Bengang Steel Plates Co., Ltd. Annual Report 2017
Bengang Steel Plates Co., Ltd.
Annual Report 2017
April, 2018
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Bengang Steel Plates Co., Ltd. Annual Report 2017
I. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of
the Supervisory Committee and senior management of the Company guarantee that
there are no misrepresentations or misleading statements, or material omission in this
report, and individually and collectively accept full responsibility for the authenticity,
accuracy and integrity of the information contained in this report.
Wang Shu, Chairman of the Company, Han Ge, the principal in charge of the
accounting, and Wang Shaoyu, Chief of Accounting Affairs, make the pledge for the
authenticity, accuracy and integrity of the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. The fourth chapter of this report “The Management
Discussion and Analysis - Prospect for future development of the Company”
describes the risks faced by the Company in its future operation, so it’s advised that
all investors should pay attention to it. This report is prepared in both of Chinese and
English. The Chinese version shall prevail when there are any controversial
statements in the two versions.
The Company takes existing share capital 3,875,371,532.00 shares as the base,
distributing cash dividends 0.5 Yuan per 10 shares (including tax), and distributing
bonus dividends 0 to shareholders. The Company will not converse capital reserve to
share capital.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Table of Contents
I. Important Notice, Table of Contents, and Definitions ...................................................................... 2
II. Company Profile and Main Financial Index ................................................................................... 5
IV. Management Discussion and Analysis ......................................................................................... 11
V. Important Events ............................................................................................................................ 20
VI. Status of Share Capital Changes and Shareholders ..................................................................... 42
VII. Status of Preferred Shares .......................................................................................................... 47
VIII. Status of Directors, Supervisors, Senior Executives and Employees ....................................... 48
IX. Corporate Governance ................................................................................................................. 53
X. Relevant Information about Corporate Bonds .............................................................................. 57
XI. Financial Report ........................................................................................................................... 58
XII. Documents available for inspection ........................................................................................... 80
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Definition
Terms to be defined Refers to Definition
Bengang Bancai, Bengang Steel, the Company,
Refers to Bengang Steel Plates Co., Ltd.
the Listed Company
Bengang Group Refers to Bengang Group Co., Ltd.
Bengang Co. Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset Administration Refers to Liaoning State-owned Asset Supervisory and Management Committee
SSE Refers to Shenzhen Stock Exchange
Bengang Puxiang Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761, 200761
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 本钢板材股份有限公司
Abbreviation of Company name in
本钢板材
Chinese
Company name in English (If any) BENGANG STEEL PLATES CO.,LTD.
Abbreviation of Company name in
BSP
English (If any)
Legal representative Wang Shu
Registration Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration Address 117000
Office address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address
Web Address None
Email bgbc761@126.com
II. Contact Information
Secretary of Board of Directors Representative of Securities Affairs
Name Sun Yanbin
No.16, Renmin Road, Pingshan District,
Address
Benxi City, Liaoning Province
Tel 024-47828860
Fax 024-47827004
Email bgbcsyb@126.com
III. Information Disclosure and Place for Consulting
Press media for information disclosure China Securities Journal, Securities Times, Hong Kong Commercial Daily
Web address for the annual report as assigned by
http://www.cninfo.com.cn
CSRC
Place for inquiry of the annual report Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code 91210000242690243E
Changes of principal business activities since listing (if any) No change
Changes of the controlling shareholder in the past (is any) No change
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Bengang Steel Plates Co., Ltd. Annual Report 2017
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’ firm Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
Signing name of accountants Wu Xue, Zhang Huice
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to change of the
accounting policy and correction of accounting errors
□ Yes √ No
Changed over
2016
last year
Before After After Before After
Adjustment Adjustment Adjustment Adjustment Adjustment
Operating income（RMB） 40,507,855,843.72 29,526,012,651.08 29,526,012,651.08 37.19% 29,253,638,605.80 29,253,638,605.80
Net profit attributable to the
shareholders of the listed 1,600,110,229.77 781,274,829.32 781,296,452.51 104.80% -3,293,624,545.17 -3,293,624,545.17
company（RMB）
Net profit after deducting of
non-recurring gain/loss
1,607,675,869.15 747,668,693.39 747,690,316.58 115.02% -3,452,130,239.63 -3,452,130,239.63
attributable to the shareholders
of listed company（RMB）
Net Cash flow generated by
2,744,243,492.51 9,557,353,906.52 9,557,419,076.92 -71.29% -2,305,005,968.10 -2,305,005,968.10
business operation（RMB）
Basic earnings per
0.510 0.249 0.249 104.82% -1.050 -1.050
share(RMB/Share)
Diluted gains per
share(RMB/Share) 0.510 0.249 0.249 104.82% -1.050 -1.050
(RMB/Share)
Weighted average net assets
11.84% 6.34% 6.34% 5.50% -24.11% -24.11%
yield
Changed over
End of 2016 End of 2015
last year
End of 2017
Before After After Before After
Adjustment Adjustment Adjustment Adjustment Adjustment
Gross assets（RMB） 62,998,143,513.02 54,155,710,718.91 54,197,775,889.31 16.24% 44,461,643,345.33 44,461,643,345.33
Net assets attributable to
shareholders of the listed 14,315,588,729.00 12,715,354,551.15 12,757,376,174.34 12.21% 11,934,100,372.02 11,934,100,372.02
company（RMB）
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
□ Applicable √ Not applicable
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Unit: Yuan
Net profit attributable to the shareholders of the Net assets attributable to the shareholders of the
listed company listed company
2017 2016 Ending balance Beginning balance
According to Chinese
1,600,110,229.77 781,296,452.51 14,315,588,729.00 12,757,376,174.34
accounting standards
Items and amounts adjusted according to IFRS: No difference
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting
standards during the reporting period.
3. Reasons of differences between domestic and foreign accounting standards
□ Applicable √ Not applicable
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operation income 11,132,407,692.65 9,604,079,211.09 9,640,672,901.66 10,130,696,038.32
Net profit attributable to the
302,653,287.07 220,982,366.50 810,662,349.27 265,812,226.93
shareholders of the listed company
Net profit after deducting
non-recurring gain/loss attributable
295,684,784.12 213,188,639.71 803,806,749.09 294,995,696.23
to the shareholders of listed
company
Net cash flows generated by
-3,422,732,831.24 -624,572,853.48 -58,127,586.39 6,849,676,763.62
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the
quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-Current Gains and Losses
√ Applicable □ Not applicable
Unit: Yuan
Item 2017 2016 2015 Notes
Gains and losses on disposal of non-current
assets (including the write off part of the -65,886,612.10 -1,854,918.03 -2,918,523.73
provision for impairment)
Government subsidy attributable to profit and
loss of current period (except such
government subsidy closely related to the
company's normal business operation, 39,086,900.00 36,089,000.00 136,992,233.61
meeting the regulation of national policy and
enjoyed constantly in certain quota or
quantity according to a certain standard)
Profit or loss from investment or
1,715,742.47 7,226,589.08
assets entrusted to others
Gains and losses of debt restructuring 4,725,936.17 8,631,844.34 12,200,032.42
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Net profit of loss of the current period from
beginning of the period to the combination
24,668.65
date of subsidiaries generated from business
combination under common control
Other non-operating income and expenses
14,538,002.49 663,844.36 5,644,831.10
other than above
Less: impact of income tax 162,375.42 11,311,378.29 639,468.02
impact of minority equity (after tax) -107,840.83 327,998.92
Total -7,565,639.38 33,606,135.93 158,505,694.46 --
Explanation for defining non-recurring gains and losses items according to the \"Public Offering of Securities Information Disclosure
Explanatory Notice No. 1 – Non-Recurring Gains and Losses\", and reasons for defining non-recurring gains and losses items listed in
the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
III. Summary of Company Business
I. the Company's main business during the reporting period
Whether the Company needs to comply with the disclosure requirement for special industry
No
(a) During the reporting period, the company's main business activities include steel smelting, rolling processing, power generation,
coal chemical industry, special steel profiles, railways, import and export trade, scientific research, and product sales. The
introduction of world advanced equipment technology has enabled the implementation of equipment upgrades for the steel industry.
The Company has built a fine steel base, formed more than 60 varieties, more than 7500 series of product specifications, high
value-added and high-tech product ratio reached more than 80%, automotive surface panels, household appliances, oil pipeline steel,
container board Shipboard and other leading products are widely used in automobiles, home appliances, petrochemicals, aerospace,
machinery manufacturing, energy transportation, construction and decoration, and metal products, and are exported to more than 60
countries and regions.
During the reporting period, the company firmly seized the favorable opportunity of China's economic stability, limited steel
production capacity, cracked down on “Grid Steel”, and the steel market continues to pick up. It increased production, tapped
potential, reduced consumption, advanced equipment, specifications and green Environmental protection has achieved remarkable
results and achieved remarkable results. In order to welcome the Central Environmental Protection Inspector as an opportunity to
adhere to both environmental protection management and environmental protection governance, and from the strengthening of the
daily operation and management of environmental protection facilities to control, to achieve all kinds of pollutants controllable
emissions and reduction emissions. In the whole year, 24 grades of products such as cold-rolled plates and galvanized plates were
certified. Some of these series of products passed the global certification of Nissan Motors and General Motors, and basically
fulfilled the full coverage of most joint-venture brands and auto brands.
The main performance drivers during the reporting period were: Steady progress The three system reforms centering on “four
determinants” continued to optimize institutional setup and staffing. According to Bengang's implementation plan for strengthening
and strengthening, we further defined the company's target measures for structural adjustment, green development and smart
manufacturing. Focusing on the partial production and overhaul of some blast furnaces, a series of production-increasing and
efficiency-enhancing transformation projects will be implemented to effectively guarantee the goal of raising production and
increasing efficiency. The full-line cold rolling high-strength steel supporting railway was formally put into operation. The 566
square meters of sintering heat recovery power generation and grid-connected power generation were successful. The cold-rolling
plant's color-coating line achieved heat load test on schedule and produced qualified color-coating panels, and continuously enhanced
the company's core competitiveness.
No significant change occurred during the reporting period.
(b) During the reporting period, China’s economy has shifted from a high-speed growth phase to a high-quality development phase,
and it is now in the period of tackling the key to transforming the mode of development, optimizing the economic structure, and
transforming the growth momentum. The supply-side structural reform is still the main line of China's economic development. The
real economy is still the focus of development. The iron and steel industry is facing a rare historical opportunity to catch up. By
seizing the historical opportunities, the company digs deeper into its potential, accurately judges the market, and achieves significant
economic benefits. The company’s comprehensive competitive strength has been continuously enhanced and its status has continued
to be consolidated.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changes
The balance at the 31 December 2017 is RMB 2,391,584.4 thousand and it has reduced
Construction in progress by 61.49%, which is mainly caused by the part of Construction in progress transferred to
fixes assets.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
The balance at the 31 December 2017 is RMB 17,043,713.40 thousand and it has
Cash at bank and on hand increased by 31.23%, which is mainly caused by the increase of current profit, increase
of loans and increase of cash reserves.
The balance at the 31 December 2017 is RMB 3,846,433.70 thousand and it has
Notes receivable increased by 89.42% compared with beginning balance, which is mainly caused by the
increase of Notes receivable.
The balance at the 31 December 2017 is RMB 1,280,689.10 thousand and it has
Prepayment increased by 159.33%, which is mainly caused by the increase of prepayment for billet
steel.
The balance at the 31 December 2017 is RMB 1,067,334.80 thousand, which is the
Other non-current assets
investment to East North Special Steel Co., Ltd.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
Whether the Company needs to comply with the disclosure requirement for special industry
No
In order to comprehensively improve the level of technological innovation and increase profitability, the company closely focuses on
the three major factors of variety, quality and cost, strengthens product adjustment and market development, enhances product
quality stability and assurance capabilities, and promotes low-cost and green manufacturing technologies and tries to solve the key
technical problems that restrict the development of enterprises.
National-level R&D platform “State-owned local joint engineering laboratories for advanced automotive steel development and
application technology” has been steadily developed. At present, nearly 20 sets (sets) of equipment have been installed and
commissioned. Through the construction of the platform, the company will further enhance its independent research and
development capabilities and technological innovation capabilities, and build a technical public service platform for automotive panel
testing, development and production, which will greatly promote the sustainable development of China's automobile industry, and at
the same time promote regional economic development and social progress.
Focus on the direction of national science and technology innovation policies and industry guidelines, strengthen foreign technology
exchanges and cooperation, and implement major science and technology projects. The expert team of academicians from
Northeastern University and other colleges and universities was hired as the chief expert of the company to carry out product
research and development, quality improvement, technological progress, and technological transformation consultation. A total of 40
new product developments were completed throughout the year, including 2000 MPa grade hot stamping super high strength steel,
martensitic dual phase steel for wheel spokes, high grade acid corrosion resistant pipeline steel, cold rolled low alloy high strength
steel, and other performance tests. All of them are qualified and realized bulk supply. Among them, the successful R&D and
application of 2000MPa hot stamped steel has received extensive attention at home and abroad.
The company completed 24 grades of products such as cold-rolled plates and galvanized plates, and some of them passed the global
certification of Nissan Motors and General Motors. The company has completed the certification of eight new automotive OEMs,
including GM, GAC, SAIC, and FAW, and 348 parts and components, and basically achieved full coverage for most of the joint
venture brands and independent brand automobile factory.
The company completed the identification work of provincial intellectual property superior enterprises. In the year, 71 patents were
authorized by the State Bureau, including 6 inventions and 65 utility models; 15 patents were accepted by the State Patent Office,
including 6 inventions and 9 utility models.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
IV. Management Discussion and Analysis
I. General
During the reporting period, the country implemented the supply-side structural reform, the effect of eliminating excess and
backward production capacity policy in the iron and steel industry was remarkable, the domestic steel market continued to present a
volatile upward trend. All staff of the Company firmly grasped the market opportunities, focused on improving the quality of
economic operations, took the enhancement of basic management level as the guarantee, aimed at ensuring production stability and
increasing employees’ basic income as the fundamental goal. Through solid and tireless efforts, the Company’s benefits have been
further enhanced. The main products of the year include 8.6788 million tons of pig iron which decreased by 10.45%, 8.8813 million
tons of crude steel which decreased by 6.48%, 11.8999 million tons of hot-rolled plate which increased by 5.57%, 5.442 million tons
of cold-rolled sheet which increased by 26.06%, and 0.724 million tons of special steel which increased by 5.92% compared to last
period.
Looking back at the past year's production and operation process, we mainly completed the following work:
First, the Company insisted on benefiting from the market and production, gave full play to the leading role of sales work, focused on
ensuring the contracts can be delivered on time, so as to achieve production economic operation, and to promote product structure
adjustment and maximize efficiency.
Second, the Company insisted on benefiting from the technology and equipment, formed efficient technology innovation system,
increased product research and development inputs, improved equipment functions, promoted the achievement of production and
efficiency of the newly constructed projects, enhanced the Company's independent innovation and sustainable development capacity.
Third, the Company insisted on benefiting from costs and energy-saving, reduced costs from all respects, carried out save-up on costs
and energy consumptions, implemented economic rationing and purchasing, reduced inventory and logistics costs, strengthened
various basic management.
Four, the Company insisted on benefiting from safety and environmental protection, improved the management system and
responsibility system, deepened the occupational health and safety management system and environmental protection management
responsibility system, created a green and safe production and management environment.
Five, the Company insisted on benefiting from reform and management, promoted the Company's sustained and healthy development,
improved the quality of economic operations, adhered to deepen reform, adhered to standardized operation, and adhered to
management improvement.
Six, the Company insisted on strengthening the Party's leadership, gave full play to the Party's fighting fortress effect and Party
members’ pioneer exemplary role, gave full play to the organization’s group advantage, concentrated the power of the staff,
promoted the harmonious and healthy development of the Company.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Components of Operating Income
Unit: Yuan
2017 2016 Change over last
Amount Proportion Amount Proportion year
Total operating income 40,507,855,843.72 100% 29,526,012,651.08 100% 37.19%
By industries
Industry 40,507,855,843.72 100.00% 29,526,012,651.08 100.00% 37.19%
By products
Steel plate 37,488,231,200.04 92.55% 27,509,431,558.50 93.17% 36.27%
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Steel billet 1,083,458.75 0.00% -100.00%
Others 3,019,624,643.68 7.45% 2,015,497,633.83 6.83% 49.82%
By regions
Northeast 12,039,186,774.85 29.72% 8,437,683,126.99 28.58% 1.14%
North China 5,345,627,433.43 13.20% 3,714,568,181.20 12.58% 0.62%
East China 11,602,151,558.67 28.64% 8,610,068,280.87 29.16% -0.52%
Northwest 65,574,747.86 0.16% 12,684,259.06 0.04% 0.12%
Southwest 121,903,398.49 0.30% 9,035,194.69 0.03% 0.27%
Central south 25,741,875.56 0.06% 20,890,552.83 0.07% -0.01%
Export 11,307,670,054.86 27.91% 8,721,083,055.44 29.54% -1.63%
(2) Industry, Product and Regions Occupying the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Whether the Company needs to comply with the disclosure requirement for special industry
No
Unit: Yuan
Operating income Operating profit Gross margin
Operating Income Operating profit Gross margin change over last change over last change over last
year year year
By industries
Industry 40,507,855,843.72 35,677,980,170.73 11.92% 37.19% 20.84% 1.11%
By products
Steel plate 37,488,231,200.04 32,944,321,961.11 12.12% 36.27% 38.24% -1.25%
Steel billet
Others 3,019,624,643.68 2,733,658,209.62 9.47% 49.82% 48.08% 1.06%
By regions
Northeast 12,039,186,774.85 10,688,392,959.67 11.22% 42.68% 44.08% -0.86%
North China 5,345,627,433.43 4,704,862,136.73 11.99% 43.91% 46.78% -2.64%
East China 11,602,151,558.67 10,216,674,867.80 11.94% 34.75% 37.72% -2.57%
Northwest 65,574,747.86 58,323,013.55 11.06% 416.98% 427.36% -1.75%
Southwest 121,903,398.49 107,372,174.10 11.92% 1,249.21% 1,262.04% -0.83%
Central south 25,741,875.56 22,771,045.28 11.54% 23.22% 24.70% -1.05%
Export 11,307,670,054.86 9,879,583,973.61 12.63% 29.66% 31.02% 0.81%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the Company's main business
statistics caliber has changed during the reporting period
□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over last
Industry classification Item Unit 2017
year
Sales ton 11,270,079.91 11,472,926.69 -1.77%
Steel rolling processing
Production ton 11,336,966 11,406,457.32 -0.61%
industry
Inventory ton 787,259.58 720,373.49 9.28%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
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Bengang Steel Plates Co., Ltd. Annual Report 2017
(4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Components of Operating Cost
Industry classification
Unit: Yuan
Industry 2017 2016 Change over last
Item
classification Amount Proportion Amount Proportion year
Steel rolling
Raw material 16,827,458,304.55 47.16% 11,048,116,535.79 43.03% 52.31%
processing industry
Steel rolling Supplementary
1,702,911,706.70 4.77% 1,271,301,205.64 4.95% 33.95%
processing industry materials
Steel rolling Spare parts and
510,752,659.98 1.43% 378,211,917.00 1.47% 35.04%
processing industry tools
Steel rolling
Fuel 9,604,880,159.74 26.92% 6,078,925,971.55 23.67% 58.00%
processing industry
Steel rolling
Energy 2,459,372,335.20 6.89% 2,687,749,842.84 10.47% -8.50%
processing industry
Steel rolling Salary and
1,892,325,541.52 5.30% 1,663,003,962.99 6.48% 13.79%
processing industry benefits
Steel rolling
Depreciation 2,020,739,760.10 5.66% 1,847,129,545.38 7.19% 9.40%
processing industry
Steel rolling
Others 726,024,503.52 2.03% 703,226,250.94 2.74% 3.24%
processing industry
Steel rolling
Total 35,677,980,170.73 100.00% 25,677,665,232.12 100.00% 0.00%
processing industry
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
√ Yes □No
During current period the Company acquired its holding subsidiary, a new subsidiary Company Baojin (Shenyang) Automotive New
Material Technology CO., LTD.
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan) 6,385,778,891.15
Total sales amount of the top five customers accounted for the
15.76%
proportion of total annual sales
The proportion of the total sales of the related parties in the
3.51%
top five customers
Information of the top 5 customers
No Name Amount(Yuan) Proportion
1 Xiamen Jianfa Metals Co., Ltd. 1,483,896,292.68 3.66%
2 Benxi Beiying Steel & Iron (Group) Co., Ltd. 1,422,507,978.34 3.51%
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Bengang Steel Plates Co., Ltd. Annual Report 2017
3 Hangzhou Thermal (HK) Co., Ltd. 1,300,125,619.20 3.21%
4 Ningbo Huajie Trading Co., Ltd. 1,113,085,864.57 2.75%
Shanghai Minxingda International Trading Co.,
5 1,066,163,136.35 2.63%
Ltd.
Total -- 6,385,778,891.15 15.76%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers (Yuan) 22,100,519,462.03
Total purchase amount of the top five suppliers accounted for
61.94%
the proportion of total purchase
The proportion of the total purchase of the related parties in
42.28%
the top five suppliers
Information of the top 5 suppliers
序号 Name Amount(Yuan) Proportion
1 Benxi Beiying Steel & Iron (Group) Co., Ltd. 12,060,223,407.24 33.80%
2 Heilongjiang Dragon Coal Group Co., Ltd. 3,217,134,323.30 9.02%
3 Benxi Steel & Iron (Group) Mining Co., Ltd. 3,023,604,499.23 8.47%
Liaoning Electric Power Co., Ltd. Benxi Electric
4 2,304,222,949.44 6.46%
Power Supply Company
5 Shenyang Coking Coal Co., Ltd. Sales Branch 1,495,334,282.82 4.19%
合计 -- 22,100,519,462.03 61.94%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Notes to significant
2017 2016 Change over last year
change
Increase of ocean freight
Selling and distribution expenses 1,184,294,573.92 903,232,507.02 31.12%
in this period
General and administrative expenses 852,860,839.20 700,546,785.17 21.74%
Increase of exchange
Financial expenses 535,642,520.07 967,614,992.29 -44.64%
gains in this period
4. Research and Development Input
√ Applicable □ Not applicable
The Company focused on three major elements variety, quality, and cost, implemented eight provincial-level major scientific
and technological projects, and carried out 57 company-level key science and technology projects. These projects involved a wide
range of areas, technical complexity, and strong correlation. Among them 32 items achieved obvious results, improved product
quality stability, significantly reduced production costs. Another 25 projects will be carried out in the following year.
Information of research and development input by the company
2017 2016 Change over last year
Number of Research and
1,669 1,542 8.24%
Development personnel
Proportion of number of
Research and Development 8.59% 7.44% 1.15%
personnel
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Bengang Steel Plates Co., Ltd. Annual Report 2017
Amount of Research and
Development Investment (In 1,390,403,000.00 1,437,398,000.00 -3.27%
RMB)
Proportion of Research and
Development investment to 3.43% 4.87% -1.44%
operating income
Amount of capitalized Research
0.00 0.00 0.00%
and Development investment
Proportion of capitalized
Research and Development
investment accounted to total 0.00% 0.00% 0.00%
Research and Development
investment
Illustrations of the prominent change in proportion of research and development input occupying the operating income over same
period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its reasonableness
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Item 2017 2016 Change over last year
Subtotal of cash inflows from
39,077,319,940.56 28,871,763,722.95 35.35%
operating activities
Subtotal of cash outflows from
36,333,076,448.05 19,314,344,646.03 88.11%
operating activities
Net cash flows from operating
2,744,243,492.51 9,557,419,076.92 -71.29%
activities
Subtotal of cash inflows from
427,294,593.14 467,307,421.09 -8.56%
investing activities
Subtotal of cash outflows paid
2,343,736,950.05 3,045,653,699.08 -23.05%
for investing activities
Net cash flows from investing
-1,916,442,356.91 -2,578,346,277.99 -25.67%
activities
Subtotal of cash inflows from
29,075,698,099.54 22,958,374,791.74 26.65%
financing activities
Subtotal of cash outflows from
29,785,971,645.05 22,469,812,521.87 32.56%
financing activities
Net cash flows from financing
-710,273,545.51 488,562,269.87 -245.38%
activities
Net increase in cash and cash
-7,062,880.14 7,711,856,886.09 -100.09%
equivalents
Illustrations of key factors of significant changes over same period last year
√ Applicable □Not applicable
(1) Subtotal of cash inflows from operating activities increased by 35.35% compared to last year, mainly due to the increase in cash
received from sale of goods or rendering of services.
