Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd.
Annual Report 2023
Bengang Steel Plates Co., Ltd. 2023 Annual Report
2023 Annual Report
SECTION I. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONSThe Board of Directors, the Supervisory Committee and the Directors, members of the SupervisoryCommittee and senior management of the Company guarantee that there are no misrepresentations ormisleading statements, or material omissions in this report, and individually and collectively accept fullresponsibility 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), havepledged the authenticity, accuracy and integrity of the attached financial statements. All the members ofthe 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 substantialcommitment 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 areany controversial statements in the two versions.
The Company has described the risks and countermeasures in detail in this report, please refer toSection III. XI "Risks to the Company and countermeasures". China Securities Journal, Securities Times, thewebsite of Shenzhen Stock Exchange and Cninfo Website are the media selected by the Company forinformation disclosure. All information of the Company shall be based on the information published in theabove 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 sharecapital by transferring its public reserves.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Table of Contents
SECTION I. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS .................................................................... 2
SECTION II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ........................................................................................ 6
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS .......................................................................................... 11
Section IV. CORPORATE GOVERNANCE ....................................................................................................................... 45
Section V. Environmental and Social Responsibility ....................................................................................................... 70
Section VI Important Events ...... 82
Section VII. Status of Share Capital Changes and Shareholders ................................................................................... 119
Section VIII. Preferred shares ........................................................................................................................................ 130
Section IX. Bonds ............................................................................................................................................................ 131
Section X. Financial Report ............................................................................................................................................ 131
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Reference File Directory
1. Financial statements containing the signatures and seals of the person in charge of the Company, the person incharge 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 certifiedpublic accountant.
3. The original copies of all Company documents and announcements that have been publicly disclosed during thereporting period;
4. Annual reports published in other securities markets.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Definition
| Interpretation items | Refers to | Interpretation contents |
| Bengang Steel Plates, Company, the Company, listed company | Refers to | Bengang Steel Plates Co., Ltd. |
| 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 Administration | Refers to | Liaoning State-owned Asset Supervisory and Management Committee |
| Bengang Puxiang | Refers to | Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. |
| Ansteel Finance Company | Refers to | Ansteel Group Finance Co., Ltd. |
| Ansteel | Refers to | Ansteel Steel Company Limited |
| Vanadium & Titanium Company | Refers to | PAnsteel Group Vanadium & Titanium Resources Co., Ltd. |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
SECTION II. COMPANY PROFILE AND MAIN FINANCIAL INDEXI. Company information
| Stock abbreviation | Bengang Steel Plates, Bengang Steel Plates plate B | Stock code | 000761, 200761 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 本钢板材股份有限公司 | ||
| Abbreviation of Company name in Chinese | 本钢板材 | ||
| Company name in English (if any) | BENGANG STEEL PLATES CO., LTD. | ||
| Abbreviation of Company name in English (if any) | BSP | ||
| Legal representative | 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 | ||
| zhengzhengli76@126.com | |||
II. Contact person and contact information
| Secretary of Board of Directors | Representative of Securities Affairs | |
| Name | Zheng Zhengli | Chen Liwen |
| Contact address | No.1-1, Steel Road, Pingshan District, Benxi City, Liaoning Province | No.1-1, Steel Road, Pingshan District, Benxi City, Liaoning Province |
| Telephone | 024-47827003 | 024-47828980 |
| Fax | 024-47827004 | 024-47827004 |
| zhengzhengli76@126.com | bgbc000761@126.com |
III. Information disclosure and place for consulting
| Website of the stock exchange where the Company discloses the annual report | http://www.SSE.cn |
| Name and website of the media in which the Company discloses the annual report | China Securities Journal, Securities Times, http：//www.cninfo.com.cn |
| Place for inquiry of the annual report | Secretary Office of the Board, Bengang Steel Plates Co., Ltd. |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
IV. Change of business registration
| Uniform social credit code | 91210000242690243E |
| Changes of principal business activities since listing (if any) | No change |
| Historical changes in controlling shareholders (if any) | 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 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 | Lixin Certified Public Accountants (Special General Partnership) |
| Address of the accountants’ firm | Fourth Floor, No.61 Nanjing East Road, Huangpu District, Shanghai |
| Name of signatory accountants | Guo Shunxi, Nick Cheung and Fu Yangyi |
Sponsor engaged by the Company to conduct sustained supervision during the reporting period?Applicable □Not applicableFinancial 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
| FY2023 | FY2022 | Increase or decrease compared with the previous year | FV2021 | |
| Operating income (RMB) | 57,814,969,351.65 | 62,616,621,627.60 | -7.67% | 77,912,144,981.46 |
| Net profit attributable to shareholders of the listed company (RMB) | -1,742,574,163.92 | -1,232,976,557.37 | -41.33% | 2,500,582,902.58 |
| Net profit after non-recurring gain or loss attributable to shareholders of the listed company (RMB) | -2,067,775,288.69 | -1,416,415,028.51 | -45.99% | 2,517,758,656.14 |
| Net cash flow from | 4,329,351,258.30 | 1,276,362,965.56 | 239.19% | 413,473,454.04 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| operating activities (RMB) | ||||
| Basic earnings per share (RMB/share) | -0.4240 | -0.3000 | -41.33% | 0.600 |
| Diluted earnings per share (RMB/share) | -0.4240 | -0.3000 | -41.33% | 0.496 |
| Weighted average return on net assets | -9.73% | -5.68% | -4.05% | 11.88% |
| FY2023 | FY2022 | Increase or decrease compared with the previous year | FV2021 | |
| Total assets (RMB) | 46,253,250,872.50 | 44,459,650,119.11 | 4.03% | 55,147,123,275.30 |
| Net assets attributable to shareholders of listed companies (RMB) | 17,009,969,496.07 | 18,789,151,216.62 | -9.47% | 22,500,969,014.30 |
The lower of the company’s net profit before and after the deduction of non-recurring gains and losses in the most recent three fiscalyears 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
| Item | FY2023 | FY2022 | Note |
| Operating income (RMB) | 57,814,969,351.65 | 62,616,621,627.60 | Gross operating income |
| Deduction amount of operating income (RMB) | 1,187,913,732.14 | 2,143,539,898.31 | Selling raw materials and waste products, providing services, etc |
| Amount after deduction of operating income（RMB） | 56,627,055,619.51 | 60,473,081,729.29 | Selling raw materials and waste products, providing services, etc |
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 Chineseaccounting standards.
□Applicable ?Not applicable
There are no differences between net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accountingstandards during the reporting period.
2. Differences in net profit and net assets between financial reports disclosed simultaneously in accordancewith 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 withforeign accounting standards and in accordance with Chinese accounting standards in the reporting period.VIII. Main financial index by quarterUnit: RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 15,784,242,237.23 | 14,783,166,967.80 | 12,935,206,488.37 | 14,312,353,658.25 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Net profit attributable to shareholders of the listed company | 47,524,016.34 | -1,052,469,640.02 | -240,873,918.19 | -496,754,622.05 |
| Net profit after non-recurring gain or loss attributable to shareholders of the listed company | 70,931,650.60 | -1,078,210,989.45 | -327,965,565.23 | -732,530,384.61 |
| Net cash flow from operating activities | 2,833,913,987.48 | 1,828,723,294.33 | 190,084,866.44 | -523,370,889.95 |
Whether the above financial indicators or the sum of such indicators are significantly different from the relevant financial indicatorsin the disclosed quarterly and semi-annual reports of the Company
□Yes ?No
IX. Non-recurring gain or loss items and amounts
?Applicable □Not applicableUnit: RMB
| Item | FY2023 amount | FY2022 amount | FY2021 amount | Description |
| Gain or loss on disposal of non-current assets (including the offsetting portion of the provision for asset impairment) | 298,940,955.41 | 3,648,546.62 | -60,100,706.71 | |
| Government subsidies included in current profit or loss (except government subsidies that are closely related to the Company's normal business operations, in accordance with national policies and continuously enjoyed in accordance with certain standards and in fixed or quantitative amounts) | 79,554,896.45 | 72,300,830.48 | 66,345,976.64 | |
| Gains or losses from entrusting others to invest or manage assets | -37,205,991.34 | |||
| Gains and losses from debt restructuring | -6,626,340.44 | 2,879,850.07 | 2,436,869.33 | |
| 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 | 5,179,346.89 | 1,274,270.98 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 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 items mentioned above | -51,663,946.71 | 13,507,766.62 | 5,176,371.41 | |
| Other profit or loss items that meet the definition of non-recurring gain or loss | 92,174,927.78 | |||
| Less: Income tax effect | 327,320.42 | 1,956,581.46 | -5,969,319.73 | |
| Effect of minority interests (after tax) | -143,533.59 | 391,139.95 | -202,407.38 | |
| Total | 325,201,124.77 | 183,438,471.14 | -17,175,753.56 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□Applicable ?Not applicable
The company does not have other specific conditions of profit and loss items that meet the definition of non-recurring profit and loss.Explanation of defining the non-recurring profit and loss items listed in the Explanatory Announcement on Information Disclosure ofCompanies Offering Securities to the Public No.1-Non-recurring Profit and Loss as recurring profit and loss items
□Applicable ?Not applicable
The company does not define the non-recurring profit and loss items listed in Explanatory Announcement No.1 on InformationDisclosure of Companies Offering Securities to the Public-Non-recurring Profit and Loss as recurring profit and loss items.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
SECTION III. MANAGEMENT DISCUSSION AND ANALYSISI. Industry situation of the company during the reporting periodThe Company belongs to the steel industry, which is an important basic industry of China's national economy, an important supportfor building a modern and powerful country, and an important area for achieving green and low-carbon development.The global steel market was gloomy, the operating environment of steel industry was severe and the industry level has beendecreasing in 2023. The development trend is largely presented as “huge supply elasticity and slow demand recovery”. The mainforce that engines steel production increase is that steel export increases and the steel demand of domestic manufacturing industrywhile the main reason of decreasing consumption is the shrinking steel demand of construction industry. Although prices of importedore fell year on year, the decreasing extent of steel enterpises’ cost is actually lower than the decreasing amplitude of steel prices.Whole profit of the industry has decreased year on year and performance indicators have been at a low level in recent years.Under the co-effect of “two carbon”target (carbon peaking and carbon neutrality) and economy condition at home and abroad, Steelindustry in China has been under an in-depth Adjustment of supply and demand structure. The year of 2024 is the crucial stage of“the 14th Five Year Plan”as well as the key stage when the Long-Range Objectives through the Year 2035 is being shaped and in themaking. The expected changes in the supply side of steel industry are not obvious and it is expected that there will be mild recoveryon the demand side. “Strong board and long-term weakness (of the stock price)”structure will continue. Meanwhile, under theblueprint of “two carbon”, the domestic steel industry will face a bunch of challenges and opportunities such as “industrialgreenization and premiumisation, procedure intelligentization ”. Steel enterprises nationwide will have to face the co-existence ofthree periods, namely “platform period for supply, adjusting period for demand and differentiation period for profit”. Faced withthese challenges, the iron and steel industry will face necessary adjustments and countermeasures. Enterprises need to pay moreattention to improving technological innovation, reducing production costs, strengthening the development of domestic and foreignmarkets, and seeking new growth points. They should focus on strengthening and deepening the basic business disk on the basis ofscale, consolidate the core competitiveness of products with technological innovation, and accelerate the transformation to high-end, green, efficient and intelligent.
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. Theintroduction of state-of-the-art equipment and technology to implement equipment upgrades for the main iron and steel industryand have built a high-quality steel base, formed more than 60 varieties, more than 7,500 specifications of product series, theproportion of high value-added and high-tech products reached more than 80%. The leading products for automotive surface panels,home appliance panels, petroleum pipeline steel, container panels, shipboard, etc. are widely used in the fields of automobiles, homeappliances, petrochemicals, aerospace, machinery manufacturing, energy and transportation, building decoration and metalproducts, 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 materialprocurement is carried out through centralized procurement, unified bidding, price comparison and negotiation. The procurementof 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
Bengang Steel Plates Co., Ltd. 2023 Annual Report
(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 agreementaccount 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 industrycharacteristics, 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 internationaltrade 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 focused on the construction of world-class enterprises, fully implemented the "7531" strategic objectives of AnsteelGroup and the "1357" work guidelines of Benxi Iron and Steel Group, and after deepening the reform and refining the market, itfurther promoted lean management, extreme efficiency improvement, benchmarking and cost reduction, core brand building andtalent team building, which condensed the powerful energy of all cadres and employees to "lead the new Benxi Iron and Steel andsupport the new Ansteel". Establish an operation and control model based on comprehensive budget and planned valuemanagement, taking benefit as the center, sales as the leader, finance as the core, benchmarking as the starting point, and vigorouslypromoting the "consistent system" management of automobile panels as the guide. Strengthen strategic determination, strengthenthe linkage of "sales, research and production", vigorously promote the "consistent system" management of the whole processquality, take users as the center, meet the needs of users, strengthen the construction of industrial chain ecosystem, build thecompetitiveness of automobile steel brand and enhance the core functions of enterprises. Firmly establish the sense of responsibilityof "seeking benefits from reform and promoting revitalization through reform", adhere to innovation drive, take reform andinnovation as the driving force, create the "source" of original technology, and improve new productivity. Adhere to the strategy of"developing enterprises with talents", take lean management as the starting point, increase the intensity of selecting and educatingpeople, promote the "four-three transformation" mode of organizational performance, and deepen the development of enterpriseswith talent empowerment. Unswervingly take the road of green and low-carbon transformation, promote industrial digitalization,gather transformation power, accelerate the pace of building "A high-quality plate base with international competitiveness led byautomobile plates and a domestic first-class excellent special steel base", and achieve hard-won achievements in production,operation and enterprise reform.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 aninternationally 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, technologicalinnovation, green and intelligent manufacturing, we will innovate management ideas, enhance the core competitiveness ofenterprises, and promote enterprises to achieve high-quality, green and intelligent development.
1. Manufacturing capacities. Adhere to the benefit as the center, strengthen the strategic determination of automobile steel to leadthe development, and adhere to the four-wheel drive of "reform + lean" and "digital + technology" according to the principle of"market first, R&D follow-up and on-site follow-up". Seize the market opportunity, coordinate the production line with the marketefficiently, continuously optimize the product structure, and continuously improve the profitability of the company. Strengthenbenchmarking, reduce costs and continuously improve. Deepen the special work of benchmarking and cost reduction, externally lookfor indicators, methods and differences, internally find problems, potentials and measures, pay attention to all employees,
Bengang Steel Plates Co., Ltd. 2023 Annual Report
foundation and implementation, and strive to outperform the manufacturing cost and processing cost of major products.
2. Equipment transformation and upgrading. In 2023, the company issued a fixed asset investment plan of 1.871 billion yuan. Wehave implemented a new round of large-scale technological transformation and ultra-low emission transformation, represented bykey projects such as the environmental protection transformation of the first coal storage plant, the environmental protectiontransformation of the second coal storage plant, the integrated iron front control of the plate iron making plant, the integratedenergy control of the plate iron making plant, the main transformation project of the cold rolling plant, the new three-time dustremoval system of the 1#2#3#7 converter of the steel plant, and the desulfurization waste liquid of the plate iron making plant. Atpresent, the environmental protection transformation projects of the first coal storage plant and the second coal storage plant havebeen put into operation.
3. New product development capabilities. Successfully developed 41 brands of new products, of which 36 brands were sold in themarket. 2000mm wide and thin tank steel, which is the first in China. Develop galvanized high-strength QP980 + Z, which will addanother member to the third generation automobile steel family of the company. Special steel products represented by 18CrNiMo7-6 fill the blank of Benxi Steel. The hot-dip galvanized dual-phase steel DH780 with reinforced formability was developed, and thelayout of hot-dip galvanized dual-phase steel and derivative products was enlarged. BGJTM800L for 800MPa load-bearing beam isdeveloped to realize batch supply. IS2062 E250A/BR, high-quality coated pipe steel for India, to achieve exclusive domestic supply.The first product was inoculated, and the laboratory research of Delta-TRIP 780 and the industrial trial production of BG650LW rimsteel with high strength and high fatigue performance were completed.
4. Technological innovation ability. We will strengthen school-enterprise cooperation, build a " postgraduate joint trainingdemonstration base " with Northeastern University, innovate a new model of talent training, promote the construction of " digital "R & D and " information intelligence " platform, and provide strong support for the intelligent decision-making of enterprise scientificresearch work. It has signed 21 foreign technical cooperation projects with Dalian University of Technology and Northeast Universityto promote the transplantation of mature scientific and technological achievements of colleges and universities to enterprises. Interms of standards : presided over the completion of 2 national standards, participated in the completion of 1 industry standard, andparticipated in the completion of 3 group standards. Drafting 94 enterprise standards. In terms of intellectual property rights : 353patents were accepted, including 6 overseas patents ; the number of authorized patents is 184, of which 82 are invention patents ;won the honorary title of " National Intellectual Property Demonstration Enterprise. " In terms of scientific and technologicalachievements, it has won 14 awards of scientific and technological progress at or above the provincial and ministerial levels. Amongthem, ' the key technology development and industrialization of the third generation of ultra-high-volume low-temperature and high-pressure pipeline steel ' won the special prize of metallurgical science and technology progress, ' the development of intensive ultra-high-strength galvanized dual-phase steel series products based on pre-oxidation technology ' won the first prize of scientific andtechnological progress in Liaoning Province, ' the key technology and industrialization application of laser welding of ultra-high-strength thin steel plate for automobile ' won the second prize of mechanical industry science and technology, and ' high-quality hot-dip galvanized dual-phase steel ' won the first prize of China Automobile Lightweight Design Competition. The ' Hot Stamping SteelSerialization Product Development ' project was included in the advanced material field of the ' Science and Technology InnovationChina ' series list.
5. Green development ability. According to the national and Liaoning provincial policy requirements for the iron and steel industryand local ultra-low emissions, the Company has the courage to assume social responsibility, relying on professional planning andresearch institutions, the preparation of environmental protection improvement plan and annual implementation plan, through cleanproduction, three waste management, environmental protection management, "AAA" level scenic garden factory construction andother all-round green improvement, to achieve environmental quality community. Strive to achieve ultra-low rank by the end of 2025,and build the company into an "ecological steel mill" that develops in harmony with the city.
6. Intelligent manufacturing capabilities. In 2023, intelligent transformation of plate iron front centralized control, plate energy
Bengang Steel Plates Co., Ltd. 2023 Annual Report
centralized control, plate intelligent material yard construction and so on has been carried out. Keep up with the pace of enterprisedevelopment in the era of big data and achieve high-quality development. Guided by the core indicators of the 14 th Five-Year Plan,we will promote the construction of " four modernizations " indicators such as automation, informatization, digitization, andintelligence. The automatic control rate of the production line in the key areas of the production unit will increase by 30 %, and theconstruction coverage of the production execution system will reach 100 %. The replacement rate of 3D posts, the completion rateof the four modernizations production line and the four chemical plants will increase by 30 %.IV. Management discussion and analysis
1. General
In 2023, the company achieved a comprehensive breakthrough in production record for the first time, and the pig iron costoutperformed the industry. The annual pig iron output was 10.412 million tons, an increase of 409,200 tons year-on-year, breakingthe historical record; The output of crude steel was 11.281 million tons, an increase of 729,000 tons year-on-year, breaking thehistorical record; The output of hot rolled plates was 10.42 million tons, an increase of 657,400 tons year-on-year, breaking thehistorical record; The output of cold rolled plate is 5.381 million tons, and the output of special steel is 511,600 tons. Realizedoperating income of 57.8 billion yuan. Looking back at the whole year's work, it is mainly reflected in the following aspects:
I. Create new performance of production and operation with the goal of extreme efficiency. The Company has built a full-processpull-type production mode, with the ultimate efficiency as the goal, make up for the shortcomings, and comprehensively build a clearinterface and clear process operation control platform. The output of iron, steel and materials has reached new highs. Eachproduction line has repeatedly refreshed Nissan and monthly production records throughout the year. The annual cumulative powergeneration was 3.342 billion kWh, a record high.
II.Reduce costs and create efficiency as the goal, deepen the system potential. Explore and construct a new model of ' wholeprocess, whole level and whole industry chain ' benchmarking management. Operating cash flow is effectively guaranteed, adhereto the preferential policies of taxes and fees, and benefit the dividends of enterprises. Set up energy development branch, with thehelp of waste heat, residual pressure power generation, heating, enjoy tax rebates ; actively strive for government special funds.Promote the compliance disposal of idle assets. Relying on the data collection advantages of the financial integration accountingsystem, we will promote the synergy of tax policy efficiency and cost expenditure control.
III.Serve customers as the center, brand building has made new progress. Fully implement the quality of Benxi Iron and Steel,service ' seven iron law ', in order to improve the brand market share as the goal, enhance the user experience as the criterion, toserve customers as the center, to meet the needs of users, brand building has made new progress ; establish a regular visit mechanismfor the main engine factory, and the production and sales of automobile steel have reached a record high. The sales volume ofautomobile steel in the whole year has reached 2.6839 million tons. Focusing on the supply guarantee of the main engine factory,strengthening the supporting role of logistics, shortening the water transportation time of automobile steel, and creating the bestlevel in history. The contract delivery rate of the OEM increased by 13 % year-on-year.
IV.Reform and innovation as the driving force, continue to enhance the competitiveness of enterprises. We will fully implementmeasures such as professional integration, separation of main and auxiliary, and performance of all staff positions, with reform andinnovation as the driving force to release our inherent potential. Adhere to the cultivation of innovative culture, won eight awards atthe above level of Ansteel, and achieved new breakthroughs in the award level of scientific and technological innovationachievements. Adhering to the guidance of scientific and technological innovation, the third generation of galvanized high strengthsteel QP980 + Z, hot-dip galvanized reinforced formability dual phase steel DH780 and wind power gear steel 18CrNiMo7-6 filled thegap of this steel. BG650LW steel for high strength and high fatigue rim was successfully trial-produced in France, which realized thefirst production of wide and thin tank steel in China. In the whole year, 26 new products were successfully developed and 24 weresold in the market. Benxi Iron and Steel Group Co., Ltd.successfully entered the list of " double hundred enterprises " in the reform
Bengang Steel Plates Co., Ltd. 2023 Annual Report
of state-owned enterprises by the State-owned Assets Supervision and Administration Commission of the State Council in 2023,successfully selected as " quality benchmark enterprises in Liaoning Province, " obtained the certification of high-tech enterprises,and the benchmark demonstration effect continued to increase. Benxi Steel Plates Co., Ltd. won the honor of " National IntellectualProperty Demonstration Enterprise " and achieved " zero breakthrough. "V. Taking the construction of world-class enterprises as the priority, new breakthroughs have been made in the high-qualitydevelopment of enterprises. Establish a lean management promotion model, take project implementation as the carrier, take theconstruction of world-class enterprises as the priority, gather the transformation power, take benchmark cultivation as the startingpoint, instant reward as the guarantee, and benefit improvement as the goal, encourage full participation and independentimprovement, promote the model innovation of lean education, and achieve new breakthroughs in high-quality development.Unswervingly take the road of green and low-carbon transformation, 32 ultra-low emission projects are put into operation onschedule. Promote the construction of ' garden-style ' factories, win the national ' AAA ' tourist attractions in advance and open theoperation. Strengthen the management and control of key energy-saving projects, and the comprehensive energy consumption perton of steel hit a record low. Promote the life cycle assessment of automotive steel products, promote industrial digitization, energycentralized control, three cold centralized control, iron front centralized control and intelligent material yard put into operation,create efficiency optimization.
2. Income and cost
(1) Breakdown of operating income
Unit: RMB
| FY2023 | FY2022 | Change over last year | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating income | 57,814,969,351.65 | 100% | 62,616,621,627.60 | 100% | -7.67% |
| By Industries | |||||
| Industry | 57,814,969,351.65 | 100.00% | 62,616,621,627.60 | 100.00% | -7.67% |
| By products | |||||
| Steel plate | 55,846,805,275.80 | 96.60% | 59,395,642,984.38 | 94.86% | 1.74% |
| Others | 1,968,164,075.85 | 3.40% | 3,220,978,643.22 | 5.14% | -1.74% |
| By regions | |||||
| Northeast | 20,691,986,568.44 | 35.79% | 23,156,472,367.43 | 36.98% | -10.64% |
| North China | 2,376,195,240.35 | 4.11% | 2,727,436,320.34 | 4.36% | -12.88% |
| East China | 24,871,999,815.08 | 43.02% | 28,747,114,756.97 | 45.91% | -13.48% |
| Northwest | 52,033,472.42 | 0.09% | 49,874,139.13 | 0.08% | 4.33% |
| Southwest | 2,341,506,258.74 | 4.05% | 2,903,291,017.72 | 4.64% | -19.35% |
| Central south | 7,481,247,996.62 | 12.94% | 5,032,433,026.01 | 8.04% | 48.66% |
| By sales model | |||||
| Sales in domestic market | 50,333,721,355.03 | 87.06% | 57,584,188,601.59 | 91.96% | -12.59% |
| Sales in export market | 7,481,247,996.62 | 12.94% | 5,032,433,026.01 | 8.04% | 48.66% |
(2) Industry, product and regions accounting for the Company’s operating income or profit over 10%?Applicable □Not applicableUnit: RMB
| Operating income | Operating costs | Gross margin | Operating income change over last year | Operating costs change over last year | Gross margin changes over last year |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| By industries | ||||||
| Industry | 57,814,969,351.65 | 58,326,286,006.53 | -0.88% | -7.67% | -6.32% | -1.45% |
| By products | ||||||
| Steel plate | 55,846,805,275.80 | 56,022,475,742.99 | -0.31% | -5.97% | -5.22% | -0.79% |
| Others | 1,968,164,075.85 | 2,303,810,263.54 | -17.05% | -38.90% | -26.83% | -19.30% |
| By regions | ||||||
| Northeast | 20,691,986,568.44 | 20,951,715,682.17 | -1.26% | -10.64% | -9.03% | -1.80% |
| North China | 2,376,195,240.35 | 2,394,016,704.65 | -0.75% | -12.88% | -11.74% | -1.29% |
| East China | 24,871,999,815.08 | 25,115,496,693.27 | -0.98% | -13.48% | -12.16% | -1.52% |
| Northwest | 52,033,472.42 | 52,465,350.24 | -0.83% | 4.33% | 5.69% | -1.30% |
| Southwest | 2,341,506,258.74 | 2,361,268,571.56 | -0.84% | -19.35% | -18.07% | -1.58% |
| Central south | 7,481,247,996.62 | 7,451,323,004.63 | 0.40% | 48.66% | 49.25% | -0.39% |
| By sales model | ||||||
| Sales in domestic market | 50,333,721,355.03 | 57,266,707,304.14 | -13.77% | -12.59% | 0.00% | -14.32% |
| Sales in export market | 7,481,247,996.62 | 4,992,627,550.58 | 33.26% | 48.66% | 0.00% | 32.47% |
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's mainbusiness 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 | FY2023 | FY2022 | Change over last year |
| Steel rolling processing industry | Sales | ton | 13,969,225.21 | 14,022,304.90 | -0.38% |
| Production | ton | 13,906,372.52 | 13,892,713.60 | 0.10% | |
| Inventory | ton | 409,472.24 | 472,324.93 | -13.31% | |
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 classificationIndustry classificationUnit: RMB
| Industry classification | Item | FY2023 | FY2022 | Change over last year | ||
| Amount | Proportion | Amount | Proportion | |||
| Steel rolling | Raw material | 29,581,611,202 | 50.72% | 32,656,346,258 | 52.45% | -1.73% |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| processing industry | .59 | .98 | ||||
| Steel rolling processing industry | Supplementary materials | 2,302,602,411.33 | 3.95% | 2,471,539,945.40 | 3.97% | -0.02% |
| Steel rolling processing industry | Spare parts and tools | 634,076,720.43 | 1.09% | 664,918,489.57 | 1.07% | 0.02% |
| Steel rolling processing industry | Fuel | 19,077,855,313.66 | 32.71% | 19,516,799,781.80 | 31.35% | 1.36% |
| Steel rolling processing industry | Energy | 2,474,454,980.42 | 4.24% | 2,654,880,861.12 | 4.26% | -0.02% |
| Steel rolling processing industry | Salary and benefits | 2,156,978,343.86 | 3.70% | 1,890,550,009.31 | 3.04% | 0.66% |
| Steel rolling processing industry | Depreciation | 1,628,409,626.63 | 2.79% | 1,941,797,897.36 | 3.12% | -0.33% |
| Steel rolling processing industry | Others | 470,297,407.61 | 0.81% | 462,501,611.18 | 0.74% | 0.07% |
| Steel rolling processing industry | Total | 58,326,286,006.53 | 100.00% | 62,259,334,854.72 | 100.00% | 0.00% |
Introduction:
None
(6) Whether changes occurred in consolidation scope in the reporting period
□Yes ?No
(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) | 9,998,697,001.58 |
| Total sales amount of the top five customers accounted for the proportion of total annual sales | 17.29% |
| The proportion of the total sales of the related parties in the top five customers | 6.80% |
Information on the top 5 customers
| No. | Name | Amount (RMB) | Proportion |
| 1 | North Hengda Logistics Co., Ltd. | 3,931,414,139.80 | 6.80% |
| 2 | SINO-ORDINS (SHANGHAI) Co., Ltd. | 1,991,253,986.40 | 3.44% |
| 3 | Hailian Jinhui Technology Co., Ltd. | 1,745,490,675.75 | 3.02% |
| 4 | Ningbo AUX Trade Co., Ltd. | 1,342,906,969.49 | 2.32% |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 5 | Shanghai Ouyeel Supply Chain Co., Ltd. | 987,631,230.14 | 1.71% |
| Total | -- | 9,998,697,001.58 | 17.29% |
Other information about principal customers
□Applicable ?Not applicable
Information on the Company’s main suppliers
| Total purchase amount of the top five suppliers (RMB) | 24,171,827,486.11 |
| Total purchase amount of the top five suppliers accounted for the proportion of total purchase | 41.44% |
| The proportion of the total purchase of the related parties in the top five suppliers | 30.32% |
Information on the top 5 suppliers
| No. | Name | Amount (RMB) | Proportion |
| 1 | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 11,588,576,048.68 | 19.87% |
| 2 | Benxi Steel & Iron (Group) Mining Co., Ltd. | 6,097,885,650.06 | 10.45% |
| 3 | Heilongjiang Dragon Coal Group Co., Ltd. | 2,762,493,436.20 | 4.74% |
| 4 | Liaoning Electric Power Co., Ltd. Benxi Electric Power Supply Company | 2,272,935,877.08 | 3.90% |
| 5 | Shanxi Coking Coal Group Co.,Ltd. | 1,449,936,474.09 | 2.49% |
| Total | -- | 24,171,827,486.11 | 41.44% |
Other information about principal suppliers
□Applicable ?Not applicable
3. Expenses
Unit: RMB
| FY2023 | FY2022 | Change over last year | Notes to significant change | |
| Selling and distribution expenses | 159,034,136.51 | 128,489,696.80 | 23.77% | |
| General and administrative expenses | 601,859,503.43 | 663,080,654.45 | -9.23% | |
| Financial expenses | 309,298,938.97 | 523,070,165.35 | -40.87% | Affected by the decrease in financial expenses and exchange gains during the year |
| Research and development expenses | 81,247,560.73 | 58,088,008.14 | 39.87% | Affected by the increase in research and development expenditure this year |
4. Research and development input
?Applicable □Not applicable
| Main R&D project | Project purpose | Project progress | Intended goal | Expected impact on the |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| name | future development of the Company | |||
| Research on preparation technology of high strength and high reactivity coke for hydrogen-rich smelting of blast furnace | In terms of the current development trend of the iron and steel industry, the long process smelting process will not be replaced in a short time. In order to achieve the goal of carbon peak and carbon neutralization, it is important to study how to reduce the carbon reduction technology of blast furnace fuel ratio to promote the low carbonization and high efficiency of blast furnace iron making. Therefore, it is of great significance for the sustainable development of coal industry and iron and steel industry to study the method of using high reactivity and high strength coke to partially replace traditional coke and reduce the coke ratio by reducing the temperature of heat reserve area. | The researches show that with the increase of CaO and MgO content in coal, the catalytic effect of coke solution loss reaction is obvious, but the strength after reaction shows a decreasing trend. When the content of CaO is more than 0.2 %, the CSR of coke after reaction decreases by 16 %. At the same time, the microscopic strength and structural strength of coke were studied. ( 2 ) According to the follow-up project research plan, it is proposed to appropriately add binders to the coking coal with CaO and MgO to strengthen the coking experiment of coke strength after reaction, so as to improve the coke reactivity and improve the coke strength after reaction by adding binder reinforcement. | (1) In view of the systematic research on the coal quality characteristics and coking characteristics of coking coal in Benxi Iron and Steel Co., Ltd., taking the basic blended coal of Benxi Iron and Steel Co., Ltd.as the raw material, the coke reactivity CRI is increased by 1～3 percentage points under the condition that the CSR of coke after reaction is basically the same as that of coke prepared by basic blended coal. When the CSR of the prepared coke is 2 percentage points lower than that of the base coke, the CRI of the coke reactivity is increased by 4～5 percentage points. (2) On the basis of ensuring that the cold strength M40 and hot strength CSR of coke are basically stable on the basis of coke made by the basic coal blending institute, the need to reduce a certain amount of CO2 emission by the existing blast furnace every year is met. | On the basis of ensuring that the coke has a certain CSR and M40 strength. When the coke CRI index is appropriately increased, the blast furnace can maintain a high utilization coefficient, and at the same time achieve the purpose of carbon reduction, which plays a positive role in the company 's realization of carbon emission targets. |
| Development and Application of Slow Cooling Process for High Strength Steel Coil Based on 2300 Hot Rolling Mill | By studying the requirements of different high strength steel varieties, specifications, uses and ambient temperature for slow cooling process, combined with the construction of slow cooling equipment of 2300 hot rolling mill, a set of feasible and efficient slow cooling process | The slow cooling experiments of cold rolled high strength steel PHS2000, TRIP780 and DP780 at 700 ~ 500 °C for 20 ~ 240 minutes have been completed, and the corresponding performance change rules have been obtained. The industrial test scheme is being drafted in | (1) The slow cooling process of hot rolled ( pickling ) high strength steel coil above500MPa was established. (2) The slow cooling process of hot rolled raw material coils of cold rolled high strength steel represented by PHS1500, PHS2000, | A set of feasible and efficient slow cooling process of hot rolled coil is established to solve the key common problems such as uneven through coil performance, poor shape and large deviation of cold rolling force caused by too fast cooling rate of hot rolled coil, and to break through the bottleneck |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| for hot rolled steel coils is established. | combination with the project progress. | DP980 and QP980 was established. | restricting the quality improvement of high strength steel in Benxi Iron and Steel Co., Ltd. | |
| Research and development of 780 MPa grade hot rolled pickling steel with high hole expansion | The 440 MPa, 540 MPa, 580 MPa grade high reaming hot rolled pickling plate has been successfully developed, and the batch stable supply has been realized. The research and development of 780 MPa grade high reaming steel is helpful to narrow the gap with advanced enterprises, improve product serialization and improve the profitability of enterprises. | The fundamental theoretical research is completed, and the first production trial is completed in combination with similar contracts. The mechanical properties basically meet the requirements of relevant standards. At present, the market promotion is being carried out, and the production trial is planned to be carried out in combination with the special contract review FB780 contract. | The mechanical properties fulfill: 600MPa ≤ ReL ( or Rp0.2 ) ≤ 760MPa, 780MPa ≤ Rm ≤ 900MPa, A80 % ≥ 12 %, reaming rate ≥ 50 %. | 780 MPa steel products are widely used in automotive safety structural parts. With high strength and high flanging forming performance, 780 MPa products have the processing and forming of more parts. There is a lot of demand in the market, which can improve the profitability and social influence of enterprises. |
| Research on fatigue performance control technology and mechanism of 650MPa high strength and high fatigue performance wheel rim steel | Through the reasonable addition of alloying elements and the improvement of the control precision of chemical composition in steelmaking, the technology of controlled rolling and controlled cooling is redesigned to make the thin material obtain the required high strength performance, so as to achieve the purpose of reducing the weight of wheel rim. | The laboratory research and industrial trial production of BG650 LW have been completed, the batch stable supply has been realized, and the relevant certification has been completed. At present, the cumulative supply is about 500 tons. | The yield strength of BG650LW product is ≥ 500MPa, the tensile strength is ≥ 650MPa and the elongation is ≥ 15 %. Fatigue performance ≥ 1.5 million times. | The successful development of BG650 LW hot rolled wheel steel can not only create considerable economic benefits for Benxi Steel, but also provide conditions for the upgrading of wheel products, energy saving and consumption reduction, national safety production and environmental protection. |
Information on research and development personnel by the Company
| FY2023 | FY2022 | Change over last year | |
| Number of research and development staff | 1,456 | 1,601 | -9.06% |
| Proportion of number of research and development staff | 10.12% | 10.83% | -0.71% |
| Educational structure of research and development staff | |||
| Bachelor | 1,090 | 1,158 | -5.87% |
| Master's degree | 152 | 164 | -7.31% |
| Age composition of research and development staff | |||
| Under the age of 30 | 75 | 82 | -8.53% |
| 30 to 40 years old | 452 | 471 | -4.03% |
Information on research and development input by the Company
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| FY2023 | FY2022 | Change over last year | |
| Amount of research and development investment (RMB) | 1,763,356,565.00 | 1,923,920,000.00 | -8.35% |
| Proportion of research and development investment to operating income | 3.05% | 3.07% | -0.02% |
| Amount of capitalized research and development investment | 0.00 | 0.00 | 0.00% |
| Proportion of capitalized research and development investment accounted to total research and development investment | 0.00% | 0.00% | 0.00% |
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 | FY2023 | FY2022 | Change over last year |
| Subtotal of cash inflows from operating activities | 55,274,413,040.41 | 51,680,631,749.58 | 6.95% |
| Subtotal of cash outflows from operating activities | 50,945,061,782.11 | 50,404,268,784.02 | 1.07% |
| Net cash flows from operating activities | 4,329,351,258.30 | 1,276,362,965.56 | 239.19% |
| Subtotal of cash inflows from investing activities | 87,797,599.66 | 145,128,645.47 | -39.50% |
| Subtotal of cash outflows from investing activities | 993,323,275.09 | 1,707,467,068.85 | -41.82% |
| Net cash flows from investing activities | -905,525,675.43 | -1,562,338,423.38 | -38.58% |
| Subtotal of cash inflows from financing activities | 2,698,377,111.10 | 4,759,751,595.78 | -43.31% |
| Subtotal of cash outflows from financing activities | 6,267,561,866.24 | 9,497,398,695.88 | -34.01% |
| Net cash flows from financing activities | -3,569,184,755.14 | -4,737,647,100.10 | -24.66% |
| Net increase in cash and cash equivalents | -111,887,711.68 | -5,002,436,380.28 | -97.76% |
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 239.19% compared with the previous period, mainly dueto the increase in the proportion of cash remittances of sales refunds in the current period.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
(2) The subtotal cash inflow from investing activities decreased by 39.5% compared with the previous period,mainly due to the reduction of the income of the disposal sub-enterprises in the current period compared withthe previous period.
(3) The subtotal of cash outflow from investing activities decreased by 41.82% compared with the previous period,which was mainly due to the decrease in the proportion of spot exchange of fixed assets purchased and built inthe current period.
(4) Net cash flow from investing activities decreased by 38.58% compared with the previous period, mainly dueto the reduction of the disposal of subsidiary enterprises ' income and the reduction of the proportion of fixedassets in the current period compared with the previous period.
(5) The subtotal of cash inflow from financing activities decreased by 43.31% 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 34.01% compared with the previous period,mainly due to the decrease in repayment of loans and interest on loans, and the decrease in restricted monetaryfunds in the current period.
(7) Net increase in cash and cash equivalents increased by 70.71% compared with the previous period, mainly dueto 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 applicableUnit: RMB
| Amount | Proportion of total profit | Reason for formation | Whether it is sustainable or not | |
| Investment Income | -2,827,424.32 | 0.18% | Investment income from disposal of long-term equity investments | No |
| Asset impairment | -35,339,403.25 | 2.24% | Due to the increase in the provision for inventory impairment | No |
| Non-operating income | 43,395,135.36 | -2.75% | Due to the income from disposal of non-current assets | No |
| Non-operating expenses | 95,059,082.07 | -6.03% | Due to the disposal of assets in the current period | No |
VI. Analysis of assets and liabilities
1. Significant change of assets components
Unit: RMB
| Ending balance of 2023 | Beginning balance of 2023 | Proportion change | Notes to significant change | |||
| Amount | Proportion in the total assets (%) | Amount | Proportion in the total assets (%) | |||
| Cash and cash | 2,194,654,161. | 4.74% | 1,461,145,641. | 3.29% | 1.45% | |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| equivalents | 34 | 87 | ||||
| Accounts receivable | 1,328,532,598.47 | 2.87% | 897,230,896.06 | 2.02% | 0.85% | |
| Contract assets | 0.00% | |||||
| Inventory | 7,708,372,894.81 | 16.67% | 8,463,728,475.18 | 19.04% | -2.37% | |
| Investment properties | 0.00% | |||||
| Long-term equity investments | 46,910,346.41 | 0.10% | 51,030,777.18 | 0.11% | -0.01% | |
| Fixed assets | 25,028,192,964.67 | 54.11% | 24,836,556,422.90 | 55.86% | -1.75% | |
| Construction in progress | 4,308,404,147.31 | 9.31% | 3,158,195,899.65 | 7.10% | 2.21% | |
| Right-of-use assets | 1,319,616,179.37 | 2.85% | 1,379,990,713.89 | 3.10% | -0.25% | |
| Short-term loans | 328,000,000.00 | 0.71% | 49,200,000.00 | 0.11% | 0.60% | |
| Contract liabilities | 3,303,108,592.38 | 7.14% | 3,794,115,592.29 | 8.53% | -1.39% | |
| Long-term borrowings | 1,723,726,700.80 | 3.73% | 1,726,938,302.30 | 3.88% | -0.15% | |
| Lease liabilities | 1,342,427,252.45 | 2.90% | 1,384,348,462.18 | 3.11% | -0.21% |
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 | The end of the period | |
| Book balance | Restricted reasons | |
| Cash and cash equivalents | 1,009,879,189.82 | Margin on bills, Letter of credit margin |
| Notes receivable | 218,427,117.76 | Pledge |
| Total | 1,228,306,307.58 | |
VII. Analysis of the investment situation
1. General
□Applicable ?Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
2. Acquiring significant equity investment in the reporting period
□Applicable ?Not applicable
3. Undergoing significant non-equity investment in the reporting period
□Applicable ?Not applicable
4. Investment of financial assets
(1) Investment in securities
□Applicable ?Not applicable
There was no investment in securities during the reporting period.
(2) Investment in derivatives
□Applicable ?Not applicable
There was no investment in derivatives during the reporting period.
5. Use of raised funds
?Applicable □Not applicable
(1) Use of raised funds
?Applicable □Not applicableUnit: RMB 10,000
| Year | Method of raising funds | Total amount of raised funds | Net amount of fund raised | Used amount of raised fund this period | The total used amount of funds raised | The total amount of funds raised for change of purpose during the reporting period | Cumulative total amount of funds raised for change of purpose | Cumulative proportion of total raised funds for changes of purposes | The total amount of funds raised not used | The purpose and destination of the raised funds not yet used | Amount of funds raised after being idle for more than two years |
| 2018 | Private placement to raise funds | 400,000 | 396,580 | 0 | 396,580 | 0 | Not applicable | ||||
| 2020 | Issue of convertible | 680,000 | 675,920 | 2,963.82 | 426,640.28 | 249,279.72 | Deposit | 101,479 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| bonds | |||||||||||
| Total | -- | 1,080,000 | 1,072,500 | 2,963.82 | 823,220.28 | 0 | 0 | 0.00% | 249,279.72 | -- | 101,479 |
| Description of the overall use of raised funds | |||||||||||
| (I) Status of use of funds for investment projects with raised funds Details of the actual use of proceeds in FY2023 of the Company are set out in (2) Details of raised fund commitment projects. (II) 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. (III) 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 1,822,749,211.07, including RMB 1,484,133,089.39 for the cold-rolled high-strength steel reconstruction project and RMB 338,616,121.68 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 88,296,207.56 for the construction of projects with self-raised funds, of which RMB 86,709,830.40 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 1,586,377.16 (not yet replaced from the special account of raised funds). The Company transferred RMB 86,709,830.40 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 62,608,242.01 for the construction of the project with self-raised funds, of which RMB 50,391,999.49 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 12,216,242.52. 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 37,435,207.38 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. During the period from January 1st ,2023 to December 31st ,2023, the construction amount of the fund-raising investment project raised for the company by self-financing payment was 21,092,488.80 RMB, all of which were used for the construction of cold-rolled high-strength steel transformation project. As of December 31st , 2023, the above amount was transferred from the fundraising account to the general deposit account. 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 366,180,860.17. 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 | |||||||||||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
balance on the day the fund is transferred out ) will permanently supplement the working capital.
2. Purpose and whereabouts of unused raised funds for public offering of convertible corporate bonds
As of December 31
st, 2023, in addition to the above-mentioned "(III) Preliminary investment and replacement of raised fundsinvestment projects", and "(IV) 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 aretemporarily deposited in a special account for raised funds.
(IX) Other information on the use of raised funds
There were no other situations about the use of raised funds of the Company.
(2) Fundraising commitments
?Applicable □Not applicableUnit: RMB 10,000
| Commitment to investment projects and over-raised funds | Whether the item has been changed (including some changes) | Total committed investment of raised funds | Adjusted total investment (1) | Amount invested during the reporting period | Cumulative investment amount by the end of the period (2) | Investment progress by the end of the period (3) = (2)/ (1) | Item reaches scheduled availability date | Benefits realized during the reporting period | Whether the expected benefit is achieved | Has the project feasibilit y changed significa ntly |
| Commitment to Investment Projects | ||||||||||
| Cold-rolled high-strength steel renovation project | No | 226,580 | 226,580 | 197,212.39 | 87.04% | 2017年12月31日 | 9,267.53 | No | No | |
| Hot-dip galvanizing production line project of the third cold rolling plant | No | 70,000 | 70,000 | 41,514.24 | 59.31% | 2018年12月31日 | 8,826.38 | Yes | No | |
| Repay bank loan | No | 100,000 | 100,000 | 100,000 | 100.00% | Not applicable | No | |||
| High grade high magnetic induction non-oriented silicon | No | 101,620 | 101,620 | 0 | 141 | 0.14% | Not applicable | No | ||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| steel engineering project | ||||||||||
| Steel Plant No. 8 Casting Machine Project | No | 33,500 | 33,500 | 1,185.02 | 18,833.93 | 56.00% | October 31st , 2020 | -11,455.37 | No | No |
| No. 5 blast furnace capacity replacement project in ironworks | No | 96,000 | 96,000 | 136.1 | 78,635.33 | 100.00% | November 30th, 2020 | -1,409.69 | No | No |
| Special Steel Electric Furnace Upgrade and Reconstruction Project | No | 141,600 | 141,600 | 1,181.44 | 80,086.09 | 57.00% | Not applicable | No | ||
| CCPP power generation project | No | 83,300 | 83,300 | 277.12 | 40,714.14 | 49.00% | December 31st, 2022 | 27,038.17 | Yes | No |
| Environmental protection renovation project of converter No. 4-6 in steelmaking plant | No | 19,900 | 19,900 | 184.14 | 8,229.8 | 41.00% | Not applicable | No | ||
| Repay bank loan | No | 200,000 | 200,000 | 0 | 200,000 | 100.00% | Not applicable | No | ||
| Subtotal of Committed Investment Projects | -- | 1,072,500 | 1,072,500 | 2,963.82 | 765,366.92 | -- | -- | 32,267.02 | -- | -- |
| Over-raised funds are invested in | Over-raised funds are invested in | |||||||||
| None | ||||||||||
| Total | -- | 1,072,500 | 1,072,500 | 2,963.82 | 765,366.92 | -- | -- | 32,267.02 | -- | -- |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Explanation by project, the situation and reasons for not reaching the planned progress and expected benefits (including the reasons for selecting "Not applicable" for "Whether to achieve the expected benefits") | The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project and the hot-dip galvanizing production line project of the third cold-rolling plant have reached their production capacity.The high-grade high-magnetic-induction non-oriented silicon steel project is greatly affected by market factors, and the development strategy is adjusted to continuously track market changes. |
| Status of the description of material changes in project feasibility | None |
| Status of amount, purpose and progress of use of over-raised funds | Not applicable |
| Status of changes in implementation locations of raised funds investment | Not applicable |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| projects | |
| Status of adjustment of the implementation method of raised funds for investment projects | Not applicable |
| Status of preliminary investment and replacement of raised funds for investment projects | Applicable |
| For details, please refer to the special report III. (4) | |
| Status of temporary replenishment of working capital with idle raised funds | Applicable |
| For details, please refer to the special report III. (4) | |
| Reasons and amount for the balance of raised funds in project implementation | Applicable |
| In 2018, the non-public offering stock offering project closed and the savings raised RMB 561.4123 million ( the specific amount is based on the balance of the bank balance on the day of the transfer of funds ) to permanently supplement the liquidity. The main reasons for the balance of the raised funds : in the process of implementing the raised funds investment project construction, the company strictly follows the relevant provisions on the use of the raised funds, starts from the actual situation of the project, and does not affect the smooth implementation of the raised funds investment project. Under the premise of completion, in line with the principles of rationality, economy and effectiveness, the Company carefully uses the raised funds, strengthens the control, supervision and management of each link cost, and reasonably saves the project construction cost. In order to improve the efficiency of the use of raised funds, under the premise of ensuring that it does not affect the construction of investment projects and the safety of raised funds, the Company has obtained certain investment income by using some temporarily idle raised funds for cash management. At the same time, a certain amount of deposit interest income has also been generated during the storage of raised funds. | |
| Use and whereabouts of unused raised funds | Unused raised funds are deposited in the special account of raised funds. |
| Problems or other situations | There is no problem otherwise |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
in the useanddisclosureof raisedfunds
(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.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
2. Substantial equity sold
?Applicable □Not applicableIX. Analysis on main subsidiaries and share participating companies?Applicable □Not applicableMain subsidiaries and the joint-stock companies influencing over 10% net profit of the CompanyUnit: RMB
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net Profit |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | Subsidiary | Processing and sales of steel | 1,920,000,000 | 4,273,687,500.63 | 2,304,357,344.37 | 8,939,304,737.19 | 325,328,064.39 | 273,163,973.25 |
Acquirement and disposal of subsidiaries during the reporting period?Applicable □Not applicable
| Company name | Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production operations and results |
| Zhejiang Jingrui Steel Processing Co., Ltd. | Equity transfer | Non-important shareholding subsidiary and it has no significant impact on the company 's production and operation and performance. |
Illustration of major holding and equity participation companies
The Company transferred the 20 % equity transfer of Zhejiang Jingrui Steel Processing Co., Ltd., a subsidiary of the company onFebruary 28
th
, and completed the change of industry and commerce on March 6
th. At present, the company no longer holds theequity of Zhejiang Jingrui Steel Processing Co., Ltd., this transfer did not have a greater impact on the Company.X. Structure entities controlled by the Company
□Applicable ?Not applicable
XI. Prospect for future development of the Company
(I) The development trend of the industry and the market competition pattern the Company faces
The year of 2024 is a key year to implement the spirit of the 20th National Congress of the Communist Party of China andpromote the implementation of the 14th Five-Year Plan. It is also an important year for Benxi Iron and Steel Plate to deepen reform,strengthen chain, upgrade and improve core competitiveness. At present, the steel industry has entered a critical period of high-quality development. Green low-carbon and intelligent manufacturing have brought more severe challenges and disruptive changes.The industry's consumer demand is insufficient, corporate profits continue to decline, and market uncertainty factors increase. Weshould not only face up to the difficulties, but also be confident. The Central Economic Work Conference pointed out that it isnecessary to fully optimize the policy mix, effectively guide market expectations, and stabilize market confidence. As a listed companydominated by high-quality plate in Ansteel Group, we shall move towards the goal of “first parade” of domestic automobile steel,
Bengang Steel Plates Co., Ltd. 2023 Annual Report
further optimize and strengthen the brand of automobile steel, and enhance the influence of core products and the profitability ofenterprises.(II) Company development strategyGeneral policy of production and management and instructive guiding thought for work in 2024 of the Company: :Take XiJinping Thoughts on Socialism with Chinese Characteristics in the New Era as the guiding principle, study and implement the spiritof the 20th Party Congress and The Second Plenary Session of the 20th Central Committee. Uphold the principle of innovation,maintain strategic concentration, take high-quality development as the primary task, and play a good role as the vanguard andmain force in building a new development pattern of “Reform + Lean” and “Digital + Technology” .(III) Business planIn 2023, the production and operation target: strive to complete 10.33 million tons of pig iron, 11.15 million tons of crude steel,
10.46 million tons of hot-rolled plate, 6.66 million tons of cold-rolled plate and 458,000 tons of special steel to realize safetyproduction target of “Three Zeroes”(Zero responsible accident, Zero personal injury and Zero damage to the environment).In order to implement the above overall work concept and production and management objectives, we focus our efforts on thefollowing aspects:
First, adhere to the bottom line thinking, and strive to prevent and resolve the four risks.Second, adhere to the overall coordination of production and marketing, and focus on optimizing and adjusting the threestructures.Third, adhere to cost control, focus on compaction pressure drop process costs.Fourth, adhere to the efficient operation, and strive to continuously improve the eight efficiency.Fifth, adhere to the people 's position, and strive to do a good job in people 's livelihood projects.(IV) Maintain the current business and complete the funding arrangements required for the investmentprojects under constructionThe Company will use its own funds and bank loans to meet the funds required for production and operation and technologicaltransformation.(V) Possible risks
1. Risks of macroeconomic policies
The Russian-Ukrainian war and the Palestinian-Israeli Conflict are continuing, the century-old changes accelerated, and the worldeconomic recovery was weak. The foundation of China 's economic recovery is not yet solid. Economic development is facing thetriple pressure of demand contraction, supply shock and expectation weakening. The external export environment is severe and thedownward pressure on the economy is increasing. The downstream demand of the domestic steel industry is generally weak, andthe market pattern of supply exceeding demand has not changed fundamentally. The optimization and adjustment of domestic steellayout has accelerated, and the strategic restructuring of iron and steel enterprises has continued to advance. Changes in macropolicies such as domestic steady growth finance and finance will bring many uncertainties to the development of the steel industry.Countermeasures : First, strengthen the research on national fiscal, financial and industrial policies, fully, accurately andcomprehensively implement the new development concept, and continuously improve the forward-looking and effectiveness ofpolicy research ; the second is to seize the development opportunities of macro policy adjustment, optimize and adjust strategic
Bengang Steel Plates Co., Ltd. 2023 Annual Report
planning in time, focus on key areas such as safety, green, high efficiency, intelligence and quality, adhere to the ultimate thinking,deepen lean operation, accelerate the transformation of old and new kinetic energy, actively promote green low-carbontransformation and upgrading, create more comparative advantages, continuously improve core competitiveness, and strive toachieve high-quality development of the Company.
2. Raw fuel prices and supply risks
The global iron ore supply monopoly situation is difficult to change in the short term, the domestic iron ore demand is highlydependent on foreign countries, the short board of strategic resources such as coal and coke is obvious, the implementation time ofthe " cornerstone plan " of China 's iron and steel industry is short, and the independent control ability of the supply chain of the ironand steel industry chain is weak. The financial attributes of black resources of ore and coal char are enhanced, and speculation offloating capital at home and abroad is frequent. The energy-saving and emission reduction policies continue to deepen, and theproduction capacity of upstream coal char enterprises is limited. Various internal and external factors lead to frequent fluctuationsin raw fuel prices, and the risk of raw fuel prices and safe supply increases.Countermeasures : First, adhere to the ' predictive ' business procurement concept, strengthen the analysis and judgment of raw fuelsupply and market demand, build a raw fuel procurement model, scientifically control the procurement timing, and adjust theprocurement strategy in a timely manner ; the second is to strengthen the strategic cooperation of raw fuel supply, consolidate andexpand domestic raw fuel procurement channels, deeply aggregate raw fuel resources, accelerate the formation of domestic andforeign dual-cycle supply chain security guarantee pattern, and enhance the price advantage of scale procurement ; the third is tooptimize the production burden structure, adjust the raw fuel procurement structure, reasonably control the raw fuel inventory,effectively reduce the adverse effects of raw fuel price fluctuations, and minimize the cost of raw fuel.
