Bengang Steel Plates Co. Ltd.
Annual Report 2020
April 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 chairman of the Company Lin Dong Chief financial officer and Cong Yajuan
the person in charge of the accounting department (the person in charge of the
accounting) make the pledge for the authenticity accuracy and integrity of the attached
financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. This report is prepared in both of Chinese and English.The Chinese version shall prevail when there are any controversial statements in the
two versions.The company has described the existing risks and countermeasures in detail in thisreport. Please refer to Section 4-9 “Prospects for the Future Development of the
Company”. “China Securities Journal” “Securities Times” “Hong Kong Commercial
Daily” and Juchao Information Network (www.cninfo.com.cn) are the company's
selected information disclosure media. All information of the company is based on the
information published in the above-mentioned designated media. Investors are advised
to pay attention to investment risks.The company’s profit distribution plan is approved by the board of directors. Taking
3875371532 shares as the base a cash dividend of 0.1 yuan (tax included) will be
distributed to all shareholders for every 10 shares and stock dividend is 0. The capital
reserve will not be converted into share capital.
Table of Contents
I. IMPORTANT NOTICE TABLE OF CONTENTS AND DEFINITIONS .............................................................. 2
II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ...................................................................................... 5
III. SUMMARY OF COMPANY BUSINESS ................................................................................................................ 9
IV. MANAGEMENT DISCUSSION AND ANALYSIS .............................................................................................. 11
V. IMPORTANT EVENTS ............................................................................................................................................ 26
VI. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS ............................................................ 66
VII. STATUS OF PREFERRED SHARES .................................................................................................................. 72
VIII. STATUS OF CONVERTIBLE CORPORATE BONDS ................................................................................... 73
IX. STATUS OF DIRECTORS SUPERVISORS SENIOR EXECUTIVES AND EMPLOYEES ........................ 75
X. CORPORATE GOVERNANCE .............................................................................................................................. 83
XI. RELEVANT INFORMATION ABOUT CORPORATE BONDS ....................................................................... 92
XII. FINANCIAL REPORT .......................................................................................................................................... 97
XIII. DOCUMENTS AVAILABLE FOR INSPECTION ......................................................................................... 253
Definition
Terms to be defined Refers to 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.
Benxi Steel & Iron CO. Bengang Co. Refers to Benxi Steel & Iron (Group) Co. Ltd.
Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co. Ltd.
II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai Bengangban B Stock Code 000761 200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company name in
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
Registration Address No.16 Renmin Road Pingshan District Benxi City Liaoning Province
Post Code of registration Address 117000
Office address No.16 Renmin Road Pingshan District Benxi City Liaoning Province
Post Code of office address 117000
Web Address None
Email bgbcdm@163.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Gao Desheng Chen Liwen
Address No.16 Renmin Road Pingshan District Benxi City Liaoning Province
No.16 Renmin Road Pingshan District
Benxi City Liaoning Province
Tel 024-47827003 024-47828980
Fax 024-47827004 024-47827004
Email bgbcdm@163.com bgbcclw@126.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure China Securities Journal Securities Times Hong Kong Commercial Daily
Web address for the annual report as assigned by
CSRC http://www.cninfo.com.cn
Place for inquiry of the annual report Secretary Office of the Board Bengang Steel Plate Co. Ltd.IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business activities since listing (if any) No change
Changes of the controlling shareholder in the past (is any) No change
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East Huangpu Shanghai
Signing name of accountants Zhu Jinmei Li Guiying
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
√ Applicable □ Not applicable
Name of the sponsor institution Address of the sponsor institution
Name of the sponsor
representative Sustained supervision period
Guotai Junan Securities Co.Ltd.No. 768 Nanjing West Road
Jingan District Shanghai Chi Huitao Yang Keyi
August 5th 2020 to December
31st 2021
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to change of the
accounting policy and correction of accounting errors
□ Yes √ No
2020 2019 Changes over last year 2018
Operating income（RMB） 48684792685.58 52741353582.28 -7.69% 50181869721.54
Net profit attributable to the shareholders
of the listed company（RMB） 384252740.78 555646971.40 -30.85% 1036493236.07
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders
of listed company（RMB）
381469784.99 549528817.13 -30.58% 1093065140.59
Net Cash flow generated by business
operation（RMB） -2039000213.29 6977824041.16 -129.22% 3619937841.93
Basic earnings per share (RMB/Share) 0.099 0.143 -30.77% 0.27
Diluted earnings per share (RMB/Share) 0.099 0.143 -30.77% 0.27
Weighted average net assets yield 1.90% 2.88% -0.98% 5.64%
End of 2020 End of 2019 Changed over last year End of 2018
Gross assets（RMB） 65007470749.20 60731425193.90 7.04% 59632504915.83
Net assets attributable to shareholders of
the listed company（RMB） 21018296389.10 19487665261.17 7.85% 19126258116.67
The lower of the company’s net profit before and after deduction of non-recurring gains and losses in the most recent three fiscal years
is negative and the audit report of the most recent year shows that the company’s ability to continue operations is uncertain
□ Yes √ No
The lower of the net profit before and after non-recurring gains and losses is negative
□ Yes √ No
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accounting standards
during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting
standards during the reporting period.VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 11728574704.88 10455962555.17 12667300144.93 13832955280.60
Net profit attributable to the
shareholders of the listed company 177998575.36 76645628.97 28865084.77 100743451.68
Net profit after deducting non-
recurring gain/loss attributable to
the shareholders of listed company
168656828.67 71228643.86 4967865.94 136616446.52
Net cash flows generated by
operating activities 684846620.22 -836322327.30 -1256153637.34 -631370868.87
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly
report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2020 2019 2018 Notes
Gains and losses on disposal of non-current
assets (including the write off part of the
provision for impairment)
-92695525.95 -77292030.26 -148409630.35
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 national policy and
enjoyed constantly in certain quota or
quantity according to a certain standard)
81193591.56 83914522.47 86085297.03
Profit or loss from investment or
assets entrusted to others 605795.19 5041397.26
Gains and losses of debt restructuring 32800.02 50640.00
Profits excluded effective hedging business 13500000.00
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 assets financial liabilities
held for trading derivative financial liabilities
and other debt investments
Other non-operating income and expenses
other than above 1592660.62 779757.58 771191.90
Other profit and loss items that meet the
definition of non-recurring gains and losses 2084.65
Less: impact of income tax 786094.20 1818703.48 22141.38
impact of minority equity (after tax) 54476.26 123911.88 38018.98
Total 2782955.79 6118154.27 -56571904.52 --
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. Summary of Company Business
I. The Company's main business during the reporting period
(1) During the reporting period the company’s main businesses include iron and steel smelting rolling processing power generation
coal chemical industry special steel profiles railways import and export trade scientific research product sales etc. The introduction
of world advanced equipment and technology to implement equipment upgrades for the main iron and steel industry and have built a
high-quality steel base formed more than 60 varieties more than 7500 specifications of product series the proportion of high value-
added and high-tech products reached more than 80%. The leading products for automotive surface panels home appliance panels
petroleum pipeline steel container panels shipboard etc. are widely used in the fields of automobiles home appliances petrochemicals
aerospace machinery manufacturing energy and transportation building decoration and metal products and are exported to more than
60 countries and regions.
During the reporting period the main performance drivers were: the implementation of a new round of technological transformation
the new fifth furnace the eighth casting machine and the converter environmental protection transformation and other key projects
reached production and efficiency. Strengthen capital management operations and complete the 6.8 billion yuan issuance of convertible
bonds. This is the first time in 20 years that the company has achieved super-large-scale direct refinancing through public issuance.
Bengang Steel Plate Co. Ltd. won the Quality Award from the Governor of Liaoning Province and was identified as "the first batch
of high-value patent cultivation centers in Liaoning Province."
During the reporting period no major changes occurred in the above content.
(2) Affected by the global epidemic during the reporting period the production and operation of enterprises were severely affected at
the beginning of the epidemic. With the implementation of national policies such as "six stability and six guarantees" and the success
of my country's epidemic prevention and control the production and operation of my country's iron and steel enterprises have gradually
improved. The company always adheres to the supply-side structural reform as the main line implements high-quality development
requirements resolutely implements the national provincial and municipal epidemic prevention and control work deployments and
the "six stability and six guarantees" requirements grasps epidemic prevention and control on the one hand and stabilizes production
and high yield on the other. Achieved both epidemic prevention and control and production and operation achieved stable economic
development continuously improved comprehensive competitiveness and continued to consolidate industry status.II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changes
Accounts receivable financing
The balance as of 31 December 2020 is RMB 4189977.9 thousand and it has increased
RMB 1760435.4 thousand compared to the beginning balance which is mainly caused
by the increase of notes receivable.Other current assets
The balance as of 31 December 2020 is RMB 5523646.8 thousand and it has increased
RMB 5210742 thousand compared to the beginning balance which is mainly caused by
the increase of time deposit.Other non-current assets
The balance as of 31 December 2020 is RMB 995840.3 thousand and it has increased by
RMB 287337.8 thousand compared to the beginning balance which mainly due to the
increase in the rental deposit.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
The company adheres to the innovation-driven and "quality + service" development model with the strategic goal of building an
internationally competitive high-quality plate base a domestic first-class special steel base and a comprehensive service provider and
exerts a strategic leading role focusing on improving quality and efficiency In terms of product upgrades technological innovation
green and intelligent manufacturing we will innovate management ideas enhance the core competitiveness of enterprises and promote
enterprises to achieve high-quality green and intelligent development.
1. Manufacturing capabilities. Innovate management ideas strengthen professional management and control of the entire chain and
continuously improve corporate management efficiency. All departments and units interact with each other continue to implement the
concept of priority on output adhere to the iron system as the core focus on the process connection of iron and steel and rationally
match the production line and resource production organization principles of the steel post process so that the production process and
operation Continuously standardize and refine make every effort to maximize quality efficiency and production scale and promote
the entire production chain toward high-end manufacturing.
2. Equipment transformation and upgrading. In 2020 the company issued a fixed asset investment plan of 5.14 billion yuan. A new
round of large-scale technological transformation represented by key projects such as the new No. 5 blast furnace No. 8 casting
machine No. 4-6 converter environmental protection transformation and special steel electric furnace upgrade and transformation. At
present the No. 5 blast furnace energy-saving and environmental protection renovation project No. 8 casting machine and the
steelmaking 4-6 converter energy-saving and environmental protection renovation project have been successfully completed and put
into production; the special steel electric furnace upgrade and renovation project 50% of the project construction progress has been
achieved in 2020.
3. New product development capabilities. Successfully developed 36 new varieties. The high-strength complex phase steel CP980 for
roll forming has filled the blank of Bengang Steel Plates’s cold-rolling production; the oil drill uses steel series products to achieve
mass supply in the international market and E4340 steel is produced by continuous casting instead of die casting. It is a domestic
initiative to replace imported high-end products. In terms of product certification 33 certification projects have been carried out
involving 150 brands and 178 specifications. The 2000MPa hot-formed steel has passed the certification of AIWAYS and Great Wall
Motors; the cold-rolled CR420LA and galvanized CR240LA products have passed the Pan Asia certification.
4. Technological innovation ability. In terms of scientific and technological cooperation to undertake meetings of the Expert Committee
of the Metals establish the strategic docking between Bengang group and China Iron and Steel Research Group strengthen cooperation
with Northeastern University and other universities and research institutes and invite national academicians and authoritative experts
to discuss the latest technological progress and industry development trends. To direct and to promote the high-quality development
of Benxi Iron and Steel Group. In terms of scientific and technological achievements it has won 4 metallurgical science and technology
awards and 3 scientific and technological progress awards in Liaoning Province. Among them "the research and development of hot
stamping steel with the highest strength and extra-thick specifications and its serial development" won the first prize in the metallurgical
industry. The industry's highest award. In terms of intellectual property rights 3 national standards and 11 corporate standards were
drafted; 211 patents were accepted by the National Bureau a year-on-year increase of 21.2%; 108 patents were authorized by the
National Bureau including 16 inventions and 92 utility models. Bengang Steel Plate Co. Ltd. won the Quality Award from the
Governor of Liaoning Province and was identified as "the first batch of high-value patent cultivation centers in Liaoning Province."
5. Green development capability. In combination with the steel industry and local ultra-low emission policy requirements the company
has the courage to assume social responsibilities relying on professional planning and research institutions to prepare an environmental
protection improvement plan and an annual implementation plan. Through all-round green improvement such as cleaner production
level three waste management environmental protection management the company is striving to achieve "ultra-low emissions"
achieve community-based environmental quality promote the integration of industry and city and build the company into an
"ecological steel" that develops harmoniously with the city. plant". At present the two dust collectors of the second sintering product
of the iron smelting plant have completed the transformation to meet the emission standards; the CCPP power generation project using
surplus gas is planned to be completed and put into operation in August 2021; the new mixed material yard and the fully enclosed
project of the material yard are also being planned Under design it is expected to be completed and put into operation in 2024.
6. Intelligent manufacturing capabilities. The company has steadily promoted the construction of related projects on the integration of
industrialization and industrialization and intelligent chemical plants. In 2020 it has issued an investment plan of 63 million yuan for
the upgrading of information infrastructure production and manufacturing management intelligent equipment for cold rolling areas
and the upgrading and transformation of railway transportation dispatching and commanding information systems Intelligent
transformation in other fields. It plans to increase investment in information technology and intelligent manufacturing keep up with
the pace of enterprise development in the era of big data and achieve high-quality development.
7. Marketing ability. The company adheres to the benefit-oriented approach optimizes the product structure achieves steady growth
in the output of its leading products and significantly enhances the core competitiveness of its products. Intensify market development
reasonably match resources develop 32 new customers and 45 new steel grades and achieve the goal of 100% production and sales
rate. The products are sold to more than 30 countries along the "Belt and Road" with 1 million tons accounting for 42% of total exports.It has completed the certification of 70 grades of cold-rolled galvanized pickled and special steel products an increase of 25% over
last year covering users of automotive sheets home appliance sheets and special steel. Some of the company's automotive sheet
products have been included in the Mercedes-Benz BQF (Global Purchasing) list. The key certification work of BMW Mercedes-Benz
Renault and others have achieved phased results; the inspection of SGS ELV and Reach products has been completed.
8. Brand building. The company builds a symbiosis and shared quality management model of "supporting a better life with steel power"
attaches importance to the construction of corporate culture actively expands brand influence strives to fulfill social responsibilities
enhances corporate social image and successfully wins the 2019 Liaoning Provincial Governor Quality Award. The company is the
only steel company to win this honor.
IV. Management Discussion and Analysis
I. General
During the reporting period the company adhered to the guidance of Xi Jinping’s Thought on Socialism with Chinese
Characteristics for a New Era thoroughly implemented the spirit of General Secretary Jinping’s important speech during
his inspection in Liaoning and the seminar on deepening the revitalization of Northeast China and insisted on supply-
side structural reform as the main line. Implement high-quality development requirements resolutely implement the
national provincial and municipal epidemic prevention and control work deployment and the "six stability and six
guarantees" requirements focus on epidemic prevention and control on the one hand and stabilize production and high
yield on the other and achieved both epidemic prevention and control and production and operation and realized the
stable development of economic operation. The annual production of pig iron was 10.069 million tons a year-on-year
increase of 3.52%; crude steel 10.31 million tons a year-on-year increase of 3.47%; hot-rolled plates 12.235 million tons
a year-on-year decrease of 0.26%; cold-rolled plates 5.438 million tons a year-on-year increase of 0.4%; special steel
721000 tons an increase of 48.21% year-on-year and the realization of "three zeros" in safe production with large
personal accidents large fire accidents and major equipment accidents. Reviewing the work of the year it is mainly
reflected in the following aspects:
(1) Management innovation. Taking benefit as the guide improve the assessment system of the responsibility certificate
increase the "cost rejection index" for factories and mines on the basis of the bonus coefficient of the main contract and
implement the "dual switch" assessment. Organize the signing of the letter of responsibility and require each unit to
decompose the indicators to the work area level by level and guide the grassroots units to sign the responsibility letter
indicators with the work area to achieve full coverage of the signing of the responsibility letter and no dead ends so that
the leadership team at all levels can focus more on the performance appraisal indicators and to achieve a good
performance-oriented situation. The company learned from the advanced experience of steel companies such as AngangIron and Steel Co. Ltd. formulated a "three-step" benchmarking management model of “bright indicators selectbenchmarks” “align indicators find gaps” “determine measures and create benefits” and build a comprehensivebenchmarking management model and improve management level. Strengthen capital management operations and
completed the 6.8 billion yuan issuance of convertible bonds for plate companies. This is the first time in 20 years that it
has achieved super-large-scale direct refinancing through a public offering.
(2) Scientific and technological innovation work. Adhering to the design concept of lightweight green and environmental
protection aiming at stable quality reasonable cost high added value and strong market competitiveness closely
combining market demand and future technological development considering the characteristics of its own production
line and developing marketable products New product. Successfully developed cold-rolled complex-phase steel CP980
filled the blank in the production of cold-rolled complex-phase steel and seized the high-end product market; oil drills
used steel series products to achieve mass supply in the international market and E4340 steel was successfully replaced
by continuous casting instead of die casting production and such replacement of imported high-end products was the first
case in China. Strengthen cooperation with Northeastern University and other universities and research institutes invite
national academicians and authoritative experts to jointly discuss the latest technological progress and industry
development trends and direct and to promote high-quality development. Bengang Steel Plate Co. Ltd. was identified as
"the first batch of high-value patent cultivation centers in Liaoning Province".
(3) Production and operation work. Adhere to the focus on smooth operation cost and quality carry out hidden danger
investigations benchmark potential increase efficiency and reduce consumption in each process and promote stable and
high output. Further optimize the production organization give full play to the role of dispatching command and
coordination scientifically and efficiently organize the comprehensive balance of various production and steadily
promote the work of reducing costs and increasing efficiency. Adhere to the implementation of the cost management and
control system and the daily settlement mechanism carry out comprehensive benchmarking and process cost analysis
and achieve dynamic management and control of key indicators and cost operations.
(4) Party building and group work. Earnestly implement the arrangements of the Party Central Committee the Provincial
Party Committee and the company’s party committees and carry out the activities of "Grassroots Party Building Work
Construction Year" and "Grassroots Party Building System Implementation Year". Revise and improve the party building
work system strengthen the education and management of party members and the standardization and standardization
of grassroots party organizations have been continuously improved. Organize the "Craftsman Cup" employee vocational
skills competition and the "Ankang Cup" competition to continuously stimulate the labor enthusiasm and innovation
vitality of the majority of employees.
(5) People's livelihood and social responsibility. The multi-dimensional parking lot project at Gate 4 added 251 parking
spaces; the bus in the factory was put into operation which met the commuting and parking needs of employees to the
greatest extent. Fully implement the three-year special rectification action for safety production adhere to the
management and control of major hazards and risk points carry out the "clearing" of potential accidents adhere to the
"anti-three violations" and establish a sound safety assessment and evaluation system.II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Breakdown of Operating Income
Unit: Yuan
2020 2019 Change over last
year Amount Proportion Amount Proportion
Total operating income 48684792685.58 100% 52741353582.28 100% -7.69%
By industries
Industry 48684792685.58 100.00% 52741353582.28 100.00% -7.69%
By products
Steel plate 45321849577.55 93.09% 46805252792.90 88.74% -3.17%
Others 3362943108.03 6.91% 5936100789.38 11.26% -43.35%
By regions
Northeast 20420940894.42 41.95% 20024243641.60 37.97% 1.98%
North China 1608496520.50 3.30% 5084223402.71 9.64% -68.36%
East China 21783663312.31 44.74% 20568857942.71 39.00% 5.91%
Northwest 48736790.89 0.10% 57451092.38 0.11% -15.17%
Southwest 241981145.95 0.50% 232028336.48 0.44% 4.29%
Central south 25508604.19 0.05% 26564062.51 0.05% -3.97%
Export 4555465417.32 9.36% 6747985103.89 12.79% -32.49%
(2) Industry Product and Regions Accounting for the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Unit: Yuan
Operating income Operating costs Gross margin
Operating income
change over last
year
Operating costs
change over last
year
Gross margin
change over last
year
By industries
Industry 48684792685.58 46392180562.59 4.71% -7.69% -5.73% -1.98%
By products
Steel plate 45321849577.55 43322474075.93 4.41% -3.17% -1.32% -1.79%
Others 3362943108.03 3069706486.66 8.72% -43.35% -42.20% -1.81%
By regions
Northeast 20420940894.42 19414606651.84 4.93% 1.98% 4.48% -2.27%
North China 1608496520.50 1526943028.55 5.07% -68.36% -67.91% -1.35%
East China 21783663312.31 20791821739.26 4.55% 5.91% 8.27% -2.09%
Northwest 48736790.89 46538965.99 4.51% -15.17% -14.06% -1.24%
Southwest 241981145.95 231749437.80 4.23% 4.29% 6.74% -2.20%
Central south 25508604.19 24194939.67 5.15% -3.97% -2.56% -1.37%
Export 4555465417.32 4356325799.48 4.37% -32.49% -31.64% -1.20%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's main business
statistics caliber has changed during the reporting period
□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Industry classification Item Unit 2020 2019 Change over last year
Steel rolling processing
industry
Sales ton 12968385.12 12936378.68 0.25%
Production ton 12940697.06 12753498.73 1.47%
Inventory ton 489522.19 461834.13 6.00%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Operating Cost
Industry classification
Unit: Yuan
Industry
classification Item
2020 2019 Change over last
year Amount Proportion Amount Proportion
Steel rolling
processing industry Raw material 23138475447.81 49.88% 24287695988.38 49.35% 0.52%
Steel rolling
processing industry
Supplementary
materials 2089395547.62 4.50% 2244278919.58 4.56% -0.06%
Steel rolling
processing industry
Spare parts and
tools 737780144.94 1.59% 792470544.15 1.61% -0.02%
Steel rolling
processing industry Fuel 12727140058.39 27.43% 13563168678.04 27.56% -0.13%
Steel rolling
processing industry Energy 2687362561.57 5.79% 2886572220.88 5.87% -0.07%
Steel rolling
processing industry
Salary and
benefits 1980205516.91 4.27% 2132408812.44 4.33% -0.06%
Steel rolling
processing industry Depreciation 2191070638.31 4.72% 2474423868.41 5.03% -0.31%
Steel rolling
processing industry Others 840750647.04 1.81% 830395613.74 1.69% 0.12%
Steel rolling
processing industry Total 46392180562.59 100.00% 49211414645.62 100.00% 0.00%
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √No
(7) Relevant Information of Significant Changes or Adjustment of the Business Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan) 9461208019.24
Total sales amount of the top five customers accounted for the proportion of total
annual sales 19.43%
The proportion of the total sales of the related parties in the top five customers 3.35%
Information of the top 5 customers
No Name Amount (Yuan) Proportion
1 Ouyeel Cloud Trade Co. Ltd. 3427597868.74 7.04%
2 Benxi Beiying Steel & Iron (Group) Co. Ltd. 1631630570.63 3.35%
3 Xiamen Jian Fa Metal Co. Ltd. 1561111934.43 3.21%
4 Ningbo AUX Trade Co. Ltd. 1492384207.69 3.07%
5 Shanghai Min Xing Da International Trade Co. Ltd. 1348483437.75 2.77%
Total -- 9461208019.24 19.43%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan) 20250289490.17
Total purchase amount of the top five suppliers accounted for the proportion of
total purchase 43.65%
The proportion of the total purchase of the related parties in the top five suppliers 34.29%
Information of the top 5 suppliers
No. Name Amount (Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co. Ltd. 5482888445.65 11.82%
2 Bengang Group International Economic and Trading Co. Ltd. 5237730233.06 11.29%
3 Benxi Steel & Iron (Group) Mining Co. Ltd. 5186341981.67 11.18%
4 Liaoning Electric Power Co. Ltd. Benxi Electric Power Supply Company 2489089422.71 5.37%
5 Heilongjiang Dragon Coal Group Co. Ltd. 1854239407.08 4.00%
Total -- 20250289490.17 43.65%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
2020 2019 Change over last year Notes to significant change
Selling and distribution expenses 97279280.21 1096688903.70 -91.13% Due to the application of new revenue standard
General and administrative expenses 792826294.81 831945841.56 -4.70%
Financial expenses 364775155.62 681842689.23 -46.50%
Loss of exchange
decreases and interest
income increases during
the current period
Research and development expenses 37989623.28 30780463.74 23.42%
4. Research and Development Input
√ Applicable □ Not applicable
Comprehensively improve the level of innovation and the ability to generate profits and increase efficiency strengthen variety
adjustment and market development improve product quality stability and assurance capabilities promote low-cost and green
manufacturing technology and determine the company's technology project plan based on the three elements of variety quality and
cost. ; Promote school-enterprise cooperation and industry-university-research cooperation promote the transformation of scientific
and technological achievements of universities and scientific research institutes and drive technological development of enterprises;
plan to develop 30 new products and more than 10 foreign cooperation projects throughout the year; The quality has been significantly
improved due to the increased R&D investment and some products have reached the leading domestic level which has improved
corporate profitability.Information of research and development input by the company
2020 2019 Change over last year
Number of Research and
Development personnel 1732 1632 6.13%
Proportion of number of
Research and Development
personnel
10.34% 9.18% 1.16%
Amount of Research and
Development Investment (In
RMB)
1541000000.00 1287080000.00 19.73%
Proportion of Research and
Development investment to
operating income
3.17% 2.44% 0.73%
Amount of capitalized Research
and Development investment 0.00 0.00 0.00%
Proportion of capitalized
Research and Development
investment accounted to total
Research and Development
investment
0.00% 0.00% 0.00%
Illustrations of the prominent change in proportion of research and development input occupying the operating income over same
period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Item 2020 2019 Change over last year
Subtotal of cash inflows from
operating activities 40062379161.40 48140957956.69 -16.78%
Subtotal of cash outflows from
operating activities 42101379374.69 41163133915.53 2.28%
Net cash flows from operating -2039000213.29 6977824041.16 -129.22%
activities
Subtotal of cash inflows from
investing activities 14037738.77 53984827.07 -74.00%
Subtotal of cash outflows paid
for investing activities 6213928829.62 4598859687.86 35.12%
Net cash flows from investing
activities -6199891090.85 -4544874860.79 36.42%
Subtotal of cash inflows from
financing activities 22997390314.56 17484678971.97 31.53%
Subtotal of cash outflows from
financing activities 18941067286.47 18304173598.95 3.48%
Net cash flows from financing
activities 4056323028.09 -819494626.98 234.80%
Net increase in cash and cash
equivalents -4211997393.46 1688866366.61 -349.40%
Illustrations of key factors of significant changes over same period last year
√ Applicable □Not applicable
Notes:
(1) Net cash flows generated from operating activities decreased 129.22% compared to the previous period mainly
because the increase of cash received from sales of goods is less than the increase of cash paid for goods.
(2) Subtotal of cash inflows from investing activities decreased 74% compared to the previous period mainly because
the decrease of cash withdrawn from purchase of financial products.
(3) Subtotal of cash outflows from investing activities increased 35.12% compared to the previous period mainly
because the increase of cash paid for investment.
(4) Net cash flows from investing activities increased 36.42% compared to the previous year mainly because the increase
of cash paid for investment.
(5) Subtotal of cash outflows from financing activities increased 3.48% compared to the previous period mainly because
the increase of cash repayment.
(6) Net cash flows from financing activities increased 234.8% compared to the previous period mainly because the
issuance of convertible corporate bonds in the current period.Illustrations of significant difference between cash flow from operating activities and net profit during the reporting period
□ Applicable √Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
Unit: Yuan
Amount Proportion in total profit Explanation of cause Whether sustainable
Investment income 13951362.33 3.35% Due to external equity investment No
Impairment of assets -67185869.37 -16.12% Due to provision of impairment of finished products No
Non-operating income 4328563.52 1.04% Due to income raised from scrapping of non-current assets No
Non-operating expenses 95724280.44 22.96% Due to scrapping of assets in current period No
IV. Assets and Liabilities
1. Significant Change of Assets Components
Adjustment to the beginning balance of the current period due to the first adoption of new revenue standards or new leasing standards
since 2020
√ Applicable □ Not applicable
Unit: Yuan
Ending balance of 2020 Beginning balance of 2020
Proportion
change
Notes to
significant
change Amount
Proportion in
the total assets
(%)
Amount
Proportion in
the total assets
(%)
Cash at bank and on
hand 13126666915.26 20.19% 18415844397.77 30.32% -10.13%
Accounts receivable 245217182.66 0.38% 235696265.66 0.39% -0.01%
Inventories 9040065342.65 13.91% 7700397685.61 12.68% 1.23%
Long-term equity
investment 0.00% 0.00%
Fixed assets 2742064.73 0.00% 2642998.70 0.00% 0.00%
Construction in
process 26284567956.44 40.43% 26123375492.40 43.01% -2.58%
Short-term loans 1839933715.58 2.83% 1833853572.58 3.02% -0.19%
Long-term loans 10067731000.00 15.49% 13151478000.00 21.66% -6.17%
3502934427.65 5.39% 4849675910.73 7.99% -2.60%
2. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: yuan
Item Beginning balance
Profit and
loss from
changes in
fair value in
the current
period
Accumulated
fair value
changes
recognised in
equity
Impairment
accrued in the
current period
Purchase
amount
during the
current period
Sales amount
during the
current period
Other
changes
Ending
balance
Financial
assets
4.Other equity
instrument
investments
1042024829
.00
10420248
29.00
Subtotal of
financial
assets
1042024829
.00
10420248
29.00
Total 1042024829.00
10420248
29.00
Financial
liabilities 0.00 0.00
3. Restricted Assets by the End of the Period
Items Ending balance Reason
Cash at bank and on hand 3897249320.14 Deposit for notes and L/C
Accounts receivable financing 887473044.29 Pledged for acceptance bill
Other equity instrument investments 1037735849.00 Pledged for loans
Fixed assets 94790118.09 Mortgage for fund lending
Intangible assets 37116386.66 Mortgage for fund lending
Total 5954364718.18
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
Year
Way of
raising
funds
Total amount
of raised
funds
Used
amount of
raised
fund this
year
The total
used
amount of
funds
raised
The
total
amount
of funds
raised
for
change
of
purpose
during
the
reportin
g period
Cumulativ
e total
amount of
funds
raised for
change of
purpose
Cumulativ
e
proportion
of total
raised
funds for
changes of
purposes
The total
amount of
funds
raised not
used
The
purpose
and
destination
of the
raised
funds not
yet used
Amount of
funds
raised after
being idle
for more
than two
years
2018
Private
placement
to raise
funds
396580 9390.49 327758.9 68821.1 Deposit
2020
Issue of
convertibl
e bonds
675920 246295.97
246295.9
7 429624.03 Deposit
Total -- 1072500 255686.46
574054.8
7 0 0 0.00% 498445.13 -- 0
Description of the overall use of raised funds
1. The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised
funds in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company's non-
public offering agreed to the company's use of idle raised funds to temporarily supplement liquidity and issued the "Guotai Junan
Securities Co. Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement Liquidity Provisionally".
As of July 27 2020 the company has returned the above-mentioned idle raised funds of RMB 666000000.00 for temporary
supplementary liquidity to the company's special account for raised funds.The funds raised from the non-public offering of shares in July 2020 for temporarily supplement working capital
The company used idle raised funds of RMB 666000000.00 (RMB 370000000.00 for the cold-rolled high-strength steel
transformation project and RMB 296000000.00 for the third cold-rolling plant hot-dip galvanizing production line project) to
temporarily supplement the working capital. The 4th meeting and the 12th meeting of the 8th Board of Supervisors reviewed and
approved. The independent directors of the company have issued clear opinions and fulfilled the necessary decision-making
procedures. The use of idle raised funds to temporarily supplement liquidity matters will not change the use of raised funds or affect
the normal progress of the investment plan with raised funds there is no situation that harms the interests of shareholders and the
time for a single replenishment of liquidity does not exceed 12 months. The company has promised not to use idle raised funds for
high-risk investments which is in line with "Guidelines for the Supervision of Listed Companies". No.-Regulatory Requirements forthe Management and Use of Funds Raised by Listed Companies” the “Shenzhen Stock Exchange Stock Listing Rules” and the“Guidelines for the Normative Operation of Listed Companies on the Main Board of the Shenzhen Stock Exchange” and other
relevant laws regulations and regulatory documents.The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised funds
in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company's non-public
offering agreed to the company's use of idle raised funds to temporarily supplement working capital and issued the "Guotai Junan
Securities Co. Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement Liquidity Provisionally". As of
December 31 2020 the company used idle funds raised from non-public issuance of stocks to temporarily supplement the balance
of working capital of RMB 666000000.00.
2. The temporary supplement of liquidity with funds raised from the public issuance of convertible corporate bonds
The company uses idle raised funds of 4180000000.00 yuan (high grade high magnetic induction non-oriented silicon steel project
1010000000.00 yuan steelmaking plant No. 8 caster project 220000000.00 yuan ironmaking plant No. 5 blast furnace capacity
replacement project 800000000.00 yuan special steel electric furnace upgrade and transformation project 1300000000.00 yuan
CCPP power generation project 700000000.00 yuan steelmaking plant No. 4-6 converter environmental protection renovation
project 150000000.00 yuan) temporary supplement of working capital matters. The fourteenth meeting of the eighth board of
directors of the company held on July 28 2020 Deliberated and approved at the 12th meeting of the 8th Board of Supervisors the
independent directors of the company have issued clear consent and fulfilled the necessary decision-making procedures. This time
the use of idle raised funds to temporarily supplement liquidity matters will not change the use of raised funds or affect normal plan
of the investment of raised funds. There is no situation that harms the interests of shareholders and the time for a single replenishment
of liquidity does not exceed 12 months. The company has promised not to use idle raised funds for high-risk investments which
complies with the "Guidelines for Supervision of Listed Companies No. 2-Listed Companies The regulatory requirements for themanagement and use of raised funds” the “Shenzhen Stock Exchange Stock Listing Rules” and the “Guidelines for the NormativeOperation of Listed Companies on the Main Board of the Shenzhen Stock Exchange” and other relevant laws regulations and
regulatory documents.The company's use of idle raised funds to temporarily supplement working capital does not involve changing the use of raised funds
in disguised form or affecting the normal progress of the investment plan of raised funds. The sponsor of the company’s public
issuance of convertible corporate bonds agreed to the company's use of idle raised funds to temporarily supplement liquidity and
issued the "Guotai Junan Securities Co. Ltd. Verification Opinions on the Company's Use of Idle Raised Funds to Supplement
Liquidity Provisionally".
As of December 31 2020 the company used idle funds raised from the public issuance of convertible corporate bonds to temporarily
supplement the balance of working capital of RMB 4180000000.00.
3. Use of surplus funds raised
During the reporting period the company did not use surplus funds raised.
4. The use of over-raised funds
During the reporting period the company did not use over-raised funds.
