.77

Ltd.Liaoning Hengtong Metallurgical Equipment

Contract liabilities 57.33 52.81

Manufacture Co. Ltd.Bengang Group International Economic and Trading

Contract liabilities 47.44 43.70

Co. Ltd.Other payables Benxi Steel & Iron (Group) Co. Ltd. 15082.08 13013.80

Benxi Steel & Iron (Group) Steel & Iron Process and

Other payables 1831.67 1681.17

Logistics Co. Ltd.Bengang Group International Economic and Trading

Other payables 1454.91 1277.85

Co. Ltd.Benxi Steel & Iron (Group) Thermal Power

Other payables 668.32 561.73

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

Benxi Steel & Iron (Group) Real-estate Development

Other payables 166.51 143.59

Co. Ltd.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Name 30 June 2021 31 December 2020

Benxi Steel & Iron (Group) Industrial Development Co.Other payables 39.03 31.33

Ltd.Other payables Liaoning Metallurgy Technician College 1.65 1.34

Benxi Steel & Iron (Group) Machinery Manufacture Co.Other payables 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. 190749.28 111423.24

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 7669068.17 square meters and

the annual rent is 54665100 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 production

lines and the lease term ends on December 31 2038. The rental fee is based on the depreciation of the original rent

value and the national additional tax plus reasonable profit negotiation. The estimated annual rent is not more than

20 million yuan and 18 million yuan respectively. The rental fee is settled and paid monthly. This related party

transaction 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 42920.00

square meters and 728282.30 square meters respectively with a lease term of 20 years and a rental price of 1.138

yuan per square meter per month. After the agreement comes into effect considering the national law and policy

adjustments every five years both parties should determine whether the rent needs to be adjusted according to the

pricing basis stipulated in Article 2 of this agreement. This related party transaction has been reviewed and approved

at 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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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

On April 26 2021 the seventeenth meeting of the eighth board of directors of the company passed

the 2020 dividend distribution plan. It is planned to use the total share capital of 3875371532

shares at the end of 2020 as the base and distribute a cash dividend of 0.1 yuan to all shareholders

for every 10 shares (including tax) a total of 38753715.32 yuan of cash dividends will be

distributed. This distribution will not be converted from capital reserves to share capital. The above

profit distribution plan has been implemented on July 19.Profit or dividend to

On August 26 2021 the 20th meeting of the 8th Board of Directors of the company passed the 2021

be distributed

interim dividend distribution plan. It is planned to use the total share capital of 3885060605 shares

at the end of June 2021 as the base and distribute cash dividends to all shareholders for every 10

shares. 5 yuan (including tax) a total of 1942530302.5 yuan in cash dividends will be distributed.In this distribution the capital reserve will not be converted into share capital. After the company’s

profit distribution plan is announced and before its implementation if the company’s share capital

changes adjustments will be made in accordance with the principle that the total amount of the

distribution does not change.

(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.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(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 and

the main production base is located in Liaoning area segmented reporting is not applicable.

(6) Other material issues that will influence investors’ decisions

1. Financing LeaseFor 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 not

exceeding RMB 5 billion per year. The Company obtains the fund through sales and lease back financial lease with

interest rate not above the benchmark interest rate of loan over the same period published by the People’s bank of China

and the interest rate will be adjusted with the changes of benchmark interest rate of loan published by the People’s bank

of China over the lease term. The lease security ratio is not higher than 30% of the lease principal amount.2. Shares pledged by the Controlling Shareholders

As at 30 June 2021 the total 2409628094 shares were held by the controlling shareholder Benxi Steel & Iron (Group)

Co. Ltd. of which 1577545000 shares were pledged and 108326179 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 learned

that Ansteel Group Co. Ltd. is planning to reorganize the Bengang Group which may lead to changes in the company's

control. Obtain the approval of relevant departments.On August 18 2021 the State-owned Assets Supervision and Administration Commission of the State Council and the

People's Government of Liaoning Province jointly issued a notice agreeing that Ansteel Group Co. Ltd. will reorganize