3. Environmental protection risks
With the continuous strengthening of the state 's environmental protection efforts and the promotion of “carbon peak, carbonneutralization”, the environmental protection department continues to increase the supervision of the pollution control of the ironand steel industry, the environmental protection investment and operation cost of the iron and steel enterprises will increase, andthe iron and steel enterprises will face increasing environmental protection pressure.Countermeasures : First, establish and improve the production and operation system of green low-carbon cycle development, thatis, through the upgrading of equipment energy conservation and environmental protection, the promotion and application ofadvanced technology, further improve the efficiency of resource and energy utilization, promote ultra-low emission transformationand comprehensive treatment of pollutants, and continuously reduce carbon emission intensity ; second, actively carry out productecological design and life cycle assessment to create green and low-carbon products ; the third is to strengthen the operation andmaintenance of existing environmental protection equipment and facilities and standardized operation control, focusing onstrengthening the monitoring of atmospheric pollution sources ; the fourth is to build a “AAA” level scenic spot garden factory as thestarting point, and strive to improve the factory environment.XII. Researches, visits and interviews received in this reporting period
?Applicable □Not applicable
| Reception time | Reception location | Reception method | Reception type | Reception object | The main content of the conversation and the information provided | Index of basic information of the research |
| February 28th, | Benxi | Telephone | Institution | Beijing Zhetou | Company | Transcript of |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 2023 | communication | Investment Co., Ltd. -Lin Xiaoshan and Fan Guannan; Gaokang Capital Investment Management Co., Ltd. -Miao Yongyan; China Securities-Zhang Shaochen; Forbes Global Alliance-Yao Lei; Great Wall Securities-Dongdan; JING CAI HU ZHI GROUP Co., Ltd. -Shi Hongxia; Beijing Quant Investment Co., Ltd. -Dou Changmin; Shanghai Mingshi Private Fund Management Co., Ltd. -Liu Jingfeng; Beijing Jiaheng Private Fund Management Co., Ltd. -Zhang Zhanqian; HSBC-Li Junwen; Zhongtai Securities-Zhou Xingzhen; Beijing Gelei Fund Co., Ltd. -Yuan Shuai; Beijing Fantaike Technology Co., Ltd. -Li Huayong; Beijing Hechuang Youliang Private Fund Management Co., Ltd. -Zhao Tianyu; Hangzhou Dechuang Investment Management Co., Ltd. -Peng Guolin; Beijing Beiyin Fengye Group Co., Ltd. | production and operation and industry situation | investor relations activities of Bengang Steel Plates Co., Ltd. on February 28th , 2023 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| -Zhang Peng | ||||||
| March 30th, 2023 | Benxi | Telephone communication | Institution | Yinhua Fund Management Co., Ltd. -Hua Qiangqiang; Pengyang Fund Management Co., Ltd. -Yuan Yamei; Dongwu Fund Management Co., Ltd. -Qin Bin; Guangfa Fund Management Co., Ltd. -Wu Xiaogang; Minsheng Securities Research Institute-Ren Heng; Xingye Fund-Li Xin; Shanghai Qushi Assets Management Co., Ltd. -Zhang Hongyun; China Life AMP Asset Management Co., Ltd. -Ge Jia; Huabao WP Fund Management Co., Ltd. -Hu Yingzhen; Bosera Funds Management Co., Ltd. -Wang Han and Gong Runhua; Beijing Xingshi Investment Management Co., Ltd. -Qiu Yinglun; China Asset Management Co., Ltd. -Hu Yuxi | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on March 23rd , 2023 |
| March 30th, 2023 | Benxi | Telephone communication | Institution | Bosera Funds Management Co., Ltd. -Wang Yixian; CITIC-Prudential Fund Management Company Ltd. -Lin Li; Yinhua Fund Management Co., Ltd. -Hua Qiangqiang; Everbright | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on March 30th , 2023 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Branch -Liu Guangzong and Liu Lan | ||||||
| April, 11th , 2023 | Benxi | Others | Individual | Earnings communication conference | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on April, 11th , 2023 |
| May 24th , 2023 | Benxi | Field research | Institution | Huatai Securities Co., Ltd. -Li Bin and Wang Xinyan; Citic Securities Co., Ltd. -Wang Bojun; Beijing Xingshi Investment Management Co., Ltd. -Qiu Yinglun; Shanghai Greenwoods Asset Management Co., Ltd. -Wang Ziyu | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on May 24th , 2023 |
| June 1st , 2023 | Benxi | Telephone communication | Institution | GF Securities Co.,Ltd. -Li Sha and Chen Qiwei | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on June 1st , 2023 |
| June 7th , 2023 | Benxi | Field research | Institution | GF Securities Co., Ltd. -Gong Shuai; Southern Fund Management Co., Ltd. -Bao Yuchen | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on June 7th , 2023 |
| June 8th , 2023 | Benxi | Field research | Institution | Guolian Securities Co., Ltd. -Liu Yiming; Huaan Securities Co., Ltd. -Hu Qianqian; Zhongrong International Trust Co., Ltd. -Tu Jiawei; Cathay Insurance Co., Ltd. -Gan Ge; Xingzheng Global Fund | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on June 8th , 2023 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Management Co., Ltd. -Qian Yiwen; Warburg Fund Management Co., Ltd. -Zhang Yanwen; China Life AMP Asset Management Co., Ltd. -Lin Han; Wanlian Securities Co., Ltd. -Zhang Weijing; China Fortune Securities Ltd. -Liu Yiwen; China Plus Investment Limited -Gao Jiayue; First Capital Securities Co., Ltd. -Yu Xiuying; Haitong International Asset Management (HK) Limited -Deng Zhanfei; Ping An Finance Co., Ltd. -Gan Lu; First Capital Securities Co., Ltd. -Bian Qin; China Everbright Investment and Assets Management Co., Ltd. -Yuan Wai; Capital Securities Corporation Limited -Tang Ren; Xingye Economic Research Consulting Co., Ltd. -Hua Peiqi | ||||||
| June 20th , 2023 | Benxi | Field research | Institution | Changjiang Securities-Zhao Chao, Yi Hong; Taikang Assets-Xiao Rui; Tianan Life Insurance-Cao Yuan; China Europe Fund-Zheng Sien | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on June 20th , 2023 |
| June 21st , 2023 | Benxi | Field research | Institution | Everbright Securities Co., | Company production and | Transcript of investor |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Ltd. -Dai Mo; China Life Asset Management Co., Ltd. -Yang Chen; Baoying Fund Co., Ltd. -Jiang Le | operation and industry situation | relations activities of Bengang Steel Plates Co., Ltd. on June 21st , 2023 | ||||
| July 18th , 2023 | Benxi | Telephone communication | Institution | Citic Securities Co., Ltd. -Tang Chuanlin | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on July 18th , 2023 |
| July 20th , 2023 | Benxi | Field research | Institution | Citic Securities Co., Ltd. -Du Bozhao; Jinyuan Capital Management (Xiamen) Co., Ltd. -Wu Xinbin, Huang Zhaoteng and Wu Qian | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on July 20th , 2023 |
| September 8th , 2023 | Benxi | Telephone communication | Institution | Agricultural Bank of China Huili Fund Management Co., Ltd. -Zhou Zihan | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on September 8th , 2023 |
| September 12th , 2023 | Benxi | Others | Individual | Earnings communication conference | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on September 12th , 2023 |
| October 10th , 2023 | Benxi | Telephone communication | Institution | The Pacific Securities Co., Ltd. -Wang Qili and Zhang Lei; Guosen Securities Co., Ltd. -Yang Lujia; Yinhua Fund Management Co., Ltd. -Hua Qiangqiang; UBS SDIC Fund Management Co., Ltd. -Huang Zhicheng; Huachuang | Company production and operation and industry situation | Transcript of investor relations activities of Bengang Steel Plates Co., Ltd. on October 10th , 2023 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Securities Co.,Ltd. -Ma Ye
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Section IV. CORPORATE GOVERNANCEI. Basic situation of corporate governanceDuring 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 theShenzhen Stock Exchange and Articles of Association. Based on the actual situation of the Company, the Company has beencontinuously improving the corporate governance structure and internal control system of the Company, improving the governancelevel, and promoting the Company's standardized operation. As of the end of the reporting period, the actual situation of corporategovernance 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 ofShareholders in strict accordance with the Company Law, Rules for Shareholders' General Meetings of Listed Companies and theCompany Articles of Association to ensure the exercise of the rights of the Company's shareholders and the standard operation ofthe shareholders' meeting. The Company's previous shareholder meetings have provided two attendance channels, on-site votingand online voting, to facilitate shareholders. Involving major issues that affect the interests of small and medium investors, theCompany counts the votes of small and medium investors individually and discloses them in a timely manner to ensure that allshareholders enjoy equal status and fully exercise their rights. And by hiring lawyers to witness and ensure the legal compliance ofthe convening, convening and voting procedures of the meeting, the legitimate rights and interests of the company and shareholdershave been safeguarded.
2. Directors and the Board of Directors: the company's Board of Directors has clear responsibilities, and the Company's directorsexercise 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, andsafeguard the legitimate rights and interests of the Company and shareholders. The Company's Board of Directors has four specialcommittees, namely audit, strategy, nomination, remuneration and assessment, each of which performs its own responsibilities andfunctions, and can carry out its work in accordance with the rules of procedure of each special committee. During the reportingperiod, the convening and holding procedures of the company's Board of Directors complied with the Company Law, Articles ofAssociation 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 effectivelyperform supervision and inspection functions. The Company's supervisors attend shareholders' meetings, attend board meetings asnon-voting delegates, regularly inspect the Company's legal operations and financial conditions, and issue opinions from the boardof 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 andconvening are strictly implemented in accordance with the Articles of Association and Rules of Procedure of the Board of Supervisorsto 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 managementcapabilities, 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 operateindependently; The Company's major decisions are made by the Board of Directors or the general meeting of shareholders inaccordance with the law. Controlling shareholders and actual controllers can strictly regulate their own behavior. There is no director indirect intervention in the Company's decision-making and production and operation activities beyond the general meeting ofshareholders, nor does it harm the interests of the Company and other shareholders.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
5. Information disclosure and transparency: The Company strictly complies with the requirements of the Shenzhen Stock ExchangeStock 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 SecuritiesJournal, Securities Times and www.cninfo.com.cn are the designated media for Company information disclosure. The Companypublishes regular reports and temporary announcements through the above-mentioned information disclosure media to ensure thatall 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 incharge of investor relations management, and the office of the Board of Directors is the organization that undertakes the daily workof investor relations management. The Company makes full use of on-site meetings, dedicated telephone calls, investor interactionplatforms and other methods to communicate with the company's shareholders, listens carefully to the opinions and suggestions ofinvestors on the Company's strategic development and production and operation, and has established a good communicationmechanism 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 controllerThe 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 andpersonnel, 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 fromthe 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 independentpurchase, production, and marketing system.
4. In organization: The internal operations of the Company are independent; the organization structure and working function aretotally independent.
5. In finance: The Company has an independent financial management department, the accounting and financial management systemthat are complete and operated independently, and has a bank account and pays taxes independently.III. Competition situations of the industry?Applicable □Not applicable
| Question type | Type of affiliation with listed companies | Company name | Company nature | Cause | Solution | Progress and follow-up plans |
| Industry competition | Controlling shareholder | Ansteel Group Co., Ltd. | Other | Caused by Ansteel | Ansteel Group promises that | The Company disclosed that |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Group’s reorganization of Benxi Iron and Steel Group Co., Ltd. | within five years from the date of issuance of its commitment letter, it will strive to use a shorter time to steadily promote relevant business integration to solve the problem of peer competition in accordance with the requirements of relevant securities regulatory authorities, and on the premise of complying with applicable laws, regulations and relevant regulatory rules at that time, comprehensively use various methods such as asset restructuring, business adjustment and entrusted management | the Plan for Major Asset Replacement and Related Party Transactions on June 21st , 2023 and planned to carry out asset replacement with Benxi Iron and Steel Company. At present, the Company is further demonstrating, communicating and negotiating the transaction plan. After the relevant matters are determined, the Company will convene the Board of Directors again for deliberation. |
IV. Annual general meeting and extraordinary shareholders’ meetings in the reporting period
1. Annual general meeting
| Sessions | Type | Investor participation ratio | Meeting Date | Date of disclosure | Index of information disclosure |
| First Extraordinary Shareholders General Meeting of 2023 | Extraordinary General Meeting | 76.81% | March 16th , 2023 | March 17th , 2023 | Announcement of Resolutions of the First Extraordinary General Meeting of Shareholders of 2023 |
| Annual Shareholders General Meeting of | Annual General Meeting | 76.73% | April 27th , 2023 | April 28th , 2023 | Announcement of Resolutions of the |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 2022 | Annual General Meeting of Shareholders of 2022 | ||||
| Second Extraordinary Shareholders General Meeting of 2023 | Extraordinary General Meeting | 76.74% | May 18th , 2023 | May 19th , 2023 | Announcement of Resolutions of the Second Extraordinary General Meeting of Shareholders of 2023 |
| Third Extraordinary Shareholders General Meeting of 2023 | Extraordinary General Meeting | 76.88% | August 21st , 2023 | August 22nd , 2023 | Announcement of Resolutions of the Third Extraordinary General Meeting of Shareholders of 2023 |
| Fourth Extraordinary Shareholders General Meeting of 2023 | Extraordinary General Meeting | 77.68% | December 18th , 2023 | December 19th , 2023 | Announcement of Resolutions of the Fourth Extraordinary General Meeting of Shareholders of 2023 |
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
| Name | Gender | Age | Position | Office status | Starting date of office term | Expiry date of office term | Number of shares held at the beginning of the period (shares) | Number of additional shares held during the period (shares) | Number of shares reduced during the period (shares) | Other changes in additions and deletions (shares) | Number of shares held at the end of the period (shares) | Reasons for change in share increase or decrease |
| Li Yan | Male | 41 | Chairman | In office | March 16th , 2023 | April 26th , 2025 | ||||||
| Huang Zuowei | Male | 53 | Director, Deputy General Manager | In office | May 18th , 2023 | April 26th , 2025 | ||||||
| Quan Xihong | Male | 46 | Director | In office | October 19th , 2023 | April 26th , 2025 | ||||||
| Wang Dongh | Male | 54 | Director | In office | March 16th , | April 26th , |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| ui | 2023 | 2025 | ||||||||||
| Tang Yaowu | Male | 51 | Director | In office | July 22nd , 2022 | April 26th , 2025 | ||||||
| Jin Ge | Male | 55 | Director | In office | December 18th , 2023 | April 26th , 2025 | ||||||
| Zhang Suxun | Female | 68 | Independent Director | In office | May 16th , 2019 | April 26th , 2025 | ||||||
| Yuan Zhizhu | Male | 42 | Independent Director | In office | May 20th , 2020 | April 26th , 2025 | ||||||
| Zhong Tianli | Female | 67 | Independent Director | In office | May 27th , 2021 | April 26th , 2025 | ||||||
| Lu Xuezhu | Male | 43 | Chairman of the Supervisory Board | In office | July 18th , 2023 | April 26th , 2025 | ||||||
| Lu Weijun | Male | 48 | Supervisor | In office | December 7th , 2021 | April 26th , 2025 | ||||||
| Zhang Weian | Male | 54 | Supervisor | In office | October 19th , 2023 | April 26th , 2025 | ||||||
| Guo Peng | Male | 45 | Supervisor | In office | October 19th , 2023 | April 26th , 2025 | ||||||
| Jiang Zhenyu | Male | 45 | Supervisor | In office | October 19th , 2023 | April 26th , 2025 | ||||||
| Liu Yansong | Male | 52 | Deputy General Manager | In office | July 18th , 2023 | April 26th , 2025 | ||||||
| Liu Zhangman | Male | 49 | Deputy General Manager | In office | August 17th , 2022 | April 26th , 2025 | ||||||
| Guo Yuwei | Male | 54 | Deputy Gener | In office | August 17th , 2022 | April 26th , 2025 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| al Manager | ||||||||||||
| Zheng Zhengli | Male | 47 | Chief Accountant, Secretary of the Board of Directors | In office | February 28th , 2023 | April 26th , 2025 | ||||||
| Huo Gang | Male | 50 | Chairman | Leave office | December 7th , 2021 | February 28th , 2023 | ||||||
| Wang Shiyou | Male | 49 | Director, Deputy General Manager | Leave office | November 18th , 2021 | April 27th , 2023 | ||||||
| Sun Zhen | Male | 40 | Director | Leave office | December 27th , 2022 | October 19th , 2023 | ||||||
| Han Mei | Female | 54 | Director | Leave office | May 27th , 2021 | February 28th , 2023 | ||||||
| Cheng Bing | Male | 60 | Chairman of the Supervisory Committee | Leave office | May 27th , 2021 | July 18th , 2023 | ||||||
| Bai Yufei | Female | 53 | Supervisor | Leave office | July 22nd , 2022 | April 27th , 2023 | ||||||
| Zhang Yanlong | Male | 46 | Supervisor | Leave office | January 26th , 2014 | October 19th , 2023 | ||||||
| Zhao Xingtao | Male | 51 | Supervisor | Leave office | June 26th , 2019 | October 19th , 2023 | ||||||
| Jing Tao | Male | 53 | Deputy General Manager | Leave office | November 18th , 2021 | July 18th , 2023 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Jiang Xiaoyu | Female | 52 | Secretary of the Board of Directors, Head of Finance | Leave office | April 26th , 2022 | February 28th , 2023 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 0 | -- |
During the reporting period, is there any resignation of directors and supervisors and dismissal of senior management personnel inthe reporting period?Yes □No
1. Mr. Huo Gang, former Chairman of the Company, resigned during the reporting period due to job changes during his term of office;
2. Mr. Wang Shiyou, former Director and Deputy General Manager of the Company resigned during the reporting period due to achange in his employment during his term of office;
3. Mr. Sun Zhen, a former employee Director of the Company, resigned during the reporting period due to job changes during histerm of office.
4. Ms. Han Mei, a former Director of the Company, resigned during the reporting period due to job changes during her term of office.
5. Mr. Liu Zhangman, former Chairman of the Supervisory Committee of the Company, resigned during the reporting period due to achange in his employment during his term of office and is still in the General Manager position;
6. Mr. Cheng Bin, the former Supervisor of the Company, resigned during the reporting period due to changes in his work during histerm of office.
7. Ms. Bai Yufei, the former Supervisor of the Company, resigned during the reporting period due to changes in her work during herterm of office.
8. Mr. Zhang Yanlong, former employee Supervisor of the Company, resigned during the reporting period due to job changes duringhis term of office;
9. Mr. Zhao Xingtao, former employee Supervisor of the Company, resigned during the reporting period due to job changes duringhis term of office;
10. Mr. Jing Tao, former Deputy General Manager of the Company resigned during the reporting period due to a change in hisemployment during his term of office.
11. Ms. Jiang Xiaoyu, the former Secretary of the Board of Directors and Head of Finance resigned during the reporting period dueto changes in her work during her term of office.Changes in directors, supervisors and senior management of the Company?Applicable □Not applicable
| Name | Position | Office status | Date | Reason |
| Huo Gang | Chairman | Leave office | February 28th , 2023 | Voluntary turnover |
| Han Mei | Director | Leave office | February 28th , 2023 | Voluntary turnover |
| Wang Shiyou | Director, Deputy | Leave office | April 27th , 2023 | Voluntary turnover |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| General Manager | ||||
| Sun Zhen | Director | Leave office | October 19th , 2023 | Voluntary turnover |
| Cheng Bin | Chairman of the Supervisory Committee | Leave office | July 18th, 2023 | Voluntary turnover |
| Bai Yufei | Supervisor | Leave office | April 27th , 2023 | Voluntary turnover |
| Zhang Yanlong | Supervisor | Leave office | October 19th , 2023 | Voluntary turnover |
| Zhao Xingtao | Supervisor | Leave office | October 19th , 2023 | Voluntary turnover |
| Liu Zhangman | Director | Appoint and dismiss | December 1st , 2023 | Voluntary turnover |
| Jing Tao | Deputy General Manager | Termination of employment | July 18th , 2023 | Job change |
| Jiang Xiaoyu | Head of Finance, Secretary of the Board of Directors | Termination of employment | February 28th , 2023 | Job change |
| Li Yan | Chairman | Elected | March 16th , 2023 | Elected |
| Huang Zuowei | Director, Chief General Manager | Elected | May 18th , 2023 | Elected |
| Quan Xihong | Director | Elected | October 19th , 2023 | Elected |
| Wang Donghui | Director | Elected | March 16th , 2023 | Elected |
| Jin Ge | Director | Elected | December 18th , 2023 | Elected |
| Lu Xuezhu | Chairman of the Supervisory Committee | Elected | July 18th , 2023 | Elected |
| Zhang Weian | Supervisor | Elected | October 19th , 2023 | Elected |
| Guo Peng | Supervisor | Elected | October 19th , 2023 | Elected |
| Jiang Zhenyu | Supervisor | Elected | October 19th , 2023 | Elected |
| Liu Yansong | Deputy General Manager | Employed | July 18th , 2023 | Employed |
| Zheng Zhengli | Chief Accountant, Secretary of the Board of Directors | Employed | February 28th , 2023 | Employed |
2. Post holding
Professional background, major work experience and current major responsibilities in the Company of the current directors,supervisors and senior managementLi Yan, male, 41 years old, PhD. Economic, senior engineer. He is currently the Party Secretary and Chairman of Benxi Steel Plate Co.,Ltd.; Chairman of Bengang Puxiang Cold Rolled Sheet Co., Ltd. He used to be the deputy director of the plate equipment departmentof Benxi Steel; Director of Benxi Steel Plate Inspection and Testing Center; Party Secretary and Director of Benxi Iron and Steel ColdRolling General Factory, General Manager of Bengang Puxiang Company; He is now deputy head,director and deputy general managerof the preparatory group of Beiying Party Committee of Benxi Iron and Steel Co., Ltd.; Director, General Manager and DeputySecretary of Party Committee of Beiying, Benxi Iron and Steel Co.Ltd.Huang Zuo, male, 53 years old, master of engineering, senior engineer. He is currently the deputy secretary of the Party Committee,director and deputy general manager of Benxi Iron and Steel Plate Co., Ltd. (temporarily responsible for the overall work of productionand operation). He used to be the Minister of Energy and Environmental Protection of Benxi Steel Plate Co., Ltd.; General Managerof Planning and Science Department of Benxi Iron and Steel Group Co., Director of Benxi Beiying Steel (Group) Co., Ltd.; Director ofBenxi Iron and Steel (Group) Mining Co., Ltd.Quan Xihong, male, 46 years old, bachelor's degree, senior engineer. He is currently deputy secretary of the Party Committee,employee director, secretary of the Discipline Inspection Commission, chairman of the trade union, general counsel, chief complianceofficer and secretary of the Party Committee of Benxi Steel Plate Co., Ltd.. He used to be deputy director of the Comprehensive
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Supervision Department of the Discipline Inspection Commission (Supervision Department) of Benxi Iron and Steel Group Company,director of the Supervision and Management Office of Discipline Inspection and Supervision Cadres, and director of the DisciplineInspection and Supervision Office; Manager of Audit Department, Deputy Secretary of Discipline Inspection Commission and Directorof Party and Government Supervision Office of Beiying Company of Benxi Iron and Steel Co.Wang Donghui, male, 54 years old, bachelor of economics, senior accountant. He is currently a director of Bengang Steel Plates Co.,Ltd.; General Manager of Capital Finance Department of Bensteel Group Co., Ltd. He used to be the chief accountant, financedepartment minister and operation improvement department minister of Bensteel Group Co., Ltd.; Vice Minister of FinanceDepartment of Bensteel Group Co., Ltd. and Chief Accountant of Beiying Company; Minister of Finance Department of BensteelGroup Co., Ltd. ; Director and chief accountant of Benxi Steel Plate Company; Chief accountant of Benxi Iron and Steel Mining Co.,Ltd.Tang Yaowu, male, 51 years old, bachelor degree, engineer. He is currently a director of Bengang Steel Plates Co., Ltd.; Full-timedirector and supervisor of Bengang Group Company Office; Director of Hengtong Company; Director of Stainless SteelCompany; Director of machinery manufacturing company. He used to be the deputy director of the rolling mill of Beiying Companyof Benxi Iron and Steel Co.; Executive Deputy Director of Rolling Plant of Beiying Company of Benxi Iron and Steel Co., Ltd.; Directorof Rolling Mill of Beiying Company of Benxi Steel; Assistant General Manager and Minister of Production Department of BeiyingCompany of Benxi Steel; Chief Engineer of Beiying Company of Benxi Steel; Chief Engineer and Director of Rolling Mill of BeiyingCompany of Bensteel; Deputy General Manager and Chief Engineer of Bensteel Group Co., Ltd. Beiying Company; Vice Minister ofEnergy and Environmental Protection Department of Bengang Steel Plates Co., Ltd.Jin Ge, male, 55 years old, graduate degree, political engineer. He is currently a director of Bengang Steel Plates Co., Ltd.; Director ofLiaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd.; Director of Bensteel Group Thermal Development Co., Ltd.;Supervisor of Bensteel Group Construction Co., Ltd. He used to be the vice chairman of the trade union of Beiying Company ofBensteel Group; Director of Comprehensive Finance Unit of Trade Union of Bensteel Group Co., Ltd..Zhang Suxun, female, 68 years old, university degree, professor. He is currently an independent director of Benxi Steel Plate Co., Ltd..He used to be a teacher of Liaoning University Business School.Yuan Zhizhu, male, 42 years old, Ph.D., associate professor of accounting at Northeastern University, master tutor, non-practicingmember of Chinese certified public accountant. He is currently independent director of Bensteel Group Co., Ltd.; Head of theAccounting Department, School of Business Administration, Northeastern University, and served as the director of LiaoningAccounting and Abacus Mental Arithmetic Society and Liaoning Auditing Society. He used to be a lecturer in the School of BusinessAdministration of Northeastern University.Zhong Tianli, female, 67 years old, is a professor (doctoral supervisor) at Northeastern University. He is currently an independentdirector of Benxi Steel Plate Co., Ltd.; Professor, Department of Accounting, School of Business Administration, NortheasternUniversity. He used to be the vice president of the School of Business Administration of Northeastern University; Dean of BasicCollege of Northeastern University and Director of Institute of Financial Management of School of Business and Technology.Introduction of Supervisory Board MembersLu Xuezhu, male, 43 years old, bachelor's degree, senior economist, is currently the chairman of the Board of Supervisors of BenxiIron and Steel Plate Co., Ltd., the general manager of the Audit Department of Benxi Iron and Steel Group Co., Ltd., the director ofBenxi Iron and Steel (Group) Mining Co., Ltd. and the supervisor of Benxi Iron and Steel Plate Co., Ltd.. He used to be the deputydirector of the Economic Responsibility Audit Department of the Audit Department of Ansteel Group; Deputy Director of theManagement Audit Department of the Audit Department of Ansteel Group; Director of Operation and Management AuditDepartment of Audit Department of Ansteel Group.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Lu Weijun, male, 48 years old, university degree, senior accountant. He is currently a supervisor of Benxi Steel Plate Company; DeputyManager of Audit Department of Benxi Iron and Steel Group Co., Ltd. He used to be the head of the Cost Section of the FinanceDepartment of Benxi Iron and Steel (Group) Construction Co., Ltd.; Chief Business Engineer of Audit Department of Benxi Steel PlateCo., Ltd.; Chief Business Engineer of Audit Department of Benxi Iron and Steel Group Company. Deputy Manager of FinanceDepartment of Benxi Steel Plate Company.Zhang Weian, male, 54 years old, university degree, senior accountant, is currently the supervisor and audit manager of Benxi SteelPlate Co., Ltd.; Supervisor of Benxi Steel Pohang Cold Rolled Sheet Co., Ltd.; Supervisor of Dalian Benruitong Automotive MaterialsTechnology Co., Ltd.; Supervisor of Benxi Steel Baojin (Shenyang) Automobile New Materials Technology Co., Ltd.. He used to be thedeputy director of the finance department of Benxi Iron and Steel Beiying Company; Deputy Director of Finance Department of BenxiIron and Steel Group Company.Guo Peng, male, 45 years old, university degree, assistant engineer and senior technician, is currently a supervisor of Benxi Iron andSteel Plate Co., Ltd., and a special technician of rolling workers in the third hot rolling production operation area of hot continuousrolling plant. He used to be the production shift supervisor of the third hot rolling production operation area of Benxi Iron and SteelPlate Hot Continuous Rolling Plant; Chief operator and first-class technician of rolling worker in Benxi Iron and Steel Hot ContinuousRolling Plant.Jiang Zhenyu, male, 45 years old, university degree, third-level writer of literary creation, is currently a supervisor of Benxi Iron andSteel Plate Co., Ltd., deputy director of the Party-mass Work Department (Party Committee Organization Department, HumanResources Department, Party Committee Propaganda Department, United Front Work Department, Trade Union, Youth LeagueCommittee, Party Committee of the government), and vice chairman of the trade union; Deputy Secretary of Party Committee,Secretary of Discipline Inspection Commission and Chairman of Trade Union of Benxi Steel Plate Co., Ltd.. He used to be the chiefbusiness engineer of the trade union of Benxi Iron and Steel Group Co. Deputy Director of Benxi Iron and Steel Reporter Station,Ansteel News Media Center.Profile of non-director senior management:
Liu Yansong, male, 52 years old, Master of Engineering, is a senior engineer. He is currently the deputy general manager of BenxiSteel Plate Co., Ltd.. He used to be the director, deputy manager and director of the Export Department of Benxi Iron and SteelInternational Trade Company; Party Secretary and Trade Union Chairman of Cold Rolling Plant of Benxi Steel Plate Company; Directorof Rolling Plant of Beiying Company of Benxi Steel; Deputy General Manager of Beiying Company of Benxi Iron and Steel Co.Guo Yuwei, male, 54 years old, Master of Engineering, Senior Engineer. He is currently the deputy general manager of Benxi SteelPlate Co., Ltd.. He used to be assistant to the director of the ironmaking plant of Benxi Steel Plate Company and deputy director ofthe ironmaking plant; Party Secretary and Trade Union Chairman of Ironmaking Plant of Benxi Steel Plate Company, Deputy Directorof Ironmaking Plant; Member of the preparatory group of the Party Committee of Beiying Company, deputy general manager,director of Benxi Iron and Steel Construction Company; Party Secretary and Deputy Director of Ironmaking General Plant of BenxiSteel Plate Company.Liu Zhangman, male, 49 years old, college degree, senior engineer. He is currently the deputy general manager of Benxi Steel PlateCo., Ltd.. He used to be deputy director of Beiying No.2 Steelmaking Plant and deputy director of Beiying Steelmaking Plant; Assistantto Executive Deputy General Manager of Beiying Company, Chairman of Association for Science and Technology, Director ofTechnology Center; Chief Engineer of Beiying Company and Chairman of Association for Science and Technology, Minister of NewProduct Department, Manager of Bar and Wire Development Project Department, Director of Bar and Wire Research Institute;Deputy General Manager and Director of Benxi Iron and Steel Beiying Company; Vice Minister of Manufacturing Department of BenxiSteel Plate Company; Deputy General Manager of Operation Management Department of Benxi Iron and Steel Group Company;Director of Benxi Steel Plate Co., Ltd.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Zheng Zhengli, male, 47 years old, MBA, senior accountant, is currently the chief accountant and secretary of the board of directorsof Benxi Steel Plate Company. He used to be the deputy director of the finance department of Benxi Steel Plate Company; Directorof Accounting and Taxation of Finance Department of Benxi Steel Plate Company; Party Committee member and assistant to generalmanager of Beiying Company of Benxi Iron and Steel Co.Ltd.Positions in shareholder units?Applicable □Not applicable
| Names of the persons in office | Names of the shareholders | Titles engaged in the shareholders | Starting date of office term | Expiry date of office term | Does he /she receive remuneration or allowance from the shareholder |
| Wang Donghui | Bengang Group Co., Ltd. | General Manager of Capital Financial Department | February 9th , 2023 | Yes | |
| Tang Yaowu | Bengang Group Co., Ltd. | Full-time Director | March 24th , 2022 | Yes | |
| Jin Ge | Bengang Group Co., Ltd. | Full-time Director | December 10th , 2021 | December 27th , 2023 | Yes |
| Lu Xuezhu | Bengang Group Co., Ltd. | General Manager of Audit Department | April 12th , 2023 | Yes | |
| Lu Weijun | Bengang Group Co., Ltd. | Deputy General Manager of Audit Department | June 6th , 2023 | Yes | |
| Description of the position in the shareholder | None | ||||
Posts holding in other companies
| Names of the persons in office | Names of the other companies | Titles engaged in other companies | Starting date of office term | Expiry date of office term | Does he /she receive remuneration or allowance from the shareholder |
| Li Yan | Benxi Steel Posco Cold Rolled Sheet Co., Ltd. | Chairman | March 2nd, 2023 | No | |
| Liu Yansong | Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. | Chairman | September 21st , 2023 | No | |
| Liu Yansong | Dalian Benruitong AUTO MATERIALS Technology Co., Ltd. | Chairman | August 12th , 2023 | No | |
| Zhang Wei’an | Dalian Benruitong AUTO MATERIALS Technology Co., Ltd. | Supervisor | August 12th , 2023 | No | |
| Zhang Wei’an | Benxi Steel Posco Cold Rolled Sheet | Supervisor | July 10th , 2023 | No |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
?Applicable □Not applicablePunishment 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 seniorexecutivesDecision-making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented upon approval of theBoard or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee undertakesassessments 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 recognitionThe remuneration scheme for a particular position is recognized based on the range of responsibilities, and duties. Remunerationsare distributed based on the assessment results and remuneration policies.Actual payment of the remunerationRemuneration is paid on monthly basis according to the remuneration allocation policies. Remuneration of Directors, Supervisorsand Senior Executives during the reporting periodUnit: RMB 10,000
| Name | Gender | Age | Position | Office status | Total remuneration received from the shareholder | Whether receive remuneration in the Company's related parties |
Co., Ltd.
| Co., Ltd. | |||||
| Zhang Wei’an | Benxi Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. | Supervisor | September 21st , 2023 | No | |
| Zhong Tianli | School of Business Administration Northeastern University | Professor | October 1st , 1982 | Yes | |
| Yuan Zhizhu | School of Business Administration Northeastern University | Dean of Department of Accounting | July 13th , 2009 | Yes | |
| Yuan Zhizhu | Shenyang Machine Tool Co., Ltd. | Independent Director | May 28th , 2021 | Yes | |
| Description of the position in other companies | None | ||||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Li Yan | Male | 41 | Chairman | In office | 1 | No |
| Huang Zuowei | Male | 53 | Director, Deputy General Manager | In office | 1 | No |
| Quan Xihong | Male | 46 | Director | In office | 1 | No |
| Wang Donghui | Male | 54 | Director | In office | 1 | Yes |
| Tang Yaowu | Male | 51 | Director | In office | 1 | Yes |
| Jin Ge | Male | 55 | Director | In office | 1 | Yes |
| Zhang Suxu | Female | 68 | Independent Director | In office | 1 | No |
| Yuan Zhizhu | Male | 42 | Independent Director | In office | 1 | No |
| Zhong Tianli | Female | 67 | Independent Director | In office | 1 | No |
| Lu Xuezhu | Male | 43 | Chairman of the Supervisory Committee | In office | 1 | Yes |
| Lu Weijun | Male | 48 | Supervisor | In office | 1 | Yes |
| Zhang Weian | Male | 54 | Supervisor | In office | 1 | No |
| Guo Peng | Male | 45 | Supervisor | In office | 1 | No |
| Jiang Zhenyu | Male | 45 | Supervisor | In office | 1 | No |
| Liu Yansong | Male | 52 | Deputy General Manager | In office | 1 | No |
| Liu Zhangman | Male | 49 | Deputy General Manager | In office | 1 | No |
| Guo Yuwei | Male | 54 | Deputy General Manager | In office | 1 | No |
| Zheng Zhengli | Male | 47 | Chief Accountant, Secretary of the Board of Directors | In office | 1 | No |
| Huo Gang | Male | 50 | Chairman | Leave office | 1 | Yes |
| Wang Shiyou | Male | 49 | Director, Deputy General Manager | Leave office | 1 | Yes |
| Sun Zhen | Male | 40 | Director | Leave office | 1 | Yes |
| Han Mei | Female | 54 | Director | Leave office | 1 | Yes |
| Cheng Bin | Male | 60 | Chairman of the Supervisory Committee | Leave office | 1 | Yes |
| Bai Yufei | Female | 53 | Supervisor | Leave office | 1 | Yes |
| Zhang Yanlong | Male | 46 | Supervisor | Leave office | 1 | No |
| Zhao Xingtao | Male | 51 | Supervisor | Leave office | 1 | No |
| Jing Tao | Male | 53 | Deputy General Manager | Leave office | 1 | Yes |
| Jiang Xiaoyu | Female | 51 | Head of Finance, Secretary of the Board of Directors | Leave office | 1 | Yes |
| Total | -- | -- | -- | -- | 28 | -- |
Illustration of other conditions?Applicable □Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
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 |
| 9th Ninth plenary session | February 28th , 2023 | March 1st , 2023 | Announcement on Resolutions of 9th Ninth plenary session |
| 10th Ninth plenary session | March 16th , 2023 | March 17th , 2023 | Announcement on Resolutions of 10th Ninth plenary session |
| 11th Ninth plenary session | March 28th , 2023 | March 30th , 2023 | Announcement on Resolutions of 11th Ninth plenary session |
| 12th Ninth plenary session | April 27th , 2023 | April 28th , 2023 | Announcement on Resolutions of 12th Ninth plenary session |
| 13th Ninth plenary session | April 28th , 2023 | Announcement on Resolutions of 13th Ninth plenary session | |
| 14th Ninth plenary session | May 30th , 2023 | May 31st , 2023 | Announcement on Resolutions of 14th Ninth plenary session |
| 15th Ninth plenary session | June 12th , 2023 | June 13th , 2023 | Announcement on Resolutions of 15th Ninth plenary session |
| 16th Ninth plenary session | June 20th , 2023 | June 21st , 2023 | Announcement on Resolutions of 16th Ninth plenary session |
| 17th Ninth plenary session | July 18th , 2023 | July 19th , 2023 | Announcement on Resolutions of 17th Ninth plenary session |
| 18th Ninth plenary session | August 4th , 2023 | August 5th , 2023 | Announcement on Resolutions of 18th Ninth plenary session |
| 19th Ninth plenary session | August 29th , 2023 | August 31st , 2023 | Announcement on Resolutions of 19th Ninth plenary session |
| 20th Ninth plenary session | September 9th , 2023 | September 12th , 2023 | Announcement on Resolutions of 20th Ninth plenary session |
| 21th Ninth plenary session | October 30th , 2023 | October 31st , 2023 | Announcement on Resolutions of 21th Ninth plenary session |
| 22th Ninth plenary session | December 1st , 2023 | December 2nd , 2023 | Announcement on Resolutions of 22th Ninth plenary session |
| 23th Ninth plenary session | December 25th , 2023 | December 26th , 2023 | Announcement on Resolutions of 23th Ninth plenary session |
2. The situation of directors attending the BOD and shareholders meeting
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Director name | Number of Board meetings necessary to be attended during the reporting period | Number of spot attendances | Number of meetings attended by Communication | Number of attendances by representative | Number of absences | Failure to personally attend board meetings successively twice (Yes/No) | Number of general meetings to be attended |
| Huo Gang | 1 | 1 | 0 | 0 | No | 0 | |
| Wang Shiyou | 4 | 3 | 1 | 0 | 0 | No | 2 |
| Sun Zhen | 12 | 4 | 8 | 0 | 0 | No | 4 |
| Han Mei | 1 | 1 | 0 | 0 | No | 0 | |
| Liu Zhangman | 14 | 6 | 8 | 0 | 0 | No | 4 |
| Tang Yaowu | 15 | 6 | 9 | 0 | 0 | No | 5 |
| Zhang Suxun | 15 | 6 | 9 | 0 | 0 | No | 5 |
| Yuan Zhizhu | 15 | 6 | 9 | 0 | 0 | No | 5 |
| Zhong Tianli | 15 | 6 | 9 | 0 | 0 | No | 5 |
| Li Yan | 14 | 6 | 8 | 0 | 0 | No | 5 |
| Huang Zuowei | 10 | 3 | 7 | 0 | 0 | No | 3 |
| Quan Xihong | 3 | 2 | 1 | 0 | 0 | No | 1 |
| Wang Donghui | 14 | 6 | 8 | 0 | 0 | No | 5 |
| Jin Ge | 1 | 1 | 0 | 0 | No | 1 |
Explanation of two consecutive absences from attending the Board of Directors in personNone
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 □NoIllustration of acceptance of or failure to accept a director’s advice to the CompanyDirectors have not made recommendations during the reporting period.VII. Duty fulfillment of the special committees under the board during the reporting period
| Committees | Membership | Number of meetings held | Meeting date | Meeting content | Important comments and suggestions raised | Other performance of duties | Specific circumstances of the objection (if any) |
| Committee of Audit and | Zhang Xuxun, Yuan Zhizhu, | 7 | March 17th , 2023 | 1. Annual report and | Agree | Not applicable | No |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Risk Management | Wang Donghui | summary for 2022; 2. Financial final accounts report for 2022; 3. Profit distribution plan for 2022; 4. Proposal on the proposed change of accounting firm; 5. Evaluation Report on Internal Control of the Company in 2022; 6. Proposal on Provision for Impairment of Assets; 7. Special Report on the Storage and Use of Raised Funds in 2022; | |||||
| April 21st , 2023 | Report for the first quarter of 2023 | Agree | Not applicable | No | |||
| April 23rd , 2023 | 1. Report on Compliance Work in 2022; 2. Work Report of Internal Control System in 2022; 3. 2023 Major Risk Assessment Report | Agree | Not applicable | No | |||
| July 12th , 2023 | Proposal on Temporary Replenishment of Working Capital with Idle Raised Funds | Agree | Not applicable | No | |||
| August 18th , 2023 | 1. Semi-annual report for | Agree | Not applicable | No |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 2023; 2. Risk Assessment Report of Ansteel Group Finance Co., Ltd.; 3. Report on the use of funds raised in the semi-annual period of 2020; 4. Proposal on Changes in Accounting Policies | |||||||
| October 20th , 2023 | Third Quarter Report of 2023 | Agree | Not applicable | No | |||
| November 20th , 2023 | 1. Proposal on the Estimation of Daily Related Party Transactions in 2024; 2. Proposal on Closing the Project of the Company's Non-public Offering of Shares and Permanently Replenishing the Working Capital with the Balance Raised Funds | Agree | Not applicable | No | |||
| Nominating Committee | Yuan Zhizhu, Zhang Suxun, Li Yan | 5 | February 23rd , 2023 | 1. Proposal to nominate candidates for director of the Company; 2. Proposal to appoint senior management of the Company | Agree | Not applicable | No |
| April 21st , 2023 | 1. Proposal to nominate candidates for director of the | Agree | Not applicable | No |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Company; 2. Proposal to appoint senior management of the Company | |||||||
| June 6th , 2023 | Proposal on the appointment of the Secretary of the Board of Directors of the Company | Agree | Not applicable | No | |||
| July 12th , 2023 | Proposal to appoint senior management of the Company | Agree | Not applicable | No | |||
| November 20th , 2023 | .Proposal to nominate candidates for director of the Company | Agree | Not applicable | No | |||
| Strategy Committee | Li Yan, Wang Donghui, Zhong Tianli | 3 | March 17th , 2023 | 1. 2022 annual report of the Board of Directors; 2. 2023 annual investment framework plan proposal | Agree | Not applicable | No |
| May 24th , 2023 | Proposal to Adjust the Company 's organizational structure | Agree | Not applicable | No | |||
| June 11th , 2023 | 1. Proposal on this major asset restructuring plan of the Company; 2. Proposal on the Plan for Major Asset Replacement and Related Party Transactions of Benxi Steel Plate Co., Ltd. and its summary; 3. | Agree | Not applicable | No |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Proposal on Signing the Framework Agreement on Major Asset Replacement with Conditions and Effectiveness between the Company and the Counterparty | |||||||
| Salary and Assessment Committee | Zhong Tianli, Yuan Zhizhu, Tang Yaowu | 1 | April 23rd , 2023 | 1. Proposal on the Completion of Operating Performance Indicators of the Company's Management in 2022; 2. Proposal on Cashing the Salary of Company Leaders in 2022; 3. Proposal on the Setting of Performance Evaluation Indicators of the Company's Management in 2023 | Agree | Not applicable | No |
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 | 13,687 |
| Number of in-service staff in main subsidiaries | 655 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Total population of in-service staff | 14,342 |
| Total population of staff receiving remuneration in the current period | 14,342 |
| Number of retired staff whose expense was borne by parent company and major subsidiary companies | 24,466 |
| Professional composition | |
| Type of professional composition | Population |
| Production staff | 12,029 |
| Sales staff | 234 |
| Technician staff | 1,217 |
| Financial staff | 91 |
| Administrative Staff | 771 |
| Total | 14,342 |
| Educational degree | |
| Type of educational degree | Population |
| PhD. | 9 |
| Postgraduate | 304 |
| Undergraduate | 3,550 |
| Junior College | 5,463 |
| Technical secondary school | 417 |
| High School and Technical School | 2,954 |
| Middle School and others | 1,645 |
| Total | 14,342 |
2. Remuneration policies
The company has established a perfect performance management system, according to the determined annual production andoperation principles, policies and management objectives, to assess the completion of various functional departments and factoriesand mines' operation indicators and work tasks, set key performance evaluation indicators, implement monthly evaluation, payaccording to posts, abilities and performance principles, set salaries by posts, change salaries by posts, guide employees to improvetheir abilities, establish a salary distribution mechanism that relies on competition for posts and contributions for income, highlightthe assessment of key performance indicators, and truly realize income can increase and decrease. Continue to promote the totalsalary contract, guide all units to rationally allocate human resources, optimize the distribution mechanism and improve laborproductivity, and give full play to the incentive and restraint role of salary.
3. Training plan
In 2023, the Company implemented the strategy of "developing enterprises with talents" in depth, focusing on building the newBenxi Steel into an internationally competitive production base for automotive steel and excellent special steel bars and wires,focusing on optimizing the education and training system, improving the training evaluation mechanism and improving the trainingquality and effect, highlighting the political, systematic, accurate and effective training, continuously improving the political ability,leadership ability, general ability and professional ability of employees, and striving to create characteristic excellent trainingprograms, effectively releasing the training effectiveness, and further improving the comprehensive quality of the workforce. Thecompany completed 15 training programs and 24,172 person-times throughout the year, with the qualified rate of training reaching95% and the implementation rate of annual training plan reaching 94%. Plan to achieve training objectives in an all-round way.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
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 duringthe reporting period?Applicable □Not applicableProfit distribution plan for FY2023: As audited by BDO China Shu Lun Pan Certified Public Accountants LLP (SpecialGeneral Partnership), the net profit attributable to the parent company for the year 2022 was RMB-1,742,574,163.92, plus the undistributed profit of RMB-720,559,670.73 at the beginning of the year. The balanceof the undistributed profit for the period was RMB -2,463,133,834.65. 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 association or the resolutions of the shareholders meeting: | Yes |
| Whether the dividend standard and ratio are clear: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors have performed their duties due diligence and played their due role: | Yes |
| Whether small and medium shareholders have sufficient opportunities to express their opinions and demands, and whether their legitimate rights and interests are fully protected: | Yes |
| Whether it meets the requirements of the company's articles of association or the resolutions of the shareholders meeting: | Yes |
| Whether it meets the requirements of the company's articles of association or the resolutions of the shareholders meeting: | Yes |
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash dividenddistribution was proposed during the reporting period
□Applicable ?Not applicable
Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□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 publicreserves for the year.
XI. Construction and implementation of internal control system during the reporting period
□Applicable ?Not applicable
During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other employee incentivemeasures and their implementation.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
During the reporting period, the Company strictly abides by the Basic Regulations of Internal Control and its supporting guidelinesand other internal control supervision requirements, combined with industry characteristics, business practices and internal controlsystems and evaluation methods. These make it possible to constantly improve and refine the internal control management system,promotes the improvement of the Company 's decision-making efficiency. Meanwhile, the Company provides guarantee for the legalcompliance and asset safety of the Company 's operation and management, and effectively promotes the steady implementation ofthe company 's strategy.The Company has established a sound internal control system, and combined with the actual operation of the timely revision andimprovement, to give full play to its system protection role. During the reporting period, the company formulated 77 systems suchas the Administrative Measures for the performance of Duties of external Directors dispatched by subsidiaries of Bengang Steel andIron Sheet Co., Ltd., the Rules for the Security Management of Network and information systems of Bengang Steel and Iron Sheet Co.,Ltd., and revised 38 systems such as the "Rules for the Management of Environmental Statistics of Bengang Steel and Iron Sheet Co.,Ltd. and the Accounting Basic Work Standards of Bengang Steel and Iron Sheet Co., Ltd. As of the end of the reporting period, theCompany had 434 effective systems.
2. Material internal control defects found during the reporting period
□Yes ?No
XIII. Management and control of subsidiaries during the reporting period
| Company name | Integration plan | Integration progress | Problems encountered during integration | Solutions implemented | Solutions progress | Follow-up solutions plan |
| Zhejiang Jingrui Steel Processing Co., Ltd. | Equity transfer | Completed | N/A | N/A | N/A | N/A |
XIV. Internal control self-evaluation report or internal control audit report
1. Internal control self-evaluation report
| Disclosing date of the internal control audit report (full text) | March 30th, 2024 |
| Index of the internal control audit report (full text) | http://www.cninfo.com.cn |
| Proportion of total assets of subsidiaries within the scope of the self-evaluation report in total assets of the Company’s consolidated financial statements | 99.06% |
| Proportion of operating income of subsidiaries within the scope of self-evaluation report in operating income of the Company’s consolidated financial | 99.98% |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| statements | ||
| Standards of defects evaluation | ||
| Category | Financial report | Non-financial report |
| Qualitative criteria | 1. Material defects: fraud of directors, supervisors and senior management; the Company corrects its published financial statements; there is a material misstatement in the financial statements, and the internal control fails to detect the misstatement during the operation; the corporate audit committee and the internal audit institution have no effect on the supervision of internal control. 2. Significant defects: the seriousness and economic consequences of accounting policies, accounting and financial reporting are lower than material defects, but there are still internal control defects that may cause the Company to deviate from the control objectives. 3. General defects: other than material and significant defects, other internal control defects in financial reporting. | 1. the Company's standards of internal control defects evaluation in terms of daily operation: 1) Material defects: have a material impact on the normal operation of the Company: affect most of the Company’s main business types/main functional areas; have a significant impact on the overall operation of the Company which makes it difficult to recover in the long run. 2) Significant defects: have a great impact on the normal operation of the Company: affect some of the Company's main business types/main functional areas; have a large impact on the Company's overall operation, requiring a great price for the Company to recover in a long period of time. 3) General defects: have a moderate or less impact on the normal operation of the Company: affect a certain main business type/main functional area or general business type/general functional area of the Company; have a moderate or less impact on the overall operation of the Company, requiring some price for the Company to recover 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 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). | ||
| Quantitative criteria | 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; 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) | 无 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| misstatement ＜ 0.5% of total shareholders’ equity. | ||
| Number of material defects in financial reporting(a) | 0 | |
| Number of material defects in non-financial reporting (a) | 0 | |
| Number of significant defects in financial reporting(a) | 0 | |
| Number of significant defects in non-financial reporting(a) | 0 | |
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, 2023. | |
| Status of the internal control audit report | Disclosure |
| Disclosing date of the internal control audit report (full text) | March 30th, 2024 |
| 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 ofDirectors?Yes ?NoXV. 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 Qualityof Listed Companies issued by the State Council and worked out the List of Listed Company Governance Initiatives based on ChinaSecurities Regulatory Commission [2020] No. 69 Announcement on Carrying out Initiatives on Corporate Governance of ListedCompanies and the Company’s practical conditions. The list reflected the problems and rectification of governance in listedcompanies in a true, accurate and comprehensive manner. The Company made efforts to strengthen the endogenous driving forceof corporate governance, improve the corporate governance system, and build a healthy ecology of corporate governance. In thoseways, 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-qualitydevelopment as a listed company and promoted the governance level.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Section V. Environmental and Social ResponsibilityI. Major environmental issues
Whether the listed company and its subsidiaries belonging to the key pollutant discharge units announced by the environmentalprotection department?Yes □NoEnvironmental protection policies and industry standardsThe Company implemented Environmental Protection Law of the People's Republic of China, Environmental Impact Assessment Lawof the People's Republic of China, Water Pollution Prevention and Control Law of the People's Republic of China, Atmospheric PollutionPrevention and Control Law of the People's Republic of China, Soil Pollution Prevention and Control Law of the People's Republic ofChina, Solid Waste Pollution Prevention and Control Law of the People's Republic of China, and other relevant ecological andenvironmental 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 AirPollutants 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 Standardfor Thermal Power Plants (GB13223-2011).
Environmental protection administrative licenseThe Company has 14 pollutants discharging units, 11 of which are key pollutants discharging units. The license was obtained for thefirst time in December 2018 and was extended to December 2026 in December 2021 according to the requirements of licensemanagement. Three units have been registered and granted the registration receipt of fixed pollution source discharge in March2020, which is valid until 2025. the Company strictly implements the stable operation of environmental protection facilities, strictlycontrols the discharge of pollutants, and discharges pollutants within the scope of permission every year. It completes quarterlyreporting and annual reporting through online filing as required.Industry emission standards and the description of pollutants emission involved in production and business activities
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Company or subsidiary name | Category of major pollutants and characteristic pollutants | Name of major pollutants and characteristic pollutants | Emission method | Number of discharge outlets | Distribution of discharge outlets | Emission concentration/intensity | Implemented pollutants discharge standards | Total emissions | Total approved emissions | Excessive emissions |
| Bengang Steel Plates Co., Ltd. | Wastewater pollutants | COD | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 6.09 | 50 | 18.62 tonnes | Not approved by the government | None |
| Bengang Steel Plates Co., Ltd. | Wastewater pollutants | Ammonia nitrogen | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 0.37 | 8 | 1.20 tonnes | Not approved by the government | None |
| Bengang Steel Plates Co., Ltd. | Exhaust gas pollutants | Particulate matter | Continuous and intermittent | 191 | Raw material dumper, transfer station, receiving tank, pre-batching; iron-making casting yard, furnace roof, fuel, solvent, granulation, ore coke tank, sintering head dust removal, machine tail dust removal; iron and steel water pretreatment, north-south pouring station, tundish, primary dust | Raw material 12-15; sintering 1.34-19; iron making 0.81-9; steel making 0.3-10 special steel 0.7-10; coking 10-50; power generation 1-7; cold rolling 6-18; hot rolling1-8 | Raw material 25; sintering 50-30; iron making 25; steel making 20-50; special steel 20; coking 10-50; power generation 10-30; cold rolling 20; hot rolling 20-30. | Smoke 1,050 tonnes, powder 11,814 tonnes | Not approved by the government | None |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| removal, secondary dust removal, refining dust removal; special steel electric furnace, refining furnace; coking coal addition, coke pushing, dry quenching, chimney desulfurization and denitrification; power boiler dust removal, desulfurization and denitrification; cold rolling acid regeneration, pickling, straightening, welding, leveling, annealing, roasting; hot rolling furnace. | ||||||||||
| Bengang Steel Plates Co., Ltd. | Exhaust gas pollutants | Sulfur dioxide | Continuous and intermittent | 65 | Sintering head; coke oven chimney; power generation boiler desulfurization; | Sintering head 12-40; coke oven chimney 1.4-50; power generation 0.33-45; cold | Sintering head 200; coke oven 50-100; power generation 100- | 3,993 tonne | Not approved by the government | None |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| cold rolling roasting and annealing; hot rolling heating furnace. | rolling 11-25; hot rolling 3-79. | 200; cold rolling 100; hot rolling 150. | ||||||||
| Bengang Steel Plates Co., Ltd. | Exhaust gas pollutants | Nitrogen oxides | Continuous and intermittent | 58 | Sintering head; coking chimney; power generation boiler; cold rolling roasting; annealing; hot rolling heating furnace. | Sintering head 75-165; coking chimney 46-120; power generation 6-130; cold rolling 84-94; hot rolling 46-124. | Sintering head 300; coking chimney 150-500; power generation 100-200; cold rolling 200; hot rolling 300. | 8,738 tonne | Not approved by the government | None |
Pollutants treatmentIn 2023, the Company has coordinate overall enterprise development and environment protection and has invested 1.72 billion yuanto comprehensively accelerate ultra-low emission renovation work combined with process route of source reduction, procedurecontrol and end-of-pipe treatment. It has successively implemented coke oven desulfurization and denitrification transformation(SDS dry desulfurization/long bag low pressure pulse dust collector/medium and low temperature SCR denitrification process),sintering desulfurization and denitrification transformation (wet desulfurization/wet electrostatic dust collector/medium and lowtemperature SCR denitrification process), material plant closure, blast furnace ore trough/tapping yard transformation (low pressurepulse coated bag dust collector/wrinkled bag dust collector process), converter tertiary dust collector (pulse coated bag dust collectorprocess), converter hot metal pretreatment station dust collector transformation (pulse ash cleaning bag dust collector process),etc. The Company has carried out ultra-low emission transformation in the whole process of organized emission, unorganizedemission and clean transportation, which can realize that the emission concentration of air pollutants meets the requirements ofultra-low emission standards, and the environmental protection management and control ability of enterprises has been significantlyimproved.Environmental self-monitoring programDuring the reporting period, manually monitored pollution source monitoring points: 250 flue gas monitoring points, 13 wastewatermonitoring points, 13 factory boundary noise monitoring points and 15 atmospheric dust reduction points. (1) There are 250 flue gasmonitoring points: 195 organized monitoring points and 55 unorganized monitoring points, which are monitored according to thefrequency of weekly, monthly, quarterly, semi-annual and annual monitoring plans, and the routine monitoring tasks of atmosphericunorganized and organized flue gas are completed. A total of 2,567 monitoring data are obtained throughout the year. (2) There are13 monitoring points for wastewater: according to the monitoring plan, the monitoring is divided into weekly, monthly and quarterlyfrequencies, and 3228 monitoring data are obtained. (3) There are 13 noise monitoring points at the factory boundary: monitoring isdivided into quarterly frequency according to the monitoring plan, and 416 monitoring data are obtained. (4) There are 15
Bengang Steel Plates Co., Ltd. 2023 Annual Report
atmospheric dust falling points: according to the monitoring plan, the monitoring is divided into quarterly frequency, and 180monitoring data are obtained.During the reporting period, automatic monitoring of pollution sources: 53 organized monitoring points for flue gas and 2 monitoringpoints for wastewater, realizing continuous automatic monitoring.Emergency plan for environmental emergenciesThe Company and its 13 subordinate units carry out environmental emergency management in strict accordance with current lawsand regulations such as the Emergency Response Law of the People's Republic of China, the Notice on Printing and Distributing theGuidelines for Risk Assessment of Environmental Emergencies in Enterprises (Trial), and the Administrative Measures for FilingEmergency Plans for Environmental Emergencies in Enterprises and Institutions (Trial), complete the revision of emergency plans forenvironmental emergencies, re-carry out risk assessment and emergency resource investigation, and complete the assessment andfiling work according to the management requirements of the Municipal Bureau. At the same time, all units of the Company workedout the drill plan for 2023 according to the plan, and carried out the corresponding drill work. In 2023, the company held 33 drills ofemergency plans for environmental emergencies, including one "Joint Exercise of Emergency Response for EnvironmentalEmergencies in Shenyang Modern Metropolitan Area" held by Liaoning Provincial Department of Ecology and Environment.Investment in environmental governance and protection and payment of environmental protection taxIn 2023, the operating cost of environmental protection facilities will be 1.045 billion yuan, the investment expenditure onenvironmental governance and protection will be 774 million yuan, and the environmental protection tax will be 36.6 million yuan.Measures are taken to reduce carbon emissions during the reporting period and their effects?Applicable ?Not applicable
1. In 2023, the comprehensive energy consumption per ton of steel will be 564.9 kgce, which is 0.1 kgce lower than planned and 11.1kgce lower than the same period of last year. The main work is to strengthen the economic operation of each main productionprocess and improve the recovery of residual energy. The energy consumption ratio of blast furnace, sintering and cold rollingprocesses in the main processes is reduced in different degrees; Second, the centralized energy control was put into operation, andthe emission rates of blast furnace gas and coke oven gas systems were 0.31% and 0.21%, respectively, which were lower thanplanned and month-on-month.
