Bengang Steel Plates Co. Ltd. 2022 Annual Report

Bengang Steel Plates Co. Ltd.Annual Report 2022

【Disclosure Time】

1Bengang Steel Plates Co. Ltd. 2022 Annual Report

2022 Annual Report

SECTION 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 omissions in this report and individually and collectively accept full

responsibility for the authenticity accuracy and integrity of the information contained in this report.Li Yan the person in charge of the Company Zheng Zhengli the person in charge of accounting

work and Sun Yanbin the person in charge of the accounting department (accounting officer in charge)

have pledged 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 risks and countermeasures in detail in this report please refer

to Section III. XI "Risks to the Company and countermeasures". China Securities Journal Securities

Times the website of Shenzhen Stock Exchange and Cninfo Website are the media selected by the

Company for information disclosure. All information of the Company shall be based on the information

published in the above designated media and investors are advised to pay attention to the investment

risks.The Company plans not to pay cash dividends not to send bonus shares and not to increase its

share capital by transferring its public reserves.

2Bengang Steel Plates Co. Ltd. 2022 Annual Report

Table of Contents

Section I. IMPORTANT NOTICE TABLE OF CONTENTS AND . 错误！

未定义书签。

Section II. COMPANY PROFILE AND MAIN FINANCIAL IND. 错误！

未定义书签。

Section III. MANAGEMENT DISCUSSION AND ANALYSIS ....错误！

未定义书签。

Section IV. CORPORATE GOVERNANCE ...................错误！

未定义书签。

Section V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY...60

Section VI. IMPORTANT EVENTS ........................66

Section VII. STATUS OF SHARE CAPITAL CHANGES AND S.. 90

Section VIII. STATUS OF PREFERRED SHARES ............98

Section IX. STATUS OF CONVERTIBLE CORPORATE BONDS .. 99

Section X. FINANCIAL REPORT ........................错误！

未定义书签。

3Bengang Steel Plates Co. Ltd. 2022 Annual Report

Reference File Directory

1. Financial statements containing the signatures and seals of the person in charge of the Company the person in charge of

accounting work and the person in charge of the accounting institution;

2. The original audit report containing the seal of the accounting firm and the signature and seal of the certified public

accountant.

3. The original copies of all Company documents and announcements that have been publicly disclosed during the

reporting period;

4. Annual reports published in other securities markets.

4Bengang Steel Plates Co. Ltd. 2022 Annual Report

Definition

Interpretation items Refers to Interpretation content

Bengang Steel Plates Company the

Refers to Bengang Steel Plates Co. Ltd.Company listed company

Ansteel Refers to Ansteel Group Co. Ltd.Bengang Group Refers to Bengang Group Co. Ltd.Benxi Iron & Steel Bengang Company Refers to Benxi Iron & Steel (Group) Co. Ltd.SSE Refers to Shenzhen Stock Exchange

Liaoning Provincial State-asset Liaoning State-owned Asset Supervisory

Refers to

Administration and Management Committee

Bengang Puxiang Cool Rolling Steel Sheet

Bengang Puxiang Refers to

Co. Ltd.Ansteel Finance Company Refers to Ansteel Group Finance Co. Ltd.Angang Refers to Angang Steel Company Limited

Pangang Group Vanadium & Titanium

Vanadium & Titanium Company Refers to

Resources Co. Ltd.

5Bengang Steel Plates Co. Ltd. 2022 Annual Report

SECTION II. COMPANY PROFILE AND MAIN FINANCIAL INDEX

I. Company information

Bengang Steel Plates Bengang Steel Plates 000761

Stock abbreviation Stock code

plate B 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 Li Yan

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

Postal code of registration address 117000

Changes in the Company's registered address history None

Office address No.1-1 Steel Road Pingshan District Benxi City Liaoning Province

Postal code of office address 117000

Company website None

E-mail zhengzhengli76@126.com

II. Contact person and contact information

Secretary of Board of Directors Representative of Securities Affairs

Name Zheng Zhengli

No.1-1 Steel Road Pingshan District

Contact address

Benxi City Liaoning Province

Telephone 024-47827003

Fax 024-47827004

E-mail zhengzhengli76@126.com

III. Information disclosure and place for consulting

Website of the stock exchange where the Company discloses

http://www.SSE.cn

the annual report

Name and website of the media in which the Company discloses China Securities Journal Securities Times http ：

the annual report //www.cninfo.com.cn

Place for inquiry of the annual report Secretary Office of the Board Bengang Steel Plates Co. Ltd.IV. Change of business registration

Uniform social credit code 91210000242690243E

Changes of principal business

No change

activities since listing (if any)

6Bengang Steel Plates Co. Ltd. 2022 Annual Report

On August 20th 2021 Liaoning State-owned Asset Supervisory

and Management Committee the former actual controller of

the Company and Ansteel Group Co. Ltd. signed the Agreement

between Liaoning State-owned Asset Supervisory and

Management Committee and Ansteel Group Co. Ltd. on the Free

Transfer of Bengang Group Co. Ltd. State-owned Equity in

Historical changes in controlling shareholders (if any) which Liaoning Provincial State-asset Administration transferred

51% of its equity interest in Bengang Group Co. Ltd. to Ansteel

without compensation. On October 12th 2021 the change of

business was completed and Ansteel Group Co. Ltd. became the

indirect controlling shareholder of the Company. The direct

controlling shareholder of the Company remains unchanged as

Benxi Iron & Steel (Group) Co. Ltd.V. Other relevant information

Accounting firm engaged by the Company

Name of the accountants’ firm ShineWing Certified Public Accountants LLP

8/F Block A Fu Hua Mansion No.8 Chaoyangmen Beidajie

Address of the accountants’ firm

Dongcheng District Beijing 100027 P.R. China

Name of signatory accountants Fan Jianping Chen Jian

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

□Applicable □Not applicable

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

institution institution representative

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

Yuan Yechen Yang Keyi

Ltd. Jing'an District Shanghai 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 is required to retroactively adjust or restate prior years' accounting data

□Yes□No

Increase or decrease

FY2022 FY2021 compared with the FY2020

previous year

Operating income

62616621627.6077912144981.46-19.63%48684792685.58

(RMB)

Net profit attributable

to shareholders of the -1232976557.37 2500582902.58 -149.31% 384252740.78

listed company (RMB)

Net profit after non-

recurring gain or loss

attributable to -1416415028.51 2517758656.14 -156.26% 381469784.99

shareholders of the

listed company (RMB)

Net cash flow from

operating activities 1276362965.56 413473454.04 208.69% -2039000213.29

(RMB)

Basic earnings per -0.300 0.600 -150.00% 0.1000

7Bengang Steel Plates Co. Ltd. 2022 Annual Report

Increase or decrease

FY2022 FY2021 compared with the FY2020

previous year

share (RMB/share)

Diluted earnings per -0.300 0.496 -160.48% 0.1000

share (RMB/share)

Weighted average -5.68% 11.88% -17.56% 1.90%

return on net assets

Increase or decrease

End of FY2022 End of FY2021 compared with the end End of FY2020

of the previous year

Total assets (RMB) 44114652440.64 55147123275.30 -20.01% 65007470749.20

Net assets attributable

to shareholders of 18789151216.62 22500969014.30 -16.50% 21018296389.10

listed companies (RMB)

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

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

uncertain.□Yes□No

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

□Yes□No

VII. Differences in accounting data under domestic and foreign accounting standards

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

Chinese accounting standards.□Applicable□Not applicable

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

accounting standards during the reporting period.

2. Differences in net profit and net assets between financial reports disclosed simultaneously in

accordance with foreign accounting standards and in accordance with Chinese accounting standards

□Applicable□Not applicable

There are no differences between the net profit and net assets of the Company in the financial reports disclosed in accordance

with foreign accounting standards and in accordance with Chinese accounting standards in the reporting period.VIII.Main financial index by quarter

Unit: RMB

First quarter Second quarter Third quarter Fourth quarter

Operating income 16621491876.35 18393685428.63 12824043663.20 14777400659.42

Net profit attributable to shareholders

433939380.46127795996.95-819660438.85-975051495.93

of the listed company

Net profit after non-recurring gain or

loss attributable to shareholders of the 423326955.85 98892471.08 -850929263.53 -1087705191.91

listed company

Net cash flow from operating activities 289055672.76 -61603830.55 1632616396.48 -583705273.13

Whether the above financial indicators or the sum of such indicators are significantly different from the relevant financial

8Bengang Steel Plates Co. Ltd. 2022 Annual Report

indicators in the disclosed quarterly and semi-annual reports of the Company

□Yes□No

IX. Non-recurring gain or loss items and amounts

□Applicable □Not applicable

Unit: RMB

Item FY2022 amount FY2021 amount FY2020 amount Description

Gain or loss on disposal of non-current assets (including

the offsetting portion of the provision for asset 3648546.62 -60100706.71 -92695525.95

impairment)

Government subsidies included in current profit or loss

(except government subsidies that are closely related to

the Company's normal business operations in

72300830.4866345976.6481193591.56

accordance with national policies and continuously

enjoyed in accordance with certain standards and in

fixed or quantitative amounts)

Gains or losses from entrusting others to invest or

2879850.072436869.330.00

manage assets

Gains and losses from debt restructuring 1274270.98 32800.02

Gains or losses from changes in fair value of financial

assets and liabilities held for trading and investment

income from the disposal of financial assets and

-37205991.3413500000.00

liabilities for trading and available-for-sale financial

assets except for effective hedging activities related to

the Company's normal business operations

Non-operating income and expenses other than the

13507766.625176371.411592660.62

items mentioned above

Other profit or loss items that meet the definition of

92174927.78

non-recurring gain or loss

Less: Income tax effect 1956581.46 -5969319.73 786094.20

Effect of minority interests (after tax) 391139.95 -202407.38 54476.26

Total 183438471.14 -17175753.56 2782955.79 --

Details of other profit and loss items that meet the definition of non-recurring profit or loss:

□Applicable □Not applicable

Description of "other profit and loss items that meet the definition of non-recurring profit or loss"

and items that are defined as non-recurring profit or loss according to the nature and

characteristics of the Company's normal business operations

Item Amount Reason

Other profit and loss items that meet the Gain arising from remeasurement of the remaining equity

4154883.39

definition of non-recurring profit or loss interest at fair value after losing control over Shenyang Baojin

Other profit and loss items that meet the Investment income from the disposal of long-term equity

88020044.39

definition of non-recurring profit or loss investment in Liaoyang Qiutuan

Explanation of the definition of non-recurring items of profit or loss listed in the Explanatory Announcement No. 1 on Disclosure

of Information by Companies Issuing Public Securities - Non-recurring Profit or Loss as recurring items of profit or loss

□Applicable□Not applicable

The Company does not have any non-recurring items of profit or loss listed in Explanatory Announcement No. 1 on Disclosure of

Information by Companies Issuing Public Securities - Non-recurring Profit or Loss that are defined as items of recurring profit or

loss.

9Bengang Steel Plates Co. Ltd. 2022 Annual Report

SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS

I. Industry situation of the company during the reporting period

The Company belongs to the steel industry which is an important basic industry of China's national economy an important

support for building a modern and powerful country and an important area for achieving green and low-carbon development.In 2022 the steel industry operating environment is more challenging downstream demand is less than expected energy prices

are firm steel prices have fallen the industry's economic benefits have declined the global steel market is in the doldrums and

the benefits of steel companies have fallen year on year. First steel production fell year-on-year and consumption intensity

weakened. According to the National Bureau of Statistics the national pig iron and crude steel production in 2022 was 863.83

million tons and 10133 billion tons decreasing by 0.8% and 2.1% year-on-year respectively. Second steel import and export

volume rose and fell according to the General Administration of Customs data the country's cumulative exports of steel were

67.32 million tons an increase of 0.9% year-on-year. Cumulative steel imports of 10.57 million tons a decrease of 25.9%. Third

steel prices rose slightly at the end of the year according to the China Iron and Steel Industry Association monitoring the China

Steel Composite Price Index was 113.25 points at the end of December up 4.32 points or 4.0%. Fourth fuel costs rose

significantly and the cumulative import of ore remained falling. According to data from the General Administration of Customs

the national import of iron ore and its concentrates amounted to 1.10686 billion tons a decrease of 1.5% year-on-year.

2023 is the beginning of the year to fully implement the spirit of the 20th Party Congress which is also the implementation of

the "14th Five-Year Plan" to carry on the important year China's economy in the expansion of domestic demand stabilization

policy will gradually return to the normal growth track. At the same time at a time when uncertainty was the norm large

fluctuations in steel prices and dynamic changes in the market environment and production conditions have significantly

increased the complexity of business decisions putting higher requirements on the Company's operational planning and

decision-making capabilities. With the domestic optimization of the epidemic prevention and control policy the domestic

market is expected to improve steel prices continue to rise and the domestic market for steel is expected to improve. At the

same time due to the rise in domestic steel prices and the sharp appreciation of the RMB China's export offers is higher the

price advantage has declined and short-term steel exports will be under pressure. In addition China's steel industry is still facing

the "double" constraints of promoting capacity reduction and replacement as well as low-carbon development and increased

energy efficiency. The country has put forth the goal of striving to achieve a carbon peak by 2030 and carbon neutrality by 2060

which has put forward new requirements for the development of the steel industry and stimulated new momentum for the high-

quality development of the steel industry.II. Main business of the Company during the reporting period

1. Main business main products and their uses

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

generation coal chemical industry special steel profiles railways import and export trade scientific research product sales etc.The introduction of state-of-the-art 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

10Bengang Steel Plates Co. Ltd. 2022 Annual Report

panels home appliance panels petroleum pipeline steel container panels shipboard etc. are widely used in the fields of

automobiles home appliances petrochemicals aerospace machinery manufacturing energy and transportation building

decoration and metal products and are exported to more than 60 countries and regions.

2. Business model

Procurement mode: The Company's procurement mode includes domestic procurement and foreign procurement. Domestic

material procurement is carried out through centralized procurement unified bidding price comparison and negotiation. The

procurement of foreign materials is carried out through the modes of long-association procurement direct procurement open

and invited bidding inquiry and comparison competitive negotiation and negotiation procurement which are mainly

represented by Benxi Iron & Steel (Group) International Economic and Trading Co. Ltd.Sales model: The Company's sales are divided into domestic sales and foreign sales domestic sales are mainly based on

agreement account sales sales channels are based on direct supply circulation and engineering organizing contract orders in

advance by month and organizing required production according to contract orders. According to different regions different

channels different industry characteristics the implementation of futures mode one plant and one policy index pricing and

other price policy sales method; export sales mainly use the Benxi Iron & Steel (Group) International Economic and Trading Co.Ltd. over the years in the international trade accumulated strong marketing network the Company's products exported by its

agent and pay Benxi Iron & Steel (Group) International Economic and Trading Co. Ltd. agency fees.

3. Main performance drivers

The Company has seized a favorable opportunity during Anben’s restructuring carried out the three-year action of state-owned

enterprise reform and three systematic reforms closely focused on Ansteel's "7531" strategic goal and Bengang Group's "1357"

working guidelines experienced the transformation of deepening reform the refinement of market decline and the challenge of

epidemic prevention and control continuously deepened the potential and improved against the standard and gathered the

powerful energy of all cadres and workers to "lead the new Ansteel support the new Ansteel" and fully promoted the

implementation of "1+2+3" important work. Establish a management and control model based on comprehensive budget and

planned value management centered on efficiency with sales as the leader finance as the core benchmarking as the grasp and

the consistent management of the automobile board as the leader closely linking "sales research and production" vigorously

promoting the consistent management of the whole process quality firmly establishing the sense of responsibility of "seeking

benefits from reform and promoting revitalization by reform" adhere to the innovation drive create a "source" of original

technology adhere to the strategy of "talent development" enhance the precise incentive role of job performance assessment

accelerate the pace of innovation and development to build "a highly competitive international high-quality plate base led by

automotive plates" and achieve hard-won production and management and enterprise reform performance.During the reporting period there was no change in the Company's main business or business model.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.

11Bengang Steel Plates Co. Ltd. 2022 Annual Report

1. Manufacturing capabilities. Focusing on economic benefits the Company firmly grasps market opportunities implements the

production and management idea of "the upper process follows the lower process and the whole process follows the market"

adheres to the innovation-driven and "manufacturing + service" strategies seizes market opportunities efficiently cooperates

with production lines and the market continuously optimizes the product structure and continuously improves the Company's

profitability. Deepen the benchmarking and digging potential increase cost control absorb the impact of upstream price

increases and continuously improve management efficiency.

2. Equipment transformation and upgrading. In 2022 the Company issued a fixed asset investment plan of RMB 1.82 billion.

Implemented the upgrading and transformation of electric furnace of special steel transformation of special steel rolling mill

environmental protection transformation of storage one coal yard environmental protection transformation of storage two coal

yard acid production from desulfurization waste liquid in the main plant of plate ironmaking upgrading and transformation of

dry quenching boiler No.1 of coke two in the main plant of plate ironmaking ultra-low emission transformation of 360

m2sintering flue gas desulfurization and denitrification ultra-low emission transformation of 2x265 m2 sintering flue gas

desulfurization and denitrification ultra-low emission transformation of 566 m2sintering flue gas desulfurization and

denitrification etc. and key projects represent a new round of large-scale technical transformation and ultra-low emission

transformation. At present the special steel electric furnace upgrade project has put into operation an electric furnace and

supporting refining equipment and continuous casting equipment.

3. New product development capabilities. The annual plan is to develop 38 new products the actual completion of 41 including

14 grades of cold-rolled products 19 grades of hot-rolled products and 8 grades of special steel products. Successfully developed

hot-dip galvanized duplex steel CR330Y590T-DH to fill the gap in the research field of galvanized DH steel. Cultivated "wide hot-

rolled high-strength steel series products" the first domestic unique extreme width (2000mm) thin specification high-strength

tank steel 550GT-TH exclusive supply in the regional market.

4. Technological innovation ability. In terms of scientific and technological cooperation the Company has signed 9 external

contracts with the University of Science and Technology Beijing the Chinese Society for Metals the Institute of Metallurgical

Industry Information Standards the Institute of Metallurgical Industry Planning and Research etc. The Company has also carried

out 10 cooperative projects with Dalian University of Technology Northeastern University and Liaoning University of Science and

Technology which are members of the "Liaoning Iron and Steel Industry University-Research Innovation Alliance". In terms of

intellectual property rights it participated in 4 national standards hosted 2 group standards and participated in 1 group standard.The number of accepted patents in the year was 283 and the number of authorized patents was 136 among which 31 were

authorized invention patents. In terms of scientific and technological achievements "2000MPa Hot Press Forming Steel" won the

"First Prize of Technical Innovation in Automotive Lightweighting Application of China Society of Automotive Engineering"

"Research and Development of Low-Cost High Strength Corrosion Resistant Steel Series for Land Transportation Containers" won

the "Second Prize of Science and Technology of China Society of Corrosion and Protection" "Development of High-Quality

Economic Nb Microalloyed Automotive Galvanized Duplex Steel Series" won the "Second Prize of Technical Progress Award of

CITIC Niobium Steel" and "Research on Stability Improvement of Roll Bearing Block in Hot Rolling Mill" won the "First Line

Worker Award of Ansteel Iron and Steel Science and Technology Award".

5. Green development capability. According to the national and Liaoning Province on the steel industry and local ultra-low

emission policy requirements the Company is brave to assume social responsibility relying on professional planning and

research institutions the preparation of environmental protection to enhance the planning and annual implementation plan

2023 planning and sorting out a total of more than 20 ultra-low emission projects have all been included in the investment plan

has launched the construction or preliminary work through the transformation of the yard flue gas emission treatment

desulfurization and denitrification of ultra-low emission transformation and other comprehensive excellent improvements and

12Bengang Steel Plates Co. Ltd. 2022 Annual Report

strive to achieve ultra-low emission by the end of 2023 the Company will become a harmonious development with the city of

"ecological steel plant".

6. Intelligent manufacturing capabilities. The Company strongly promotes the construction of information technology

intelligence and other intelligent manufacturing-related projects and has carried out intelligent transformation in 2022 such as

the integration of information system construction the overall improvement of steel industry management and information

support the centralized control of plate energy blast furnace intelligent management system steel industry daily cost

management system and the improvement of production and manufacturing management system. Keep pace with the

development of enterprises in the era of big data to achieve high-quality development.IV. Management discussion and analysis

1. General

In 2022 the annual production of pig iron was 10.003 million tons an increase of 165300 tons; crude steel production was

10.552 million tons an increase of 114000 tons; hot-rolled plate production was 13.2874 million tons an increase of 70500

tons; cold-rolled plate production was 5.948 million tons and special steel production was 443400 tons. Reviewing the work of

the whole year it is mainly reflected in the following aspects:

(1) Production-oriented to operation-oriented transformation the Company's operation quality continues to improve

The management and control model based on comprehensive budget and planned value management centered on efficiency

sales as the leader finance as the core benchmarking as the grip and the consistent management of the automobile board as

the leader has been established and the management consciousness of all staff has been enhanced significantly. The Company

intensified its market development efforts and set up 12 technical service teams for priority customers to provide personalized

services. Closely linking "sales research and production" the annual output of automobile plates reached a record high.Strengthen financial control improve the efficiency of capital operation in all aspects and significantly reduce the balance of

"two funds" compared with the beginning of the year. Vigorously promote the consistent management of the whole process

quality and the "quality storm" is effective. Build a star production line equipment operation efficiency continued to improve

and each unit set new capacity records many times.

(2) Continuing to promote marketization and deepening reform of enterprises

The Company firmly establishes the sense of responsibility of "seeking benefits from reform and promoting revitalization by

reform" and actively and steadily promotes the three-year action of reforming state-owned enterprises in a thorough and

practical manner. The Company has implemented the "recruitment competition with indicators and contract" and 100%

coverage of "two systems and one contract" and "double contract" management. Comprehensively implement the full post-

performance assessment and continuously enhance the precise incentive role of post-performance assessment. Highlighting the

typical lead the way "authorization + the same benefit" market-oriented reform to activate the micro subject motivation

selected grass-roots operation area as a pilot unit combined with their own characteristics to develop a personalized reform

program the indicators have repeatedly achieved good results regional workers fully enjoyed the reform dividend income level

has increased significantly. In accordance with the Korean Puxiang model the Company will promote the standardized operation

of Bengang Puxiang create a "special zone" and a "model" for reform and development and lead Bengang Steel Plates to be on

par with world-class enterprises.

(3) Consolidation of standardized operation and significant enhancement of corporate governance

13Bengang Steel Plates Co. Ltd. 2022 Annual Report

Risk management-oriented improving the internal control system deeply analyzing the risk points of each process dynamic

evaluation and real-time control. Establish a list management model realize the list of authority and responsibility boundaries

institutionalize procedural norms and streamline the decision-making operation. The Company builds a full-cycle authorization

and evaluation system from three aspects including corporate governance standardization of exercise of authority the

effectiveness of exercise of authority and implements dynamic management to ensure that the authority is "released accepted

and stable". The Company will further strengthen investor relations improve capital market operations and pay cash dividends

of RMB 2.465 billion to all shareholders in 2022 to effectively reward investors.

(4) Optimize system management system and improve management efficiency and effectiveness

Taking the promotion of consistent management as a guide the Company has developed "system" thinking continued to

improve the construction of the system optimized the process control points item by item built a closed-loop control network

and continuously improved management efficiency and effectiveness. Insist on "safety first" promote "safety storm" special

action investigate and correct hidden dangers and achieve full coverage of safety training. Build up the concept of green

development and build the beautiful home of Bengang Steel Plates together. The Company completed 10 ultra-low emission

projects according to the planned nodes throughout the year; the synchronous operation rate of environmental protection

facilities and production facilities was 100% and the environment of the plant was significantly improved.

(5) Adhere to the innovation-driven to create the original technology "Source"

Implemented 9 collaborative projects in Anben Science and Technology 9 innovative cooperation projects in Liaoning Steel

Association's Industry-University-Research Alliance and 203 scientific research projects. Vigorously promote the digitalization

construction introduce the integrated operation mode of cross-regional multi-bases in the main steel industry and the

"manufacturing + service" system of multi-bases synergy and realize business innovation and process reengineering. The "one-

touch steelmaking" in the steel mill was recognized by the industry; the iron front centralized control the energy centralized

control and the intelligent manufacturing project with the three cold rolling mills as the pilot were all implemented as planned

laying a solid foundation for the sustainable development of the Company.

(6) Strengthen the leadership of Party building the work of the group organizations is full of highlights

The main line of learning and propaganda to implement the spirit of the 20th CPC National Congress through a variety of ways

to grasp the political theory and professional business learning of party members and cadres so that learning becomes a source

of strength to gather strength and overcome difficulties and a fundamental guarantee to serve the masses and promote work.The Company has promoted the standardized construction of party organizations selected and strengthened the cadres of the

party group system and promoted the comprehensive improvement standardization and hardening of the grassroots party

construction work. Adhering to the strategy of "talent development" the Company has established a talent pool and made

efforts to build Bengang Steel Plates' own expert team. To carry out labor competitions and various special activities for youth to

build up their work all workers overcome difficulties together establish a new image of young people of Bengang Steel Plates

and cultivate the main force for the future development of the enterprise.

(7) Deeply rooted in people-oriented to create a beautiful home for plate workers

The Company strongly promotes the construction of people's livelihood projects takes the workers' affairs as the top priority

and implements them into action making every effort to create a "family culture" across the board. The establishment of the

"voice of workers" direct line and the regular promotion of "doing practical things for the masses" has greatly enhanced the

sense of belonging and happiness of the masses of workers. To build a "AAA" level scenic garden factory as a basis and strive to

improve the plant environment.

14Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Income and cost

(1) Breakdown of operating income

Unit: RMB

FY2022 FY2021 Change over

Amount Proportion Amount Proportion last year

Total operating

62616621627.60100%77912144981.46100%-19.63%

income

By Industries

Industry 62616621627.60 100.00% 77912144981.46 100.00% -19.63%

By products

Steel plate 59395642984.38 94.86% 69992675798.60 89.84% -15.14%

Others 3220978643.22 5.14% 7919469182.86 10.16% -59.33%

By regions

Northeast 23156472367.43 36.98% 31503298043.72 40.43% -26.50%

North China 2727436320.34 4.36% 3199355088.45 4.11% -14.75%

East China 28747114756.97 45.91% 33516981788.40 43.02% -14.23%

Northwest 49874139.13 0.08% 68888026.23 0.09% -27.60%

Southwest 0.00 0.00% 135459678.97 0.17% -100.00%

Central south 2903291017.72 4.64% 3152641431.89 4.05% -7.91%

Export 5032433026.01 8.04% 6335520923.80 8.13% -20.57%

By sales model

Sales in domestic

57584188601.5991.96%71576624057.6691.87%-19.55%

market

Sales in export market 5032433026.01 8.04% 6335520923.80 8.13% -20.57%

(2) Industry product and regions accounting for the Company’s operating income or profit over 10%

□Applicable □Not applicable

Unit: RMB

Operating income Operating costs Gross margin

Gross

Operating income Operating costs change over last change over last changes over

margin

year year last year

By industries

Industry 62616621627.60 62259334854.72 0.57% -19.63% -13.40% -7.80%

By products

Steel plate 59395642984.38 59110682153.73 0.48% -15.14% -8.74% -7.58%

Others 3220978643.22 3148652700.99 2.25% -59.33% -55.78% -8.91%

By regions

Northeast 23156472367.43 23031001219.05 0.54% -26.50% -20.41% -8.33%

North China 2727436320.34 2712587336.95 0.54% -14.75% -7.49% -8.56%

East China 28747114756.97 28591540849.21 0.54% -14.23% -8.00% -7.30%

Northwest 49874139.13 49638921.44 0.47% -27.60% -22.38% -7.25%

Southwest 0.00 0.00 0.00% -100.00% -100.00% -7.35%

Central south 2903291017.72 2881938977.49 0.74% -7.91% -0.07% -8.57%

Export 5032433026.01 4992627550.58 0.79% -20.57% -14.96% -7.11%

By sales model

Sales in

domestic 57584188601.59 57266707304.14 0.55% -19.55% -13.26% -7.86%

market

Sales in export 5032433026.01 4992627550.58 0.79% -20.57% -14.96% -7.11%

15Bengang Steel Plates Co. Ltd. 2022 Annual Report

Operating income Operating costs Gross margin

Gross

Operating income Operating costs change over last change over last changes over

margin

year year last year

market

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

business statistics caliber has changed during the reporting period

□Applicable□Not applicable

(3) Whether the Company’s physical sales income exceeded service income

□ Yes □No

Industry classification Item Unit FY2022 FY2021 Change over last year

Sales ton 14022304.90 13883661.11 1.00%

Production ton 13892713.60 13996055.15 -0.74%

Steel rolling processing industry

Inventory ton 472324.93 601916.23 -21.53%

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

□Applicable□Not applicable

(4) Performance of significant sales and purchase contracts signed up in this reporting period

□Applicable□Not applicable

(5) Breakdown of operating cost

Industry classification

Industry classification

Unit: RMB

Industry FY2022 FY2021 Change over

Item

classification Amount Proportion Amount Proportion last year

Steel rolling

Raw material 32656346258.98 52.45% 37341970406.79 51.94% 0.51%

processing industry

Steel rolling Supplementary

2471539945.403.97%2839512165.813.95%0.02%

processing industry materials

Steel rolling Spare parts and

664918489.571.07%785960965.251.09%-0.02%

processing industry tools

Steel rolling

Fuel 19516799781.80 31.35% 22184848601.81 30.86% 0.49%

processing industry

Steel rolling

Energy 2654880861.12 4.26% 3182838986.67 4.43% -0.17%

processing industry

Steel rolling

Salary and benefits 1890550009.31 3.04% 2582531198.03 3.59% -0.55%

processing industry

Steel rolling

Depreciation 1941797897.36 3.12% 2333028229.90 3.25% -0.13%

processing industry

Steel rolling

Others 462501611.18 0.74% 640907782.70 0.89% -0.15%

processing industry

Steel rolling

Total 62259334854.72 100.00% 71891598336.96 100.00% 0.00%

processing industry

Instruction:

None

(6) Whether changes occurred in consolidation scope in the reporting period

□ Yes □ No

16Bengang Steel Plates Co. Ltd. 2022 Annual Report

Chongqing Liaoben Steel Trading Co. Ltd. Harbin Nanjing Bengang Economic Trading Co. Ltd. Nanjing Bengang Material Sales

Co. Ltd. and Wuxi Bengang Steel Sales Co. Ltd. were cancelled during the reporting period.Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co. Ltd. lost control due to the capital increase of Xiamen

Xianghong Investment Co. Ltd. on July 8th 2022 and was no longer included in the scope of consolidation.Bengang Steel Plate Liaoyang Qiutuan Co. Ltd. was sold to Benxi Iron & Steel (Group) Mining Co. Ltd. on September 30th 2022.

(7) Relevant information on significant changes or adjustments of the business product or service in the reporting period

□Applicable□Not applicable

(8) Information of main customers and main suppliers

Information about the Company’s main customers

Total sales amount of the top five customers (RMB) 12044601335.68

Total sales amount of the top five customers accounted for the proportion of total annual sales 19.24%

The proportion of the total sales of the related parties in the top five customers 0.00%

Information on the top 5 customers

No. Name Amount (RMB) Proportion

1 SINO-ORDINS (SHANGHAI) Co. Ltd. 4733513419.58 7.56%

2 Ningbo AUX Trade Co. Ltd. 2291124107.81 3.66%

3 Xiamen Jian Fa Metal Co. Ltd. 1924217733.92 3.07%

4 Shanghai Xiangyu Musheng Trading Co. Ltd. 1554697112.29 2.48%

5 Shanghai Ouyeel Supply Chain Co. Ltd. 1541048962.08 2.46%

Total -- 12044601335.68 19.24%

Other information about principal customers

□Applicable□Not applicable

Information on the Company’s main suppliers

Total purchase amount of the top five suppliers (RMB) 26231620231.03

Total purchase amount of the top five suppliers accounted for

42.13%

the proportion of total purchase

The proportion of the total purchase of the related parties in the

31.85%

top five suppliers

Information on the top 5 suppliers

No. Name Amount (RMB) Proportion

Benxi Beiying Steel & Iron

114514254816.9823.31%

(Group) Co. Ltd.Benxi Steel & Iron (Group)

25318150084.188.54%

Mining Co. Ltd.Heilongjiang Dragon Coal

33407948503.545.47%

Group Co. Ltd.Liaoning Electric Power Co.

4 Ltd. Benxi Electric Power 2048164867.34 3.29%

Supply Company

Jiaozuo Guolong Logistics Co.

5943101958.991.51%

Ltd.Total -- 26231620231.03 42.13%

Other information about principal suppliers

□Applicable□Not applicable

17Bengang Steel Plates Co. Ltd. 2022 Annual Report

3. Expenses

Unit: RMB

Notes to significant

FY2022 FY2021 Change over last year

change

Selling and distribution

128489696.80141394565.57-9.13%

expenses

General and Affected by decreases

administrative 663080654.45 1187239442.10 -44.15% in salaries repair costs

expenses and labor costs

Financial expenses 523070165.35 536593635.06 -2.52%

Research and

58088008.1456401594.442.99%

development expenses

4. Research and development input

□Applicable □Not applicable

Expected impact on the

Main R&D project

Project purpose Project progress Intended goal future development of

name

the Company

Through process technology It helps Bengang to

research realize the enter the high-end

Achieve stable

industrialized production of bearing steel market

control of chemical

special quality bearing steel improve the economic

Oxygen titanium composition

to provide support for high- efficiency of the

Key technology calcium and inclusions inclusions low-

speed trains automobiles enterprise and can

research on smelting control process research frequency

wind power and other high- lead the overall special

of special quality is underway and organization and

end equipment fields and steel process

bearing steel production process trials rolling contact

meet the raw material technology progress

are being conducted. fatigue life of bearing

needs of domestic and laying the foundation

steel greater than

international high-end for building a high-

107 cycles.

bearing manufacturing quality special steel

enterprises. production base.Through blast furnace

breakage investigation

Completed breakage The exploration of the

furnace design analysis

investigation refractory safe life cycle of

resistant material Clarify the

erosion mechanism castables is of great

performance analysis mechanism of

research formed Blast significance to

binder simulation furnace cylinder

Furnace Lining Erosion Bengang and the

Long life technology experiment and mechanism breakage improve

Characteristics Analysis successful development

study of blast analysis blast furnace the blast furnace life

and Blast Furnace of new furnace cylinder

furnace No.5 operation analysis and blast by 1 year on the

Cylinder Binder Physical technology can

furnace rapid repair basis of design and

Phase and Performance fundamentally solve

technology analysis we reach 3.5 years of

Analysis two analysis the problem of the

analyze the causes of castable material life.reports completed the short life of large blast

furnace cylinder breakage

mid-term node. furnaces.and take effective measures

to improve the cylinder life.Through improving the Expand the market

cleanliness of the strip order quantity of cold-

High-grade cold- Improve the surface quality

optimizing the acid rolled automobile outer

rolled automotive of high-grade cold-rolled Batch production

rolling speed and plates improve the

outer plate surface automotive outer plates to qualification rate of

changing the rolling visibility of cold-rolled

quality meet user needs and reduce 72% or more.mode of the flattening automobile outer plate

improvement manufacturing costs.machine from constant products enhance

elongation to constant market

18Bengang Steel Plates Co. Ltd. 2022 Annual Report

Expected impact on the

Main R&D project

Project purpose Project progress Intended goal future development of

name

the Company

rolling force mode competitiveness and

optimizing the final create considerable

rolling temperature of economic benefits.the hot rolling and the

pressing rate of the cold

rolling the focus is on

solving the longitudinal

stamping stripe and

wide plate scooping

defects of the high-

grade outer plate.At present processing

enterprises mainly purchase

1500mm-based high-

strength tank steel

materials equipment

production efficiency is low

the efficiency of personnel is

low while because of more

welding seams led to an

Take advantage of the

increase in man-hours With efficiency as the

2300 unit to produce

aesthetics and other focus according to

high strength thin

defects. The market is in the light weight

Completed laboratory specification and wide

Research and urgent need of extra-wide demand of steel for

research industrial trial width expand the

development of specification tank steel commercial vehicle

production has market of such

steel for wide high (width ≥ 1800mm) which tanks the Company

achieved batch stable products form unique

strength tank series can effectively improve the has developed a wide

supply. products fill the gaps in

utilization rate of materials range of high-

the industry and

equipment personnel and strength steel for

improve market

production efficiency of tank series.competitiveness.processing enterprises.Using the advantages of the

production line of Bensteel

2300 unit to produce wide

specification high strength

steel the development of

wide high strength tank

body series with steel to

meet market demand.Based on the study of Based on the For the current Ti

microstructure grain metallographic tests the micro-alloyed

boundary characteristics grain size of the micro- 500MPa ~ 750MPa

precipitation phase alloyed series of hot-rolled

characteristics automotive structural automotive

Micro-alloyed series

strengthening mechanism high-strength steels was structural beam

of automotive

and other mechanisms of measured using Image- steel compartment This project focuses on

structural high-

micro-alloyed automotive Pro Plus software and steel and hot-rolled increasing sales by

strength steel

structural high-strength the contribution of pickled plate etc. to improving customer

performance

steel the micro-alloyed precipitation achieve the average satisfaction.stability technology

series of hot-rolled strengthening to yield tensile strength

research

automotive structural high- strength was back- ±50MPa range hit

strength beam steel calculated from the rate from the current

compartment steel and actual performance test 78.71% to 85.00%

automotive structural steel results and then the the use of increased

performance stability is differences of Ti content reduce

19Bengang Steel Plates Co. Ltd. 2022 Annual Report

Expected impact on the

Main R&D project

Project purpose Project progress Intended goal future development of

name

the Company

improved through the precipitation the amount of

control of steel-making strengthening with precious alloy.composition and precise different Ti contents and

control of the hot rolling its contribution to yield

process. strength were analyzed.Information on research and development personnel by the Company

FY2022 FY2021 Change over last year

Number of research and development staff 1601 1798 -10.96%

Proportion of number of research and development staff 10.83% 9.53% 1.30%

Educational structure of research and development staff

Bachelor 1158 1233 -6.08%

Master's degree 164 162 1.23%

Age composition of research and development staff

Under the age of 30 82 109 -24.77%

30 to 40 years old 471 586 -19.62%

Information on research and development input by the Company

FY2022 FY2021 Change over last year

Amount of research and development investment (RMB) 1923920000.00 2343822000.00 -17.92%

Proportion of research and development investment to operating

3.07%3.01%0.06%

income

Amount of capitalized research and development investment 0.00 0.00 0.00%

Proportion of capitalized research and development investment

0.00%0.00%0.00%

accounted to total research and development investment

Reasons for and effects of significant changes in the composition of the Company's R&D staff

□Applicable□Not applicable

Reasons for the significant change in total R&D investment as a proportion of operating income compared to the previous year

□Applicable□Not applicable

Reasons for the significant change in the capitalization rate of R&D investment and its reasonableness

□Applicable□Not applicable

5. Cash flow

Unit: RMB

Item FY2022 FY2021 Change over last year

Subtotal of cash inflows from operating activities 51680631749.58 56328587878.30 -8.25%

Subtotal of cash outflows from operating activities 50404268784.02 55915114424.26 -9.86%

Net cash flows from operating activities 1276362965.56 413473454.04 208.69%

Subtotal of cash inflows from investing activities 145128645.47 11402720358.72 -98.73%

Subtotal of cash outflows from investing activities 1707467068.85 7504976365.56 -77.25%

Net cash flows from investing activities -1562338423.38 3897743993.16 -140.08%

Subtotal of cash inflows from financing activities 4759751595.78 8162945228.08 -41.69%

Subtotal of cash outflows from financing activities 9497398695.88 15363346740.69 -38.18%

Net cash flows from financing activities -4737647100.10 -7200401512.61 -34.20%

Net increase in cash and cash equivalents -5002436380.28 -2930318531.64 70.71%

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

□Applicable □Not applicable

(1) Net cash flow from operating activities increased by 208.69% compared with the previous period mainly due to the decrease

in profit for the period the decrease in income tax paid and the receipt of incremental retained tax refund for value-added tax in

20Bengang Steel Plates Co. Ltd. 2022 Annual Report

the period.