Bengang Group Co. Ltd. and the Liaoning Provincial State-owned Assets Supervision and Administration Commission

will transfer 51% equity of Bengang Group to Ansteel Group for free. The transfer still needs to perform the necessary

procedures and there is still uncertainty about whether the relevant approval can be obtained and whether the transfer

can be implemented smoothly.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

On August 20 2021 the State-owned Assets Supervision and Administration Commission of the People’s Government

of Liaoning Province which holds 80% of the company’s indirect controlling shareholder Bengang Group Co. Ltd. and

the State-owned Assets Supervision and Administration Commission of the State Council which hold 100% share of

Ansteel Group Co. Ltd. made an agreement: "agreement on the Gratuitous Transfer of State-owned Equity of Bengang

Group Co. Ltd. between the State-owned Assets Supervision and Administration Commission of the People's

Government of Liaoning Province and Ansteel Group Co. Ltd.". According to the agreement the State-owned Assets

Supervision and Administration Commission of Liaoning Province will transfer its 51% stake in Bengang Group to

Ansteel Group for free. After the completion of this transfer Ansteel Group will become the controlling shareholder of

Bengang Group. Ansteel Group indirectly controls 81.08% of the company’s shares through Bengang Group Benxi Iron

and Steel (Group) Co. Ltd. and Ansteel Group Capital Holding Co. Ltd. The direct controlling shareholder of the

company remains unchanged still Benxi Iron & Steel (Group) Co. Ltd. and the actual controller of the company is

changed 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) 242295140.93 283561303.90

1-2 years (inclusive) 2368098.28 2420511.80

2-3 years (inclusive) 6457890.55 6500255.55

Over 3 years 175437393.38 177111797.34

Sub-total 426558523.14 469593868.59

Less: Provision for bad debts 177857503.65 179728406.39

Total: 248701019.49 289865462.20

2. Accounts receivable disclosed by category

30 June 2021

Gross carrying amount Provision for bad debts

Items

Bad debts Book value

Amount Percentage (%) Amount

ratio (%)

Individually significant

and tested for 47762337.18 11.20 47762337.18 100

impairment

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021

Gross carrying amount Provision for bad debts

Items

Bad debts Book value

Amount Percentage (%) Amount

ratio (%)

individually

Accounts receivable

tested for impairment 378796185.96 88.80 130095166.47 31.28 248701019.49

by portfolio

Include:

Portfolio 1: Aging 225673278.40 52.90 130095166.47 53.71 95578111.93

Portfolio 2: Related

party within 153122907.56 35.90 153122907.56

consolidation scope

Total 426558523.14 100.00 177857503.65 248701019.49

31 December 2020

Gross carrying amount Provision for bad debts

Items

Percentage Bad debts Book value

Amount Amount

(%) ratio (%)

Individually significant and

tested for impairment 47762337.18 10.17 47762337.18 100

individually

Accounts receivable tested

421831531.41 89.83 131966069.21 31.28 289865462.20

for impairment by portfolio

Include:

Portfolio 1: Aging 245720903.60 52.33 131966069.21 53.71 113754834.39

Portfolio 2: Related party

176110627.81 37.5 176110627.81

within consolidation scope

Total 469593868.59 100.00 179728406.39 289865462.20

Receivables individually insignificant but tested for impairment individually:

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

30 June 2021

Items Provision for bad Bad debts

Accounts receivable Reason

debts ratio（%）

Benxi Nanfen Xinhe Metallurgical Benxi Nanfen Xinhe has

47762337.18 47762337.18 100.00

Co. Ltd. ceased operation.Total 47762337.18 47762337.18

Accounts receivable tested for impairment by portfolio

Portfolio tested by aging

30 June 2021

Items

Gross carrying amount Provision for bad debts Bad debts ratio (%)

Within 1 year 89172233.37 891722.33 1.00

1-2 years 2368098.28 236809.83 10.00

2-3 years 6457890.55 1291578.11 20.00

Over 3 years 127675056.20 127675056.20 100.00

Total 225673278.40 130095166.47

3. Information of provision reversal or recovery of bad debts of current period.The reversal of bad debts of current period is RMB 1870902.74.4. No accounts receivable has been written off this year.5. Top five debtors at the end of the period