2. According to the maintenance situation of each production line and the gas balance plan, adjust the gas consumption of users andboilers according to the time node, and give full play to the peak shaving ability of the gas holder to reduce the gas emission index. In2023, the blast furnace gas emission rate was 0.31%, which was 0.19% lower than planned and 0.25% lower than the same period oflast year; The emission rate of coke oven gas was 0.21%, which was 0.14% lower than planned and 0.1% lower than the same periodof last year.
3. By adjusting the overhaul time of gas furnace and the recovery parameters of converter gas, the recovery of converter gas per tonof steel will be completed by 133.8 m3 in 2023, which is 1.8 m3 higher than planned and 2.1 m3 higher than the same period of lastyear.
4. Strictly implement the economic operation plan in each process and strengthen the daily electricity management. The annualpower consumption per ton of steel is 500kWh, which is 27kWh lower than planned and 19kWh lower than the same period of lastyear.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
5. Take measures such as strictly controlling the amount of external steam supply and depressurizing operation of steam pipenetwork. The annual consumption of thermal coal was 169,700 tons, 30,300 tons lower than planned and 28,300 tons lower than thesame period of last year.
6. In 2023, 11 energy-saving and carbon-reducing projects will be promoted, 6 projects will be completed, and the remaining 5projects will be implemented next year. The Company completed six projects, including frequency conversion transformation ofprimary dust removal fans of No.4, No.5 and No.6 converters in steelmaking plant, pressure boosting transformation of No.1 CDQboiler, heating mode transformation of Xing'an raw material area, heating transformation of high temperature slag flushing waterplate in new furnace, efficiency improvement transformation of heat exchange source of slag flushing water plate in No.6 and No.7blast furnaces, and transformation of high energy-consuming electromechanical equipment in plate factory area, with annualbenefits of 34.79 million yuan and annual standard coal saving of 36,800 tons.Administrative penalties for environmental issues during the reporting period
| Company or subsidiary name | Causation of penalty | Violation | Consequence of penalty | Influence on the production and operation of listed companies | the Company's rectification measures |
| Bengang Steel Plates Co., Ltd. | Fugitive emissions | Scrap steel pipes with rust, scale and impurities are cut in the open air at No.3 site of waste steel plant, which leads to unorganized emission of smoke and dust and pollutes the environment. | Penalty: RMB80, 000 | None | All have been rectified. First, strictly implement management responsibilities, strictly control entry, and strictly control the entry of scrap steel with oversize, grease, rubber products and other environmental pollution into the factory. During the cutting operation, on-site personnel strictly select and confirm, and store scrap steel that may cause environmental pollution separately without processing. Second, the rolls, slag lumps and waste coils recovered internally are processed by the cutting room of the dust collector in our factory; Cutting and processing pure scrap steel with low smoke |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| and dust, such as medium plate and tail coil, which are recovered from internal production, in the existing site; The large scrap steel recovered from non-production and overhauled in engineering shall be handed over to the scrap steel plant after being processed by the scrap producer and qualified. If sensory pollution occurs during cutting operation, operators should deal with it in time to reduce the damage to environmental pollution. | |||||
| Bengang Steel Plates Co., Ltd. | Fugitive emissions | The raw materials in the Coking Dongfeng Plant area of the Ironmaking General Plant are easy to produce dusty materials for open stacking. No effective coverage measures were taken to prevent dust. | Penalty: RMB30,000 | None | All have been rectified. Act and rectify instantly and cover the materials |
| Bengang Steel Plates Co., Ltd. | Fugitive emissions | Smoke and dust overflow from the exhaust port of 8 # 9 # coke screen dust collector in Coking Branch of Ironmaking General Plant. This leads to fugitive emission of smoke and dust and pollutes the environment. | Penalty: RMB60,000 | None | All have been rectified. Rectification measures : The dry quenching dust scraper machine replaced by ultra-low emission transformation is used for recycling. After replacing the scraper machine, the ash is discharged on time to avoid smoke and dust spillover. |
| Bengang Steel | On line facility | There are failures | Penalty: | None | All have been |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Plates Co., Ltd. | accidents | in on-line facilities of 360 sintering desulfurization outlet in No.3 sintering operation area of Ironmaking Branch of General Ironmaking Plant. During the failure period, manual monitoring was not conducted as required. This causes some data to be missing. | RMB60,000 | rectified. The ironmaking plant actively organized the ice cleaning work. Due to the cold weather and safety considerations, the ice-clearing work was completed on the morning of January 13th . In the afternoon of the same day, manual monitoring was implemented. The monitoring results show that the pollutant emission concentration is within the limit and meets the discharge standard. At present, 360 desulfurization outlet online equipment is running normally. | |
| Bengang Steel Plates Co., Ltd. | Pollutant emission | The law enforcement personnel of Benxi Ecological Bureau checked the emission of Coking Branch of ironmaking Plant in 2022 and found that the actual emission of particulate matter was excessive. | Penalty: RMB300,000 | None | All have been rectified. Four CDQ dust removal facilities and four coke oven desulfurization and denitration treatment facilities in Coking Branch are under construction. According to the Regulations on the Administration of Pollutant Discharge Permit, if no online facilities are installed, only the pollution production coefficient can be used for accounting, so the total amount of particulate matter exceeds the |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| standard. At present, coke oven desulfurization and denitration treatment facilities and CDQ desulfurization treatment facilities are under construction and installation, and the renovation will be completed in December 2023. After the transformation, the online method is adopted to calculate the emissions. | |||||
| Bengang Steel Plates Co., Ltd. | On line facility setting problems | In the high-pressure operation area, the excess air coefficient of the 25 # furnace CEMS online monitoring system is set to 1.4. Thermal energy conversion type for gas boiler. The basic oxygen content should be set at 3 %. | Penalty: RMB86,000 | None | All have been rectified. The Plant strengthens the understanding of the ability of environmental protection management personnel and increases the study of relevant national norms. Currently, the online instrument operation and maintenance unit such as personnel of the Northern Environmental Protection Operation and Maintenance have modified the display base oxygen content in the 25 # furnace online facility to be consistent with the networking application form. This is in line with the specification requirements of 5.2-Table 4 of Emission Standard for Air Pollutants from Thermal Power Plants |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| G813223-2011). For boilers whose heat energy conversion type is gas, the basic oxygen content should be set at 3 %. | |||||
| Bengang Steel Plates Co., Ltd. | Fugitive emissions | Law enforcement officers of Benxi Ecological Bureau conducted on-site inspection on Benxi Steel Plate Factory. They found that the furnace door in the coking operation area of the General Ironmaking Plant (Coking) was not tightly blocked, and some doors and windows of the coke screening building in the CDQ operation area were not closed. These problems lead to some smoke overflow and pollute the environment. | Penalty: RMB60,000 | None | All have been rectified. Plate Ironmaking General Plant signed a contract with Xingtai Equipment Manufacturing Co., Ltd.. It will professionally operate, maintain and replace 900 oven doors in coking plant. The contract period is from January 1st , 2023 to December 31st , 2023. Coking Branch Plant shall take actions and rectify instantly, and deal with problems as soon as possible to prevent sensory pollution. |
| Bengang Steel Plates Co., Ltd. | Noises | The Company supervised and monitored the noise emission at the boundary of the desulfurization and denitration facilities of 360 sintering machine, and found that it exceeded the relevant requirements of the Environmental Noise Emission Standard for Industrial Enterprises (GB12348-2008). | Penalty: RMB80,000 | None | All have been rectified. 1.Increase the noise of enclosure interception around the induced draft fan. The expansion joint is added at the outlet of the induced draft fan to the chimney to reduce the resonance and reduce the noise source. Add a deflector at the chimney inlet to change the reverse direction of the flue gas flow and divert the flue gas to reduce noise. |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Increase the cyclone to destroy the impact of flue gas and the inner wall of the chimney to reduce the noise source. On November 18th 2023, the monitoring station of Benxi City conducted a retest, and the noise monitoring results met the standard. | |||||
| Bengang Steel Plates Co., Ltd. | Fugitive emissions | The law enforcement personnel of Benxi Ecological Bureau implemented on-site inspection of the resource service branch. They found that the staff in the operation area filled the torpedo tank with scrap steel by grabbing steel machine. This leads to a large amount of smoke, which is directly discharged into the air and pollutes the environment. | Penalty: RMB60,000 | None | All have been rectified. Immediately stop the operation that the steel grabbing machine in the southern tank station to add scrap steel to the torpedo tank. |
| Bengang Steel Plates Co., Ltd. | Pollutant emission | The sulfur dioxide and nitrogen oxides at the chimney outlet of coke ovens 4B and 5 in the coking process of the ironmaking plant were monitored. The concentration of pollutants exceeded the emission limit in the Coking Chemical Industry Pollutant Emission Standard GB16171-2012. | Penalty: RMB180,000 | None | All have been rectified. The desulfurization and denitrification treatment facilities of No.4B and No.5 coke ovens in the General Plates Ironmaking Plant started construction in April 2023. The construction was completed on October 15,2023, and the commissioning was carried out after debugging. During commissioning , it |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
can temporarilymeet the ultra-lowemissionstandards. It isnow put intoofficial operationand is in line withultra-low emissionstandards.
Other environmental information that should be disclosedNoneOther environmental protection related informationNoneII. Social responsibilityPlease refer to 2023 Corporate Social Responsibility Report of Bengang Steel Plates Co., Ltd. disclosed on http://www.cninfo.com.cnon March 30
th, 2024.III. Consolidate and expand the achievements of poverty alleviation and rural revitalizationFurther consolidate the fruit of poverty solving and poverty alleviation for employees and push forward effective coherence ofpoverty employee assistance and elevation of employees’ living quality. Strictly implement the Principle of “Construct all that needto be constructed, help all that need to be helped, manage dynamically and adopt targeted policies”. Stay firmly the faith that “Neverleave any employees behind”. Establish a long-acting mechanism of doing practical things and good things to employees to solve theproblems of employees. Grant 4, 002, 100 yuan salvage money to 47 needy employees all year round and promote whole coverageto register and help poor employees that meet the standards.The Company has actively selected excellent officials to join rural revitalization work. Currently, there are 5 people serving as firstParty secretaries. Focusing on serving to find a new breakthrough for a three-year action of rejuvenation in all respects and based onactual condition of the location, resident working team members remain true to the commitment and strive to fulfill the mission,engaging in tenacious struggle with firm confidence. Poverty elimination and works of preventing people from falling back intopoverty at pair-up poverty alleviation points have been well accomplished in 2023. The Company has provided growth points to ruralcollective economies by ways such as a direct sentinel procurement of resident agricultural and sideline products for employeewelfare,etc and the income per capita is effectively increased. The Company has been awarded as advanced unit of targeted povertyalleviation in Liaoning Province for years.
Bengang Steel Plates Co., Ltd. 2023 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 ofthe reporting period made by actual controller, shareholder, party involved, acquirer, company and otherrelated parties?Applicable ?Not applicable
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| Commitment made in the acquisition report or the equity change report | Ansteel Group Co., Ltd. | Other commitment | 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 standard operation of Bengang Steel Plates, interfere with Bengang Steel Plates’ business decisions, or damage the legitimate rights and interests of Bengang Steel Plates and other shareholders. Ansteel Group and other 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 | August 20th, 2021 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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. | ||||||
| Commitment made in the acquisition report or the equity change report | Ansteel Group Co., Ltd. | Other commitment | 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 to the requirements of existing laws, regulations and relevant policies, Ansteel Group will issue a letter of commitment. Within 5 years or less time if more effort from the date of issue, it will comprehensively adopt various 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 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 | August 20th, 2021 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| will strictly 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. | ||||||
| Commitment made in the acquisition report or the equity change report | Ansteel Group Co., Ltd. | Other commitment | 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 | August 20th,2021 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 transaction, Ansteel Group and other enterprises controlled by Ansteel Group will sign an agreement with Bengang Steel Plates and its subordinate enterprises in accordance with the principles of fairness, equity, and 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. |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 during initial public offering or refinancing | Company directors, senior management/Benxi Steel & Iron (Group) Co., Ltd. | Other commitment | According to the relevant regulations of China Securities Regulatory Commission, all directors and senior management of the Company have made the following commitments to the Company’s fulfillment of the diluted immediate return measures: 1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and interests of the Company and all shareholders. 2. I promise not to deliver benefits to other units or individuals without compensation or under unfair conditions, nor to use other means to damage the Company's interests. 3. I promise to restrict the position-related consumption 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 | May 22nd, 2019 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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. | ||||||
| Commitment made during initial public offering or refinancing | Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. | Other commitment | 1. The filing of foreign economic and trade operators, taking into account the need to gradually improve the qualification certification of raw material suppliers, customs import and export qualification certification, etc. In the short term, the actual conditions and capabilities for independent import and export business are still lacking. In order to ensure the normal business development of Bengang Steel 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 Trade,during 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 | July 24th,2019 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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. | ||||||
| Commitment made during initial public offering or refinancing | Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., Ltd. | Other commitment | 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 | July 24th,2019 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| controlling shareholder of Bengang Steel Plates, the Group and other enterprises controlled by the Group other than Bengang Steel Plates no longer produce or develop any products that compete or may compete with the products produced by Bengang Steel Plates and its subsidiaries at home and abroad, and do not directly or indirectly operate any business that competes with Bengang Steel Plates and its subsidiaries. Businesses that may constitute competition, nor are they involved in investing in any other enterprise that competes with or may compete with products or businesses produced by Bengang Steel Plates and its subsidiaries. 2. If Bengang Steel Plates and 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 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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. | ||||||
| Commitment made during initial public | Bengang Group Co., Ltd. and Benxi Steel & Iron (Group) Co., | Other commitment | In order to regulate The Group's related transaction with | July 24th,2019 | Long term | Under normal fulfillment |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| offering or refinancing | Ltd. | 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 making of Bengang Steel Plates, guarantee the independence of Bengang Steel Plates’ business, the completeness of asset, and the independence of personnel and finance to avoid and reduce unnecessary related transactions. The Group will strictly control related transactions with Bengang Steel Plates and its subsidiaries. 2. The Group and other 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| enterprises controlled by the Group will reduce related transactions as much as possible with Bengang Steel Plates. If 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 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| 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 on time or not | Yes | |||||
2. The Company remarks that there are assets or projects which meet the original profit forecast and thereasons when there are assets or projects profit forecast of the Company and the reporting period is still inthe forecast period
□Applicable ?Not applicable
II. Non-operating capital occupation of listed companies by the controlling shareholder andother 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 IndependentDirectors (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 accountingerror as compared with the financial report of last year?Applicable ?Not applicable
1. Significant changes in accounting policy
(1) Implement "Accounting for deferred income tax related to assets and liabilities arising from a single transaction which is notsubject to the accounting treatment of initial recognition exemption" in Accounting Standards for Business EnterprisesInterpretation No. 16.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
On November 30
th
, 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 toassets and liabilities arising from a single transaction which is not subject to the accounting treatment of initial recognitionexemption" came into force on January 1
st, 2023.
Interpretation No. 16 stipulates that for a single transaction that is not a business combination, neither affects accounting profitnor taxable income (or deductible loss) at the time of the transaction, and the assets and liabilities initially recognized result in thesame amount of taxable temporary differences and deductible temporary differences (including the lease transaction where thelessee initially recognizes lease liabilities and includes them in the right-of-use asset on the commencement date of the lease term,and the provision for fixed assets is recognized and included in the cost of related assets and other single transactions), theprovisions for the exemption of initial recognition of deferred income tax liabilities and deferred income tax assets are notapplicable. When the transaction occurs, the enterprise shall recognize the corresponding deferred income tax liabilities anddeferred income tax assets respectively in accordance with the "Accounting Standards for Business Enterprises No. 18-Income Tax"and other relevant regulations.
Where taxable temporary differences and deductible temporary differences arise from a single transaction that applies theprovisions between the beginning of the earliest period presented in the financial statements for the first time applying theprovisions and the date of implementation, as well as lease liabilities and right-of-use assets recognized as a result of a singletransaction that applies the provisions at the beginning of the earliest period presented in the financial statements, as well asestimated liabilities related to decommissioning obligations and corresponding related assets recognized, the enterprise shall makeadjustments in accordance with the provisions.
The Company will implement this regulation as of January 1
st, 2023. The main effects of implementing this regulation are asfollows :
| Contents and reasons of accounting policy change | Report items effected | Account effected to the balance on January 1st, 2022 | |
| Consolidated | Parent company | ||
The adjustment of theoperating lease existingbefore the first executiondate by the company asthe lessee.
| The adjustment of the operating lease existing before the first execution date by the company as the lessee. | Deferred income tax assets | 360,091,312.08 | 360,091,312.08 |
| Deferred income tax liabilities | 360,091,312.08 | 360,091,312.08 |
| Contents and reasons of accounting policy change | Report items effected | Consolidated | Parent company | ||
| December 31st , 2023/FY2023 | December 31st ,2022/FY2022 | December 31st , 2023/FY2023 | December 31st , 2022/FY2022 | ||
The adjustment ofthe operating leaseexisting before the
| The adjustment of the operating lease existing before the | Deferred income tax assets | 340,687,848.63 | 344,997,678.47 | 340,687,848.63 | 344,997,678.47 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| first execution date by the company as the lessee | Deferred income tax liabilities | 329,904,044.87 | 344,997,678.47 | 329,904,044.87 | 344,997,678.47 |
VII. Illustration of changes in the consolidation scope as compared with the financial report of lastyear
□Applicable ?Not applicable
There were no changes of consolidated report scope.
VIII. Appointment and dismissal of certified accountants’ firmAccountants’ firm currently appointed
| Name of the domestic accountants’ firm | BDO China Shu Lun Pan Certified Public Accountants LLP (Special General Partnership) |
| Payment to the domestic accountants’ firm (in RMB 10,000) | 295 |
| Service life of domestic accountants’ firm providing audit service | 1 |
| Name of CPAs from the domestic accountants’ firm | Guo Shunxi, Zhang Jiahui and Fu Yangyi |
| Service life of domestic accountants’ providing audit service | 1 |
| Name of the oversea accountants’ firm (if any) | Not applicable |
| Payment to the oversea accountants’ firm (in RMB 10,000) (if any) | 0 |
| Service life of oversea accountants’ firm providing audit service (if any) | Not applicable |
| Name of CPAs from the oversea accountants’ firm (if any) | Not applicable |
| Service life of oversea accountants’ providing audit service (if any) | Not applicable |
Whether the accountants’ firm is changed during the auditing period
□Yes ?No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing?Applicable ?Not applicableThe Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP (Special General Partnership) as the audit institutionfor internal control auditing at the price of RMB 600,000.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.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
XI. Significant lawsuits and arbitrations
?Applicable ?Not applicable
| Basic information of lawsuits (arbitrations) | Total amount involved (RMB 10,000) | Where there are estimated liabilities | Progress of lawsuits (arbitrations) | Judicial result and influence of lawsuits (arbitrations) | Enforcement of the judgment of lawsuits and arbitrations | Date of disclosure | Index of disclosure |
| Summary of significant lawsuits and arbitrations not reaching the standard of disclosure | 9,132.49 | No | In judgement | The Company has won most cases and is not affected. | Implementation according to laws |
XII. Punishment and rectification?Applicable ?Not applicable
| Name | Type | Reason | Type of investigation punishment | Conclusion (if any) | Date of disclosure | Index of disclosure |
| Liu Yansong | Senior manager | His father did a short-term trading | Other | The earnings have been handed in to the Company | August 12th , 2023 | 2023-045 |
Illustration of the rectification?Applicable ?Not applicable
1.Mr.Liu Yansong expressed deep self-blame for the failure to timely remind and urge the obligation, and sincerely apologized to themajority of investors. He also promised to study in depth and strictly abide by the provisions of relevant laws and regulations,consciously maintain the order of the securities market and urge relatives to implement in place to prevent such situations. Mr. LiuGang has deeply realized the seriousness of this matter, and sincerely apologizes to the investors for the adverse effects of this short-term transaction, and will strengthen the study of relevant laws and regulations in the future. Strictly abide by the relevant regulationsin securities trading to ensure that such situations do not occur again. Mr. Liu Yansong and his father Mr. Liu Gang promised toconsciously abide by the provisions of Article 44 of the " Securities Law " on the prohibition of short-term transactions, and not to sellcompany shares within six months from the date of the last purchase of company shares, and not to buy company shares within sixmonths from the date of the last sale of company shares.
2. According to the provisions of Article 44 of the Securities Law, the income of Mr. Gang Liu should be owned by the company. Mr.Gang Liu made a total profit of RMB 1,087 yuan in this short-term transaction, which has been turned over to the company.
3. The Board of Directors of the Company will continue to strengthen compliance training and publicity. Directors, supervisors, seniormanagers and shareholders holding more than 5% of the Company's shares are required to strengthen their study of relevant laws,regulations and normative documents such as Securities Law, Guidelines for Self-regulation of Listed Companies No.1-StandardizedOperation of Listed Companies on Main Board, Guidelines for Self-regulation of Listed Companies of Shenzhen Stock Exchange No.10-Share Change Management, Rules for the Management of Shares and Changes of the Company Held by Directors, Supervisors andSenior Managers of Listed Companies, and strictly abide by relevant regulations. The Company will further urge relevant personnelto strictly regulate the behavior of buying and selling the Company's shares, so as to prevent such incidents from happening again.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
XIII. Credit status of the Company and its controlling shareholders and actual controllers
□Applicable ?Not applicable
XIV. Major related transactions
1. Related transactions relevant to daily operations
?Applicable ?Not applicable
| Related parties | Relationship | Type of related party transactions | Content of related party transactions | Pricing principle of related party transactions | Price of related party transactions | Amount of related party transactions s (RMB 10,000) | Proportion of similar transactions | The approved trading limit of transactions (RMB 10,000) | Whether exceed the approved limit (Y/N) | Means of payment of related party transactions | Available market price of similar transactions | Date of disclosure | Index of disclosure |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 1,116,629.59 | 19.14% | 1,508,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel Mining Co., Ltd. | Same parent company | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 608,801 | 10.44% | 895,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Same parent company | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 23,988.48 | 0.41% | 30,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Industrial Development Co., | Same parent company | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 29,709.96 | 0.51% | 60,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Ltd. | |||||||||||||
| Ansteel Group Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 7,804.06 | 0.13% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Group Mining Gongchangling Co., Ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 37,501.57 | 0.64% | 50,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Group International Economic Trade Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 36,949 | 0.63% | 30,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 65,569.22 | 1.12% | 130,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Group Mining Co., Ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 0 | 0.00% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Panzhihua Iron and Steel Group Vanadium Titanium Resources | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 357.34 | 0.01% | 4,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Co., Ltd | |||||||||||||
| Shanxi products international energy co., ltd | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 4,356.15 | 0.07% | 0 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel metallurgy furnace material technology co., ltd | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing main raw materials | Market principles | Related agreement price | 2,059.21 | 0.04% | 0 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Beijing Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 0 | 0.00% | 2,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Liaoning hengtong metallurgical equipment manufacturing co., ltd | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 13,796.47 | 0.24% | 20,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel Electric Co., Ltd | Associates of the parent company | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 15,036.48 | 0.26% | 20,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Grou | Same parent company | Purchasing goods/providing | Purchasing auxiliary mater | Market principles | Related agreement price | 8,016.25 | 0.14% | 12,000 | No | Execute according to the | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| p) Machinery Manufacturing Co., Ltd. | services | ials | agreement | ||||||||||
| Ansteel Industry Group Metallurgical Machinery Co., Ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 1,034.79 | 0.02% | 1,500 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel steel rope co., ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 40.23 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Other subsidiaries of Ansteel Group | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing auxiliary materials | Market principles | Related agreement price | 0 | 0.00% | 550 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Beijing Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods/providing services | Purchasing energy power | Market principles | Related agreement price | 61,990.78 | 1.06% | 80,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 47,359.85 | 0.81% | 58,500 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Beijing Iron and Steel (Grou | Both belong to Bengang Group | Purchasing goods/providing servic | Accepting supportive services | Market principles | Related agreement price | 10,394.2 | 0.18% | 10,000 | Yes | Execute according to the agree | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| p) Co., Ltd. | es | ment | |||||||||||
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 65,137.29 | 1.12% | 10,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 987.57 | 0.02% | 5,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel Group International Economic Trade Co., Ltd. | Both belong to Bengang Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 6,129.09 | 0.11% | 20,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 1,756.84 | 0.03% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Steel Processing and Distribution | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 146.78 | 0.00% | 1,300 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| (Changchun) Co., Ltd. | |||||||||||||
| Ansteel Group Engineering Technology Co., Ltd | Associates of the Asteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 49,647.58 | 0.85% | 2,300 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel construction group co., ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 10,106.07 | 0.17% | 5,500 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel Group Co., Ltd | Controlling shareholder of parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 3,551.25 | 0.06% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Co., Ltd. | Parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 32,964.18 | 0.57% | 35,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Liaoning hengtai heavy machinery co., ltd | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 6,692.86 | 0.11% | 5,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| North Hengda logistics co., ltd | Both belong to Bengang Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 10,734.06 | 0.18% | 3,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Liaoning Metall | Same parent | Purchasing goods | Accepting suppo | Market princi | Related agree | 1,610.62 | 0.03% | 1,000 | Yes | Execute accor | Yes | December 14th , | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| urgical Technician College | company | /providing services | rtive services | ples | ment price | ding to the agreement | 2022 | ||||||
| Benxi Iron and Steel (Group) New Enterprise Development Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 351.91 | 0.01% | 7,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Group Automation Co., Ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 10,821.5 | 0.19% | 23,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Delin dry port supply chain service co., ltd | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 63,771.14 | 1.09% | 0 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Same parent company | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 6,885.04 | 0.12% | 8,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Kurita (Anshan) Water Treatment Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 0 | 0.00% | 1,200 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Ansteel Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 0 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Other subsidiaries of Ansteel Group | Both belong to Ansteel Group | Purchasing goods/providing services | Accepting supportive services | Market principles | Related agreement price | 1,966.31 | 0.03% | 2,100 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Lianzhong (Guangzhou) Stainless Steel Co., Ltd. | Both belong to Ansteel Group | Purchasing goods/providing services | Purchasing steel products | Market principles | Related agreement price | 0 | 0.00% | 16,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| North Hengda logistics co., ltd | Both belong to Bengang Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 393,141.41 | 6.80% | 200,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Delin dry port supply chain service co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 81,632.15 | 1.41% | 190,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Beijing Iron and Steel (Grou | Both belong to Bengang Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 47,469.02 | 0.82% | 180,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| p) Co., Ltd. | |||||||||||||
| Ansteel chemical technology co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 15,680.19 | 0.27% | 150,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Zhejiang Jingrui steel processing co., ltd | joint stock company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 0 | 0.00% | 130,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel steel co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 131.74 | 0.00% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 69,765.14 | 1.21% | 79,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Group International Economic Trade Co., Ltd. | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 25,002.24 | 0.43% | 30,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Steel Distribution (Hefei) Co., Ltd. | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 917.29 | 0.02% | 36,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Steel | Both belong to | Selling goods | Selling goods | Market princi | Related agree | 5,510.35 | 0.10% | 30,000 | No | Execute accor | Yes | December 14th , | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Distribution (Wuhan) Co., Ltd. | Ansteel Group | /providing services | ples | ment price | ding to the agreement | 2022 | |||||||
| Ansteel Steel Processing and Distribution (Zhengzhou) Co., Ltd. | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,046.99 | 0.02% | 30,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel green resources technology co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 13,392.28 | 0.23% | 25,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 9,419.12 | 0.16% | 15,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 6,672.22 | 0.12% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Grou | Parent company | Selling goods/providing | Selling goods | Market principles | Related agreement price | 723.91 | 0.01% | 2,000 | No | Execute according to the | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| p) Co., Ltd. | services | agreement | |||||||||||
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 489.55 | 0.01% | 10,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,296.25 | 0.02% | 9,400 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 7,257.52 | 0.13% | 8,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 196.99 | 0.00% | 5,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Liaoning hengtong metallurgical equip | Both belong to Bengang Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 17,438.9 | 0.30% | 5,000 | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| ment manufacturing co., ltd | |||||||||||||
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 3,927.58 | 0.07% | 5,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Steel Processing and Distribution (Changchun) Co., Ltd. | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 2,451.39 | 0.04% | 4,300 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel Shenyang steel processing and distribution co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 0 | 0.00% | 3,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Guangzhou Ansteel steel processing co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,251.05 | 0.02% | 3,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Ansteel energy technology | Both belong to Ansteel Group | Selling goods/providing servic | Selling goods | Market principles | Related agreement price | 2,318.38 | 0.04% | 2,700 | No | Execute according to the agree | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| co., ltd | es | ment | |||||||||||
| Dalian Boluole steel pipe co., ltd | Same parent company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,611.43 | 0.03% | 2,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Panzhong yihong metal products (Chongqing) co., ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 0 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Mining Yanjiagou Limestone Mine Co., Ltd. | Both belong to Bengang Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 205.23 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Suzhou Longben metal material co., ltd | joint stock company | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 0 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Panzhihua Iron and Steel Group Jiangyou Great Wall Special Steel Co., Ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,485.23 | 0.03% | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Ansteel Group Energy Saving Technology Service Co., Ltd | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,077.86 | 0.02% | Yes | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 | |
| Other subsidiaries of Ansteel Group | Both belong to Ansteel Group | Selling goods/providing services | Selling goods | Market principles | Related agreement price | 1,610.38 | 0.03% | 2,200 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel (Group) Mining Co., Ltd | Same parent company | Selling goods/providing services | Providing supportive services | Market principles | Related agreement price | 0 | 0.00% | 1,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Benxi Iron and Steel Group Co., Ltd | Controlling shareholder of parent company | Selling goods/providing services | Providing supportive services | Market principles | Related agreement price | 0 | 0.00% | 8,000 | No | Execute according to the agreement | Yes | December 14th , 2022 | 2022-073 |
| Total | -- | -- | 3,077,776.51 | -- | 4,287,550 | -- | -- | -- | -- | -- | |||
| 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 related transactions which would occur during the reporting period(if any) | N/A | ||||||||||||
| Reason for any significant difference between the transaction price and the market price for reference (if applicable) | N/A | ||||||||||||
2. Related transactions relevant to asset acquisition or sold
□Applicable ?Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
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 applicableDeposit business
| Related party | Relationship | Maximum daily deposit limit (RMB 10,000) | Deposit rate range | Beginning balance (RMB 10,000) | Amount for this period | Closing balance (RMB 10,000) | |
| Total deposit amount for the current period (RMB 10,000) | Total amount withdrawn in the current period (RMB 10,000) | ||||||
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group | 450,000 | 1.9% | 107,491.85 | 13,291,179.19 | 13,359,533.29 | 39,137.76 |
Loan business
| Related party | Relationship | Loan amount (RMB 10,000) | Loan interest rate range | Beginning balance (RMB 10,000) | Amount for this period | Closing balance (RMB 10,000) | |
| Total loan amount for the current period (RMB 10,000) | Total repayment amount for the current period (RMB 10,000) | ||||||
Credit or other financial business
| Related party | Relationship | Business type | Total (RMB 10,000) | Actual amount (RMB 10,000) |
| Ansteel Finance Co., Ltd. | Belong to Ansteel Group | Other financial business | 2,027 | 2,027 |
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 theCompany and related parties.
7. Other significant related transactions
□Applicable ?Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
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 applicableDescription 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 | 255,045.87 | |
| Bengang Tendering Co., Ltd. | Plants and ancillary facilities | 250,917.43 | |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd | Plants and ancillary facilities | 217,960.00 |
Company as the lessee:
| Lessor | Lease capital category | Account this year | Account last year | ||||||||
| Simplified Rental expense for short- | Variable lease payments not included in the | Rent paid | Interest expense on lease liabilities | Increase right-of-use | Simplified Rental expense for short- | Variable lease payments not included in the | Rent paid | Interest expense on lease liabilities | Increase right-of-use assets | ||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| term leases and leases of low-value assets | measurement of lease liabilities | assets | term leases and leases of low-value assets | measurement of lease liabilities | ||||||||
| Benxi Steel & Iron (Group) Co., Ltd. | Land use right 7,669,068.17 m2. Land use right 42,920.00 m2. | 27,716,930.88 | 39,000,108.00 | 55,251,233.39 | 39,600,209.28 | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | 2300 Hot rolling product line, related real estate | 8,042,372.92 | 7,740,688.68 | 16,098,161.06 | 7,982,648.96 | |||||||
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | 1780 Hot rolling product line, related real estate | 5,961,443.40 | 12,397,899.09 | 6,147,787.68 | ||||||||
| Bengang Group Co., Ltd. | Land use right 728,282.30 m2 | 4,886,077.60 | 2,449,918.80 | 9,945,423.08 | 2,666,923.92 | |||||||
| Northern Hengda Logisti | Real estate of office | |||||||||||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| cs Co., Ltd. | areas | 120,596.33 |
Projects that bring profits and losses to the Company reaching more than 10% of the Company's total profit during the reportingperiod
□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 than10% 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
There were no other major contracts during the reporting period.XVI. Description of other major events?Applicable ?Not applicableOn June 20
th
, 2023, the Company published Great Assets Replacement and Related Transactions Plan. The Company intends toconduct assets replacement Benxi Iron&Steel (Group) Co., Ltd. The assets intended to be purchased is 100% stock rights of BenxiIron&Steel (Group) Mining Industry Limited Liability Company; The assets intended to be sold are all assets and liabilities other thanretained assets and liabilities of listed company. The difference between assets intended to be purchased and assets intended to besold shall be compensated in cash by one party to the other. Currently, the Company is conducting further argument and coordinationtowards the transaction plan and will hold a board meeting again to discuss after the confirmation of related items.Mr. Liu Gang, the father of Company’s deputy general manager Mr. Liu Yansong, purchased and sold the Company’s stock from July20th, 2023 to August 9th, 2023. Mr. Liu Gang has constituted a short term trading behavior according to relevant laws and regulations.Mr. Liu Gang has handed in all the earnings from this short term trading to the Company. Mr. Liu Yansong and his father Mr. Liu Ganghave deeply recognized the severity of this event and have sent their apologies to the investors for the adverse influence brought bythis short term trading. They will reinforce learning of relevant laws and regulations in the future, strictly follow relevant regulationsin securities transaction to ensure that conditions of this kind will never happen again.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
XVII. Major events of subsidiaries of the Company?Applicable ?Not applicableThe company transferred the 20 % equity transfer of the subsidiary Zhejiang Jingrui Steel Processing Co., Ltd.on February 28th , andcompleted the business change on March 6th . At present, The company no longer holds the equity of Zhejiang Jingrui SteelProcessing Co., Ltd. This matter did not have a greater impact on the Company.
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Section VII. Status of Share Capital Changes and ShareholdersI. Share Capital Changes
1. Share capital changes
Unit: shares
| Before the change | Increase/decrease(+，-) | After the change | |||||||
| Before the change | Increase/decrease(+，-) | After the change | Before the change | Increase/decrease(+，-) | After the change | Before the change | Increase/decrease(+，-) | After the change | |
| 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 | |||||||||
| 4. Foreign shareholding | |||||||||
| Including: Foreign legal person holding | |||||||||
| Foreign natural person holding | |||||||||
| II. Un- | 4,108,212 | 100.00% | 7,085 | 7,085 | 4,108,219 | 100.00% | |||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| restricted shares | ,217 | ,302 | |||||||
| 1.Common shares in RMB | 3,708,212,217 | 90.26% | 7,085 | 7,085 | 3,708,219,302 | 90.26% | |||
| 2. Foreign shares in domestic market | 400,000,000 | 9.74% | 400,000,000 | 9.74% | |||||
| 3. Foreign shares in foreign market | |||||||||
| 4. Other | |||||||||
| III. Total shares | 4,108,212,217 | 100.00% | 7,085 | 7,085 | 4,108,219,302 | 100.00% |
Causation of share capital changes?Applicable □Not applicableDuring the reporting period, 925 convertible corporate bonds issued by the Company were converted into shares, and the total sharecapital of the Company increased by 20,838 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 pershare 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
Bengang Steel Plates Co., Ltd. 2023 Annual Report
3. Status of existing internal employee shares
□Applicable ?Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
III. Shareholders and actual controllers
1. Number of shareholders and their shareholding of the Company
Unit: shares
| Total number of common shareholders at the end of the reporting period | 49,067 | Total shareholders at the end of the previous month from the date of disclosing the annual report | 49,197 | The total number of preferred shareholders voting rights restored at the end of the reporting period (if any) (refer to Notes 8) | 0 | Total preferred shareholders at the end of the previous month from the date of disclosing the annual report (refer to Notes 8) | 0 | |
| Shareholding of shareholders holding more than 5% or top 10 shareholders | ||||||||
| Name of the shareholder | Nature of the shareholder | Shareholding percentage (%) | Number of shares held at the end of the reporting period | Changes during the reporting period | Restricted shares held | Un-restricted shares held | Number of pledged, marked or frozen shares | |
| Status | Number | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | State-owned legal person | 58.65% | 2,409,628,094 | 0 | 0 | 2,409,628,094 | Pledged | 110,000,000 |
| Frozen | 102,100,000 | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | State-owned legal person | 17.95% | 737,371,532 | 0 | 0 | 737,371,532 | Not applicable | 0 |
| Guan Hui | Domestic natural person | 0.70% | 28,730,000 | 2,760,000 | 0 | 28,730,000 | Not applicable | 0 |
| Gao Tao | Domestic natural person | 0.58% | 23,750,000 | 750,000 | 0 | 23,750,000 | Not applicable | 0 |
| Zhang Wenyou | Domestic natural person | 0.47% | 19,149,967 | 0 | 0 | 19,149,967 | Not applicable | 0 |
| Hong Kong Securities Clearing Co., Ltd. | Foreign legal person | 0.35% | 14,228,749 | -2,865,981 | 0 | 14,228,749 | Not applicable | 0 |
| Basic endowment insurance fund 804 portfolio | Other | 0.25% | 10,285,100 | 10,285,100 | 0 | 10,285,100 | Not applicable | 0 |
| Jia Peng | Domestic natural person | 0.23% | 9,430,000 | 9,430,000 | 0 | 9,430,000 | Not applicable | 0 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| China Universal Asset Management Co.,Ltd－Social security fund 423 portfolio | Other | 0.22% | 9,090,200 | 9,090,200 | 0 | 9,090,200 | Not applicable | 0 |
| Zhou Wei | Domestic natural person | 0.22% | 8,996,300 | -85,500 | 0 | 8,996,300 | Not applicable | 0 |
| Strategy investors or general legal persons become top 10 shareholders due to shares newly issued (if any) (See Notes 3) | None | |||||||
| Illustration of relationship or “action in concert” | Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Bengang Group Co., Ltd., and is a person acting in concert as stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is an 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 abstention from voting rights | Illustration of the above shareholders do not involve entrusting/ entrusted voting rights or abstention from voting rights | |||||||
| Special remarks for the buy-back accounts of top 10 shareholders (if any) (See Notes 10) | N/A | |||||||
| Shareholding of top 10 unrestricted shareholders | ||||||||
| Name of the shareholder | Un-restricted shares held at the end of the reporting period | Category of shares | ||||||
| Category of shares | Quantity | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | 2,409,628,094 | Common shares in RMB | 2,409,628,094 | |||||
| Begang Group Co., Ltd. | 737,371,532 | Common shares in RMB | 737,371,532 | |||||
| Guan Hui | 28,730,000 | Common shares in RMB | 28,730,000 | |||||
| Gao Tao | 23,750,000 | Common shares in RMB | 23,750,000 | |||||
| Zhang Wenyou | 19,149,967 | Common shares in RMB | 19,149,967 | |||||
| Hong Kong Securities Clearing Company Ltd. | 14,228,749 | Common shares in RMB | 14,228,749 | |||||
| Basic endowment | 10,285,100 | Common | 10,285,100 | |||||
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| insurance fund 804 portfolio | shares in RMB | ||
| Jia Peng | 9,430,000 | Common shares in RMB | 9,430,000 |
| China Universal Asset Management Co.,Ltd－Social security fund 423 portfolio | China Universal Asset Management Co.,Ltd－Social security fund 423 portfolio | Common shares in RMB | 9,090,200 |
| Zhou Wei | 8,996,300 | Common shares in RMB | 8,996,300 |
| Illustration of relationship or “action in concert” among top 10 un-restricted shareholders, and between top 10 un-restricted shareholders and top 10 shareholders | Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Bengang Group Co., Ltd., and is a person acting in concert as stipulated in the Administrative Measures for the Acquisition of Listed Companies. The Company is not aware of whether there is an 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 top 10 shareholders participating in securities margin trading (if any) (see Notes 4) | Guan Hui holds 730,000 shares through an investor ordinary account and holds 28,000,000 shares through an investor credit securities account. Zhang Wenyou holds 19,149,967shares through an investor credit securities account. Zhou Wei holds 164,500 shares through an investor ordinary account and holds 8,831,800 shares through an investor credit securities account. | ||
The lending of shares for the top 10 shareholders participating in refinance business
□Applicable ?Not applicable
Changes of the top ten shareholders compared to that in the last period?Applicable ?Not applicableUnit: Shares
| Changes of the top ten shareholders compared to that at the end of last period | |||||
| Name of shareholder (full name) | Newly-added/quit in this period | The lent shares refinanced and the amount has not returned at the end of the period | , The number of shares held by shareholders ' ordinary accounts, credit accounts and refinancing and lending shares not returned at the end of the period | ||
| Total amount | Percentage | Total amount | Percentage | ||
| Huatai Youyi No. 5 Mixed Pension Product－China Bank Co., Ltd. | Quit | 0 | 0.00% | 0 | 0.00% |
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | Quit | 0 | 0.00% | 0 | 0.00% |
| Gao Tao | Newly-added | 0 | 0.00% | 23,750,000 | 0.58% |
| Basic endowment insurance fund 804 portfolio | Newly-added | 0 | 0.00% | 10,285,100 | 0.25% |
| Jia Peng | Newly-added | 0 | 0.00% | 9,430,000 | 0.23% |
| China Universal Asset | Newly-added | 0 | 0.00% | 9,090,200 | 0.22% |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
ManagementCo.,Ltd－Socialsecurity fund 423portfolio
Whether the top 10 common shareholders and top 10 un-restricted common shareholders have buy-back agreement dealing duringthe reporting period
□Yes ?No
The top 10 common shareholders and top 10 un-restricted common shareholders have no buy-back agreement dealing during thereporting period.
2. Controlling shareholder
Nature of controlling shareholders: central state-owned holdingsType of controlling shareholders: legal person
| Name of the controlling shareholder | Legal representative/person in charge | Date of incorporation | Organization code | Principal business activities |
| Benxi Iron and Steel (Group) Co., Ltd. | Li Naiming | July 10th , 1996 | 91210500119726263U | Steel, iron smelting, steel rolling processing, metal material manufacturing, ferroalloy smelting, heat production and supply, metal cutting processing services, general equipment manufacturing (excluding special equipment manufacturing), goods import and export, office services, building materials sales, refractory materials sales, refractory materials production, instrumentation manufacturing, natural science research and experimental development, professional design services, industrial design services, information consulting services (excluding licensed information consulting services), property management, productive scrap metal recovery, renewable resource recovery (except productive scrap metal), |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| renewable resource processing, renewable resource sales, non-residential real estate leasing, housing leasing, asset management services invested by self-owned funds, advertising production, advertising design, agency, advertising release (except for projects subject to approval according to law, carry out business activities independently according to law with business licenses) | ||
| Equity of the controlling shareholder in other domestic/foreign listed companies under its control or participation during the reporting period | None | |
hanges 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 AgencyActual controller type: Legal person
| Name of the controlling shareholder | Legal representative/person in charge | Date of incorporation | Organization code | Principal business activities |
| Ansteel Group Co., Ltd. | Tan Chengxu | July 28th, 2010 | 91210000558190456G | 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, nonmetallic mining and comprehensive utilization, mining |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| 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 companies under its control during the reporting period | During the reporting period, Ansteel Group Co., Ltd. indirectly held 53.45% of the shares of Ansteel and indirectly held 49.67% of the shares of Pansteel Vanadium and Titanium. | |
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 pledgedshares accounting for 80% of the Company's shares held by them
□Applicable ?Not applicable
Bengang Steel Plates Co., Ltd. 2023 Annual Report
5. Shareholders holding more than 10% of the shares
□Applicable ?Not applicable
6. Share reduction limitation of controlling shareholders, actual controller, restructuring party and othercommitment subject
□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
Bengang Steel Plates Co., Ltd. 2023 Annual Report
Section VIII. Preferred shares
□Applicable ?Not applicable
There were no preferred shares in the Company during the reporting period.
Bengang Steel Plates Co., Ltd. 2023 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 ConvertibleBonds was adjusted to RMB 5.02 per share on July 19
th, 2021.
3. Due to the Company's implementation of the 2021 mid-term equity distribution plan, the conversion price of Bengang ConvertibleBonds was adjusted to RMB 4.55 per share on October 13
th, 2021.
4. Due to the Company's implementation of the 2021 annual equity distribution plan, the conversion price of Bengang ConvertibleBonds was adjusted to RMB 3.95 per share on October 13
th
, 2021.
Auditor’s Report Page 1
2. Cumulative share conversion
?Applicable ?Not applicable
| Convertible bond abbreviation | Conversion beginning and ending date | Total amount issued (bonds) | Total amount issued (RMB) | Cumulative amount of shares converted (RMB) | Cumulative number of shares converted (shares) | Proportion of the number of converted shares to the total issued shares before conversion | Amount not yet converted (RMB) | Proportion of unconverted amount to total issued amount |
| Bengang Convertible Bonds | From January 4th, 2021 to June 28th, 2026 | 68,000,000 | 6,800,000,000.00 | 1,168,975,900.00 | 232,847,770 | 6.01% | 5,631,024,100.00 | 82.81% |
3. Top ten holders of convertible bonds
| No. | Convertible bond holders | Nature of convertible bond holders | Number of convertible bonds held at the end of the reporting period (bonds) | Amount of convertible bonds held at the end of the reporting period (RMB) | Percentage of convertible bonds held at the end of the reporting period |
| 1 | Agricultural Bank of China Co., Ltd.-Southern Xiyuan Convertible Bond Securities Investment Fund | Other | 1,678,975 | 167,897,500.00 | 2.98% |
| 2 | Bank of China Limited-Nanfang Changyuan Convertible Bond Securities Investment Fund | Other | 1,651,138 | 165,113,800.00 | 2.93% |
| 3 | Bank of China Limited-E Fund Steady Income Bond Securities Investment Fund | Other | 1,540,602 | 154,060,200.00 | 2.74% |
| 4 | China CITIC Group Co., Ltd. Enterprise Annuity Plan-CITIC Bank Co., Ltd. | Other | 1,405,380 | 140,538,000.00 | 2.50% |
| 5 | Industrial and Commercial Bank of China Limited-Bosera Credit Bond Investment Fund | Other | 1,382,219 | 138,221,900.00 | 2.45% |
Auditor’s Report Page 2
| 6 | Huaxia Fund Longevity No.9 Fixed Income Pension Product-China Merchants Bank Co., Ltd. | Other | 1,362,468 | 136,246,800.00 | 2.42% |
| 7 | China Construction Bank Co., Ltd.-Huashang Credit Enhancement Bond Securities Investment Fund | Other | 1,093,427 | 109,342,700.00 | 1.94% |
| 8 | Pacific Asset Management-China Merchants Bank-Pacific Zhuoyue Convertible Bonds Products | Other | 938,925 | 93,892,500.00 | 1.67% |
| 9 | China Construction Bank Corporation-Zheshang Fengli Enhanced Bond Securities Investment Fund | Other | 800,000 | 80,000,000.00 | 1.42% |
| 10 | Industrial and Commercial Bank of China Limited Enterprise Annuity Plan-China Construction Bank Corporation | Other | 764,258 | 76,425,800.00 | 1.36% |
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 arrangementsand debt repayment in future yearsAt the end of the reporting period, the Company's major accounting data and financial indicators and theCompany'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 netassets at the end of the previous year
□Applicable ?Not applicable
VI. Overdue interest-bearing debts except for bonds at the end of the reportingperiod
□Applicable ?Not applicable
Auditor’s Report Page 3
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 pasttwo years at the end of the reporting periodUnit: RMB 10,000
| Item | At the end of this period | At the end of last period | Change |
| Current ratio | 0.70 | 0.81 | -13.58% |
| Liabilities to Assets Ratio | 61.89% | 56.42% | 5.47% |
| Quick ratio | 0.27 | 0.21 | 28.57% |
| At the end of this period | At the end of last period | Change | |
| Net profit after deducting nonrecurring gains and losses (RMB) | -206,777.53 | -139,183.79 | 10.89% |
| EBITDA total liabilities ratio | 0.03% | 0.11% | -0.08% |
| Interest coverage ratio | -2.43 | -0.75 | 368.00% |
| Cash interest coverage ratio | 9.07 | 3.68 | 146.47% |
| EBITDA interest coverage ratio | 1.12 | 2.39 | -53.14% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest repayment rate | 100.00% | 100.00% |
Auditor’s Report Page 4
Section X. Financial Report
Auditor’s Report
Xksbz[2024] No. ZG10444
To the Shareholders of Bengang Steel Plates Co., Ltd.:
I. Auditor’s Opinion
We have audited the financial statements of Bengang Steel PlatesCo., Ltd. (hereinafter referred to as “Bengang Steel Plates” ), whichcomprise the consolidated and the parent company’s statement offinancial position as at December 31
st, 2023, the consolidated and theparent company’s income statement, the consolidated and the parentcompany’s cash flow statement and the consolidated and the parentcompany’s statement of changes in shareholders’ equity for the year 2023,and the notes to the financial statements.
In our opinion, the accompanying financial statements wereprepared in accordance with Accounting Standards for BusinessEnterprises in all material respects, and presented fairly the consolidatedand the parent company’s financial position of Bengang Steel Plates as ofDecember 31st, 2023, and the consolidated and the parent company’sresults of operations and cash flows for the year 2023.
II. Basis for Opinion
We conducted our audit in accordance with China Standards onAuditing for Chinese Certified Public Accountants. Our responsibilitiesunder those standards are further described in the “Auditor’sResponsibilities for the Audit of the Financial Statements” section of ourreport. We are independent of Bengang Steel Plates in accordance withthe Code of Ethics for Chinese Certified Public Accountants, and we havefulfilled our other ethical responsibilities of the code. We believe that theaudit evidence we have obtained is sufficient and appropriate to providea basis for our audit.
III. Key Audit Matters
Auditor’s Report Page 5
Key audit matters are those matters that, in our professionaljudgment, are considered to be most significant to the audit of thefinancial statements for the period. These matters were addressed in thecontext of our audit of the financial statements as a whole and, in formingour audit opinion thereon, and we do not express a separate opinion onthese matters.
We have compiled key audition items identified during the auditionas follows:
| Key Audit Matters | Responses in the Audit |
| (I) Confirmation of Incomes | |
| Please refer to the policies in Note (XXIII) of “III. Important accounting policies and accounting estimates” and Note (XXXVIII) of “V. Notes consolidated financial report items ” In the year 2023, the balance of income in the Consolidated Statement of Financial Position of Bengang Steel Plates was RMB 57,814,969,400. We classified it as a key audit matter in view of the high risk of the management of misstate arising from the significant changes in cash and cash equivalents. | The audit procedures we performed were as follows: (1) Understanding and testing key internal controls related to cash and cash equivalents and evaluating whether the relevant controls are properly designed and effectively implemented; (2) We have conducted analytical procedures on income, including the comparison of the gross profit of the main products in the current period with the previous period, the analysis of income fluctuations, and the inspection of whether there are abnormalities ; (3) Obtaining the sales details of the year and select samples of the revenue transactions recorded in the year. Checking the supporting documents such as sales contracts, invoices, warehouse receipts, and customs declarations. Evaluating whether the relevant revenue recognition is in line with the Company 's |
Auditor’s Report Page 6
| accounting policies ; (4) Selecting samples to check the sales contract. Identifying the contract terms and conditions related to the transfer of commodity control rights and evaluating whether the income recognition time point of Bengang Plate Company meets the requirements of enterprise accounting standards ; (5) In combination with the audit procedure of accounts receivable, the correspondence procedure is performed to the sample customers on the sales income during the reporting period ; (6) Examining sales to related parties, review the fairness of related party transaction prices, and perform confirmation procedures to related party customers ; (7) Checking whether the information related to income matters has been properly presented and disclosed in the financial statements. | |
| (II) Provision for declines in inventory prices | |
| Please refer to the policies in (XI) of “III. Important accounting policies and accounting estimates” and Note (XXXVIII) of “V. Notes consolidated financial report items ” On December 31st ,2023, the inventory amount in the | The audit procedures we performed were as follows: (1) Evaluating the design and operation of the internal control related to the inventory decline preparation of Bengang Steel Plates Co., Ltd.; |
Auditor’s Report Page 7
| consolidated financial statements of Bengang Steel Plate Co., Ltd. was RMB7,782,548,800, the inventory price reduction preparation was RMB74,175,900, and the book value was RMB7,708,372,900. Inventory is measured by the method of cost and net realizable value. Whether the provision for inventory depreciation is sufficient has a greater impact on financial statements. The net realizable value of Bengang Steel Plates Co., Ltd. is determined by subtracting the estimated sales price of inventory goods from the estimated sales expenses and related taxes and fees. The management estimates its expected selling price based on the state of the inventory goods, and the management needs to use major judgments in the process of estimation. The book value of the inventory as on December 31st , 2023 was significant and involved an estimate of the net realisable value, so we treated it as a key audit matter. | (2) Monitoring the inventory of Bengang Steel Plates Co., Ltd. Checking the quantity and condition of inventory, and check the inventory with longer storage age ; (3) Obtaining the calculation table of inventory price decline preparation of Bengang Steel Plates Co., Ltd. Checking whether the implementation of the relevant accounting policies according to the steel plate. Checking the changes in the current period of inventory depreciation reserves accrued in the previous year, and analyzing whether the inventory depreciation reserves are sufficient ; (4) Implementing the method of inventory net realizable value test and review the provision for inventory depreciation. Testing report and data integrity based. |
IV. Other Information
The management of Bengang Steel Plates (hereinafter referred to asthe Management) is responsible for the other information. Other
Auditor’s Report Page 8
information includes the information covered in the 2023 Annual Reportof Bengang Steel Plates, but excludes the financial statements and ourauditor’s report.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusionthereon.