(2) The subtotal cash inflow from investing activities decreased by 98.73% compared with the previous period mainly due to the

decrease in time deposits in the current period.

(3) The subtotal of cash outflow from investing activities decreased by 77.25% compared with the previous period which was

mainly due to the absence of investment and financial management activities in the current period.

(4) Net cash flow from investing activities decreased by 140.08% compared with the previous period mainly due to the decrease

in time deposits collected and the absence of investment and financial management activities in the current period.

(5) The subtotal of cash inflow from financing activities decreased by 41.69% compared with the previous period mainly due to

the decrease of borrowings in the current period.

(6) The subtotal of cash outflow from financing activities decreased by 38.17% compared with the previous period mainly due to

the decrease in repayment of loans and interest on loans and the decrease in restricted monetary funds in the current period.

(7) Net cash flow from financing activities decreased by 34.2% compared with the previous period mainly due to the decrease in

repayment of loans and interest on loans in the current period.

(8) Net increase in cash and cash equivalents increased by 70.71% compared with the previous period mainly due to the

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

□Applicable□Not applicable

V. Analysis of non-core business

□Applicable □Not applicable

Unit: RMB

Whether it is

Amount Proportion of total profit Reason for formation

sustainable or not

Investment income from disposal of

Investment Income 89589183.44 -8.29% No

long-term equity investments

Due to the increase in the provision

Asset impairment -33475219.25 0.40% No

for inventory impairment

Non-operating Due to the income from disposal of

40130944.39 -3.71% No

income non-current assets

Due to the disposal of assets in

Operating expenses 26623177.77 -2.46% No

the current period

VI. Analysis of assets and liabilities

1. Significant change of assets components

Unit: RMB

Ending balance of 2022 Beginning balance of 2022

Notes to

Proportion Proportion Proportion

significant

Amount in the total Amount in the total change

change

assets (%) assets (%)

Due to

Cash and cash repayment of

1461145641.873.31%8831095737.8516.01%-12.70%

equivalents borrowings by

the Company

Accounts receivable 897230896.06 2.03% 256850782.71 0.47% 1.56%

Contract assets 0.00%

Inventory 8463728475.18 19.19% 10190166138.98 18.48% 0.71%

Investment properties 0.00%

21Bengang Steel Plates Co. Ltd. 2022 Annual Report

Long-term equity

51030777.180.12%2981784.070.01%0.11%

investments

Fixed assets 24836556422.90 56.30% 25480674048.94 46.20% 10.10%

Construction in

3158195899.657.16%2434182101.134.41%2.75%

progress

Right-of-use assets 1379990713.89 3.13% 1440365248.31 2.61% 0.52%

Due to

repayment of

Short-term loans 49200000.00 0.11% 4053088140.00 7.35% -7.24%

borrowings by

the Company

Contract liabilities 3794115592.29 8.60% 4708188093.78 8.54% 0.06%

Long-term borrowings 1726938302.30 3.91% 4222821771.74 7.66% -3.75%

Lease liabilities 1384348462.18 3.14% 1424667169.15 2.58% 0.56%

High proportion of abroad assets

□Applicable□Not applicable

2. Assets and liabilities measured at fair value

□Applicable□Not applicable

3. Restricted assets by the end of the period

Items Closing balance Restricted reasons

Bank acceptance margin 164482958.67 Margin on bills

355701965.15 Pledge and endorsement discounting

Letter of credit margin

not yet due

1016420266.27 Release of pledge agreement has been

signed and application for release of

Loan margin

registration of equity pledge is in

process

85164490.39 Mortgage to obtain funds for

Time deposit or notice deposit for guarantee

borrowing

35260567.22 Mortgage to obtain funds for

Restricted deposits

borrowing

Total 1657030247.70

VII. Analysis of the investment situation

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

22Bengang Steel Plates Co. Ltd. 2022 Annual Report

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

23Bengang Steel Plates Co. Ltd. 2022 Annual Report

(1) Use of raised funds

□Applicable □Not applicable

Unit: RMB 10000

Cumula

Amoun

tive The

The total Cumulati t of

propor purpose

amount of ve total funds

tion of and

Used funds amount raised

Method Total The total total The total destinat

amount of raised for of funds after

Ye of amount of used raised amount of ion of

raised change of raised being

ar raising raised amount of funds funds raised the

fund this purpose for idle for

funds funds funds raised for not used raised

period during the change more

change funds

reporting of than

s of not yet

period purpose two

purpos used

years

es

Private

placeme

20

nt to 396580 4520.32 338726.62 57853.38 Deposit

18

raise

funds

Issue of

20 converti 10147

675920 62608.05 423676.46 252243.54 Deposit

20 ble 9

bonds

To 10147

--107250067128.37762403.08000.00%310096.92--

tal 9

Description of the overall use of raised funds

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

Details of the actual use of proceeds in FY2022 of the Company are set out in Appendix I Comparison Table on the Use of Proceeds

from Non-public Offering of Shares and Appendix II Comparison Table on the Use of Proceeds from Public Offering of Convertible

Bonds.

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

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

locations and implementation methods.

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

(1) Status of preliminary investment and replacement of funds raised from non-public offering of stocks

At the 14th meeting of the 7th Board of Directors and the 10th meeting of the 7th Board of Supervisors of the Company About the

Use of Raised Funds to Replace Pre-Invested Raised Funds for Investment Projects was reviewed and approved. Before the raised

funds arrive in the account in order to ensure the smooth implementation of the raised investment projects the Company uses

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

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

and RMB 338616121.68 for the hot-dip galvanizing production line project of the third cold rolling plant.During the period from March 1st 2018 to February 28th 2019 the Company paid RMB 88296207.56 for the construction of

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

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

replaced from the special account of raised funds). The Company transferred RMB 86709830.40 from the fundraising account to

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

24Bengang Steel Plates Co. Ltd. 2022 Annual Report

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

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

transferred the above amount from the fundraising account to the general deposit account in 2021.During the period from June 1st 2021 to May 31st 2022 the Company paid the amount of RMB 37435207.38 for the construction

of the raised fund investment project with self-raised funds all of which was used for the construction of cold-rolled high-strength

steel renovation project. As of December 31st 2022 the Company has transferred the above amount from the fund-raising account

to the general deposit account in 2022.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the project construction amount of RMB 1082356809.47 including high grade high magnetic inductance non-oriented silicon

steel project RMB 180000.00. The No. 8 casting machine project is RMB 55364729.08 the No. 5 blast furnace capacity

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

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

renovation project in the steel plant item RMB 30111840.69. The Company has transferred the above amount from the fundraising

account to the general deposit account in 2021.During the period from June 1st 2021 to May 31st 2022 the Company paid the construction amount of RMB 614208698.23 for the

investment projects with self-raised funds including: No.8 casters project of steel-making plant No.8 RMB 12881890.61 No.5 blast

furnace capacity replacement project of iron making plant RMB 17508088.97 electric furnace upgrade project of special steel

RMB 364155482.35 CCPP power generation project RMB 186441497.75 No.4 and No.6 converters environmental improvement

project of steel making plant RMB 33221738.55. The Company has transferred the above amount from the fund-raised account to

the general deposit account in 2022.

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

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

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

provisions of the Supervisory Guidelines for Listed Companies No. 2 - Supervisory Requirements for the Management and Use of

Funds Raised by Listed Companies (Revised in 2022) (SFC Announcement [2022] No. 15) and other normative documents in line

with the principle of following the principle of maximizing the interests of shareholders and on the premise of ensuring the capital

needs of the raised funds investment projects and the normal progress of the raised funds investment projects in order to improve

the use efficiency of raised funds will further reduce the company's financial costs reduce financial expenditures and protect the

interests of investors. The Company plans to use idle raised funds to temporarily supplement working capital. The use period shall

not exceed 12 months from the date of deliberation and approval by the Board of Directors. Liquidity will save the company

financial expenses.

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

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

25Bengang Steel Plates Co. Ltd. 2022 Annual Report

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

use shall not exceed 12 months from the date of approval by the Board of Directors (March 13th 2018).As of March 11th 2019 the Company has returned all the above-mentioned idle raised funds of RMB 530000000.00 used to

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

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

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

use shall not exceed 12 months from the date of approval by the Board of Directors (March 21st 2019).As of March 23rd 2020 the company has returned all the above-mentioned idle raised funds of RMB 742000000.00 used to

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

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

The Company used idle raised funds of RMB 666000000.00 (RMB 370000000.00 for the cold-rolled high-strength steel

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

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

eighth supervisory committee. The independent directors of the Company issued a clear agreement and the replenishment of

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

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

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

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

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

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

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

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

and approved and the independent directors of the Company have issued a clear agreement that the time for replenishing working

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

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

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

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

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

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

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

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

and approved and the independent directors of the Company have expressed their clear consent and the replenishment of

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

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

Temporarily Supplement Working Capital.As of July 28th 2022 the Company used the idle funds raised from non-public issuance of stocks to temporarily supplement the

26Bengang Steel Plates Co. Ltd. 2022 Annual Report

balance of working capital of RMB 604000000.00.

6) In July 2022 the funds raised from the non-public offering of stocks temporarily supplemented the working capital

The Company used idle funds raised of RMB 592000000.00 (RMB 308000000.00 for the cold-rolled high-strength steel renovation

project and RMB 284000000.00 for hot-dip galvanizing production line projects of three cold-rolling plants) to temporarily

supplement the working capital at the third meeting of the 9th Board of Directors and the third meeting of the 9th Supervisory

Committee of the Company held on July 28th 2022 considered and approved and the independent directors of the Company have

expressed their clear consent to the supplemental working capital for a period not exceeding 12 months.The sponsor of the Company's non-public offering agreed to the Company's use of idle raised funds to temporarily supplement

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

Temporarily Supplement Working Capital.As of December 31st 2022 the balance of the Company's use of the idle proceeds from the non-public offering of shares to

temporarily replenish working capital was RMB 592000000.00.

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

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

The Company used idle raised funds of RMB 4180000000.00 (RMB 1010000000.00 for the high-grade high magnetic induction

non-oriented silicon steel project RMB 220000000.00 for the No. 8 casting machine project of the steelmaking plant RMB

800000000.00 for the production capacity replacement project of the No. 5 blast furnace in the ironmaking plant and RMB

1300000000.00 for special steel electric furnace upgrade and reconstruction project RMB 700000000.00 for CCPP power

generation project RMB 150000000.00 for steel plant No. 4-6 converter environmental protection renovation project) Temporarily

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

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

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

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

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

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

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

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

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

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

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

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

working capital The nineteenth meeting of the eighth Board of Directors of the company held on July 28th 2021 It was reviewed and

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

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

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

Use of Idle Raised Funds to Temporarily Supplement Working Capital.As of July 28th 2022 the Company used the idle funds raised from the public issuance of convertible corporate bonds to temporarily

supplement the balance of working capital of RMB 3030000000.00.

(3) In July 2022 the funds raised from the public offering of convertible bonds temporarily replenished working capital

The Company used idle proceeds of RMB 3014000000.00 (RMB 1015000000.00 for high grade high magnetic susceptibility non-

27Bengang Steel Plates Co. Ltd. 2022 Annual Report

oriented silicon steel project RMB 165000000.00 for No. 8 casters project of steel making plant RMB 175000000.00 for No. 5

blast furnace capacity replacement project of iron making plant RMB 933000000.00 for special steel electric furnace upgrade

project CCPP power generation project RMB 578000000.00 and RMB 148000000.00 for environmental protection improvement

project of No. 4-6 converters of steel making plant) temporary supplemental working capital matters were considered and

approved at the third meeting of the ninth session of the Board of Directors and the third meeting of the ninth session of the

Supervisory Committee of the Company held on July 28th 2022 and the independent The directors have expressed their clear

consent to the supplemental liquidity for a period not exceeding 12 months.The sponsor of the Company's public offering of convertible corporate bonds agreed that the Company will use idle raised funds to

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

Use of Idle Raised Funds to Temporarily Supplement Working Capital.As of December 31st 2022 the balance of RMB 3014000000.00 was used by the Company to temporarily replenish working

capital with idle proceeds from the public offering of convertible corporate bonds.

5. Cash management with idle raised funds

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

6. Use of surplus raised funds

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

raised fund investment projects

7. Use of over-raised funds

The Company does not use over-raised funds.

8. Purpose and whereabouts of unused raised funds

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

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

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

temporarily deposited in a special account for raised funds.Other information on the use of raised funds

There were no other situations about the use of raised funds of the Company.

28Bengang Steel Plates Co. Ltd. 2022 Annual Report

(2) Fundraising commitments

□Applicable □Not applicable

Unit: RMB 10000

Wheth

Has

er the

the

item Item

Total proje

has Cumulative Investment reach

Commitment committe Amount Benefits Whether ct

been Adjusted investment progress es

to investment d invested realized the feasi

change total amount by by the end sched

projects and investme during the during the expected bilit y

d investme the end of of the uled

over-raised nt of reporting reporting benefit is chan

(includi nt (1) the period period (3) availa

funds raised period period achieved ged

ng (2) = (2)/ (1) bility

funds signif

some date

ica

change

ntly

s)

Commitment to Investment Projects

Cold-rolled

high-strength

steel No 226580 226580 4520.32 197212.39 87.04% -14582.14 No No

renovation

project

Hot-dip

galvanizing

production

No 70000 70000 41514.24 59.31% -1797.61 Yes No

line project of

the third cold

rolling plant

Repay bank Not

No 100000 100000 100000 100.00% No

loan applicable

High grade

high magnetic

induction

Not

non-oriented No 101620 101620 141 0.14% No

applicable

silicon steel

engineering

project

Steel Plant

No. 8 Casting

No 33500 33500 1300.8 17648.91 52.68% -8801.71 Yes No

Machine

Project

No. 5 blast

furnace

capacity

No 96000 96000 1805.68 78499.23 81.77% -8672.7 No No

replacement

project in

ironworks

Special Steel

Electric

Furnace Not

No 141600 141600 37182.68 78904.64 55.72% No

Upgrade and applicable

Reconstructio

n Project

CCPP power No 83300 83300 18996.71 40437.02 48.54% Not No

29Bengang Steel Plates Co. Ltd. 2022 Annual Report

Wheth

Has

er the

the

item Item

Total proje

has Cumulative Investment reach

Commitment committe Amount Benefits Whether ct

been Adjusted investment progress es

to investment d invested realized the feasi

change total amount by by the end sched

projects and investme during the during the expected bilit y

d investme the end of of the uled

over-raised nt of reporting reporting benefit is chan

(includi nt (1) the period period (3) availa

funds raised period period achieved ged

ng (2) = (2)/ (1) bility

funds signif

some date

ica

change

ntly

s)

generation applicable

project

Environmental

protection

renovation

project of Not

No 19900 19900 3322.17 8045.66 40.43% No

converter No. applicable

4-6 in

steelmaking

plant

Repay bank Not

No 200000 200000 200000 100.00% No

loan applicable

Subtotal of

Committed

--1072500107250067128.37762403.08-----33854.16----

Investment

Projects

Over-raised funds are invested in

None

Total -- 1072500 1072500 67128.37 762403.08 -- -- -33854.16 -- --

Explanation

by project the

situation and

reasons for

not reaching

the planned

progress and

expected The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project and the hot-

benefits dip galvanizing production line project of the third cold-rolling plant have reached their production capacity. During the

(including the reporting period other projects did not meet the planned progress or expected income.reasons for

selecting "Not

applicable" for

"Whether to

achieve the

expected

benefits")

Status of the

description of

material

None

changes in

project

feasibility

30Bengang Steel Plates Co. Ltd. 2022 Annual Report

Wheth

Has

er the

the

item Item

Total proje

has Cumulative Investment reach

Commitment committe Amount Benefits Whether ct

been Adjusted investment progress es

to investment d invested realized the feasi

change total amount by by the end sched

projects and investme during the during the expected bilit y

d investme the end of of the uled

over-raised nt of reporting reporting benefit is chan

(includi nt (1) the period period (3) availa

funds raised period period achieved ged

ng (2) = (2)/ (1) bility

funds signif

some date

ica

change

ntly

s)

Status of

amount

purpose and

Not applicable

progress of

use of over-

raised funds

Status of

changes in

implementati

on locations

Not applicable

of raised

funds

investment

projects

Status of

adjustment of

the

implementati

on method of Not applicable

raised

funds for

investment

projects

Status of Applicable

preliminary

investment

and

replacement

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

of raised

funds for

investment

projects

Status of Applicable

temporary

replenishment

of working

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

capital with

idle raised

funds

Reasons and Not applicable

amount for

the balance of

raised funds in

31Bengang Steel Plates Co. Ltd. 2022 Annual Report

Wheth

Has

er the

the

item Item

Total proje

has Cumulative Investment reach

Commitment committe Amount Benefits Whether ct

been Adjusted investment progress es

to investment d invested realized the feasi

change total amount by by the end sched

projects and investme during the during the expected bilit y

d investme the end of of the uled

over-raised nt of reporting reporting benefit is chan

(includi nt (1) the period period (3) availa

funds raised period period achieved ged

ng (2) = (2)/ (1) bility

funds signif

some date

ica

change

ntly

s)

project

implementati

on

Use and

whereabouts

For details please refer to the special report III. (8)

of unused

raised funds

Problems or

other

situations in

There is no problem otherwise

the use and

disclosure of

raised funds

(3) The situation for change of fund-raising projects

□Applicable□Not applicable

During the reporting period the Company did not have any changes in the fund raising project.VIII.Significant assets and equity sold in the reporting period

1. Significant assets sold

□Applicable□Not applicable

There was no significant asset sold during the reporting period.

32Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Substantial equity sold

□Applicable □Not applicable

Whether the

Net profit implementat

contributed by Proportion ion is on

the equity of net profit Whether the schedule as

interest to the contributed Whethe equity planned

Affiliati

Equity Transaction listed company Impact of the to the total Equity sale r it is a interests and if not

on with Disclosure Disclosure

Counterparty interests Sale day price (RMB from the sale on the net profit of pricing related involved the reasons

counter date index

sold 10000) beginning of Company the listed principles transact have been and the

parties

the period to company ion fully measures

the date of from equity transferred taken by the

sale (RMB sales Company

10000) should be

explained

The transfer will The

help promote the transaction

Announceme

Company's price is

nt on Equity

100% equity development based on the

Same Transfer and

interest in strategy of equity

subsidia Connected

Benxi Iron & Bengang Septembe "building a high- valuation

ry of October 1st Transaction

Steel Mining Co. Steel Plates r 29th 69798 quality plate value issued Yes Yes yes

Benxi 2022 of Wholly-

Ltd. Liaoyang 2022 base" and further by China

Iron & owned

Pellet Co. solve the United

Steel Subsidiary

Ltd. problem of Assets

(No. 2022-

competition in Appraisal

058)

the same Group Co.industry Ltd.

33Bengang Steel Plates Co. Ltd. 2022 Annual Report

IX. Analysis on main subsidiaries and share participating companies

□Applicable □Not applicable

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

Unit: RMB

Compa

Compan Main Registered Operating Operating

ny Total assets Net assets Net Profit

y type business capital income profit

name

Bengan

g

Puxiang

Processi

Cool

Subsidia ng and 19200000 3674072114 2303358054 9820616858 175215785. 135690857.Rolling

ry sales of 00 .13 .33 .86 24 38

Steel

steel

Sheet

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

□Applicable □Not applicable

Method of acquisition and disposal of Impact on overall production

Company name

subsidiaries during the reporting period operations and results

Harbin Nanjing Bengang Economic Trading Co. Ltd. Cancellation None

Nanjing Bengang Material Sales Co. Ltd. Cancellation None

Chongqing Liaoben Steel Trading Co. Ltd. Cancellation None

Wuxi Bengang Steel Sales Co. Ltd. Mergers and acquisitions None

Benxi Steel Baojin (Shenyang) Automobile New Loss of control of the Company due to

None

Material Technology Co. Ltd. capital increase by other shareholders

Illustration of major holding and equity participation companies

Chongqing Liaoben Steel Trading Co. Ltd. Harbin Nanjing Bengang Economic Trading Co. Ltd. and Nanjing Bengang Material

Sales Co. Ltd. were cancelled during the reporting period. Wuxi Bengang Steel Sales Co. Ltd. was absorbed and consolidated

during the reporting period. Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co. Ltd. was no longer included

in the scope of consolidation as the Company lost control due to the capital increase of Xiamen Xianghong Investment Co. Ltd.X. Structure entities controlled by the Company

□Applicable□Not applicable

XI. Prospect for future development of the Company

1. The development trend of the industry and the market competition pattern the Company faces

The year 2023 is a "challenge year" for Bengang Steel Plates to improve itself in the face of difficulties. The world economy is

entering a new period of turbulence and change as the century-old changes and the epidemic of the century intertwine

economic globalization encounters a counter-current and the game between major powers becomes increasingly fierce. At the

same time we should also clearly understand the favorable signals released by the Party's 20th National Congress China's

economic resilience potential long-term positive fundamentals have not changed with the continued force of infrastructure

demand and the steady growth of new energy vehicles the steel market is expected to end the downturn and gradually stabilize.

34Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Company development strategy

Overall work concept in 2023: take Xi Jinping Thoughts on Socialism with Chinese Characteristics in the New Era as the guiding

principle study and implement the spirit of the 20th Party Congress rely on "two main lines" adhere to "three leading" follow

the "1357" working policy anchored on the standard of world-class steel enterprises deepen and refine the "1+2+3+N" priority

work which is: focus on one center: adhere to the efficiency-centered high-quality development of listed companies; lay two

foundations: the foundation of safe development and green development; focus on three enhancements: reform and innovation

capacity enhancement management level enhancement and "N" measures to ensure a comprehensive benchmarking

enhancement and strive to build a highly competitive international high-quality plate base and a domestic first-class special

steel base.

3. Business plan

In 2023 the production and operation target: strive to complete 10.3 million tons of pig iron 11.41 million tons of crude steel

14.29 million tons of hot-rolled plate 5.7 million tons of cold-rolled plate and 720000 tons of special steel.

In order to implement the above overall work concept and production and management objectives we focus our efforts on the

following aspects:

First adhere to the efficiency as the center and comprehensively promote the high-quality development of Bengang Steel Plates

Second adhere to safe and green development and enhance the development of Bengang Steel Plates security power in all

aspects

Third adhere to breaking our limits comprehensive development of Bengang Steel Plates to create new advantages

Fourth adhere to the Party's leadership comprehensive leadership Bengang Steel Plates dream new journey

Fifth adhere to the people's supremacy and play the theme of Bengang Steel Plates in an all-round way.

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) Market risk

The world economy has not yet the momentum to recover the overall demand for steel downstream industries is weak the

steel market supply-demand relationship is weak balance and the supply exceeds demand market pattern has not changed

fundamentally. Restricted supply channels geopolitical conflicts and other factors the supply of energy resources factors market

tightening ore coal and coke and other bulk raw fuel prices fluctuate upward business operating costs increased and the

market risk highlighted.Countermeasures: Establish predictive management thinking strengthen market information collection enhance analysis and

judgment of market changes accurately control the market rhythm dynamically adjust marketing strategies and timely adjust

marketing prices; strengthen regional market synergy deepen strategic long-term cooperation and enhance the proportion of

35Bengang Steel Plates Co. Ltd. 2022 Annual Report

direct supply and sales in the market; optimize product structure adjust raw material structure seize low-cost resources

reasonably control inventory and effectively cope with market risks.

(2) Raw material supply risk

With the release and implementation of the "Fourteenth Five-Year Plan" Comprehensive Work Plan for Energy Conservation and

Emission Reduction the double-high industry capacity production "double limit" total energy consumption intensity "double

control" and carbon peak carbon neutral and other policies continue to deepen environmental regulations are becoming

increasingly stringent the upstream coal and coke enterprises to eliminate backward production capacity and environmental

governance continue to increase coal and coke production capacity is limited prices run high. In terms of iron ore supply

domestic supply is insufficient foreign dependence is still high influenced by geopolitics capital speculation and other factors

there are many uncertainties in the supply and price of iron ore and ore prices will maintain a wide range of oscillation pattern

which will have a serious impact on the supply chain security and business performance of steel companies.Countermeasures: Strengthen the analysis and analysis of raw material production capacity and market demand actively

promote strategic cooperation in raw material supply consolidate and expand domestic raw material procurement channels

deeply aggregate raw material resources accelerate the formation of domestic and foreign double-cycle supply chain security

pattern enhance the scale of procurement price advantage; scientifically control the timing of procurement timely adjustment

of procurement strategy; continuously promote process innovation optimize the production furnace structure adjust the

procurement of raw material structure reasonable control of raw material inventory adjust raw fuel winter storage policy

effectively reduce the adverse impact of raw material price fluctuations.

(3) Environmental protection risk

As the iron and steel industry continues to promote ultra-low emission policies and the "Fourteenth Five-Year Plan"

Comprehensive Work Plan for Energy Conservation and Emission Reduction the Noise Pollution Prevention and Control Law and

other environmental laws and regulations are released and implemented national and local governments are becoming

increasingly stringent on environmental protection energy conservation and emission reduction requirements and enterprises

are facing further pressure for environmental protection and green low-carbon development.Countermeasures: Deeply implement the concept of green low-carbon development strictly implement national environmental

protection laws and regulations focus on the "source reduction intermediate control terminal transformation" of the whole

process of environmental management in accordance with the "three treatment (treatment of gas water solid) the

implementation of four (that is cleaning greening beautification culture) "environmental protection concept promote the

"higher than standard better than the city into the city" green steel plant construction the full implementation of the "cleaning

greening beautification culture" project accelerate the formation of "exhaust gas ultra-low emission waste water zero

discharge solid waste does not leave the factory" green development pattern and strive to build the national steel industry

whole process ultra-low emission demonstration project and steel enterprises green development benchmark to ensure the

realization of environmental and ecological protection and green high-quality development of the "win-win" new situation.

(4) Safety production risk

The government has been increasing the supervision and punishment of enterprise safety production and occupational health. If

production safety measures are not in place and responsibilities are not implemented various types of accident hazards and

safety risks are interwoven and superimposed during production and maintenance and production safety accidents may occur

causing economic losses and adverse effects to enterprises.

36Bengang Steel Plates Co. Ltd. 2022 Annual Report

Countermeasures: Implement the important remarks of General Secretary Xi Jinping on safe production firmly establish the

concept of safe development focus on the goal of preventing and curbing serious accidents and more in-depth assessment and

grading of the risk points and danger sources identified by the special action especially to promote the work of grading and

controlling the risks of safe production promote the scientific information standardization institutionalization and

standardization of accident prevention to achieve the control of risks before the formation of hidden dangers and eliminate

hidden dangers in front of accidents.XII. Researches visits and interviews received in this reporting period

□Applicable □Not applicable

The main content

Reception time Reception Reception Reception

of the conversation Index of basic

location method type Reception object and the information ofinformation the research

provided

CITIC Construction Transcript of

Investment-Wang Company investor

February 22nd Company Telephone Institution XiaofangShenwan production and relations2022 communication Hongyuan-Meng operation and activities on

Xiangwen Chen industry situation February 22nd

Songtao 2022

Company Transcript ofinvestor

April 8th 2022 Company Others Individual Investors production andoperation and relations

industry situation activities onApril 8th 2022

Company Transcript ofinvestor

May 31st 2022 Company Telephone Hua'an Securities-Xu production andcommunication Institution Yongqi operation and relations

industry situation activities onMay 31st 2022

Hua'an Securities-Xu Company

Transcript of

investor

June 16th 2022 Company Telephone production andcommunication Institution YongqiIndividual investors operation and

relations

industry situation activities onJune 16th 2022

CITIC Securities-Tang

Chuanlin

CITIC Securities-

Wang Huixian and

Xiao Fan

Guoshou Pension-Li

Chi

Agricultural Bank of

China-Xu Qiao

Yingda Capital

Management-Zhang

Lichen Transcript of

Telephone Huarong Securities-Li

Company investor

June 27th 2022 Company communication Institution Yadong

production and relations

Changxin Fund-Cai operation andindustry situation activities onJunhua June 27th 2022

Rongtong Fund

Management Co.Ltd.-Li Guandi

Shenzhen Hongchou

Investment Co. Ltd.-

Wang Zhidong

Hangzhou Zhongda

Junyue Investment

Co. Ltd.-Lin Binbin

Shanghai Lizhen

Investment

37Bengang Steel Plates Co. Ltd. 2022 Annual Report

Management Co.Ltd.- Zhu Yujun

Shanghai RuiYi

Investment

Development Center

(Limited Partnership)

- Li Jingyao

PRUDENCE

INVESTMENT

MANAEGEMENT

(HONG KONG)

LIMITED-Zhang

Zhibin

Cinda Securities-

Zhang Chi Wang

Minglu

Huabao Fund-Sun

Jialun

Huaxin Securities

Asset Management-

Yang Jinglei Transcript of

Evergrande Life - Shi Company investor

July 14th 2022 Company Telephone production andcommunication Institution Han operation and relationsUBS SDIC Fund

Management Co. industry situation

activities on July

14th 2022

Ltd.-Wang Kan

China Capital Orient

Fund Management

Co. Ltd.-Li Jinlong

CPIC Fund

Management Co.Ltd.- Tang Jingyi

Transcript of

Company investor

September 6th

2022 Company Others Individual Investors

production and relations

operation and activities on

industry situation September 6th

2022

Transcript of

Company investor

September 15th

2022 Company Others Individual Investors

production and relations

operation and activities on

industry situation September 15th

2022

Transcript of

Company investor

September 18th

2022 Company Field research Individual Zhang Zheng

production and relations

operation and activities on

industry situation September 18th

2022

38Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section IV. 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 improving the

governance level and promoting 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 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. Controlling shareholders and actual controllers can strictly regulate their own

39Bengang Steel Plates Co. Ltd. 2022 Annual Report

behavior. 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 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 and actual controller

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 the general manager vice general manager secretary of the Board of Directors etc.receive a salary from the Company and none of them holds an important position in the shareholders' entity other than director.

(3) In Asset: The Company and controlling shareholder have a clear ownership relationship. The Company has its own

independent purchase production and marketing system.

(4) In organization: The internal operations of the Company are independent; the organization structure and working function

are totally independent.

(5) In finance: The Company has an independent financial management department the accounting and financial management

system that are complete and operated independently and has a bank account and pays taxes independently.

40Bengang Steel Plates Co. Ltd. 2022 Annual Report

III. Competition situations of the industry

□Applicable □Not applicable

Type of

Question affiliation Company Company

Cause Solution Progress and follow-up plans

type with listed name nature

companies

Industry Controlling In 2021 the

Based on the principle of

competition shareholder Company's original

benefiting the development of

actual controller

Bengang Steel and safeguarding

Liaoning State-owned

the interests of shareholders

Assets Supervision and

Ansteel especially the interests of small

Administration

Group has and medium shareholders

Commission

Ansteel made Ansteel Group will

transfered its 51%

Group Other commitments comprehensively use various

stakes in Bengang

Co. Ltd. to avoid methods such as asset

Group to Ansteel

industry restructuring business

Group for free and

competition. adjustment and entrusted

Ansteel Group will

management to steadily promote

become the

the integration of related

Company's indirect

businesses to solve the problem

controlling

of horizontal competition.shareholder

IV. Annual general meeting and extraordinary shareholders’ meetings in the reporting period

1. Annual general meeting

Investor Index of information

Sessions Type participation Meeting Date Date of disclosure

ratio disclosure

First Extraordinary Announcement of Resolutions of

Extraordinary

Shareholders General 63.41% March 3rd 2022 March 4th 2022 the First Extraordinary General

General Meeting

Meeting of 2022 Meeting of Shareholders of 2022

Annual Shareholders Announcement of Resolutions of

Annual General

General Meeting of 63.59% April 26th 2022 April 27th 2022 the Annual General Meeting of

Meeting

2021 Shareholders of 2021

Second Extraordinary Announcement of Resolutions of

Extraordinary

Shareholders General 76.72% July 22nd 2022 July 23rd 2022 the Second Extraordinary General

General Meeting

Meeting of 2022 Meeting of Shareholders of 2022

Third Extraordinary Announcement of Resolutions of

Extraordinary September 9th September 10th

Shareholders General 76.82% the Third Extraordinary General

General Meeting 2022 2022

Meeting of 2022 Meeting of Shareholders of 2022

Fourth Extraordinary Announcement of Resolutions of

Extraordinary December 2nd

Shareholders General 76.86% December 3rd 2022 the Fourth Extraordinary General

General Meeting 2022

Meeting of 2022 Meeting of Shareholders of 2022

Fifth Extraordinary Announcement of Resolutions of

Extraordinary December 29th December 30th

Shareholders General 77.07% the Fifth Extraordinary General

General Meeting 2022 2022

Meeting of 2022 Meeting of Shareholders for 2022

41Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Request for an extraordinary general meeting by preferred stockholders whose voting rights restored

□Applicable□Not applicable

V. Status of directors supervisors senior executives and employees

1. Basic situation

Number of Number of Number of Other Number of

Reasons for

shares held additional shares changes in shares held

change in

Office Starting date Expiry date of at the shares held reduced additions at the end

Name Position Sex Age share

status of office term office term beginning of during the during the and of the

increase or

the period period period deletions period

decrease

(shares) (shares) (shares) (shares) (shares)

December 7th

Huo Gang Chairman In office Male 49 April 26th 2025

2021

Director Deputy

Wang November

General In office Male 48 thth April 26 2025Shiyou 18 2021

Manager

December

Sun Zhen Director In office Male 39 th

27th

April 26 2025

2022

May 27th

Han Mei Director In office Female 53 April 26th 2025

2021

Director Deputy

Liu August 17th

General In office Male 48 April 26th 2025

Zhangman 2022

Manager

Tang Yaowu Director In office Male 50 July 22nd 2022 April 26th 2025

Zhang Independent May 16th

In office Female 67 April 26th 2025

Suxun Directors 2019

Yuan Independent May 20th

In office Male 41 April 26th 2025

Zhizhu Directors 2020

Zhong Independent May 27th

In office Female 66 April 26th 2025

Tianli Director 2021

Chairman of the

May 27th

Cheng Bin Supervisory In office Male 59 April 26th 2025

2021

Board

Bai Yufei Supervisor In office Female 52 July 22nd 2022 April 26th 2025

42Bengang Steel Plates Co. Ltd. 2022 Annual Report

Number of Number of Number of Other Number of

Reasons for

shares held additional shares changes in shares held

change in

Office Starting date Expiry date of at the shares held reduced additions at the end

Name Position Sex Age share

status of office term office term beginning of during the during the and of the

increase or

the period period period deletions period

decrease

(shares) (shares) (shares) (shares) (shares)

December 7th

Lu Weijun Supervisor In office Male 47 April 26th 2025

2021

Zhang January 26th

Supervisor In office Male 45 April 26th 2025

Yanlong 2014

Zhao June 26th

Supervisor In office Male 50 April 26th 2025

Xingtao 2019

Deputy General November

Jing Tao In office Male 52 th April 26

th 2025

Manager 18 2021

Deputy General August 17th

Guo Yuwei In office Male 53 April 26th 2025

Manager 2022

Secretary of the

Jiang Board of April 26th

In office Female 51 April 26th 2025

Xiaoyu Directors Head 2022

of Finance

Leave December

Niu Li Director Male 54 nd

office 25th

August 2 2022

2021

Director Deputy

Leave May 27th

Lin Dong General Male 52 August 2nd 2022

office 2021

Manager

Director

Gao Leave December 7th

Secretary of the Male 48 July 6th 2022

Desheng office 2021

Board

Zhao Leave May 27th

Supervisor Female 38 July 6th 2022

Zhonghua office 2021

Yang Deputy General Leave April 16th

Male 58 August 2nd 2022

Xiaofang Manager office 2021

Wang Chief Leave November

Male 53 April 26th 2022

Donghui Accountant office 18th 2021

Total -- -- -- -- -- -- 0 0 0 0 0 --

43Bengang Steel Plates Co. Ltd. 2022 Annual Report

During the reporting period is there any resignation of directors and supervisors and dismissal of senior management personnel

in the reporting period?

□Yes □No

(1) Mr. Niu Li a former employee Director of the Company resigned during the reporting period due to job changes during his

term of office.

(2) Mr. Lin Dong former Director and Deputy General Manager of the Company resigned during the reporting period due to a

change in his employment during his term of office.

(3) Mr. Gao Desheng former Director and Secretary of the Board of Directors of the Company resigned during the reporting

period due to changes in his work during his term of office

(4) Mr. Yang Xiaofang the former Deputy General Manager of the Company resigned during the reporting period due to

changes in his work during his term of office

(5) Ms. Zhao Zhonghua the former Supervisor of the Company resigned during the reporting period due to changes in her work

during her term of office.