(2) Subtotal of cash outflows from operating activities increased by 88.11% compared to last year, mainly due to the increase in cash
paid for goods and services.
(3) Net cash flows from operating activities decreased by 71.29% compared to last year, mainly due to the fact that cash paid for
goods and services is over cash received from sale of goods or rendering of services in this period.
(4) Subtotal of cash outflows from financing activities increased by 32.56% compared to last year, mainly due to the increase in cash
repayments of borrowings.
(5) Net cash flows from financing activities decreased by 245.38% compared to last year, mainly due to the increase in cash
repayments of borrowings.
15
Bengang Steel Plates Co., Ltd. Annual Report 2017
(6) Net increase in cash and cash equivalents decreased by 100.09% compared to last year, mainly due to the decrease in net cash
flows from operating activities.
Illustrations of significant difference between cash flow from operating activities and net profit during the reporting period
□ Applicable √Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
Amount Proportion in total profit Explanation of cause Whether sustainable
Investment income from financial
Investment income 4,052,996.54 0.21% products and financial assets Yes
available-for-sale
The profit and losses on
0.00%
the changes in fair value
Impairment of assets 103,538,184.34 5.40% Inventory loss and bad debt loss No
Non-operating income 19,335,019.49 1.01% No
Non-operating expenses 70,238,377.22 3.67% No
IV. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
End of 2017 End of 2016
Notes to
Proportion in Proportion in Proportion
significant
Amount the total assets Amount the total assets change
change
(%) (%)
Monetary fund 17,037,713,410.49 27.04% 12,982,977,188.24 23.95% 3.09%
Accounts receivable 728,597,926.39 1.16% 623,865,427.25 1.15% 0.01%
Inventories 11,209,898,096.16 17.79% 9,782,173,936.74 18.05% -0.26%
Investment property 0.00% 0.00% 0.00%
Long-term equity
2,726,009.03 0.00% 0.00% 0.00%
investment
Fixed assets 23,852,067,166.10 37.86% 20,688,468,637.44 38.17% -0.31%
Construction in
2,391,584,410.46 3.80% 6,210,673,674.11 11.46% -7.66%
process
Short-term loans 21,999,103,900.00 34.92% 18,762,472,779.48 34.62% 0.30%
Long-term loans 2,444,185,630.28 3.88% 3,448,931,721.62 6.36% -2.48%
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
Items Ending balance Reason
Monetary assets 4,720,136,890.31 Deposit for notes and L/C
Notes receivable 2,167,864,988.83 Pledged for acceptance bill
Bank short-term financing products 500,000,000.00 Not yet due
16
Bengang Steel Plates Co., Ltd. Annual Report 2017
Total 7,388,001,879.14
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
□ Applicable √ Not applicable
There was no use of raised funds during the reporting period.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
Unit: Yuan
17
Bengang Steel Plates Co., Ltd. Annual Report 2017
Company Main Registered Operating Operating
Company Name Total assets Net assets Net Profit
type business capital income profit
Bengang
Processing
Puxiang Cool 1,920,000,000 4,390,590,542 1,991,164,140 7,442,109,333
Subsidiaries and sales 49,491,529.32 37,153,450.95
Rolling Steel .00 .86 .86 .08
of steel
Sheet Co., Ltd.
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companies
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
1. The development trend of the industry and the market competition
The year 2018 is the year in which the Party's Nineteenth Congress Spirit is implemented. It is a crucial year for success in building a
well-to-do society and implementing the “Thirteenth Five-Year Plan”. It is also a year of hard work for the Company to develop
innovative concept, improve the quality of operations, and create high-quality listed company brand. The report of the Party's
Nineteenth Congress pointed out that China's economy has shifted from a high-speed growth stage to a high-quality development
stage, and it is now in the period of tackling the key to transforming the mode of development, optimizing the economic structure,
and transforming the growth momentum. Based on this judgment, the supply-side structural reform is still the main line of China's
economic development, and the real economy is still the focus of development. The iron and steel industry is facing a rare historical
opportunity to catch up. Standing at the starting point of a new era of national and industry development, we have ample confidence
to move toward the new journey.
2. The Company’s development strategy
The overall working idea of economic operation in 2018 includes raising the great banner of Xi Jinping’s socialist ideology with
Chinese characteristics in the new era, implementing the spirit of the Party's Nineteenth Congress, following the development laws of
the iron and steel industry, implementing the company’s strategic decision-making, innovating the concept of development,
improving the quality of operations and creating a high-quality listed company brand.
3. Business plan
The main objectives of production and operation are: 9.2 million tons of pig iron, 9.18 million tons of crude steel, 12.97 million tons
of hot-rolled plates, 5.95 million tons of cold-rolled plates, and 0.7 million tons of special steel products, achieving a safety
production ratio of zero to zero. The business plan does not constitute a company’s performance commitment to investors. Investors
should maintain sufficient risk awareness and should understand the difference between business plans and performance
commitments.
To achieve the above goals, we must do the following:
1). Adhere to the basic concept of standardized operations, and promote the company's advancement into the management of
outstanding listed companies.
2). Adhere to the principle of quality-oriented services, and create a high value-added production and manufacturing system for
economic operation.
3). Adhere to the core goal of product profitability, actively expand sales channels, and increase sales contribution.
4). Adhere to the system construction of scientific and technological innovation and enhance the ability of independent innovation
and sustainable development of enterprises.
5). Adhere to the development requirements of energy conservation and environmental protection, and build a safe, orderly and
ecologically modernized modern enterprise.
6). Adhere to and strengthen the party's overall leadership, promote the harmonious and healthy development of the enterprise, and
realize the employees' better vision.
4. Maintaining current business and completing the required capital arrangements of invested projects under construction.
The company will use its own funds and bank loans to meet the funds needed for production operations and technological
transformation.
5. Potential risks
Operational risks: Due to overcapacity in the steel industry, low concentration, prominent product structural conflicts, severe
homogenization competition, and high debt ratio, these situations still exist. There are many contradictions between supply and
demand in the upstream, and the price of external coal and coke fluctuated at a high level for a long period of time. The factors
18
Bengang Steel Plates Co., Ltd. Annual Report 2017
affecting the price of raw fuel increased, and the market risk increased, which may result in high procurement costs of raw materials.
The total consumption of downstream steel products and the intensity of consumption tend to decline. The growth rate of the steel
industry such as construction and household appliances is slow. Although the demand for steel products in the automobile and
railway industries increases, it is difficult to stimulate the overall demand growth.
Responsive measures: Continuously promote the optimization of product structure, continuously increase the market share of
strategic products in the domestic market, improve quality and efficiency; optimize the supply structure and improve management
capabilities. Pay attention to the shipments, consumptions, and inventory changes of major raw materials, maintain reasonable
inventory, reduce inventory capitalization, increase contract and supplier management, and ensure that the original fuel procurement
work is efficient, stable, and reliable. We will take advantage of the centralized procurement scale, carry out strategic cooperation,
and reduce procurement costs. At the same time, strengthen market information management, aim at price fluctuations, timely make
market prejudgment and corresponding adjustments, further adjust product structure, continuously expand sales of high value-added
products, increase the proportion of advantageous products, strengthen customer service, enhance customer satisfaction, solve
difficulties for customers, and continuously improve profitability
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
√□ Applicable □ Not applicable
Reception date Reception type Reception object type Index of the basic condition the survey
Understand the production and operation
2017.07.20 On-the-spot investigation Institution
of the Company
Reception times
Number of institutions
Number of individuals
Number of other objects
Whether undisclosed major information was
No
disclosed
19
Bengang Steel Plates Co., Ltd. Annual Report 2017
V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policy during
the reporting period
□ Applicable √ Not applicable
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share capital in recent three
years (including the reporting period)
1. Profit distribution proposal of 2017
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2017 was RMB 1,600,110,229.77. After adding the retained profit of RMB -496,947,619.42 at the beginning of the year, the
balance of undistributed profit was RMB 1,103,162,610.35.
Profits distribution plan of 2017: The company will take existing share capital 3,875,371,532 shares as the base, distributing cash
dividends RMB 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute RMB193,768,576.60 dividends of
ordinary shares, and the remaining RMB 909,394,033.75 will be carried over to next year’s undistributed profits. This proposal will
be subject to approval of the Shareholders’ Annual Meeting of 2017.
2. Profit distribution plan of 2016
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2016 was RMB 781,274,829.32. After adding the retained profit of RMB -1,278,244,071.93 at the beginning of the year, the
balance of undistributed profit was RMB -496,969,242.61.
Profits distribution plan of 2016: due to a loss in 2016, according to the relevant Chinese regulations and laws and the Company's
Articles of Association, the company would not withdraw surplus reserves. The company planed not to distribute cash dividend or
bonus shares, and not to convert capital reserve into share capital.
3. Profit distribution plan of 2015
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2015 was RMB -3,293,624,545.17. After adding the retained profit of RMB 2,172,180,473.24 at beginning of the year and
deducting RMB 156,800,000.00 of dividend distributed for the last year, the balance of undistributed profit was RMB
-1,278,244,071.93.
Profits distribution plan of 2015: due to a loss in 2015, according to the relevant Chinese regulations and laws and the Company's
Articles of Association, the company would not withdraw surplus reserves. The company planed not to distribute cash dividend or
bonus shares, and not to convert capital reserve into share capital.
Cash dividend distribution in recent three years
Unit: Yuan
Net profit Ratio in net profit
attributable to the attributable to the Amount of cash Proportion of cash
Cash dividend
Year parent company in parent company in dividends in other dividends in other
(Including Tax)
the consolidated the consolidated ways ways
financial statements financial statements
2017 193,768,576.60 1,600,110,229.77 12.11%
2016 0.00 781,296,452.51 0.00%
2015 0.00 -3,293,624,545.17 0.00%
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash dividend distribution
was proposed during the reporting period
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□ Applicable √ Not applicable
20
Bengang Steel Plates Co., Ltd. Annual Report 2017
Dividend distributed per 10 shares (share)
Cash dividend per 10 shares (RMB)（including tax） 0.50
The number of capital reserve conversion per 10
shares (share)
Share capital base of the distribution plan (share)
Total amount of cash dividends (Yuan) (including
tax)
Distributable profits 1,103,162,610.35
The proportion of cash dividends to total profit
distribution
The distribution of cash dividends
Others
Detailed description profit distribution or capital reserve conversion proposal
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent company of the
year 2017 was RMB 1,600,110,229.77. After adding the retained profit of RMB -496,947,619.42 at the beginning of the year, the
balance of undistributed profit was RMB 1,103,162,610.35.
Profits distribution plan of 2017: The company will take existing share capital 3,875,371,532 shares as the base, distributing cash
dividends 0.5 per 10 shares (including tax) to shareholders. The company plans to distribute 193,768,576.60 dividends of
ordinary shares, and the remaining 909,394,033.75 will be carried over to next year’s undistributed profits. This proposal will be
subject to approval of the Shareholders’ Annual Meeting of 2017.
III. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments by the end of
the period made by actual controller, acquirer, director, supervisor, senior management personnel and
other related parties.
□ Applicable √ Not applicable
There was no fulfilled commitment during the reporting period or under-fulfillment commitment by the end of the period made by
actual controller, acquirer, director, supervisor, senior management personnel and other related parties.
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period
is still in the forecast period
□ Applicable √ Not applicable
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and
Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on
the Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
21
Bengang Steel Plates Co., Ltd. Annual Report 2017
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
There was no change in accounting policies, accounting estimates and accounting methods during the reporting period.
Ⅶ. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
In current period, the company acquired a subsidiary holding by the parent company and added as a subsidiary company, Bengang
Baojin (Shenyang) Auto New Material Technology Co., Ltd.
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm (RMB 10
thousand)
Service life of domestic accountant’s firm providing
audit service
Name of CPAs from the domestic accountant’s firm Wu Xue, Zhang Huice
Service life of domestic accountants’ providing audit
service
Name of the overseas accountant’s firm (if any) None
Payment to overseas accountant’s firm (RMB 10
thousand) (if any)
Service life of overseas accountant’s firm providing
None
audit service (if any)
Name of CPAs from the overseas accountant’s firm
None
(if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal control auditing at
RMB 600 thousand.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
22
Bengang Steel Plates Co., Ltd. Annual Report 2017
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
There was no effective judgment of a court or large amount of debt maturity that the Company, its controlling shareholders and actual
controller failed to perform or pay off during the reporting period.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Execute
Benxi Purchas Relate
accordi
Steel & Parent e of Accounts On d
24,248. ng to 2018.04
Iron Compan goods payable agreeme agree 0.68% 35,000 No No
68 the .20
(Group) y and for repair nt ment
agreeme
Co., Ltd. services price
nt
Execute
Benxi Purchas Relate
accordi
Steel & Parent e of On d
Land 5,469.1 ng to 2018.04
Iron Compan goods agreeme agree 0.15% No No
lease fee 4 the .20
(Group) y and nt ment
agreeme
Co., Ltd. services price
nt
Bengang
Execute
Cold-rolle Purchas Relate
accordi
d Same e of On d
ng to 2018.04
Stainless controll goods Products agreeme agree 5.03 0.00% 500 No Yes
the .20
Steel er and nt ment
agreeme
Dandong services price
nt
Co., Ltd.
Benxi Same Purchas Labor cost On Relate 2,659.1 0.07% No Execute No 2018.04
Steel & controll e of agreeme d 7 accordi .20
23
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Iron er goods nt agree ng to
(Group) and ment the
Mining services price agreeme
Co., Ltd. nt
Benxi Raw Execute
Purchas Relate
Steel & material accordi
Same e of On d
Iron and 299,526 ng to
controll goods agreeme agree 8.40% 400,000 No Yes
(Group) suppleme .85 the
er and nt ment
Mining ntary agreeme
services price
Co., Ltd. material nt
Benxi Execute
Purchas Relate
Steel & accordi
Same e of On d
Iron ng to 2018.04
controll goods Freight agreeme agree 174.43 0.00% No Yes
(Group) the .20
er and nt ment
Mining agreeme
services price
Co., Ltd. nt
Benxi
Steel & Raw Execute
Purchas Relate
Iron material accordi
Same e of On d
(Group) and 17,396. ng to 2018.04
controll goods agreeme agree 0.49% 20,000 No No
Metallurg suppleme 46 the .20
er and nt ment
y ntary agreeme
services price
Residues material nt
Co., Ltd.
Benxi
Steel &
Iron Execute
Purchas Relate
(Group) accordi
Same e of On d
Steel & Processin ng to 2018.04
controll goods agreeme agree 168.26 0.00% 1,000 No No
Iron g fee the .20
er and nt ment
Process agreeme
services price
and nt
Logistics
Co., Ltd.
Benxi
Steel &
Iron Execute
Purchas Relate
(Group) accordi
Same e of On d
Steel & ng to 2018.04
controll goods Products agreeme agree 0.00% No No
Iron the .20
er and nt ment
Process agreeme
services price
and nt
Logistics
Co., Ltd.
Benxi
Steel &
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Raw 8,215.5 ng to 2018.04
Real-estat controll goods agreeme agree 0.23% 12,000 No Yes
materials 7 the .20
e er and nt ment
agreeme
Develop services price
nt
ment Co.,
Ltd.
24
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Benxi
Steel &
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Spare 13,745. ng to 2018.04
Machiner controll goods agreeme agree 0.39% 30,000 No Yes
parts 15 the .20
y er and nt ment
agreeme
Manufact services price
nt
ure Co.,
Ltd.
Benxi
Steel &
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Repair 2,252.8 ng to 2018.04
Machiner controll goods agreeme agree 0.06% No No
services 2 the .20
y er and nt ment
agreeme
Manufact services price
nt
ure Co.,
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Spare ng to 2018.04
(Group) controll goods agreeme agree 526.58 0.01% No No
parts the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Project 7,854.9 ng to 2018.04
(Group) controll goods agreeme agree 0.22% No No
fee 7 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Repair 8,397.2 ng to 2018.04
(Group) controll goods agreeme agree 0.24% 70,000 No No
services 7 the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
Benxi
Raw Execute
Steel & Purchas Relate
material accordi
Iron Same e of On d
and ng to 2018.04
(Group) controll goods agreeme agree 83.75 0.00% No No
suppleme the .20
Construct er and nt ment
ntary agreeme
ion Co., services price
material nt
Ltd.
Benxi
Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
ng to 2018.04
(Group) controll goods Freight agreeme agree 708.03 0.02% No No
the .20
Construct er and nt ment
agreeme
ion Co., services price
nt
Ltd.
25
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) Spare ng to 2018.04
controll goods agreeme agree 0.00% No No
Industrial parts the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi
Raw Execute
Steel & Purchas Relate
material accordi
Iron Same e of On d
and 25,210. ng to 2018.04
(Group) controll goods agreeme agree 0.71% 45,000 No No
suppleme 95 the .20
Construct er and nt ment
ntary agreeme
ion Co., services price
material nt
Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) Repair 1,608.4 ng to 2018.04
controll goods agreeme agree 0.05% No No
Industrial services 2 the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) ng to 2018.04
controll goods Freight agreeme agree 540.76 0.02% No No
Industrial the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of On d
(Group) Project ng to 2018.04
controll goods agreeme agree 244.17 0.01% No No
Industrial fee the .20
er and nt ment
Develop agreeme
services price
ment Co., nt
Ltd.
Benxi Raw
Steel & material Execute
Purchas Relate
Iron & accordi
Same e of On d
(Group) suppleme ng to 2018.04
controll goods agreeme agree 651.23 0.02% No No
Construct ntary the .20
er and nt ment
ion and materials agreeme
services price
Repairing & spare nt
Co., Ltd. parts
Benxi Execute
Steel & Purchas Relate
accordi
Iron Same e of On d
Project 5,058.4 ng to 2018.04
(Group) controll goods agreeme agree 0.14% 25,000 No No
fee 9 the .20
Construct er and nt ment
agreeme
ion and services price
nt
Repairing
26
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Co., Ltd.
Benxi
Steel & Execute
Purchas Relate
Iron accordi
Same e of Accounts On d
(Group) 12,129. ng to 2018.04
controll goods payable agreeme agree 0.34% No No
Construct 28 the .20
er and for repair nt ment
ion and agreeme
services price
Repairing nt
Co., Ltd.
Raw Execute
Purchas Relate
Bengang material accordi
Same e of On d
Electronic and 14,201. ng to 2018.04
controll goods agreeme agree 0.40% 21,000 No No
s and Gas suppleme 43 the .20
er and nt ment
Co., Ltd. ntary agreeme
services price
material nt
Execute
Purchas Relate
Bengang accordi
Same e of On d
Electronic Project ng to 2018.04
controll goods agreeme agree 0.00% No No
s and Gas fee the .20
er and nt ment
Co., Ltd. agreeme
services price
nt
Execute
Purchas Relate
Bengang accordi
Same e of On d
Electronic Repair 1,824.5 ng to 2018.04
controll goods agreeme agree 0.05% No No
s and Gas services 7 the .20
er and nt ment
Co., Ltd. agreeme
services price
nt
Benxi
Execute
High-tech Purchas Relate
accordi
Drilling Same e of On d
Spare ng to 2018.04
Tools controll goods agreeme agree 104.3 0.00% 800 No No
parts the .20
Manufact er and nt ment
agreeme
ure Co., services price
nt
Ltd.
Benxi Execute
Purchas Relate
New accordi
Same e of Labor On d
Career ng to 2018.04
controll goods protection agreeme agree 533.84 0.01% No No
Develop the .20
er and fee nt ment
ment Co., agreeme
services price
Ltd. nt
Raw
Benxi Execute
Purchas material Relate
New accordi
Same e of and On d
Career ng to 2018.04
controll goods suppleme agreeme agree 692.7 0.02% 2,000 No No
Develop the .20
er and ntary nt ment
ment Co., agreeme
services material price
Ltd. nt
and food
Execute
Liaoning Purchas Relate
accordi
Metallurg Same e of On d
Training ng to 2018.04
y controll goods agreeme agree 0.00% No No
fees the .20
Technicia er and nt ment
agreeme
n College services price
nt
27
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Execute
Liaoning Purchas Relate
accordi
Metallurg Same e of On d
Spare 1,504.9 ng to 2018.04
y controll goods agreeme agree 0.04% 3,000 No No
parts 8 the .20
Technicia er and nt ment
agreeme
n College services price
nt
Execute 2018.04
Liaoning Purchas Relate
accordi .20
Metallurg Same e of On d
Project ng to
y controll goods agreeme agree 159.82 0.00% No No
fee the
Technicia er and nt ment
agreeme
n College services price
nt
Execute 2018.04
Liaoning Purchas Relate
accordi .20
Metallurg Same e of On d
Repair ng to
y controll goods agreeme agree 259.04 0.01% 1,500 No No
services the
Technicia er and nt ment
agreeme
n College services price
nt
Bengang 2018.04
Group Execute .20
Purchas Relate
Internatio accordi
Same e of On d
nal Agency 7,905.4 ng to
controll goods agreeme agree 0.22% No No
Economic fee 7 the
er and nt ment
and agreeme
services price
Trading nt
Co., Ltd.
Bengang 2018.04
Group Execute .20
Purchas Relate
Internatio accordi
Same e of On d
nal Port 16,376. ng to
controll goods agreeme agree 0.46% 36,000 No No
Economic surcharges 02 the
er and nt ment
and agreeme
services price
Trading nt
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Spare 1,521.6 ng to
Informati controll goods agreeme agree 0.04% No No
parts 9 the
on and er and nt ment
agreeme
Automati services price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Project 2,024.8 ng to
Informati controll goods agreeme agree 0.06% 8,000 No No
fee 7 the
on and er and nt ment
agreeme
Automati services price
nt
c Tech
Co., Ltd.
Benxi Same Purchas Repair On Relate 968.96 0.03% No Execute No 2018.04
28
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Steel & controll e of services agreeme d accordi .20
Iron er goods nt agree ng to
(Group) and ment the
Informati services price agreeme
on and nt
Automati
c Tech
Co., Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Purchas Relate
accordi
(Group) Same e of On d
Heating ng to
Thermal controll goods agreeme agree 176.63 0.00% 2,000 No No
costs the
Power er and nt ment
agreeme
Develop services price
nt
ment Co.,
Ltd.
Benxi 2018.04
Steel & .20
Raw Execute
Iron Purchas Relate
material accordi
(Group) Same e of On d
and ng to
Thermal controll goods agreeme agree 3.67 0.00% No No
suppleme the
Power er and nt ment
ntary agreeme
Develop services price
material nt
ment Co.,
Ltd.