30 June 2021

Company Percentage of total accounts Provision for

Amount

receivable (%) bad debts

No.1 153122907.56 35.90

No.2 55439913.76 13.00 554399.14

No.3 47762337.18 11.20 47762337.18

No.4 26597899.13 6.24 269294.00

No.5 8719094.48 2.04 9008967.00

Total 291642152.11 68.37 57594997.32

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 4967026780.38 4143431412.08

Include: Bank acceptance bill 4551062910.25 1876753316.46

Commercial acceptance bill 415963870.13 2266678095.62

Total 4967026780.38 4143431412.08

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 16991847.39

Commercial acceptance bill 6000000.00

Total 22991847.39

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 23332790273.96

Commercial acceptance bill 573182722.67

Total 23332790273.96 573182722.67

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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items 30 June 2021 31 December 2020

Interest receivables 46266951.12 23028942.73

Dividend receivables

Other receivables 195392156.95 205151247.29

Total 241659108.07 228180190.02

1. Interest receivable

(1) Interest receivable disclosed by category

Items 30 June 2021 31 December 2020

Deposit interest 46266951.12 23028942.73

Subtotal 46266951.12 23028942.73

Less: provision for bad debt

Total 46266951.12 23028942.73

(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) 27403063.93 35550478.46

1-2 years (inclusive) 40528700.32 42319451.22

2-3 years (inclusive) 13842023.46 13842023.46

Over 3 years 180717695.14 180717695.14

Sub-total 262491482.85 272429648.28

Less: Provision for bad debts 67099325.90 67278400.99

Total 195392156.95 205151247.29

(2) Provision for bad debt provision

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Stage one Stage two Stage three

Lifetime expected

Lifetime expected

Provision for bad debts 12-month expected credit losses (credit Total

credit losses (no

credit losses impairment

credit impairment)

occurred)

Beginning balance 352376.05 9475267.75 57450757.19 67278400.99

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 179075.09 179075.09

Current period write-off

Other change

Ending balance 352376.05 9296192.66 57450757.19 67099325.90

Changes in the gross carrying amount of other receivables are as follows

Stage one Stage two Stage three

Gross carrying Lifetime expected credit Lifetime expected credit

12-month expected credit Total

amount losses (no credit losses (credit impairment

losses

impairment) occurred)

Ending balance

194557372.69 20421416.81 57450858.78 272429648.28

of last year

Beginning

194557372.69 20421416.81 57450858.78 272429648.28

balance

--Transfer to

Stage two

--Transfer to

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Stage one Stage two Stage three

Gross carrying Lifetime expected credit Lifetime expected credit

12-month expected credit Total

amount losses (no credit losses (credit impairment

losses

impairment) occurred)

Stage three

--Reversal to

Stage two

--Reversal to

Stage one

Increase 57173194.63 6006395.62 137227870.96

Derecognition 65320609.16 7797146.52 177194576.13

Other change

Ending balance 186409958.16 18630665.91 57450858.78 262491482.85

(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 255494499.52 264617899.56

Other 6996983.33 7811748.72

Total 262491482.85 272429648.28

(4) Top five debtors at the year-end

Percentage of total

Provision for bad

Company Nature or content Amount Aging other receivables

debts

(%)

Receivable and

The First 5492200.00 Within 1 year 2.81 54922.00

payable

Receivable and Within 1 year

The Second 3125550.76 1.60 2538389.24

payable and over 3 years

Receivable and

The Third 2261360.00 over 3 years 1.16 2261360.00

payable

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Percentage of total

Provision for bad

Company Nature or content Amount Aging other receivables

debts

(%)

Receivable and

The Fourth 2123692.31 2-3 years 1.09 424738.46

payable

RMB353222.31

Receivable and is 2-3 years and

The Fifth 1908708.06 0.98 1626130.21

payable the rest is over 3

years

Total 14911511.13 7.63 6905539.91

(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

30 June 2021 31 December 2020

Items Gross carrying

Impairment Book value Gross carrying amount Impairment Book value

amount

Subsidiaries 2016281902.16 2016281902.16 2016281902.16 2016281902.16

Joint ventures

Total 2016281902.16 2016281902.16 2016281902.16 2016281902.16

Details of investment in subsidiaries

Impairm Ending

Ending ent of balance of

Name of entity Beginning balance Increase Decrease

balance current impairme

period nt

Guangzhou Bengang Steel & Iron Trading

30000000.00 30000000.00

Co. Ltd.Shanghai Bengang Metallurgy Science and

30000000.00 30000000.00

Technology Co. Ltd.Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Bengang Steel Plates Liaoyang Pellet Co.529899801.38 529899801.38