(6) Mr. Wang Donghui the former Chief Accountant of the Company resigned during the reporting period due to the change in

his work during his term of office.Changes in directors supervisors and senior management of the Company

□Applicable □Not applicable

Name Position Office status Date Reason

Niu Li Director Leave office August 2nd 2022 Voluntary turnover

Lin Dong Director Deputy General Manager Leave office August 2nd 2022 Voluntary turnover

Gao Desheng Director Secretary of the Board Leave office July 6th 2022 Voluntary turnover

Zhao Zhonghua Supervisors Leave office July 6th 2022 Voluntary turnover

Termination of

Yang Xiaofang Deputy General Manager August 2nd 2022 Job change

employment

Termination of

Wang Donghui Chief Accountant April 26th 2022 Job change

employment

2. Posts holding

Professional background major work experience and current major responsibilities in the Company of the current directors

supervisors and senior management

Member profiles of the Board of Directors:

Huo Gang male 49 years old Ph. D. professor-researcher-level senior engineer. He successively served as the director of the

steel rolling branch of Benxi Iron and Steel Cold Rolling Plant; the deputy director of the technology department of Benxi Iron and

Steel No. 2 Cold Rolling Plant; the deputy director of the technology department and the director of the inspection laboratory

the director of the production department the assistant to the general manager the deputy general manager General Manager;

Secretary of the Party Committee and Executive Deputy Director and Director of the Third Cold Rolling Plant of Benxi Steel Plate

Company; Deputy General Manager and Director of the Cold Rolling Plant of Bengang Steel Plate Co. Ltd.; Secretary of the Party

Committee Chairman and Chairman of the Labor Union of Benxi Iron and Steel International Trade Company. He is currently a

member of the Standing Committee of the Party Committee and Deputy General Manager of Bengang Group Secretary of the

Party Committee and Chairman of the Board of Directors of Sheet Metal Company and Chairman of the Board of Directors of

44Bengang Steel Plates Co. Ltd. 2022 Annual Report

Bengang Puxiang Company.Wang Shiyou male 48 years old master senior engineer. He successively served as the director of the thermal workshop and the

secretary of the party branch of the iron-making plant of Bengang Steel Plates Company the deputy director of the new No. 1

blast furnace workshop the director of the fifth blast furnace workshop and the secretary of the party branch the chief of the

production section the chief of the planning section and the deputy director; Benxi Steel Director of Standard Management of

the Manufacturing Department of the Plate Company; Director of the Iron-making Plant of Benxi Iron and Steel Beiying Company;

Secretary of the Party Committee and Director of the Iron-making General Plant of Benxi Iron and Steel Plate Company. He is

currently the deputy secretary of the party committee director and deputy general manager of Bengang Steel Plates Co. Ltd.(temporarily responsible for overall production and operation).Sun Zhen male 39 years old bachelor of university assistant economist. He has served as the director of the office of Bengang

Steel Plates Company; secretary of the organ party committee chairman of the labor union director of the office and secretary

of the Board of Directors of Bengang Group Company; deputy head of the party committee preparatory group head of the

disciplinary committee preparatory group chairman of the labor union employee director general counsel head of the organ

party committee preparatory group of Bengang Steel Mining Company; deputy secretary of the party committee head of the

disciplinary committee preparatory group chairman of the labor union secretary of the organ party committee of Bengang Steel

Plates Company; he is currently the deputy secretary of the party committee secretary of the disciplinary committee chairman

of the labor union and secretary of the organ party committee and employee director of Bengang Steel Plates Company.Liu Zhangman male 48 years old college degree senior engineer. He has served as deputy director of Beiying Second

Steelmaking Plant deputy director of Beiying Steelmaking Plant; assistant to the executive vice general manager of Beiying

Company and chairman of Science and Technology Association director of Technology Center; chief engineer of Beiying Company

and chairman of Science and Technology Association director of New Products Department manager of bar and wire

development project department director of Bar and Wire Institute; deputy general manager and director of Bengang Beiying

Company; deputy director of manufacturing department of Bengang Steel Plates; deputy general manager of the Operations

Management Department of Bengang Group. Currently he is a director and deputy general manager of Bengang Steel Plates Co.Ltd.Han Mei female 53 years old Bachelor senior accountant. She successively served as the deputy director of the finance

department of Bengang Steel Plate Co. Ltd.; the deputy director of the audit department of Benxi Iron and Steel Group Co. Ltd.and the director of the supervisory board management department the deputy chairman of the third board of supervisors the

supervisor of Benxi Iron and Steel Group Finance Company and the auditor of Benxi Iron and Steel (Group) Co. Ltd. Director of

the Department; Director of the Audit Department of Bengang Group Co. Ltd. Chairman and Vice Chairman of the Supervisory

Committee of Bengang Steel Plate Co. Ltd. She is currently the Deputy Chief Accountant of Benxi Iron and Steel Group

Corporation General Manager of the Finance Department of Benxi Iron and Steel Group and Director of Benxi Iron and Steel

Plate Company.Tang Yaowu male 50 years old bachelor of university engineer. He has served as deputy director of the rolling mill of Bengang

Beiying Company; executive deputy director of the rolling mill of Bengang Beiying Company; director of the rolling mill of

Bengang Beiying Company; assistant to the general manager and director of the production department of Bengang Beiying

Company; chief engineer of Bengang Beiying Company; chief engineer and director of the rolling mill of Bengang Beiying

Company; deputy general manager and chief engineer of Bengang Beiying Company; deputy director of energy and

environmental protection department of Bengang Steel Plates. He is currently a full-time director and supervisor of Bengang

Group's office; director of Stainless-Steel Company; director of Machinery Manufacturing Company; director of Bengang Steel

Plates Co. Ltd. and supervisor of Thermal Power Development Company.

45Bengang Steel Plates Co. Ltd. 2022 Annual Report

Zhang Suxun Female 67 years old bachelor's degree professor. She has served as a teacher at the Business School of Liaoning

University; now she is retired.Yuan Zhizhu male 41 years old PhD associate professor of accounting at Northeastern University master tutor non-practicing

member of Chinese certified public accountants. He has served as a lecturer in the School of Business Administration of

Northeastern University; he is currently the director of the Accounting Department of the School of Business Administration of

Northeastern University and serves as a director of the Liaoning Accounting and Abacus Mental Arithmetic Society and a director

of the Liaoning Auditing Society.Zhong Tianli Female born in 1966 professor (doctoral supervisor) at Northeastern University. She successively served as the

deputy dean of the School of Business Administration of Northeastern University; the dean of the School of Basic Studies of

Northeastern University and the director of the Institute of Financial Management of the Business School of Northeastern

University; she is currently a professor of the Accounting Department of the School of Business Administration of Northeastern

University.Members profile of the Supervisory Board:

Cheng Bin male 59 years old master senior engineer. He successively served as the director of the material supply department

of Benxi Iron and Steel; the vice chairman of the board the secretary of the party committee and the chairman of the labor

union the secretary of the Disciplinary Committee and the deputy manager of Bengang International Trade Co. Ltd.; the

director of the customer service department of the sales department of Bengang Steel Plate Co. Ltd.; Secretary of the Party

Committee and Manager of the Center; Secretary of the Party Committee and Deputy Director of the Hot Rolling Plant of

Bengang Steel Plate Co. Ltd. Ltd.; Director of the Audit Department of Bengang Group; currently Chief Auditor of Bengang Group

Corporation and Chairman of the Supervisory Board of Bengang Steel Plate Co. Ltd.Bai Yufei female 52 years old master senior engineer. She has served as assistant professor and lecturer in the construction

teaching and research department of the Department of Mechanical Construction of Bengang Engineering College; director of

the engineering audit division of the audit department of Bengang Group Company; director of the audit department of the

Plates Company; supervisor of the Finance Company; executive deputy head of the preparation group of Bengang Group Tender

Company; manager of Bengang Group Tender Company. Currently she is the general manager of the audit department of

Bengang Group Company director of Mining Company and supervisor of Bengang Steel Plates Co. Ltd.Lu Weijun male 47 years old master senior accountant. He successively served as the chief of the cost section of the finance

department of Benxi Iron and Steel (Group) Construction Co. Ltd.; the chief business engineer of the audit department of Benxi

Iron and Steel Sheet Co. Ltd.; the chief business engineer of the audit department of Benxi Iron and Steel Group Corporation. He

is currently the Supervisor and Deputy Manager of the Finance Department of Bengang Steel Plate Co. Ltd.Zhang Yanlong Male 45 years old master senior engineer. He successively served as production director of the steelmaking

workshop of Bengang Steel Plate Co. Ltd. steelmaking plant; deputy section chief of the technical quality section of Bengang

Steel Plate Co. Ltd. steelmaking plant; director of the steelmaking workshop of Bengang Steel Plate Co. Ltd. steelmaking plant;

Bengang Steel Plate Co. Ltd. Chief of the production section of the company's steelmaking plant; assistant to the director of the

steelmaking plant of Bengang Steel Plate Co. Ltd.; currently deputy director of the steelmaking plant of Bengang Steel Plate Co.Ltd.; supervisor of Bengang Steel Plate Co. Ltd.Zhao Xingtao male 50 years old university degree master of engineering senior engineer. He has served as deputy chief

engineer of Bengang Puxiang Company; deputy general manager of Bengang Puxiang Company; deputy director of the cold

rolling mill of Bengang Steel Plates Co. Ltd.; secretary of the party committee and chairman of labor union of the cold rolling mill

of Bengang Steel Plates Co. Ltd. He is currently the deputy head of the party committee preparatory group head of the

46Bengang Steel Plates Co. Ltd. 2022 Annual Report

disciplinary committee preparatory group and chairman of the labor union of Bengang Steel Plates Company Marketing Center

and supervisor of Bengang Steel Plates Co. Ltd.Profile of non-director senior management:

Jing Tao male 52 years old master senior engineer. He has served as director of the finishing workshop and deputy secretary of

the party branch of the hot rolling mill head of the technical quality section and secretary of the party branch assistant plant

manager and deputy plant manager of Bengang Steel Plates; deputy director secretary of the party committee and deputy

director of the quality management center manager of the packaging project department and manager of the Packaging

Company of Bengang Steel Plates; director of the hot rolling mill of Bengang Steel Plates; secretary of the party committee and

chairman of the labor union and vice president of the technical research institute of Bengang Steel Plates; director of the science

and technology innovation department of Bengang Group. He is currently the deputy general manager and general counsel of

Bengang Steel Plates and the head of the party committee preparation group of the marketing center of the Plates Company.Guo Yuwei male 53 years old master's degree senior engineer. He has served as assistant director of iron making plant and

deputy director of iron making plant of Bengang Steel Plates Company; secretary of the party committee and chairman of the

labor union of iron making plant and deputy director of iron making plant of Bengang Steel Plates Company; member of

preparatory group of the party committee and deputy general manager of Beiying Company director of Bengang Steel

Construction Company; secretary of the party committee and deputy director of iron making plant of Bengang Steel Plates

Company; He is currently the deputy general manager of Bengang Steel Plates Co. Ltd.Jiang Xiaoyu female 51 years old university degree senior accountant. She has been the director of comprehensive

management director of capital management and deputy general manager of the finance department of Bengang Group

Company and supervisor of Benxi Beiying Iron & Steel (Group) Co. Ltd. She is currently the assistant general manager financial

officer and secretary of the Board of Directors of Bengang Steel Plates and the chairman of the supervisory board of Northeast

Special Steel.Positions in shareholder units

□Applicable □Not applicable

Does he /she receive

Expiry date

Names of the Names of the Titles engaged in the Starting date of remuneration or

of office

persons in office shareholders shareholders office term allowance from the

term

shareholder

Bengang Group

Huo Gang Deputy General Manager October 11th 2022 Yes

Co. Ltd.Deputy Chief Accountant

Bengang Group

Han Mei General Manager of February 1st 2021 Yes

Co. Ltd.Finance Department

Bengang Group

Tang Yaowu Full-time Director April 20th 2022 Yes

Co. Ltd.Bengang Group

Cheng Bin Chief Auditor February 1st 2021 Yes

Co. Ltd.Bengang Group General Manager of Audit

Bai Yufei November 29th 2021 Yes

Co. Ltd. Department

Description of

the position in None

the shareholder

Posts holding in other companies

□Applicable □Not applicable

47Bengang Steel Plates Co. Ltd. 2022 Annual Report

Does he /she

receive

Names of the Names of the other Titles engaged in Starting date of Expiry date of

remuneration or

persons in office companies other companies office term office term

allowance from

the shareholder

Bengang POSCO Cold-

Huo Gang Chairman November 1st 2021 No

rolled Sheet Co. Ltd.Dongbei Special Steel Chairman of the

Han Mei May 11th 2022 No

Group Co. Ltd. Supervisory Board

Description of

the position in None

other companies

Punishment by the security’s regulatory authorities in the last three years

□Applicable□Not applicable

3. 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

assessments 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

The remuneration scheme for a particular position is recognized based on the range of responsibilities and 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 10000

Total Whether receive

remuneration remuneration in the

Name Position Sex Age Office status

received from Company's related

the shareholder parties

Huo Gang Chairman Male 49 In office 36.95 Yes

Director Deputy General

Wang Shiyou Male 48 In office 44.1 No

Manager

Sun Zhen Director Male 39 In office 1.2 Yes

Han Mei Director Female 53 In office Yes

Director Deputy General

Liu Zhangman Male 48 In office 9.86 Yes

Manager

Tang Yaowu Director Male 50 In office Yes

Zhang SuXun Independent Director Female 67 In office 5 No

Yuan Zhizhu Independent Director Male 41 In office 5 No

Zhong Tianli Independent Director Female 66 In office 5 No

Cheng Bin Chairman of the Male 59 In office Yes

48Bengang Steel Plates Co. Ltd. 2022 Annual Report

Total Whether receive

remuneration remuneration in the

Name Position Sex Age Office status

received from Company's related

the shareholder parties

Supervisory Board

Bai Yufei Supervisors Female 52 In office Yes

Lu Weijun Supervisors Male 47 In office 22.2 No

Zhang Yanlong Supervisors Male 45 In office 35.4 No

Zhao Xingtao Supervisors Male 50 In office 33.36 No

Jing Tao Deputy General Manager Male 52 In office 30.52 No

Guo Yuwei Deputy General Manager Male 53 In office 11.92 Yes

Secretary of the Board of

Jiang Xiaoyu Female 51 In office 15.11 Yes

Directors Head of Finance

Niu Li Directors Male 54 Leaving office 17.45 Yes

Director Deputy General

Lin Dong Male 52 Leaving office 23.83 Yes

Manager

Gao Desheng Director Male 48 Leaving office Yes

Zhao Zhonghua Supervisors Female 38 Leaving office 12.95 No

Yang Xiaofang Deputy General Manager Male 58 Leaving office 18.1 Yes

Wang Donghui Chief Accountant Male 53 Leaving office 7.68 Yes

Total -- -- -- -- 335.63 --

VI. Duty fulfillment of directors during the reporting period

1. The situation of the Board of Directors during the reporting period

Sessions Meeting Date Date of disclosure Index of information disclosure

25th Eighth plenary session January 27th 2022 January 28th

Announcement on Resolutions of 25th

2022

Eighth plenary session

Announcement on Resolutions of 26th

26th Eighth plenary session February 15th 2022 February 16th 2022

Eighth plenary session

th th Announcement on Resolutions of 27th27th Eighth plenary session March 24 2022 March 26 2022

Eighth plenary session

th th Announcement on Resolutions of 1st1st Ninth plenary session April 26 2022 April 27 2022

Ninth plenary session

2nd Ninth plenary session July 6th th

Announcement on Resolutions of 2nd

2022 July 7 2022

Ninth plenary session

th th Announcement on Resolutions of 3rd3rd Ninth plenary session July 27 2022 July 28 2022

Ninth plenary session

Announcement on Resolutions of 4th

4th Ninth plenary session August 17th 2022 August 19th 2022

Ninth plenary session

th th Announcement on Resolutions of 5th5th Ninth plenary session September 25 2022 September 26 2022

Ninth plenary session

Announcement on Resolutions of 6th

6th Ninth plenary session October 26th 2022 October 28th 2022

Ninth plenary session

th th Announcement on Resolutions of 7th7th Ninth plenary session November 15 2022 November 16 2022

Ninth plenary session

Announcement on Resolutions of 8th

8th Ninth plenary session December 8th 2022 December 9th 2022

Ninth plenary session

49Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. The situation of directors attending the BOD and shareholders meeting

Attendance of Directors at Board of Directors and General Meetings of Shareholders

Failure to

Number of Number

personally

Board meetings Number of Number of of

Number of Number attend board

necessary to be meetings attendances general

Director name spot of meetings

attended during attended by by meetings

attendances absences successively

the reporting Communication representative to be

twice

period attended

(Yes/No)

Huo Gang 11 2 9 0 0 No 6

Wang Shiyou 11 2 9 0 0 No 6

Sun Zhen 0 0 0 0 0 No 0

Han Mei 11 2 9 0 0 No 6

Liu Zhangman 4 0 4 0 0 No 2

Tang Yaowu 6 0 6 0 0 No 3

Zhang Suxun 11 0 11 0 0 No 6

Yuan Zhizhu 11 0 11 0 0 No 6

Zhong Tianli 11 0 11 0 0 No 6

Niu Li 6 2 4 0 0 No 3

Lin Dong 6 2 4 0 0 No 3

Gao Desheng 5 2 3 0 0 No 2

Explanation of two consecutive absences from attending the Board of Directors in person

None

3. Objections of directors on relevant issues

Objections of independent directors on some relevant issues

□Yes √ No

Independent directors proposed no objection against the relevant matters during the reporting period.

4. Other notes to duty fulfillment of directors

Whether any director’s advice to the Company was accepted

√ Yes □ No

Illustration of acceptance of or failure to accept a director’s advice to the Company

Directors have not made recommendations during the reporting period.

50Bengang Steel Plates Co. Ltd. 2022 Annual Report

VII. Duty fulfillment of the special committees under the board during the reporting period

Important Other Specific

Number of

Committees Membership Meeting date Meeting content comments and performance circumstances of the

meetings held

suggestions raised of duties objection (if any)

Zhang Suxun Yuan January 20th 1. Proposal on the implementation of

Audit Committee 7 Agree Not applicable No

Zhizhu Han Mei 2022 daily connected transactions for 2021

1. 2021 annual report and abstract; 2.

2021 annual financial accounts report; 3.

2021 annual profit distribution proposal;

4. proposal to sign the Raw Materials and

Services Supply Agreement with Ansteel;

5. proposal to sign the Raw Materials and

Fully

Zhang Suxun Yuan March 13th Services Supply Agreement (2022-2024)

Audit Committee 7 Agree communicate No

Zhizhu Han Mei 2022 with Pangang Steel Vanadium and

with auditors

Titanium; 6. proposal to anticipate daily

connected transactions in 2022; 7. 2021

annual internal control evaluation report;

8. proposal to make provision for asset

impairment; 9. 2021 special report on the

deposit and use of funds raised

Zhang Suxun Yuan

Audit Committee 7 April 20th 2022 2022 first quarter report Agree Not applicable No

Zhizhu Han Mei

Zhang Suxun Yuan Proposal to use idle proceeds to

Audit Committee 7 July 18th 2022 Agree Not applicable No

Zhizhu Han Mei temporarily replenish working capital

1. Half-yearly report for 2022; 2. Proposal

Zhang Suxun Yuan August 10th to change the accounting firm; 3. Special

Audit Committee 7 Agree Not applicable No

Zhizhu Han Mei 2022 report on the deposit and use of proceeds

for the half-yearly period of 2022

Zhang Suxun Yuan October 20th 1. 2022 Third quarterly report; 2. Proposal

Audit Committee 7 Agree Not applicable No

Zhizhu Han Mei 2022 for change in accounting estimates

Zhang Suxun Yuan December 8th Proposal on estimated daily connected

Audit Committee 7 Agree Not applicable No

Zhizhu Han Mei 2022 transactions for 2023

1. Proposal on the general election of the

Nominating Yuan Zhizhu Zhang March 13th Board of Directors of the Company; 2.

5 Agree Not applicable No

Committee Suxun Huo Gang 2022 Proposal on the resignation of the

Secretary of the Board of Directors

51Bengang Steel Plates Co. Ltd. 2022 Annual Report

Important Other Specific

Number of

Committees Membership Meeting date Meeting content comments and performance circumstances of the

meetings held

suggestions raised of duties objection (if any)

1. Proposal to elect the chairman of the

ninth session of the Board of Directors of

Nominating Yuan Zhizhu Zhang

5 April 20th 2022 the Company; 2. Proposal to resign the Agree Not applicable No

Committee Suxun Huo Gang

senior management of the Company; 3.Proposal to appoint senior management

1. Proposal on the resignation of directors

Nominating Yuan Zhizhu Zhang st of the Company; 2. Proposal on the5 July 1 2022 Agree Not applicable No

Committee Suxun Huo Gang nomination of candidates for directors of

the Company

Proposal on the appointment of the

Nominating Yuan Zhizhu Zhang

5 July 21st 2022 Secretary of the Board of Directors of the Agree Not applicable No

Committee Suxun Huo Gang

Company

1. Proposal to nominate candidates for

Nominating Yuan Zhizhu Zhang August 10th director of the Company; 2. Proposal to

5 Agree Not applicable No

Committee Suxun Huo Gang 2022 appoint senior management of the

Company

Huo Gang Wang

th 1. 2021 annual report of the Board ofStrategy Shiyou Gao March 13

3 Directors; 2. 2022 annual investment Agree Not applicable No

Committee Desheng Zhong 2022

framework plan proposal

Tianli

Huo Gang Wang

Proposal on the sale of equity interest in a

Strategy Shiyou Gao September 19th

3 wholly-owned subsidiary and connected Agree Not applicable No

Committee Desheng Zhong 2022

transaction

Tianli

Huo Gang Wang

Strategy Shiyou Gao November 10th Proposal on the acquisition of equity

3 Agree Not applicable No

Committee Desheng Zhong 2022 interest in Ansteel Group Finance Co. Ltd.Tianli

52Bengang Steel Plates Co. Ltd. 2022 Annual Report

VIII.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 to the supervision issue during the reporting period.IX. Staff condition

1. Number of staff professional structure and education level

Number of in-service staff in the parent company 16854

Number of in-service staff in main subsidiaries 629

Total population of in-service staff 17483

Total population of staff receiving remuneration in the current

17483

period

Number of retired staff whose expense was borne by parent

22867

company and major subsidiary companies

Professional composition

Type of professional composition Population

Production staff 14501

Sales staff 234

Technician staff 1658

Financial staff 119

Administrative Staff 971

Total 17483

Educational degree

Type of educational degree Population

PhD. 11

Postgraduate 319

Undergraduate 4062

Junior College 6374

Technical secondary school 457

High School and Technical School 3520

Middle School and others 2740

Total 17483

2. Remuneration policies

In 2022 the Company established a complete performance management system based on the determined annual production

and operation guidelines policies and overall management goals. The Company evaluated the operation indicator and work

tasks of various functional departments factories and mines set key performance evaluation indicators and implements

monthly evaluations. Salary is based on position ability and performance. Salary is determined by post a salary is changed by

post guide employees to improve their abilities establish a salary distribution mechanism that relies on competition and income

by contribution and highlights the assessment of key performance indicators so as to truly realize that income can be increased

or decreased. Continue to promote the total salary contract guide all units to rationally allocate human resources optimize the

allocation mechanism and improve labor productivity and give full play to the role of salary incentives and constraints.

53Bengang Steel Plates Co. Ltd. 2022 Annual Report

3. Training plan

In 2022 the company aims to deeply implement the talent-first development strategy significantly enhance the ability of talent

training take the overall improvement of the overall quality of employees as the ultimate goal focus on meeting training needs

and focus on updating training concepts innovating training methods and improving training quality. The focus is to adhere to

the principle of "controlling the total amount optimizing the structure and focusing on practical results" and while closely

focusing on the production and operation center comprehensively carry out systematic modular and precise education and

training. Promote the development of training products that combine long and short high and low matching and parallel sizes

and strive to create characteristic high-quality training programs effectively release training effectiveness and further improve

the overall quality of the workforce laying a solid foundation for the high-quality development of the steel sheet. The Company

completed 54 training programs throughout the year training 43299 people with a full training rate of 80% and an annual

training plan implementation rate of 96%. The training target plan was fully achieved.

4. Outsourcing

□Applicable□Not applicable

X. 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 ShineWing Certified Public Accountants LLP the net profit attributable to the parent company for the year 2022

was RMB -1232976557.37 plus the undistributed profit of RMB 2977306297.64 at the beginning of the year net of the profit

distribution of RMB 2464914827.4 made in the current period for the year 2021 and the recovery of the profit from the

disposal of Guangzhou Benpu Automobile Board Sales Co. Ltd. in the current period of RMB 25416.4. The balance of the

undistributed profit for the period was RMB -720559670.73.The profit distribution plan for FY2022 is: No cash dividend no bonus shares and no capitalization of capital reserve.Special description of cash dividend policy

Whether it meets the requirements of the company's articles of

Yes

association or the resolutions of the shareholders meeting:

Whether the dividend standard and ratio are clear: Yes

Whether the relevant decision-making procedures and

Yes

mechanisms are complete:

Whether independent directors have performed their duties

Yes

due diligence and played their due role:

Whether small and medium shareholders have sufficient

opportunities to express their opinions and demands and Yes

whether their legitimate rights and interests are fully protected:

Whether it meets the requirements of the company's articles of

Yes

association or the resolutions of the shareholders meeting:

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

Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period

54Bengang Steel Plates Co. Ltd. 2022 Annual Report

□Applicable□Not applicable

The Company plans to distribute no cash dividends no bonus shares and no increase in capital by way of the transfer of public

reserves for the year.XI. Implementation of Company equity incentive plans employee stock ownership plans or

other employee incentives

□Applicable□Not applicable

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

incentive measures and their implementation.XII. Construction and implementation of internal control system during the reporting period

1. Construction and implementation of internal control system

(1) Reconstruct the system of rules and regulations in Bengang Steel Plates. The Company has established a system of rules and

regulations which takes fundamental management regulations as the basis professional management regulations as the main

body and work norms as the support. The current effective rules and regulations at the Company level relate to functional

modules and core businesses such as strategic planning production operation financial management etc.

(2) Strictly execute the regulations review procedure and establish and implement a long-term mechanism for the management

of rules and regulations. the Company has revised and issued Provisions on the Management of the Rules and Regulations in

Bengang Steel Plates Co. Ltd. released Notice on Carrying out the Establishment of Rules and Regulations pushed forward the

work of issuing revising repealing and interpreting rules and regulations as planned adhered to the principles of being

compliant with both laws and regulations being systematic and comprehensive pragmatic and effective and being clear in

rights and responsibilities. the Company’s rules and regulations have been analyzed and sorted out and a total of 215

regulations have been reformulated and revised. The compliance review node has been added to the regulations review

procedure. It’s a must that regulations have passed the compliance review before being released to ensure the rate of the

regulations' compliance review is 100%.

(3) Optimize the special internal control system. the Company has gradually established and improved the internal control

system involving risk internal control compliance management and supervision and accountability based on Regulations on

Comprehensive Risk and Internal Control Management in Bengang Steel Plates Co. Ltd. and supported by Measures for Risk

Assessment and Compliance Review of Important Events in Bengang Steel Plates Co. Ltd. Measures for Internal Control

Evaluation in Bengang Steel Plates Co. Ltd. and Compliance Management Measures in Bengang Steel Plates Co. Ltd.

(4) Improve the standards of risk assessment and internal control defects evaluation. According to the requirements of material

defects significant defects and general defects evaluation in the enterprise's internal control system and the factors such as the

Company's size risk appetite and risk tolerance the Company has nailed down the specific qualitative and quantitative

standards of internal control defects evaluation with reference to the risk assessment standards. Each functional management

department can identify and determine critical risk factors in relevant businesses by analyzing the impact and probability of risks

and considering practical conditions. Based on the internal control inspection of Ansteel Group and the self-examination of

Bengang Steel Plates the Company has timely rectified the identified internal control defects and fully performed the role of the

Board of Directors in the leadership and supervision of comprehensive internal control evaluation. In the annual internal control

auditing of an external audit institution the Company has reached the goal of zero material internal control defects.

55Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Material internal control defects found during the reporting period

□Yes□No

XIII.Management and control of subsidiaries during the reporting period

Integration Integration Problems encountered Solutions Solutions Follow-up

Company name

plan progress during integration implemented progress solutions plan

Harbin Bengang Economic

Deregistration Completed N/A N/A N/A N/A

and Trading Co. Ltd.Nanjing Bengang

Deregistration Completed N/A N/A N/A N/A

Materials Sales Co. Ltd.Chongqing Liaoben Steel

Deregistration Completed N/A N/A N/A N/A

& Iron Trading Co. Ltd.Wuxi Bengang Steel & Iron Mergers and

Completed N/A N/A N/A N/A

Sales Co. Ltd. acquisitions

Bengang Baojin Loss of control

(Shenyang) Automobile due to other

Completed N/A N/A N/A N/A

New Materials Technology shareholders’

Co. Ltd. raised funds

XIV. Internal control self-evaluation report or internal control audit report

1. Internal control self-evaluation report

Disclosing date of the internal

March 30th 2023

control audit report (full text)

Index of the internal control audit

http://www.cninfo.com.cn

report (full text)

Proportion of total assets of

subsidiaries within the scope of the

self-evaluation report in total assets 97.16%

of the Company’s consolidated

financial statements

Proportion of operating income of

subsidiaries within the scope of self-

evaluation report in operating 92.50%

income of the Company’s

consolidated financial statements

Standards of defects evaluation

Category Financial report Non-financial report

1. Material defects: fraud of directors 1. the Company's standards of internal control

supervisors and senior management; defects evaluation in terms of daily operation: 1)

the Company corrects its published Material defects: have a material impact on the

financial statements; there is a normal operation of the Company: affect most of

material misstatement in the financial the Company’s main business types/main

statements and the internal control functional areas; have a significant impact on the

fails to detect the misstatement overall operation of the Company which makes it

Qualitative criteria

during the operation; the corporate difficult to recover in the long run. 2) Significant

audit committee and the internal defects: have a great impact on the normal

audit institution have no effect on the operation of the Company: affect some of the

supervision of internal control. Company's main business types/main functional

2. Significant defects: the seriousness areas; have a large impact on the Company's

and economic consequences of overall operation requiring a great price for the

accounting policies accounting and Company to recover in a long period of time. 3)

56Bengang Steel Plates Co. Ltd. 2022 Annual Report

financial reporting are lower than General defects: have a moderate or less impact

material defects but there are still on the normal operation of the Company: affect a

internal control defects that may certain main business type/main functional area

cause the Company to deviate from or general business type/general functional area

the control objectives. 3. General of the Company; have a moderate or less impact

defects: other than material and on the overall operation of the Company

significant defects other internal requiring some price for the Company to recover

control defects in financial reporting. within a certain period of time. 2. the Company's

standards of internal control defects evaluation in

terms of business objectives: 1) Material defects:

have a significant impact on the Company's

business objectives: have a significant impact on

any type of budget indicators of the Company;

affect most of the Company's important

management objectives; have a significant impact

on liquidity (0.8 times ≤ current asset turnover

rate < 1 time ); have a significant impact on any

type of budget indicators of the Company (profit ≥

RMB 800 million). 2) Significant defects: have a

great impact on the Company's business

objectives: have a great impact on any type of

budget indicators of the Company; affect some

important management objectives of the

Company; have a great impact on current capital

(0.5 times ≤ current asset turnover rate ﹤ 0.8

times); have a great impact on any type of budget

indicators of the Company (RMB 400 million ≤

profit ﹤ RMB 800 million). 3) General defects:

have a moderate or less impact on the Company’s

business objectives: have a moderate or less

impact on any type of budget indicators of the

Company; affect one important management

objective or several general management

objectives of the Company; have a moderate or

less impact on current capital (current asset

turnover rate ﹤ 0.5 times); have a moderate or

less impact on any type of budget indicators of the

Company (profit ﹤ RMB 400 million). 3. the

Company's standards of internal control defects

evaluation in terms of safety: 1) Material defects:

affect a certain number of employees/public

health/safety critical accidents. 2) Significant

defects: affect some employees/public

health/safety major accidents.

3) General defects: affect a small number of

employees/public health/safety minor accidents.

4. the Company's standards of internal control

defects evaluation in terms of environmental

protection: 1) Material defects: serious

environmental damage the occurrence of critical

environmental incidents (national level II or above

environmental protection accidents).

2) Significant defects: great environmental

damage and major environmental incidents

(national level III).

3) General defects: moderate or less

environmental impact general environmental

incidents (national level IV).

57Bengang Steel Plates Co. Ltd. 2022 Annual Report

1. Range of misstatement amount of

material defects in financial

statements: 1) misstatement ≥ 5% of

total profits; 2) misstatement ≥ 3% of

total assets; 3) misstatement ≥ 1% of

total operating income; 4)

misstatement ≥ 1% of total

shareholders’ equity. 2. Range of

misstatement amount of significant

defects in financial statements: 1) 3%

of total profits ≤ misstatement ＜ 5%

of total profits; 2) 0.5% of total assets

≤ misstatement ＜ 3% of total assets;

Quantitative criteria None

3) 0.5% of total operating income ≤

misstatement ＜ 1% of total operating

income; 4) 0.5% of total shareholders’

equity ≤ misstatement ＜ 1% of total

shareholders’ equity. 3. Range of

misstatement amount of general

defects in financial statements: 1)

misstatement ＜ 3% of total profits; 2)

misstatement

＜ 0.5% of total assets; 3)

misstatement ＜ 0.5% of total

operating income; 4) misstatement ＜

0.5% of total shareholders’ equity.

Number of material defects in

0

financial reporting(a)

Number of material defects in non-

0

financial reporting (a)

Number of significant defects in

0

financial reporting(a)

Number of significant defects in

0

non-financial reporting(a)

2. Internal control audit report

□Applicable □Not applicable

Opinion in the internal control audit report

According to Fundamental Rules of Enterprise Internal Control and related regulations Bengang Steel Plates has remained effective

internal control in financial reporting up to December 31st 2022.Status of the internal control audit report Disclosure

Disclosing date of the internal control audit report (full text) March 30th 2023

Index of the internal control audit report (full text) http://www.cninfo.com.cn

Internal audit report’s opinion Standard unqualified opinion

Whether there are significant defects in non-financial reporting No

Whether the accountants’ firm issues a qualified opinion in the internal control audit report

□Yes□No

Whether the internal control audit report issued by the accountants’ firm agrees with the self-assessment report of the Board of

Directors

□Yes □No

58Bengang Steel Plates Co. Ltd. 2022 Annual Report

XV. Self-examination and rectification of governance initiatives of listed companies

During the reporting period the Company actively followed and implemented the spirit of Opinions on Further Improving the

Quality of Listed Companies issued by the State Council and worked out the List of Listed Company Governance Initiatives based

on China Securities Regulatory Commission [2020] No. 69 Announcement on Carrying out Initiatives on Corporate Governance of

Listed Companies and the Company’s practical conditions. The list reflected the problems and rectification of governance in

listed companies in a true accurate and comprehensive manner. The Company made efforts to strengthen the endogenous

driving force of corporate governance improve the corporate governance system and build a healthy ecology of corporate

governance. In those ways it has further optimized the governance structure as a listed company featuring clear-cut duties and

responsibilities harmonious coordination and operation and effective check and balance and has tamped the foundation for

high-quality development as a listed company and promoted the governance level.

59Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section V. Environmental and Social Responsibility

I. Major environmental issues

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

protection department

□Yes □No

Environmental protection policies and industry standards

The Company implemented Environmental Protection Law of the People's Republic of China Environmental Impact Assessment

Law of the People's Republic of China Water Pollution Prevention and Control Law of the People's Republic of China Atmospheric

Pollution Prevention and Control Law of the People's Republic of China Soil Pollution Prevention and Control Law of the People's

Republic of China Solid Waste Pollution Prevention and Control Law of the People's Republic of China and other relevant

ecological and environmental policies and complied with such industry standards as Water Pollutants Emission Standard for Iron

and Steel Industry (GB13456-2012) and Pollutants Emission Standard for Coking Chemical Industry(GB16171-2012) Sintering and

Sintered Pellets Air Pollutants Emission Standard for Iron and Steel Industry (GB28662-2012) Air Pollutants Emission Standard for

Iron Making Industry (GB28663-2012) Air Pollutants Emission Standard for Steel Rolling Industry (GB28665-2012) and Air

Pollutants Emission Standard for Thermal Power Plants (GB13223-2011).Environmental protection administrative license

The Company has 14 pollutants discharging units 11 of which are key pollutants discharging units. The license was obtained for

the first time in December 2018 and was extended to December 2026 in December 2021 according to the requirements of

license management. Three units have been registered and granted the registration receipt of fixed pollution source discharge in

March 2020 which is valid until 2025. the Company strictly implements the stable operation of environmental protection

facilities strictly controls the discharge of pollutants and discharges pollutants within the scope of permission every year. It

completes quarterly reporting and annual reporting through online filing as required.Industry emission standards and the description of pollutants emission involved in production and business activities

60Bengang Steel Plates Co. Ltd. 2022 Annual Report

Category of

Company Name of major Number Implemented

major Total

or pollutants and Emission of Distribution of discharge Emission pollutants Total Excessive

pollutants and approved

subsidiary characteristic method discharge outlets concentration/intensity discharge emissions emissions

characteristic emissions

name pollutants outlets standards

pollutants

Bengang Not

Steel Wastewater Energy General Plant 66.18 approved by

COD Continuous 1 12.5 50 None

Plates Co. pollutants Sewage Treatment Plant tonnes the

Ltd. government

Bengang Not

Steel Wastewater Ammonia Energy General Plant 2.17 approved by

Continuous 1 0.4 8 None

Plates Co. pollutants nitrogen Sewage Treatment Plant tonnes the

Ltd. government

Raw material dumper

transfer station receiving

tank pre-batching; iron-

making casting yard

furnace roof fuel solvent

granulation ore coke

Raw material

tank sintering head dust

25; sintering

removal desulfurization

50-30; iron

machine tail dust removal;

Raw material 14-19; making 25;

iron and steel water

sintering 13-25; iron steel making Smoke

pretreatment north-

Bengang making 7-35; steel 20-50; 1231 Not

Continuous south pouring station

Steel Exhaust gas Particulate making 3-10; special special steel tonnes approved by

and 191 tundish primary dust None

Plates Co. pollutants matter steel 3-10; coking 5-50; 20; coking powder the

intermittent removal secondary dust

Ltd. power generation 3-18; 10-50; power 11794 government

removal refining dust

cold rolling 6-18; hot generation tonnes

removal; special steel

rolling 6-15. 5-30; cold

electric furnace refining

rolling 20-30;

furnace; coking coal

hot rolling

addition coke pushing

20-30.

dry quenching chimney

desulfurization and

denitrification; power

boiler dust removal

desulfurization and

denitrification; cold rolling

61Bengang Steel Plates Co. Ltd. 2022 Annual Report

Category of

Company Name of major Number Implemented

major Total

or pollutants and Emission of Distribution of discharge Emission pollutants Total Excessive

pollutants and approved

subsidiary characteristic method discharge outlets concentration/intensity discharge emissions emissions

characteristic emissions

name pollutants outlets standards

pollutants

acid regeneration

pickling straightening

welding leveling

annealing roasting; hot

rolling furnace.Sintering

head 200;

Sintering head; coke oven

Sintering head 12-40; coke oven

chimney; power

Bengang coke oven chimney 20- 30-100; Not

Continuous generation boiler

Steel Exhaust gas 50; power generation power 3378 approved by

Sulfur dioxide and 65 desulfurization; cold None

Plates Co. pollutants 5-45; cold rolling 80- generation tonnes the

intermittent rolling roasting and

Ltd. 100; hot rolling 118- 35-200; cold government

annealing; hot rolling

128. rolling

heating furnace.