Benxi Execute 2018.04
Purchas Relate
Steel & accordi .20
Same e of On d
Iron Design ng to
controll goods agreeme agree 385.79 0.01% 3,000 No No
(Group) fees the
er and nt ment
Designing agreeme
services price
Institute nt
Benxi Raw Execute 2018.04
Purchas Relate
Beiying material accordi .20
Same e of On d
Steel & and 1,131,9 ng to
controll goods agreeme agree 31.73% No No
Iron suppleme 47.10 the
er and nt ment
(Group) ntary agreeme
services price
Co., Ltd. material nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & Energy & 64,877. ng to
controll goods agreeme agree 1.82% No No
Iron Power 65 the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & 1,350,0 ng to
controll goods Freight agreeme agree 781.29 0.02% No No
Iron 00 the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Benxi Same Purchas On Relate 7,460.8 Execute 2018.04
Beiying controll e of Labor cost agreeme d 0.21% No accordi No .20
Steel & er goods nt agree ng to
29
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Iron and ment the
(Group) services price agreeme
Co., Ltd. nt
Benxi Execute 2018.04
Purchas Relate
Beiying accordi .20
Same e of On d
Steel & Spare ng to
controll goods agreeme agree 955.5 0.03% No No
Iron parts the
er and nt ment
(Group) agreeme
services price
Co., Ltd. nt
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Purchas Relate
Raw accordi
ical Same e of On d
material 9,117.9 ng to
Equipmen controll goods agreeme agree 0.26% 18,000 No No
and spare 5 the
t er and nt ment
parts agreeme
Manufact services price
nt
ure Co.,
Ltd.
Liaoning Execute 2018.04
Purchas Relate
Hengtai Raw accordi .20
Same e of On d
Heavy material ng to
controll goods agreeme agree 802.73 0.02% No No
Machiner and spare the
er and nt ment
y Co., parts agreeme
services price
Ltd. nt
Liaoning Execute 2018.04
Purchas Relate
Hengtai accordi .20
Same e of Repair On d
Heavy 1,437.1 ng to
controll goods and labor agreeme agree 0.04% 7,000 No No
Machiner 8 the
er and cost nt ment
y Co., agreeme
services price
Ltd. nt
Execute 2018.04
Purchas Relate
accordi .20
Bengang e of Property On d
Controll ng to
Group goods managem agreeme agree 84.55 0.00% 800 No No
er the
Co., Ltd. and ent fee nt ment
agreeme
services price
nt
Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Electronic goods Energy & ng to
controll agreeme agree 88.05 0.00% 500 No No
s and Gas and Power the
er nt ment
Co., Ltd. services agreeme
price
nt
Raw 2018.04
Benxi material Execute .20
Relate
Beiying Sales of & accordi
Same On d
Steel & goods suppleme 107,584 ng to
controll agreeme agree 2.66% No No
Iron and ntary .27 the
er nt ment
(Group) services materials agreeme
price
Co., Ltd. & spare nt
parts
Benxi Same Sales of On Relate 1,475.1 Execute 2018.04
Beiying controll goods Products agreeme d 0.04% 150,000 No accordi Yes .20
Steel & er and nt agree ng to
30
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Iron services ment the
(Group) price agreeme
Co., Ltd. nt
Benxi Execute 2018.04
Relate
Beiying Sales of accordi .20
Same On d
Steel & goods Energy & 33,191. ng to
controll agreeme agree 0.82% No No
Iron and Power 37 the
er nt ment
(Group) services agreeme
price
Co., Ltd. nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Real-estat controll agreeme agree 20.88 0.00% 800 No No
and Power the
e er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Real-estat controll agreeme agree 0.00% No No
and Power the
e er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi 2018.04
Steel & .20
Iron Execute
Relate
(Group) Sales of accordi
Same On d
Steel & goods Energy & ng to
controll agreeme agree 74.66 0.00% 10,000 No No
Iron and Power the
er nt ment
Process services agreeme
price
and nt
Logistics
Co., Ltd.
Benxi 2018.04
Steel & .20
Iron Execute
Relate
(Group) Sales of accordi
Same On d
Steel & goods ng to
controll Products agreeme agree 29.25 0.00% No Yes
Iron and the
er nt ment
Process services agreeme
price
and nt
Logistics
Co., Ltd.
Benxi Execute 2018.04
Steel & Relate .20
Sales of accordi
Iron Same On d
goods 1,065.9 ng to
(Group) controll Products agreeme agree 0.03% No Yes
and 9 the
Machiner er services
nt ment
agreeme
y price
nt
Manufact
31
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
ure Co.,
Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & 1,606.1 ng to
Machiner controll agreeme agree 0.04% 18,000 No No
and Power 0 the
y er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Benxi 2018.04
Raw
Steel & .20
material Execute
Iron Relate
Sales of & accordi
(Group) Same On d
goods suppleme ng to
Machiner controll agreeme agree 87.96 0.00% No No
and ntary the
y er nt ment
services materials agreeme
Manufact price
& spare nt
ure Co.,
parts
Ltd.
Benxi 2018.04
Execute
Steel & Relate .20
Sales of accordi
Iron Same On d
goods Energy & ng to
(Group) controll agreeme agree 156.41 0.00% No No
and Power the
Construct er nt ment
services agreeme
ion Co., price
nt
Ltd.
Raw 2018.04
Benxi
material Execute .20
Steel & Relate
Sales of & accordi
Iron Same On d
goods suppleme 1,026.5 ng to
(Group) controll agreeme agree 0.03% 30,000 No No
and ntary 4 the
Construct er nt ment
services materials agreeme
ion Co., price
& spare nt
Ltd.
parts
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods Energy & 71,317. ng to
controll agreeme agree 1.76% No No
(Group) and Power 95 the
er nt ment
Mining services agreeme
price
Co., Ltd. nt
Raw 2018.04
Benxi material Execute .20
Relate
Steel & Sales of & accordi
Same On d
Iron goods suppleme 9,874.0 ng to
controll agreeme agree 0.24% 100,000 No No
(Group) and ntary 6 the
er nt ment
Mining services materials agreeme
price
Co., Ltd. & spare nt
parts
Benxi Sales of Relate Execute 2018.04
Same On
Steel & goods Freight .20
controll agreeme d 804.19 0.02% No accordi No
Iron and revenue agree ng to
er nt
(Group) services ment the
32
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Mining price agreeme
Co., Ltd. nt
Benxi Execute 2018.04
Relate
Steel & Sales of accordi .20
Same On d
Iron goods 1,013.4 ng to
controll Products agreeme agree 0.03% No Yes
(Group) and 1 the
er nt ment
Mining services agreeme
price
Co., Ltd. nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & 2,913.1 ng to
Thermal controll agreeme agree 0.07% No No
and Power 8 the
Power er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi
Raw
Steel &
material Execute
Iron Relate
Sales of & accordi
(Group) Same On d
goods suppleme 2,264.7 ng to 2018.04
Thermal controll agreeme agree 0.06% 15,000 No No
and ntary 0 the .20
Power er nt ment
services materials agreeme
Develop price
& spare nt
ment Co.,
parts
Ltd.
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Freight ng to
Thermal controll agreeme agree 28.34 0.00% No No
and revenue the
Power er nt ment
services agreeme
Develop price
nt
ment Co.,
Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 814.35 0.02% 25,000 No No
Industrial and Power the
er nt ment
Develop services agreeme
price
ment Co., nt
Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods ng to
controll Products agreeme agree 0.00% No Yes
Industrial and the
er nt ment
Develop services agreeme
price
ment Co., nt
Ltd.
Benxi Same Sales of Raw On Relate 6,337.0 0.16% No Execute No 2018.04
Steel & controll goods material agreeme d 1 accordi .20
33
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Iron er and & nt agree ng to
(Group) services suppleme ment the
Industrial ntary price agreeme
Develop materials nt
ment Co., & spare
Ltd. parts
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Informati controll agreeme agree 16.89 0.00% 100 No No
and Power the
on and er nt ment
services agreeme
Automati price
nt
c Tech
Co., Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 136.39 0.00% 1,200 No No
Construct and Power the
er nt ment
ion and services agreeme
price
Repairing nt
Co., Ltd.
Benxi Raw 2018.04
Steel & material Execute .20
Relate
Iron Sales of & accordi
Same On d
(Group) goods suppleme ng to
controll agreeme agree 0.00% No No
Construct and ntary the
er nt ment
ion and services materials agreeme
price
Repairing & spare nt
Co., Ltd. parts
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods Energy & ng to
controll agreeme agree 448.98 0.01% No No
Metallurg and Power the
er nt ment
y services agreeme
price
Residues nt
Co., Ltd.
Benxi Raw 2018.04
Steel & material Execute .20
Relate
Iron Sales of & accordi
Same On d
(Group) goods suppleme 12,068. ng to
controll agreeme agree 0.30% 12,000 No No
Metallurg and ntary 73 the
er nt ment
y services materials agreeme
price
Residues & spare nt
Co., Ltd. parts
Benxi Execute 2018.04
Steel & Relate .20
Sales of accordi
Iron Same On d
goods Freight ng to
(Group) controll agreeme agree 0.00% No No
and revenue the
Metallurg er services
nt ment
agreeme
y price
nt
Residues
34
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Co., Ltd.
Benxi 2018.04
Steel & Execute .20
Relate
Iron Sales of accordi
Same On d
(Group) goods ng to
controll Products agreeme agree 0.00% No Yes
Metallurg and the
er nt ment
y services agreeme
price
Residues nt
Co., Ltd.
Execute 2018.04
Benxi Relate
Sales of accordi .20
Steel & Parent On d
goods Energy & ng to
Iron Compan agreeme agree 314.5 0.01% No No
and Power the
(Group) y nt ment
services agreeme
Co., Ltd. price
nt
Raw 2018.04
material Execute .20
Benxi Relate
Sales of & accordi
Steel & Parent On d
goods suppleme ng to
Iron Compan agreeme agree 736.31 0.02% 12,000 No No
and ntary the
(Group) y nt ment
services materials agreeme
Co., Ltd. price
& spare nt
parts
Benxi Execute 2018.04
Relate
New Sales of accordi .20
Same On d
Career goods Energy & ng to
controll agreeme agree 48.09 0.00% 500 No No
Develop and Power the
er nt ment
ment Co., services agreeme
price
Ltd. nt
Raw 2018.04
Benxi material Execute .20
Relate
New Sales of & accordi
Same On d
Career goods suppleme ng to
controll agreeme agree 0.00% No No
Develop and ntary the
er nt ment
ment Co., services materials agreeme
price
Ltd. & spare nt
parts
Execute 2018.04
Dalian Relate
Sales of accordi .20
Boluole Same On d
goods ng to
Steel controll Products agreeme agree 510.74 0.01% 1,000 No Yes
and the
Tube Co., er nt ment
services agreeme
Ltd. price
nt
Liaoning Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Steel & goods ng to
controll Products agreeme agree 38.85 0.00% 5,000 No Yes
Iron and the
er nt ment
Trading services agreeme
price
Co., Ltd. nt
Benxi Sales of Relate Execute 2018.04
Same On
Steel & goods Energy & d accordi No .20
controll agreeme 10.33 0.00% 50 No
Iron and Power agree ng to
er nt
(Group) services ment the
35
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
General price agreeme
Hospital nt
Benxi 2018.04
Steel & .20
Execute
Iron Relate
Sales of accordi
(Group) Same On d
goods Energy & ng to
Zhengtai controll agreeme agree 0.18 0.00% 50 No No
and Power the
Construct er nt ment
services agreeme
ion price
nt
Materials
Co., Ltd.
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Relate
Sales of accordi
ical Same On d
goods Energy & 1,156.6 ng to
Equipmen controll agreeme agree 0.03% No No
and Power 5 the
t er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Liaoning
Raw
Hengtong
material Execute
Metallurg Relate
Sales of & accordi
ical Same On d
goods suppleme 1,799.2 ng to 2018.04
Equipmen controll agreeme agree 0.04% 12,000 No No
and ntary 9 the .20
t er nt ment
services materials agreeme
Manufact price
& spare nt
ure Co.,
parts
Ltd.
Liaoning 2018.04
Hengtong .20
Execute
Metallurg Relate
Sales of accordi
ical Same On d
goods ng to
Equipmen controll Products agreeme agree 611.65 0.02% No Yes
and the
t er nt ment
services agreeme
Manufact price
nt
ure Co.,
Ltd.
Raw 2018.04
Bengang
material Execute .20
Cold-rolle Relate
Sales of & accordi
d Same On d
goods suppleme ng to
Stainless controll agreeme agree 7.16 0.00% 500 No No
and ntary the
Steel er nt ment
services materials agreeme
Dandong price
& spare nt
Co., Ltd.
parts
Bengang 2018.04
Execute
Cold-rolle Relate .20
Sales of accordi
d Same On d
goods ng to
Stainless controll Products agreeme agree 0.00% No No
and the
Steel er nt ment
services agreeme
Dandong price
nt
Co., Ltd.
36
Bengang Steel Plates Co., Ltd. Annual Report 2017
The
Amount
approve Means
Pricing Price of Whethe Availabl
d of
Type of Content of principle of related Proporti r exceed e
trading paymen Index
related related of relate party on of the market Date of
Related Relation limit of t of of
party party related d transacti similar approve price of disclosu
parties ship transacti related disclos
transacti transactio party party ons (in transacti d similar re
ons (in party ure
ons ns transacti transa 10 ons limited transacti
10 transacti
ons ctions thousan (Y/N) ons
thousan ons
d)
d)
Execute 2018.04
Relate
Suzhou Sales of accordi .20
Same On d
Bengang goods 26,643. ng to
controll Products agreeme agree 0.66% 36,000 No Yes
Industrial and 27 the
er nt ment
Co., Ltd. services agreeme
price
nt
Execute 2018.04
Relate
Bengang Sales of accordi .20
Same On d
Group goods Energy & ng to
controll agreeme agree 1.49 0.00% 800 No No
Finance and Power the
er nt ment
Co., Ltd. services agreeme
price
nt
Execute
Relate
Sales of accordi
Bengang On d
Controll goods Energy & ng to 2018.04
Group agreeme agree 2.47 0.00% 500 No No
er and Power the .20
Co., Ltd. nt ment
services agreeme
price
nt
1,989,3 2,522,6
Total -- -- -- -- -- -- -- --
09.78 00.00
Details of any sales return of a large
None
amount
Give the actual situation during the
reporting period where a forecast had
been made for the total amounts of
None
routine related-party transactions，by
type to occur in the current period(if
any)
Reason for any significant difference
between the transaction price and the
None
Market price for reference (if
applicable)
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there are any non-operating related credits and debts
□ Yes √ No
There were no non-operating related credits and debts during the reporting period.
37
Bengang Steel Plates Co., Ltd. Annual Report 2017
5. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
□ Applicable √ Not applicable
There was no lease during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√ Applicable □ Not applicable
Resource of entrusted
Type Entrusted funds amount Unexpired balance Overdue amount
funds
Temporary turnover
Bank financial products 68,000 50,000
capital
Total 68,000 50,000
The specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable √ Not applicable
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
38
Bengang Steel Plates Co., Ltd. Annual Report 2017
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing other corporation social responsibilities
During the reporting period, the Company conformed to the provisions stipulated by the relevant documents of social responsibility
implementation, actively protected the legitimate rights and interests of the creditors and staff, honestly treated the suppliers,
customers and consumers and actively engaged in the public welfare undertakings such as environmental protection and community
development, while pursuing the economic profits and protecting the interests of the shareholders. In the business activities, the
company consciously complied with the principle of voluntariness, fairness, compensation of equal value and honesty and credibility,
consciously abided by social morality, professional ethics, consciously accepted the supervision from the government and the public
and actively performed the company’s social responsibility.
2. Performing corporation social responsibility of targeted poverty alleviation
In the annual report of the company, there has been no accurate poverty alleviation work, and there is no follow-up accurate poverty
alleviation plan.
3. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental
protection department.
Yes
Main The
The number Emission The Approved Surpass the
pollutants Discharge distribution Total
Name of discharge concentratio emission total emission
and specific modes of discharge emission
hatch n standard emission standard
pollutants hatch
Energy
integral
Bengang Unapproved
factory Sewage
Steel Plates COD Continuous 1 Sewage 50 336 by the None
sewage 21.6
Co., Ltd. government
treatment
plant.
Raw None
material
dumper,
transfer
station,
mine pit,
pre-mixing; Raw
Raw
ironmaking materials
materials
iron and 14-23;
25;
steel field, Ironmaking
ironmaking
furnace top, 7-35;
25-50;
fuel, Steelmaking
steelmaking
Bengang Continuous solvent, 7-27; Unapproved
Particulate 20-50;
Steel Plates and 178 whole grain, Special 34321.25 by the
Matter special steel
Co., Ltd. intermittent ore coke steel 7-15; government
20; power
tank, Power
generation
sintering generation
10-30; cold
head, tail; 5-10; Cold
rolling 20;
steelmaking rolling;
hot rolling
water 6-18 hot
20.
pretreatmen rolling 6-15.
t, iron alloy
feeding ,
North-South
inverted
irrigation
stations,
39
Bengang Steel Plates Co., Ltd. Annual Report 2017
primary
dust
removal,
secondary
dust
removal,
refining and
dust
removal;
special steel
furnace,
refining
furnace,
electro slag
furnace;
desulfurizati
on and
denitrificati
on of power
generation
boilers;
cold-rolled
acid
regeneration
, pickling,
tensioning,
welding,
leveling,
Annealing,
baking; hot
rolling
furnace.
Ironmaking Sintering Unapproved None
sintering machine Sintering by the
head; power head 12-40; head 200; government
generation power power
Bengang Continuous
boiler; cold generation generation
Steel Plates SO and 64 3912.25
rolling 10-70; cold 100-200;
Co., Ltd. intermittent
roasting, rolling cold rolling
annealing; 80-100; hot 150; hot
hot rolling rolling rolling 150.
furnace. 118-128.
Ironmaking Unapproved None
Sintering
sintering by the
head Sintering
head; power government
100-230; head 300;
generation
power power
Bengang Continuous boiler; cold
Oxides of generation generation
Steel Plates and 57 rolling 11594.00
nitrogen 50-140; 100-200;
Co., Ltd. intermittent roasting,
cold rolling cold rolling
annealing;
69-172; hot 300; hot
hot rolling
rolling rolling 300.
furnace.
105-124.
furnace.
Construction and operation of pollution prevention facility:
The company has a total of 178 sets of environmental pollution prevention and control facilities. In addition to the hot rolling mill
2300 production line, the rough-rolling finishing rolling plastic plate dust collector which is designed for the production of stainless
steel, the rest of the facilities are put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects
(1) Bengang Baojin (Shenyang) Auto New Material Technology Co., Ltd. processing and distribution project received approval
from the environmental assessment: Shenyang East Environmental Protection Bureau Dadong Branch,
Shen-Huan-Bao-Da-Dong-Shen-Zi [2017] 0040.
(2) The No.7 blast furnace dry dust removal and TRT reconstruction project of the Plate Energy Plant received the approval of the
environmental assessment: Ben-Huan-Jian-Biao-Zi [2017]08.
40
Bengang Steel Plates Co., Ltd. Annual Report 2017
(3) Newly-built fueling station construction project of the Storage and Transportation Center, obtained the acceptance of
environmental protection approval: Ben-Huan-Yan [2017] No. 11
(4) Plate-fired power plant high-pressure workshop coal-fired boiler desulfurization and denitrification project, obtained
environmental protection acceptance approval: Ben-Huan-Yan [2017] 09
(5) Newly built 566-sintering sinter machine for slabs - supporting waste heat utilization project for power plants, obtained approval
for environmental protection acceptance: Ben-Huan-Yan [2017] No.15.
Emergency plan for emergency environmental incidents
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, and carried out
related work such as risk assessment and investigation of emergency resources in accordance with the \"Law of the People's Republic
of China on Incident Responses\", \"Notice on Printing and Distributing the Guidelines for Risk Assessment of Enterprises'
Environmental Emergencies (Trial)\", and \"Emergency Preparedness for Environmental Incidents of Enterprises and Institutions\"
Existing laws and regulations such as the Administrative Measures (Trial).
Environmental self-monitoring project.
In 2017, the company's pollution monitoring points were: 187 flue gas, 9 wastewater monitoring sites, and 5 noise points at the plant
boundary. The monitoring schedule was divided into weeks, months, quarters and half-years to monitor and a total of 8622 data were
reported.
Other environmental information that should be disclosed
None
Other environmental protection related information
Pursuant to the “ Notice of the tenth clean production audit issued by the Liaoning Provincial Environmental Protection Department’,
four organizations, including sheet ironmaking plants, sheet steelmaking plants, sheet cold rolling mills, and Bengang Pohang Cold
Rolling Plant were responsible for conducting cleaner production audits and completing audit evaluations.
XIX. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
41
Bengang Steel Plates Co., Ltd. Annual Report 2017
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change Increase/decrease(+，-) After the Change
Capitalization
Issuing of Bonus
Quantity Percentage of common Others Subtotal Quantity Percentage
new share shares
reserve fund
II. Non-restricted Shares 3,136,000,000 100.00% 3,136,000,000 100.00%
1. Common shares in
2,736,000,000 87.24% 2,736,000,000 87.24%
RMB
2. Foreign shares in
400,000,000 12.76% 400,000,000 12.76%
domestic market
III. Total shares 3,136,000,000 100.00% 3,136,000,000 100.00%
Causation of share capital changes
□ Applicable √ Not applicable
Approval of share capital changes
□ Applicable √ Not applicable
Status of registration process of transferred shares
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, and net asset per
share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
□ Applicable √ Not applicable
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
□ Applicable √ Not applicable
2. Total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Employee Shareholding Status
□ Applicable √ Not applicable
42
Bengang Steel Plates Co., Ltd. Annual Report 2017
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
Total number The total number of Total preferred
Total shareholders
of common shareholders at the
at the end of the preferred shareholders
shareholders at end of the month from
65,786 month from the 68,592 voting rights restored at 0
the end of the the date of disclosing
date of disclosing the end of the reporting
reporting the annual report (if
the annual report period (See Notes 8)
period any) (See Notes 8)
Shareholding of shareholders holding more than 5% or top 10 shareholders
Changes Number of pledged or
Holding Number of Restricted
Name of the Nature of in Un-restricted frozen shares
Percentage shares held at shares
shareholder shareholder reporting shares held
(%) period-end held Status Number
period
1,483,095,13
Benxi Steel & Iron State-owned -157,904,8 Pledged
72.84% 2,284,411,202 2,284,411,202
(Group) Co., Ltd. legal person
Frozen 45,000,000
VANGUARD
EMERGING Overseas legal
0.26% 8,157,311 8,157,311
MARKETS STOCK person
INDEX FUND
Domestic
Chen Jinhong 0.18% 5,707,500 5,707,500
natural person
Domestic
Liu Ruijun 0.16% 5,123,800 5,123,800
natural person
VANGUARD TOTAL
INTERNATIONAL Overseas legal
0.15% 4,606,141 4,606,141
STOCK INDEX person
FUND
Domestic
Wu Zhanglin 0.13% 4,071,200 4,071,200
natural person
Domestic
Yu Xiaofan 0.13% 4,002,707 4,002,707
natural person
FIRST TRUST
EMERGING
Overseas legal
MARKETS SMALL 0.13% 3,951,482 3,951,482
person
CAP ALPHADEX
FUND
Hong Kong Securities
Overseas legal
Clearing Company 0.12% 3,898,387 3,898,387
person
Limited
Bank of China
Limited by Share Ltd
- South quantitative Others 0.11% 3,589,600 3,589,600
growth stock
investment fund
Strategy investors or general legal
person becomes top 10 shareholders
None
due to rights issued (if any ) (See
Notes 3)
Notes to relationship or ‘action in It is unknown to the Company whether there is any related connection or ‘Action in
concert’ among the top 10 Concert’ as described by Rules of Information Disclosing Regarding Changing of
shareholders. Shareholding Status of Listed Companies existing among the above shareholders.
