Beijing Shougang Co. Ltd Annual Report 2021
Beijing Shougang Company Limited
2021 Annual Report
27 April 2022
Beijing Shougang Co. Ltd Annual Report 2021
Section I. Important notice, Content, DefinitionsThe board of directors (the “Board”), the supervisory committee, all directors, supervisors and senior executivesof the Company warrant that there are no false representations, misleading statements or material omissions in thisannual report; and are jointly and individually responsible for the truthfulness, accuracy and completeness of theinformation contained in this annual report.Mr. Zhao Minge, representative of the Company, Mr. Liu Jianhui, general manager, Mr. Li Baizheng, personoverseeing the accounting operations, and Ms. Gong Juanjuan, head of Accounting Department, maderepresentations in respect of the truthfulness, accuracy and completeness of the financial report contained in theannual report.All directors have attended the board meeting to review of and deliberate on this report.Forward-looking statements contained in this annual report do not constitute any substantive commitments toinvestors by the Company. Investors should be aware of the relevant investment risks.Certain risks that may exist have been elaborated by the Company in this report. Please refer to Discussion andAnalysis of Business Operations for details.Notes to the profit distribution plan or the plan for converting capital reserve into share capital during thereport period:
On 18 March 2022, the Company has received the“Approval for Beijing Shougang Co., Ltd. to Issue Shares toShougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds” (zjxk [2022] No. 553) from ChinaSecurities Regulatory Commission.The Company is proceeding with this transaction in accordance with the regulations of Measures for theAdministration of Securities Issuance and Underwriting issued by the China Securities Regulatory Commission.The Company neither distributes cash nor convert capital reserve into share capital this year.The Company intends to review and arrange relatedprofit distribution plan in accordance with the provisions ofrelevant laws, regulations, rules, normative documents and Articles of Association as soon as this transaction iscompleted.This report is prepared based on Chinese text and is prepared in both Chinese and English versions. In the event ofany discrepancy between Chinese and English versions, please subject to the Chinese text.
Beijing Shougang Co. Ltd Annual Report 2021
CONTENTS
SECTION I. IMPORTANT NOTICE, CONTENT, DEFINITIONS ........................................................................... 2
SECTION II. COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ......................................................... 6
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS ......................................................................... 10
SECTION IV. CORPORATE GOVERNANCE .................................................................................................. 32
SECTION V. ENVIRONMENT AND SOCIAL RESPONSIBILITY ....................................................................... 54
SECTION VI. SIGNIFICANT EVENTS ......................................................................................................... 63
SECTION VII. MOVEMENTS IN SHARE CAPITAL AND SHAREHOLDERS ........................................................ 71
SECTION VIII. PREFERRED SHARES ........................................................................................................ 80
SECTION IX. BONDS RELATED INFORMATION .......................................................................................... 81
SECTION X. FINANCIAL REPORT ............................................................................................................. 85
Beijing Shougang Co. Ltd Annual Report 2021
File directory for reference
1.Accounting statements with signatures and seals of Chairman, general manager, chief accountant and person in charge ofaccounting institution.
2. Original audit report with seals of accounting firm and signature and seals of CPA.
3. All the original documents and announcements publicly disclosed in newspapers designated by China Securities RegulatoryCommission during the reporting period.
4. The Articles of Association of the Company, etc.
Beijing Shougang Co. Ltd Annual Report 2021
INTERPRETATION
| Items | Refers to | Contents |
| CSRC | Refers to | China Securities Regulatory Commission |
| SZSE | Refers to | Shenzhen Stock Exchange |
| Company, the Company or Shougang Co. | Refers to | Beijing Shougang Company Limited |
| Shougang or Shougang Group | Refers to | Shougang Group (Reforming from an enterprise owned by the whole people to exclusively state-owned companies, name of Shougang Group is changed from Shougang Corporation. The specific content is detailed in 15 June 2017 public announcement.) |
| Listing Rules of SZSE | Refers to | Listing Rules of Shenzhen Stock Exchange |
| The Articles of Association | Refers to | The Articles of Association of Beijing Shougang Company Limited |
| Board of Directors or the Board | Refers to | The board of directors of Beijing Shougang Company Limited |
| Supervisory Committee | Refers to | The supervisory committee of Beijing Shougang Company Limited |
| Shareholders’ General Meeting | Refers to | The Shareholders’ General Meeting of Beijing Shougang Company Limited |
| Qiangang Co. | Refers to | Shougang Qian'an Iron&Steel Co., Ltd. (Branch of the Company) |
| Cold-R Co. | Refers to | Beijing Shougang Cold Rolling Co., Ltd. (Holding subsidiary of the Company, holds 70.2806%) |
| Zhixin Co. | Refers to | Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. (Holding subsidiary of the Company, holds 82.7688%) |
| New-E Co. | Refers to | Beijing Shougang New Energy Automobile Material Technology Co., Ltd. (Holding subsidiary of the Company, holds 45.9184%) |
| Steel Trading | Refers to | Beijing Shougang Steel Trading Investment Management Co., Ltd. (Holding subsidiary of the Company, holds 51%) |
| Qianshun production line | Refers to | Qiangang Co, Zhixin Co., located in Qian-an, Hebei province, and Cold-R Co., located in Shunyi District, Beijing, establishing an upstream and downstream integrate production management system and research and development system. |
| Jingtang Co. | Refers to | Shougang Jingtang United Iron&Steel Co., Ltd. (Holding subsidiary of the Company, the Company holds 70.1823%, Steel Trading Co. holds 29.8177%) |
| First Reorganization, and Previous Major Assets Reorganization | Refers to | Since the shut down of the main process of iron and steel manufacturing in late 2010, which was operated in Shijingshan District, Beijing, a transaction between the Company and Shougang carried out. The transaction event was announced as "Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Swap and Asset Purchase through Issue of Shares". The event was unconditional approved by China Securities Regulatory Commission Restructuring Committee on 16 January 2013. On 29 January 2014, the Company received the approval document, named "The Approval of Related Party Transactions between Beijing Shougang Co., Ltd. and Shougang Corporation - Major Assets Reorganization and Asset Purchase through Issue of Shares", which was issued by China Securities Regulatory Commission. On 25 April 2014, the reorganization was accomplished. |
| Second Reorganization | Refers to | On 23 April 2015, trading in the shares of the Company was suspended and the major assets swap launched. Main content of the swap is: 100% shareholding of Guizhou Investment Co., Ltd. was replaced with 51% shareholding of Jingtang Co., any insufficiency was paid in cash. This major assets swap was accomplished at the end of 2015. On 27 April 2016, re-election of the board of directors and amendment of Articles of Association of Jingtang Co. was accomplished and the Company was qualified to consolidate the financial statements of Jingtang Co. The second swap was then accomplished. |
| EVI | Refers to | Early Vendor Involvement means involving the downstream users at early stage of product development process and fully understanding clients’ requirements for raw material so that high-performance materials and personalized services could be offered to users. |
| Reporting Period | Refers to | From 1 January 2021 to 31 December 2021 |
| Thousand, Million, Billion | Refers to | RMB Thousand, RMB Million, RMB Billion |
Beijing Shougang Co. Ltd Annual Report 2021
Section II. Company Profile and Major Financial IndicatorsI. Company information
| Short name of stock | Shougang Stock | Stock code | 000959 |
| Stock exchange for listing of shares | The Shenzhen Stock Exchange | ||
| Statutory Chinese name of the Company | 北京首钢股份有限公司 | ||
| Statutory Chinese name of the Company | 首钢股份 | ||
| Statutory English name of the Company (if any) | Beijing Shougang Co., Ltd. | ||
| Legal representative of the Company | Zhao Minge | ||
| Registered address | Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the registered address | 100041 | ||
| Historical changes of the company's registered address | N/A | ||
| Office address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC | ||
| Postal code of the office address | 100041 | ||
| The Company’s website | www.sggf.com.cn | ||
| Email address | sggf@sgqg.com | ||
II. Contact information
| Secretary of the board | |
| Name | Chen Yi |
| Correspondence address | No. 99 Shijingshan Road, Shijingshan District, Beijing, PRC |
| Telephone | 010-88293727 |
| Fax | 010-88292055 |
| Email address | Chenyi@shougang.com.cn |
III. Information disclosure and place for inspection
| The website of the stock exchange for disclosing the annual report of the Company | China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily |
| The media name and website for disclosing the annual report of the Company | http://www.cninfo.com.cn |
| Place for inspection of the annual report | Secretary office of the board of the Company, The Shenzhen Stock Exchange |
IV. Changes of registration
| Organization code | 911100007002343182 |
| Changes of the core business since listing (if any) | No changes |
| Changes of controlling shareholder (if any) | No changes |
V. Other relevant informationAccounting firm engaged by the company
| Name of accounting firm | Grant Thornton LLP |
| Address of accounting firm | 5th Floor of Scitech Plaza, No. 22 Jianguomenwai Avenue, Chaoyang District, Beijing |
| Signed CPA | Qian Bin, LiuYiwei |
Beijing Shougang Co. Ltd Annual Report 2021
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Not applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi,Zhang Zhanpei | 1 May 2021- 31 December 2022 |
| China Securities Co., Ltd. | Building 4, 66 Anli Road, Chaoyang District, Beijing | Wang Bo, Lv Jia | 1 May 2021- 31 December 2022 |
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√ Applicable □ Not applicable
| Name | Office address | Representatives | Supervision period |
| Huatai United Securities Co., Ltd. | Room 401, Building B7, Qianhai Shenzhen-Hong Kong Fund Town, No.128 guiwan Fifth Road, Nanshan Street, Qianhai Shenzhen-Hong Kong Joint Development Zone, Shenzhen | Chai Qizhi,Zhang Zhanpei | 1 May 2021- 31 December 2022 |
| China Securities Co., Ltd. | Building 4, 66 Anli Road, Chaoyang District, Beijing | Wang Bo, Lv Jia | 1 May 2021- 31 December 2022 |
VI. Major accounting data and financial indicators
Whether the Company has retroactive adjustment or re-statement on previous accounting data or not
□ YES √ NO
Reasons for retroactive adjustment or restatementBusiness combination under common control
| 2021 | 2020 | Changes over last year | 2019 | |
| Operating revenue | 134,034,486,136.13 | 79,951,181,948.10 | 67.65% | 68,841,307,821.91 |
| Net profit attributable to shareholders of the listed company | 7,014,335,009.45 | 1,786,452,832.06 | 292.64% | 1,185,589,702.44 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss | 7,014,226,910.72 | 1,714,439,720.83 | 309.13% | 1,237,189,576.69 |
| Net cash flows from operating activities | 15,043,727,257.76 | 10,274,678,796.19 | 46.42% | 3,415,002,015.35 |
| Basic earnings per share | 1.1291 | 0.3377 | 234.35% | 0.2241 |
| Diluted earnings per share | 1.1291 | 0.3377 | 234.35% | 0.2241 |
| Weighted average return on net assets | 19.07% | 6.40% | Increase 12.67% | 4.52% |
| 31 December 2021 | 31 December 2020 | Changes over end of last year | 31 December 2019 | |
| Total assets | 147,211,560,696.41 | 144,367,221,971.10 | 1.97% | 146,872,471,898.20 |
| Net assets attributable toshareholders of the listed company | 41,827,745,395.60 | 28,959,395,268.02 | 44.44% | 26,881,935,733.01 |
Thelower of the net profit before and after deducting non-recurring profit and loss of the Company in the last three fiscal years isnegative, and the audit profit of the latest year presents that the Company’s ability of continuing operations is uncertain.
□ YES √ NO
Beijing Shougang Co. Ltd Annual Report 2021
The lower of the net profit before and the after deducting non - recurring profit and loss is negative.
□ YES √ NO
VII. Difference of accounting data under accounting rules in and out of China
1. Differences of net profit and net assets in financial statements disclosed according to International Financial ReportingStandards and Chinese Accounting Standards
□ Applicable √ Not applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with InternationalFinancial Reporting Standards and Chinese Accounting Standards during the reporting period of the Company.
2. Difference of net profit and net assets in financial statements disclosed according to foreign accounting standards andChinese Accounting Standards
□ Applicable √ Not applicable
There is no difference between the net profit and net assets in the financial statements disclosed in accordance with foreignaccounting standards and Chinese Accounting Standards during the reporting period of the Company.VIII. Major financial indicators by quarter in 2021
Unit: RMB Yuan
| Q1 | Q2 | Q3 | Q4 | |
| Total revenue | 29,273,170,720.26 | 34,104,708,653.01 | 36,173,744,194.09 | 34,482,862,568.77 |
| Net profit attributable to shareholders of the listed company | 1,043,625,582.45 | 2,389,794,383.86 | 2,383,191,483.97 | 1,197,723,559.17 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss | 1,037,069,586.95 | 2,381,580,854.14 | 2,370,740,330.95 | 1,224,836,138.68 |
| Net cash flows from operating activities | 1,489,334,634.79 | 3,340,766,089.66 | 5,041,958,026.41 | 5,171,668,506.90 |
Whether there are significant differences between the above-mentioned financial indicators or the sum and the relevant financialindicators disclosed in the Company’s quarterly report and semi-annual report
□ YES √ NO
IX. Items and amounts of non-recurring profit and loss
√ Applicable □ Not applicable
Unit: RMB Yuan
| Item | 2021 | 2020 | 2019 | Note |
| Gains and losses on disposal of non-current assets (including the write-off that accrued for impairment of assets) | -55,726,886.68 | -633,491.79 | -7,684,491.35 | |
| Government grant included in the current profit and loss (except for the government grant which are closely related to the business of the company and are in accordance with the national unified standard quota) | 48,447,356.52 | 58,640,213.30 | 42,102,501.30 | |
| Current net profit and loss of subsidiaries from the beginning of the period to the date of business combination under the common control | 61,522,051.81 | 5,124,466.43 | ||
| Profit and loss from external entrusted loans | 10,518,170.49 | 10,361,268.74 | 8,187,426.69 | |
| Other non-operating income and expenses except the above items | 1,941,256.62 | -289,865.40 | -18,673,930.68 | |
| Other profit and loss items conforming to the definition of non-recurring profit and loss | -6,922,580.64 | -66,820,816.33 | ||
| Less: The impact of income tax | -950,188.41 | 7,022,263.80 | 4,039,236.83 | |
| The impact on non-controlling interests(post-tax) | 6,021,986.63 | 43,642,220.99 | 9,795,793.48 | |
| Total | 108,098.73 | 72,013,111.23 | -51,599,874.25 | -- |
Details of other profit and loss items that meet the definition of non recurring profit and loss:
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
The Company has no other profit and loss items that meet the definition of non recurring profit and loss.Explanation of reclassifying the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items as recurring items:
□ Applicable √ Not applicable
During the reporting period, no non-recurring profit and loss item listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items is reclassied as recurring item.
Beijing Shougang Co. Ltd Annual Report 2021
Section III. Management Discussion and Analysis
I. The industry situation of the Company during the reporting periodIn 2021, the development of electrical steel industry is healthy and stable, the output of oriented and non-oriented electrical steelachieves double growth, including in which, the output of orientedelectrical steel is about 1.83 million and the output of non-orientedelectrical steel is about 11.46 million, which indicates that China is the world's first producer of electrical steel. Significant growth ofhigh-grade materials such as energy-saving transformers and driving motors of new energy automotive is achieved. High-endelectrical steel products provide strong support for the national "dual carbon" policy landing, manufacturing upgrade and powerindustry development.In 2021, the overall performance of the steel industry in the first three quarters was in good situation and a dynamic balance betweensupply and demand was achieved. Through tapping potential for efficiency and overcoming the impact of high crude fuel prices, theindustry benefits created the historic best level.Entering the fourth quarter, affected by the shrinking demand, steel prices generallyfell and the reduction rate is greater than the decline of raw fuel.During the reporting period, major adjustments have taken place in national industrial policies. First, the control of productioncapacity and output is implemented, steel export tax rebate policy is cancelled, and carbon peak, carbon neutral target are launched;Second, ultra-low emission transformation and strict assessment of double control of energy consumption put an impact on theguarantee of production factors; Third, the domestic and foreign markets fluctuate greatly, the commodity prices rise and fall sharply,and the market environment is complicated; Fourth, the industrial efficiency improved significantly and the structure of assets andliabilities was further optimized.Affected by the capacity and output policies, the cumulative production of iron in China is 869 million tons, decreases of 43% yearon year; the cumulative production of crude steel is 1.033 billion tons, decreases of 3.0% year on year; the cumulative production ofsteel 1.337 billion tons, increases of 0.6% year-on-year.
II.Main business of the Company during the reporting periodThe main business of the Company is the production and sales of steel products and metal soft magnetic materials (electrical steel)
1. Zhixin Co.
Electric steel is an indispensable electromagnetic material in the fields of power, electronics and military industry. It is the core softmagnetic functional material applied in the power industry and serves the generation, transmission and use of electric energy.Electricsteel is divided into oriented electric steel and non-oriented electric steel. Oriented electric steel is mainly used in the field ofultra-high voltage, ultra-high voltage and high energy efficiency distribution transformers. It is used to manufacture transformercores.Non-oriented electric steel is mainly used in new energy vehicles, household appliances, industrial motors, small andmedium-sized motors and other industries or fields, used to manufacture motors, frequency conversion compressors and otherproducts.Zhixin Co. is a research and development, manufacturing and sales base of metallic soft magnetic materials (electric steel), and hasbecome the world's leading manufacturer and service provider of electric steel. Products include oriented and non-oriented electricalsteel. The orientedelectric steel includs high magnetic induction, magnetic domain refinement, low noise, low excitation, nounderlying, intermediate frequency six products. Independent researching and developing of low temperature slab reheating technicsproducing high magnetic induction orientation technology of electric steel and becoming the world's fourth all cryogenic technologyindustrialization enterprises. Non-oriented electric steel includes four categories of products including new energy vehicles, stressrelief annealing, high efficiency and general, with stable batch production capacity of all grades.
2.Jingtang Co.
Jingtang Co. is a large steel base with advanced international level designed and constructed in full accordance with the concept of
Beijing Shougang Co. Ltd Annual Report 2021
circular economy. It has the obvious advantages of being near the sea and near the harbor, large equipments, high productionefficiency and low cost.Iron and steel products of Jingtang Co. include hot and cold plates. The hot plates mainly contain hot-rolled products, i.e., hot-rolledpickling sheet, weather-resistant steel, automobile structure steel, high-performance construction steel, pipeline steel, etc.; and alsocontain medium and thick plates products, such as bridge steel,energy steel, pipeline steel, etc. The cold plates mainly containautomobile sheet, tin sheet, cold-rolled special-use plate, color-coated sheet, etc. four main products series.
3. Qianshun production line
Qianshun production line is an important high-end plate production base in China, with world-class equipment and industry-leadingclean steel manufacturing technology, and has full range supply capacity of high-end auto plate and high-end household applianceboard.Products of Qianshun production line include hot and cold plates. The hot plates mainly contain hot-rolled pickle sheet,weather-resistant steel, automobile structure steel, high-strengthconstruction machinery steel, pipeline steel, etc. The cold platesmainly contain automobile sheet, cold-rolled special-use plate, etc.III.Analysis of core competitiveness
1. Market-leading technology
The Company, Jingtang Co., Zhixin Co., Cold-R Co. are high-tech enterprises, the R&D investment of RMB 5.3 billion in 2021accounts for 3.97% of the operating revenue. Technological innovation is guided by benefit and demand, making technical researchprojects, expert workstations and platforms for external cooperation rely on the research and development system of "one instituteand multiple centers". The cultivation of new products, new technologies and new technological processes is accelerating.New Product development: Six new products represented by CR290Y490T-DP-GI dual-phase high-strength outer panel forautomobiles has launched in China; 29 high-end materials represented by DP500 of automobile exterior panel have been replaced bydomestic products; High grade non-oriented electric steel represented by high strength and low iron loss product 15SW1100H hascompleted 12 new product development projects.Key technological breakthroughs: Nine complete sets of technologies have been completed, including "technology for smoothstability and longevity of blast furnaces", the No. 1 blast furnace of Jingtang Co. have reached the first place in China by using thecoefficient and coke ratio, "Large proportion pelletizing iron making technology" is in the leading place in China, the pelletizing oreratio is up to 60%, and the carbon reduction effect is obvious.Patents：The Company has obtained 450 patents, including 182 invention patents and 268 utility model patents.75 projects won the"National Invention Exhibition Invention Entrepreneurship Award and Project Award".Standards：The Company has set up standard industry benchmark, presided over the formulation of 24 standards at all levels,including "Evaluation Standard of Green Production Management in Iron and Steel Industry" and "Technical Specifications for HighPrecision Filtration of Converter Flue Gas Emission", and participated in the formulation and revision of 44 standards at all levels.Science and technology awards：The project of "Carbon dioxide green and Clean steelmaking Technology and Application" and"Low-carbon clean and efficient iron-making process and Technology integration" won the special prize and the first prize ofmetallurgical science and technology respectively, and the second prize and the third prize of metallurgical Science and technologywere respectively awarded for "High grade non-oriented silicon Steel ultra-low Identical Plate Difference Control Technology" and"Ultra-thin tinplate Efficient green Manufacturing Technology and Application".