100; hot

rolling 150.Sintering

head 300;

Sintering head; coking Sintering head 90-167; coking

Bengang chimney; power coking chimney 60-120; chimney 150- Not

Continuous

Steel Exhaust gas Nitrogen generation boiler; cold power generation 21- 500; power 8637 approved by

and 58 None

Plates Co. pollutants oxides rolling roasting; 140; cold rolling 69- generation tonnes the

intermittent

Ltd. annealing; hot rolling 172; hot rolling 105- 50-200; cold government

heating furnace. 124. rolling 200;

hot rolling

300.

62Bengang Steel Plates Co. Ltd. 2022 Annual Report

Pollutants treatment

In 2022 13 ultra-low emission projects have been completed involving iron-making yards mining tank dust removal and

standard upgrading transformation and sintering head desulfurization and denitrification transformation; secondary dust

removal transformation of steelmaking; coking process VOCs treatment machine side dust removal desulfurization and

denitrification and other project transformation. Pollution prevention and control facilities are in stable operation and the total

amount of pollutant emissions in 2022 decreased by 8.6% year on year.Environmental self-monitoring program

Manual monitoring points of pollution sources during the reporting period: 261 flue gas monitoring points 14 wastewater

monitoring points 13 boundary noise points 17 atmospheric dust reduction points and 190 organized flue gas monitoring

points 71 unorganized flue gas monitoring points. Monitoring is carried out on a weekly monthly quarterly semi-annual and

annual frequency. 204 pieces of monitoring data were obtained at atmospheric dust reduction points. The Company has

accomplished routine monitoring of unorganized atmospheric dust reduction and organized flue gas and acquired 1985 pieces

of monitoring data throughout the year. 416 pieces of monitoring data were obtained in boundary noise points; 3457 pieces of

monitoring data were obtained in wastewater monitoring points; 125 pieces of monitoring data were obtained in other points.Monthly quarterly and annual monitoring reports were prepared.Automatic monitoring points of pollution sources during the reporting period: 50 organized flue gas monitoring points and 2

wastewater monitoring points. The Company has realized continuous automatic monitoring.Emergency plan for environmental emergencies

Strictly based on the Emergency Response Law of the People's Republic of China the Notice on Printing and Distributing the

"Guidelines for Risk Assessment of Environmental Emergencies for Enterprises (Trial) andMeasures for the Filing Management of

Environmental Emergency Response Plans of Enterprises and Undertakings (Trial) and other existing laws and regulations the

Company and its subsidiaries have carried out environmental emergency management revised the emergency plan for

environmental emergencies re-implemented risk assessment and emergency resource investigation and have already

completed assessment and filing according to the management requirements of the municipal bureau. At the same time each

unit of Bengang Steel Plates formulates a drill plan according to the emergency plan and carries out the drill.Investment in environmental governance and protection and payment of environmental protection tax

In 2022 the operating expenses of environmental protection facilities were RMB 1.239 billion. RMB 355 million was invested in

environmental governance and protection and RMB 37.46 million was paid for environmental protection taxes.Measures are taken to reduce carbon emissions during the reporting period and their effects

□Applicable □Not Applicable

1. Reduce the comprehensive energy consumption of steel in tonne. The Company continuously reduced the comprehensive

energy consumption of steel in tonne by cutting down the energy consumption of the main process and improving secondary

energy recovery in 2022. In the iron-making process the Company ensured stable blast furnace operation and rose the air

temperature to reduce the fuel ratio reduced the gas consumption through the centralized control of the hot blast furnace and

did a good job in the linkage between TRT and the blast furnace to improve the recovery of residual energy realizing the power

generation of iron in tonne 42.53kwh/t. Under the stable operation of the sintering machine the power generation of waste heat

reached 13kwh/t and the comprehensive waste heat recovery of mine in tonne rose to 0.15GJ. In the coking process the

Company focused on the stable operation of the dry quenching system increasing the CDQ recovery of coke steam in tonne joule

to 7.0GJ. In the steel-making process the Company optimized the waste heat recovery by improving gas recovery and

63Bengang Steel Plates Co. Ltd. 2022 Annual Report

transferring waste heat-saturated steam to support the power generation of 265m2 sintering machine. The comprehensive

energy consumption of steel making remained below -10kgce/t after April. In the hot rolling process the Company made

continuous efforts to reduce air consumption during the waiting period and increase the purchase of first- and secondary-level

waste heat steam. In 2022 the Company's comprehensive energy consumption of steel in tonne was planned to be 580kgce/t

and the actual consumption was 575.92kgce/t which was 4.08kgce/t lower than the plan and 10.42kgce/t lower than the same

period of last year.

2. The fuel consumption of sintered solids in the sintering process was 50.68kg/t which was 1.52kg/t lower than the plan and

1.67kg/t lower than the same period of last year. The energy consumption of the negative energy steel-making process was -

5.5kgce/t a year-on-year decrease of 2.81kgce/t. While reducing the comprehensive energy consumption of steel in tonne the

Company paid continuous strenuous efforts in the fuel ratio reduction making the fuel ratio 532.64kg/t in 2022 a year-on-year

decrease of 1.86kg/t.

3. Push forward the implementation of energy-saving projects in full swing. The Company invested a total of RMB 1257.49

million completed 7 energy saving projects in 2022 and put them into operation including CCPP power generation six-furnace

heat exchanger transformation cold-fired substation dynamic compensation transformation hot rolling 1700 production line

reactive power compensation transformation hot rolling 2300 production line phosphorus removal pump transformation

converter saturated steam system optimization and energy-saving transformation converter gas recovery and efficiency

improvement transformation. The projects created benefits of RMB 177.52 million and saved 59500 tonnes of standard coal per

year.Administrative penalties for environmental issues during the reporting period

Influence

on the

Company

Causation production

or Consequence of

of Violation and the Company's rectification measures

subsidiary penalty

penalty operation

name

of listed

companies

1.9# The coke oven All have been rectified: 1. The coking

door was not tightly process was implemented in strict

closed resulting in accordance with the operation procedure.fugitive emissions of The sealing of the furnace door was

some smoke and dust checked in time. The furnace wall was

in the carbonization welded and repaired and the furnace door

chamber. 2. The was repaired to reduce sensory pollution. 2.emission of fugitive The main reason for exceeding the standard

exhaust gas pollutants was as below. The ammonia decomposition

Environmental

on the roof of No.8 furnace of the production facility was

Bengang protection

coke oven exceeded overhauled according to the maintenance

Steel Fugitive penalties were

the standard value; 3. None plan in the gas purification operation area

Plates emissions imposed 3 times

During the and the replacement of gas pipelines during

Co. Ltd. totaling RMB

oxygenation blowing the maintenance and relocation process

470000.

process of steel caused fugitive emissions. The Company

making 7# converter accelerated the construction progress and

part of the smoke and resumed normal production. 3. The

dust overflew from the Company strengthened the quality

plant cover to cause inspection of molten iron and coordinated

fugitive emissions due the replacement of molten iron in time

to poor molten iron when problems were found. The smoke

composition and problem caused by poor molten iron

improper operation. composition was effectively resolved.

64Bengang Steel Plates Co. Ltd. 2022 Annual Report

Other environmental information that should be disclosed

None

Other environmental protection related information

None

II. Social responsibility

Please refer to 2022 Corporate Social Responsibility Report of Bengang Steel Plates Co. Ltd. disclosed on

http://www.cninfo.com.cn on March 30th 2023.III. Consolidate and expand the achievements of poverty alleviation and rural revitalization

1. The Company selected 10 outstanding cadres in a succession to participate in rural revitalization 4 of which still serve as the

first secretary in villages for the present. During the special period of normal epidemic prevention and control the cadres in

villages remained true to their original aspiration kept their mission in mind strengthened their confidence and worked

tenaciously. They did a good job in poverty alleviation and prevention from returning to poverty after being lifted out of it in

designated poverty relief regions in 2022. the Company provided growth points for the rural collective economy through

employee welfare procurement of agricultural and sideline products in rural areas effectively increasing per capita income. It

has been completing rated as Outstanding Unit for Poverty Alleviation in Designated Regions of Liaoning Province for many

consecutive years.

2. To provide assistance for employees in need who were determined in accordance with the standard for the review and

identification of all types of employees in need the Company made full use of the assistance system of the national trade union

and the normalized assistance mechanism and endeavored to offer substantive assistance to employees in need through a

combination of holiday visits and regular assistance. The Company provided mutual-aid insurance covering hospitalization

critical illness and accident for employees to further improve their capacity for resisting medical risks.

65Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section VI. Important Events

I. Performance of committed issues

1. The fulfilled commitments during the reporting period and under-fulfillment commitments by the end of the reporting period made by actual controller

shareholder party involved acquirer company and other related parties

□Applicable □Not applicable

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

In order to maintain the independence of Bengang Steel Plates Ansteel

Group undertakes the following: 1. Ansteel Group guarantees to keep

separate from Bengang Steel Plates in terms of assets personnel finance

organization and business and strictly abides by the China Securities

Regulatory Commission's regulations on the independence of listed

companies. It does not use its controlling position to interfere with the

Commitment made

standard operation of Bengang Steel Plates interfere with Bengang Steel

in the acquisition Ansteel Group Co. Other August 20th Under normal

Plates’ business decisions or damage the legitimate rights and interests of Long term

report or the equity Ltd. commitment 2021 fulfillment

Bengang Steel Plates and other shareholders. Ansteel Group and other

change report

subsidiaries controlled by it promise not to illegally occupy the funds of

Bengang Steel Plates and its controlled subsidiaries in any way. 2. The above

commitments will continue to be effective during the period when Ansteel

Group has control over Bengang Steel Plates. If Ansteel Group fails to fulfill

the above-mentioned commitments and causes losses to Bengang Steel

Plates Ansteel Group will bear the corresponding liability for compensation.In order to avoid horizontal competition Ansteel Group undertakes the

following: (1) In view of the overlapping business between Ansteel Group

and Bengang Steel Plates after the completion of the acquisition according

Commitment made

to the requirements of existing laws regulations and relevant policies

in the acquisition Ansteel Group Co. Other August 20th Under normal

Ansteel Group will issue a letter of commitment. Within 5 years or less time Long term

report or the equity Ltd. commitment 2021 fulfillment

if more effort from the date of issue it will comprehensively adopt various

change report

methods such as asset restructuring business adjustment and entrusted

management to steadily promote the integration of relevant businesses to

solve the problem of horizontal competition in accordance with the

66Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

requirements of the relevant securities regulatory authorities under the

premise of complying with the applicable laws and regulations and relevant

regulatory rules at that time and in the principle of facilitating the

development of Bengang Steel Plates and safeguard the interests of

shareholders especially the interests of small and medium shareholders. The

aforesaid solutions include but are not limited to: 1) Asset restructuring: a

different way of asset purchase asset replacement asset transfer or other

feasible restructuring methods permitted by relevant laws and regulations

such as cash consideration or issue share consideration. It will gradually sort

out and reorganize the assets of the overlapping parts of the business

between Ansteel Group and Bengang Steel Plates to eliminate the

overlapping of some businesses. 2) Business adjustment: it will sort out the

business boundaries and try the best to achieve differentiated operations

such as business categorization through asset transactions business

separation and other different methods including but not limited to

business composition product grade application field and customer groups

etc. 3) Entrusted management: by signing an entrustment agreement one

party will entrust decision making and management of related asset

operation of overlapping parts to the other party for unified management. 4)

Other feasible solutions permitted by laws regulations and relevant policies.The implementation of the above-mentioned solutions is premised on

performing the necessary deliberation procedures for listed companies and

the approval procedures of securities regulatory authorities and relevant

competent authorities in accordance with relevant laws and regulations. (2)

Ansteel Group has not yet formulated a specific implementation plan and

time arrangement for solving the problem of partial business overlap

between Ansteel Group and Bengang Steel Plates. It will timely perform the

duty of disclosing information required by relevant laws and regulations

when a feasible specific plan is formulated. (3) In addition to the above

circumstances when Ansteel Group or other subsidiaries obtain business

opportunities that may compete with the business of Bengang Steel Plates

Ansteel Group will do its best to give Bengang Steel Plates the priority to

develop such

opportunities and the right to first refuse or purchase the project ensure the

price of the relevant transaction is fair and reasonable and set the price

based on the business practices followed in normal commercial transactions

as independent third parties. (4) Ansteel Group guarantees that it will strictly

67Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

abide by laws regulations Articles of Association of Bengang Steel Plates

Co. Ltd. and its relevant management system and not use its position as an

indirect controlling shareholder of Bengang Steel Plates to seek illegitimate

interests which thereby impair the rights and interests of other shareholders

of Bengang Steel Plates. (5) During the period of control over Bengang Steel

Plates the above commitments made by Ansteel Group are all valid. In the

event of violation of the above commitments and the damage to the rights

and interests of Bengang Steel Plates is caused Ansteel Group is willing to

assume the corresponding liability for damages.In order to standardize and reduce the related transactions between Ansteel

Group and listed companies Ansteel Group has made commitments: 1.Ansteel Group will ensure the independence of Bengang Steel Plates’

business the completeness of its assets and the independence and

completeness of production supply sales and other auxiliary facilities. 2.Ansteel Group and other enterprises controlled by Ansteel Group will not

take advantage of the control over Bengang Steel Plates to seek preferential

transactions with Bengang Steel Plates and its subordinate enterprises. 3.Ansteel Group and other enterprises controlled by Ansteel Group will avoid

and reduce unnecessary transactions with Bengang Steel Plates and its

subordinate enterprises. If there is a truly necessary and unavoidable

Commitment made transaction Ansteel Group and other enterprises controlled by Ansteel

in the acquisition Ansteel Group Co. Other Group will sign an agreement with Bengang Steel Plates and its subordinate August Under normal

Long term

report or the equity Ltd. commitment enterprises in accordance with the principles of fairness equity and 20th2021 fulfillment

change report compensation for equal value perform legal procedures and comply with

relevant laws regulations and standard documents and Articles of

Association of Bengang Steel Plates Co. Ltd. to perform the duty of

disclosing information and execute relevant internal decision making and

approval procedures. Ansteel Group ensures that it will not offer an unfair

price or condition compared with market price in the transactions with

Bengang Steel Plates and its subordinate enterprises and not use such

transactions to engage in any behavior that damages the legitimate rights

and interests of Bengang Steel Plates and its shareholders. 4. In the event of

violation of the above commitments and the damage to the legitimate rights

and interests of Bengang Steel Plates is caused Ansteel Group will

compensate for the losses caused to Bengang Steel Plates according to laws.Commitment made Company directors Other According to the relevant regulations of China Securities Regulatory May 22nd Under normal

Long term

during initial public senior commitment Commission all directors and senior management of the Company have 2019 fulfillment

68Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

offering or management/Benxi made the following commitments to the Company’s fulfillment of the diluted

refinancing Steel & Iron immediate return measures: 1. I promise to perform my duties faithfully and

(Group) Co. Ltd. diligently and safeguard the legitimate rights and interests of the Company

and all shareholders. 2. I promise not to deliver benefits to other units or

individuals without compensation or under unfair conditions nor to use

other means to damage the Company's interests. 3. I promise to restrict the

position-related consumption 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 meetings (If I

have voting rights). 6. If the Company intends to implement equity

incentives I promise to within the scope of my responsibilities and

authority make every effort to promote the Company’s proposed equity

incentive exercise conditions 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

meetings (If I have voting rights). 7. Between the issuance of this

commitment and the completion of the Company’s public issuance of

convertible corporate bonds if China Securities Regulatory Commission

announces other new regulations on compensation measures and

commitments and the above commitments cannot meet the regulations the

Company promises to issue a supplementary promise in accordance with the

latest regulations. The Company's controlling shareholder Benxi Iron & Steel

(Group) Co. Ltd. promises not to interfere with the Company's operation

and management activities beyond its authority nor to infringe on the

Company's interests.

1. The filing of foreign economic and trade operators taking into account the

Commitment made Bengang Group Co. need to gradually improve the qualification certification of raw material

during initial public Ltd. and Benxi Steel Other suppliers customs import and export qualification certification etc. In the July Under normal

Long term

offering or & Iron (Group) Co. commitment short term the actual conditions and capabilities for independent import 24th2019 fulfillment

refinancing Ltd. and export business are still lacking.In order to ensure the normal business development of Bengang Steel

69Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

Plates the Group agrees that within the period of no more than 5 years from

the date of issuance of this commitment the main import and export

business of Bengang Steel Plates will still be represented by Bengang

International Trade until Bengang Steel Plates can independently develop

Import and export business and Bengang International Tradeduring this

period will provide the necessary support for the establishment and

improvement of Bengang Steel Plates’ 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 steel products of a third party. 2. The sales company under the

Group Shanghai Bengang Iron and Steel Sales Co. Ltd. is currently no longer

actually engaged in any business activities specifically: 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 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.In order to avoid horizontal competition 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 shareholder of

Bengang Steel Plates Co. Ltd. (Hereinafter referred to as Bengang Steel

Plates) undertake the following: 1. During the period when the Group is the

controlling shareholder of Bengang Steel Plates the Group and other

enterprises controlled by the Group other than Bengang Steel Plates no

Commitment made Bengang Group Co. longer produce or develop any products that compete or may compete with

during initial public Ltd. and Benxi Steel Other the products produced by Bengang Steel Plates and its subsidiaries at home July Under normal

Long term

offering or & Iron (Group) Co. commitment and abroad and do not directly or indirectly operate any business that 24th2019 fulfillment

refinancing Ltd. competes with Bengang Steel Plates and its subsidiaries. Businesses that may

constitute competition nor are they involved in investing in any other

enterprise that competes with or may compete with products or businesses

produced by Bengang Steel Plates and its subsidiaries. 2. If Bengang Steel

Plates and its subsidiaries further expand their business scope the Group

and other enterprises controlled by the Group will not compete with the

expanded business of Bengang Steel Plates and its subsidiaries. If any

business may compete with the expanded business of Bengang Steel Plates

70Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

and its subsidiaries it will withdraw from the competition with Bengang

Steel Plates as follows: (1) Stop the business that may or may compete with

Bengang Steel Plates and its subsidiaries; (2) Incorporate the competing

businesses into the business scope of Bengang Steel Plates and its

subsidiaries in a legal and compliant manner; (3) Transfer the competing

business to unrelated third parties. 3. If the Group has engaged in or

participated in any business opportunity that may constitute competition

with Bengang Steel Plates’ operation the Group shall immediately notify

Bengang Steel Plates of the above opportunity. If Bengang Steel Plates is

willing to take advantage of the business opportunity and replies with an

affirmative answer within a reasonable period specified in the notice the

Group will endeavor to give the business opportunity to Bengang Steel Plates

with the conditions not worse than those offered to any independent third

party. 4. If the above commitments are violated the Group is willing to bear

all the responsibilities arising therefrom and fully compensate or

compensate for all direct or indirect losses caused to Bengang Steel Plates. 5.This letter of commitment continues to be effective during the period of the

Group as the controlling shareholder of Bengang Steel Plates and cannot be

changed or withdrawn.In order to regulate The Group's related transaction with Bengang Steel

Plates 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 shareholder of Bengang Steel Plates Co. Ltd.(Hereinafter referred to as Bengang Steel Plates) undertake the following: 1.The Group will fully respect the independent legal person status of Bengang

Steel Plates ensure the independent operation and independent decision

Commitment made Bengang Group Co. making of Bengang Steel Plates guarantee the independence of Bengang

during initial public Ltd. and Benxi Steel Other Steel Plates’ business the completeness of asset and the independence of July Under normal

Long term

offering or & Iron (Group) Co. commitment personnel and finance to avoid and reduce unnecessary related transactions. 24th2019 fulfillment

refinancing Ltd. The Group will strictly control related transactions with Bengang Steel Plates

and its subsidiaries. 2. The Group and other enterprises controlled by the

Group promise not to use loans debt repayment substitute funds or other

ways to occupy or misappropriate the funds of Bengang Steel Plates and its

subsidiaries nor require Bengang Steel Plates and its subsidiaries to provide

illegal guarantees for the Group and other enterprises controlled by the

Group. 3. The Group and other enterprises controlled by the Group will

reduce related transactions as much as possible with Bengang Steel Plates. If

71Bengang Steel Plates Co. Ltd. 2022 Annual Report

Type of Commitment Commitment

Commitments Commitment party Contents Performance

commitment time period

related transactions are indeed necessary and unavoidable it will strictly

implement the decision making authority decision making procedures

avoidance system and other requirements stipulated in Bengang Steel Plates’

Articles of Association and related transaction decision making systems give

full play to the role of the Board of Supervisors and independent directors

and earnestly fulfill the obligation of disclosing information to ensure that

transactions are conducted in accordance with the open fair and equal

principles of market transactions and normal commercial terms. The Group

and other enterprises controlled by the Group will not require or accept

Bengang Steel Plates to offer preferential treatment which is not given to a

third party in any fair market transaction thereby protecting other

shareholders and interests of Bengang 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 will bear all the losses caused to Bengang Steel Plates.Whether

Commitment fulfilled Yes

on time or not

72Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. The Company remarks 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

II. Non-operating capital occupation of listed companies by the controlling shareholder and

other related parties

□Applicable□Not applicable

There was no non-operating occupation of funds by the controlling shareholder and related parties.III. Non-compliance with external guarantees

□Applicable□Not applicable

There was no non-compliance with external guarantees.IV. Illustration by the Board of Directors on the latest Qualified Audit Report

□Applicable□Not applicable

V. Illustration by the Board of Directors the Supervisory Committee and the Independent

Directors (if any) on the Qualified Audit Report of the accountants’ firm for the reporting

period

□Applicable□Not applicable

VI. Illustration of changes in accounting policy accounting estimate and significant accounting

error as compared with the financial report of last year

□Applicable □Not applicable

Significant changes in accounting policy

* Accounting Standards for Business Enterprises Interpretation No. 15

On December 30th 2021 the Ministry of Finance issued the Accounting Standards for Business Enterprises Interpretation No. 15

(Caikuai [2021] No. 35 hereinafter referred to as Interpretation No. 15) in which "Accounting for the external sales of products

or by-products produced by an enterprise before the fixed assets reach the usable condition as intended or are in the R&D

Process" and "Judgment on loss-making contracts" came into force on January 1st 2022.* Accounting Standards for Business Enterprises Interpretation No. 16

On December 30th 2022 the Ministry of Finance issued the Accounting Standards for Business Enterprises Interpretation No. 16

(Caikuai [2022] No. 31 hereinafter referred to as Interpretation No. 16) in which "Accounting for deferred income tax related to

assets and liabilities arising from a single transaction which is not subject to the accounting treatment of initial recognition

exemption" came into force on January 1st 2023. "Accounting for the income tax implications of dividends related to financial

73Bengang Steel Plates Co. Ltd. 2022 Annual Report

instruments classified by issuers as equity instruments" and "Accounting for enterprises changing from cash-settled share

payment to equity-settled share payment" came into force on the date of promulgation.Significant changes in accounting estimate

Content and causation of accounting Date of Affected items of financial

Approval process Amount

estimate change application statements

Accumulated depreciation 271947090.70

The 6th meeting of the Operating costs 266457899.30

Types of fixed assets Depreciation

Company’s 9th Board of July 1st 2022 Administrative expenses 5489191.40

period and residual value rate

Directors Total profit 271947090.70

Net profit 271947090.70

In recent years the Company has continuously increased investment in fixed assets launched technical transformation and

technological innovation of the main equipment production line regularly overhauled the equipment improved the

performance of the equipment and extended the service life of fixed assets. Following the principle of accounting prudence and

Accounting Standards for Business Enterprises No. 4 - Fixed Assets Article 15 of Chapter 4 about "an enterprise shall reasonably

confirm the service life and estimated net residual value of fixed assets according to the nature and use of fixed assets" the

Company changes the accounting estimates of fixed asset types depreciation period and residual value rate according to the

nature and use of fixed assets so that the type depreciation period and residual value rate of fixed assets are closer to practical

conditions.On October 26th 2022 the Company held the 6th meeting of the 9th Board of Directors and deliberated and passed the Proposal

on Changes in Accounting Estimate.The Company began to implement the changed accounting estimate on July 1st 2022. This change in accounting estimate had no

impact on the Company's main business scope. The Company's depreciation amount will reduce by RMB 270 million in 2022.VII. Illustration of changes in the consolidation scope as compared with the financial report of

last year

□Applicable □Not applicable

Chongqing Liaoben Steel & Iron Trading Co. Ltd. Harbin Bengang Economic and Trading Co. Ltd. Nanjing Bengang Materials

Sales Co. Ltd. and Wuxi Bengang Steel & Iron Sales Co. Ltd. were deregistered during the reporting period.The Company lost control over Bengang Baojin (Shenyang) Automobile New Materials Technology Co. Ltd. due to the raised

funds of Xiamen Xianghong Investment Co. Ltd. on July 8th 2022 and thus Bengang Baojin was no longer included in the

consolidation.Bengang Steel Plates Liaoyang Pellet Co. Ltd. was sold to Benxi Steel & Iron (Group) Mining Co. Ltd. on September 30th 2022.VIII.Appointment and dismissal of certified accountants’ firm

Accountants’ firm currently appointed

Name of the domestic accountants’ firm ShineWing Certified Public Accountants LLP

Payment to the domestic accountants’ firm (in RMB 10000) 295

Service life of domestic accountants’ firm providing audit service 1

Name of CPAs from the domestic accountants’ firm Fan Jianping Chen Jian

Service life of domestic accountants’ providing audit service 1

74Bengang Steel Plates Co. Ltd. 2022 Annual Report

Whether the accountants’ firm is changed during the reporting period

□Yes □No

Whether the accountants’ firm is changed during the auditing period

□Yes □No

On August 17th 2022 and September 9th 2022 the Company respectively held the 4th meeting of the 9th Board of Directors and

the 3rd extraordinary general meeting deliberated and passed the Proposal on Changes in Accountants’ Firm and appointed

ShineWing Certified Public Accountants LLP as the Company's audit institution for the year of 2022. The Company has

communicated in advance with BDO China Shu Lun Pan CPAs the Company's original accounting and audit institution about the

change of accountants’ firm and the latter was informed of the change and confirmed that there was no objection.Whether the change of the accountants’ firm has complied with the approval procedure

□Yes □No

Detailed illustration of the appointment and change of the accountants’ firm

The Company took into account the practical conditions including its business development and audit needs personnel

arrangement and work plans of the accountants’ firm and intended to ShineWing Certified Public Accountants LLP as the

Company's audit institution for the year of 2022 after comprehensive communication and negotiation The Company has

communicated in advance with BDO China Shu Lun Pan CPAs the Company's original accounting and audit institution about the

change of accountants’ firm and the latter was informed of the change and confirmed that there was no objection. The

Company's Audit Committee independent directors and the Board of Directors had no objection to the change of accountants’

firm which has been deliberated and approved by the Company's general meeting of shareholders. For details please refer to

the Announcement on the Proposed Change of Accountants’ Firm (2022-051) disclosed by the Company on August 19th 2022.Engagement of accountant’s firms financial consultants or sponsors for internal control auditing

□Applicable □Not applicable

The Company appointed ShineWing Certified Public Accountants LLP as the audit institution for internal control auditing at the

price of RMB 600000.IX. Risk of suspension or termination of listing after the disclosure of the annual report

□Applicable□Not Applicable

X. Bankruptcy and restructuring events

□Applicable□Not Applicable

There were no bankruptcy and restructuring events during the reporting period.

75Bengang Steel Plates Co. Ltd. 2022 Annual Report

XI. Significant lawsuits and arbitrations

□Applicable □Not applicable

Total

Basic Where there Judicial result Enforcement of

amount

information are Progress of lawsuits and influence the judgment of Date of Index of

involved

of lawsuits estimated (arbitrations) of lawsuits lawsuits and disclosure disclosure

(RMB

(arbitrations) liabilities (arbitrations) arbitrations

10000)

Summary of

significant

The Company

lawsuits and Implementation

In has won most

arbitrations 6961 No according to

judgment/execution cases and is

not reaching laws

not affected.the standard

of disclosure

XII. Punishment and rectification

□Applicable□Not Applicable

There was no punishment or rectification during the reporting period.XIII. Credit status of the Company and its controlling shareholders and actual controllers

□Applicable□Not Applicable

76Bengang Steel Plates Co. Ltd. 2022 Annual Report

XIV.Major related transactions

1. Related transactions relevant to daily operations

□Applicable □Not applicable

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Benxi Beiying Execute

Purchasing Purchasing Related

Iron and Steel Same On according to March

goods/providing main raw agreement 1401540.48 22.51% 1928000 No Yes 2022-017

(Group) Co. controller agreement the 26th 2022

services materials price

Ltd. agreement

Benxi Iron and Execute

Same Purchasing Purchasing Related

Steel (Group) On according to March

parent goods/providing main raw agreement 652634.84 10.48% 895000 No Yes 2022-017

Mining Co. agreement the 26th 2022

company services materials price

Ltd. agreement

Benxi Iron and Execute

Both belong Purchasing Purchasing Related

Steel (Group) On according to March

to Bengang goods/providing main raw agreement 28954.33 0.47% 51000 No Yes 2022-017

Metallurgical agreement the 26th 2022

Group services materials price

Slag Co. Ltd. agreement

Benxi Iron and

Execute

Steel (Group) Both belong Purchasing Purchasing Related

On according to March

Industrial to Bengang goods/providing main raw agreement 40737.18 0.65% 30000 Yes Yes 2022-017

agreement the 26th 2022

Development Group services materials price

agreement

Co. Ltd.Execute

Anshan Iron Both belong Purchasing Purchasing Related

On according to March

and Steel Co. to Ansteel goods/providing main raw agreement 7550.44 0.12% 130000 No Yes 2022-017

agreement the 26th 2022

Ltd. Group services materials price

agreement

Ansteel Group Execute

Both belong Purchasing Purchasing Related

Mining On according to March

to Ansteel goods/providing main raw agreement 46171.1 0.74% 160000 No Yes 2022-017

Gongchangling agreement the 26th 2022

Group services materials price

Co. Ltd. agreement

77Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Ansteel Group Execute

Both belong Purchasing Purchasing Related

International On according to March

to Ansteel goods/providing main raw agreement 5829.2 0.09% 120000 No Yes 2022-017

Economic and agreement the 26th 2022

Group services materials price

Trade Co. Ltd. agreement

Ansteel Scrap Execute

Both belong Purchasing Purchasing Related

Resources On according to March

to Ansteel goods/providing main raw agreement 50126.48 0.81% 70000 No Yes 2022-017

(Anshan) Co. agreement the 26th 2022

Group services materials price

Ltd. agreement

Pangang Group

Execute

Vanadium & Both belong Purchasing Purchasing Related

On according to March

Titanium to Ansteel goods/providing main raw agreement 0 0.00% 2000 No Yes 2022-017

agreement the 26th 2022

Resources Co. Group services materials price

agreement

Ltd.Benxi Beiying Execute

Both belong Purchasing Purchasing Related

Iron and Steel On according to March

to Bengang goods/providing supplementary agreement 23759.86 0.38% 2000 Yes Yes 2022-017

(Group) Co. agreement the 26th 2022

Group services materials price

Ltd. agreement

Liaoning

Hengtong Execute

Both belong Purchasing Purchasing Related

Metallurgical On according to March

to Bengang goods/providing supplementary agreement 13568.94 0.22% 25000 No Yes 2022-017

Equipment agreement the 26th 2022

Group services materials price

Manufacture agreement

Co. Ltd.Associates Execute

Bengang Purchasing Purchasing Related

of the On according to March

Electric Co. goods/providing supplementary agreement 12121.98 0.19% 20000 No Yes 2022-017

parent agreement the 26th 2022

Ltd. services materials price

company agreement

Benxi Iron and

Execute

Steel (Group) Both belong Purchasing Purchasing Related

On according to March

Machinery to Bengang goods/providing supplementary agreement 15433.29 0.25% 10000 Yes Yes 2022-017

agreement the 26th 2022

Manufacturing Group services materials price

agreement

Co. Ltd.

78Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Liaoning Execute

Both belong Purchasing Purchasing Related

Hengyi Steel On according to March

to Bengang goods/providing supplementary agreement 41058.53 0.66% 0 Yes Yes 2022-017

Trading Co. agreement the 26th 2022

Group services materials price

Ltd. agreement

Ansteel Mining Execute

Both belong Purchasing Purchasing Related

Machinery On according to March

to Ansteel goods/providing supplementary agreement 0 0.00% 3000 No Yes 2022-017

Manufacturing agreement the 26th 2022

Group services materials price

Co. Ltd. agreement

Execute

Both belong Purchasing Purchasing Related

Angang Steel On according to March

to Ansteel goods/providing supplementary agreement 0 0.00% 1000 No Yes 2022-017

Rope Co. Ltd. agreement the 26th 2022

Group services materials price

agreement

Execute

Other Both belong Purchasing Purchasing Related

On according to March

subsidiaries of to Ansteel goods/providing supplementary agreement 15654.65 0.25% 2000 Yes Yes 2022-017

agreement the 26th 2022

Ansteel Group Group services materials price

agreement

Benxi Beiying Execute

Both belong Purchasing Purchasing Related

Iron and Steel On according to March

to Bengang goods/providing energy & agreement 77911.05 1.25% 60000 Yes Yes 2022-017

(Group) Co. agreement the 26th 2022

Group services power price

Ltd. agreement

Benxi Steel & Execute

Both belong Purchasing Receiving Related

Iron (Group) On according to March

to Bengang goods/providing supporting agreement 77578.83 1.25% 52000 Yes Yes 2022-017

Construction agreement the 26th 2022

Group services services price

Co. Ltd. agreement

Benxi Beiying Execute

Both belong Purchasing Receiving Related

Iron and Steel On according to March

to Bengang goods/providing supporting agreement 10342.45 0.17% 10000 Yes Yes 2022-017

(Group) Co. agreement the 26th 2022

Group services services price

Ltd. agreement

Benxi Iron and Execute

Both belong Purchasing Receiving Related

Steel (Group) On according to March

to Bengang goods/providing supporting agreement 13307.82 0.21% 20000 No Yes 2022-017

Machinery agreement the 26th 2022

Group services services price

Engineering agreement

79Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Co. Ltd.Benxi Iron and Execute

Same Purchasing Receiving Related

Steel (Group) On according to March

parent goods/providing supporting agreement 3311.18 0.05% 5000 No Yes 2022-017

Mining Co. agreement the 26th 2022

company services services price

Ltd. agreement

Benxi Iron and

Execute

Steel (Group) Both belong Purchasing Receiving Related

On according to March

International to Bengang goods/providing supporting agreement 90447.11 1.45% 50000 Yes Yes 2022-017

agreement the 26th 2022

Economic and Group services services price

agreement

Trade Co. Ltd.Benxi Iron and

Execute

Steel (Group) Both belong Purchasing Receiving Related

On according to March

Information to Bengang goods/providing supporting agreement 10458.42 0.17% 13000 No Yes 2022-017

agreement the 26th 2022

Automation Group services services price

agreement

Co. Ltd.Ansteel Steel

Execute

Processing and Both belong Purchasing Receiving Related

On according to March

Distribution to Ansteel goods/providing supporting agreement 10.11 0.00% 1300 No Yes 2022-017

agreement the 26th 2022

(Changchun) Group services services price

agreement

Co. Ltd.Ansteel Group

Execute

Engineering Both belong Purchasing Receiving Related

On according to March

Technology to Ansteel goods/providing supporting agreement 6337.58 0.10% 201500 No Yes 2022-017

agreement the 26th 2022

Development Group services services price

agreement

Co. Ltd.Execute

Ansteel Both belong Purchasing Receiving Related

On according to March

Construction to Ansteel goods/providing supporting agreement 3684.09 0.06% 3000 Yes Yes 2022-017

agreement the 26th 2022

Group Co. Ltd. Group services services price

agreement

Both belong Purchasing Receiving Related Execute

Bengang Group On March

to Bengang goods/providing supporting agreement 380.48 0.01% 10000 No according to Yes 2022-017

Co. Ltd. agreement 26th 2022

Group services services price the

80Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

agreement

Execute

Benxi Steel & Both belong Purchasing Receiving Related

On according to March

Iron (Group) to Bengang goods/providing supporting agreement 29280.12 0.47% 35000 No Yes 2022-017

agreement the 26th 2022

Co. Ltd. Group services services price

agreement

Liaoning Execute

Both belong Purchasing Receiving Related

Hengtai Heavy On according to March

to Bengang goods/providing supporting agreement 4870.21 0.08% 4100 Yes Yes 2022-017

Machinery Co. agreement the 26th 2022

Group services services price

Ltd. agreement

Liaoning Execute

Both belong Purchasing Receiving Related

Metallurgical On according to March

to Bengang goods/providing supporting agreement 1468.99 0.02% 2000 No Yes 2022-017

Technician agreement the 26th 2022

Group services services price

College agreement

Northern Execute

Both belong Purchasing Receiving Related

Hengda On according to March

to Bengang goods/providing supporting agreement 2553.01 0.04% Yes Yes 2022-017

Logistics Co. agreement the 26th 2022

Group services services price

Ltd. agreement

Benxi Iron and

Execute

Steel (Group) Both belong Purchasing Receiving Related

On according to March

Machinery to Bengang goods/providing supporting agreement 6395.63 0.10% 10000 No Yes 2022-017

agreement the 26th 2022

Manufacturing Group services services price

agreement

Co. Ltd.Execute

Ansteel Group Both belong Purchasing Receiving Related

On according to March

Automation to Ansteel goods/providing supporting agreement 7287.3 0.12% Yes Yes 2022-017

agreement the 26th 2022

Co. Ltd. Group services services price

agreement

Execute

Other Both belong Purchasing Receiving Related

On according to March

subsidiaries of to Ansteel goods/providing supporting agreement 6802.95 0.11% 1570 Yes Yes 2022-017

agreement the 26th 2022

Ansteel Group Group services services price

agreement

Ansteel Both belong Purchasing Purchasing On Related Execute March

0 0.00% 16000 No Yes 2022-017

Lianzhong to Ansteel goods/providing steel products agreement agreement according to 26th 2022

81Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

(Guangzhou) Group services price the

Stainless Steel agreement

Co. Ltd.Benxi Beiying Execute

Both belong Selling Related

Iron and Steel On according to March

to Bengang goods/providing Selling goods agreement 96772.69 1.55% 420000 No Yes 2022-017

(Group) Co. agreement the 26th 2022

Group services price

Ltd. agreement

Execute

Anshan Iron Both belong Selling Related

On according to March

and Steel Co. to Ansteel goods/providing Selling goods agreement 16864.38 0.27% 210000 No Yes 2022-017

agreement the 26th 2022

Ltd. Group services price

agreement

Benxi Iron and Execute

Same Selling Related

Steel (Group) On according to March

parent goods/providing Selling goods agreement 114274.98 1.82% 190000 No Yes 2022-017

Mining Co. agreement the 26th 2022

company services price

Ltd. agreement

Suzhou Execute

Selling Related

Longben Metal Joint stock On according to March

goods/providing Selling goods agreement 195.2 0.00% 50000 No Yes 2022-017

Materials Co. company agreement the 26th 2022

services price

Ltd. agreement

Benxi Iron and Execute

Same Selling Related

Steel (Group) On according to March

parent goods/providing Selling goods agreement 17875.85 0.29% 50000 No Yes 2022-017

Metallurgical agreement the 26th 2022

company services price

Slag Co. Ltd. agreement

Ansteel Group Execute

Both belong Selling Related

International On according to March

to Ansteel goods/providing Selling goods agreement 0 0.00% 30000 No Yes 2022-017

Economic and agreement the 26th 2022

Group services price

Trade Co. Ltd. agreement

Panzhong

Execute

Yihong Metal Both belong Selling Related

On according to March

Products to Ansteel goods/providing Selling goods agreement 676.43 0.01% 20000 No Yes 2022-017

agreement the 26th 2022

(Chongqing) Group services price

agreement

Co. Ltd.

82Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Changchun

FAW Ansteel Execute

Both belong Selling Related

Steel On according to March

to Ansteel goods/providing Selling goods agreement 976.82 0.02% 11000 No Yes 2022-017

Processing and agreement the 26th 2022

Group services price

Distribution agreement

Co. Ltd.Benxi Iron and

Execute

Steel (Group) Same Selling Related

On according to March

Thermal parent goods/providing Selling goods agreement 6111.08 0.10% 10000 No Yes 2022-017

agreement the 26th 2022

Development company services price

agreement

Co. Ltd.Benxi Iron and

Execute

Steel (Group) Same Selling Related

On according to March

Machinery parent goods/providing Selling goods agreement 4339.83 0.07% 10000 No Yes 2022-017

agreement the 26th 2022

Manufacturing company services price

agreement

Co. Ltd.Ansteel Execute

Both belong Selling Related

Chemical On according to March

to Ansteel goods/providing Selling goods agreement 14293.74 0.23% 177822 No Yes 2022-017

Technology agreement the 26th 2022

Group services price

Co. Ltd. agreement

Benxi Steel & Execute

Same Selling Related

Iron (Group) On according to March

parent goods/providing Selling goods agreement 6824.78 0.11% 8000 No Yes 2022-017

Construction agreement the 26th 2022

company services price

Co. Ltd. agreement

Liaoning

Hengtong Execute

Both belong Selling Related

Metallurgical On according to March

to Bengang goods/providing Selling goods agreement 3534.73 0.06% 5000 No Yes 2022-017

Equipment agreement the 26th 2022

Group services price

Manufacture agreement

Co. Ltd.Benxi Iron and Same Selling On Related Execute March

Selling goods 4015.97 0.06% 5000 No Yes 2022-017

Steel (Group) parent goods/providing agreement agreement according to 26th 2022

83Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

Industrial company services price the

Development agreement

Co. td.Execute

Dalian Boroller Same Selling Related

On according to March

Steel Pipe Co. parent goods/providing Selling goods agreement 1713.88 0.03% 2000 No Yes 2022-017

agreement the 26th 2022

Ltd. company services price

agreement

Execute

Benxi Steel & Selling Related

Parent On according to March

Iron (Group) goods/providing Selling goods agreement 1528.38 0.02% 1000 Yes Yes 2022-017

company agreement the 26th 2022

Co. Ltd. services price

agreement

Delin Land Port Execute

Both belong Selling Related

Supply Chain On according to March

to Ansteel goods/providing Selling goods agreement 6853.43 0.11% 253000 No Yes 2022-017

Service Co. agreement the 26th 2022

Group services price

Ltd. agreement

Northern Execute

Both belong Selling Related

Hengda On according to March

to Bengang goods/providing Selling goods agreement 157552.24 2.52% Yes Yes 2022-017

Logistics Co. agreement the 26th 2022

Group services price

Ltd. agreement

Zhejiang Execute

Selling Related

Jingrui Steel Joint stock On according to March

goods/providing Selling goods agreement 63487.86 1.01% Yes Yes 2022-017

Processing Co. company agreement the 26th 2022

services price

Ltd. agreement

Ansteel Green Execute

Both belong Selling Related

Resources On according to March

to Ansteel goods/providing Selling goods agreement 9258.71 0.15% Yes Yes 2022-017

Technology agreement the 26th 2022

Group services price

Co. Ltd. agreement

Wuhan Execute

Selling Related

Yuanhong Joint stock On according to March

goods/providing Selling goods agreement 5185.43 0.08% Yes Yes 2022-017

Trading Co. company agreement the 26th 2022

services price

Ltd. agreement

Other Both belong Selling Selling goods On Related 406.56 0.01% 2355 No Execute Yes March 2022-017

84Bengang Steel Plates Co. Ltd. 2022 Annual Report

The

Whether

Pricing approved Means of Available

Price of Amount of exceed

Type of related Content of principle of Proportion trading limit payment of market

related related party the Date of Index of

Related parties Relationship party related party related of similar of related price of

party transactions s approved disclosure disclosure

transactions transactions party transactions transactions party similar

transactions (RMB 10000) limit

transactions (RMB transactions transactions

(Y/N)

10000)

subsidiaries of to Ansteel goods/providing agreement agreement according to 26th 2022

Ansteel Group Group services price the

agreement

Benxi Iron and Execute

Same Selling Providing Related

Steel (Group) On according to March

parent goods/providing supporting agreement 637.57 0.01% 1000 No Yes 2022-017

Mining Co. agreement the 26th 2022

company services services price

Ltd. agreement

Controlling Execute

Selling Providing Related

Bengang Group Shareholder On according to March

goods/providing supporting agreement 0 0.00% 17000 No Yes 2022-017

Co. Ltd. of parent agreement the 26th 2022

services services price

company agreement

Total -- -- 3240949.17 -- 5416647 -- -- -- -- --

Details of any sales return of a large amount N/A

Illustration of the actual situation during the reporting period where a

forecast had been made by type for the total amounts of routine

N/A

related transactions which would occur during the reporting period(if

any)

Reason for any significant difference between the transaction price

N/A

and the market price for reference (if applicable)

85Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Related transactions relevant to asset acquisition or sold

□Applicable□Not applicable

There was no related transaction relevant to asset acquisition or sale 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 credits and liabilities with related parties.

5. Transactions with related financial companies

□Applicable □Not applicable

Deposit business

Amount for this period

Maximum Beginning Closing

Total deposit Total amount

Related daily deposit deposit balance balance

Relationship amount for the withdrawn in the

party limit (RMB rate range (RMB (RMB

current period current period

10000)10000)10000)

(RMB 10000) (RMB 10000)

Ansteel

Both belong

Group

to Ansteel 450000 1.9% 442965.63 16081552.08 16417025.86 107491.85

Finance

Group

Co. Ltd.Bengang

Both belong

Group

to Bengang 1100000 3.0%-3.5% 0 269.72 269.72 0

Finance

Group

Co. Ltd.Loan business

Amount for this period

Closing

Loan amount Loan Beginning Total loan Total repayment

Related balance

Relationship (RMB interest balance amount for the amount for the

party (RMB

10000) rate range (RMB 10000) current period current period

10000)

(RMB 10000) (RMB 10000)

Credit or other financial business

Actual amount (RMB

Related party Relationship Business type Total (RMB 10000)

10000)

6. Transactions between financial companies controlled by the Company and related parties

□Applicable□Not applicable

There were no deposit business loan business credit or other financial business between financial companies controlled by the

Company and related parties.

86Bengang Steel Plates Co. Ltd. 2022 Annual Report

7. Other significant related transactions

□Applicable□Not applicable

During the reporting period the Company had no other significant related transactions.XV. 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

Description of lease

Company as the lessor

Lessee Lease capital category Lease income of this year Lease income of last year

Ansteel Tendering Co. Ltd. Plants and ancillary facilities 255045.87

Bengang Tendering Co. Ltd. Plants and ancillary facilities 250917.43 480000.00

Company as the lessee

Rental expense for short-

Assumed interest expense on

term leases and leases of Rent paid

lease liability

Lessor Lease capital category low-value assets

Amount for Amount for Amount for Amount for Amount for Amount for

this year last year this year last year this year last year

Land use right

Benxi Steel &

7669068.17 m2. Land

Iron (Group) 55251233.39 55251233.39 38983993.51 39600209.28

use right 42920.00

Co. Ltd.m2.Benxi Steel & 2300 Hot rolling

Iron (Group) product line related 16098161.06 16098161.06 7657901.26 7982648.96

Co. Ltd. real estate

Benxi Beiying

1780 Hot rolling

Iron and Steel

product line related 12397899.09 12397899.09 5897685.23 6147787.68

(Group) Co.real estate

Ltd.Bengang Land use right

9945423.089945423.082375669.842666923.92

Group Co. 728282.30 m2

87Bengang Steel Plates Co. Ltd. 2022 Annual Report

Rental expense for short-

Assumed interest expense on

term leases and leases of Rent paid

lease liability

Lessor Lease capital category low-value assets

Amount for Amount for Amount for Amount for Amount for Amount for

this year last year this year last year this year last year

Ltd.Northern

Hengda Real estate of office

120596.33

Logistics Co. areas

Ltd.Notes: 1. According to the Land Use Right Lease Contract and subsequent supplementary agreements signed between the

Company and Bengang Group on April 7th 1997 and December 30th 2005 the Company leased land from Bengang Group with a

monthly rent of RMB 0.594/m2. The leased land is 7669068.17m2 and the annual rent is RMB 54.6651 million.

2. On August 14th 2019 the Company signed the House Lease Agreement with Bengang Group and Beiying Iron & Steel Co. Ltd.

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 December 31st 2038.

3. On July 15th 2019 the Company signed Land Lease Agreementwith Bengang Group leased and used a total of 8 pieces of land

from Bengang Group with leased areas of 42920.00m2 and 728282.30m2. The lease term is 20 years and the rental price is

RMB 1.138/m2 per month.Projects that bring profits and losses to the Company reaching more than 10% of the Company's total profit during the reporting

period

□Applicable□Not applicable

During the reporting period of the Company there was no leasing project that brought the Company's profit and loss to more

than 10% of the Company's total profit during the reporting period.

2. Guarantee

□Applicable□Not applicable

There was no guarantee during the reporting period.

3. Entrusting others for managing cash assets

(1) Entrusted finance

□Applicable□Not applicable

There was no entrusted finance during the reporting period.

(2) Entrusted loans

□Applicable□Not applicable

There were no entrusted loans during the reporting period.

4. Other major contracts

□Applicable□Not applicable

88Bengang Steel Plates Co. Ltd. 2022 Annual Report

There were no other major contracts during the reporting period.XVI.Description of other major events

□Applicable □Not applicable

On March 21st 2023 the Company issued the Indicative Announcement of Bengang Steel Plates Co. Ltd. on the Planning of

Significant Asset Replacement and Related Party Transactions. In order to enhance the operating efficiency and profitability of

the Company and accelerate the pace to be a world-class mining development enterprise it intends to conduct an asset

replacement with its controlling shareholder Benxi Steel & Iron (Group) Co. Ltd. (hereinafter referred to as "Benxi Steel & Iron")

specifically the assets to be received being mining-related assets under Benxi Steel & Iron to be surrendered being the assets

and liabilities related to all the Company's iron and steel businesses and the difference between received and surrender made up

in cash by one party to the other. At present the transaction is still in the planning stage which means specific information such

as the scope and pricing of the underlying assets have yet to be finalized and no agreement has been signed by the two sides.The transaction proposal still requires further demonstration communication and consultation and is subject to necessary

decision-making and approval procedures in accordance with relevant laws regulations and the Articles of Association of the

Company. There are still significant uncertainties in the relevant matters.XVII. Major events of subsidiaries of the Company

□Applicable □Not applicable

1. Harbin Bengang Economic and Trading Co. Ltd. completed the deregistration procedure at the Bureau of Industry and

Commerce on August 4th 2022 with a registered capital of RMB 30000000.

2. Nanjing Bengang Materials Sales Co. Ltd. completed the deregistration procedure at the Bureau of Industry and Commerce on

July 1st 2022 with a registered capital of RMB 1150000.

3. Chongqing Liaoben Steel & Iron Trading Co. Ltd. completed the deregistration procedure at the Bureau of Industry and

Commerce on June 16th 2022 with a registered capital of RMB 30000000.

4. Wuxi Bengang Steel & Iron Sales Co. Ltd. was merged and acquired by Shanghai Bengang Metallurgy Science and Technology

Co. Ltd. with a registered capital of RMB 30000000 and completed the deregistration procedure at the Bureau of Industry and

Commerce on September 15th 2022.

5. The Company lost control over Bengang Baojin (Shenyang) Automobile New Materials Technology Co. Ltd. because Xiamen

Xianghong Investment Co. Ltd. Raised funds on July 8th 2022 and thus Baojin was not included in the consolidation.The above events of subsidiaries will not exert significant influence on the Company.

89Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section VII. Status of Share Capital Changes and Shareholders

I. Share Capital Changes

1. Share capital changes

Unit: shares

Before the change Increase/decrease(+，-) After the changeIssuing of Bonus Capitalization of

Quantity Percentage Other Subtotal Quantity Percentage

new share shares common reserve fund

I. Restricted shares

1. State shareholdings

2. State-own Legal person shareholding

3. Other domestic shareholdings

Including: Domestic legal person

holding

Domestic natural person holding

3. Foreign shareholding

Including: Foreign legal person holding

Foreign natural person holding

II. Un-restricted shares 4108191379 100.00% 20838 20838 4108212217 100.00%

1.Common shares in RMB 3708191379 90.26% 20838 20838 3708212217 90.26%

2. Foreign shares in domestic market 400000000 9.74% 400000000 9.74%

3. Foreign shares in foreign market

Other

III. Total shares 4108191379 100.00% 20838 20838 4108212217 100.00%

90Bengang Steel Plates Co. Ltd. 2022 Annual Report

Causation of share capital changes

□Applicable □Not applicable

During the reporting period 925 convertible corporate bonds issued by the Company were converted into shares and the total

share capital of the Company increased by 20838 shares.Status of approval of share capital changes

□Applicable□Not applicable

Status of the registration process of transferred shares

□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 in the most recent year and the most recent period

□Applicable□Not applicable

Other information that 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) during the reporting period

□Applicable□Not applicable

2. Status of total shares and shareholder change and assets and liability structure change

□Applicable□Not applicable

3. Status of existing internal employee shares

□Applicable□Not applicable

91Bengang Steel Plates Co. Ltd. 2022 Annual Report

III. Shareholders and actual controllers

1. Number of shareholders and their shareholding of the Company

Unit: shares

Total The total number

shareholders of preferred

Total number of at the end of shareholders

Total preferred shareholders at the end

common the previous voting rights

of the previous month from the date of

shareholders at 65350 month from 65573 restored at the 0 0

disclosing the annual report (refer to

the end of the the date of end of the

Notes 8)

reporting period disclosing reporting period

the annual (if any) (refer to

report Notes 8)

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

Number of Number of pledged marked or frozen shares

Shareholding shares held at Changes during

Name of the Restricted shares Un-restricted

Nature of the shareholder percentage the end of the the reporting

shareholder held shares held Status Number

(%) reporting period

period

Benxi Steel & Iron

State-owned legal person 58.65% 2409628094 2409628094 Pledged 110000000

(Group) Co. Ltd.Benxi Steel & Iron

State-owned legal person 58.65% 2409628094 2409628094 Frozen 102100000

(Group) Co. Ltd.Ansteel Group

State-owned legal person 17.95% 737371532 737371532

Co. Ltd.Huatai Youyi No.5

Mixed Pension

Other 0.68% 27800000 27800000

Product - Bank of

China Co. Ltd

Zhang Wenyou Domestic natural person 0.47% 19149967 19149967

Guan Hui Domestic natural person 0.42% 17400000 17400000 17400000

Hong Kong

Securities Foreign legal person 0.27% 11271134 -20758667 11271134

Clearing Co. Ltd.Zhou Wei Domestic natural person 0.21% 8831800 1198869 8831800

Li Chunhou Domestic natural person 0.18% 7550000 7550000 7550000

92Bengang Steel Plates Co. Ltd. 2022 Annual Report

China

International

Capital

Foreign legal person 0.15% 6012372 -987600 6012372

Corporation Hong

Kong Securities

Ltd.Shanghai Pudong

Development

Bank Co. Ltd. -

Jianxin

Zhongsheng Other 0.11% 4455500 4455500 4455500

Index 1000

Enhanced Launch

Securities

Investment Fund

Strategy investors or general legal persons

become top 10 shareholders due to shares None

newly issued (if any) (See Notes 3)

Benxi Iron and Steel (Group) Co. Ltd. has an associated relationship with Bengang Group Co. Ltd. and is a person acting in concert asIllustration of relationship or “action in stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is anconcert” among top 10 shareholders associated relationship between other shareholders or whether they are persons acting in concert as stipulated in the Administrative

Measures for the Acquisition of Listed Companies.Illustration of the above shareholders involving

entrusting/entrusted voting rights and Illustration of the above shareholders do not involve entrusting/ entrusted voting rights or abstention from voting rights

abstention from voting rights

Special remarks for the buy-back accounts of

N/A

top 10 shareholders (if any) (See Notes 10)

Shareholding of top 10 unrestricted shareholders

Category of shares

Name of the shareholder Un-restricted shares held at the end of the reporting period

Category of shares Quantity

Common shares in

Benxi Steel & Iron (Group) Co. Ltd. 2409628094 2409628094

RMB

Common shares in

Ansteel Group Co. Ltd. 737371532 737371532

RMB

Huatai Youyi No.5 Mixed Pension Product - Common shares in

2780000027800000

Bank of China Co. Ltd RMB

Common shares in

Zhang Wenyou 19149967 19149967

RMB

Guan Hui 17400000 Common shares in 17400000

93Bengang Steel Plates Co. Ltd. 2022 Annual Report

RMB

Common shares in

Hong Kong Securities Clearing Co. Ltd. 11271134 11271134

RMB

Common shares in

Zhou Wei 8831800 8831800

RMB

Common shares in

Li Chunhou 7550000 7550000

RMB

China International Capital Domestic listed

60123726012372

Corporation Hong Kong Securities Ltd. foreign shares

Shanghai Pudong Development Bank Co. Ltd. -

Common shares in

Jianxin Zhongsheng Index 1000 Enhanced 4455500 4455500

RMB

Launch Securities Investment FundIllustration of relationship or “action inBenxi Iron and Steel (Group) Co. Ltd. has an associated relationship with Bengang Group Co. Ltd. and is a person acting in concert asconcert” among top 10 un-restricted

stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is an

shareholders and between top 10 un-

associated relationship between other shareholders or whether they are persons acting in concert as stipulated in the Administrative

restricted shareholders and top 10

Measures for the Acquisition of Listed Companies.shareholders

Illustration of top 10 shareholders Zhang Wenyou holds 19149967 shares through an investor credit securities account. Guan Hui holds 17400000 shares through an investor

participating in securities margin trading (if credit securities account. Zhou Wei holds 8831800 shares through an investor credit securities account. Li Chunhou holds 7550000 shares

any) (see Notes 4) through an investor credit securities account.Whether the top 10 common shareholders and top 10 un-restricted common shareholders have buy-back agreement dealing during the reporting period

□Yes□No

The top 10 common shareholders and top 10 un-restricted common shareholders have no buy-back agreement dealing during the reporting period.

2. Controlling shareholder

Nature of controlling shareholders: central state-owned holdings

Type of controlling shareholders: legal person

Name of the controlling Legal representative/person in Date of

Organization code Principal business activities

shareholder charge incorporation

Steel smelting mine exploitation plates rolling pipe manufacturing power

generation special steel material manufacturing heating supply of the water

Benxi Steel & Iron th electricity wind and gas metal processing electro mechanics repairment andZhai Hongwei July 10 1996 91210500119726263U

(Group) Co. Ltd. manufacturing equipment manufacturing architecture installation railway

highway transportation import and export trade traveling hotel catering and

entertaining services printing newspaper and periodical distribution building

94Bengang Steel Plates Co. Ltd. 2022 Annual Report

Name of the controlling Legal representative/person in Date of

Organization code Principal business activities

shareholder charge incorporation

materials refractory materials meters and instruments material supply and

marketing real estate development scientific research design and

information services property management communications purchase

processing and sales of scrap steel housing civil air defense project leasing

steel adjustment waste oil purchase (the above projects are limited to

subsidiaries) assets management Bengang Daily publishing; design and

production of print advertisements use Bengang Daily to publish domestic

and foreign advertisements design and produce TV station advertisements.Equity of the controlling

shareholder in other

domestic/foreign listed

companies under its None

control or participation

during the reporting

period

Changes of the controlling shareholder during the reporting period

□Applicable□Not applicable

The controlling shareholder of the Company did not change during the reporting period.

3. Actual controller and concerted action person

Actual controller nature: Central State-owned Assets Management Agency

Actual controller type: Legal person

Name of the controlling Legal representative/person in Date of

Organization code Principal business activities

shareholder charge incorporation

Steel iron vanadium titanium stainless steel special steel production and

manufacturing nonferrous metal production and manufacturing steel

rolling processing iron vanadium titanium and other non-ferrous metal

th nonmetallic mining and comprehensive utilization mining auxiliary industryAnsteel Group Co. Ltd. Tan Chengxu July 28 2010 91210000558190456G

clean energy power generation sales of coal and products chemical

products and gases (excluding hazardous chemicals) production and sales of

refractory materials industrial and mining engineering metallurgical

engineering construction engineering and technical services equipment

95Bengang Steel Plates Co. Ltd. 2022 Annual Report

Name of the controlling Legal representative/person in Date of

Organization code Principal business activities

shareholder charge incorporation

manufacturing Internet of Things information services energy conservation

technical services of environmental protection R&D of new materials

development of renewable resources mechanical processing technology

development transfer and services transportation services real estate

development urban energy supply software and information technology

services intelligent manufacturing and services domestic and foreign trade

financial management bidding and tendering services medical and health

care services vocational skills training economic information consulting

services enterprise management hotel and catering services operating of

other state-owned assets and investments within the scope authorized by

the State-owned Assets Supervision and Administration Commission of the

State Council; operations of branches include: newspaper distribution

publication printing packaging decoration and other print printing. (For

projects subject to approval according to laws business activities can only be

carried out after approval by relevant departments.)

Equity of the controlling

shareholder in other

domestic/foreign listed During the reporting period Ansteel Group Co. Ltd. indirectly held 53.35% of the shares of Ansteel and indirectly held 52.62% of the shares of Pansteel Vanadium

companies under its and Titanium.control during the

reporting period

96Bengang Steel Plates Co. Ltd. 2022 Annual Report

Change of the actual controller during the reporting period

□Applicable□Not applicable

There is no change of the Company’s actual controller during the reporting period.Block diagram of the ownership and control relations between the Company and the actual controller

Whether the actual controller is controlling the Company through trusteeship or other asset management service

□Applicable□Not applicable

4. Controlling shareholder or the largest shareholder and its concerted action person's cumulative

pledged shares accounting for 80% of the Company's shares held by them

□Applicable□Not applicable

5. Shareholders holding more than 10% of the shares

□Applicable□Not applicable

6. Share reduction limitation of controlling shareholders actual controller restructuring party and other

commitment subjects

□Applicable□Not applicable

IV. Implementation of share repurchase during the reporting period

Implementation progress of share repurchase

□Applicable□Not applicable

Implementation progress of reducing share repurchase by centralized bidding

□Applicable□Not applicable

97Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section VIII. Preferred shares

□Applicable□Not applicable

There were no preferred shares in the Company during the reporting period.

98Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section IX. Bonds

□Applicable □Not applicable

I. Corporate bonds

□Applicable□Not applicable

There were no corporate bonds in the Company during the reporting period.II. Company bonds

□Applicable□Not applicable

There were no company bonds in the Company during the reporting period

III. Non-financial corporate debt financing instruments

□Applicable□Not applicable

There were no non-financial corporate debt financing instruments in the Company during the reporting period.IV. Company bonds

□Applicable □Not applicable

1. Previous adjustment of conversion price

(1) The initial conversion price of Bengang Convertible Bonds was RMB 5.03 per share.

(2) Due to the Company's implementation of the 2020 annual equity distribution plan the conversion price of Bengang

Convertible Bonds was adjusted to RMB 5.02 per share on July 19th 2021.

(3) Due to the Company's implementation of the 2021 mid-term equity distribution plan the conversion price of Bengang

Convertible Bonds was adjusted to RMB 4.55 per share on October 13th 2021.

(4) Due to the Company's implementation of the 2021 annual equity distribution plan the conversion price of Bengang

Convertible Bonds was adjusted to RMB 3.95 per share on October 13th 2021.

99Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Cumulative share conversion

□Applicable □Not applicable

Cumulative Proportion of the Proportion of

Conversion Cumulative

Convertible bond Total amount Total amount number of shares number of converted Amount not yet unconverted

beginning and amount of shares

abbreviation issued (bonds) issued (RMB) converted shares to the total issued converted (RMB) amount to total

ending date converted (RMB)

(shares) shares before conversion issued amount

From January

Bengang

4th 2021 to June 68000000 6800000000.00 1168947900.00 232840685 6.01% 5631052100.00 82.81%

Convertible Bonds

28th 2026

3. Top ten holders of convertible bonds

Unit: shares

Number of convertible bonds Amount of convertible bonds Percentage of convertible

Nature of convertible

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

bond holders

reporting period (bonds) period (RMB) reporting period

Industrial Bank Co. Ltd. - Tianhong Yongli Bond

1 Other 2614994 261499400.00 4.64%

Securities Investment Fund

Bank of China - Yifangda Stable Profit Increase

2 Other 1804006 180400600.00 3.20%

Bond Securities Investmen Fund

China CITIC Group Corporation Limited

3 Enterprise Annuity Plan - China CITIC Bank Other 1407519 140751900.00 2.50%

Corporation Limited

China AMC Yannian Yishou No. 9 Fixed Income

4 Pension Product－ China Merchants Bank Co. Other 1362468 136246800.00 2.42%

Ltd.China Construction Bank Corporation Limited -

5 Zheshang Fengli Enhanced Bond Securities Other 1000000 100000000.00 1.78%

Investment Fund

Domestic non-state-

6 Great Wall Glory Securities Co. Ltd. 853440 85344000.00 1.52%

owned legal person

Industrial and Commercial Bank of China

7 Limited Enterprise Annuity Plan - China Other 764258 76425800.00 1.36%

Construction Bank Corporation Limited

100Bengang Steel Plates Co. Ltd. 2022 Annual Report

Number of convertible bonds Amount of convertible bonds Percentage of convertible

Nature of convertible

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

bond holders

reporting period (bonds) period (RMB) reporting period

Dacheng Fund - Postal Savings Bank of China -

8 Dacheng Fund - PSBC No. 1 Integrated Assets Other 751826 75182600.00 1.34%

Management Plan

CITIC Securities - Sany Heavy Industry Co. Ltd. -

9 CITIC Sany Privileged Customized No. 1 Single Other 687877 68787700.00 1.22%

Assets Management Plan

China AMC Yannian Yishou No. 8 Fixed Income

10 Pension Product - China CITIC Bank Corporation Other 679931 67993100.00 1.21%

Limited

101Bengang Steel Plates Co. Ltd. 2022 Annual Report

4. Significant changes in the guarantor's profitability asset condition and credit standing

□Applicable□Not applicable

5. Liabilities and changes in credit at the end of the reporting period and cash arrangements and debt

repayment in future years

At the end of the reporting period the Company's major accounting data and financial indicators and the Company's credit

rating of convertible bonds in the past two years have not changed this year.V. Loss in the consolidation during the reporting period exceeding 10% of the net assets at

the end of the previous year

□Applicable□Not applicable

VI. Overdue interest-bearing debts except for bonds at the end of the reporting period

□Applicable□Not applicable

VII. Violation of rules and regulations during the reporting period

□Yes□No

VIII.The main accounting data and financial indicators of the Company in the past two years at

the end of the reporting period

Unit: RMB 10000

Item At the end of this period At the end of last period Change

Current ratio 0.81 1.14 -28.95%

Liabilities to Assets Ratio 56.08% 58.17% -2.09%

Quick ratio 0.21 0.66 -68.18%

At the end of this period At the end of last period Change

Net profit after deducting

-139183.79251775.87-155.28%

nonrecurring gains and losses (RMB)

EBITDA total liabilities ratio 10.89% 19.23% -8.34%

Interest coverage ratio -0.75 4.37 -117.16%

Cash interest coverage ratio 3.68 2.35 56.60%

EBITDA interest coverage ratio 2.39 6.12 -60.95%

Loan repayment rate 100.00% 100.00% 0.00%

Interest repayment rate 100.00% 100.00% 0.00%

102Bengang Steel Plates Co. Ltd. 2022 Annual Report

Section X. Financial report

I. Auditor’s report

Opinion of audit report Standard unmodified opinion

Date of audit report March 28th 2023

Name of CPA firm ShineWing Certified Public Accountants LLP

Audit report number XYZH/2023BJAA15B0064

Name of CPA Fan Jianping Chen Jian

Auditor’s Report

XYZH/2023BJAA15B0064

To the Shareholders of Bengang Steel Plates Co. Ltd.:

Auditor’s opinion

We have audited the financial statements of Bengang Steel Plates Co. Ltd. (hereinafter referred to as “Bengang Steel Plates”)

which comprise the consolidated and the parent company’s statement of financial position as at December 31st 2022 the

consolidated and the parent company’s income statement the consolidated and the parent company’s cash flow statement and

the consolidated and the parent company’s statement of changes in shareholders’ equity for the year 2022 and the notes to the

financial statements.In our opinion the accompanying financial statements were prepared in accordance with Accounting Standards for Business

Enterprises in all material respects and presented fairly the consolidated and the parent company’s financial position of Bengang

Steel Plates as of December 31st 2022 and the consolidated and the parent company’s results of operations and cash flows for

the year 2022.Basis for Opinion

We conducted our audit in accordance with China Standards on Auditing for Chinese Certified Public Accountants. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the FinancialStatements” section of our report. We are independent of Bengang Steel Plates in accordance with the Code of Ethics for

Chinese Certified Public Accountants and we have fulfilled our other ethical responsibilities of the code. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit.Key audit matters

Key audit matters are those matters that in our professional judgment are considered to be most significant to the audit of the

financial statements for the period. These matters were addressed in the context of our audit of the financial statements as a

whole and in forming our audit opinion thereon and we do not express a separate opinion on these matters.

103Bengang Steel Plates Co. Ltd. 2022 Annual Report

1. Cash and cash equivalents matters

Key audit matters Responses in the audit

Please refer to Notes 1 and 52 of "VI. Notes to the principal The audit procedures we performed were as follows:items of the consolidated financial statements” in the notes to (1) Understanding and testing key internal controls related to

the financial statements. cash and cash equivalents and evaluating whether the

As at December 31st 2022 the balance of cash and cash relevant controls are properly designed and effectively

equivalents in the Consolidated Statement of Financial Position of implemented;

Bengang Steel Plates was RMB 1461145600 a decrease of RMB (2) Checking original vouchers for receipts and disbursements

7369950100 from the balance at the beginning of the year and related to cash journals and bank deposit journals; testing

we classified it as a key audit matter in view of the high risk of bank journals for large amounts of receipts and

misstatement arising from the significant changes in cash and disbursements;

cash equivalents. (3) Checking bank statements obtaining account opening list

obtaining historical details of bank transactions performing

two-way verification and performing correspondence

procedures for bank accounts and fund attribution;

(4) Checking the Statement of Bank Reconciliation and

performing cut-off tests;

(5) Performing audit procedures on other cash and cash

equivalents examining restricted cash and cash equivalents

and verifying the reasons for restricted cash and cash

equivalents;

(6) Checking whether the information related to cash and cash

equivalents matters has been properly presented and

disclosed in the financial statements.

2. Bank borrowing matters

Key audit matters Responses in the audit

The audit procedures we performed were as follows:

Please refer to the accounting policies described in Note 17

(1) Understanding and testing key internal controls related to

of "IV. Significant accounting policies and accounting estimates"

long- and short-term borrowings and interest on long- and

and Notes 17 24 and 26 of "VI. Notes to the principal items of the

short-term borrowings and evaluating whether the relevant

consolidated financial statements" in the notes to the financial

controls are appropriate and effectively implemented;

statements.

(2) Obtaining borrowing contracts reviewing the nature of

As at December 31st 2022 the balance of long- and short-

borrowings understanding the borrowing intentions of

term borrowings of Bengang Steel Plates amounted to RMB

Bengang Steel Plates understanding the future plans for the

4277308200 which was significant and Bengang Steel Plates

relevant borrowing cost capitalization items and reviewing its

had interest capitalization items so we classified it as a key audit

internal resolutions related to the capitalization of borrowing

matter.costs;

104Bengang Steel Plates Co. Ltd. 2022 Annual Report

(3) Recalculating the borrowing costs of Bengang Steel Plates

and checking whether the classification of the expensed

amount and capitalized amount is correct;

(4) Reviewing in the field the current status of borrowing cost

capitalization items analyzing and checking whether they

meet the conditions for borrowing cost capitalization and

checking the accounting treatment related to borrowing cost

capitalization;

(5) Checking whether the information related to borrowing

matters has been properly presented and disclosed in the

financial statements.

3. Revenue recognition matters

Key audit matters Responses in the audit

Please refer to the accounting policies described in Note 24 The audit procedures we performed were as follows:

of "IV. Significant accounting policies and accounting estimates" (1) Understanding and testing key internal controls related to

and Notes 37 of "VI. Notes to the principal items of the revenue and evaluating whether the relevant controls are

consolidated financial statements" in the notes to the financial appropriate and effectively implemented;

statements. (2) Selecting samples to examine sales contracts identify the

In FY2022 the amount of operating income recognized in contractual terms and conditions related to the transfer of

the consolidated financial statements of Bengang Steel Plates was control of goods and evaluate whether the timing of revenue

RMB 62616621600. Since revenue is a key performance recognition of Bengang Steel Plates meets the requirements of

indicator of Bengang Steel Plates and the management of the Accounting Standards for Business Enterprises;

Bengang Steel Plates may be exposed to the risk of material (3) Obtaining details of sales for the current year selecting

misstatement in revenue recognition we classified revenue samples of revenue transactions recorded during the year to

recognition as a key audit matter. check supporting documents such as sales contracts invoices

outbound orders acceptance slips customs declarations

ocean bills of lading and evaluate whether the relevant

revenue recognition is in accordance with the Company's

accounting policies;

(4) Performing analytical procedures on revenues including a

comparison of the gross profit of revenues of major products

for the current period with the gross profit of revenues of the

previous period and the same industry and an analysis of

fluctuations in revenues to check for abnormalities;

(5) Performing correspondence procedures with a sample of

customers regarding sales revenue for the reporting period in

conjunction with the accounts receivable audit procedures;

(6) Checking sales to related parties reviewing the fairness of

105Bengang Steel Plates Co. Ltd. 2022 Annual Report

related party transaction prices and performing

correspondence procedures with related party customers;

(7) Selecting a sample of revenue recognition transactions

around the balance sheet date to examine the original

documents related to revenue recognition and evaluate

whether revenues are recorded in the appropriate accounting

period;

(8) Checking whether the information related to revenue

matters has been properly presented and disclosed in the

financial statements.Other Information

The management of Bengang Steel Plates (hereinafter referred to as the Management) is responsible for the other information.Other information includes the information covered in the 2022 Annual Report of Bengang Steel Plates 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 express any form of assurance

conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so

consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the

audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of the other information we are

required to report that fact. We have nothing to report in this regard.Responsibilities of the Management and those charged with governance for the financial

statements

The Management is responsible for the preparation of the financial statements in accordance with the provisions of the

Accounting Standards for Business Enterprises to achieve a fair presentation and designing implementing and maintaining the

necessary internal controls so that the financial statements are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing the ability of Bengang Steel Plates to continue

as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting

unless the Management either intends to liquidate Bengang Steel Plates or to cease operations or have no realistic alternative

but to do so.Those charged with governance are responsible for overseeing the financial reporting process of Bengang Steel Plates.Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material

misstatement whether due to fraud or error and to issue an auditor’s report that expresses our opinion. Although reasonable

assurance is a high level of assurance it is not a guarantee that an audit conducted in accordance with auditing standards will

106Bengang Steel Plates Co. Ltd. 2022 Annual Report

always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered

material if individually or in the aggregate they could reasonably be expected to influence the economic decisions that users of

the financial statements make on the basis of the financial statements.During the course of the audit in accordance with auditing standards we exercise professional judgement and maintain

professional skepticism. We also carry out the following works:

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 audit. 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.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by the Management.Conclude on the appropriateness of the 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 the ability of Bengang Steel Plates 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 in

accordance with the auditing standards or if such disclosures are inadequate we shall 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.Evaluate the overall presentation structure and content (including disclosures) of the financial statements and also

whether the financial statements represent the underlying transactions and events in a manner that achieves fair

presentation.Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities

within Bengang Steel Plates to express an opinion on the consolidated financial statements. We are responsible for the

direction supervision and performance audit of the group. We remain solely responsible for our 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 etc. including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with those relevant ethical

requirements regarding independence and to communicate with them all relationships and other matters that may reasonably

be thought to bear on our independence and related safeguards where 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 prohibited public disclosure about the matter or when in 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.ShineWing Certified Public Accountants LLP Chinese Certified Public Accountant: (Engagement partner)

107Bengang Steel Plates Co. Ltd. 2022 Annual Report

Chinese Certified Public Accountant:

Beijing China March 28th 2023

II. Financial statements

The unit of the statements in the financial notes is RMB.