Shareholding of top 10 unrestricted shareholders
Name of the shareholder Un-restricted shares held at Category of shares
43
Bengang Steel Plates Co., Ltd. Annual Report 2017
the end of the reporting period Category of shares Quantity
Benxi Steel & Iron (Group) Co., Ltd. 2,284,411,202 Common shares in RMB 2,284,411,202
VANGUARD EMERGING MARKETS
8,157,311 Foreign shares in domestic exchange 8,157,311
STOCK INDEX FUND
Chen Jinhong 5,707,500 Common shares in RMB 5,707,500
Liu Ruijun 5,123,800 Foreign shares in domestic exchange 5,123,800
VANGUARD TOTAL
INTERNATIONAL STOCK INDEX 4,606,141 Foreign shares in domestic exchange 4,606,141
FUND
Wu Zhanglin 4,071,200 Common shares in RMB 4,071,200
Yu Xiaofan 4,002,707 Foreign shares in domestic exchange 4,002,707
FIRST TRUST EMERGING MARKETS
3,951,482 Foreign shares in domestic exchange 3,951,482
SMALL CAP ALPHADEX FUND
Hong Kong Securities Clearing Company
3,898,387 Common shares in RMB 3,898,387
Limited
Bank of China Limited by Share Ltd -
South quantitative growth stock 3,589,600 Common shares in RMB 3,589,600
investment fund
Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with
any of the other shareholders among the top 10 shareholders, neither being regarded as
Notes to relationship or ‘action in concert’ action-in-concert parties by the Information Disclosure Regulations for Change of
among the top 10 non-restricted Shareholding in PLC. The Company is not aware of any relationship among the other
shareholders, and among the top 10 shareholders, neither being regarded as action-in-concert parties by the Information
non-restricted shareholders and top 10 Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware
shareholders of any relationship among the top 10 shareholders, neither being regarded as
action-in-concert parties by the Information Disclosure Regulations for Change of
Shareholding in PLC.
Benxi Steel & Iron (Group) Co., Ltd. holds 2,034,411,202 shares of the Company’s
Shareholders among the top 10
stock through ordinary security account and holds 250,000,000 shares of the Company’s
participating in securities margin trading
stock through credit security account, totaling 2,284,411,202 shares. Wu Zhanglin. holds
(if any) (see Note 4)
4,071,200 shares of the Company’s stock through credit security account.
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing
in reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the
Legal representative Date of Organization
Controlling Principal business activities
/ person in charge incorporation Code
shareholder
Business scope: steel smelt, mine exploitation, panel
rolling, oxygen manufacturing, pipe manufacturing, power
generating, coal industry, special steel material
manufacturing, heating, supply of the water, electricity,
wind and gas, metal processing, electro mechanics builds,
Benxi Steel & device manufacturing, architecture installation, railway,
912105001197 highway transportation, import and export trade, traveling
Iron (Group) Co., Han Ge July 10,1996
26263U industry, construction material, refractory material,
Ltd.
measuring device instrument, goods and materials supply
and marketing, development of real estate, scientific
research, design , information service, property
management, telecommunication, processing of waste
iron, property leasing, exchange of steel material, and
recycling of waste oils (to the extent of licensed to the
44
Bengang Steel Plates Co., Ltd. Annual Report 2017
subsidiary companies) , property management; publishing
of Bengang Daily; designing and making of presswork and
advertisement, releasing, producing of TV advertisements
in the country and abroad.
Equity of other
domestic/foreign
listed company
with share
controlling and None
share participation
by controlling
shareholder in
reporting period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
Name of the controlling Legal representative Principal business
Date of incorporation Organization Code
shareholder / person in charge activities
Bengang Group Co., Ltd. Chen Jizhuang November 25, 2010 912100005646255759 Asset management
Equity of other
domestic/foreign listed
company with share
controlling and share None
participation by controlling
shareholder in reporting
period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There is no change of actual controller during the reporting period.
Block diagram of the ownership and control relations between the Company and the actual controller
Liaoning Provincial State-owned Assets
Supervision and Administration Commission
Liaoning Council for social security fund
80% 20%
Bengang Group Finance Co., Ltd.
100%
Benxi Steel & Iron (Group) Co., Ltd.
72.8%
Bengang Steel Plates Co., Ltd.
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
45
Bengang Steel Plates Co., Ltd. Annual Report 2017
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring
Party and Other Commitment Subjects
□ Applicable √ Not applicable
46
Bengang Steel Plates Co., Ltd. Annual Report 2017
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no Preferred Shares during the reporting period.
47
Bengang Steel Plates Co., Ltd. Annual Report 2017
VIII. Status of Directors, Supervisors, Senior Executives and
Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
Shares Shares Shares Shares
Other
Starting Expiry date held at increased decreased held at
Office increase
Name Position Sex Age date of of office the during the during the the
status /
office term term year-beg reporting reporting year-en
decrease
in period period d
In December May 26,
Wang Shu Director, Chairman Male 47
office 27, 2016
In October 26, May 26,
Cao Aimin Director, Chairman Male 51
office 2009
Director, General In February May
Han Ge Male 49
Manager office 19, 2014 26,2019
Tang In December May
Director Male 55
Chaosheng office 27, 2016 26,2019
Independent In May 17, May
Jin Yongli Male 60
Director office 2013 26,2019
Zhong Independent In May 20, May
Female 62
Tianli Director office 2014 26,2019
Zhao Independent In May 21, May
Male 58
Xinan Director office 2015 26,2019
Supervisor,
Chairman of In February May
Dong Liju Female 54
Supervisory office 19, 2014 26,2019
Committee
In February May
Han Mei Supervisor Female 49
office 19, 2014 26,2019
In February May
Li Lin Supervisor Female 50
office 19, 2014 26,2019
Li In April 1, May
Supervisor Male 45
Zhengchun office 2015 26,2019
Zhang In January 26, May
Supervisor Male 41
Yanlong office 2014 26,2019
Bao Deputy General In December May
Male 55
Mingwei Manager office 28, 2012 26,2019
Wang Deputy General In January 26, May
Male 53
Fengmin Manager office 2014 26,2019
Hu Deputy General In January 26, May
Male 58
Guangyuan Manager office 2014 26,2019
Wang Deputy General In October 28, May
Male 54
Shaoyu Manager, CFO office 2015 26,2019
Secretary of the In August 3, May
Sun Yanbin Male 36
Board office 2015 26,2019
Zhang Deputy General Resign June 26, August
Male
Jichen Manager ed 2008 23,2017
Total -- -- -- -- -- --
48
Bengang Steel Plates Co., Ltd. Annual Report 2017
II. Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date Reason
Deputy General
Zhang Jichen Resigned August 23,2017 Age
Manager
III. Posts holding
Work experience in the past five years of Directors, Supervisors and Senior Executives in current office
Profiles of the members of the Board:
Wang Shu, Male, 47, undergraduate, MBA，economist. Once General Manager Assistant of Benxi Steel & Iron (Group) Co., Ltd.and
Manager of Guo Mao; General Manager Assistant of Bengang Group Co., Ltd. and Manager of Guo Mao; Deputy General Manager
of Bengang Group Co., Ltd. He is now deputy CCP Secretary, General Manager, Deputy Chairman of Bengang Group Co., Ltd. and
Chairman of Bengang Steel Plates Co., Ltd.
Cao Aimin, Male, 51, undergraduate, senior accountant. Once Head of Capital Division of Finance Department; Head of Planning
and Finance Division; and Chief Accountant. He is now Director and Chief Accountant of Bengang Group Co., Ltd., Vice Chairman
of Bengang Steel Plates Co., Ltd.
Hen Ge, Male, 49, undergraduate, MBA, senior engineer. Once he was manager of hot-rolling factory of the Company; vice manager
of iron-making factory; assistant of general manager of Bengang Group. He is now Chairman of Benxi Steel & Iron (Group) Co., Ltd.
and General Manager of Bengang Steel Plates Co., Ltd.
Tang Chaosheng, Male, 55, postgraduate, senior accountant. Once he was Chief Accountant of Bengang Group Dalian Fire Resistant
Material Co., Head of No.1 Division of Bengang Group Audit Department; Chief Accountant of Bengang Bei Ying; Head of
Bengang Goup Co. Ltd. Finance Department. He is now Assistant General Manager and Head of Finance Department of Bengang
Group Co., Ltd. and Director of Bengang Steel Plates Co., Ltd.
Jin Yongli, Male, 60, postgraduate, professor. Once he was the dean of engineering school of Shenyang University. At present he is
the dean of Business School of Shenyang University. He has been Independent Director of the Company since May 2013.
Zhong Tianli, Female, 62. Once she was Professor of Northeast Universities (Doctorial Tutor). Once she was vice dean of Business
School of Northeast University, dean of Fundamental Study School and Head of Accounting Institute of Northeast University. At
present she is professor of Accounting Dept. of Business School of Northeast University. She has been Independent Director of the
Company since May 2014.
Zhao Xinan, Male, 58, Professor of Northeast Universities (Doctorial Tutor). Once he was vice dean of Business School of Northeast
University, member of the national Education Dept of Management science and Engineering Teaching steering Committee; He is
now Professor of Business School of Northeast University. He has been independent director of the Company since May 2015.
Profiles of the Supervisory Committee:
Dong Liju, Female, 54, undergraduate, senior engineer. Once she was head of auditing department of the Company; the secondary
Chairman of Supervisory Committee of the Company. She now is Supervisor, Deputy Secretary Commission for Discipline
Inspection of Bengang Group; Chairman of Supervisory Committee of Bengang Steel Plates Co., Ltd.
Hen Mei, Female, 49, undergraduate, senior accountant. Once she was the vice head of financial department of the Company; vice
head of auditing department and head of administration department of the supervisory committee of Bengang Group; Provincial
Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of Audit Dept. She now is Head of Audit Department,
Head of Supervisory Committee Management of Bengang Group; Head of Audit Department and the third Chairman of Supervisory
Committee of Benxi Steel & Iron (Group) Co. Ltd.; Supervisor of Bengang Steel Plates Co. Ltd.
Li Lin, Female, 50, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group; vice chief engineer
of Transportation Department of the Company; substitute chairman of the trade union of Transportation Department of the Company.
She now is Secretary of Commission for Discipline Inspection of Transportation Department and Chairman of the Labour Union of
Bengang Steel Plates Co. Ltd. She is Supervisor of Bengang Steel Plates Co. Ltd.
Li Zhengchun, Male, 45, undergraduate, senior administration engineer. Once he was member of Huan Resource Department of
Bengang Group; Assistant Director, Director of Organization Management Department. He now is Deputy Director of CCP Work
Department of Bengang Steel Plates Co. Ltd.; Deputy Chairman of Labour Union, Deputy Secretary of Commission for Discipline
49
Bengang Steel Plates Co., Ltd. Annual Report 2017
Inspection and Supervisor of Bengang Steel Plates Co. Ltd.
Zhang Yanlong, Male, 41, undergraduate, senior engineer. He once was the workshop manager of steel-making factory; vice chief of
QC department of iron-making factory, Director of Steel-making plant, Manager of Manufacturing Department of Bengang Steel
Plates Co., Ltd.; He is now the assistant of director of production division of steel-making plant, Supervisor of Bengang Steel Plates
Co. Ltd.
Executives other than directors:
Bao Mingwei, Male, 55, undergraduate, senior engineer. Once he was Vice Director and Secretary of CCP of hot-rolled steel plant of
Bengang Steel Plates Co. Ltd., Director of the plant. He is now Vice General Manager of Bengang Steel Plates Co. Ltd.
Wang Fengmin, Male, 53, postgraduate, senior engineer. Once he was Vice Director of Iron-making plant, Director and Secretary of
CCP of Iron-making plant of Bengang Steel Plates Co. Ltd. He is now Vice General Manager and Director of Manufacturing
Department of Bengang Steel Plates CO. Ltd.
Hu Guangyuan, Male, 58, postgraduate, senior engineer. Once he was the vice general manager and general manager of Bengang
Puxiang Cool-rolling Plate Co., Ltd.; Vice General Manager and Dean of Product Research and Development Institution of Bengang
Steel Plates Co. Ltd. He is now Vice General Manager of Bengang Steel Plates Co. Ltd. and Director of cold-rolled plant.
Wang Shaoyu, Male, 54, undergraduate, senior accountant. Once he was Vice Director of Financial Department of Bengang Steel
Plates Co. Ltd.; Deputy director, Director of Financial Department; Assistant of General Manager. He is now Vice General Manager
and Director of Financial Department of Bengang Steel Plates Co. Ltd.
Sun Yanbin, Male, 36, undergraduate, senior accountant. Once he was the officer and deputy director of budget finance Dept of
Bengang Group; manager of Finance Dept of hot rolling factory of Finance Dept of Bengang Steel Plates Co., Ltd.; the assistant
minister of Finance Dept of Bengang Steel Plates Co., Ltd.. At present he is the Secretary of the Board of Bengang Steel Plates Co.,
Ltd..
Posts holding in Shareholders
√ Applicable □ Not applicable
Does he /she
Expiry
Starting date of receive
Names of the Names of the date of
Titles engaged in the shareholders remuneration or
persons in office shareholders office term office
allowance from
term
the shareholder
Vice Secretary of CCP, General Manager,
Wang Shu Bengang Group Co., Ltd. December 1, 2013 Yes
Chairman
Cao Aimin Bengang Group Co., Ltd. Director, Chief Accountant November 1, 2010 Yes
Benxi Steel & Iron (Group)
Han Ge Chairman March 1, 2016 No
Co., Ltd.
General Manager Assistant, Director of
Tang Chaosheng Bengang Group Co., Ltd. February 1, 2013 Yes
Financial Department
Supervisor, Deputy Secretary of
Dong Liju Bengang Group Co., Ltd. September 1, 2014 Yes
Commission for Discipline Inspection
Director of Audit Department, Director of
Han Mei Bengang Group Co., Ltd. February 1, 2016 Yes
Supervisory Committee Management
Office taking in
shareholder None
companies
Posts holding in other companies
□ Applicable √ Not applicable
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors, Supervisors and Senior
Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented upon approval of the
50
Bengang Steel Plates Co., Ltd. Annual Report 2017
Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee undertakes
assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration policies for Directors,
Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties. Remunerations are
distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
Unit: 10 thousand Yuan
Total Whether receive
remuneration remuneration in
Name Position Sex Age Office status
received from the the Company's
shareholder related parties
Wang Shu Director, Chairman Male 47 In office Yes
Cao Aimin Director, Chairman Male 51 In office Yes
Han Ge Director, General Manager Male 49 In office 34.81 No
Tang Chaosheng Director Male 55 In office Yes
Jin Yongli Independent Director Male 60 In office 5 No
Zhong Tianli Independent Director Female 62 In office 5 No
Zhao Xinan Independent Director Male 58 In office 5 No
Supervisor, Chairman of
Dong Liju Female 54 In office Yes
Supervisory Committee
Han Mei Supervisor Female 49 In office Yes
Li Lin Supervisor Female 50 In office 13.85 No
Li Zhengchun Supervisor Male 45 In office 12.85 No
Zhang Yanlong Supervisor Male 41 In office 12.21 No
Bao Mingwei Deputy General Manager Male 55 In office 25.82 No
Wang Fengmin Deputy General Manager Male 53 In office 25.52 No
Hu Guangyuan Deputy General Manager Male 58 In office 25.6 No
Deputy General Manager,
Wang Shaoyu Male 54 In office 25.47 No
CFO
Sun Yanbin Secretary of the Board Male 36 In office 10.58 No
Zhang Jichen Deputy General Manager Male 61 Resigned 15.61 No
Total -- -- -- -- 217.32 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company 19,253
Population of in-service staff in main subsidiaries
Total population of in-service staff 19,841
Total population of staff receiving remuneration in the current 19,841
51
Bengang Steel Plates Co., Ltd. Annual Report 2017
period
Population of retired staff whose expense was borne by parent
21,949
company and major subsidiary companies
Professional Composition
Type of Professional Composition Population
Production Staff 16,007
Sales Staff
Technician 1,388
Financial Staff
Administrative Staff 2,087
Total 19,841
Educational Degree
Type of Educational Degree Population
PhD.
Postgraduate
Undergraduate 3,508
Junior college 5,531
Others 10,441
Total 19,841
2. Remuneration Policies
In 2017, the company further strengthened payroll distribution management, raised the income level of employees, and carried out
various work in a down-to-earth manner. The company raised the standard for the calculation and calculation of payrolls for seniority,
increase the level of pay and income of employees, and constantly optimize the distribution relationship. Strengthen the management
of remuneration distribution, clarify the responsibilities and the issuance process of special award management departments, and
highlight the process control of performance-based wages. Re-evaluate the ERP salary management operation authority, define the
privilege level, and improve the data security of the payroll management system. Continue to improve ERP payroll report
management, data extraction and information upload operations, and improve the efficiency of pay management.
3. Training Plan
88 training programs were provided to 18449 employees, ensuring that 85% training plan were enforced and 70% of the whole
employees were covered.
4. Outsourcing
□ Applicable √ Not applicable
52
Bengang Steel Plates Co., Ltd. Annual Report 2017
IX. Corporate Governance
I. Basic Situation of Corporate Governance
Since listed in the stock exchange, the Company has been following the laws, regulations and documents such as the Company Law,
Securities Law, Listed Company Governance Rules, Shareholders’ Meeting Criteria of Listed Companies, Guide of Lifting the
Quality of Listed Company, and Instructions for Articles of Association of Listed Companies. The Company has been establishing
and improving governance structure to protect the interests of the Company and the investors. The Shareholders’ Meeting was
working with clear responsibilities and decision making procedures. Arrangements were made to enable convenient participating of
the public investors. Online voting system was introduced for material decision making processes. During the reporting period,
according to the relevant laws and regulations, and combining with the actual situation of the Company, ‘Company policy’ and
‘Rules of Shareholders' General Meeting’ was formulated.
Whether there exist any difference in compliance with corporate governance, PRC Company Law and relevant provisions of CSRC
□ Yes √ No
There exist no difference in compliance with corporate governance, PRC Company Law and relevant provisions of CSRC.
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel, assets, organization and finance, etc.
and has its own independent and complete business operation.
(1) In business operation: the Company has its own production and business planning, financial affairs check and calculate, personnel,
raw material supplies and products selling business system independently and completely, .
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor, personnel and salary management.
Such senior executives as company's chairman, general manager, vice general manager, secretary of Board of Directors, etc. get
salary from the Company, and have not held the important position other than a director in shareholding party.
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The Company has its own independent
purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structuring and working function are
totally independent.
(5) In finance: The company has independent financial & accounting department, the accounting and financial management system
were are complete and operated independently, and has bank account and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Index of information
Sessions Type Meeting Date Date of disclosure
participation ratio disclosure
53
Bengang Steel Plates Co., Ltd. Annual Report 2017
Announcement No.:
Annual General Annual General 2017-025
78.56% June 1, 2017 June 2, 2017
Meeting of 2016 Meeting http://www.cninfo.c
om.cn
Announcement No.:
The first provisional Provisional 2017-051
Shareholders’ General shareholders’ 73.73% December 26, 2017 December 27, 2017
Meeting in 2017 General Meeting http://www.cninfo.c
om.cn
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights Restore
□ Applicable √ Not applicable
V. Duty fulfillment of Independent Directors in Reporting Period
Attendance of independent directors
Number of Number of
Failure to
Board meetings Number of general
Number of personally attend
Independent necessary to be Number of spot meetings Number of meetings
attendances by board meetings
Directors attended during attendances attended by absence
representative successively to be
the reporting Communication
twice (Yes/No) attended
period
Jin Yongli 7 2 5 0 0 No
Zhong Tianli 7 2 5 0 0 No
Zhao Xinan 7 2 5 0 0 No
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
The Remuneration and Assessment Committee is responsible to inspect the assessment process of the executives in year 2016.
The Development and Strategy Committee is responsible to examine the Board of Directors’ Work Report 2016 and the Proposal of
Investment Structural Planning 2017 in advance and provide suggestions on the Company’s long-term development basing on its
researches.
54
Bengang Steel Plates Co., Ltd. Annual Report 2017
The Auditing Committee is responsible to inspect the operation of internal auditing system, to verify the financial information
disclosure, to examine the Financial Report 2016, and the Internal Control Introspective Evaluation Report, etc.
Nomination Committee provided opinions on the adjustment of executive positions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives has become a regular mechanism. Annual business plans adopted by
the shareholders’ meeting and the Board were assigned and authorized to the executive team of the Company and were used as basis
of annual assessment. Operational targets were scheduled by the Board to the executives to the executives and were reviewed from
time to time in the year and annual rewards or penalties were issued at end of year. The incentive scheme was working effectively to
motivate the directors, supervisors and executives.
IX. Internal Control
1. Significant Defects of the Internal Control Found in the Internal Control Self-Assessment Report in the
Reporting Period
√Yes □ No
Significant Defects of The Internal Control Found In The Report Period
No significant defects of the internal control were found during the reporting period
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing report full text April 20, 2018
Index of the internal control auditing report full text http//www.cninfo.com.cn
Proportion of total assets of subsidiaries belong to the scope
of self-evaluation report in the total assets of the Company’s 99.00%
consolidated financial statements
Proportion of operation income of subsidiaries belong to the
scope of self-evaluation report in the operation income of the 75.00%
Company’s consolidated financial statements
Standards of Defects Evaluation
Category Financial Report Non-financial Report
1. Material deficiencies: The frauds made by 1. Material deficiencies: Major errors caused by
the directors, or supervisors, or senior decision-making procedure; the important business
management personnel that leads to lacks institutional control or has a systematic failure
significant losses and adverse effects to the while lacking effective compensatory control;
company serious drain of senior and middle level management
2. Significant deficiencies: Not in accordance personnel and senior technical staff; the results of
Qualitative criteria with generally accepted accounting standards internal control evaluation, especially the significant
selection and application of accounting deficiencies have not been corrected; other
policies; Not established anti-fraud circumstances that have big negative impact on the
procedures and control measures; Not company.
established the corresponding control 2. Significant deficiencies: General errors caused by
mechanism or not implemented the decision-making procedure; there are defects in the
corresponding compensatory control on the important business regulations and system serious
55
Bengang Steel Plates Co., Ltd. Annual Report 2017
accounting treatment of non-conventional or drain of business personnel in key posts; the results
special deals; there are one or more defects in of internal control evaluation, especially the
the process control of the final financial report important deficiencies have not been corrected; other
and which leads to cannot reasonably circumstances that have comparably big negative
guaranteeing the financial report compiled to impact on the company.
achieve the goal of being true and accurate. 3. General deficiencies: low-efficiency on the
3. General deficiencies: the internal control decision-making process; existed defects in the
deficiencies except those constitute the ordinary business institution or system; serious drain
material deficiencies and the significant of business personnel in general posts; general
deficiencies. deficiencies that have not been corrected.
1. Material deficiencies: 1) misstatement≥5%
of the total profits;2) misstatement≥3% of the 1. Material deficiencies: 1) misstatement≥5% of the
total assets;3) misstatement≥1% of the total total profits; 2) misstatement≥3% of the total assets;
operating income4) misstatement≥1% of the 3) misstatement≥1% of the total operating income;
total amount of the owner’s equity. 5) 3% of 4) misstatement≥1% of the total amount of the
the total profits ≤misstatement＜5% of the owner’s equity. 5) 3% of the total profits
total profits; 2. Significant deficiencies: 1) ≤misstatement ＜ 5% of the total profits; 2.