2. High-end products
The Company continues to optimize the product structure, production line structure and customer structure, so as to achieve bothproduct quality and efficiency improvement, to achieve three development strategies, including adhere to the continuous leadershipof electric steel, automotive board to do more refined and stronger, breakthrough into the tin plate high-end market. During thereporting period, the total output of the three strategic products was 5.68 million tons, accounting for 26% of steel output and
Beijing Shougang Co. Ltd Annual Report 2021
contributes about 40% to profit.The total output of eight key products of the Company (cold-rolled special steel, hot-rolled picklingplate, weather-resistant steel, energy steel, automotive structural steel, high-strength construction machinery steel, pipeline steel,bridge steel) was 9.47 million tons. The total output of key and strategic products accounts for 68% of steel output and contributesabout 85% to profit.Production 1.5 million tons of electric steel, and the dimensional accuracy and composition control have reached theworld-class level. With the promotion of the national "dual carbon" strategy, the electrification level of the whole society has beenfurther improved, the demand for high-end electric steel products continues to grow, and the company's high-end electric steelproducts account for 48%.In terms of high magnetic orientation electric steel, the output of 0.20mm and below ultra-thin high magnetic orientation electric steelproducts reached 54,000 tons, increasing 74% year-on-year, and the market share reached 60%, achieving the first domestic salesvolume for four consecutive years. Manufacturing 983 new standard level Ⅰ energy efficiency transformers; The Baihetan-Jiangsu±800kV UHVDC transmission project has 4 rheological converters, realizing full coverage of AC and DC transformers.Continuousoptimization of non oriented electrical steel product structure, the output of high-grade non-oriented electric steel products reached547,000 tons, increasing 28% year on year, among which, the output of high-grade non-oriented electric steel products for newenergy vehicles increased 231% year on year; 5 of the top 10 global sales companies of new energy vehicles are stably supplied, andnine of the top 10 domestic sales companies are stably supplied.Production 3.55 million tons of automobile plate, increasing 5% year on year, and the products cover all types of automobiles.The product structure was further optimized, and the output of galvanized sheet, high-strength sheet, outer sheet increases by 18%,20% and 14% year-on-year respectively. Zinc aluminum magnesium coating products were the first to successfully replace electrogalvanized products, which catching up with competitors and the annual order quantity exceeded 120,000 tons, with a year-on-yeargrowth of 93%. The customer structure was further upgraded. OEM orders accounts for 43% and the share of core OEM is stable andrising. The supply of Japanese cars increased by 58% year on year; Joint venture car brand customer supply increased by 3% year onyear;Shougang BMW Brilliance Alliance Innovation Studio has been jointly established by the Company to achievecross-professional, cross-field and cross-enterprise in-depth cooperation.Production 630,000 tons of tinned (chrome) plate, increasing 8% year on year, capacity utilization rate reached 120%.Tinplate deep drawing cupping DI material to achieve the widest specification coverage (width up to 1202mm), exporting to theNorth American market in batches; Developing 0.19mmt5 Red Bull iron products with customers, and the replacement of 0.2mmt4product was realized for the first time; The 0.12mm "Cicanyi steel" was first used to make postcards and became the cultural andcreative product of the Beijing Winter Olympics. The market share of high-extension easy-open lid and high-surface milk powdercans is in leading place, and the output of easy-open lid, iron milk powder and two-can products has increased by more than 50%year on year, and the advantageous products continue to increase.
3.Safety supply chain
The Company is the only platform for Shougang Group, the controlling shareholder, to develop and integrate the iron and steel andupstream iron ore resource industry in China. Shougang Group owns Shuichang Iron Mine and Xingshan Iron Mine with an annualproduction capacity of 4 million tons of iron powderin domestic and owns Peruvian Iron Mine with an annual production capacity of20 million tons of iron powder overseas.Macheng Iron Mine under construction has high reserves, low cost, environmentally friendlyand efficient transportation, with an annual production capacity of 7 million tons of iron powder, which is expected to be put intooperation by the end of 2023, and the iron ore resource guarantee capacity of the Company will be further improved.Coke resourcessupply is guaranteed because the coke of Qiangang Co. is mainly supplied by Qian'an Sinochem Coal Chemical Industrial Co., Ltd.,a joint venture of the Company and Kailuan Energy Chemical Co., Ltd, and the coke of Jingtang Co. is supplied by TangshanShougang Jingtang Xishan Coking Co., Ltd., a joint venture ofJingtang Co. and Shanxi Xishan Coal and Electricity Power Co.,Ltd.The Company has signed long-term agreements with large state-owned coal groups, among which Shougang Fushan ResourcesGroup Co. Ltd., a joint venture of Shougang Group, provides part of high-quality coking coal resources to the Company that ensuring
Beijing Shougang Co. Ltd Annual Report 2021
sufficient coal supply.
4. Green and low-carbon
According to the policy requirements, Qiangang Co. and Jingtang Co. take independent emission reduction measures to continulymaintaine the "A level" enterprises under Hebei Province environmental performance evaluation.Through the sharing of ultra-lowemission advanced technology and management experience, Qiangang Co. has served more than 30 steel enterprises.CCTV newsBroadcast, Xinhua News Agency and Phoenix TV praised Shougang's green and low-carbon transformation developmentrespectively.Through the establishment of green manufacturing committee, the Company carries out energy-saving and carbon reductiontechnology research and establishes LCA data acquisition system, and provides product life cycle evaluation reports according tocustomer requirements.Jingtang Co. is the first demonstration iron and steel enterprise in China that applies carbon dioxide toconverter top and bottom double blowing system. Meanwhile, its large proportion pellet iron-making technology replaces sinter withpellet, which realizes high efficiency, low energy consumption, low emissions, carbon reduction and environmental protectionadvantages.The "burning - heat - electricity - water - salt" five-effect integrated high efficiency recycling system of Jingtang Co. won the firstprize of China Energy Conservation Association energy-saving and Emission Reduction Science and Technology progress, and also,Jingtang Co. won a number of awards such as green and low-carbon excellent brand enterprise, green manufacturing standardizationsupport unit, green development benchmark enterprise in the steel industry. The "cold rolling high strength steel plate and strip forautomobile" of Cold-R Co. has been recognized as national "green design product" by the Ministry of Industry and InformationTechnology.
5. "Technology + Service" marketing
The Company takes customers as the center to deepen the marketing strategy of "technology + service" and create service to enhancethe brand value ofShougang.By improving the three-level service system and improving service efficiency, the Company meetscustomers' requirements for quality, delivery time, research and development, and service. The Company has improved EVI servicecapacity year by year, and the EVI supply increased by 26.1% year on year. By establishing product advantage analysis model,strengthening product research and development, and improving manufacturing capacity, the Company has promoted key products tomaintain competitive advantages and expanded the leading edge of strategic products.The Company has established a centralized, unified, fast response and efficient marketing management network with marketingcenter as the core, 5 regional steel trading subsidiaries and 11 processing centers, to further consolidate and enhance the channelstructure of the combination of leading enterprises in the industrial chain and high-quality small and medium-sized customers.Inorder to stabilize the market-share and improve the comparative advantage of industrial chain cooperation, enhance the depth ofcooperation and enhance the viscosity of cooperation, the company carries out all-round, multi-level and high-quality cooperationwith key customers in the industry.
6.Talent thriving enterprise
The Company has further promoted the strategy of strengthening enterprises with talents and built a multi-level training system forall staff.Iron and steel products of Qianshun production line and Zhixin Co. has established the career development system of thewhole life cycle of high potential talents, and held deep Blue special training camp and Blue green training camp to strengthen theability of talents. Jingtang Co. has established the "four horizontal and three vertical" training system for all staff, and implementedthe "Blue Project" to build a platform for cadres to improve quality and talent growth. In 2021, two employees of the Company wonthe "National May 1 Labor Medal", one won the "Capital Labor Certificate", one won the second "Beijing Grand Craftsman", andone won the "Nominated person of Beijing Great craftsman".The Company perfects talent promotion evaluation mechanism, smoothes talent career development path.The Company attachesgreat importance to performance-oriented and result-oriented, refining the performance evaluation mechanism for verticaldevelopment of three talent teams of operation management, professional technology and skill operation, opening up the channel for
Beijing Shougang Co. Ltd Annual Report 2021
horizontal flow of talents from different sequences, strengthening the training and development of high-level personnel, and steadilyincreasing the proportion of high-tech and high-skilled personnel.
II. Analysis of principal business
1. Overview
The Company has precisely implemented COVID-19 prevention and control measures to achieve the "3-zero" elimination target.Qiangang Co. and Jingtang Co. are stable and orderly in their production and operation under the condition of keeping theenvironmental performance evaluation of class A. The Company adheres to the innovation-driven and "manufacturing + service"strategy, seizes the market opportunity, efficiently coordinates the production line with the market, and continuously optimizes theproduct mix, thus continuously enhancing the profitability of the company. The Company takes benefit as the center, deepens thepotential to explore the standard, increases the cost control, digs the impact of the material price rise of suppliers, and continuouslyimproves the management efficiency. The Company through capital operation for enterprises to empower, optimize the quality of thecompany's assets, to achieve a substantial year-on-year growth in operating performance in 2021.The achievement of major accounting data and financial indicators:
Operating revenue is RMB 134.034 billion (67.65% year on year increase); total profit is RMB 9.799 billion (252.76% year on yearincrease); net profit attributable to shareholders of the listed company is RMB 7.014 billion (year on year increase 292.64%); EPS isRMB 1.1291(234.35% year on year increase); total asset is RMB 147.212 billion; equity attributable to shareholders of the listedcompany is RMB 41.828 billion.The achievement of major products:
(1) Metallic soft magnetic material (Electric steel)
Zhixin Co.：Electric steel1.501 million tons，2.7% year on year decrease, of which the output of oriented electric steel is 0.193 milliontons, 0.2% year on year increase, and the output of non-oriented electric steel is 1.308 million tons,3.1% year on year decrease. Theoutput of thin specification oriented steel is 163,000 tons, 26% year on year increase, and the output of high grade non-oriented steelis 547,000 tons, 28% year on year increase. Sales revenue of metal soft magnetic materials is RMB 13.307 billion, accounts for 9.93%of operating income of the Company.
(2) Iron and steel products
Qiangang Co.: iron 8.001 million tons, (0.3% year on year decrease); steel 8.490 million tons (flat year-on-year);Hot-rolled steel
8.213 million tons (including raw materials supplied), flat year-on-year.
Jingtang Co.: iron 13.909 million tons (8.1% year on year increase);steel 15.229 million ton (35% year on year increase); material
14.333 million ton (41.6% year on year increase).
Cold-R Co.: Cold-rolled plate 2.028 million tons (10% year on year increase). Sales revenue of iron and steel products is RMB
116.113 billion, accounts for 86.63% of operating revenue of the Company.
Highlights of Operating indicatorsNet profit attributable to shareholders of listed companies is RMB 7.014 billion, 292.64% year on year increase;Net cash flow from operating activities is RMB 15.044 billion, 46.42% year on year increase;The weighted average return on net assets is 19.07%, 12.67 percentage points year on year increase;The leverage ratio is 66.59%, 6.51 percentage pointsyear on year decrease;The profit margin of cost and expense is 7.90%, 4.32 percentage pointsyear on year increase;Inventory turnover rate is 10.42 times, 39.49% year on year increase;Financial cost per ton of steel is RMB 95.18, 12.97%year on year decrease;Depreciation expense per ton of steel is RMB 307.23, 5.14% year on year decrease;Strategic products are 5.68 million tons, 2.90% year on year increase.
Beijing Shougang Co. Ltd Annual Report 2021
2. Revenue and cost
(1) Composition of operating revenue
Unit：RMB Yuan
| 2021 | 2020 | Year-on-year Changes | |||
| Amount | Proportion in operating revenue | Amount | Proportion in operatingrevenue | ||
| Total operating revenue | 134,034,486,136.13 | 100% | 79,951,181,948.10 | 100% | 67.65% |
| According to industries | |||||
| Metallurgy | 134,034,486,136.13 | 100.00% | 79,951,181,948.10 | 100.00% | 67.65% |
| According to products | |||||
| Billet | 577,251,931.16 | 0.43% | 265,307,282.20 | 0.33% | 117.58% |
| Hot-rolled steel | 55,678,740,307.61 | 41.54% | 32,142,438,742.64 | 40.20% | 73.23% |
| Cold-rolled steel | 56,592,919,705.57 | 42.22% | 32,788,063,652.98 | 41.01% | 72.60% |
| Metallic soft magnetic material | 13,307,346,567.78 | 9.93% | 8,967,862,684.34 | 11.22% | 48.39% |
| Other steels | 3,268,139,872.13 | 2.44% | 2,040,682,356.91 | 2.55% | 60.15% |
| Other businesses | 4,610,087,751.88 | 3.44% | 3,746,827,229.03 | 4.69% | 23.04% |
| According to regions | |||||
| North China | 49,852,422,793.89 | 37.19% | 31,963,143,971.62 | 39.98% | 55.97% |
| Northeast China | 4,123,150,971.76 | 3.08% | 2,018,512,234.99 | 2.52% | 104.27% |
| East China | 49,632,951,146.49 | 37.03% | 26,099,070,246.72 | 32.64% | 90.17% |
| Mid-South China | 2,623,070,863.28 | 1.96% | 1,723,422,495.05 | 2.16% | 52.20% |
| South China | 19,205,674,818.92 | 14.33% | 12,862,722,449.82 | 16.09% | 49.31% |
| Southwest China | 1,608,695,620.53 | 1.20% | 1,147,368,135.20 | 1.44% | 40.21% |
| Northwest China | 786,965,070.05 | 0.59% | 310,725,864.94 | 0.39% | 153.27% |
| Export | 6,201,554,851.21 | 4.63% | 3,826,216,549.76 | 4.79% | 62.08% |
| Distribution model | |||||
| Direct selling | 127,832,931,284.92 | 95.37% | 76,124,965,398.34 | 95.21% | 67.93% |
| Sales by agents | 6,201,554,851.21 | 4.63% | 3,826,216,549.76 | 4.79% | 62.08% |
(2) Industries, products, or regions that generated operating revenue or operating profit over 10% of the total operatingrevenue or operating profit of the Company
√ Applicable □ Not applicable
Unit: RMB Yuan
| Operating revenue | Costs of sales | Gross margin | Year-on-year changes of operating revenue | Year-on-year changes of costs of sales | Year-on-year changes of gross margin | |
| According to industries | ||||||
| Metallurgy | 129,424,398,384.25 | 114,806,306,669.92 | 11.29% | 69.84% | 63.95% | 3.18% |
| According to products | ||||||
| Billet | 577,251,931.16 | 529,612,988.15 | 8.25% | 117.58% | 120.92% | -1.39% |
| Hot-rolled steel | 55,678,740,307.61 | 49,137,279,925.26 | 11.75% | 73.23% | 65.54% | 4.10% |
| Cold-rolled steel | 56,592,919,705.57 | 50,648,101,932.66 | 10.50% | 72.60% | 68.43% | 2.22% |
| Metallic soft magnetic material | 13,307,346,567.78 | 11,615,160,638.80 | 12.72% | 48.39% | 40.83% | 4.69% |
| Other steels | 3,268,139,872.13 | 2,876,151,185.05 | 11.99% | 60.15% | 61.37% | -0.67% |
| According to regions | ||||||
| North China | 45,242,335,042.01 | 41,186,401,259.65 | 8.96% | 60.34% | 55.73% | 2.69% |
| Northeast China | 4,123,150,971.76 | 3,470,176,637.61 | 15.84% | 104.27% | 100.35% | 1.65% |
| East China | 49,632,951,146.49 | 43,421,918,754.68 | 12.51% | 90.17% | 83.51% | 3.17% |
| Mid-South China | 2,623,070,863.28 | 2,326,790,746.73 | 11.30% | 52.20% | 46.17% | 3.67% |
Beijing Shougang Co. Ltd Annual Report 2021
| South China | 19,205,674,818.92 | 16,666,254,350.73 | 13.22% | 49.31% | 43.05% | 3.80% |
| Southwest China | 1,608,695,620.53 | 1,415,904,770.64 | 11.98% | 40.21% | 40.13% | 0.05% |
| Northwest China | 786,965,070.05 | 714,624,354.70 | 9.19% | 153.27% | 157.11% | -1.36% |
| Export | 6,201,554,851.21 | 5,604,235,795.18 | 9.63% | 62.08% | 53.43% | 5.09% |
| Distribution model | ||||||
| Direct selling | 123,222,843,533.04 | 109,202,070,874.74 | 11.38% | 70.25% | 64.53% | 3.08% |
| Sales by agents | 6,201,554,851.21 | 5,604,235,795.18 | 9.63% | 62.08% | 53.43% | 5.09% |
The adjusted principal business data according to the financial report of the Company under the circumstances that the statisticalranges of the Company’s principal business data changed during the reporting period.