5. Purpose and destination of unused raised funds
As of December 31 2020 the company has excluded the aforementioned "Preliminary Investment and Replacement of Raised Funds
Investment Projects" "Present Investment and Replacement of Funds Raised in Investment Projects with Idle Raised Funds" and
"Use of Idle Raised Funds for Temporary Supplement of Working Capital". Except for the temporary supplement of working capital
the remaining funds raised are temporarily stored in a special account for raised funds.
6. Other usage of raised funds
During the reporting period the company had no other use of raised funds.
7. Change the use of funds for investment projects with raised funds
During the reporting period the company's investment projects with raised funds remained unchanged.
8. Problems in the use and disclosure of raised funds
During the reporting period the company strictly followed the "Shenzhen Stock Exchange Stock Listing Rules" the "Guidelines for
the Standardized Operation of Companies Listed on the Main Board of the Shenzhen Stock Exchange (Revised in 2015)" (Shenzheng
Shang [2015] No. 65) and the company's "Raise Funds" Management System" and other relevant regulations manage the special
account of raised funds and the investment projects of raised funds will be implemented as planned. The use and management of the
company's raised funds are legal and effective and it has strictly fulfilled its information disclosure obligations. There is no untimely
untrue incorrect or incomplete disclosure and there is no violation of the management of raised funds.
9. Approval of special report
This special report was approved by the board of directors on April 26 2021.
(2) Fundraising commitments
√Applicable □ Not applicable
Unit: 10 thousand yuan
Committed investment
projects and over-
raised funds
Whether
the
project
has been
changed
(includin
g partial
changes)
Raised
funds
promised
total
investme
nt
Total
amount
of
investme
nt after
adjustme
nt (1)
Amount
invested
during
the
reporting
period
Accumul
ated
investme
nt
amount
as of the
end of the
period
(2)
Investme
nt
progress
as of the
end of the
period
(3)＝
(2)/(1)
Date of
the
project
reaches
the
expected
usable
status
Benefits
achieved
during
the
reporting
period
Whether
the
expected
benefits
are
achieved
Whether
the
project
feasibility
has
changed
significan
tly
Committed invested projects
High Strength Cold
Rolling Steel
Renovation Project
No 226580 226580 9390.49 187466.29 82.74%
31.12.2017 5357.65 No No
The Third Cold Rolling
Work Hot-Dip
Galvanizing
Production Line
Project
No 70000 70000 40292.61 57.56% 31.12.2018 8490.1 No No
Repayment of bank
loans No 100000 100000
100000 100.00%
Not
applicabl
e
No
High grade high
magnetic induction
non-oriented silicon
steel project
No 101620 101620 123 123 0.12%
Not
applicabl
e
No
Steelmaking Plant No.
8 Casting Machine
Project
No 33500 33500 9864.44 9864.44 29.45% 31.10.2020 2819.04 No No
Capacity Replacement
Project of No. 5 Blast
Furnace in Ironmaking
Plant
No 96000 96000 13322.74 13322.74 13.88% 31.11.2020 -3749.14 No No
Special Steel Electric
Furnace Upgrade
Project
No 141600 141600 11703.34 11703.34 8.27%
Not
applicabl
e
No
CCPP power
generation project No 83300 83300 9570.15 9570.15 11.49%
Not
applicabl
e
No
Steelmaking plant No.
4-6 converter
environmental
protection renovation
project
No 19900 19900 1712.3 1712.3 8.60% 31.12.2020 No No
Repayment of bank
loans No 200000 200000 200000 200000
Not
applicabl
e
No
Subtotal -- 1072500 1072500 255686.46
574054.8
7 --
-- 12917.65 -- --
Over-raised funds
Not applicable No
Total -- 1072500 1072500 255686.46
574054.8
7 -- -- 12917.65 -- --
Situation and cause of
failure to meet planned
progress or projected
earnings (disclosed by
project)
1. The market environment has undergone major changes. Although the cold-rolled high-strength steel
transformation project and the third cold-rolling plant hot-dip galvanizing production line project have
basically reached production capacity and profitability has improved there is still a need to steadily
increase the production of high value-added products. More customers recognized the new line of
products.
2. The No. 8 caster engineering project of the steelmaking plant reached the expected usable state in
October 2020 and the capacity is in the ramp-up phase this year and the expected profit in this period has
not been reached; the capacity replacement project of the No. 5 blast furnace of the iron smelting plant
reached the expected usable status in November 2020. This year is in a ramp-up phase of production
capacity and after considering the provision for impairment of assets related to the replacement capacity of
the original No. 5 blast furnace the expected profit has not been reached in this period.
Description of major
changes in project
feasibility
None.
Amount use and
progress of usage of
over-raised funds
Not applicable
Change in the
implementation
location of the raised
funds investment
project
Not applicable
Adjustment of
implementation
methods of fund-
raising investment
projects
Not applicable
The initial investment
and replacement of the
fundraising investment
project
Applicable
Refer to the Contents in Special Report III 3
Temporary
replenishment of
working capital with
idle raised funds
Applicable
Refer to the Contents in Special Report III 4
The amount and reason
for the rest of raised
fund in the project
implementation
Applicable
There was no surplus of funds raised for project implementation this year.Use and destination of
raised funds that have
not been used
Refer to the Contents in Special Report III 7
Problems or other
situations in the use
and disclosure of raised
funds
None.
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period the company did not have any changes in the fundraising project.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
Company Name Company type
Main
business
Registered
capital Total assets Net assets
Operating
income
Operating
profit Net Profit
Bengang
Puxiang Cool
Rolling Steel
Sheet Co. Ltd.Subsidiaries
Processing
and sales
of steel
1920000000
.00
5184119484.
86
2024536003
.56
7327060880
.66 56003512.60 42005550.17
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
None
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
(1) The development trend of the industry and the market competition pattern the company faces
In 2021 from the perspective of the international economic situation there are many uncertainties in the changes in the
epidemic and the external environment. Next year the world economic situation will remain complex and severe the
recovery will be unstable and uneven and various derivative risks caused by the impact of the epidemic cannot be ignored.
From the perspective of the domestic economic situation China will enter the "14th Five-Year Plan" period and creating
a new pattern of "dual cycles" will be the main strategic direction and "expansion of domestic demand" has become an
important strategic basis. At present China has become the only major economy in the world to achieve positive economic
growth. The three major battles have made decisive achievements. The rapid economic recovery will drive a significant
increase in steel demand. At the same time we must also see that steel production maintains high strength under the
expected upward pull of demand high steel inventories are running high steel prices are under pressure and other issues
are more prominent and it is also very difficult for companies to improve economic efficiency. Therefore we must
maintain a clear understanding fully implement the national "revitalizing the Northeast" decision and deployment firmly
grasp the development opportunities of "digital Liaoning intelligent building a strong province" give full play to the
advantages of resources location and other advantages maintain strategic determination and actively Responding to
market changes we insist on focusing on economic benefits improve quality and increase production reduce costs and
increase efficiency and ensure that the company achieves higher-quality development.
(2) Company development strategy
The overall work plan for 2021: guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era
thoroughly study and implement the spirit of the 19th National Congress of the Communist Party of China and the 2nd
3rd 4th and 5th Plenary Sessions of the 19th National Congress of the Communist Party of China and earnestly
implement the Party Central Committee and the State Council Provincial and municipal epidemic prevention and control
and the "six stability" and "six guarantees" work requirements comprehensively strengthen the party's leadership
standardize corporate governance and adhere to the principle of benefit-centered and technological innovation on the
basis of normalizing epidemic prevention and control As a guide with deepening reform as the driving force and with
stable and high output as the guarantee we will strive to achieve a high starting point for the 14th Five-Year Plan.
(3) Business plan
The overall goal of production and operation in 2021: Strive to complete 10.76 million tons of pig iron 11.303 million
tons of crude steel 13.797 million tons of hot-rolled plates 5.82 million tons of cold-rolled plates (deducting 200000
tons of chilled internal supply) and 700000 tons of special steel Safety production realizes "three for zero".In order to achieve the above goals we will focus on the following aspects:
1. Promote the construction of smart enterprises and achieve higher quality development
2. Strengthen safety management and realize energy-saving and green development
3. Adhere to the innovation-driven strategy and promote the construction of smart factories
4. Consolidate various basic management and enhance corporate management efficiency
5. Unswervingly deepen reforms and stimulate the vitality of enterprise development
6. Adhere to the leadership of the party to the enterprise and provide strong political guarantee
(4) Maintain the current business and complete the funding arrangements required for the investment projects under
construction
The company will use its own funds and bank loans to meet the funds required for production and operation and
technological transformation.
(5) Possible risks
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 make efforts 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 items for the weak links and bottlenecks that affect the level
of the index clarify the research goals measures time points and responsible persons and steadily advance the index
improvement.
2. Risks of prevention and control of the COVID-19 epidemic
Risk: Since the outbreak of the COVID-19 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.
X. Researches visits and interviews received in this reporting period
1. Registration form of researches visits and interviews received in this reporting period
□ Applicable √ Not applicable
During the reporting period the Company did not receive any research communication interviews and other activities.
V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation implementation and adjustment of profit distribution policy of common shares especially cash dividend
policy during the reporting period
√ Applicable □ Not applicable
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the company's net profit attributable to the
parent company in 2020 is RMB 384252740.78 plus the undistributed profit at the beginning of the year of RMB
2307765664.6 and the undistributed profit at the end of the year is RMB 2692018405.40.
Profits distribution plan of 2019: based on the company’s existing share capital of 3875371532 shares a cash dividend
of 0.1 yuan (including tax) will be distributed to all shareholders for every 10 shares. The proposed distribution of ordinary
share dividends is RMB 38753715.32 and the remaining RMB 2653264690.08 will be carried forward to the next
year’s undistributed profits.Special description of cash dividend policy
Whether it meets the requirements of the company's articles of
association or the resolutions of the shareholders meeting: Yes
Whether the dividend standard and ratio are clear: Yes
Whether the relevant decision-making procedures and
mechanisms are complete: Yes
Whether independent directors have performed their duties due
diligence and played their due role: Yes
Whether small and medium shareholders have sufficient
opportunities to express their opinions and demands and whether
their legitimate rights and interests are fully protected:
Yes
If the cash dividend policy is adjusted or changed whether the
conditions and procedures are compliant and transparent: Yes
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital in
recent three years (including the reporting period)
1. Profit distribution proposal of 2020
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the company's net profit attributable to the
parent company in 2020 is RMB 384252740.78 plus the undistributed profit at the beginning of the year of RMB
2307765664.62 and the undistributed profit at the end of the year is RMB 2692018405.40.
Based on the company’s existing share capital of 3875371532 shares a cash dividend of 0.1 yuan (including tax) will
be distributed to all shareholders for every 10 shares. The proposed distribution of ordinary share dividends is RMB
38753715.32 and the remaining RMB 2653264690.08 will be carried forward to the next year’s undistributed profits.
2. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the net profit attributable to the parent
company of the year 2019 was RMB 555646971.4. After adding the retained profit of RMB 1945887269.82 at the
beginning of the year and deducting the actual dividend of RMB 193768576.6 from the previous year the balance of
undistributed profit was RMB 2307765664.62.Profits distribution plan of 2019:
Considering the uncertainty of the Coronavirus on the economy the company did not make profit distribution or convert
the provident fund into capital in 2019.
3. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the net profit attributable to the parent
company of the year 2018 was RMB 1036493236.07. After adding the retained profit of RMB 1103162610.35 at the
beginning of the year and deducting the actual dividend of RMB 193768576.6 from the previous year the balance of
undistributed profit was RMB 1945887269.82.Profits distribution plan of 2018: The company will take existing share capital 3875371532 shares as the base
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193768576.60 dividends of ordinary shares and the remaining RMB 1752118693.22 will be carried over to next
year’s undistributed profits.
Cash dividend distribution in recent three years
Unit: Yuan
Year
Cash
dividend
(Including
Tax)
Net profit
attributable to the
parent company in
the consolidated
financial statements
Ratio in net profit
attributable to the
parent company in
the consolidated
financial
statements
Amount of cash
dividends in
other ways
(repurchasing
shares)
Ratio of cash
dividend in other
way in net profit
attributable to the
parent company in
the consolidated
financial
statements
Amount of
cash
dividends in
other ways
Proportion
of cash
dividends in
other ways
2020 38753715.32 384252740.78 10.09% 0.00 0.00%
38753715.
32 9.69%
2019 0.00 555646971.40 0.00% 0.00 0.00% 0.00 0.00%
2018 193768576.60 1036493236.07 18.69% 0.00 0.00%
193768576
.60 18.69%
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash dividend distribution
was proposed during the reporting period
□ Applicable √ Not applicable
II. 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) 0.1
The base of the share capital of the distribution
plan (shares) 3875371532.00
Cash dividend amount (yuan) (tax included) 38753715.32
Cash dividend amount in other ways (such as share
repurchase) (yuan) 0.00
Total cash dividends (including other methods)
(yuan) 0
Distributable profit (yuan) 2692018405.40
The ratio of total cash dividends (including other
methods) to total profit distribution 0
Cash dividend of the current period
If the company's development stage is in the growth period and has major capital expenditure arrangements when the profit
distribution is carried out the proportion of cash dividends in this profit distribution should be at least 20%.Notes to the profit distribution or capital reserve transfer plan
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital
in recent three years (including the reporting period)
1. Profit distribution proposal of 2020
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the company's net profit attributable to the
parent company in 2020 is RMB 384252740.78 plus the undistributed profit at the beginning of the year of RMB
2307765664.62 and the undistributed profit at the end of the year is RMB 2692018405.40.
Profits distribution plan of 2020: based on the company’s existing share capital of 3875371532 shares a cash dividend
of 0.1 yuan (including tax) will be distributed to all shareholders for every 10 shares. The proposed distribution of
ordinary share dividends is RMB 38753715.32 and the remaining RMB 2653264690.08 will be carried forward to
the next year’s undistributed profits.
2. Profit distribution proposal of 2019
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the net profit attributable to the parent
company of the year 2019 was RMB 555646971.40. After adding the retained profit of RMB 1945887269.82 at the
beginning of the year and deducting the actual dividend of RMB 193768576.6 from the previous year the balance of
undistributed profit was RMB 2307765664.62.Profits distribution plan of 2019:
Considering the uncertainty of the Coronavirus on the economy the company did not make profit distribution or convert
the provident fund into capital in 2019.
3. Profit distribution proposal of 2018
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP. the net profit attributable to the parent
company of the year 2018 was RMB 1036493236.07. After adding the retained profit of RMB 1103162610.35 at
the beginning of the year and deducting the actual dividend of RMB 193768576.6 from the previous year the balance
of undistributed profit was RMB 1945887269.82.Profits distribution plan of 2018: The company will take existing share capital 3875371532 shares as the base
distributing cash dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute
RMB193768576.60 dividends of ordinary shares and the remaining RMB 1752118693.22 will be carried over to
next year’s undistributed profits.III. Performance of Committed Issues
1. 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 party
Type of
commitment Contents
Commitment
time
Commitment
period Performance
Commitment of shares
reform
Commitment made in the
acquisition report or the
equity change report
Commitment made during
asset restructuring
Commitment made during
initial public offering or
refinancing
Company
directors
senior
management
Other
commitment
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
May 22 2019 Long term Under normal fulfillment
and all shareholders. 2. I
promise not to deliver
benefits to other units or
individuals without
compensation or under
unfair conditions nor to
use other means to
damage the Company's
interests. 3. I promise to
restrict the position-
related consumption
behavior of company
directors and senior
management personnel.
4. I promise not to use
the Company’s assets to
do investment and
consumption activities
that are not related to the
performance of my
duties. 5. Within the
scope of my
responsibilities and
authority I promise to
make every effort to
promote the company's
board of directors or the
remuneration system
established by the
remuneration and
appraisal committee to
be linked to the
implementation of the
company's
compensation measures
and vote in favor of the
relevant proposals
reviewed by the
company's board of
directors and general
meeting (If I have voting
rights). 6. If the company
intends to implement
equity incentives I
promise to within my
own responsibilities and
jurisdiction make every
effort to promote 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.
Benxi Steel &
Iron (Group)
Co. Ltd. and
Bengang
Group Co.Ltd.Other
Commitment
The sales companies of
Bengang International
Trade Co. Ltd. and
Bengang Steel plates in
the same region
guarantee independent
personnel independent
business independent
finance and independent
assets and are
guaranteed not to be in
the same registration
place or in the 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
July 242019 Long term Under normal fulfillment
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.
Benxi Steel &
Iron (Group)
Co. Ltd.
Other
Commitment
The Group's horizontal
competition with Benxi
Steel Plates and the
measures and
commitments to avoid
inter-industry
competition 1. During
the period when the
Group is the controlling
shareholder of Bengang
Steel Plates in addition
to the matters listed in
Article 1 of this
Commitment Letter the
Group and other
enterprises controlled by
the Group other than
Bengang Steel Plates no
longer produce or
develop any products
that compete or may
compete with the
products produced by
Bengang Steel Plates and
its subsidiaries at home
and abroad and do not
directly or indirectly
operate any business that
competes with 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
July 242019 Long term
The company
has completed
the acquisition
of the
2300mm hot
rolling mill
production
line and the
industry
competition
problem has
been
completely
resolved.Other
commitments
continue to be
fulfilled
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
Benxi Steel &
Iron (Group)
Co. Ltd. and
Bengang
Group Co.Ltd.Other
Commitment
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.
Ltd. (hereinafter
collectively referred to
as the "Group") as a
direct controlling
shareholder and an
indirect controlling
shareholder of Bengang
Steel Plates Co. Ltd.(hereinafter referred to
as "Bengang Steel
Plates") in order to
protect the interests of
Bengang Steel Plates and
other shareholders of
Bengang Steel Plates
regulate The Group's
related transaction with
Bengang Steel Plates
hereby promises: 1. The
Group will fully respect
the independent legal
person status of Bengang
Steel Plates ensure the
independent operation
and independent
decision-making of
Bengang Steel Plates
ensure the independence
of Bengang Steel Plates’
business asset integrity
and personnel
Independence and
financial 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
July 242019 Long term Under normal fulfillment
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 No
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period is
still in the forecast period
□ Applicable √ Not applicable
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and
Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on the
Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
A. Change of major accounting policy during this reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 14-Revenue" (revised in 2017) (hereinafter referred
to as "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14-Revenue" in 2017. The revised
standard stipulates that for the first implementation of the standard the amount of retained earnings and other related items in
the financial statements at the beginning of the year should be adjusted according to the cumulative impact and the information
for the comparable period should not be adjusted.The Company implemented the new revenue standard from January 1 2020. According to the standard the Company only
adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for the
cumulative impact of contracts that have not been completed on the date of first implementation and does not make adjustments
to the comparative financial statements.The major impact of the implementation of the above regulations are as follows:
Compared with the original revenue standards the impact of the implementation of the new revenue standards on the relevant
items of the financial statements for the period of 2020 is as follows (increase/(decrease)):
Affected items in the statement of
financial position
Amount of impact on the balance on Dec 31 2020
Consolidated Financial
statement
Parent company financial
statement
Advance from customers -5038299156.48 -6016524270.87
Contract liabilities 4458671819.90 5324357761.83
Other current liabilities 579627336.58 692166509.04
Affected items in the statement of
comprehensive income
Impact amounts to the period of 2020
Consolidated Financial statement Parent company financial statement
Operating costs 1112122323.44 655370940.93
Selling and distribution expenses -1112122323.44 -655370940.93
(2) Implementation of "Accounting Standards for Business Enterprises No. 13 "
The Ministry of Finance issued the "Accounting Standards for Business Enterprises Interpretation No. 13" (Cai Kuai [2019] No.
21 hereinafter referred to as "Interpretation No. 13") on December 10 2019 which will come into force on January 1 2020.
Change of accounting policy content
and reason
Amount of impact on the balance on Jan 1 2020
Affected items Consolidated Financial
statement
Parent company
financial statement
The Company implemented the
"Accounting Standards for Business
Enterprises No. 14-Revenue"
(referred to as "New Revenue
Standards") promulgated by the
Ministry of Finance in 2017 on
January 1 2020
Advance from customers -4429821526.79 -5597707687.22
Contract liabilities 3920196041.41 4953723617.01
Other current liabilities 509625485.38 643984070.21
No requirement of retrospective adjustment.a. The recognition of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or joint venture between
an enterprise and other member units (including parent companies and subsidiaries) of the enterprise group to which it belongs;
a joint venture of the enterprise and other joint ventures or joint ventures of the enterprise. In addition Interpretation No. 13 also
clarifies that only two or more companies that are significantly affected by one party do not constitute related parties. It also
adds that joint ventures include joint ventures and their subsidiaries.b. The definition of business
Interpretation No. 13 completes the three elements of business composition refines the judgment conditions of the business
composition and introduces the "concentration test" option to simplify to a certain extent the judgment of whether a combination
obtained under the same control constitutes a business etc.The company implemented Interpretation No. 13 from January 1 2020 and the comparative financial statements will not be
adjusted. Implementation Interpretation No. 13 has not had a significant impact on the company's financial position and
operating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"
On December 16 2019 the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment of Carbon
Emissions Trading" (Cai Kuai [2019] No. 22) which is applicable to the related companies in the key emission enterprises
(hereinafter referred to as key emission companies) that conduct carbon emission rights business in accordance with the "Interim
Measures for the Administration of Carbon Emissions Trading" and other relevant regulations. This regulation came into effect
on January 1 2020 and key emission companies should adopt the prospective application to apply this regulation.The Company implemented the above regulation from January 1 2020 and the comparative financial statements will not be
adjusted. The implementation of this regulation has not had a significant impact on the company's financial position and
operating results.
(4) Implement the "Regulations on Accounting Treatment of Rental Concessions Related to the Coronavirus Pandemic"
On June 19 2020 the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental Concessions Related to
the Coronavirus Pandemic " (Caikuai (2020) No. 10) which came into effect on June 19 2020 allowing companies to adjust
the relevant rental concessions that occurred between Jan 1 2020 and the implementation date of this regulation. According to
the regulation companies can choose to adopt simplified methods for accounting treatments for rent reductions and deferred
payment of rents directly caused by the Coronavirus Pandemic that meet the conditions.The company chooses to adopt a simplified method for accounting treatment for all rent concessions that fall within the scope
of the regulation and adjusts the relevant rent concessions that occur between January 1 2020 and the effective date of the
regulation accordingly.
The implementation of the regulations did not have a significant impact on the company's financial position and operating results.
B. Change of accounting estimate during the reporting period
Items
Approval
procedure
Application
date
Affected
items
Affected
amounts
Change in
depreciation
period
Approved by the eighth
meeting of the eighth
board of directors
Jan 1 2020
Accumulated
depreciation
633195486.72
Operating costs 616340171.08
General and
administrative
expenses
16855315.64
Total profit 633195486.72
Net profit 474896615.04
C. The first implementation of the new revenue standard adjustment to the financial statements at the beginning of the
year
Consolidated Statement of Financial Position
Items
Ending balance of
the last period
Beginning balance
of the current period
Adjusted amounts
Reclassification Remeasurement Total
Advance
from
customers
4429821526.79 -4429821526.79 -4429821526.79
Contract
liabilities
3920196041.41 3920196041.41 3920196041.41
Other
current
liabilities
509625485.38 509625485.38 509625485.38
Statement of Financial Position of the Parent Company
Items
Ending balance of
the last period
Beginning balance
of the current period
Adjusted amounts
Reclassification Remeasurement Total
Advance from 5597707687.22 -5597707687.22 -5597707687.22
Items
Ending balance of
the last period
Beginning balance
of the current period
Adjusted amounts
Reclassification Remeasurement Total
customers
Contract
liabilities
4953723617.01 4953723617.01 4953723617.01
Other current
liabilities
643984070.21 643984070.21 643984070.21
Ⅶ. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There is no change of the consolidation scope during the reporting period.IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (RMB 10
thousand) 280
Service life of domestic accountant’s firm providing
audit service 13
Name of CPAs from the domestic accountant’s firm Zhu Jinmei Li Guiying
Service life of domestic accountants’ providing audit
service 0
Name of the overseas accountant’s firm (if any) None
Payment to overseas accountant’s firm (RMB 10
thousand) (if any) 0
Service life of overseas accountant’s firm providing
audit service (if any) None
Name of CPAs from the overseas accountant’s firm
(if any) None
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal control auditing at RMB
600 thousand.
During the year due to the issue of convertible corporate bonds in this year the company hired Guotai Junan Securities Co. Ltd. as
the sponsor at RMB 40.80 million.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation Situation of Stock Incentive Plan of the Company Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no implementation situation of stock incentive plan of the Company employee stock ownership plan or other
employee incentive measures during the reporting period.XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Bengan
g
Electro
nics
and
Gas
same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
72.4 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Co.
Ltd.
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1384
09.84
2.84
%
3000
00 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
2150.
96
0.04
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
2260
2.26
0.46
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Real-
estate
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
8.65 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Steel &
Iron
Process
and
Logisti
cs Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
25.88 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Steel &
same
contro
ller
Sales
of
goods
and
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
0.00% No
Execu
te
accor
ding
to the
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Iron
Process
and
Logisti
cs Co.
Ltd.servic
es
agree
ment
Benxi
Steel &
Iron
(Group)
Machin
ery
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
1898.
85
0.04
% 8000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Machin
ery
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
2088.
72
0.04
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Machin
ery
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
338.5
6
0.01
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
699.1
6
0.01
%
1000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
on
agree
ment
Relat
ed
agree
ment
price
6452.
06
0.13
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
spare
parts
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
6202
0.89
1.27
%
1000
00 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
9678.
23
0.20
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Freigh
t
reven
ue
on
agree
ment
Relat
ed
agree
ment
price
743.9 0.02% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
1107.
48
0.02
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Therma
l Power
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
2995.
62
0.06
% 8000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Therma
l Power
Develo
pment
same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
on
agree
ment
Relat
ed
agree
ment
price
1750.
62
0.04
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Co.
Ltd.spare
parts
Benxi
Steel &
Iron
(Group)
Therma
l Power
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Freigh
t
reven
ue
on
agree
ment
Relat
ed
agree
ment
price
0.00% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
824.4
7
0.02
% 5000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
3.97 0.00% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1914.
44
0.04
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Informa
tion
and
Automa
tic
Tech
same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
14.64 0.00% 300 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Co.
Ltd.
Benxi
Steel &
Iron
(Group)
Constru
ction
and
Repairi
ng Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
125.1
5
0.00
% 8000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
and
Repairi
ng Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
368.0
3
0.01
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Metallu
rgy
Residue
s Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
659.8
4
0.01
%
3000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Metallu
rgy
Residue
s Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
2683
9.91
0.55
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Metallu
rgy
Residue
s Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Freigh
t
reven
ue
on
agree
ment
Relat
ed
agree
ment
price
0.00% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Benxi
Steel &
Iron
(Group)
Metallu
rgy
Residue
s Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
423.5
3
0.01
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Co.
Ltd.Parent
Comp
any
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
205.4
7
0.00
% 2000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Co.
Ltd.Parent
Comp
any
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1013.
53
0.02
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
New
Career
Develo
pment
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
38.37 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Dalian
Boluole
Steel
Tube
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
1136.
33
0.02
% 1000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Bengan
g Steel
& Iron
Trading
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
0.00% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
same
contro
ller
Sales
of
goods
and
Energ
y &
Power
on
agree
ment
Relat
ed
agree
0.00% 50 No
Execu
te
accor
ding
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
General
Hospita
l
servic
es
ment
price
to the
agree
ment
Benxi
Steel &
Iron
(Group)
Zhengt
ai
Constru
ction
Materia
ls Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
2.16 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Hengto
ng
Metallu
rgical
Equipm
ent
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
0.00% 5000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Hengto
ng
Metallu
rgical
Equipm
ent
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
731.8
6
0.02
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Hengto
ng
Metallu
rgical
Equipm
ent
Manufa
cture
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
908.8
9
0.02
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Bengan
g Cold-
rolled
Stainles
s Steel
Dandon
g Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
0.00%
5000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g Cold-
rolled
Stainles
s Steel
Dandon
g Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
2716.
09
0.06
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Suzhou
Bengan
g
Industri
al Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
4998
3.82
1.03
%
6500
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g
Group
Finance
Co.
Ltd.same
contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
1.3 0.00% 50 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g
Group
Co.
Ltd.contro
ller
Sales
of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
7.33 0.00% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g
Group
Co.
Ltd.contro
ller
Sales
of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1539.
32
0.03
% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Liaonin
g
Hengtai
Heavy
Machin
ery Co.Ltd.same
contro
ller
Sales
of
goods
and
servic
es
produ
cts
on
agree
ment
Relat
ed
agree
ment
price
29.54 0.00% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Co.
Ltd.Parent
Comp
any
Purch
ase of
goods
and
servic
es
repair
fees
on
agree
ment
Relat
ed
agree
ment
price
3020
6.47
0.65
%
5000
0 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Co.
Ltd.Parent
Comp
any
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
2121.
13
0.05
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g Cold-
rolled
Stainles
s Steel
Dandon
g Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
invent
ory
on
agree
ment
Relat
ed
agree
ment
price
22.39 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
labor
costs
on
agree
ment
Relat
ed
agree
ment
price
3213.
23
0.07
%
6500
00 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
5141
93.5
11.08
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Mining
same
contro
ller
Purch
ase of
goods
and
servic
es
Freigh
t
on
agree
ment
Relat
ed
agree
ment
price
1227.
47
0.03
% No
Execu
te
accor
ding
to the
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Co.
Ltd.agree
ment
Benxi
Steel &
Iron
(Group)
Metallu
rgy
Residue
s Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
3430
3.84
0.74
%
4000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Steel &
Iron
Process
and
Logisti
cs Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Proces
sing
fees
on
agree
ment
Relat
ed
agree
ment
price
63.22 0.00% 300 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Real-
estate
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
als
on
agree
ment
Relat
ed
agree
ment
price
0.00%
1000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Machin
ery
Manufa
cture
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
5984.
04
0.13
%
2500
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Machin
ery
Manufa
cture
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
2773.
62
0.06
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1624.
97
0.04
%
5000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
projec
t fees
on
agree
ment
Relat
ed
agree
ment
price
2027
4.33
0.44
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
1802
2.98
0.39
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
1241.
22
0.03
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Freigh
t
on
agree
ment
Relat
ed
agree
ment
price
51.39 0.00% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
2109
5.06
0.45
%
3000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
1537.
66
0.03
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Freigh
t
on
agree
ment
Relat
ed
agree
ment
price
0.00% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Industri
al
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
projec
t
funds
on
agree
ment
Relat
ed
agree
ment
price
107.0
1
0.00
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
and
Repairi
ng Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
228.1
8
0.00
%
3500
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Constru
ction
and
Repairi
ng Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
projec
t fees
on
agree
ment
Relat
ed
agree
ment
price
1911.
38
0.04
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Benxi
Steel &
Iron
(Group)
Constru
ction
and
Repairi
ng Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
fees
on
agree
ment
Relat
ed
agree
ment
price
1747
5.94
0.38
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Bengan
g
Electro
nics
and
Gas
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
1385
6.3
0.30
%
2000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g
Electro
nics
and
Gas
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
3063.
31
0.07
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
High-
tech
Drilling
Tools
Manufa
cture
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
39 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
New
Career
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
0.00% 1800 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
New
Career
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als &
food
on
agree
ment
Relat
ed
agree
ment
price
1028.
9
0.02
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Liaonin
g
Metallu
rgy
Technic
ian
College
same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
933.2
6
0.02
% 1500 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Metallu
rgy
Vocatio
nal
Technic
al
College
same
contro
ller
Purch
ase of
goods
and
servic
es
projec
t fees
on
agree
ment
Relat
ed
agree
ment
price
0.00% 1000 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Liaonin
g
Metallu
rgy
Vocatio
nal
Technic
al
College
same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
648.2
4
0.01
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Bengan
g
Group
Internat
ional
Econo
mic and
Trading
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
5089
61.39
10.97
%
2500
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Bengan
g
Group
Internat
ional
Econo
mic and
Trading
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
agenc
y fees
on
agree
ment
Relat
ed
agree
ment
price
5531.
64
0.12
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Bengan
g
Group
Internat
ional
Econo
mic and
same
contro
ller
Purch
ase of
goods
and
servic
es
Port
surcha
rges
on
agree
ment
Relat
ed
agree
ment
price
9279.
98
0.20
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Trading
Co.
Ltd.
Benxi
Steel &
Iron
(Group)
Informa
tion
and
Automa
tic
Tech
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
850.3
5
0.02
%
1000
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Steel &
Iron
(Group)
Informa
tion
and
Automa
tic
Tech
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
projec
t fees
on
agree
ment
Relat
ed
agree
ment
price
1121.
38
0.02
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Informa
tion
and
Automa
tic
Tech
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
servic
es
on
agree
ment
Relat
ed
agree
ment
price
1732.
5
0.04
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
(Group)
Therma
l Power
Develo
pment
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
heatin
g
costs
on
agree
ment
Relat
ed
agree
ment
price
119 0.00% 500 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Steel &
Iron
same
contro
ller
Purch
ase of
goods
Raw
materi
al &
on
agree
ment
Relat
ed
agree
71.04 0.00% No
Execu
te
accor
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
(Group)
Therma
l Power
Develo
pment
Co.
Ltd.and
servic
es
supple
menta
ry
materi
als
ment
price
ding
to the
agree
ment
Benxi
Steel &
Iron
(Group)
Designi
ng
Institut
e
same
contro
ller
Purch
ase of
goods
and
servic
es
design
fees
on
agree
ment
Relat
ed
agree
ment
price
125.9
8
0.00
% 2000 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Raw
materi
al &
supple
menta
ry
materi
als
on
agree
ment
Relat
ed
agree
ment
price
4923
90.02
10.61
%
1550
000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Energ
y &
Power
on
agree
ment
Relat
ed
agree
ment
price
4658
9.86
1.00
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
Freigh
t
on
agree
ment
Relat
ed
agree
ment
price
407.5
3
0.01
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
labor
costs
on
agree
ment
Relat
ed
agree
ment
price
7190.
62
0.15
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Benxi
Beiying
Steel &
Iron
(Group)
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
1710.
81
0.04
% No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Liaonin
g
Hengto
ng
Metallu
rgical
Equipm
ent
Manufa
cture
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
raw
materi
al &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
8336.
02
0.18
%
1500
0 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Hengto
ng
Metallu
rgical
Equipm
ent
Manufa
cture
Co.
Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
&
labor
costs
on
agree
ment
Relat
ed
agree
ment
price
661.1
4
0.01
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Liaonin
g
Hengtai
Heavy
Machin
ery Co.Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
raw
materi
al &
spare
parts
on
agree
ment
Relat
ed
agree
ment
price
138.5
9
0.00
% 8000 No
Execu
te
accor
ding
to the
agree
ment
Yes 2020/4/22
Liaonin
g
Hengtai
Heavy
Machin
ery Co.Ltd.same
contro
ller
Purch
ase of
goods
and
servic
es
repair
&
labor
costs
on
agree
ment
Relat
ed
agree
ment
price
716.9
9
0.02
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Bengan
g
Group
Co.