1. Consolidated statement of financial position

Prepared by: Bengang Steel Plates Co. Ltd.December 31st 2022

Unit: RMB

Item December 31st 2022 January 1st 2022

Current assets:

Cash and cash equivalents 1461145641.87 8831095737.85

Settlement provisions

Capital lent

Financial assets held for trading

Derivative financial assets

Notes receivable 429707174.70 1540482182.07

Accounts receivable 897230896.06 256850782.71

Accounts receivable financing 137591996.02 1530735647.38

Prepayments 1247177748.33 994370345.64

Premium receivable

Reinsurance accounts receivable

Receivable deposit for reinsurance contract

Other receivables 127198692.92 165937280.41

Including: Interest receivables 2523993.39

Dividends receivable

Redemptory financial assets for sale

Inventories 8463728475.18 10190166138.98

Contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 395441136.26 754948193.56

Total current assets 13159221761.34 24264586308.60

Non-current assets:

Loan and advances issued

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments 51030777.18 2981784.07

Other equity instrument investments 1020418482.31 1042024829.00

Other non-current financial assets

Investment property

Fixed assets 24836556422.90 25480674048.94

Construction in progress 3158195899.65 2434182101.13

Productive biological assets

Oil and gas assets

Right-of-use assets 1379990713.89 1440365248.31

Intangible assets 262784937.41 297921548.81

Development expenditure

Goodwill

Long-term deferred expenses

108Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item December 31st 2022 January 1st 2022

Deferred tax assets 136387885.28 153756548.31

Other non-current assets 110065560.68 30630858.13

Total non-current assets 30955430679.30 30882536966.70

Total assets 44114652440.64 55147123275.30

Current liabilities:

Short-term loans 49200000.00 4053088140.00

Loan from central bank

Loan from other banks

Financial liability held for trading

Derivative financial liabilities

Notes payable 4389336619.36 4635083376.48

Accounts payable 3696420463.85 5352272685.89

Advance from customers 0.00 0.00

Contract liabilities 3794115592.29 4708188093.78

Financial assets sold for repurchase

Deposits from customers and interbank

Receipt from vicariously traded securities

Receipt from vicariously underwriting securities

Employee benefits payable 10046363.27 152095376.49

Taxes payable 44392920.78 114267988.70

Other payables 1247722165.47 1348025731.98

Including: Interest payable

Dividends payable

Handling charges and commission payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year 2586250886.43 310780518.14

Other current liabilities 493235027.03 612064452.20

Total current liabilities 16310720038.48 21285866363.66

Non-current liabilities:

Provision for insurance contract

Long-term loans 1726938302.30 4222821771.74

Bonds payable 5276502232.78 5054251668.83

Including: Preferred stock

Perpetual bond

Leasing liabilities 1384348462.18 1424667169.15

Long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 42377015.51 93106285.89

Deferred tax liabilities 27309.01

Other non-current liabilities

Total non-current liabilities 8430193321.78 10794846895.61

Total liabilities 24740913360.26 32080713259.27

Owners' equity:

Share capital 4108212217.00 4108191379.00

Other equity instruments 947863834.02 947882663.63

Including: Preferred stock

Perpetual bond

Capital reserves 13272205160.21 13272134173.09

Less: Treasury shares

Other comprehensive income -15904760.02

Special reserves 2217913.77 337978.57

Surplus reserves 1195116522.37 1195116522.37

General risk reserve

109Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item December 31st 2022 January 1st 2022

Undistributed profits -720559670.73 2977306297.64

Total equity attributable to owners of the parent company 18789151216.62 22500969014.30

Non-controlling interests 584587863.76 565441001.73

Total owners’ equity 19373739080.38 23066410016.03

Total of liabilities and owners’ equity 44114652440.64 55147123275.30

Legal Representative: Li Yan Chief Financial Officer: Zheng Zhengli Chief Accountant: Sun Yanbin

2. Statement of financial position of the parent company

Unit: RMB

Item December 31st 2022 January 1st 2022

Current assets:

Cash and cash equivalents 585125555.12 7580872007.38

Financial assets held for trading

Derivative financial assets

Notes receivable 669193401.02 1514416395.80

Accounts receivable 931035796.58 353631563.42

Accounts receivable financing 127468835.80 1504640362.79

Prepayments 1247084271.88 1004241075.82

Other receivables 150724545.56 268606048.52

Including: Interest receivables 2014931.61

Dividends receivable

Inventories 6988993205.61 8289784141.78

Contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 310293996.25 670787069.41

Total current assets 11009919607.82 21186978664.92

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments 2270277904.85 2015186190.50

Other equity instrument investments 1020418482.31 1041624829.00

Other non-current financial assets

Investment property

Fixed assets 23777736434.39 24110222815.60

Construction in progress 3127247793.98 2401120232.45

Productive biological assets

Oil and gas assets

Right-of-use assets 1379990713.89 1440365248.31

Intangible assets 174295096.19 178414033.19

Development expenditure

Goodwill

Long-term deferred expenses

Deferred tax assets 115126210.76 124046003.13

Other non-current assets 110065560.68 22010941.60

Total non-current assets 31975158197.05 31332990293.78

Total assets 42985077804.87 52519968958.70

Current liabilities:

Short-term loans 49200000.00 3353088140.00

Financial liability held for trading

Derivative financial liabilities

Notes payable 3982738952.59 4650517420.18

Accounts payable 3821848200.25 5674841169.66

110Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item December 31st 2022 January 1st 2022

Advance from customers 0.00 0.00

Contract liabilities 4805281178.80 4660051055.89

Employee benefits payable 9901551.31 151595453.62

Taxes payable 22518649.65 40949825.13

Other payables 861392691.88 683141570.83

Including: Interest payable

Dividends payable

Liabilities held for sale

Non-current liabilities due within one year 2586250886.43 310780518.14

Other current liabilities 624686553.24 605806637.27

Total current liabilities 16763818664.15 20130771790.72

Non-current liabilities:

Long term loans 1726938302.30 4222821771.74

Bonds payable 5276502232.78 5054251668.83

Including: Preferred stock

Perpetual bond

Lease liabilities 1384348462.18 1424667169.15

Long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 42377015.51 93106285.89

Deferred tax liabilities 27309.01

Other non-current liabilities

Total non-current liabilities 8430193321.78 10794846895.61

Total liabilities 25194011985.93 30925618686.33

Shareholder’s equity:

Share capital 4108212217.00 4108191379.00

Other equity instruments 947863834.02 947882663.63

Including: Preferred stock

Perpetual bond

Capital reserves 12852053478.09 12851982490.97

Less: Treasury shares

Other comprehensive income -15904760.02

Special reserves 58212.15 155469.58

Surplus reserves 1195116522.37 1195116522.37

Undistributed profits -1296333684.67 2491021746.82

Total owners' equity 17791065818.94 21594350272.37

Total liabilities and owners’ equity 42985077804.87 52519968958.70

3. Consolidated income statement

Unit: RMB

Item FY2022 FY2021

I. Total operating income 62616621627.60 77912144981.46

Including: Operating income 62616621627.60 77912144981.46

Interest income

Premium earned

Income from handling charges and commission

II. Total operating cost 63838504250.02 74244688137.82

Including: Operating cost 62259334854.72 71891598336.96

Interest expense

Expenditure for handling charges and commission

Surrender value

Net expenditure for compensation

Net provision for insurance contract appropriated

111Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item FY2022 FY2021

Bonus payment for policy

Reinsurance premium

Tax and surcharges 206440870.56 431460563.69

Selling and distribution expenses 128489696.80 141394565.57

General and administrative expenses 663080654.45 1187239442.10

Research and development expenses 58088008.14 56401594.44

Financial expenses 523070165.35 536593635.06

Including: Interest expense 599359597.96 1007595231.75

Interest income 80619490.18 393818460.36

Add: Other income 72300830.48 66345976.64

Income on investment (“-” for loss) 89589183.44 -120519309.82

Including: Income from associates and joint ventures -181084.64 520432.46

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) -4366027.94 -7754375.77

Assets impairment loss (“-” for loss) -33475219.25 -113671335.02

Assets disposal gains (“-” for loss) 3648546.62 130675.05

III. Operational profit(“-” for loss) -1094185309.07 3491988474.72

Add: Non-operating income 40130944.39 7783225.80

Less: Non-operating expenses 26623177.77 64272629.43

IV. Total profit (“-” for loss) -1080677542.45 3435499071.09

Less: Income tax expenses 125374177.41 901863572.46

V. Net profit(“-” for loss) -1206051719.86 2533635498.63

(I) Classification by continuing operating

1. Net profit from continuing operation(“-” for loss) -1206051719.86 2533635498.63

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

(II) Classification by ownership

1. Net profit attributable to the owners of parent company -1232976557.37 2500582902.58

2. Net profit attributable to non-controlling shareholders 26924837.51 33052596.05

VI. Net after-tax amount of other comprehensive income -15879343.62 0.00

Other comprehensive income attributable to owners of the parent company after

-15879343.620.00

tax

(I) Other comprehensive income items that will not be reclassified into gains/losses -15879343.62 0.00

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 -15879343.62

4. Changes in fair value of Company's credit risk

5. Others

(II) Other comprehensive income that will be reclassified into profit or loss 0.00 0.00

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

4. Credit impairment provision of other debt investments

5. Cash flow hedge reserves

6. Translation differences in foreign currency financial statements

7. Others

Other comprehensive income attributable to non-controlling shareholders’ equity

after tax

-

VII. Total comprehensive income 2533635498.63

1221931063.48

-

Total comprehensive income attributable to the owner of the parent company 2500582902.58

1248855900.99

112Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item FY2022 FY2021

Total comprehensive income attributable to non-controlling shareholders 26924837.51 33052596.05

VIII. Earnings per share

(I) Basic earnings per share -0.300 0.600

(II) Diluted earnings per share -0.300 0.496

In the event of a business combination under common control during the period the net profit realized by the party being

consolidated before the combination was RMB: and the net profit realized by the consolidated party in the previous period

was RMB: .Legal Representative: Li Yan Chief Financial Officer: Zheng Zhengli Chief Accountant: Sun Yanbin

4. Income statement of the parent company

Unit: RMB

Item FY2022 FY2021

I. Operating income 63081757089.14 78721461725.71

Less: Operating cost 63165254867.80 73203463475.56

Tax and surcharges 157419976.34 381385801.80

Selling and distribution expenses 162072670.40 122357594.15

General and administrative expenses 579730173.82 1123575016.51

Research and development expenses 58088008.14 56401594.44

Financial expenses 523903605.28 521028798.20

Including: Interest expense 580671493.79 971156413.61

Interest income 59532341.41 372598200.22

Add: Other income 71247038.47 65897317.34

Income on investment (“-” for loss) 260636435.24 -123815558.88

Including: Income from associates and joint ventures -580788.56 0.00

Income from derecognition of financial assets measured at amortized cost (“-”

for loss)

Net exposure hedge income (“-” for loss)

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

Credit impairment loss (“-” for loss) -4244546.20 -8563525.91

Assets impairment loss (“-” for loss) -33475219.25 -113671335.02

Assets disposal gains (“-” for loss) 3669258.68 130675.05

II. Operational profit (“-” for loss) -1266879245.70 3133227017.63

Add: Non-operating income 32814019.52 3831724.04

Less: Non-operating expenses 26463198.79 62183332.01

III. Total profit (“-” for loss) -1260528424.97 3074875409.66

Less: Income tax expenses 59489282.29 734765484.50

IV. Net profit (“-” for loss) -1320017707.26 2340109925.16

(I) Net profit from continuing operation (“-” for loss) -1320017707.26 2340109925.16

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

V. Net after-tax amount of other comprehensive income -15904760.02 0.00

(I) Other comprehensive income items that will not be reclassified into gains/losses -15904760.02 0.00

1. Re-measurement of defined benefit plans of changes

2. Other comprehensive income under the equity method cannot be reclassified

into profit or loss

3. Changes in fair value of investments in other equity instruments -15904760.02

4. Changes in fair value of Company's credit risk

5. Others

(II) Other comprehensive income that will be reclassified into profit or loss 0.00 0.00

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 hedge reserves

113Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item FY2022 FY2021

6. Translation differences in foreign currency financial statements

7. Others

-

VI. Total comprehensive income 2340109925.16

1335922467.28

VII. Earnings per share

(I) Basic earnings per share

(II) Diluted earnings per share

5. Consolidated cash flow statement

Unit: RMB

Item FY2022 FY2021

I. Cash flow from operating activities

Cash received from sale of goods or rendering of services 51073772028.16 55748897664.65

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 483849940.14 78323445.53

Other cash received relating to operating activities 123009781.28 501366768.12

Subtotal of cash inflows from operating activities 51680631749.58 56328587878.30

Cash paid for goods and services 46861851072.12 50647643333.57

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 2802982355.80 2451084010.00

Cash paid for all types of taxes 651109945.61 2673210895.18

Other cash paid relating to operating activities 88325410.49 143176185.51

Subtotal of cash outflows from operating activities 50404268784.02 55915114424.26

Net cash flows from operating activities 1276362965.56 413473454.04

II. Cash flows from investing activities

Cash received from disposal of investments 422818.29 11400000000.00

Cash received from return on investments 2879850.07 2717582.45

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

4752720.712776.27

term assets

Net cash received from disposal of subsidiary and other operating units 137073256.40 0.00

Other cash paid relating to investing activities

Subtotal of cash inflows from investing activities 145128645.47 11402720358.72

Cash paid for acquisition of fixed assets intangible assets and other long-term assets 1707467068.85 1304976365.56

Cash paid for investments 6200000000.00

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 1707467068.85 7504976365.56

Net cash flows from investing activities -1562338423.38 3897743993.16

III. Cash flows from financing activities

114Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item FY2022 FY2021

Proceeds from investment

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

subsidiary

Proceeds from borrowings 2000000000.00 5801673020.00

Other proceeds relating to financing activities 2759751595.78 2361272208.08

Subtotal of cash inflows from financing activities 4759751595.78 8162945228.08

Cash repayments of borrowings 6245551350.67 12072544553.18

Cash payments for the distribution of dividends profit or interest expenses 2765916748.51 2550802187.51

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

subsidiaries

Other cash payments relating to financing activities 485930596.70 740000000.00

Subtotal of cash outflows from financing activities 9497398695.88 15363346740.69

Net cash flows from financing activities -4737647100.10 -7200401512.61

IV. Effect of foreign exchange rate changes on cash and cash equivalents 21186177.64 -41134466.23

V. Net increase in cash and cash equivalents -5002436380.28 -2930318531.64

Add: Cash and cash equivalents at the beginning of the period 6299099063.48 9229417595.12

VI. Cash and cash equivalents at the end of the period 1296662683.20 6299099063.48

6. Cash flow statement of the parent company

Unit: RMB

Item FY2022 FY2021

I. Cash flow from operating activities

Cash received from the sale of goods or the rendering of services 52566695245.11 60408664898.10

Tax rebate received 446252731.21 21209047.83

Other cash received relating to operating activities 95185405.62 461672257.35

Subtotal of cash inflows from operating activities 53108133381.94 60891546203.28

Cash paid for goods and services 48331653935.65 55735903034.60

Cash paid to and on behalf of employees 2666197042.40 2345338852.62

Cash paid for all types of taxes 339347119.05 2498120146.95

Other cash paid relating to operating activities 114224449.37 123901730.49

Subtotal of cash outflows from operating activities 51451422546.47 60703263764.66

Net cash flows from operating activities 1656710835.47 188282438.62

II. Cash flows from investing activities

Cash received from disposal of investments 0.00 11400000000.00

Cash received from return on investments 56019227.23 2436869.33

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

4341972.000.00

term assets

Net cash received from disposal of subsidiary and other operating units 205076325.08 0.00

Other cash received relating to investing activities 0.00 0.00

Subtotal of cash inflows from investing activities 265437524.31 11402436869.33

Cash paid for acquisition of fixed assets intangible assets and other long-term assets 1698674088.11 1304157060.45

Cash paid for investments 850000000.00 6200000000.00

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 2548674088.11 7504157060.45

Net cash flows from investing activities -2283236563.80 3898279808.88

III. Cash flows from financing activities

Cash flows from financing activities

Cash received from borrowings 2000000000.00 5101673020.00

Other cash received relating to financing activities 2759751595.78 1374782185.21

Subtotal of cash inflows from financing activities 4759751595.78 6476455205.21

Cash repayments of borrowings 5545551350.67 11112544553.18

Cash payments for distribution of dividends profit or interest 2750764581.84 2518311312.47

Other cash payments relating to financing activities 485930596.70 740000000.00

115Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item FY2022 FY2021

Subtotal of cash outflows from financing activities 8782246529.21 14370855865.65

Net cash flows from financing activities -4022494933.43 -7894400660.44

IV. Effect of foreign exchange rate changes on cash and cash equivalents 20787925.20 -41145257.65

V. Net increase in cash and cash equivalents -4628232736.56 -3848983670.59

Add: Cash and cash equivalents at the beginning of the period 5048875333.01 8897859003.60

VI. Cash and cash equivalents at the ending of the period 420642596.45 5048875333.01

116Bengang Steel Plates Co. Ltd. 2022 Annual Report

7. Consolidated statement of changes in owners’ equity

Amount in current period

Unit: RMB

FY2022

Equity attributable to owners of the parent company

Item Other equity instruments Less: Other General Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income reserve

I. Closing balance of

4108191379.000.000.00947882663.6313272134173.090.000.00337978.571195116522.370.002977306297.6422500969014.30565441001.7323066410016.03

the prior year

Add: Change of

0.00

accounting policies

Correction of

0.00

prior-period errors

Business

consolidation under 0.00

common control

Others 0.00

II. Opening balance of

4108191379.000.000.00947882663.6313272134173.090.000.00337978.571195116522.370.002977306297.640.0022500969014.30565441001.7323066410016.03

the current year

III. Changes in current

20838.000.000.00-18829.6170987.120.00-15904760.021879935.200.000.00-3697865968.370.00-3711817797.6819146862.03-3692670935.65

year (“-” for decrease)

(I) Total

comprehensive -15879343.62 -1232976557.37 -1248855900.99 26924837.51 -1221931063.48

income

(II) Capital increase

and decrease by 20838.00 0.00 0.00 -18829.61 70987.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 72995.51 -7777975.48 -7704979.97

owners

1. Common share

invested by 0.00 0.00

shareholders

2. Capital input by

the holder of other 20838.00 -18829.61 70987.12 72995.51 72995.51

equity instruments

3. Share-based

payment attributable 0.00 0.00

to shareholders’

117Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2022

Equity attributable to owners of the parent company

Item Other equity instruments Less: Other General Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income reserve

equity

4. Others 0.00 0.00 -7777975.48 -7777975.48

(III) Profit

0.000.000.000.000.000.000.000.000.000.00-2464914827.400.00-2464914827.400.00-2464914827.40

distribution

1. Appropriation to

0.000.00

surplus reserves

2. Appropriation to

0.000.00

general risk reserve

3. Profit

distribution to owners -2464914827.40 -2464914827.40 -2464914827.40

(or shareholders)

4. Others 0.00 0.00

(IV) Internal transfer

0.000.000.000.000.000.00-25416.400.000.000.0025416.400.000.000.000.00

of owners' equity

1. Capital reserve

converted into capital 0.00 0.00

(or share capital)

2. Surplus reserve

converted into capital 0.00 0.00

(or share capital)

3. Recover of loss

0.000.00

by surplus reserve

4. Changes in

defined benefit plans

0.000.00

carried forward to

retained earnings

5. Other

comprehensive

income carried -25416.40 25416.40 0.00 0.00

forward to retained

earnings

6. Others 0.00 0.00

(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1879935.20 0.00 0.00 1879935.20 0.00 1879935.20

1. Withdrawn in 77018511.80 77018511.80 4978649.22 81997161.02

118Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2022

Equity attributable to owners of the parent company

Item Other equity instruments Less: Other General Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income reserve

current period

2. Used in current

75138576.6075138576.604978649.2280117225.82

period

(VI) Others 0.00 0.00

IV. Closing balance of

4108212217.000.000.00947863834.0213272205160.210.00-15904760.022217913.771195116522.370.00-720559670.730.0018789151216.62584587863.7619373739080.38

the current period

Amount in prior period

Unit: RMB

FY2021

Equity attributable to owners of the parent company

Other equity instruments Gen

Item Less: Other eral Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income rese

rve

I. Closing balance

3875371532.000.000.001146290662.4212343209847.290.000.00300412.14961105529.850.002692018405.4021018296389.10532388405.6821550684794.78

of the prior year

Add: Change of

accounting 0.00 0.00

policies

Correction of

prior-period 0.00 0.00

errors

Business

consolidation

0.000.00

under common

control

Others 0.00 0.00

II. Opening

balance of the 3875371532.00 0.00 0.00 1146290662.42 12343209847.29 0.00 0.00 300412.14 961105529.85 0.00 2692018405.40 0.00 21018296389.10 532388405.68 21550684794.78

current year

III. Changes in

232819847.000.000.00-198407998.79928924325.800.000.0037566.43234010992.520.00285287892.240.001482672625.2033052596.051515725221.25

current year (“-”

119Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2021

Equity attributable to owners of the parent company

Other equity instruments Gen

Item Less: Other eral Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income rese

rve

for decrease)

(I) Total

comprehensive 2500582902.58 2500582902.58 33052596.05 2533635498.63

income

(II) Capital

increase and

232819847.000.000.00-198407998.79928924325.800.000.000.000.000.000.000.00963336174.010.00963336174.01

decrease by

owners

1. Common

share invested by 0.00 0.00

shareholders

2. Capital input

by the holder of

0.000.00

other equity

instruments

3. Share-based

payment

attributable to 0.00 0.00

shareholders’

equity

4. Others 232819847.00 -198407998.79 928924325.80 963336174.01 963336174.01

(III) Profit

0.000.000.000.000.000.000.000.00234010992.520.00-2215295010.340.00-1981284017.820.00-1981284017.82

distribution

1.

Appropriation to 234010992.52 -234010992.52 0.00 0.00

surplus reserves

2.

Appropriation to

0.000.00

general risk

reserve

3. Profit

-1981284017.82-1981284017.82-1981284017.82

distribution to

120Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2021

Equity attributable to owners of the parent company

Other equity instruments Gen

Item Less: Other eral Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income rese

rve

owners (or

shareholders)

4. Others 0.00 0.00

(IV) Internal

transfer of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

owners' equity

1. Capital

reserve converted

0.000.00

into capital (or

share capital)

2. Surplus

reserve converted

0.000.00

into capital (or

share capital)

3. Recover of

loss by surplus 0.00 0.00

reserve

4. Changes in

defined benefit

plans carried 0.00 0.00

forward to

retained earnings

5. Other

comprehensive

income carried 0.00 0.00

forward to

retained earnings

6. Others 0.00 0.00

(V) Special

0.000.000.000.000.000.000.0037566.430.000.000.000.0037566.430.0037566.43

reserves

1. Withdrawn

63036424.5863036424.5863036424.58

in current period

121Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2021

Equity attributable to owners of the parent company

Other equity instruments Gen

Item Less: Other eral Non-controlling Total of owners’

Special

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves risk Undistributed profit Others Subtotal interest equity

Others reserves

shares bond shares income rese

rve

2. Used in

62998858.1562998858.1562998858.15

current period

(VI) Others 0.00 0.00

IV. Closing

1195116522.3

balance of the 4108191379.00 0.00 0.00 947882663.63 13272134173.09 0.00 0.00 337978.57 0.00 2977306297.64 0.00 22500969014.30 565441001.73 23066410016.03

7

current period

8. Parent company's statement of changes in owners' equity

Amount in current period

Unit: RMB

FY2022

Other equity instruments Less: Other

Item Special Undistributed Total of owners’

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others

Others reserves profit equity

shares bond shares income

I. Closing balance of the

4108191379.000.000.00947882663.6312851982490.970.000.00155469.581195116522.372491021746.8221594350272.37

prior year

Add: Change of

0.00

accounting policies

Correction of prior-

0.00

period errors

Others 0.00

II. Opening balance of

4108191379.000.000.00947882663.6312851982490.970.000.00155469.581195116522.372491021746.820.0021594350272.37

the current year

III. Changes in current

20838.000.000.00-18829.6170987.120.00-15904760.02-97257.430.00-3787355431.490.00-3803284453.43

period (“-” for decrease)

(I) Total comprehensive

-15904760.02-1320017707.26-1335922467.28

income

(II) Capital increase and

20838.000.000.00-18829.6170987.120.000.000.000.00-2422896.830.00-2349901.32

decrease by owners

122Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2022

Other equity instruments Less: Other

Item Special Undistributed Total of owners’

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others

Others reserves profit equity

shares bond shares income

1. Common share

0.00

invested by owners

2. Capital input by the

holder of other equity 20838.00 -18829.61 70987.12 72995.51

instruments

3. Share-based

payment attributable to 0.00

owners’ equity

4. Others 0.00 0.00 -2422896.83 -2422896.83

(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -2464914827.40 0.00 -2464914827.40

1. Appropriation to

0.00

surplus reserves

2. Profit distribution to

-2464914827.40-2464914827.40

owners (or shareholders)

3. Others 0.00

(IV) Internal transfer of

0.000.000.000.000.000.000.000.000.000.000.000.00

owners' equity

1. Capital reserve

converted into capital (or 0.00

share capital)

2. Surplus reserve

converted into capital (or 0.00

share capital)

3. Recover of loss by

0.00

surplus reserve

4. Changes in defined

benefit plans carried

0.00

forward to retained

earnings

5. Other

comprehensive income

0.00

carried forward to

retained earnings

6. Others 0.00

(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -97257.43 0.00 0.00 0.00 -97257.43

123Bengang Steel Plates Co. Ltd. 2022 Annual Report

FY2022

Other equity instruments Less: Other

Item Special Undistributed Total of owners’

Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others

Others reserves profit equity

shares bond shares income

1. Withdrawn in

60105371.5360105371.53

current period

2. Used in current

60202628.9660202628.96

period

(VI) Others 0.00

IV. Closing balance of the

4108212217.000.000.00947863834.0212852053478.090.00-15904760.0258212.151195116522.37-1296333684.670.0017791065818.94

current period

Amount in prior period

Unit: RMB

FY2021

Other equity instruments Less:

Other

Treas

Item comprehe Special Oth Total of owners’

Share capital Preference Perpetu Capital reserves ury Surplus reserves Undistributed profit

Others nsive reserves ers equity

shares al bond share

income

s

I. Closing balance of the

3875371532.000.000.001146290662.4211923058165.170.000.00120972.62961105529.852366206832.0020272153694.06

prior year

Add: Change of

0.00

accounting policies

Correction of prior-

0.00

period errors

Others 0.00

II. Opening balance of

3875371532.000.000.001146290662.4211923058165.170.000.00120972.62961105529.852366206832.000.0020272153694.06

the current year

III. Changes in current

period (“-” for 232819847.00 0.00 0.00 -198407998.79 928924325.80 0.00 0.00 34496.96 234010992.52 124814914.82 0.00 1322196578.31

decrease)

(I) Total

2340109925.162340109925.16

comprehensive income

(II) Capital increase

and decrease by 232819847.00 0.00 0.00 -198407998.79 928924325.80 0.00 0.00 0.00 0.00 0.00 0.00 963336174.01

owners

1. Common share

0.00

invested by owners

124Bengang Steel Plates Co. Ltd. 2022 Annual Report

2. Capital input by

the holder of other 0.00

equity instruments

3. Share-based

payment attributable to 0.00

owners’ equity

4. Others 232819847.00 -198407998.79 928924325.80 963336174.01

(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 234010992.52 -2215295010.34 0.00 -1981284017.82

1. Appropriation to

234010992.52-234010992.520.00

surplus reserves

2. Profit distribution

to owners (or -1981284017.82 -1981284017.82

shareholders)

3. Others 0.00

(IV) Internal transfer of

0.000.000.000.000.000.000.000.000.000.000.000.00

owners' equity

1. Capital reserve

converted into capital 0.00

(or share capital)

2. Surplus reserve

converted into capital 0.00

(or share capital)

3. Recover of loss by

0.00

surplus reserve

4. Changes in defined

benefit plans carried

0.00

forward to retained

earnings

5. Other

comprehensive income

0.00

carried forward to

retained earnings

6. Others 0.00

(V) Special reserves 0.00 0.00 0.00 0.00 0.00 0.00 0.00 34496.96 0.00 0.00 0.00 34496.96

1. Withdrawn in

43962017.7143962017.71

current period

2. Used in current

43927520.7543927520.75

period

(VI) Others 0.00

125Bengang Steel Plates Co. Ltd. 2022 Annual Report

IV. Closing balance of

4108191379.000.000.00947882663.6312851982490.970.000.00155469.581195116522.372491021746.820.0021594350272.37

the current period

126Bengang Steel Plates Co. Ltd. 2022 Annual Report

III. Basic information of the Company

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 March 27th 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 June 27th 1997

by Benxi Steel & Iron (Group) Co. Ltd. (“Benxi Iron and Steel 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 on Shenzhen Stock Exchange on June 10th 1997.On November 3rd 1997 the Company issued another 120000000 A-shares (Renminbi Common Shares)

at RMB 5.40 each and listed on Shenzhen Stock Exchange since January 15th 1998. The capital shares

totalled 1136000000 shares.On March 14th 2006 according to the resolutions of the Shareholders’ Meeting regarding share equity

relocation the Share Equity Relocation Scheme Response to Bengang Steel Plates Co. Ltd. about Share

Equity Relocation issued by Liaoning Provincial Government State-owned Asset Administrative

Committee(hereinafter referred to as the Liaoning SASAC) Benxi Iron and Steel 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 June 30th 2006 the Company was approved to place 2 billion Renminbi

common shares particularly to Benxi Iron and Steel Group and the proceeds would be used to purchase

the related assets of the Benxi Iron and Steel Group. On the same day Benxi Iron and Steel Group

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

On the same day Benxi Iron and Steel Group obtained the document "Zheng Jian Company Zi (2006) No.

127" issued by the China Securities Regulatory Commission which agreed to exempt Benxi Iron and Steel

Group from the acquisition of 2 billion new shares issued by the Company resulting in the number of

shares held by the Company reaching 2.5752 billion shares (accounting for the Company's 82.12% of the

total share capital) to fulfill the tender offer obligation. On August 28th 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 September 28th 2006 the listing

procedure of the new shares of Bengang Steel Plates in this non-public offering was approved by

Shenzhen Stock Exchange. The issue price of new shares: RMB 4.6733 per share.Approved by the China Securities Regulatory Commission [2017] No. 1476 Bengang Steel Plates 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 February 9th 2018 and 739371532 shares were actually

issued. The placing price was RMB5.41 per share.

127Bengang Steel Plates Co. Ltd. 2022 Annual Report

On August 20th 2021 Liaoning Provincial State-owned Assets Supervision and Administration

Commission (hereinafter referred to as the Liaoning SASAC) and Ansteel Group Co. Ltd. (hereinafter

referred to as Ansteel Group) signed the "Liaoning Provincial People's Government State-owned Assets

Supervision and Administration Commission and Ansteel Group Co. Ltd. on Free Transfer Agreement on

the State-owned Equity of Bengang Group Co. Ltd. According to the agreement Liaoning State-owned

Assets Supervision and Administration Commission will transfer its 51% shares of Bengang Group Co. Ltd.(hereinafter referred to as Bengang Group) to Angang Group for free. After the completion of the free

transfer Ansteel Group will become the controlling shareholder of Bengang Group and Ansteel Group

will hold 81.07% of the total share capital of Bengang Group Co. Ltd. indirectly.As at December 31st 2022 the capital shares totalled 4108212217 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16 Renmin Road Pingshan District Benxi Liaoning Province.The Company’s legal representative: Huo Gang.The parent company of Bengang Steel Plates Co. Ltd is Benxi Steel & Iron (Group) Co. Ltd. and the actual

controller is Ansteel Group Co. Ltd.Bengang Steel Plates Co. Ltd. belongs to the ferrous metal smelting and rolling processing industry and is

mainly involved in producing and trading of ferrous metal products.As at December 31st 2022 there were nine subsidiaries within the scope of the Company's consolidated

financial statements as detailed below:

Subsidiary name

Guangzhou Benxi Iron and Steel Trade Co. Ltd.Shanghai Bengang Metallurgy Technology Co. Ltd.Dalian Benruitong AUTOMATERIALS Technology Co. Ltd.Changchun Bengang Iron & Steel Sales Co. Ltd.Yantai Benxi Steel Sales Co. Ltd.Tianjin Benxi Iron and Steel Trade Co. Ltd.BX Steel Posco Cold Rolled Sheet Co. Ltd.Benxi Bengang Steel Sales Co. Ltd.Shenyang Bengang Metallurgical Technology Co. Ltd.The number of entities included in the scope of consolidated financial statements for the year decreased

by 6 as compared to the previous year. For details of the change in the scope of consolidation pleaserefer to Note "VIII. Changes in the scope of consolidation”.For details of the Company's subsidiaries please refer to Note "IX. Equity in other entities".IV. Basis of preparation

1. Basis of preparation

The Company's financial statements have been prepared on a going concern basis based on actual

transactions and events in accordance with the Accounting Standards for Business Enterprises issued by

128Bengang Steel Plates Co. Ltd. 2022 Annual Report

the Ministry of Finance and related regulations and based on the accounting policies and estimates described in

Note "IV. Significant accounting policies and accounting estimates".

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 the reporting period.V. Significant accounting policies and accounting estimates

Notice of specific accounting policies and accounting estimates: The specific accounting policies and

accounting estimates formulated by the Company based on actual production and operation

characteristics include operating cycle recognition and measurement of allowance for bad debts of

receivables measurement of inventories issued classification of fixed assets and depreciation methods

amortization of intangible assets conditions for capitalization of research and development expenses

and recognition and measurement of revenue.

1. Statement of compliance with China Accounting Standards for Business Enterprises

The financial statements prepared by the Company comply with the requirements of Accounting

Standards for Business Enterprises and give a true and complete picture of the financial position

operating results and cash flows of the Company.

2. Accounting year

The Accounting year is from January 1st to December 31st.

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 combinations 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 acquiree’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) the 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

129Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 Standards 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 the fair value of identifiable net assets on the acquisition date. For

subsidiaries through acquisition that are under common control the assets and liabilities (as well as the

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

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

130Bengang Steel Plates Co. Ltd. 2022 Annual Report

If the Company has a new subsidiary due to a business combination under common control during the

reporting period it shall adjust the beginning balance in the consolidated statement of financial position

when preparing the 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 the 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 the 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 the remeasurement of the defined benefit plan is excluded.

2) Disposing subsidiaries or businesses

* General treatment

If the Company disposes of a subsidiary during the reporting period the revenue expenses and profits of

the subsidiary from the beginning of the reporting period to the 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 the 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.

131Bengang Steel Plates Co. Ltd. 2022 Annual Report

The difference between sums of the consideration received for the disposal of 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 the 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.* 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 does not

form part of a bundled transaction apply the treatment of disposing of 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 of the subsidiary in common cases.

(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholders

132Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 the 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 net 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 has 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. Criteria for determining 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.

133Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 on 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 of 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 amortized 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 amortized 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.

134Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 amortized 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 amortized 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 account

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 of 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

135Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 recognized in profit and loss.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 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

recognized 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

recognized 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 amortized cost

Financial liabilities measured at amortized cost include short-term borrowings notes payables accounts

payables other payables long-term borrowings bonds payables and long-term payables.

136Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 recognized 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

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 the 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 the 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

137Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 (the 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 are 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 terminate 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 in

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 to the

circumstances and for which sufficient data are available to measure fair value. The Company chooses

relevant observable inputs for identical or similar assets or liabilities. Only when relevant observable

inputs are unavailable or should the Company use unobservable inputs for the asset or liability.

(6) Impairment provision of the financial assets

The Company recognized 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 an 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 the difference between the cash flow receivable from

138Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 the 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 the

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 recognize the 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 materials in transit raw material turnover materials finished goods work in process

issuing commodities 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

139Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 a 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

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 right 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 amounts. An entity shall present any

unconditional rights to consideration (only the passage of time is required) separately as a receivable.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 “IV. Significant accounting policies and accountingestimates”.

140Bengang Steel Plates Co. Ltd. 2022 Annual Report

13. Contract costs

Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard

for example Inventories Property Plant and Equipment or Intangible Assets the Company shall

recognize 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 recognize as an asset the incremental costs of obtaining a contract with a customer if

the Company expects to recover those costs.An asset recognized in accordance with contract costs shall be amortized in consistence with the transfer

to the customer of the goods or services to which the asset relates. The Company may recognize the

incremental costs of obtaining a contract as an expense when incurred if the amortization period of the

asset is one year or less.The Company shall recognize 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 recognized as

expenses.The Company shall recognize in profit or loss a reversal of some or all of an impairment loss previously

recognized when the impairment conditions no longer exist or have improved. The increased carrying

amount of the asset shall not exceed the carrying amount if no impairment loss had been recognized

previously.

14. Long-term equity investment

(1) Criteria of joint control and significant influence

Joint control is the contractually agreed sharing of control of an arrangement which exists only when

decisions about the relevant activities require the unanimous consent of the parties sharing control. If the

Company and other joint ventures 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.

141Bengang Steel Plates Co. Ltd. 2022 Annual Report

Significant influence is the power to participate in the financial and operating policy decisions of the

investee but not control or joint 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 the 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 the

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 the cost method for the long-term investment in a 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

142Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 attributed 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 a 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 of 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 an 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

143Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 the 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 and 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 of 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. For 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 first 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 for separately.

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

144Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 economic benefits in a different way then different

depreciation rate or methods shall be applied and the depreciation of the components shall be calculated

separately.Fixed assets acquired under financial leasing are depreciated over the useful life if it is reasonably certain

that the ownership of the leased assets will be acquired upon expiry of the lease or over the shorter of

the lease term and useful life if it is not reasonably certain that the ownership of the leased assets will be

acquired upon expiry of the lease.Details of classification residual value rate and annual depreciation rate are as follows:

Category Depreciation method Depreciation period Residual value rate Annual depreciation rate

Plants and Buildings Year average method 40 5 2.38

Machinery Year average method 17-24 5 3.96-5.59

Transportation and other

Year average method 5-12 5 7.92-19.00

equipment

(3) Disposal of fixed assets

When a fixed asset is disposed of or it is expected that no economic benefits will be generated through

use or disposal the recognition of the fixed asset shall be determined. The amount of disposable income

of fixed assets raised from sale 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 by 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 their intended use or for sale.