In connection with our audit of the financial statements, ourresponsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appearsto be materially misstated.
If, based on the work we have performed, we conclude that there isa material misstatement of the other information, we are required toreport that fact. We have nothing to report in this regard.V. Responsibilities of the Management and those charged with
governance for the financial statements
The Management is responsible for the preparation of the financialstatements in accordance with the provisions of the Accounting Standardsfor Business Enterprises to achieve a fair presentation, and designing,implementing and maintaining the necessary internal controls so that thefinancial statements are free from material misstatement, whether dueto fraud or error.
In preparing the financial statements, the Management isresponsible for assessing the ability of Bengang Steel Plates to continueas a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless theManagement either intends to liquidate Bengang Steel Plates or to ceaseoperations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing thefinancial reporting process of Bengang Steel Plates.
VI. Auditor’ s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance as to whether thefinancial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor’s report thatexpresses our opinion. Although reasonable assurance is a high level ofassurance, it is not a guarantee that an audit conducted in accordance
Auditor’s Report Page 9
with auditing standards will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error and are generallyconsidered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions that users ofthe 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:
(I) Identify and assess the risks of material misstatement of thefinancial statements, whether due to fraud or error, design and performaudit procedures responsive to those risks, and obtain audit evidence thatis sufficient and appropriate to provide a basis for our audit. The risk ofnot detecting a material misstatement resulting from fraud is higher thanfor one resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override of internalcontrol.
(II) Obtain an understanding of internal control relevant to the auditin order to design audit procedures that are appropriate in thecircumstances.
(III) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made bythe Management.
(IV) Conclude on the appropriateness of the Management’ s use ofthe going concern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the ability of Bengang SteelPlates to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’ sreport to the related disclosures in the financial statements in accordancewith the auditing standards or, if such disclosures are inadequate, we shallmodify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’ s report. However, future eventsor conditions may cause Bengang Steel Plates to cease to continue as agoing concern.
(V) Evaluate the overall presentation, structure and content(including disclosures) of the financial statements, and also whether thefinancial statements represent the underlying transactions and events ina manner that achieves fair presentation.
(VI) Obtain sufficient appropriate audit evidence regarding thefinancial information of the entities or business activities within Bengang
Auditor’s Report Page 10
Steel Plates to express an opinion on the consolidated financialstatements. We are responsible for the direction, supervision andperformance audit of the group. We remain solely responsible for ouraudit opinion.
We communicate with those charged with governance regarding,among other matters, the planned scope and timing of the audit andsignificant audit findings etc., including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statementthat we have complied with those relevant ethical requirementsregarding independence, and to communicate with them all relationshipsand other matters that may reasonably be thought to bear on ourindependence and related safeguards, where applicable.
From the matters communicated with those charged withgovernance, we determine those matters that were of most significancein the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation prohibited public disclosureabout the matter or when, in rare circumstances, we determine that amatter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh thepublic interest benefits of such communication.
Lixin Certified Public Accountants Co., Ltd.
(Special General Partnership)
Chinese Certified Public Accountant: Guo Shunxi
(Engagement partner)Chinese Certified Public Accountant: Zhang Jiahui
Chinese Certified Public Accountant: Fu Yangyi
Shanhai·China April 25
th, 2024
Statement Page 1
Bengang Steel Plates Co., Ltd.Consolidated Balance SheetDecember 31, 2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Assets | Notes | Closing balance | Opening balance |
| Current assets | |||
| Cash and cash equivalents | V. (I) | 2,194,654,161.34 | 1,461,145,641.87 |
| Seetlement provisions | |||
| Capital lent | |||
| Financial assets held for drading | |||
| Derivative financial assets | |||
| Notes receivable | V. (II) | 453,560,095.49 | 429,707,174.70 |
| Accounts receivable | V. (III) | 1,328,532,598.47 | 897,230,896.06 |
| Accounts receivable financing | V. (IV) | 806,822,622.43 | 137,591,996.02 |
| Prepayments | V. (V) | 674,872,999.29 | 1,247,177,748.33 |
| Premium receivable | |||
| Reinsurance accounts receivable | |||
| Receivable deposit for reinsurance contract | |||
| Other receivables | V. (VI) | 318,793,157.58 | 127,198,692.92 |
| Redemptory financial assets for sale | |||
| Inventories | V. (VII) | 7,708,372,894.81 | 8,463,728,475.18 |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | V. (VIII) | 157,789,976.90 | 395,441,136.26 |
| Total current assets | 13,643,398,506.31 | 13,159,221,761.34 | |
| Non-current assets: | |||
| Loan and advances issued | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | V. (IX) | 46,910,346.41 | 51,030,777.18 |
| Other equity instrument investments | V. (X) | 974,463,039.83 | 1,020,418,482.31 |
| Other non-current financial assets | |||
| Investment property | |||
| FIxed assets | V. (XI) | 25,028,192,964.67 | 24,836,556,422.90 |
| Construction in progress | V. (XII) | 4,308,404,147.31 | 3,158,195,899.65 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | V. (XIII) | 1,319,616,179.37 | 1,379,990,713.89 |
| Intangible assets | V. (XIV) | 256,020,436.13 | 262,784,937.41 |
| Development expenditure | |||
| Goodwill | |||
| Long-term deffered expenses | |||
| Deferred tax assets | V. (XV) | 467,040,631.42 | 481,385,563.75 |
| Other non-current assets | V. (XVI) | 137,933,599.61 | 110,065,560.68 |
| Total non-current assets | 32,538,581,344.75 | 31,300,428,357.77 | |
| Total assets | 46,181,979,851.06 | 44,459,650,119.11 |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 2
Bengang Steel Plates Co., Ltd.Consolidated Balance Sheet (Continued)
December 31, 2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Assets | Notes | Closing balance | Opening balance |
| Current liabilities: | |||
| Short-term loans | V. (XVIII) | 328,000,000.00 | 49,200,000.00 |
| Loan from central bank | |||
| Loan from other banks | |||
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | V. (XIX) | 10,364,993,998.89 | 4,389,336,619.36 |
| Accounts payable | V. (XX) | 2,809,435,260.77 | 3,696,420,463.85 |
| Advance from customers | |||
| Contract liabilities | V. (XXI) | 3,303,108,592.38 | 3,794,115,592.29 |
| Financial assets sold for repurchase | |||
| Deposits from customers and interbank | |||
| Receipt from vicariously traded securities | |||
| Receipt from vicariously underwriting securities | |||
| Employee benefits payable | V. (XXII) | 1,175,970.83 | 10,046,363.27 |
| Taxes payable | V. (XXIII) | 55,402,959.11 | 44,392,920.78 |
| Other payables | V. (XXIV) | 1,659,284,531.06 | 1,247,722,165.47 |
| Handling charges and commission payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | V. (XXV) | 685,881,691.76 | 2,586,250,886.43 |
| Other current liability | V. (XXVI) | 392,122,093.59 | 493,235,027.03 |
| Total current liabilities | 19,599,405,098.39 | 16,310,720,038.48 | |
| Non-current liabilities: | |||
| Provision for insurance contract | |||
| Long-term loans | V. (XXVII) | 1,723,726,700.80 | 1,726,938,302.30 |
| Bonds payable | V. (XXVIII) | 5,451,381,676.38 | 5,276,502,232.78 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Leasing liabilities | V. (XXIX) | 1,342,427,252.45 | 1,384,348,462.18 |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | V. (XXX) | 136,084,955.18 | 42,377,015.51 |
| Deferred tax liabilities | V. (XV) | 329,914,385.19 | 345,024,987.48 |
| Other non-current liabilities | |||
| Total non-current liabilities | 8,983,534,970.00 | 8,775,191,000.25 | |
| Total liabilities | 28,582,940,068.39 | 25,085,911,038.73 | |
| Owners' equity: | |||
| Share capital | V. (XXXI) | 4,108,219,302.00 | 4,108,212,217.00 |
| Other equity instruments | V. (XXXII) | 947,858,134.16 | 947,863,834.02 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Capital reserves | V. (XXXIII) | 13,272,225,870.92 | 13,272,205,160.21 |
| Less: Capital reserves | |||
| Other comprehensive income | V. (XXXIV) | -50,371,341.88 | -15,904,760.02 |
| Special reserves | V. (XXXV) | 54,843.15 | 2,217,913.77 |
| Surplus reserves | V. (XXXVI) | 1,195,116,522.37 | 1,195,116,522.37 |
| General risk reserve | |||
| Undistributed profits | V. (XXXVII) | -2,463,133,834.65 | -720,559,670.73 |
| Total equity attributable to owners of the parent company | 17,009,969,496.07 | 18,789,151,216.62 | |
| Non-controlling interests | 589,070,286.60 | 584,587,863.76 | |
| Total owners' equity | 17,599,039,782.67 | 19,373,739,080.38 | |
| Total of liabilities and owners' equity | 46,181,979,851.06 | 44,459,650,119.11 |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 3
Bengang Steel Plates Co., Ltd.Statement of financial position of the parent company
December 31, 2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Assets | Notes | Closing balance | Opening balance |
| Current assets: | |||
| Cash and cash equivalents | 2,084,382,077.60 | 585,125,555.12 | |
| Cash and cash equivalents | |||
| Derivative financial assets | |||
| Notes receivable | 613,514,613.02 | 669,193,401.02 | |
| Notes receivable | XIV. (I) | 1,243,326,802.56 | 931,035,796.58 |
| Accounts receivable financing | 664,669,952.97 | 127,468,835.80 | |
| Prepayments | 735,940,974.41 | 1,247,084,271.88 | |
| Other receivables | XIV. (II) | 604,535,173.18 | 150,724,545.56 |
| Inventories | 6,726,641,809.04 | 6,988,993,205.61 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Non-current assets due within one year | 82,661,697.57 | 310,293,996.25 | |
| Total current assets | 12,712,971,194.62 | 11,009,919,607.82 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | XIV. (III) | 2,269,191,936.65 | 2,270,277,904.85 |
| Other equity instrument investments | 974,463,039.83 | 1,020,418,482.31 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 24,052,882,215.31 | 23,777,736,434.39 | |
| Construction in progress | 4,275,801,115.73 | 3,127,247,793.98 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 1,319,616,179.37 | 1,379,990,713.89 | |
| Intangible assets | 170,176,158.95 | 174,295,096.19 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | 465,645,459.77 | 460,123,889.23 | |
| Other non-current assets | 131,159,433.56 | 110,065,560.68 | |
| Total non-current assets | 33,658,935,539.17 | 32,320,155,875.52 | |
| Total assets | 46,371,906,733.79 | 43,330,075,483.34 |
Statement Page 4
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 5
Bengang Steel Plates Co., Ltd.Statement of financial position of the parent company (Continued)
December 31, 2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Liabilities and owners' equity | Notes | Closing balance | Opening balance |
| Current liabilities: | |||
| Short-term loans | 328,000,000.00 | 49,200,000.00 | |
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | 10,361,392,779.12 | 3,982,738,952.59 | |
| Accounts payable | 3,190,842,780.56 | 3,821,848,200.25 | |
| Advance from customers | |||
| Contract liabilities | 4,903,008,138.37 | 4,805,281,178.80 | |
| Employee benefits payable | 9,901,551.31 | ||
| Taxes payable | 30,105,183.40 | 22,518,649.65 | |
| Other payables | 1,656,804,114.53 | 861,392,691.88 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 685,881,691.76 | 2,586,250,886.43 | |
| Other current liabilities | 79,447,326.71 | 624,686,553.24 | |
| Total current liabilities | 21,235,482,014.45 | 16,763,818,664.15 | |
| Non-current liabilities: | |||
| Long term loans | 1,723,726,700.80 | 1,726,938,302.30 | |
| Bonds payable | 5,451,381,676.38 | 5,276,502,232.78 | |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | 1,342,427,252.45 | 1,384,348,462.18 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | 136,084,955.18 | 42,377,015.51 | |
| Deferred tax liabilities | 329,914,385.19 | 345,024,987.48 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 8,983,534,970.00 | 8,775,191,000.25 | |
| Total liabilities | 30,219,016,984.45 | 25,539,009,664.40 | |
| Shareholder' s equity: | |||
| Share capital | 4,108,219,302.00 | 4,108,212,217.00 | |
| Other equity instruments | 947,858,134.16 | 947,863,834.02 | |
| Other equity instruments | |||
| Perpetual bond | |||
| Capital reserves | 12,852,074,188.80 | 12,852,053,478.09 | |
| Less: Treasury shares | |||
| Other comprehensive income | -50,371,341.88 | -15,904,760.02 | |
| Special reserves | 3,681.16 | 58,212.15 | |
| Surplus reserves | 1,195,116,522.37 | 1,195,116,522.37 | |
| Undistributed profits | -2,900,010,737.27 | -1,296,333,684.67 | |
| Total owners' equity | 16,152,889,749.34 | 17,791,065,818.94 | |
| Total liabilities and owners' equity | 46,371,906,733.79 | 43,330,075,483.3 |
Statement Page 6
| Liabilities and owners' equity | Notes | Closing balance | Opening balance |
| 4 |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 7
Bengang Steel Plates Co., Ltd.Consolidated income statement
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | Notes | Closing balance | Opening balance |
| I. Total operating income | 57,814,969,351.65 | 62,616,621,627.60 | |
| Including: Operating income | V. (XXXVIII) | 57,814,969,351.65 | 62,616,621,627.60 |
| Interest income | |||
| Premium earned | |||
| Income from handling charges and commission | |||
| II. Total operating cost | 59,689,287,769.42 | 63,838,504,250.02 | |
| Including: Operating cost | V. (XXXVIII) | 58,326,286,006.53 | 62,259,334,854.72 |
| Interest expense | |||
| Expenditure for handling charges and commission | |||
| Surrender value | |||
| Net expenditure for compensation | |||
| Net provision for insurance contract appropriated | |||
| Bonus payment for policy | |||
| Reinsurance premium | |||
| Tax and surcharges | V. (XXXIX) | 211,561,623.25 | 206,440,870.56 |
| Selling and distribution expenses | V. (XL) | 159,034,136.51 | 128,489,696.80 |
| General and administrative expenses | V. (XLI) | 601,859,503.43 | 663,080,654.45 |
| Research and development expenses | V. (XLII) | 81,247,560.73 | 58,088,008.14 |
| Financial expenses | V. (XLIII) | 309,298,938.97 | 523,070,165.35 |
| Including: Interest expense | 415,219,929.72 | 599,359,597.96 | |
| Interest income | 54,957,360.07 | 80,619,490.18 | |
| Add: Other income | V. (XLIV) | 79,554,896.45 | 72,300,830.48 |
| Income on investment (“-” for loss) | V. (XLV) | -2,827,424.32 | 89,589,183.44 |
| Including: Income from associates and joint ventures | -1,085,968.20 | -181,084.64 | |
| 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) | V. (XLVI) | 10,043,277.55 | -4,366,027.94 |
| Assets impairment loss (“-” for loss) | V. (XLVII) | -35,339,403.25 | -33,475,219.25 |
| Assets disposal gains (“-” for loss) | V. (XLVIII) | 298,940,955.41 | 3,648,546.62 |
| III. Operational profit(“-” for loss) | -1,523,946,115.93 | -1,094,185,309.07 | |
| Add: Non-operating income | V. (XLIX) | 43,395,135.36 | 40,130,944.39 |
| Less: Non-operating expenses | V. (L) | 95,059,082.07 | 26,623,177.77 |
| IV. Total profit (“-” for loss) | -1,575,610,062.64 | -1,080,677,542.45 | |
| Less: Income tax expenses | V. (LI) | 94,460,782.09 | 125,374,177.41 |
| V. Net profit(“-” for loss) | -1,670,070,844.73 | -1,206,051,719.86 | |
| (I) Classification by continuing operating | |||
| 1. Net profit from continuing operation(“-” for loss) | -1,670,070,844.73 | -1,206,051,719.86 | |
| 2. Net profit from discontinued operation(“-” for loss) | |||
| (II) Classification by ownership | |||
| 1. Net profit attributable to the owners of parent company | -1,742,574,163.92 | -1,232,976,557.37 | |
| 2. Net profit attributable to non-controlling shareholders | 72,503,319.19 | 26,924,837.51 | |
| VI. Net after-tax amount of other comprehensive income | -34,466,581.86 | -15,879,343.62 | |
| Other comprehensive income attributable to owners of the parent company after tax | -34,466,581.86 | -15,879,343.62 | |
| （I）Other comprehensive income items that will not be reclassified into gains/losses | -34,466,581.86 | -15,879,343.62 | |
| 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 | -34,466,581.86 | -15,879,343.62 | |
| 4. Changes in fair value of Company's credit risk | |||
| （II）Other comprehensive income that will be reclassified into profit or loss | |||
| 1. Other comprehensive income under the equity method which can be reclassified into profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Amount of financial assets reclassified into other comprehensive income | |||
| 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 | -1,704,537,426.59 | -1,221,931,063.48 | |
| Total comprehensive income attributable to the owner of the parent company | -1,777,040,745.78 | -1,248,855,900.99 | |
| Total comprehensive income attributable to non-controlling shareholders | 72,503,319.19 | 26,924,837.51 | |
| VIII. Earnings per share | |||
| （I）Basic earnings per share | -0.42 | -0.30 | |
| （II）Diluted earnings per share | -0.42 | -0.30 |
Statement Page 8
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 9
Bengang Steel Plates Co., Ltd.Income statement of the parent company
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | Notes | Closing balance | Opening balance |
| I. Operating income | XIV. (IV) | 58,186,982,131.76 | 63,081,757,089.14 |
| Less: Operating cost | XIV. (IV) | 59,293,494,660.13 | 63,165,254,867.80 |
| Tax and surcharges | 160,404,863.00 | 157,419,976.34 | |
| Selling and distribution expenses | 143,971,980.36 | 162,072,670.40 | |
| General and administrative expenses | 577,042,517.96 | 579,730,173.82 | |
| Research and development expenses | 81,247,560.73 | 58,088,008.14 | |
| Financial expenses | 320,034,306.92 | 523,903,605.28 | |
| Including: Interest expense | 413,822,456.17 | 580,671,493.79 | |
| Interest income | 40,683,621.30 | 59,532,341.41 | |
| Add: Other income | 78,279,172.38 | 71,247,038.47 | |
| Income on investment (“-” for loss) | XIV. (V) | 461,590,550.66 | 260,636,435.24 |
| Including: Income from associates and joint ventures | -1,085,968.20 | -580,788.56 | |
| Income from derecognition of financial assets measured at amortized cost | |||
| Net exposure hedge income ("-" for loss) | |||
| Gains from change of fair value ("-" for loss) | |||
| Credit impairment loss ("-" for loss) | 12,829,866.46 | -4,244,546.20 | |
| Assets impairment loss ("-" for loss) | -35,339,403.25 | -33,475,219.25 | |
| Assets disposal gains ("-" for loss) | 298,940,955.41 | 3,669,258.68 | |
| II. Operational profit ("-" for loss) | -1,572,912,615.68 | -1,266,879,245.70 | |
| Add: Non-operating income | 42,653,931.69 | 32,814,019.52 | |
| Less: Non-operating expenses | 94,106,015.35 | 26,463,198.79 | |
| III. Total profit ("-" for loss) | -1,624,364,699.34 | -1,260,528,424.97 | |
| Less: Income tax expenses | -20,687,646.74 | 59,489,282.29 | |
| IV. Net profit (“-” for loss) | -1,603,677,052.60 | -1,320,017,707.26 | |
| （I）Net profit from continuing operation ("-" for loss) | -1,603,677,052.60 | -1,320,017,707.26 | |
| （II）Net profit from discontinued operation ("-" for loss) | |||
| V. Net after-tax amount of other comprehensive income | -34,466,581.86 | -15,904,760.02 | |
| （I）Other comprehensive income items that will not be reclassified into gains/losses | -34,466,581.86 | -15,904,760.02 | |
| 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 | -34,466,581.86 | -15,904,760.02 | |
| 4. Changes in fair value of Company's credit risk | |||
| （II） Other comprehensive income that will be reclassified into profit or loss | |||
| 1. Other comprehensive income under the equity method investee can be reclassified into profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Amount of financial assets reclassified into other comprehensive income | |||
| 4. Credit impairment provision of other debt investments | |||
| 5. Cash flow hedge reserves | |||
| 6. Translation differences in foreign currency financial statements | |||
| 7. Others | |||
| VI. Total comprehensive income | -1,638,143,634.46 | -1,335,922,467.28 |
Statement Page 10
| Item | Notes | Closing balance | Opening balance |
| VII. Earnings per share | |||
| （I） Basic earnings per share | |||
| （II）Diluted earnings per share |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 11
Bengang Steel Plates Co., Ltd.Consolidated cash flow statement
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | Notes | Amounts incured in current period | Amounts incured in prior period |
| I. Cash flow from operating activities | |||
| Cash received from sale of goods or rendering of services | 54,782,375,927.56 | 51,073,772,028.16 | |
| 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 | 208,015,496.04 | 483,849,940.14 | |
| Other cash received relating to operating activities | V. (LII) | 284,021,616.81 | 123,009,781.28 |
| Subtotal of cash inflows from operating activities | 55,274,413,040.41 | 51,680,631,749.58 | |
| Cash paid for goods and services | 47,499,784,626.09 | 46,861,851,072.12 | |
| 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 | 2,504,872,313.64 | 2,802,982,355.80 | |
| Cash paid for all types of taxes | 521,328,876.71 | 651,109,945.61 | |
| Other cash paid relating to operating activities | V. (LII) | 419,075,965.67 | 88,325,410.49 |
| Subtotal of cash outflows from operating activities | 50,945,061,782.11 | 50,404,268,784.02 | |
| Net cash flows from operating activities | 4,329,351,258.30 | 1,276,362,965.56 | |
| II. Cash flows from investing activities | |||
| Cash received from disposal of investments | 1,843,800.00 | 422,818.29 | |
| Cash received from return on investments | 896,200.00 | 2,879,850.07 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 85,057,599.66 | 4,752,720.71 | |
| Net cash received from disposal of subsidiary and other operating units | 137,073,256.40 | ||
| Other cash paid relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 87,797,599.66 | 145,128,645.47 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 993,323,275.09 | 1,707,467,068.85 | |
| Cash paid for investments | |||
| 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 | 993,323,275.09 | 1,707,467,068.85 | |
| Net cash flows from investing activities | -905,525,675.43 | -1,562,338,423.38 | |
| III. Cash flows from financing activities | |||
| Proceeds from investment | |||
| Including: Proceeds from the investment of non-controlling shareholders of the subsidiary | |||
| Proceeds from borrowings | 1,570,000,000.00 | 2,000,000,000.00 | |
| Other proceeds relating to financing activities | V. (LII) | 1,128,377,111.10 | 2,759,751,595.78 |
| Subtotal of cash inflows from financing activities | 2,698,377,111.10 | 4,759,751,595.78 | |
| Cash repayments of borrowings | 3,947,582,606.32 | 6,245,551,350.67 | |
| Cash payments for the distribution of dividends, profit or interest expenses | 279,847,394.73 | 2,765,916,748.51 | |
| Including: Cash paid to non-controlling shareholders as dividends and profit by subsidiaries | 68,041,170.80 | ||
| Other cash payments relating to financing activities | V. (LII) | 2,040,131,865.19 | 485,930,596.70 |
| Subtotal of cash outflows from financing activities | 6,267,561,866.24 | 9,497,398,695.88 |
Statement Page 12
| Item | Notes | Amounts incured in current period | Amounts incured in prior period |
| Net cash flows from financing activities | -3,569,184,755.14 | -4,737,647,100.10 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 33,471,460.59 | 21,186,177.64 | |
| V. Net increase in cash and cash equivalents | -111,887,711.68 | -5,002,436,380.28 | |
| Add: Cash and cash equivalents at the beginning of the period | 1,296,662,683.20 | 6,299,099,063.48 | |
| VI. Cash and cash equivalents at the end of the period | 1,184,774,971.52 | 1,296,662,683.20 |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 13
Bengang Steel Plates Co., Ltd.Cash flow statement of parent company
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | Notes | Amounts incured in current period | Amounts incured in prior period |
| I. Cash flow from operating activities | |||
| Cash received from the sale of goods or the rendering of services | 54,729,135,209.16 | 52,566,695,245.11 | |
| Tax rebate received | 182,654,395.44 | 446,252,731.21 | |
| Other cash received relating to operating activities | 313,226,321.84 | 95,185,405.62 | |
| Subtotal of cash inflows from operating activities | 55,225,015,926.44 | 53,108,133,381.94 | |
| Cash paid for goods and services | 47,458,464,490.84 | 48,331,653,935.65 | |
| Cash paid to and on behalf of employees | 2,350,688,837.49 | 2,666,197,042.40 | |
| Cash paid for all types of taxes | 227,899,745.84 | 339,347,119.05 | |
| Other cash paid relating to operating activities | 383,220,547.63 | 114,224,449.37 | |
| Subtotal of cash outflows from operating activities | 50,420,273,621.80 | 51,451,422,546.47 | |
| Net cash flows from operating activities | 4,804,742,304.64 | 1,656,710,835.47 | |
| II. Cash flows from investing activities | |||
| Cash received from disposal of investments | |||
| Cash received from return on investments | 204,123,512.41 | 56,019,227.23 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 85,053,599.66 | 4,341,972.00 | |
| Net cash received from disposal of subsidiary and other operating units | 205,076,325.08 | ||
| Other cash received relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 289,177,112.07 | 265,437,524.31 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 989,247,449.99 | 1,698,674,088.11 | |
| Cash paid for investments | 850,000,000.00 | ||
| Net cash paid for acquisition of subsidiary and other operating unit | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash outflows paid for investing activities | 989,247,449.99 | 2,548,674,088.11 | |
| Net cash flows from investing activities | -700,070,337.92 | -2,283,236,563.80 | |
| III. Cash flows from financing activities | |||
| Cash flows from financing activities | |||
| Cash received from borrowings | 1,570,000,000.00 | 2,000,000,000.00 | |
| Other cash received relating to financing activities | 1,128,377,111.10 | 2,759,751,595.78 | |
| Subtotal of cash inflows from financing activities | 2,698,377,111.10 | 4,759,751,595.78 | |
| Cash repayments of borrowings | 3,947,582,606.32 | 5,545,551,350.67 | |
| Cash payments for distribution of dividends, profit or interest | 211,806,223.93 | 2,750,764,581.84 | |
| Other cash payments relating to financing activities | 2,022,320,452.46 | 485,930,596.70 | |
| Subtotal of cash outflows from financing activities | 6,181,709,282.71 | 8,782,246,529.21 | |
| Net cash flows from financing activities | -3,483,332,171.61 | -4,022,494,933.43 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 32,520,496.22 | 20,787,925.20 | |
| V. Net increase in cash and cash equivalents | 653,860,291.33 | -4,628,232,736.56 | |
| Add: Cash and cash equivalents at the beginning of the period | 420,642,596.45 | 5,048,875,333.01 | |
| VI. Cash and cash equivalents at the ending of the | 1,074,502,887.78 | 420,642,596.45 |
Statement Page 14
| Item | Notes | Amounts incured in current period | Amounts incured in prior period |
| period |
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 15
Bengang Steel Plates Co., Ltd.Consolidated statement of changes in owners’ equity
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | FY2023 | |||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interest | Total of owners' equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| I. Closing balance of the prior year | 4,108,212,217.00 | 947,863,834.02 | 13,272,205,160.21 | -15,904,760.02 | 2,217,913.77 | 1,195,116,522.37 | -720,559,670.73 | 18,789,151,216.62 | 584,587,863.76 | 19,373,739,080.38 | ||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of prior-period errors | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| II. Opening balance of the current year | 4,108,212,217.00 | 947,863,834.02 | 13,272,205,160.21 | -15,904,760.02 | 2,217,913.77 | 1,195,116,522.37 | -720,559,670.73 | 18,789,151,216.62 | 584,587,863.76 | 19,373,739,080.38 | ||||
| III. Changes in current year ("-" for decrease) | 7,085.00 | -5,699.86 | 20,710.71 | -34,466,581.86 | -2,163,070.62 | -1,742,574,163.92 | -1,779,181,720.55 | 4,482,422.84 | -1,774,699,297.71 | |||||
| （I）Total comprehensive income | -34,466,581.86 | -1,742,574,163.92 | -1,777,040,745.78 | 72,503,319.19 | -1,704,537,426.59 | |||||||||
| （II）Capital increase and decrease by owners | 7,085.00 | -5,699.86 | 20,710.71 | 22,095.85 | 22,095.85 | |||||||||
| 1. Common share invested by shareholders | ||||||||||||||
| 2. Capital input by the holder of other equity instruments | 7,085.00 | -5,699.86 | 20,710.71 | 22,095.85 | 22,095.85 | |||||||||
| 3. Share-based payment attributable to shareholders' equity | ||||||||||||||
| 4. Others | ||||||||||||||
| （III）Profit distribution | -68,041,170.80 | -68,041,170.80 | ||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||||
| 2. Appropriation to general risk reserve | ||||||||||||||
| 3. Profit distribution to owners (or shareholders) | -68,041,170.80 | -68,041,170.80 | ||||||||||||
| 4. Others | ||||||||||||||
| （IV）Internal transfer of owners' equity | ||||||||||||||
| 1. Capital reserve converted into capital (or share capital) | ||||||||||||||
| 2. Surplus reserve converted | ||||||||||||||
Statement Page 16
| Item | FY2023 | |||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interest | Total of owners' equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| into capital (or share capital) | ||||||||||||||
| 3. Recover of loss by surplus reserve | ||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | ||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||||
| 6. Others | ||||||||||||||
| （V）Special reserves | -2,163,070.62 | -2,163,070.62 | 20,274.45 | -2,142,796.17 | ||||||||||
| 1. Withdrawn in current period | 77,964,469.55 | 77,964,469.55 | 4,945,238.85 | 82,909,708.40 | ||||||||||
| 2. Used in current period | 80,127,540.17 | 80,127,540.17 | 4,924,964.40 | 85,052,504.57 | ||||||||||
| （VI）Others | ||||||||||||||
| IV. Closing balance of the current period | 4,108,219,302.00 | 947,858,134.16 | 13,272,225,870.92 | -50,371,341.88 | 54,843.15 | 1,195,116,522.37 | -2,463,133,834.65 | 17,009,969,496.07 | 589,070,286.60 | 17,599,039,782.67 | ||||
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 17
Bengang Steel Plates Co., Ltd.Consolidated statement of changes in owners’ equity (Continued)
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | FY2023 | |||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interest | Total of owners' equity | ||||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||||
| Preference shares | Perpetual bond | Others | ||||||||||||||
| I. Closing balance of the prior year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||||
| Add: Change of accounting policies | ||||||||||||||||
| Correction of prior-period errors | ||||||||||||||||
| Business consolidation under common control | ||||||||||||||||
| Others | ||||||||||||||||
| II. Opening balance of the current year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||||
| III. Changes in current year ("-" for decrease) | 20,838.00 | -18,829.61 | 70,987.12 | -15,904,760.02 | 1,879,935.20 | -3,697,865,968.37 | -3,711,817,797.68 | 19,146,862.03 | -3,692,670,935.65 | |||||||
| （I） Total comprehensive income | -15,879,343.62 | -1,232,976,557.37 | -1,248,855,900.99 | 26,924,837.51 | -1,221,931,063.48 | |||||||||||
| （II）Capital increase and decrease by owners | 20,838.00 | -18,829.61 | 70,987.12 | 72,995.51 | -7,777,975.48 | -7,704,979.97 | ||||||||||
| 1. Common share invested by shareholders | ||||||||||||||||
| 2. Capital input by the holder of other equity instruments | 20,838.00 | -18,829.61 | 70,987.12 | 72,995.51 | 72,995.51 | |||||||||||
| 3. Share-based payment attributable to shareholders' equity | ||||||||||||||||
| 4. Others | -7,777,975.48 | -7,777,975.48 | ||||||||||||||
| （III）Profit distribution | -2,464,914,827.40 | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||||||
| 2. Appropriation to general risk reserve | ||||||||||||||||
| 3. Profit distribution to owners (or shareholders) | -2,464,914,827.40 | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||||||
| 4. Others | ||||||||||||||||
| （IV）Internal transfer of owners' equity | -25,416.40 | 25,416.40 | ||||||||||||||
| 1. Capital reserve converted into capital (or share capital) | ||||||||||||||||
| 2. Surplus reserve converted into capital (or share capital) | ||||||||||||||||
| 3. Recover of loss by surplus reserve | ||||||||||||||||
Statement Page 18
| Item | FY2023 | |||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interest | Total of owners' equity | ||||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||||
| Preference shares | Perpetual bond | Others | ||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | ||||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -25,416.40 | 25,416.40 | ||||||||||||||
| 6. Others | ||||||||||||||||
| （V） Special reserves | 1,879,935.20 | 1,879,935.20 | 1,879,935.20 | |||||||||||||
| 1. Withdrawn in current period | 77,018,511.80 | 77,018,511.80 | 4,978,649.22 | 81,997,161.02 | ||||||||||||
| 2. Used in current period | 75,138,576.60 | 75,138,576.60 | 4,978,649.22 | 80,117,225.82 | ||||||||||||
| （VI）Others | ||||||||||||||||
| IV. Closing balance of the current period | 4,108,212,217.00 | 947,863,834.02 | 13,272,205,160.21 | -15,904,760.02 | 2,217,913.77 | 1,195,116,522.37 | -720,559,670.73 | 18,789,151,216.62 | 584,587,863.76 | 19,373,739,080.38 | ||||||
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 19
Bengang Steel Plates Co., Ltd.Parent company's statement of changes in owners' equity
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | FY2023 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profit | Total of owers' equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| I. Closing balance of the prior year | 4,108,212,217.00 | 947,863,834.02 | 12,852,053,478.09 | -15,904,760.02 | 58,212.15 | 1,195,116,522.37 | -1,296,333,684.67 | 17,791,065,818.94 | |||
| Add: Change of accounting policies | |||||||||||
| Correction of prior-period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 4,108,212,217.00 | 947,863,834.02 | 12,852,053,478.09 | -15,904,760.02 | 58,212.15 | 1,195,116,522.37 | -1,296,333,684.67 | 17,791,065,818.94 | |||
| III. Changes in current period ("-" for decrease) | 7,085.00 | -5,699.86 | 20,710.71 | -34,466,581.86 | -54,530.99 | -1,603,677,052.60 | -1,638,176,069.60 | ||||
| (I) Total comprehensive income | -34,466,581.86 | -1,603,677,052.60 | -1,638,143,634.46 | ||||||||
| (II) Capital increase and decrease by owners | 7,085.00 | -5,699.86 | 20,710.71 | 22,095.85 | |||||||
| 1. Common share invested by owners | |||||||||||
| 2. Capital input by the holder of other equity instruments | 7,085.00 | -5,699.86 | 20,710.71 | 22,095.85 | |||||||
| 3. Share-based payment attributable to owners’ equity | |||||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | |||||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Profit distribution to owners (or shareholders) | |||||||||||
| 3. Others | |||||||||||
| (IV) Internal transfer of owners' equity | |||||||||||
| 1. Capital reserve converted into capital (or share capital) | |||||||||||
| 2. Surplus reserve converted into capital (or share capital) | |||||||||||
| 3. Recover of loss by surplus reserve | |||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserves | -54,530.99 | -54,530.99 | |||||||||
| 1. Withdrawn in current period | 63,360,278.27 | 63,360,278.27 | |||||||||
Statement Page 20
| Item | FY2023 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profit | Total of owers' equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 2. Used in current period | 63,414,809.26 | 63,414,809.26 | |||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of the current period | 4,108,219,302.00 | 947,858,134.16 | 12,852,074,188.80 | -50,371,341.88 | 3,681.16 | 1,195,116,522.37 | -2,900,010,737.27 | 16,152,889,749.34 | |||
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Statement Page 21
Bengang Steel Plates Co., Ltd.Parent company's statement of changes in owners' equity (Continued)
FY2023（Unless otherwise specified, all amounts are in RMB Yuan）
| Item | FY2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profit | Total of owners' equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| I. Closing balance of the prior year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
| Add: Change of accounting policies | |||||||||||
| Correction of prior-period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
| III. Changes in current period ("-" for decrease) | 20,838.00 | -18,829.61 | 70,987.12 | -15,904,760.02 | -97,257.43 | -3,787,355,431.49 | -3,803,284,453.43 | ||||
| (I) Total comprehensive income | -15,904,760.02 | -1,320,017,707.26 | -1,335,922,467.28 | ||||||||
| (II) Capital increase and decrease by owners | 20,838.00 | -18,829.61 | 70,987.12 | -2,422,896.83 | -2,349,901.32 | ||||||
| 1. Common share invested by owners | |||||||||||
| 2. Capital input by the holder of other equity instruments | 20,838.00 | -18,829.61 | 70,987.12 | 72,995.51 | |||||||
| 3. Share-based payment attributable to owners' equity | |||||||||||
| 4. Others | -2,422,896.83 | -2,422,896.83 | |||||||||
| (III) Profit distribution | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Profit distribution to owners (or shareholders) | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal transfer of owners' equity | |||||||||||
| 1. Capital reserve converted into capital (or share capital) | |||||||||||
| 2. Surplus reserve converted into capital (or share capital) | |||||||||||
| 3. Recover of loss by surplus reserve | |||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||
Statement Page 22
| Item | FY2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profit | Total of owners' equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserves | -97,257.43 | -97,257.43 | |||||||||
| 1. Withdrawn in current period | 60,105,371.53 | 60,105,371.53 | |||||||||
| 2. Used in current period | 60,202,628.96 | 60,202,628.96 | |||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of the current period | 4,108,212,217.00 | 947,863,834.02 | 12,852,053,478.09 | -15,904,760.02 | 58,212.15 | 1,195,116,522.37 | -1,296,333,684.67 | 17,791,065,818.94 | |||
The attached Notes of Financial Report is a part of the Financial Report.Legal representative: Chief Financial Officer: Chief Accountant:
Notes of Financial Report Page 1
Bengang Steel Plates Co., Ltd.FY 2023 Notes of Financial Report（Unless otherwise specified, all amounts are in RMB Yuan）
I. Basic Information of the Company
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “theCompany” ), as approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Governmenton March 27th, 1997, was incorporated as a joint stock limited company through publicshare offer of domestic listed foreign currency denominated shares (B shares) in thePeople’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 andliabilities of its plants, namely, Steel Smelting Plant, Primary Rolling Plant and ContinuousHot Rolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “theCSRC”), the Company issued 400,000,000 B-shares at HKD 2.38 each on Shenzhen StockExchange on June 10th, 1997. On November 3rd, 1997, the Company issued another120,000,000 A-shares (Renminbi Common Shares) at RMB 5.40 each and listed onShenzhen Stock Exchange since January 15th, 1998. The capital shares totalled1,136,000,000 shares.
On March 14th, 2006, according to the resolutions of the Shareholders’ Meeting regardingshare equity relocation, the Share Equity Relocation Scheme, Response to Bengang SteelPlates Co., Ltd. about Share Equity Relocation issued by Liaoning Provincial GovernmentState-owned Asset Administrative Committee(hereinafter referred to as the LiaoningSASAC), Benxi Iron and Steel Group – the only holder of non-negotiable state-owned legalperson shares paid the consideration to the current shareholders to obtain the currentoption for the 40,800,000 shares of the total 616,000,000 shares it was holding.Shareholding positions have been registered with China Securities Depository & ClearingCorporation Ltd. Shenzhen Office. However, the total amount of capital shares of BengangSteel 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 ChinaSecurities Regulatory Commission on June 30th, 2006, the Company was approved toplace 2 billion Renminbi common shares, particularly to Benxi Iron and Steel Group and
Notes of Financial Report Page 2
the proceeds would be used to purchase the related assets of the Benxi Iron and SteelGroup. 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, BenxiIron 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 Ironand 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 offerobligation. On August 28th, 2006, as approved by China Securities Depository & ClearingCorporation Ltd. Shenzhen Office, the registration and conditional placing procedures ofthe 2 billion new shares were completed. On September 28th, 2006, the listing procedureof the new shares of Bengang Steel Plates in this non-public offering was approved byShenzhen Stock Exchange. The issue price of new shares: RMB 4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang SteelPlates Co., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares)to no more than 10 issuers. The non-public offering was completed on February 9th, 2018,and 739,371,532 shares were actually issued. The placing price was RMB5.41 per share.
On August 20th, 2021, Liaoning Provincial State-owned Assets Supervision andAdministration Commission (hereinafter referred to as the Liaoning SASAC) and AnsteelGroup Co., Ltd. (hereinafter referred to as Ansteel Group) signed the "Liaoning ProvincialPeople's Government State-owned Assets Supervision and Administration Commissionand Ansteel Group Co., Ltd. on Free Transfer Agreement on the State-owned Equity ofBengang Group Co., Ltd. According to the agreement, Liaoning State-owned AssetsSupervision and Administration Commission will transfer its 51% shares of Bengang GroupCo., Ltd. (hereinafter referred to as Bengang Group) to Ansteel Group for free. After thecompletion of the free transfer, Ansteel Group will become the controlling shareholder ofBengang Group, and Ansteel Group will hold 81.07% of the total share capital of BengangGroup Co., Ltd. indirectly.As at December 31st, 2022, the capital shares totalled 4,108,212,217 shares. The Company’s uniform social credit code: 91210000242690243E.
Company registered address: No. 16, Renmin Road Pingshan District Benxi, Liaoning
Notes of Financial Report Page 3
Province; Company legal representative: Li Yan.
Bengang Steel Plates Co., Ltd. belongs to the ferrous metal smelting and rolling processingindustry and is mainly involved in producing and trading of ferrous metal products.
These financial statements were presented as approved by the Board of Directors of theCompany on April 25
th, 2024.
II. Basis of preparation of financial report(I) Basis of Preparation
The Company’s financial statements have prepared in accordance with the AccountingStandards for Business Enterprises-Basic Standards promulgated by the Ministry ofFinance and various specific accounting standards, guidelines for the application ofaccounting standards for business enterprises, explanations of accounting standards forbusiness enterprises and other relevant provisions (hereinafter collectively referred to as"Accounting Standards for Business Enterprises"), as well as the relevant provisions of theChina Securities Regulatory Commission's Rules for the Compilation and Reporting ofInformation Disclosure by Companies Offering Securities to the Public No.15-GeneralProvisions for Financial Reports.
(II) Going concern
The Company is operating normally and in a good condition
III. Significant accounting policies and accounting estimates
The disclosed contents below consist of specific accounting policy and accountingestimation of this company in accordance with actual production and managementfeatures. For details, see Note “Ⅲ (X) Financial Tools”, “Ⅲ (XI) Inventories”, “Ⅲ (XIV) FixedAssets”, “Ⅲ (XVII) Intangible Assets” and “Ⅲ (XXIII) Income”.(I) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements ofAccounting Standards for Business Enterprises and give a true and complete picture of thefinancial position of the Company merger on December 31th, 2023 and the parentcompany and the operating results and cash flows of the merger company and parentcompany in 2023.
Notes of Financial Report Page 4
(II) Accounting year
The Accounting year is from January 1st to December 31st.
(III) Operating period
The operating period is 12 months
(IV) Functional currency
The Company’s functional currency is RMB
(V) The accounting treatment for Business combinations under/not under common control
Business combination under common control: The assets and liabilities that the Companyacquired in a business combination shall be measured on the basis of their carryingamount of acquiree’s assets, liabilities (as well as the goodwill arising from the businesscombination) in the consolidated financial statement of the ultimate controller on thecombining date. As for the balance between the carrying amount of the net assetsobtained by the Company and the carrying amount of the consideration paid by it (or thetotal par value of the shares issued), the capital reserve needs to be adjusted. If the capitalreserve is not sufficient, any excess shall be adjusted against retained earnings.
Business combination not under common control: The Company shall, on the acquisitiondate, measure the assets given and liabilities incurred or assumed by an enterprise for abusiness combination in light of their fair values, and shall record the balances betweenthem and their carrying amounts into the profits and losses at the current period. TheCompany shall recognize the positive balance between the combination costs and the fairvalue of the identifiable net assets it obtains from the acquiree as goodwill. The Companyshall treat the negative balance between the combination costs and the fair value of theidentifiable net assets it obtains from the acquiree into the profits and losses of the currentperiod.
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 theprofits and losses at the current period. The transaction expenses for the issuance ofequity securities for the business combination shall be recorded into the initial recognition
Notes of Financial Report Page 5
amount of equity securities.
(VI) Judgement standards for control and compiling method for consolidated financial
statements
1. Judgement standards for control
The scope of consolidation of consolidated financial statements is determinedbased on control. All the subsidies (including separable sections of the investeescontrolled by the Company) have been consolidated into the scope of consolidationfor this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based onthe financial statements of the parent and its subsidiaries and using other relatedinformation. When preparing consolidated financial statements, the parent shallconsider the entire group as an accounting entity, adopt uniform accounting policiesand apply the requirements of Accounting Standards for Business Enterprisesrelated to recognition, measurement and presentation. The consolidated financialstatements shall reflect the overall financial position, operating results and cashflows of the group. The accounting policy and accounting period of the subsidiarieswithin the consolidation scope shall be in accordance with those of the Company. Ifnot, it is necessary to make the adjustment according to the Company’s accountingpolicies and accounting period when preparing the consolidated financialstatements. For subsidiaries through acquisition that are now under commoncontrol, the financial statements are adjusted according to the fair value ofidentifiable net assets on the acquisition date. For subsidiaries through acquisitionthat are under common control, the assets, and liabilities (as well as the goodwillarising from purchasing the subsidiary by the ultimate controller) are adjustedaccording to the book value of net assets in the financial statements of the ultimatecontroller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiaryattributable to the non-controlling shareholders shall be presented separately in theshareholders’ equity of the consolidated balance sheet and under the item of netprofit of the consolidated statement of comprehensive income and under the item
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of total comprehensive income. Where losses assumed by the minority exceed theminority’s interests in the beginning equity of a subsidiary, the excess shall becharged against the minority’s interests.
(1) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to a business combination under commoncontrol during the reporting period, it shall adjust the beginning balance in theconsolidated statement of financial position when preparing the consolidatedstatement of financial position. The revenue, expenses and profits of thesubsidiaries from the acquisition date to the end of the reporting period areincluded in the Company’s consolidated statement of comprehensive income. Thecash flow of the subsidiaries from the acquisition date to the end of the reportingperiod is included in the Company’s consolidated statement of cash flows. Andmeanwhile, the Company shall adjust the relevant items of the comparativefinancial statements as if the reporting entity for the purpose of consolidation hasbeen in existence since the date the ultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee undercommon control due to additional investment or other reasons, adjustment shallbe made as if the reporting entity after the combination has been in existence sincethe date the ultimate controlling party first obtained control. The investmentincome recognized between the date of previously obtaining equity investment andthe date the acquiree and acquirer are under common control, which is later, andthe combining date, other comprehensive income and other changes of net assetsarising from the equity investment previously held before obtaining the control theacquiree shall be adjusted against the prior retained earnings of the comparativefinancial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginningbalance in the consolidated statement of financial position when preparing theconsolidated statement of financial position. The revenue, expenses and profits ofthe subsidiaries from the acquisition date to the end of the reporting period areincluded 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
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reporting period is included in the Company’s consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee nowunder common control due to additional investment or other reasons, the acquirershall remeasure its previously held equity interest in the acquiree to its fair value atthe acquisition date. The difference between the fair value and the carrying amountshall be recognized as investment income for the period when the acquisition takesplace. When the previously-held equity investment is accounted for under theequity method, any other comprehensive income previously recognized in relationto the acquiree’s equity changes shall be transferred to profit or loss for the currentperiod when the acquisition takes place. Other comprehensive income arising fromthe remeasurement of the defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
① 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 periodto the disposal date are included in the Company’s consolidated statement ofcomprehensive income. The cash flow of the subsidiaries from the beginning of thereporting period to the disposal date is included in the Company’s consolidatedstatement of cash flows.
When the Company loses control over an investee due to partial disposal or otherreasons, the acquirer shall re-measure the remaining equity interests in theacquiree to its fair value at the acquisition date. The difference, between sums ofthe consideration received for the disposal of equity shares and fair value of theremaining shares, and sums of share of net assets of the subsidiary calculatedcontinuously from the acquisition date or the combination date based on theprevious shareholding proportion and goodwill shall be recognized as investmentincome for the period when the Company loses control over acquiree. When thepreviously-held equity investment is accounted for under the equity method, anyother comprehensive income previously recognized in relation to the acquiree’sequity changes, and other equity changes rather than changes from net profit,other comprehensive income and profit distribution, shall be transferred toinvestment income for the current period when the Company loses control over
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acquiree. Other comprehensive income arising from re-measurement of thedefined benefit plan is excluded. When the Company loses control over a subsidiarydue to the increase of capital from other investors and thus the shareholding ratioof the Company declines, accounting treatment shall be in accordance with theabove-mentioned principles.
②Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in whichit disposes of its subsidiary in stages, in determining whether to account for themultiple transactions as a single transaction, the Company shall consider all of theterms and conditions of the transactions and their economic effects. One or moreof the following may indicate that the Company shall account for the multiplearrangements as a single transaction:
(1) Arrangements are entered into at the same time or in contemplation of eachother;
(2) Arrangements work together to achieve an overall commercial effect;
(3) The occurrence of one arrangement is dependent on the occurrence of at leastone other arrangement; and
(4) One arrangement considered on its own is not economically justified, but it iseconomically justified when considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction whicheventually results in loss of control of the subsidiary, these multiple transactionsshall be accounted for as a single transaction. In the consolidated financialstatements, the difference between the consideration received and thecorresponding proportion of the subsidiary’s net assets in each transaction prior tothe loss of control shall be recognized in other comprehensive income andtransferred to the profit or loss when the Company eventually loses control of thesubsidiary.
If each of the multiple transactions which eventually results in loss of control of thesubsidiary does not form part of a bundled transaction, apply the treatment ofdisposing of partial long-term equity investments in a subsidiary without loss ofcontrol prior to the loss of control. After the loss of control, apply the treatment ofdisposing of the subsidiary in common cases.
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(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholdersWhere 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 theshare of net assets of the subsidiary calculated continuously from the acquisitiondate or the combination date based on the new shareholding proportion shall beadjusted to the capital reserve( capital premium or share premium) in theconsolidated financial statements. If the balance of the capital reserve is notsufficient, 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 asubsidiary without loss of control, the difference between the amount of theconsideration received and the corresponding portion of the net assets of thesubsidiary calculated continuously from the acquisition date or the combinationdate related to the disposal of the long-term equity investments shall be adjustedto the capital reserve (capital premium or share premium) in the consolidatedfinancial statements. If the balance of the capital reserve is not sufficient, any excessshall be adjusted against retained earnings.(VII) 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 theassets 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 jointoperation
(1). Confirm the assets held by the Company separately, and confirm the assets held jointlyby the Company's share;
(2). Recognize the liabilities assumed by the Company separately and the liabilities jointlyassumed by the Company's share;
(3). Recognize the income generated by the sale of the Company’s share of commonoperating output;
(4). Recognize the revenue generated from the sale of joint operations based on theCompany's share;
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(5). Confirm the expenses incurred separately and the expenses incurred in the jointoperation according to the Company's share.
The Company uses equity method to calculate, for details, see Notes “III. (XIII) Long-termequity investment”.
(VIII) 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 andwhich are subject to an insignificant risk of change in value.
(IX) 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 dayof transactions.The foreign currency monetary items shall be translated at the spot exchange rateon the balance sheet date. The balance of exchange arising from the differencebetween the spot exchange rate on the balance sheet date and the spot exchangerate at the time of initial recognition or prior to the balance sheet date, except thosearising from the raising of special foreign debt for the purchase or construction ofcapitalizable assets thus shall be capitalized according to the borrowing costscapitalization principle, shall be recorded into the profits and losses at the currentperiod.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translatedat 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 spotexchange rate at the time when they are incurred. The income and expense itemsin the income statement shall be translated using an exchange rate that isdetermined in a systematic and reasonable manner and approximates the spotexchange rate on the transaction date.When disposing of an overseas business, the Company shall shift the balance, which
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is presented under the items of the owner's equities in the statement of financialposition and arises from the translation of foreign currency financial statementsrelated to this oversea business, into the disposal profits and losses of the currentperiod.
(X) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
A financial asset shall be measured at amortized cost if both of the followingconditions are met. The financial asset is held within a business model whoseobjective is to hold financial assets in order to collect contractual cash flows and thecontractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest on the principal amountoutstanding.
The Company classifies financial assets that meet the following conditions and arenot designated as at fair value through profit or loss as financial assets measured atamortized cost:
－ The financial asset is held within a business model whose objective is to holdfinancial assets in order to collect contractual cash flows;－ The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amountoutstanding.
The Company classifies financial assets that meet the following conditions and arenot designated as at fair value through profit or loss as financial assets (debtinstruments) at fair value through other comprehensive income:
－ The financial asset is held within a business model whose objective is achievedby both collecting contractual cash flows and selling financial assets;－ The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amountoutstanding.
The Company may make an election at initial recognition for non-trading equity
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instrument investments whether it is designated as a financial asset (equityinstrument) that is measured at fair value through other comprehensive income.The designation is made on the basis of a single investment, and the relatedinvestment meets the definition of an equity instrument from the issuer'sperspective.
Other financial assets other than these are classified as financial assets measuredat fair value through profit or loss. At the initial recognition, in order to eliminate orsignificantly reduce accounting mismatches, financial assets that should beclassified as measured at amortized value or financial assets measured at fair valuethrough other comprehensive income can be designated as financial assetsmeasured at fair value through profit or loss.
The Company shall classify financial liabilities as financial liabilities measured atamortized cost and financial liabilities measured at fair value through profit or lossat initial measurement.
The Company may, at initial recognition, designate a financial liability as measuredat fair value through profit or loss because either:
1）it eliminates or significantly reduces an accounting mismatch;2）a group of financial liabilities or financial assets and financial liabilities ismanaged and its performance is evaluated on a fair value basis, in accordance witha documented risk management or investment strategy, and information about thegroup is provided internally on that basis to the entity’s key management personnel;3）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, accountsreceivables, other receivables, long-term receivables, debt investments, etc. Atinitial recognition, the Company shall measure a financial asset at its fair value plusor minus transaction costs that are directly attributable to the acquisition or issueof the financial asset. The Company shall measure account receivables at theirtransaction price if the account receivables do not contain a significant financing
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component and account receivables that the Company has decided not to considerfor a financing component of no more than one year.
Interests calculated by using the effective interest method during the holding periodshall be recognized in profit or loss.
When recovering or disposing of the receivables, the difference between the priceobtained 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 (debtinstruments) include receivables financing, other debt investments, etc. At initialrecognition, the Company shall measure a financial asset at its fair value plustransaction costs that are directly attributable to the acquisition or issuance of thefinancial asset. The financial assets are subsequently measured at fair value.Changes in fair value are included in other comprehensive income except forinterest calculated using the effective interest method, impairment losses or gainsand exchange gains and losses. When the financial assets are derecognized, theaccumulated gain or loss previously recognized in other comprehensive income istransferred from other comprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equityinstruments)
Financial assets at fair value through other comprehensive income (equityinstruments). include other equity instrument investments, etc. At initialrecognition, the Company shall measure a financial asset at its fair value plustransaction costs that are directly attributable to the acquisition or issue of thefinancial asset. The financial assets are subsequently measured at fair value.Changes in fair value are included in other comprehensive income. The dividendsobtained are recognized in profit and loss.
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When the financial assets are derecognized, the accumulated gain or loss previously.recognized in other comprehensive income is transferred from othercomprehensive 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 financialassets, 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 includedin profit or loss.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financialliabilities, 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 includedin profit or loss.
When the financial liabilities are derecognized, the difference between the fairvalue and the. initially recorded amount is recognized as investment income, andthe 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, bondspayables, and long-term payables.
At initial recognition, the Company shall measure a financial liability at its fair valueplus transaction costs that are directly attributable to the acquisition or issue of thefinancial asset.
Interests calculated by using the effective interest method during the holding period
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shall be recognized in profit or loss.
When the financial liabilities are derecognized, the difference between the priceobtained 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 therecognition of financial assets.－ Termination of contractual rights to receive cash flows from financial assets;－ Termination of contractual rights to receive cash flows from financial assets;－ The financial assets have been transferred. Although the Company has neithertransferred nor retained almost all the risks and rewards of the ownership of thefinancial assets, it has not retained control of the financial assets.
If the Company modifies or renegotiates the contract with the counterparty andconstitutes a substantial modification, the original financial asset shall beterminated and a new financial asset shall be confirmed according to the modifiedterms.