□Applicable √ Not applicable
(3) Whether revenue from sales of goods is greater than it from render of services
√ Yes □ No
| Industry | Item | Unit | 2021 | 2020 | Year-on-year changes |
| Metallurgy | Sales | Ton | 22,288,362 | 18,031,678 | 23.61% |
| Output | Ton | 22,316,080 | 18,063,304 | 23.54% | |
| Storage | Ton | 817,590 | 789,872 | 3.51% |
Explanation in the year-on-year changes over 30% based on aboved data
□ Applicable √ Not applicable
(4) Fulfillment of the singed significant sales contracts and purchase contracts during the reporting period
□ Applicable √ Not applicable
(5) Composition of costs of sales
Presented as industries
Unit: RMB Yuan
| Industry | Item | 2021 | 2020 | Year-on-year changes | ||
| Amount | Proportion in costs of sales | Amount | Proportion in costs of sales | |||
| Metallurgy | Raw materials | 66,559,199,438.35 | 57.98% | 37,771,414,049.42 | 53.94% | 4.04% |
| Metallurgy | Fuels | 25,364,248,318.11 | 22.09% | 16,254,776,211.68 | 23.21% | -1.12% |
| Metallurgy | Power cost | 1,840,911,083.84 | 1.60% | 1,124,364,629.16 | 1.61% | -0.01% |
| Metallurgy | Staff cost | 3,271,961,950.60 | 2.85% | 2,130,681,593.97 | 3.04% | -0.19% |
| Metallurgy | Depreciation | 7,057,100,771.85 | 6.15% | 5,093,233,457.87 | 7.27% | -1.12% |
| Metallurgy | Manufacturing cost | 10,712,885,107.17 | 9.33% | 7,650,707,122.66 | 10.93% | -1.60% |
| Total | 114,806,306,669.92 | 100.00% | 70,025,177,064.76 | 100.00% | 0.00% | |
(6) Whether the scope of consolidation changes during the reporting period
□ Yes √ No
(7) Significant adjustments or changes in businesses, products, or services during the reporting period
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
(8) Major clients and suppliers
Major clients of the Company
| Total sales of the top 5 clients (RMB) | 14,704,089,556.15 |
| Proportion of total sales for the top 5 clients in total annual sales | 10.97% |
| Proportion of sales from related parties in total sales among the top 5 clients | 5.21% |
Information for top 5 clients of the Company
| Serial | Name | Sales (RMB Yuan) | Proportion in total annual sales |
| 1 | Client A | 4,346,619,581.89 | 3.24% |
| 2 | Client B | 4,133,903,346.48 | 3.08% |
| 3 | Client C | 2,635,744,920.56 | 1.97% |
| 4 | Client D | 2,038,332,494.68 | 1.52% |
| 5 | Client E | 1,549,489,212.54 | 1.16% |
| Total | -- | 14,704,089,556.15 | 10.97% |
Other information for the major clients of the Company
□ Applicable √ Not applicable
Major suppliers
| Total purchase amount from top 5 suppliers (RMB) | 87,083,467,022.55 |
| Proportion of total purchase amount for top 5 suppliers in total annual purchases | 70.24% |
| Proportion of purchase from related parties in total purchases among the top 5 suppliers | 67.20% |
Information for the top five suppliers of the Company
| Serial | Name | Procurement (RMB Yuan) | Proportion of total annual procurement |
| 1 | Shougang Group Co., Ltd. | 63,205,704,037.14 | 50.98% |
| 2 | Supplier B | 14,376,752,955.19 | 11.60% |
| 3 | Supplier C | 5,732,766,394.84 | 4.62% |
| 4 | Supplier D | 2,641,469,541.30 | 2.13% |
| 5 | Supplier E | 1,126,774,094.08 | 0.91% |
| Total | -- | 87,083,467,022.55 | 70.24% |
Other information for the major suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
Unit: RMB Yuan
| 2021 | 2020 | Year-on-year changes | Notes of material changes | |
| Selling expenses | 213,309,534.38 | 167,040,690.13 | 27.70% | The year-on-year increase in selling expenses is mainly caused by the increase in staff compensation |
| Administrativeexpenses | 1,299,881,734.32 | 976,426,260.85 | 33.13% | The year-on-year increase in administrative expenses is mainly caused by the increase in staff compensation. |
| Finance expenses | 2,257,586,032.80 | 2,163,091,932.82 | 4.37% | |
| Research and development expenses | 652,926,385.56 | 480,487,074.39 | 35.89% | Mainly due to the increase in labor costs of research and development personnel |
4. Research and development investment
√ Applicable □ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
| Name of main R&D project | Project objective | Progress of the project | Goals to be achieved | The expected impact on the company's future development |
| Inhibitor strengthening and high reduction rate control of low temperature oriented silicon steel containing Cu | Optimizing process parameters and establishing database for cold rolling reduction rate of thin specification oriented silicon steel. | Finished | Develop new technology, new process | It is beneficial to the establishment of inhibitor, texture and organization evaluation mechanism for each process of new cu-containing oriented silicon products, and provides theoretical support for the realization process of thin specification oriented silicon steel products. |
| Isolation additive technology for high temperature annealing of low temperature high magnetic orientation silicon steel | Improving the surface quality of products and studying the mechanism of different additives in the process of high temperature annealing. | Pilot stage | Develop new technology, new process | It is beneficial to improve product quality, quality and efficiency, and enhance market competitiveness of oriented silicon steel. |
| Effect of application conditions on properties of non-oriented silicon steel for new energy vehicles | Understanding the influence of application conditions such as stress and temperature on magnetic and mechanical properties. | Pilot stage | Develop new technology, new process | It is helpful to make up the deficiency of Shougang electric steel in application technology, narrow the gap with advanced enterprises in the field of application technology of electric steel, and improve the ability of application technology service of Shougang electric steel. |
| Research on comprehensive characterization technology of inclusions and precipitates in non oriented electrical steel | Determine the best parameters of equipment and instruments in sample preparation process, develop a set of scientific and reasonable testing methods, avoid repetitive testing work, and improve testing efficiency. | Bench-scale test | Develop new technology, new process | It is helpful to make up the deficiency of precipitate detection statistical technology of Shougang electric steel and narrow the gap with advanced enterprises in the field of microscopic detection of electrical steel. It is of great significance to meet the increasing requirements of high quality scientific research of non-oriented electrical steels. |
| Development and mechanism research of low cost and high efficiency non-oriented electrical steel for high-end compressor | Increase production capacity of the machine and reduce consumption of medium energy resourseby promoting the high grade of acid rolling. | Bench-scale test | Develop new product | It is beneficial to adjust the product structure, improve the leading edge of technology, expand the market share and improve the brand image of Shougang products. |
| Research on oxygen activity control technology of automobile plate before aluminum addition | Reduce the oxygen activity of automobile inner plate before adding aluminum, and stabilize in a certain range, improve the internal quality of automobile. | Finished | Develop new technology | It is conducive to stable and smooth production of automobile inner plate, improve the quality of automobile inner plate, reduce the alloy cost, meet the needs of more customers, and help to expand the market and improve the visibility of enterprises. |
| Technological development of medium and high carbon alloy tool steel | Explore the market of special steel industry, improve the core technology level of smelting and rolling in the field of special steel, and improve the comprehensive competitiveness of shougang special steel products. | Batch trial production | Develop new technology, new process | It is beneficial to accelerate the adjustment of variety structure, reduce production cost and enhance product profitability |
| Optimization of continuous casting process for automobile outer plate and development of steel defect reduction | Reduce the incidence of steel genetic defects, improve the surface quality of automobile exterior panels, meet the needs of high-end customers. | Finished | Develop new technology, new process | It is beneficial to improve the quality control level of exterior panel surface of the company, reduce quality loss, improve customer recognition, and increase the market competitiveness of exterior panel of the company. |
Beijing Shougang Co. Ltd Annual Report 2021
| technology | ||||
| Research and application of integrated control technology of forming reinforced dual phase steel | Solve the low number of continuous casting furnace in steelmaking process, high cost, the problems of sheet color difference and flat roll in hot rolling process, surface numbing problem in galvanizing process, etc., ensure the stable batch system of the whole process and stable production. Product competitiveness is in improving. | Batch trial production | Develop new technology | Reduce production cost and improve product profitability |
| Development and application of advanced high strength steel structure and segregation control technology | Determining the formation mechanism of macro/micro segregation of advanced high strength steel continuous casting billet and forming the corresponding control technology. Clarifying the genetic evolution of solidification structure and segregation of slab during reheating and the formation mechanism and quantitative evaluation method of banded structure. | Batch trial production | Develop new technology, new process | It is beneficial to speed up the variety structure adjustment, increase enterprise sales income and improve enterprise economic benefit. |
| Intelligent closed-loop control technology for iron - steel - making interface with multi-objective optimization | Solve the problems of low energy efficiency, high energy consumption and heavy pollution, and realize the high integration of green and intelligent steel process. | Finished | The operation efficiency and stability of material flow and energy flow at the iron-steelmaking interface are significantly improved | Promote the production efficiency and energy utilization efficiency of the whole process. |
| Research on temperature control deformation coupling performance matching and intelligent surface quality control technology in hot rolling process | Solve the problem that the surface quality of hot rolled flat material is difficult to control in the preparation process. | Finished | A new method was developed to reduce the fluctuation of mechanical properties of hot rolled products and improve the accuracy of thickness prediction error ≤±2μm | Realize the intelligent control of the whole process of flat material, reduce production cost and improve production efficiency. |
| Multi-objective optimization of clean and low carbon integrated iron making technology | Aiming at the problems of high energy consumption and pollutant emission in sintering and ironmaking processes in the iron and steel process, promoting the development of green iron and steel process. | Finished | Establish a 5500m 3 high proportion pellet application demonstration project, the proportion of pellet ore into the furnace ≥50%, the energy consumption per ton of iron reduced by over 5kgce | The steel industry to achieve low-carbon green development has a leading demonstration role, reduce carbon emissions, to achieve efficient production. |
| The invention relates to a treatment method for edge folding defect of cold rolled strip steel | Reduce the defect of edge folding printing, improve the surface quality of strip steel, which is conducive to the subsequent processes such as stamping, phosphating, painting | Curing process, batch trial production | Develop new process | Effectively solve strip edge printing defects, greatly improve strip surface quality, reduce quality loss. |
Beijing Shougang Co. Ltd Annual Report 2021
| etc. | ||||
| The invention relates to a control method for emulsion trace on the surface of cold rolled strip steel | Reduce emulsion trace on strip surface, improve product grade and avoid loss of economic benefit of the company. | Curing process, batch trial production | Develop new technology, new process | Reduce emulsion trace on strip surface, improve strip surface quality and improve production efficiency. |
| The invention relates to a production method of DP steel for drum washing machine and automobile | Improve the mechanical properties of products, so as to meet the needs of collision resistance and achieve the successful manufacturing of automotive structural parts. | Follow up and verify DP steel process and quality stability | Develop new process | Reduce unqualified products, improve production efficiency, increase enterprise sales income, improve enterprise economic benefits. |
| Automobile structural steel and its production method | Produce materials with high strength, high elongation and good weldability, improve impact safety while meeting the needs of lightweight. | Curing process, batch trial production | Develop new technology, new process | Accelerate product structure adjustment, improve product performance, increase sales revenue. |
| Development of a method for manufacturing dual phase steel | Dual-phase steel has the characteristics of high strength and light weight, which can be used in the automobile industry to reduce the weight of cars and improve the impact safety. | Follow up and verify production process | Develop new technology, new process | Accelerate product structure adjustment, increase market share, increase sales revenue. |
| A continuous annealing furnace dew point control device | Design humidification system in furnace area, control dew point in furnace area. | Curing process, batch trial production | Develop new technology, new process | Improve response speed, easy to operate, greatly improve production efficiency and surface quality, with good application value. |
Information of R&D personnel of the Company
| 2021 | 2020 | Proportion of changes | |
| Number of R&D staff | 2,295 | 2,454 | -6.48% |
| Proportion of R&D staff | 12.86% | 13.51% | -0.65% |
| Educational background of R&D personnel | —— | —— | —— |
| Bachelor’s degree | 1,179 | 1,059 | 11.33% |
| Master’s degree | 662 | 578 | 14.53% |
| Age structure of R&D personnel | —— | —— | —— |
| Below 30 | 111 | 93 | 19.35% |
| 30~40 | 1,348 | 1,260 | 6.98% |
Details about R&D investments:
| 2021 | 2020 | Proportion of changes | |
| R&D investments (RMB) | 5,321,486,664.95 | 3,271,192,781.46 | 62.68% |
| R&D investments as % in operating revenue | 3.97% | 4.09% | -0.12% |
| Capitalized R&D investments (RMB) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D investments as % in total R&D investments | 0.00% | 0.00% | 0.00% |
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant year-to-year change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash flow analysis
Unit: RMB Yuan
| Item | 2021 | 2020 | Year-on-year changes |
| Cash inflow from operating activities | 78,330,821,588.46 | 46,210,312,179.99 | 69.51% |
| Cash outflow from operating activities | 63,287,094,330.70 | 35,935,633,383.80 | 76.11% |
| Net cash flow from operating activities | 15,043,727,257.76 | 10,274,678,796.19 | 46.42% |
| Cash inflow from investing activities | 599,102,178.51 | 796,378,617.06 | -24.77% |
| Cash outflow from investing activities | 3,429,497,677.12 | 3,561,628,500.42 | -3.71% |
| Net cash flow from investing activities | -2,830,395,498.61 | -2,765,249,883.36 | -2.36% |
| Cash inflow from financing activities | 33,854,046,954.17 | 38,819,178,840.00 | -12.79% |
| Cash outflow from financing activities | 42,491,421,256.60 | 45,772,207,230.67 | -7.17% |
| Net cash flow from financing activities | -8,637,374,302.43 | -6,953,028,390.67 | -24.22% |
| Net increase in cash and cash equivalents | 3,575,957,456.72 | 556,400,522.16 | 542.69% |
Main reasons for significant year-on-year changes in relevant data
√Applicable □ Not applicable
The increase in cash inflow and cash outflow from operating activities is mainly due to:1. the incrase in stell price and upstream rawfuel price; 2. The sales volume of stell increased after the Jingtang phase II was put into operation and the increasing in operatingrevenue and purchase volume leads to the corresponding increase in cash inflow and outflow.Explanation of the significant difference between thenet cash flow from operating activities and the annual net profit during thereporting period:
√Applicable □ Not applicable
During the reporting period, the net cash flow from operating activities of the Company is RMB 15.043 billion, the annual net profitof the Company is RMB 8.327 billion, the difference is RMB 6.716 billion. The main factors causing the difference are: depreciationand amortization of RMB 7.442 billion, finance cost of 2.258 billion, increase in payables from operating activities of RMB 1.528billion, increase in receivables from operating activities of RMB -2.80 billion, incease in inventory of RMB -1.458 billion.V. Non-principal business analysis
□ Applicable √ Not applicable
VI. Assets and liabilities analysis
1. Significant changes in the composition of assets
Unit: RMB Yuan
| End of the year 2021 | Beginning of the year 2021 | Proportion changes | Notes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Cash and Cash equivalents | 10,284,988,713.99 | 6.99% | 6,292,499,840.73 | 4.36% | 2.63% | |
| Accounts receivable | 1,678,608,393.71 | 1.14% | 1,424,092,844.92 | 0.99% | 0.15% | |
| Inventories | 11,900,618,235.51 | 8.08% | 10,599,731,052.28 | 7.34% | 0.74% | |
| Long-term equity investments | 3,065,928,898.28 | 2.08% | 3,341,208,164.76 | 2.31% | -0.23% | |
| Fixed assets | 95,632,825,411.62 | 64.96% | 96,220,769,301.39 | 66.65% | -1.69% | |
| Construction in progress | 7,136,983,761.07 | 4.85% | 8,297,181,948.62 | 5.75% | -0.90% | |
Beijing Shougang Co. Ltd Annual Report 2021
| Right-of-use assets | 100,279,997.64 | 0.07% | 62,492,294.21 | 0.04% | 0.03% | |
| Short-term borrowings | 25,278,373,316.25 | 17.17% | 23,712,391,440.25 | 16.43% | 0.74% | |
| Contract liabilities | 5,230,456,327.37 | 3.55% | 4,659,444,741.25 | 3.23% | 0.32% | |
| Long-term borrowings | 11,692,710,000.00 | 7.94% | 20,639,300,000.00 | 14.30% | -6.36% | |
| Lease liabilities | 86,123,210.35 | 0.06% | 56,687,860.68 | 0.04% | 0.02% |
Foreign assets account for a relatively high proportion:
□Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB Yuan
| Item | Opening balance | Profit and loss from changes in fair value in the current period | Cumulative changes in fair value included in equity | Impairment accrual in the period | Amount of purchase in the period | Sales amount in current period | Other changes | Closing balance |
| Financial assets | ||||||||
| 4. Other equity instruments investments | 276,246,686.56 | -11,345,922.59 | 264,900,763.97 | |||||
| Financing receivables | 4,532,592,689.43 | 4,015,188,495.05 | ||||||
| Other non-current financial assets | 0 | 80,000,000.00 | ||||||
| Total | 4,808,839,375.99 | -11,345,922.59 | 4,360,089,259.02 | |||||
| Financial liabilities | 0.00 | 0.00 | ||||||
Whether the main asset measurement attributes of the Company changed significantly during the reporting period
□ YES √ NO
3. Major restricted assets at the end of the reporting period
| Items | Carrying amount at 31.12.2021(RMB) | Restriction reason |
| Cash and Cash equivalents | 1,748,307,781.74 | Various deposits and frozen by court |
Notes receivable
| Notes receivable | 1,030,885,929.77 | Pledgednotes |
| Total | 2,779,193,711.51 |
(1) As of 31 December 2021, the cash and cash equivalents include various cash deposits of RMB1,637,798,719.24, fixed termdeposit of RMB 10,000,000.00, court attachment of RMB 100,509,062.50.
(2) As of 31 December 2021, the restricted note receivables include pledged notes amounting to RMB1,030,885,929.77.VII. Investment analysis
1. Overall situation
√ Applicable □ Not applicable
| Invested amount during the reporting period (RMB Yuan) | Investment amount during the previous reporting period (RMB Yuan) | Change |
| 3,400,636,748.78 | 5,650,066,189.27 | -39.81% |
2. Significant equity investment during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investment during the reporting period
√ Applicable □ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
Unit: RMB Yuan
| Project name | Investment method | Fixed asset investment or not (Y/N) | Related industries | Investment amount during the reporting period | Actual investment amount up to the end of reporting period | Capital source | Project schedule | Anticipated benefits | Realized income up to the end of reporting period | Reasons for non-achievement of planned schedule and anticipated income | Disclosure date (if any) | Disclosure reference (if any) |
| New energy vehicle electrician steel project | Self-built | Y | Iron and steel | 897,109,488.20 | 1,523,115,164.43 | Self-raised | 86.97% | 437,370,000.00 | 0.00 | The devices of the project are being installed | ||
| Shougang Jingtang-Phase II | Self-built | Y | Iron and steel | 492,352,675.34 | 23,278,773,190.34 | Self-raised | 98.00% | 1,361,360,000.00 | 2,146,299,539.88 | The project has been transferred to fixed assets | ||
| Total | -- | -- | -- | 1,389,462,163.54 | 24,801,888,354.77 | -- | -- | 1,798,730,000.00 | 2,146,299,539.88 | -- |
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company has no securities investment during the reporting period.
(2) Derivatives investment
□ Applicable √ Not applicable
The Company has no derivatives investment during the reporting period.
5. Use of raised funds
√ Applicable □ Not applicable
(1) Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
| Fund-rai sing year | Fund-rai sing method | Total raised funds | Total amount of raised funds used in the current period | Total accumulated used raised funds in current period | Total amount of raised funds with changed purposes during the reporting period | Accumulated total amount of raised funds with changed purposes | Proportion of total raised funds with accumulative change of purpose | Total amount of unused raised funds | Purpose and destination of unused raised funds | Amount of raised funds idle for more than two years |
| 2021 | Non-public offering | 82,340.00 | 82,340.00 | 82,340.00 | 0 | 0 | 0.00% | 0 | Non | 0 |
| Total | -- | 82,340.00 | 82,340.00 | 82,340.00 | 0 | 0 | 0.00% | 0 | -- | 0 |
| Explanation of the overall use of raised funds | ||||||||||
| During the reporting period, the total amount of supporting funds raised by the Company's non-public issuance of RMB common shares (A shares) was RMB 823,399,977.75. After deducting the underwriting expenses of the lead underwriter, the subscription amount received by the company's special account for raised funds was RMB 812,927,978.08. After deducting the independent financial adviser and other relevant expenses of this restructuring, the net amount of raised funds was RMB 794,365,426.24. Up to 31 December 2021, the total interest income generated from the raised funds is RMB 277,802.62. The total amount of raised funds and interest income of RMB 794,643,228.86 have been used to supplement working capital, and the balance of the raised funds special account isRMB 0. | ||||||||||
(2) Committed projects of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
| Committed investment projects and investment of excessive raised funds | Whether projects have been altered (including partial alternation) | Total committed investment with raised funds | Adjusted total investment amount (1) | Investment amount during the reporting period | Accumul ative investment amount up to the end of the current period (2) | Investment progressup to the end of the current period (3) = (2)/(1) | Date when the projects are ready for their intend ed use | Benefits realized during the reporting period | Whether the expected benefits are achieved | Is there any significant change in the feasibility of the project | |
| Committed investment projects | |||||||||||
| Supplementary liquidity | No | 125,000.00 | 79,464.32 | 79,464.32 | 79,464.32 | 100.00% | 0 | Not applic able | No | ||
| Subtotal of committed investment projects | -- | 125,000.00 | 79,464.32 | 79,464.32 | 79,464.32 | -- | -- | 0 | -- | -- | |
| Investment of excessive raised funds | |||||||||||
| None | |||||||||||
Beijing Shougang Co. Ltd Annual Report 2021
| Total | -- | 125,000.00 | 79,464.32 | 79,464.32 | 79,464.32 | -- | -- | 0 | -- | -- |
| Circumstances and reasons for not reaching the planned progress or expected income (by specific projects) | Not applicable | |||||||||
| Description of major changes in project feasibility | Not applicable | |||||||||
| Amount, purpose and use progress of over raised funds | Not applicable | |||||||||
| Changes in the implementation location of the project invested by raised funds | Not applicable | |||||||||
| Adjustment of implementation mode of investment projects with raised funds | Not applicable | |||||||||
| Advance investment and replacement of investment projects with raised funds | Not applicable | |||||||||
| Temporary replenishment of working capital with idle raised funds | Not applicable | |||||||||
| Amount and reasons for the balance of raised funds in the implementation of the project | Not applicable | |||||||||
| Purpose and destination of unused raised funds | None | |||||||||
| Problems or other situations in the use and disclosure of raised funds | None | |||||||||
(3) Altered projects of taised funds
□ Applicable √ Not applicable
The Company has no altered projects of raised funds in the reporting period.
VIII. Material disposal of assets and equity
1. Material disposal of assets
□ Applicable √ Not applicable
The Company has no disposal of assets during the reporting period.
2. Material disposal of equity
□ Applicable √ Not applicable
IX. Analysis of main holding companies and stock-jointly companies
√ Applicable □ Not applicable
Main subsidiaries and stock-jointly companies that have an impact on the company's net profit of over 10%.
Unit: RMB Yuan
| Company Name | Type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profits | Net profits |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Subsidiary | Steel smelting, steel rolling, other metal smelting and rolling processing and sales; Production and sales of sinter, pellet, coke and chemical products; Power generation and power supply; Production and sales of secondary and multiple energy and resource reuse products, etc. | 35,821,676,294.00 | 84,207,686,148.29 | 34,308,190,211.85 | 82,544,910,369.15 | 7,446,461,231.47 | 6,283,543,011.04 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Subsidiary | Manufacture of cold rolled electrical steel sheet and strip; Manufacturing of special metallurgical equipment; Motor manufacturing; Manufacturing of power transmission and distribution and control equipment; Energy saving technology promotion services; New material technology promotion services; Enterprise management consulting services; Industrial design services; Product quality inspection service; Wholesale and retail of building materials, non-metallic minerals and products, metal materials, metal products and chemical products (excluding hazardous chemicals). | 9,042,054,084.39 | 18,689,847,269.86 | 10,387,195,130.39 | 13,857,367,585.59 | 1,274,862,927.11 | 1,082,906,520.97 |
| Beijing Shougang Cold Rolling Co., Ltd. | Subsidiary | Production of cold-rolled sheet and hot-dip galvanized steel coil; General freight; Design and sell cold-rolled sheet and hot-dip galvanized steel coil; Warehousing services; Technical development and consultation. | 2,600,000,000.00 | 6,275,179,212.13 | -1,287,343,612.38 | 12,553,753,097.50 | 166,764,077.72 | 164,435,553.57 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Subsidiary | Investment management; Project investment; Asset management; Warehousing services; Market Research; Technology development; Selling steel. | 1,136,798,235.00 | 19,647,690,465.71 | 11,708,267,014.47 | 968,858,246.21 | 1,945,467,564.08 | 1,924,919,227.71 |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Subsidiary | Technology development, technical consultation, technology transfer and technical services; Enterprise management consulting; Economic information consultation; Sales of mechanical equipment and steel; Machinery and equipment leasing (excluding automobiles); Import and export of goods; Technology import and export; Acting import and export. | 980,000,000.00 | 1,757,620,456.12 | 978,064,081.10 | 0.00 | -757,900.08 | -853,605.04 |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Subsidiary | Metallurgical technology development and consulting services; Environmental protection technology promotion services; Enterprise management consulting services; Safety consulting services; Computer application software development; Wholesale and retail of special equipment for environmental protection, steel slag, water slag, slag, dust removal ash, desulfurization ash, steel and chemical products | 1,900,000.00 | 215,927,482.12 | -95,933,853.51 | 32,147,582.35 | 3,635,863.70 | 3,636,263.70 |
Beijing Shougang Co. Ltd Annual Report 2021
| (excluding hazardous chemicals); Domestic advertising design, production, agency and release; Non self owned house leasing services, etc. (within the scope of authorization of the house owner). | ||||||||
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Joint stock | Metallurgical technology development and consulting services; Environmental protection technology promotion services; Enterprise management consulting services; Safety consulting services; Computer application software development; Wholesale and retail of special equipment for environmental protection, steel slag, water slag, slag, dust removal ash, desulfurization ash, steel and chemical products (excluding hazardous chemicals); Domestic advertising design, production, agency and release; Coking of non owned house leasing services (within the scope of authorization of the house owner); Manufacture of coke oven gas, tar, crude benzene, sulfur, ammonium sulfate, ammonium thiocyanate and primary coal chemical products; Waste heat utilization; Hardware products, building materials, special mining equipment and spare parts, construction machinery spare parts, rubber products, plastic products, lubricating grease, pig iron, ferroalloy, iron concentrate powder, pelletized iron ore, sintered iron ore, iron ore, limestone, quartz, dolomite, charge, bentonite, coke, coke powder, billet, chemical products (excluding licensed chemical products), coal wholesale and retail; Coking technology consultation and service | 992,400,000.00 | 4,221,005,209.00 | 2,195,597,347.39 | 6,295,880,462.27 | 409,971,879.87 | 292,507,527.36 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint stock | Coke, coal tar, benzene, sulfuric acid, ammonium sulfate, gas, CDQ waste heat power generation, steam production and sales; Technical advisory services; Labor services (excluding labor dispatch). | 2,000,000,000.00 | 4,746,955,771.56 | 2,228,088,412.66 | 10,931,089,729.11 | 80,177,449.92 | 58,527,067.07 |
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Notesof major holding and joint stock companiesNone
X. Structured entity controlled by the Company
□ Applicable √ Not applicable
XI. Future development prospects
1. Industry competition pattern and development trend
In 2022, the recovery of the global economy slowed down due to COVID-19 and uncertainties in the international environment.Atpresent, China's economy is under the triple pressure of shrinking demand, delayed supply, and weakening expectations. However,the Chinese economy has given top priority to ensuring stability and making progress while maintaining stability. We have kept theeconomy operating within a reasonable range, and the fundamentals of strong resilience, full potential, and long-term sound growthwill not change.As the "double control" policy of energy consumption will shift to the "double control" policy of total carbonemission and intensity, the incentive and constraint mechanism of pollution reduction and carbon reduction will accelerate theformation, resulting in the continuous constraint of steel supply. Energy prices such as electricity and coal and ferrous resource pricessuch as iron ore, scrap steel and ferroalloy keep stable, which forming a multi-dimensional challenge to steel production costs.However, under the influence of the domestic policy of steady growth, the demand for steel driven by infrastructure development andthe trend growth of manufacturing industry may accelerate the release, which will effectively support the domestic steel consumptionto remain high. It is expected that the steel demand of electric power, automobile, shipbuilding, infrastructure and other industrieswill maintain growth.