Ltd.contro
ller
Purch
ase of
goods
and
servic
es
proper
ty
manag
ement
fees
on
agree
ment
Relat
ed
agree
ment
price
0.00%
2000
0 No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Bengan
g
Group
Co.
Ltd.contro
ller
Purch
ase of
goods
and
servic
es
labor
costs
on
agree
ment
Relat
ed
agree
ment
price
1887
6.38
0.41
% No
Execu
te
accor
ding
to the
agree
ment
No 2020/4/22
Related
parties
Relati
onshi
p
Type
of
relate
d
party
transa
ctions
Conte
nt of
relate
d
party
transa
ctions
Pricin
g
princi
ple of
relate
d
party
transa
ctions
Price
of
relate
d
party
transa
ctions
Amou
nt of
relate
d
party
transa
ctions
(in 10
thous
and)
Propo
rtion
of
simila
r
transa
ctions
The
appro
ved
tradin
g
limit
of
transa
ctions
(in 10
thous
and)
Whet
her
excee
d the
appro
ved
limite
d
(Y/N)
Mean
s of
paym
ent of
relate
d
party
transa
ctions
Avail
able
marke
t price
of
simila
r
transa
ctions
Date
of
disclo
sure
Index
of
discl
osure
Total -- --
2144
591.3
3
-- 3141500 -- -- -- -- --
Details of any sales return of a large
amount No applicable
Give the actual situation during the
reporting period where a forecast
had been made for the total amounts
of routine related-party
transactions，by type to occur inthe current period(if any)
No applicable
Reason for any significant
difference between the transaction
price and the Market price for
reference (if applicable)
No applicable
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□Applicable √ Not applicable
There were no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
□Applicable √ Not applicable
XVII. Major Contracts and Their Performance
1. Trusteeship contracting and lease
(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
Lessee Lease capital category Lease income of 2020 (included tax)
Lease income of
2019 (included
tax)
Benxi Steel & Iron (Group) Steel &
Iron Process and Logistics Co. Ltd.Warehouse and Affiliated facilities
500000.00
500000.00
Benxi Steel & Iron (Group)
Machinery Manufacture Co. Ltd.Plants and Affiliated facilities
122500.03
Lessor Lease capital category Lease income of 2020
(without tax)
Lease income of
2019 (without tax)
Benxi Steel & Iron (Group) Co. Ltd.
Land use rights 7669068.17 square
meters land use rights 42920.00
square meters
55277544.11
54984486.36
Benxi Steel & Iron (Group) Co. Ltd. 2300 hot rolling mill production line related properties
16098161.06
167859103.82
Benxi Beiying Steel & Iron (Group)
Co. Ltd.
1780 hot rolling mill production line
related properties
15006983.06
83686698.60
Bengang Group Co. Ltd Land use rights 728282.30 square meters
9945423.08
4972711.56
Gains or losses from lease counted over 10% of total profit.
□ Applicable √ Not applicable
During the reporting period there were no lease projects that resulted in a profit or loss of more than 10% of the total profit of the
company during the reporting period
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
□ Applicable √ Not applicable
There was no entrusted finance during the reporting period.
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing other corporation social responsibilities
During the reporting period the company actively protected the legitimate rights and interests of creditors and all
employees while pursuing the economic benefits of the company and protecting the interests of shareholders in
accordance with the spirit of corporate social responsibility and actively treated suppliers customers and consumers.Public welfare undertakings such as environmental protection and community building. In the business activities
consciously follow the principles of voluntariness fairness equal pay honesty and credit consciously abide by social
morality professional ethics consciously accept the supervision of the government and the public and actively fulfill the
corporate social responsibility.
2. Performing corporation social responsibility of targeted poverty alleviation
In the annual report of the company there has been no accurate poverty alleviation work and there is no follow-up
accurate poverty alleviation plan.
3. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the
environmental protection department.Yes
Name
Main
pollutants
and specific
pollutants
Discharge
modes
The
number of
discharge
hatch
The distribution
of discharge
hatch
Emission
concentra
tion
The
emission
standard
Total
emission
Approved
total
emission
Surpass the
emission
standard
Bengang
Steel Plates
Co. Ltd.
COD、
Ammonia Continuous 1
Energy integral
factory sewage
treatment plant.Sewage
COD24
、
Ammonia
2
Sewage
COD50、
Ammonia 8
COD：240
tons；
Ammonia：
5.43 tons
Unapproved
by the
government
None
Bengang
Steel Plates
Co. Ltd.
Particulate
Matter
Continuous
and
intermittent
179
Raw material
dumper transfer
station
receiving ore
tank pre-batch;
coke oven
adding coal
pushing coke
dry quenching;
ironmaking
tapping field
furnace roof
fuel solvent
granulation ore
coke tank;
sintering head
machine Tail;
iron and steel
water
pretreatment
ferroalloy
feeding north-
south infusion
station tundish
primary dust
removal
secondary dust
removal
refining dust
removal; special
Raw
materials
14-23;
Sintering
8-40;
Ironmaki
ng 7-35;
Steelmaki
ng 7-27;
Special
steel 7-
15;
Coking
15-30;
Power
generatio
n 5-10;
Cold
rolling;
6-18 ;
hot
rolling 6-
15.
Scrap
steel 20
Raw
materials
25;
Sintering
30-50;
Ironmaking
25-50;
Steelmaking
20-50;
Special
steel 20-50;
Coking 15-
50;
power
generation
10-30;
cold rolling
20; hot
rolling 20;
Scrap steel
20.
13081 tons
Unapproved
by the
government
None
steel electric
furnace refining
furnace electric
slag furnace;
power
generation
boiler
desulfurization
and
denitrification;
cold rolling acid
regeneration
Pickling
drawing
straightening
welding
machine
smoothing
annealing
roasting; hot
rolling heating
furnace. Scrap
steel cutting
Bengang
Steel Plates
Co. Ltd.
SO?
Continuous
and
intermittent
Sintering head;
Power
generation
boiler; Coke
oven chimney;
cold rolling
roasting
annealing; hot
rolling furnace.Sintering
head 12-
40;
Power
generatio
n boiler
10-70;
Coke
oven 40;
Cold
rolling
80-100;
Hot
rolling
118-128.
Sintering
head 200;
Power
generation
100; Coke
oven 50;
Cold rolling
150; Hot
rolling 150.
5262.76
tons
Unapproved
by the
government
None
Bengang
Steel Plates
Co. Ltd.
Oxides of
nitrogen
Continuous
and
intermittent
57
Sintering head;
power
generation
boiler; cold
rolling roasting
annealing; hot
rolling furnace.furnace.Sintering
head 100-
230;
Power
generatio
n 50-140;
Cold
rolling
69-172;
Hot
rolling
105-124.
Sintering
head 300;
Coke oven
chimney
150; Power
generation
100-200;
Cold rolling
300; Hot
rolling 300.
11267 tons
Unapproved
by the
government
None
Construction and operation of pollution prevention facility:
The company has a total of 179 sets of environmental pollution prevention and control facilities. All processes are equipped with dust
removal desulfurization and denitrification and online facilities in accordance with pollutant emission standards. Environmental
protection facilities such as wet desulfurization of sintering machine head dry desulfurization and denitrification of coke oven chimney
and wet desulfurization and SCR denitrification of power generation have been put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects
(1) Advanced treatment and reuse project of board water. Obtained EIA approval: Benxi City Ecological Environment
Bureau Ben Huan Jian Table Zi [2020] No. 03.
(2) Special steel rolling mill renovation project (Phase II Phase III) project. Obtained EIA approval: Benxi City Ecological
Environment Bureau Ben Huan Jian Table Zi [2020] 05.
(3) Upgrade and transformation project of plate special steel electric furnace. Obtained EIA approval: Liaoning Provincial
Department of Ecology and Environment Liaohuanhan [2019] No. 172.
(4) Production capacity replacement project for plate No. 5 blast furnace. Obtained EIA approval: Liaoning Provincial
64
Department of Ecology and Environment Liaohuanhan [2019] No. 171.
(5) The flue gas desulfurization and denitrification project of No. 7 coke oven in the plate coking plant. Obtained EIA
approval: Benxi City Ecological Environment Bureau Ben Huan Jian Biao Zi [2019] No. 10.
(6) Ultra-low emission transformation project for thermal power workshop of sheet power plant. It has completed the EIA
registration form for the record record number: 202021050200000075.
(7) A new tower type desulfurization renovation project was added to the plate coking plant. It has completed the EIA
registration form for the record record number: 202021050200000081.
(8) Plate steelmaking plant 1#2#3#7# converter secondary and tertiary dust removal system transformation project: It has
completed the environmental assessment registration form for the record record number: 202021050200000084.
(9) The converter gas recovery and efficiency improvement project in the plate plant area has obtained the environmental
impact assessment approval: Benxi City Ecological Environment Bureau Ben Huan Jian Biao Zi [2020] No. 10.
(10) The flue gas desulfurization and denitrification project of No. 8 and 9 coke ovens of the plate coking plant obtained
the environmental impact assessment approval: Benxi City Ecological Environment Bureau Ben Huan Jian Table Zi
[2020] No. 11.
(11) The Caixi Special Steel Feeding Station Project of Benxi Iron and Steel Plate Scrap Plant has obtained environmental
assessment approval: Benxi City Ecological Environment Bureau Benhuan Jianbiao Zi [2020] No. 12.
Emergency plan for emergency environmental incidents
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents and
carried out related work such as risk assessment and investigation of emergency resources in accordance with the "Law
of the People's Republic of China on Incident Responses" "Notice on Printing and Distributing the Guidelines for Risk
Assessment of Enterprises' Environmental Emergencies (Trial)" and "Emergency Preparedness for Environmental
Incidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial).
Environmental self-monitoring project.
In 2020 the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.
The monitoring points of Bengang Steel pollution sources: 168 flue gas 10 wastewater monitoring points 13 noise points
at the boundary of the plant 27 atmospheric dustfall points and 71 unorganized monitoring. From the plate factory to the
mine the monitoring is divided into weekly monthly seasonal semi-annual and annual frequency monitoring. The main
monitoring items of the automatic air quality monitoring station obtained total of 52560 monitoring data throughout the
year; 27 steel dust points were distributed in the steel plant area and 324 monitoring data were obtained; routine
monitoring tasks for flue gas were completed and monitoring was achieved throughout the year 1624 data; 13 noise
monitoring points at the boundary of the plant 416 monitoring data; 10 wastewater monitoring points 4847 monitoring
data; 251 temporary monitoring data and a total of 7462 monitoring data reported by the monitoring station. Monthly
quarterly reports and separate monitoring reports for each mine are reported.Other environmental information that should be disclosed
None
Other environmental protection related information
None
XIX. Other Major Issues
√ Applicable □ Not applicable
1. Issuance and listing of convertible bonds
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 RMB 100 and a total issuance of RMB 6.8 billion. The
convertible bonds of this public offering are given priority placement to the original shareholders of the company registered after the
market close on the equity registration date and the balance of the original shareholders' priority placement (including the portion that
the original shareholders waived the priority placement) is used online to public investors through the Shenzhen Stock Exchange The
way the trading system is sold. The part of the subscription amount less than 6.80 billion will be underwritten by the lead underwriter.With the approval of the “Shenzhen Stock Exchange [2020] No. 656” of the Shenzhen Stock Exchange the company’s RMB 6.80
billion of convertible corporate bonds will be listed on the Shenzhen Stock Exchange on August 4 2020. The abbreviation of the bonds
is "Bengang Convertible Bonds" and the bond code is " 127018".
2. Benxi Iron and Steel (Group) Co. Ltd. the controlling shareholder of the company plans to increase its own funds through methods
permitted by laws and regulations (including but not limited to centralized bidding and block transactions) within 6 months from
February 14 2020. Holding company shares. The total amount of this shareholding increase plan is not less than RMB 50 million not
more than RMB 100 million and there is no price range. The implementation of the share increase plan was completed on August 13
2020. Benxi Iron and Steel Company has increased its holdings of the company’s shares by 28523000 shares accounting for 0.74%
of the company’s total share capital the total amount of holdings increased by RMB 99976300 and the average holding price was
RMB 3.51 per share.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the Change
Quantity Percentage
Issuing of new
share
Bonus
shares
Capitaliz
ation of
common
reserve
fund
Others Subtotal Quantity Percentage
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% 3875371532 100.00%
1. Common shares in
RMB 3475371532 89.68% 3475371532 89.68%
2. Foreign shares in
domestic market 400000000 10.32% 400000000 10.32%
III. Total shares 3875371532 100.00% 3875371532 100.00%
Causation of share capital changes
□Applicable √Not applicable
Approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share diluted earnings per share 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
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
√ Applicable □ Not applicable
The name of
the stock and
derivative
securities
Issue date
Issue price
（or interestrate）
Issue number Listing date
Number of
approved
listing
transactions
Transaction
termination
date
Disclosure
Index
Disclosure
date
Stocks
Convertible corporate bonds separately traded convertible corporate bonds corporate bonds
Bengang
Convertible
Bonds
June 29 2020 100 6800000000
August
042020
680000000
0 June 282026
Other derivative securities
Notes to securities issuance (excluding preferred shares) during the reporting period
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 RMB 100 and a total issuance of RMB 6.8 billion. The
convertible bonds of this public offering are given priority placement to the original shareholders of the company registered after the
market close on the equity registration date and the balance of the original shareholders' priority placement (including the portion that
the original shareholders waived the priority placement) is used online to public investors through the Shenzhen Stock Exchange The
way the trading system is sold. The part of the subscription amount less than RMB 6.80 billion will be underwritten by the lead
underwriter.With the approval of the “Shenzhen Stock Exchange [2020] No. 656” of the Shenzhen Stock Exchange the company’s RMB 6.80
billion of convertible corporate bonds will be listed on the Shenzhen Stock Exchange on August 4 2020. The abbreviation of the bonds
is "Bengang Convertible Bonds" and the bond code is " 127018".
Bond’s term to maturity: The maturity of the convertible corporate bonds issued this time is 6 years from the date of issuance that is
from June 29 2020 to June 28 2026.
Coupon interest rates: 0.6% in the first year 0.8% in the second year 1.5% in the third year 2.9% in the fourth year 4.0% in the fifth
year and 5.0% in the sixth year.
Conversion period: The conversion period of the convertible corporate bonds issued this time starts from six months after the first
trading day issuance of the convertible corporate bonds (July 3 2020) to the convertible corporate bonds The expiry date is from
January 4 2021 to June 28 2026.Initial conversion price: RMB 5.03 /share.
2. Total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Employee Shareholding Status
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
Total number of
common shareholders
at the end of the
reporting period
50293
Total
shareholders at
the end of the
month from the
date of
disclosing the
annual report
51611
The total number of
preferred shareholders
voting rights restored at
the end of the reporting
period (See Notes 8)
0
Total preferred
shareholders at the
end of the month from
the date of disclosing
the annual report (if
any) (See Notes 8)
0
Shareholding of shareholders holding more than 5% or top 10 shareholders
Name of the
shareholder
Nature of
shareholder
Holding
Percentage
(%)
Number of
shares held at
period-end
Changes in
reporting
period
Restricted
shares held
Un-restricted
shares held
Number of pledged or
frozen shares
Status Number
Benxi Steel & Iron
(Group) Co. Ltd.State-owned
legal person 62.18% 2409628094 28523000 2409628094
Pledged 712545000
Frozen 102100000
CCB Principal Asset
Management – ICBC
– CR Trust – CR
Trust · Xing Sheng
No. 5 Collective Fund
Trust Plan
Others 4.77% 184842883 184842883
Bei Xin Rui Feng
Fund – China
Merchants Bank – Bei
Xin Rui Feng Fund
Feng Qing No. 229
Asset Management
Plan
Others 4.77% 184842883 184842883
China Life AMP
Fund– ICBC – China
Life AMP – Hua Xin
Trust Targeted
Additional Shares
Issuance No. 10 Asset
Management Plan
Others 4.77% 184842883 184842883
Liaoning Provincial
Transportation
Investment Group
Co. Ltd.
State-owned
legal person 3.88% 150470883 -34248500 150470883
Shanghai Yicun
Investment
Management Co.Ltd.-Yicun Shenghui
No. 3 Private Equity
Securities Investment
Fund
Others 0.31% 12000000 12000000 12000000
Fang Lei Domestic natural person 0.28% 10885300 10885300 10885300
VANGUARD
EMERGING
MARKETS STOCK
INDEX FUND
Foreign legal
person 0.28% 10702004 10702004 10702004
Fang Huaiyue Domestic natural person 0.24% 9205501 9205501 9205501
Shanghai Yingshui
Investment
Management Co.Ltd.-Yingshui Fulin
No. 10 Private
Securities Investment
Fund
Others 0.24% 9175030 9175030 9175030
Strategy investors or general legal
person becomes top 10 shareholders due
to rights issued (if any) (See Notes 3)
None
Notes to relationship or ‘action in
concert’ among the top 10 shareholders.It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as
described by Rules of Information Disclosing Regarding Changing of Shareholding Status of
Listed Companies existing among the above shareholders.Shareholding of top 10 unrestricted shareholders
Name of the shareholder Un-restricted shares held at the end of the reporting period
Category of shares
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
Fund Trust Plan
184842883 Common shares in RMB 184842883
Bei Xin Rui Feng Fund – China Merchants
Bank – Bei Xin Rui Feng Fund Feng Qing No.
229 Asset Management Plan
184842883 Common shares in RMB 184842883
China Life AMP Fund– ICBC – China Life
AMP – Hua Xin Trust Targeted Additional
Shares Issuance No. 10 Asset Management Plan
184842883 Common shares in RMB 184842883
Liaoning Provincial Transportation Investment
Group Co. Ltd. 150470883 Common shares in RMB 150470883
Shanghai Yicun Investment Management Co.Ltd.-Yicun Shenghui No. 3 Private Equity
Securities Investment Fund
12000000 Common shares in RMB 12000000
Fang Lei 10885300 Common shares in RMB 10885300
VANGUARD EMERGING MARKETS
STOCK INDEX FUND 10702004 Common shares in RMB 10702004
Fang Huaiyue 9205501 Common shares in RMB 9205501
Shanghai Yingshui Investment Management
Co. Ltd.-Yingshui Fulin No. 10 Private
Securities Investment Fund
9175030 Common shares in RMB 9175030
Notes to relationship or ‘action in concert’
among the top 10 non-restricted shareholders
and among the top 10 non-restricted
shareholders and top 10 shareholders
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
Shareholding in PLC. The Company is not aware of any relationship among the other
shareholders neither being regarded as action-in-concert parties by the Information
Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
of any relationship among the top 10 shareholders neither being regarded as action-in-
concert parties by the Information Disclosure Regulations for Change of Shareholding in
PLC.
Shareholders among the top 10 participating in
securities margin trading (if any) (see Note 4)
Benxi Steel & Iron (Group) Co. Ltd. Holds 2170628094 shares of the Company’s stock
through credit security account and holds 239000000 shares of the Company’s stock
totaling 2409628094 shares. Shanghai Yicun Investment Management Co. Ltd.-Yicun
Shenghui No. 3 Private Securities Investment Fund holds 12000000 shares of the
company's stock through investor credit securities account; Fang Lei holds 10885300
shares of the company's stock through investor credit securities account; Fang Huaiyue
holds 9205501 shares of the company's stock through the investor's credit securities
account; Shanghai Yingshui Investment Management Co. Ltd.-Yingshui Fulin No. 10
Private Securities Investment Fund holds 9175030 shares of the company's stock through
the investor's credit securities account.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.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the
Controlling
shareholder
Legal representative
/ person in charge
Date of
incorporation
Organization
Code Principal business activities
Benxi Steel & Iron
(Group) Co. Ltd. Yang Chengguang July 101996
9121050011972
6263U
Business scope: steel smelt mine exploitation panel
rolling oxygen manufacturing pipe manufacturing power
generating coal industry special steel material
manufacturing heating supply of the water electricity
wind and gas metal processing electro mechanics builds
device manufacturing architecture installation railway
highway transportation import and export trade traveling
industry construction material refractory material
measuring device instrument goods and materials supply
and marketing development of real estate scientific
research design information service property
management telecommunication processing of waste
iron property leasing exchange of steel material and
recycling of waste oils (to the extent of licensed to the
subsidiary companies) property management; publishing
of Bengang Daily; designing and making of presswork and
advertisement releasing producing of TV advertisements
in the country and abroad.
Equity of other
domestic/foreign
listed company
with share
controlling and
share participation
by controlling
shareholder in
reporting period
None
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
The controlling shareholder of the company has not changed during the reporting period.
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
Name of the controlling shareholder Legal representative / person in charge
Date of
incorporation Organization Code
Principal business
activities
Liaoning Provincial State-owned Assets
Supervision and Administration Commission
Unknown Unknown Unknown
Equity of other domestic/foreign listed
company with share controlling and share
participation by controlling shareholder in
reporting period
The Company was not informed of the actual controller's control of the equity of other
domestic and foreign listed companies during the reporting period.
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There is no change of actual controller during the reporting period.
Block diagram of the ownership and control relations between the Company and the actual controller
Bengang Steel Plates Co. Ltd.
Bengang Group Co. Ltd.
Benxi Steel & Iron (Group) Co. Ltd.
Liaoning Provincial State-owned Assets
Supervision and Administration Commission
Liaoning Council for social security fund
80% 20%
85.33%
62.18%
Huatai Securities (Shanghai) Asset Management Co. Ltd.
14.67%
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders Actual Controller Restructuring Party
and Other Commitment Subjects
□ Applicable √ Not applicable
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock in the company during the reporting period.
VIII. Status of Convertible Corporate Bonds
√ Applicable □ Not applicable
I. Previous adjustments to the conversion price
With the approval of the Shenzhen Stock Exchange "Shenzhen Securities [2020] No. 656" the company’s RMB 6.8 billion convertible
corporate bonds will be listed on the Shenzhen Stock Exchange on August 4 2020. The abbreviation of the bonds is "Bengang
Convertible Bonds" and the bond code is " 127018". Since the listing of the convertible bonds the company has not adjusted the
conversion price and the initial conversion price is RMB 5.03/share.II. Cumulative share conversion
□ Applicable √ Not applicable
III. Top ten holders of convertible bonds
Unit: shares
No. Convertible bond holders
Nature of
convertible bond
holders
Number of
convertible bonds
held at the end of the
reporting period
(sheets)
Amount of
convertible bonds
held at the end of the
reporting period
(yuan)
Percentage of
convertible bonds
held at the end of the
reporting period
1 Benxi Iron and Steel (Group) Co. Ltd.
State-owned legal
person 5500000 550000000.00 8.09%
2
Shanghai Pudong
Development Bank
Co. Ltd.-Yifangda
Yuxiang Return
Bond Securities
Investment Fund
Others 2646781 264678100.00 3.89%
3
Huaxin International
Trust Co. Ltd.-
Huaxin Trust·Zhidu
Investment No. 16
Single Fund Trust
Others 1046355 104635500.00 1.54%
4 CITIC Securities Co. Ltd.
State-owned legal
person 1000000 100000000.00 1.47%
5
E Fund-Minsheng
Bank-Bank of
Hangzhou Co. Ltd.Others 888048 88804800.00 1.31%
6
Huaxin International
Trust Co. Ltd.-
Huaxin
Trust · Caitong
Investment No. 12
Single Fund Trust
Others 857768 85776800.00 1.26%
7 E Fund Stable
Return Fixed-income
Others 779998 77999800.00 1.15%
Pension Product-
Bank of
Communications
Co. Ltd.
8
Industrial and
Commercial Bank of
China Co. Ltd.-E
Fund Security
Return Bond
Securities
Investment Fund
Others 776230 77623000.00 1.14%
9
China Everbright
Bank Co. Ltd.-E
Fund E Fund 6-
month regular
opening of bond
securities investment
funds
Others 761925 76192500.00 1.12%
10
China Construction
Bank Corporation-E
Fund Double Bond
Enhanced Bond
Securities
Investment Fund
Others 733755 73375500.00 1.08%
IV. Significant changes in the guarantor’s profitability asset status and credit status
□ Applicable √ Not applicable
V. At the end of the reporting period the company’s liabilities credit changes and cash
arrangements for debt repayment in future years
For details please refer to Section XI. VIII. As of the end of the reporting period the company’s main accounting data and financial
indicators for the past two years the company’s convertible bond credit rating for the current year has not changed.
IX. Status of Directors Supervisors Senior Executives and
Employees
I. Change in Shares held by Directors Supervisors and Senior Executives
Name Position
Office
status
Sex Age
Starting
date of
office term
Expiry
date of
office
term
Shares
held at
the
year-
begin
Shares
increased
during the
reporting
period
Shares
decreased
during the
reporting
period
Other
increase
/
decrease
Shares
held at
the year-
end
Gao Lie
Director
Chairman
In office Male 53
Mar 14
2019
May
162022
Cao Aimin
Director
Vice
Chairman
In office Male 53
Jun 03
2010
May
162022
Shen
Qiang
Director
General
Manager
In office Male 52
May 16
2019
May
162022
Huang
Xinghua
Director In office Male 57
May 24
2018
May
162022
Yuan
Zhizhu
Independent
Director
In office Male 39
May 21
2020
May
212023
Zhao
Xinan
Independent
Director
In office Male 60
May 21
2015
May 21
2021
Zhang
Suxun
Independent
Director
In office
Femal
e
65
May 16
2019
May
162022
Han Mei
Supervisor
Chairman of
Supervisory
Committee
In office
Femal
e
51
Feb 19
2014
May
162022
Li Lin Supervisor In office
Femal
e
52
Feb 19
2014
May
162022
Li Xiaowei Supervisor In office Male 45
Mar 14
2019
May
162022
Zhao
Xingtao
Supervisor In office Male 48
Jun 26
2019
May
162022
Zhang
Yanlong
Supervisor In office Male 43
Jan 26
2014
May
162022
Bao
Mingwei
Deputy
General
Manager
In office Male 57
Dec 28
2012
May
162022
Wang
Fengmin
Deputy
General
Manager
In office Male 55
Jan 26
2014
May
162022
Huo Gang
Deputy
General
Manager
In office Male 47
March
142019
May
162022
Zhao
Zhonghua
Director of
Finance
In office
Femal
e
36
April 18
2019
May
162022
Gao
Desheng
Secretary of
the Board
In office Male 46
September
202018
May
162022
Zhong
Tianli
Independent
Director
Leaving
office
Femal
e
64 20-May-14
May
212020
Total -- -- -- -- -- --
II. Change in Directors Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date Reason
Zhong Tianli
Independent
Director
Leaving office after
expiry of term
May 21 2020
Leaving office after expiry of
term
III. Posts holding
Work experience professional background and currently mainly responsibilities of Directors Supervisors and Senior
Executives in current office
Gao Lei Male 53 undergraduate master of engineering professor-level senior engineer. Once Chairman of Benxi
Iron and Steel(Group)Mining Co.Ltd; Manager of Mineral Resources Development Company; Assistant General
Manager of Bengang Group Co. Ltd. and Manager of Mineral Resources Development Company; He is now
Member of the Standing Committee of the company's party committee Deputy General Manager of Bengang Group
Co.Ltd chairman of Bengang Steel Plate Co. Ltd.
Cao Aimin Male 53 undergraduate professor-level senior accountant. Once Head of Capital Division of Finance
Department; Head of Planning and Finance Division; and Chief Accountant. Director and Chief Accountant of Benxi
Iron and Steel (Group) Co. Ltd. Ltd. He is now Member of the Standing Committee of the company's party
committee Director and Chief Accountant of Bengang Group Co. Ltd Vice Chairman of Bengang Steel Plates Co.Ltd.Shen Qiang Male 52 years old undergraduate master of engineering senior engineer. He has served as Secretary
of the Board of Directors and Director of the Board of Directors of Bengang Group Corporation Director of the
Office Director of the Secretary of Secretaries Secretary of the Party Committee of Bengang Group Corporation
Chairman of the Board of Directors of the Real Estate Company Secretary of the Party Committee; Director of
Benxi Iron and Steel Company Deputy Secretary of the Party Committee Deputy General Manager Board of
Directors Secretary; Assistant General Manager of Bengang Group Corporation Minister of Human Resources
Department (Organization Department); assistant to the General Manager Secretary of the Board of Directors
Director of the Office of the Board of Directors and Minister of the Organization Department (Human Resources
Department) of Bengang Group; current Director and General Manager of Bengang Steel Plate Co. Ltd.
Huang Xinghua Male 57 College degree senior accountant. Once Deputy director of the planning and finance
department of Benxi Iron and Steel (Group) Co. Ltd.; Director and Chief accountant of Benxi Iron and Steel (Group)
Co. Ltd.; Director of the finance department of Bengang Group Co. Ltd. He is now the head of the finance
department of Bengang Group Co. Ltd. Director of Benxi Iron and Steel (Group) Co. Ltd. Director of Bengang
Steel Plate Co. Ltd.Zhao Xinan Male 60 professor (doctoral supervisor) of Northeastern University. Served as the vice dean of the
School of Business Administration of Northeastern University and a member of the National Education Department
Management Science and Engineering Teaching Steering Committee; currently a professor of the School of Business
Administration of Northeastern University independent director of Bengang Steel Plate Co.
Zhang Suxun Female 65 bachelor degree professor. Former Liaoning University Business School teacher; now
retired. The current independent director of Bengang Steel Plate Co. Ltd.Yuan Zhizhu male 39 PhD degree associate professor of accounting at Northeastern University master supervisor
non-practicing member of Chinese certified public accountant. Served as a lecturer in the School of Business
Administration of Northeastern University; currently the director of the Accounting Department of the School of
Business Administration of Northeastern University and a director of the Liaoning Accounting and Abacus Mental
Arithmetic Society and a director of the Liaoning Auditing Society; independent director of Bengang Steel Plate
Co. Ltd.
Profiles of the Supervisory Committee:
Han Mei Female 50 undergraduate senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee of
Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co. Ltd. Director of Audit
Dept. She now is Head of Audit Department Director of Finance Company; Chairman of Board of Supervisors of
Bengang Steel Plate Co. Ltd.
Li Lin Female 52 postgraduate engineer. Once she was the administrator of HR department of Bengang Group;
Vice Chief Engineer of Transportation Department of the Company; Substitute Chairman of the Trade Union of
Transportation Department of the Company Secretary of Commission for Discipline Inspection of Transportation
Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd Group leader of Discipline
Inspection and Supervision group One Assigned by Discipline Inspection Commission of Bengang Group Co. Ltd.She is now Party secretary of Railway company; Supervisor of Bengang Steel Plates Co. Ltd.Li Xiaowei Male 45 undergraduate economist. He was once senior officer of the audit department and Division
chief of the operation audit department of Bengang Group Co. Ltd. He is now the deputy director of the Audit
Department of Bengang Group Co. Ltd. the supervisor of the board of supervisors of Bengang Steel Plate Co. Ltd.
Zhang Yanlong Male 43 undergraduate senior engineer. He once was the workshop manager of steel-making
factory; Vice Chief of QC department of iron-making factory Director of Steel-making plant Manager of
Manufacturing Department of Bengang Steel Plates Co. Ltd. Assistant of Director of Production Division of Steel-
Making Plant; He is now Vice Director of Production Division of Steel-Making Plant and Supervisor of Bengang
Steel Plates Co. Ltd.Zhao Xingtao Male 49 university degree master of engineering senior engineer. Served as Deputy Director of the
Cold Rolling Plant of Bengang Steel Plate Co. Ltd.; Party Secretary and Chairman of the Labor Union of the Cold
Rolling Plant of Bengang Steel Plate Co. Ltd.
Executives other than directors:
Bao Mingwei Male 57 years old Undergraduate senior engineer. Served as Secretary of the Party Committee
Deputy Plant Manager and Plant Manager of the Hot Strip Mill of Bengang Steel Plate Co. Ltd.; Deputy General
Manager and Plant Manager of the Third Cold Rolling Plant of Bengang Steel Plate Co. Ltd.; Deputy Chief Engineer
Planning and Development Department of Bengang Steel Group Co. Ltd. (Science and Technology Development
Department) Minister; Deputy Chief Engineer of Bengang Group Co. Ltd.; current Deputy General Manager of
Bengang Plate Co. Ltd.
Wang Fengmin Male 55 graduate degree professor and researcher-level senior engineer. Served as deputy director
director and party secretary of the ironmaking plant of Benxi Iron and Steel Plate Co. Ltd.; deputy general manager
and head of the manufacturing department of Benxi Iron and Steel Plate Co. Ltd.; deputy chief engineer of Benxi
Iron and Steel Group Co. Ltd.; The current deputy general manager of Bengang Steel Plate Co. Ltd.Huo Gang Male 47 graduate degree doctor of engineering professor and researcher-level senior engineer. Served
as acting general manager and general manager of the cold rolling mill of Benxi Iron and Steel Pohang Company;
Party Secretary and Executive Deputy Director of the Third Cold Rolling Plant of Bengang Steel Plate Co. Ltd.;
Party Secretary and Plant Manager of the Third Cold Rolling Plant of Bengang Steel Plate Co. Ltd.; Director of
Bengang Steel Plate Co. Ltd. Cold Rolling Plant and General Manager of Pohang Cold Rolling.
Zhao Zhonghua Female 36 graduate degree master of management accountant. She has successively been deputy
director and director of the Finance Department of Bengang Steel Plate Co. Ltd. assistant director of the Finance
Department of Bengang Group Co. Ltd. deputy manager of Bengang Group Finance Co. Ltd. and currently the
CFO and finance minister of Bengang Steel Plate Co. Ltd.
Gao Desheng Male 46 undergraduate master of management senior economist. He has been the acting director
of the Business Planning Department of the Operation Improvement Department of Bengang Group Co. Ltd. the
director of the Ownership Management Department of the Operation Improvement Department of Bengang Group
Co. Ltd. the director of the Ownership Management Department of the Operation Improvement Department of
Bengang Group Co. Ltd. the vice-chairman of the First Supervisory Board and now he is the director of the office
and Secretary of the board of Bengang Group Co. Ltd..Posts holding in Shareholders
√ Applicable □ Not applicable
Names of the
persons in
office
Names of the
shareholders
Titles engaged in the
shareholders
Starting date of
office term
Expiry
date of
office
term
Does he /she
receive
remuneration
or allowance
from the
shareholder
Gao Lie
Bengang Group Co.
Ltd.Vice General Manager March 1 2014 Yes
Cao Aimin
Bengang Group Co.
Ltd.
Director Chief Accountant
November 4
2010
Yes
Huang Xinghua
Bengang Group Co.
Ltd.Minister of Finance August 1 2017 Yes
Huang Xinghua
Benxi Iron and Steel
(Group) Co. Ltd.
Director April 1 2018 No
Han Mei
Bengang Group Co.
Ltd.
Director of Audit Department
February 1
2016
Yes
Li Xiaowei
Bengang Group Co.