When a financial assets are transferred, if almost all risks and rewards on theownership of the financial asset are retained, the recognition of the financial assetwill not be terminated.
To judge whether the transfer of a financial asset can satisfy the conditions asprescribed in these Standards for stopping the recognition of a financial asset, theCompany shall follow the principle of substance over form.
Transfer of an entire financial asset can be divided into partial financial assetstransfer and entire financial asset transfer. If the transfer of an entire financial assetsatisfies the conditions for de-recognition, the difference between the amounts ofthe 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
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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 assetAvailable-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, theentire book value of the transferred financial asset shall, between the portionwhose recognition has been stopped and the portion whose recognition has notbeen stopped (under such circumstance, the service asset retained shall be deemedas a portion of the financial asset whose recognition has not been stopped), beapportioned according to their respective relative fair value, and the differencebetween the amounts of the following 2 items shall be included into the profits andlosses 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 valueoriginally recorded in the owner's equities which is corresponding to the portionwhose recognition has been stopped (in the event that the financial asset involvedin the transfer is a financial asset Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop therecognition, it shall continue to be recognized as financial assets and theconsideration 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 inpart 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 tosubstitute the existing financial liabilities by way of any new financial liability, and ifthe contractual stipulations regarding the new financial liability are substantiallydifferent from that regarding the existing financial liability, it shall terminate therecognition of the existing financial liability, and shall at the same time recognizethe new financial liability.
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Where the Company makes substantial revisions to part or all of the contractualstipulations of the existing financial liability, it shall terminate the recognition of theexisting financial liability or part of it, and at the same time recognize the financialliability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, theCompany shall include in the profits and losses of the current period the differencebetween the carrying amount which has been terminated from recognition and theconsiderations it has paid (including the non-cash assets it has transferred out andthe new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, onthe date of repurchase, the carrying amount of the whole financial liabilities in lightof the comparatively fair value of the part that continues to be recognized and thepart whose recognition has already been terminated. The gap between the carryingamount which is distributed to the part whose recognition has terminated and theconsiderations it has paid (including the noncash assets it has transferred out andthe new financial liabilities it has assumed) shall be recorded into the profits andlosses 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 measuredby quoted prices in the active markets. If active markets for the financialinstruments do not exist, valuation techniques shall be applied for themeasurement. The Company uses valuation techniques appropriate to thecircumstances and for which sufficient data are available to measure fair value. TheCompany chooses relevant observable inputs for identical or similar assets orliabilities. Only when relevant observable inputs are unavailable or should theCompany 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 atamortized cost, financial assets measured at fair value through othercomprehensive income (debt instruments), financial guarantee contract, and so on,
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on an individual or portfolio basis.
The Company considers all reasonable and relevant information, including pastevents, current conditions, and forecasts of future economic conditions, and usesthe risk of default as the weight to calculate the probability-weighted amount ofpresent value of the difference between the cash flow receivable from the contractand the cash flow expected to be received to confirm the expected credit loss.
For account receivables and contract assets recognized according to AccountingStandards for Business Enterprises No. 14 Revenue (2017), whether a significantfinancing component is contained or not, the Company shall always measure theloss allowance at an amount equal to lifetime expected credit losses.
For lease receivables arising from transactions regulated by Accounting Standardsfor Business Enterprises No.21-Leases, the Company chooses to measure its lossprovision at all times at an amount equivalent to the expected credit loss during thewhole life.
For other financial instruments, the Company assesses the changes in the credit riskof the relevant financial instruments since their initial recognition on each balancesheet date.
The Company compares the risk of default on the balance sheet date of financialinstruments with the risk of default on the date of initial recognition to determinethe relative change in the risk of default during the expected life of the financialinstrument to assess whether there is a significant increase in the credit risk offinancial assets since the initial recognition. Generally, the Company believes thatthe credit risk of the financial instrument has significantly increased over 30 daysafter the due date unless there is solid evidence that the credit risk of the financialinstrument has not increased significantly since initial recognition.
If the credit risk of a financial instrument at the reporting date is relatively low, theCompany considers that the credit risk of the financial instrument has not increasedsignificantly since the initial recognition.
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If the credit risk of the financial instrument has increased significantly since its initialrecognition, the Company shall measure its loss reserve according to the amountequivalent to the expected credit loss of the financial instrument during its entirelife; If the credit risk of the financial instrument has not increased significantly sinceits initial recognition, the Company shall measure its loss reserve at an amountequivalent to the expected credit loss of the financial instrument in the next 12months. The resulting increase or reversal of loss reserves shall be recorded incurrent profits and losses as impairment losses or gains. For financial assets (debtinstruments) measured at fair value and whose changes are included in othercomprehensive income, their loss reserves are recognized in other comprehensiveincome, and impairment losses or gains are included in current profits and losseswithout reducing the book value of the financial assets listed in the balance sheet.
(XI) Inventory
1. Inventory classification
Inventories include materials in transit, raw material, turnover materials, finishedgoods, 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 currentlocation and state.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventoriesdispatched.
3. Inventory system
Adopt a perpetual inventory system.
4. Amortization method of low-value consumables and packaging materials
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(1) Adopt one-time resale method when dealing with low-value consumables
(2) Adopt the method of one-time resale when dealing with the packaging
5. Confirmation standards and accrual method of provision for inventory
impairment loss
On the balance sheet date, inventories shall be measured at the lower of cost andnet realizable value. When the cost of inventories is higher than its net realizablevalue, provision for inventory impairment loss shall be made. The net realizablevalue refers to the amount of the estimated selling price of the inventory minus theestimated costs that will occur at the time of completion, estimated sellingexpenses, 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 calculatedby deducting the estimated sale expense and relevant taxes from the estimated saleprice of inventories; The net realizable value of inventories for further processing inthe daily business activity shall be calculated by deducting the estimated cost ofcompletion, estimated sale expense and relevant taxes from the estimated saleprice of inventories; The net realizable value of inventories held for the executionof sales contracts or labor contracts shall be calculated on the ground of thecontract price. If the Company holds more inventories than the quantitiessubscribed in the sales contract, the net realizable value of the excessive part of theinventories shall be calculated on the ground of the general sales price.
After the inventory impairment is withdrawn, if the factors that previously affectedthe write-down of the inventory value have disappeared, causing the net realizablevalue of the inventory to be higher than its book value, it shall be reversed withinthe amount of the inventory impairment that has been withdrawn, and the revertedamount shall be included in the current profit and loss.
(XII) Contract asset
1. Confirmation method and standard for contract asset
When either party to a contract has performed, the Company shall present the
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contract in the statement of financial position as a contract asset or a contractliability, depending on the relationship between the Company’ s performance andthe 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 transferringgoods or services to a customer, the entity shall present the contract as a contractasset. Contract assets and contract liabilities under the same contract are disclosedin net amounts. An entity shall present any unconditional rights to consideration(only the passage of time is required) separately as a receivable.
2. Confirmation method and accounting treatment method of expected credit loss
of contract assets
For the confirmation method and accounting treatment method of expected creditloss of contract assets, please refer to "(X) 6. Test method and accounting treatmentmethod of impairment of financial instruments" in this note.(XIII) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, whichexists only when decisions about the relevant activities require the unanimousconsent of the parties sharing control. If the Company and other joint ventures havejoint control of the investee and have rights to the net assets of the investee, theinvestee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policydecisions of the investee but not control or joint control of those policies. If theCompany could exert significant influence over the investee, the investee is theassociate 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 thecombination is satisfied by paying cash, transfer of non-cash assets or assumptionof liabilities and the issue of equity securities, the initial investment cost of the long-
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term equity investment shall be the absorbing party’s share of the carrying amountof the owner’s equity of the party being absorbed in the consolidated financialstatements of the ultimate controlling party at combination date. When an investorbecomes capable of exercising control over an investee under common control dueto additional investment or other reasons, the initial investment cost shall be theabsorbing party’s share of the carrying amount of the owner’s equity of the partybeing absorbed in the consolidated financial statements of the ultimate controllingparty at combination date. The difference between the initial investment cost andthe carrying amount of the previously held equity investment, together with theadditional investment cost for new shares at the combination date, shall beadjusted to the capital reserve. If the balance of capital reserve is not sufficient, anyexcess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment costof the long-term equity investment shall be the acquisition cost at the acquisitiondate. When an investor becomes capable of exercising control over an investee dueto additional investment or other reasons, the initial investment cost under the costmethod shall be the carrying amount of previously-held equity investment togetherwith the additional investment cost.
(2) The initial cost of the long-term equity investment other than from businessacquisition
The initial cost of a long-term equity investment obtained by making payment incash shall be the purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained by making payment incash shall be the purchase cost which is actually paid.
3. Subsequent measurement and profit or loss recognition
(1) Cost method for the long-term investment
The Company adopts the cost method for the long-term investment in a subsidiarycompany. Under the cost method, an investing enterprise shall, in accordance with
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the attributable share of the net profits or losses of the invested entity, recognizethe investment profits or losses except the dividend declared but unpaid, which isincluded in the payment when acquiring the investment.
(2) Equity method for the long-term investment
A long-term equity investment in an associate or a joint venture shall be accountedfor using the equity method. Where the initial investment cost of a long-term equityinvestment exceeds investor’ s interest in the fair values of an investee’ s identifiablenet assets at the acquisition date, no adjustment shall be made to the initialinvestment cost. Where the initial cost is less than the investor’ s interest in the fairvalues of the investee’ s identifiable net assets at the acquisition date, thedifference shall be credited to profit or loss for the current period, and the cost oflong-term equity investment shall be adjusted accordingly.
The Company shall recognize its share of the investee’s net profits or losses, as wellas its share of the investee’s other comprehensive income, as investment income orlosses and other comprehensive income, and adjust the carrying amount of theinvestment accordingly. The carrying amount of the investment shall be reduced bythe portion of any profit distributions or cash dividends declared by the investeethat 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, othercomprehensive income or profit distribution (for short, other owners’ equitychanges ), and the carrying amount of the long-term equity investment shall beadjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses aftermaking appropriate adjustments according to the Company’s accounting principlesand operating period based on the fair values of the investee’s identifiable netassets at the acquisition date. During the holding period, if the investee makesconsolidated financial statements, the Company shall calculate its share based onthe investee’s net profit, other comprehensive income and the amount of otherowners’ equity attributed to the investee in the consolidated financial statements.
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The unrealized profits or losses resulting from transactions between the investorand its associate or joint venture shall be eliminated in proportion to the investor’sequity interest in the investee, based on which investment income or losses shallbe recognized, except the transaction of investment or sale of assets is a business.Any losses resulting from transactions between the investor and investee which areattributable to asset impairment shall be recognized in full.
The Company’s net losses incurred by joint ventures or associates, in addition toassuming additional loss obligations, are limited to the book value of long-termequity investments and other long-term equity that essentially constitutes a netinvestment in joint ventures or associates. If a joint venture or associated enterpriserealizes net profits in the future, the Company resumes recognizing its share ofprofits 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 theproceeds actually received and the carrying amount shall be recognized in profit orloss for the current period.
Partial disposal of long-term equity investments accounted for by the equitymethod, and the remaining equity is still accounted for by the equity method, theother comprehensive income recognized by the original equity method shall becarried forward according to the same basis as the direct disposal of related assetsor liabilities by the investee. All other changes in the interests of the holders arecarried 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 overan investee due to partial disposal of an equity investment or other reasons, anyother comprehensive income previously recognized shall be accounted for on thesame basis as would have been required if the investee had directly disposed of therelated assets or liabilities for the current period upon discontinuation of the equitymethod. Other owner's equity change shall be transferred into profit or loss of thecurrent period in full when the Company cease to adopt the equity method.
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When an investor can no longer control the investee due to partial disposal, whenthe individual financial statements are prepared, the remaining equity can exercisejoint control or significant influence on the investee, and the equity method shallbe used to account for the remaining equity. It is deemed that the equity method isadopted for adjustment since the acquisition, and the other comprehensive incomerecognized before the control of the investee is obtained is carried forward on thesame 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 otherowners’ 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 onthe investee, it shall be recognized as a financial asset, and the difference betweenits fair value and book value on the date when control is lost shall be included in thecurrent profit and loss, and other comprehensive income and other owner’sinterests previously recognized shall be transferred to profit or loss in full.
If the equity investment of a subsidiary is disposed of through multiple transactionsuntil it loses control, which is a package transaction, each transaction shall beaccounted as a transaction that disposes of the equity investment of the subsidiaryand loses control. For each transaction before the loss of control, the differencebetween the disposal price and the book value of the corresponding disposed partof long-term equity investment is first recognized as other comprehensive incomein individual financial statements and then transferred to the current profit and losswhen the control is lost. If it is not a package transaction, each transaction shall beaccounted for separately.
(XIV) Fixed assets
1. Recognition and Initial Measurement of Fixed Assets
The term "fixed assets" refers to the tangible assets held for the sake of producingcommodities, rendering labor service, renting or business management and ofwhich useful life is in excess of one fiscal year. No fixed asset may be recognizedunless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into theenterprise; and
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(2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (and considering the impact of expecteddismantling cost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixedassets when the related economic benefits are likely to flow in and their costs canbe reliably measured; the book value of the replaced part is derecognized; all othersubsequent expenditures are incurred shall be included in the current profit andloss.
2. Depreciation Method
Fixed assets are depreciated under the straight-line method. The depreciation rateis determined according to the category of assets, the useful life and the expectedresidual rate. If the components of the fixed assets have different useful lives orprovide economic benefits in a different way, then different depreciation rate ormethods shall be applied and the depreciation of the components shall becalculated separately.
Details of classification, residual value rate and annual depreciation rate are asfollows:
| Category | Depreciation method | Depreciation life (year) | Residual value rate (%) | Residual value rate (%) |
| Plants and Buildings | Year average method | 40 | 5.00 | 2.38 |
| Machinery | Year average method | 17-24 | 5.00 | 3.96-5.59 |
| Transportation and other equipment | Year average method | 5-12 | 5.00 | 7.92-19.00 |
3. Disposal of fixed assets
When a fixed asset is disposed of, or it is expected that no economic benefits will
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be generated through use or disposal, the recognition of the fixed asset shall bedetermined. The amount of disposable income of fixed assets raised from sale,transfer, scrapping or damage shall be included in the current profit and loss afterdeducting its book value and related taxes.
(XV) Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includesconstruction costs, installation costs, borrowing costs that meet the capitalizationconditions, and other necessary expenditures incurred before the construction in progressreaches its intended use status.
Construction in progress is transferred to fixed asset when it has reached its workingcondition for its intended use and depreciation will be accrued from the next month.
(XVI) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
Where the borrowing costs incurred by an enterprise can be directly attributable tothe acquisition and construction or production of assets eligible for capitalization,it shall be capitalized and recorded into the costs of relevant assets. Otherborrowing costs shall be recognized as expenses on the basis of the actual amountincurred 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 orproduction may take quite a long time to get ready for their intended use or for sale.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to thecessation of capitalization of the borrowing costs, excluding the period ofsuspension of capitalization of the borrowing costs.
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The borrowing costs shall not be capitalized unless they simultaneously meet thefollowing requirements:
(1) The asset disbursements have already been incurred, which shall include cash,transferred noncash assets or interest-bearing debts paid for the acquisition andconstruction 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 toprepare the asset for its intended use or sale have already started.
When the qualified asset under acquisition and construction or production is readyfor the intended use or sale, the capitalization of the borrowing costs shall beceased.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset areinterrupted abnormally and the interruption period lasts for more than 3 months,the capitalization of the borrowing costs shall be suspended. If the interruption is anecessary step for making the qualified asset under acquisition and construction orproduction ready for the intended use or sale, the capitalization of the borrowingcosts shall continue. The borrowing costs incurred during such period shall berecognized as expenses and shall be recorded into the profits and losses of thecurrent period, till the acquisition and construction or production of the assetrestarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing
costs
For interest expense (minus the income of interests earned on the unusedborrowing loans as a deposit in the bank or investment income earned on the loanas a temporary investment) and the ancillary expense incurred to a specificallyborrowed loan, those incurred before a qualified asset under acquisition,construction or production is ready for the intended use or sale shall be capitalized
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at the incurred amount when they are incurred, and shall be recorded into the costsof the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized number ofinterests on the general borrowing by multiplying the weighted average assetdisbursement of the part of the accumulative asset disbursements minus thegeneral borrowing by the capitalization rate of the general borrowing used. Thecapitalization rate shall be calculated and determined in light of the weightedaverage interest rate of the general borrowing.
(XVII) 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, relevanttaxes and other necessary disbursements which may be directly attributable tobringing 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 uponacquisition.
Intangible assets with finite beneficial periods shall be amortized under the straight-line method; during the period when the intangible asset can bring economicbenefits to the enterprise. If it is unable to estimate the beneficial period of theintangible asset, it shall be regarded as an intangible asset with uncertain servicelife and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives:
| Item | Estimated useful life | Criteria of estimated useful life |
| Land use right | 50 years | Land use right certificate |
3. Classification criteria for the internal research phase and development phase:
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The expenditures for the internal research and development projects of anenterprise shall be classified into research expenditures and developmentexpenditures.
Research phase refers to the phase of creative and planned investigation to acquireand study to acquire and understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of the researchphase or other knowledge is applied to certain projects or designs for themanufacturing of new or substantially improved materials, devices and productsbefore commercial manufacturing and use.
4. Specific conditions for capitalization of development phase expenditures:
Research expenditures are recognized in profit or loss as incurred. Expenditures inthe development phase are recognized as intangible assets if the followingconditions are met, and expenditures in the development phase that do not meetthe following conditions are recognized in profit or loss:
(1) It is technically feasible to complete the intangible asset so that it can be usedor sold;
(2) There is an intent to complete the intangible asset and use or sell it;
(3) The manner in which an intangible asset generates economic benefits, includingbeing able to demonstrate that there is a market for the product produced from theintangible asset or that there is a market for the intangible asset itself and that theintangible asset will be used internally, should prove its usefulness;
(4) There are sufficient technical, financial and other resources to support thecompletion of the development of the intangible asset and is capable of using orselling the intangible asset;
(5) The expenditure attributable to the development phase of the intangible assetcan be measured reliably.
If it is not possible to distinguish between research phase expenditures anddevelopment phase expenditures, all research and development expendituresincurred are charged to current profit or loss.
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(XVIII) 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 forimpairment if there is an indication of impairment at the balance sheet date. If the resultof the impairment test indicates that the recoverable amount of an asset is less than itsbook value, the difference shall be recognized as a provision for impairment and includedin impairment loss. The recoverable amount is the higher of the fair value of assets, lesscosts 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 individualbasis, and if it is difficult to estimate the recoverable amount of an individual asset, theCompany shall recognize the recoverable amount of asset group to which the assetbelongs. The term “assets group” refers to a minimum combination of assets by which thecash flows could be generated independently
Goodwill arising from business combinations, intangible assets with an indefinite usefullife, and intangible assets that have not yet reached their intended useable state shall betested for impairment at least at the end of each year, regardless of whether there is anindication of impairment.
In performing an impairment test on goodwill, the Company shall apportion the bookvalue of goodwill arising from business combinations to the relevant asset group from thedate of purchase in accordance with a reasonable method; for those that it is difficult tobe apportioned to the relevant asset group, they shall be apportioned to the relevantportfolio of asset group. The relevant asset group or combination of asset groups are thosethat can benefit from the synergistic effects of the business combination.
In performing an impairment test on the relevant asset group or portfolio of asset groupthat contains goodwill, the Company shall conduct the impairment test first on the assetgroup or portfolio of asset group that does not contain goodwill if there is an indication ofimpairment on the asset group or portfolio of asset group relating to goodwill, andcalculate its recoverable amount as well as compare it with the relevant book value torecognize the corresponding impairment loss. Then the impairment test shall beperformed for the asset group or portfolio of asset group that contains goodwill,
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comparing its book value and its recoverable amount. If the recoverable amount is lessthan the book value, the amount of impairment loss shall be offset and apportioned to thebook value of goodwill contained in the asset group or portfolio of asset group, and thenoffset the book value of other assets in proportion to the proportion of book value ofassets other than goodwill in the asset group or portfolio of asset group.
The impairment losses on assets mentioned above, once recognized, shall not be reversedin subsequent accounting periods.
(XIX) Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by thecurrent and subsequent accounting period, which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly.
(XX) Contract liabilities
The Company shall present contract assets or contract liabilities in the statement offinancial position in accordance with the relationship between the performance of anobligation and the payment of customers. The obligation of the Company to transfer goodsor provide services to customers for consideration received or receivable from customersshall be presented as contract liabilities. Contract assets and contract liabilities under thesame contract shall be shown on a net basis.
(XXI) Employee benefits
1. Accounting treatment for short-term employee benefits
The Company shall recognize the short-term benefits actually incurred as theliabilities, and recognize such liabilities into the current profit and loss or the costsof the related assets in the accounting period to which the employees render theservices.
Payments made by the Company of social security contributions for employees,payments of housing provident funds, union funds and employee education costsprovided in accordance with relevant requirements shall, in the accounting periodin which employees provide services, be calculated according to prescribed bases
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and percentages in determining the amount of employee benefits.
The employee welfare expenses incurred by the Company are included in thecurrent profit and loss or related asset costs based on the actual amount when theyactually 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 employeeprovides service, pension fund and unemployment fund for employees as liabilitiesaccording to the local government regulations. The amount shall be calculatedaccording to local prescribed bases and percentages in determining the amount ofemployee benefits, with a corresponding charge to the profit or loss or cost of anasset for the current period.
The Company contributes to the basic pension insurance and unemploymentinsurance for its employees in accordance with the relevant local governmentregulations. The amount payable is calculated on the basis of the contribution baseand at the rate prescribed by the local regulations and is recognized as a liability andcharged to current profit and loss or the cost of related assets in the accountingperiod in which the employees provide services to the Company. In addition, theCompany participates in an enterprise annuity plan/supplemental pension fundapproved by the relevant state authorities. The Company contributes a certainpercentage of the employees' gross salaries to the annuity plans/local socialinsurance institutions and the corresponding expenses are charged to current profitand 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 thefollowing dates: when the Company cannot unilaterally withdraw the offer oftermination benefits because of an employment termination plan or a curtailmentproposal; or when the Company recognizes costs or expenses related to a
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restructuring that involves the payment of termination benefits.
(XXII) Estimated liabilities
The obligation pertinent to a contingency shall be recognized as an estimated liabilitywhen 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 theperformance 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 estimateof 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 thetime value of money is of great significance, the best estimate shall be determined afterdiscounting the relevant future outflow of cash.
If there is a continuous range of expenses required and the likelihood of various outcomeswithin 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 mostlikely outcome.? If the contingencies relate to more than one item, the best estimate shall be calculatedand 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 liabilitiesof an enterprise is expected to be compensated by a third party, the compensation shallbe separately recognized as an asset only when it is virtually certain that thereimbursement will be obtained. The amount recognized for the reimbursement shall notexceed 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
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estimate, the book value will be adjusted according to the current best estimate.
(XXIII) Revenue
1. Accounting policies used for revenue recognition and measurement
The Company shall recognize revenue when (or as) the Company satisfies aperformance obligation when (or as) the customer obtains control of a promisedgood or service. Control of a promised good or service refers to the ability to directthe use of, and obtain substantially all of the remaining benefits from it.
If the contract contains two or more performance obligations, the Company shallallocate the transaction price to each individual performance obligation based onthe relative proportion of the stand-alone selling price of the goods or servicespromised by each individual performance obligation on the date of the contract.The Company measures revenue based on the transaction price allocated to eachindividual performance obligation.
The transaction price is the amount of consideration to which the Company expectsto be entitled in exchange for transferring promised goods or services to customers,excluding amounts collected on behalf of the third parties or amounts expected tobe returned to customers. The Company shall consider the terms of the contractand its customary business practices to determine the transaction price. Whendetermining the transaction price, the Company shall consider the effects of all ofthe following: variable consideration, the existence of a significant financingcomponent in the contract, non-cash consideration, and consideration payable tocustomers. The Company determines the transaction price that includes variableconsideration at an amount that does not exceed the amount of accumulatedrecognized revenue that is unlikely to be materially reversed when the relevantuncertainty is eliminated. If there is a significant financing component in thecontract, the Company shall recognize revenue at an amount that reflects the pricethat a customer would have paid for the promised goods or services if the customerhad 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 thetransaction price and the contract consideration during the contract period. Whenone of the following conditions is met, the Company is deemed to have undertaken
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the performance obligation within a certain time; otherwise, it will be deemed asundertaking the performance obligation at a certain point in time:
? The customer simultaneously receives and consumes the benefits provided bythe Company’s performance as the Company performs;? The customer has control over the goods in progress during the Company'sperformance.? The goods produced in the course of the Company's performance are ofirreplaceable use and the Company is entitled to receive payment for the portion ofthe performance that has been completed cumulatively to date during the entireterm of the contract.
The Company shall recognize revenue over time by measuring the progress towardscomplete satisfaction of that performance obligation, except where theperformance progress cannot be reasonably determined. The Company considersthe nature of the goods or services and adopts the output method or the inputmethod to determine the progress of performance. Where the performanceprogress cannot be reasonably determined, but the Company expects to recoverthe costs incurred in satisfying the performance obligation, the Company shallrecognize revenue only to the extent of the costs incurred until such time that it canreasonably measure the outcome of the performance obligation.
For performance obligations satisfied at a certain point in time, the Company shallrecognize revenue at the point when the customer obtains control of the relevantgoods or services. To determine the point in time at which a customer obtainscontrol of promised goods or services, the Company shall consider requirements asfollows:
? The Company has a present right to payment for the promised goods or servicesand 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 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 thegoods to the customer, that is, the customer has the main risks and rewards of
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ownership of the goods;? The customer has accepted the promised goods or services.
The Company determines whether it is the principal responsible person or agent atthe time of the transaction according to whether it has control over the goods orservices before transferring them to customers. If the Company can control thegoods or services before transferring them to customers, the Company is the mainresponsible person and recognizes the income according to the total considerationreceived or receivable; Otherwise, the Company, acting as an agent, shall recognizerevenue at the amount of commission or handling fee it is expected to be entitledto receive.
2. Disclosure of specific revenue recognition methods and measurement methods
according to business typesCommodity sales contracts between companies and customers usually only containperformance obligations to transfer goods or services such as steel. Suchperformance obligations belong to performance obligations performed at a certainpoint in time, and the Company recognizes revenue at the point when customersobtain control over related goods or services. When judging whether customershave acquired control over goods or services, the company considers the followingindications:
The Company obtains the right to collect money at present, the legal ownership ofthe commodity is transferred to the customer, the physical assets of the commodityare transferred to the customer, the Company transfers the main risks and rewardsof the ownership of the commodity to the customer, and the customer has acceptedthe commodity.
(XXIV) Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining acontract.
If the costs incurred in fulfilling a contract with a customer are not within the scope ofanother Standard, for example, Inventories, Property, Plant and Equipment or IntangibleAssets, the Company shall recognize an asset from the costs incurred to fulfil a contract
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only if those costs meet all of the following criteria:
? the costs relate directly to a contract or to an expected contract;? the costs generate or enhance resources of the Company that will be used in satisfyingperformance obligations in the future; and? the costs are expected to be recovered.
The Company shall recognize as an asset the incremental costs of obtaining a contract witha customer if the Company expects to recover those costs.
An asset recognized in accordance with contract costs shall be amortized in consistencewith the transfer to the customer of the goods or services to which the asset relates. TheCompany may recognize the incremental costs of obtaining a contract as an expense whenincurred 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 thecarrying amount of an asset related to contract assets exceeds:
1. the remaining amount of consideration that the Company expects to receive inexchange for the goods or services to which the asset relates; less
2. the costs that relate directly to providing those goods or services and that have not beenrecognized as expenses.
The Company shall recognize in profit or loss a reversal of some or all of an impairmentloss previously recognized when the impairment conditions no longer exist or haveimproved. The increased carrying amount of the asset shall not exceed the carryingamount if no impairment loss had been recognized previously.
(XXV) Government grants
1. Types
Government grants mean the monetary or non-monetary assets obtained free ofcharge by the Company from the government. Government grants consist ofgovernment subsidies pertinent to assets and government subsidies pertinent toincome.
Government grants related to assets are government grants acquired by the
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Company for the acquisition or other formation of long-term assets. Governmentgrants related to income are government grants other than those related to assets.
The specific criteria for the Company to classify government grants as asset-relatedare: government grants acquired by the enterprise and used to acquire or otherwiseform long-term assets.
The criteria of the Company recognizing the government grants related to incomeis: In addition to government grants related to assets, government grants that havebeen clearly targeted for subsidies.
For government documents that do not specify the object of the grant, theCompany classifies the government grant as asset-related or income-related basedon the following judgment: if it can form a long-term asset, the portion of thegovernment 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 itis difficult to distinguish, the government grant as a whole is treated as an income-related government grant.
2. Time point of recognition
Government grants related to assets are recognized when the Company can fulfillthe premises attached to it and the grants are actually received.
3. Accounting treatment
Government grants related to assets shall be used to offset the book value of therelated assets or recognized as deferred income. The government grants recognizedas deferred income shall be charged to current profit and loss (if they relate toordinary activities, to other income; if do not, to non-operating income) inaccordance with a reasonable and systematic method over the useful life of therelated assets;
Government grants related to income that is used to compensate for the relatedcosts and expenses or losses in subsequent periods shall be recognized as deferredincome 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
Notes of Financial Report Page 40
related costs and expense or losses are recognized, or offset the related costs andexpenses or losses; for those used to compensate for the related costs and expensesor losses that have been incurred, they shall be directly included in current profitand 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 followingtwo 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 Companywill take the actual amount of the loan received as the entry value of the loan andcalculate the relevant borrowing costs based on the loan principal and the policypreferential interest rate.
(2) If the government directly allocates the discounted funds to the Company, theCompany will write-down the relevant borrowing costs with the correspondingdiscounts.
(XXVI) Deferred income tax assets/deferred income tax liabilities
Income tax includes current income tax and deferred income tax. Except for income taxarising from business combinations and transactions or events that are directly includedin owner's equity (including other comprehensive income), the Company will includecurrent income tax and deferred income tax in current profit and loss.
Deferred income tax assets and deferred income tax liabilities are calculated andconfirmed based on the difference (temporary difference) between the tax base of assetsand liabilities and their book values.
An enterprise shall recognize the deferred income tax assets arising from a deductibletemporary difference to the extent of the amount of the taxable income which it is mostlikely 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
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amount of future taxable income to be offset by the deductible loss or tax deduction to belikely obtained.
Deferred income tax liabilities are recognized for taxable temporary differences, except inexceptional circumstances.
Special circumstances in which deferred income tax assets or deferred income taxliabilities 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 andjoint ventures, deferred income tax liabilities are recognized, unless the Company cancontrol the timing of the reversal of the temporary differences and the temporarydifferences are likely not to be transferred back into the foreseeable future. For deductibletemporary differences related to investments in subsidiaries, associates and joint ventures,when the temporary differences are likely to be reversed in the foreseeable future and arelikely to be used to deduct the taxable income of deductible temporary differences in thefuture, income tax assets are recognized.
On the balance sheet date, deferred income tax assets and deferred income tax liabilitiesare measured at the applicable tax rate during the period when the relevant assets areexpected to be recovered or the relevant liabilities are expected to be recovered inaccordance with the provisions of the tax law.
On the balance sheet date, the Company reviews the book value of deferred income taxassets. If it is probable that sufficient taxable income cannot be obtained in the future tooffset the benefits of deferred income tax assets, the book value of the deferred incometax 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 ona net basis or to obtain assets and pay off liabilities simultaneously, the current income tax
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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 liabilitiesare 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 currentincome tax liabilities on a net basis;?Deferred income tax assets and deferred income tax liabilities relate to income taxeslevied by the same taxation authority on the same taxable entity or on different taxableentities, but in each future period in which it is significant that the deferred income taxassets and liabilities reverse, the taxable entities involved intend to settle the currentincome tax assets and liabilities on a net basis or to acquire the assets and settle theliabilities simultaneously.
(XXVII) Leases
A lease is a contract whereby the lessor transfers the right of usage on an asset to thelessee for consideration within a certain period of time. On the contract commencementdate, the Company evaluates whether the contract is a lease or includes a lease. If oneparty in the contract transfers the right to control the use of one or more identified assetswithin a certain period in exchange for consideration, the contract is a lease or includes alease.
If the contract contains multiple separate leases at the same time, the Company will splitthe contract and conduct accounting treatment for each separate lease. If the contractincludes both lease and non-lease parts, the Company, as the lessor and lessee, will splitthe lease and non-lease parts for accounting treatment
1. The Company as a lessee
(1) Right-of-use assets
On the beginning date of the lease term, the Company recognizes the right-of-useassets 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
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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.
The Company subsequently depreciates right-of-use assets using the straight-linemethod. If it is reasonably certain that ownership of the leased asset will beobtained at the end of the lease term, the Company depreciates the leased assetover its remaining useful life; otherwise, the leased asset is depreciated over theshorter 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 assethas been impaired, please refer to Note “III. (XVIII) Impairment of long-term assets”.
(2) Lease liabilities
At the beginning of the lease term, the Company recognizes lease liabilities forleases other than short-term leases and leases of low-value assets. The leaseliability 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 ifthe interest rate implicit in the lease cannot be reasonably determined, the
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Company's incremental borrowing rate is used as the discount rate.
The Company calculates the interest expense of the lease liability in each period ofthe lease term according to the fixed periodic interest rate and includes it in thecurrent profit and loss or the cost of related assets.
Variable lease payments that are not included in the measurement of leaseliabilities are included in the current profit and loss or the cost of related assetswhen they are actually incurred.
After the commencement date of the lease term, the Company shall re-measurethe lease liabilities and adjust the corresponding right-of-use assets under thefollowing circumstances. If the book value of the right-of-use assets has beenreduced to zero, but the lease liabilities still need to be further reduced, thedifference is included in the current profit and loss:
? When there is a change in the evaluation results of the purchase option, leaserenewal option or termination option, or when the actual exercise of theaforementioned options is inconsistent with the original evaluation result, theCompany shall calculate the lease payment amount after the change and therevised discounted value. Remeasure the lease liability at the present value ofthe rate calculation;? When the actual fixed payment changes, the estimated payable amount of theguaranteed residual value changes, or the index or ratio used to determine thelease payment changes, the Company re-measures the lease liability at thepresent value of the changed lease payments and the original discount rate.However, where changes in lease payments resulting from changes in floatinginterest rates, a revised discount rate is used to calculate the present value.
(3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities forshort-term leases and low-value asset leases, and includes the relevant leasepayments in the current profit and loss or related asset costs on a straight-line basisover each period of the lease term. Short-term leases refer to leases with a leaseterm of not more than 12 months and excluding purchase options on the
Notes of Financial Report Page 45
commencement date of the lease term. A low-value asset lease refers to a leasewith a lower value when a single-leased asset is a brand-new asset. If the Companysubleases or expects to sublease the leased assets, the original lease is not a low-value asset lease.
(4) Lease changes
If the lease changes and the following conditions are met at the same time, theCompany 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 theindividual price of the expanded part of the lease scope according to thecontract.
If the lease modification is not accounted for as a separate lease, on the effectivedate of the lease modification, the Company re-allocates the consideration of themodified contract, re-determines the lease term, and re-calculates the lease liabilitybased on the present value of the modified lease payments and the revised discountrate.
If the lease modification leads to the narrowing of the lease scope or the shorteningof the lease term, the Company will reduce the book value of the right-of-use assetsaccordingly, and include the relevant gains or losses on partial or completetermination of the lease into the current profit and loss. If other lease changes resultin re-measurement of lease liabilities, the Company adjusts the book value of theright-of-use assets accordingly.
2. The Company as a lessor
On the lease commencement date, the Company classifies leases into financialleases and operating leases. A financial lease is a lease that essentially transfersalmost all the risks and rewards associated with the ownership of the leased asset,regardless of whether ownership is ultimately transferred. Operating leases refer toleases other than financial leases. When the Company acts as a sublease lessor, itclassifies the sublease based on the right-of-use asset arising from the original lease.
Notes of Financial Report Page 46
(1) Accounting treatment of operating leases
The Company recognizes lease receipts from operating leases as rental incomeusing the straight-line method for each period of the lease term. Initial direct costscapitalized in connection with operating leases are amortized over the lease termon the same basis as rental income is recognized and are recognized in current profitand loss. Variable lease payments not included in the amount of lease receipts arerecognized in current profit and loss when they are actually incurred. When thereis a change in operating leases, the Company accounts for it as a new lease from theeffective date of the change, and the amount of lease receipts received in advanceor receivable in relation to the lease prior to the change is treated as a receipt underthe new lease.
(2) Accounting treatment of financial lease
On the lease commencement date, the Company recognizes the financial leasereceivables for the financial lease and derecognizes the financial lease assets. Whenthe Company initially measures the financial lease receivables, the net investmentin the lease is regarded as the entry value of the financial lease receivables. The netlease investment is the sum of the unguaranteed residual value and the presentvalue of the lease receipts not yet received at the commencement date of the leaseterm, discounted at the interest rate implicit in the lease.
The Company calculates and recognizes interest income over the lease term at afixed periodic rate. Derecognition and impairment of finance lease receivables areaccounted for in accordance with Note “V. 10. Financial assets and financialliabilities".
Variable lease payments not included in the measurement of net investment inleases are charged to current profit and loss when actually incurred.
If the financial lease is changed and the following conditions are met at the sametime, the Company will account for the change as a separate lease:
? The change expands the scope of the lease by increasing the right to use oneor more of the leased assets;
Notes of Financial Report Page 47
? The increased consideration is equivalent to the amount adjusted by the
individual price of the expanded part of the lease scope according to thecontract.
If the modification of a financial lease is not accounted for as a separate lease, theCompany shall deal with the modified lease under the following circumstances:
? If the change had been effective on the inception date of the lease and thelease would have been classified as an operating lease, the Company shallaccount for it as a new lease from the effective date of the lease change anduse the net investment in the lease prior to the effective date as the book valueof the leased asset;? If the change had been effective at the inception date of the lease and thelease would have been classified as a finance lease, the Company shall accountfor it in accordance with the policy on modification or renegotiation ofcontracts as described in Note “III. (X) Financial tools”.
(XXVIII) Debt restructuring
1. The Company as creditor
The Company shall terminate the recognition of creditor's rights when thecontractual right to receive cash flow from creditor's rights terminates. If debtrestructuring is carried out by means of paying off debts with assets or convertingdebts into equity instruments, the Company shall recognize the relevant assetswhen they meet their definition and recognition conditions.
When debt restructuring is carried out by means of liquidating debts with assets,the Company shall measure the transferred non-financial assets at cost wheninitially recognizing them. The cost of inventory includes the fair value of the waiverof creditor's rights and other costs directly attributable to the asset, such as taxes,transportation fees, loading and unloading fees, insurance premiums, etc., whichare incurred to bring the asset to its current position and state. The cost of investingin an associate or joint venture includes the fair value of the waiver of claims andother costs such as taxes directly attributable to the asset. The cost of investmentreal estate includes the fair value of abandoned creditor's rights and other costssuch as taxes directly attributable to the asset. The cost of fixed assets includes the
Notes of Financial Report Page 48
fair value of waiving creditor's rights and other costs that can be directly attributedto the assets, such as taxes, transportation fees, loading and unloading fees,installation fees, professional service fees, etc. The cost of biological assets includesthe fair value of waived creditor's rights and other costs such as taxes,transportation fees and insurance premiums that can be directly attributed to theassets. The cost of intangible assets includes the fair value of the waiver of claimsand other costs that can be directly attributable to taxes and other costs incurred inmaking the assets achieve their intended purposes. If debt restructuring byconverting debt into equity instruments causes creditors to convert their creditor'srights into equity investment in joint ventures or joint ventures, the Company shallmeasure its initial investment cost according to the fair value of abandonedcreditor's rights and other costs such as taxes directly attributable to the assets. Thedifference between the fair value and the book value of the abandoned creditor'srights is included in the current profits and losses. In case of debt restructuring bymodifying other clauses, the Company shall recognize and measure therestructured creditor's rights according to "III, (X) Financial tools" in this note.
In case of debt restructuring by means of paying off debts or combining multipleassets, the Company first recognizes and measures the transferred financial assetsand restructured creditor's rights according to "III. (X) Financial Instruments" in thisnote, and then distributes the net amount of the fair value of the abandonedcreditor's rights after deducting the confirmed amount of the transferred financialassets and restructured creditor's rights according to the fair value ratio of variousassets other than the transferred financial assets, and determines the cost of eachasset according to the aforesaid method. The difference between the fair value andthe book value of the abandoned creditor's rights shall be included in the profitsand losses of the current period.
2. The Company as debtor
The Company shall terminate the recognition of the debt when the currentobligation of the debt is discharged.
If debt restructuring is carried out by means of paying off debts with assets, the
Notes of Financial Report Page 49
Company shall derecognize the relevant assets and the paid-off debts when theymeet the conditions for derecognition, and the difference between the book valueof the paid-off debts and the book value of the transferred assets shall be includedin the profits and losses of the current period.
In case of debt restructuring by converting debts into equity instruments, theCompany shall derecognize the debts paid off when they meet the conditions forderecognition. When the Company initially recognizes equity instruments, it shallmeasure them according to the fair value of equity instruments. If the fair value ofequity instruments cannot be reliably measured, it shall be measured according tothe fair value of debts paid off. The difference between the book value of the debtpaid off and the amount recognized by the equity instrument shall be included inthe profits and losses of the current period.
In case of debt restructuring by modifying other terms, the Company shall recognizeand measure the restructured debt according to "III. (X) Financial Instruments" inthis note.
If debt restructuring is carried out by means of paying off debts or combiningmultiple assets, the Company shall recognize and measure equity instruments andrestructured debts according to the aforesaid methods, and the difference betweenthe book value of the paid-off debts and the book value of the transferred assetsand the sum of the recognized amounts of equity instruments and restructureddebts shall be included in the profits and losses of the current period.
(XXIX) Other significant accounting policies and accounting estimates
Major accounting estimates and judgements
When preparing financial statements, the Company's Management needs to use estimatesand assumptions, which will affect the application of accounting policies and the amountof assets, liabilities, income and expenses. Actual conditions may differ from theseestimates. The Management of the Company continuously evaluates the judgment of keyassumptions and uncertainties involved in the estimation, and the impact of changes inaccounting estimates will be recognized in the current and future periods.
Notes of Financial Report Page 50
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 theexpected credit loss rate, and determines the expected credit loss rate based on thedefault probability and the default loss rate. When determining the expected credit lossrate, the Company uses internal historical credit loss experience and other data, andadjusts the historical data in combination with current conditions and forward-lookinginformation. When considering forward-looking information, the indicators used by theCompany include the risk of economic downturn, the expected increase in unemploymentrate, changes in the external market environment, technological environment andcustomer conditions. The Company regularly monitors and reviews assumptions relatedto the calculation of expected credit losses.
2. Provision for decline in value of inventories
As mentioned in Note “III. (XI) Inventory” , the Company regularly estimates the netrealizable value of the inventory, and recognizes the difference in inventory cost higherthan the net realizable value. When estimating the net realizable value of inventory, theCompany considers the purpose of holding the inventory and uses the availableinformation as the basis for estimation, including the market price of the inventory andthe Company's past operating costs. The actual selling price, completion cost, salesexpenses and taxes of the inventory may change according to changes in market salesconditions, production technology, or the actual use of the inventory. Therefore, theamount 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 “III. (XVIII) Long-term Asset Impairment”, the Company performs animpairment assessment on assets other than inventory and financial assets on the balancesheet date to determine whether the recoverable amount of the asset has fallen to a lowerlevel than its book value. If the situation shows that the book value of the long-term assetsmay not be fully recovered, the relevant assets will be deemed to be impaired and theimpairment loss will be recognized accordingly.
Notes of Financial Report Page 51
The recoverable amount is the higher of the net value of the fair value of the asset (orasset group) minus the disposal expenses and the present value of the asset (or assetgroup) 's expected future cash flow. Because the Company cannot reliably obtain thepublic market price of assets (or asset groups), and cannot reliably and accurately estimatethe fair value of assets. Therefore, the Company regards the present value of the expectedfuture cash flow as the recoverable amount. When estimating the present value of futurecash 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 thediscount rate used in calculating the present value. The Company will use all availablerelevant information when estimating the recoverable amount, including the prediction ofoutput, selling price and related operating costs based on reasonable and supportableassumptions.
4. Depreciation and amortization of assets such as fixed assets and intangible assetsAs described in Note “III. (XIV) Fixed assets” and Note “III. (XVII) Intangible assets”, theCompany shall accrue depreciation for the fixed assets and amortization for intangibleassets within the useful life after considering their residual values. The Company regularlyreviews the useful life of related assets to determine the amount of depreciation andamortization expenses to be included in each reporting period. The useful life of assets isdetermined by the Company based on past experience with similar assets and incombination with anticipated technological changes. If the previous estimates changesignificantly, 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 toutilize the unrecovered tax losses and deductible temporary differences, the Companycalculates and recognizes the related deferred income tax asset to the extent that it isprobable that taxable income will be available against which the unrecovered tax lossesand deductible temporary differences can be utilized, and on the basis of the income taxrate applicable to the period in which the asset is expected to be recovered. The Companyis required to use judgment to estimate the timing and amount of future taxable incomeand to make reasonable estimates and judgments about the applicable future income taxrates in accordance with current tax policies and other relevant policies to determine theamount of deferred income tax assets to be recognized. If the timing and amount of actual
Notes of Financial Report Page 52
profits to be generated in future periods or the actual applicable income tax rate differsfrom the Management's estimates, such differences will have an impact on the amount ofdeferred income tax assets.
(XXX) Changes in significant accounting policies and accounting estimates
1. Changes in significant accounting policies
(1) Implementation of the regulation that “Accounting treatment for deferredincome tax relating to assets and liabilities arising from a single transaction forwhich no exemption from initial recognition applies” in Accounting Standards forBusiness Enterprises No. 16.
On November 30
th, 2022, the Ministry of Finance issued Interpretation ofAccounting Standard for Business Enterprises No. 16 (Cai Kuai [2022] No. 31,hereinafter referred to as "Interpretation No. 16"), in which "Accounting treatmentfor deferred income tax relating to assets and liabilities arising from a singletransaction for which no exemption from initial recognition applies" is effectivefrom January 1
st, 2023; "Accounting treatment for the income tax effect ofdividends related to financial instruments classified as equity instruments by theissuer" and "Accounting treatment for an enterprise that modifies a cash-settledshare-based payment to an equity-settled share-based payment" is effective fromthe date of publication.
Interpretation No. 16 on single transactions (including lease transactions in whichthe lessee initially recognizes a lease liability at the inception date of the lease andrecords it in the right-of-use asset, and transactions in which an estimated liabilityis recognized and recorded in the cost of the related asset because of the existenceof an abandonment obligation, such as a fixed asset, etc., hereinafter referred to assingle transactions to which this interpretation applies) that are not businesscombinations, that affect neither accounting profit nor taxable income(ordeductible loss) at the time of the transaction and where the initial recognition ofassets and liabilities results in taxable temporary differences and deductibletemporary differences in equal amounts, and the provisions in Articles 11 (2) and13 of Accounting Standards for Business Enterprises No. 18 - Income Tax concerningthe exemption of deferred income tax liabilities and deferred income tax assets for
Notes of Financial Report Page 53
initial recognition are not applicable. The enterprise should recognize thecorresponding deferred income tax liabilities and deferred income tax assets for thetaxable temporary differences and deductible temporary differences arising fromthe initial recognition of assets and liabilities for the transaction when thetransaction occurs, in accordance with the relevant provisions of AccountingStandards for Business Enterprises No. 18 - Income Tax and other relevantregulations, respectively.
In case of taxable temporary differences and deductible temporary differencesarising from individual transactions applicable to the provisions between thebeginning of the earliest period reported in the financial statements for the firsttime and the implementation date, as well as lease liabilities and right-to-use assetsrecognized due to the individual transactions applicable to the provisions at thebeginning of the earliest period reported in the financial statements, and estimatedliabilities related to disposal obligations and corresponding related assetsrecognized, the enterprise shall make adjustments in accordance with theprovisions.
The Company has conducted this Regulation since January 1
st
, 2023, the maineffects of this Regulation are as below:
| The content and reasons for changes in accounting estimates | Report items influenced | Accounts affected to the balance on January 1st , 2022 | |
| Consolidated | Parent company | ||
| The adjustment of the operating lease existing before the first execution date by the company as the lessee. | Deferred income tax assets | 360,091,312.08 | 360,091,312.08 |
| Deferred income tax liabilities | 360,091,312.08 | 360,091,312.08 | |
| The content and reasons for changes in accounting estimates | Statement items affected | Consolidated | Parent company | ||
| December 31st , 2023/FY2023 | December 31st , 2022/FY2022 | December 31st , 2023/FY2023 | December 31st , 2022/FY2022 | ||
| The adjustment of the operating lease | Deferred income tax assets | 340,687,848.63 | 344,997,678.47 | 340,687,848.63 | 344,997,678.47 |
| Deferred income tax | 329,904,044.87 | 344,997,678.47 | 329,904,044.87 | 344,997,678.47 | |
Notes of Financial Report Page 54
| The content and reasons for changes in accounting estimates | Statement items affected | Consolidated | Parent company | ||
| December 31st , 2023/FY2023 | December 31st , 2022/FY2022 | December 31st , 2023/FY2023 | December 31st , 2022/FY2022 | ||
| existing before the first execution date by the company as the lessee. | liabilities | ||||
2. Changes in significant accounting estimates
There were no changes in main accounting estimates in the reporting period.
IV. Taxes
(I) Main tax categories and tax rates
| Type of tax | Tax base | Tax rate (%) |
| Value-added tax (VAT) | Output VAT is calculated on the basis of the income from the sale of goods and taxable services in accordance with the provisions of the tax law, and after subtracting the deductible input VAT for the current period, the difference is VAT payable | 6, 9, 13 |
| City maintenance and construction tax | Based on VAT actually paid | 7 |
| Corporate income tax | For details, see the table below |
Disclosure of information if there are taxable entities with different corporate income taxrates:
| Name of taxpayer | Income tax rate (%) |
| Bengang Steel Plates Co.,Ltd. | 25 |
| Shanghai Bengang Metallurgy Technology Co., Ltd. | 25 |
| Benxi Bengang Steel Sales Co., Ltd. | 25 |
| BX Steel Posco Cold Rolled Sheet Co., Ltd. | 15 |
Notes of Financial Report Page 55
| Name of taxpayer | Income tax rate (%) |
| Tianjin Bengang Special Steel Sales Co., Ltd. | 25 |
| Changchun Bengang Steel & Iron Sales Co., Ltd. | 25 |
| Changchun Bengang Steel & Iron Trading Co., Ltd. | 25 |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd | 25 |
| Dalian Benruitong Automobile Material Technology Co., Ltd | 25 |
| Shenyang Bengang Metallurgy Science and Technology Co., Ltd | 25 |
(II) Tax incentives
1. Subsidiary company of the Company, BX Steel Posco Cold Rolled Sheet Co., Ltd., hasgained high-tech enterprise certificate. Certificate number is GR202321001624; Thevalidity is from December 20
th
, 2023 to December 20
th, 2026. Enterprise income tax ofBX Steel Posco Cold Rolled Sheet Co., Ltd shall be paid at a reduced rate of 15%.
2. On December 30
th, 2021, the Ministry of Finance and the State Administration ofTaxation issued the Announcement on Improving the Value-added Tax Policy forComprehensive Utilization of Resources (Announcement No.40 of the Ministry of Financeand the State Administration of Taxation of the Ministry of Finance, 2021), which will beimplemented from March 1
st, 2022. The original Notice of the Ministry of Finance and theState Administration of Taxation on Printing and Distributing the Preferential Catalogue ofValue-added Tax on Products and Services for Comprehensive Utilization of Resources(Caishui [2015] No.78) Electricity and heat produced and sold by Energy DevelopmentBranch of Benxi Iron and Steel Co., Ltd., a branch of the Company, belong to the itemslisted in the Preferential Catalogue of Value-added Tax on Products and Services forComprehensive Utilization of Resources, and the immediate VAT refund policy is applicable.
Notes of Financial Report Page 56
V. Notes to the items of the consolidated financial statements(I) Cash and cash equivalent
| Item | Closing balance | Opening balance |
| Cash on hand | ||
| Cash in bank | 1,184,774,971.52 | 1,296,662,683.20 |
| Other cash and cash equivalents | 1,009,879,189.82 | 164,482,958.67 |
| Total | 2,194,654,161.34 | 1,461,145,641.87 |
| Including: Total money depoited overseas | ||
| Money depoited overseas and remittance of the money is constrained |
Other notes: Among the monetary funds at the end of the period, cash and cashequivalents not included in the cash flow statement mainly include bank acceptance billdeposit of RMB909,879,189.82 and letter of credit deposit of RMB100,000,000.00 .
(II) Notes receivable
1. Notes receivable listed by categories
| Item | Closing balance | Opeing balance |
| Bank acceptance bill | 367,402,376.67 | 139,442,122.88 |
| Commercial acceptance bill | 86,157,718.82 | 290,265,051.82 |
| Total | 453,560,095.49 | 429,707,174.70 |
Notes of Financial Report Page 57
2. Notes receivable classified and disclosed by the bad debt accrual method
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book balance | Book balance | Bad debt provision | Book balance | |||||
| Amount | Ratio (%) | Amount | Accrual ratio (%) | Amout | Ratio (%) | Amount | Accrual ratio (%) | |||
| Provision for bad debts on individual basis | ||||||||||
| Provision for bad debts by the combination of credit risk characteristics | 453,560,095.49 | 100.00 | 453,560,095.49 | 429,707,174.70 | 100.00 | 429,707,174.70 | ||||
| Total | 453,560,095.49 | 100.00 | 453,560,095.49 | 429,707,174.70 | 100.00 | 429,707,174.70 | ||||
Notes of Financial Report Page 58
Provision for bad debts by the combination of credit risk characteristics:
Accrual items combined:
| Name | Closing balance | ||
| Notes receivable | Bad debt provision | Accrual ratio （%） | |
| Commercial acceptance bill | 86,157,718.82 | ||
| Bank acceptance bill | 367,402,376.67 | ||
| Total | 453,560,095.49 | ||
3. Notes receivable pledged by the Company at the end of the period
| Item | Amount pledged at the end of the period |
| Bank acceptance bill | 218,427,117.76 |
| Commercial acceptance bill | |
| Total | 218,427,117.76 |
4. Notes receivable endorsed or discounted by the Company at the end of the period
and not yet due at the balance sheet date
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bill | 3,449,086,820.87 | 262,875,431.13 |
| Commercial acceptance bill | ||
| Total | 3,449,086,820.87 | 262,875,431.13 |
(III) Accounts receivable
1. Accounts receivable disclosed by aging
| Aging | Closing balance | Opening balance |
| Within 1 year | 1,047,842,246.01 | 892,035,646.81 |
| 1 to 2 years | 322,945,580.33 | 14,717,227.92 |
| 2 to 3 years | 647,190.77 | 5,931,757.76 |
| 3 to 4 years | 5,690,114.98 | 304,038,419.97 |
| 4 to 5 years | 300,882,005.30 | 16,776,684.51 |
| Over 5 years | 98,724,184.94 | 135,333,377.50 |
| Subtotal | 1,776,731,322.33 | 1,368,833,114.47 |
| Less: Bad debt provision | 448,198,723.86 | 471,602,218.41 |
| Total | 1,328,532,598.47 | 897,230,896.06 |
Notes of Financial Report Page 59
2. Accounts receivable classified and disclosed by the bad debt accrual method
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book value | Bad debt provision | Book value | |||||
| Amount | Ratio（%） | Amount | Accrual ratio（%） | Amount | Ratio（%） | Amount | Accrual ratio（%） | |||
| Provision for bad debts made on an individual basis | 353,419,325.80 | 19.89 | 353,419,325.80 | 100.00 | 353,419,325.80 | 25.82 | 353,419,325.80 | 100.00 | ||
| Provision for bad debts by the portfolio of credit risk characteristics: | 1,423,311,996.53 | 80.11 | 94,779,398.06 | 6.66 | 1,328,532,598.47 | 1,015,413,788.67 | 74.18 | 118,182,892.61 | 11.64 | 897,230,896.06 |
| Including | ||||||||||
| Aging portfolio | 1,423,311,996.53 | 80.11 | 94,779,398.06 | 6.66 | 1,328,532,598.47 | 1,015,413,788.67 | 74.18 | 118,182,892.61 | 11.64 | 897,230,896.06 |
| Total | 1,776,731,322.33 | 100.00 | 448,198,723.86 | 1,328,532,598.47 | 1,368,833,114.47 | 100.00 | 471,602,218.41 | 897,230,896.06 | ||
Notes of Financial Report Page 60
Important accounts receivable whose provision for bad debts was made on anindividual basis：
| Name | Closing balance | Opening balance | ||||
| Book balance | Provision for bad debt | Accrual ratio (%) | Accrual basis | Book balance | Provision for bad debt | |
| Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd. | 48,196,244.68 | 48,196,244.68 | 100.00 | It has been discontinued and is not expected to be recovered | 48,196,244.68 | 48,196,244.68 |
| Brilliance Auto Group Holding Co., Ltd. | 305,223,081.12 | 305,223,081.12 | 100.00 | It has been discontinued and is not expected to be recovered | 305,223,081.12 | 305,223,081.12 |
| Total | 353,419,325.80 | 353,419,325.80 | 353,419,325.80 | 353,419,325.80 | ||
Provision for bad debt by portfolio of credit risk characteristics:
Portfolio accrual item: Aging portfolio
| Item | Closing balance | ||
| Accounts receivable | Bad debt provision | Accrual（%） | |
| Within 1 year (inclusive) | 1,047,842,246.01 | 10,478,422.46 | 1.00 |
| 1 to 2 years (iclusive) | 322,945,580.33 | 32,294,558.03 | 10.00 |
| 2 to 3 years (inclusive) | 647,190.77 | 129,438.15 | 20.00 |
| 3 to 4 years (inclusive) | 845,982.97 | 845,982.97 | 100.00 |
| 4 to 5 years (inclusive) | 503,056.19 | 503,056.19 | 100.00 |
| Over 5 years | 50,527,940.26 | 50,527,940.26 | 100.00 |
| Total | 1,423,311,996.53 | 94,779,398.06 | |
3. Provision for bad debts accrued, recovered or reversed in the current period
Notes of Financial Report Page 61
| Category | Opening balance | Amount of change in the current period | Closing balance | |||||
| Accrual | Recovery or reversal | Write-off | Others | |||||
| Provision for bad debts on accounts receivable | 471,602,218.41 | -21,955,575.63 | 1,447,918.92 | 448,198,723.86 | ||||
| Total | 471,602,218.41 | -21,955,575.63 | 1,447,918.92 | 448,198,723.86 | ||||
Of which the amount of provision for bad debts recovered or reversed in the currentperiod is material: Non.