2. Corporate development strategy
The strategic focus of the Company is to promote and implement the "two strong and three excellent" project (the development goalof the iron and steel industry with strong profitability, strong innovation ability, excellent asset quality, excellent operation efficiencyand excellent energy conservation and environmental protection) to promote the enterprise to deepen reform and high-qualitydevelopment.Adhering to the development direction of "quality + service", the company continues to promote the development ofhigh-end products focusing on electrical steel, automobile board and tin (chrome) plate, and constantly improve the service level andoperation efficiency of steel material manufacturing, forming a group of strategic product customer clusters with internationalcompetitiveness.Strive to build the Company into a large, comprehensive and diversified steel listed company with international
Beijing Shougang Co. Ltd Annual Report 2021
competitiveness and influence.
3. Operating plans of 2022
(1) Capacity of main products
①Qiangang Co.: 7.95 million tons of iron, year-on-year decrease of 0.6%; 8.49 million tons of steel, basically equal on ayear-on-year basis; 8.20 million tons of steel products, year-on-year decrease of 0.2%.
②Jingtang Co.: 13.80 million tons of iron, year-on-yeardecrease of 0.8%; 15.00 million tons of steel, year-on-year decrease of 1.5%;
14.00 million tons of steel products, year-on-yeardecrease of 2.3%.
③Zhixin Co.: 1.64 million tons of electric steel, year-on-year rise of 9.3%. Including: 1.45 million tons of non-oriented electric steel,year-on-year rise of 14.9% and 0.19 million tons of oriented electric steel, year-on-year decrease of 1.6%.
④Cold-R Co.: 1.95 million tons of cold-rolled steel sheets, year-on-year decrease of 3.8%. Including: 0.93 million tons ofcontinuous annealing line for cold-rolled steel sheets, year-on-year decrease of 9.2%; 0.92 million tons of galvanized sheet,year-on-year decrease of 0.1%, 0.1 million tons of Cold rolled sheet, year-on-yearrise of 2.1%.
(2) Budget arrangement of financial indicators
RMB 121.4 billion for operating revenue,year-on-year decrease of 12.6 billion (in proportion of 9.4%). Including in which, RMB
42.8 billion for operating revenue of parent company, year-on-year decrease of 5.1%; RMB 73.0 billion for operating revenue ofJingtang Co., year-on-year decrease of 11.6%; RMB 14.5 billion for operating revenue of Zhixin Co., year-on-year rise of 4.6%;RMB 11.5billion for operating revenue of Cold-R Co., year-on-year decrease of 8.4%; RMB 820 million for operating revenue ofSteel Trading Co., year-on-year decrease of 15.4%.
(3) Budget arrangement of capital income and expenditure
RMB 173.264 billion for capital inflows, including RMB 139.078 billion capital inflows from operating activities, RMB 93 millioncapital inflows from investing activities, RMB 34.093 billion capital inflows from financing activities.RMB 171.531 billion for capital outflows, including RMB 124.97 billion capital outflows for production activities, RMB 5.014billion capital outflows for investing activities, RMB 41.547 billion capital outflows for financing activities.
(4) Budget arrangement of fixed-assets project capital expenditure
Arrangement of fixed assets is RMB 4.364 billion, including: RMB 698 million for Qiangang Co., RMB 2.389 billion for JingtangCo., RMB 874 million for Zhixin Co., RMB 58 million for Cold-R Co., RMB 195 million for New-E Co. and RMB 150million forSteel Trading.
4. Potential risks
(1) Policy and industry risk
Due to the implementation of the iron and steel industry output "double control" policy, the capacity utilization rate of someenterprises has been affected, and the market shows a strong supply and weak demand pattern, resulting in iron ore and other raw fuelprices remain high and promote the cost of steel production, which will further increase the difficulty of enterprise operation.To deal with the above risk, first, strengthen market prediction and analysis, optimize resource allocation, and take active actions todeal with uncertainties by strengthening the construction of supply chains and industrial chains; Second, continuing to promote costreform, strengthen the "overall scheduling" of cost control, adhere to the dual control of "material consumption" and "price", andspare no effort to achieve the target of cost control; Third, giving full play to the advantages of production lines and products,improves the ability of "manufacturing + service", promotes the in-depth optimization and adjustment of product structure andchannel structure, strengthens the organization of the project of initial products, marketing of new products and substitute importedproducts, and expands the cluster of high-end products.
(2) Low carbon environmental risk
As "the implementation of ultra-low emissions in the iron and steel industry" has become the norm, "carbon neutrality, carbon peak"policy, concept of "lucid waters and lush mountains are invaluable assets" deeply rooted in the hearts of the people, all these putforward higher requirements for the implementation of green and sustainable iron and steel enterprises, resulting in unprecedented
Beijing Shougang Co. Ltd Annual Report 2021
pressure on environmental protection costs.To address the above risk, first, further building a solid foundation for sustainable development, continuing to maintain healthydevelopment, practicing responsibility as a "pacesetter", carrying out the green action plan, and making green the underpinning ofhigh-quality development of enterprises.Second, actively driving on the work of "dual carbon" and "dual control", refining theassessment indicators, improving the LCA online data collection platform, promoting the steel low-carbon technology verificationproject, and continuing to standardize the way and content of "carbon management" activities. Third, continuing to build a greensupply chain system, pushing on the selection of green materials, and promoting green procurement, production, transportation andother processes.
(3) Horizontal competition risk
Shougang Group and its affiliates have a certain degree of horizontal competition with the Company.In order to solve the horizontal competition, during the first restructuring, Shougang Group issued “the commitment on the settlementmeasures and avoidance of horizontal competition after the assets restructuring”. According to the iron and steel industrydevelopment plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron andsteel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of ShougangGroup's iron and steel and upstream iron ore resources business in China. Since then, Shougang Group has made furthercommitments on the basis of the above-mentioned commitments of horizontal competition. These commitments are fulfilled onschedule and for details, please refer to “Corporate Governance” in the annual report.
(4) Marketing risk
From the perspective of market environment, China's economic development is facing triple pressure of demand contraction, supplydelay and weakening expectation, and the market volatility is intensified. Therefore, the domestic and foreign competitionenvironment is becoming more and more severe. In the industrial environment, overcapacity is still serious, leading to intensifiedproduct homogenization competition and product structure adjustment direction convergence.In order to cope with the above risk, first, strengthen the awareness of market players, pay close attention to and timely studyingmacro policies and the development and changes of upstream and downstream industrial chains and industries, which can improvethe rapid response capacity of enterprises. Second, paying more attention to customer needs and appeals, give full play to thesynergistic advantages of the system to improve the strength and level of customer service, and mobilizing production lines and R&Dresources to quickly solve product quality problems, so as to improve user experience. At the same time, improving supportingsupply capacity, improve delivery cycle, reducing logistics costs, enhancing user stickiness and the core competitiveness ofShougang service. Third, transforming the marketing management business of standard advanced steel mills, and promote theconstruction of information system, system application and promotion and application innovation centering on improvingmanagement efficiency. Fourth, actively adapting to the requirements of the new development pattern, promoted the export ofcompetitive products, strengthened cooperation with multinational enterprises and joint ventures, and increased the internationalinfluence of products.
(5) Related transactions risk
Related transactions exit among Shougang Co., Shougang Group and the affiliated companies, Shougang Co. and Shougang Groupsigned the framework agreement of related transactions in accordance with the stock listing rules and other provisions for regularrelated transactions. If the agreement cannot be strictly executed in the future, interests of the company will be damaged and also therisks of related transactions will emerge.The above-mentioned regular related transactions are the continuous related transactions in the ordinary operation and productionprocess of the Company, all of which are signed agreements in accordance with regulations and approved legally, and thetransactions will not affect the independence of the Company. The Company will strictly implement the provisions of relatedtransactions, perform the obligation of information disclosure in accordance with the requirements of the stock listing rules and theArticles of Association, ensure the openness, fairness and justice of related transactions, and protect the legitimate rights and interestsof the Company and all shareholders.
Beijing Shougang Co. Ltd Annual Report 2021
XII. Reception of research, communication and interview
√ Applicable □ Not applicable
| Time | Location | Method | Type | Counterparty | Main contents and provided material | Reference for basic information |
| 1 Feb. 2021 | Conference room | Telephone Communication | Institution | More than 10 institutional analysts include: Huatai Securities Co., Ltd.,Haitong Securities Co., Ltd.,Huabao Securities Co., Ltd.,Nanhua Futures Co., Ltd., Foresight Fund Co., Ltd.,Icbc Credit Suisse Asset Management Co., Ltd. | Mainly explains thethe Company's operation and production, variety structure optimization, cost reduction and efficiency increaseand answers questions that investors are concerned about. | Hold a telephone communication session for institutional investors, and the details were disclosed on the interactive platform on 2 Feb. 2021. |
| 17 Mar. 2021 | Conference room | On-site investigation | Institution | More than 10 institutional analysts include: GF Securities Co., Ltd.,Orient Securities Company Limited,Qianhe Capital Management Co., Ltd.,Bank of China Investment Management, China Merchants Fund Management Co., Ltd., National Council of Social Security Fund | Communicates about the Company's basic operating conditions, and answers questions that investors are concerned about. | Receiving investors for on-site investigation, details were disclosed on the interactive platform on 19 Mar. 2021. |
| 29 Apr. 2021 | Panorama Network broadcast room (http://ir.p5w.net) | Other | Other | All investors | Mainly explains the performance of the Company in 2020 and the first quarter of 2021 and answers questions that investors are concerned about. | Hold the company performance presentation for 2020 and the first quarter of 2021, and the details were disclosed on the interactive platform on 30 Apr. 2021. |
| 8 Jul. 2021 | Jingtang Co., Qiangang Co. | On-site investigation | Institution | 24 institutional investors include: China Securities Co., Ltd., Zheshang Securities Co., Ltd., GF Securities Co., Ltd., Changjiang Securities Company Limited, China Merchants Securities Co., Ltd., Ping An Securities Ltd., The Pacific Securities Co., Ltd., Haitong Securities Co., Ltd., Pingan Asset Management Co., Ltd., Wanjia Asset Management Co., Ltd., The China Orient Asset Management Co., Ltd., PICC Funds, Icbc Credit Suisse Asset Management Co., Ltd., Zhongjin Asset Management Co., Ltd., Italian Asset Management Co., Ltd., Gome Finance Technology Co., Ltd., Shenzhen Kaifeng Investment Management Co., Ltd., Shenzhen Hongchou Investment Co., Ltd., Shanghai Yinsheng Asset Management Co., Ltd., Changsheng Fund Management Co., Ltd., Xiandai Resource Co. Ltd., Beijing Siyi Aier Intelligent Technology Co., Ltd., Beijing Bull Riding Swallow | Introduces the operation of the Company and answers questions that investors are concerned about. | Receiving investors for on-site investigation, details were disclosed on the interactive platform on 12 Jul. 2021. |
Beijing Shougang Co. Ltd Annual Report 2021
| Investment Management Co., Ltd., Hebei Donghong Investment Management Co., Ltd. etc. | |||||
| 3 Aug. 2021 | Corporate office | Telephone Communication | Institution | 17 institutional investors include: Comein Finance Co., Ltd., Zheshang Securities Co., Ltd., Xiniu Investment Co., Ltd., ABC Huili Asset Management Co., Ltd., PICC Health Pension Co., Ltd., Taiping Pension Co., Ltd., HSBC Jintrust Fund Management Co. Ltd.,HFT, Wanjia Asset Management Co., Ltd., CMS, Guotai Yuanxin Asset Management Co., Ltd., Panjing Investment, Morgan Stanley Huaxin Fund Management Co., Ltd., Lingze Investment, Donghai Funds Co., Ltd., Ping An Credit Evaluation, Galaxy Asset Management Co., Ltd. etc. | Explains the equity incentive plan of the Companyand answers questions that investors are concerned about. |
Hold a telephonecommunication sessionfor institutionalinvestors, and the detailswere disclosed on theinteractive platform on 5Aug. 2021
| 20 Aug. 2021 | Conference room | Telephone Communication | Institution | More than 10 institutional investors include: GF Securities Co., Ltd., Everbright Securities Co. Ltd., Zheshang Securities Co., Ltd., Foresight Fund Co., Ltd., PICC Asset Management Co., Ltd., PICC Health Pension Co., Ltd., CCB Pension Management Co., Ltd., China Southern Asset Management Co., Ltd., Ping An Annuity Insurance Company of China, Ltd., Qianhai Kaiyuan Fund Management Co., Ltd., Invesco Great Wall Fund Management Co. Ltd. etc. | Explains the Company's half-year performance in 2021and answers questions that investors are concerned about. | Hold the 2021 semi-annual performance presentation and details were disclosed on the interactive platform on 23 Aug. 2021 |
| 13 Sep. 2021 | Conference room | Telephone Communication | Institution | More than 10 institutional investors include: Zheshang Securities Co., Ltd., Taikang Pension Insurance Co., Ltd., Zhongjin Asset Management Co., Ltd., China Southern Asset Management Co., Ltd., Xingyin Fund Management Co., Ltd., Ruihua Holding Co., Ltd., Pingan Asset Management Co., Ltd., Taiping Pension, Shanghai Yinsheng Asset Management Co., Ltd., Beijing Kaidu Investment Management Co., Ltd., Comein Finance Technology Co., Ltd. etc. | Explains the situation of the Company's purchase of assets by issuing shares and answers the questions investors are concerned about. | Hold a telephone communication session for institutional investors, and the details were disclosed on the interactive platform on 14 Sep. 2021. |
| 1 Nov. 2021 | Conference room | Other | Institution | More than 10 institutional investors include: Zheshang Securities Co., Ltd., Guotai Junan, Kaiyuan Securities Co., Ltd., Huatai Securities Co., Ltd., Everbright Securities Co. Ltd., Guosen Securities Co., Ltd., GF Securities Co., Ltd., Orient Securities Co., Ltd., Loyal Valley Capital, Beijing Taozhu Capital Management Co., Ltd., Orient Securities Asset Management Co., Ltd., | Explains the Company's performance for the first three quarters of 2021 and answers questions investors are concerned about. | The performance presentation for the first three quarters of 2021 will be held in the manner of Tencent conference, and details were disclosed on the interactive platform on 2 Nov. 2021 |
Beijing Shougang Co. Ltd Annual Report 2021
| Kaifeng Investment Management Co., Ltd., CICC Assets Management Co., Ltd., Shanghai Tongan Investment Management Co., Ltd.,E Fund Management,Guotai Asset Management Co., Ltd., Qianhai Kaiyuan Fund Management Co., Ltd., Invesco Great Wall Fund Management Co., Ltd., Zhejiang Shaoxia Investment Management Co., Ltd., etc. | ||||||
| 8 Dec. 2021 | Conference room | Telephone Communication | Institution | More than 40 analysts and institutional investors include: GF Securities Co., Ltd.,Zheshang Securities Co., Ltd., Haitong Securities Co., Ltd., Changxin Fund Management Co., Ltd., Huaan Fund Management Co. Ltd., Dacheng Fund Management Co., Ltd., Zhong Ou Asset Management Co., Ltd., Zhonghai Fund Management Co., Ltd., Minsheng Royal Fund Management Co., Ltd., ABC-CA Fund Management Co., Ltd., XA SPDB Investment Managers Co., Ltd., China Life Insurance Security Fund Management Co., Ltd., HongNuo Fund Management Co., Ltd., Guangdong Yuancheng Private Equity Investment Fund Management Co., Ltd., Picc Asset Management Co. Ltd., China Life Pension Co. Ltd., Changjiang Pension Insurance Co., Ltd., Cathay Insurance Co. Ltd., Guang Dong Silver Stone Investment Co., Ltd., Shanghai Silver Leaf Investment Co., Ltd., Beijing Huixin Juying Private Fund Management Co., Ltd., Citic Capital Investment Co. Ltd., Beijing Greatfund Asset Management Co., Ltd., Guangzhou Zhujiang Asset Management Co., Ltd., Beijing Jiangyi Capital Management Co., Ltd., Shanghai Tuling Asset Management Co., Ltd., Shenzhen Fengling Capital Management Co., Ltd., Weixing Asset Management (Shanghai) Co., Ltd., Guangzhou Zhujiang Asset Management Co., Ltd., Fuge Investment Co., Ltd., Cephei Capital Management Co., Ltd.,Shenzhen Shanshi Fund Management Co., Ltd. etc. | Answers the questions investors are concerned about. | Hold a telephone communication session for institutional investors, and the details were disclosed on the interactive platform on 13 Dec. 2021 |
| 15 Dec. 2021 | Conference room | Telephone Communication | Institution | Bank of Communications Schroder Fund Management Co., Ltd.:Xu Senzhou、Tan Xingxing | Answers questions that investors are concerned about. | Hold a telephone communication session for institutional investors, and the details were disclosed on the interactive platform on |
Beijing Shougang Co. Ltd Annual Report 2021
Beijing Shougang Co. Ltd Annual Report 2021
Section IV. Corporate Governance
I. Information of corporate governanceIn accordance with the Company Law of People’s Republic of China, the Securities Law of People’s Republic of China, the Code ofCorporate Governance for Listed Companies,Self-regulatory Guide for Listed Companies of Shenzhen Stock Exchange No. 1 -Business Management, the Articles of Association and other applicable regulations and laws, the Company has established a perfectinternal control system, actively promoted and improved the corporate governance structure and continued to deepen and standardizethe operation, Improve the quality of corporate governance and maintain good communication with all shareholders.According to the Articles of Association and Rules of Procedures of the General Shareholders Meeting, the Board of Directors, theSupervisory Committee, the company organizes the General Shareholders Meeting, the meeting of director board, and the meeting ofsupervisory committee. Directors and supervisors are assiduous and dutiful, complying with the applicable rules and regulations,diligently safeguarding the lawful rights and interests of the company and its all shareholders. The management regularly operatesthe company, and faithfully abide by the rules of internal system. In accordance with the relevant regulations such as the ListingRules of Shenzhen Stock Exchange, the Company perform the duty of information disclosure, and guarantee the truthiness, accuracyand completeness of the prepared information, without any false record, misleading or material omission.During the reporting period, the Company did its corporate governance work weill in the following aspects:first, the articles ofAssociation is amended according to the fact that issuance of shares to purchase assets leads to an increase in the total sharecapital.Second, according to operational needs, the Company has formulated 51 systems such as the Economic Responsibility AuditManagement System and revised 66 systems such as the Scientific and Technological Achievements Management System.Thirdly, inresponse to business adjustments and system updates, the Company organised internal control self-evaluation in conjunction with theRisk Control Process Manual and the Risk Control Evaluation Manual. Fourthly, in accordance with the Articles of Association, theRules of Procedure for General Meetings and relevant regulations, the General Meetings were held by way of "on-site + onlinevoting" to ensure that the matters submitted to the General Meetings for consideration and approval were in compliance with the law.As of the end of the reporting period, the Company has a total of 504 internal control systems, of which 491 systems are formulatedand implemented by the Company and 13 systems are forwarded to the government and regulatory authorities.Whether there are material differences between the actual state of corporate governance and the regulatory documents issued by theCSRC on the governance of listed companies.