145Bengang Steel Plates Co. Ltd. 2022 Annual Report

(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 been incurred which shall include cash transferred noncash

assets or interest-bearing debts paid for the acquisition and construction or production activities for

preparing assets eligible for capitalization;

2) The borrowing costs have already been 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 are 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 number 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

146Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 includes 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 periods 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.Estimated useful lives of intangible assets with limited useful lives:

Item Estimated useful life Criteria

Land use right 50 years Land use right certificate

(2) Accounting policies for internal research and development expenditures

Classification criteria for the internal research phase and development phase:

The expenditures for the 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 the research phase or other knowledge

is applied to certain projects or designs for the manufacturing of new or substantially improved materials

devices and products before commercial manufacturing and use.Specific conditions for capitalization of development phase expenditures:

Research expenditures are recognized in profit or loss as incurred. Expenditures in the development

phase are recognized as intangible assets if the following conditions are met and expenditures in the

development phase that do not meet the following conditions are recognized in profit or loss:

1) It is technically feasible to complete the intangible asset so that it can be used or sold;

2) There is an intent to complete the intangible asset and use or sell it;

147Bengang Steel Plates Co. Ltd. 2022 Annual Report

3) The manner in which an intangible asset generates economic benefits including being able to

demonstrate that there is a market for the product produced from the intangible asset or that there is a

market for the intangible asset itself and that the intangible asset will be used internally should prove its

usefulness;

4) There are sufficient technical financial and other resources to support the completion of the

development of the intangible asset and is capable of using or selling the intangible asset;

5) The expenditure attributable to the development phase of the intangible asset can be measured

reliably.If it is not possible to distinguish between research phase expenditures and development phase

expenditures all research and development expenditures incurred are charged to current profit or loss.

148Bengang Steel Plates Co. Ltd. 2022 Annual Report

19. Impairment of long-term assets

Long-term equity investments fixed assets construction in progress right-of-use assets intangible assets

with limited useful lives and other long-term assets shall be tested for impairment if there is an indication

of impairment at the balance sheet date. If the result of the impairment test indicates that the

recoverable amount of an asset is less than its book value the difference shall be recognized as a

provision for impairment and included in impairment loss. The recoverable amount is the higher of the

fair value of assets less costs of disposal and the present value of estimated future cash flows from the

assets. The provision for impairment of assets shall be calculated and recognized on an individual basis

and if it is difficult to estimate the recoverable amount of an individual asset the Company shall recognizethe recoverable amount of asset group to which the asset belongs. The term "assets group” refers to a

minimum combination of assets by which the cash flows could be generated independently

Goodwill arising from business combinations intangible assets with an indefinite useful life and

intangible assets that have not yet reached their intended useable state shall be tested for impairment at

least at the end of each year regardless of whether there is an indication of impairment.In performing an impairment test on goodwill the Company shall apportion the book value of goodwill

arising from business combinations to the relevant asset group from the date of purchase in accordance

with a reasonable method; for those that it is difficult to be apportioned to the relevant asset group they

shall be apportioned to the relevant portfolio of asset group. The relevant asset group or combination of

asset groups are those that can benefit from the synergistic effects of the business combination.In performing an impairment test on the relevant asset group or portfolio of asset group that contains

goodwill the Company shall conduct the impairment test first on the asset group or portfolio of asset

group that does not contain goodwill if there is an indication of impairment on the asset group or

portfolio of asset group relating to goodwill and calculate its recoverable amount as well as compare it

with the relevant book value to recognize the corresponding impairment loss. Then the impairment test

shall be performed for the asset group or portfolio of asset group that contains goodwill comparing its

book value and its recoverable amount. If the recoverable amount is less than the book value the amount

of impairment loss shall be offset and apportioned to the book value of goodwill contained in the asset

group or portfolio of asset group and then offset the book value of other assets in proportion to the

proportion of book value of assets other than goodwill in the asset group or portfolio of asset group. The

impairment losses on assets mentioned above once recognized shall not be reversed in subsequent

accounting periods.

20. Long-term deferred expense

The long-term deferred expense refers to the expenses incurred but shall be borne by the 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 liabilities

The Company shall present contract assets or contract liabilities in the statement of financial position in

accordance with the relationship between the performance of an obligation and the payment of

149Bengang Steel Plates Co. Ltd. 2022 Annual Report

customers. The obligation of the Company to transfer goods or provide services to customers for

consideration received or receivable from customers shall be presented as contract liabilities. Contract

assets and contract liabilities under the same contract shall be shown on a net basis.

22. Employee benefits

(1) Accounting treatment for short-term employee benefits

The Company shall recognize the short-term benefits actually incurred as the liabilities and recognize

such liabilities into the current profit and loss or the costs of the related assets in the accounting period to

which the employees render the services.Payments made by the Company of social security contributions for employees payments of housing

provident funds union funds and 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 for 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 liabilities 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.The Company contributes to the basic pension insurance and unemployment insurance for its employees

in accordance with the relevant local government regulations. The amount payable is calculated on the

basis of the contribution base and at the rate prescribed by the local regulations and is recognized as a

liability and charged to current profit and loss or the cost of related assets in the accounting period in

which the employees provide services to the Company. In addition the Company participates in an

enterprise annuity plan/supplemental pension fund approved by the relevant state authorities. The

Company contributes a certain percentage of the employees' gross salaries to the annuity plans/local

social insurance institutions and the corresponding expenses are charged to current profit and loss or to

the cost of related assets.

2) Defined benefit plan

None.

3) Accounting treatment for termination benefits

The Company shall recognize employee benefits liabilities for termination benefits with a corresponding

charge to the current profit and loss at the earlier of the following dates: when the Company cannot

150Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 Company;

2) It is likely to cause any economic benefit to flow out of the Company as a result of the performance of

the obligation; and

3) The amount of the obligation can be measured in a reliable way.

The estimated liabilities 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 the Company 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.If there is a continuous range of expenses required and the likelihood of various outcomes within that

range is equal the best estimate is determined by the mid-point of the range; in other cases the best

estimate is treated separately as follows.* If a contingency relates to a single item it shall be determined in the light of the most likely outcome.* If the contingencies relate to more than one item 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 liabilities 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 liabilities.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

(1) Accounting policies used for revenue recognition and measurement

The Company shall recognize 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

151Bengang Steel Plates Co. Ltd. 2022 Annual Report

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 customers excluding amounts collected on

behalf of the 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 customers. 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 recognize 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. When one of the following conditions is met the Company is deemed to have

undertaken the performance obligation within a certain time; otherwise it will be deemed as undertaking

the performance obligation at a certain point in time:

* The customer simultaneously receives and consumes the benefits provided by the Company’s

performance as the Company performs;

* The customer has control over the goods in progress during the Company's performance.* The goods produced in the course of the Company's performance are of irreplaceable use and the

Company is entitled to receive payment for the portion of the performance that has been completed

cumulatively to date during the entire term of the contract.The Company shall recognize 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 reasonably determined but the Company expects to recover the costs incurred in satisfying the

performance obligation the Company shall recognize 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 recognize 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 promised goods or services the Company shall consider

requirements as follows:

*The Company has a present right to payment for the promised goods or services and the customer is

presently obliged to pay for that;

*The Company has transferred the legal ownership of the goods to the customer that is the customer

152Bengang Steel Plates Co. Ltd. 2022 Annual Report

has the legal ownership to the goods;

* The Company has transferred physical possession of the goods to the customer that is the customer

has taken possession of the goods;

*The Company has transferred the main risks and rewards of ownership of the goods to the customer

that is the customer has the main risks and rewards of ownership of the goods;

* The customer has accepted the promised goods or services.Differences in accounting policies for revenue recognition due to different operating models for the same

type of business.

(2) Specific accounting policies for revenue recognition

Commodity sales contracts between companies and customers usually only include performance

obligations for the transfer of steel and other commodities or service. 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 indications:

The Company obtains the present 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.Differences in accounting policies for revenue recognition due to different operating models for the same

type of business.

25. Government grants

(1) Types

Government grants mean the monetary or non-monetary assets obtained free of charge by the Company

from the government. Government grants consist of government subsidies pertinent to assets and

government subsidies pertinent to income.Government grants related to assets are government grants acquired by the Company for the acquisition

or other formation of long-term assets. Government grants related to income are government grants

other than those related to assets.The specific criteria for the Company to classify government grants as asset-related are: government

grants acquired by the enterprise and used to acquire or otherwise form long-term assets.The criteria of the Company recognizing the government grants related to income is: In addition to

government grants related to assets government grants that have been clearly targeted for subsidies.For government documents that do not specify the object of the grant the Company classifies the

government grant as asset-related or income-related based on the following judgment: if it can form a

long-term asset the portion of the government grant that corresponds to the value of the asset is treated

as an asset-related government grant and the rest as an income-related government grant; if it is difficult

153Bengang Steel Plates Co. Ltd. 2022 Annual Report

to distinguish the government grant as a whole is treated as an income-related government grant.

(2) Recognition

Government grants related to assets are recognized when it actually received and transferred the

deferred income to the current profit and loss according to the estimated use period of the long-term

assets from when the long-term assets are available.Government grants related to income are recognized when it actually received. Which to compensate the

relevant expenses or losses in subsequent periods shall be included in the current non-operating income

during the period when the relevant expenses are recognized. Which to compensate expenses or losses

already incurred shall be recognized in current non-operating income.

(3) Accounting treatment

Government grants related to assets shall be used to offset the book value of the related assets or

recognized as deferred income. The government grants recognized as deferred income shall be charged to

current profit and loss (if they relate to ordinary activities to other income; if do not to non-operating

income) in accordance with a reasonable and systematic method over the useful life of the related assets;

Government grants related to income that is used to compensate for the related costs and expenses or

losses in subsequent periods shall be recognized as deferred income and charged to current profit and

loss (if they relate to ordinary activities to other income; if do not to non-operating income) in the

period in which the related costs and expense or losses are recognized or offset the related costs and

expenses or losses; for those used to compensate for the related costs and expenses or losses that have

been incurred they shall be directly included in current profit and loss (if they relate to ordinary activities

to other income; if do not to non-operating income) or offset the related costs and expenses or losses.The policy discount loans obtained by the Company are divided into the following two situations and are

separately accounted for:

1) If 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 Company will take the actual amount of the loan

received as the entry value of the loan and calculate the relevant borrowing costs based on the loan

principal and the policy preferential interest rate.

2) If the government directly allocates the discounted funds to the Company the Company will write-

down the relevant borrowing costs with the corresponding discounts.

26. Deferred income tax assets/deferred income tax liabilities

Income tax includes current income tax and deferred income tax. Except for income tax arising from

business combinations 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 values.An enterprise shall recognize the deferred income tax assets arising from a deductible temporary

154Bengang Steel Plates Co. Ltd. 2022 Annual Report

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.Deferred income tax liabilities are recognized for taxable temporary differences except in exceptional

circumstances.Special circumstances in which deferred income tax assets or deferred income tax liabilities are not

recognized include:

* The initial recognition of goodwill.*Transactions or events that are neither business combinations nor when they occur affect accounting

profit and taxable income (or deductible losses).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 into 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 settle on a net basis and intends to settle on a net basis or

to obtain assets and pay off liabilities simultaneously the current income tax assets and current income

tax liabilities are presented at the net amount after offsetting.On the balance sheet date deferred income tax assets and deferred income tax liabilities are stated at the

net of offsetting amounts when the following conditions are also met:

* The taxable entity has the legal right to settle current income tax assets and current income tax

liabilities on a net basis.*Deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same

taxation authority on the same taxable entity or on different taxable entities but in each future period in

which it is significant that the deferred income tax assets and liabilities reverse the taxable entities

involved intend to settle the current income tax assets and liabilities on a net basis or to acquire the

assets and settle the liabilities simultaneously.

155Bengang Steel Plates Co. Ltd. 2022 Annual Report

27. Leases

(1) Accounting treatment for operating leases

A lease is a contract whereby the lessor transfers the right of usage on an asset to the lessee for

consideration within a certain period of time. On the contract commencement date the Company

evaluates whether the contract is a lease or includes a lease. If one party in the contract transfers the

right to control the use of one or more identified assets within a certain period in exchange for

consideration the contract is a lease or includes a lease.If the contract contains multiple separate leases at the same time the Company will split the contract and

conduct accounting treatment for each separate lease. If the contract includes both lease and non-lease

parts the Company as the lessor and lessee will split the lease and non-lease parts for accounting

treatment

For rent reductions exemptions deferred payments and other rental reductions directly caused by the

COVID-19 epidemic and reached on existing lease contracts if the following conditions are met at the

same time the Company adopts a simplified method for all lease and does not evaluate whether there is

a lease change. Lease classification is not reassessed:

*The lease consideration after the reduction is less than or substantially the same as before the reduction.The lease consideration may be undiscounted or discounted at the discount rate before the reduction;

* The reduction is only for lease payments payable before June 30th 2022 an increase in lease

payments payable after June 30th 2022 does not affect meeting this condition and a decrease in lease

payments payable after June 30th 2022 does not satisfy this condition;

* The other terms and conditions of the lease have not changed significantly after taking into account

both qualitative and quantitative factors.

1) The Company as a lessee

* Right-of-use assets

On the beginning date of the lease term the Company recognizes the right-of-use assets for leases other

than short-term leases and low-value asset leases. The right-of-use assets are initially measured at cost.This cost includes:

*Initial measurement amount of lease liabilities;

* For the lease payment paid on or before the beginning of the lease term if there is lease incentive

the relevant amount of lease incentive enjoyed shall be deducted;

* The initial direct costs incurred by the Company;

* Costs expected to be incurred by the Company to dismantle and remove the leased asset to restore

the site on which the leased asset is located or to restore the leased asset to its agreed condition under

the terms of the lease but do not include costs that are part of the costs incurred to produce the

inventory.

156Bengang Steel Plates Co. Ltd. 2022 Annual Report

The Company subsequently depreciates right-of-use assets using the straight-line method. If it is

reasonably certain that ownership of the leased asset will be obtained at the end of the lease term the

Company depreciates the leased asset over its remaining useful life; otherwise the leased asset is

depreciated over the shorter of the lease term or the remaining useful life of the leased asset.For the principles by which the Company determines whether the right-of-use asset has been impaired

please refer to Note “IV.19 Impairment of long-term assets”.* Lease liabilities

At the beginning of the lease term the Company recognizes lease liabilities for leases other than short-

term leases and leases of low-value assets. The lease liability is initially measured at the present value of

outstanding lease payments. Lease payments include:

* Fixed payments (including actual fixed payments) if there is a lease incentive deduct the relevant

amount of the lease incentive;

* Variable lease payments that depend on an index or ratio;

* The expected payment according to the residual value of the guarantee provided by the Company;

* The exercise price of the purchase option provided that the Company is reasonably certain that the

option will be exercised;

* Payments for exercising the option to terminate the lease provided that the lease term reflects that

the Company will exercise the option to terminate the lease.The Company uses the interest rate implicit in the lease as the discount rate but if the interest rate

implicit in the lease cannot be reasonably determined the Company's incremental borrowing rate is used

as the discount rate.The Company calculates the interest expense of the lease liability in each period of the lease term

according to the fixed periodic interest rate and includes it in the current profit and loss or the cost of

related assets.Variable lease payments that are not included in the measurement of lease liabilities are included in the

current profit and loss or the cost of related assets when they are actually incurred.After the commencement date of the lease term the Company shall re-measure the lease liabilities and

adjust the corresponding right-of-use assets under the following circumstances. If the book value of the

right-of-use assets has been reduced to zero but the lease liabilities still need to be further reduced the

difference is included in the current profit and loss:

* When there is a change in the evaluation results of the purchase option lease renewal option or

termination option or when the actual exercise of the aforementioned options is inconsistent with the

original evaluation result the Company shall calculate the lease payment amount after the change and

the revised discounted value. Remeasure the lease liability at the present value of the rate calculation;

* When the actual fixed payment changes the estimated payable amount of the guaranteed residual

value changes or the index or ratio used to determine the lease payment changes the Company re-

measures the lease liability at the present value of the changed lease payments and the original discount

157Bengang Steel Plates Co. Ltd. 2022 Annual Report

rate. However where changes in lease payments resulting from changes in floating interest rates a

revised discount rate is used to calculate the present value.* Short-term leases and low-value asset leases

The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and

low-value asset leases and includes the relevant lease payments in the current profit and loss or related

asset costs on a straight-line basis over each period of the lease term. Short-term leases refer to leases

with a lease term of not more than 12 months and excluding purchase options on the commencement

date of the lease term. A low-value asset lease refers to a lease with a lower value when a single-leased

asset is a brand-new asset. If the Company subleases or expects to sublease the leased assets the original

lease is not a low-value asset lease.* Lease changes

If the lease changes and the following conditions are met at the same time the Company will account for

the lease change as a separate lease:

* The lease modification expands the scope of the lease by adding the right to use one or more leased

assets;

* The increased consideration is equivalent to the amount adjusted by the individual price of the

expanded part of the lease scope according to the contract.If the lease modification is not accounted for as a separate lease on the effective date of the lease

modification the Company re-allocates the consideration of the modified contract re-determines the

lease term and re-calculates the lease liability based on the present value of the modified lease

payments and the revised discount rate.If the lease modification leads to the narrowing of the lease scope or the shortening of the lease term

the Company will reduce the book value of the right-of-use assets accordingly and include the relevant

gains or losses on partial or complete termination of the lease into the current profit and loss. If other

lease changes result in re-measurement of lease liabilities the Company adjusts the book value of the

right-of-use assets accordingly.* Rent reductions related to COVID-19 epidemic

For those using the simplified method of rent reductions related to the COVID-19 epidemic the Company

does not assess whether a lease change has occurred continues to calculate interest expense on the

lease liability at the same discount rate as before the reductions and includes it in current profit and loss

and continues to depreciate right-of-use assets on the same basis as before the reductions. If a rent

reduction occurs the Company treats the reduced rent as a variable lease payment and reduces the

related asset cost or expense by the amount discounted at the undiscounted or pre-reduction discount

rate when the original rent payment obligation is discharged such as when a reduction agreement is

reached and adjusts the lease liability accordingly; if the rent payment is deferred the Company reduces

the lease liability recognized in prior periods when the actual payment is made.For short-term leases and low-value asset leases the Company continues to include the original

158Bengang Steel Plates Co. Ltd. 2022 Annual Report

contractual rentals in the cost or expense of the relevant assets in the same way as before the concession.In the event of rent reduction or exemption the Company will take the reduced rent as the variable lease

payment and write down the relevant asset costs or expenses during the reduction or exemption period;

if the rent payment is delayed the Company will recognize the rent payable as payable during the original

payment period. When the actual payment is made the payables recognized in the previous period are

offset.

2) The Company as a lessor

On the lease commencement date the Company classifies leases into financial leases and operating

leases. A financial lease is a lease that essentially transfers almost all the risks and rewards associated

with the ownership of the leased asset regardless of whether ownership is ultimately transferred.Operating leases refer to leases other than financial leases. When the Company acts as a sublease lessor

it classifies the sublease based on the right-of-use asset arising from the original lease.

1 Accounting treatment of operating leases

The Company recognizes lease receipts from operating leases as rental income using the straight-line

method for each period of the lease term. Initial direct costs capitalized in connection with operating

leases are amortized over the lease term on the same basis as rental income is recognized and are

recognized in current profit and loss. Variable lease payments not included in the amount of lease

receipts are recognized in current profit and loss when they are actually incurred. When there is a change

in operating leases the Company accounts for it as a new lease from the effective date of the change and

the amount of lease receipts received in advance or receivable in relation to the lease prior to the change

is treated as a receipt under the new lease.

(2) Accounting treatment of financial lease

1) Accounting treatment of financial lease

On the lease commencement date the Company recognizes the financial lease receivables for the

financial lease and derecognizes the financial lease assets. When the Company initially measures the

financial lease receivables the net investment in the lease is regarded as the entry value of the financial

lease receivables. The net lease investment is the sum of the unguaranteed residual value and the present

value of the lease receipts not yet received at the commencement date of the lease term discounted at

the interest rate implicit in the lease.The Company calculates and recognizes interest income over the lease term at a fixed periodic rate.Derecognition and impairment of finance lease receivables are accounted for in accordance with Note “V.

10. Financial assets and financial liabilities".

Variable lease payments not included in the measurement of net investment in leases are charged to

current profit and loss when actually incurred.If the financial lease is changed and the following conditions are met at the same time the Company will

account for the change as a separate lease:

159Bengang Steel Plates Co. Ltd. 2022 Annual Report

* The change expands the scope of the lease by increasing the right to use one or more of the leased

assets;

* The increased consideration is equivalent to the amount adjusted by the individual price of the

expanded part of the lease scope according to the contract.If the modification of a financial lease is not accounted for as a separate lease the Company shall deal

with the modified lease under the following circumstances:

* If the change had been effective on the inception date of the lease and the lease would have been

classified as an operating lease the Company shall account for it as a new lease from the effective date of

the lease change and use the net investment in the lease prior to the effective date as the book value of

the leased asset;

If the change had been effective at the inception date of the lease and the lease would have been

classified as a finance lease the Company shall account for it in accordance with the policy onmodification or renegotiation of contracts as described in Note “V. 10. Financial assets and financialliabilities".

2) Rent reductions related to COVID-19 epidemic

* For operating leases that use the simplified method of rent reductions related to the COVID-19

epidemic the Company continues to recognize the original contractual rentals as lease income in the

same manner as before the reductions; where rent reductions occur the Company treats the reduced

rentals as variable lease payments and reduces lease income in the period of the reductions; where the

collection of rentals is deferred the Company recognizes the rentals receivable in the original collection

period and reduces the receivables recognized in prior periods when they are actually received.For financial leases using the simplified method of rent reduction related to the COVID-19 epidemic the

Company continues to calculate interest and recognize it as lease income at a discount rate consistent

with the rate prior to the reduction. In the event of a rent reduction the Company treats the reduced rent

as a variable lease payment and upon waiver of the original right to receive rent such as the conclusion

of a reduction agreement reduces the originally recognized lease income by the amount discounted at

the undiscounted or pre-reduction discount rate with any shortfall charged to investment income and

the financial lease receivable adjusted accordingly; in the event of deferred receipt of rent the Company

reduces the previously recognized financial lease receivable upon actual receipt In the event of delayed

collection of rentals the Company will reduce the financial lease receivable recognized in the previous

period upon actual receipt.

28. Other significant accounting policies and accounting estimates

Major accounting estimates and judgements

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

160Bengang Steel Plates Co. Ltd. 2022 Annual Report

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) Provision for decline in value of inventories

As mentioned in Note “V. 11. Inventory” 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 “V. 19 Long-term Asset Impairment” 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

161Bengang Steel Plates Co. Ltd. 2022 Annual Report

As described in Note “V. 15. Fixed assets” and Note “V. 18. Intangible assets” the Company shall accrue

depreciation for the fixed assets and amortization for intangible assets within the useful life after

considering their residual values. 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 income tax assets

When it is estimated that sufficient taxable income will be available in future periods to utilize the

unrecovered tax losses and deductible temporary differences the Company calculates and recognizes the

related deferred income tax asset to the extent that it is probable that taxable income will be available

against which the unrecovered tax losses and deductible temporary differences can be utilized and on the

basis of the income tax rate applicable to the period in which the asset is expected to be recovered. The

Company is required to use judgment to estimate the timing and amount of future taxable income and to

make reasonable estimates and judgments about the applicable future income tax rates in accordance with

current tax policies and other relevant policies to determine the amount of deferred income tax assets to

be recognized. If the timing and amount of actual profits to be generated in future periods or the actual

applicable income tax rate differs from the Management's estimates such differences will have an impact

on the amount of deferred income tax assets.

29. Changes in significant accounting policies and accounting estimates

(1) Changes in significant accounting policies

□Applicable □Not applicable

The content and reasons for changes in accounting policies Approval procedure Note

1 Interpretation of Accounting Standards for Business Enterprises No. 15

On December 30th2021 the Ministry of Finance issued Interpretation of Accounting Standards for Business

Enterprises No. 15 (Cai Kuai [2021] No. 35 hereinafter referred to as "Interpretation No. 15") in which

"Accounting treatment for the external sale of products or by-products produced by an enterprise before a

fixed asset reaches its intended useable state or during the research and development process" and

"Judgment on onerous contracts" are effective from January 1st 2022.Interpretation No. 15 provides that an enterprise that sells to the public products or by-products produced

before a fixed asset reaches its intended useable state or during the research and development shall be

accounted for the revenue and costs related to trial sales separately in accordance with applicable

accounting standards such as Accounting Standards for Business Enterprises No. 14 - Revenue and

Accounting Standards for Business Enterprises No. 1 - Inventories and shall be included in the current profit

and loss. The net amount of revenue related to trial sales after offsetting related costs should not be

written down against the cost of fixed assets or research and development expenditure.Interpretation No. 15 on onerous contracts refers to contracts where the costs that would inevitably be

incurred in performing the contractual obligations exceed the expected economic benefits. The costs that

would inevitably be incurred in performing a contractual obligation should reflect the lowest net cost of

exiting that contract i.e. the lower of the cost of performing that contract or the compensation or penalties

incurred for failure to perform that contract. The cost to the enterprise of performing the contract includes

the incremental cost of performing the contract and the apportioned amount of other costs directly related

to the performance of the contract such as the apportioned amount of direct labour direct materials

162Bengang Steel Plates Co. Ltd. 2022 Annual Report

depreciation of fixed assets used to perform the contract etc.The implementation of the above provisions has not had a material impact on the financial position and

results of operations of the Company.

2 Interpretation of Accounting Standards for Business Enterprises No. 16

On November 30th 2022 the Ministry of Finance issued Interpretation of Accounting Standard for Business

Enterprises No. 16 (Cai Kuai [2022] No. 31 hereinafter referred to as "Interpretation No. 16") in which

"Accounting treatment for deferred income tax relating to assets and liabilities arising from a single

transaction for which no exemption from initial recognition applies" is effective from January 1st 2023;

"Accounting treatment for the income tax effect of dividends related to financial instruments classified as

equity instruments by the issuer" and "Accounting treatment for an enterprise that modifies a cash-settled

share-based payment to an equity-settled share-based payment" is effective from the date of publication.Interpretation No. 16 on single transactions (including lease transactions in which the lessee initially

recognizes a lease liability at the inception date of the lease and records it in the right-of-use asset and

transactions in which an estimated liability is recognized and recorded in the cost of the related asset

because of the existence of an abandonment obligation such as a fixed asset etc. hereinafter referred to

as single transactions to which this interpretation applies) that are not business combinations that affect

neither accounting profit nor taxable income(or deductible loss) at the time of the transaction and where

the initial recognition of assets and liabilities results in taxable temporary differences and deductible

temporary differences in equal amounts and the provisions in Articles 11 (2) and 13 of Accounting

Standards for Business Enterprises No. 18 - Income Tax concerning the exemption of deferred income tax

liabilities and deferred income tax assets for initial recognition are not applicable. The enterprise should

recognize the corresponding deferred income tax liabilities and deferred income tax assets for the taxable

temporary differences and deductible temporary differences arising from the initial recognition of assets

and liabilities for the transaction when the transaction occurs in accordance with the relevant provisions of

Accounting Standards for Business Enterprises No. 18 - Income Tax and other relevant regulations

respectively.Interpretation No. 16 regarding financial instruments classified as equity instruments (such as perpetual

bonds classified as equity instruments etc.) by an enterprise (referring to the issuer the same below) in

accordance with the provisions of Accounting Standards for Business Enterprises No. 37 - Presentation of

Financial Instruments etc. and the related dividend expense is deducted before corporate income tax in

accordance with the relevant provisions of the tax policy the enterprise shall recognize the income tax

effect related to the dividend when recognizing the dividend payable. The income tax effect of the dividend

is usually more directly related to the transaction or event in the past that gave rise to the distributable

profit and the enterprise should recognize the income tax effect of the dividend in current profit and loss

or in an item of owners' equity (including an item of other comprehensive income) in a manner consistent

with the accounting treatment used in the past for the transaction or event that gave rise to the

distributable profit. For profits distributed from transactions or events previously giving rise to gains or

losses the income tax effect of such dividends should be charged to current profit and loss; for profits

distributed from transactions or events previously recognized in owners' equity the income tax effect of

such dividends should be charged to the item of owners' equity.Interpretation No. 16 on the modification by an enterprise of the terms and conditions in a cash-settled

share-based payment agreement to make it an equity-settled share-based payment. At the date of

modification the enterprise shall measure the equity-settled share-based payment at the fair value of the

equity instrument granted on that date record the services acquired in capital surplus and derecognize the

liability recognized for the cash-settled share-based payment at the date of modification with the

difference between the two charged to current profit or loss. The same applies where the modification

occurs after the end of the waiting period. If the waiting period is extended or shortened as a result of the

163Bengang Steel Plates Co. Ltd. 2022 Annual Report

modification the enterprise should account for the above in accordance with the modified waiting period

(without regard to the relevant accounting provisions for adverse modifications). If the enterprise cancels a

cash-settled share-based payment grants an equity-settled share-based payment and determines at the

date of grant of the equity instrument that it is intended to replace the cancelled cash-settled share-based

payment (except where it is cancelled because the conditions for exercising the right have not been met)

the above provisions of this Interpretation apply.

(2) Changes of significant accounting estimates

□Applicable □Not applicable

The content and reasons for changes in Point of commencement of

Approval procedure Note

accounting estimates application

Fixed asset categories depreciable lives Sixth Meeting of the Ninth Session

July 1st 2022

and residual value rates of the Board of Directors

Affected statement items Amount

Accumulated depreciation 271947090.70

Operating costs 266457899.30

Administrative expenses 5489191.40

Total profits 271947090.70

Net profit 271947090.70

In recent years the Company has continuously increased its investment in fixed assets and through

technical renovation and innovation of the main equipment production line and regular maintenance of

equipment the performance of the equipment has been improved and the useful life of fixed assets has

been extended. In accordance with the principle of prudence in accounting and in accordance with the

provisions of Chapter 4 Article 15 of Accounting Standards for Business Enterprises No. 4 - Fixed Assets "An

enterprise shall reasonably recognize the useful life and estimated net residual value of fixed assets based

on the nature and use of the fixed assets". The Company has changed the accounting estimates for the

categories of fixed assets depreciable lives and residual value rates to bring the categories of fixed assets

depreciable lives and residual value rates closer to their actuals based on the nature and use of fixed assets.The Company held the Sixth Meeting of the Ninth Session of the Board of Directors on October 26th 2022

and considered and approved the Proposal on Change in Accounting Estimates.The Company will implement the changed accounting estimate effective July 1st 2022. The change in

accounting estimate will have no impact on the Company's scope of principal activities and will reduce the

Company's depreciation by RMB 270 million in 2022.

30. Others

Termination of operations is a separately distinguishable component that meets one of the following

conditions and which has been disposed of by the Company or classified by the Company as held-for-sale.

1) The component stands for an independent main business or a separate major business area;

2) The component is a part of the disposal plan of an independent main business or a major business area;

The component is part of a linked plan for the proposed disposal of an independent main business or a

separate major business area;

3) This component is a subsidiary acquired specifically for resale.

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 amount 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

164Bengang Steel Plates Co. Ltd. 2022 Annual Report

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.VI. Taxes

1. Main tax categories and tax rates

Type of tax Tax base Tax rate

Output VAT is calculated on the basis of the income from

the sale of goods and taxable services in accordance with

Value-added tax (VAT) the provisions of the tax law and after 6% 9% 13%

subtracting the deductible input VAT for the current

period the difference is VAT payable

City maintenance and construction tax Based on VAT actually paid 7% 5%

Corporate income tax Based on taxable profit 25%

Disclosure of information if there are taxable entities with different corporate income tax rates

Name of taxable entity Income tax rates

VII. Notes to the items of the consolidated financial statements

1. Cash and cash equivalents

Unit: RMB

Item Closing balance Opening balance

Cash on hand 24334.93

Cash in bank 1296662683.20 6299074728.55

Other cash and cash equivalents 164482958.67 2531996674.37

Total 1461145641.87 8831095737.85

Total amount restricted in use due to

164482958.672531996674.37

mortgage pledge or freeze

Other notes:

Restricted use of cash and cash equivalents

Item Closing balance Opening balance

Margin for bank acceptance bill 163297958.67 1492236674.37

Margin for letter of credit 125000000.00

Loan deposit 760000.00

Time deposit or notice deposit for guarantee 174000000.00

Restricted deposit 1185000.00 740000000.00

Total 164482958.67 2531996674.37

2. Notes receivable

(1) Presentation of notes receivable by category

Unit: RMB

Item Closing balance Opening balance

Bank acceptance bill 139442122.88

165Bengang Steel Plates Co. Ltd. 2022 Annual Report

Commercial acceptance bill 290265051.82 1540482182.07

Total 429707174.70 1540482182.07

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Book Book

Accrual Accrual

Amount Ratio Amount value Amount Ratio Amount value

ratio ratio

Including：

Including：

If the provision for bad debts on notes receivable is based on the general model of expected credit losses please disclose

information about the provision for bad debts in the same manner as the disclosure for other receivables.□Applicable□Not applicable

(2)Notes receivable pledged by the Company at the end of the period

Unit: RMB

Item Amount pledged at the end of the period

Bank acceptance bill 139442122.88

Total 139442122.88

(3) Notes receivable endorsed or discounted by the Company at the end of the period and not yet due at the

balance sheet date

Unit: RMB

Amount derecognized at the end of the

Item Amount not derecognized at the end of the period

period

Commercial acceptance bill 216259842.27

Total 216259842.27

166Bengang Steel Plates Co. Ltd. 2022 Annual Report

3. Accounts receivable

(1) Accounts receivable disclosure by category

Unit: RMB

Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category

Accrual Book value Accrual Book value

Amount Percentage Amount Amount Percentage Amount

ratio ratio

Accounts receivable

for which bad debt

provision is made 353419325.80 25.82% 353419325.80 100.00% 352985418.30 47.20% 352985418.30 100.00%

on an individual

basis

Including：

Accounts receivable

for which bad debt

1015413788.6774.18%118182892.6111.64%897230896.06394916528.3352.80%138065745.6234.96%256850782.71

provision is made

on a portfolio basis

Including：

Portfolio 1: Aging

1015413788.6774.18%118182892.6111.64%897230896.06394916528.3352.80%138065745.6234.96%256850782.71

portfolio

Total 1368833114.47 100.00% 471602218.41 897230896.06 747901946.63 100.00% 491051163.92 256850782.71

Provision for bad debts on an individual basis：353419325.80

Unit: RMB

Closing balance

Name

Book balance Bad debt provision Accrual ratio Reasons for accrual

Benxi Nanfen Xinhe Metallurgical Furnace Material Co. Ltd. 48196244.68 48196244.68 100.00% Production has ceased and is not expected to be recovered

Brilliance Automotive Group Holdings Co. Ltd. 305223081.12 305223081.12 100.00% Bankruptcy reorganization with no expected recovery

Total 353419325.80 353419325.80

Provision for bad debts on an individual basis：

167Bengang Steel Plates Co. Ltd. 2022 Annual Report

Unit: RMB

Closing balance

Item

Book balance Bad debt provision Accrual ratio Reasons for accrual

Provision for bad debts on a portfolio basis：

Unit: RMB

Closing balance

Item

Book balance Bad debt provision Accrual ratio

Within 1 year (inclusive) 892035646.81 8920356.48 1.00%

1 to 2 years (inclusive) 14717227.92 1471722.79 10.00%

2 to 3 years (inclusive) 1087625.75 217525.15 20.00%

Over 3 years 107573288.19 107573288.19 100.00%

Total 1015413788.67 118182892.61

Notes for determining the basis of the portfolio:

If the provision for bad debts on accounts receivable is based on the general model of expected credit losses please disclose

information about the provision for bad debts in the same manner as the disclosure for other receivables:

□Applicable□Not applicable

Disclosure by aging

Unit: RMB

Aging Book balance

Within 1 year (inclusive) 892035646.81

1 to 2 years 14717227.92

2 to 3 years 5931757.76

Over 3 years 456148481.98

3 to 4 years 456148481.98

Total 1368833114.47

(2) Provision for bad debts accrued recovered or reversed in the current period

Provision for bad debts in the current period:

Unit: RMB

Amount of change in the current period

Category Opening balance Recovery or Closing balance

Accrual Write-off Others

reversal

Provision for bad debts

491051163.929155504.2528604449.76471602218.41

on accounts receivable

Total 491051163.92 9155504.25 28604449.76 471602218.41

Of which the amount of provision for bad debts recovered or reversed in the current period is material:

Unit: RMB

Name of the company Amount recovered or reversed Recovery methods

168Bengang Steel Plates Co. Ltd. 2022 Annual Report

(3) Actual write-off of accounts receivable in the current period

Unit: RMB

Write-off

Item

amount

Changzhou Foreign Enterprise Goods & Materials General Company 9008967.00

Shenyang Welded Pipe Factory 3991372.27

Benxi Civil Affairs Hongda Metal Restructuring Plant 2386307.13

Yanji Rongjun Building Materials Sales Department 2295095.34

Zhuhai Special Economic Zone Huaxinyue Industrial Co. Ltd. 1883089.58

Dalian Free Trade Zone Benda Special Steel Co. Ltd. 1464685.47

Wafangdian Bengang Special Steel Sales Co. Ltd. 992110.82

Dalian Free Trade Zone Maofeng International Industry and Trade Company 766111.09

Tianjin Bengang Special Steel Sales Co. Ltd. 749215.44

Dalian Economic and Technological Development Zone Bengang Special Steel Sales Office 650313.34

Benxi Branch of Dalian Hardware and Mineral Import and Export Company 613819.73

Hefei Zhongya Cement Machine Factory 435086.35

Chengdu Bente Building Materials Management Company 345428.35

Material Supply and Marketing Company of Shenyang Environmental Protection Equipment Industry Company 343523.05

Lingning Linyuan Steel-tube Factory 340167.23

Others 2339157.57

Total 28604449.76

169Bengang Steel Plates Co. Ltd. 2022 Annual Report

Of which significant write-offs of accounts receivable:

Unit: RMB

Whether the

Nature of accounts Write-off Write-off procedures amount arises

Name of the company Reasons for write-off

receivable amount performed from related

transactions

Changzhou Foreign Enterprise A suspended company that is unreachable for a long time

Legal advice and Board

Goods & Materials General Payment for goods 9008967.00 without business transactions and included in the No

of Directors approval

Company management of account write-offs

A suspended company that is unreachable for a long time

Legal advice and Board

Shenyang Welded Pipe Factory Payment for goods 3991372.27 without business transactions and included in the No

of Directors approval

management of account write-offs

A suspended company that is unreachable for a long time

Benxi Civil Affairs Hongda Metal Legal advice and Board

Payment for goods 2386307.13 without business transactions and included in the No

Restructuring Plant of Directors approval

management of account write-offs

Yanji Rongjun Building Materials Legal advice and Board

Payment for goods 2295095.34 Cancelled No

Sales Department of Directors approval

Zhuhai Special Economic Zone Legal advice and Board

Payment for goods 1883089.58 Cancelled No

Huaxinyue Industrial Co. Ltd. of Directors approval

A suspended company that is unreachable for a long time

Dalian Free Trade Zone Benda Legal advice and Board

Payment for goods 1464685.47 without business transactions and included in the No

Special Steel Co. Ltd. of Directors approval

management of account write-offs

A suspended company that is unreachable for a long time

Wafangdian Bengang Special Steel Legal advice and Board

Payment for goods 992110.82 without business transactions and included in the No

Sales Co. Ltd. of Directors approval

management of account write-offs

Dalian Free Trade Zone Maofeng A suspended company that is unreachable for a long time

Legal advice and Board

International Industry and Trade Payment for goods 766111.09 without business transactions and included in the No

of Directors approval

Company management of account write-offs

A suspended company that is unreachable for a long time

Tianjin Bengang Special Steel Legal advice and Board

Payment for goods 749215.44 without business transactions and included in the No

Sales Co. Ltd. of Directors approval

management of account write-offs

Dalian Economic and

Legal advice and Board

Technological Development Zone Payment for goods 650313.34 Cancelled No

of Directors approval

Bengang Special Steel Sales Office

Benxi Branch of Dalian Hardware

Legal advice and Board

and Mineral Import and Export Payment for goods 613819.73 Cancelled No

of Directors approval

Company

Hefei Zhongya Cement Machine Payment for goods 435086.35 Cancelled Legal advice and Board No

170Bengang Steel Plates Co. Ltd. 2022 Annual Report

Whether the

Nature of accounts Write-off Write-off procedures amount arises

Name of the company Reasons for write-off

receivable amount performed from related

transactions

Factory of Directors approval

A suspended company that is unreachable for a long time

Chengdu Bente Building Materials Legal advice and Board

Payment for goods 345428.35 without business transactions and included in the No

Management Company of Directors approval

management of account write-offs

Material Supply and Marketing

A suspended company that is unreachable for a long time

Company of Shenyang Legal advice and Board

Payment for goods 343523.05 without business transactions and included in the No

Environmental Protection of Directors approval

management of account write-offs

Equipment Industry Company

A suspended company that is unreachable for a long time

Lingning Linyuan Steel-tube Legal advice and Board

Payment for goods 340167.23 without business transactions and included in the No

Factory of Directors approval

management of account write-offs

A suspended company that is unreachable for a long time

Legal advice and Board

Others Payment for goods 2339157.57 without business transactions and included in the No

of Directors approval

management of account write-offs

Total 28604449.76

Notes on write-off of accounts receivable:

171Bengang Steel Plates Co. Ltd. 2022 Annual Report

(4) Accounts receivable of the top five closing balances collected by arrears

Unit: RMB

Percentage of total closing Closing balance of bad debt

Name of the company Closing balance

balance of accounts receivable provision

The First 663311074.79 48.46% 6633110.75

The Second 305223081.12 22.30% 305223081.12

The Third 73094699.54 5.34% 730947.00

The Fourth 51257341.26 3.74% 1756550.97

The Fifth 48196244.68 3.52% 48196244.68

Total 1141082441.39 83.36%

4. Receivables financing

Unit: RMB

Item Closing balance Opening balance

Notes receivable 137591996.02 1530735647.38

Total 137591996.02 1530735647.38

Changes in receivables financing in the current period and changes in fair value

□Applicable□Not applicable

If the provision for impairment of receivables financing is based on the general model of expected credit losses please disclose

information about the provision for impairment by referring to the disclosure for other receivables as follows:

□Applicable□Not applicable

Other notes:

Notes receivable endorsed or discounted at year-end and not yet due at the balance sheet date

Item Amount derecognized at year-end Amount not derecognized at year-end

Bank acceptance bill 7682157083.95

Commercial acceptance bill

Total 7682157083.95

5. Prepayments

(1) Prepayments are presented by aging

Unit: RMB

Closing balance Opening balance

Aging

Amount Percentage Amount Percentage

Within 1 year 1235907044.32 99.10% 977541107.55 98.31%

1 to 2 years 8892828.10 0.71% 16681487.73 1.68%

2 to 3 years 2301638.78 0.18% 147750.36 0.01%

Over 3 years 76237.13 0.01%

Total 1247177748.33 994370345.64

Notes to the reasons why prepayments aged over one year and of significant amount have not been settled in a timely manner:

As at the end of the reporting period there was no significant prepayment aged more than one year.