4. Actual write-off of accounts receivable in the current period
| Item | Write-off amount |
| Actual write-off of accounts receivable | 1,447,918.92 |
Of which significant write-offs of accounts receivable:
| Name of the company | Nature of payment receivable | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Jining Forging Center | Payment for goods | 461,229.33 | Cancelled | Legal advice and working conference minute | No |
| Xuzhou Jinshanqiao Development Zone Yong'an Metal Material Corporation | Payment for goods | 200,265.48 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | No |
| Shanghai Bengang Industry and Trade Company | Payment for goods | 193,625.29 | Cancellation | Legal advice and working conference minute | No |
| ORDINS Northeast Company Fushun Technology and Trade Center | Payment for goods | 155,616.74 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write- | Legal advice and working conference minute | No |
Notes of Financial Report Page 62
| Name of the company | Nature of payment receivable | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| offs | |||||
| Tonghua Machinery Factory for Grain and Oils | Payment for goods | 141,139.39 | Cancelled | Legal advice and working conference minute | No |
| Bengang Yantai Marketing Co., Ltd | rayment for goods | 138,378.96 | Cancelled | iegal advice and working conference minute | No |
| Shandong Zhucheng Industrial Supply and Marketing Company | Payment for goods | 87,085.43 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | No |
| Tieling Jinlong Sale Agency for Petroleum Pipeline Mechanical Products | Payment for goods | 24,608.99 | Cancelled | Legal advice and working conference minute | No |
| Shenzhen Zhongtianda Product Industry and Trade Co., Ltd. | Payment for goods | 20,441.96 | Cancelled | Legal advice and working conference minute | No |
| Benxi Steel Material Sale Agency | Payment for goods | 7,167.87 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | No |
| Shunde Xiqiangsheng Mould Co., Ltd. | Payment for goods | 6,997.93 | Cancelled | Legal advice and working conference minute | No |
| Heilongjiang Hua'an Industry Group Corporation | Payment for goods | 5,637.27 | Cancelled | Legal advice and working conference minute | No |
| Guagdong Zhaoqing Construction Materials and Minerial Product Company for Township Enterprises | Payment for goods | 5,566.44 | Cancelled | Legal advice and working conference minute | No |
Notes of Financial Report Page 63
| Name of the company | Nature of payment receivable | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Ningbo Hongkai Iron and Steel Co., Ltd. | Payment for goods | 157.82 | Irrecoverable | No | No |
| Shanghai Honghou Trade Co., Ltd. | Payment for goods | 0.02 | Irrecoverable | No | No |
| Total | 1,447,918.92 |
5. Accounts receivable of the top five closing balances collected by arrears
| Name of the company | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Percentage of total closing balance of accounts receivale and contract assets (%) | Closing balance of bad debt provision |
| Bengang Group International Economy and Trade Co., Ltd. | 854,482,902.28 | 854,482,902.28 | 48.09 | 33,128,484.15 | |
| Brilliance Auto Group Holding Co., Ltd. | 305,223,081.12 | 305,223,081.12 | 17.18 | 305,223,081.12 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 162,404,481.01 | 162,404,481.01 | 9.14 | 1,637,032.46 | |
| Liaoning North Coal Chemical Industry (Group) Co., Ltd. | 79,511,150.05 | 79,511,150.05 | 4.48 | 795,111.50 | |
| Benxi North Iron Industry Co., Ltd. | 52,161,339.98 | 52,161,339.98 | 2.94 | 519,656.39 | |
| Total | 1,453,782,954.44 | 1,453,782,954.44 | 81.82 | 341,303,365.62 |
(IV) Receivables financing
1. Receivables financing listed by categories
| Item | Closing balance | Opening balance |
| Notes receivable | 806,822,622.43 | 137,591,996.02 |
| Accounts receivable | - | - |
Notes of Financial Report Page 64
| Item | Closing balance | Opening balance |
| Total | 806,822,622.43 | 137,591,996.02 |
2. Receivables financing increase and decrease at current period and changes of fair
values
| Item | Closing balance | Increase in current period | Current period derecognization | Other changes | Closing balance | Accumulated loss reserves recognized in other comprehensive income |
| Notes receivable | 137,591,996.02 | 4,000,009,820.29 | 3,330,779,193.88 | - | 806,822,622.43 | - |
| Accounts receivable | - | - | - | - | - | |
| Total | 137,591,996.02 | 4,000,009,820.29 | 3,330,779,193.88 | 806,822,622.43 |
3. Receivables financing endorsed or discounted by the Company at the end of the
period and not yet due at the balance sheet date
| Item | Amount derecognized the end of the period | Amount not derecognized the end of the period |
| Bank acceptance bill | 2,583,907.68 | |
| Commercial acceptance bill | ||
| Total | 2,583,907.68 |
(V) Prepayments
1. Prepayments are presented by aging
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage(%) | Amount | Percentage(%) | |
| Within 1 year | 647,043,310.27 | 95.88 | 1,235,907,044.32 | 99.10 |
| 1 to 2 years | 22,062,469.17 | 3.27 | 8,892,828.10 | 0.71 |
| 2 to 3 years | 3,389,343.94 | 0.50 | 2,301,638.78 | 0.18 |
| Over 3 years | 2,377,875.91 | 0.35 | 76,237.13 | 0.01 |
| Total | 674,872,999.29 | 100.00 | 1,247,177,748.33 | 100.00 |
As at the end of the reporting period, there was no significant prepayment agedmore than one year.
Notes of Financial Report Page 65
2. Top five prepayments with closing balances, grouped by prepaid objects
| Prepaid objective | Closing balance | Percentage of total closing balance of prepayments (%) |
| Shanxi Coking Coal Group Co., Ltd. | 122,350,040.34 | 16.40 |
| Shanxi Coking Coal Energy Group Co., Ltd. | 97,774,410.87 | 13.10 |
| Shanxi Coking Coal Saling Co., Ltd. | 97,556,387.16 | 13.07 |
| China Railway Shenyang Group Co.,Ltd. Shenyang Freight Center | 78,832,178.99 | 10.57 |
| Shanxi Coking Co., Ltd. | 41,000,000.00 | 6.08 |
| Total | 437,513,017.36 | 64.84 |
(VI) Other receivables
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Devidends receivable | ||
| Other receivables | 318,793,157.58 | 127,198,692.92 |
| Total | 318,793,157.58 | 127,198,692.92 |
1. Other receivables
(1) Disclosure by aging
| Aging | Closing balance | Opeing balance |
| Within 1 year | 288,095,370.24 | 85,596,605.22 |
| 1 to 2 years | 35,231,832.41 | 38,267,869.02 |
| 2 to 3 years | 6,078,775.88 | 3,519,908.21 |
| 3 to 4 years | 3,125,628.24 | 573,902.12 |
| 4 to 5 years | 229,028.24 | 10,653,923.17 |
| Over 5 years | 61,270,101.82 | 52,719,681.94 |
| Subtotal | 394,030,736.83 | 191,331,889.68 |
| Less: Provision for bad debt | 75,237,579.25 | 64,133,196.76 |
| Total | 318,793,157.58 | 127,198,692.92 |
Notes of Financial Report Page 66
(2) Classification of other receivables by nature of payment
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage（%） | Amount | Accrual ratio（%） | Amount | Percentage（%） | Amount | Accrual ratio（%） | |||
| Bad debt provision is made on an individual basis | 18,245,545.94 | 4.63 | 18,245,545.94 | 100.00 | 15,031,598.34 | 7.86 | 15,031,598.34 | 100.00 | ||
| Bad debt provision is made on a portfolio basis | 375,785,190.89 | 95.37 | 56,992,033.31 | 15.17 | 318,793,157.58 | 176,300,291.34 | 92.14 | 49,101,598.42 | 27.85 | 127,198,692.92 |
| Including: | ||||||||||
| Aging portfolio | 375,513,463.19 | 95.30 | 56,992,033.31 | 15.18 | 318,521,429.88 | 141,980,250.55 | 74.21 | 49,101,598.42 | 34.58 | 92,878,652.13 |
| Other portfolio | 271,727.70 | 0.07 | 271,727.70 | 34,320,040.79 | 17.94 | 34,320,040.79 | ||||
| Total | 394,030,736.83 | 100.00 | 75,237,579.25 | 318,793,157.58 | 191,331,889.68 | 100.00 | 64,133,196.76 | 127,198,692.92 | ||
Notes of Financial Report Page 67
Significant other receivables whose provision for bad debts was made on anindividual basis：
| Name | Closing balance | |||
| Book balance | Provision for bad debt | Accrual ratio (%) | Accrual basis | |
| Benxi Iron and Steel (Group) No. 3 Architectural Engineering Co., Ltd. | 12,504,978.59 | 12,504,978.59 | 100.00 | Bankrupcy liquidation |
| Benxi Iron and Steel (Group) No. 1 Architectural Engineering Co., Ltd. | 3,247,307.07 | 3,247,307.07 | 100.00 | Bankrupcy liquidation |
| Xuzhou Jinshanqiao Development Zone Metal Material Corporation | 5,670.77 | 5,670.77 | 100.00 | Irrecoverable |
| Xuzhou Railway Material Factory | 6,567.20 | 6,567.20 | 100.00 | Irrecoverable |
| Harbin Xuda Company | 10,644.72 | 10,644.72 | 100.00 | Irrecoverable |
| Jining Economy and Trade Joint Development Corporation | 12,831.81 | 12,831.81 | 100.00 | Irrecoverable |
| Zhangdian Iron and Steel Headquarter Factory | 15,167.78 | 15,167.78 | 100.00 | Irrecoverable |
| Zibo Zhouchun Welfare Spring Factory | 15,666.59 | 15,666.59 | 100.00 | Irrecoverable |
| Weifang Head Office of Constructive Materials | 25,179.84 | 25,179.84 | 100.00 | Irrecoverable |
| Jiaozhou Zhenxing Metal Product Plant (Weifang) | 411,891.80 | 411,891.80 | 100.00 | Irrecoverable |
| Historical debts | 158,680.98 | 158,680.98 | 100.00 | Irrecoverable |
| Jiaozhou Zhenxing Metal Product Plant | 32,989.12 | 32,989.12 | 100.00 | Irrecoverable |
| Tai'an Taishan Metal Constructive Material Company | 41,145.75 | 41,145.75 | 100.00 | Irrecoverable |
| Xuzhou Guanghuan Steel Pipeline Company | 49,016.73 | 49,016.73 | 100.00 | Irrecoverable |
| Guan County Cold Rolling Plate and Strip Headquarter Factory | 52,602.25 | 52,602.25 | 100.00 | Irrecoverable |
| Weifang Nonggao Industry and Trade Center | 68,000.00 | 68,000.00 | 100.00 | Irrecoverable |
| Benxi Fangyuan Provition Management Agent | 80,000.00 | 80,000.00 | 100.00 | Irrecoverable |
| Weifang Sanfeng Steel Pipeline Co., Ltd. | 81,657.46 | 81,657.46 | 100.00 | Irrecoverable |
| Qingdao Liduo Economy and Trade Co., Ltd. | 133,163.36 | 133,163.36 | 100.00 | Irrecoverable |
| Weifang Mingxin Trading and Supply Company | 197,900.80 | 197,900.80 | 100.00 | Irrecoverable |
| Gao Pengquan | 204,294.00 | 204,294.00 | 100.00 | Irrecoverable |
| Zhangdian Jinkun Steel Plate Management Agent | 231,910.95 | 231,910.95 | 100.00 | Irrecoverable |
| Harbin Band Steel Factory | 403,559.70 | 403,559.70 | 100.00 | Irrecoverable |
| Bengang Group International Economy | 6,617.52 | 6,617.52 | 100.00 | Irrecoverable |
Notes of Financial Report Page 68
| Name | Closing balance | |||
| Book balance | Provision for bad debt | Accrual ratio (%) | Accrual basis | |
| and Trade Co., Ltd. | ||||
| Changchun Kanghong Metal Material Co., Ltd. | 85,277.50 | 85,277.50 | 100.00 | Irrecoverable |
| Historical debt | 84,164.75 | 84,164.75 | 100.00 | Irrecoverable payment |
| China Railway Shenyang Bureau Group Co., Ltd. Benxi Freight Center | 53,712.42 | 53,712.42 | 100.00 | Irrecoverable payment |
| FAW Jiefang Automobile Co., Ltd. Procurement Department | 24,648.73 | 24,648.73 | 100.00 | Irrecoverable payment |
| Jilin Province Jinghai Material Distribution Co., Ltd | 297.75 | 297.75 | 100.00 | Irrecoverable payment |
| Total | 18,245,545.94 | 18,245,545.94 | ||
Provision for bad debt by portfolio of credit risk characteristics:
Portfolio accrual item: Aging portfolio
| Item | Closing balance | ||
| Other receivables | Bad debt provision | Accrual ratio（%） | |
| Within 1 year (inclusive) | 285,331,382.26 | 2,864,723.85 | 1.00 |
| 1 to 2 years (inclusive) | 35,230,832.41 | 3,523,083.24 | 10.00 |
| 2 to 3 years (inclusive) | 5,433,777.88 | 1,086,755.58 | 20.00 |
| 3 to 4 years (inclusive) | 3,125,628.24 | 3,125,628.24 | 100.00 |
| 4 to 5 years (inclusive) | 229,028.24 | 229,028.24 | 100.00 |
| Over 5 years | 46,162,814.16 | 46,162,814.16 | 100.00 |
| Total | 375,513,463.19 | 56,992,033.31 | |
(3) Provision for bad debts
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses for the next 12 months | Expected credit losses over the entire life (Not credit-impaired) | Expected credit losses over the entire life (Credit-impaired) | ||
| Opening balance | 850,661.71 | 1,353,672.38 | 61,928,862.67 | 64,133,196.76 |
| Opening balance in the current period | -3,523,083.24 | 397,455.00 | 3,125,628.24 | |
| --Transfer to stage 2 | -3,523,083.24 | 3,523,083.24 | ||
| --Transfer to stage 3 | -3,125,628.24 | 3,125,628.24 | ||
| --Reverse to stage 2 | ||||
| --Reverse to stage 1 | ||||
| Accrual in the current | 5,537,145.38 | 2,858,711.44 | 3,516,441.26 | 11,912,298.08 |
Notes of Financial Report Page 69
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses for the next 12 months | Expected credit losses over the entire life (Not credit-impaired) | Expected credit losses over the entire life (Credit-impaired) | ||
| period | ||||
| Reversal in the current period | ||||
| Carry-forward in the current period | ||||
| Write-off in the current period | -807,915.59 | -807,915.59 | ||
| Other changes | ||||
| Ckosing balance | 2,864,723.85 | 4,609,838.82 | 67,763,016.58 | 75,237,579.25 |
(4) Provision for bad debts accrued, recovered or reversed in the current period
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Accrual | Recovery or reversal | Charge off or write off | Other changes | |||
| Bad debt provision for other receivables | 64,133,196.76 | 11,912,298.08 | 807,915.59 | 75,237,579.25 | ||
| Total | 64,133,196.76 | 11,912,298.08 | 807,915.59 | 75,237,579.25 | ||
(5) Actual write-off of other receivables in the current period
| Item | Write-off amount |
| Write-off of other receivables | 807,915.59 |
Of which significant write-offs of other receivables:
| Name of the company | Nature of other receivables | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Beijing Bengang materials sales center | Remained payment to be cleared | 807,915.59 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and minute of office conference | No |
| Total | 807,915.59 |
Notes of Financial Report Page 70
(6) Classification of other receivables by nature of payment
| Nature of payment | Closing book balance | Opening book balance |
| Compensation of "Life show belt" Project | 212,242,400.00 | |
| Amount current | 176,055,536.99 | 181,771,075.61 |
| Others | 5,732,799.84 | 9,560,814.07 |
| Total | 394,030,736.83 | 191,331,889.68 |
(7) Other receivables of the top five closing balances collected by arrears
| Name of the company | Nature of the payment | Closing balance | Aging | Percentage of total closing balance of prepayments (%) | Closing balance of bad debt provision |
| Benxi Xihu District Government | Compensation of "Life show belt" Project | 212,242,400.00 | Within 1 year | 53.86 | 2,122,424.00 |
| Benxi Iron and Steel (Group) Third construction Engineering Co., Ltd | Amount current | 12,504,978.59 | 2 to 3 years; Over 5 years | 3.17 | 12,504,978.59 |
| Benxi Iron and Steel (Group) Co., Ltd. | Amount current | 7,413,860.80 | Within 1 year; Over 5 years | 1.88 | 4,561,714.36 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Amount current | 3,545,583.40 | Within 1 year | 0.90 | 35,455.83 |
| Liaoning Huawei Coal Preparation Co., Ltd. | Amount current | 2,261,360.00 | Over 5 years | 0.57 | 2,261,360.00 |
| Total | 237,968,182.79 | 60.38 | 21,485,932.78 |
(VII) Inventories
Notes of Financial Report Page 71
1. Classification of inventories
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for decline in value of inventories or impairment of contract performance costs | Book value | Book balance | Provision for decline in value of inventories or impairment of contract performance costs | Book value | |
| Raw material | 4,596,538,313.45 | 56,931,870.40 | 4,539,606,443.05 | 4,215,260,584.25 | 24,954,852.46 | 4,190,305,731.79 |
| Work-in-process | 1,627,187,498.35 | 12,076,074.97 | 1,615,111,423.38 | 2,070,182,298.44 | 18,271,254.09 | 2,051,911,044.35 |
| Goods in stock | 1,558,823,023.16 | 5,167,994.78 | 1,553,655,028.38 | 2,236,715,664.20 | 15,203,965.16 | 2,221,511,699.04 |
| Total | 7,782,548,834.96 | 74,175,940.15 | 7,708,372,894.81 | 8,522,158,546.89 | 58,430,071.71 | 8,463,728,475.18 |
Notes of Financial Report Page 72
2. Provision for the decline in value of inventories and provision for impairment of contract performance costs
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Accrual | Others | Reversal or carry-forward | Others | |||
| Raw materials | 24,954,852.46 | 31,977,017.94 | 56,931,870.40 | |||
| Work-in-process | 18,271,254.09 | -6,195,179.12 | 16,239,572.86 | 12,076,074.97 | ||
| Goods in stock | 15,203,965.16 | -10,035,970.38 | 15,203,965.16 | 5,167,994.78 | ||
| Total | 58,430,071.71 | 15,745,868.44 | 31,443,538.02 | 74,175,940.15 | ||
Notes of Financial Report Page 73
(VIII) Other current assets
| Item | Closing balance | Opening balance |
| VAT input tax | 88,281,138.57 | 228,449,995.81 |
| Prepaid taxes | 17,220,232.46 | 166,991,140.45 |
| Others | 52,288,605.87 | |
| Total | 157,789,976.90 | 395,441,136.26 |
Notes of Financial Report Page 74
(IX) Long-term equity investments
1. Details of long-term equity investment
| Investee | Opening balance | Opening balance for impairment provision | Increase/decrease in the current period | Closing balance | Closing balance of provision for impairment | |||||||
| Increase in investment | Decrease in investment | Gains and losses on investments recognized under the equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends and profits declared | Impairment provision | Others | |||||
| 1．Joint ventures | ||||||||||||
| Subtotal | ||||||||||||
| 2．Associates | ||||||||||||
| Benxi Iron and Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. | 47,996,314.61 | - | - | -1,085,968.20 | - | - | - | - | - | 46,910,346.41 | - | |
| CIMC Tongchuang (Zhejiang) Steel Chain Co., Ltd. | 3,034,462.57 | - | 3,034,462.57 | - | - | - | - | - | - | - | - | |
| Subtotal | 51,030,777.18 | 3,034,462.57 | -1,085,968.20 | 46,910,346.41 | ||||||||
| Total | 51,030,777.18 | 3,034,462.57 | -1,085,968.20 | 46,910,346.41 | ||||||||
Notes of Financial Report Page 75
(X) Other equity instrument investments
1. Details of other equity instrument investment
| Item | Closing balance | Opening balance | Gains included in other comprehensive income in the current period | Losses included in other comprehensive income in the current period | Accumulated gains included in other comprehensive income at the end of this period | Accumulated losses included in other comprehensive income at the end of the current period | Income gain confirmed in the current period | Reasons for designation as at fair value through other comprehensive income |
| Equity of Suzhou Longben Metal Material Co., Ltd. | 3,930,341.27 | 3,998,216.04 | 67,874.77 | 41,361.27 | - | - | ||
| Equity of Northeast Special Steel Group Co., Ltd. | 970,532,698.56 | 1,016,420,266.27 | 45,887,567.71 | 67,203,150.44 | - | |||
| Equity of Sinosteel Shanghai Steel Service Co., Ltd. | 14,414,693.00 | - | ||||||
| Total | 974,463,039.83 | 1,020,418,482.31 | 45,955,442.48 | 81,617,843.44 |
Notes of Financial Report Page 76
(XI) Fixed assets
1. Fixed assets and liquidation of fixed assets
| Item | Closing balance | Opening balance |
| Fixed assets | 25,028,192,964.67 | 24,836,556,422.90 |
| Liquidation of fixed assets | ||
| Total | 25,028,192,964.67 | 24,836,556,422.90 |
Notes of Financial Report Page 77
2. Details of fixed assets
| Item | Houses and buildings | Machinery and equipment | Transpotation equipment | Office equipment | Total |
| 1．Original book value: | |||||
| （1）Opening balance | 13,266,511,262.90 | 50,537,244,878.62 | 410,563,105.73 | 164,083,906.71 | 64,378,403,153.96 |
| （2）Increase in the current period | 2,242,576.95 | 1,980,138,535.66 | 2,719,825.19 | 45,427,950.83 | 2,030,528,888.63 |
| —Purchase | 13,307,071.26 | 468,938.05 | 13,776,009.31 | ||
| —Transferred from costruction in progress | 2,242,576.95 | 1,966,831,464.40 | 2,116,587.14 | 45,427,950.83 | 2,016,618,579.32 |
| —Increase from business combinations | |||||
| —Transferred from rent after sales | |||||
| —Others | 134,300.00 | 134,300.00 | |||
| （3）Dectease in the current period | 237,332,092.50 | 1,004,470,654.25 | 14,245,607.37 | 10,830,236.33 | 1,266,878,590.45 |
| —Disposal or scrapping | 36,817,120.71 | 337,023,205.63 | 4,114,364.98 | 2,172,187.99 | 380,126,879.31 |
| —Transferred out of rent after sales | |||||
| —Others | 200,514,971.79 | 667,447,448.62 | 10,131,242.39 | 8,658,048.34 | 886,751,711.14 |
| （4）Closing balance | 13,031,421,747.35 | 51,512,912,760.03 | 399,037,323.55 | 198,681,621.21 | 65,142,053,452.14 |
| 2．Accumulated depreciation | |||||
| （1）Opening balance | 6,561,764,169.95 | 32,469,694,729.23 | 325,097,328.13 | 91,812,407.79 | 39,448,368,635.10 |
| （2）Increase in the current period | 202,210,097.57 | 1,391,526,294.80 | 12,453,684.31 | 22,219,549.95 | 1,628,409,626.63 |
| —Accrual | 202,210,097.57 | 1,391,526,294.80 | 12,453,684.31 | 22,219,549.95 | 1,628,409,626.63 |
| —Increase from business combiations | |||||
| —Others | |||||
| （3）Decrease in the current period | 126,211,639.18 | 933,156,257.47 | 13,752,165.08 | 1,106,972.35 | 1,074,227,034.08 |
| —Disposal or scrapping | 24,756,831.54 | 270,629,993.67 | 3,999,411.88 | 1,106,972.35 | 300,493,209.44 |
Notes of Financial Report Page 78
| Item | Houses and buildings | Machinery and equipment | Transpotation equipment | Office equipment | Total |
| —Transferred out of rent after sales | |||||
| —Others | 101,454,807.64 | 662,526,263.80 | 9,752,753.20 | 773,733,824.64 | |
| （4）Closing balance | 6,637,762,628.34 | 32,928,064,766.56 | 323,798,847.36 | 112,924,985.39 | 40,002,551,227.65 |
| 3．Provision for impairment | |||||
| （1）Opening balance | 84,098,414.32 | 9,379,681.64 | 93,478,095.96 | ||
| （2）Increase in the current period | 19,593,534.81 | 19,593,534.81 | |||
| —Accrual | 19,593,534.81 | 19,593,534.81 | |||
| —Others | |||||
| （3）Decrease in the current period | 849,152.24 | 913,218.71 | 1,762,370.95 | ||
| —Disposal or scrapping | 849,152.24 | 913,218.71 | 1,762,370.95 | ||
| —Others | |||||
| （4）Closing balance | 83,249,262.08 | 28,059,997.74 | 111,309,259.82 | ||
| 4．Book value | |||||
| （1）Closing book value | 6,310,409,856.93 | 18,556,787,995.73 | 75,238,476.19 | 85,756,635.82 | 25,028,192,964.67 |
| （2）Opening book value | 6,620,648,678.63 | 18,058,170,467.75 | 85,465,777.60 | 72,271,498.92 | 24,836,556,422.90 |
Notes of Financial Report Page 79
3. Temporarily idle fixed assets
| Item | Original book value | Accumulated depreciation | Provision for impairment | Book value | Notes |
| Houses and buildings | 112,751,517.87 | 68,153,743.49 | 41,943,853.74 | 2,653,920.64 | |
| Machinery and equipment | 3,034,473.01 | 2,366,013.66 | 75,666.43 | 592,792.92 | |
| Total | 115,785,990.88 | 70,519,757.15 | 42,019,520.17 | 3,246,713.56 |
4. Fixed assets leased out through operating leases
| Item | Closing book value |
| Houses and buildings | 963,913.41 |
5. Fixed assets without proper title certificate
| Item | Book value | Reasons for non-completion of title certificates |
| Houses and buildings | 2,461,140,033.39 | In process |
(XII) Construction in progress
1. Construction in progress and construction materials
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Construction | 4,307,646,942.37 | 4,307,646,942.37 | 3,158,195,899.65 | 3,158,195,899.65 | ||
| Construction materials | 757,204.94 | 757,204.94 | - | - | ||
| Total | 4,308,404,147.31 | - | 4,308,404,147.31 | 3,158,195,899.65 | - | 3,158,195,899.65 |
2. Details of construction in progress
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Special Steel Electric Furnace | 1,195,585,747.24 | - | 1,195,585,7 | 1,437,078,751.92 | - | 1,437,078,751.92 |
Notes of Financial Report Page 80
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Upgrading and Rennovation Project | 47.24 | |||||
| First Cold Rolling Transformation Project | 578,301,217.76 | - | 578,301,217.76 | 90,087,329.61 | - | 90,087,329.61 |
| Environmental Protection Renovation of Sheet Raw Material Plant | 452,296,692.77 | - | 452,296,692.77 | 165,792,014.40 | - | 165,792,014.40 |
| Special Steel Rolling Mill Renovation Project | 367,831,655.88 | - | 367,831,655.88 | 470,182,411.88 | - | 470,182,411.88 |
| Environmental Protection Renovation in No. 2 Coal Storage Field of Plates Raw Material Plant | 256,434,251.91 | - | 256,434,251.91 | 19,266.06 | - | 19,266.06 |
| Integration Construction of Informatization System for Ansteel and Bengang Recombination | 112,748,748.06 | - | 112,748,748.06 | - | - | - |
| Blocking of ABC and DEF Stockyard in Plates Iron Making General Plant | 99,129,674.71 | - | 99,129,674.71 | 150,000.00 | - | 150,000.00 |
| Desulphurization Waste Liquor Acid Making Project in Plates Iron Making Plant | 78,562,923.84 | - | 78,562,923.84 | 30,000.00 | - | 30,000.00 |
| Plate No.1 Dry Quenching System Boosting Modification and Unit No.34 New Construction | 76,994,180.14 | - | 76,994,180.14 | 20,249,501.21 | - | 20,249,501.21 |
| Steelmaking 1#2#3#7#Converter New Three Times Dust Removal System | 76,798,979.91 | - | 76,798,979.91 | 42,834,455.31 | - | 42,834,455.31 |
| Centralized Contol Project before Ironmaking of | 61,969,240.03 | - | 61,969,240.03 | - | - | - |
Notes of Financial Report Page 81
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Plates Iron Making General Plant | ||||||
| 1780 Production Line Upgrading | 58,044,160.54 | - | 58,044,160.54 | - | - | - |
| Flue Gas Desulfurization and Denitrification Project of 4B and 5 Furnance Group in Bengang Plates and Iron Making General Plant | 54,553,821.01 | - | 54,553,821.01 | - | - | - |
| Plates Energy Centralized Control Project | 50,276,243.36 | - | 50,276,243.36 | - | - | - |
| Supporting Projects for Outward Transportation of Nanfen Pipeline Transported Mineral Concentrate in Bengang Plates and Iron Making General Plant | 37,857,546.59 | - | 37,857,546.59 | - | - | - |
| Steelmaking 4#5#6#Converter New Three Times Dust Removal System | 36,885,526.75 | - | 36,885,526.75 | 40,000.00 | - | 40,000.00 |
| Improvement of Quality and Efficiency of 2300 Line in Hot Continuous Rolling Plant of Benxi Iron and Steel Co., Ltd. ( First Phase ) - Layer Cooling and Upgrading of Secondary System | 32,327,295.12 | - | 32,327,295.12 | 646,287.44 | - | 646,287.44 |
| Centralized Contol Center before Ironmaking of Plates Iron Making General Plant | 31,573,183.16 | - | 31,573,183.16 | - | - | - |
Notes of Financial Report Page 82
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Benxi Iron and Steel Plate Co., Ltd. Ironmaking Plant No.5 Blast Furnace Capacity Replacement Project ( Plate Ironmaking Plant No.5 Blast Furnace Energy Saving and Environmental Protection Reconstruction ) | 31,033,533.06 | - | 31,033,533.06 | - | - | - |
| Blocking Project for Second and Third Burning Mixing Warehouse Recycling Operation Area | 26,589,400.00 | - | 26,589,400.00 | - | - | - |
| New Construction of 40, 000 m3/h Nitrogen Compressors in Energy General Plant | 25,842,342.61 | - | 25,842,342.61 | 6,763,230.39 | - | 6,763,230.39 |
| Renovation of No. 5 RH Refining in Plates Steel Making General Plant | 25,772,677.77 | - | 25,772,677.77 | - | - | - |
| Outage for 2300 Line Heating Furance in Plates Hot Continuous Rolling Plant | 22,388,923.72 | - | 22,388,923.72 | - | - | - |
| Capitalized Outage for Roads in Plates Plant | 22,004,500.00 | - | 22,004,500.00 | 12,000,000.00 | - | 12,000,000.00 |
| 566 Square Meters Sintering Waste Heat Utilization Project | - | - | - | 92,259,450.24 | - | 92,259,450.24 |
| Waste Heat Power Generation Project of 360 Square Meters Sintering Machine in Bengang Power Plant | - | - | - | 82,730,000.00 | - | 82,730,000.00 |
Notes of Financial Report Page 83
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Supply Station of Caixi Special Steel in Plates Waste Steel Plant | - | - | - | 51,959,719.57 | - | 51,959,719.57 |
| Overall Upgrading of Bengang Manufecturing and Management | - | - | - | 39,756,485.12 | - | 39,756,485.12 |
| Renovation Project for Energy Conservation and Evironment Protection of 4#, 5# and 6# Converter | - | - | - | 24,470,633.70 | - | 24,470,633.70 |
| Pyrogenation Processs Purification No. 1 Desulfurization System Renovation in Plates Iron Making General Plant | 23,436,618.10 | - | 23,436,618.10 | 23,070,618.10 | - | 23,070,618.10 |
| Informatization Construction in the Iron Area of Bengang Plates | - | - | - | 18,023,984.15 | - | 18,023,984.15 |
| Cold Rolling Quality Improvement and Renovation Project | 29,808,246.51 | - | 29,808,246.51 | 27,093,496.08 | - | 27,093,496.08 |
| Other projects | 442,599,611.82 | - | 442,599,611.82 | 552,958,264.47 | - | 552,958,264.47 |
| Total | 4,307,646,942.37 | 4,307,646,942.37 | 3,158,195,899.65 | - | 3,158,195,899.65 | |
Notes of Financial Report Page 84
3. Changes in significant construction in progress projects in the current period
| Name of project | Budget | Opening balance | Amount increased in the current period | Amount transferred to fixed assets in the current period | Other decreases in the current period | Closing balance | Percentage of cumulative investment in projects to budget | Progress | Accumulated amount of capitalized interest | Including: Amount of interest capitalized in the current period | Capitalization rate of interest in the current period(%) | Source of fund |
| Upgrading and Renovation Project for Special Steel Electric Furnance | 1,732,481,000.00 | 1,437,078,751.92 | 72,462,574.36 | 313,955,579.04 | - | 1,195,585,747.24 | 87.13 | 87.13 | 75,371,612.93 | 14,953,108.09 | 4.35 | Fund raising |
| Renovation Project for Evironment Protection in Raw Material Yard | 1,286,370,000.00 | 165,792,014.40 | 286,504,678.37 | - | - | 452,296,692.77 | 35.16 | 35.16 | 71,404,216.75 | 14,679,596.72 | 4.35 | Loans from financial institutions |
| No.1 Cold Roll Renovation Project | 843,640,000.00 | 90,087,329.61 | 488,213,888.15 | - | - | 578,301,217.76 | 75.33 | 75.33 | 59,719,040.93 | 12,683,066.41 | 4.35 | Loans from financial institutions |
| Special Steel Rolling Mill Renovation Project | 734,730,000.00 | 470,182,411.88 | 51,604,170.91 | 153,954,926.91 | - | 367,831,655.88 | 84.92 | 84.92 | 54,315,536.22 | 8,918,454.24 | 3.12 | Loans from financial institutions |
| Environmental Protection Renovation in No. 2 Coal Storage Field of Plates Raw Material Plant | 310,000,000.00 | 19,266.06 | 256,414,985.85 | - | - | 256,434,251.91 | 82.72 | 82.72 | - | - | - | Others |
| Blocking of ABC and DEF Stockyard in Plates Iron Making General Plant | 125,000,000.00 | 150,000.00 | 98,979,674.71 | - | - | 99,129,674.71 | 79.30 | 79.30 | - | - | - | Others |
| Steelmaking 1#2#3#7#Converter New Three Times Dust Removal System | 111,310,000.00 | 42,834,455.31 | 45,535,317.22 | 11,570,792.62 | - | 76,798,979.91 | 79.91 | 79.91 | 15,545,892.66 | 3,170,804.73 | 4.35 | Loans from financial institutions |
| Desulphurization Waste Liquor Acid Making Project in | 99,760,000.00 | 30,000.00 | 78,532,923.84 | - | - | 78,562,923.84 | 78.75 | 78.75 | - | - | - | Others |
Notes of Financial Report Page 85
| Name of project | Budget | Opening balance | Amount increased in the current period | Amount transferred to fixed assets in the current period | Other decreases in the current period | Closing balance | Percentage of cumulative investment in projects to budget | Progress | Accumulated amount of capitalized interest | Including: Amount of interest capitalized in the current period | Capitalization rate of interest in the current period(%) | Source of fund |
| Plates Iron Making Plant | ||||||||||||
| Plate No.1 Dry Quenching System Boosting Modification and Unit No.34 New Construction | 93,270,000.00 | 20,249,501.21 | 56,744,678.93 | - | - | 76,994,180.14 | 82.55 | 82.55 | - | - | - | Others |
| Integration Construction of Informatization System for Ansteel and Bengang Recombination | 232,100,000.00 | - | 112,748,748.06 | - | - | 112,748,748.06 | 80.77 | 80.77 | 22,854,471.47 | 4,533,748.06 | 4.35 | Loans from financial institutions |
| Total | 2,226,423,730.39 | 1,547,741,640.40 | 479,481,298.57 | - | 3,294,684,072.22 | 299,210,770.96 | 58,938,778.25 |
Notes of Financial Report Page 86
(XIII) Right-of-use assets
1. Right-of-use asset condition
| Item | Land | Houses and buildings | Total |
| 1. Original book value | |||
| (1) Opening balance | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| (2) Increase in the current period | |||
| —Increased lease | |||
| —Enterprise consolidated increase | |||
| (3) Decrease in the current period | |||
| —Transfer out to fixed assets | |||
| —Disposal | |||
| (4) Losing balance | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| 2. Accumulated depreciation | |||
| (1) Opening balance | 79,808,472.44 | 40,940,596.40 | 120,749,068.84 |
| (2) Increase in the current period | 39,904,236.24 | 20,470,298.28 | 60,374,534.52 |
| —Accrual | 39,904,236.24 | 20,470,298.28 | 60,374,534.52 |
| (3) Decrease in the current period | |||
| —Transfer out to fixed assetss | |||
| —Disposal | |||
| （4）Closing balance | 119,712,708.68 | 61,410,894.68 | 181,123,603.36 |
| 3．Provision for impairment | |||
| （1）Opening balance | |||
| （2）Increase in the current period | |||
| —Accrual | |||
| （3）Decrease in the current period | |||
| —Transfer out to fixed assets | |||
| —Disposal | |||
| （4）Closing balance | |||
| 4．Book value | |||
| （1）Closing book value | 1,012,561,706.49 | 307,054,472.88 | 1,319,616,179.37 |
| （2）Opening book value | 1,052,465,942.73 | 327,524,771.16 | 1,379,990,713.89 |
(XIV) Intangible assets
1. Details of intangible assets
| Item | Land use right | Software and others | Total |
| 1．Original book value | |||
| （1）Opening balance | 336,885,314.76 | 267,948.72 | 337,153,263.48 |
| （2）Increase in the current period |
Notes of Financial Report Page 87
| Item | Land use right | Software and others | Total |
| —Purchase | |||
| —Internal research and development | |||
| —Increase from business combinations | |||
| （3）Decrease in the current period | |||
| —Disposal | |||
| —Parts that are invalid and derecognised | |||
| （4）Closing balance | 336,885,314.76 | 267,948.72 | 337,153,263.48 |
| 2．Accumulated amoritization | |||
| （1）Opening balance | 74,208,486.41 | 159,839.66 | 74,368,326.07 |
| （2）Increase in the current period | 6,737,706.36 | 26,794.92 | 6,764,501.28 |
| —Accrual | 6,737,706.36 | 26,794.92 | 6,764,501.28 |
| （3）Decrease in the current period | |||
| —Disposal | |||
| —Parts that are invalid and derecognised | |||
| （4）Closing balance | 80,946,192.77 | 186,634.58 | 81,132,827.35 |
| 3．Provision for impairment | |||
| （1）Opening balance | |||
| （2）Increase in the current period | |||
| —Accrual | |||
| （3）Decrease in the current period | |||
| —Disposal | |||
| —Parts that are invalid and derecognised | |||
| （4）Closing balance | |||
| 4．Book value | |||
| （1）Closing book value | 255,939,121.99 | 81,314.14 | 256,020,436.13 |
| （2）Opening book value | 262,676,828.35 | 108,109.06 | 262,784,937.41 |
2. Land use right without proper title certificate
| Item | Book value | Reasons for non-completion of title certificates |
| Land use right | 37,930,667.39 | 正在办理 |
| Total | 37,930,667.39 |
(XV) Deferred income tax assets/deferred income tax liabilities
1. Deferred income tax assets not offset
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Impairmet of assets | 403,698,019.09 | 100,549,055.02 | 396,834,109.83 | 99,208,527.46 |
| Internal unrealized profit | 80,751,325.52 | 20,187,831.38 | ||
| Deductible losses | ||||
Notes of Financial Report Page 88
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Changes in fair value of other financial assets included in other comprehensive income | 81,617,843.44 | 20,404,460.86 | 21,315,582.73 | 5,328,895.68 |
| Lease liabilities | 1,384,348,462.17 | 346,087,115.54 | 1,424,667,169.16 | 356,166,792.29 |
| Others | 1,974,067.76 | 493,516.94 | ||
| Total | 1,869,664,324.70 | 467,040,631.42 | 1,925,542,255.00 | 481,385,563.75 |
2. Deferred income tax liabilities not offset
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Changes in fair value of other financial assets included in other comprehensive income | 41,361.27 | 10,340.32 | 109,236.04 | 27,309.01 |
| Right-of-use assets | 1,319,616,179.47 | 329,904,044.87 | 1,379,990,713.89 | 344,997,678.47 |
| Total | 1,319,657,540.74 | 329,914,385.19 | 1,380,099,949.93 | 345,024,987.48 |
3. Unrecognized deferred tax assets
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 305,223,483.99 | 305,224,166.01 |
| Deductible losses | 4,213,758,736.79 | 1,349,817,349.12 |
| Total | 4,518,982,220.78 | 1,655,041,515.13 |
4. The deductible loss of unrecognized deferred tax assets due in the following years
| Year | Amount at end of period | Amount ar beginning of period | |
| Year 2023 | - | 6,836,473.11 | |
| Year 2024 | 12,164,389.35 | 12,164,389.35 | |
| Year 2025 | 8,257,832.98 | 8,257,832.98 | |
| Year 2026 | 6,799,314.77 | 6,799,314.77 | |
| Year 2027 | 1,919,832,999.81 | 1,315,759,338.91 | |
| Year 2028 | 2,266,704,199.88 | - | |
| Total | 4,213,758,736.79 | 1,349,817,349.12 |
(XVI) Other non-current assets
Notes of Financial Report Page 89
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Prepaid long-term assets | 137,933,599.61 | 137,933,599.61 | 110,065,560.68 | 110,065,560.68 | ||
| Total | 137,933,599.61 | 137,933,599.61 | 110,065,560.68 | 110,065,560.68 | ||
(XVII) Assets with restricted ownership and use rights
| Item | The end of the period | |
| Book balance | Reason for retrictions | |
| Cash and cash equivalents | 1,009,879,189.82 | Margin on bills, Margin on L/Cs |
| Notes receivable | 218,427,117.76 | Pledge |
| Total | 1,228,306,307.58 | |
(XVIII) Short-term borrowings
1. Classification of short-term borrowings
| Item | Closing balance | Opening balance |
| Secured borrowings | ||
| Credit borrowings | ||
| Guaranteed borrowings | ||
| Credit borrowings | 300,000,000.00 | |
| Discounted undue notes | 28,000,000.00 | 49,200,000.00 |
| Total | 328,000,000.00 | 49,200,000.00 |
(XIX) Note payable
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 8,601,590,577.15 | 2,242,219,356.03 |
| Commercial acceptance bill | 463,403,421.74 | 1,407,117,263.33 |
| Letter of credit | 1,300,000,000.00 | 740,000,000.00 |
| Total | 10,364,993,998.89 | 4,389,336,619.36 |
The total amount of notes payable due and unpaid at the end of the current period was RMB 0.
(XX) Accounts payable
1. Presentation of accounts payable
| Item | Closing balance | Opening balance |
| Within 1 year (Inclusive) | 2,782,628,881.51 | 3,603,291,359.95 |
| 1 to 2 years (Inclusive) | 9,101,689.71 | 43,865,650.21 |
| 2 to 3 years (Inclusive) | 7,414,901.65 | 49,263,453.69 |
Notes of Financial Report Page 90
| Item | Closing balance | Opening balance |
| Over 3 years | 10,289,787.90 | - |
| Total | 2,809,435,260.77 | 3,696,420,463.85 |
2. Significant accounts payable aged over 1 year
| Item | Closing balance | Reason of no repayment or carrying over |
| Primetals Technologies (China) Co., Ltd. | 3,963,017.01 | Settlement conditions not yet met |
| Henan Weihua Heavy Machinery Co., Ltd. | 6,829,683.84 | Settlement conditions not yet met |
| Total | 10,792,700.85 |
(XXI) Contract liabilities
1. Details of contract liabilities
| Item | Closing balance | Opening balance |
| Deposits of product and service received | 3,302,218,364.90 | 3,794,115,592.29 |
| Others | 890,227.48 | - |
| Total | 3,303,108,592.38 | 3,794,115,592.29 |
As of the end of this report, there were no significant contractual liabilities olderthan one year.
2. Amount and reasons for significant changes in the book value during the reporting
period.
| Item | Amount of change | Reasons for change |
| Payment for goods | -491,897,227.39 | Mainly due to lower steel prices in current year |
| Total | -491,897,227.39 |
(XXII) Employee benefits payable
1. Presentation of employee benefits
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Short-term benefits | 10,046,363.27 | 2,158,007,835.86 | 2,166,878,228.30 | 1,175,970.83 |
| Post-employment benefits - defined contribution plan | 277,797,572.66 | 277,797,572.66 | ||
| Termination benefits | 64,829,767.83 | 64,829,767.83 | ||
| Other benefits due within a year |
Notes of Financial Report Page 91
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Other | ||||
| Total | 10,046,363.27 | 2,500,635,176.35 | 2,509,505,568.79 | 1,175,970.83 |
2. Presentation of short-term benefits
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| （1）Salaries, bonuses, allowances and subsidies | 1,534,680,493.02 | 1,534,680,493.02 | ||
| （2）Employee welfare | 197,958,867.96 | 197,958,867.96 | ||
| （3）Social insurance | 178,330,772.45 | 178,330,772.45 | ||
| Including: Medical insurance and maternity insurance | 134,817,423.74 | 134,817,423.74 | ||
| Work injury insurance | 41,299,564.71 | 41,299,564.71 | ||
| Others | 2,213,784.00 | 2,213,784.00 | ||
| （4）Housing provident fund | 6,622,309.00 | 177,278,089.00 | 183,900,398.00 | |
| （5） Union funds and staff education fee | 3,424,054.27 | 36,502,456.55 | 38,750,539.99 | 1,175,970.83 |
| （6）Paid short-term absence | ||||
| （7）Short-term profit sharing plan | ||||
| （8）Other short-term benefits (e.g. healthcare, labor protection and temporary employment, etc. ) | 33,257,156.88 | 33,257,156.88 | ||
| Total | 10,046,363.27 | 2,158,007,835.86 | 2,166,878,228.30 | 1,175,970.83 |
3. Presentation of defined contribution plan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Basic pension fund | 255,263,426.42 | 255,263,426.42 | ||
| Unemployment insurance | 8,011,770.20 | 8,011,770.20 | ||
| Enterprise annuity | 14,522,376.04 | 14,522,376.04 | ||
| Total | 277,797,572.66 | 277,797,572.66 |
(XXIII) Taxes payable
| Item of tax and due | Closing balance | Opening balance |
| Value-added tax (VAT) | 7,969,729.86 | 5,168,511.13 |
| Corporate income tax | 16,637,900.58 | 11,469,020.92 |
Notes of Financial Report Page 92
| Item of tax and due | Closing balance | Opening balance |
| City maintenance and construction tax | 526,991.99 | 175,567.61 |
| Property tax | 3,997,351.10 | 3,785,986.96 |
| Land use tax | 1,088,809.99 | 1,051,651.99 |
| Personal income tax | 2,427,153.14 | 2,546,699.73 |
| Education surcharge (including local education surcharge) | 376,422.86 | 125,405.40 |
| Others | 22,378,599.59 | 20,070,077.04 |
| Total | 55,402,959.11 | 44,392,920.78 |
(XXIV) Other payables
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 1,659,284,531.06 | 1,247,722,165.47 |
| Tota; | 1,659,284,531.06 | 1,247,722,165.47 |
1. Other payables
(1) Presentation of other payables by nature of payment
| Item | Closing balance | Opening balance |
| Deposit | 679,292.00 | 2,303,050.00 |
| Margin | 328,420,047.69 | 290,353,044.56 |
| Current money | 1,317,921,724.74 | 941,440,196.32 |
| Others | 12,263,466.63 | 13,625,874.59 |
| Total | 1,659,284,531.06 | 1,247,722,165.47 |
(2) Significant other payables aged over 1 year
| Item | Closing balance | Reasons for non-reimbursement or carry-over |
| The First Taxation Branch of Benxi Taxation Bureau of the State Administration of Taxation | 40,357,710.00 | non carry over |
(XXV) Non-current liabilities due within one year
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 562,310,473.60 | 2,501,169,854.72 |
| Bonds payable due within one year | 81,650,008.44 | 44,762,324.73 |
| Long-term account payable due within one year | ||
| Lease liabilities due within one year | 41,921,209.72 | 40,318,706.98 |
| Total | 685,881,691.76 | 2,586,250,886.43 |
Notes of Financial Report Page 93
(XXVI) Other current liabilities
| Item | Closing balance | Opening balance |
| Output tax to be transffered | 392,122,093.59 | 493,235,027.03 |
| Total | 392,122,093.59 | 493,235,027.03 |
(XXVII) Long-term borrowings
| Item | Closing balance | Opening balance |
| Secured borrowings | ||
| Pledged borrowings | ||
| Credit borrowings | 360,780,612.70 | |
| Credit borrowings | 1,723,726,700.80 | 1,366,157,689.60 |
| Total | 1,723,726,700.80 | 1,726,938,302.30 |
Notes: Interest rates on long-term borrowings ranged from 2.10% to 3.283%
(XXVIII) Bonds payable
1. Details of bonds payable
| Item | Closing balance | Opening balance |
| Convertible corporate bonds | 5,451,381,676.38 | 5,276,502,232.78 |
| Total | 5,451,381,676.38 | 5,276,502,232.78 |
Notes of Financial Report Page 94
2. Increase or decrease in bonds payable (Excluding other financial instruments such as preference shares and perpetual debt classified as financial
liabilities
| Name | Nominal value | Issue date | Term to maturity | Amount issued | Opening balance | Issued in the current period | Interest accrues at nominal value | Amortization of premium and discount | Current period reimbursement | Transfer of shares in the current year | Closing balance | Default or not |
| Bengang Convertible Bond (Bond code:127018 | 6,800,000,000.00 | June 29th, 2020 | 6 years | 6,800,000,000.00 | 5,276,502,232.78 | - | 123,882,899.20 | 174,907,443.60 | 42,232,890.76 | 28,000.00 | 5,533,031,684.82 | No |
| Less: Bonds payable due within one year | 81,650,008.44 | 81,650,023.45 | No | |||||||||
| Total | 6,800,000,000.00 | 6,800,000,000.00 | 5,276,502,232.78 | 42,232,890.76 | 174,907,443.60 | 42,232,890.76 | 28,000.00 | 5,451,381,676.38 |
3. Illustration for the Company’s convertible bond
Approved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds were listedon the Shenzhen Stock Exchange on August 4th, 2020, and the abbreviation is "Bengang Convertible Bond". The bond code is "127018". The conversionperiod of the convertible corporate bonds issued this time is from the first trading day after six months of the issuance of the convertible corporatebonds (July 3rd, 2020) to the maturity date of the convertible corporate bonds, that is, from January 4th, 2021 to June 28th, 2026. The initial conversionprice of the convertible bonds is RMB 5.03 per share. During the period from January 1st, 2022 to December 31st, 2022, the Company's A-shareconvertible bonds of RMB 92,500.00 were converted into the Company's A-share ordinary shares, and the number of converted shares was 20,838.00shares. Of which:
In the first quarter of 2023, Bengang's convertible bonds decreased by RMB 4,000 (40 bonds) due to share conversion, the number of shares convertedwas 1,012.00 shares, and the conversion price was RMB 3.95 per share;
Notes of Financial Report Page 95
In the second quarter of 2023, Bengang's convertible bonds decreased by RMB 6,000 (60 bonds) due to share conversion, the number of sharesconverted was 1,518.00 shares, and the conversion price was RMB 3.95 per share;In the third quarter of 2023, Bengang's convertible bonds decreased by RMB 12,000.00 (120 bonds) due to share conversion, the number of sharesconverted was 3,037.00 shares, and the conversion price was RMB 3.95 per share;
In the fourth quarter of 2023, Bengang's convertible bonds decreased by RMB 6,000.00 (60 bonds) due to share conversion, the number of sharesconverted was 1,518.00 shares, and the conversion price was RMB 3.95 per share; As at December 31st, 2021, the Company's face value balance ofconvertible bonds was RMB 5,631,024,100.00 (56,310,241.00 bonds).