Ltd.Dalian Benruitong Automobile Material

65000000.00 65000000.00

Technology Co. Ltd.Bengang Posco Cold-rolled Sheet Co. Ltd. 1019781571.10 1019781571.10

Changchun Bengang Steel & Iron Sales

28144875.36 28144875.36

Co. Ltd.Harbin Bengang Economic and Trading

29923398.23 29923398.23

Co. Ltd.Nanjing Bengang Materials Sales Co. Ltd. 2081400.65 2081400.65

Wuxi Bengang Steel & Iron Sales Co. Ltd. 29936718.57 29936718.57

Xiamen Bengang Steel & Iron Sales Co.1095711.66 1095711.66

Ltd.Yantai Bengang Steel & Iron Sales Co.49100329.41 49100329.41

Ltd.Tianjin Bengang Steel & Iron Trading Co.60318095.80 60318095.80

Ltd.Benxi Bengang Steel Sales Co. Ltd 5000000.00 5000000.00

Shenyang Bengang Metallurgical Science

30000000.00 30000000.00

and Technology Co. Ltd.Chongqing Liaoben Steel & Iron Trade

30000000.00 30000000.00

Co. Ltd.Bengang Baojin (Shenyang) Automobile

76000000.00 76000000.00

New Materials Technology Co. Ltd.Total 2016281902.16 2016281902.16

(5) Operating income and operating cost

Current period Previous period

Items

Revenue Cost Revenue Cost

Principal business 35825208026.61 32386871142.30 19591244860.47 18369564255.82

Other business 3255993831.68 2898719746.40 2168536821.65 2009584025.45

Total 39081201858.29 35285590888.70 21759781682.12 20379148281.27

Details of operating income:

Items Principal Business Other Business

Classified by business area 35825208026.61 3255993831.68

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

Items Principal Business Other Business

Including：Domestic 32477047388.32 3255993831.68Abroad 3348160638.29

Classified by the time of commodity transfer 35825208026.61 3255993831.68

Including: recognize at a certain point in time 35825208026.61 3255993831.68

recognize over a certain period of time

Total 35825208026.61 3255993831.68

(5) Income on investment

Items Current period Previous period

Income from long-term equity investment (cost method)

Short term Bank financial product income 1553175.04

Total 1553175.04

XIII. Supplementary Information

(1) Details of non-recurring profit and loss

Items Amount Notes

Profit or loss from disposal of non-current assets -22272050.41

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 government

subsidy closely related to the company's normal business operation meeting the regulation of

32659483.34

national policy and enjoyed constantly in certain quota or quantity according to a certain

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 less

than 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

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

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 losses from contingencies are not related to the company's normal business

operations

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 and disposal of transactional

financial assets and derivative financial Investment income from assets trading financial

liabilities derivative financial liabilities and other debt investments

Reversal of impairment provision for individually tested impairment of receivables

Profits and losses from external entrusted loans

Profits and losses from changes in fair value of investment real estate that use the fair value

model for subsequent measurement

Profit and loss affected due to the adjustments of requirements of taxation accounting and other

laws and regulations

Trustee income from trust operations

Other non-operating revenue and expenditure other than above items 2555535.73

Other non-recurring profit and loss

Subtotal

Impact of income tax 3235742.17

Impact of minority interests 51621.88

Total 9655604.61

(2) Net asset yield and earnings per share

Weighted average net assets Earnings per share (Yuan)

Profit in the Reporting Period

yield (%) 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

non-recurring profit and loss

Bengang Steel Plates Co. Ltd.For the half year ended 30 June 2021

Notes to the financial statements

(3) Differences between Domestic and Foreign Accounting Standards

Not applicable.Bengang Steel Plates Co. Ltd.（Seal）

25 August 2021