Ltd.Vice Director of Audit
Department
January 1
2018
Yes
Posts holding in other companies
√Applicable □Not applicable
Names of the
persons in
office
Names of the other
companies
Titles engaged
in other
companies
Starting date of
office term
Expiry
date of
office term
Does he /she
receive
remuneration or
allowance from
the shareholder
Gao Lie
Bengang Puxiang Cold-
rolled Sheet Co. Ltd.
Chairman December 12019 No
Cao Aimin
Bengang Group Finance
Co. Ltd.
Chairman October 12016 No
Cao Aimin
Zhongtian Securities Co.Ltd.
Director December 12016 No
Han Mei
Bengang Group Finance
Co. Ltd.
Director December 12016 No
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
IV. Remuneration to Directors Supervisors and Senior Executives
Decision-making procedures basis of recognition and actual payment of the remuneration to Directors Supervisors
and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal which will be implemented upon
approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors Supervisors and Senior Executives and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities duties.Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.Remuneration of Directors Supervisors and Senior Executives during the reporting period
Unit: RMB 10 thousand
Name Position Sex Age Office status
Total
remuneration
received from the
shareholder
Whether receive
remuneration in
the Company's
related parties
Gao Lie Director Chairman Male 53 In office Yes
Cao Aimin Director Vice Chairman Male 53 In office Yes
Shen Qiang Director General Manager Male 52 In office 40.44 No
Huang Xinghua Director Male 57 In office Yes
Zhao Xinan Independent Director Male 60 In office 5 No
Zhang Suxun Independent Director Female 65 In office 5 No
Yuan Zhizhu Independent Director Male 39 In office 5 No
Han Mei
Supervisor supervisory
board chairman
Female 51 In office Yes
Li Lin Supervisor Female 52 In office 28.58 No
Li Xiaowei Supervisor Male 45 In office Yes
Zhao Xingtao Supervisor Male 48 In office 32.28 No
Zhang Yanlong Supervisor Male 43 In office 34.64 No
Bao Mingwei Deputy General Manager Male 57 In office 34.24 No
Wang Fengmin Deputy General Manager Male 55 In office 34.44 No
Huo Gang Deputy General Manager Male 47 In office 34.07 No
Zhao Zhonghua CFO Female 36 In office 29.72 No
Gao Desheng Secretary of Board Male 46 In office 25.63 No
Zhong Tianli Independent Director Female 64 Leaving office No
Total -- -- -- -- 309.04 --
Incentive equity to Directors Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population Professional Structure and Education Level
Population of in-service staff in parent company 16221
Population of in-service staff in main subsidiaries 524
Total population of in-service staff 16745
Total population of staff receiving remuneration in the current
period
16745
Population of retired staff whose expense was borne by parent
company and major subsidiary companies
23377
Professional Composition
Type of Professional Composition Population
Production Staff 12922
Sales Staff 188
Technician 1532
Financial Staff 141
Administrative Staff 1962
Total 16745
Educational Degree
Type of Educational Degree Population
PhD. 14
Postgraduate 359
Undergraduate 3765
Junior College 5325
Technical secondary school 390
High School and Technical School 3166
Middle School and others 3726
Total 16745
2. Remuneration Policies
In 2020 we will further strengthen the management of salary distribution continue to promote the total salary
contract guide all units to rationally allocate human resources optimize the distribution mechanism and increase
labor productivity and give full play to the role of salary incentives and constraints. Implementing a job performance
wage system that determines individual salaries based on job value personal abilities and performance contributions
opening up career development channels for business technical and operational positions; implementing an annual
salary assessment system linked to company benefits and employee income.
3. Training Plan
The company plans to complete 86 training projects and train 17402 people throughout the year. The training rate
of the whole staff reaches 70% and the implementation rate of the annual training plan reaches 85%.
4. Outsourcing
□ Applicable √ Not applicable
X. Corporate Governance
I. Basic Situation of Corporate Governance
During the reporting period the Company has been following the laws regulations and documents
such as the Company Law Securities Law Governance Guidelines for Listed Companies
Guidelines for the Normative Operation of Listed Companies on the Shenzhen Stock Exchange and
Articles of Association. Based on the actual situation of the company the Company has been
continuously improving the corporate governance structure and internal control system of the
company improves the governance level and promotes the company's standardized operation. As
of the end of the reporting period the actual situation of corporate governance meets the
requirements of the regulatory documents related to the governance of listed companies.
1. Shareholders and Shareholders' General Meeting: The company has formulated the "Rules of
Procedures for General Meetings of Shareholders" in strict accordance with the "Company Law"
"Rules for Shareholders' General Meetings of Listed Companies" and the company's "Articles of
Association" to ensure the exercise of the rights of the company's shareholders and the standard
operation of the shareholders' meeting. The company's previous shareholder meetings have provided
two attendance channels on-site voting and online voting to facilitate shareholders. Involving
major issues that affect the interests of small and medium investors the company counts the votes
of small and medium investors individually and discloses them in a timely manner to ensure that all
shareholders enjoy equal status and fully exercise their rights. And by hiring lawyers to witness and
ensure the legal compliance of the convening convening and voting procedures of the meeting the
legitimate rights and interests of the company and shareholders have been safeguarded.
2. Directors and the board of directors: the company's board of directors has clear responsibilities
and the company's directors exercise their powers in strict accordance with the "Articles of
Association" "Rules of Procedures of the Company's Board of Directors" "Company Independent
Directors Work System" and other related systems perform their duties with integrity and diligence
and safeguard the legitimate rights and interests of the company and shareholders. The company's
board of directors has four special committees namely audit strategy nomination remuneration
and assessment each of which performs its own responsibilities and functions and can carry out its
work in accordance with the rules of procedure of each special committee. During the reporting
period the convening and holding procedures of the company's board of directors complied with
the “Company Law” “Articles of Association” and “Rules of Procedure of the Board of Directors”
and other relevant laws and regulations.
3. Supervisors and Board of Supervisors: The company's supervisors can earnestly perform their
duties independently and effectively perform supervision and inspection functions. The company's
supervisors attend shareholders' meetings attend board meetings as non-voting delegates regularly
inspect the company's legal operations and financial conditions and issue opinions from the board
of supervisors. Supervise the company's finances the performance of the company's directors and
senior management personnel and the capital exchanges with related parties so as to safeguard the
legal rights and interests of the company and shareholders. The number and structure of the board
of supervisors meet the requirements of laws and regulations and its convening and convening are
strictly implemented in accordance with the "Articles of Association" and "Rules of Procedure of
the Board of Supervisors" to ensure that the board of supervisors effectively performs its duties.
4. Controlling shareholders and the company: The company has independent and complete business
and independent management capabilities and is independent of the controlling shareholders and
actual controllers in terms of business personnel assets institutions and finances; The company's
board of directors board of supervisors and other internal institutions operate independently; The
company's major decisions are made by the board of directors or the general meeting of shareholders
in accordance with the law. There is no direct or indirect intervention in the company's decision-
making and production and operation activities beyond the general meeting of shareholders nor
does it harm the interests of the company and other shareholders.
5. Information disclosure and transparency: The company strictly complies with the requirements
of the "Shenzhen Stock Exchange Stock Listing Rules" and the "Information Disclosure
Management System" and other requirements truthful accurate and complete without false
records misleading statements or major omissions in performing information disclosure obligation
"China Securities Journal" "Securities Times" "Hong Kong Commercial Daily" and
www.cninfo.com.cn are the designated media for company information disclosure. The company
publishes regular reports and temporary announcements through the above-mentioned information
disclosure media to ensure that all shareholders of the company can obtain information with equal
opportunities.
6. Investor relationship management: The company continues to strengthen communication with
investors to deepen investors' understanding and recognition of the company. The company appoints
the secretary of the board of directors as the person in charge of investor relations management and
the office of the board of directors is the organization that undertakes the daily work of investor
relations management. The company makes full use of on-site meetings dedicated telephone calls
investor interaction platforms and other methods to communicate with the company's shareholders
listens carefully to the opinions and suggestions of investors on the company's strategic
development and production and operation and has established a good communication mechanism
with investors which enhances investors' understanding and investment confidence in the company.Whether there exists any difference in compliance with corporate governance PRC Company Law
and relevant provisions of CSRC
□ Yes √ No
There exists no difference in compliance with corporate governance PRC Company Law and
relevant provisions of CSRC.
II. Explanation on Structural Independence of the Company on Business Personnel Assets
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business personnel assets
organization and finance etc. and has its own independent and complete business operation.
(1) In business operation: The Company has its own production and business planning financial
affairs check and calculate labor and personnel raw material supplies and products selling business
system independently and completely.
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor
personnel and salary management. Such senior executives as company's chairman general manager
vice general manager secretary of Board of Directors etc. get salary from the Company and hold
the important position other than a director in shareholder department.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The
Company has its own independent purchase production and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structure
and working function are totally independent.
(5) In finance: The company has independent financial management department the accounting and
financial management system where are complete and operated independently and has bank account
and pay taxes independently.III. Competition Situations of the Industry
□ Applicable √Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Sessions Type
Investor
participation ratio
Meeting Date Date of disclosure
Index of information
disclosure
Annual General
Meeting of 2019
Annual General
Meeting
76.79% May 21 2020 May 22 2020
Announcement No.:
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights
Restore
□ Applicable √ Not applicable
V. Duty fulfillment of Independent Directors in Reporting Period
1. The situation of independent directors attending the BOD and shareholders meeting
Attendance of independent directors
86
Independent
Directors
Number of
Board
meetings
necessary to be
attended
during the
reporting
period
Number of
spot
attendances
Number of
meetings
attended by
Communicatio
n
Number of
attendances
by
representative
Number of
absence
Failure to
personally
attend board
meetings
successively
twice (Yes/No)
Number of
general
meetings to be
attended
Zhao Xinan 9 1 8 0 0 No 1
Zhang Suxun 9 1 8 0 0 No 1
Yuan Zhizhu 6 1 5 0 0 No 1
Zhong Tianli 3 0 3 0 0 No 1
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
There are four special committees under the company's board of directors namely the audit
committee the remuneration and appraisal committee the nomination committee and the
development strategy committee. During the reporting period the special committees carried out
their work in accordance with the relevant laws and regulations regulatory documents and other
relevant provisions based on the principle of diligence and due diligence.
(1) Performance of Audit Committee
During the reporting period the audit committee of the company's board of directors actively
performed its duties in accordance with the “Company Law” “Listed Company GovernanceGuidelines” “Articles of Association” “Rules of Procedure of Audit Committee” and otherrelevant regulations. Reviewed the company's regular reports internal control self-evaluation
reports financial final accounts reports special reports on the deposit and use of raised funds
renewal of the appointment of an accounting firm Anticipating daily connected transactions using
raised funds to replace self-raised funds invested in investment projects with raised funds in advance
and paid issuance fees using temporarily idle funds for cash management using idle raised funds
to temporarily supplement working capital etc.
(2) Performance of the Remuneration and Appraisal Committee of the Board of Directors
During the reporting period the Remuneration and Appraisal Committee conscientiously performed
its duties in accordance with the Articles of Association the Rules of Procedure for the
Remuneration and Appraisal Committee of the Board of Directors and other relevant regulations.The Remuneration and Appraisal Committee reviewed the remuneration of the company's directors
and senior management in 2019 and believed that the remuneration system implemented by the
company's senior management staff the company's directors supervisors and senior management
staff's remuneration during the reporting period were true and in line with the company's
performance appraisal indicators.
(3) Performance of the Nomination Committee
During the reporting period the Nomination Committee carried out its work and performed its
duties in accordance with the Articles of Association the Rules of Procedure for the Nomination
Committee of the Board of Directors and other relevant regulations. Deliberated the company's
nomination of independent director candidates and put forward suggestions on the selection criteria
and procedures for company directors and senior executives.
(4) Performance of the Development Strategy Committee
During the reporting period the Development Strategy Committee conscientiously performed its
duties in accordance with the Articles of Association the Rules of Procedure for the Development
Strategy Committee of the Board of Directors and other relevant regulations and reviewed the
company's 2019 Board of Directors Work Report and the 2020 Investment Framework Plan
Proposal. According to the actual situation of the company formulate development strategies
discuss and analyze development plans and foreign investment put forward opinions and
suggestions and make decisions.VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting
period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives implements a combination of daily
accountability and annual comprehensive assessment and evaluation. Senior Executives shall be
punished if they fail to perform their duties properly make mistakes or neglect their duty. The annual
comprehensive assessment is conducted in the form of positive evaluation horizontal evaluation
and reverse democratic evaluation. The comprehensive evaluation results are an important basis for
selecting and appointing senior management personnel cultivating education management
supervision and incentives.IX. Internal Control
1. Significant defects of the internal control found in the internal control self-assessment report in
the reporting period
□ Yes √ No
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing
report full text
April 28 2021
Index of the internal control auditing report
full text
http://www.cninfo.com.cn
Proportion of total assets of subsidiaries
belong to the scope of self-evaluation
report in the total assets of the Company’s
consolidated financial statements
97.79%
Proportion of operation income of
subsidiaries belong to the scope of self-
evaluation report in the operation income
of the Company’s consolidated financial
statements
74.70%
Standards of Defects Evaluation
Category Financial Report Non-financial Report
Qualitative criteria
1. Material deficiencies：The frauds made by
the directors or supervisors or senior
management personnel that leads to
significant losses and adverse effects to the
company. 2. Significant deficiencies：Not in
accordance with generally accepted
accounting standards selection and
application of accounting policies; ； Not
established anti-fraud procedures and control
measures; Not established the corresponding
control mechanism or not implemented the
corresponding compensatory control on the
accounting treatment of non-conventional or
special deals; there are one or more defects in
the process control of the final financial report
and which leads to cannot reasonably
guaranteeing the financial report compiled to
achieve the goal of being true and accurate.
1. Material
deficiencies ： Major
errors caused by
decision-making
procedure; the important
business lacks
institutional control or
has a systematic failure
while lacking effective
compensatory control;
serious drain of senior
and middle level
management personnel
and senior technical
staff; the results of
internal control
evaluation especially
the significant
3. General deficiencies：the internal control
deficiencies except those constitute the
material deficiencies and the significant
deficiencies.deficiencies have not
been corrected; other
circumstances that have
big negative impact on
the company. 2.Significant
deficiencies ： General
errors caused by
decision-making
procedure; there are
defects in the important
business regulations and
system serious drain of
business personnel in
key posts; the results of
internal control
evaluation especially
the important
deficiencies have not
been corrected; other
circumstances that have
comparably big negative
impact on the company.
3. General deficiencies：
low-efficiency on the
decision-making
process; existed defects
in the ordinary business
institution or system;
serious drain of business
personnel in general
posts; general
deficiencies that have
not been corrected.Quantitative criteria
1. Material deficiencies：1）misstatement≥5% of the total profits; 2）misstatement≥3% of the total assets; 3）
misstatement≥1% of the total operatingincome; 4）misstatement≥1% of the total
amount of the owner’s equity. 5) 3% of the
total profits ≤misstatement＜5% of the totalprofits；2. Significant deficiencies：1）
0.5% of the total assets ≤misstatement＜3%of the total assets；2）0.5% of the total
1. Materialdeficiencies：1）
misstatement≥5% of thetotal profits；2）
misstatement≥3% of thetotal assets；3）
misstatement≥1% of the
total operating income.
4）misstatement≥1% of
the total amount of the
operating income ≤misstatement＜1% of thetotal operating income； 3）0.5% of the
total amount of the owner’s equity
≤misstatement＜1% of the total amount of
the owner’s equity。3. Generaldeficiencies：1）misstatement＜3% of thetotal profits；2）misstatement＜0.5% of thetotal assets；3）misstatement＜0.5% of thetotal operating income；4）misstatement＜
0.5% of the total amount of the owner’sequity。
owner’s equity. 5) 3%
of the total profits
≤misstatement＜5% of
the total profits；2.Significantdeficiencies：1）0.5%
of the total assets
≤misstatement＜3% ofthe total assets；2）
0.5% of the total
operating income
≤misstatement＜1% of
the total operatingincome；3）0.5% of
the total amount of the
owner’s equity
≤misstatement＜1% of
the total amount of the
owner’s equity。3.General deficiencies：
1）misstatement＜3%of the total profits；2）
misstatement＜0.5% ofthe total assets；3）
misstatement＜0.5% of
the total operating
income；
Number of major defects in financial
reporting(a)
0
Number of major defects in non-financial
reporting (a)
0
Number of important defects in financial
reporting(a)
0
Number of important defects in non-
financial reporting(a)
0
X. Internal Control Audit Report
√ Applicable □ Not applicable
Opinion in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31 2020.Internal Control Audit Report Disclosure
Status
Disclosure date of audit report of
internal control (full-text)
April 28 2021
Index of audit report of internal
control (full-text)
http://www.cninfo.com.cn
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect
in non-financial report
No
Whether the accountants’ firm issued a qualified opinion on report of internal control audit
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-
assessment report of the Board of Directors
√ Yes □ No
XI. Relevant Information about Corporate Bonds
Whether the company has publicly issued corporate bond which is listed on the stock exchange and is not due on
the date of approval of the annual report or has not been fully redeemed at the due date
Yes
I. Basic information about corporate bonds
Bond name
Bond
abbreviation
Bond Code Issue date Maturity Date
Bond balance
（tenthousand）
Interest rate
Repayment of
principal and
interest
Convertible
corporate
bonds of
Bengang Steel
Plate Co. Ltd.
Bengang
Convertible
bond
127018 29th June 2020 28th June 2026 680000
The convertible
bonds issued in
this issuance
adopt the
method of
paying interest
once a year
and the
company will
pay 119% of
the face value
of the
convertible
bonds
(including the
last annual
interest) to
investors for
the
unconverted
convertible
bond at
maturity.Trading place for the listing or
transfer of corporate bonds
Shenzhen Stock Exchange
Investor suitability
arrangements
Not applicable
Interest payment and
redemption of corporate bonds
The interest payment date is not due during the reporting period
during the reporting period
The implementation of the
relevant clauses during the
reporting period if corporate
bonds are accompanied by
special clauses such as issuer or
investor option clauses
exchangeable clauses etc. (if
applicable).Not applicable
II. Information on bond trustees and credit rating agencies
Bond trustee：
Name
Guotai Junan
Securities Co.Ltd.Office address
618
Shangcheng
Road China
(Shanghai)
Pilot Free
Trade Zone
Contact
Chi Huitao
Yang Keyi
Contact Tel 021-38676666
Credit rating agencies that tracked and rated corporate bonds during the reporting period：
Name
China Chengxin International Credit Rating Co.
Ltd.Office address
No. 2 Nanzhugan Hutong Dongcheng District
Beijing 60101
During the reporting period the bond
trustee and credit rating agency hired by
the company changed the reason for the
change the procedures performed the
impact on the interests of investors etc. (if
applicable)
Not applicable
III. Use of proceeds from corporate bonds
The use of proceeds from corporate bonds
and the procedures for implementation
Please refer to "5 Use of raised funds" in "Five. Analysis of Investment Status" in
"Section IV Discussion and Analysis of Business Conditions" of this report
Ending balance（RMB ten thousand） 499130.52
Operation of the special account for raised
funds
In order to regulate the use and management of the company’s raised funds and protect
the rights and interests of small and medium-sized investors in accordance with the
China Securities Regulatory Commission’s "Listed Companies Supervision Guidelines
No. 2-Regulatory Requirements for the Management and Use of Funds Raised by
Listed Companies" and "Regulations for Listed Companies on the Shenzhen Stock
Exchange" "Operation Guidelines" and the company’s fund-raising management
system and other relevant regulations the company will cooperate with Industrial and
Commercial Bank of China Co. Ltd. Benxi Branch Bank of China Co. Ltd. Benxi
Branch China Construction Bank Co. Ltd. Benxi Branch and China Construction
Bank Co. Ltd. on July 9 2020. Benxi Branch of Bank Co. Ltd. Benxi Xinhua Sub-
branch of Agricultural Bank of China Co. Ltd. and the sponsor Guotai Junan
Securities Co. Ltd. signed the "Tripartite Supervision Agreement on Special Accounts
for Raising Funds" and disclosed them (Announcement No.: 2020-044)
whether the use of raised funds consistent
with the promised purpose use plan and
other agreements in the prospectus
Consistent
IV. Information rating of corporate bonds
On December 10 2019 China Chengxin International Credit Rating Co. Ltd. issued the "Bengang Steel Plate Co.
Ltd. Public Issuance of A-Share Convertible Corporate Bonds Credit Rating Report". The rating result: The
company's main body credit rating is AA+ and the rating outlook is Stable; the corporate bond credit rating is AAA.
For details please refer to the "Credit Rating Report of Bengang Steel Plate Co. Ltd. Public Issuance of A-Share
Convertible Corporate Bonds" disclosed on Juchao Information Website on June 23 2020.
On July 31 2020 China Chengxin International Credit Rating Co. Ltd. issued the "Bengang Steel Plate Co. Ltd.Public Issuance of A-Share Convertible Corporate Bond Tracking Rating Report". The tracking rating result:
maintain the company's entity credit rating at AA+ rating the outlook is stable; the credit rating of the "Bengang
Convertible Bonds" is maintained at AAA. For details please refer to the "Tracking Rating Report on the Public
Issuance of A-Share Convertible Bonds of Bengang Steel Plate Co. Ltd." disclosed by the company on Juchao.com
on August 6 2020.
V. Corporate bond credit enhancement mechanism debt repayment plan and
other debt repayment safeguard measures
1 、 Convertible corporate bond credit enhancement mechanism: Bengang Group Co. Ltd. provides a full
unconditional and irrevocable joint liability guarantee for the convertible corporate bonds issued by the company
this time. The guarantee scope includes bond principal interest default amount and damages and the full cost of
realizing the creditor's rights
2、Repayment plan：
1）The convertible bond issued this time adopts the interest payment method of paying interest once a year and the
start date of interest calculation is the first day of issuance of the convertible bond；
2）Interest payment date: The interest payment date of each year is the day of each full year from the first day of
issuance of the convertible bonds issued this time. If that day is a legal holiday or a rest day it will be postponed to
the next trading day. The postponement period does not apply for interest payment. An interest accrual year is defined
between every two adjacent interest payment dates；
3）Creditor's interest rights registration date: The annual creditor's rights registration date is the trading day before
the annual interest payment date and the company will pay the current year's interest within five trading days after
the annual interest payment date. For application of conversion of convertible bonds into the company's A shares
before the creditor's rights registration date (including the creditor's rights registration date) the company will no
longer pay its holders the interest of this year and interests of subsequent years；
4）The tax payable on the interest income received by the holder of the convertible bond shall be borne by the holder
of the convertible bond。
3、Repayment safeguard measures
From the end of 2018 to the end of 2020 the company's asset-liability ratio (consolidated basis) was 67.03% 67.05%
and 66.85% respectively and the asset-liability ratio (parent company) was 67.55% 67.87% and 67.45% showing
a steady but declining trend; Overall the company’s debt-to-asset ratio is still within a reasonable range.
From the end of 2018 to the end of 2020 the company's current ratio was 1.02 0.87 and 1.04 and the quick ratio
was 0.69 0.65 and 0.77 respectively. The current ratio and quick ratio are on the rise and the company's short-term
debt solvency has increased.
From the end of 2018 to the end of 2020 the company's interest coverage ratio were 1.98 1.59 and 1.4 respectively
and the interest repayment risk was relatively low.The source of funds for the interest payment and redemption of the convertible bonds mainly includes the income
and cash inflows from the normal operations of the company's business. The company will formulate a fund
utilization plan based on the interest payment and redemption of convertible bonds rationally allocate funds pay
interest on schedule and redeem relevant amounts of convertible bonds. In the past three years and the first quarter
the company has been operating well with stable financial indicators and good debt solvency.VI. Meetings of bondholders held during the reporting period
During the reporting period the company did not hold bondholder meetings。
Ⅶ. The performance of the bond trustee's duties during the reporting period
The company’s convertible corporate bond trustee is Guotai Junan Securities Co. Ltd. During the reporting period
Guotai Junan strictly performed the duties of the trustee in accordance with the agreement continued to pay attention
to the company’s production and operation financial status and credit status and urged the company to implement
the obligations stipulated in the document of the convertible bond prospectus and have actively performed the duties
of bond trustees and effectively safeguarded the legitimate rights and interests of bondholders.The trustee has issued to the Public on May 12 2020 the 2019 sponsorship report on the continuous supervision of
Bengang Steel Plates the 2019 training report on the continuous supervision of Bengang Steel Plates the 2019 on-
site inspection report on the continuous supervision of Bengang Steel Plates and Summary Report on Continuous
Supervision and Sponsorship of the Non-public Issuance of A Shares of Bengang Steel Plates.VIII. As of the end of the reporting period the Company's main accounting data
and financial indicators for the past 2 years
Unit：RMB10 thousand
Item 2020 2019 Change
EBITDA 299275.63 334839.47 -10.62%
Current ratio 1.04% 0.87% 0.17%
Assets and liabilities ratio 66.85% 67.05% -0.20%
Quick ratio 0.77% 0.65% 0.12%
EBITDA total liabilities ratio 0.07% 0.08% -0.01%
Interest coverage ratio 1.4 1.59 -11.95%
Cash interest coverage ratio -0.96 8.37 -111.47%
EBITDA interest coverage ratio 7.91 10.03 -21.14%
Loan repayment rate 100.00% 100.00% 0.00%
Interest repayment rate 100.00% 100.00% 0.00%
The main reason why the above accounting data and financial indicators have changed more than 30% year-on-
year
□ applicable √ Not applicable
IX. Interest payment status of other bonds and debt financing instruments during
the reporting period
During the reporting period the Company did not make interest payments for other bonds and debt financing
instruments.X. The status of bank credits usage and repayment of bank loans during the
reporting period
At the end of the reporting period the total bank credit of the company was 37.58 billion yuan
28.35 billion yuan had been used and the unused credit line was 9.23 billion yuan. The total amount
of loans at the beginning of the reporting period was 18.236 billion yuan the net repayment of loans
in the current period was 3.357 billion yuan and the loan balance at the end of the period was 14.879
billion yuan.XI. Implementation of relevant agreements or commitments in the corporate bond
prospectus during the reporting period
During the reporting period the Company strictly implemented the relevant agreements and commitments in the
prospectus of convertible corporate bonds and there was no damage to the interests of bond investors.XII. Significant events occurred during the reporting period
None.XIII. Whether there is any guarantor for corporate bonds
√ Yes □ No
Whether the guarantor of the corporate bonds is a legal person or other organization
√ Yes □ No
Whether to separately disclose the financial statements of the guarantor during the reporting period within 4 months
from the end of each fiscal year including the balance sheet income statement cash flow statement statement of
changes in owner's equity (shareholders' equity) and notes to the financial statements
√ Yes □ No
XII. Financial Report
Opinion of audit report Unqualified audit opinion
Date of audit report 26th April 2021
Name of CPA Firm BDO China Shu Lun Pan CPAs LLP
Audit report number
PCPAR [2020] No. ZB10714
Name of CPA Zhu Jinmei Li Guiying
Auditors’ Report
PCPAR [2021] No. ZB10714
To All Shareholders of Bengang Steel Plates Co. Ltd.:
Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co. Ltd.(hereinafter referred to as “the Company”) which comprise the consolidated statement of
financial position and statement of financial position as at 31 December 2020 the
consolidated statement of comprehensive income and statement of comprehensive income
the consolidated statement of changes in equity and statement of changes in equity the
consolidated statement of cash flows and statement of cash flows for the year then ended
and notes to the financial statements.In our opinion the financial statements present fairly in all material respects the
consolidated financial position and financial position of the Company as at 31 December
2020 and the consolidated results of operations and results of operations and the
consolidated cash flows and cash flows of the Company for the year then ended in
accordance with the requirements of Accounting standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified
Public Accountants. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the China Code of Ethics for
Certified Public Accountants and we have fulfilled our other ethical responsibilities in
accordance with China Code of Ethics for Certified Public Accountants. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.Key Audit Matters
The key audit matters are matters that we consider to be the most important for the audit of
the current financial statements based on professional judgment. The response to these
matters is based on the overall audit of the financial statements and the formation of audit
opinions. We do not express a separate opinion on these matters.We have identified the following items as key audit matters that need to be disclosed in the
audit report.Key Audit Matters Audit Procedure
1. Provision for Bad Debts
Please refer to the Note (10) financialinstruments under “3. Significantaccounting policies and accountingestimates” and Note (2) Accountsreceivable under “5. Notes to consolidatedfinancial statements”.
As at December 31 2020 the carrying
amount of Accounts receivable is RMB
733850787.45 and the bad debt is RMB
488633604.79.
The management determines the estimated
recoverable amount of accounts receivable
based on the assessment of the credit
status financial status and actual
repayment status of relevant customers.
Because the management determines the
estimated recoverable amount of accounts
receivable based on significant accounting
estimation and judgement and the impact
amount is significant we determine that
the recoverability of accounts receivable is
a key audit matter.The audit process implemented for
recoverability of Accounts receivable
includes mainly:
1. Understand evaluate and test
management's aging analysis of
receivables and the internal control process
related to determine bad debt provision for
accounts receivable;
2. Review the management's consideration
and objective evidence for the impairment
test of accounts receivable and pay close
attention to whether the management has
fully identified the items that have been
impaired;
3. Sample the accounts receivable tested
for impairment individually and review on
the assumption and reasonableness of
future cash flows estimation made by the
management;
4. For accounts receivable tested for
impairment by portfolio evaluate the
reasonableness of the bad debt provision
proportion;
5. Perform confirmation procedure and
check the confirmation results with the
amount recorded by the management;
6. Check the amount received after the
reporting period and evaluate the
reasonableness of provision for bad debts
made by the management.
2. Impairment of Inventory
Please refer to the Note （11）Inventoryunder “3. Significant accounting policiesand accounting estimates” and (6)Inventory under “5. Notes toconsolidated financial statements”.
As at December 312020 the carrying
amount of inventory in consolidated
statement is RMB 9073623111.13
impairment of inventory is RMB
33557768.48 the book value of inventory
The procedures carried out for the
impairment of inventory include:
1. Evaluated the design and operation of
internal control related to the impairment
of inventory;
2. Supervise stock taking and check the
quantity and status of inventory especially
the aged inventory;
3. Obtain the calculation of the impairment
of inventory. Check whether it follows the
requirements of related accounting
is RMB 9040065342.65. Inventory is
measured at the lower of cost and net
realizable value. The sufficiency of
impairment for inventory will exert a great
impact on the financial statement.The net realizable value of finished
products 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.It involves significant judgement when the
management determines the estimated
selling price of the finished products based
on status.
As at December 31 2020 the carrying
amount of inventory was significant and
involves the estimation of net realizable
value. Therefore we identified it as a key
audit matter.standards of the Company check any
changes of the accrual of inventory
impairment in the current period and
analyse the sufficiency of impairment;
4. For products with open market selling
price we inquired the open market price
independently and compared with the
estimated selling price. For products
without open market selling price we
compare the estimated price of the
products with the latest actual selling price
or selling price after the reporting period.
5.Evaluate the estimated sales expenses
and related taxes and fees made by the
management and compare with the
historical data of similar products and
compare with the actual costs occurred
after the balance sheet date.Other information
The management of the Company is responsible for the other information. The other
information comprises information of the Company's annual report for the period of 2020
but excludes the financial statements and our auditor's report.Our opinion on the financial statements does not cover the other information and we do not
and will not express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the
other information identified above and in doing so consider whether the other information
is materially inconsistent with the financial statements or our knowledge obtained in the
audit if there appears to be a material misstatement.
Based on the work we have performed if we determine that there is a material misstatement
of other information we should report that fact. In this regard we have nothing to report.Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with requirements of Accounting Standards for Business
Enterprises and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement whether
due to fraud or error.In preparing the financial statements management of the Company is responsible for
assessing the Company's ability to continue as a going concern disclosing as applicable
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations or has no
realistic alternative but to do so.Those charged with governance are responsible for supervising the Company's financial
reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
are free from material misstatement whether due to fraud or error and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance with China Standards on Auditing
for Certified Public Accountants will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individually or
in the aggregate they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
As part of an audit in accordance with accordance with Chinese Certified Public
Accountants Auditing Standards we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements
whether due to fraud or error design and perform audit procedures responsive to those risks
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and based on the audit evidence obtained whether a material uncertainty exists
related to events or conditions that may cast significant doubt on Bengang Steel Plate’s
ability to continue as a going concern. If we conclude that a material uncertainty exists we
are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or if such disclosures are inadequate to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.However future events or conditions may cause Bengang Steel Plates to cease to continue
as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements
including the disclosures and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of
entities or business activities within Bengang Steel Plates to express an opinion on the
financial statements. We are responsible for guiding supervising and executing the group
audit and assume full responsibility for the audit opinion.We communicate with those charged with governance regarding among other matters the
planned scope and timing of the audit and significant audit findings including any
significant deficiencies in internal control that we identify during our audit.
We also provide a statement to those charged with governance on compliance with the
ethical requirements associated with independence and communicate with those charged
with governance all relationships and other matters that may reasonably be considered to
affect our independence and related precautions (if applicable).
From the matters communicated with those charged with governance we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when in
extremely rare circumstances we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
BDO CHINA SHULUN PAN CERTIFIED Certified Public Accountants of China
PUBLIC ACCOUNTANTS LLP (Engagement Partner)
Certified Public Accountants of China
Shanghai the People’s Republic of China 26 April 2021
This auditor’s report and the accompanying notes to the financial statement are English translation of the
Chinese auditors’ report. In case of doubt as to the presentation of these documents the Chinese version shall
prevail.