Notes of Financial Report Page 96
(XXIX) Lease liabilities
| Item | Closing balance | Opening balance |
| Lease payments | 2,098,254,018.65 | 2,191,946,735.27 |
| Less: Unrecognized financing expenses | 713,905,556.48 | 767,279,566.11 |
| Reclassification to non-current liabilities due within one year | 41,921,209.72 | 40,318,706.98 |
| Total | 1,342,427,252.45 | 1,384,348,462.18 |
(XXX) Deferred income
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Causes of formation |
| Government grants | 42,377,015.51 | 144,266,000.00 | 50,558,060.33 | 136,084,955.18 | |
| Total | 42,377,015.51 | 144,266,000.00 | 50,558,060.33 | 136,084,955.18 |
Items involving government grants:
Notes of Financial Report Page 97
| Liabilities items | Opening balance | Amount of new grants in the current period | Amount charged to non-operating income in the current period | Amount charged to other gains in the current period | Amount of current period's elimination of costs and expenses | Other changes | Closing balance | Asset-related / income-related |
| Research and Development of High-strength Steel for the Third Generation of Automobiles | 1,160,000.00 | 580,000.00 | 580,000.00 | Asset | ||||
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 2,400,000.00 | 600,000.00 | 1,800,000.00 | Asset | ||||
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 5,700,000.00 | 1,900,000.00 | 3,800,000.00 | Asset | ||||
| Second Sintering Finishing Dust Removal Ultra-low Emission Reconstruction Project | 1,230,000.00 | 410,000.00 | 820,000.00 | Asset | ||||
| Converter Gas Recovery Efficiency Improvement Project for Plate Material Area | 1,500,000.00 | 10,600,000.00 | 2,420,000.00 | 9,680,000.00 | Asset | |||
| Central environmental protection award fund | 105,440,000.00 | 21,088,000.00 | 84,352,000.00 | Asset | ||||
| 2021 Intellectual Manufacturing Strong Province Special Fund | 4,800,000.00 | 960,000.00 | 3,840,000.00 | Asset |
Notes of Financial Report Page 98
| Liabilities items | Opening balance | Amount of new grants in the current period | Amount charged to non-operating income in the current period | Amount charged to other gains in the current period | Amount of current period's elimination of costs and expenses | Other changes | Closing balance | Asset-related / income-related |
| 2020 Ecological Civilization Construction Special Project (Special Steel Electric Furnace Upgrading Project) | 20,000,000.00 | 20,000,000.00 | Asset | |||||
| 2021 Manufacturing Strong Province Special Fund Project | 8,100,000.00 | 8,100,000.00 | Asset | |||||
| Government grant for “Liaoning Revitalization Talent Plan” | 350,000.00 | 113,500.00 | 236,500.00 | Asset | ||||
| 2022 Provincial Science and Technology Department Liaoning Provincial Natural Science Foundation Program Project Section | 30,000.00 | 1,600.00 | 28,400.00 | Asset | ||||
| Design of Rare Earth Steel Metallurgical Slag System and Research on Its Physicochemical Properties | 340,000.00 | 22,651.00 | 317,349.00 | Asset | ||||
| 2021 Municipal Skilled Master Workstation Fee | 77,300.48 | 81.03 | 77,219.45 | Income | ||||
| Study on the Mechanism and Control of the Effect of Rare Earth Oxysulfides on the Plasticizability of Automotive Steel | 334,448.50 | 212,228.30 | 122,220.20 | Income | ||||
| 2021 Benxi Experts and Talents Interaction with Enterprises Project | 5,000.00 | 5,000.00 | Income |
Notes of Financial Report Page 99
| Liabilities items | Opening balance | Amount of new grants in the current period | Amount charged to non-operating income in the current period | Amount charged to other gains in the current period | Amount of current period's elimination of costs and expenses | Other changes | Closing balance | Asset-related / income-related |
| 2019 Municipal Master Skill Workstation Fee | 69,500.19 | 69,500.19 | Income | |||||
| 2018 Municipal Master Skill Workstation Fee | 58,766.34 | 58,766.34 | Income | |||||
| Liaoning Province "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018 | 220,000.00 | 220,000.00 | Income | |||||
| 2023 Instant Allowance Without Application Special Fund | 500,000.00 | 500,000.00 | - | Income | ||||
| 2022 Digital Liaoning and Intellectual Manufacturing Strong Province Special Fund | 20,000,000.00 | 20,000,000.00 | - | Income | ||||
| 2021 Intellectual Manufacturing Strong Province Direction | 1,700,000.00 | 1,700,000.00 | - | Income | ||||
| Provincial Science and Technology Department National Natural Science Foundation Committee | 334,000.00 | 334,000.00 | Income | |||||
| 2019 Provincial Skilled Master Workstation Fee | 200,000.00 | 200,000.00 | Income | |||||
| 2020 Provincial Skilled Master Workstation Fee | 100,000.00 | 100,000.00 | Income | |||||
| Fundamental Research on New Technology of Composite Iron Coke Low | 168,000.00 | 168,000.00 | Income |
Notes of Financial Report Page 100
| Liabilities items | Opening balance | Amount of new grants in the current period | Amount charged to non-operating income in the current period | Amount charged to other gains in the current period | Amount of current period's elimination of costs and expenses | Other changes | Closing balance | Asset-related / income-related |
| Carbon Ironmaking Furnace Charge | ||||||||
| The Second Batch of 2021 Liaoning Funds on Central Government Guiding the Development of Local Science and Technology | 300,000.00 | 300,000.00 | Income | |||||
| Liaoning Province “BaiQianWan Talents Program” Funded Project in 2020 | 50,000.00 | 50,000.00 | - | Income | ||||
| 2022 Digital Liaoning Intellectual Manufacturing Strong Province | 300,000.00 | 300,000.00 | Income | |||||
| Municipal Enterprise Operation Class Patent Navigation Project Funding Grant | 200,000.00 | 200,000.00 | Income | |||||
| Genetic Engineering and Artificial Intelligence Design of Aviation Critical Materials (Research Institute) | 376,000.00 | 376,000.00 | Income | |||||
| Total | 42,377,015.51 | 144,266,000.00 | - | 50,558,060.33 | - | - | 136,084,955.18 |
Notes of Financial Report Page 101
(XXXI) Share capital
| Item | Opening balance | Increase/decrease (+, -) | Closing balance | ||||
| Issue of new shares | Bonus issue | Transfer from provident fund | Others | Subtotal | |||
| Total shares | 4,108,212,217.00 | 7,085.00 | 7,085.00 | 4,108,219,302.00 | |||
Other notes: The decrease in the current period is due to the conversion of the A-shareconvertible bonds issued by the company into 7,085.00 bonds A-share ordinary shares inthe current period. As of December 31th , 2023, the company 's remaining convertiblebond balance is RMB 5,631,024,100.00 ( 56,310,241.00 bonds ). See note 5, bonds. Fordetails, see Notes V. (XXVIII) Bonds payable.
Notes of Financial Report Page 102
(XXXII) Other equity instruments
1. Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
| Issued financial tools | Opening balance | Increase in the current period | Decrease in the current period | End of the period | ||||
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
| Convertible bonds | 56,310,521.00 | 947,863,834.02 | - | - | 280.00 | 5,699.86 | 56,310,241.00 | 947,858,134.16 |
| Total | 56,310,521.00 | 947,863,834.02 | - | - | 280.00 | 5,699.86 | 56,310,241.00 | 947,858,134.16 |
Other notes: The decrease in the current period is due to the conversion of the A-share convertible bonds issued by the company into RMB28,000.00 (280bonds) A-share ordinary shares in the current period. As of December 31th , 2023, the company 's remaining convertible bond face value balance is RMB5,631,024,100.00 ( 56,310,241.00 bonds ). See note 5, bonds. For details, see Notes V. (XXVIII) Bonds payable.
Notes of Financial Report Page 103
(XXXIII) Capital reserve
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (share capital premium) | 13,156,287,691.39 | 20,710.71 | 13,156,308,402.10 | |
| Other capital reserve | 115,917,468.82 | 115,917,468.82 | ||
| Total | 13,272,205,160.21 | 20,710.71 | 13,272,225,870.92 |
Other notes, including notes on changes in the current period and reasons for changes:
The increase in the current period is due to the conversion of A-share convertible bonds issued bythe Company into A-share ordinary shares. For details, please refer to note “VI. 27. Bonds payable”.
Notes of Financial Report Page 104
(XXXIV) Other comprehensive income
| Item | Opening balance | Amount incurred in the current period | Closing balance | |||||
| Amount incurred before income tax in the current period | Less: Transfer to profit or loss in the current period from prior periods charged to other comprehensive income | Less: Transfer to retained earnings in the current period from prior periods charged to other comprehensive income | Less: Income tax expense | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| 1．Other comprehensive income that cannot be reclassified to profit or loss | -15,904,760.02 | -45,955,442.48 | -11,488,860.62 | -34,466,581.86 | -50,371,341.88 | |||
| Including: Remeasurement and setting benefit plan changes | ||||||||
| Changes in fair value of investments in other equity instruments | -15,904,760.02 | -45,955,442.48 | -11,488,860.62 | -34,466,581.86 | -50,371,341.88 | |||
| 2. Other comprehensive income reclassified in profit and loss | ||||||||
| Including: Other comprehensive income of convertible profit and loss under the equity method | ||||||||
| Total other comprehensive income | -15,904,760.02 | -45,955,442.48 | -11,488,860.62 | -34,466,581.86 | -50,371,341.88 | |||
Notes of Financial Report Page 105
(XXXV) Special reserve
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Safety production cost | 2,217,913.77 | 77,964,469.55 | 80,127,540.17 | 54,843.15 |
| Total | 2,217,913.77 | 77,964,469.55 | 80,127,540.17 | 54,843.15 |
(XXXVI) Surplus reserve
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Legal surplus reserve | 1,195,116,522.37 | 1,195,116,522.37 | ||
| Free surplus reserve | ||||
| Reserve funds | ||||
| Enterprise development funds | ||||
| Others | ||||
| Total | 1,195,116,522.37 | 1,195,116,522.37 |
(XXXVII) Undistributed profits
| Item | Current period | Prior period |
| Adjustments of the beginning distributed profits | -720,559,670.73 | 2,977,306,297.64 |
| Adjustments of the beginning undistributed profits total amount (increase +, decrease -) | ||
| The beginning undistributed profits after adjusrment | -720,559,670.73 | 2,977,306,297.64 |
| Add: Net profit for the period attributable to owners of the parent company | -1,742,574,163.92 | -1,232,976,557.37 |
| Other factors | 25,416.40 | |
| Less: Withdrawal of statutory surplus reserve | ||
| Withdrawal of discretionary surplus reserve | ||
| Withdrawal of general risk privision | ||
| Cash dividends distributed in the current period | 2,464,914,827.40 | |
| Dividends on ordinary shares converting to capital | ||
| Cash dividends distributed in the current period | ||
| Undistributed profit at the end of the period | -2,463,133,834.65 | -720,559,670.73 |
(XXXVIII) Business income and business cost
Notes of Financial Report Page 106
1. Details of business income and business cost
| Item | Current period | Prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 56,674,968,934.42 | 57,214,004,924.40 | 59,395,642,984.38 | 59,110,682,153.73 |
| Other business | 1,140,000,417.23 | 1,112,281,082.13 | 3,220,978,643.22 | 3,148,652,700.99 |
| Total | 57,814,969,351.65 | 58,326,286,006.53 | 62,616,621,627.60 | 62,259,334,854.72 |
2. Details of business income
| Category | Income from main business | Cost from main business | Income from other business | Cost from other business |
| Classification by business regions | ||||
| Including: Domestic | 49,193,720,937.80 | 49,793,865,920.91 | 1,140,000,417.23 | 1,112,281,082.13 |
| Oversea | 7,481,247,996.62 | 7,420,139,003.49 | ||
| Total | 56,674,968,934.42 | 57,214,004,924.40 | 1,140,000,417.23 | 1,112,281,082.13 |
| Classification by commodity alienation time: | ||||
| Confirmation at some point | 56,674,968,934.42 | 57,214,004,924.40 | 1,135,127,056.62 | 1,109,906,049.33 |
| Confirmation in some period | 4,873,360.61 | 2,375,032.80 | ||
| Total | 56,674,968,934.42 | 57,214,004,924.40 | 1,140,000,417.23 | 1,112,281,082.13 |
(XXXIX) Taxes and surcharges
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Environmental tax | 38,630,331.48 | 37,955,614.65 |
| City maintenance and construction tax | 11,150,706.61 | 8,247,520.23 |
| Education surcharge | 8,100,823.33 | 6,202,547.48 |
| Property tax | 82,175,453.10 | 81,251,574.97 |
| Land use tax | 12,189,312.63 | 13,148,324.89 |
| Vehicle and vessel use tax | 219,332.32 | 182,560.36 |
| Stamp duty | 58,612,006.24 | 59,436,033.58 |
| Others | 483,657.54 | 16,694.40 |
| Total | 211,561,623.25 | 206,440,870.56 |
(XL) Selling expenses
Notes of Financial Report Page 107
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Import and export agency fee | 41,843,829.87 | 62,722,202.78 |
| Employee benefits | 79,109,440.68 | 37,325,748.94 |
| Package fee | 6,434,329.15 | 9,716,348.12 |
| Others | 31,646,536.81 | 18,725,396.96 |
| Total | 159,034,136.51 | 128,489,696.80 |
(XLI) Administrative expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Employee benefits | 335,026,348.30 | 319,515,626.55 |
| Insurance expense | 12,422,253.82 | 12,672,429.74 |
| Depreciation | 40,772,552.53 | 40,266,699.01 |
| Repair esxpense | 2,051,321.51 | 159,772,788.05 |
| Intermediary expense | 11,046,116.76 | 4,454,794.80 |
| Office expense | 1,191,120.82 | 1,491,585.53 |
| Travel expense | 2,450,942.89 | 2,599,480.20 |
| Afforestation fee | 9,035,946.93 | 8,074,706.58 |
| Other | 187,624,701.34 | 114,232,543.99 |
| Total | 601,859,503.43 | 663,080,654.45 |
(XLII) Research and development expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Depreciation, materials and benefits, etc. | 81,247,560.73 | 58,088,008.14 |
| Total | 81,247,560.73 | 58,088,008.14 |
(XLIII) Financial expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Interest expenses | 415,219,929.72 | 599,359,597.96 |
| Less: Interest income | 54,957,360.07 | 80,619,490.18 |
| Exchange net income | ||
| Add: Exchange income and loss | -59,468,641.72 | -3,956,001.44 |
| Other expenditure | 8,505,011.04 | 8,286,059.01 |
| Total | 309,298,938.97 | 523,070,165.35 |
(XLIV) Other income
Notes of Financial Report Page 108
| Item | Amount incurred in the current period | Amount incurred in the prior period | ||||
| Research and Development of High-strength Steel for the Third Generation of Automobiles | 580,000.00 | 580,000.00 | ||||
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 600,000.00 | 600,000.00 | ||||
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 1,900,000.00 | 1,900,000.00 | ||||
| Municipal Allocated Oil Tank Special Passivation Project for Millions of Talents | 50,000.00 | |||||
| Second Sintering Finishing Dust Removal Ultra-low Emission Reconstruction Project | 410,000.00 | 410,000.00 | ||||
| Recovery Efficiency Improvement Project for Plate Material Area | 2,420,000.00 | |||||
| Central Government Environmental Protection Award Fund | 21,088,000.00 | |||||
| 2021 Intellectual Manufacturing Strong Province Special Fund (Upgrading and renovation of information and network) | 960,000.00 | |||||
| 2023 Instant Allowance Without Application Special Fund (2022 National Green Design Products Hot-Rolled High Strength Steel Plate and Steel Strip for Automobile) | 500,000.00 | |||||
| 2022 Digital Liaoning and Intellectual Manufacturing Strong Province Special Fund | 20,000,000.00 | |||||
| “Liaoning Rejuvenation Talent Plan” Government Grants | 113,500.00 | |||||
| Study on the Mechanism and Control of the Effect of Rare Earth Oxysulfides on the Plasticizability of Automotive Steel | 212,228.30 | |||||
| 2022 Provincial Science and Technology Department Liaoning Provincial Natural Science Foundation Program Project Fund | 1,600.00 | |||||
| Design of Rare Earth Steel Metallurgical Slag System and Research on Its Physicochemical Properties | 22,651.00 | |||||
| 2023 Intellectual Manufacturing Strong Province Direction (Bengang Technical Center Innovation Capacity Improvement) | 1,700,000.00 | |||||
| 2021 Municipal Skilled Master Workstation Fee | 81.03 | 2,702.49 | ||||
| Job Retention Training of Labor Employment Subsidies | 2,358.49 | |||||
| Cold-rolled High-strength Steel Renovation Project | 50,000,000.00 | |||||
| 7 Sets of 130 Tons Combustion Boiler Flue Gas Desulfurization Project in Power Plant | 4,800,000.00 | |||||
| Power Plant Three Power Plant Cogeneration Reform Project | 2,000,000.00 | |||||
| 2021 Benxi Experts and Talents Interaction with Enterprises Project | 5,000.00 | |||||
| 2019 Municipal Skilled Master Workstation Fee | 28,583.97 | |||||
| Liaoning Province Craftmen Subsidies | 18.92 | |||||
| Study on the mechanism and control of the effect of rare-earth oxysulfides on the plasticizability of automotive steel | 122,965.00 | |||||
| Dalian Jinpu New District Employment and Social Insurance Business Service Centre Skills Upgrading Special Account – Work-for-Training Grants | 4,510.00 | |||||
| Additional tax relief for retired soldiers in 2022 | 1,080,000.00 | |||||
| Benxi Human Resources Service Centre Unemployment Insurance Fund | 6,308,848.00 | |||||
| Tax returns | 27,685,686.22 | 771,262.00 | ||||
| Withholding and remitting tax income | 913,893.41 | 3,686,940.10 | ||||
| Value-added tax exemption | 394,898.00 | - | ||||
Notes of Financial Report Page 109
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Total | 79,554,896.45 | 72,300,830.48 |
(XLV) Investment income
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Investment income from long-term equity investments accounted for under the equity method | -1,085,968.20 | -181,084.64 |
| Investment income from the disposal of long-term equity investments | -294,462.57 | 88,020,044.39 |
| Investment income from the holding of financial assets held for trading | ||
| Investment income from the disposal of financial assets held for trading | -6,558,780.75 | |
| Gain from remeasurement of remaining equity at fair value after loss of control | 4,154,883.39 | |
| Gain from debt restructuring | 5,179,346.89 | 1,274,270.98 |
| Others | -6,626,340.44 | 2,879,850.07 |
| Total | -2,827,424.32 | 89,589,183.44 |
(XLVI) Credit impairment losses
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Bad debt losses on accounts receivable | -21,955,575.63 | 9,155,504.25 |
| Bad debt losses on other receivables | 11,912,298.08 | -4,789,476.31 |
| Total | -10,043,277.55 | 4,366,027.94 |
(XLVII) Assets impairment losess
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Loss on decline in value of inventories and impairment loss on contract performance costs | 15,745,868.44 | 33,475,219.25 |
| Impairment loss on fixed assets | 19,593,534.81 | |
| Total | 35,339,403.25 | 33,475,219.25 |
(XLVIII) Assets disposal gains
| Item | Amount incurred in the period | Amount incurred in the prior period | Amounts included in non-recurring gains and losses for the current period |
| Gains of disposal of fixed assets | 298,940,955.41 | 3,648,546.62 | 298,940,955.41 |
Notes of Financial Report Page 110
| Item | Amount incurred in the period | Amount incurred in the prior period | Amounts included in non-recurring gains and losses for the current period |
| Total | 298,940,955.41 | 3,648,546.62 | 298,940,955.41 |
(XLIX) Non-operating income
| Item | Amount incurred in the period | Amount incurred in the prior period | Amount recorded in non-recurring gains and losses during the current period |
| Incomes of destruction and retirement of non-current assets | 22,695,633.31 | 19,686,518.10 | 22,695,633.31 |
| Donation accepted | 116,390.00 | 116,390.00 | |
| Liquidated damages | 2,795,340.47 | 82,285.55 | 2,795,340.47 |
| Unpayable accounts payable (Debt liquidation income) | 10,136,697.80 | 17,144,884.54 | 10,136,697.80 |
| Others | 7,651,073.78 | 3,217,256.20 | 7,651,073.78 |
| Total | 43,395,135.36 | 40,130,944.39 | 43,395,135.36 |
(L) Non-operating expenses
| Item | Amount incurred in the period | Amount incurred in the prior period | Amount recorded in non-recurring gains and losses during the current period |
| Losses on destruction and retirement of non-current assets | 88,675,217.02 | 26,618,184.57 | 88,675,217.02 |
| Penalty expenses | 5,867,021.85 | 4,993.20 | 5,867,021.85 |
| Others | 516,843.20 | 516,843.20 | |
| Total | 95,059,082.07 | 26,623,177.77 | 95,059,082.07 |
(LI) Income tax expenses
1. Table of income tax expenses
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Current income tax expenses | 83,737,591.43 | 108,153,891.06 |
| Deferred income tax expenses | 10,723,190.66 | 17,220,286.35 |
| Total | 94,460,782.09 | 125,374,177.41 |
2. Reconciliation between income tax expense and accounting profit
| Item | Amount incurred in the current period |
| Total profit | -1,575,610,062.64 |
Notes of Financial Report Page 111
| Item | Amount incurred in the current period |
| Income tax expense calculated at statutory [or applicable] tax rate | -393,902,515.66 |
| Effect of different tax ratios used by subsidiaries | 32,462,151.19 |
| Effect of the adjustment on prior-period income tax | 14,392,495.72 |
| Effect of non-taxable income | 587,418.51 |
| Effect of non-deductible costs, expenditures and losses | 13,199,477.94 |
| Effect of deductible losses for using deferred income tax assets not confirmed in the early period | -20,412,569.67 |
| Effect of deductible temporary differences or deductible losses of deferred income tax assets not confirmed in the current period. | 501,737,365.06 |
| Changes led by tax rate adjustment in the balance of deferred income tax assets / liabilities at the beginning of the period. | 117,428.09 |
| Others | -53,720,469.08 |
| Income tax expenses | 94,460,782.09 |
(LII) Cash flow statement items
1. Other cash in relation to operating activities
(1) Other cash received in relation to operating activities
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Current accounts, advances received | 14,699,541.48 | 5,681,740.65 |
| Interest income | 54,957,360.07 | 80,619,490.18 |
| Special subsidies, grants | 149,050,517.00 | 9,720,381.00 |
| Non-operating income | 8,470,709.79 | 1,853,285.67 |
| Others | 56,843,488.47 | 25,134,883.78 |
| Total | 284,021,616.81 | 123,009,781.28 |
(2) Other cash paid in relation to operating activities
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Intercompany current accounts | 20,254,516.96 | 15,076,408.22 |
| Administration expenses | 87,569,406.75 | 45,010,167.69 |
| Selling expenses | 9,993,368.25 | 19,555,768.39 |
| Service charges | 4,755,565.60 | 8,286,059.01 |
| Others | 296,503,108.11 | 397,007.18 |
| Total | 419,075,965.67 | 88,325,410.49 |
2. Other cash in relation to financing activities
(1) Other cash received in relation to financing activities
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Notes, letter of guarantee, and letter of credit | 1,128,377,111.10 | 1,845,751,595.78 |
Notes of Financial Report Page 112
| Item | Amount incurred in the period | Amount incurred in the prior period |
| margins | ||
| Recovery of time deposits | - | 174,000,000.00 |
| Recovery of short-term borrowing funds used for targeted payments | - | 740,000,000.00 |
| Total | 1,128,377,111.10 | 2,759,751,595.78 |
(2) Other cash paid in relation to financing activities
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Notes, letter of guarantee, and letter of credit margins | 1,981,675,071.06 | 391,052,880.08 |
| Short-term borrowing funds used for targeted payments | 17,811,412.73 | - |
| Lease payments | 40,645,381.40 | 93,692,716.62 |
| Restricted deposits | - | 1,185,000.00 |
| Total | 2,040,131,865.19 | 485,930,596.70 |
(LIII) Supplementary information of cash flow statement
1. Supplementary information of cash flow statement
| Supplementary information | Current period amount | Prior period amount |
| 1. Reconciliation of net profit to cash flows from operating activities | ||
| Net profit | -1,670,070,844.73 | -1,206,051,719.86 |
| Add: Credit impairment losses | 35,339,403.25 | 33,475,219.25 |
| Provision for impairment of assets | -10,043,277.55 | 4,366,027.94 |
| Depreciation of fixed assets | 1,628,409,626.63 | 1,941,797,897.36 |
| Depreciation of productive biological assets | ||
| Depreciation of oil and gas assets | ||
| Depreciation of right-of-use assets | 60,374,534.52 | 60,374,534.42 |
| Amortisation of intangible assets | 6,764,501.28 | 7,072,335.72 |
| Amortisation of long-term deferred expenses | ||
| Loss on disposal of fixed assets, intangible assets and other long-term assets (gain listed with “-”) | -298,940,955.41 | -3,648,546.62 |
| Loss on damaged and retired non-current assets (gain listed with “-”) | 65,979,583.71 | 6,931,666.47 |
| Loss on changes in fair value (gain listed with “-”) | ||
| Financial expenses (gain listed with “-”) | 355,751,288.00 | 595,403,596.52 |
| Investment losses (gain listed with “-”) | 2,827,424.32 | -89,589,183.44 |
| Decrease in deferred tax assets (increase listed with "-") | 25,816,824.26 | 22,697,558.71 |
| Decrease in deferred tax assets (increase listed with "-") | -15,093,633.60 | |
| Decrease in inventories (increase listed with "-") | 739,609,711.93 | 1,692,962,444.55 |
| Decrease in receivables from operating activities (increase listed with "-") | -62,145,226.76 | 2,034,468,353.22 |
| Increase in payables from operating activities (decrease listed with "-") | 3,466,935,369.07 | -3,825,777,153.88 |
Notes of Financial Report Page 113
| Supplementary information | Current period amount | Prior period amount |
| Others | -2,163,070.62 | 1,879,935.20 |
| Net cash flows from operating activities | 4,329,351,258.30 | 1,276,362,965.56 |
| 2. Significant non-cash investing and financing activities: | ||
| Conversion of debts into capital | ||
| Convertible bonds due within 1 year | ||
| Fixed assets under financing leases | ||
| 3. Changes in cash and cash equivalents: | ||
| Closing balance of cash | 1,184,774,971.52 | 1,296,662,683.20 |
| Less：Opening balance of cash | 1,296,662,683.20 | 6,299,099,063.48 |
| Add：Closing balance of cash equivalents | ||
| Less：Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -111,887,711.68 | -5,002,436,380.28 |
2. Composition of cash and cash equivalents
| Item | Closing balance | Opening balance |
| I. Cash | 1,184,774,971.52 | 1,296,662,683.20 |
| Including: Cash on hand | ||
| Bank deposits readily available for payment | 1,184,774,971.52 | 1,296,662,683.20 |
| Other monetary funds readily available for payment | ||
| Deposits of Central Bank funds available for payment | ||
| Deposits from interbanks | ||
| Deposits from loan trades | ||
| II. Cash equivalents | ||
| Including: Bond investment due within three mouths | ||
| III. Balance of cash and cash equivalents at the end of the period | 1,184,774,971.52 | 1,296,662,683.20 |
| Including: Cash and cash equivalents held but can not be used by parent company or other subsidiaries within the Group |
(LIV) Foreign currency monetary items
1. Foreign currency monetary items
| Item | Foreign currency balance at the end of the period | Cross rate | Converted RMB balance at the end of the period |
| Cash and cash equivalents | 589,077,898.20 | ||
| Including: USD | 81,951,964.90 | 7.0827 | 580,441,181.80 |
| EUR | 408,004.95 | 7.8592 | 3,206,592.51 |
| HKD | 5,992,191.45 | 0.9062 | 5,430,123.89 |
| Non-current liabilities due within one year | 1,163,435.20 | ||
| Including: JPY | 23,176,000.00 | 0.0502 | 1,163,435.20 |
| Long-term loan | 3,490,305.60 | ||
| Including: JPY | 69,528,000.00 | 0.0502 | 3,490,305.60 |
Notes of Financial Report Page 114
VI. Equity in other entities(I) Equity in subsidiaries
1. Constitution of enterprise group
| Name of subsidiary | Main place of business | Registration place | Nature of business | Shareholding ratio (%) | Acquiring method | |
| Direct | Indirect | |||||
| Guangzhou Bengang Steel & Iron Trading Co., Ltd | Guangzhou | Guangzhou | Sale | 100.00 | Establishment | |
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd | Shanghai | Shanghai | Sale | 100.00 | Establishment | |
| Dalian Benruitong Automobile Material Technology Co., Ltd | Dalian | Dalian | Production | 65.00 | Establishment | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | Benxi | Benxi | Production | 75.00 | Business combination under common control | |
| Changchun Bengang Steel & Iron Trading Co., Ltd. | Changchun | Changchun | Sale | 100.00 | Business combination under common control | |
| Yantai Bengang Steel Sales Co., Ltd. | Yantai | Yantai | Sale | 100.00 | Business combination under common control | |
| Tianjin Bengang Steel Trading Co., Ltd. | Tianjin | Tianjin | Sale | 100.00 | Business combination under common control | |
| Benxi Bengang Steel & Iron Sales Co., Ltd. | Benxi | Benxi | Sale | 100.00 | Establishment | |
| Shenyang Bengang Metallurgy Science and Technology Co., Ltd | Shenyang | Shenyang | Sale | 100.00 | Establishment | |
2. Significant non-wholly owned subsidiaries
Notes of Financial Report Page 115
| Name of subsidiary | Minority shareholding ratio | Profit or loss for the period attributable to minority shareholders | Dividends declared to minority shareholders during the period | Balance of minority interests at the end of the period |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 25.00% | 68,290,993.31 | 68,041,170.80 | 576,089,336.09 |
Notes of Financial Report Page 116
3. Key financial information on significant non-wholly owned subsidiaries
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total Liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total Liabilities | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 3,314,945,506.13 | 958,741,994.50 | 4,273,687,500.63 | 1,969,330,156.26 | 1,969,330,156.26 | 2,642,318,664.91 | 1,031,753,449.22 | 3,674,072,114.13 | 1,370,714,059.80 | 1,370,714,059.80 | ||
| Name of subsidiary | Amount incurred in the period | Amount incurred in the prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 8,939,304,737.19 | 273,163,973.25 | 273,163,973.25 | -492,826,903.06 | 9,820,616,858.86 | 135,690,857.38 | 135,690,857.38 | 368,340,695.62 |
Notes of Financial Report Page 117
(II) Equity in joint venture arrangements or associated enterprises
1. Significant joint ventures or associates
The Company has no significant joint ventures or associates.
2. Collected financial information in insignificant joint ventures or associates
| Closing balance / Amount incurred in the year | Opening balance / Amount incurred in the prior year | |
| Joint ventures: | ||
| Total book value of investment | ||
| The total amount of the following items calculated in proportion to shareholding | ||
| —Net profit | ||
| —Other comprehensive income | ||
| —Total comprehensive income | ||
| Associates: | ||
| Total book value of investment | 46,910,346.41 | 51,030,777.18 |
| The total amount of the following items calculated in proportion to shareholding | -1,085,968.20 | -181,084.64 |
| —Net profit | -1,085,968.20 | -181,084.64 |
| —Other comprehensive income | ||
| —Total comprehensive income | -1,085,968.20 | -181,084.64 |
VII. Government grants(I) Category, amount and listed item of government grants
1. Government grants incurred in the current profit and loss
| Account title | Amount incurred in the period | Amount incurred in the prior period |
| Other income | 78,246,105.04 | 68,613,890.38 |
VIII. Risks associated with financial instruments
The Company's principal financial instruments include investments in other equityinstruments, borrowings, receivables and payables, and a detailed description of eachfinancial instrument is set out in Note VI. The risks associated with these financialinstruments, and the risk management policies adopted by the Company to mitigate theserisks, are described below. These risk exposures are managed and monitored by theCompany’s management to ensure that the above risks are kept within limits.
Notes of Financial Report Page 118
The Company's objectives in engaging in risk management are to strike an appropriatebalance between risk and return, to minimise the negative impact of risk on the Company'soperating performance and to maximise the interests of shareholders and other equityinvestors. Based on these risk management objectives, the Company's basic strategy forrisk management is to identify and analyse the various risks to which the Company isexposed, establish appropriate risk tolerance limits and manage the risks, as well asmonitor the various risks in a timely and reliable manner to keep the risks within the limits.
1. Credit risk
At December 31st, 2023, the largest exposure to credit risk that could give rise tofinancial losses for the Company arises primarily from losses incurred on theCompany's financial assets as a result of the failure of the other party to the contractto perform its obligations, specifically:
The book value of financial assets is recognised in the consolidated balance sheet;for financial instruments measured at fair value, the book value reflects the riskexposure but is not the maximum exposure and its maximum exposure will changewith future changes in fair value.In order to mitigate credit risk, the Company has established a dedicateddepartment to determine credit limits, perform credit approvals and implementother monitoring procedures to ensure that the necessary measures are taken tocollect overdue claims. In addition, the Company reviews the collection of eachindividual receivable at each balance sheet date to ensure that adequate provisionsfor bad debts are made for uncollectible amounts. As a result, the Company'smanagement believes that the Company's exposure to credit risk has beensignificantly reduced.The Company's working fund is placed with financial institutions with high creditratings and therefore it is a low-credit risk working fund.
2. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financialobligations as they fall due. The Company manages its liquidity risk by ensuring thatit has sufficient financial liquidity to meet its obligations as they fall due withoutincurring unacceptable losses or causing damage to its corporate reputation, and it
Notes of Financial Report Page 119
regularly analyses the structure and maturity of its liabilities to ensure thatsufficient funds are available. The Company's management monitors the use ofbank borrowings and ensures compliance with borrowing agreements. At the sametime, the Company negotiates financing with financial institutions to maintain acertain credit limit and mitigate liquidity risk.
3. Market risk
The market risk of financial instruments refers to the risk that the fair value or futurecash flow of financial instruments fluctuates due to market price changes, includingexchange rate risk, interest rate risk and other price risks.
(1) Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows of afinancial instrument due to market rate changes.
The Company’s exposure to interest rate risk is cash flow interest risk primarilyarising from variable-rate bank balances and variable-rate borrowings. Currently,the Company does not have a specific policy to manage its interest rate risk. Themanagement will carefully choose financing methods, and combine fixedinterest rates with variable interest rates, and short-term obligations with long-term obligations. By using effective interest rate risk management methods, theCompany closely monitors interest rate risk, controls the size of variable-rateborrowings and will consider interest-rate swaps to acquire an expectedstructure of interest rates shall the need arise.
(2) Exchange rate risk
Exchange rate risk refers to the risk of fluctuations in the fair value of financialinstruments or future cash flows due to changes in foreign exchange rates.
The Company's exposure to exchange rate risk relates primarily to USD, HKD, JPYand EUR. Except for a small amount of purchases of raw materials and sales offinished goods which are settled in USD, HKD, JPY and EUR, the Company's othermajor business activities are settled in RMB. As at December 31st, 2023, the assetsor liabilities described in the table below are the balances of items expressed in USD,HKD, JPY and EUR.
Notes of Financial Report Page 120
| Item | December 31st , 2023 | December 31st , 2022 |
| Cash and cash equivalents - USD | 81,951,964.90 | 6,358,482.45 |
| Cash and cash equivalents - HKD | 5,992,191.45 | 5,518,749.45 |
| Cash and cash equivalents - EUR | 408,004.95 | 2,866.74 |
| Non-current liabilities due within one year - USD | 4,700,000.00 | |
| Non-current liabilities due within one year - EUR | 9,460,158.74 | |
| Non-current liabilities due within one year - JPY | 23,176,000.00 | 23,176,000.00 |
| Long-term borrowings - USD | 2,450,000.00 | |
| Long-term borrowings - EUR | 18,714,699.47 | |
| Long-term borrowings - JPY | 69,528,000.00 | 92,704,000.00 |
IX. Disclosure of fair value
The values input of fair value measurement are divided into three layers:
The first layer input value is the unadjusted quotation of the same assets or liabilities thatcan be obtained on the measurement day in the active market.
The second layer input value is the directly or indirectly observable input value of therelated assets or liabilities in addition to the first layer input value.
The third layer input value is the unobservable input value of the related assets or liabilities.
The layer of fair value measurement results is determined by the lowest level of the inputvalue which is of great significance to the fair value measurement as a whole.
(I) Period-end fair value of assets and liabilities measured at fair value
Notes of Financial Report Page 121
| Item | Fair value at end of the period | |||
| Fair value measuremet in the first level | Fair value measuremet in the second level | Fair value measuremet in the third level | Total | |
| I. Continous fair value measurement | ||||
| ◆Financing of accounts receivable | 806,822,622.43 | 806,822,622.43 | ||
| ◆Investments in other equity instruments | 974,463,039.83 | 974,463,039.83 | ||
| Total amount of assets with continuous fair value measurement | 1,781,285,662.26 | 1,781,285,662.26 | ||
X. Related parties and related transactions(I) The parent company of the Company
| Name of the Company | Place of registration | Nature of business | Registered capital | Shareholding ratio (%) | Voting power ratio (%) |
| Benxi Steel & Iron (Group) Co., Ltd. | Benxi, Liaoning | Production | 8 billion RMB | 58.65 | 58.65 |
The ultimate controlling party of the Company is Ansteel Group Co., Ltd.
(II) Details of subsidiaries
For details of subsidiaries of the Company please refer to Note “VI. ”Entities in othersubjects”.
(III) The Company’s joint ventures and associates
For details of the Company’s joint ventures and associates please refer to Note “VI. Entitiesin other subjects”.
Other joint ventures or joint ventures that have related party transactions with theCompany in the current period or have related party transactions with the Company in theprevious period to form a balance are as follows :
| Name of the Company's joint ventures and associates | Relationship with the Company |
| Benxi Iron and Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. | Associates |
Notes of Financial Report Page 122
(IV) Details of other related parties
| Name of other related parties | Relationship |
| Benxi Iron and Steel (Group) Co., Ltd. | Parent company |
| Bengang Group Co., Ltd. | Parent company & controlling shareholder |
| Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | Same parent company |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd | Same parent company |
| Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Design and Research Institute | Same parent company |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Same parent company |
| Benxi New Cause development Co., Ltd | Same parent company |
| Dalian Boluole steel pipe Co., Ltd | Same parent company |
| Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd | Same parent company |
| Liaoning hengtai heavy machinery Co., Ltd | Same parent company |
| Liaoning Metallurgical Technician College | Same parent company |
| Liaoning Metallurgical Vocational and Technical College | Same parent company |
| Benxi Iron and Steel Electric Co., Ltd | Associates of parent company |
| Suzhou Longben metal material Co., Ltd | Joint-stock company |
| Wuhan Yuanhong trading Co., Ltd | Joint-stock company |
| Zhejiang Jingrui steel processing Co., Ltd | Joint-stock company |
| North Hengda logistics Co., Ltd | Both belong to Bengangl Group |
| Benxi Iron and Steel Group Finance Co., Ltd | Both belong to Bengangl Group |
| Benxi Iron and Steel Group International Economic Trade Co., Ltd. | Both belong to Bengangl Group |
| Benxi Steel Tendering Co., Ltd | Both belong to Bengangl Group |
| Benxi Beitai Casting Pipe Co., Ltd | Both belong to Bengangl Group |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengangl Group |
| Benxi High-Tech Drilling Tool Manufacturing Co., Ltd | Both belong to Bengangl Group |
| Liaoning Hengyi Steel Trading Co., Ltd | Both belong to Bengangl Group |
| Ansteel Electrlc Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. Chaoyang Branch | Both belong to Ansteel Group |
| Ansteel Steel Processing&Distribution (Dalian) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Processing&Distribution (Changchun) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Processing&Distribution (Zhengzhou) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Distribution (Hefei) Co., Ltd. | Both belong to Ansteel Group |
Notes of Financial Report Page 123
| Name of other related parties | Relationship |
| Ansteel Steel Distribution (Wuhan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Rope Co., Ltd | Both belong to Ansteel Group |
| Ansteel Co., Ltd | Both belong to Ansteel Group |
| Ansteel Chemical Technology Co., Ltd | Both belong to Ansteel Group |
| Ansteel Group (Anshan) Railway Transportation Equipment Manufacturing Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Development Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group International Economic Trade Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Mining Gongchangling Co., Ltd | Both belong to Ansteel Group |
| Ansteel Group Mining Co., Ltd | Both belong to Ansteel Group |
| Ansteel group Co., Ltd | Both belong to Ansteel Group |
| Ansteel Group Automation Co., Ltd | Both belong to Ansteel Group |
| Ansteel Construction Group Co., Ltd | Both belong to Ansteel Group |
| Ansteel Metal Structure Co., Ltd | Both belong to Ansteel Group |
| Ansteel Science and Technology Development Co., Ltd | Both belong to Ansteel Group |
| Ansteel Mining Machinery Manufacturing Co., Ltd | Both belong to Ansteel Group |
| Ansteel Green Resources Technology Co., Ltd | Both belong to Ansteel Group |
| Ansteel Energy Technology Co., Ltd | Both belong to Ansteel Group |
| Ansteel Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd. | Both belong to Ansteel Group |
| Anshan Iron and Steel Industry Group Metallurgical Machinery Co., Ltd | Both belong to Ansteel Group |
| Ansteel Shuangsheng (Anshan) Fan Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Modern City Service (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel roll Co., Ltd | Both belong to Ansteel Group |
| Anshan Iron and Steel Heavy Machinery Design and Research Institute Co., Ltd | Both belong to Ansteel Group |
| Ansteel heavy machinery Co., Ltd | Both belong to Ansteel Group |
| Ansteel cast steel Co., Ltd | Both belong to Ansteel Group |
| Chengdu Pansteel Hotel Co., Ltd | Both belong to Ansteel Group |
| Delin industrial products Co., Ltd | Both belong to Ansteel Group |
| Delin dry port supply chain service Co., Ltd | Both belong to Ansteel Group |
| Guangzhou Ansteel steel processing Co., Ltd | Both belong to Ansteel Group |
| Pansteel and Steel Group Xichang Steel Vanadium Co., Ltd | Both belong to Ansteel Group |
| Panzhong Yihong Metal Products (Chongqing) Co., Ltd | Both belong to Ansteel Group |
| Tianjin Ansteel steel processing and distribution Co., Ltd | Both belong to Ansteel Group |
| Tianjin Ansteel International North Trading Co., Ltd | Both belong to Ansteel Group |
| Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd | Both belong to Ansteel Group |
| Ansteel tendering Co., Ltd | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Co., Ltd | Associates of Ansteel Group |
(V) Details of related party transaction
1. Related party transaction of purchase and sale of goods and providing and
receiving servicesTable of purchase of goods/receiving services
Notes of Financial Report Page 124
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Ansteel Electric Co., Ltd. | Repair charge | 988,649.97 | 985,900.00 |
| Ansteel Steel Scrap Resources (Anshan) Co., Ltd. | Raw material | 655,692,228.69 | 501,264,827.39 |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | Processing charge | 532,674.24 | |
| Ansteel Steel Processing and Distribution (Changchun) Co., Ltd. | Storage fee | 37,433.12 | |
| Ansteel Steel Processing and Distribution (Changchun) Co., Ltd. | Processing charge | 1,430,380.27 | 101,089.62 |
| Ansteel Steel Rope Co., Ltd. | Raw material | 402,320.80 | |
| Ansteel Co., Ltd. | Steel | 1,526,698.42 | |
| Ansteel Co., Ltd. | Raw material | 937,641.12 | 75,504,413.81 |
| Ansteel Group (Anshan) Railway Transportation Equipment Manufacturing Co., Ltd. | Raw material | 541,592.84 | |
| Ansteel Group Finance Co., Ltd. | Financial service | 843,849.85 | 509,257.61 |
| Ansteel Group Engineering Technology Co., Ltd. | Engineering cost | 495,812,040.18 | 63,375,792.47 |
| Ansteel Group Engineering Technology Co., Ltd. | Repair charge | 663,800.00 | |
| Ansteel Group International Economic Trade Co., Ltd. | Raw fuels | 369,490,000.25 | 58,292,035.42 |
| Ansteel Group Mining Gongchangling Co., Ltd. | Raw materials | 375,015,701.56 | 362,137,279.01 |
| Ansteel Group Mining Co., Ltd | Raw materials | 99,573,714.25 | |
| Ansteel Group Co., Ltd. | Technical service | 559,822.74 | |
| Ansteel Group Automation Co., Ltd | Engineering cost | 108,215,000.00 | 72,873,000.00 |
| Ansteel Construction Group Co., Ltd. | Engineering cost | 101,060,733.94 | 34,442,304.94 |
| Ansteel Construction Group Co., Ltd. | Repair service | 3,727,071.28 | |
| Ansteel Science and Technology Development Co., Ltd. | Testing fee | 4,182.00 | |
| Ansteel Energy Technology Co., Ltd. | Raw auxiliary materials | 116,947.24 | |
| Ansteel Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd. | Repair service | 14,317,414.23 | |
| Anshan Iron and Steel Industry Group Metallurgical Machinery Co., Ltd. | Spare parts | 9,254,415.92 | |
| Anshan Iron and Steel Industry Group Metallurgical Machinery Co., Ltd. | Repair charge | 1,093,480.00 | 2,511,630.02 |
| Ansteel Shuangsheng (Anshan) Fan Co., Ltd. | Raw auxiliary materials | 149,000.00 | |
| Anshan Iron and Steel Heavy Machinery Design and Research Institute Co., Ltd | Engineering cost | 1,478,000.00 | 6,200,000.00 |
| Ansteel Heavy Machinery Co., Ltd | Spare | 4,130,873.60 | 3,000,690.00 |
Notes of Financial Report Page 125
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| parts | |||
| Ansteel Heavy Machinery Co., Ltd | Engineering cost | 3,627,700.00 | |
| Anshan Ansteel International Travel Agency Co., Ltd. | Conference expenses | 3,771,073.93 | |
| Anshan Iron and Steel Metallurgy Furnace Material Technology Co., Ltd | Raw auxiliary materials | 20,592,124.94 | |
| North Hengda Logistics Co., Ltd | Storage charges | 5,485,245.27 | 4,261,203.22 |
| North Hengda Logistics Co., Ltd | Processing charge | 731,028.05 | 1,401.77 |
| North Hengda Logistics Co., Ltd | Sales service fee | 4,243,472.90 | |
| North Hengda Logistics Co., Ltd | Raw auxiliary materials and spare parts | 5,619,710.89 | 25,720,478.21 |
| North Hengda Logistics Co., Ltd | Testing fee | 91,261,108.54 | 21,267,471.20 |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd | Raw materials and auxiliary materials | 348,937.34 | |
| Benxi Iron and Steel Electric Co., Ltd | Spare parts | 181,875.00 | |
| Benxi Iron and Steel Electric Co., Ltd | Engineering cost | 4,899,146.41 | |
| Benxi Iron and Steel Electric Co., Ltd | Repair charge | 10,918,383.89 | 13,542,063.00 |
| Benxi Iron and Steel Electric Co., Ltd | Raw auxiliary materials | 134,365,349.92 | 121,219,826.14 |
| Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | Engineering cost | 4,631,760.00 | |
| Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | Repair charge | 2,328,495.00 | |
| Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | Raw auxiliary materials | 929,311.04 | |
| Benxi Iron and Steel Group International Economic Trade Co., Ltd. | Agency fee | 61,290,890.44 | 60,892,920.39 |
| Benxi Iron and Steel Group Co., Ltd | Repair service | 3,804,811.13 | |
| Benxi Aike Hydraulic Seal Co., Ltd | Spare parts | 6,297,816.12 | |
| Benxi Aike Hydraulic Seal Co., Ltd | Engineering cost | 117,514.00 | |
| Benxi North Iron Industry Co., Ltd | Raw materials and auxiliary materials | 303,625,003.05 |
Notes of Financial Report Page 126
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Storage charges | 9,016.26 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Service fee | 73,782,240.24 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Energy and power | 619,907,820.37 | 779,110,506.13 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Heating costs | 13,310,207.04 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Repair charge | 8,807,530.29 | 97,016,086.32 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Raw materials, auxiliary materials and fuels | 10,862,670,931.26 | 14,015,404,775.69 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Testing fee | 8,032,969.35 | 6,238,586.40 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Spare parts | 237,598,626.48 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Agency fee | 169,853.96 | |
| Benxi Dongfeng Lake Iron and Steel Resources Utilization Co., Ltd | Raw materials, auxiliary materials and fuels | 44,370,758.10 | |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Engineering cost | 2,893,311.49 | 1,767,865.81 |
| Benxi Iron and Steel (Group) Guomao Tengda Co., Ltd. | Port surcharge | 636,896,070.98 | 843,578,220.03 |
| Benxi Iron and Steel (Group) Electromechanical Installation Engineering Co., Ltd. | Engineering cost | 43,034,800.02 | |
| Benxi Iron and Steel (Group) Electromechanical Installation Engineering Co., Ltd. | Raw materials and spare parts | 1,153,388.60 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Raw materials, axilliary materials and spare parts | 73,747,200.55 | 154,332,860.09 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Engineering cost | 48,057,147.53 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Service fee | 11,036,444.38 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Repair charge | 9,039,082.00 | 63,956,264.17 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Rental fee | 717,737.14 | |
| Benxi Iron and Steel (Group) Inspection and Testing Co., Ltd. | Engineering cost | 114,000.00 | |
| Benxi Iron and Steel (Group) Construction Advanced Decoration Co., | Engineering cost | 554,873.39 |
Notes of Financial Report Page 127
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Ltd. | |||
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Engineering cost | 364,430,836.36 | 520,498,816.97 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Service fee | 7,247,447.63 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Equipment calibration | 4,008,300.00 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Repair charge | 34,709,635.27 | 254,504,020.71 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Raw materials and spare parts | 4,049,388.78 | 35,884,838.98 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Testing fee | 88,934.45 | 785,478.54 |
| Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd. | Engineering cost | 43,916,148.59 | |
| Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd. | Repair charge | 12,066,104.00 | |
| Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd. | Raw auxiliary materials | 140,320.00 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Spare parts | 2,248,751.72 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Service fee | 150,042.14 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Energy and power | 7,476,859.63 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Raw materials and auxiliary materials | 6,088,009,996.57 | 6,526,348,389.47 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Repair service | 33,111,773.58 | |
| Benxi Iron and Steel (Group) Road and Bridge Construction Engineering Co., Ltd. | Engineering cost | 1,596,283.35 | |
| Benxi Iron and Steel (Group) Road and Bridge Construction Engineering Co., Ltd. | Raw materials | 790,211.60 | |
| Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd. | Heating costs | 797,049.85 | 3,243,574.57 |
| Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd. | Raw materials and auxiliary materials | 373,267.40 | 397,091.33 |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Spare parts | 7,015,595.48 | |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Engineering cost | 449,295,500.86 | 26,575,682.85 |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Repair charge | 142,853,909.52 | 103,244,339.53 |
Notes of Financial Report Page 128
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Raw materials and auxiliary materials | 5,844,867.44 | 3,258,197.53 |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Testing fee | 2,174,824.48 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Engineering cost | 316,333.57 | 1,974,511.01 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Service fee | 362,000.00 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Repair charge | 1,155,049.00 | 3,445,388.98 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Raw materials and auxiliary materials | 37,503,759.27 | 407,371,792.39 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Testing fee | 5,862,435.57 | 4,953,917.35 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Spare parts | 46,331,491.99 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Testing fee | 14,500,000.00 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Engineering cost | 89,244,708.98 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Repair service | 15,339,461.49 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Raw auxiliary materials and spare parts | 3,068,409.30 | 8,171,621.28 |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Raw materials and auxiliary materials | 239,884,805.78 | 289,543,277.06 |
| Benxi Iron and Steel (Group) Co., Ltd. | Engineering cost | 46,971.56 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Financial service | 1,397,473.55 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Energy and power | 73,134.75 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Heating costs | 328,521.69 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Equipment calibration | 3,321,904.00 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Repair charge | 320,657,100.00 | 292,771,749.19 |
| Benxi Iron and Steel (Group) Co., Ltd. | Raw materials and auxiliary | 181,824.33 |
Notes of Financial Report Page 129
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| materials | |||
| Benxi Iron and Steel (Group) Co., Ltd. | Testing fee | 278,654.36 | |
| Benxi Iron and Steel (Group) Co., Ltd. | Testing fee | 29,476.75 | |
| Benxi High-Tech Drilling Tool Manufacturing Co., Ltd | Spare parts | 33,451.50 | |
| Benxi Xihu Metallurgical Burden Co., Ltd | Raw auxiliary materials | 207,529,292.47 | |
| Benxi New Business Development Co., Ltd | Engineering cost | 24,369.91 | |
| Benxi New Business Development Co., Ltd | Service fee | 574,417.10 | |
| Benxi New Business Development Co., Ltd | Rental fee | 2,920,353.98 | |
| Benxi New Business Development Co., Ltd | Raw auxiliary materials and meal fee | 12,217,302.64 | |
| Dalian Boluole Steel Pipe Co., Ltd | Spare parts | 693,726.32 | |
| Delin Industrial Products Co., Ltd | Engineering cost | 834,704.34 | |
| Delin Industrial Products Co., Ltd | Raw auxiliary materials and spare parts | 74,741,575.57 | 10,765,203.78 |
| Delin Land Port Supply Chain Service Co., Ltd | Storage charges | 246,824.45 | |
| Delin Land Port Supply Chain Service Co., Ltd | Testing fee | 568,487.64 | 911,910.76 |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Engineering cost | 37,188,300.00 | 13,781,211.87 |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Service fee | 350,800.00 | |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Repair charge | 18,645,700.00 | 15,853,592.59 |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Raw auxiliary materials and spare parts | 10,665,788.41 | 18,919,911.07 |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Testing fee | 78,037.61 | 147,379.53 |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | Spare parts | 133,050,407.42 | 135,689,377.05 |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | Repair charge | 4,914,275.00 | 5,984,428.81 |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | Engineering cost | 2,070,000.00 | |
| Liaoning Hengyi Steel Trading Co., Ltd | Spare parts | 410,585,327.20 | |
| Liaoning Lide IOT Co., Ltd | Service fee | 35,512,505.43 |
Notes of Financial Report Page 130
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Liaoning Metallurgical Technician College | Spare parts | 13,181,606.66 | |
| Liaoning Metallurgical Technician College | Training expense | 1,180,127.18 | |
| Liaoning Metallurgical Vocational and Technical College | Training expense | 239,175.22 | |
| Liaoning Metallurgical Vocational and Technical College | Repair service | 14,450,747.87 | |
| Liaoning Yitong Machinery Manufacturing Co., Ltd | Spare parts | 8,183,307.29 | |
| Liaoning Yitong Machinery Manufacturing Co., Ltd | Engineering cost | 18,050.00 | |
| Liaoning Yitong Machinery Manufacturing Co., Ltd | Repair charge | 15,272.60 | |
| Pansteel Group Chengdu Vanadium and Titanium Resources Development Co., Ltd | Raw auxiliary materials | 3,573,383.68 | |
| Panzhihua Iron and Steel Group Engineering Engineering Consulting Co., Ltd | Engineering cost | 3,535,680.02 | |
| Shanxi Products International Energy Co., Ltd | Raw fuels | 43,561,493.05 | |
| Tianjin Ansteel Steel Processing and Distribution Co., Ltd | Processing charge | 1,448,165.59 | |
| Total | 23,646,547,348.47 | 27,075,669,758.18 |
Table of selling products/providing services
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Ansteel (Hangzhou) Automobile Material Technology Co., Ltd. | Steel and Steel products | 2,034,371.33 | |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | Steel and Steel products, processing income and logistic services | 72,575,160.26 | 22,445,530.77 |
| Ansteel Steel Processing and Distribution (Changchun) Co., Ltd. | Steel and Steel products | 24,513,902.53 | 15,877,239.25 |
| Ansteel Steel Processing and Distribution (Zhengzhou) Co., Ltd. | Steel and Steel products | 10,469,864.30 | 6,664,609.41 |
| Ansteel Steel Distribution (Hefei) Co., Ltd. | Steel and Steel products | 9,172,909.61 | 41,250,074.07 |
| Ansteel Steel Distribution (Wuhan) Co., Ltd. | Steel and Steel products | 55,103,512.47 | 18,120,370.66 |