0.5% of the total assets ≤misstatement＜3% Significant deficiencies: 1) 0.5% of the total assets
of the total assets; 2) 0.5% of the total ≤misstatement＜3% of the total assets; 2) 0.5% of
Quantitative criteria operating income ≤misstatement＜1% of the the total operating income ≤misstatement＜1% of
total operating income; 3) 0.5% of the total the total operating income; 3) 0.5% of the total
amount of the owner’s equity ≤misstatement amount of the owner’s equity ≤misstatement＜1% of
＜1% of the total amount of the owner’s the total amount of the owner’s equity. 3. General
equity. 3. General deficiencies: 1) deficiencies: 1) misstatement ＜ 3% of the total
misstatement ＜ 3% of the total profits; 2) profits; 2) misstatement＜0.5% of the total assets; 3)
misstatement＜0.5% of the total assets; 3) misstatement＜0.5% of the total operating income;
misstatement ＜ 0.5% of the total operating 4) misstatement＜0.5% of the total amount of the
income; 4) misstatement＜0.5% of the total owner’s equity.
amount of the owner’s equity.
Number of major defects in
financial reporting(a)
Number of major defects in
non-financial reporting (a)
Number of important defects
in financial reporting(a)
Number of important defects
in non-financial reporting(a)
X. Internal Control Audit Report
√ Applicable □ Not applicable
Review opinions in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance with ‘Fundamental
Rules of Enterprise Internal Control’ up to December 31, 2017.
Internal Control Audit Report Status Disclosure
Disclosure date of audit report of internal control (full-text) April 20, 2018
Index of audit report of internal control (full-text) http//www.cninfo.com.cn
Internal audit report’s opinion Standard unqualified opinion
Whether there is significant defect in non-financial report No
Whether the accountants’ firm issued a qualified auditor’s report of internal control
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-assessment report of the Board of
Directors
√ Yes □ No
56
Bengang Steel Plates Co., Ltd. Annual Report 2017
X. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange or any matured corporate bonds
which the listed company failed to pay in full at the approval date of the annual report
No
57
Bengang Steel Plates Co., Ltd. Annual Report 2017
XI. Financial Report
AUDITORS’ REPORT
PCPAR [2018]No.ZB
To All Shareholders of Bengang Steel Plates Co., Ltd.:
1、 Auditor’s Opinion
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the
Company”) which comprise the consolidated statement of financial position and statement of financial position as at 31
December 2017, the consolidated statement of comprehensive income and statement of comprehensive income, the consolidated
statement of changes in equity and statement of changes in equity, the consolidated statement of cash flows and statement of
cash flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the
Company as at 31 December 2017, and its the consolidated statement of financial position and statement of financial position as
at 31 December 2017, the consolidated statement of comprehensive income and statement of comprehensive income, the
consolidated statement of changes in equity and statement of changes in equity, the consolidated statement of cash flows and
statement of cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.
2、 Basis for Opinion
We conduted our audit in accordance with Chinese Certified Public Accountants Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilites for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the ethical requirenments and have fulfilled our other
responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
3、 Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements. Our audit procedures relating to these matters were designed in the context of our audit of the financial statement as
a whole. Our opinion on the financial statements is not modified with respect to any of the key audit matters described below,
and we do not express an opinion on these individual matters. We believe those key matters should discussed with govermance.
Key matters Response to the audit
1、Provision for bad debts
Please refer to the Note（11）Bad debt provision of The audit process implemented for recoverability of
Accounts receivable under “3. Significnat accounting Accounts receivable includes mainly:
policies and accounting estimates” and Note (3) 1.Understand, evaluate and test the management's
Accounts receivebale under “5. Notes to consolidated corresponding account receivable aging analysis and
financial statements” identify the internal control in relation to account
On December 31, 2017, the carrying amount of receivable’s provision for bad debts.
Accounts receivebale is RMB 982,207,611.54 and the 2.Review the management's consideration and
bad debt is RMB 253,609,685.15. objective evidence for the impairment test of
accounts receivable, and pay close attention to
In determining the expected recoverable amount of whether the management has fully identified the
accounts receivable, the management of the Company items that have been impaired.
needs to assess the credit status of the relevant clients, 3.Sample the accounts receivable tested for
58
Bengang Steel Plates Co., Ltd. Annual Report 2017
including the availability and conditions of mortgages impairment individually, and review on the
or pledge, and the actual collection . assumption and reasonableness of future cash flows
estimation made by the management.
It invloves significant accounting estimates and 4. For accounts receivable tested for impairment by
judgments when the management of the Company portfolio , evaluate the reasonableness of the bad
determines the recoverable amount of accounts debt provision.
receivable and the amount is significant. Therefore, 5.Perform confirmation procedure, and check the
we determine that the recoverability of accounts confirmation results with the amount recorded by the
receivable is one key audit matter. management.
6.Check the amount received after the reporting
period and evaluate the reasonableness of provision
for bad debts made by the management.
2、Inventory impairment
Please refer to the Note （12）Inventory under “3. The procedures carried out for the impairment of
Significant accounting policies and accounting inventory include:
estimates” and (3) Inventory under “5. Notes to
consolidated financial statements”. 1 Test and evaluate the effectiveness of internal
control in relation to the impairment of inventory.
On December 31,2017,the carrying amount of 2 .Supervise inventory taking and check the quantity,
inventory in consolidated statement is RMB condition of inventory, especially slow-moving and
11,266,913,730.26, inventory impairment is RMB aged inventory .
57,015,634.10, the book value of inventory is RMB 3. Obtain the calculation of the impairment of
11,209,898,096.16. Inventory is measured by lower of inventory, Check any changes of the accrual of
cost and net realizable value. The sufficiency of inventory impairment in this period and analyse the
inventory impairment will exert a great impact on the sufficiency of impairment.
financial statement.
The net realizable value of inventory and
4.For the products with open market selling price,
commodities is determined by deducting the the
obtain the the open market price independently and
estimated sales cost and the amount of related taxes
compared with the estimated selling price; For the
and fees from the estimated selling price.
products without open market selling price, Compare
the estimated price of the products with the latest
It involves significant judgement when the actual selling price or selling price after the reporting
management determines the estimated selling price of period.
the inventory. 5.Evaluate estimation of the sales expenses and
related taxes and fees made by the management and
On December 31, 2017, the carring amount of compare with the historical data of the same kind of
inventory was significant and involves the estimation products and compare with the actual amount after
of net realizable value. Therefore, we identified it as a the balance sheet date.
key audit matter.
4、 Other information
The management of the Company is responsible for the other information. The other information comprises information of the
Company's annual report in 2017, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard
5、 Responsibilities of Management and Those Charged with Governance for the Financial Statements
59
Bengang Steel Plates Co., Ltd. Annual Report 2017
The Company's management is responsible for preparing the financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining
internal control that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds
or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue
as a going concern, disclosing matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
6、 Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with Chinese Certified Public Accountants Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Company to express an opinion on the financial statements and bear all liability for the opinion. We communicate with
those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit
matters, including any significant deficiencies in internal control that we identify during our audit. We also provide those
charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
BDO China Shu Lun Pan Certified Chinese CPA：
Public Accountants LLP (Engagement partner)
Chinese CPA：
Shanghai, the People’s Republic of China 18 April 2018
60
Bengang Steel Plates Co., Ltd. Annual Report 2017
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Asset Notes At the end of term Beginning of term
Current assets
Cash at bank and on hand 5 (1) 17,037,713,410.49 12,982,977,188.24
Settlement provisions
Capital lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 5 (2) 3,846,433,700.87 2,030,681,138.03
Accounts receivable 5 (3) 728,597,926.39 623,865,427.25
Prepayments 5 (4) 1,280,689,094.33 493,839,659.44
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurance contract
Interests receivable 5 (5) 18,448,520.50 4,208,818.85
Dividends receivable
Other receivables 5 (6) 290,376,985.34 117,909,972.49
Redemptory financial assets for sale
Inventories 5 (7) 11,209,898,096.16 9,782,173,936.74
Assets held for sale
Non-current assets due within one year
Other current assets 5 (8) 809,322,127.79 513,398,815.83
Total current assets 35,221,479,861.87 26,549,054,956.87
Non-current assets
Loan and advances issued
Available-for-sale financial assets 5 (9) 3,888,980.00 5,856,585.63
Held-to-maturity investment
Long-term receivables
Long-term equity investments 5 (10) 2,726,009.03
Investment property
Fixed assets 5 (11) 23,852,067,166.10 20,688,468,637.44
Construction in progress 5 (12) 2,391,584,410.46 6,210,673,674.11
Construction materials 5 (13) 4,558,919.60 7,783,370.29
Disposal of fixed assets
Productive biological assets
Oil and gas assets
61
Bengang Steel Plates Co., Ltd. Annual Report 2017
Asset Notes At the end of term Beginning of term
Intangible assets 5 (14) 253,884,881.48 259,837,410.93
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 5 (15) 200,618,461.36 476,101,254.04
Other non-current assets 5 (16) 1,067,334,823.12
Total non-current assets 27,776,663,651.15 27,648,720,932.44
Total assets 62,998,143,513.02 54,197,775,889.31
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Liabilities and equities Notes Ending balance Beginning balance
Current Liabilities
Short-term loans 5 (17) 21,999,103,900.00 18,762,472,779.48
Loan from central bank
Absorbed deposit and interbank deposit
Loan from other financial institutions
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 5 (18) 11,494,589,827.27 6,372,173,897.13
Accounts payable 5 (19) 3,897,668,513.77 5,680,244,661.52
Advance from customers 5 (20) 3,308,567,598.05 3,679,477,129.80
Financial assets sold for repurchase
Handling charges and commission payable
Employee benefits payable 5 (21) 43,722,537.58 24,063,493.70
Current tax liabilities 5 (22) 87,807,128.50 45,806,231.81
Interests payable 5 (23) 84,139,288.02 75,115,265.66
Dividends payable
Other payables 5 (24) 576,989,932.31 460,014,298.78
Reinsurance accounts payable
Provision for insurance contract
Receipt from vicariously traded securities
Receipt from vicariously underwriting securities
Liabilities held for sale
Non-current liabilities due within one year 5 (25) 3,811,540,590.84 437,669,535.66
Other current liabilities 5 (26) 27,979,093.21
Total current liabilities 45,332,108,409.55 35,537,037,293.54
Non-current liabilities
Long-term loans 5 (27) 2,444,185,630.28 3,448,931,721.62
Bonds payable 5 (28) 1,494,825,782.32
Including: Preferred stock
Perpetual bond
62
Bengang Steel Plates Co., Ltd. Annual Report 2017
Liabilities and equities Notes Ending balance Beginning balance
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 5 (29) 372,785,000.00 410,399,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 2,816,970,630.28 5,354,156,503.94
Total liabilities 48,149,079,039.83 40,891,193,797.48
Shareholders' equity:
Share capital 5 (30) 3,136,000,000.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 5 (31) 9,114,845,542.05 9,156,845,542.05
Less: treasury shares
Other comprehensive income
Special reserves 5 (32) 475,046.75 372,721.86
Surplus reserves 5 (33) 961,105,529.85 961,105,529.85
General risk reserve
Undistributed profits 5 (34) 1,103,162,610.35 -496,947,619.42
Total equity attributable to equity holders of the parent company 14,315,588,729.00 12,757,376,174.34
Non-controlling interests 533,475,744.19 549,205,917.49
Total shareholder's equity 14,849,064,473.19 13,306,582,091.83
Total of liabilities and owners’ equity 62,998,143,513.02 54,197,775,889.31
The notes to the financial statements attached form part of these financial statements.
Legal Representative： Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Assets Notes Ending balance Beginning balance
Current assets
Cash at bank and on hand 16,717,913,081.42 12,402,995,087.03
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 3,515,361,992.96 1,870,384,367.64
Accounts receivable 14 (1) 482,181,593.45 455,070,302.00
Prepayments 1,280,354,579.87 487,869,713.72
Interests receivable 18,377,036.96 4,208,818.85
Dividends receivable
Other receivables 14 (2) 376,863,448.72 210,089,804.88
Inventories 9,228,860,225.75 8,308,291,029.07
63
Bengang Steel Plates Co., Ltd. Annual Report 2017
Assets Notes Ending balance Beginning balance
Assets held for sale
Non-current assets due within one year
Other current assets 682,211,823.73 431,675,085.33
Total current assets 32,302,123,782.86 24,170,584,208.52
Non-current assets
Available-for-sale financial assets 3,888,980.00 12,888,980.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment 14 (3) 1,756,981,902.16 1,700,981,902.16
Investment property
Fixed assets 21,621,369,452.27 18,125,714,092.15
Construction in progress 2,383,533,130.37 6,196,524,880.06
Construction materials 4,134,133.28 4,134,139.52
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 152,082,315.24 155,388,452.53
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets 100,189,921.33 378,696,605.02
Other non-current assets 1,037,735,849.00
Total non-current assets 27,059,915,683.65 26,574,329,051.44
Total assets 59,362,039,466.51 50,744,913,259.96
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF FINANCIAL POSITION (Continued)
As at 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Liabilities and shareholders' equities Notes Ending balance Beginning balance
Current liabilities
Short-term loans 20,499,694,500.00 17,376,963,500.00
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 10,866,669,546.93 5,768,523,196.16
Accounts payable 4,184,763,509.38 5,939,417,729.46
Advance from customers 3,217,423,443.14 3,671,944,099.35
64
Bengang Steel Plates Co., Ltd. Annual Report 2017
Liabilities and shareholders' equities Notes Ending balance Beginning balance
Employee benefits payable 42,380,713.02 22,386,057.59
Current tax liabilities 66,903,531.67 28,902,954.65
Interests payable 79,074,426.27 70,109,821.13
Dividends payable
Other payables 343,211,639.65 289,522,026.53
Liabilities held for sale
Non-current liabilities due within one year 3,811,540,590.84 437,669,535.66
Other current liabilities 27,979,093.21
Total current liabilities 43,139,640,994.11 33,605,438,920.53
Non-current liabilities
Long term loans 2,444,185,630.28 3,448,931,721.62
Bonds payable 1,494,825,782.32
Including: Preferred stock
Perpetual bond
Long-term payables
Long-term employee benefits payable
Special accounts payable
Estimated liabilities
Deferred income 372,785,000.00 410,399,000.00
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 2,816,970,630.28 5,354,156,503.94
Total liabilities 45,956,611,624.39 38,959,595,424.47
Shareholder’s equity:
Share capital 3,136,000,000.00 3,136,000,000.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves 8,694,693,859.93 8,694,693,859.93
Less: Treasury shares
Other comprehensive income
Special reserves 276,727.96 230,735.89
Surplus reserves 961,105,529.85 961,105,529.85
Undistributed Profits 613,351,724.38 -1,006,712,290.18
Total shareholder's equity 13,405,427,842.12 11,785,317,835.49
Total liabilities and shareholder’s equity 59,362,039,466.51 50,744,913,259.96
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2017
65
Bengang Steel Plates Co., Ltd. Annual Report 2017
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2017
1. Total operating income 40,507,855,843.72 29,526,012,651.08
Including: Operating income 5 (35) 40,507,855,843.72 29,526,012,651.08
Interest income
Premium earned
Income from handling charges and commission
2. Total operating cost 38,588,059,963.38 28,532,767,412.24
Including: Operating cost 5 (35) 35,677,980,170.73 25,677,665,232.12
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 5 (36) 233,743,675.12 147,571,935.24
Selling and distribution expenses 5 (37) 1,184,294,573.92 903,232,507.02
General and administrative expenses 5 (38) 852,860,839.20 700,546,785.17
Financial expenses 5 (39) 535,642,520.07 967,614,992.29
Asset impairment loss 5 (40) 103,538,184.34 136,135,960.40
Add：Gains from change of fair value （“-”for loss）
Income on investment（“-”for loss） 5 (41) 4,052,996.54 2,019,053.44
Including: Income from associates and joint ventures 758,403.40
Exchange gains
Assets disposal gains（“-”for loss） 5 (42) 4,280,684.29 11,801,616.20
Other income 5 (43) 39,086,900.00
3. Operational profit（“-”for loss） 1,967,216,461.17 1,007,065,908.48
Add ：Non-operational income 5 (44) 19,335,019.49 46,269,813.13
Less：Non-operating expenses 5 (45) 70,238,377.22 14,543,658.66
4. Total profit(“-”for loss) 1,916,313,103.44 1,038,792,062.95
Less：Income tax expenses 5 (46) 306,922,395.71 213,287,217.25
5. Net profit 1,609,390,707.73 825,504,845.70
1.Classification by continuing operating
1.Net profit from continuing operation 1,609,390,707.73 825,504,845.70
2.Net profit from discontinued operation
2.Classification by ownership
1. Net profit attributable to the owners of parent company 1,600,110,229.77 781,296,452.51
2. Net profit attributable to non-controlling shareholders 9,280,477.96 44,208,393.19
6.Other comprehensive income
Other comprehensive income attributable to owners of the parent company after tax
1.Other comprehensive income items that will not be reclassified into gains/losses in the
subsequent accounting period
1）.Re-measurement of defined benefit plans of changes in net debt or net assets
2）Other comprehensive income under the equity method investee cannot be reclassified
into profit or loss
2.Other comprehensive income that will be reclassified into profit or loss.
1）Other comprehensive income under the equity method investee can be reclassified into
profit or loss
2）Gains and losses from changes in fair value available for sale financial assets
3）Held-to-maturity investments reclassified to gains and losses of available for sale
financial assets
66
Bengang Steel Plates Co., Ltd. Annual Report 2017
Items Notes 2017
4）The effective portion of cash flow hedges and losses
5）Translation differences in currency financial statements
6）Other
Other comprehensive income attributable to non-controlling shareholders’ equity after tax
7. Total comprehensive income 1,609,390,707.73 825,504,845.70
Total comprehensive income attributable to the owner of the parent company 1,600,110,229.77 781,296,452.51
Total comprehensive income attributable to non-controlling shareholders 9,280,477.96 44,208,393.19
8. Earnings per share
1）Basic earnings per share 0.510 0.249
2）Diluted earnings per share 0.510 0.249
The business combination under common control occurred in the current period. The net profit of the combined party realized before combination is RMB 24,668.65, The net profit
realized by the combined party in the previous period is RMB 25,439.05.
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2017
1. Operating income 14 (4) 41,239,125,343.24 29,364,395,482.30
Less: Operating cost 14(4) 37,080,706,204.98 26,083,359,198.14
Tax and surcharges 200,820,143.07 116,460,450.85
Selling and distribution expenses 769,196,392.70 670,821,345.25
General and administrative expenses 806,607,065.68 648,932,544.53
Financial expenses 476,274,625.93 904,933,228.73
Asset impairment loss 103,897,129.58 136,136,868.48
Add: Gains from the change in fair value (\"-\" for loss)
Income on investment 14 (5) 105,369,227.90 15,429,070.92
Including: Income from associates and joint ventures
Assets disposal gains（ “-”for loss） 4,280,684.29 11,660,376.86
Other income 39,086,900.00
2. Operating profit (\"-\" for loss) 1,950,360,593.49 830,841,294.10
Add: Non-operating income 18,377,401.15 43,934,364.24
Less: Non-operating expenses 70,167,296.39 13,656,534.23
3. Total profit before tax (\"-\" for total loss) 1,898,570,698.25 861,119,124.11
Less: Income tax expenses 278,506,683.69 183,375,413.40
4. Net profit (\"-\" for net loss) 1,620,064,014.56 677,743,710.71
1.Net profit from continuing operation（ “-” for loss） 1,620,064,014.56 677,743,710.71
2.Net profit from discontinued operation（ “-” for loss）
5. Other comprehensive income after tax
1) Other comprehensive income unable to be reclassified into profit and
loss afterwards
(1) Change of net liabilities or net assets through remeasuring defined
benefit plan
(2) Share of other comprehensive income of investee not to be
67
Bengang Steel Plates Co., Ltd. Annual Report 2017
Items Notes 2017
classified into profit or loss afterwards under equity method
2) Other comprehensive income to be reclassified into profit and loss
afterwards
(1) Share of other comprehensive income of investee to be classified
into profit or loss afterwards under equity method
(2) Gains and losses on remeasuring available-for-sale financial assets
(3) Gains and losses resulting from reclassification of
held-to-maturity investment to financial assets held for sale
(4) Effective portion of gains or losses from cash flow hedging
(5)Gains and losses resulting from translating the foreign currency
financial statements
(6) Other
6. Total comprehensive income 1,620,064,014.56 677,743,710.71
7. Earnings per share:
1) Basic earnings per share (RMB)
2) Diluted earnings per share (RMB)
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
(Expressed in Renminbi unless otherwise indicated)
Items Notes 2017
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services 38,398,560,637.86 28,241,551,432.83
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
Net increase of Financial assets at fair value through profit or loss
Cash from receiving interest, handling charge and commission
Net increase of loans from other financial institutions
Net increase of fund for buy-back business
Tax rebate received 396,593,593.65 197,081,126.50
Other cash received relating to operating activities 5 (47) 282,165,709.05 433,131,163.62
Subtotal of cash inflows from operating activities 39,077,319,940.56 28,871,763,722.95
Cash paid for goods and services 33,511,750,779.63 16,785,161,764.39
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
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees 1,818,262,493.84 1,732,720,138.71
Cash paid for all types of taxes 497,364,981.50 177,242,826.85
Other cash paid relating to operating activities 5 (47) 505,698,193.08 619,219,916.08
Subtotal of cash outflows from operating activities 36,333,076,448.05 19,314,344,646.03
68
Bengang Steel Plates Co., Ltd. Annual Report 2017
Items Notes 2017
Net cash flows from operating activities 2,744,243,492.51 9,557,419,076.92
2. Cash flows from investing activities
Cash received from return on investments 424,000,000.00 453,000,000.00
Cash received from distribution of dividends or profit 3,294,593.14 2,019,053.44
Net cash received from disposal of fixed assets, intangible assets and other long-term
12,288,367.65
assets
Net cash received from disposal of subsidiary and other operating units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities 427,294,593.14 467,307,421.09
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 577,962,615.41 2,348,653,699.08
Cash paid for acquisition of investments 1,765,735,849.00 697,000,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities 5 (47) 38,485.64
Subtotal of cash outflows from investing activities 2,343,736,950.05 3,045,653,699.08
Net cash flows from investing activities -1,916,442,356.91 -2,578,346,277.99
3. Cash flows from financing activities
Proceeds from investment 9,000,000.00 42,000,000.00
Including: Proceeds from investment of non-controlling shareholders of subsidiary 9,000,000.00 42,000,000.00
Proceeds from borrowings 29,066,698,099.54 22,692,917,296.84
Cash received from bond issuance
Other proceeds relating to financing activities 5 (47) 223,457,494.90
Subtotal of cash inflows from financing activities 29,075,698,099.54 22,958,374,791.74
Cash repayments of borrowings 24,367,516,288.90 21,347,292,445.53
Cash payments for distribution of dividends, profit or interest expenses 1,348,382,179.94 939,292,589.51
Including: Cash paid to non-controlling shareholders as dividend and profit by
34,024,878.25
subsidiaries
Other cash payments relating to financing activities 5 (47) 4,070,073,176.21 183,227,486.83
Subtotal of cash outflows from financing activities 29,785,971,645.05 22,469,812,521.87
Net cash flows from financing activities -710,273,545.51 488,562,269.87
4. Effect of foreign exchange rate changes on cash and cash equivalents -124,590,470.23 244,221,817.29
5. Net increase in cash and cash equivalents -7,062,880.14 7,711,856,886.09
Add: Cash and cash equivalents at the beginning of the period 12,324,639,659.07 4,612,782,772.98
6. Cash and cash equivalents at the ending of the period 12,317,576,778.93 12,324,639,659.07
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CASH FLOWS
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Items Note 2017
1. Cash flow from operating activities
Cash received from sale of goods or rendering of services 38,408,092,773.75 29,446,843,561.82
Tax rebate received 285,379,382.79 172,506,656.56
Other cash received relating to operating activities 256,722,673.91 125,792,149.08
Subtotal of cash inflows from operating activities 38,950,194,830.45 29,745,142,367.46
69
Bengang Steel Plates Co., Ltd. Annual Report 2017
Items Note 2017
Cash paid for goods and services 33,504,491,064.85 18,729,162,875.25
Cash paid to and on behalf of employees 1,716,037,102.55 1,638,137,170.73
Cash paid for all types of taxes 391,088,388.18 19,559,029.42
Other cash paid relating to operating activities 480,784,596.96 131,675,505.02
Subtotal of cash outflows from operating activities 36,092,401,152.54 20,518,534,580.42
Net cash flows from operating activities 2,857,793,677.91 9,226,607,787.04
2. Cash flows from investing activities
Cash received from return on investments 424,000,000.00 453,000,000.00
Cash received from distribution of dividends or profit 105,369,227.90 1,715,742.47
Net cash received from disposal of fixed assets, intangible
12,136,292.65
assets and other long-term assets
Net cash received from disposal of subsidiary and other
operating units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 529,369,227.90 466,852,035.12
Cash paid for acquisition of fixed assets, intangible assets and
535,378,428.27 2,330,445,853.26
other long-term assets
Cash paid for acquisition of investments 1,764,735,849.00 706,000,000.00
Net cash paid for acquisition of subsidiary & other operating
unit
Other cash paid relating to investing activities 38,485.64
Subtotal of cash outflows paid for investing activities 2,300,152,762.91 3,036,445,853.26
Net cash flows from investing activities -1,770,783,535.01 -2,569,593,818.14
3. Cash flows from financing activities
Proceeds from investment
Cash received from borrowings 27,099,099,299.54 21,124,677,912.68
Other proceeds relating to financing activities
Other cash received relating to financing activities 210,000,000.00
Subtotal of cash inflows from financing activities 27,099,099,299.54 21,334,677,912.68
Cash repayments of borrowings 22,501,298,853.33 19,837,110,764.77
Cash payments for distribution of dividends, profit or interest 1,250,068,065.92 879,486,861.85
Other cash payments relating to financing activities 4,034,360,176.07 132,384,026.03
Subtotal of cash outflows from financing activities 27,785,727,095.32 20,848,981,652.65
Net cash flows from financing activities -686,627,795.78 485,696,260.03
4. Effect of foreign exchange rate changes on cash and cash
-124,633,410.57 244,195,433.65
equivalents
5. Net increase in cash and cash equivalents 275,748,936.55 7,386,905,662.58
Add: Cash and cash equivalents at the beginning of the period 11,876,536,613.66 4,489,630,951.08
6. Ending balance of cash and cash equivalents 12,152,285,550.21 11,876,536,613.66
The notes to the financial statements form part of these financial statements
Legal Representative: Chief Financial Officer: Chief Accountant:
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
70
Bengang Steel Plates Co., Ltd. Annual Report 2017
Owner's equity attributable to parent company
Other equity instruments Less: Gene
Items Other Non-contr Total of
Treas ral Undistrib
Share Prefer Capital Special Surplus olling owner's
Perpe compreh
ence Oth ury risk uted interest
capital reserves ensive reserves reserves equity
tual share profit
share ers income reser
bond s
s ve
1. Ending
3,136,000, 9,156,845, 372,721. 961,105,5 -496,947,6 549,205,9 13,306,582,
balance of
000.00 542.05 86 29.85 19.42 17.49 091.83
last year
Add: Change
of
accounting
policies
Correc
tion of errors
for last
period
Busine
ss
consolidatio
n under
common
control
Others
2. Beginning
3,136,000, 9,156,845, 372,721. 961,105,5 -496,947,6 549,205,9 13,306,582,
balance of
000.00 542.05 86 29.85 19.42 17.49 091.83
current year
3. Changes
in current -42,000,00 102,324. 1,600,110, -15,730,17 1,542,482,3
year (“-” for 0.00 89 229.77 3.30 81.36
decrease )
1) Total
1,600,110, 9,280,477. 1,609,390,7
comprehensi
229.77 96 07.73
ve income
2) Capital
increase and 9,000,000. 9,000,000.0
decrease by 00
shareholders
(1)
Comm
on
share
investe
d by
shareho
lders
(2)
Capital
input
by the
holder
of other
equity
instrum
ents
(3)
Share-b
ased
payme
nt
attribut
able to
owners'
equity
(4) 9,000,000. 9,000,000.0
Others 00
3) Profit -34,024,87 -34,024,878
71
Bengang Steel Plates Co., Ltd. Annual Report 2017
Owner's equity attributable to parent company
Other equity instruments Less: Gene
Items Other Non-contr Total of
Treas ral Undistrib
Share Prefer Capital Special Surplus olling owner's
Perpe compreh
ence Oth ury risk uted interest
capital reserves ensive reserves reserves equity
tual share profit
share ers income reser
bond s
s ve
distribution 8.25 .25
(1)
Appro
priatio
n to
surplu
s
reserv
es
(2)
Appro
priatio
n to
genera
l risk
reserv
e
(3)
Profit
distrib
-34,024,87 -34,024,878
ution
8.25 .25
to
shareh
olders
(4)
Others
4)
Transfers
within
shareholders'
equity
(1)
Capital
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(2)
Surplus
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(3)
Surplus
reserve
s to
recover
loss
(4)
Others
5) Special 102,324.