□ Yes √ No
There is no material difference between the fact of corporate governance and the regulations for listing companies required by theCSRC.
II. Independence of the Company from the controlling shareholder and actual controller interms of assets, personnel, finance, organization, businessThe Company plans and operates in strict accordance with the law and maintains complete independence from the controllingshareholders in terms of business, personnel, assets, institutions and finance. The Company has a complete procurement, production,marketing and operation management system, perfect product R & D institutions and personnel, and the ability of independentproduction and operation.
1.Business: The Company has a complete raw fuel procurement, product manufacturing, product marketing and management system,an independent business system, conducts its business independently, operates independently and bears its own risks.
2. Personnel: The Company has a complete human resources management system, which operates independently and has a sound andeffective system. The directors and supervisors of the Company are elected in accordance with the statutory approval proceduressuch as shareholders' meetings or corresponding democratic elections; senior management personnel are appointed or dismissed by
Beijing Shougang Co. Ltd Annual Report 2021
the Board of Directors, and there are no irregularities in their concurrent positions with controlling shareholders and related parties.
3. Assets:The Company has a production system and its supporting facilities that are independent of the controlling shareholder andits related parties. The Company's assets are independent and complete, with clear ownership.
4. Institutions:The Company has a general meeting of shareholders, the board of directors, the board of supervisors, managers andother corporate governance structure, a complete organizational system, independent operation, independent exercise of power. Andthere is no subordinate relationship with the controlling shareholder and its related parties.
5. Financial:The Company has an independent financial management department, equipped with full-time financial personnel, with acomplete internal financial accounting and management system and perfect financial management system, whichis sound and capableof making independent financial decisions, and the Company is independently and legally subject to taxation.III. Horizontal competition
√ Applicable □ Not applicable
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| Competition in the same industry | The controlling shareholder | Shougang Group Co., Ltd. | Local SASAC | Since the listing of the Company, there has been inter-sector competition and connected transactions resulting from the partial conversion to listing. | 1. Shougang Group undertakes in respect of measures to resolve inter-sector competition and avoid inter-sector competition after the First Reorganisation (1) Except for the situation of inter-sector competition existing prior to the date of this Letter of Undertaking, if the Company obtains opportunities for acquisition, development and investment in the same or similar business as Shougang Co, the Company will immediately notify Shougang Co and offer them to Shougang Co for selection on a priority basis and make its best efforts to make such business opportunities available for transfer to Shougang Co. (2) In integrating and operating existing steel assets not yet transferred to Shougang Co., the Company will select the appropriate platform and means to achieve resource integration in a manner that is conducive to the future transfer to Shougang Co. and will not include provisions in the relevant agreements or arrangements with partners or third parties that restrict or prohibit the injection of such assets or businesses into Shougang Co. (3) The Company will, as far as possible, safeguard the normal operation and profitability of the existing steel assets not injected into Shougang Co. and ensure that the aforesaid assets and businesses do not fall into operational difficulties due to the Company or other circumstances that prevent the ultimate injection into Shougang Co. or render such injection legally impeded. (4) Each commitment made by the Company in eliminating or avoiding competition in the same line of business shall also apply to other enterprises under the direct or indirect control of the Company other than Shougang Co. and its subsidiaries, and the Company is obliged to supervise and ensure that the other subsidiaries of the Company implement the arrangements for each of the matters described in this document and strictly comply with all the commitments. 2. As approved by the second extraordinary general meeting of the Company for 2018 on 27 December 2018, Shougang Group undertakes to: (1) According to the development | In December 2021,Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ".Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. Shougang shares will continue to negotiate with Shougang Group and actively promote the follow-up work in accordance with the commitment to resolve horizontal competition. |
Beijing Shougang Co. Ltd Annual Report 2021
| Type | Type of association with the Company | Name of controlling shareholder | Nature of controlling shareholder | Causes | Solutions | Work progress and follow-up plan |
| plan of Shougang's steel industry, Shougang shares will serve as the sole platform for the development and integration of Shougang Group's steel and upstream iron ore resources industries in the PRC, and ultimately realise the overall listing of Shougang Group's steel and upstream iron ore resources businesses in the PRC. (2) In the event that Shougang Group's other companies engaged in steel operations and production further optimise and adjust their product structure through active implementation of national industrial policies and environmental protection requirements, and achieve profits for three consecutive years, and that the overall situation of the industry does not fluctuate significantly, Shougang Group will, in accordance with the requirements of securities laws and regulations and industry policies, initiate a process including but not limited to acquisition, merger, restructuring and other means in the interests of shareholders of the listed company The injection of relevant high-quality assets into Shougang will be completed within 36 months after the commencement of the relevant matters. |
IV. General shareholders’ meetings and extraordinary shareholders’ general meeting duringthe reporting period
1. Information on the general shareholders’ meeting
| Sessions | Type | Investor participation ratio | Date | Date of Disclosure | Meeting resolution |
| 2020 Annual General Meeting | Annual General Shareholders Meeting | 77.05% | 29 June 2021 | 30 June 2021 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| 2021 First Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 75.19% | 29 November 2021 | 30 November 2021 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| 2021 Second Extraordinary General Meeting | Extraordinary General Shareholders Meeting | 81.93% | 20 December 2021 | 21 February 2022 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V.Directors, Supervisors, Senior Management
I. General information
| Name | Post | Status of employment | Gender | Age | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Zhao Minge | Chairman | Incumbent | Male | 55 | 2013/05/16 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Jianhui | Director | Incumbent | Male | 57 | 2014/09/19 | 2022/12/22 | 0 | 0 | 0 | 0 | 290,000 | Restricted stocks granted |
| Qiu Yinfu | Director | Incumbent | Male | 54 | 2014/09/19 | 2022/12/22 | 0 | 0 | 0 | 0 | 290,000 | Restricted stocks granted |
Beijing Shougang Co. Ltd Annual Report 2021
| Name | Post | Status of employment | Gender | Age | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Wu Dongying | Director | Incumbent | Male | 58 | 2019/12/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Yin Tian | Independent director | Incumbent | Male | 67 | 2016/01/07 | 2022/1/6 | 0 | 0 | 0 | 0 | 0 | |
| Ye Lin | Independent director | Incumbent | Male | 58 | 2017/12/26 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Gu Wenxian | Independent director | Incumbent | Male | 60 | 2021/12/20 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Shen | Independent director | Incumbent | Male | 46 | 2020/6/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Peng Feng | Independent director | Incumbent | Male | 42 | 2020/6/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Sun Yi | Supervisory board chairman | Incumbent | Male | 56 | 2021/11/29 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Guo Liyan | Supervisory | Incumbent | Female | 46 | 2016/1/7 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Yang Mulin | Supervisory | Incumbent | Male | 50 | 2019/12/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liang Wangnan | Supervisory | Incumbent | Male | 47 | 2021/6/29 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Cui Aimin | Employee representative supervisor | Incumbent | Female | 53 | 2021/7/7 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Qu Erlong | Employee representative supervisor | Incumbent | Male | 40 | 2021/7/7 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Liu Jianhui | General manager | Incumbent | Male | 57 | 2014/8/29 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Peng Kaiyu | Vice general manager | Incumbent | Male | 41 | 2019/4/24 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Li Ming | Vice general manager | Incumbent | Male | 47 | 2015/1/27 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Li Baizheng | Chief accountant | Incumbent | Male | 56 | 2015/10/28 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Sun Maolin | Vice general manager | Incumbent | Male | 45 | 2017/10/25 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Li Jingchao | Vice general manager | Incumbent | Male | 55 | 2017/10/25 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Ma Jiaji | Chief engineer | Incumbent | Male | 58 | 2019/12/23 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | |
| Chen yi | Vice general manager | Incumbent | Male | 54 | 2019/4/24 | 2022/12/22 | 0 | 0 | 0 | 0 | 261,000 | Restricted stocks granted |
| Secretary of the board of directors | Incumbent | Male | 54 | 2015/8/26 | 2022/12/22 | 0 | 0 | 0 | 0 | 0 | ||
| Yang Guipeng | Independent director | Retired | Male | 49 | 2016/1/7 | 2021/12/30 | 0 | 0 | 0 | 0 | 0 | |
| Shao Wence | Supervisory board chairman | Retired | Male | 58 | 2019/12/23 | 2021/8/17 | 0 | 0 | 0 | 0 | 0 | |
| Chen Xiaowei | Employee representative supervisor | Retired | Female | 48 | 2019/12/23 | 2021/7/7 | 0 | 0 | 0 | 0 | 0 |
Beijing Shougang Co. Ltd Annual Report 2021
| Name | Post | Status of employment | Gender | Age | Start date of term | End date of term | Number of shares held at the beginning of the period | Number of shares increased in the current period | Number of shares reduced in the current period (shares) | Other changes | Number of shares held at the end of the period | Reasons for changes in the increase or decrease of shares |
| Guo Yuming | Employee representative supervisor | Retired | Male | 54 | 2019/12/23 | 2021/7/7 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 2,146,000 | -- |
During the reporting period, whether there was any resignation of directors and supervisors and dismissal of senior managers duringtheir term of office
√ Yes □ No
Please refer to "Changes in directors, supervisors and senior manager" for details.Yin Tian has completed his six-year term as an independent director of the Company from 7 January 2016 to 6 January 2022.According to the regulations on the tenure of independent directors of listed companies, Yin Tian resigned as an independent directoron 6 January 2022.
Changes in directors, supervisors and senior manager
√Applicable □Not applicable
| Name | Post | Type | Date | Reason of changes |
| Yang Guipeng | Independent director | Retired | 2021/12/20 | Resigned for personal reasons. |
| Shao Wence | Supervisory board chairman | Retired | 2021/08/17 | Resigned due to job changes. |
| Chen Xiaowei | Employee representative supervisor | Retired | 2021/07/07 | Resigned for personal reasons. |
| Guo Yuming | Employee representative supervisor | Retired | 2021/07/07 | Resigned for personal reasons. |
II. Current positionProfessional background, main work experience and main responsibilities of the current board members, supervisors, and seniormanager of the Company
A. Board members
1. Zhao Minge: Chairman, professor-level senior engineer, doctoral education, PhD of Engineering. The major employment historyof Mr. Zhao is as follows: a teacher of mining and metallurgy department of Beijing Iron and Steel College; a deputy director ofteaching section of educational division, a deputy director (in charge of daily routine) of educational division, the vice president ofthe college; a deputy director of Shougang Training Centre; a deputy director of Shougang Ironmaking Factory; a deputy director ofthe No.2 Ironmaking Plant of Shougang Co.; the secretary of CPC Committee of Beijing Shougang Oxygen Factory; a director ofShougang Training Center (Training Department); the head (first vice president of the Institute) of Technical Quality Department(Technical Research Institute, Xingang Technical Quality Department); a deputy secretary of CPC Committee and deputy generalmanager of Xingang Co.; a member of the board and general manager of Shougang Changzhi Steel&Iron Co., Ltd.; a director andgeneral manager of Shougang Changzhi Steel&Iron Co., Ltd. (assistant level of the headquarter); the assistant of general manager ofShougang Corporation, the deputy chief engineer and president of Shougang Technology Research Institute; later, concurrently, thedeputy secretary of the CPC Committee and executive deputy general manager of Shougang Jingtang United Iron&Steel Co., Ltd.; astanding member of CPC Committee, director, vice general manager of Shougang Co., at the same time, appointed as the director ofBeijing Shougang Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd. In addition, Mr. Zhao also is a standing member of
Beijing Shougang Co. Ltd Annual Report 2021
CPC Committee, director, vice general manager of Shougang Group. Mr. Zhao served as Chairman of Beijing Shougang Co., Ltd.Also, Mr. Zhao is the deputy secretary of the Party, the director and the general manager of Shougang Group.
2.Liu Jianhui: director and general manager, professor-level senior engineer, postgraduate education, master of engineering. Themajor employment history of Mr. Liu is as follows: a professional in the steel-making section of Beigang Technology Office anddeputy director of the steel-making inspection station; a student of Lugou Engineering School of Shougang; a deputy director of theNo.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chief engineer, technical assistant offactory manager and technical section director of the No.2 Steelmaking Plant of Shougang and director of the Research Institute; atechnical assistant of the factory manager and director of the technical section and technical deputy director of the No.2 Steel-makingPlant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of Beijing Shougang Co., Ltd.; the assistant ofgeneral manager and head of steelmaking department of Shouqin Co.; the assistant of general manager and deputy general managerof Qiangang Co.; the deputy general manager (acting general manager) and general manager of sales company of ShougangCorporation; the deputy secretary of CPC Committee, general manager and director of marketing management department ofShougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager and director of marketingmanagement department; the deputy secretary of CPC Committee, director and general manager of Shougang Co., concurrentlyserved as secretary of CPC Committee and director for Jingtang Co. At present, he is the secretary of CPC Committee, director andgeneral manager of Beijing Shougang Co., Ltd.
3. Qiu Yinfu: director, university education. The major employment history of Mr. Qiu is as follows: a professional and person incharge of the mobile section of Shougang’ Medium and Heavy Plate Plant; the deputy director, director, or director and secretary ofCPC Branch of mobile division of the Shougang’s No.2 Steelmaking Plant; a director and secretary of CPC Committee of the No.2Steelmaking Plant of Beijing Shougang Co., Ltd.; the deputy director to director of Shougang Oxygen Factory; the director andsecretary of CPC Branch of Oxygen Production Division and director of the Oxygen Factory of Shougang; the director of the OxygenFactory of Shougang and head of Jingtang Integration Project; the director of the Oxygen Factory of Shougang and head of JingtangIntegration Project, director of Oxygen Production Branch of Tangshan Shougang Baoye Steel & Iron Co., Ltd.; the director of coldrolling operation department and assistant to general manager in Qiangang Co.; director and secretary of CPC Committee of coldrolling operation department, and assistant to general manager of Qiangang Co.; the director and secretary of CPC Committee of coldrolling operation department, and deputy general manager of Qiangang Co.; the deputy secretary of CPC Committee, director of theboard and general manager of Cold-R Co.; deputy secretary of CPC Committee, chairman and general manager of Cold-R Co.,;deputy secretary of CPC Committee, chairman and general manager of Cold-R Co., and deputy general manager of Shougang Co.;the deputy secretary of the CPC Committee, chairman of labor union, deputy general manager of Shougang Co., and secretary ofCPC Committee of Qiangang Co.; the deputy secretary of the CPC Committee, chairman of labor union, deputy general manager ofShougang Co., secretary of CPC Committee of Qiangang Co., director of BAIC Motor Corporation., Ltd., director of BeijingAutomobile Investment Co., Ltd.; At present, he is the secretary of CPC Committee and chairman of Jingtang Co., director ofShougang Co., and director of BAIC Motor Co., Ltd.
4. Wu Dongying: director, PhD candidate. The major employment history of Mr. Wu is as follows: a teacher of Hefei University ofTechnology; a researcher, person in charge and deputy director of strategic research agency of Baosteel; the director of strategicsection under planning & development department of Baosteel Group; the director of strategic development department of BaosteelGroup; the director of economy and management institute ofBaosteel Group; the general manager of planning & developmentdepartment and director of economy & planning institute of Baosteel Group; the general manager of planning & developmentdepartment and director of economy & planning institute of Baowu Group. At present, he is the general manager (president) ofstrategic planning department (economic & planning institute) of Baowu Group and director of Shougang Co.
5. Yin Tian: independent director, university education, professor, PhD supervisor. Once served as assistant professor, lecturer andassociate professor of Southwest University of political science and law, and visiting scholar sent by the State Education Commissionto Toulouse University of Social Sciences, director and professor of French law research center of Southwest University of politicalscience and law, and director, professor and doctoral supervisor of Law Department of Southwest University of political science and
Beijing Shougang Co. Ltd Annual Report 2021
law. Now Mr. Yin is a professor, doctoral supervisor and director of the civil law research center of Peking University, and alsoserves as the director of China law society, vice president of China Civil Law Research Association, President of China InsuranceLaw Research Association, special supervisor of the Supreme People's court, consulting expert of the Supreme People's Procuratorate,and independent director of Skyworth Digital Co., Ltd. On 7 January 2016, Mr. Yin served as an independent director of BeijingShougang Co., Ltd.
6. Ye Lin: independent director, professor and doctoral supervisor, doctor in law, Ye Lin was serving Law School of RenminUniversity of China (hereinafter “RUC”) as an assistant, lecturer, associate professor and professor, successively. At present, he is thedirector, professor and doctoral supervisor of Civil & Commercial Law Teaching and Research Agency of RUC Law School. He isalso an independent director of China Life Asset Management Co., Ltd., an independent director of Founder Securities Co., Ltd., anda part-time lawyer of Beijing Shengang Law Firm. Major part-time jobs include: the vice president of China Commercial LawSociety under China Law Society, the vice president of Civil and Commercial Law Society under Beijing Law Society, the presidentof Beijing Consumer Rights Protection Law Society; a legislative consultant of Financial and Economic Affairs Committee of theNational People's Congress of PRC, a consultant of drafting group to Futures Law, a consultant of Administrative PunishmentCommittee of CSRC, a consumer rights protection social supervisor of China Insurance Regulatory Commission, a consultant of theLegal Professional Committee of the Insurance Society of China, a member of the Advisory Committee of Beijing High People’sCourt, a consultant of the Company Law Committee of China Lawyers Association, a consultant of the Company Law Committee ofBeijing Lawyers Association, a member of the Professional Committee of Shanghai Stock Exchange and China Financial FuturesExchange, a arbitrator and expert of the Advisory Committee of China International Economic and Trade Arbitration Commission.Ye Lin serves Shougang Co. as an independent director from 26 December, 2017.
7. Gu Wenxian:independent director, university education, senior accountant, Certified public Accountant in China. He used to be ateacher of Shanghai Railway Medical College, a teacher of Shanghai Fisheries University, a senior manager of Dahua CertifiedPublic Accountants LLP, a senior manager of Ernst & Young Da Hua Certified Public Accountants, and a member of the first,second and third mergers and acquisitions Committee of China Securities Regulatory Commission. Mr. Gu is now a senior partnerand director of BDO China Shu Lun Pan Certified Public Accountants LLP. Gu Wenxian serves Shougang Co. as an independentdirector from 20 December, 2021.
8. Liu Shen: independent director, Ph.D. Once served as an employee of the real estate credit department of Shanghai Branch ofChina Construction Bank, assistant manager, manager and senior manager of the listed company Department of Shanghai StockExchange, executive manager and assistant director of the office of Shanghai Stock Exchange, assistant director of the secondSupervision Department of listed company of Shanghai Stock Exchange, deputy director of the issuance and listing business centerof Shanghai Stock Exchange and member Department of Shanghai Stock Exchange Deputy director. During the period, Mr. Liuworked in the issuance Supervision Department of China Securities Regulatory Commission (CSRC), and is a member of the 16thmain board stock issuance examination committee of CSRC. At present, Mr. Liu is the vice general manager of Shanghai XinfugangReal Estate Development Co., Ltd., an independent director of Shanghai Kangheng environment Co., Ltd. (unlisted company) and anindependent director of Guizhou Guotai Liquor Co., Ltd. (unlisted company). Mr. Liu serves as an independent director of BeijingShougang Co., Ltd. since 23 June 2020.
9. Peng Feng: independent director, master degree, professor level senior engineer. Mr. Peng once served as assistant engineer,engineer and deputy director of Smelting raw materials department of Metallurgical Industry Planning and Research Institute, chiefdesigner and vice director of smelting raw materials department of Metallurgical Industry Planning and Research Institute, chiefdesigner and director of smelting raw materials department of Metallurgical Industry Planning and Research Institute. At present, Mr.Peng is vice chief engineer and chief designer of Metallurgical Industry Planning and Research Institute, director of smelting rawmaterials department, vice chairman of ferroalloy branch of China Society for metals, and executive deputy secretary ofZhongguancun Stainless Steel and Special Alloy New Material Industry Technology Innovation Alliance. Mr. Peng serves as anindependent director of Beijing Shougang Co., Ltd. since 23 June 2020.
Beijing Shougang Co. Ltd Annual Report 2021
B. Supervisors
1. Sun Yi: Chairman of Supervisory Board,doctor degree, doctor of Economics, senior economist. The major employment history ofMr. Sun is as follows: A cadre of machinery workshop of Changchun Bus Factory in Jilin Province, a research secretary in thefactory director's office, a staff member, section member, deputy director section member of Jilin Provincial Labor Department laborManagement Office, a deputy director of the First General Affairs Department, a director of the first General Affairs Department,chief secretary of the secretariat and deputy secretary of the Secretariat of jilin Provincial Government general Office, Director,deputy general manager, chairman of the trade union, standing member of the Party Committee, secretary of the Disciplineinspection Commission and Secretary of the Party Committee of Tonghua Iron & Steel Co., Ltd. Mr. Sun is currently the Director ofthe Work Office of the Supervisory Board of Shougang Group Co., Ltd., and the Chairman of the Supervisory Board of BeijingShougang Co., Ltd.