| Ansteel Co., Ltd | Steel and Steel products and information technology services | 1,317,394.48 | 61,069,908.45 |
| Ansteel Chemical Technology Co., Ltd | Chemical and by products | 156,801,931.63 | 142,937,378.90 |
| Ansteel Group Engineering Technology Co., Ltd | Energy and power | 39,419.63 | 81,276.69 |
| Ansteel Group Energy Saving | Energy and power, | 10,778,642.31 |
Notes of Financial Report Page 131
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Technology Service Co., Ltd | detectionized test | ||
| Ansteel Group Mining Co., Ltd | detectionized test | 6,415.09 | |
| Ansteel Construction Group Co., Ltd | Energy and power | 197,984.99 | 119,001.02 |
| Ansteel Green Resources Technology Co., Ltd | Chemical and by products, raw auxiliary materials and spare parts | 133,922,761.19 | 92,587,078.07 |
| Ansteel Energy Technology Co., Ltd | Energy and power | 23,183,781.78 | 124,582.55 |
| Anshan Iron and Steel Heavy Machinery Design and Research Institute Co., Ltd | Energy and power | 4,853.78 | |
| North Hengda Logistics Co., Ltd | Steel and Steel products, detectionized test | 3,931,414,139.80 | 1,575,318,242.55 |
| Benxi Iron and Steel Electric Co., Ltd | Energy and power | 621,817.77 | 875,626.86 |
| Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | Energy and power, detectionized test | 11,039.01 | |
| Benxi Iron and Steel Group Co., Ltd | Energy and power | 208,112.60 | 135,434.69 |
| Benxi North Iron Industry Co., Ltd | Raw auxiliary materials and spare parts | 192,687,665.61 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Energy and power, detectionized test, chemical and by-products, raw auxiliary materials and spare parts | 282,002,512.53 | 59,612,037.69 |
| Benxi Dongfeng Lake Iron and Steel Resources Utilization Co., Ltd | Energy and power, detectionized test, chemical and by-proucts, raw auxiliary materials and spare parts | 27,512,145.34 | |
| Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | Energy and power | 74,559.84 | 110,785.80 |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Energy and power | 2,245.04 | 2,229.09 |
| Benxi Iron and Steel (Group) Electromechanical Installation Engineering Co., Ltd. | Energy and power | 272,525.36 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Steel and Steel products, energy and power, detectionized test, raw auxiliary materials and spare parts | 12,911,322.91 | 18,448,720.59 |
| Benxi Iron and Steel (Group) Construction Advanced Decoration Co., Ltd. | Energy and power | 527.01 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Energy and power, information technology services and detectionized test | 4,299,873.92 | 68,247,810.64 |
Notes of Financial Report Page 132
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd. | Energy and power | 595,139.57 | |
| Benxi Iron and Steel (Group) Mining Liaoyang Jiajiabao Iron Mine Co., Ltd. | Energy and power and detectionized test | 55,244,352.50 | |
| Benxi Iron and Steel (Group) Mining Liaoyang Maerling Pellet Co., Ltd. | Energy and power, detectionized test, raw auxiliary materials and spare parts | 83,205,175.45 | |
| Benxi Iron and Steel (Group) Mining Yanjiagou Limestone Mine Co., Ltd. | Energy and power and detectionized test | 2,052,313.28 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Energy and power, chemical and by-products, logistic transportation, detectionized test, raw auxiliary materials and spare parts | 559,201,878.94 | 956,298,497.17 |
| Benxi Iron and Steel (Group) Road and Bridge Construction Engineering Co., Ltd. | Detectionized test | 4,695.28 | |
| Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd. | Energy and power, detectionized test, raw auxiliary materials and spare parts | 66,722,210.85 | 27,593,537.32 |
| Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd. | Energy and power, detectionized test, raw auxiliary materials, spare parts and lease of fixed assets | 10,477,308.55 | 1,066,969.43 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Energy and power, detectionized test, logistic transportaiton, raw auxiliary materials and spare parts | 11,699,668.02 | 40,159,705.27 |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Energy and power, detectionized test, raw auxiliary materials and spare parts | 943,413.65 | 153,773.87 |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | raw auxiliary materials and spare parts | 94,191,190.98 | 5,533,038.14 |
| Benxi Iron and Steel (Group) Co., Ltd. | Energy and power, detectionized test, raw auxiliary materials and spare parts | 6,966,540.85 | 15,283,844.12 |
| Benxi Xihu Metallurgical Burden Co., Ltd | Energy and power, detectionized test | 51,845.77 | |
| Benxi Weier Surfacing Manufacturing Co., Ltd | Energy and power | 39,029.56 |
Notes of Financial Report Page 133
| Related party | Related party transaction | Amount incurred in the period | Amount incurred in the prior period |
| Benxi New Business Development Co., Ltd | Energy and power and detectionized test | 51,788.65 | 44,469.48 |
| Dalian Boluole Steel Pipe Co., Ltd | Steel and Steel products, logistic transportation | 16,114,335.27 | 3,396.23 |
| Delin Land Port Supply Chain Service Co., Ltd | Steel and Steel products | 816,321,523.81 | 68,534,296.17 |
| Guangzhou Ansteel Steel Pocessing Co., Ltd | Steel and Steel products | 12,510,453.69 | 1,608,574.50 |
| Liaoning Hengtai Heavy Machinery Co., Ltd | Energy and power, detectionized test | 12,194.90 | 8,558.44 |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | detectionized test, raw auxiliary materials and spare parts | 174,388,966.12 | 35,333,688.31 |
| Liaoning Slag Micropowder Co., Ltd | detectionized test | 12,120.75 | |
| Liaoning Yitong Machinery Manufacturing Co., Ltd | Energy and power, detectionized test | 9,874.53 | |
| Pansteel Group Jiangyou Great Wall Special Steel Co., Ltd | Steel and Steel products | 14,852,323.92 | |
| Tianjin Ansteel Steel Processing and Distribution Co., Ltd | Steel and Steel products | 1,415,942.58 | 1,607,469.03 |
| Tianjin Ansteel International North Trade Co., Ltd | Steel and Steel products | 249,512,844.48 | |
| Yantai Ansteel International Trade Co., Ltd | Steel and Steel products | 509,560.40 | |
| Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd | Steel and Steel products | 1,969,914.22 | 9,768,207.73 |
| Total | 7,131,217,998.69 | 3,287,025,962.96 |
2. Lease information of related parties
The Company as the lessor:
| Leasee | Type of leased assets | Lease income recognized in the period | Lease income recognized in the prior period |
| Ansteel Tendering Co., Ltd. | Warehouse and ancillary facilities | 255,045.87 | |
| Benxi Iron and Steel Tendering Co., Ltd. | Warehouse and ancillary facilities | 250,917.43 | |
| Benxi Steel and Iron (Group) Equipment Project Co., Ltd. | Warehouse and ancillary facilities | 217,960.00 |
Notes of Financial Report Page 134
The Company as the lessee:
| Lessor | Type of leased assets | Amount incurred in the period | Amount incurred in the prior period | ||||||||
| Rental expense on short term leases and leases of low value assets with a simplified treatment | Variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liabilities assumed | Increase in right-of-use assets | Rental expense on short term leases and leases of low value assets with a simplified treatment | Variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liabilities assumed | Increase in right-of-use assets | ||
| Benxi Steel & Iron (Group) Co., Ltd. | Land use right 7,669,068.17 square meter, land use right 42,920.00 square meter | 27,716,930.88 | 39,000,108.00 | 55,251,233.39 | 39,600,209.28 | ||||||
| Benxi Steel & Iron (Group) Co., Ltd. | 2300 hot rolling product line, related real estate | 8,042,372.92 | 7,740,688.68 | 16,098,161.06 | 7,982,648.96 | ||||||
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | 1780 hot rolling product line, related real estate | 5,961,443.40 | 12,397,899.09 | 6,147,787.68 | |||||||
Notes of Financial Report Page 135
| Lessor | Type of leased assets | Amount incurred in the period | Amount incurred in the prior period | ||||||||
| Rental expense on short term leases and leases of low value assets with a simplified treatment | Variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liabilities assumed | Increase in right-of-use assets | Rental expense on short term leases and leases of low value assets with a simplified treatment | Variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liabilities assumed | Increase in right-of-use assets | ||
| Bengang Group Co., Ltd. | Land use right 728,282.30 square meter | 4,886,077.60 | 2,449,918.80 | 9,945,423.08 | 2,666,923.92 | ||||||
| North Hengda Logistics Co., Ltd. | Office room property | 120,596.33 | |||||||||
Notes of Financial Report Page 136
3. Remuneration of key management personnel
Unit: RMB10,000
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Remuneration of key management personnel | 427.09 | 335.63 |
(VI) Receivables and payables of related party
1. Receivables
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Ansteel Steel Processing and Distribution (Dalian) Co., Ltd | 27,279,295.84 | 272,792.96 | ||
| Accounts receivable | Ansteel Steel Company Limited. | 30,314,005.82 | 303,140.06 | ||
| Accounts receivable | Ansteel Group Engineering Technology Co., Ltd | 30,509.40 | 305.09 | ||
| Accounts receivable | Ansteel Group Mining Co., Ltd | ||||
| Accounts receivable | Anshan Steel Construction Group Co., Ltd | 4,154.16 | 41.54 | ||
| Accounts receivable | Ansteel Green Resources Technology Co., Ltd | 4,667,550.15 | 46,675.50 | ||
| Accounts receivable | Ansteel Energy Technology Co., Ltd | 283.53 | 2.84 | ||
| Accounts receivable | Bensteel Group International economic trading Co., Ltd | 854,482,902.28 | 29,419,309.19 | 663,311,074.79 | 6,633,110.75 |
| Accounts receivable | Bensteel Group Co., Ltd | 1,246.09 | 12.46 | ||
| Accounts receivable | Benxi North iron industry Co., Ltd | 52,161,339.98 | 539,226.50 | ||
| Accounts receivable | Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 1,129,130.33 | 11,291.30 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd | 269,832.53 | 244,698.20 | ||
| Accounts | Benxi Iron and | 5,954,675.29 | 10,700.06 | ||
Notes of Financial Report Page 137
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
receivable
| receivable | Steel (Group) Construction Co., Ltd | ||||
| Accounts receivable | Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd | 662,998.24 | 11,004.96 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Mining mineral Resources Development Co., Ltd | 88,983.85 | 889.84 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Mining Liaoyang Jiajiapu Iron Ore Co., Ltd | 303,609.00 | 3,036.09 | ||
| Accounts receivable | Benxi Iron and Steel (Group) mining Liaoyang Ma 'er Ling Pellet Co., Ltd | 1,602,237.39 | 16,022.37 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Mining Co., Ltd | 43,742,238.95 | 437,422.39 | 500,000.00 | |
| Accounts receivable | Benxi Iron and Steel (Group) thermal development Co., Ltd | 14,206,508.48 | 122,217.47 | 840,398.67 | 8,403.99 |
| Accounts receivable | Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd | 11,642,752.56 | 256,914.89 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Industrial development Co., Ltd | 20,496,130.86 | 2,727.99 | ||
| Accounts receivable | Benxi Iron and Steel (Group) information automation Co., Ltd | 14,700.00 | 147.00 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Co., Ltd | 19,025,699.80 | 681,571.55 | ||
| Accounts receivable | Benxi Xihu Metallurgical Charge Co., Ltd | 13,216.40 | 132.16 | ||
| Accounts receivable | Benxi Well Surfacing Welding Manufacturing Co., Ltd | 191,720.22 | 16,994.63 | ||
| Accounts receivable | Benxi New Business | 49,497.48 | 55.28 |
Notes of Financial Report Page 138
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Development Co., Ltd | |||||
| Accounts receivable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | 162,404,481.01 | 1,637,032.46 | 144,307.22 | 1,443.07 |
| Accounts receivable | Liaoning Slag Powder Co., Ltd | 12,848.00 | 128.48 | ||
| Accounts receivable | Ansteel Steel Processing and Distribution (Zhengzhou) Co., Ltd | 4,477,814.06 | 44,778.14 | ||
| Accounts receivable | Ansteel Steel Distribution (Hefei) Co., Ltd | 248,775.35 | 2,487.75 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Thermal Development Co., Ltd | 1,984,761.29 | 19,847.61 | ||
| Accounts receivable | Ansteel Steel Distribution (Wuhan) Co., Ltd | 8,113,115.19 | 81,131.15 | ||
| Other receivables | Ansteel Co., Ltd | 95,781.27 | 46,061.89 | 421,142.66 | 421,142.66 |
| Other receivables | Ansteel Group Co., Ltd | 6,706.00 | 67.06 | ||
| Other receivables | Saddle Capital (Tianjin) Financial Leasing Co., Ltd | 8,064,427.98 | 80,644.28 | ||
| Other receivables | North Hengda Logistics Co., Ltd | 1,000.00 | - | 65,563.55 | |
| Other receivables | Bensteel Group International economic trading Co., Ltd | 6,617.52 | 6,617.52 | 6,617.52 | |
| Other receivables | Bensteel Group Co., Ltd | 7,305.59 | 73.06 | ||
| Other receivables | Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 3,478,250.07 | 23,340.75 | ||
| Other receivables | Benxi Iron and Steel (Group) Electromechanical Installation Engineering Co., Ltd | ||||
| Other receivables | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd | 1,061,981.67 | 106,198.17 | ||
| Other | Benxi Iron and | 250,679.61 | 250,679.61 | 13,028,492.10 | 433,910.93 |
Notes of Financial Report Page 139
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
receivables
| receivables | Steel (Group) Construction Co., Ltd | ||||
| Other receivables | Benxi Iron and Steel (Group) Mining Co., Ltd | 1,193,997.66 | 11,939.98 | ||
| Other receivables | Benxi Iron and Steel (Group) Thermal Development Co., Ltd | ||||
| Other receivables | Benxi Iron and Steel (Group) equipment Engineering Co., Ltd | 4,760,949.45 | 47,609.49 | ||
| Other receivables | Benxi Iron and Steel (Group) Industrial development Co., Ltd | 431,639.87 | 43,163.99 | ||
| Other receivables | Benxi Iron and Steel (Group) Co., Ltd | 7,413,860.80 | 4,561,714.36 | ||
| Other receivables | Benxi New Business Development Co., Ltd | 2,280,942.73 | 2,280,942.73 | ||
| Other receivables | Liaoning Hengtai heavy machine Co., Ltd | 3,545,583.40 | 35,455.83 | ||
| Other receivables | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd | 1,097,290.88 | 991,268.28 | ||
| Other receivables | Ansteel Heavy Machinery Design and Research Institute Co., Ltd | 5,176,720.00 | 51,767.20 | ||
| Other receivables | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | 144,307.22 | 1,443.07 | ||
| Other receivables | Bengang Electric Co., Ltd | 36,455.28 | 364.55 | ||
| Other receivables | Ansteel Group Engineering Technology Co., Ltd | 73,908.67 | 739.09 | ||
| Other non-current assets | Ansteel Co. Ltd | 7,305.45 | |||
| Other non-current assets | Ansteel Group Engineering Technology Co., Ltd | 14,517,451.17 | |||
| Other non- | Ansteel Heavy | 3,506,580.00 |
Notes of Financial Report Page 140
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
currentassets
| current assets | Machinery Design and Research Institute Co., Ltd | ||||
| Other non-current assets | Bensteel Gaoyuan Industrial Development Co., Ltd | 542,400.00 | |||
| Other non-current assets | Benxi Iron and Steel (Group) Machinery manufacturing Co., Ltd | 4,176.00 | |||
| Other non-current assets | Benxi Iron and Steel (Group) construction Co., Ltd | 22,094,076.34 | |||
| Other non-current assets | Benxi Iron and Steel (Group) Mine construction Engineering Co., Ltd | 3,155,429.08 | |||
| Other non-current assets | Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd | 22,915,336.04 | |||
| Other non-current assets | Benxi Iron and Steel (Group) Industrial Development Co., Ltd | 833,139.38 | |||
| Other non-current assets | Benxi Iron and Steel (Group) information automation Co., Ltd | 16,042,420.95 | |||
| Other non-current assets | Liaoning Hengtai heavy machine Co., Ltd | 263,473.40 | |||
| Other non-current assets | Anshan Steel Construction Group Co., Ltd | 132,687.84 | |||
| Prepayments | Ansteel Steel Company Limited. | 882,482.46 | |||
| Prepayments | Ansteel Group Engineering Technology Co., Ltd | 6,774,166.05 | |||
| Prepayments | Ansteel Group International Economic trading Co., Ltd | 0.01 | 0.01 | ||
| Prepayments | North Hengda Logistics Co., Ltd | 874,210.39 | |||
| Prepayments | Bensteel Group International economic trading Co., Ltd | 10,176,164.50 | 398,341,075.40 | ||
| Prepayments | Benxi Beiying | 1,119,904.00 |
Notes of Financial Report Page 141
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Iron and SteelGroup Import andexport Co., Ltd
| Iron and Steel Group Import and export Co., Ltd | |||||
| Prepayments | Benxi Iron and Steel (Group) Machinery manufacturing Co., Ltd | 49,429,296.57 | |||
| Prepayments | Benxi Iron and Steel (Group) equipment Engineering Co., Ltd | 3,162,173.15 | |||
| Prepayments | Benxi Iron and Steel (Group) information automation Co., Ltd | 1,075,365.83 | |||
| Prepayments | Benxi New Business Development Co., Ltd | 8,122,937.94 | 2,324,912.22 |
2. Payables
| Item name | Related party | Closing balance | Opening balance |
| Accounts payable | Ansteel Electric Co., Ltd | 170,418.08 | |
| Accounts payable | Ansteel Scrap Resources (Anshan) Co., Ltd . | 66,774,511.99 | 52,203,765.63 |
| Accounts payable | Ansteel Steel Processing and Distribution (Changchun) Co., Ltd . | 208,377.96 | |
| Accounts payable | Ansteel Steel Rope Co., Ltd | 263,044.11 | 894,924.67 |
| Accounts payable | Ansteel Co., Ltd | 145,476.64 | |
| Accounts payable | Ansteel Group Engineering Technology Co., Ltd | 170,708.00 | |
| Accounts payable | Ansteel Group International Economic Trade Co., Ltd . | 38,512,770.27 | |
| Accounts payable | Ansteel Group Mining Gongchangling Co., Ltd | 6,637,769.40 | |
| Accounts payable | Ansteel energy technology Co., Ltd | 132,150.38 | |
| Accounts payable | Ansteel Industrial Group (Anshan) Equipment Operation and Maintenance Co., Ltd . | 3,063,464.44 | |
| Accounts payable | Anshan Iron and Steel | 2,198,235.32 | 2,265,928.00 |
Notes of Financial Report Page 142
| Item name | Related party | Closing balance | Opening balance |
| Industry Group Metallurgical Machinery Co., Ltd | |||
| Accounts payable | Ansteel heavy machinery Co., Ltd | 864,614.53 | 2,873,047.05 |
| Accounts payable | Anshan iron and steel metallurgy furnace material technology Co., Ltd | 5,954,131.61 | |
| Accounts payable | North Hengda logistics Co., Ltd | 4,962,246.27 | |
| Accounts payable | Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd | 42,982.27 | |
| Accounts payable | Benxi Iron and Steel Electric Co., Ltd | 2,903,896.45 | 1,893,516.67 |
| Accounts payable | Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | 1,125,249.71 | |
| Accounts payable | Benxi Iron and Steel Group International Economic Trade Co., Ltd . | 47,218,526.77 | 51,306,166.70 |
| Accounts payable | Benxi Iron and Steel Group Co., Ltd | 4,688,315.28 | 50,000.00 |
| Accounts payable | Benxi Aike hydraulic seal Co., Ltd | 1,646,773.75 | |
| Accounts payable | Benxi North Iron Industry Co., Ltd | 4,486,925.32 | |
| Accounts payable | Benxi Beiying Iron and Steel (Group) Co., Ltd . | 152,926,015.01 | 131,248,293.37 |
| Accounts payable | Benxi Beiying Iron and Steel Group Import and Export Co., Ltd | 225,141.59 | |
| Accounts payable | Benxi Dongfeng Lake Iron and Steel Resources Utilization Co., Ltd | 11,255,094.10 | |
| Accounts payable | Benxi Iron and Steel (Group) First architectural engineering Co., Ltd . | 108.90 | |
| Accounts payable | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd . | 130,815.00 | 372,520.06 |
| Accounts payable | Benxi Iron and Steel (Group) Guomao Tengda Co., Ltd . | 42,667,716.38 | |
| Accounts payable | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd . | 2,228,869.19 | 2,874,934.49 |
| Accounts payable | Benxi Iron and Steel (Group) Construction Advanced Decoration Co., Ltd . | 264,705.62 | |
| Accounts payable | Benxi Iron and Steel (Group) Construction Co., Ltd . | 35,954,925.98 | 240,928,491.19 |
Notes of Financial Report Page 143
| Item name | Related party | Closing balance | Opening balance |
| Accounts payable | Benxi Iron and Steel (Group) Mine Construction Engineering Co., Ltd . | 7,069,202.17 | |
| Accounts payable | Benxi Iron and Steel (Group) Mining Liaoyang Maerling Pellet Co., Ltd . | 55,297,876.79 | |
| Accounts payable | Benxi Iron and Steel (Group) Mining Co., Ltd . | 71,864,074.04 | 45,768,605.27 |
| Accounts payable | Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd . | 281,092.78 | 413,463.33 |
| Accounts payable | Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd . | 47,480,851.11 | 87,111,368.27 |
| Accounts payable | Benxi Iron and Steel (Group) Industrial Development Co., Ltd . | 99,026,848.37 | 75,043,780.30 |
| Accounts payable | Benxi Iron and Steel (Group) Information Automation Co., Ltd . | 18,762,233.66 | 88,684,293.06 |
| Accounts payable | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd . | 250,593.53 | 47,468,411.05 |
| Accounts payable | Benxi Iron and Steel (Group) Co., Ltd . | 32,174,626.26 | 39,872,070.78 |
| Accounts payable | Benxi Xihu metallurgical burden Co., Ltd | 25,620,902.35 | |
| Accounts payable | Benxi Weier surfacing manufacturing Co., Ltd | 234,112.13 | |
| Accounts payable | Benxi new cause development Co., Ltd | 3,357,637.09 | 18,937.09 |
| Accounts payable | Delin industrial products Co., Ltd | 9,685,683.68 | 9,556,739.82 |
| Accounts payable | Delin dry port supply chain service Co., Ltd | 58,351.28 | |
| Accounts payable | Liaoning hengtai heavy machinery Co., Ltd | 18,098,769.50 | |
| Accounts payable | Liaoning hengtong metallurgical equipment manufacturing Co., Ltd | 1,409,071.37 | 30,626,084.39 |
| Accounts payable | Liaoning Lide IOT Co., Ltd | 4,170,770.16 | |
| Accounts payable | Liaoning Metallurgical Vocational and Technical College | 48,048.00 | 513,779.95 |
| Accounts payable | Liaoning yitong machinery manufacturing Co., Ltd | 2,127,118.28 |
Notes of Financial Report Page 144
| Item name | Related party | Closing balance | Opening balance |
| Accounts payable | Shanxi products international energy Co., Ltd | 91,859.97 | |
| Accounts payable | Tianjin Bengang Plate Processing and Distribution Co., Ltd | 7.25 | |
| Contract liabilities | Ansteel (Hangzhou) Automobile Material Technology Co., Ltd . | 299,035.59 | |
| Contract liabilities | Ansteel Steel Processing and Distribution (Changchun) Co., Ltd . | 5,370,495.95 | 695,012.13 |
| Contract liabilities | Ansteel Steel Distribution (Hefei) Co., Ltd . | 3,050,349.68 | 4,731,954.99 |
| Contract liabilities | Ansteel steel Co., Ltd | 130,744.73 | |
| Contract liabilities | Ansteel chemical technology Co., Ltd | 6,485,543.83 | 3,631,726.76 |
| Contract liabilities | Ansteel green resources technology Co., Ltd | 1,484,311.95 | |
| Contract liabilities | Ansteel energy technology Co., Ltd | 283.55 | 12,048.13 |
| Contract liabilities | Anshan Iron and Steel Heavy Machinery Design and Research Institute Co., Ltd | 23,079.79 | |
| Contract liabilities | North Hengda logistics Co., Ltd | 54,423,037.31 | 53,109,140.37 |
| Contract liabilities | Benxi Beiying Iron and Steel (Group) Co., Ltd . | 1,579,294.00 | |
| Contract liabilities | Benxi Dongfeng Lake Iron and Steel Resources Utilization Co., Ltd | 2,470,669.23 | |
| Contract liabilities | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd . | 177,026.55 | |
| Contract liabilities | Benxi Iron and Steel (Group) Construction Co., Ltd . | 5,898.81 | |
| Contract liabilities | Benxi Iron and Steel (Group) Mining Co., Ltd . | 4,862,723.19 | |
| Contract liabilities | Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd . | 4,487,918.73 | |
| Contract liabilities | Benxi Iron and Steel (Group) Industrial Development Co., Ltd . | 1,587,538.32 | 535,124.96 |
| Contract liabilities | Benxi Iron and Steel (Group) Information Automation Co., Ltd . | ||
| Contract liabilities | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd . | 0.02 | 1,044,047.73 |
| Contract liabilities | Benxi Xihu | 20,000.00 |
Notes of Financial Report Page 145
| Item name | Related party | Closing balance | Opening balance |
| metallurgical burden Co., Ltd | |||
| Contract liabilities | Dalian Boluole Steel Pipe Co., Ltd | 3,221,292.56 | 1,776,832.88 |
| Contract liabilities | Delin Dry Port Supply Chain Service Co., Ltd | 188,703,584.97 | 14,902,176.11 |
| Contract liabilities | Guangzhou Ansteel Steel Processing Co., Ltd | 1,067.17 | 644,213.74 |
| Contract liabilities | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | 3,588,934.12 | |
| Contract liabilities | Liaoning Metallurgical Vocational and Technical College | 0.01 | |
| Contract liabilities | Panzhihua Iron and Steel Group Jiangyou Great Wall Special Steel Co., Ltd | 1,779,438.17 | |
| Contract liabilities | Tianjin Ansteel steel processing and distribution Co., Ltd | 374,664.00 | |
| Contract liabilities | Tianjin Ansteel International North Trading Co., Ltd | 32,000,000.00 | |
| Contract liabilities | Changchun FAW Ansteel Steel Processing and Distribution Co., Ltd | 589,358.32 | 69,561.39 |
| Contract liabilities | Ansteel Steel Processing and Distribution (Dalian) Co., Ltd . | 2,468,274.66 | |
| Contract liabilities | CIMC Tongchuang (Zhejiang) Steel Chain Co., Ltd . | 80,484,269.96 | |
| Contract liabilities | Wuhan yuanhong trading Co., Ltd | 4,736,783.67 | |
| Other payables | Ansteel (Liaoning) Material Technology Co., Ltd . | 390,000.00 | |
| Other payables | Ansteel Scrap Resources (Anshan) Co., Ltd . | 500,000.00 | 52,203,765.63 |
| Other payables | Ansteel Group Engineering Technology Co., Ltd | 183,423,813.04 | 73,908.67 |
| Other payables | Ansteel group Co., Ltd | 1,635.00 | |
| Other payables | Ansteel Group Automation Co., Ltd | 1,283,900.00 | 3,565,330.00 |
| Other payables | Ansteel construction group Co., Ltd | 6,676,229.55 | 132,687.84 |
| Other payables | Ansteel metal structure Co., Ltd | 10,000.00 | 10,000.00 |
| Other payables | Anshan Iron and Steel Heavy Machinery Design and Research Institute Co., Ltd | 50,000.00 | 5,176,720.00 |
Notes of Financial Report Page 146
| Item name | Related party | Closing balance | Opening balance |
| Other payables | Ansteel heavy machinery Co., Ltd | 409,930.10 | 189,621.75 |
| Other payables | Anshan Ansteel international travel agency Co., Ltd | 245,460.00 | |
| Other payables | Anshan iron and steel metallurgy furnace material technology Co., Ltd | 50,000.00 | |
| Other payables | North Hengda logistics Co., Ltd | 5,522,865.33 | 65,563.55 |
| Other payables | Benxi Iron and Steel Electric Co., Ltd | 5,768,826.24 | 36,455.28 |
| Other payables | Benxi Iron and Steel Gaoyuan Industrial Development Co., Ltd | 3,058,404.54 | |
| Other payables | Benxi Iron and Steel Group International Economic Trade Co., Ltd . | 44,960,728.47 | 663,311,074.79 |
| Other payables | Benxi Iron and Steel Group Co., Ltd | 903,375.93 | |
| Other payables | Benxi aike hydraulic seal Co., Ltd | 142,790.82 | |
| Other payables | Benxi Beiying Iron and Steel (Group) Co., Ltd . | 40,103,767.22 | 3,100,000.00 |
| Other payables | Benxi Steel (Group) and Beijing Steel Co., Ltd . | 210,000.00 | |
| Other payables | Benxi Dongfeng Lake Iron and Steel Resources Utilization Co., Ltd | 950,878.70 | |
| Other payables | Benxi Iron and Steel (Group) No.3 architectural engineering Co., Ltd . | 381,280.45 | |
| Other payables | Benxi Iron and Steel (Group) First architectural engineering Co., Ltd . | 1,999,087.29 | |
| Other payables | Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd . | 49,429,296.57 | |
| Other payables | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd . | 75,000.00 | |
| Other payables | Benxi Iron and Steel (Group) Inspection and Testing Co., Ltd . | 265,274.55 | |
| Other payables | Benxi Iron and Steel (Group) Construction Advanced Decoration Co., Ltd . | 186,939,097.90 | 13,028,492.10 |
| Other payables | Benxi Iron and Steel (Group) Construction Co., Ltd . | 36,371,606.19 | |
| Other payables | Benxi Iron and Steel (Group) Mine Construction | 318.66 |
Notes of Financial Report Page 147
| Item name | Related party | Closing balance | Opening balance |
| Engineering Co., Ltd . | |||
| Other payables | Benxi Iron and Steel (Group) Road and Bridge Construction Engineering Co., Ltd . | 2,070,400.72 | 840,398.67 |
| Other payables | Benxi Iron and Steel (Group) Thermal Power Development Co., Ltd . | 293,195,637.86 | 4,760,949.45 |
| Other payables | Benxi Iron and Steel (Group) Equipment Engineering Co., Ltd . | 4,078,753.90 | 10,191,802.55 |
| Other payables | Benxi Iron and Steel (Group) Industrial Development Co., Ltd . | 54,062,361.00 | 1,150,225.42 |
| Other payables | Benxi Iron and Steel (Group) Information Automation Co., Ltd . | 13,372,608.70 | |
| Other payables | Benxi Iron and Steel (Group) Co., Ltd . | 200,000.00 | |
| Other payables | Benxi Xihu metallurgical burden Co., Ltd | 15,131,176.03 | 2,324,912.22 |
| Other payables | Benxi New Cause Development Co., Ltd | 20,000.00 | 450,952.17 |
| Other payables | Dalian Boluole steel pipe Co., Ltd | 943,215.92 | 9,556,739.82 |
| Other payables | Delin industrial products Co., Ltd | 6,941,075.21 | 13,619,388.23 |
| Other payables | Liaoning hengtai heavy machinery Co., Ltd | 20,000.00 | 144,307.22 |
| Other payables | Liaoning hengtong metallurgical equipment manufacturing Co., Ltd | 2,229,204.00 | |
| Other payables | Liaoning Metallurgical Technician College | 707,260.00 | 528,854.07 |
| Other payables | Liaoning Metallurgical Vocational and Technical College | 30,396.50 | |
| Other payables | Liaoning Yitong Machinery Manufacturing Co., Ltd | 1,001,991.58 | |
| Other payables | Pansteel Group Engineering Engineering Consulting Co., Ltd | 523,642.00 | |
| Other payables | Ansteel Electric Co., Ltd | 345,269.90 | |
| Other payables | Liaoning Jinsuoju Material Technology Co., Ltd | 543,412.47 |
Notes of Financial Report Page 148
(VII) Centralized management of funds
1. The main contents of the centralized management of funds that the Company
participates in and implements are as follows:
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd.(hereinafter referred to as Ansteel Finance Company), the Financial ServicesAgreement (2022-2024) was signed to stipulate the relevant financial businessterms and the upper limit of the relevant transaction amount between theCompany and its subsidiaries and Ansteel Finance Company in 2022, 2023 and2024. According to the agreement, in the next 12 months, the maximum dailydeposit balance of the Company and its holding subsidiaries in Ansteel FinanceCompany is 4.5 billion yuan, the maximum credit limit for loans, bills and otherforms is 5 billion yuan, and the maximum entrusted loan provided by AnsteelFinance Company to the Company is RMB2 billion .
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd.(hereinafter referred to as Ansteel Finance Company), the Financial ServicesAgreement (2022-2024) was signed to agree on the relevant financial businessterms and amount cap of related transactions between the Company and itssubsidiaries and Ansteel Finance Company in 2022, 2023, and 2024. The agreementstipulates that the maximum daily deposit balance of the Company and its holdingsubsidiaries in Ansteel Finance Company in the next twelve months is RMB 4.5billion, the maximum credit limit of loans, bills and other forms is RMB 5 billion, andAnsteel Finance Company provides entrusted loans to the Company. The maximumlimit is RMB 2 billion.
2. Funds of the Company centralized to the Group
Funds that are not centralized to Group parent company and directly deposited intofinancial company.
| Item name | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | |
| Cash and cash equivalents (Deposited | 391,377,566.87 | 1,074,918,531.75 | ||
Notes of Financial Report Page 149
| Item name | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | |
into Ansteel GroupFinancial Co., Ltd. )
| into Ansteel Group Financial Co., Ltd. ) | ||||
| Total | 391,377,566.87 | 1,074,918,531.75 | ||
| Including: Funds with restricted withdrawal due to fund centralized management |
XI. Commitments and Contingencies(I) Significant commitments
1. Significant commitments at the balance sheet date
(1) According to the Land Use Right Leasing Contract and subsequentsupplementary agreements signed by the Company and Benxi Steel (Group) on April7th, 1997, and December 30th, 2005, the Company leased land from Benxi Steel(Group). The monthly rent is RMB 0.594 per square meter, the leased land area is7,669,068.17 square meters, and the annual rent is RMB 54,665,100.
(2) On August 14
th, 2019, the Company signed the House Lease Agreement withBenxi Steel (Group) and Beiying Steel respectively, leasing the houses and auxiliaryfacilities occupied by 2300 and 1780 hot rolling mill production lines, and the leaseterm ends on December 31st, 2038. The rental fee is based on the depreciation ofthe original rent value and the national additional tax, plus reasonable profitnegotiation. The estimated annual rent is not more than RMB 20 million and RMB18 million respectively. The rental fee is settled and paid monthly. This related partytransaction has been reviewed and approved at the fourth meeting of the eighthBoard of Directors of the Company.
(3) On July 15th, 2019, the Company signed Land Lease Agreement with BengangGroup and Benxi Steel (Group) respectively, and leased and used a total of 8 piecesof land of the two companies. The lease areas are 42,920.00 square meters and728,282.30 square meters respectively, with a lease term of 20 years, and a rentalprice of RMB 1.138 per square meter per month. After the agreement comes intoeffect, considering the national law and policy adjustments every five years, bothparties should determine whether the rent needs to be adjusted according to thepricing basis stipulated in Article 2 of this agreement. This related party transaction
Notes of Financial Report Page 150
has been reviewed and approved at the third meeting of the eighth Board ofDirectors of the Company.
(4) As at December 31st, 2023, the amount of irrevocable letter of credit that wasnot fulfilled was RMB 1.3 billion.
(II) Contingencies
As at December 31st, 2023, it also should be stated that the Company has nosignificant contingencies that are required to be disclosed
XII. Events after the balance sheet date
On April 20
th
, 2024, the Company published Bengang Steel Plates Co., Ltd. ProcessAnnouncement on Great Assets Replacement and Related Transactions. TheCompany intends to conduct assets replacement with the controlling shareholder—Benxi Iron&Steel (Group) Co., Ltd. (hereinafter referred to as Benxi Iron&Steel). Theassets intended to be purchased is 100% stock rights of Benxi Iron&Steel (Group)Mining Industry Co., Ltd; The assets intended to be sold are all assets and liabilitiesother than retained assets and liabilities of listed company. The difference betweenassets intended to be purchased and assets intended to be sold shall becompensated in cash by one party to the other. Currently, elements such as thescope of specific underlying assets and trading prices still need further argumentand communication. Essential decisions and approval procedures shall beconducted according to relevant laws, regulations and articles of associations.Significant uncertainties of relevant events still remain.
XIII. Other significant events(I) Significant prior error correction
None.(II) Significant debt restructuring
Notes of Financial Report Page 151
| Item | Way of debt restructuring | Book value of the original restructuring debt | Confirmed gain/loss from debt restructuring | Capital stock increase caused by debt turning into capatal | Investment increase caused by debt turning into stock | Ratio of the investment in total share of the debtor (%) | Contingent payable/Contingent receivable | Confirmation measure and source for fair value during debt restructuring |
| Accounts payable | Settlement of debts by cash the value is less than the book value of the debts | 15,944,424.62 | 5,179,346.89 | |||||
| Total | 15,944,424.62 | 5,179,346.89 |
Notes of Financial Report Page 152
(III) Segment information
Since the Company's main product is steel, other products have a small proportion of sales,the main production base is in Liaoning, and the disclosure of the segment report is notapplicable.
XIV. Notes to the financial statements of parent company(I) Accounts receivable
1. Accounts receivable disclosed by aging
| Aging | Closing balance | Year end balance for last year |
| Within 1 year | 719,865,861.39 | 924,570,849.45 |
| 1-2 years | 561,695,759.42 | 14,717,227.92 |
| 2-3 years | 647,190.77 | 1,087,625.52 |
| 3-4 years | 845,982.97 | 1,579,610.23 |
| 4-5 years | 503,056.19 | 16,776,684.51 |
| Over 5 years | 98,702,147.96 | 135,116,794.18 |
| Subtotal | 1,382,259,998.70 | 1,093,848,791.81 |
| Less: Provision for bad debts | 138,933,196.14 | 162,812,995.23 |
| Total | 1243,326,802.56 | 931,035,796.58 |
Notes of Financial Report Page 153
2. Accounts receivable disclosed by bad debt provision
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion （%） | Amount | Proportion accrued （%） | Account | Proportion (%) | Account | Proportion accrued （%） | |||
| Provision for bad debts made on an individual basis | 48,196,244.68 | 3.49 | 48,196,244.68 | 100.00 | 48,196,244.68 | 4.41 | 48,196,244.68 | 100.00 | ||
| Provision for bad debts by the portfolio of credit risk characteristics: | 1,334,063,754.02 | 96.51 | 90,736,951.46 | 6.80 | 1,243,326,802.56 | 1,045,652,547.13 | 95.59 | 114,616,750.55 | 10.96 | 931,035,796.58 |
| Including: | ||||||||||
| Aging portfolio | 1,021,248,997.51 | 73.88 | 90,736,951.46 | 8.88 | 930,512,046.05 | 886,147,539.07 | 81.01 | 114,616,750.55 | 771,530,788.52 | |
| Associates portfolio | 312,814,756.51 | 22.63 | 312,814,756.51 | 159,505,008.06 | 159,505,008.06 | |||||
| Total | 1,382,259,998.70 | 100.00 | 138,933,196.14 | 1,243,326,802.56 | 1,093,848,791.81 | 100.00 | 162,812,995.23 | 931,035,796.58 | ||
Notes of Financial Report Page 154
Significant accounts receivable whose provision for bad debts was made on anindividual basis：
| Name | Closing balance | Opening balance | ||||
| Book balance | Provision for bad debt | Accrual basis (%) | Accrual basis | Book balance | Provision for bad debt | |
| Benxi Nanfen Xinhe Metallurgical Furnace Material Co., Ltd. | 48,196,244.68 | 48,196,244.68 | 100.00 | 48,196,244.68 | 48,196,244.68 | |
| Total | 48,196,244.68 | 48,196,244.68 | 48,196,244.68 | 48,196,244.68 | ||
Provision for bad debt by portfolio of credit risk characteristics:
Portfolio accrual item: Aging portfolio
| Item | Closing balance | ||
| Accounts receivable | Provition for bad debt | Accrual ratio（%） | |
| Within 1 year (inclusive) | 645,801,283.97 | 6,458,012.84 | 1.00 |
| 1 to 2 years (inclusive) | 322,945,580.33 | 32,294,558.03 | 10.00 |
| 2 to 3 years (inclusive) | 647,190.77 | 129,438.15 | 20.00 |
| 3 to 4 years (inclusive) | 845,982.97 | 845,982.97 | 100.00 |
| 4 to 5 years (inclusive) | 503,056.19 | 503,056.19 | 100.00 |
| Over 5 years | 50,505,903.28 | 50,505,903.28 | 100.00 |
| Total | 1,021,248,997.51 | 90,736,951.46 | |
3. Provision for bad debts accrued, recovered or reversed in the current period
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Accrual | Recovery or reversal | Write-off | Other changes | |||
| Provision for bad debts on accounts receivable | 162,812,995.23 | -22,432,038.01 | 1,447,761.08 | 138,933,196.14 | ||
| Total | 162,812,995.23 | -22,432,038.01 | 1,447,761.08 | 138,933,196.14 | ||
Of which the amount of provision for bad debts recovered or reversed in the currentperiod is material: None.
Notes of Financial Report Page 155
4. Actual write-off of accounts receivable in the current period
| Item | Write-off amount |
| Actual write-off of accounts receivable | 1,447,761.08 |
Of which significant write-offs of accounts receivable:
| Name of the company | Nature of payment receivable | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Jining Forging Center | Payment for good | 461,229.33 | Cancelled | Legal advice and working conference minute | No |
| Xuzhou Jinshanqiao Development Zone Yong'an Metal Material Corporation | Payment for goods | 200,265.48 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | 否 |
| Shanghai Bengang Industry and Trade Company | Payment for goods | 193,625.29 | Cancelled | Legal advice and working conference minute | No |
| ORDINS Northeast Company Fushun Technology and Trade Center | Payment for goods | 155,616.74 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | No |
| Tonghua Machinery Factory for Grain and Oils | Payment for goods | 141,139.39 | Cancelled | iegal advice and working conference minute | No |
| Bengang Yantai Marketing Co., Ltd | Payment for goods | 138,378.96 | Cancelled | iegal advice and working conference minute | No |
| Shandong Zhucheng Industrial | Payment for goods | 87,085.43 | A suspended company that is unreachable | iegal advice and working conference | No |
Notes of Financial Report Page 156
| Name of the company | Nature of payment receivable | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Supply and Marketing Company | for a long time without business transactions and included in the management of account write-offs | minute | |||
| Tieling Jinlong Sale Agency for Petroleum Pipeline Mechanical Products | Payment for goods | 24,608.99 | Cancelled | iegal advice and working conference minute | No |
| Shenzhen Zhongtianda Product Industry and Trade Co., Ltd. | Payment for goods | 20,441.96 | Cancelled | iegal advice and working conference minute | No |
| Benxi Steel Material Sale Agency | Payment for goods | 7,167.87 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and working conference minute | No |
| Shunde Xiqiangsheng Mould Co., Ltd. | Payment for goods | 6,997.93 | Cancelled | Legal advice and working conference minute | No |
| Heilongjiang Hua'an Industry Group Corporation | Payment for goods | 5,637.27 | Cancelled | Legal advice and working conference minute | No |
| Guagdong Zhaoqing Construction Materials and Minerial Product Company for Township Enterprises | Payment for goods | 5,566.44 | Cancelled | Legal advice and working conference minute | No |
| Total | 1,447,761.08 |
5. Accounts receivable of the top five closing balances collected by arrears and
contract assets
Notes of Financial Report Page 157
| Name of the company | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Percentage of total closing balance of accounts receivale and contract assets (%) | Closing balance of bad debt provision for accounts receivable and provision for impairment for contract assets |
| Bengang Group International Economy and Trade Co., Ltd | 483,565,406.67 | 483,565,406.67 | 34.98 | 29,419,309.19 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd | 162,404,481.01 | 162,404,481.01 | 11.75 | 1,637,032.46 | |
| Liaoning Benxi North Coal Chemical Co., Ltd. | 79,511,150.05 | 79,511,150.05 | 5.75 | 795,111.50 | |
| Benxi North Iron Industy Co., Ltd. | 52,161,339.98 | 52,161,339.98 | 3.77 | 519,656.39 | |
| Bengang Refractory Materials Co., Ltd. | 48,494,971.80 | 48,494,971.80 | 3.51 | 2,928,250.41 | |
| Total | 826,137,349.51 | 826,137,349.51 | 59.77 | 35,299,359.95 |
(II) Other receivables
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 260,000,000.00 | |
| Other receivables | 344,535,173.18 | 150,724,545.56 |
| Total | 604,535,173.18 | 150,724,545.56 |
1. Dividends receivable
(1) Details of dividends receivable
| Item (Or investees) | Closing balance | Opening balance |
| Changchun Bengang Steel Sales Co., Ltd. | 43,000,000.00 | |
| Shenyang Bengang Metallurgical Technology Co., Ltd. | 30,000,000.00 |
Notes of Financial Report Page 158
| Item (Or investees) | Closing balance | Opening balance |
| Tianjin Bengang Steel Trading Co., Ltd. | 47,000,000.00 | |
| Shanghai Bengang Metallurgical Technology Co., Ltd. | 15,000,000.00 | |
| Yantai Bengang Steel Sales Co., Ltd. | 25,000,000.00 | |
| Guangzhou Bengang Steel Trading Co., Ltd. | 100,000,000.00 | |
| Subtotal | 260,000,000.00 | |
| Less: Provision for bad debts | ||
| Total | 260,000,000.00 |
(2) Aging of significant dividends receivable over one year
None.
2. Other receivables
(1) Disclosure by aging
| Aging | Closing balance | Opening balance |
| Within 1 year | 284,052,848.38 | 89,160,291.73 |
| 1 to 2 years | 35,230,832.41 | 58,187,051.40 |
| 2 to 3 years | 33,345,904.56 | 3,519,908.21 |
| 3 to 4 years | 3,125,628.24 | 573,902.12 |
| 4 to 5 years | 229,028.24 | 10,488,624.67 |
| Over 5 years | 60,748,068.66 | 52,197,648.78 |
| Subtotal | 416,732,310.49 | 214,127,426.91 |
| Less: Provision for bad debts | 72,197,137.31 | 63,402,881.35 |
| Total | 344,535,173.18 | 150,724,545.56 |
Notes of Financial Report Page 159
(2) Classification and disclosure of other receivables by nature of payment
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage（%） | Amount | Accrual ratio（%） | Amount | Percentage（%） | Amount | Accrual ratio（%） | |||
| Bad debt provision is made on an individual basis | 15,752,285.66 | 3.78 | 15,752,285.66 | 100.00 | 15,031,598.34 | 7.02 | 15,031,598.34 | 100.00 | ||
| Bad debt provision is made on a portfolio basis | 400,980,024.83 | 96.22 | 56,444,851.65 | 14.08 | 344,535,173.18 | 199,095,828.57 | 92.98 | 48,371,283.01 | 24.30 | 150,724,545.56 |
| Including: | ||||||||||
| Aging portfolio | 373,617,582.97 | 89.65 | 56,444,851.65 | 15.11 | 317,172,731.32 | 136,339,409.35 | 63.67 | 48,371,283.01 | 35.48 | 87,968,126.34 |
| Other portfolio | 27,362,441.86 | 6.57 | 27,362,441.86 | 62,756,419.22 | 29.31 | 62,756,419.22 | ||||
| Total | 416,732,310.49 | 100.00 | 72,197,137.31 | 344,535,173.18 | 214,127,426.91 | 100.00 | 63,402,881.35 | 150,724,545.56 | ||
Notes of Financial Report Page 160
Significant other receivables whose provision for bad debts was made on anindividual basis：
| Name | Closing balance | |||
| Book value | Provision for bad debt | Accrual ratio（%） | Accrual basis | |
| Benxi Iron and Steel (Group) No. 3 Architectural Engineering Co., Ltd. | 12,504,978.59 | 12,504,978.59 | 100.00 | Off production |
| Benxi Iron and Steel (Group) No. 1 Architectural Engineering Co., Ltd. | 3,247,307.07 | 3,247,307.07 | 100.00 | Bankruptcy reorganization |
| Total | 15,752,285.66 | 15,752,285.66 | ||
Provision for bad debt by portfolio of credit risk characteristics:
Portfolio accrual item: Aging portfolio
| Item | Closing balance | ||
| Other receivables | Bad debt privision | Accrual ratio（%） | |
| Within 1 year (inclusive) | 283,957,535.20 | 2,839,575.35 | 1.00 |
| 1 to 2 years (inclusive) | 35,230,832.41 | 3,523,083.24 | 10.00 |
| 2 to 3 years (inclusive) | 5,433,777.88 | 1,086,755.58 | 20.00 |
| 3 to 4 years (inclusive) | 3,125,628.24 | 3,125,628.24 | 100.00 |
| 4 to 5 years (inclusive) | 229,028.24 | 229,028.24 | 100.00 |
| Over 5 years | 45,640,781.00 | 45,640,781.00 | 100.00 |
| Total | 373,617,582.97 | 56,444,851.65 | |
(3) Provision for bad debts
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses for the next 12 months | Expected credit losses over the entire life (Not credit-impaired) | Expected credit losses over the entire life (Credit-impaired) | ||
| Opening balance | 801,060.44 | 1,353,672.38 | 61,248,148.53 | 63,402,881.35 |
| Opening balance in the current period | -3,523,083.24 | 397,455.00 | 3,125,628.24 | |
| --Transfer to stage 2 | -3,523,083.24 | 3,523,083.24 | ||
| --Transfer to stage 3 | -3,125,628.24 | 3,125,628.24 | ||
| --Tranfer back to stage 2 | ||||
| --Transfer back to stage 1 | ||||
| Accrual in the current period | 5,561,598.15 | 2,858,711.44 | 1,181,861.96 | 9,602,171.55 |
| Transferring back in the current period | ||||
| Charge-off in the current period | ||||
| Write-off in the current | -807,915.59 | -807,915.59 |
Notes of Financial Report Page 161
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses for the next 12 months | Expected credit losses over the entire life (Not credit-impaired) | Expected credit losses over the entire life (Credit-impaired) |
period
| period | ||||
| Other changes | ||||
| Ckosing balance | 2,839,575.35 | 4,609,838.82 | 64,747,723.14 | 72,197,137.31 |
(4) Provision for bad debts accrued, recovered or reversed in the current period
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Accrual | Recovery or reversal | Charge off or write off | Other change | |||
| Bad debt provision for other receivables | 63,402,881.35 | 9,602,171.55 | 807,915.59 | 72,197,137.31 | ||
| Total | 63,402,881.35 | 9,602,171.55 | 807,915.59 | 72,197,137.31 | ||
Of which conversion of bad debt provision or significant amounts recovered: None.
(5) Actual write-off of other receivables in the current period
| Item | Write-off amount |
| Write-off of other receivables | 807,915.59 |
Of which significant write-offs of other receivables:
| Name of the company | Nature of other receivables | Write-off amount | Reasons for write-off | Write-off procedures performed | Whether the amount arises from related transactions |
| Beijing Bengang materials sales center | Remained payment to be cleared | 807,915.59 | A suspended company that is unreachable for a long time without business transactions and included in the management of account write-offs | Legal advice and minute of office conference | No |
| Total | 807,915.59 |
(6) Classification of other receivables by nature of payment
Notes of Financial Report Page 162
| Nature of payment | Closing book balance | Opening book balance |
| Compensation of "Life show belt" Project | 212,242,400.00 | |
| Amount current | 198,934,209.00 | 205,620,987.47 |
| Others | 5,555,701.49 | 8,506,439.44 |
| Total | 416,732,310.49 | 214,127,426.91 |
(7) Other receivables of the top five closing balances collected by arrears
| Name of the company | Nature of the payment | Closing balance | Aging | Percentage of total closing balance of prepayments (%) | Closing balance of bad debt provision |
| Benxi Xihu District Government | Compensation of "Life show belt" Project | 212,242,400.00 | Within 1 year | 50.93 | 2,122,424.00 |
| Benxi Iron and Steel (Group) Third construction Engineering Co., Ltd | Amount current | 12,504,978.59 | 2 to 3 years; Over 5 years | 3.17 | 12,504,978.59 |
| Benxi Iron and Steel (Group) Co., Ltd. | Amount current | 5,466,371.64 | Within 1 year; Over 5 years | 1.31 | 4,025,426.64 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Amount current | 3,545,583.40 | Within 1 year | 0.85 | 35,455.83 |
| Liaoning Huawei Coal Preparation Co., Ltd. | Amount current | 2,261,360.00 | Over 5 years | 0.54 | 2,261,360.00 |
| Total | 236,020,693.63 | 56.63 | 20,949,645.06 |
(III) Long-term equity investments
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investments in subsidiaries | 2,222,281,590.24 | 2,222,281,590.24 | 2,222,281,590.24 | 2,222,281,590.24 | ||
| Investments in joint ventures and associates | 46,910,346.41 | 46,910,346.41 | 47,996,314.61 | 47,996,314.61 | ||
| Total | 2,269,191,936.65 | 2,269,191,936.65 | 2,270,277,904.85 | 2,270,277,904.85 | ||
Notes of Financial Report Page 163
1. Investments in subsidiaries
| Investee | Opening balance | Opening balance of provision for impairment | Changes in the period | Closing balance | Closing balance of provision for impairment | |||
| Additional investments | Reduced investments | Accrual of provision for impairment in the current period | others | |||||
| Shanghai Bengang Metallurgical Technology Co., Ltd. | 229,936,718.57 | 229,936,718.57 | ||||||
| Benxi Bengang Steel & Iron Sales Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 1,019,781,571.10 | 1,019,781,571.10 | ||||||
| Tianjin Bengang Steel Trade Co., Ltd. | 230,318,095.80 | 230,318,095.80 | ||||||
| Changchun Bengang Steel Sales Co., Ltd. | 28,144,875.36 | 28,144,875.36 | ||||||
| Yantai Bengang Steel Sales Co., Ltd. | 219,100,329.41 | 219,100,329.41 | ||||||
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | 200,000,000.00 | 200,000,000.00 | ||||||
| Dalian Benruitong Automobile Material Technology Co., Ltd | 65,000,000.00 | 65,000,000.00 | ||||||
| Shenyang Bengang Metallurgy Science and Technology Co., Ltd | 200,000,000.00 | 200,000,000.00 | ||||||
| Total | 2,222,281,590.24 | 2,222,281,590.24 | ||||||
Notes of Financial Report Page 164
2. Investments in joint ventures and associates
| Investee | Opening balance | Opening balance of provision for impairment | Changes in the period | Closing balance | Closing balance of provision for impairment | |||||||
| Additional investments | Reduced investments | Investment income recognized under equity method | Adjustment to other comprehensive income | Other equity changes | Declaration of cash dividend or profit | Accrualof provision for impairment | Others | |||||
| 1．Joint ventures | ||||||||||||
| Subtotal | ||||||||||||
| 2．Associates | ||||||||||||
| Benxi Iron and Steel Baojin (Shenyang) Automobile New Material Technology Co., Ltd. | 47,996,314.61 | -1,085,968.20 | 46,910,346.41 | |||||||||
| Subtotal | 47,996,314.61 | -1,085,968.20 | 46,910,346.41 | |||||||||
| Total | 47,996,314.61 | -1,085,968.20 | 46,910,346.41 | |||||||||
Notes of Financial Report Page 165
(IV) Operating income and operating cost
1. Details of business income and business cost
| Item | Amount incurred in the period | Amount incurred in the prior period | ||
| Income | Icost | Income | cost | |
| Main business | 56,614,035,827.20 | 57,748,112,204.90 | 58,937,350,684.09 | 59,090,024,551.87 |
| Other businesses | 1,572,946,304.56 | 1,545,382,455.23 | 4,144,406,405.05 | 4,075,230,315.93 |
| Total | 58,186,982,131.76 | 59,293,494,660.13 | 63,081,757,089.14 | 63,165,254,867.80 |
2. Information relating to income
| Category | Income from main business | Cost from main business | Income from other business | Cost from other business |
| Classification by business regions | ||||
| Including: Domestic | 50,055,418,101.64 | 51,194,812,008.07 | 1,572,946,304.56 | 1,545,382,455.23 |
| Oversea | 6,558,617,725.56 | 6,553,300,196.83 | ||
| Total | 56,614,035,827.20 | 57,748,112,204.90 | 1,572,946,304.56 | 1,545,382,455.23 |
| Classification by commodity alienation time: | ||||
| Confirmation at some point | 56,614,035,827.20 | 57,748,112,204.90 | 1,570,447,976.75 | 1,545,382,455.23 |
| Confirmation in some period | 2,498,327.81 | |||
| Total | 56,614,035,827.20 | 57,748,112,204.90 | 1,572,946,304.56 | 1,545,382,455.23 |
(V) Investment income
| Item | Amount incurred in the period | Amount incurred in the prior period |
| Long-term equity investment income calculated by cost method | 464,123,512.41 | |
| Long-term equity investment income calculated by equity methoddividends receivable | -1,085,968.20 | -580,788.56 |
| Investment income from disposal of long-term equity investment | 263,652,271.12 | |
| Investment income from disposal of transactional financial assets | -6,558,780.75 | |
| Investment income from debt restructuring | 5,179,346.89 | 1,243,883.36 |
| Others | -6,626,340.44 | 2,879,850.07 |
| Total | 461,590,550.66 | 260,636,435.24 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
XV. Supplementary information(I) Details of non-recurring profit and loss for the period
| Item | Amount | Note |
| Profit or loss on the disposal of non-current assets, including the write-off part of the provision for impairment of assets | 298,940,955.41 | |
| Government grants included to current profit or loss (except those closely related to the Company's normal business operations, which are in line with national policies and are enjoyed on an ongoing basis at a fixed or quantitative rate in accordance with certain standards) | 79,554,896.45 | |
| Except for the effective hedging business related to the normal operation of the Company, the gains and losses from changes in fair value arising from the holding of financial assets and financial liabilities by non-financial enterprises and the gains and losses arising from the disposal of financial assets and financial liabilities | ||
| Capital occupation expense charged to non-financial enterprises included in current profits and losses | ||
| Profit and loss of entrusting others to invest or manage assets | -6,626,340.44 | |
| Profits and losses from entrusted loans to foreign countries | ||
| Loss of assets due to force majeure factors, such as natural disasters | ||
| Reversal of impairment provision for receivables separately tested for impairment | ||
| The cost of acquiring investment in subsidiaries, joint ventures and joint ventures is less than the income generated by the fair value of the identifiable net Assets of the invested entity when the enterprise acquires the investment | ||
| Current net profit and loss of subsidiaries from the beginning of the period to the merger date arising from the merger of enterprises under the same control | ||
| Exchange gains and losses of non-monetary assets | ||
| Profit and loss of debt restructuring | 5,179,346.89 | |
| One-time expenses incurred by an enterprise due to the non-continuation of related business activities, such as expenses for resettling employees, etc. | ||
| One-time impact on current profits and losses due to the adjustment of laws and regulations such as taxation and accounting | ||
| Share-based payment fees confirmed at one time due to cancellation or modification of equity incentive plan | ||
| For cash-settled share-based payment, the profit and loss arising from the change of fair value of salary payable to employees after the feasible right date | ||
| Profit and loss arising from changes in fair value of investment real estate measured by fair value model | ||
| Income from transactions where the transaction price is obviously unfair | ||
| Profit and loss arising from contingencies unrelated to the normal operation of the company | ||
| Custody fee income obtained from entrusted operation | ||
| Other non-operating income and expenses other than the above items | -51,663,946.71 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | ||
| Subtotal | 325,384,911.60 |
Bengang Steel Plates Co., Ltd. 2023 Annual Report
| Item | Amount | Note |
| Income tax impact | 327,320.42 | |
| Impact amount of minority shareholders' equity (after tax) | -143,533.59 | |
| Total | 325,201,124.77 |
(II) Return on equity and earnings per share
| Profit for the reporting period | Weighted average return on equity（%） | Earnings per share（RMB） | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | -9.73 | -0.424 | -0.424 |
| Net profit after non-recurring profit and loss attributable to ordinary shareholders of the Company | -11.65 | -0.503 | -0.503 |
Note: Assuming that the convertible bonds of the Company are converted into ordinary shares, thenumber of ordinary shares issued in the current period will increase by 1,425,575,721.52 shares, and thenet profit will increase by 224,088,328.99 yuan, thus increasing the earnings per share by 0.157yuan/share, indicating that the potential ordinary shares are not diluted, but anti-diluted, so they will notbe considered in calculating diluted earnings per share. Diluted earnings per share is determined accordingto basic earnings per share.
Bengang Steel Plates Co., Ltd.
（Official Seal）April 25
th, 2024