14,226.99 116,551.88
reserves
(1) 40,325,1 14,226.99 40,339,395.
72
Bengang Steel Plates Co., Ltd. Annual Report 2017
Owner's equity attributable to parent company
Other equity instruments Less: Gene
Items Other Non-contr Total of
Treas ral Undistrib
Share Prefer Capital Special Surplus olling owner's
Perpe compreh
ence Oth ury risk uted interest
capital reserves ensive reserves reserves equity
tual share profit
share ers income reser
bond s
s ve
Provision of 68.14
special
reserves
(2) Use
40,222,8 40,222,843.
of special
43.25
reserves
-42,000,00 -42,000,000
6) Others
0.00 .00
4. Ending
3,136,000, 9,114,845, 475,046. 961,105,5 1,103,162, 533,475,7 14,849,064,
balance of
000.00 542.05 75 29.85 610.35 44.19 473.19
current year
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer:
Chief Accountant:
73
Bengang Steel Plates Co., Ltd. Annual Report 2017
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Owner's equity attributable to parent company
Other equity instruments Less: Gene Total
Items Other Non-contr
ral Undistrib shareholde
Prefer Treas olling
Share Capital compreh Special Surplus r's
Perpe ury risk uted
capital ence Oth reserves ensive reserves reserves interest
tual share profit equity
share ers income reser
bond s
s ve
1. Ending
3,136,000, 9,114,845, 393,372. 961,105,5 1,278,244, 504,993,0 12,439,093,
balance of
000.00 542.05 05 29.85 071.93 49.45 421.47
last year
Add: Change
of
accounting
policies
Correc
tion of errors
for last
period
Busine
ss
consolidatio
n under
common
control
Others
2. Beginning
3,136,000, 9,114,845, 393,372. 961,105,5 1,278,244, 504,993,0 12,439,093,
balance of
000.00 542.05 05 29.85 071.93 49.45 421.47
current year
3. Changes
in current 42,000,000 -20,650. 781,296,45 44,212,86 867,488,67
year (“-” for .00 19 2.51 8.04 0.36
decrease )
1) Total
781,296,45 44,208,39 825,504,84
comprehensi
2.51 3.19 5.70
ve income
2) Capital
increase and
decrease by
shareholders
(1)
Comm
on
share
investe
d by
shareho
lders
(2)
Capital
input
by the
holder
of other
equity
instrum
ents
(3)
Share-b
ased
payme
nt
attribut
74
Bengang Steel Plates Co., Ltd. Annual Report 2017
Owner's equity attributable to parent company
Other equity instruments Gene Total
Less: Non-contr
Items Other ral shareholde
Prefer Treas Undistrib olling
Share Capital compreh Special Surplus r's
Perpe ury risk uted
capital ence Oth reserves ensive reserves interest
tual reserves equity
share ers share reser profit
bond income
s s ve
able to
shareho
lders'
equity
(4)
Others
3) Profit
distribution
(1)
Appro
priatio
n to
surplu
s
reserv
es
(2)
Appro
priatio
n to
genera
l risk
reserv
es
(3)
Profit
distrib
ution
to
shareh
olders
(4)
Others
4)
Transfers
within
shareholders'
equity
(1)
Capital
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(2)
Surplus
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(3)
Surplus
reserve
s to
recover
75
Bengang Steel Plates Co., Ltd. Annual Report 2017
Owner's equity attributable to parent company
Other equity instruments Gene Total
Less: Non-contr
Items Other ral shareholde
Prefer Treas Undistrib olling
Share Capital compreh Special Surplus r's
Perpe ury risk uted
capital ence Oth reserves ensive reserves interest
tual reserves equity
share ers share reser profit
bond income
s s ve
loss
(4)
Others
5) Special -20,650.
4,474.85 -16,175.34
reserves
(1)
Provision of 39,766,8 39,771,330.
4,474.85
special 55.73
reserves
(2) Use
39,787,5 39,787,505.
of special
05.92
reserves
42,000,000 42,000,000.
6) Others
.00
4. Ending
3,136,000, 9,156,845, 372,721. 961,105,5 -496,947,6 549,205,9 13,306,582,
balance of
000.00 542.05 86 29.85 19.42 17.49 091.83
current year
The notes to the financial statements attached form part of these financial statement
Legal Representative: Chief Financial Officer:
Chief Accountant
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
76
Bengang Steel Plates Co., Ltd. Annual Report 2017
Other equity Less:
instruments Other
Items Treas Special Total
Share Capital compreh Surplus Undistribu
Prefer Perpe ury shareholde
capital Oth reserves ensive reserves reserves ted profits
ence tual share r’s equity
ers income
shares bond s
1. Ending
3,136,000, 8,694,693, 230,735. 961,105,5 -1,006,712, 11,785,317,
balance of
000.00 859.93 89 29.85 290.18 835.49
last year
Add:
Change of
accounting
policies
Correction
of errors
for last
period
Others
2.
Beginning
3,136,000, 8,694,693, 230,735. 961,105,5 -1,006,712, 11,785,317,
balance of
000.00 859.93 89 29.85 290.18 835.49
current
year
3. Changes
in current
45,992.0 1,620,064,0 1,620,110,0
year (“-”
7 14.56 06.63
for
decrease )
1) Total
comprehen 1,620,064,0 1,620,064,0
sive 14.56 14.56
income
2)
Capital
increase
and
decrease
by
shareholde
rs
(1)
Comm
on
share
investe
d by
shareho
lders
(2)
Capital
input
by the
holder
of other
equity
instrum
ents
(3)
Share-b
ased
paymen
t
attribut
able to
owners'
equity
77
Bengang Steel Plates Co., Ltd. Annual Report 2017
(4)
Others
3) Profit
distribution
(1)
Approp
riation
to
surplus
reserve
s
(2)
Profit
distribu
tion to
shareho
lders
(3)
Others
4)
Transfers
within
shareholde
rs' equity
(1)
Capital
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(2)
Surplus
reserve
s
transfer
red into
paid-in
capital
(or
stock)
(3)
Surplus
reserve
s to
recover
loss
(4)
Others
5)
45,992.0
Special 45,992.07
reserves
(1)
Provision 34,507,2 34,507,289.
of special 89.29
reserves
(2)
Use of 34,461,2 34,461,297.
special 97.22
reserves
6)
Others
4. Ending 3,136,000, 8,694,693, 276,727. 961,105,5 613,351,72 13,405,427,
balance of 000.00 859.93 96 29.85 4.38 842.12
current
78
Bengang Steel Plates Co., Ltd. Annual Report 2017
year
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer:
Chief Accountant
79
Bengang Steel Plates Co., Ltd. Annual Report 2017
BENGANG STEEL PLATES CO., LTD.
STATEMENT OF CHANGES IN EQUITY (Continued)
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
Other equity Less:
instruments Other
Items Treas Special Undistrib Total
Share Capital comprehe Surplus
Prefer Perpe ury uted shareholde
capital Oth reserves nsive reserves reserves
ence tual share profits r’s equity
ers income
shares bond s
1. Ending
3,136,000, 8,694,693, 393,372. 961,105,5 -1,684,456, 11,107,736,
balance of
000.00 859.93 05 29.85 000.89 760.94
last year
Add:
Change of
accounting
policies
Correction
of errors
for last
period
Others
2.
Beginning
3,136,000, 8,694,693, 393,372. 961,105,5 -1,684,456, 11,107,736,
balance of
000.00 859.93 05 29.85 000.89 760.94
current
year
3. Changes
in current
-162,636. 677,743,71 677,581,074
year (“-”
16 0.71 .55
for
decrease )
1) Total
comprehen 677,743,71 677,743,710
sive 0.71 .71
income
2)
Capital
increase
and
decrease by
shareholder
s
(1)
Commo
n share
invested
by
shareho
lders
(2)
Capital
input by
the
holder
of other
equity
instrum
ents
(3)
Share-b
ased
paymen
t
attributa
ble to
80
Bengang Steel Plates Co., Ltd. Annual Report 2017
Other equity Less:
instruments Other
Items Treas Special Undistrib Total
Share Capital comprehe Surplus
Prefer Perpe ury uted shareholde
capital Oth reserves nsive reserves reserves
ence tual share profits r’s equity
ers income
shares bond s
shareho
lders'
equity
(4)
Others
3) Profit
distribution
(1)
Approp
riation
of
surplus
reserves
(2)
Profit
distribut
ion to
shareho
lders
(3)
Others
4)
Transfers
within
shareholder
s' equity
(1)
Capital
reserves
transfer
red into
paid-in
capital
(or
stock)
(2)
Surplus
reserves
transfer
red into
paid-in
capital
(or
stock)
(3)
Surplus
reserves
to
recover
loss
(4)
Others
5)
-162,636.
Special -162,636.16
reserves
(1)
Provision 34,079,6 34,079,630.
of special 30.37
reserves
(2) 34,242,2 34,242,266.
Use of 66.53
81
Bengang Steel Plates Co., Ltd. Annual Report 2017
Other equity Less:
instruments Other
Items Treas Special Undistrib Total
Share Capital comprehe Surplus
Prefer Perpe ury uted shareholde
capital Oth reserves nsive reserves reserves
ence tual share profits r’s equity
ers income
shares bond s
special
reserves
6) Others
4. Ending
balance of 3,136,000, 8,694,693, 230,735. 961,105,5 -1,006,712, 11,785,317,
current 000.00 859.93 89 29.85 290.18 835.49
year
The notes to the financial statements attached form part of these financial statements
Legal Representative: Chief Financial Officer:
Chief Account
82
Bengang Steel Plates Co., Ltd. Annual Report 2017
Bengang Steel Plates Co., Ltd.
Notes to the financial statements
For the year ended 31 December 2017
(Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”), as approved in Liao-Zheng (1997) No. 57 by
Liaoning People’s Government on 27 March 1997, was incorporated as a joint stock limited company through public share offer
of domestic listed foreign currency denominated shares (B shares) in the People’s Republic of China (the “PRC”) on 27 June
1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Bengang Group”), through reorganization of operations, assets and liabilities
of its plants, namely, Steel Smelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant.
As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”), the Company issued
400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997, the Company
issued another 120,000,000 A-shares (Renminbi common Shares) at RMB5.40 each, and listed in Shenzhen Stock Exchange
since 15 January 1998. The capital shares were totaled to 1,136,000,000 shares including 616,000,000 shares held by the
promoter.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation, the Share
Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation issued by Liaoning
Provincial Government State-owned Asset Administrative Committee, Bengang Group – the only holder of non-negotiable
state-owned legal person shares paid the consideration to the current shareholders to obtain the current option for the 40,800,000
shares of the total 616,000,000 shares it was holding. Shareholding positions have been registered with China Securities
Depository & Clearing Corporation Ltd. Shenzhen Office. However, the total amount of capital shares of Bengang Steel Plates
Co., Ltd. was not changed through the share equity relocation action.
According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China Securities Regulatory Commission on
30 June 2006, the Company was approved to place 2 billion Renminbi common shares particularly to Bengang Group and the
proceeds would be used to purchase the related assets of the Group. On the same day, Bengang Group received circular
Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and were exempted for the liability
of undertaking the purchase offer. The liability was caused by subscribing of the 2 billion new shares and the total shareholding
was thus increased to 2.5752 billion shares (accounting for 82.12% of the total capital shares of the Company). On 28 August
2006, as approved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and
conditional placing procedures of the 2 billion new shares were completed. On 28 September 2006, the privately placed shares
were approved by Shenzhen Stock Exchange to be placed in the stock market. The new shares were placed in the market with
face value of RMB1.00 per share and the placing price was RMB4.6733 per share. The newly placed shares were restricted to be
sold in 36 months when they were registered to the account of Bengang Group.
Up to 31 December 2016, the capital shares of Bengang Steel Plates Co., Ltd were amounted to 3,136,000,000 shares. The
unified social credit code was 91210000242690243E. The registered address is 16th Renmin Road, Pingshan District, Benxi,
Liaoning Province. The registered capital is RMB 3,136,000,000. The legal representative is Wang Shu.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd. and the actual controller is the
State-owned Assets Supervision and Administration Commission of the State Council of Liaoning province.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry, and is mainly involved in
producing and trading of ferrous metal products.
The financial statements have been approved for reporting by the board of directors of the Company on 18 April 2018.
1
Bengang Steel Plates Co., Ltd. Annual Report 2017
(2) Consolidation scope
As at 31 December 2017, subsidiaries included in the Company’s consolidated financial statements are as follows:
Name of the subsidiaries
Guangzhou Bengang Steel & Iron Trading Co., Ltd.
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
Bengang Steel Plates Liaoyang Pellet Co., Ltd.
Dalian Benruitong Automobile Material Technology Co., Ltd.
Changchun Bengang Steel & Iron Sales Co., Ltd.
Harbin Bengang Economic and Trading Co., Ltd.
Nanjing Bengang Materials Sales Co., Ltd.
Wuxi Bengang Steel & Iron Sales Co., Ltd.
Xiamen Bengang Steel & Iron Sales Co., Ltd.
Yantai Bengang Steel & Iron Sales Co., Ltd.
Tianjin Bengang Steel & Iron Trading Co., Ltd.
Bengang Posco Cold-rolled Sheet Co., Ltd.
Benxi Bengang Steel Sales Co., Ltd
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
Chongqing Liaoben Steel & Iron Trading Co., Ltd.
Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd.
For details of consolidation scope and change of the consolidation scope for the period, please refer to Note 6 “Change of the
consolidation scope” and Note 7 “Equity in other entities”.
2. Basis of preparation
(1) Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading and events in accordance with
“Accounting Standards for Business Enterprises – Basic Standard” and relevant specific standards, application materials,
interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issued by the Ministry of
Finance, and “Information Disclosure Rules for Companies of securities for public issuance No. 15 – General Regulations for
Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to continue to operate in the next
twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
The following disclosed content covers the detailed accounting policies and accounting estimates that are adopted by the
Company according to the actual features of production or operation.
(1) Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results and cash flows of the Company
during the reporting period in accordance with China Accounting Standards for Business Enterprises.
(2) Accounting year
The Accounting year is from 1 January to 31 December.
(3) Operating period
The operating period is twelve months.
2
Bengang Steel Plates Co., Ltd. Annual Report 2017
(4) Functional currency
The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/not under common control
Business combination under common control
The assets and liabilities that the Company acquired in a business combination shall be measured on the basis of their carrying
amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in the consolidated
financial statement of the ultimate controller on the combining date. As for the balance between the carrying amount of the net
assets obtained by the Company and the carrying amount of the consideration paid by it (or the total par value of the shares
issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excess shall be adjusted against retained
earnings.
Business combination not under common control
The Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a
business combination in light of their fair values, and shall record the balances between them and their carrying amounts into the
profits and losses at the current period. The Company shall recognize the positive balance between the combination costs and
the fair value of the identifiable net assets it obtains from the acquiree as goodwill. The Company shall treat the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree into the
profits and losses of the current period.
The intermediary costs and relevant fees for the business combination paid by the acquirer, including the expenses for audit,
assessment and legal services, shall be recorded into the profits and losses at the current period. The transaction expenses for the
issuance of equity securities for the business combination shall be recorded into the initial recognition amount of equity
securities.
(6) Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control. All the subsidies (including
separable sections of the investees controlled by the Company) have been consolidated into the scope of consolidation for this
period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial statements of the parent and its
subsidiaries, and using other related information. When preparing consolidated financial statements, the parent shall consider the
entire group as an accounting entity, adopt uniform accounting policies and apply the requirements of Accounting Standard for
Business Enterprises related to recognition, measurement and presentation. The consolidated financial statements shall reflect
the overall financial position, operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be in accordance with
those of the Company. If not, it is necessary to make the adjustment according to the Company’s accounting policies and
accounting period when preparing the consolidated financial statements. For subsidiaries through acquisition that are now under
common control, the financial statements are adjusted according to fair value of identifiable net assets on the acquisition date.
For subsidiaries through acquisition that are under common control, the assets, liabilities (as well as the goodwill arising from
purchasing the subsidiary by the ultimate controller) are adjusted according to book value of net assets in the financial
statements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controlling
shareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under the item of net
profit of the consolidated statement of comprehensive income and under the item of total comprehensive income. Where losses
assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary, the excess shall be charged
against the minority’s interests.
(1) Increasing new subsidiaries and businesses
3
Bengang Steel Plates Co., Ltd. Annual Report 2017
If the Company has a new subsidiary due to business combination under common control during the reporting period, it shall
adjust the beginning balance in the consolidated statement of financial position when preparing consolidated statement of
financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to the end of the reporting
period are included in the Company’s consolidated statement of comprehensive income. The cash flow of the subsidiaries
from the acquisition date to the end of the reporting period is included in the Company’s consolidated statement of cash
flows. And meanwhile the Company shall adjust the relevant items of the comparative financial statements as if the reporting
entity for the purpose of consolidation has been in existence since the date the ultimate controlling party first obtained
control.
When the Company becomes capable of exercising control over an investee under common control due to additional
investment or other reasons, adjustment shall be made as if the reporting entity after the combination has been in existence
since the date the ultimate controlling party first obtained control. The investment income recognized between date of
previously obtaining equity investment and the date the acquiree and acquirer are under common control, which is later, and
the combining date, other comprehensive income and other changes of net assets arising from the equity investment
previously-held before obtaining the control the acquiree shall be adjusted against the prior retained earnings of the
comparative financial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in the consolidated statement of
financial position when preparing consolidated statement of financial position. The revenue, expenses and profits of the
subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’s consolidated
statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to the end of the reporting
period is included in the Company’s consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under common control due to additional
investment or other reasons, the acquirer shall remeasure its previously held equity interest in the acquiree to its fair value at
the acquisition date. The difference between the fair value and the carrying amount shall be recognized as investment income
for the period when the acquisition takes place. When the previously-held equity investment is accounted for under the
equity method, any other comprehensive income previously recognized in relation to the acquiree’s equity changes shall be
transferred to profit or loss for the current period when the acquisition takes place. Other comprehensive income arising from
remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses and profits of the subsidiary
from the beginning of the reporting period to disposal date are included in the Company’s consolidated statement of
comprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal date is
included in the Company’s consolidated statement of cash flows.