2. Guo Liyan: Supervisor, university education, MBA, senior accountant.The major employment history of Mrs. Guo is as follows: amember of the financial section of the Mechanical Factory of Beijing Shougang Machinery& Electric Co., Ltd.; an auditor of theaudit administration of Beijing Shougang Machinery& Electric Co., Ltd., the director of the accounting section under the HydraulicCenter of Beijing Shougang Machinery& Electric Co., Ltd., the deputy director of the finance division under Shougang Corporationfinance & accounting department; the deputy director of the cost division under Shougang Corporation finance & accountingdepartment; the deputy director of the financial station of the Technical Research Institute under Shougang Corporation finance &accounting department; the executive deputy director of the first division under audit department of Shougang Corporation; anassistant to the director and deputy director of Shougang Corporation audit department; the director of Shougang Corporation auditdepartment and supervisor of Shougang Co. Mrs. Guo is the current director of audit department of Shougang Group and the currentsupervisor of Shougang Co.,.
3. Yang Mulin: Supervisor, university education, master of engineering, senior economist. The major employment history of Mr.Yang is as follows: the dispatcher and production planner of production department of Qinhuangdao Shougang Plate Mill Co., Ltd.(hereinafter “Qinhuangdao Plate Co.”) the production manager of comprehensive department of Qinhuangdao Branch of Zhongshou,the secretary and deputy director of factory affairs office of Qinhuangdao Plate Co.; the executive deputy director of human resourcesdepartment and the deputy director of factory affairs office of Qinhuangdao Plate Co.; the director of human resources departmentand the director of factory affairs office of Qinhuangdao Plate Co.; assistant to the general manager of Qinhuangdao Plate Co.; thedirector ofhuman resources department of Qinhuangdao Plate Co.; assistant to the director and duty director of human resourcesdepartment of Jingtang Co.; the secretary of CPC Committee, secretary of CDI and chairman of labor union of cold-rolled operationdepartment of Jingtang Co.; the director of organization department and human resources department under CPC Committee ofJingtang Co.; the deputy director of labor & salary department of Shougang Corporation; the deputy director of labor & salarydepartment of Shougang Corporation; the director of system optimization department of Shougang Corporation. Besides servingShougang Co. as a supervisor, Yang Mulin is the head of system optimization department of Shougang Group Co., Ltd
4. Liang Wangnan:Supervisor,university education,an engineer. Mr. Liang used to be a cadre of the Labor and Finance Departmentand Organization Department of the West Suburb Grain Depot of Beijing Grain Group Co., Ltd., a cadre of Beijing MunicipalCommittee of Commerce and Trade, a section member, a deputy director member, a director member of Enterprise LeadershipManagement Office of Beijing State-owned Assets Supervision and Administration Commission, a deputy General Manager ofGeneral Management Department, Deputy General Manager of Human Resources Department, General Manager of HumanResources Department, Deputy General Manager of Fund Investment Department, Minister of Organization Department, DeputyGeneral Manager of Fund Investment Department, General Manager of Fund Investment Department, General manager of TheSecond Fund Investment Department, Secretary of the Sixth Party Branch Beijing State-owned Capital Operation and ManagementCenter, a member of investment decision-making committee Department of Beijing State-owned Capital Operation and ManagementCenter.Beijing Jing Guorui Soe Reform and Development Fund(L.P.), a director of Jingtang Co.Currently, Mr. Liang is the secretaryof the Sixth Party Branch of the Headquarters and the general manager of the Second Fund Investment Department, of Beijing
Beijing Shougang Co. Ltd Annual Report 2021
State-owned Capital Operation and Management Center, a member of the Investment decision-making Committee of Beijing JingGuorui Soe Reform and Development Fund(L.P.), and a supervisor of Beijing Shougang Co., Ltd.
5. Cui Aimin: Employee representative supervisor, university education,master degree,senior engineer. Mr. Cui used to be aprofessional in the Technology Department of the Second Steelmaking Plant of Shougang Co., a director of the ProductionTechnology Room of the Steelmaking Operation Department of Qiangang Co., a deputy Section chief of the ManagementDepartment of the Technical Quality Department. Beijing Shougang Co., Ltd., a deputy director of Hot-Rolled Product Room ofTechnical Quality Department, a director of Management Innovation Room of Operation Improvement Department, a director ofOperation Management Room of Operation Planning Department, a deputy Secretary of party Committee, a secretary of DisciplineInspection Commission, the chairman of labor Union, the director of office research Office, an inspector of Party CommitteeInspection Office of Shougang Group Co., Ltd. Mr. Cui is the director of research Office of Beijing Shougang Co., Ltd., and thesupervisor of employee representative of Beijing Shougang Co., Ltd.
6. Qu Erlong:Employee representative supervisor, university education, senior technician,engineer. Mr. Qu worked as a worker inShougang High-speed Wire Mill, Shougang Equipment Maintenance Center, Qiangang Co. Equipment Maintenance Center, QianSteel Company Equipment Maintenance Center, Beijing Shougang Co., Ltd. Equipment Department, hot-rolling OperationDepartment.
C. Senior manager
1.Liu Jianhui: director and general manager, professor-level senior engineer, postgraduate education, master of engineering. Themajor employment history of Mr. Liu is as follows: a professional in the steel-making section of Beigang Technology Office anddeputy director of the steel-making inspection station; a student of Lugou Engineering School of Shougang; a deputy director of theNo.1 Steel-making Plant of Shougang and director of the Shougang’ Research Institute; the chief engineer, technical assistant offactory manager and technical section director of the No.2 Steelmaking Plant of Shougang and director of the Research Institute; atechnical assistant of the factory manager and director of the technical section and technical deputy director of the No.2 Steel-makingPlant of Shougang Corporation; a deputy director of the No.2 Steelmaking Plant of Beijing Shougang Co., Ltd.; the assistant ofgeneral manager and head of steelmaking department of Shouqin Co.; the assistant of general manager and deputy general managerof Qiangang Co.; the deputy general manager (acting general manager) and general manager of sales company of ShougangCorporation; the deputy secretary of CPC Committee, general manager and director of marketing management department ofShougang Co.; the deputy secretary of CPC Committee of Shougang Co., director, general manager and director of marketingmanagement department; the deputy secretary of CPC Committee, director and general manager of Shougang Co., concurrentlyserved as secretary of CPC Committee and director for Jingtang Co. At present, he is the secretary of CPC Committee, director andgeneral manager of Beijing Shougang Co., Ltd.
2. Peng Kaiyu: vice general manager, postgraduate education, master of engineering, MBA, senior engineer. The major employmenthistory of Mr. Peng is as follows: a technician in the production technology office of the Qiangang Co. Steelmaking Branch; the chiefdeputy operator (training on duty), the chief deputy operator and the chief operator, in No.1 steelmaking refining operation areaunder steelmaking operation department of Shougang Co.; the assistant to the director under the steelmaking operation department ofQiangang Co.; the assistant to the director and the deputy director of steelmaking operation department of Qiangang Co.; the deputydirector (presiding over work) and director of steelmaking operation department of Shougang Co.; the secretary of CPC Committee,the ecretary of CDI, chairman in labor union and director of steelmaking operation department of Shougang Co.; the secretary ofCPC Committee, the secretary of CDI and the chairman in labor union, under steelmaking operation department of Shougang Co.;the deputy secretary of CPC Committee of Shougang Co. Mr. Peng is the current deputy secretary of CPC Committee and the deputygeneral manager of Shougang Co.
3. Li Ming: vice general manager, university education, doctoral candidate, professor level senior engineer. The major employmenthistory of Mr. Li is as follows: a technician, person in charge of refining workshop, the deputy director of refining workshop, theexecutive deputy director of refining workshop, the director of refining workshop, the deputy director (leading roles of sections or
Beijing Shougang Co. Ltd Annual Report 2021
equivalents) of technical research section; an assistant to the director of the technical quality division and the director of the technicalsection under technical quality division, the deputy director of technical quality division, in Qiangang Co.; an assistant to themanager and then the deputy manager of Qiangang Co.; the deputy manager of Qiangang Co.; the deputy secretary of CPCCommittee and director of marketing management department of Shougang Co.; the deputy secretary of CPC Committee and directorof Marketing Management Department, and the deputy general manager of Shougang Co.; the deputy secretary of CPC Committeeand director of marketing management department, and the deputy general manager and director of Shougang Co. At present, he isthe deputy secretary of CPC Committee and director of marketing management department, and the deputy general manager anddirector of Shougang Co. Executive director and general manager of Beijing Shougang Steel Trading Investment Management Co.,Ltd.
4. Li Baizheng: Chief accountant, university education, chief accountant, accountant, economist. The major employment history ofMr. Li is as follows: the planning controller of No.1 Steelmaking Factory; the dispatcher of production setion, the planning controllerof steelmaking workshop, the planning controller of production section, the chief controller of production section, the planner ofproduction section, the director of billet area, the deputy director of production section, the director of finance and accounting section,planning person in charge of production and planning section, in No. 2 Steelmaking Factory; the deputy director and then director offinance and accounting department of Qiangang Co.; the director of finance and accounting department of Qiangang Co.; the chiefaccountant of Shougang Co. Li Baizheng is the current chief accountant of Shougang Co., the board member of Beijing ShougangCold Rolling Co., Ltd. and Shougang Jingtang United Iron & Steel Co., Ltd.
5. Sun Maolin: university education, MBA, engineer. The major employment history of Mr. Sun is as follows: when servingShougang Medium and Heavy Plate Factory, a professional in the technical section, the deputy secretary of CPC Branch and deputydirector of hot rolling section, the secretary of CPC Branch of operation zone B, the deputy director of technical research section; thedeputy director of technical section under technical quality division, an assistant to the director of technical quality division, theexecutive deputy director of silicon steel department, the standing deputy director of silicon steel department in Qiangang Co.; theexecutive deputy director and then director of silicon steel business department of Shougang Co.; the director of Silicon SteelEngineering Research Center; the secretary of CPC Committee and director of silicon steel business department, and an assistant tothe general manager of Shougang Co.; the director of silicon steel business department. Sun is the current deputy general manager ofShougang Co. and director of Silicon Steel Engineering Research Center. He also servesZhixin Co. as the executive director,Minmetals Special Steel (Dongguan) Co., Ltd. as the vice chairman of the board, and Minmetals Tianwei Steel Co., Ltd. as adirector.
6. Li Jingchao: vice general manager, university education, engineer. The major employment history of Mr. Li is as follows: amilling worker of rail workshop in Shougang Middle-sized Factory; an electrician of electrical apparatus workshop in ShougangPower Factory; the person in charge of the Youth League Committee of Shougang Testing Branch; in Shougang No. 3 Steel Mill, theworker of steelmaking workshop, the administrative person in charge of the billet cast machine workshop, the production deputydirector of power workshop, the director (leading roles of sections or equivalents) of power workshop, the director (leading roles ofsections or equivalents) of spare parts section, the deputy director (leading roles of sections or equivalents) of mobile section, thedeputy director (leading roles of sections or equivalents) of equipment section, the deputy director (leading roles of sections orequivalents) of equipment section and director (leading roles of sections or equivalents) of power workshop, the deputy director(leading roles of sections or equivalents) of equipment section; an assistant to the director, the deputy director, the director ofequipment division and the director of equipment department of Qiangang Co.; an assistant to the general manager and the director ofequipment department of Qiangang Co.; an assistant to the general manager of Qiangang Co.; an assistant to the general manager ofQiangang Co., and the secretary of CPC Committee and the director of equipment department of Shougang Co.; an assistant to thegeneral manager of Qiangang Co.; an assistant to the general manager of Qiangang Co., and the secretary of CPC Committee and thedirector of equipment department of Shougang Co., the director of intelligent application department of Shougang Co.; an assistant tothe general manager of Qiangang Co., and secretary of CPC Committee and the director of equipment department of Shougang Co.At present, Li Jingchao is the deputy general manager of Shougang Co., and concurrently vice chairman of Qian'an Sinochem Coal
Beijing Shougang Co. Ltd Annual Report 2021
Chemical Industrial Co., Ltd. and the director of Qian'an China Petroleum Kunlun Gas Co., Ltd.
7. Ma Jiaji: Chief engineer, master degree, professor level senior engineer. The major employment history of Mr. Ma is as follows: aprofessional in the technical section of Shougang No.2 Wire Rod Coil Factory; a professional in the steel rolling section under thetechnical division of Shougang Beigang Co., a designer in the rolling process section of Shougang Design Institute, a deputy groupleader and group leader of the first group of the rolling section under steel rolling division of Shougang Design Institute; the deputydirector of the steel rolling section under steel rolling department of Shougang Design Institute; a deputy chief in the steel rollingdesign office of Beijing Shougang Design Institute; a production deputy director in Shougang Small-sized Factory; the productiondeputy director of No. 1 Plate Factory of Shougang Corporation. The director of Shougang No.2 Wire Rod Coil Factory; the directorof Beijing Shougang Fulu Shicai Coated Plate Co., Ltd.; the leader of cold-rolled preparation group, the general manager of BeijingShougang Fulu Shicai Coated Plate Co., Ltd.; the leader of cold-rolled preparation group, the director and general manager of BeijingShougang Fulu Shicai Coated Plate Co., Ltd., and the deputy general manager of Shougang Co.; leader of cold-rolled preparationgroup, the director and general manager of Beijing Shougang Fulu Shicai Coated Plate Co., Ltd., and the director of Cold RolledSheet Steel Department and the deputy general manager of Shougang Co.; the manager of Shunyi Cold Rolled Branch and the deputygeneral manager of Shougang Co.; the manager and board member of Cold-R Co. and the deputy general manager of Shougang Co.;the deputy general manager of Shougang Co.; the deputy chief engineer of Qiangang Co. Ma is the current deputy chief engineer ofShougang Co.
8. Chen Yi: vice general manager, board secretary, postgraduate education, doctor of management, senior economist. The majoremployment history of Mr. Chen is as follows: a professional in the mobile section, an assistant to the director of the maintenanceworkshop, the deputy director of the mobile section of Shougang Medium-sized Rolling Mill; the secretary of the CPC Committeeoffice; a trainee of the overseas training course of Shougang University; the deputy director of the engineering division of the Jichaitechnical transformation leading group of Shougang; the deputy director of the Office (CPC Office) under the Shougang Economy &Trade Department; the deputy director of the board secretary office ofBeijing Shougang Xinganglian Technology&Trade Co., Ltd.;the deputy manager of Shougang Marketing Co.; the deputy director of marketing management department, the deputy director ofmarketing management department and the person in charge of the board secretary office, in Shougang Co.; the board secretary andthe director of the board secretary office of Shougang Co.; the general counsel, board secretary and director of the board secretaryoffice of Shougang Co., and director of Cold-R Co. and Jingtang Co. At the end of the reporting report, Chen Yi was the deputygeneral manager, board secretary, general counsel of Shougang Co., and director of Cold-R Co. and Jingtang Co.Position in the shareholders’ company
√Applicable □Not applicable
| Name | Entity | Position in shareholder company | Start date of term | End date of term | Received remuneration from other entity (Y/N) |
| Zhao Minge | Shougang Group Co., Ltd. | vice secretary of the Party Committee, Director and General Manager | 2020/07 | Y | |
| Sun Yi | Shougang Group Co., Ltd. | Director of the office of the board of supervisors | 2021/01 | Y | |
| Guo Liyan | Shougang Group Co., Ltd. | Director of audit department | 2017/06 | Y | |
| Yang Mulin | Shougang Group Co., Ltd. | Director of system optimization department | 2017/06 | Y | |
| Wu Dongying | China Baowu Steel Group Corporation Ltd. | General manager (president) of strategic planning department (Institute of economics and planning) | 2019/12 | Y | |
| Notes to the position in the shareholders’ company | None | ||||
Position in other entity
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
Notes for any punishment from securities review and management authorities, on resigned or current directors, supervisors, andsenior managers within the three years
□ Applicable √ Not applicable
IIⅠ. Remuneration of directors, supervisors and senior management
Decision making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior managers：
Remuneration for directors: the independent directors of the Company collect the allowance of independent directors, and theallowance standard of independent directors is determined by the general meeting of shareholders; the director who concurrentlyserves as the general manager does not collect the director remuneration; director Qiu Yinfu collects remuneration in Jingtang Co.,which is not the director remuneration; other directors do not collect remuneration from the Company.Remuneration for supervisors: employee representative supervisors collect remuneration from the Company, while other supervisorsdo not collect remuneration from the Company. The employee representative supervisor shall be remunerated according to theposition of non-supervisor in the Company.Remuneration for senior management: the remuneration committee under the board of directors is responsible for organizing theperformance assessment to the general manager and proposes remuneration, in terms of the Annual Measures for Assessment andDistribution of General Manager Salary, and reports the performance and deserved remuneration of general manger to the board.After the consideration and approval from the board of directors, the company actually affords the remuneration. Other seniormanagement remuneration is afforded monthly, in accordance with performing duties assessed by the general manager and directorunder the Board’s authorization.Remuneration of directors, supervisors and senior management during the reporting period
Unit：RMB 0,000
| Name | Position | Gender | Age | Status of employment | Total pretax remuneration received from the company | Whether to get remuneration from related parties of the company |
| Zhao Minge | Chairman | Male | 55 | Incumbent | 0 | Yes |
| Liu Jianhui | Director | Male | 57 | Incumbent | 0 | No |
| Qiu Yinfu | Director | Male | 54 | Incumbent | 128.01 | No |
| Wu Dongying | Director | Male | 58 | Incumbent | 0 | Yes |
| Yin Tian | Independent director | Male | 67 | Incumbent | 12 | No |
| Ye Lin | Independent director | Male | 58 | Incumbent | 12 | No |
| Gu Wenxian | Independent director | Male | 60 | Incumbent | 0 | No |
| Liu Shen | Independent director | Male | 46 | Incumbent | 12 | No |
| Peng Feng | Independent director | Male | 42 | Incumbent | 0 | No |
| Sun Yi | Supervisory board chairman | Male | 56 | Incumbent | 0 | Yes |
| Guo Liyan | Supervisory | Female | 46 | Incumbent | 0 | Yes |
| Yang Mulin | Supervisory | Male | 50 | Incumbent | 0 | Yes |
| Liang Wangnan | Supervisory | Male | 47 | Incumbent | 0 | Yes |
| Cui Aimin | Employee representative supervisor | Female | 53 | Incumbent | 14.64 | No |
| Qu Erlong | Employee representative supervisor | Male | 40 | Incumbent | 12.32 | No |
| Liu Jianhui | General manager | Male | 57 | Incumbent | 129.98 | No |
Beijing Shougang Co. Ltd Annual Report 2021
| Name | Position | Gender | Age | Status of employment | Total pretax remuneration received from the company | Whether to get remuneration from related parties of the company |
| Peng Kaiyu | Vice general manager | Male | 41 | Incumbent | 113.17 | No |
| Li Ming | Vice general manager | Male | 47 | Incumbent | 118.58 | No |
| Li Baizheng | Chief accountant | Male | 56 | Incumbent | 114.79 | No |
| Sun Maolin | Vice general manager | Male | 45 | Incumbent | 116.36 | No |
| Li Jingchao | Vice general manager | Male | 55 | Incumbent | 117.85 | No |
| Ma Jiaji | Chief engineer | Male | 58 | Incumbent | 119.72 | No |
| Chen yi | Vice general manager, Secretary of the board of directors | Male | 54 | Incumbent | 112.77 | No |
| Yang Guipeng | Independent director | Male | 49 | Retired | 12 | No |
| Shao Wence | Supervisory board chairman | Male | 58 | Retired | 0 | Yes |
| Chen Xiaowei | Employee representative supervisor | Female | 48 | Retired | 67.6 | No |
| Guo Yuming | Employee representative supervisor | Male | 54 | Retired | 25.34 | No |
| Total | -- | -- | -- | -- | 1,239.13 | -- |
VI. Performance of Directors during the reporting period
1. Board meetings during the reporting period
| Meeting | Convening date | Disclosure date | Resolutions of meeting |
| The first Extraordinary General Meeting of the year 2021 | 2021/3/31 | 2021/4/1 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The seventh meeting of the seventh session of the Board | 2021/4/28 | 2021/4/29 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The second Extraordinary General Meeting of 2021 | 2021/6/1 | 2021/6/2 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The eighth meeting of the seventh session of the Board | 2021/8/2 | 2021/8/3 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The ninth meeting of the seventh session of the Board | 2021/8/18 | 2021/8/19 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The tenth meeting of the seventh session of the Board | 2021/9/10 | 2021/9/11 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The third Extraordinary General Meeting of shareholders in 2021 | 2021/9/17 | 2021/9/18 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The fourth Extraordinary General Meeting of shareholders in 2021 | 2021/10/29 | 2021/10/30 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The fifth Extraordinary General Meeting of shareholders of 2021 | 2021/11/12 | 2021/11/13 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
Beijing Shougang Co. Ltd Annual Report 2021
| Meeting | Convening date | Disclosure date | Resolutions of meeting |
| The eleventh meeting of the seventh session of the Board | 2021/11/29 | 2021/12/1 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The sixth Extraordinary General Meeting of shareholders of 2021 | 2021/12/9 | 2021/12/10 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
| The seventh Extraordinary General Meeting of shareholders of 2021 | 2021/12/17 | 2021/12/18 | Refers to the company's announcement on the disclosure date of the resolution of the meeting for details |
2. Attendance of Directors at Board meetings and general meetings
| Attendance of Directors at Board meetings and general meetings | |||||||
| Name of Directors | Number of attendance required for Board meetings during the reporting period | Attendance at Board meetings in person | Attendance at Board meetings by communication | Attendance at Board meetings by proxy | Absence from Board meetings | Absent from Board meetings in person for two consecutive times | Attendance at general meetings |
| Zhao Minge | 12 | 5 | 7 | 0 | 0 | No | 3 |
| Liu Jianhui | 12 | 5 | 7 | 0 | 0 | No | 3 |
| Qiu Yinfu | 12 | 5 | 7 | 0 | 0 | No | 3 |
| Wu Dongying | 12 | 0 | 12 | 0 | 0 | No | 0 |
| Yin Tian | 12 | 2 | 10 | 0 | 0 | No | 0 |
| Ye Lin | 12 | 3 | 9 | 0 | 0 | No | 1 |
| Yang Guipeng | 12 | 4 | 8 | 0 | 0 | No | 3 |
| Liu Shen | 12 | 0 | 12 | 0 | 0 | No | 0 |
| Peng Feng | 12 | 4 | 8 | 0 | 0 | No | 1 |
| Gu Wenxian | 0 | 0 | 0 | 0 | 0 | No | 1 |
Explanation for the absent from board meetings in person for two consecutive timesNot applicable
3. Objections from Directors on related issues of the Company
Whether the directors raise any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company
4. Other instructions for directors to perform their duties
Whether the directors' suggestions on the Company have been adopted
√Yes □No
Explanation of the directors on the adoption or non adoption of relevant suggestions of the CompanyNot applicable
VII. Special committees under the board of directors during the reporting period
| Name of the committee | Member | Number of meeting convened | Convening date | Details of the meeting | Important opinion and advice | Other performance of duty | Details of objection (if any) |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of the committee | Member | Number of meeting convened | Convening date | Details of the meeting | Important opinion and advice | Other performance of duty | Details of objection (if any) |
| Strategic and Risk Management Committee | It is composed of 5 directors, including 2 independent directors. | 0 | Independent directors express independent opinions in accordance with regulations | ||||
| Audit Committee | It is composed of 3 independent directors. | 2 | 2021/2/25 | Summary of communication between CPA and audit committee (independent director) before audit | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | |
| 2021/4/9 | Annual audit: communication letter with independent directors and the audit committee of the board of directors after the certified public accountant issued preliminary audit opinions on the company's 2020 annual financial statement report | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | ||||
| Remuneration and Assessment Committee | It is composed of 3 independent directors. | 2 | 2021/4/9 | Proposal on the general manager's salary cashing in 2020 and the salary and assessment distribution method in 2021 | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | |
| 2021/7/23 | Report on Beijing Shougang Co., Ltd.2021 Restricted Stock Incentive Plan (Draft) and its abstract | Agreed to submit to the Board for review | Independent directors express independent opinions in accordance with regulations | ||||
| Nomination Committee | It is composed of 3 directors, including 2 independent directors. | 0 | Independent directors express independent opinions in accordance with regulations |
VIII. Performance of duties by the Supervisory Committee
Whether the board of supervisors found any risks in the company during the supervision activities during the reporting period?