172Bengang Steel Plates Co. Ltd. 2022 Annual Report

(2) Top five prepayments with closing balances grouped by prepaid objects

Percentage of total closing

Name of the company Closing balance Aging

balance of prepayments (%)

The First 398341075.40 Within 1 year 31.94

The Second 102919025.91 Within 1 year 8.25

The Third 88438260.66 Within 1 year 7.09

The Fourth 75243235.25 Within 1 year 6.03

The Fifth 62721935.31 Within 1 year 5.03

Total 727663532.53 —— 58.34

Other notes:

6. Other receivables

Unit: RMB

Item Closing balance Opening balance

Interest receivable 2523993.39

Other receivables 127198692.92 163413287.02

Total 127198692.92 165937280.41

(1) Interest receivable

1) Classification of interest receivable

Unit: RMB

Item Closing balance Opening balance

Time deposit 2523993.39

Total 2523993.39

(2) Other receivables

1) Classification of other receivables by nature of payment

Unit: RMB

Nature of payment Closing book balance Opening book balance

Account current 181771075.61 224540231.45

Others 9560814.07 11572865.95

Total 191331889.68 236113097.40

2) Provision for bad debts

Unit: RMB

Stage 1 Stage 2 Stage 3

Expected credit Expected credit losses Expected credit losses

Bad debt provision Total

losses for the next over the entire life (Not over the entire life

12 months credit-impaired) (Credit-impaired)

Balance as at January 1st 2022 526800.70 6305393.56 65867616.12 72699810.38

Balance as at January 1st 2022 in

the current period

——Transfer to stage 2 -64969.07 64969.07

——Transfer to stage 3 -114780.42 114780.42

Accrual in the current period 388830.08 -4901909.83 -276396.56 -4789476.31

173Bengang Steel Plates Co. Ltd. 2022 Annual Report

Stage 1 Stage 2 Stage 3

Expected credit Expected credit losses Expected credit losses

Bad debt provision Total

losses for the next over the entire life (Not over the entire life

12 months credit-impaired) (Credit-impaired)

Write-off in the current period 3774307.31 3774307.31

Other changes -2830.00 -2830.00

Balance as at December 31st 2022 850661.71 1353672.38 61928862.67 64133196.76

Changes in the book balance of the provision for losses with a significant amount of change in the period

□Applicable□Not applicable

Disclosure by aging

Unit: RMB

Aging Book balance

Within 1 year (inclusive) 85596605.22

1 to 2 years 38267869.02

2 to 3 years 3519908.21

Over 3 years 63947507.23

3 to 4 years 63947507.23

Total 191331889.68

3) Provision for bad debts accrued recovered or reversed in the current period

Provision for bad debts in the current period:

Unit: RMB

Amount of change in the current period

Category Opening balance Recovery or Closing balance

Accrual Write-off Others

reversal

Bad debt provision for

72699810.38-4789476.313774307.312830.0064133196.76

other receivables

Total 72699810.38 -4789476.31 3774307.31 2830.00 64133196.76

Of which the amount of provision for bad debts reversed or recovered in the current period is material:

Unit: RMB

Name of the company Amount reversed or recovered Recovery methods

4) Actual write-off of other receivables in the current period

Unit: RMB

Item Write-off amount

Write-off of other receivables 3774307.31

Of which significant write-offs of other receivables:

Unit: RMB

Whether the

Nature of Write-off amount

Write-off

Name of the company other Reasons for write-off procedures arises from

amount

receivables performed related

transactions

Benxi Manchu Payment for A suspended company that is Legal advice

2202434.85 No

Autonomous County goods unreachable for a long time without and Board of

174Bengang Steel Plates Co. Ltd. 2022 Annual Report

Whether the

Nature of Write-off amount

Write-off

Name of the company other Reasons for write-off procedures arises from

amount

receivables performed related

transactions

Dibang Concrete Co. Ltd. business transactions and included Directors

in the management of account approval

write-offs

Legal advice

Liming Farm of Benxi

Payment for and Board of

Forestry Department of 225088.76 Cancelled No

goods Directors

Shenyang Mining Bureau

approval

A suspended company that is

Legal advice

unreachable for a long time without

Benxi Lifa New Building Payment for and Board of

186772.35 business transactions and included No

Materials Co. Ltd. goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Benxi Iron and Steel Payment for and Board of

131098.24 business transactions and included No

Recycling Materials Plant goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Benxi Xihu District Payment for and Board of

100150.00 business transactions and included No

Huafeng Smelting Plant goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Benxi Fuledo Pipe Co. Payment for and Board of

39904.04 business transactions and included No

Ltd. goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

Benxi Xihu District unreachable for a long time without

Payment for and Board of

Xiujiang Paper Products 32942.48 business transactions and included No

goods Directors

Factory in the management of account

approval

write-offs

A suspended company that is

Legal advice

Benxi Plastic Mining and unreachable for a long time without

Payment for and Board of

Metallurgy Machinery 31257.51 business transactions and included No

goods Directors

Factory in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Payment for and Board of

Xihu Tar Chemical Plant 21309.78 business transactions and included No

goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

Benxi Iron and Steel unreachable for a long time without

Payment for and Board of

(Group) Chint Building 18673.20 business transactions and included Yes

goods Directors

Materials Co. Ltd. in the management of account

approval

write-offs

A suspended company that is

Legal advice

Bengang Crude Fuel unreachable for a long time without

Payment for and Board of

Division Distribution 18001.73 business transactions and included No

goods Directors

Company in the management of account

approval

write-offs

175Bengang Steel Plates Co. Ltd. 2022 Annual Report

Whether the

Nature of Write-off amount

Write-off

Name of the company other Reasons for write-off procedures arises from

amount

receivables performed related

transactions

A suspended company that is

Legal advice

Comprehensive Plant of unreachable for a long time without

Payment for and Board of

Oxygen Plant of Benxi 18000.00 business transactions and included No

goods Directors

Iron and Steel in the management of account

approval

write-offs

A suspended company that is

Legal advice

The Second Small Rolling unreachable for a long time without

Payment for and Board of

Mill of Benxi Iron and 17522.80 business transactions and included No

goods Directors

Steel in the management of account

approval

write-offs

A suspended company that is

Metal Processing Plant of Legal advice

unreachable for a long time without

Material Supply Payment for and Board of

16554.16 business transactions and included No

Department of Benxi Iron goods Directors

in the management of account

and Steel Co. Ltd. approval

write-offs

A suspended company that is

Legal advice

Auto Parts Branch of unreachable for a long time without

Payment for and Board of

Benxi Iron and Steel Co. 12165.92 business transactions and included No

goods Directors

Ltd. in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Bengang Sheet Processing Payment for and Board of

11093.60 business transactions and included No

Plant goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Bengang Primary Rolling Payment for and Board of

9355.68 business transactions and included No

Mini Mill goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Bengang Primary Rolled Payment for and Board of

8963.60 business transactions and included No

Plate Processing Plant goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Payment for and Board of

Benxi Shenquan Company 8763.52 business transactions and included No

goods Directors

in the management of account

approval

write-offs

A suspended company that is

Legal advice

unreachable for a long time without

Payment for and Board of

Others 664255.09 business transactions and included No

goods Directors

in the management of account

approval

write-offs

Total 3774307.31

Notes to write-off of other receivables:

176Bengang Steel Plates Co. Ltd. 2022 Annual Report

5) Other receivables of the top five closing balances collected by arrears

Unit: RMB

Percentage of total

Name of the Closing balance of

Nature of payment Closing balance Aging closing balance of

company bad debt provision

other receivables

The First Account current 13028492.10 1-2 years 6.81% 433910.93

The Second Account current 11612008.77 Over 1-3 years 6.07% 11612008.77

The Third Account current 5176720.00 Within 1 year 2.71% 51767.20

The Fourth Account current 4760949.45 Within 1 year 2.49% 47609.49

The Fifth Account current 4609686.93 Within 1 year 2.41% 46096.87

Total 39187857.25 20.49% 12191393.26

7. Inventories

Whether the Company is required to comply with the disclosure requirements of the real estate industry

No

(1) Classification of inventories

Unit: RMB

Closing balance Opening balance

Provision for Provision for

decline in value decline in value

of inventories of inventories or

Item

Book balance or impairment Book value Book balance impairment of Book value

of contract contract

performance performance

costs costs

Raw

4215260584.2524954852.464190305731.794730515761.3426986533.694703529227.65

materials

Work-in-

2070182298.4418271254.092051911044.352105832905.0725390821.522080442083.55

process

Goods in

2236715664.2015203965.162221511699.043439625765.6633430937.883406194827.78

stock

Total 8522158546.89 58430071.71 8463728475.18 10275974432.07 85808293.09 10190166138.98

(2) Provision for the decline in value of inventories and provision for impairment of contract performance

costs

Unit: RMB

Increase in the current period Decrease in the current period

Item Opening balance Reversal or Closing balance

Accrual Others Others

carry-forward

Raw materials 26986533.69 2031681.23 24954852.46

Work-in-process 25390821.52 18271254.09 25390821.52 18271254.09

Goods in stock 33430937.88 15203965.16 33430937.88 15203965.16

Total 85808293.09 33475219.25 60853440.63 58430071.71

177Bengang Steel Plates Co. Ltd. 2022 Annual Report

8. Other current assets

Unit: RMB

Item Closing balance Opening balance

Prepaid taxes 166991140.45 444009128.46

VAT input tax 228449995.81 310939065.10

Total 395441136.26 754948193.56

Other notes:

178Bengang Steel Plates Co. Ltd. 2022 Annual Report

9. Long-term equity investments

Unit: RMB

Increase/decrease in the current period

Gains and

Closing

Opening losses on Other Cash Closing

Other balance of

Investee balance(Book Increase in Decrease in investments comprehensive dividends Impairment balance(Book

changes Others provision for

value) investment investment recognized income and profits provision value)

in equity impairment

under the adjustments declared

equity method

I. Joint ventures

II. Associates

Benxi Iron and

Steel Baojin

(Shenyang)

Automobile 48230077.75 -233763.14 47996314.61

New Material

Technology Co.Ltd.ZheJiang Ben

gang-Elite Iron

& Steel 2981784.07 52678.50 3034462.57

Processing Co.Ltd.Subtotal 2981784.07 48230077.75 -181084.64 51030777.18

Total 2981784.07 48230077.75 -181084.64 51030777.18

Other notes:

179Bengang Steel Plates Co. Ltd. 2022 Annual Report

10. Other equity instrument investments

Unit: RMB

Item Closing balance Opening balance

Equity of Suzhou Longben Metal Material Co. Ltd. 3998216.04 3888980.00

Equity of Zhonggang Shanghai Steel Processing Co. Ltd.Equity of Northeast Special Steel Group Co. Ltd. 1016420266.27 1037735849.00

Equity of Guangzhou Benpu Automobile Panel Sales Co. Ltd. 200000.00

Wuhan Yuanhong Trading Co. Ltd. 200000.00

Total 1020418482.31 1042024829.00

Segmental disclosure of investments in non-trading equity instruments in the current period

Unit: RMB

Reasons for Reasons for transfer

Transfer from other

Dividend designation as at fair of other

Accumulated Accumulated comprehensive

Item income value through other comprehensive

gains losses income to retained

recognized comprehensive income to retained

earnings

income earnings

Equity of

Suzhou

Longben

109236.04

Metal

Material

Co. Ltd.Equity of

Zhonggang

Shanghai

14414693.00

Steel

Processing

Co. Ltd.Equity of

Northeast

Special

21315582.73

Steel

Group Co.Ltd.Equity of

Guangzhou

Benpu

25416.40 -25416.40 Disposal

Automobile

Panel Sales

Co. Ltd.Wuhan

Yuanhong

Disposal

Trading

Co. Ltd.Total 134652.44 35730275.73 -25416.40

Other notes:

Note:* The Company holds 15% equity in Zhonggang Shanghai Steel Processing Co. Ltd.* The Company's 9.93% equity in Northeast Special Steel Group Co. Ltd. has been pledged to Bank of

Dalian Co. Ltd. Shenyang Branch and a release of pledge agreement was signed with Bank of Dalian Co. Ltd.Shenyang Branch in February 2022 and the application for release of registration of the pledge of equity

interest is being processed.

180Bengang Steel Plates Co. Ltd. 2022 Annual Report

11. Fixed assets

Unit: RMB

Item Closing balance Opening balance

Fixed assets 24836556422.90 25480674048.94

Total 24836556422.90 25480674048.94

(1) Details of fixed assets

Unit: RMB

Houses and Machinery and Transportation and

Item Total

buildings equipment other equipment

I. Original book value：

13244653376.3

1.Opening balance 49481748950.04 920958736.87 63647361063.24

3

2. Increase in the current period 220247656.28 1628388714.05 -339256459.51 1509379910.82

(1) Purchase 3315146.56 43608939.48 1949125.85 48873211.89

(2) Transferred from construction in

215069360.241205698394.5839738944.111460506698.93

progress

(3) Increase from business combinations

(4) Others 1863149.48 379081379.99 -380944529.47

3. Decrease in the current period 198389769.71 572892785.47 7055264.92 778337820.10

(1) Disposal or scrapping 13727420.22 188889936.22 4593296.36 207210652.80

(2) Decrease from business combinations 184662349.49 384002849.25 2461968.56 571127167.30

13266511262.9

4.Closing balance 50537244878.62 574647012.44 64378403153.96

0

II. Accumulated depreciation

1.Opening balance 6411622637.46 31016196563.08 645389717.80 38073208918.34

2. Increase in the current period 266279988.34 1898941569.41 -223423660.39 1941797897.36

(1) Accrual 265622268.77 1621405745.52 54769883.07 1941797897.36

(2) Others 657719.57 277535823.89 -278193543.46

3. Decrease in the current period 116138455.85 445443403.26 5056321.49 566638180.60

(1) Disposal or scrapping 8981517.95 157477897.86 3579135.16 170038550.97

(2) Decrease from business combinations 107156937.90 287965505.40 1477186.33 396599629.63

4.Closing balance 6561764169.95 32469694729.23 416909735.92 39448368635.10

III. Provision for impairment

1.Opening balance 84098414.32 9379681.64 93478095.96

2. Increase in the current period

(1) Accrual

3. Decrease in the current period

(1) Disposal or scrapping

4.Closing balance 84098414.32 9379681.64 93478095.96

IV. Book value

1.Closing book value 6620648678.63 18058170467.75 157737276.52 24836556422.90

2.Opening book value 6748932324.55 18456172705.32 275569019.07 25480674048.94

(2) Temporarily idle fixed assets

Unit: RMB

Accumulated Provision for

Item Original book value Book value Notes

depreciation impairment

Houses and buildings 223416300.48 139189651.03 84098414.32 128235.13

Machinery and equipment 100086005.34 89198289.39 9379681.64 1508034.31

181Bengang Steel Plates Co. Ltd. 2022 Annual Report

Transportation 1042125.89 1042125.89

Total 324544431.71 229430066.31 93478095.96 1636269.44

(3) Fixed assets leased out through operating leases

Unit: RMB

Item Closing book value

Houses and buildings 1239002.14

(4) Fixed assets without proper title certificate

Unit: RMB

Item Book value Reasons for non-completion of title certificates

Houses and buildings 1142595483.45 In process

Other notes:

12. Construction in progress

Unit: RMB

Item Closing balance Opening balance

Construction in progress 3158195899.65 2431761889.08

Construction materials 2420212.05

Total 3158195899.65 2434182101.13

182Bengang Steel Plates Co. Ltd. 2022 Annual Report

(1) Details of construction in progress

Unit: RMB

Closing balance Opening balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Special Steel Electric Furnace Capacity Replacement Project 1437078751.92 1437078751.92 975649876.97 975649876.97

CCPP Power Generation Project 662907316.06 662907316.06

Special Steel Rolling Mill Renovation Project 470182411.88 470182411.88 225662005.25 225662005.25

Environmental Protection Renovation of Sheet Raw Material Plant 165792014.40 165792014.40 10144284.63 10144284.63

Energy General Plant No. 1 Converter Gas Tank System

66477477.1366477477.13

Transformation Project

First Cold Rolling Transformation Project 90087329.61 90087329.61

360 Square Meter Sintering Machine Waste Heat Utilization 82730000.00 82730000.00 56547049.50 56547049.50

Caixi Special Steel Feeding Station of Steel Plate Scrap Plant 51959719.57 51959719.57 38375436.67 38375436.67

Steelmaking 1#2#3#7#Converter New Three Times Dust Removal

42834455.3142834455.31391744.50391744.50

Energy Main Plant Supporting Project

The Overall Improvement of Benxi Steel’s Manufacturing 39756485.12 39756485.12 36748743.10 36748743.10

No. 4-6 Converter Environmental Protection Renovation Project 24470633.70 24470633.70

Renovation of the Desulphurization System of the Coking Process in

23070618.1023070618.10

the Ironmaking General Plant

Plate No.1 Dry Quenching System Boosting Modification and Unit

20249501.2120249501.21

No.33 Relocation

Information Technology Construction in the Iron Zone of Bengang

18023984.1518023984.15778685.00778685.00

Plates

Overall Improvement of Bengang’s Information Technology

17745620.1217745620.1217108420.1217108420.12

Infrastructure Platform

Self-built Domestic Water Preparation in the Panel Plant Area 38500000.00 38500000.00

Adaptive Transformation of Steelmaking Processes to Reduce Iron

17440611.6817440611.6820492385.1820492385.18

Consumption

Purification of I and II vocs Exhaust Gas Treatment 16878425.31 16878425.31 18980000.00 18980000.00

360 Square Meter Sintering Machine 92259450.24 92259450.24 88340997.99 88340997.99

Other projects 547635887.33 547635887.33 174657466.98 174657466.98

Total 3158195899.65 3158195899.65 2431761889.08 2431761889.08

183Bengang Steel Plates Co. Ltd. 2022 Annual Report

(2) Changes in significant construction in progress projects in the current period

Unit: RMB

Other

Capitaliza

decre Percentage Including:

tion rate

Amount ases of Accumulated Amount of

Amount Pro of

transferred to in the cumulative amount of interest Source of

Name of project Budget Opening balance increased in the Closing balance gres interest in

fixed assets in the curre investment capitalized capitalized in fund

current period s the

current period nt in projects interest the current

current

perio to budget period

period(%)

d

Special Steel

Electric Furnace

Capacity 1923430000.00 975649876.97 461428874.95 1437078751.92 7471.00% 89 8077442.20 8077442.20 4.35% Self- raised

Replacement

Project

CCPP Power

Generation 1060000000.00 662907316.06 50965642.63 713872958.69 6735.00% 100 26401127.09 11903565.01 3.12 % Self- raised

Project

Special Steel

Loans from

Rolling Mill

823860000.00 225662005.25 244684106.63 163700.00 470182411.88 6945.00% 72 13164686.38 6394453.47 3.12% financial

Renovation

institutions

Project

Environmental

Protection Loans from

Renovation of 677043263.46 10144284.63 155647729.77 165792014.40 2449.00% 43 4302198.84 4302198.84 4.35 % financial

Sheet Raw institutions

Material Plant

No.1 Converter

Loans from

Gas Tank System

160860000.00 66477477.13 54785840.22 121263317.35 7538.00% 100 644634.60 644634.60 4.35% financial

Modification

institutions

Project

First Cold Rolling Loans from

Transformation 973010000.00 90087329.61 90087329.61 1514.00% 81 3831132.38 3831132.38 4.35% financial

Project institutions

360 Square

Meter Sintering

91750000.00 56547049.50 26182950.50 82730000.00 9210.00% 95 Others

Machine Waste

Heat Utilization

184Bengang Steel Plates Co. Ltd. 2022 Annual Report

Other

Capitaliza

decre Percentage Including:

tion rate

Amount ases of Accumulated Amount of

Amount Pro of

transferred to in the cumulative amount of interest Source of

Name of project Budget Opening balance increased in the Closing balance gres interest in

fixed assets in the curre investment capitalized capitalized in fund

current period s the

current period nt in projects interest the current

current

perio to budget period

period(%)

d

Newly

Constructed 8#

Single-Strand

Slab Casting 592690759.86 78639051.12 78639051.12 8972.00% 100 Others

Machine

Supporting

Project

Integration of

Information

Technology Loans from

Systems in the 232100000.00 74719067.36 74719067.36 3219.00% 100 1846067.36 1846067.36 4.35% financial

Reorganization of institutions

Ansteel Group

Co. Ltd.High-Strength

6389880000.00 68002169.36 68002169.36 9326.00% 100 Others

Steel Renovation

Caixi Special

Steel Feeding

121140000.00 38375436.67 13584282.90 51959719.57 4289.00% 47 Others

Station of Steel

Plate Scrap Plant

Steelmaking

1#2#3#7#Conver

ter New Three

Loans from

Times Dust

112054271.67 391744.50 43020692.47 577981.66 42834455.31 3823.00% 66 959815.54 959815.54 4.35% financial

Removal Energy

institutions

Main Plant

Supporting

Project

The Overall

Improvement of 56000000.00 36748743.10 3007742.02 39756485.12 7099.00% 93 Others

Benxi Steel’s

185Bengang Steel Plates Co. Ltd. 2022 Annual Report

Other

Capitaliza

decre Percentage Including:

tion rate

Amount ases of Accumulated Amount of

Amount Pro of

transferred to in the cumulative amount of interest Source of

Name of project Budget Opening balance increased in the Closing balance gres interest in

fixed assets in the curre investment capitalized capitalized in fund

current period s the

current period nt in projects interest the current

current

perio to budget period

period(%)

d

Manufacturing

Loans from

220kV Substation

313500000.00 29491156.12 29491156.12 5994.00% 100 811868.32 811868.32 4.35% financial

Project

institutions

No. 4-6

Converter

Environmental

243192029.42 24470633.70 24470633.70 8698.00% 91 Others

Protection

Renovation

Project

Renovation of

the

Desulphurization

System of the 39250000.00 23070618.10 23070618.10 5878.00% 20 Others

Coking Process in

the Ironmaking

General Plant

Support for the

Overall

Improvement of

the Management

72630000.00 22370000.00 22370000.00 3080.00% 100 Others

and

Informatization

of Bengang’s

Steel Industry

Plate No.1 Dry

Quenching

System Boosting

65400000.00 20249501.21 20249501.21 3096.00% 35 Others

Modification and

Unit No.33

Relocation

186Bengang Steel Plates Co. Ltd. 2022 Annual Report

Other

Capitaliza

decre Percentage Including:

tion rate

Amount ases of Accumulated Amount of

Amount Pro of

transferred to in the cumulative amount of interest Source of

Name of project Budget Opening balance increased in the Closing balance gres interest in

fixed assets in the curre investment capitalized capitalized in fund

current period s the

current period nt in projects interest the current

current

perio to budget period

period(%)

d

Information

Technology

Construction in 25550000.00 778685.00 17245299.15 18023984.15 7054.00% 87 Others

the Iron Zone of

Bengang Plates

Overall

Improvement of

Bengang’s

Information 24300000.00 17108420.12 637200.00 17745620.12 7303.00% 84 Others

Technology

Infrastructure

Platform

Self-built

Domestic Water

Preparation in 38500000.00 17505131.99 17505131.99 4547.00% 100 Others

the Panel Plant

Area

Adaptive

Transformation

of Steelmaking

20492385.18 16182585.56 3874557.86 2616531.74 17440611.68 8511.00% 91 Others

Processes to

Reduce Iron

Consumption

Purification of I

and II vocs

18980000.00 16878425.31 16878425.31 8893.00% 94 Others

Exhaust Gas

Treatment

360 Square Loans from

Meter Sintering 1377230000.00 88340997.99 3918452.25 92259450.24 9382.00% 96 68627433.26 financial

Machine institutions

Total 15452842709.59 2195314622.48 1544466455.23 1129221065.39 2610560012.32 128666405.97 38771177.72

187Bengang Steel Plates Co. Ltd. 2022 Annual Report

(3) Construction materials

Unit: RMB

Closing balance Opening balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Construction materials 2420212.05 2420212.05

Total 2420212.05 2420212.05

Other notes:

13. Right-of-use assets

Unit: RMB

Item Land Houses and buildings Total

I. Original book value

1.Opening balance 1132274415.17 368465367.56 1500739782.73

2. Increase in the current period

3. Decrease in the current period

4.Closing balance 1132274415.17 368465367.56 1500739782.73

II. Accumulated depreciation

1.Opening balance 39904236.22 20470298.20 60374534.42

2. Increase in the current period 39904236.22 20470298.20 60374534.42

(1) Accrual 39904236.22 20470298.20 60374534.42

3. Decrease in the current period

(1) Disposal

4.Closing balance 79808472.44 40940596.40 120749068.84

III. Provision for impairment

1.Opening balance

2. Increase in the current period

(1) Accrual

3. Decrease in the current period

(1) Disposal

4.Closing balance

IV. Book value

1.Closing book value 1052465942.73 327524771.16 1379990713.89

2.Opening book value 1092370178.95 347995069.36 1440365248.31

Other notes:

14. Intangible assets

(1) Intangible assets

Unit: RMB

Non-patented Software and

Item Land use right Patent right Total

technology others

I. Original book value

1.Opening balance 367668797.84 310401.55 367979199.39

188Bengang Steel Plates Co. Ltd. 2022 Annual Report

Non-patented Software and

Item Land use right Patent right Total

technology others

2. Increase in the current period

(1) Purchase

(2) Internal research and development

(3) Increase from business combinations

3. Decrease in the current period 30783483.08 42452.83 30825935.91

(1) Disposal 42452.83 42452.83

(2)Decrease from business combinations 30783483.08 30783483.08

4.Closing balance 336885314.76 267948.72 337153263.48

II. Accumulated amortization

1.Opening balance 69882153.01 175497.57 70057650.58

2. Increase in the current period 7045540.80 26794.92 7072335.72

(1) Accrual 5354681.52 26794.92 5381476.44

3. Decrease in the current period 2719207.40 42452.83 2761660.23

(1) Disposal 42452.83 42452.83

(2)Decrease from business combinations 2719207.40 2719207.40

4.Closing balance 74208486.41 159839.66 74368326.07

III. Provision for impairment

1.Opening balance

2. Increase in the current period

(1) Accrual

3. Decrease in the current period

(1) Disposal

4.Closing balance

IV. Book value

1.Closing book value 262676828.35 108109.06 262784937.41

2.Opening book value 297786644.83 134903.98 297921548.81

Percentage of intangible assets formed through internal research and development to the balance of intangible assets at the end

of current period.

(2) Land use right without proper title certificate

Unit: RMB

Item Book value Reasons for non-completion of title certificates

Land use right 38743466.68 In process

Other notes:

15. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets not offset

Unit: RMB

Closing balance Opening balance

Item Deductible temporary Deferred income tax Deductible temporary Deferred income

differences assets differences tax assets

Impairment of assets 396834109.83 99208527.46 451808313.33 112952078.33

Internal unrealized profit 80751325.52 20187831.38 93178777.44 23294694.36

Depreciation or amortization

21906259.435476564.86

differences

189Bengang Steel Plates Co. Ltd. 2022 Annual Report

Closing balance Opening balance

Item Deductible temporary Deferred income tax Deductible temporary Deferred income

differences assets differences tax assets

Changes in fair value of other

financial assets included in 21315582.73 5328895.68

other comprehensive income

Others 46650523.04 11662630.76 48132843.04 12033210.76

Total 545551541.12 136387885.28 615026193.24 153756548.31

(3) Deferred income tax liabilities not offset

Unit: RMB

Closing balance Opening balance

Item Taxable temporary Deferred income tax Taxable temporary Deferred income

differences liabilities differences tax liabilities

Changes in fair value of other

financial assets included in 109236.04 27309.01

other comprehensive income

Total 109236.04 27309.01

(4) Unrecognized deferred tax assets

Unit: RMB

Item Closing balance Opening balance

Deductible temporary differences 305224166.01 305643743.02

Deductible losses 1349817349.12 45093302.90

Total 1655041515.13 350737045.92

(3) The deductible loss of unrecognized deferred tax assets due in the following years

Unit: RMB

Item Amount at end of period Amount at beginning of period Notes

Year 2022 1001166.72

Year 2023 6836473.11 10336118.65

Year 2024 12164389.35 13696334.51

Year 2025 8257832.98 10723063.42

Year 2026 6799314.77 9336619.60

Year 2027 1315759338.91

Total 1349817349.12 45093302.90

Other notes:

16. Other non-current assets

Unit: RMB

Closing balance Opening balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Prepaid long-term

110065560.68110065560.6830630858.1330630858.13

assets

Total 110065560.68 110065560.68 30630858.13 30630858.13

Other notes:

190Bengang Steel Plates Co. Ltd. 2022 Annual Report

17. Short-term borrowings

(1) Classification of short-term borrowings

Unit: RMB

Item Closing balance Opening balance

Guaranteed borrowings 3823088140.00

Credit borrowings 230000000.00

Discounted outstanding notes 49200000.00

Total 49200000.00 4053088140.00

Notes to the classification of short-term borrowings:

18. Notes payable

Unit: RMB

Category Closing balance Opening balance

Commercial acceptance bill 1407117263.33 1724083376.48

Bank acceptance bill 2242219356.03 2286000000.00

Domestic letter of credit 740000000.00 625000000.00

Total 4389336619.36 4635083376.48

The total amount of notes payable due and unpaid at the end of the current period was RMB 0.

19. Accounts payable

(1) Presentation of accounts payable

Unit: RMB

Item Closing balance Opening balance

Accounts payable for goods 2650335777.91 4272890365.57

Accounts payable for labor services 60238703.49 51392037.81

Accounts payable for project and equipment 767867762.87 557316885.80

Repair expense and others 217978219.58 470673396.71

Total 3696420463.85 5352272685.89

(2) Significant accounts payable aged over 1 year

Unit: RMB

Reasons for non-reimbursement or

Item Closing balance

carry-over

Company 1 12919780.46 Settlement conditions not yet met

Total 12919780.46

Other notes:

20. Contract liabilities

Unit: RMB

Item Closing balance Opening balance

Advance for goods 3794115592.29 4708188093.78

Total 3794115592.29 4708188093.78

Amount and reasons for significant changes in the book value during the reporting period.Unit: RMB

191Bengang Steel Plates Co. Ltd. 2022 Annual Report

Item Amount of change Reasons for change

Advance for goods -914072501.49 Mainly due to lower steel prices in current year

Total -914072501.49 ——

21. Employee benefits payable

(1) Presentation of employee benefits

Unit: RMB

Increase in the current Decrease in the

Item Opening balance Closing balance

period current period

I. Short-term benefits 152095376.49 2341407303.98 2483456317.20 10046363.27

II. Post-employment benefits -

274990162.78274990162.78

defined contribution plan

II. Termination benefits 44535875.82 44535875.82

Total 152095376.49 2660933342.58 2802982355.80 10046363.27

(2) Presentation of short-term benefits

Unit: RMB

Increase in the Decrease in the

Item Opening balance Closing balance

current period current period

1. Salaries bonuses

138746833.891599823245.281738570079.17

allowances and subsidies

2. Employee welfare 290726764.03 290726764.03

3. Social insurance 194901531.45 194901531.45

Work injury insurance 43279967.12 43279967.12

4. Housing provident fund 6862795.00 166439550.24 166680036.24 6622309.00

5. Union funds and staff

6485747.6037782328.6640844021.993424054.27

education fee

6. Other short-term benefits 51733884.32 51733884.32

Total 152095376.49 2341407303.98 2483456317.20 10046363.27

(3)Presentation of defined contribution plan

Unit: RMB

Increase in the current Decrease in the

Item Opening balance Closing balance

period current period

1. Basic pension fund 266794222.70 266794222.70

2. Unemployment insurance 8195940.08 8195940.08

Total 274990162.78 274990162.78

Other notes:

22. Taxes payable

Unit: RMB

Item Closing balance Opening balance

Value-added tax (VAT) 5168511.13 29696795.33

Corporate income tax 11469020.92 35810190.67

Personal income tax 2546699.73 4744348.35

City maintenance and construction tax 175567.61 2362795.25

Property tax 3785986.96 16819232.89

Land use tax 1051651.99 2878545.36

192Bengang Steel Plates Co. Ltd. 2022 Annual Report

Education surcharge (including local

125405.401710729.40

education surcharge)

Others 20070077.04 20245351.45

Total 44392920.78 114267988.70

Other notes:

193Bengang Steel Plates Co. Ltd. 2022 Annual Report

23. Other payables

Unit: RMB

Item Closing balance Opening balance

Other payables 1247722165.47 1348025731.98

Total 1247722165.47 1348025731.98

(1) Other payables

1)Presentation of other payables by nature of payment

Unit: RMB

Item Closing balance Opening balance

Deposit 2303050.00 1556363.89

Margin 290353044.56 127642584.79

Current money 941440196.32 1133934695.19

Others 13625874.59 84892088.11

Total 1247722165.47 1348025731.98

2) Significant other payables aged over 1 year

Unit: RMB

Reasons for non-reimbursement or carry-

Item Closing balance

over

Company 1 26293468.88 Unsettled

Total 26293468.88

Other notes:

24. Non-current liabilities due within one year

Unit: RMB

Item Closing balance Opening balance

Long-term borrowings due within one year 2501169854.72 246949595.95

Bonds payable due within one year 44762324.73 25053455.40

Lease liabilities due within one year 40318706.98 38777466.79

Total 2586250886.43 310780518.14

Other notes:

25. Other current liabilities

Unit: RMB

Item Closing balance Opening balance

Output tax to be transferred 493235027.03 612064452.20

Total 493235027.03 612064452.20

Changes in short-term bonds payable:

Unit: RMB

Issued in Interest

Amortization of

Nominal Issue Term to Amount Opening the accrues Current period Closing

Name premium and

value date maturity issued balance current at reimbursement balance

discount

period nominal

194Bengang Steel Plates Co. Ltd. 2022 Annual Report

value

Total

Other notes:

26. Long-term borrowings

(1) Classification of long-term borrowings