When the Company loses control over an investee due to partial disposal or other reasons, the acquirer shall re-measure
the remaining equity interests in the acquiree to its fair value at the acquisition date. The difference, between sums of
consideration received for disposal equity shares and fair value of the remaining shares, and sums of share of net assets of
the subsidiary calculated continuously from the acquisition date or the combination date based on the previous
shareholding proportion and goodwill, shall be recognized as investment income for the period when the Company loses
control over acquiree. When the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized in relation to the acquiree’s equity changes, and other equity changes rather
than changes from net profit, other comprehensive income and profit distribution, shall be transferred to investment
income for the current period when the Company loses control over acquiree. Other comprehensive income arising from
re-measurement of defined benefit plan is excluded. When the Company loses control over a subsidiary due to the
increase of capital from other investors and thus the shareholding ratio of the Company declines, accounting treatment
shall be in accordance with the above-mentioned principles
2. Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its subsidiary in stages,
in determining whether to account for the multiple transactions as a single transaction, the Company shall consider all of
the terms and conditions of the transactions and their economic effects. One or more of the following may indicate that
the Company shall account for the multiple arrangements as a single transaction:
4
Bengang Steel Plates Co., Ltd. Annual Report 2017
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is economically justified when
considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control of the
subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financial
statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s net
assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred
to the profit or loss when the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary do not form part of a
bundled transaction, apply the treatment of disposing partial long-term equity investments in a subsidiary without loss of
control prior to the loss of control. After the loss of control, apply the treatment of disposing the subsidiary in common
cases.
3. Acquiring the subsidiaries’ equity interest held by non-controlling shareholders
Where the Company has acquired a subsidiary’s equity interest held by non-controlling shareholders, the difference
between the increase in the cost of long-term investments as a result of acquisition of non-controlling interests and the
share of net assets of the subsidiary calculated continuously from the acquisition date or the combination date based on
the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium) in the
consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted
against retained earnings.
4.Disposing portion of equity investments in subsidiaries without lossing control
When the Company disposes of a portion of the long-term equity investments in a subsidiary without loss of control, the
difference between the amount of the consideration received and the corresponding portion of the nest assets of the
subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of the
long-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in the
consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted
against retained earnings.
(7) Recognition of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the unrestricted deposit.
And the term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in
value.
(8) Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The balance of
exchange arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the
time of initial recognition or prior to the balance sheet date, except those arising from the raising of special foreign debt for the
purchase or construction of capitalizable assets thus shall be capitalized according to the borrowing costs capitalization principle,
shall be recorded into the profits and losses at the current period.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on the balance sheet
date. Among the owner's equity items, except the ones as \"undistributed profits\", others shall be translated at the spot exchange
5
Bengang Steel Plates Co., Ltd. Annual Report 2017
rate at the time when they are incurred. The income and expense items in the statement of comprehensive income shall be
translated at the spot exchange rate of the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is presented under the items of the owner's
equities in the statement of financial position and arises from the translation of foreign currency financial statements related to
this oversea business, into the disposal profits and losses of the current period. If the overseas business is disposed of partially,
the Company shall calculate the balance arising from the translation of foreign currency statements of the part of disposal based
on the disposal rate and shall shift them into the profits and losses of the current period.
(9) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments
1. Classification of financial instruments
The classification of financial assets and financial liabilities at initial recognition are as follows: financial assets or financial
liabilities designated at fair value through current profit and loss, including: trading financial investment, held-to-maturity
investment, loans and receivables, available-for-sale investment and other financial liabilities.
2. Recognition and measurement of financial instruments
(1) The financial assets (liabilities) at fair value through profit or loss
The financial assets (financial liabilities) at fair value through profit or loss are recognized initially at fair value (minus cash
dividends declared but not received or bond interest matured but not drawn yet). The relevant transaction cost is recognized in
current profit and loss when occurred.
The cash dividends or interest are recognized as investment income when the Company receives such financial assets. At the
balance sheet date, the Company recognizes the fair value changes in current profit and loss.
The Company recognizes the difference between initial recognition and fair value of the financial assets as investment income
when disposing the financial assets and at the same time adjusts the fair value changes in current profit and loss.
(2) Held-to-maturity investment
The Held-to-maturity investments are recognized initially at fair value (minus bond interest matured but not drawn yet) plus
any related transaction cost.
The held-to-maturity investments are measured at amortized cost using the effective interest rate. The interest income is
recognized as investment income. The effective interest will be determined at the initial recognition and will not be changed in
the holding period or within a shorter applicable period.
When disposing the held-to-maturity investment, the difference between the investing proceeds and the carrying value is
recognized as investment income.
(3) Receivables
Receivables from selling products and rendering services or receivable of other company not including the receivables with
quoted price in the active market (including: accounts receivable, other receivables, notes receivable, prepayments, long-term
receivables) are measured at contract price; if the receivables is of financing nature, it shall be recognized at the present value
initially.
When disposing the receivables, the difference between the proceeds and the carrying value is recognized in current profit and
loss.
(4) Available-for-sale financial assets
Available-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividends that have been
declared but not distributed and bond interests that have matured but not been drawn) and transaction costs when acquired.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
The Company recognizes the interest or cash dividends as investment income. At each balance sheet date, available-for-sale
financial assets are measured at fair value and the fair value changes are recognized in the capital reserve - other capital
reserve.
The difference between the proceeds of the disposal and the carrying value shall be recognized as investment income. And the
related fair value change in the shareholders’ equity shall be transferred out, and recorded as investment income.
(5) Other financial liabilities
For other financial liabilities, they are initially recognized at fair value plus any directly attributable transaction costs. After the
initial recognition, the other financial liabilities are measured at amortized cost.
3. Recognition and measurement of financial assets transfer
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the
transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to the ownership
of the financial asset, it shall not stop recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for stopping the
recognition of a financial asset, the Company shall follow the principle of the substance over form. Transfer of an entire
financial asset can be divided into partial financial assets transfer and entire financial asset transfer. If the transfer of an entire
financial asset satisfies the conditions for de-recognition, the difference between the amounts of the following 2 items shall be
recorded in the profits and losses of the current period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value
originally recorded in the owners' equities (in the event that the financial asset involved in the transfer is a financial asset
Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of the transferred financial
asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped
(under such circumstance, the service asset retained shall be deemed as a portion of financial asset whose recognition has not
been stopped), be apportioned according to their respective relative fair value, and the difference between the amounts of the
following 2 items shall be included into the profits and losses of the current period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative amount
of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion whose
recognition has been stopped (in the event that the financial asset involved in the transfer is a financial asset
Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shall continue to be recognized as
financial assets and the consideration received shall be recognized as financial liabilities.
4. Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial
liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way
of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different
from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall
at the same time recognize the new financial liability.
Where the Company makes substantial revisions to part or all of the contractual stipulations of the existing financial liability, it
shall terminated the recognition of the existing financial liability or part of it, and at the same time recognize the financial
liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company shall include into the profits and
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Bengang Steel Plates Co., Ltd. Annual Report 2017
losses of the current period the difference between the carrying amount which has been terminated from recognition and the
considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase, the carrying amount
of the whole financial liabilities in light of the comparatively fair value of the part that continues to be recognized and the part
whose recognition has already been terminated. The gap between the carrying amount which is distributed to the part whose
recognition has terminated and the considerations it has paid (including the noncash assets it has transferred out and the new
financial liabilities it has assumed) shall be recorded into the profits and losses of the current period.
5. Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quoted prices in the active markets. If
active markets for the financial instruments do not exist, valuation techniques shall be applied for the measurement. The
Company uses valuation techniques appropriate in the circumstances and for which sufficient data are available to measure fair
value. The Company chooses relevant observable inputs for identical or similar assets or liabilities. Only when relevant
observable inputs are unavailable or should the Company use unobservable inputs for the asset or liability.
6. Impairment provision of the financial assets (excluding accounts receivables)
The Company shall carry out impairment review for the financial assets at the balance sheet date except for the financial assets
at fair value through profit or loss. Where there is any objective evidence proving that such financial asset has been impaired, an
impairment provision shall be made.
(1) Impairment of available-for-sale financial assets
An impairment provision shall be made where the fair value of the available-for-sale financial assets drops significantly at the
balance sheet date or the trend of decrease is expected not to be temporary after taking various factors into consideration. The
accumulative losses arising from the decrease of the fair value of the owners’ equity which was directly included shall be
transferred out and recorded as impairment loss.
Where any available-for-sale debt instruments is recognized as having suffered from any impairment loss, if there is any
objective evidence proving that the value of the said debt instruments has been restored, and it is objectively related to the
events that occur after such loss is recognized, the impairment-related losses as originally recognized shall be reversed and be
recorded into the profits and losses of the current period.
Impairment losses incurred by investment transactions of available-for-sale equity instruments shall not be reversed through
profits and losses.
The criteria for “significant” decrease of fair value of available-for-sale equity instruments: the book value the equity
investment is lower than 50% of the fair value;
The criteria for “non-temporary” decrease of fair value of available-for-sale equity instruments: available-for-sale equity
instruments have been subject to material un-normal factors or the book value has been lower than the purchase price for over
one year (including one year).
(2) Impairment of held-to-maturity investment
The impairment of the held-to-maturity investment can be measured at reference to the measurement of the impairment of
accounts receivables.
(10) Receivables
1. The recognition and provision for bad debts for the individually significant receivables
The recognition standard for the individually significant receivables:
Accounts receivable over RMB10 million or other receivables over RMB 5 million.
The provision method for bad debts for the individually significant receivables:
The impairment test shall be assessed individually for each individually significant receivable. If there is evidence indicating
that the receivables have been impaired, the difference between the present value of the future cash flows and the book value of
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Bengang Steel Plates Co., Ltd. Annual Report 2017
receivables shall be recognized as bad debts provision and shall be recorded into the profits and losses at the current period.
Receivables that are assessed not to be impaired individually are subsequently assessed for impairment in portfolios.
2. The provision for bad debts for the receivables in portfolio
The provision method for bad debts for the receivables in portfolio
Criteria for portfolio
Individual insignificant receivables and receivables that are individually assessed not to be
Portfolio
impaired
Provision method for bad debts for portfolio
Portfolio Aging analysis method
Aging analysis method for bad debts provision
Bad debts ratio for Bad debts ratio for
Aging
accounts receivable (%) other receivables (%)
Within 1 year (inclusive)
1-2 years (inclusive) 5.00 5.00
2-3 years (inclusive) 20.00 20.00
Over 3 years 100.00 100.00
3. Individually insignificant receivables of which bad debts are provisioned individually
(1) Reasons for individual provision of bad debts:
Individually insignificant receivables are individually assessed to be impaired.
(2) The provision method for bad debts
The difference between the present value of the future cash flows and the book value of receivables shall be recognized as bad
debts provision and shall be recorded into the profits and losses at the current period.
(11) Inventory
1. Inventory classification
Inventories include material in transit, raw material, low-valued consumables, finished goods, work in process, materials for
consigned processing, etc.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to make provision for the inventories
impairment loss
The net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct selling in the daily
business activity shall be calculated by deducting the estimated sale expense and relevant taxes from the estimated sale price of
inventories; The net realizable value of inventories for further processing in the daily business activity shall be calculated by
deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of
inventories; The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated
on the ground of the contract price. If the Company holds more inventories than the quantities subscribed in the sales contract,
the net realizable value of the excessive part of the inventories shall be calculated on the ground of the general sales price.
The Company shall make provision for loss on decline in value of inventories on the ground of each item of inventories at the
year end. For inventories with large quantity and relatively low unit prices, the provision for loss on decline in value of
inventories shall be made on the ground of the categories of inventories. For the inventories related to the series of products
manufactured and sold in the same area, and of which the final use or purpose is identical or similar thereto, and if it is difficult
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Bengang Steel Plates Co., Ltd. Annual Report 2017
to measure them by separating them from other items, the provision for loss on decline in value of inventories shall be made on
a combination basis.
Unless clear evidence shows that the market price is exceptionally fluctuating, the net realizable value of inventory is based on
the market price at the balance sheet date.
The net realizable value of inventory at the year-end is based on the market price at the balance sheet date.
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance
(12) Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require the unanimous consent of the parties sharing control. If the Company and other joint venture have
joint control of the investee and have rights to the net assets of the investee, the investee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or
join control of those policies. If the Company could exert significant influence over the investee, the investee is the associate of
the Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
For a business combination under common control, if the consideration of the combination is satisfied by paying cash, transfer
of non-cash assets or assumption of liabilities and issue of equity securities, the initial investment cost of the long-term equity
investment shall be the absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed in the
consolidated financial statements of the ultimate controlling party at combination date. When an investor becomes capable of
exercising control over an investee under common control due to additional investment or other reasons, the initial investment
cost shall be the absorbing party’s share of the carrying amount of the owner’s equity of the party being absorbed in the
consolidated financial statements of the ultimate controlling party at combination date. The difference between the initial
investment cost and the carrying amount of the previously-held equity investment, together with the additional investment cost
for new shares at combination date, shall be adjusted to the capital reserve. If the balance of capital reserve is not sufficient,
any excess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment cost of the long-term equity investment shall be
the acquisition cost at the acquisition date. When an investor becomes capable of exercising control over an investee due to
additional investment or other reasons, the initial investment cost under the cost method shall be the carrying amount of
previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is
actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the
equity securities issued.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received and surrendered
can be reliably measured, the fair value of the assets surrendered shall be used as the basis for determining the cost of the
assets received, unless there is any exact evidence showing that the fair value of the assets received is more reliable. Where
any non-monetary assets transaction does not meet the conditions as prescribed above, the carrying value and relevant payable
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Bengang Steel Plates Co., Ltd. Annual Report 2017
taxes of the assets surrendered shall be the initial cost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fair values.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long term investment in subsidiary company. Under the cost method, an investing
enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity, recognize the
investment profits or losses except the dividend declared but unpaid, which is included in the payment when acquiring the
investment.
(2) Equity method
A long-term equity investment in an associate or a joint venture shall be accounted for using the equity method. Where the
initial investment cost of a long-term equity investment exceeds tan investor’s interest in the fair values of an investee’s
identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial cost
is less than the investor’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, the difference
shall be credited to profit or loss for the current period.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s other
comprehensive income, as investment income or losses and other comprehensive income, and adjust the carrying amount of
the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profit distributions
or cash dividends declared by the investee that is attributable to the investor. The investor’s share of the investee’s owners’
equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit
distribution, and the carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustments according to
the Company’s accounting principles and operating period based on the fair values of the investee’s identifiable net assets at
the acquisition date. During the holding period, if the investee makes consolidated financial statements, the Company shall
calculate its share based on the investee’s net profit, other comprehensive income and the amount of other owners' equity
attribute to the investee in the consolidated financial statements.
The unrealized profits or losses resulting from transactions between the investor and its associate or joint venture shall be
eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or losses shall be
recognized. Any losses resulting from transactions between the investor and investee which are attributable to asset
impairment shall be recognized in full. If the transaction of investment or sale of assets among the Company and associate and
joint venture and the assets is a business, it shall apply the treatment mentioned in Note 3 (5) “The accounting treatment for
Business combination under/now under common control” and Note 3 (6) “Consolidation of Financial Statements”.
When the Company recognizes the losses of invested enterprise, it shall follow the following sequence: First of all, offset the
book value of long term equity investment. If the book value of long term equity is insufficient to dilute, the investing
enterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and
other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero.
If the company still has the obligation to undertake extra losses per contract, and then estimated liabilities shall be recognized
into current profit and loss accordingly to the estimated obligation.
(3) Disposal of long-term equity investment
When disposing long-term equity investment, the difference between the proceeds actually received and the carrying amount
shall be recognized in profit or loss for the current period.
When the previously-held equity investment is accounted for under the equity method, any other comprehensive income
previously recognized shall be accounted for on the same basis as would have been required if the investee had directly
disposed of the related assets or liabilities. Those owner's equity recognized other than the change of net profits or loss, other
comprehensive income, profit distribution of the invested entity shall be transferred proportionally into profit or loss of current
period, other comprehensive income arising from the re-measurement of defined benefit plan is excluded.
When an investor can no longer exercise joint control of or significant influence over an investee due to partial disposal of
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Bengang Steel Plates Co., Ltd. Annual Report 2017
equity investment or other reasons, the remaining equity investment shall be accounted for in accordance with “Accounting
Standard for Business Enterprises No. 22-Financial instruments: recognition and measurement”. The difference between the
fair value and the carrying amount at the date of the loss of join control or significant influence shall be charged to profit or
loss for the current period. When the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the
investee had directly disposed of the related assets or liabilities for the current period upon discontinuation of the equity
method. Those owner's equity recognized other than the change of net profits or loss, other comprehensive income, profit
distribution of the invested entity shall be transferred into profit or loss of current period in full when the Company cease to
adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal of equity investment or due to
decrease of shareholding ratio because of additional investment by other investors, and with the retained interest, still has joint
control of, or significant influence over, the investee, when preparing the individual financial statements, the investor shall
change to the equity method and adjust the remaining equity investment as if the equity method had been applied from the
date of the first acquisition. If the investor cannot exercise joint control of or significant influence over the investee after
partial disposal of equity investment, the remaining equity investment shall be accounted for in accordance with “Accounting
Standard for Business Enterprises No.22-Financial instruments: Recognition and Measurement”, and the difference between
the fair value and carrying amount at the date of the loss of control shall be charged to profit or loss for the current period.
When the equity investment disposed is acquired through business combination due to additional investment or other reasons,
in stand-alone financial statement, the remaining equity investment shall adopt cost method or equity method, any other
comprehensive income and other owner’s interests previously recognized of the previously-held equity investment under the
equity method shall be transferred proportionally. For those remaining equity investment accounted for in accordance with
“Accounting Standard for Business Enterprises No.22-Financial instruments: Recognition and Measurement” after disposal,
other comprehensive income and other owner’s interests previously recognized shall be transferred to profit or loss in full.
(13) Fixed assets
1. Recognition of Fixed assets
The term \"fixed assets\" refers to the tangible assets held for the sake of producing commodities, rendering labor service, renting
or business management and of which useful life is in excess of one fiscal year. No fixed asset may be recognized unless it
simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is determined according to the category of
assets, the useful life and the expected residual rate. If the components of the fixed assets have different useful lives or provide
the economic benefits in a different way, then different depreciation rate or method shall be applied and the depreciation of the
components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonably certain that the ownership of
the leased assets will be acquired upon expiry of lease, or over the shorter of lease term and useful life if it is not reasonably
certain that the ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate are as follows:
Depreciation Rate
Classification Depreciation Period Residual Value Rate (%)
(%)
Plants and Buildings 8-40 years 0.00 2.50-12.50
Machinery 4-18 years 3.00 5.39-24.25
Transportation and other equipment 5-18 years 3.00 5.39-19.40
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing:
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Bengang Steel Plates Co., Ltd. Annual Report 2017
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the
leased asset at the date when the option becomes exercisable;
(3) The lease term covers the major part of the use life of the leased asset; and
(4) The present value of the minimum lease payments on the lease beginning date amounts to substantially all of the fair value
of the leased asset on the lease beginning date.
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of
the minimum lease payments on the lease beginning date as the initial book value, recognize the amount of the minimum lease
payments as the initial book value of long-term account payable, and treat the difference between the recorded amount of the
leased asset and the long-term account payable as unrecognized financing charges.
(14) Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred for bringing the
asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it has reached its working
condition for its intended use. In case the final project accounts have not been completed or approved, the asset shall be
transferred to fixed assets at an estimated value by considering project budget, cost or actual cost of the project and etc., and the
deprecation of the said fixed assets shall be provided in accordance with the Company’s accounting policy since it has reached
its working condition for its intended use. After the project accounts have been approved, the estimated values shall be adjusted
based on the actual cost, but those provided deprecation shall not be adjusted.
(15) Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary
expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or production
of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs
shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and
losses.
Assets eligible for capitalization refer to the fixed assets, investment real estate, inventories and other assets, of which the
acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest bearing
debts paid for the acquisition and construction or production activities for preparing assets eligible for capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended use or
sale have already started.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the borrowing
costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization
of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed separately and is ready for
use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready for use or sale
during the continuing construction of other parts, but it cannot be used or sold until the asset is entirely completed, the
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Bengang Steel Plates Co., Ltd. Annual Report 2017
capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period
lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step
for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the
capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recognized as
expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and construction or
production of the asset restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank or investment
income earned on the loan as a temporary investment) and the ancillary expense incurred to a specifically borrowed loan, those
incurred before a qualified asset under acquisition, construction or production is ready for the intended use or sale shall be
capitalized at the incurred amount when they are incurred, and shall be recorded into the costs of the asset eligible for
capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying
the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the
capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the
weighted average interest rate of the general borrowing.
(16) Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other necessary disbursements
which may be directly attributable to bringing the intangible asset to the conditions for the expected purpose. If the payment
for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost of the
intangible asset shall be determined on the basis of the present value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial recognition is based on
its fair value, and the difference between the debt restructured and the fair value of the intangible assets are recognized in the
current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the fair value of the assets
obtained or surrendered can be reliably measured, the initial recognition of the asset obtained is based on the fair value of the
asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable. For intangible assets
obtained through non-monetary transactions which do not meet the above criteria, the initial recognition is based on the book
value of the assets surrendered and the relevant taxes payable. No gain or loss will be recognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period when the
intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of the intangible
asset, it shall be regarded as an intangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
Item Estimated useful life Criteria
Land use right 50 years Land use right certificate
The Company shall review the useful lives and amortization methods of intangible assets with limited useful lives at each year
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Bengang Steel Plates Co., Ltd. Annual Report 2017
end.
Per review, the useful lives and amortization methods of intangible assets with limited useful lives at the year-end is the same
with that of last year.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall be classified into research expenditures
and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and understand new
scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge is applied into certain
projects or designs for the manufacturing of new or substantially improved material, device and product.
(17) Impairment of long-term assets
For long-term assets under the cost model such as fixed assets, construction in progress, intangible assets etc., the Company
shall perform impairment tests at the period end if there is clear indication of impairment. If the recoverable amounts of
long-term assets are less than their carrying amounts, the carrying amounts of the assets shall be written down to their
recoverable amounts. The write-downs are recognized as impairment losses and charged to current profit and loss. The
recoverable amounts of long-term assets are the higher of their fair values less costs to sell and the present values of the future
cash flows expected to be derived from the assets. The Company shall estimate its recoverable amount on an individual basis.
Where it is difficult to do so, it shall determine the recoverable amount of the group assets on the basis of the asset group to
which the asset belongs. The term \"group assets” refers to a minimum combination of assets by which the cash flows could be
generated independently
The goodwill shall be subject to an impairment test at least at the end of each year.
When the Company makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying value of the
business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Where it is difficult to
do so, it shall be apportioned to the relevant combinations of asset groups. When apportioning the carrying value of the business
reputation to the relevant asset groups or combinations of asset groups, it shall be apportioned on the basis of the proportion of
the fair value of each asset group or combination of asset groups to the total fair value of the relevant asset groups or
combinations of asset groups. Where it is difficult to measure the fair value reliably, it shall be apportioned on the basis of the
proportion of the carrying value of each asset group or combination of asset groups to the total carrying value of the relevant
asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containing business reputation, if
any evidence shows that the impairment of asset groups or combinations of asset groups is possible, the Company shall first
make an impairment test on the asset groups or combinations of asset groups not containing business reputation, calculate the
recoverable amount, compare it with the relevant carrying value and recognize the corresponding impairment loss. Then the
Company shall make an impairment test of the asset groups or combinations of asset groups containing business reputation, and
compare the carrying value of these asset groups or combinations of asset groups (including the carrying value of the business
reputation apportioned thereto) with the recoverable amount. Where the recoverable amount of the relevant assets or
combinations of the asset groups is lower than the carrying value thereof, it shall recognize the impairment loss of the business
reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periods once recognized.
(18) Long-term deferred expense
15
Bengang Steel Plates Co., Ltd. Annual Report 2017
The long-term deferred expense refers to the expenses incurred but shall be borne by current and subsequent accounting period,
which is more than one year.
The long-term deferred expense shall be amortized over its beneficiary period evenly
(19) Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognized , in the accounting period in which an employee provides service, actually occurred short-term
employee benefits as a liability, with a corresponding charge to the profit or loss or cost of an asset for the current period.