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 5 31 Dec 2020 31 Dec 2019
Current assets
Cash at bank and on hand (1) 13126666915.26 18415844397.77
Settlement provisions
Capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable -
Accounts receivable (2) 245217182.66 235696265.66
Accounts receivable financing (3) 4189977871.92 2429542461.88
Prepayments (4) 2108044777.65 1291047458.11
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Other receivables (5) 142101351.27 172807036.77
Redemptory financial assets for sale
Inventories (6) 9040065342.65 7700397685.61
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets (7) 5523646836.01 312904824.09
Total current assets 34375720277.42 30558240129.89
Non-current assets
Loan and advances issued
Debt Investments
Other debt investments
Long-term receivables
Long-term equity investments (8) 2742064.73 2642998.70
Other equity instrument investments (9) 1042024829.00 1041824829.00
Other non-current financial assets
Investment property
Fixed assets (10) 26284567956.44 26123375492.40
Construction in progress (11) 1839933715.58 1833853572.58
Productive biological assets
Oil and gas assets
Intangible assets (12) 264932652.54 271500023.34
Development expenditure
Assets Notes 5 31 Dec 2020 31 Dec 2019
Goodwill
Long-term deferred expenses
Deferred tax assets (13) 201708932.84 191485595.49
Other non-current assets (14) 995840320.65 708502552.50
Total non-current assets 30631750471.78 30173185064.01
Total assets 65007470749.20 60731425193.90
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes 5 31 Dec 2020 31 Dec 2019
Current Liabilities
Short-term loans (15) 10067731000.00 13151478000.00
Loan from central bank
Loan from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable (16) 9814149348.42 11828514676.95
Accounts payable (17) 5914228256.82 4527513030.27
Advance from customers (18) 4429821526.79
Contract liabilities (19) 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 (20) 25749485.25 23698174.56
Current tax liabilities (21) 55302080.96 284825814.80
Other payables (22) 709448301.92 662701744.97
Handling charges and commission payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year (23) 1308030361.43 234474657.99
Other current liabilities (24) 579627336.58
Total current liabilities 32932937991.28 35143027626.33
Non-current liabilities
Provision for insurance contract
Long-term loans (25) 3502934427.65 4849675910.73
Bonds payable (26) 5752229339.52
Including: Preferred stock
Perpetual bond
Long-term payables (27) 1114232362.74 516939408.14
Long-term employee benefits payable
Estimated liabilities
Liabilities and equities Notes 5 31 Dec 2020 31 Dec 2019
Deferred income (28) 154451833.23 208955407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10523847963.14 5575570726.17
Total liabilities 43456785954.42 40718598352.50
Shareholders' equity:
Share capital (29) 3875371532.00 3875371532.00
Other equity instruments (30) 1146290662.42
Including: Preferred stock
Perpetual bond
Capital reserves (31) 12343209847.29 12343209847.29
Less: treasury shares
Other comprehensive income
Special reserves (32) 300412.14 212687.41
Surplus reserves (33) 961105529.85 961105529.85
General risk reserve
Undistributed profits (34) 2692018405.40 2307765664.62
Total equity attributable to equity holders of the parent company 21018296389.10 19487665261.17
Non-controlling interests 532388405.68 525161580.23
Total shareholder's equity 21550684794.78 20012826841.40
Total of liabilities and owners’ equity 65007470749.20 60731425193.90
The notes to the financial statements attached form part of these financial statements.Legal Representative： Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Assets Notes 14 31 Dec 2020 31 Dec 2019
Current assets
Cash at bank and on hand 11808618300.87 16982227928.89
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable (1) 289865462.20 388997108.46
Accounts receivable financing (2) 4143431412.08 2193319842.60
Prepayments 2117204935.75 1184632345.13
Other receivables (3) 228180190.02 266663235.81
Inventories 7420499172.20 6114582832.33
Contract assets
Assets held for sale
Non-current assets due within one year
Assets Notes 14 31 Dec 2020 31 Dec 2019
Other current assets 5437282088.94 191249460.42
Total current assets 31445081562.06 27321672753.64
Non-current assets
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments (4) 2016281902.16 2016281902.16
Other equity instrument investments 1041624829.00 1041624829.00
Other non-current financial assets
Investment property
Fixed assets 24755665765.30 24447763305.12
Construction in progress 1798639941.58 1813889136.42
Productive biological assets
Oil and gas assets
Intangible assets 142163903.40 145470040.68
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 98480706.23 93555276.54
Other non-current assets 988475426.53 696351867.38
Total non-current assets 30841332474.20 30254936357.30
Total assets 62286414036.26 57576609110.94
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes 14 31 Dec 2020 31 Dec 2019
Current liabilities
Short-term loans 9107731000.00 11851478000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 8348607405.21 10225969445.22
Accounts payable 6280468684.34 4909389629.86
Prepayments 5597707687.22
Contract liabilities 5324357761.83
Liabilities and shareholders' equities Notes 14 31 Dec 2020 31 Dec 2019
Employee benefits payable 23981010.53 21872906.71
Current tax liabilities 42514891.31 274181048.14
Other payables 368374954.61 384125032.59
Liabilities held for sale
Non-current liabilities due within one year 1308030361.43 234474657.99
Other current liabilities 692166509.04
Total current liabilities 31496232578.30 33499198407.73
Non-current liabilities
Long term loans 3502934427.65 4849675910.73
Bonds payable 5752229339.52
Including: Preferred stock
Perpetual bond
Long-term payables 1108412163.50 516939408.14
Long-term employee benefits payable
Estimated liabilities
Deferred income 154451833.23 208955407.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 10518027763.90 5575570726.17
Total liabilities 42014260342.20 39074769133.90
Shareholder’s equity:
Share capital 3875371532.00 3875371532.00
Other equity instruments 1146290662.42
Including: Preferred stock
Perpetual bond
Capital reserves 11923058165.17 11923058165.17
Less: Treasury shares
Other comprehensive income
Special reserves 120972.62 53330.99
Surplus reserves 961105529.85 961105529.85
Undistributed Profits 2366206832.00 1742251419.03
Total shareholder's equity 20272153694.06 18501839977.04
Total liabilities and shareholder’s equity 62286414036.26 57576609110.94
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Current period Previous period
1. Total operating income 48684792685.58 52741353582.28
Items Notes 5 Current period Previous period
Including: Operating income (35) 48684792685.58 52741353582.28
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 47900922736.61 52124252623.88
Including: Operating cost (35) 46392180562.59 49211414645.62
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 (36) 215871820.10 271580080.03
Selling and distribution expenses (37) 97279280.21 1096688903.70
General and administrative expenses (38) 792826294.81 831945841.56
Research and development expenses (39) 37989623.28 30780463.74
Financial expenses (40) 364775155.62 681842689.23
Including: Interest expense 1028857436.14 948799627.90
Interest income 378523984.03 333750262.79
Add: Other income (41) 81305181.92 83916607.12
Income on investment（“-” for loss） (42) 13951362.33 1058377.90
Including: Income from associates and joint ventures 374119.86 452582.71
Income from derecognition of financial assets measured at amortized cost
Exchange gains（“-” for loss）
Net exposure hedge income（“-” for loss）
Gains from change of fair value （“-” for loss）
Credit impairment loss （“-” for loss） (43) -304019761.75 -6541900.62
Asset impairment loss （“-” for loss） (44) -67185869.37 -43256982.72
Assets disposal gains（“-” for loss） (45) 325651.61 3441646.67
3. Operational profit（“-” for loss） 508246513.71 655718706.75
Add: Non-operating income (46) 4328563.52 10306462.87
Less: Non-operating expenses (47) 95724280.44 90209742.22
4. Total profit (“-” for loss) 416850796.79 575815427.40
Less: Income tax expenses (48) 25371230.56 18954938.42
5. Net profit（“-” for loss） 391479566.23 556860488.98
1.Classification by continuing operating
1.Net profit from continuing operation（“-” for loss） 391479566.23 556860488.98
2.Net profit from discontinued operation（“-” for loss）
2.Classification by ownership
1. Net profit attributable to the owners of parent company （“-” for loss） 384252740.78 555646971.40
2. Net profit attributable to non-controlling shareholders （“-” for loss） 7226825.45 1213517.58
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items that will not be reclassified into gains/losses
1) Re-measurement of defined benefit plans of changes in net debt or net assets
2) Other comprehensive income under the equity method cannot be reclassified into
profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or loss.
1) Other comprehensive income under the equity method which can be reclassified into
profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive income
Items Notes 5 Current period Previous period
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income 391479566.23 556860488.98
Total comprehensive income attributable to the owner of the parent company 384252740.78 555646971.40
Total comprehensive income attributable to non-controlling shareholders 7226825.45 1213517.58
8. Earnings per share
1）Basic earnings per share 0.099 0.143
2）Diluted earnings per share 0.099 0.143
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 14 Current period Previous period
1. Total operating income (5) 48811106474.73 52605113207.02
Less: Operating cost (5) 46742700421.70 49734189460.60
Tax and surcharges 182486280.99 219994347.76
Selling and distribution expenses 86927530.44 640211381.70
General and administrative expenses 738689535.43 775147352.42
Research and development expenses 37989623.28 30780463.74
Financial expenses 339059288.37 654332095.34
Including: Interest expense 973520152.09 889827373.77
Interest income 348394576.76 302622279.00
Add: Other income 80671964.84 83594522.47
Income on investment（“-” for loss） (6) 13577242.47 27594915.42
Including: Income from associates and joint ventures
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） 1333341.31 -4408068.83
Assets impairment loss（“-” for loss） -67185869.37 -43256982.72
Assets disposal gains（“-” for loss） 325651.61 3488648.92
2. Operational profit（“-” for loss） 711976125.38 617471140.72
Add: Non-operating income 3588687.69 10128386.99
Less: Non-operating expenses 95171437.11 90098761.28
3. Total profit (“-” for loss) 620393375.96 537500766.43
Less: Income tax expenses -3562037.01 2664726.46
4. Net profit（“-” for loss） 623955412.97 534836039.97
1.Net profit from continuing operation (“-” for loss) 623955412.97 534836039.97
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
Items Notes 14 Current period Previous period
2) Other comprehensive income under the equity method cannot be
reclassified into profit or loss
3) Changes in fair value of investments in other equity instruments
4) Changes in fair value of company's credit risk
2.Other comprehensive income that will be reclassified into profit or
loss.
1) Other comprehensive income under the equity method investee
can be reclassified into profit or loss
2) Changes in fair value of other debt investments
3) Amount of financial assets reclassified into other comprehensive
income
4) Credit impairment provision of other debt investments
5) Cash flow hedges reserve
6) Translation differences in foreign currency financial statements
7) Others
6. Total comprehensive income 623955412.97 534836039.97
7. Earnings per share
1）Basic earnings per share
2）Diluted earnings per share
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 5 Current period Previous period
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 38849024657.06 47399776780.22
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Cash from receiving interest handling charge and commission
Net increase of loans from borrowing funds
Net increase of fund for repurchase business
Net cash received from traded securities
Tax rebate received 396399799.91 364095520.25
Other cash received relating to operating activities (48) 816954704.43 377085656.22
Subtotal of cash inflows from operating activities 40062379161.40 48140957956.69
Cash paid for goods and services 38688312946.57 37675995353.53
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 1973351870.94 2109471410.71
Items Notes 5 Current period Previous period
Cash paid for all types of taxes 952434837.20 1054705726.35
Other cash paid relating to operating activities (48) 487279719.98 322961424.94
Subtotal of cash outflows from operating activities 42101379374.69 41163133915.53
Net cash flows from operating activities -2039000213.29 6977824041.16
2. Cash flows from investing activities
Cash received from disposal of investments 52773000.00
Cash received from return on investments 13852296.30 871060.75
Net cash received from disposal of fixed assets intangible assets and other long-
term assets
185442.47 340766.32
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 14037738.77 53984827.07
Cash paid for acquisition of fixed assets intangible assets and other long-term assets 1013928829.62 4546086687.86
Cash paid for acquisition of investments 5200000000.00 52773000.00
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 6213928829.62 4598859687.86
Net cash flows from investing activities -6199891090.85 -4544874860.79
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of subsidiary
Proceeds from borrowings 21667514000.00 15913409000.00
Other proceeds relating to financing activities (48) 1329876314.56 1571269971.97
Subtotal of cash inflows from financing activities 22997390314.56 17484678971.97
Cash repayments of borrowings 18115736896.61 17121821388.69
Cash payments for distribution of dividends profit or interest expenses 749821254.37 1172008803.59
Including: Cash paid to non-controlling shareholders as dividend and profit by
subsidiaries
9198305.14
Other cash payments relating to financing activities (48) 75509135.49 10343406.67
Subtotal of cash outflows from financing activities 18941067286.47 18304173598.95
Net cash flows from financing activities 4056323028.09 -819494626.98
4. Effect of foreign exchange rate changes on cash and cash equivalents -29429117.41 75411813.22
5. Net increase in cash and cash equivalents -4211997393.46 1688866366.61
Add: Cash and cash equivalents at the beginning of the period 13441414988.58 11752548621.97
6. Cash and cash equivalents at the ending of the period 9229417595.12 13441414988.58
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items Notes 14 Current period Previous period
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 43332373821.90 45925314655.54
Tax rebate received 324045932.64 318311209.48
Other cash received relating to operating activities 786085304.22 289883909.31
Subtotal of cash inflows from operating activities 44442505058.76 46533509774.33
Items Notes 14 Current period Previous period
Cash paid for goods and services 43585984954.05 35992848593.70
Cash paid to and on behalf of employees 1870605772.33 1975902597.93
Cash paid for all types of taxes 824396654.24 897467468.84
Other cash paid relating to operating activities 476274984.82 231467233.26
Subtotal of cash outflows from operating activities 46757262365.44 39097685893.73
Net cash flows from operating activities -2314757306.68 7435823880.60
2. Cash flows from investing activities
Cash received from disposal of investments
Cash received from return on investments 13577242.47 27594915.42
Net cash received from disposal of fixed assets intangible
assets and other long-term assets
1637.16
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 13578879.63 27594915.42
Cash paid for acquisition of fixed assets intangible assets and
other long-term assets
1013911078.29 4500165073.02
Cash paid for acquisition of investments 5200000000.00
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 6213911078.29 4500165073.02
Net cash flows from investing activities -6200332198.66 -4472570157.60
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 20607514000.00 14603409000.00
Other cash received relating to financing activities 1294921225.43 1484945138.77
Subtotal of cash inflows from financing activities 21902435225.43 16088354138.77
Cash repayments of borrowings 16715736896.61 15794901388.69
Cash payments for distribution of dividends profit or interest 701262726.60 1101521395.66
Other cash payments relating to financing activities 72689078.37 8731273.67
Subtotal of cash outflows from financing activities 17489688701.58 16905154058.02
Net cash flows from financing activities 4412746523.85 -816799919.25
4. Effect of foreign exchange rate changes on cash and cash
equivalents
-29414313.38 75337651.52
5. Net increase in cash and cash equivalents -4131757294.87 2221791455.27
Add: Cash and cash equivalents at the beginning of the period 13029616298.47 10807824843.20
6. Ending balance of cash and cash equivalents 8897859003.60 13029616298.47
The notes to the financial statements attached form part of these financial statements.Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items
Current period
Owner's equity attributable to parent company
Non-controlling
interest
Total of owner's
equity Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensive
income
Special reserves Surplus reserves
General
risk
reserve
Undistributed
profit
Subtotal Preference
shares
Perpetual
bond Others
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
Items
Current period
Owner's equity attributable to parent company
Non-controlling
interest
Total of owner's
equity Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensive
income
Special reserves Surplus reserves
General
risk
reserve
Undistributed
profit
Subtotal Preference
shares
Perpetual
bond 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
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items
Previous period
Owner's equity attributable to parent company
Non-controlling
interest
Total of owner's
equity Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensive
income
Special reserves Surplus reserves
General
risk
reserve
Undistributed
profit
Subtotal Preference
shares
Perpetual
bond
Others
1. Ending balance of last year 3875371532.00 12343209847.29 683937.71 961105529.85 1945887269.82 19126258116.67 533146339.49 19659404456.16
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 683937.71 961105529.85 1945887269.82 19126258116.67 533146339.49 19659404456.16
3. Changes in current year (“-” for decrease) -471250.30 361878394.80 361407144.50 -7984759.26 353422385.24
1) Total comprehensive income 555646971.40 555646971.40 1213517.58 556860488.98
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity
instruments
(3) Share-based payment attributable to owners'
equity
Items
Previous period
Owner's equity attributable to parent company
Non-controlling
interest
Total of owner's
equity Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensive
income
Special reserves Surplus reserves
General
risk
reserve
Undistributed
profit
Subtotal Preference
shares
Perpetual
bond
Others
(4) Others
3) Profit distribution -193768576.60 -193768576.60 -9198305.14 -202966881.74
(1) Appropriation to surplus reserves
(2) Appropriation to general risk reserve
(3) Profit distribution to shareholders -193768576.60 -193768576.60 -9198305.14 -202966881.74
(4) Others
4) Transfers within shareholders' equity
(1) Capital reserves transferred into paid-in capital
(or stock)
(2) Surplus reserves transferred into paid-in
capital (or stock)
(3) Surplus reserves to recover loss
(4) Net changes of defined contribution plans
transferred into Retained Earnings
(5) Other comprehensive income transferred into
Retained Earnings
(6) Others
5) Special reserves -471250.30 -471250.30 28.30 -471222.00
(1) Provision of special reserves 47843133.40 47843133.40 28.30 47843161.70
(2) Use of special reserves 48314383.70 48314383.70 48314383.70
6) Others
4. Ending balance of current year 3875371532.00 12343209847.29 212687.41 961105529.85 2307765664.62 19487665261.17 525161580.23 20012826841.40
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items
Current period
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensi
ve income
Special
reserves
Surplus reserves
Undistributed
profits
Total shareholder’s
equity Preference
shares
Perpetual
bond Others
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
Items
Current period
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensi
ve income
Special
reserves Surplus reserves
Undistributed
profits
Total shareholder’s
equity Preference
shares
Perpetual
bond
Others
6) Others
4. Ending balance of current year 3875371532.00 1146290662.42 11923058165.17 120972.62 961105529.85 2366206832.00 20272153694.06
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO. LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
Items
Previous period
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensi
ve income
Special
reserves
Surplus reserves
Undistributed
profits
Total shareholder’s
equity Preference
shares
Perpetual
bond
Others
1. Ending balance of last year 3875371532.00 11923058165.17 525218.48 961105529.85 1401183955.66 18161244401.16
Add: Change of accounting policies
Correction of errors for last period
Others
2. Beginning balance of current year 3875371532.00 11923058165.17 525218.48 961105529.85 1401183955.66 18161244401.16
3. Changes in current year (“-” for decrease) -471887.49 341067463.37 340595575.88
1) Total comprehensive income 534836039.97 534836039.97
2) Capital increase and decrease by shareholders
(1) Common share invested by shareholders
(2) Capital input by the holder of other equity instruments
(3) Share-based payment attributable to shareholders' equity
(4) Others
3) Profit distribution -193768576.60 -193768576.60
(1) Appropriation of surplus reserves
(2) Profit distribution to shareholders -193768576.60 -193768576.60
(3) Others
Items
Previous period
Share capital
Other equity instruments
Capital reserves
Less:
Treasury
shares
Other
comprehensi
ve income
Special
reserves
Surplus reserves
Undistributed
profits
Total shareholder’s
equity Preference
shares
Perpetual
bond
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 -471887.49 -471887.49
(1) Provision of special reserves 45445975.41 45445975.41
(2) Use of special reserves 45917862.90 45917862.90
6) Others
4. Ending balance of current year 3875371532.00 11923058165.17 53330.99 961105529.85 1742251419.03 18501839977.04
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
Bengang Steel Plates Co. Ltd.
Notes to the financial statements
For the year ended 31 December 2020
(Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co. Ltd. (hereinafter referred to as “Bengang Steel Plates” or “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 HKD 2.38 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 was completed on 9 February 2018 and 739371532 shares were actually issued. The
placing price was RMB5.41 per share.
As at 31 December 2020 the capital shares were totaled to 3875371532 shares.
The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road Pingshan District Benxi Liaoning Province.The Company’s legal representative: Gao Lie.The parent company of Bengang Steel Plates Co. Ltd is Benxi Steel and Iron (Group) Co. Ltd. and the 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.The financial statements have been approved for reporting by the board of directors of the Company on 26
April 2021.
(2) Consolidation scope
As at 31 December 2020 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 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.
2. 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 the Ministry of
Finance and “Information Disclosure Rules for Companies of securities for public issuance No.
15 – General Regulations 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.
3. 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 and accounting 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.
(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 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.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 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
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.
(8) Recognition of cash and cash equivalents
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.
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.
(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 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.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. The designation is made on the basis of a single
investment and the related investment meets the definition of an equity instrument from the
issuer's perspective.Other financial assets other than these are classified as financial assets measured at fair value
through profit or loss. At the initial recognition in order to eliminate or significantly reduce
accounting mismatches financial assets that should be classified as measured at amortized
value or financial assets measured at fair value through other comprehensive income can be
designated as financial assets measured at fair value through profit or loss.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.In the initial recognition in order to eliminate or significantly reduce accounting mismatches
financial assets can be designated as financial assets measured at fair value and their changes
included in the current profit and loss. According to the above conditions the Company does
not have such designated financial assets.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.
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.
(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 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. Termination of recognition of financial assets and financial assets transfer
When one of the following conditions is met the company terminates the recognition of financial assets.- Termination of contractual rights to receive cash flows from financial assets;
- The financial assets have been transferred and almost all the risks and rewards in the
ownership of the financial assets have been transferred to the transferee;
- The financial assets have been transferred. Although the company has neither transferred
nor retained almost all the risks and rewards of the ownership of the financial assets it has
not retained control of the financial assets.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
(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.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 (excluding accounts receivables)
The Company recognize the expected credit loss on financial assets measured at amortized cost financial assets
measured at fair value through other comprehensive income (debt instruments) financial guarantee contract
and so on on the individual or portfolio basis.The Company considers all reasonable and relevant information including past events current conditions and
forecasts of future economic conditions and uses the risk of default as the weight to calculate the probability-
weighted amount of present value of difference between the cash flow receivable from the contract and the cash
flow expected to be received to confirm the expected credit loss.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.The measurement of expected credit loss depends on whether there is a significant increase in credit risk of
financial assets since the initial recognition.The company compares the risk of default on the balance sheet date of financial instruments with the risk of
default on the date of initial recognition to determine the relative change in the risk of default during the
expected life of the financial instrument to assess whether there is a significant increase in credit risk of financial
assets since the initial recognition. Generally the Company believes that the credit risk of the financial
instrument has significantly 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 and contract assets recognized according to Accounting Standards for Business
Enterprises No. 14 Revenue (2017) 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 lease receivables the Company shall always measure the loss allowance at an amount equal to lifetime
expected credit losses.
(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.Inventory is initially measured at cost. Inventory cost includes purchase cost processing cost and other
expenditures incurred to bring inventory to its current location and state.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to make provision for
the inventory impairment loss
On the balance sheet date inventories shall be measured at the lower of cost and net realizable value. When the
cost of inventories is higher than its net realizable value provision for inventory impairment loss shall be made.The net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated
costs that will occur at the time of completion estimated selling expenses and relevant taxes in daily activities.The net realizable value of inventories (finished products stock commodity material etc.) held for direct
selling in the daily business activity shall be calculated by deducting 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 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.
After the inventory impairment is withdrawn if the factors that previously affected the write-down of the
inventory value have disappeared causing the net realizable value of the inventory to be higher than its book
value it shall be reversed within the amount of the inventory impairment that has been withdrawn and the
reverted amount shall be included in the current profit and loss.
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
Accounting Policies Adopted After January 1 2020
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 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 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.
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 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 and the cost of long-term equity investment shall be adjusted accordingly.The Company shall recognize its share of the investee’s net profits or losses as well as its 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 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 except the transaction of investment or sale of assets is a
business. Any losses resulting from transactions between the investor and investee which are attributable to
asset impairment shall be recognized in full.The company’s net losses incurred by joint ventures or associates in addition to assuming additional loss
obligations are limited to the book value of long-term equity investments and other long-term equity that
essentially constitutes net investment in joint ventures or associates. If a joint venture or associated enterprise
realizes net profits in the future the company resumes recognizing its share of profits after the share of profits
makes up for the share of unrecognized losses.
(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.Partial disposal of long-term equity investments accounted for by the equity method and the remaining equity
is still accounted for by the equity method the other comprehensive income recognized by the original equity
method shall be carried forward according to the same basis as the direct disposal of related assets or liabilities
by the investee. All other changes in the interests of the holders are carried forward to the current profit and
loss on a pro rata basis.When an investor can no longer exercise joint control of or significant influence over an investee due to partial
disposal of equity investment or other reasons 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. Other owner's
equity change shall be transferred into profit or loss of current period in full when the Company cease to adopt
the equity method.When an investor can no longer control the investee due to partial disposal when the individual financial
statements are prepared the remaining equity can exercise joint control or significant influence on the investee
the equity method shall be used to account for the remaining equity. It is deemed that the equity method is
adopted for adjustment since the acquisition and the other comprehensive income recognized before the control
of the investee is obtained is carried forward on the same basis as the direct disposal of related assets or liabilities
by the investee because the equity method is used for accounting. The confirmed changes in other owners’
equity are carried forward to the current profit and loss on a pro rata basis. If the remaining equity cannot
exercise joint control or exert significant influence on the investee it shall be recognized as a financial asset
and the difference between its fair value and book value on the date when control is lost shall be included in
the current profit and loss and other comprehensive income and other owner’s interests previously recognized
shall be transferred to profit or loss in full.If the equity investment of a subsidiary is disposed through multiple transactions until it loses control which is
a package transaction each transaction shall be accounted as a transaction that disposes of the equity investment
of the subsidiary and loses control. Each transaction before the loss of control the difference between the
disposal price and the book value of the corresponding disposed part of long-term equity investment is firstly
recognized as other comprehensive income in individual financial statements and then transferred to the current
profit and loss when the control is lost. If it is not a package transaction each transaction shall be accounted
separately.
(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).Subsequent expenditures related to investment property are included in the cost of investment property when
the relevant economic benefits are likely to flow in and their costs can be reliably measured. Otherwise they
are included in the current profit and loss when incurred.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.
Fixed assets are initially measured at cost (and considering the impact of expected dismantling cost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the related
economic benefits are likely to flow in and their costs can be reliably measured; the book value of the replaced
part is derecognized; all other subsequent expenditures are incurred shall be included in the current profit and
loss.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is 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:
Category Depreciation method
Depreciation
Period
Residual Value
Rate (%)
Depreciation
Rate
(%)
Plants and Buildings straight line method 10-45 years 0.00 2.22-10.00
Machinery straight line method 10-28 years 3.00 3.46-9.70
Transportation and
other equipment
straight line method 8-22 years 3.00 4.41-12.13
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria it shall be recognized as a financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair
value of the leased asset at the date when the option becomes exercisable;
(3) The lease term covers the major part of the use life of the leased asset;
(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; and
(5) The leased assets are of a special nature and unless major renovations are made only the lessee can use it.
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.
4. Disposal of fixed assets
When a fixed asset is disposed or it is expected that no economic benefits will be generated through use or
disposal the recognition of fixed asset shall be de terminated. The amount of disposal income of fixed assets
raising from sell transfer scrapping or damage shall be included in the current profit and loss after deducting
its book value and related taxes.
(16) Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includes construction costs
installation costs borrowing costs that meet the capitalization conditions and other necessary expenditures
incurred before the construction in progress reaches its intended use status.
Construction in progress is transferred to fixed asset when it has reached its working condition for its intended
use and depreciation will be accrued from the next month.
(17) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
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 property 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.
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.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.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.
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
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.
During the capitalization period the exchange difference between the principal and interest of the foreign
currency special loan is capitalized and included in the cost of the assets that meet the capitalization conditions.
Exchange differences arising from the principal and interest of foreign currency borrowings other than foreign
currency special borrowings are included in the current profits and losses.
(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.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period
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
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 to
do so it shall determine the recoverable amount of the assets on the basis of the asset group towhich 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
(21) Contract liability
Accounting Policies Adopted After January 1 2020
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 welfare expenses incurred by the company are included in the current profit and
loss or related asset costs based on the actual amount when they actually occur. Among them
non-monetary benefits are measured at fair value.
2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize in the accounting period in which an employee 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.
(2) Defined benefit plan
None
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
The obligation pertinent to a contingency 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.
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.
(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.The company reviews the book value of the estimated liabilities on the balance sheet date. If there is conclusive
evidence that the book value does not reflect the current best estimate the book value will be adjusted according
to the current best estimate.
(24) Revenue
Accounting policy adopted after Jan 1 2020
(1) The general principle of revenue recognition and measurement
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.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.
(2) The specific criteria of revenue recognition and measurement
Commodity sales contracts between companies and customers usually only include performance obligations
for the transfer of steel and other commodities. This type of performance obligation is a performance obligation
performed at a certain point in time.The company recognizes revenue when the customer obtains control of the relevant goods or services. When
judging whether the customer has obtained control of goods or services the company considers the following
signs:
The company obtains the current right of collection of receivables the legal ownership of the goods is
transferred to the customer the physical assets of the goods are transferred to the customer the company
transfers the main risks and rewards of the ownership of the goods to the customer and the customer has
accepted the goods.
Accounting policy adopted before Jan 1 2020
(1) The general principle of revenue recognition and measurement
The Company has transferred to the buyer the significant risks and rewards of ownership of the goods.Retained neither continuing managerial involvement which usually relates to the ownership nor exerts effective
control over the goods sold.The relevant amount of revenue can be measured reliably.The economic benefits related to the transaction will flow into the enterprise.The relevant costs incurred or to be incurred can be measured reliably.
(2) The specific criteria of revenue recognition and measurement
The Company mainly sells steel and other products. Domestic sales revenue is recognized when the following
conditions are met: The Company has delivered the products to buyer under the contract amount of product
sales revenue is determinable received or the certificate of the right to receive the amount has been obtained
and the relevant economic benefits are likely to flow into the entity and related costs can be measured reliably.
Export sales revenue is recognized when the following conditions are met: the Company has undertaken the
Customs declaration and delivery has occurred under the contract bill of lading has been obtained amount of
product sales revenue is determinable received or the certificate of the right to receive the amount has been
obtained and the relevant economic benefits are likely to flow into the entity and related costs can be measured
reliably.
(3) Recognition Criteria for the Revenue from alienating of Assets Use Rights
When it is probable that economic benefits in relation to the transaction will flow into the enterprise; and the
amount of revenues can be measured reliably. The Company shall ascertain the amount of revenues from the
transfer of Assets Use Right based on the following circumstances respectively:
(1) Interest income shall be calculated based on the duration of which the Company's cash is used by others and
the actual interest rate; or
(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in the relevant
contract or agreement.
(25) Contract costs
Accounting policy adopted before Jan 1 2020
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard for
example Inventories Property Plant and Equipment or Intangible Assets the company shall recognise an asset
from the 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.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 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
Income tax includes current income tax and deferred income tax. Except for income tax arising from business
mergers and transactions or events that are directly included in owner's equity (including other comprehensive
income) the company will include current income tax and deferred income tax in current profit and loss.
Deferred income tax assets and deferred income tax liabilities are calculated and confirmed based on the
difference (temporary difference) between the tax base of assets and liabilities and their book value.
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).
For taxable temporary differences related to investments in subsidiaries associates and joint ventures deferred
income tax liabilities are recognized unless the company can control the timing of the reversal of the
temporary differences and the temporary differences are likely not to be transferred back in the foreseeable
future. For deductible temporary differences related to investments in subsidiaries associates and joint
ventures when the temporary differences are likely to be reversed in the foreseeable future and are likely to
be used to deduct the taxable income of deductible temporary differences in the future income tax assets are
recognized.On the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the
applicable tax rate during the period when the relevant assets are expected to be recovered or the relevant
liabilities are expected to be recovered in accordance with the provisions of the tax law.On the balance sheet date the company reviews the book value of deferred income tax assets. If it is probable
that sufficient taxable income cannot be obtained in the future to offset the benefits of deferred income tax
assets the book value of the deferred income tax assets shall be written down. When it is possible to obtain
sufficient taxable income the reduced amount shall be reversed.When the Company has the statutory right to offset and intend to offset or obtain assets and pay off liabilities
at the same time the current income tax assets and current income tax liabilities are presented at the net amount
after offsetting.
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
1. Accounting treatment of operating lease
(1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using
the straight-line method over each period of the lease term. The initial direct costs paid by the Company shall
be recorded into the profits and losses of the current period
If the lessor has shouldered any expense related to the lease which shall have been borne by the Company
the Company shall deduct these expenses from the total rental expense and the remaining rental expense shall
be allocated to each period during the lease term
(2) The rents collected from operating leases shall be recorded in the profits and losses of the current period
by using the straight-line method over each period of the whole lease term in which free lease period is
included. The initial direct costs paid by the Company shall be recorded into the profits and losses of the
current period. The initial direct costs shall be capitalized if it is material and be allocated to each period as
per the basis for rental revenue recognition.If the Company has shouldered any expense related to the lease which shall have been borne by the lessee
the company shall deduct these expenses from the total rental revenue and the remaining rental revenue shall
be allocated to each period during the lease term.
2. Accounting treatment of financial leasing
(1) Leased in asset
On the lease beginning date a lessee shall record the lower one of the fair value of the leased asset and the
present 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 balance between the recorded amount of the leased asset and the long-term account payable as
unrecognized financing charges. The lessee shall adopt the effective interest rate method to calculate and
recognize the financing charge in the current period. The unrecognized financing charge shall be amortized
to each period during the lease term. Initial direct costs incurred by the Company shall be recorded in the
value of the leased asset.
(2) Leased out asset
On the lease beginning date a lessee shall record the balance between the sum of finance lease receivables
plus unguaranteed residual value and the present value of the sum as unrealized financing income and record
rental as revenue when received for each period in the future. Initial direct costs incurred by the Company
related to the leased asset shall be recorded in the initial measurement of the finance lease receivables and
reduce the amount of revenue recognized during the lease term.
(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:
(1) The component stands for an independent main business or a major business area;
(2) The component is a part of disposal plan of an independent main business or a major business area;
(3) The component is a subsidiary which is acquired only for sale again.
The profit and loss from continuing operations and the profit and loss from discontinued operations are
separately listed in the income statement. Operational gains and losses such as impairment losses and
reversal amounts and disposal gains and losses from discontinued operations are reported as discontinued
operation gains and losses. For the discontinued operations reported in the current period the Company
adjusts the information previously disclosed as continuing operations profits and losses in the current
financial statements as the discontinued operations profits and losses for the comparable accounting period.