□Yes √No
The board of supervisors has no objection to the supervision matters during the reporting period.IX. Company employees
1. Number of employees, professional composition and education background
| Number of active employees in the parent company | 5,646 |
| Number of active employees in the main subsidiary | 12,203 |
| Total number of active employees at the end of the reporting period | 17,846 |
| Total number of employees receiving salary in the current period | 17,846 |
| Number of retired employees to be borne by the parent company and major subsidiaries | 446 |
| Professional composition | |
Beijing Shougang Co. Ltd Annual Report 2021
| Professional composition category | Number of professional composition |
| Production | 12,126 |
| Salesman | 671 |
| Technician | 2,034 |
| Finance | 283 |
| Administrative | 2,343 |
| Services and others | 389 |
| Total | 17,846 |
| Education background | |
| Type | Quantity |
| Master degree or above | 1,549 |
| Bachelor's degree | 7,165 |
| College | 5,821 |
| Vocational secondary and below | 3,311 |
| Total | 17,846 |
2. Remuneration policies
The middle-level employees of the company implement the annual salary system, and the annual salary structure includes three parts:
basic annual salary, performance annual salary and term incentive. The basic salary is paid monthly. The performance bonus links tothe performing duty monthly or annually, and is distributed monthly and annually in terms of the Responsible Agreement of BusinessObjectives. After performance appraisal at the end of employment term according to the Responsible Agreement of Objective duringThe Employment Term, the incentives bonuses to employment term will be afforded flowing the assessment results.The salary system of front-line and blow staff is composed of occupation salary and benefit salary. The occupation salary isinfluenced by the attendance, and the benefit salary is distributed as the monthly performance on the duty.
3. Training program
According to the national and Beijing municipal vocational skills improve action plan and the needs of the Company to the workerteam, Qianshun production line and Zhixin Co., establish a whole life cycle of high potential talent "sail" career development system.The system emphasizes pertinence, practicability and value to theory and practice, study and summary, which improves the quality ofthe company's talents, exercises the ability of the company's talents, so that the company's talents quickly accumulated.According tothe company's talent needs at different levels such as reserve, backbone, core, key and strategy, the company designs five levels oftalent development and cultivation projects of "wave, sail, set sail, pilot and pilot", which creates a continuous and advanced map oftalent cultivation and development with high potential. This project divides talents into different stages and levels, and formulatesdifferent systematic talent training plans according to the ability characteristics and growth factors of talents at different stages, whicheffectively realizes the cultivation and guidance of talents and accelerates the growth of talents.The company organized andcompleted more than 150 kinds of training projects throughout the year, which fully covered the three talent teams of operationmanagement, professional technology and skill operation. The training projects enhanced the cohesion of the enterprise and the staffand provided strong support for the high-quality development of the company.Jingtang Co. constructs "four horizontal and three vertical" training system for all staff, which smoothen the path of talent careerdevelopment. The lecture hall for leaders, the rotation training class for middle-level leaders and the training class for youngbackbone also accelerate the improvement of the comprehensive quality of leaders and backup backbone.In the training plan of
Beijing Shougang Co. Ltd Annual Report 2021
"Qinglan Project" (a platform for the growth of technical skills and talents), 148 teachers are selected to teach and cultivate 148employees, which gives full play to the role of staff innovation studio. Systematic training was carried out for team leaders atdifferent levels, and 21 "gold medal team leaders" were awarded.The company adheres to the principle of "internal training as themain, external employment as the auxiliary" to build a teaching staff, the establishment of internal trainer selection, training,incentive closed-loop management mechanism, mining and training professional internal trainer team.Through continuousimprovement of the competition system, the company has established an independent identification mechanism of vocational skills,which has been completed by 1635 employees. The long-term mechanism of rapid growth of the company's employees is moreperfect.
4. Outsourcing of labor source
□ Applicable √ Not applicable
X. Porposal for profit distribution and transfer of capital reserve to share capitalFormulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthereporting period
√Applicable □Not applicable
1. The Company since its inception, highly valued the investment return for shareholders, the protection for legitimate rights andinterests of all shareholders, especially for the small and medium shareholders. According to various regulations and relevantrequirements issued by the regulatory authority, the Company timely revised and improved the provisions of the profit distributionpolicy in the Articles of Association of the Company, and the standard and proportion of cash dividends shall be explicit and clarity.
2. During the reporting period, profit distribution proposal complied with the provision of profit distribution in the Articles ofAssociation of the Company, complied with the provisions of normative documents issued by CSRC and other regulatory agenciesand fulfilled the procedures for independent directors to issue independent opinions and legal approval.
| Special description on cash dividend policy | |
| Whether it meets the requirements of the Article of Association or the Resolution of the General Meeting (Y/N): | Y |
| Whether the bonus standards and proportion is clear and well-defined (Y/N): | Y |
| Whether has a completed relevant decision-making procedures and mechanism (Y/N): | Y |
| Whether independent directors fulfill duties and play their due role (Y/N): | Y |
| Minority shareholders whether has opportunity of full expression and appeals, the legal interest of the minorityare being protected adequately (Y/N): | Y |
| Whether the conditions and procedures of cash dividend adjustment are transparent or compliant (Y/N): | Y |
The Company was profitable during the reporting period and the profit available to shareholders of the parent company was positive,but no cash dividend distribution plan was proposed
√Applicable □Not applicable
| Explanation on why it was profitable during the reporting period and the profit available to shareholders of the parent company was positive, but no cash dividend distribution plan was proposed | Purpose and use plan of undistributed profits of the Company |
| Audited by Grant Thornton LLP, in 2021, the net profit of parent company is RMB 802,053,622.97, withdraw 10% of legal surplus reserve RMB 80,205,362.30, the profit available for distribution for the year is RMB 721,848,260.67. In view of the fact that the Company is currently promoting the issue of "issuing shares to purchase assets, raising supporting funds and related party transactions", according to the relevant provisions of the Administrative Measures on Securities Issuance and Underwriting issued by China Securities Regulatory Commission, the Company is not going to distribute cash this time, nor convert capital reserve into share capital. | The Company intends to review and arrange matters related to profit distribution of the Company in accordance with relevant laws, regulations, rules, normative documents and the articles of association as soon as possible after the implementation of "Purchasing Assets through Issuing Shares, Raising Supporting Funds and Related transactions". |
Beijing Shougang Co. Ltd Annual Report 2021
Profit distribution and conversion of capital reserves into share capital during the reporting period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends, bonus shares or increase share capital with provident fund.XI. Implementation of the equity incentive plan, employee shareholding plan or otheremployee incentive measures of the Company.
√Applicable □Not applicable
1. Equity incentive
According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-ownedAssets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and theresolution of the Company's first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021restricted stock incentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technicalpersonnel and management backbones. The grant date of the restricted stock is 9 December 2021. The restricted stock was registeredas of 23 December 2021.
Beijing Shougang Co. Ltd Annual Report 2021
Equity incentives obtained by directors and senior managers of the Company
√Applicable □Not applicable
Unit: share
| Name | Position | Number of share options held at the beginning of the period | Number of new share options during the reporting period d | Number of shares exercisable during the reporting period | Number of shares exercised during the reporting period | Exercise price of the shares exercised during the reporting period (RMB yuan/ share) | Number of share options held at the end of the period | Market price at the end of the reporting period (RMB yuan/ share) | Number of restricted shares held at the beginning of the period | Number of unlocked shares during the current period | Number of newly granted restricted shares during the reporting period | Grant price of restricted shares (RMB yuan/ share) | Number of restricted shares held at the end of the period |
| Liu Jianhui | Director, General manager | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 290,000 | 3.25 | 290,000 |
| Qiu Yinfu | Director | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 290,000 | 3.25 | 290,000 |
| Peng Kaiyu | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Li Ming | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Li Baizheng | Chief accountant | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Sun Maolin | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Li Jingchao | Vice General Manager | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Chen Yi | Vice General Manager, Secretary of the board of directors | 0 | 0 | 0 | 0 | 0 | 0 | 5.73 | 0 | 0 | 261,000 | 3.25 | 261,000 |
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 0 | 0 | 2,146,000 | -- | 2,146,000 |
Beijing Shougang Co. Ltd Annual Report 2021
Evaluation mechanism and incentive of senior managersIn order to condense and stimulate the enthusiasm of core talents and effectively combine the interests of shareholders, the Companyand core employees, restricted stock incentives are implemented for directors, senior managers, core technicians and managementbackbones of the Company (including holding subsidiaries) with the approval of Beijing SASAC and the deliberation and approvalof the Company's general meeting of shareholders. In order to give full play to the role of equity incentive, strictly standardize thequalification conditions of personnel within the scope during the implementation, clarify the company performance conditions andindividual performance standards for granting restricted shares, and determine the conditions for lifting the restrictions on the sale ofrestricted shares with the return on net assets, growth rate of operating profit, asset liability ratio, growth rate of strategic productoutput, proportion of science and technology investment in operating income as evaluation indicators. It is closely linked with theinterests of the Company and the incentive object. The implementation of equity incentive policy has played a great positive role inattracting and retaining talents, supporting the long-term development of the Company and maintaining and increasing the value ofstate-owned capital.
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established a sound internal control system, and combined with the actual operation of timely revision andimprovement, which gives full play to its guarantee role. During the reporting period, according to operational needs, the Companyhas formulated 51 systems such as the Economic Responsibility Audit Management System and revised 66 systems such as theScientific and Technological Achievements Management System. As of the end of the reporting period, the Company has a total of504 internal control systems, of which 491 systems are formulated and implemented by the Company and 13 systems are forwardedto the government and regulatory authorities.
2.Particulars of material deficiencies in internal control detected during the reporting period
□Yes √ No
XIII. The Company’s management and control of subsidiaries during the reporting periodNot applicableXIV. Self-assessment report on internal control or auditor’s report on internal control
1. Appraisal Report of Internal Control
| Disclosure date of full internal control evaluation report | 29 April 2022 | |
| Disclosure index of full internal control evaluation report | Beijing Shougang Co., Ltd. 2021 Internal Control Self-Assessment Report, disclosed on CNINFO Website (http://www.cninfo.com.cn/). | |
| Proportion of total assets included in internal control evaluation report accounting for the total assets in the consolidated financial statements | 99.85% | |
| Proportion of operating revenue included in internal control evaluation report accounting for operating revenue in the consolidated financial statements | 99.94% | |
| Defect identification criteria | ||
| Type | Financial Reports | Non-financial reporting |
Beijing Shougang Co. Ltd Annual Report 2021
| Qualitative criteria | 1. General deficiency: it may or has caused slight impact on business activities, which is not an objective reason and has exceeded the budget by 1% - 5% in terms of time, manpower or cost without proper approval; 2. Significant deficiency: it may or has slowed down the business operation, or unable to achieve some business objectives, or not exceeding the budget by 6% - 20% in terms of time, manpower or cost for non-objective reasons and without proper approval; 3. Material deficiency: (1) it may or has made the company unable to achieve all operating objectives, resulting in business suspension. It is not an objective reason and has exceeded the budget by more than 20% in terms of time, manpower or cost without proper approval, and has exceeded the level of importance; (2) The Company has financial related fraud, which affects the accuracy of financial statements. | 1. General deficiency: it may or has temporarily affected the health of employees or the public; the negative news may or has caused slight impact on the company, spreading within the company or locally, and will not attract the attention of stakeholders; violation of the company or relevant rules and regulations or conflict with self-made rules and regulations may have caused slight social impact, basically will not lead to the attention of regulators. 2. Significant deficiency: it may or has had a negative impact; it may or has seriously affected the health of many employees or the public, or caused general environmental damage, and the situation needs external support to be controlled; the negative news may or has caused a greater impact on the company, and disseminates in a certain region It has attracted the attention of relevant stakeholders, such as the suspension of cooperation by partners, low efficiency of employees, reduction of customer loyalty, etc.; it has violated national and regional laws and regulations or industry norms, faced with legal proceedings, economic compensation, which may or has caused general social impact, attracted the attention of regulatory agencies, and required regular rectification. 3. Material deficiency: there is causing casualties of many employees and local residents, causing serious damage to the environment and out of control of the situation; the negative information may or has caused significant impact on the company, which is widely spread, causing significant damage to the reputation of the enterprise. The government or regulatory authorities conduct investigation, causing public concern and irreparable damage to the reputation of the enterprise; violating laws and regulations, in the face of business suspension, legal proceedings or economic compensation,; it may or has caused serious social impact; it has been notified or publicly condemned by regulatory authorities, or even ordered to suspend business for rectification. |
| Quantitative criteria | 1. General misstatement: amount of misstatement < 0.5% of total assets 2. Significant misstatement: 0.5% of total assets≤amount of misstatement < 1% of total assets 3. Material misstatement: amount of misstatement≥ 1% of total assets | 1. General misstatement: RMB 100,000≤amount of direct property loss < RMB 5,000,000 2. Significant misstatement: RMB 5,000,000≤amount of direct property loss < RMB 10,000,000 3. Material misstatement: amount of direct property loss≥RMB10,000,000 |
| Number of material defects in financial reports | 0 | |
| Number of material defects in non-financial reports | 0 | |
| Number of significant defects in financial reports | 0 | |
| Number of significant defects in non-financial reports | 0 | |
2.Audit report for internal control
√ Applicable □ Not applicable
| Audit opinion on internal control |
| Shougang Co. has kept the effective internal control over financial reporting in all material matters on 31 December 2021, in accordance with the “Basic Standards for Internal Control of Enterprises” and other relevant regulations. |
Beijing Shougang Co. Ltd Annual Report 2021
| Disclosure of internal control audit report | Disclosed |
| Date of disclosure of the full internal control audit report | 29 April 2022 |
| Source for the full internal control audit report | Searching for: http://www.cninfo.com.cn/. |
| Audit opinion on internal control | Standard unqualified opinion |
| Whether material deficiency over non-financial reporting | No |
Whether the accounting firm has issued an internal control audit report with unqualified opinion
□ Yes √ No
Is the internal control audit report issued by the accounting firm consistent with the self-evaluation report of the board of directors
√ Yes □ No
XV. Rectification of problems found in self-inspection under the special initiative oncorporate governance of the listed company
The Company has no problems found in self-inspection under the special initiative on corporate governance of the listed company.