Payments made by an enterprise of social security contributions for employees, payments of housing funds, and union running
costs employee education costs provided in accordance with relevant requirements shall, in the accounting period in which
employees provide services, be calculated according to prescribed bases and percentages in determining the amount of
employee benefits.
The employee benefits which are non-monetary benefits shall be measured at fair value if it could be measured reliably.
2. Accounting treatment of post-employment benefits
(1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides service, pension fund and
unemployment fund for employees as a liability according to the local government regulations. The amount shall be calculated
according to local prescribed bases and percentages in determining the amount of employee benefits, with a corresponding
charge to the profit or loss or cost of an asset for the current period.
(2) Defined benefit plan
None
3. Accounting treatment of termination benefits
The Company shall recognize an employee benefits liability for termination benefits, with a corresponding charge to the profit
or loss for the current period, at the earlier of the following dates: when the Company cannot unilaterally withdraw the offer of
termination benefits because of an employment termination plan or a curtailment proposal; or when the Company recognizes
costs or expenses related to a restructuring that involves the payment of termination benefits
(20) Estimated liabilities
1. Recognition criteria of estimated liabilities
The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring) shall be recognized as an estimated
liabilities when the following conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation; and
(3) The amount of the obligation can be measured in a reliable way.
2. Measurement of estimated liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and
other factors pertinent to the Contingencies. If the time value of money is of great significance, the best estimate shall be
determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a continuous range for the necessary expenses and if all the outcomes within this range are equally likely to occur, the
best estimate shall be determined in accordance with the average estimate within the range, that is, the average of the upper and
lower limit.
If there is not a sequent range for the necessary expenses and if the outcomes within this range are not equally likely to occur,
16
Bengang Steel Plates Co., Ltd. Annual Report 2017
the best estimate shall be determined as follows:
(1) If the Contingencies concern a single item, it shall be determined in the light of the most likely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated and determined in accordance with all
possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to be
compensated by a third party, the compensation shall be separately recognized as an asset only when it is virtually certain that
the reimbursement will be obtained. The amount recognized for the reimbursement shall not exceed the book value of the
estimated debts.
(21) Revenue
(1) The general principle of revenue recognition and measurement
The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; and retained neither
continuing managerial involvement which usually relates to the ownership nor exerts effective control over the goods sold.
The relevant amount of revenue can be measured reliably, the economic benefits related to the transaction will flow into the
enterprise; and the relevant costs incurred or to be incurred can be measured reliably. Revenue from the sale of goods may be
recognized.
(2) The specific criteria of revenue recognition and measurement
The Company mainly sells steel and other products. Domestic sales revenue is recognized when the following conditions are
met: The Company has delivered the products to buyer under the contract, amount of product sales revenue is determinable,
received or the certificate of the right to receive the amount has been obtained and the relevant economic benefits are likely to
flow into the entity, and related costs can be measured reliably.
Export sales revenue is recognized when the following conditions are met: the Company has undertaken the Customs
declaration and delivery has occurred under the contract, bill of lading has been obtained, amount of product sales revenue is
determinable, received or the certificate of the right to receive the amount has been obtained and the relevant economic
benefits are likely to flow into the entity, and related costs can be measured reliably.
(3) Recognition Criteria for the Revenue from alienating of Assets Use Rights
When it is probable that economic benefits in relation to the transaction will flow into the enterprise; and the amount of
revenues can be measured reliably. The Company shall ascertain the amount of revenues from the transfer of Assets Use Right
based on the following circumstances respectively:
(1) Interest income shall be calculated based on the duration of which the Company's cash is used by others and the actual
interest rate; or
(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in the relevant contract or
agreement.
(4) Recognition Criteria for the Revenue from Providing Labor Services and Construction Contracts under Percentage
of Completion Method
Revenue from providing labor services are recognized under the percentage of completion method if the outcome of the labor
service provision transaction can be reliably measured. Percentage completed is determined by measurement of work
completed.
Total revenue from providing of labor services is determined based on the received or receivable amount stipulated in the
contract or agreement, unless the received or receivable amount as stipulated in the contract or agreement is unfair. The
Company shall, on the date of the balance sheet, ascertain the current revenue from providing labor services by multiplying the
total amount of revenues from providing labor services with the percentage completion, less cumulative revenues recognized in
the previous accounting periods. At the same time, the enterprise shall recognize current cost of labor services by multiplying
the total estimated cost of providing of labor services with percentage completion less cumulative costs recognized in the
previous accounting periods.
If the result of a transaction concerning the providing of labor services cannot be reliably measured at the balance sheet date, it
shall be measured as follows:
(1) If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall
be recognized to the extent of the cost of labor services incurred, and the cost of labor services shall be recognized; or
(2) If the cost of labor services incurred is not expected to compensate, the cost incurred shall be recognized in the current
profit and loss, and no revenue from the providing of labor services shall be recognized.
(22) Government Subsidies
17
Bengang Steel Plates Co., Ltd. Annual Report 2017
A government subsidy means the monetary or non-monetary assets obtained free of charge by the Company from the
government. Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent
to income.
The criteria and accounting treatment of government subsidies pertinent to assets.
Government subsidies related to assets are government subsidies whose primary condition is that an entity qualifying for them
should purchase, construct or otherwise acquire long-term assets.
Recognition
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount of the assets or
recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss over the
periods during the useful lives of the relevant assets.
Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount of the assets or
recognized as deferred income. Subsidies that recognized as deferred income shall be recognized in profit or loss on a
systematic basis over the periods during the useful lives of the relevant assets (Subsidies related to daily activities should be
recorded in Other Income. Subsidies that unrelated to daily activities should be recorded in Non-operating Income).
The criteria and accounting treatment of government subsidies pertinent to income.
The government subsidy related to income refers to the government subsidy other than the government subsidy related to the
asset.
Recognition
The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred income and
transferred to current profit or loss. Government subsidies to compensate expenses or losses already incurred shall be
recognized in current profit and loss.
Accounting treatment
The government subsidies related to incomes to compensate future expenses, shall be recognized as deferred income and
transferred to current profit or loss (Subsidies related to daily activities should be recorded in Other Income. Subsidies that
unrelated to daily activities should be recorded in Non-operating Income) in the period during which the expenses compensation
is recognized, or deduct relevant cost or loss. Government subsidies to compensate expenses or losses already incurred shall be
recognized in current profit and loss (Subsidies related to daily activities should be recorded in Other Income. Subsidies unrelated
to daily activities should be recorded in Non-operating Income) or deduct relevant cost or loss.
(23) Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax assets arising from a deductible temporary difference to the extent of the
amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary
difference.
As for any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax
assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax
deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain limited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognition of goodwill; initial
recognition of an asset or liability in a transaction or event that is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit (tax loss).
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entity has a legally enforceable right to
set off current tax assets against current tax liabilities; and (b) the deferred tax assets and the deferred tax liabilities relate to
income taxes levied by the same taxation authority on either:(i) the same taxable entity; or (ii) different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled
or recovered.
(24) Leases
18
Bengang Steel Plates Co., Ltd. Annual Report 2017
1. Accounting treatment of operating lease
(1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using the straight-line
method over each period of the lease term. The initial direct costs paid by the Company shall be recorded into the profits and
losses of the current period
If the lessor has shouldered any expense related to the lease which shall have been borne by the Company, the Company shall
deduct these expenses from the total rental expense and the remaining rental expense shall be allocated to each period during
the lease term
(2) The rents collected from operating leases shall be recorded in the profits and losses of the current period by using the
straight-line method over each period of the whole lease term in which free lease period is included. The initial direct costs
paid by the Company shall be recorded into the profits and losses of the current period. The initial direct costs shall be
capitalized if it is material, and be allocated to each period as per the basis for rental revenue recognition.
If the Company has shouldered any expense related to the lease which shall have been borne by the lessee, the company shall
deduct these expenses from the total rental revenue and the remaining rental revenue shall be allocated to each period during
the lease term.
2. Accounting treatment of financial leasing
(1) Leased in asset
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the present value of the
minimum lease payments on the lease beginning date as the initial book value, recognize the amount of the minimum lease
payments as the initial book value of long-term account payable, and treat the balance between the recorded amount of the
leased asset and the long-term account payable as unrecognized financing charges.
The lessee shall adopt the effective interest rate method to calculate and recognize the financing charge in the current period.
The unrecognized financing charge shall be amortized to each period during the lease term. Initial direct costs incurred by the
Company shall be recorded in the value of the leased asset.
(2) Leased out asset
On the lease beginning date, a lessee shall record the balance between the sum of finance lease receivables plus unguaranteed
residual value and the present value of the sum as unrealized financing income, and record rental as revenue when received for
each period in the future
Initial direct costs incurred by the Company related to the leased asset shall be recorded in the initial measurement of the
finance lease receivables, and reduce the amount of revenue recognized during the lease term.
(25) Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for sale by the Company, and can be
distinguished separately in operating and preparing financial statements when one of the following conditions is met:
(1) The component stands for an independent main business or a major business area;
(2) The component is a part of disposal plan of an independent main business or a major business area;
(3) The component is a subsidiary which is acquired only for sale again.
(26) Significant accounting policies and change of accounting estimate
1. Significant changes in accounting policies
Implementation of “CAS No.42-Non-current assets held for sale, disposal group and discontinued operation”, “CAS
No.16-government subsidy” and “Notice of the Ministry of Finance on the revision of the format for the issuance of the
financial statements of the general enterprise”.
Ministry of Finance issued in 2017 “CAS No.42-Non-current assets held for sale, disposal group and discontinued operation”,
which took effect on 28th May 2017. For the Non-current assets held for sale, disposal group and discontinued operation
already existed before the effective date of the standard; the Company will apply the standard prospectively.
Ministry of Finance issued an amendment in 2017 to “CAS No.16-Govermentment subsidy”, which took effect on 12nd June
2017. For the government subsidy already existed before 1 January 2017, the Company will apply the standard prospectively.
19
Bengang Steel Plates Co., Ltd. Annual Report 2017
For the government subsidy received from 1 January 2017 to the effective date of the Standard, the Company will apply the
amendment of the standard and make adjustment accordingly.
Ministry of Finance issued in 2017 “Notice of the Ministry of Finance on the revision of the format for the issuance of the
financial statements of the general enterprise”, which revised the format of financial statement for the general enterprise and is
applicable to financial statement of 2017 and periods thereafter.
The major impacts of the implementation of the above regulations are as follows:
The content and the reason for the changes of accounting The name and amount of the report item
Approval procedures
policies affected
The net profit from continuing operation” and “net profit from Net profit from continuing operation for
discontinued operation” are presented separately in the Approved by Board of the current year is RMB 1,609,390,707.73
income statement. And the comparative figures are adjusted directors and the last year is RMB 825,504,845.70.
accordingly.
The government subsidy related to ordinary activities are
Approved by Board of The other income for the current year is
recorded in other income instead of “non-operating income”.
directors RMB 39,086,900.00
comparative figures are not adjusted
This year Non-operating income was
reduced by RMB 4,280,684.29, and
Non-operating expenses reduced by RMB
The assets disposal gains and losses presently previously in 0.00.Both are reclassified to asset disposal
“Non-operating income” will be reclassified to new item in Approved by Board of gains. In the previous year, the
the income statement “asset disposal gains”. The comparative directors Non-operating income was reduced by
figures are adjusted accordingly. RMB 11,801,616.20, and the
Non-operating expenses were reduced by
RMB 0.00, which was reclassified to the
asset disposal gains.
2．Significant changes in accounting estimates
The company's accounting estimates have not changed during the reporting period.
4. Taxes
(1) Major type of taxes and corresponding tax rates
Tax Taxation Method Tax Rate
The balance of output VAT calculated based on product sales
Value-added Tax(VAT) and taxable services revenue in accordance with the tax laws 17%, 11%, 6%
after subtracting the deductible input VAT of the period
Based on taxable operating revenue(from 1 May 2016, the
Business tax 5%
Business tax has changed into VAT)
City maintenance and construction tax Based on VAT and business tax actually paid 7%, 5%
Educational surcharges Based on VAT and business tax actually paid 3%, 2%
Enterprise income tax Based on taxable profit 25%
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items Ending balance Beginning balance
Cash on hand 20,871.51 47,743.38
Cash at bank 12,317,555,907.42 12,289,906,915.69
20
Bengang Steel Plates Co., Ltd. Annual Report 2017
Items Ending balance Beginning balance
Other monetary funds 4,720,136,631.56 693,022,529.17
Total 17,037,713,410.49 12,982,977,188.24
Total amount deposited abroad
The details of restricted monetary funds resulted from guarantee or pledge or freeze accounts are as follows:
Items Ending balance Beginning balance
Margin for bank acceptance bill 3,147,582,187.96 483,737,529.17
Time deposit or notice deposit for
guarantee 1,572,554,443.60 174,600,000.00
Total 4,720,136,631.56 658,337,529.17
(2) Notes receivable
1. Notes receivable disclosed by category
Items Ending balance Beginning balance
Bank acceptance bill 3,622,042,309.91 2,003,701,859.70
Commercial acceptance bill 224,391,390.96 26,979,278.33
Total 3,846,433,700.87 2,030,681,138.03
2. The pledged acceptance bill at the year-end
Items The pledged acceptance bill at the year-end
Bank acceptance bill 2,167,864,988.83
Total 2,167,864,988.83
3. The amount of Notes receivable endorsed over but not yet matured at the year-end.
Items Derecognized ending balance Underecognized ending balance
Bank acceptance bill 7,588,682,313.37
Commercial acceptance bill 92,271,846.41
Total 7,588,682,313.37 92,271,846.41
4. No Notes receivable has been transferred into accounts receivable due to inability of drawer to meet
acceptance bill at the year-end.
(3) Accounts receivable
1. Accounts receivable disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts
Book value
Amount (%)
Amount ratio (%)
21
Bengang Steel Plates Co., Ltd. Annual Report 2017
Individually significant and 47 ,762,337.18 4.86 47,762,337.18 100.00
tested for impairment
individually
Accounts receivable tested for 934,445,274.36 95.14 205,847,347.97 22.03 728,597,926.39
impairment by portfolio
Other insignificant items but
tested for impairment
individually
Total 982,207,611.54 100.00 253,609,685.15 728,597,926.39
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts ratio
Book value
Amount (%)
Amount (%)
Individually significant and
tested for impairment
individually
Accounts receivable tested for
impairment by portfolio 829,837,954.48 100.00 205,972,527.23 24.82 623,865,427.25
Other insignificant items but
tested for impairment
individually
Total 829,837,954.48 100.00 205,972,527.23 623,865,427.25
Accounts receivables individually significant and tested for impairment individually
Ending balance
Company Provision for bad Bad debts
Carrying amount ratio (%)
Reason
debts
Benxi Nanfen Xinhe
Metallurgical Furnace Material 47,762,337.18 47,762,337.18 100.00 Halt operation
Co., Ltd
Total 47,762,337.18 47,762,337.18
Accounts receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 627,072,908.02
1-2 years (inclusive) 33,022,230.26 1,651,111.52 5.00
2-3 years (inclusive) 87,692,374.53 17,538,474.90 20.00
Over 3 years 186,657,761.55 186,657,761.55 100.00
Total 934,445,274.36 205,847,347.97
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 47,637,157.92.
1. No accounts receivable has been written off this year.
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Bengang Steel Plates Co., Ltd. Annual Report 2017
2. Top five debtors at the year-end
Ending balance
Company Percentage of total Provision for
Amount
Accounts receivable (%) bad debts
The first 248,424,241.50 25.29
The second 80,411,687.88 8.19 6,513,105.93
The third 62,242,087.46 6.34 22,754,881.58
The fourth 61,670,255.06 6.28
The fifth 47,762,337.18 4.86 47,762,337.18
Total 500,510,609.08 50.96 77,030,324.69
(4) Prepayments
1. Prepayments disclosed by aging
Ending balance Beginning balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 1,259,327,577.20 98.33 452,700,499.16 91.67
1-2 years (inclusive) 13,457,173.07 1.05 31,080,628.03 6.29
2-3 years (inclusive) 1,669,541.26 0.13 8,279,599.88 1.68
Over 3 years 6,234,802.80 0.49 1,778,932.37 0.36
Total 1,280,689,094.33 100.00 493,839,659.44 100.00
Notes: As of December 31, 2017, there were no outstanding prepayments of over 1 year.
2. Top five prepaid companies at the year-end
Name of the company Amount Percentage (%)
The First 664,151,443.09 51.86
The Second 132,745,453.15 10.37
The Third 125,883,344.25 9.83
The Fourth 82,511,152.25 6.44
The Fifth 46,000,000.00 3.59
Total 1,051,291,392.74 82.09
(5) Interest receivable
1. Interest receivable disclosed by category
Items Ending balance Beginning balance
Deposit interest 18,448,520.50 4,208,818.85
Total 18,448,520.50 4,208,818.85
(6) Other receivables
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Bengang Steel Plates Co., Ltd. Annual Report 2017
1. Other receivables disclosed by category
Ending balance
Items Carrying amount Provision for bad debts
Percentage Bad debts ratio Book value
Amount Amount
(%) (%)
Individually significant and tested for impairment
individually
359 ,690,439. 99.52 71,053,454. 19.75 288,636,985.
Accounts receivable tested for impairment by portfolio
99 65
Other insignificant items but tested for impairment 1,740,000.00 0.48 1,740,000.00
individually
361,430,439. 100.00 71,053,454. 290,376,985.
Total
99 65
Beginning balance
Items Carrying amount Provision for bad debts
Percentage Bad debts Book value
Amount (%)
Amount
ratio (%)
Individually significant and tested for
impairment individually
Accounts receivable tested for
impairment by portfolio 183,443,116.06 99.06 67,273,143.57 36.67 116,169,972.49
Other insignificant items but tested for
impairment individually 1,740,000.00 0.94 1,740,000.00
Total 185,183,116.06 100.00 67,273,143.57 117,909,972.49
Other receivables tested for impairment by portfolio using the method of Aging analysis
Ending balance
Items
Carrying amount Provision for bad debts Bad debts ratio (%)
Within 1 year (inclusive) 268 ,082,914.37
1-2 years (inclusive) 8,741,934.65 437,096.72 5.00
2-3 years (inclusive) 15,311,541.31 3,062,308.27 20.00
Over 3 years 67,554,049.66 67,554,049.66 100.00
Total 359,690,439.99 71,053,454.65
Other receivables individually insignificant but tested for impairment individually
Provision for Bad debts
Items Carrying Amount Reason
bad debts ratio (%)
Sinking Fund of Japanese yen from Finance
1,740,000.00 Sinking fund
Bureau of Benxi
Total 1,740,000.00
Notes: The Sinking Fund of Japanese yen from Finance Bureau of Benxi is the margin for JPY loans of which
the aging is over 3 years and no bad debts provision has been made for it.
24
Bengang Steel Plates Co., Ltd. Annual Report 2017
2. Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 3,780,311.08.
3. No other receivables have been written off this year.
4. Other receivables disclosed by nature
Nature Ending balance Beginning balance
Accounts 345 ,146,993.73 165,494,806.44
Export tax rebate 4,990,848.26
Margin and deposit 3,045,619.00 3,329,519.00
Others 13,237,827.26 11,367,942.36
Total 361,430,439.99 185,183,116.06
5. Top five debtors at the year-end
Percentage of Provision
Nature or
Company Amount Aging total other for bad
content
receivables(%) debts
20,014,006.17 within 1 year RMB 5.54 8,617.52
The First Accounts 20,005,388.65; over 3 years
RMB 8,617.52
The Second Accounts 14,890,418.63 1-3 years 4.12 2,462,178.25
Accounts 12,408,569.67 with 1 year RMB 8,877,932.00, 3.43 176,531.88
The Third
1-2years RMB 3,530,637.67
The Fourth Accounts 9,188,976.40 within 1 year 2.54
The Fifth Others 5,922,247.07 within 1 years 1.64
Total 62,424,217.94 17.27 2,647,327.65
(7) Inventories
1. Inventories disclosed by category
Ending balance Beginning balance
Items
Carrying amount Impairment Book value Carrying amount Impairment Book value
Raw material
5,612,450,076.70 4,894,918.76 5,607,555,157.94 5,524,143,499.59 4,894,918.76 5,519,248,580.83
and main material
Work in process and
self-made
1,689,682,178.82 23,431,222.63 1,666,250,956.19 1,565,629,213.06 52,905,684.06 1,512,723,529.00
semi-finished
product
Finished products 3,964,781,474.74 28,689,492.71 3,936,091,982.03 2,755,527,232.24 5,325,405.33 2,750,201,826.91
Total 11,266,913,730.26 57,015,634.10 11,209,898,096.16 9,845,299,944.89 63,126,008.15 9,782,173,936.74
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Bengang Steel Plates Co., Ltd. Annual Report 2017
2. Impairment of inventory
Increase Decrease
Category Beginning balance Ending balance
Provision Others Write-back or write-off Others
Raw material
4,894,918.76 4,894,918.76
and main material
Work in process and
self-made semi-finished 52,905,684.06 23,431,222.63 52,905,684.06 23,431,222.63
product
Finished products 5,325,405.33 28,689,492.71 5,325,405.33 28,689,492.71
Total 63,126,008.15 52,120,715.34 58,231,089.39 57,015,634.10
(8) Other current assets
Items Ending balance Beginning balance
Prepaid enterprise income tax 182,938,934.20 183,264,161.99
Input tax to be deducted 120,383,193.59 86,134,653.84
Bank Short-Term Financial Products 506,000,000.00 244,000,000.00
Total 809,322,127.79 513,398,815.83
(9) Available-for-sale financial assets
1. Details of available-for-sale financial assets
Ending balance Beginning balance
Items Carrying
Carrying amount Impairment Book value Impairment Book value
amount
Available-for-sale
debt instruments
Available-for-sale
equity 18,303,673.00 14,414,693.00 3,888,980.00 20,271,278.63 14,414,693.00 5,856,585.63
instruments
Including:
Measured at
fair value
Measured at
cost 18,303,673.00 14,414,693.00 3,888,980.00 20,271,278.63 14,414,693.00 5,856,585.63
Total 18,303,673.00 14,414,693.00 3,888,980.00 20,271,278.63 14,414,693.00 5,856,585.63
26
Bengang Steel Plates Co., Ltd. Annual Report 2017
2. Available-for-sale financial assets measured at cost
Carrying amount Impairment Cash
Percenta divide
Compa
ge of nd of
ny
Beginning Increas Decrea Ending Beginning Increa Decrea Ending share in the
invested
Balance e se Balance Balance se se Balance the firm curren
in
(%) t
period
Zhejiang
Bengang
Jingrui
1,967,605.
Steel 1,967,605.63 20.00
Processi
ng Co.,
Ltd.
Suzhou
Bengang
3,888,980.0
Industria 3,888,980.00 20.10
l Co.,
Ltd.
China
Steel
Shangha
14,414,693. 14,414,693. 14,414,693.
i Steel 14,414,693.00
00 00
15.00
Processi
ng Co.,
Ltd.
1,967,605. 18,303,673. 14,414,693. 14,414,693.
Total 20,271,278.63
63 00 00
(10) Long-term equity investment
Increase/decrease
Invest
ment
Gains Amoun
and Othe Declar t Total
Begin Adjustme
Losses r ation of Provisi Impair
Investees ning Add Reduce nt Ending
Recogn Equit Cash on ment
Balan Invest Invest Compreh Others Balance
ized y Divide Total Ending
ce ment ment ensive
under Chan nds or Impair Balance
Income ment
the ges Profit
Equity
Metho
d
1．Joint
Venture
Subtotal
2．Asso
ciated
Enterpris
27
Bengang Steel Plates Co., Ltd. Annual Report 2017
Increase/decrease
Invest
ment
Gains Amoun
and Othe Declar t Total
Begin Adjustme
Losses r ation of