(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 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 assets
As mentioned in note (19) Long-term Asset Impairment under “3 Significant accounting policies andaccounting estimates” 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 cannot reliably obtain the public market price of assets (or asset groups) and cannot 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 assets
As described in note (15) Fixed Assets and note (18) Intangible Assets under “3 Significant accountingpolicies and accounting 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
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
A. Change of major accounting policy during this reporting period
(1) Implementation of "Accounting Standards for Business Enterprises No. 14-Revenue" (revised in 2017)
(hereinafter referred to as "New Revenue Standards")
The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14-Revenue" in
2017. The revised standard stipulates that for the first implementation of the standard the amount of retained
earnings and other related items in the financial statements at the beginning of the year should be adjusted
according to the cumulative impact and the information for the comparable period should not be adjusted.The Company implemented the new revenue standard from January 1 2020. According to the standard the
Company only adjusts the retained earnings at the beginning of 2020 and the amount of other related items in
the financial statements for the cumulative impact of contracts that have not been completed on the date of
first implementation and does not make adjustments to the comparative financial statements.The major impact of the implementation of the above regulations are as follows:
Compared with the original revenue standards the impact of the implementation of the new revenue standards
on the relevant items of the financial statements for the period of 2020 is as follows (increase/(decrease)):
Change of accounting policy
content and reason
Amount of impact on the balance on Jan 1
2020
Affected items Consolidated
Financial statement
Parent company
financial statement
The Company implemented the
"Accounting Standards for
Business Enterprises No. 14-
Revenue" (referred to as "New
Revenue Standards")
promulgated by the Ministry of
Finance in 2017 on January 1
2020
Advance from customers -4429821526.79 -5597707687.22
Contract liabilities 3920196041.41 4953723617.01
Other current liabilities 509625485.38 643984070.21
Affected items in the
statement of
financial position
Amount of impact on the balance on Dec 31 2020
Consolidated Financial
statement
Parent company
financial
statement
Advance from customers -5038299156.48 -6016524270.87
Contract liabilities 4458671819.90 5324357761.83
Other current liabilities 579627336.58 692166509.04
Affected items in the statement of
comprehensive income
Impact amounts to the period of 2020
Consolidated Financial
statement
Parent company financial
statement
Operating costs 1112122323.44 655370940.93
Selling and distribution expenses -1112122323.44 -655370940.93
(2) Implementation of "Accounting Standards for Business Enterprises No. 13 "
The Ministry of Finance issued the "Accounting Standards for Business Enterprises Interpretation No. 13"
(Cai Kuai [2019] No. 21 hereinafter referred to as "Interpretation No. 13") on December 10 2019 which
will come into force on January 1 2020. No requirement of retrospective adjustment.a. The recognition of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or
joint venture between an enterprise and other member units (including parent companies and subsidiaries) of
the enterprise group to which it belongs; a joint venture of the enterprise and other joint ventures or joint
ventures of the enterprise. In addition Interpretation No. 13 also clarifies that only two or more companies
that are significantly affected by one party do not constitute related parties. It also adds that joint ventures
include joint ventures and their subsidiaries.b. The definition of business
Interpretation No. 13 completes the three elements of business composition refines the judgment conditions
of the business composition and introduces the "concentration test" option to simplify to a certain extent the
judgment of whether a combination obtained under the same control constitutes a business etc. .The company implemented Interpretation No. 13 from January 1 2020 and the comparative financial
statements will not be adjusted. Implementation Interpretation No. 13 has not had a significant impact on the
company's financial position and operating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"
On December 16 2019 the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment
of Carbon Emissions Trading" (Cai Kuai [2019] No. 22) which is applicable to the related companies in the
key emission enterprises (hereinafter referred to as key emission companies) that conduct carbon emission
rights business in accordance with the "Interim Measures for the Administration of Carbon Emissions
Trading" and other relevant regulations. This regulation came into effect on January 1 2020 and key emission
companies should adopt the prospective application to apply this regulation.The Company implemented the above regulation from January 1 2020 and the comparative financial
statements will not be adjusted. The implementation of this regulation has not had a significant impact on the
company's financial position and operating results.
(4) Implement the "Regulations on Accounting Treatment of Rental Concessions Related to the Coronavirus
Pandemic"
On June 19 2020 the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental
Concessions Related to the Coronavirus Pandemic " (Caikuai (2020) No. 10) which came into effect on June
19 2020 allowing companies to adjust the relevant rental concessions that occurred between Jan 1 2020 and
the implementation date of this regulation. According to the regulation companies can choose to adopt
simplified methods for accounting treatments for rent reductions and deferred payment of rents directly caused
by the Coronavirus Pandemic that meet the conditions.The company chooses to adopt a simplified method for accounting treatment for all rent concessions that fall
within the scope of the regulation and adjusts the relevant rent concessions that occur between January 1
2020 and the effective date of the regulation accordingly.
The implementation of the regulations did not have a significant impact on the company's financial position
and operating results.
B. Change of accounting estimate during the reporting period
Items
Approval
procedure
Application
date
Affected items
Affected
amounts
Change in
depreciation
period
Approved
by the
eighth
meeting of
the eighth
board of
directors
Jan 1 2020
Accumulated
depreciation
633195486.72
Operating costs 616340171.08
General and
administrative
expenses
16855315.64
Total profit 633195486.72
Items
Approval
procedure
Application
date
Affected items
Affected
amounts
Net profit 474896615.04
C. The first implementation of the new revenue standard adjustment to the financial statements at the
beginning of the year
Consolidated Statement of Financial Position
Items
Ending balance of the
last period
Beginning balance of
the current period
Adjusted amounts
Reclassification Remeasurement Total
Advance
from
customers
4429821526.79
-
4429821526.79
-4429821526.79
Contract
liabilities
3920196041.41 3920196041.41 3920196041.41
Other
current
liabilities
509625485.38 509625485.38 509625485.38
Statement of Financial Position of the Parent Company
Items
Ending balance of the
last period
Beginning balance of
the current period
Adjusted amounts
Reclassification Remeasurement Total
Advance
from
customers
5597707687.22
-
5597707687.22
-5597707687.22
Contract
liabilities
4953723617.01 4953723617.01 4953723617.01
Other current
liabilities
643984070.21 643984070.21 643984070.21
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
Value-added Tax (VAT) The balance of output VAT calculated
based on product sales and taxable
6% 10% 13%
services revenue in 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%
(2) Tax Preference
None.
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items 20201231 20191231
Cash on hand 3026.68 5588.98
Cash at bank 9229414568.44 13441409399.60
Other monetary funds 3897249320.14 4974429409.19
Total 13126666915.26 18415844397.77
Including: Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as
follows:
Items 20201231 20191231
Margin for bank acceptance bill 3306509320.14 4803950250.12
Margin for letter of credit 78000000.00 166527026.07
Time deposit or notice deposit
for guarantee 512000000.00
Loan deposit 740000.00 3330000.00
Other 622133.00
Total 3897249320.14 4974429409.19
(2) Accounts receivable
1. Accounts receivable disclosed by aging analysis
Items 20201231 20191231
Within 1 year (inclusive) 245084695.28 187728755.63
1-2 years (inclusive) 57537987.36 31659160.02
2-3 years (inclusive) 251762129.07 24710744.49
Over 3 years 179465975.74 177928572.30
Sub-total 733850787.45 422027232.44
Less: Provision for bad
debts 488633604.79 186330966.78
Total: 245217182.66 235696265.66
2. Accounts receivable disclosed by bad debt accrual method
Items
20201231
Carrying amount Provision for bad debts
Book value
Amount Percentage (%) Amount
Bad
debts
ratio (%)
Provision for bad
debts individually 352985418.30 48.10 352985418.30 100.00
Provision for bad
debts based on
portfolio
380865369.15 51.90 135648186.49 35.62 245217182.66
Include:
Portfolio 1: Aging
portfolio 380865369.15 51.90 135648186.49 35.62 245217182.66
Total 733850787.45 100.00 488633604.79 245217182.66
Items
20191231
Carrying amount Provision for bad debts
Book value
Amount Percentage (%) Amount
Bad
debts
ratio (%)
Provision for bad debts
individually 47762337.18 11.32 47762337.18 100.00
Provision for bad debts
based on portfolio 374264895.26 88.68 138568629.60 37.01 235696265.66
Include:
Portfolio 1: Aging
portfolio 374264895.26 88.68 138568629.60 37.01 235696265.66
Total 422027232.44 100.00 186330966.78 235696265.66
Accounts receivables tested for impairment individually:
Items
20201231
Carrying amount
Provision for
bad debts
Bad debts
ratio (%)
Reason
Brilliance Automotive
Group Holdings Co. Ltd.
305223081.12 305223081.12 100.00
Bankruptcy
reorganization
Benxi Nanfen Xinhe
Metallurgical Furnace
Material Co. Ltd
47762337.18 47762337.18 100.00 Discontinued
Total 352985418.30 352985418.30
Provision for bad debts by portfolio: Aging analysis
Items
20201231
Account
Receivable
Provision for
bad
debts
Bad debt
ratio
（%）
Within 1 year
(inclusive)
240240563.27 2402405.64 1.00
1-2 year (inclusive) 2420911.77 242091.18 10.00
2-3 year (inclusive) 6500255.55 1300051.11 20.00
Over 3 year 131703638.56 131703638.56 100.00
Total 380865369.15 135648186.49
3. The provision for bad debts accrued reversed or recovered in the current period
The amount of bad debt provision accrued in the current period is RMB 302302638.01.
4. No accounts receivable has been written off this year.
5. Top five debtors at the year-end
Company
20201231
Amount Percentage of total Accounts receivable (%)
Provision for
bad debts
The first 305223081.12 41.59 305223081.12
The second 104634496.36 14.26 1046344.96
The third 56158745.71 7.65 561587.46
The fourth 47762337.18 6.51 47762337.18
The fifth 26929400.04 3.67 269294.00
Total 540708060.41 73.68 354862644.72
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. Details of accounts receivable financing
Items 20201231 20191231
Notes Receivable 4189977871.92 2117763147.67
Including: Bank acceptance bill 1875594439.85 2108970139.40
Commercial acceptance bill 2314383432.07 8793008.27
Accounts receivable 311779314.21
Total 4189977871.92 2429542461.88
Notes: Accounts receivable financing reflects notes receivable and accounts receivable
that are measured at fair value through other comprehensive income on the balance sheet
date.
2. The pledged acceptance bill at the year-end
Item The pledged acceptance bill at the year-end
Bank acceptance bill 484093073.28
Commercial acceptance bill 403379971.01
Total 887473044.29
3. The amount of Notes receivable endorsed over or discounted but not yet matured at
the year-end
Item
Amount confirmed
at the end of
the period
Amount not
confirmed at
the end of the
period
Bank acceptance bill 19140766051.06
Commercial acceptance bill 2277888430.86
Total 19140766051.06 2277888430.86
4. No Notes receivable has been transferred into accounts receivable due to inability of
drawer to meet acceptance bill at the year-end.
(4) Prepayments
1. Prepayments disclosed by aging
Aging
20201231 20191231
Amount Percentage (%) Amount Percentage (%)
Within 1 year 2096232640.14 99.44 1284678069.97 99.51
1-2 years 11812137.51 0.56 6279487.94 0.49
2-3 years 53900.20
Over 3 years 36000.00
Total 2108044777.65 100.00 1291047458.11 100.00
Notes: As of December 31 2020 there were no outstanding prepayments over 1 year.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
The First 1146621194.17 54.39
The Second 134979953.65 6.40
The Third 133093798.08 6.31
The Fourth 125253186.74 5.94
The Fifth 96036913.74 4.56
Total 1635985046.38 77.60
(5) Other receivables
Items 20201231 20191231
Interest receivables 33685359.01 20504422.47
Dividend receivables
Other receivables 108415992.26 152302614.30
Total 142101351.27 172807036.77
1．Interest receivable
(1) Interest receivable disclosed by category
Items 20201231 20191231
Deposit interest 33685359.01 20504422.47
Subtotal 33685359.01 20504422.47
Less: provision for bad debts
Total 33685359.01 20504422.47
(2) The company has no significant provision for overdue interest and bad debts.
2．Other receivables
(1) Other receivables disclosed by aging
Items 20201231 20191231
Within 1 year (inclusive) 53420775.41 135162016.85
1-2 years (inclusive) 42323476.43 15306496.22
2-3 years (inclusive) 12988305.06 3479413.70
Over 3 years 68267923.76 65222052.19
Sub-total 177000480.66 219169978.96
Less: Provision for bad
debts 68584488.40 66867364.66
Total： 108415992.26 152302614.30
（2）Information of provision for bad debts
Provision for bad
debts
Stage one Stage two Stage three
Total
12-month expected
credit losses
lifetime expected credit
losses
(credit impairment has not
occurred)
lifetime
expected
credit losses
(credit
impairment
has already
occurred)
Beginning balance 9494109.69 57373254.97 66867364.66
--Transfer to the
second stage
--Transfer to the
third stage
-768390.73 768390.73
--Write-back to the
second stage
--Write-back to the
first stage
6592.60 -6592.60
Accrual for the
current period
351990.79 2816265.57 656152.83 3824409.19
Provision for bad
debts
Stage one Stage two Stage three
Total
12-month expected
credit losses
lifetime expected credit
losses
(credit impairment has not
occurred)
lifetime
expected
credit losses
(credit
impairment
has already
occurred)
Reversal during the
current period
6207.34 220683.79 226891.13
Write-back of the
current period
1747858.43 132535.89 1880394.32
Write-off during the
current period
Other changes
Ending balance 352376.05 9566849.71 58665262.64 68584488.40
Changes in the book value of other receivables are as follows:
Book value
Stage one Stage two Stage three
Total
12-month
expected credit
losses
lifetime expected credit
losses
(credit impairment has not
occurred)
lifetime expected
credit losses
(credit impairment has
already occurred)
Beginning balance 137511976.11 24284747.88 57373254.97 219169978.96
--Transfer to the
second stage
--Transfer to the
third stage
-1369740.15 1369740.15
--Write-back to the
second stage
Book value
Stage one Stage two Stage three
Total
12-month
expected credit
losses
lifetime expected credit
losses
(credit impairment has not
occurred)
lifetime expected
credit losses
(credit impairment has
already occurred)
--Write-back to the
first stage
14813.42 -14813.42
Increase 376415795.03 6006395.62 54905.00 382477095.65
Termination of
confirmation
416212048.83 8302009.23 132535.89 424646593.95
Other changes
Ending balance 97730535.73 20604580.70 58665364.23 177000480.66
(3) No other accounts receivable actually written off in the current period
(4) Other receivables disclosed by nature
Nature 20201231 20191231
Accounts 167775115.62 209700618.22
Others 9225365.04 9469360.74
Total 177000480.66 219169978.96
(5) Top five debtors at the year-end
Company Nature Amount Aging
Percentage of
total other
receivables (%)
Provision for
bad debts
The First Accounts 6012104.38 within 1 year 3.40
The Second Accounts 5492200.00 within 1 year 3.10 54922.00
The Third Accounts 3408537.26 within 1 year 1.93
The Fourth Accounts 2783078.98 within 1 year to over 3 year 1.57 2538389.24
The Fifth Accounts 2394571.41 within 1 year 1.35
Total 20090492.03 11.35 2593311.24
(6) There is no other receivables relates to any government subsidies in the
reporting period.
(7) There is no other receivables derecognized due to the transfer of financial
assets in the reporting period
(8) There no assets and liabilities formed by transfer of other receivables and
continued involvement in the reporting period
(6) Inventories
1. Inventories disclosed by category
Items
20201231 20191231
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material
and main material
4535270857.67 26986533.69 4508284323.98 3737655945.87 26986533.69 3710669412.18
Work in process and self-
made semi-finished
product
1732705334.71 1946088.69 1730759246.02 1302249713.48 25995508.16 1276254205.32
Finished goods 2805646918.75 4625146.10 2801021772.65 2730735542.67 17261474.56 2713474068.11
Total 9073623111.13 33557768.48 9040065342.65 7770641202.02 70243516.41 7700397685.61
2. Provision for inventory impairment and provision for impairment of contract performance costs
Category 20191231 20200101
Increase Decrease
20201231
Provision Others Write-back or write-off Others
Raw material
and main material
26986533.69 26986533.69 26986533.69
Work in process and
self-made semi-finished
product
25995508.16 25995508.16 1946088.69 25995508.16 1946088.69
Finished goods 17261474.56 17261474.56 4625146.10 17261474.56 4625146.10
Total 70243516.41 70243516.41 6571234.79 43256982.72 33557768.48
(7) Other current assets
Items 20201231 20191231
Prepaid tax 183320437.20 182484616.27
VAT input tax 86091954.53 130420207.82
Time deposit 5254234444.28
Total 5523646836.01 312904824.09
(8) Long-term equity investment
Investees 20191231
Increase/decrease
20201231
Total
Impairme
nt Ending
Balance
Add
Invest
ment
Reduce
Investme
nt
Investment Gains
and Losses
Recognized under
the Equity Method
Other
Comprehen
sive Income
Adjustment
Other
Equity
Changes
Declaration of
Cash Dividends
or Profit
Provision
Others
Joint Venture
Zhejiang Bengang Jingrui
Steel Processing Co. Ltd.. 2642998.70 374119.86 -275053.83 2742064.73
Subtotal 2642998.70 374119.86 -275053.83 2742064.73
Total 2642998.70 374119.86 -275053.83 2742064.73
(9) Other equity instrument investments
Item 20201231 20191231
Equity of Suzhou Bengang
Industrial Co. Ltd.
3888980.00 3888980.00
Equity of Zhonggang Shanghai
Steel Processing Co. Ltd.
Equity of Northeast Special
Steel Group Co. Ltd.
1037735849.00 1037735849.00
Equity of Guangzhou Benpu
Automobile Panel Sales Co.
Ltd.
200000.00 200000.00
Equity of Wuhan Bengang
Yuanhong Trading Co. Ltd.
200000.00
Total 1042024829.00 1041824829.00
Notes:“Other equity instrument investment" items reflects the ending balance of non-tradingequity instrument investments designated as measured at fair value through other
comprehensive income.The Company holds 15% equity of Zhonggang Shanghai Steel Processing Co. Ltd.
9.93% equity of Northeast Special Steel Group Co. Ltd. held by the Company has been
pledged to Bank of Dalian Shenyang branch.
(10) Fixed assets
1. Fixed assets and Disposal of fixed assets
Items 20201231 20191231
Fixed assets 26284567956.44 26123375492.40
Disposal of fixed assets
Total 26284567956.44 26123375492.40
2. Details of fixed assets
Items Houses and buildings
Mechanical
equipment
Transportation
and other
equipment
Total
1. Total original value
20191231 12321783218.79 47625624131.28 908284781.31 60855692131.38
Increase
in current period
692077508.12 1828190321.00 7904567.97 2528172397.09
Including: Purchase 14642922.72 3900232.67 18543155.39
Transferre
d from construction in
progress
692077508.12 1813547398.28 4004335.30 2509629241.70
Merging
Decrease in current
period 21686964.04 533554926.88 3269036.43 558510927.35
Including: Disposal
or scrapping 21686964.04 514479792.15 3269036.43 539435792.62
Others 19075134.73 19075134.73
20201231 12992173762.87 48920259525.40 912920312.85 62825353601.12
2.Total accumulated
depreciation
20191231 5843160062.67 28243587548.42 604346279.82 34691093890.91
Increase
in current period
300111149.37 1862985952.81 27973536.13 2191070638.31
Including: Provision 300111149.37 1862985952.81 27973536.13 2191070638.31
Decrease in current
period 9982342.40 427152414.07 3187684.13 440322440.60
Including: Disposal
or scrapping 9982342.40 427152414.07 3187684.13 440322440.60
20201231 6133288869.64 29679421087.16 629132131.82 36441842088.62
3. Total impairment
20191231 38596028.99 2626719.08 41222748.07
Increase
in current period
60614634.58 60614634.58
Including: accrued 60614634.58 60614634.58
Others
Decrease in current
period 1632408.07 1261418.52 2893826.59
Including: Disposal
or scrapping 1632408.07 1261418.52 2893826.59
20201231 36963620.92 61979935.14 98943556.06
4. Total net book
value of Fixed assets
20201231 6821921272.31 19178858503.10 283788181.03 26284567956.44
20191231 6440027127.13 19379409863.78 303938501.49 26123375492.40
3. Fixed assets idled temporarily
Items Gross value
Accumulated
depreciation
Impairment
Net book
value
Notes
Houses and buildings 94707444.27 59005241.87 35702202.40
Mechanical equipment 539534736.81 474785348.84 63241353.66 1508034.31
Transportation and other
equipment
1042125.89 1042125.89
Total 635284306.97 534832716.60 98943556.06 1508034.31
4. Fixed assets leased in through financial leasing
As of the end of this reporting period the value of the fixed assets leased in through financial leasing was RMB
1114232362.74 all of which were leased from the related party Liaoning Hengyi Financial Leasing Co. Ltd.
5. Fixed assets leased out through financial leasing
Item Ending balance
Houses and buildings 6755257.55
Total 6755257.55
6. Fixed assets without property rights certificates at the year-end
Items Book value Reason
Houses and buildings 1145596922.34 Being processed
(11) Construction in progress
1. Construction in progress and Construction materials
Items 20201231 20191231
Construction in progress 1837160389.66 1820264689.19
Project materials 2773325.92 13588883.39
Total 1839933715.58 1833853572.58
2. Details of construction in progress
Items
20201231 20191231
Gross value
Total
impairment
Net book value Gross value
Total
impairment
Net book value
Special Steel Electric
Furnace Capacity
Replacement Project
358101195.01 358101195.01 62311284.01 62311284.01
CCPP power
generation project
300907874.71 300907874.71 85320752.59 85320752.59
Special steel rolling
mill renovation project
151433585.06 151433585.06 126479522.35 126479522.35
Advanced Treatment
and Reuse Project of
Reclaimed Water in
General Energy Plant
98563871.96 98563871.96 1300481.22 1300481.22
360 square meter
sintering machine
82878409.99 82878409.99 60930506.79 60930506.79
No. 7 blast furnace dry
dust removal and
energy-saving
transformation of TRT
power generation
70402228.77 70402228.77 40993916.95 40993916.95
Environmental
protection overhaul
project of No. 6 blast
furnace
66322604.36 66322604.36 30937257.41 30937257.41
360 square meter
sintering machine
waste heat utilization
56547049.50 56547049.50 55089094.50 55089094.50
One-tower
desulfurization revamp
in the coking plant
31893853.65 31893853.65 8469241.97 8469241.97
Items
20201231 20191231
Gross value
Total
impairment
Net book value Gross value
Total
impairment
Net book value
The overall
improvement of Benxi
Steel's manufacturing
management
29824289.00 29824289.00 20685421.72 20685421.72
Flue gas
desulfurization and
denitrification of No. 7
coke oven in the plate
coking plant
28774283.25 28774283.25 17437798.33 17437798.33
Energy General Plant
No. 1 Converter Gas
Tank System
Transformation Project
24008553.86 24008553.86
Cold rolled high-
strength steel
renovation project
23961023.15 23961023.15
220kV Substation
Project of General
Energy Plant
23302571.03 23302571.03 773057.78 773057.78
Chemical Coke Oven
Gas Project – Bengang
transferred to Liaoning
Coal
21840791.70 21840791.70 21840791.70 21840791.70
5#Blast furnace
relocation overhaul
491069345.30 491069345.30
1700 Hot Rolling
Improvement
39806201.09 39806201.09
Environmental
protection
69541903.74 69541903.74
Items
20201231 20191231
Gross value
Total
impairment
Net book value Gross value
Total
impairment
Net book value
transformation of No.
4-6 converter
1# converter energy
saving and
environmental
protection
transformation
148803402.52 148803402.52
Newly built 8# single-
strand slab caster
project
100460943.24 100460943.24
5#-7# Oxygen
Generator Nitrogen-
increasing and Energy-
saving Modification
34339392.96 34339392.96
8#9# Coke oven
wastewater advanced
treatment
20335268.74 20335268.74
Transformation of No.
2 Casting Machine in
Steelmaking Plant
81419913.88 81419913.88
Other 468398204.66 468398204.66 301919190.40 301919190.40
Total 1837160389.66 1837160389.66 1820264689.19 1820264689.19
3. The change of major construction in progress
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
Special Steel
Electric Furnace
Capacity
Replacement
Project
161761.00 62311284.01 295789911.00 358101195.01 22.00 20.00
Self-raised
fund
CCPP power
generation project
106000.00 85320752.59 215587122.12 300907874.71 28.00 30.00 6359003.29 3831836.54 4.35
Self-raised
fund & Loan
Special steel
rolling mill
renovation project
59607.00 126479522.35 29779762.70 4825699.99 151433585.06 26.00 25.00 3905897.06 1923970.35 4.35
Self-raised
fund & Loan
Advanced
Treatment and
Reuse Project of
17000.00 1300481.22 97263390.74 98563871.96 57.00 60.00
Self-raised
fund
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
Reclaimed Water
in General Energy
Plant
No. 7 blast
furnace dry dust
removal and
energy-saving
transformation of
TRT power
generation
9332.00 40993916.95 29408311.82 70402228.77 75.00 70.00 293980.07 123401.63 4.35
Self-raised
fund & Loan
Environmental
protection
overhaul project of
No. 6 blast furnace
25225.00 30937257.41 35385346.95 66322604.36 75.00 70.00
Self-raised
fund
One-tower 7000.00 8469241.97 23424611.68 31893853.65 45.00 40.00 Self-raised
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
desulfurization
revamp in the
coking plant
fund
5#Blast furnace
relocation
overhaul
124086.50 491069345.30 335096315.94 826165661.24 - 66.00 70.00 31410224.05 13027763.86 4.35
Self-raised
fund & Loan
1700 Hot Rolling
Improvement
25000.00 39806201.09 139473010.30 179279211.39 - 71.00 70.00
Self-raised
fund
No. 7 blast furnace
of the plate iron
plant builds a new
4# hot blast
furnace
4200.00 31557158.36 31557158.36 - 75.00
100.0
0
Self-raised
fund
Perfect function of
hot blast stove in
6332.00 45544017.06 45544017.06 - 71.00
100.0
0
Self-raised
fund
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
plate ironmaking
plant
Environmental
protection
transformation of
No. 4-6 converter
27000.00 69541903.74 92467786.33 162009690.07 - 60.00 95.00 2799798.26 1548185.22 4.35
Self-raised
fund & Loan
1# converter
energy saving and
environmental
protection
transformation
21800.00 148803402.52 17992331.86 140247061.81
2654
8672.
57
- 64.00 70.00 1770758.63 821940.53 4.35
Self-raised
fund & Loan
Newly built 8#
single-strand slab
caster project
64341.00 100460943.24 249198752.55 349659695.79 - 54.00 60.00
Self-raised
fund
5#-7# Oxygen 4726.10 34339392.96 4947418.50 39286811.46 - 83.00 85.00 Self-raised
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
Generator
Nitrogen-
increasing and
Energy-saving
Modification
fund
The cold rolling
mill (three cold
process) pickling
rolling and
continuous
stripping
galvanizing line
have perfect
functions
5600.00 54854105.81 54854105.81 - 97.00
100.0
0
Self-raised
fund
Renewal of 2# 5800.00 56302688.85 56302688.85 - 97.00 100.0 Self-raised
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
and 7# Casting
Machine
Equipment in
Plate Steelmaking
Plant
0 fund
The cold rolling
mill (first cold
process) silicon
steel production
line has perfect
functions
5200.00 48647411.29 48647411.29 - 93.00
100.0
0
Self-raised
fund
8#9# Coke oven
wastewater
advanced
treatment
2306.00 20335268.74 20335268.74 - 88.00
100.0
0
Self-raised
fund
Project
Budget
(in 10
thousand
yuan)
20191231 Increase Transfer to FA
Other
decrea
se
20201231
Input
of
Budget
(%)
Prog
ress
(%)
Accumulated
amount of
capitalized
interest
Including:
capitalized
interest of
current period
Capi
taliza
tion
rate
Source of
fund
Upgrading and
Transformation of
4# 5# Converter
Equipment in
Plate Steelmaking
Plant
3800.00 35253273.23 35253273.23 - 92.00
100.0
0
Self-raised
fund
Transformation of
No. 2 Casting
Machine in
Steelmaking Plant
10090.00 81419913.88 1418076.05 82837989.93 - 82.00 85.00 284551.59 155425.89 4.35
Self-raised
fund & Loan
Total 1341588827.97 1839390803.14 2076805745.02
2654
8672.
57
1077625213.
52
46824212.95 21432524.02
4. There is no impairment of construction in progress during the current period.
5. Construction materials
Items
20201231 20191231
Gross value Impairment Net Book Value Gross value Impairment
Net Book
Value
Construction
materials 2773325.92 2773325.92 13588883.39 13588883.39
Total 2773325.92 2773325.92 13588883.39 13588883.39
(12) Intangible assets
1. Details of intangible assets
Items Land use right Software Total
1.Total gross value
20191231 327028797.84 310401.55 327339199.39
Increase
Including: Purchase
Internal Research and Development
Merger
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231 327028797.84 310401.55 327339199.39
2. Total of Accumulated Amortization
20191231 55717267.98 121908.07 55839176.05
Increase 6540576.22 26794.58 6567370.80
Including: Accrued 6540576.22 26794.58 6567370.80
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231 62257844.20 148702.65 62406546.85
3. Total Impairment
20191231
Increase
Including: Accrued
Decrease
Including: Disposal
Invalid and terminated confirmation
20201231
4. Total Net value
20201231 264770953.64 161698.90 264932652.54
20191231 271311529.86 188493.48 271500023.34
2. Land use right without Certificate of Land use right at the year-end
None.
(13) Deferred tax asset and deferred tax liability
1. Undedicated deferred tax asset
Items
20201231 20191231
Deductible
temporary
differences
Deferred tax asset
Deductible
temporary
differences
Deferred tax
asset
Impairment of assets 398431973.43 99607993.35 378651125.80 94662781.44
Internal unrealized
profit 74424898.92 18606224.73 53312397.14 13328099.29
Depreciation of fixed
assets 333978859.03 83494714.76 333978859.03 83494714.76
Total 806835731.38 201708932.84 765942381.97 191485595.49
2. Unrecognized deferred tax assets
Items 20201231 20191231
Deductible temporary differences 305702137.30 428163.12
Deductible losses 54629940.42 653832187.01
Total 360332077.72 654260350.13
3. The deductible loss of unrecognized deferred tax assets due in the following period
Items 20201231 20191231 Notes
Year 2020 19216380.38
Year 2021 10945961.04 10981383.41
Year 2022 1001166.72 589299581.01
Year 2023 14114953.21 16327268.19
Year 2024 17910573.13 18007574.02
Year 2025 10657286.32
Total 54629940.42 653832187.01
(14) Other non-current assets
Items
20201231 20191231
Gross value Impairment Net book value Gross value Impairment Net book value
Prepaid long-
term assets
995840320.65 995840320.65 708502552.50 708502552.50
Total 995840320.65 995840320.65 708502552.50 708502552.50
(15) Short-term loans
1. Short-term loan disclosed by type
Items 20201231 20191231
Pledge loans
Mortgage loans
Guaranteed loans 9687731000.00 12731478000.00
Credit loans 380000000.00 420000000.00
Total 10067731000.00 13151478000.00
2.There is no short-term loans that were overdue at the end of the reporting period
(16) Notes payable
Items 20201231 20191231
Bank acceptance bill 7747043186.29 8897442732.91
Commercial acceptance bill 857106162.13 1174963839.77
Domestic letter of credit 1210000000.00 1756108104.27
Total 9814149348.42 11828514676.95
At the end of the reporting period there is no notes payable due and unpaid.
(17) Accounts payable
(1) Accounts payable disclosed by category
Items 20201231 20191231
Accounts payable for goods 5122416750.84 3481176373.75
Accounts payable for labor 18697483.74 56959052.87
Accounts payable for project and equipment 513842739.32 581909120.17
Repair expense and others 259271282.92 407468483.48
Total 5914228256.82 4527513030.27
(2) Significant accounts payable aging over one year
Items Ending balance Of which: more than 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
Other notes: The above significant accounts payable aged over one year have not yet reached the settlement
conditions.
(18) Advance from customers
1. Advance from customers disclosed by category
Items 20201231 20191231
Advance for goods 4429821526.79
Total 4429821526.79
2. There is no significant advance from customers aging over one year.
(19) Contract liabilities
1. Details of contract liabilities
Items 20201231
Advance for goods 4458671819.90
Total 4458671819.90
As of December 31 2020 the value-added tax received in advance from customers was RMB 579627336.58
(December 31 2019: RMB 509625485.38) and disclosed as other current liabilities.
(20) Employee benefits payable
1. Employee benefits payable
Items 20191231 Increase Decrease 20201231
Short-term employee
benefits 22208442.94 1813558032.80 1810017573.44 25748902.30
Post-employment benefits
- defined contribution
plans
62312.32 166603750.88 166665480.25 582.95
Termination benefits 1427419.30 43733.23 1471152.53
Other benefits due within
one year
Total 23698174.56 1980205516.91 1978154206.22 25749485.25
2. Short-term employee benefits
Items 20191231 Increase Decrease 20201231
(1) Salary bonus
allowance and subsidy 12974335.94 1389001397.17 1385384616.00 16591117.11
Items 20191231 Increase Decrease 20201231
(2) Employee welfare 137995433.01 137995433.01
(3) Social Insurance 756616.34 131390670.04 131493573.64 653712.74
Including: Medical
insurance 106650.30 102065806.41 102168773.60 3683.11
Work injury
insurance 649966.04 27066935.19 27066871.60 650029.63
Maternity
insurance 2257928.44 2257928.44
(4) Housing funds 6855601.00 119143709.00 119140115.00 6859195.00
(5) Union funds and staff
education fee 1621889.66 36026823.58 36003835.79 1644877.45
(6) Short-term
compensated absences
(7) Short-term profit -
sharing scheme
Total 22208442.94 1813558032.80 1810017573.44 25748902.30
3. Defined contribution plans
Items 20191231 Increase Decrease 20201231
Basic pension fund 60423.10 161461180.42 161521038.24 565.28
Unemployment insurance 1889.22 5142570.46 5144442.01 17.67
Total 62312.32 166603750.88 166665480.25 582.95
(21) Taxes payable
(22) Other payables
Items 20201231 20191231
Interest payables 10818986.30
Dividends payables
Items 20201231 20191231
Value-added tax 22541925.74 246921117.21
Corporate income tax 9589798.62 6250204.39
City maintenance and construction tax 4490656.56 11416274.65
House property tax 3661600.13 3445290.84
Educational surcharges 3211296.48 8146826.78
Land holding tax 1180402.66 1128141.09
Environmental tax 8398902.77 5264008.42
Others 2227498.00 2253951.42
Total 55302080.96 284825814.80
Items 20201231 20191231
Other payables 709448301.92 651882758.67
Total 709448301.92 662701744.97
1. Interests payable
Items 20201231 20191231
Loan interests 10818986.30
Total 10818986.30
2. Other payables
(1) Other payables disclosed by nature
Items 20201231 20191231
Deposit 1713563.89 1933435.69
Margin 98316454.89 86166961.89
Accounts 525775209.97 454536559.31
Others 83643073.17 109245801.78
Total 709448301.92 651882758.67
(2) No significant other payables aged over one year
(23) Non-current liabilities due within one year
Items 20201231 20191231
Long-term loans due within one year 1287630361.43 234474657.99
Bond payables due within one year 20400000.00
Long-term payables due within one year
Total 1308030361.43 234474657.99
Notes: RMB 255943331.43 of long-term due within one year is guaranteed loans and RMB 1031687030.00 is
credit loans.
(24) Other current liabilities
Items 20201231 20191231
Output tax to be transferred 579627336.58 509625485.38
Total 579627336.58 509625485.38
Please refer to “Note 3 (31) Changes in Important Accounting Policies and Accounting Estimates” for details of the
difference between the beginning balance and the ending balance of the previous year (December 31 2019).
(25) Long-term loans
Long-term loans disclosed by category
Categories 20201231 20191231
Pledged loans 622600000.00 622600000.00
Mortgage loan
Guaranteed loans 798714362.65 1106159800.73
Credit loans 2081620065.00 3120916110.00
Total 3502934427.65 4849675910.73
(26) Bonds payables
(1) Bonds payables disclosed by category
Items 20201231 20191231
Convertible Bond 5752229339.52
Total 5752229339.52
(2) Changes in Bonds payables ( Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
Items Book value
Issue
date
Term to
maturity
Issuance amount
Balance at the end
of the previous year
Current issue
Interest accrued at
face value
Premium and discount
amortization
Balance at the end of
the current year
Convertible
Bond (Bond
code:127018)
6800000000.00
Jun 29 2
020
6 years 6800000000.00 6800000000.00 20400000.00 1047770660.48 5752229339.52
Total 6800000000.00 6800000000.00 6800000000.00 20400000.00 1047770660.48 5752229339.52
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 amortized cost using the effective interest rate method.
(3) 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.
(4) Notes to other financial instruments classified as financial liabilities
None.
(27) Long-term payables
Items 20201231 20191231
Long-term payables 1114232362.74 516939408.14
Special payables
Total 1114232362.74 516939408.14
Long-term payables
Items 20201231 20191231
Financing lease payments 1114232362.74 516939408.14
Including: unrealized financing
xpenses
779232152.85 427091325.39
Total 1114232362.74 516939408.14
Notes: At the end of the reporting period the amount of unrealized financing expenses due to
finance lease payments was RMB 779232152.85.The minimum financial lease payment to be paid after the balance sheet date was RMB
1893464515.59.
The Company needs to pay interest on time and the principal is paid in one lump-sum after the
lease contract expires. The lease contracts that have not yet been executed are due for more than
3 years.
(28) Deferred income
Items 20191231 Increase Decrease 20201231 Reason
Government
subsidy 208955407.30 27056919.00 81560493.07 154451833.23
Total 208955407.30 27056919.00 81560493.07 154451833.23
Projects of government subsidies:
Items 20191231 Increase
Transfer to
current profit
and loss
Other
decrease 20201231
Related
to assets
or
income
Cold-rolled high-strength steel reconstruction project 150000000.00 50000000.00 100000000.00 Assets
7 sets of 130 tons combustion boiler flue gas desulfurization
project in power plant 14400000.00 4800000.00 9600000.00 Assets
Production line of high-grade electro-galvanized sheet for
automobile 8208000.00 8208000.00 Assets
Advanced Treatment Project of Carbon Fiber Wastewater in
Dongfeng Plant Area of Plate Coking Plant 9500000.00 9500000.00 Assets
Power plant three power plant cogeneration reform project 6000000.00 2000000.00 4000000.00 Assets
Industrial enterprise energy management center construction
demonstration project 4640000.00 2320000.00 2320000.00 Assets
Introduce special funds for overseas advanced and
applicable technologies 4000000.00 2000000.00 2000000.00 Assets
Desulfurization and Denitrification Project of Coal-fired
Boiler in High-pressure Workshop of Bengang Power Plant 4200000.00 600000.00 3600000.00 Assets
Research and development of high-strength steel for the
third generation of automobiles 2900000.00 580000.00 2320000.00 Assets
Energy saving and environmental protection project for
sintering machine in ironworks 1160000.00 1160000.00 Assets
Bengang Group Co. Ltd. Automotive Panel Engineering
Laboratory Project Construction 1000000.00 1000000.00 Assets
Automatic air quality monitoring system 105000.00 70000.00 35000.00 Assets
Liaoning Artisan Subsidy 100002.97 99981.08 21.89 Assets“Steel for high-strength pipelines under low-temperature andhigh-pressure service conditions” Project national support
121000.00 90322.26 30677.74 Assets
Items 20191231 Increase
Transfer to
current profit
and loss
Other
decrease 20201231
Related
to assets
or
income
funds
2018 Municipal Skill Master Workstation Fee 187039.34 120423.00 66616.34 Assets
Construction Project of Bengang Automotive Sheet
Engineering Laboratory 1000000.00 -1000000.00 Assets
Research and development of anti-oxidation hot forming
steel PHS1500A 250000.00 84847.73 165152.27 Assets
Construction of professional technology innovation platform
for automobile steel industry 1000000.00 800000.00 200000.00 Assets
Research on the Influence Mechanism and Control of Rare
Earth Oxide Sulfide on Automobile Steel Plasticity 184364.99 184364.99 Assets
2019 Municipal Skills Master Workstation Cost
180000.00 180000.00 Assets
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 250000.00 Assets
Supplementary Fund for Relocation of Railway Transport 1626919.00 1626919.00 Income
Liaoning Provincial Local Financial Supervision and
Administration Bureau to support the development of special
funds for enterprises to go public
5000000.00 5000000.00 Income
Total 208955407.30 27056919.00 80560493.07 -1000000.00 154451833.23
(29) Share capital
(30) 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:
As of December 31 2020 the convertible corporate bonds issued this time have not yet reached the conversion period and there is no conversion into A-share ordinary shares in this period.
Items 20191231
Increase/decrease (+ - )
20201231
Issuing of new share Bonus shares
Transferred from
reserves Others Subtotal
Capital shares 3875371532.00 3875371532.00
Items
20191231 Increase Decrease 20201231
Number
Book
value
Number Book value Number Book value Number Book value
Convertible
corporate bonds
68000000 1146290662.42 68000000 1146290662.42
Total 68000000 1146290662.42 68000000 1146290662.42
(31) Capital reserves
(32) Special Reserves
Items 20191231 Increase Decrease 20201231
Safety production cost 212687.41 54000536.58 53912811.85 300412.14
Total 212687.41 54000536.58 53912811.85 300412.14
(33) Surplus Reserves
Items 20191231 20200101 Increase Decrease 20201231
Statutory surplus
reserves 961105529.85 961105529.85 961105529.85
Total 961105529.85 961105529.85 961105529.85
(34) Undistributed Profits
Items 2020 2019
Before adjustments: undistributed profits at last year-end 2307765664.62 1945887269.82
Adjustments of the beginning distributed profits
(increase + / decease -)
After adjustments: undistributed profit at this year-
beginning 2307765664.62 1945887269.82
Add: undistributed profit belonging to parent company 384252740.78 555646971.40
Less: Statutory surplus reserves
Discretionary reserves
General risk reserves
Common shares dividend payable 193768576.60
Common shares dividend transferred to paid-in capital
Ending balance of undistributed profits 2692018405.40 2307765664.62
(35) Operating income and operating cost
Items
2020 2019
Revenue Cost Revenue Cost
Principal business 45321849577.55 43322474075.93 46805252792.90 43900514006.74
Other business 3362943108.03 3069706486.66 5936100789.38 5310900638.88
Total 48684792685.58 46392180562.59 52741353582.28 49211414645.62
Items 20191231 Increase Decrease 20201231
Capital premium 12227292378.47 12227292378.47
Other capital reserves 115917468.82 115917468.82
Total 12343209847.29 12343209847.29
Details for operating income:
Item
Principal
business
Other business
Classified by business area 45321849577.55 3362943108.03
Including：Domestic 40766384160.23 3362943108.03
Abroad 4555465417.32
Classified by the time of commodity transfer 45321849577.55 3362943108.03
Including: recognize at a certain point in time 45321849577.55 3362352384.22
recognize over a certain period of time 590723.81
Total 45321849577.55 3362943108.03
(36) Tax and surcharges
Items 2020 2019
City maintenance and construction tax 39002807.95 74291089.29
Educational surcharge 28155477.26 53346630.36
Housing property tax 79753764.80 77359590.55
Land use right tax 13090099.93 13076581.16
Environmental tax 28417193.46 22681208.92
Stamp duty 26523801.64 29816392.95
Others 928675.06 1008586.80
Total 215871820.10 271580080.03
(37) Selling and distribution expenses
Items 2020 2019
Freight 912729271.74
Port surcharges 70973850.23
Import and export agency fee 55316442.53 63097328.89
Salary and benefits 25955134.20 25965599.95
Package fee 6179183.22 7564585.54
Others 9828520.26 16358267.35
Total 97279280.21 1096688903.70
(38) General and administrative expenses
Items 2020 2019
Salary and benefits 368149507.51 374106639.18
Repair expense 216309807.28 230168663.91
Land use right fee 65600418.40 59957197.92
Depreciation 39060982.28 44362834.97
Heating fee 25929633.73 28855893.31
Water resources fee 18956412.81 27515155.10
Sewage charges 13186781.11 11345616.35
Others 45632751.69 55633840.82
Total 792826294.81 831945841.56
(39) Research and development expenses
Items 2020 2019
Depreciation materials and compensation etc. 37989623.28 30780463.74
Total 37989623.28 30780463.74
(40) Financial expenses
Items 2020 2019
Interest expenditure 1028857436.14 948799627.90
Less: Interest income 378523984.03 333750262.79
Exchange loss -307919937.19 44724851.35
Others 22361640.70 22068472.77
Total 364775155.62 681842689.23
(41) Other income
Items 2020 2019
Government subsidy 81193591.56 83914522.47
Others 111590.36 2084.65
Total 81305181.92 83916607.12
(42) Income on investment
Items 2020 2019
Income on long-term equity investment by equity method 374119.86 452582.71
Income on disposal of financial assets holding for trading 13500000.00
Dividend income obtained during the holding period of other
equity instrument investments 77242.47
Income on bank short-term financial products 605795.19
Total 13951362.33 1058377.90
(43) Credit impairment losses
Items 2020 2019
Loss from bad debts of account receivable 302302638.01 4618663.91
Loss from impairment of account receivable
financing
Loss from bad debts of other receivables 1717123.74 1923236.71
Total 304019761.75 6541900.62
Note: Loss is shown as positive figures
(44) Assets impairment loss
Items 2020 2019
Impairment of inventory and contract
performance costs
6571234.79 43256982.72
Impairment of fixed assets 60614634.58
Total 67185869.37 43256982.72
Note: Loss is shown as positive figures
(45) Asset disposal income
Items 2020 2019
The amount
recognized in non-
recurring profit
Disposal gains or losses
arising from disposal of
fixed assets not held for sale
325651.61 3441646.67 325651.61
Items 2020 2019
The amount
recognized in non-
recurring profit
Total 325651.61 3441646.67 325651.61
(46) Non-operating income
Items 2020 2019
The amount
recognized in non-
recurring profit
Non-current assets scrapped gains 2703102.88 9476065.29 2703102.88
Debt restructuring gain 32800.02 50640.00 32800.02
Others 1592660.62 779757.58 1592660.62
Total 4328563.52 10306462.87 4328563.52
(47) Non-operating expense
Items 2020 2019
The amount
recognized in non-
recurring profit
Donations
Non-current assets scrapped loss 95724280.44 90209742.22 95724280.44
Others
Total 95724280.44 90209742.22 95724280.44
(48) Income tax expenses
1. Income tax expenses
Items 2020 2019
Income tax payable for the current year 35594567.91 18987986.70
Adjustment of deferred income tax -10223337.35 -33048.28
Total 25371230.56 18954938.42
2. Accounting profit and income tax expense adjustment process
Items 2020
Total profit 416850796.79
Income tax expense calculate according to the official or applicable tax rate 104212699.20
Effect of different tax rates applied by subsidiaries
Effect of adjustment of the income tax expense of prior period 2107736.22
Items 2020
Effect of non-taxable income -93529.97
Effect of undeductible costs expenses or losses 122123.16
Effect of use of deductible losses of unrecognized deferred tax asset of prior
period -158710195.23
Effect of deductible temporary differences or deductible losses of unrecognized
deferred tax asset of current period 77732397.18
Changes in the balance of deferred income tax assets and liabilities at the
beginning of the period due to the additional deductible expenses and tax rate
adjustments required by the tax law
Income tax expenses 25371230.56
(49) Earnings 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 2020 2019
Consolidated net profit attributable to
ordinary shareholders of parent company
384252740.78 555646971.40
The weighted average number of common
shares issued by the company
3875371532.00 3875371532.00
Basic earnings per share 0.099 0.143
Including: basic earnings per share for
continuing operations
0.099 0.143
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.
(50) Notes of statement of cash flows
1. Cash received related to other operating activities
Items 2020 2019
Withdraw of current accounts advance for another 415131996.05 80209527.36
Interest income 365343047.49 289867473.89
Special subsidy income 27624696.63 3378441.11
Non-operating income 673106.88 9799.92
Others 8181857.38 3620413.94
Total 816954704.43 377085656.22
2. Cash paid related to other operating activities
Items 2020 2019
Current accounts advance for another 347552655.29 67238789.58
Sales expenses 72862184.48 139977333.30
Administrative expenses 44664338.51 77588717.78
Bank charges 20710711.34 14562642.52
Others 1489830.36 23593941.76
Total 487279719.98 322961424.94
3. Cash received related to other financing activities
Items 2020 2019
Margin for bill letter of guarantee and letter of credit 1076807422.35 1571269971.97
Proceeds from negotiation 253068892.21
Total 1329876314.56 1571269971.97
4. Cash paid related to other financing activities
Items 2020 2019
Margin for bill letter of guarantee and letter of credit 34424434.31 1612133.00
Convertible bond issuance costs 41084701.18
Others 8731273.67
Total 75509135.49 10343406.67
(51) Supplementary details of statement of cash flows
1. Supplementary details for statement of cash flows
Items 2020 2019
1. A reconciliation of net profit to cash flows from
operating activities:
Net profit 391479566.23 556860488.98
Add: Credit impairment loss 304019761.75 6541900.62
Impairment of assets 67185869.37 43256982.72
Depreciation of fixed assets 2191070638.31 2432266554.80
Amortization of intangible assets 6567370.80 6562417.70
Amortization of long-term deferred expenses
Losses proceeds from disposal of fixed assets intangible
assets and other long-term assets (Earnings marked“－”) -325651.61 -3441646.67
Scrapped losses from fixed assets (Earnings
marked“－”) 93021177.56
80733676.93
Loss from changes in fair value (Earnings marked“－”)
Financial expenses (Earnings marked“－”) 720937498.95 1009666817.96
Investment losses (Earnings marked“－”) -13951362.33 -1058377.90
Deferred tax assets reduction (Addition marked“－”) -10223337.35 -33048.28
Deferred tax liabilities increased (Reduction marked“－”)
Reduction of inventory (Addition marked“－”) -1302981909.11 2992064351.09
Operating receivable items reduction (Addition
marked“－”) -2847086786.29 1617190398.59
Operating payable items increase (Less marked"－") -1638713049.57 -1762786475.38
Others
Net cash flows generated from operating activities -2039000213.29 6977824041.16
2. Payments of investing and financing activities not
involving cash:
Liabilities transferred to capital
Convertible corporate bonds due within one year
Fixed assets financed by leasing
3. The net increase in cash and cash equivalents:
Ending balance of cash 9229417595.12 13441414988.58
Less: Beginning balance of cash 13441414988.58 11752548621.97
Add: Ending balance of cash equivalents
Less: Opening balance of cash equivalents
The net increase in cash and cash equivalents -4211997393.46 1688866366.61
2. The structure of cash and cash equivalents
Items 20201231 20191231
1. Cash 9229417595.12 13441414988.58
Including: Cash on hand 3026.68 5588.98
Bank deposits available on demand 9229414568.44 13441409399.60
Items 20201231 20191231
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 9229417595.12 13441414988.58
Including: Cash and cash equivalents limited to use by the
parent company of other subsidiary in the group
(52) Assets of which ownership or right to use are restricted
Items Ending balance Reason
Cash at bank and on hand 3897249320.14 Deposit for notes and letter of credit
Receivables financing 887473044.29 Pledged for acceptance bill
Other equity instrument
investments
1037735849.00 Pledged for loans
Fixed assets 94790118.09 Mortgage for fund borrowing
Intangible assets 37116386.66 Mortgage for fund borrowing
Total 5954364718.18
(53) Foreign currency monetary items
1． Foreign currency monetary items
Items Ending balance in foreign currency
Exchange rate at
the year-end
Ending balance
translated to RMB
Cash at bank and on hand 470322450.33
Including: USD 71983473.35 6.5249 469684965.31
EUR 50753.26 8.0250 407294.97
HKD 273514.80 0.8416 230190.05
Short-term loans 1239731000.00
Including: USD 190000000.00 6.5249 1239731000.00
Non-current liabilities due
within one year 108050361.43
Including: USD 4700000.00 6.5249 30667030.00
EUR 9460158.74 8.0250 75917773.89
JPY 23176000.00 0.0632 1465557.54
Items Ending balance in foreign currency
Exchange rate at
the year-end
Ending balance
translated to RMB
Long-term loans 388134427.65
Including: USD 11850000.00 6.5249 77320065.00
EUR 37635016.95 8.0250 302021017.45
JPY 139056000.00 0.0632 8793345.20
2. The Company has no overseas operating entities.
(54) Government subsidies
1. Government subsidies related to assets
Item Amount
Items listed on
the balance
sheet
The amount included in the current profit or loss or offsetting the
loss of related costs
Items included in the current
profit or loss or offsetting the
loss of related costs 2020 2019
Cold-rolled high-strength steel reconstruction
project
250000000.00
Deferred
income
50000000.00 50000000.00 Other income
Production line of high-grade electro-
galvanized sheet for automobile
41040000.00
Deferred
income
8208000.00 8208000.00 Other income
7 130t Boilers Flue Gas Desulfurization
Renovation Project of Power Plant
24000000.00
Deferred
income
4800000.00 4800000.00 Other income
Waste heat utilization project and
desulfurization transformation project of
sintering machine in ironworks
21020000.00
Deferred
income
4204000.00 Other income
Environmental Pollution Control Project 26170000.00
Deferred
income
3620000.00 Other income
Introduce special funds for overseas advanced 14420000.00 Deferred 2000000.00 2884000.00 Other income
Item Amount
Items listed on
the balance
sheet
The amount included in the current profit or loss or offsetting the
loss of related costs
Items included in the current
profit or loss or offsetting the
loss of related costs 2020 2019
and applicable technologies income
Industrial enterprise energy management
center construction demonstration project
11600000.00
Deferred
income
2320000.00 2320000.00 Other income
Power plant three power plant cogeneration
reform project
10000000.00
Deferred
income
2000000.00 2000000.00 Other income
MES Project Special Fund 8600000.00
Deferred
income
1720000.00 Other income
Special funds for environmental protection 5800000.00
Deferred
income
1160000.00 Other income
Energy saving and environmental protection
project for sintering machine in ironworks
5800000.00
Deferred
income
1160000.00 1160000.00 Other income
Desulfurization and Denitrification Project of
Coal-fired Boiler in High-pressure Workshop
of Bengang Power Plant
6000000.00
Deferred
income
600000.00 600000.00 Other income
Environmental governance projects and 2400000.00 Deferred 340000.00 Other income
Item Amount
Items listed on
the balance
sheet
The amount included in the current profit or loss or offsetting the
loss of related costs
Items included in the current
profit or loss or offsetting the
loss of related costs 2020 2019
comprehensive prevention and control projects
for regional river basin environmental
protection
income
Iron Smelter 360 Sintering Machine Flue Gas
Desulfurization Project
1000000.00
Deferred
income
200000.00 Other income
Research on the Influence Mechanism and
Control of Rare Earth Oxide Sulfide on
Automobile Steel Plasticity
357520.00
Deferred
income
173155.01 Other income
Automatic air quality monitoring system 350000.00
Deferred
income
70000.00 70000.00 Other income“Steel for high-strength pipelines under low-temperature and high-pressure serviceconditions” Project national support funds
188000.00
Deferred
income
90322.26 67000.00 Other income
2018 Municipal Skill Master Workstation Fee 240000.00
Deferred
income
120423.00 52960.66 Other income
Item Amount
Items listed on
the balance
sheet
The amount included in the current profit or loss or offsetting the
loss of related costs
Items included in the current
profit or loss or offsetting the
loss of related costs 2020 2019
Research and development of the third-
generation high-strength steel for automobiles
2900000.00
Deferred
income
580000.00 Other income
Bengang Group Co. Ltd. Automotive Sheet
Engineering Laboratory Engineering
Construction Fund
1000000.00
Deferred
income
1000000.00 Other income
Research and development of anti-oxidation
hot forming steel PHS1500A
250000.00
Deferred
income
84847.73 Other income
Construction of a professional technology
innovation platform for the automotive steel
industry
1000000.00
Deferred
income
800000.00 Other income
Liaoning craftsman subsidy 100002.97
Deferred
income
99981.08 Other income
2. Government subsidies related to income
Items Amount
The amount included in the current profit or loss or
offsetting the loss of related costs
Items included in the
current profit or loss
or offsetting the loss
of related costs
2020 2019
Service support 240000.00 240000.00 Other income
Technical Support 80000.00 80000.00 Other income
Education-integrated
enterprises reduce education
fees and local education fees
15406.80 15406.80 Other income
Supplementary Fund for
Relocation of Railway
Transport
1626919.00 1626919.00 Other income
Liaoning Provincial Local
Financial Supervision and
Administration Bureau to
support the development of
special funds for enterprises to
go public
5000000.00 5000000.00 Other income
Job stabilization subsidy 19151.07 19151.07 Other income
Items Amount
The amount included in the current profit or loss or
offsetting the loss of related costs
Items included in the
current profit or loss
or offsetting the loss
of related costs
2020 2019
Subsidy for training by work 44400.00 44400.00 Other income
Tax refund 569547.42 569547.42 Other income
3. Return of government subsidies during the reporting period
None
6. Changes in the scope of consolidation
There is no changes to the scope of consolidation during the current period.
7. Equity in other entities
(1) Equity in subsidiaries
1. Constitution of enterprise group
Name of the subsidiaries
Principal
place of
business
Registered
address
Notes of
business
Shareholding ratio
Acquiring method
Direct Indirect
Xiamen Bengang Steel & Iron Sales
Co. Ltd. Xiamen Xiamen Sales 100.00
Business combination
under common control
Wuxi Bengang Steel & Iron Sales Co.Ltd. Wuxi Wuxi Sales 100.00
Business combination
under common control
Tianjin Bengang Steel & Iron Trading
Co. Ltd. Tianjin Tianjin Sales 100.00
Business combination
under common control
Nanjing Bengang Materials Sales Co.Ltd. Nanjing Nanjing Sales 100.00
Business combination
under common control
Yantai Bengang Steel & Iron Sales
Co. Ltd. Yantai Yantai Sales 100.00
Business combination
under common control
Harbin Bengang Economic and
Trading Co. Ltd. Harbin Harbin Sales 100.00
Business combination
under common control
Changchun Bengang Steel & Iron
Sales Co. Ltd. Changchun Changchun Sales 100.00
Business combination
under common control
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
Manufactu
ring 100.00 Establishment
Dalian Benruitong Automobile
Material Technology Co. Ltd. Dalian Dalian
Manufactu
ring 65.00 Establishment
Bengang POSCO Cold-rolled Sheet
Co. Ltd. Benxi Benxi
Manufactu
ring 75.00
Business combination
under common control
Benxi Bengang Steel Sales Co. Ltd Benxi Benxi Sales 100.00 Establishment
Shenyang Bengang Metallurgical
Science and Technology Co. Ltd. Shenyang Shenyang Sales 100.00 Establishment
Chongqing Liaoben Steel & Iron
Trading Co. Ltd. Chongqing Chongqing Sales 100.00 Establishment
Bengang Baojin (Shenyang) auto new
material technology Co. Ltd. Shenyang Shenyang
Manufactu
ring 85.00
Business combination
under common control
2. Significant but not wholly-owned subsidiaries
Name of the subsidiaries
Proportion of
non-
controlling
interests (%)
Profits and
losses
attributing to
non-controlling
shareholders
Dividend
declared to
distribute to
non-controlling
shareholders
Ending
balance of
non-
controlling
interests
Bengang POSCO Cold-
rolled Sheet Co. Ltd. 25.00 10501387.54 506134000.89
3. Financial information of significant but not wholly-owned subsidiaries
Name of the
subsidiaries
20201231
Current assets Non-current assets Total assets
Current
liabilities
Non-
current
liabilitie
s
Total liabilities
Bengang POSCO
Cold-rolled Sheet
Co. Ltd.
3799519376.39 1384600108.47 5184119484.86 3159583481.30 3159583481.30
20191231
Name of the
subsidiaries
Current
assets
Non-current
assets Total assets
Current
liabilities
Non-
current
liabilities
Total liabilities
Bengang
POSCO Cold-
rolled Sheet Co.Ltd.
4305831723.98 1509417518.88 5815249242.86 3832718789.47 3832718789.47
Name of the subsidiaries
2020
Operating
income Net profit
Total
comprehensive
income
Net cash flows
from operating
activities
Bengang POSCO Cold-rolled
Sheet Co. Ltd.
7327060880.66 42005550.17 42005550.17 301022342.34
Name of the subsidiaries
2019
Operating
income Net profit
Total
comprehensiv
e income
Net cash flows from
operating activities
Bengang POSCO Cold-rolled
Sheet Co. Ltd.
7379865156.54 19378253.07 19378253.07 -517602292.64
4. Significant restrictions on the use of enterprise group assets and the settlement of enterprise group debts
None.
5. Financial or other support provided to structured entities included in the scope of consolidated financial
statements
None.
(2) The shareholder's equity in the subsidiary has changed and still control the subsidiary's transactions
The Company does not exist such matters.
(3) Equity in joint venture or associates
1. 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
20201231/2020 20191231/2019
Joint ventures:
Total book value of investment: 2742064.73 2642998.70
The total amount of the following items
calculated according to the shareholding
ratio
—Net profit 374119.86 452582.71
—Other comprehensive income
—Total comprehensive income 374119.86 452582.71
3. Explanation on the significant limitation of the ability of the joint venture or associate to transfer funds to
the company
The Company does not exist such matters.
4. Excess losses incurred by joint ventures or associates
The Company does not exist such matters.
5. Unconfirmed commitments related to joint venture investment
The Company does not exist such matters.
6. Contingent liabilities related to joint venture or associate investment
The Company does not exist such matters.
(4) Important joint operations
The Company does not exist such matters.
(5) Equity in structured entities that not included in the scope of consolidated financial statements
The Company does not exist such matters.
8. 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 assess the credit risk of new customers including
external credit ratings and bank credit certificates in certain cases (when this information is available). The
company has set a credit limit for each customer which is the maximum amount that does not require additional
approval.The Company ensures that the company's overall credit risk is within a controllable range through regular
monitoring of existing customers' credit ratings and periodic review of aging analysis of accounts receivable.In addition the Company strictly approves the line of credit and only sells on credit to important customers for
newly-developed products. In the monitoring of credit risk 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 Euro
Hongkong dollars and Japanese Yen. The ending balance of the assets and liabilities after converted in RMB is
shown as below:
(In 10 Thousand Yuan)
Items
Ending balance
USD Euro HKD Japanese Yen Total
Assets 46968.50 40.73 23.02 47032.25
Liabilities 134771.81 37793.88 1025.89 173591.58
Items
Beginning balance
USD Euro HKD Japanese Yen Total
Assets 8990.85 1109.84 22.90 10123.59
Liabilities 147372.23 45006.35 1188.28 193566.86
On December 31 2020 with all other variables held constant if the relevant currency appreciates or depreciates
against RMB by 5% the company will increase or decrease the net profit of RMB 47459800 (on December
31 2018: RMB 91721600). Management believes that 5% reasonably reflects the reasonable range of possible
currency-to-renminbi changes 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)
Items
20201231
Within 1 year 1-2 years 2-5 years Over 5 years Total
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
(In 10 Thousand Yuan)
Items
20191231
Within 1 year 1-2 years 2-5 years Over 5 years Total
Trade and other payables 1700791.05 51693.94 1752484.99
Loans and interests 1339677.16 328523.94 133765.16 22678.49 1824644.75
Total 3040468.21 328523.94 133765.16 74372.43 3577129.74
9. 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
Item
Fair value at the end of the period
Fair value
measuremen
t in the first
level
Fair value
measuremen
t in the
second level
Fair value measurement
in the third level
Total
1. Continuous fair
Item
Fair value at the end of the period
Fair value
measuremen
t in the first
level
Fair value
measuremen
t in the
second level
Fair value measurement
in the third level
Total
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
(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
Item
Fair value at the end of the period
Fair value
measuremen
t in the first
level
Fair value
measuremen
t in the
second level
Fair value measurement
in the third level
Total
◆ Accounts
receivable
financing
4189977871.92 4189977871.92
◆ Other debt
investments
◆ Investment in
other equity
instruments
1042024829.00 1042024829.00
◆ 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
Item
Fair value at the end of the period
Fair value
measuremen
t in the first
level
Fair value
measuremen
t in the
second level
Fair value measurement
in the third level
Total
value and its
changes are included
in the current profit
and loss
(a) Investment in
debt instruments
(b) Others
Total assets
continuously
measured at fair
value
5232002700.92 5232002700.92
◆Financial
liabilities held for
trading
Including:
Issued
tradin
g
bonds
Derivative financial
liabilities
Others
◆Designated as a
financial liability
measured at fair
value and its
Item
Fair value at the end of the period
Fair value
measuremen
t in the first
level
Fair value
measuremen
t in the
second level
Fair value measurement
in the third level
Total
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
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
No
10. Related party transactions
(1) Details of parent company
Name of parent company Place of Registry
Notes of
Business
Registered
capital
Share
proportion (%)
Voting
rights (%)
Benxi Steel & Iron
(Group) Co. Ltd.
Benxi
Liaoning Manufacturing 62.92 62.18 62.18
Note:
The ultimate controlling party of the Company is the State-owned Assets Supervision and Administration
Commission of the People's Government 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 "Beiying Steel")
Belongs to Bengang Group Co. Ltd.
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
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 Bengxi Steel and Iron (Group) Co. Ltd.
Guangzhou Free Trade Zone Bengang Sales
Co. Ltd.
Belongs to Bengxi Steel and Iron (Group) Co. Ltd.
Benxi Steel & Iron (Group) General Hospital Belongs to Bengxi Steel and Iron (Group) Co. Ltd.
Liaoning Bengang Steel & Iron Trading Co.Ltd.Same parent company
Liaoning Hengtai Heavy Machinery Co. Ltd. Same parent company
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.Same parent company
Liaoning Metallurgy Technician College Same parent company
Liaoning Metallurgy Vocational Technical
College
Same parent company
Suzhou Bengang Industrial Co. Ltd. Shareholding company
Benxi Steel & Iron (Group) Medical Services
Department;
Associate of parent company
Bengang Group Finance Co. Ltd. Belongs to Bengang Group Co. Ltd.
Liaoning Hengyi Financial Leasing Co. Ltd. Belongs to Bengang Group Co. Ltd.
(5) Related Party Transactions
1. Related party transactions of purchasing goods and services
Company as the purchaser
(In 10 Thousand Yuan)
Name The content of related party transactions 2020 2019
Benxi Steel & Iron (Group) Co. Ltd. Repair expense 30206.47 27611.81
Benxi Steel & Iron (Group) Co. Ltd.
Raw material and
supplementary material 2121.13
Bengang Cold-rolled Stainless Steel Dandong Co. Ltd. Products 22.39 171.87
Benxi Steel & Iron (Group) Mining Co. Ltd. Labor cost 3213.23 864.66
Benxi Steel & Iron (Group) Mining Co. Ltd.
Raw material and
supplementary material 514193.50 466510.90
Benxi Steel & Iron (Group) Mining Co. Ltd. Freight 1227.47 1318.16
Benxi Steel & Iron (Group) Metallurgy Residues Co.
Ltd.Raw material and
supplementary material 34303.84 27932.17
Benxi Steel & Iron (Group) Steel & Iron Process and
Logistics Co. Ltd.Processing fee
63.22 127.67
Benxi Steel & Iron (Group) Real-estate Development
Co. Ltd.
Raw materials
3648.95
Benxi Steel & Iron (Group) Machinery Manufacture
Co. Ltd.
Spare parts 5984.04 11131.68
Benxi Steel & Iron (Group) Machinery Manufacture
Co. Ltd.
Repair services 2773.62 2922.74
Benxi Steel & Iron (Group) Construction Co. Ltd. Spare parts 1624.97 787.21
Benxi Steel & Iron (Group) Construction Co. Ltd. Project fee 20274.33 18016.18
Benxi Steel & Iron (Group) Construction Co. Ltd. Repair services 18022.98 21561.78
Benxi Steel & Iron (Group) Construction Co. Ltd.
Raw material and
supplementary material
1241.22 236.10
Benxi Steel & Iron (Group) Construction Co. Ltd. Freight 51.39 502.47
Benxi Steel & Iron (Group) Industrial Development Co. Raw material and 21095.06 19118.00
Ltd. supplementary material
Benxi Steel & Iron (Group) Industrial Development Co.
Ltd.Repair services 1537.66 2157.65
Benxi Steel & Iron (Group) Industrial Development Co.
Ltd.
Freight 446.80
Benxi Steel & Iron (Group) Industrial Development Co.
Ltd.Project fee 107.01 235.00
Benxi Steel & Iron (Group) Construction and Repairing
Co. Ltd.
Raw material &
supplementary
materials & spare parts
228.18 256.76
Benxi Steel & Iron (Group) Construction and Repairing
Co. Ltd.
Project fee 1911.38 4998.34
Benxi Steel & Iron (Group) Construction and Repairing
Co. Ltd.
Repair expense 17475.94 19506.98
Bengang Electronics and Gas Co. Ltd.
Raw material and
supplementary material
13856.30 13763.00
Bengang Electronics and Gas Co. Ltd. Repair services 3063.31 1879.36
Benxi High-tech Drilling Tools Manufacture Co. Ltd. Spare parts 39.00 26.63
Benxi New Career Development Co. Ltd. Repair services 487.81
Benxi New Career Development Co. Ltd.
Raw material and
supplementary material
and food
1028.90 907.16
Liaoning Metallurgy Technician College Spare parts 933.26 1202.01
Liaoning Metallurgy Vocational Technical College Project fee
Liaoning Metallurgy Vocational Technical College Repair services 648.24 580.5
Bengang Group International Economic and Trading
Co. Ltd.
Raw material and
supplementary material
508961.39
Bengang Group International Economic and Trading
Co. Ltd.
Agency fee 5531.64 6309.73
Bengang Group International Economic and Trading
Co. Ltd.
Port surcharges 9279.98 7099.20
Benxi Steel & Iron (Group) Information and Automatic
Tech Co. Ltd.Spare parts 850.35 785.28
Benxi Steel & Iron (Group) Information and Automatic
Tech Co. Ltd.Project fee 1121.38 1942.52
Benxi Steel & Iron (Group) Information and Automatic
Tech Co. Ltd.Repair services 1732.50 3483.24
Benxi Steel & Iron (Group) Thermal Power
Development Co. Ltd.
Heating costs 119.00 115.25
Company as the seller
(In 10 Thousand Yuan)
Name The content of related party transactions 2020 2019
Bengang Electronics and Gas Co. Ltd. Energy & Power 72.4 76.74
Benxi Beiying Steel & Iron (Group) Co. Ltd.
Raw material &
supplementary materials
& spare parts
138409.84 500154.15
Benxi Beiying Steel & Iron (Group) Co. Ltd. Products 2150.96 1286.59
Benxi Beiying Steel & Iron (Group) Co. Ltd. Energy & Power 22602.26 21662.54
Benxi Steel & Iron (Group) Real-estate
Development Co. Ltd.
Energy & Power 8.65 10.44
Benxi Steel & Iron (Group) Steel & Iron
Process and Logistics Co. Ltd.
Energy & Power 25.88 36.79
Benxi Steel & Iron (Group) Steel & Iron
Process and Logistics Co. Ltd.Products 89.25
Benxi Steel & Iron (Group) Machinery Products 1898.85 980.32
Benxi Steel & Iron (Group) Thermal Power
Development Co. Ltd.
Raw material and
supplementary material
71.04 70.93
Benxi Steel & Iron (Group) Designing Institute Design fees 125.98 1323.40
Benxi Beiying Steel & Iron (Group) Co. Ltd.
Raw material and
supplementary material
492390.02
1154378.5
3
Benxi Beiying Steel & Iron (Group) Co. Ltd. Energy & Power 46589.86 54489.91
Benxi Beiying Steel & Iron (Group) Co. Ltd. Freight 407.53 571.46
Benxi Beiying Steel & Iron (Group) Co. Ltd. Labor cost 7190.62 8663.23
Benxi Beiying Steel & Iron (Group) Co. Ltd. Spare parts 1710.81 1308.45
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.Raw material and spare
parts
8336.02 8758.96
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.Repair services 661.14
Liaoning Hengtai Heavy Machinery Co. Ltd.Raw material and spare
parts
138.59 231.09
Liaoning Hengtai Heavy Machinery Co. Ltd. Repair and labor cost 716.99 1930.35
Bengang Group Co. Ltd.
Property management
fee
Bengang Group Co. Ltd. Labor cost 18876.38 15507.90
Name The content of related party transactions 2020 2019
Manufacture Co. Ltd.
Benxi Steel & Iron (Group) Machinery
Manufacture Co. Ltd.
Energy & Power 2088.72 2137.30
Benxi Steel & Iron (Group) Machinery
Manufacture Co. Ltd.Raw material &
supplementary materials
& spare parts
338.56 641.3
Benxi Steel & Iron (Group) Construction
Co. Ltd.
Energy & Power 699.16 593.8
Benxi Steel & Iron (Group) Construction
Co. Ltd.
Raw material &
supplementary materials
& spare parts
6452.06 5781.00
Benxi Steel & Iron (Group) Mining Co. Ltd. Energy & Power 62020.89 64747.81
Benxi Steel & Iron (Group) Mining Co. Ltd.
Raw material &
supplementary materials
& spare parts
9678.23 10078.34
Benxi Steel & Iron (Group) Mining Co. Ltd. Freight revenue 743.9 1031.79
Benxi Steel & Iron (Group) Mining Co. Ltd. Products 1107.48 502.82
Benxi Steel & Iron (Group) Thermal Power
Development Co. Ltd.
Energy & Power 2995.62 2639.73
Benxi Steel & Iron (Group) Thermal Power
Development Co. Ltd.
Raw material &
supplementary materials
& spare parts
1750.62 2749.21
Benxi Steel & Iron (Group) Thermal Power
Development Co. Ltd.
Freight revenue
Benxi Steel & Iron (Group) Industrial
Development Co. Ltd.
Energy & Power 824.47 827.49
Benxi Steel & Iron (Group) Industrial
Development Co. Ltd.
Products 3.97
Benxi Steel & Iron (Group) Industrial
Development Co. Ltd.
Raw material &
supplementary materials
& spare parts
1914.44 2295.96
Benxi Steel & Iron (Group) Information and
Automatic Tech Co. Ltd.
Energy & Power 14.64 15.87
Benxi Steel & Iron (Group) Construction and
Repairing Co. Ltd.
Energy & Power 125.15 133.05
Benxi Steel & Iron (Group) Construction and
Repairing Co. Ltd.Raw material &
supplementary materials
& spare parts
368.03 93.84
Name The content of related party transactions 2020 2019
Benxi Steel & Iron (Group) Metallurgy
Residues Co. Ltd.
Energy & Power 659.84 532.33
Benxi Steel & Iron (Group) Metallurgy
Residues Co. Ltd.Raw material &
supplementary materials
& spare parts
26839.91 25018.15
Benxi Steel & Iron (Group) Metallurgy
Residues Co. Ltd.
Freight revenue
Benxi Steel & Iron (Group) Metallurgy
Residues Co. Ltd.Products 423.53
Benxi Steel & Iron (Group) Co. Ltd. Energy & Power 205.47 232.43
Benxi Steel & Iron (Group) Co. Ltd.
Raw material &
supplementary materials
& spare parts
1013.53 796.46
Benxi New Career Development Co. Ltd. Energy & Power 38.37 40.25
Dalian Boluole Steel Tube Co. Ltd. Products 1136.33 404.87
Liaoning Bengang Steel & Iron Trading Co.Ltd.Products
Benxi Steel & Iron (Group) General Hospital Energy & Power 5.09
Benxi Steel & Iron (Group) Zhengtai
Construction Materials Co. Ltd.
Energy & Power 2.16 5.22
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.
Energy & Power
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.Raw material &
supplementary materials
& spare parts
731.86 2444.76
Liaoning Hengtong Metallurgical Equipment
Manufacture Co. Ltd.Products 908.89 352.89
Bengang Cold-rolled Stainless Steel
Dandong Co. Ltd.
Raw material &
supplementary materials
& spare parts
46.59
Bengang Cold-rolled Stainless Steel
Dandong Co. Ltd.
Products 2716.09 111.16
Suzhou Bengang Industrial Co. Ltd. Products 49983.82 41269.54
Bengang Group Finance Co. Ltd. Energy & Power 1.3 1.39
Bengang Group Co. Ltd. Energy & Power 7.33 2.78
Bengang Group Co. Ltd.
Raw material &
supplementary materials
1539.32
Name The content of related party transactions 2020 2019
& spare parts
Liaoning Hengtai Heavy Machinery Co.Ltd.products 29.54
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
Operating Lease
Company as the lessor
Currency unit: Yuan
Lessee Lease capital category Lease income of 2020 Lease income of 2019
Benxi Steel & Iron
(Group) Steel & Iron
Process and Logistics
Co. Ltd.
Warehouse and
ancillary facilities
500000.00 500000.00
Benxi Steel & Iron
(Group) Machinery
Manufacture Co. Ltd.Plants and ancillary
facilities
122500.03
Company as the lessee
Currency unit: Yuan
Lessor Lease capital category
Lease
charges of
2020
Lease charges of
2019
Benxi Steel & Iron
(Group) Co. Ltd
Land use right
7669068.17 sq.m.
Land use right
42920.00 sq.m
57383355.31 54984486.36
Benxi Steel & Iron
(Group) Co. Ltd
2300 Hot rolling product line
related real estate 16711424.34 167859103.82
Benxi Beiying Steel &
Iron (Group) Co. Ltd.
1780 Hot rolling product line
related real estate 15578677.65 83686698.60
Bengang Group Co.
Ltd.Land use right
728282.30 sq.m.
9945423.08 4972711.56
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed
between the Company and Bengang Steel (Group)on April 7 1997 December 30 2005 and subsequent the
Company leases land from Benxi Steel (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 Benxi Steel (Group) 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
(Group) respectively leased and used a total of 8 pieces of land from Bengang Group and Bengang Group
Company with leased areas of 42920.00 square meters and 728282.30 square meters. The lease term is 20
years the rental price is 1.138 yuan per square meter per month.Notes of Financial Leasing
During the reporting period the Company purchased equipment from Liaoning Hengyi Financial Leasing Co.
Ltd. in the form of financial leasing. The annual purchase amount (including tax) in 2020 was RMB
933008875.20 and interest and handling fees were RMB 43807781.54.
3. Information of Guarantee among related parties
Company as the warrantee
Warrantor Amount of guarantee
Starting date
of Guarantee
Ending date of
Guarantee
Has the guarantee
been fulfilled
Bengang Group
Co. Ltd.
RMB 15000000000.00 2020/8/13 2022/8/12 No
Bengang Group
Co. Ltd.
RMB 500000000.00 2020/6/19 2021/6/18 No
Bengang Group
Co. Ltd.
RMB 310000000.00 2020/5/26 2021/5/25 No
Bengang Group RMB 670000000.00 2020/5/26 2021/5/25 No
Co. Ltd.
Bengang Group
Co. Ltd.
RMB 400000000.00 2020/10/20 2021/10/19 No
Bengang Group
Co. Ltd.
RMB 1280000000.00 2020/11/5 2021/11/4 No
Bengang Group
Co. Ltd.
RMB 400000000.00 2020/10/28 2021/10/27 No
Bengang Group
Co. Ltd.
RMB 1800000000.00 2020/12/1 2021/12/1 No
Bengang Group
Co. Ltd.
RMB 6024000000.00 2020/3/17 2021/3/17 No
Benxi Steel & Iron
(Group) Co. Ltd.
RMB 5024000000.00 2020/11/4 2021/11/4 No
Bengang Steel
Plates Co. Ltd
RMB 250000.00 2020/5/25 2021/5/25 No
Bengang Steel
Plates Co. Ltd
RMB 490000.00 2020/8/20 2021/8/20 No
Bengang Steel
Plates Co. Ltd
RMB 200000000.00 2020/12/24 2021/12/24 No
Bengang Group
Co. Ltd. and Benxi
Steel & Iron
(Group) Co. Ltd.
RMB 70000000.00 2016/3/30 2025/3/20 No
Bengang Group
Co. Ltd. and Benxi
Steel & Iron
(Group) Co. Ltd.
RMB 430000000.00 2017/2/27 2025/2/20 No
Bengang Group
Co. Ltd.
RMB 622600000.00 2017/12/15 2024/8/20 No
Bengang Group
Co. Ltd.
RMB 87280000.00 2018/3/26 2024/6/21 No
Bengang Group
Co. Ltd.
RMB 24620000.00 2017/11/15 2021/12/21 No
Bengang Group
Co. Ltd.
RMB 30560000.00 2015/6/25 2021/9/21 No
Bengang Group
Co. Ltd.
RMB 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 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 EUR 7585942.33 2015/6/25 2025/10/31 No
Co. Ltd.
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.
RMB 12000000000.00 2019/3/16 2021/9/3 No
Bengang Group
Co. Ltd.
RMB 740000000.00 2020/1/8 2021/1/8 No
4. Asset transfer and debt restructuring of related parties
Currency unit: Yuan
Related Party
Related
transaction
content
Current Amount
(Excluding tax)
Amount of last period
(Excluding tax)
Benxi Steel & Iron (Group) Co. Ltd.
Purchase of 2300
hot rolling mill
production line
3004988590.00
Benxi Beiying Steel & Iron (Group) Co. Ltd.
Purchase of 1780
hot rolling mill
production line
684727905.00
Notes:
On August 14 2019 the Company signed the "Asset Transfer Agreement" with Benxi Steel (Group) and Beiying
Steel respectively to acquire the related equipment assets of the 2300mm hot rolling mill production line held
by Benxi Steel (Group) and the 1780mm held by Beiying Steel.
5.Remuneration of key management personnel
(In 10 Thousand Yuan)
Name 2020 2019
Remuneration of key management
personnel 309.04 302.23
6. 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 1364312.51 17703820.82 17735933.55 1332199.78
1. The interests income of deposits of Bengang Group Finance Co. Ltd. is RMB 308242.3 thousand in
2020. As at 31 December 2020 the interest receivable from Bengang Group Finance Co. Ltd. is RMB
87919.8 thousand.
2. As at 31 December 2020 the restricted deposits in Bengang Group Finance Co. Ltd. is RMB
2408822.8 thousand.
3. In 2020 the company and its subsidiaries did not borrow money from financial companies.
4. Bengang Group Finance Co. Ltd. granted the Company an unsecured credit line of RMB 4.5 billion in
2020. The amount of acceptance bill issued by Bengang Group Finance Co. Ltd. was RMB 4.077 billion
in 2020. As of December 31 2020 the amount of acceptance bills that the Company entrusted Finance
Company had issued and not yet paid was RMB 2.409 billion with a margin ratio of 100.00%.
(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: In 2020 the interest accrued is RMB 3545625.00 and as of 31 December 2020 the Company has no interest
that has not been paid.
6. Receivables and payables of the related parties
1、Receivables of the Company
(in 10 thousand yuan)
Items Name
20201231 20191231
Carrying
amount
Provision
for bad
debts
Carrying
amount
Provision
for bad
debts
Accounts
receivable
financing
Benxi Beiying Steel & Iron
(Group) Co. Ltd.
230217.55 - 42342.56 -
Benxi Steel & Iron (Group) Co.
Ltd.
81.99 - 402.17 -
Zhejiang Bengang Jingrui Steel
Processing Co. Ltd.- - 400.00 -
Accounts
Receivable
Bengang Group International
Economic and Trading Co. Ltd.
10463.45 104.63 5892.34 58.92
Benxi Steel & Iron (Group)
Thermal Power Development
Co. Ltd.
2692.94 26.93 1301.32 13.01
Bengang Cold-rolled Stainless
Steel Dandong Co. Ltd.
188.46 1.88 188.80 1.89
Benxi Steel & Iron (Group)
Metallurgy Residues Co. Ltd.
0.10 - 0.14 -
Benxi Steel & Iron (Group)
Machinery Manufacture Co.Ltd.- - 7.70 0.08
Prepayments
Bengang Group International
Economic and Trading Co. Ltd.
114662.12 - - -
Benxi Steel & Iron (Group)
Machinery Manufacture Co.Ltd.
6470.61 - 3559.63 -
Benxi Beiying Steel & Iron
(Group) Co. Ltd.- -
93762.24
-
Other
receivables
Bengang Group International
Economic and Trading Co. Ltd.
601.21 - 432.77 0.20
Items Name
20201231 20191231
Carrying
amount
Provision
for bad
debts
Carrying
amount
Provision
for bad
debts
Benxi Steel & Iron (Group) Real-
estate Development Co. Ltd.
278.31 253.84 270.17 246.52
Benxi Steel & Iron (Group)
Zhengtai Construction Materials
Co. Ltd.
27.05 19.96 24.60 12.30
Liaoning Metallurgy Technician
College
5.80 5.80 5.80 5.80
Benxi Steel & Iron (Group)
Medical Services Department;
- - 94.75 85.27
Benxi Steel & Iron (Group)
Industrial Development Co. Ltd.- - 0.02 -
Other non-
current assets
Liaoning Hengyi Financial
Leasing Co. Ltd.
86459.06 58419.72
2、 Payables of the Company
(in 10 thousand yuan)
Items Name 2020.12.31 2019.12.31
Notes payable
Bengang Group
International
Economic and Trading
Co. Ltd.
345103.76
Benxi Steel & Iron
(Group) Mining Co.Ltd.
91857.00 69292.59
Bengang Electronics
and Gas Co. Ltd.
6414.33 2285.78
Benxi Steel & Iron
(Group) Industrial
Development Co. Ltd.
5253.76 3203.52
Items Name 2020.12.31 2019.12.31
Liaoning Hengyi
Financial Leasing Co.
Ltd.
4602.43 1758.01
Liaoning Hengtong
Metallurgical
Equipment
Manufacture Co. Ltd.
868.28
Benxi Steel & Iron
(Group) Machinery
Manufacture Co. Ltd.
255.94 186.51
Liaoning Metallurgy
Technician College
133.27 195.91
Liaoning Hengtai
Heavy Machinery Co.Ltd.
84.78
Liaoning Metallurgy
Vocational Technical
College
47.90 43.55
Benxi Steel & Iron
(Group) Metallurgy
Residues Co. Ltd.
16.62
Benxi Beiying Steel &
Iron (Group) Co. Ltd.
508775.58
Benxi Steel & Iron
(Group) Real-estate
Development Co. Ltd.
684.81
Benxi Steel & Iron
(Group) Information
and Automatic Tech
Co. Ltd.
189.02
Bengang Cold-rolled
Stainless Steel
Dandong Co. Ltd.
71.84
Benxi Steel & Iron
(Group) Construction
and Repairing Co.Ltd.
14.82
Benxi Steel & Iron
(Group) Construction
13.05
Items Name 2020.12.31 2019.12.31
Co. Ltd.
Benxi High-tech
Drilling Tools
Manufacture Co. Ltd.
5.71
Accounts
payable
Benxi Steel & Iron
(Group) Mining Co.Ltd.
20807.68 8524.77
Liaoning Hengyi
Financial Leasing Co.
Ltd.
5799.10
Benxi Steel & Iron
(Group) Construction
and Repairing Co.Ltd.
5182.75 4443.69
Benxi Beiying Steel &
Iron (Group) Co. Ltd.
3172.95
Benxi Steel & Iron
(Group) Construction
Co. Ltd.
2394.63 10331.91
Liaoning Hengtai
Heavy Machinery Co.Ltd.
2171.25 3246.28
Benxi Steel & Iron
(Group) Information
and Automatic Tech
Co. Ltd.
1852.50 6567.06
Benxi Steel & Iron
(Group) Metallurgy
Residues Co. Ltd.
1645.14 1033.48
Bengang Electronics
and Gas Co. Ltd.
1500.74 1149.26
Liaoning Metallurgy
Technician College
1388.84 724.86
Liaoning Hengtong
Metallurgical
Equipment
Manufacture Co. Ltd.
1297.91 1487.15
Items Name 2020.12.31 2019.12.31
Bengang Group Co.
Ltd.
1246.38 3148.91
Benxi Steel & Iron
(Group) Machinery
Manufacture Co. Ltd.
964.33 1143.65
Liaoning Metallurgy
Vocational Technical
College
746.81 671.93
Bengang Cold-rolled
Stainless Steel
Dandong Co. Ltd.
616.72 521.64
Bengang Group
International
Economic and Trading
Co. Ltd.
579.53 70193.27
Benxi New Career
Development Co. Ltd.
415.37 292.66
Benxi Steel & Iron
(Group) Industrial
Development Co. Ltd.
385.20 11311.75
Benxi Steel & Iron
(Group) Thermal
Power Development
Co. Ltd.
178.73 144.24
Benxi Iron and Steel
(Group) Engineering
Construction
Supervision Co. Ltd.
65.51 16.28
Benxi Steel & Iron
(Group) Real-estate
Development Co. Ltd.
61.52 62.65
Benxi High-tech
Drilling Tools
Manufacture Co. Ltd.
38.60 33.77
Benxi Steel & Iron
(Group) Zhengtai
Construction
Materials Co. Ltd.
0.24 0.24
Benxi Steel & Iron
(Group) Medical
2.04
Items Name 2020.12.31 2019.12.31
Services Department;
Advance from customers
Suzhou Bengang
Industrial Co. Ltd.
5374.03 1635.62
Dalian Boluole Steel
Tube Co. Ltd.
181.60 85.93
Benxi Steel & Iron
(Group) Metallurgy
Residues Co. Ltd.
161.66 126.57
Benxi Steel & Iron
(Group) Industrial
Development Co. Ltd.
55.77 35.79
Liaoning Hengtong
Metallurgical
Equipment
Manufacture Co. Ltd.
52.81 82.00
Bengang Group
International
Economic and Trading
Co. Ltd.
43.70
Benxi Steel & Iron
(Group) Steel & Iron
Process and Logistics
Co. Ltd.
1582.14
Other payables
Benxi Steel & Iron
(Group) Co. Ltd.
13013.80 18278.27
Benxi Steel & Iron
(Group) Steel & Iron
Process and Logistics
Co. Ltd.
1681.17
Bengang Group
International
Economic and Trading
Co. Ltd.
1277.85 1432.74
Benxi Steel & Iron
(Group) Thermal
Power Development
Co. Ltd.
561.73 437.69
Items Name 2020.12.31 2019.12.31
Benxi Steel & Iron
(Group) Construction
Co. Ltd.
436.25 526.14
Guangzhou Free Trade
Zone Bengang Sales
Co. Ltd.
267.44 267.44
Liaoning Hengyi
Financial Leasing Co.
Ltd.
208.60 0.39
Benxi New Career
Development Co. Ltd.
197.61 223.84
Benxi Steel & Iron
(Group) Real-estate
Development Co. Ltd.
143.59 143.59
Benxi Steel & Iron
(Group) Industrial
Development Co. Ltd.
31.33 30.42
Liaoning Metallurgy
Technician College
1.34 1.34
Benxi Steel & Iron
(Group) Machinery
Manufacture Co. Ltd.
1.01 1.01
Bengang Group
Finance Co. Ltd.
0.98 0.60
Benxi Beiying Steel &
Iron (Group) Co. Ltd.
6.00
Non-current
Payables
Liaoning Hengyi
Financial Leasing Co.
Ltd.
111423.24 51693.94
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.
(4) As of December 31 2020 the amount of financial lease contracts that the Company and Liaoning Hengyi
Financial Leasing Co. Ltd. had signed but had not yet started to execute was 0.806 billion yuan.
2. Irrevocable letter of credit
As at December 31 2020 the amount of irrevocable letter of credit that was not fulfilled was 1.21 billion
yuan.
(2) Contingencies
At the balance sheet date no significant contingencies need to be disclosed.
12. Subsequent events
(1) Important non-adjustment matters
None
(2) Profit Distribution
Profit or
dividend to be
distributed
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 number to
distribute a cash dividend of 0.1 yuan for every 10 shares to all shareholders
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 needs to be reviewed and approved by the general
meeting of shareholders.
(3) Sales Return
Not applicable.
(4) Divided into assets held for sale and disposal portfolio
Not applicable.
(5) Other subsequent events
Not applicable.
13. Other significant events
(1) Correction of previous accounting errors
None
(2) Debt restructuring
None
(3) Asset replacement
None
(4) Termination of business
None
(5) Segment information
Since the Company's main product is steel other products account have a small proportion of sales
the main production base is in Liaoning and the disclosure of the segment report is not applicable.
(6) Other important matters that have an impact on investor decisions
1. Financial leasing matters
In order to optimize the debt structure and broaden the financing channels the Company signed the
"Financial Leasing Cooperation Framework Agreement" with Liaoning Hengyi Financial Leasing
Co. Ltd. in 2018. The financing amount is not more than RMB 5 billion per year. The Company
obtains funds through financing after-sales leaseback. The lease interest rate is not higher than the
benchmark loan interest rate announced by the People's Bank of China for the same period. The
lease interest rate during the lease period is dynamically adjusted with the changes in the benchmark
interest rate announced by the People's Bank of China. The ratio of lease deposit is not higher than
30% of the lease principal amount.
2. The controlling shareholder pledges the Company's shares
As of the balance sheet date the Company's controlling shareholder Benxi Iron and Steel (Group)
Co. Ltd. held 2409628094 shares of the Company of which 712545000 shares were in pledged
status and 102100000 shares were in restricted sales and frozen status.
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. As of the audit report the restructuring is still in the planning stage and after the plan is
determined the approval of the relevant departments is still required.
14. Notes to the financial statements of parent company
1. Accounts receivable
(1) Accounts receivable disclosed by aging
Items 201201231 20191231
Within 1 year (inclusive) 283561303.90 339851051.52
1-2 years (inclusive) 2420511.80 31642073.27
2-3 years (inclusive) 6500255.55 24708264.04
Over 3 years 177111797.34 175744519.91
Sub-total 469593868.59 571945908.74
Less: Provision for bad
debts 179728406.39 182948800.28
Total: 289865462.20 388997108.46
(2) Accounts receivable disclosed by category
Items
20201231 20191231
Carrying amount Provision for bad debts
Book value
Carrying amount Provision for bad debts
Book value
Amount
Percent
age (%)
Amount
Bad
debts
ratio (%)
Amount
Percentage
(%)
Amount
Bad debts
ratio (%)
Provision for
Bad Dept
individually
47762337.18 10.17 47762337.18 100.00 47762337.18 8.35 47762337.18 100.00
Provision for
Bad Dept by
portfolio
421831531.41 89.83 131966069.21 31.28 289865462.20 524183571.56 91.65 135186463.10 25.79 388997108.46
Include:
Portfolio 1:
Aging
245720903.60 52.33 131966069.21 53.71 113754834.39 268981818.03 47.03 135186463.10 50.26 133795354.93
Portfolio
2:Combined
related party
176110627.81 37.50 176110627.81 255201753.53 44.62 255201753.53
Total 469593868.59 100.00 179728406.39 289865462.20 571945908.74 100.00 182948800.28 388997108.46
Accounts receivable tested for impairment individually
Items
20201231
Accounts receivable
Provision for
bad debts
Bad debts
ratio
（%）
Reason
Benxi Nanfen Xinhe Metallurgical
Co. Ltd.
47762337.18 47762337.18 100.00
Benxi Nanfen
Xinhe has halt
operation.Total 47762337.18 47762337.18
Accounts receivable tested for impairment by portfolio:
Portfolio tested by aging
Items
20201231
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year 107450676.09 1074506.76 1.00
1-2 years 2420511.80 242051.18 10.00
2-3 years 6500255.55 1300051.11 20.00
Over 3 years 129349460.16 129349460.16 100.00
Total 245720903.60 131966069.21
(3) Information of provision reversal or recovery of bad debts of current period.
The amount of bad debt provision reversed in the current period is 3220393.89 yuan
(4) No accounts receivable has been written off this year.
(5) Top five debtors at the year-end
Company
20201231
Amount Percentage of total accounts receivable (%)
Provision for
bad debts
The first 176110627.81 37.50
The second 56158745.71 11.96 561587.46
The third 47762337.18 10.17 47762337.18
The fourth 26929400.04 5.73 269294.00
The fifth 9008967.00 1.92 9008967.00
Total 315970077.74 67.28 57602185.64
(6) There is no accounts receivable derecognized due to the transfer of financial assets in the current
period.
(7) There is no assets and liabilities formed by continued involvement due to the
transfer of Account receivables.
3. Accounts receivable financing
(1) Details of accounts receivable financing
Items 20201231 20191231
Notes receivable 4143431412.08 2193319842.60
Include: Bank
acceptance bill 1876753316.46 2184526834.33
Commercial
acceptance bill 2266678095.62 8793008.27
Total 4143431412.08 2193319842.60
Other information: The "receivable financing" item reflects the notes and accounts receivable that are measured at
fair value at the balance sheet date and whose changes are included in other comprehensive income.
(2) Acceptance bills pledged by the company at the end of the period
Items Pledged amount
Bank acceptance bill 484093073.28
Commercial acceptance bill 403379971.01
Total 887473044.29
(3) Acceptance bills have been endorsed or discounted by the company and have not expired
at the year end
Items Derecognized amount Not derecognized amount
Bank acceptance bill 13819427581.34
Commercial acceptance bill 2230183094.41
Total 13819427581.34 2230183094.41
(4) There are no bills converted into accounts receivable due to the failure of the issuer to
perform the contract at the end of the period.
4. Other receivables
Item 20201231 20191231
Interest receivables 23028942.73 19658230.77
Dividend receivables
Other receivables 228379193.99 247005005.04
Total 251408136.72 266663235.81
1. Interest receivables
(1) Interest receivable disclosed by category
Items 20201231 20191231
Deposit interest 23028942.73 19658230.77
Subtotal 23028942.73 19658230.77
Less: provision for bad debt
Total 23028942.73 19658230.77
(2) There is no significant provision for overdue interest and bad debt provision.
2. Other receivables
(1) Other receivables disclosed by aging
Items Ending balance Beginning balance
Within 1 year (inclusive) 53898656.03 115480359.05
1-2 years (inclusive) 47649189.02 15711856.93
2-3 years (inclusive) 13842023.46 3479413.59
Over 3 years 180717695.14 177724723.88
Sub-total 296107563.65 312396353.45
Less: Provision for bad
debts 67728369.66 65391348.41
Total: 228379193.99 247005005.04
(2) Provision for bad debt provision
Provision for bad debts
Stage one Stage two Stage three
Total
12-month
expected credit
losses
Lifetime
expected credit
losses (no credit
impairment)
Lifetime
expected
credit losses
(credit
impairment
occurred)
Beginning balance 9179698.89 56211649.52 65391348.41
Beginning balance in
current period
--Transfer to Stage two
--Transfer to Stage three -768390.73 768390.73
--Reversal to Stage two
--Reversal to Stage one 6592.60 -6592.60
Current period provision 801959.46 2816265.56 601252.83 4219477.85
Current period reversal 6207.34 6207.34
Current period write-back 1745713.37 130535.89 1876249.26
Current period write-off
Other change
Provision for bad debts
Stage one Stage two Stage three
Total
12-month
expected credit
losses
Lifetime
expected credit
losses (no credit
impairment)
Lifetime
expected
credit losses
(credit
impairment
occurred)
Ending balance 802344.72 9475267.75 57450757.19 67728369.66
Changes of other receivables
Provision for bad debts
Stage one Stage two Stage three
Total
12-month
expected credit
losses
Lifetime
expected credit
losses (no credit
impairment)
Lifetime
expected
credit losses
(credit
impairment
occurred)
Beginning balance 232528777.63 23655926.30 56211649.52 312396353.45
Beginning balance in
current period
--Transfer to Stage two
--Transfer to Stage three -1369740.15 1369740.15
--Reversal to Stage two
--Reversal to Stage one 14813.42 -14813.42
Current period increase 149569647.91 6006395.62 5.00 155576048.53
Current period
derecognition
163877950.90 7856351.54 130535.89 171864838.33
Other change
Ending balance 218235288.06 20421416.81 57450858.78 296107563.65
(4) Provision for bad debts accrued reversed or recovered in the current period.
(5) There is no other accounts receivable actually written off in the current period.
(6) Other receivables disclosed by nature
Nature 20201231 20191231
Receivable and payable 288295814.93 304483575.55
Other 7811748.72 7912777.90
Total 296107563.65 312396353.45
(7) Top five debtors at the year-end
Company Nature or content Amount Aging
Percentage of total
other receivables
(%)
Provision for
bad debts
The First Receivable and payable 23677915.37
Within 1
year:18348177.57
Remaining：1-2
years
8.00 449968.67
The Second Receivable and payable 5492200.00 Within 1 year 1.85 54922.00
The Third
Receivable and payable 2446897.43
Within 1 year to 3
years
0.83 2202207.69
The Fourth
Receivable and payable
2261360.00
Over 3 years
0.76 2261360.00
The Fifth Receivable and payable 2123692.31 2-3years 0.72 424738.46
Total 36002065.11 12.16 5393196.82
（8）No other receivables involving government subsidies in the current period.
（9）There are no other receivables derecognized due to the transfer of financial assets in the
current period.
（10）No assets and liabilities formed by continued involvement due to the transfer of other
receivables in the current period.
5. Long-term equity investment
Items
Ending balance Beginning balance
Carrying
amount
Impairme
nt
Book value Carrying amount
Impair
ment
Book value
Subsidiaries 2016281902.16 2016281902.16 2016281902.16 2016281902.16
Joint Venture
Total 2016281902.16 2016281902.16 2016281902.16 2016281902.16
Details of investment in subsidiaries
Name of entity Beginning balance Increase Decrease
Ending
balance
Impairme
nt of
current
period
Ending
balance
of
impairm
ent
Guangzhou Bengang
Steel & Iron Trading Co.Ltd.
30000000.00 30000000.00
Shanghai Bengang
Metallurgy Science and
Technology Co. Ltd.
30000000.00 30000000.00
Bengang Steel Plates
Liaoyang Pellet Co. Ltd.
529899801.38 529899801.38
Dalian Benruitong
Automobile Material
Technology Co. Ltd.
65000000.00 65000000.00
Bengang POSCO Cold-
rolled Sheet Co. Ltd.
1019781571.10 1019781571.10
Changchun Bengang
Steel & Iron Sales Co.Ltd.
28144875.36 28144875.36
Harbin Bengang
Economic and Trading
Co. Ltd.
29923398.23 29923398.23
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. Ltd.
1095711.66 1095711.66
Yantai Bengang Steel &
Iron Sales Co. Ltd.
49100329.41 49100329.41
Tianjin Bengang Steel &
Iron Trading Co. Ltd.
60318095.80 60318095.80
Name of entity Beginning balance Increase Decrease
Ending
balance
Impairme
nt of
current
period
Ending
balance
of
impairm
ent
Benxi Bengang Steel
Sales Co. Ltd
5000000.00 5000000.00
Shenyang Bengang
Metallurgical Science
and Technology Co. Ltd.
30000000.00 30000000.00
Chongqing Liaoben
Steel & Iron Trade Co.Ltd.
30000000.00 30000000.00
Bengang Baojin
(Shenyang) Automobile
New Materials
Technology Co. Ltd.
76000000.00 76000000.00
Total 2016281902.16 2016281902.16
6. Operating Income and Operating Cost
Operating income and operating cost
Items
2020 2019
Revenue Cost Revenue Cost
Principal business 44436384616.09 42659983317.54 45495328832.91 43241111129.03
Other business 4374721858.64 4082717104.16 7109784374.11 6493078331.57
Total 48811106474.73 46742700421.70 52605113207.02 49734189460.60
Breakdown of operating income
Items Principal Business Other Business
Classified by business area 44436384616.09 4374721858.64
Including：Domestic 40653042300.78 4374721858.64
Abroad 3783342315.31
Classified by the time of commodity
transfer
44436384616.09 4374721858.64
Items Principal Business Other Business
Including: recognize at a certain point
in time
44436384616.09 4374131134.83
recognize over a certain period of time 590723.81
合计 44436384616.09 4374721858.64
7. Income on investment
Items 2020 2019
Income from long-term equity investment (cost method) 27594915.42
Dividend income obtained during the holding period of other
equity instrument investments 77242.47
Total 77242.47 27594915.42
15. Supplementary information
(1) Details of non-recurring profit and loss
Items Amount Notes
Profit or loss from disposal of non-current assets -92695525.95
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 national policy and
enjoyed constantly in certain quota or quantity according to a certain
standard)
81193591.56
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
Profit or loss from debt restructuring 32800.02
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 assets trading financial
liabilities derivative financial liabilities and other debt investments
13500000.00
Items Amount Notes
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 1592660.62
Other non-recurring profit and loss
Subtotal 3623526.25
Impact of income tax -786094.20
Impact of minority interests -54476.26
Total 2782955.79
(2) Net asset yield and earnings per share
Profit in the Reporting Period Weighted average net assets yield (%)
Earnings per share (Yuan)
Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders 1.90 0.099 0.099
Net profit attributable to ordinary shareholders
after deducting non-recurring profit and loss 1.88 0.098 0.098
(3) Differences between Domestic and Foreign Accounting Standards
（1）The differences in net profit and net assets in financial reports disclosed under International Financial
Reporting Standards and Chinese accounting standards
□ applicable √ not applicable
（2）The difference between net profit and net assets in financial reports disclosed under overseas accounting
standards and Chinese accounting standards
□ applicable √ not applicable
（3）Explanation of the reasons for differences in accounting data under domestic and foreign accounting
standards. If the data that has been audited by an overseas audit institution is adjusted for differences the
name of the overseas institution should be indicated.
(4) Others
XIII. Documents available for inspection
1 Financial Statements signed and stamped by the legal representative CFO and accounting manager;
2 All of the original copies of documents and announcements that have been published on China Securities Journal
Securities Times and Hong Kong Commercial Daily;
3 Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certified
accountants.
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