Beijing Shougang Co. Ltd Annual Report 2021
Section V. Environment and Social ResponsibilityI. Major environmental protection matters
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental protection department
√ Yes □ No
| Name of the company or subsidiary | Names of major pollutants and characteristic contaminants | Emissionmethod | Number of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Exceed the standard or not |
| QiangangCo. | COD (Chemical Oxygen Demand) | Discharge to rivers and lakes after treatment | 1 | Total wastewater discharge port of the Company | 1-5mg/L | 50mg/L | 0.6 | 648.99 | No |
| QiangangCo. | Ammonia Nitrogen | Discharge to rivers and lakes after treatment | 1 | Total wastewater discharge port of the Company | 0.05-1mg/L | 5mg/L | 0.02 | 64.899 | No |
| QiangangCo. | Sulfur Dioxide | Organized | 69 | Energy, Ironmaking, Steelmaking, Hot Roll, Roll. | 0-20mg/m3 | Energy、Ironmaking、Steelmaking、Hot Roll 35mg/m3，Cold Roll 50mg/m3 | 849.2 | 926.402 | No |
| QiangangCo. | Nitrogen Oxides | Organized | 69 | Energy, Ironmaking, Steelmaking, Hot Roll, Roll. | 5~35mg/m3 | Energy、Ironmaking、Steelmaking、Hot Roll 50mg/m3，Cold Roll 150mg/m3 | 1129.1 | 2220.565 | No |
| QiangangCo. | Particulate Matter | Organized | 153 | Energy, Ironmaking, Steelmaking, Hot Roll, Roll. | 1-3mg/m3 | Energy、Ironmaking5mg/m3 Steelmaking、Hot Roll, Cold Roll 10mg/m3 | 1356.7 | 1414.607 | No |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of the company or subsidiary | Names of major pollutants and characteristic contaminants | Emissionmethod | Number of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Exceed the standard or not |
| Jingtang Co. | Sulfur Dioxide | Organized | 42 | Coke oven chimney, coke pushing、coke outlet, CDQ outlet, outlet of baghouse system after desulphurization of sintering machine, outlet of hot blast stove of no.1 and no.2 bf, lime kiln roasting, heat treatment furnace, 2 × 300mw generating units chimney exit, gas boiler chimney exit. | Coke oven chimney :<10 mg/m3; Coke pushing :<30 mg/m3、Coke outlet :<70 mg/m3; CDQ outlet :<80 mg/m3; Sintering desulfurization:<30 mg/m3; Lime kiln roasting:＜50 mg/m3; Heat treatment furnace:<50 mg/m3; Coal-fired and gas-fired generating units:<20 mg/m3. | Coke oven chimney:30 mg/m3;Coke pushing: 30 mg/m3、Coke outlet:70 mg/m3; CDQ outlet: 80 mg/m3; Sintering desulfurization: 35 mg/m3; Hot blast stove: 50mg/m3; Lime kiln roasting: 35 mg/m3; Cold rolled furnace: 50 mg/m3; Annealing furnace for continuous annealing unit and hot-dip galvanizing unit: 50 mg/m3; Coal-fired and gas-fired generating units: 35mg/m3; Gas boiler: 50 mg/m3 | 1140.70 | 2965.74 | No |
| Jingtang Co. | Nitrogen Oxides | Organized | 38 | Coke oven chimney, outlet of baghouse system after desulphurization of sintering machine, outlet of hot blast stove of no.1 and no.2 bf, lime kiln roasting, heat treatment furnace, 2 × 300mw generating units chimney exit, gas boiler chimney exit. | Coke oven chimney :<100 mg/m3; Sintering desulfurization :<50mg/m3; Outlet of hot blast stove of No.1 and No.2 BF :<150mg/m3; Continuous annealing line of cold rolling mill and hot rolling mill、annealing furnace of HDG line :<150 mg/m3; Coal-fired and gas-fired generating units :<40 mg/m3. | Coke oven chimney :130mg/m3; Sintering desulfurization :50 mg/m3; Outlet of hot blast stove of No.1 and No.2 BF、heating furnace of hot rolling mill、continuous annealing line、annealing furnace of HDG line、Roasting device of waste acid regeneration station:150mg/m3; Lime kiln roasting: 150 mg/m3; Coal-fired and gas-fired generating units:50 mg/m3; Gas boiler:150 mg/m3 | 3533.23 | 6379.92 | No |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of the company or subsidiary | Names of major pollutants and characteristic contaminants | Emissionmethod | Number of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Exceed the standard or not |
| Jingtang Co. | Particulate Matter | Organized | 176 | Coke pushing、coke outlet, CDQ outlet, coke oven chimney, dust removal outlet of stock ground transfer station, dust removal outlet of sintering machine batching, crushing, finished products screening, dust removal outlet of sintering machine tail and ring cooler, dust removal outlet of primary flue gas of bf tapping field, secondary flue gas of bf tapping field、dust removal outlet below the blast furnace bunker, dust removal outlet of cast iron machine, dust removal outlet of blast furnace pulverized coal production, dust removal outlet of hot blast stove of bf, steelmaking electric dust removal、steelmaking secondary dedusting outlet, dust removal outlet of flame descaling, lime kiln top dust collector outlet, heat treatment furnace、dust removal of finishing mill, dust removal exit of tension leveler and welder of PLTCM, dust removal exit of iron powder warehouse, 2 × 300mw generating units chimney exit, gas boiler chimney exit. | Coke pushing、Coke outlet、CDQ outlet、Coke oven chimney:<10 mg/m3; The transfer point of stock ground:<10 mg/m3; Sintering machine batching, crushing, finished products screening、sintering machine tail and ring cooler:<10 mg/m3; primary flue gas and Secondary flue gas of BF tapping field:<10 mg/m3; Below the blast furnace bunker、cast iron machine、blast furnace pulverized coal production、hot blast stove of BF:<10mg/m3; Steelmaking electric dust removal: <20mg/m3; Steelmaking secondary dedusting、flame descaling、Lime kiln top dust collector:<10mg/m3; Heat treatment furnace、finishing mill、tension leveler and welder of PLTCM:<10 mg/m3; Iron powder warehouse:<10mg/m3; Coal-fired and gas-fired generating units:<10 mg/m3. | Coke pushing、Coke outlet、CDQ outlet、Coke oven chimney:10 mg/m3; The transfer point of stock ground:10mg/m3; Sintering machine batching, crushing, finished products screening、sintering machine tail and ring cooler :10mg/m3; Primary flue gas and Secondary flue gas of BF tapping field:10 mg/m3; Below the blast furnace bunker、cast iron machine、blast furnace pulverized coal production、：10mg/m3; Hot blast stove of BF:10mg/m3; Steelmaking electric dust removal :50 mg/m3; Steelmaking secondary dedusting :10mg/m3; Dust removal of Lime kiln top and flame descaling: 10mg/m3; Heat treatment furnace:10mg/m3; Finishing mill 10mg/m3; Tension leveler and welder of PLTCM :10mg/m3; Iron powder warehouse: 10mg/m3; Coal-fired and gas-fired generating units: 10mg/m3; Gas boiler: 10mg/m3 | 4320.49 | 4330.44 | No |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of the company or subsidiary | Names of major pollutants and characteristic contaminants | Emissionmethod | Number of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Exceed the standard or not |
| Zhixin Co. | PM | Organized | 69 | Acid regeneration, continuous annealing furnace, normalizing annealing furnace, decarburization annealing furnace, annular furnace, hot drawing furnace, scoring | Acid regeneration<=30mg/m3, heat treatment furnace and scoring <=10mg/m3 | Heat treatment furnace, tension leveler, finishing and shot blasting 10 mg/m3, acid regeneration 30 mg/m3 | 18.005 | 27.793 | No |
| Zhixin Co. | Sulfur Dioxide | Organized | 50 | Continuous annealing furnace, normalizing annealing furnace, decarburization annealing furnace, annular furnace and hot drawing furnace | <=30mg/m3 | 30mg/m3 | 5.685 | 81 | No |
| Zhixin Co. | Nitrogen Oxide | Organized | 50 | Continuous annealing furnace, normalizing annealing furnace, decarburization annealing furnace, annular furnace and hot drawing furnace | <=100mg/m3 | 100mg/m3 | 37.512 | 131.649 | No |
| Cold-R Co. | COD (Chemical Oxygen Demand) | Organized | 1 | Wastewater stations | 10-24.2 mg/m3 | 30mg/m3 | 21.4511 | 67.5 | No |
| Cold-R Co. | Ammonia Nitrogen | Organized | 1 | Wastewater stations | 0.002-2.46 mg/m3 | 1.5(2.5) mg/m3 | 0.42035 | 3.937 | No |
| Cold-R Co. | Sulfur Dioxide | Organized | 8 | Continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, roaster of acid regeneration station, hydrogen production generator, 1# boiler room, 2# boiler room, 3# boiler room. | 3-5mg/m3 | Continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, Roaster of acid regeneration station, Hydrogen production generator:20 mg/m3; 1# boiler room, 2# boiler room, 3# boiler room:10 mg/m3 | 4.0452 | 18 | No |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of the company or subsidiary | Names of major pollutants and characteristic contaminants | Emissionmethod | Number of drains | Distribution of emission drains | Emission concentration | Implemented pollutant emission standards | Total emissions (tons) | Total approved emissions (tons) | Exceed the standard or not |
| Cold-R Co. | Nitrogen oxides | Organized | 8 | Continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, roaster of acid regeneration station, hydrogen production generator,1# boiler room, 2# boiler room, 3# boiler room. | Continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line:7-50mg/m3; Roaster of acid regeneration station :12-59 mg/m3; 2# boiler room :23 mg/m3; 1# boiler room, Hydrogen production generator, 3# boiler room :14-56 mg/m3 | Continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, Roaster of acid regeneration station, Hydrogen production generator :100 mg/m3; 1# boiler room, 2# boiler room, 3# boiler room :80 mg/m3 | 53.0158 | 148.184 | No |
| Cold-R Co. | Particulate matter | Organized | 10 | Exhaust gas of tension leveler, continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, roaster of acid regeneration station, hydrogen production generator, iron powder warehouse at acid regeneration station, 1# boiler room, 2# boiler room, 3# boiler room. | Exhaust gas of tension leveler :3.7-4.1 mg/m3; continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, roaster of acid regeneration station, hydrogen production generator :1.3-5.6 mg/m3; iron powder warehouse at acid regeneration station, 1# boiler room, 2# boiler room, 3# boiler room:1.5-2.8 mg/m3 | Exhaust gas of tension leveler, continuous annealing furnace, annealing furnace of 1# HDG line, annealing furnace of 2# HDG line, Roaster of acid regeneration station, Hydrogen production generator, iron powder warehouse at acid regeneration station :10 mg/m3; 1# boiler room, 2# boiler room, 3# boiler room:5 mg/m3 | 18.6915 | 18.75 | No |
Beijing Shougang Co. Ltd Annual Report 2021
Construction and operation of pollution prevention facilitiesQiangang Co., strengthened the level of environmental protection governance, led the industry, maintained the sustainability ofenvironmental governance, and continued to promote the green action plan for the iron and steel sector based on the ultra-lowemission and performance class A basic platform. In 2021, Qiangang Co., started 52 environmental protection special treatmentprojects, established a project leading group, held regular project promotion meetings regularly, coordinated and solved existingproblems and promoted the progress of green projects. By the end of the reporting period, 48 items had been completed, and theremaining 4 items continued to be implemented.Through a series of measures such as improving the environmental protection management system, adhering to daily inspection andimplementing problem rectification, the Company has continuously strengthened the control of environmental protection facilitiesand daily production operation, and the environmental protection facilities and production facilities operate synchronously and stably.Strengthen the maintenance management of environmental protection facilities, and conduct simultaneous maintenance ofenvironmental protection facilities such as desulfurization and denitration, dust removal and wastewater treatment with the mainproduction facilities. Through self-monitoring and supervision and monitoring by the environmental protection department, 100% ofall pollutants are discharged up to the standard.Jingtang Co., has built 225 sets of waste gas treatment facilities such as dust removal, desulfurization and denitration to effectivelytreat all kinds of waste gas. The dust adopts bag dust removal, plastic burning plate dust removal, electric dust removal and othermethods; Coke oven flue gas adopts ammonia desulfurization + medium and low temperature SCR denitration process; Sintering andpelletizing adopt circulating fluidized bed desulfurization + medium and low temperature SCR denitration process; Seawaterdesulfurization + SCR denitration process is adopted for desulfurization of self-owned power plant. A total of 12 sets of mainwastewater treatment facilities is built. It includes coking phenol cyanogen wastewater treatment system, continuous castingwastewater treatment system, hot rolling, cold rolling, medium and heavy plate, steel rolling wastewater treatment system andcomprehensive wastewater treatment station. After treatment, the clean water is mixed with rich seawater desalination water for reuseto realize coupled zero discharge of wastewater. A total of five types of solid waste treatment facilities, briquette comprehensiveutilization facilities and 6 ×600000 ton / p.a. slag fine grinding cement production line is build, converting the blast furnace slag ofiron and steel plant into high-quality cement raw materials by adopting new processing technology; Dust removal ash and iron oxidescale from raw materials, ironmaking, hot rolling and other processes are returned to sintering ingredients for utilization. At present,all environmental protection facilities of Jingtang Co., operate well, and all processes in the whole process meet ultra-low emissionstandards.The Cold-R Co., builds annealing furnace and gas-fired boiler with natural gas as fuel to reduce waste gas pollution from the source.11 sets of waste gas treatment facilities including oil mist purification system, acid mist purification system, bag dust removal systemand alkali mist treatment system is built, and all waste gas was discharged up to standard; 1 wastewater station was built to dischargeall wastewater up to standard after treatment through four systems: acid containing wastewater treatment, dilute alkali wastewatertreatment, oil-bearing and finishing liquid wastewater treatment. By selecting low-noise equipment and taking vibration reductionmeasures, effectively do a good job in noise prevention and control, and install silencers at the discharge of iron oxide powder bin;The air compressor, booster, nitrogen compressor and other equipment were set in the plant, and the sound insulation cover was set.The silencing tower was built at the outlet of the nitrogen generating unit. The above environmental protection facilities operate well,and all pollutants are discharged up to the standard.By upgrading the oil mist removal system of acid rolling, Zhixin Co., has solved the problem of oil mist overflow and insufficientflue height; The construction of high-efficiency car washing station has effectively reduced the atmospheric dust pollution in theplant; In order to avoid the problems such as the open-air stacking of bagged iron red, the displacement of iron red and the scatteringof iron red caused by the damage of iron red bag during hoisting, a rain proof shed for iron red storage under closed storage andhoisting and loading conditions has been built. All the existing environmental protection facilities of the Company operate stably, andthe pollutants are discharged up to the standard.
Beijing Shougang Co. Ltd Annual Report 2021
Construction of environmental impact assessment of projects and other environmental protection administrative permitsIn order to further implement energy conservation and emission reduction as well as enhance the corporate environmental image, theCompany invested various projects such as Qiangang Co. Dust-removing Environmental Management Project and Qiangang Co.Whitening Water and Exhausted Steam for Blast Furnace Slag Project, which have been registered on the registration form ofconstruction project environmental impacts. In September 2017, the Company obtained a new version of the sewage permit issued bythe Tangshan Environmental Protection Bureau. In August 2020, the extension of the pollution discharge permit was completed, andthe validity period was extended to 2025.Jingtang Co. adheres to the equally importance principle of production development and environmental protection, evaluates theenvironmental impact assessment project strictly in accordance with the Environment Impact Assessment Act of China, constructsstrictly in accordance with the EIA approval during the implementation of the project. All construction projects are supported byconstruction of environmental protection facilities, to meet the “Three Simultaneous” management requirements for environmentalprotection. In April 2006, the Company obtained the environmental impact assessment approval from the Ministry of EnvironmentalProtection (formerly the State Environmental Protection Administration (State Environmental Assessment [2006] No. 181). In May2010, it obtained the approval of the Ministry of Environmental Protection to change the environmental impact assessment (StateEnvironmental Assessment [2010] No. 11). In January 2012, it obtained the trial production approval from Hebei ProvincialEnvironmental Protection Department (Hubei Environmental Assessment [2012] No. 17). In January 2014, it obtained theenvironmental protection acceptance approval for the completion of the first phase of the Ministry of Environmental Protection (StateEnvironmental Assessment [2014] No. 4). In December 2014, it obtained a pollutant emission permit issued by the Hebei ProvincialEnvironmental Protection Department. In October 2015, it obtained the environmental impact assessment approval for the secondphase of the Hebei Provincial Department of Environmental Protection (Hebei Environmental Assessment [2015] No. 359). InAugust 2017, the Company obtained a new version of the pollution discharge permit issued by the Tangshan EnvironmentalProtection Bureau; it combined with the second-stage one-step construction project, the pollutant discharge permit was changed inApril 2019, and the sewage outlet of the second-stage one-step project was included in standardized management.In April 2019, theReply Letter on the Opinions on the Changes of the One Step of the Second Phase of Jingtang Co. (Hebei Environmental AssessmentLetter [2019] No.465) was obtained from Hebei Provincial Department of Ecology and Environment. In April 2019, the certificate ofpollutant discharge permit change was completed, and the sewage outlets of phase II one-step project was included in standardizedmanagement. The environmental protection acceptance of phase II one-step project was completed in October 2020. The extension ofthe pollutant discharge permit has been completed in August 2020, and the validity period was extended to 2025.In October 2017, Cold-R Co. is the first company that obtained the pollution discharge permit in Shunyi District, Beijing. InSeptember 2020, it submitted an application for renewal of the pollution discharge permit in accordance with relevant regulations. Itpassed the government review at the end of October and the validity period was extended to 2025.Zhixin Co. completed the environmental impact assessment of the High Performance Oriented-steel Project of Shougang ZhixinQian'an Electromagnetic Material Co., Ltd. in 2021. The pollutant discharge permit was obtained according to law in July 2018, andthe modification and extension of the pollutant discharge permit were completed in July 2021.
Emergency plans for environmental emergenciesIn accordance with the Environmental Protection Law of the People's Republic of China and other laws and regulations andnormative documents, Qiangang Co. has formulated the Emergency Plan for Environmental Emergencies. The plan focuses onstrengthening the daily management and safety prevention of production, strictly prevents all kinds of sudden environmental events,regulates and strengthens the abilities to deal with environmental emergencies, focuses on preventing the occurrence of suddenenvironmental events, gradually improves the mechanism of early warning, disposal and rehabilitation of environmental emergencies,and establishes the Company's emergency disposal system, which would be strong, orderly, efficient, unified and coordinated, for
Beijing Shougang Co. Ltd Annual Report 2021
emergency environmental emergencies. On this basis,Qiangang Co. also formulated three special plans, namelySuddenEnvironmental Event Emergency Plan Special for Atmospheric, Sudden Environmental Event Emergency Plan Special for Water andSudden Emergency Plan for Hazardous Wastes in Environmental Incidents, to further improve the air pollution and water pollutionemergency response capacities.According to the requirements of the Emergency Treatment Plan for Environmental Emergencies (Third Edition), Jingtang Co.identifies gas storage tanks, pipelines and benzene tanks, acid storage tanks, liquid ammonia storage tanks and other dangerouschemicals and toxic and harmful substances production, storage areas as dangerous target for emergency rescue. In accordance withthe requirements of the Emergency Response Plan for Environmental Emergencies of Shougang Jingtang United Iron & Steel Co.,Ltd. (Third Edition), 24 emergency drills were carried out in 2021, including waste oil leakage, radioactive source leakageemergency drills, waste water exceeding the standard, waste acid leakage, wharf ship offshore oil spill emergency drills, so as toensure the effective implementation of rescue in accordance with the requirements of the Plan and improve the skills of preventingand dealing with sudden environmental pollution accidents and the actual combat capability.According to relevant laws and regulations, Cold-R Co., formulated a new version of Emergency Plan for EnvironmentalEmergencies and put it on record. According to the requirements of the Plan, Cold-R Co., organized and carried out the plan drill,timely rectify the problems found in the drill, and enhanced the emergency response ability of environmental emergencies.Zhixin Co. organized the preparation of Emergency Plan for Environmental Emergencies (version 2021) and complete the filing. Inaddition, organized all units to carry out 12 emergency drills for environmental emergencies throughout the year, covering water, gas,sound, slag, radiation and other projects.
Environmental self-monitoring programIn accordance with the relevant provisions of the National Key Monitoring Enterprises Self-Monitoring and Information DisclosureMeasures (Trial) and National Key Monitoring Enterprises Pollution Source Supervision and Information Disclosure Measures (Trial)and other relevant regulations, Qiangang Co. establishes and improves the pollution source monitoring and information disclosuresystem, formulates the Pollutant Emission Monitoring Plan 2021 and strictly implements it. In 2021, 1380 monitoring of PM, fluegas, air quality, plant boundary noise, etc. are organized and completed as planned. The monitoring results showed that 100% of thepollutants are up to the standard.The environmental monitoring system of Jingtang Co. consists of two parts: automatic monitoring and manual monitoring. Themanual monitoring system entrusts a qualified third-party testing organization to regularly monitor the environment of waste gas,waste water, noise, radioactive sources and other items of pollution sources in the plant according to the Annual Self-monitoring Planfor Key Monitoring Enterprises, so as to form monitoring data and reports. The annual monitoring plan for 2021 has been completed,and all environmental protection control indicators have reached the standard normally.Cold-R Co., formulated self-monitoring plan according to the requirements of pollutant discharge permit, and supervise and test eachdischarge point on a daily, monthly and quarterly basis. In 2021, the company's emission indicators of pollution sources will all meetthe standards.In accordance with the requirements of relevant national regulations, Zhixin Co., formulated the Self-Monitoring Plan for 2021,strengthen internal control, and entrust a qualified third-party monitoring organization to monitor according to the monitoring planand plan every week, month and quarter. Through the development of intelligent application software, locate the monitoring points,achieve real-time monitoring and real-time data management, and ensure the discharge of pollutants up to the standard.
Administrative penalties for environmental problems during the reporting periodThere is no administrative penalty for environmental problems during the reporting period.
Beijing Shougang Co. Ltd Annual Report 2021
Other environmental information that should be disclosedOn the basis of adhering to the environmental protection work, Qiangang Co., Jingtang Co., Cold-R Co., and Zhixin Co. use thenational key monitoring enterprises’ self-monitoring information disclosure platform, website of government environmentalprotection department and self-established information disclosure platform, to publicize and display the environmental protectionprojects, operation of environmental protection facilities, names and emissions of major pollution sources, monitoring methods,monitoring indicator names, solid waste comprehensive utilization, etc. and actively accepts social supervision.
Measures and effects taken to reduce carbon emissions during the reporting period
□ Applicable √ Not applicable
Other environmental related informationIn order to develop circular economy and low-carbon economy, build resource-saving, environment-friendly and low-carbon orientedcompany, and also achieve a good and rapid development of the Company, Shougang Co. launched the preparation of environmentalresponsibility report at the end of 2016. The scope of the environmental responsibility report includes Qiangang Co., Jingtang Co.,Cold-R Co., and other subsidiaries. In April 2020, the 2020 Environmental Responsibility Report of Beijing Shougang Co., Ltd. wasreleased on the website of Shougang Co. (http://www.sggf.com.cn).During the reporting period, the Company and its subsidiaries have not been punished by any regulator in aspect of environmentalprotection. Meanwhile, the Company supervising and urging related shareholding companies to operates in an environmentallyfriendly way and in compliance with the Law of the People's Republic of China on Environmental Protection and other related laws,regulations, rules and normative documents.II.Social responsibilityThe Company independently prepared the 2021 annual social responsibility report and submit it to the thirteenth board meeting of theseventh session for deliberation. Please refer to the company announcement on 29 April 2022 for details.III.Consolidate and expand the achievements of poverty alleviation and rural revitalizationThe Company has actively fulfilled social responsibilities, expand the achievements of poverty alleviation, implement consumptionpoverty alleviation, and help rural revitalization. Purchase agricultural products such as potatoes in Yangyuan County, ZhangjiakouCity, Hebei Province, and sets of jujube, raisins and other poverty alleviation products in Xinjiang, with a total amount of RMB
1.3768 million.
Beijing Shougang Co. Ltd Annual Report 2021
Section VI. Significant Events
I. Implementation of commitment
1.Commitments made by the company's actual controller, shareholders, related parties, acquirers, companies and other committedrelated parties have been fulfilled during the reporting period and have not been fulfilled by the end of the reporting period
√ Applicable □ Not applicable
| Commitment | Commitment party | Commitment type | Commitment contents | Commitment date | Commitment term | Implementation |
| Commitments to share reform | ||||||
| Commitments made in a statement of acquisition or equity change | ||||||
| Commitment in assets restructuring | Shougang Group Co., Ltd. | 1.According to the iron and steel industry development plan of Shougang Group, Shougang Co. will be the only platform for the development and integration of the iron and steel and upstream iron ore resources industry of Shougang Group in China, and eventually achieve the overall listing of Shougang Group's iron and steel and upstream iron ore resources business in China 2. As for the other companies of Shougang Group engaged in iron and steel production business, if the profits could be achieved for three consecutive years through optimizing and adjusting the product structure and actively implementing national industrial policies and environmental protection requirements, and the overall situation of the industry does not appear large fluctuation, Shougang Group will activate the manners in line with the interests of shareholders of listed companies, including but not limited to acquisition, merger, reorganization, etc. to invest relevant high-quality assets in Shougang Co. in accordance with the requirements of securities laws, regulations and industrial policies, and will complete the investment within 36 months after start-up. | 27 Dec. 2018 | Refer to contents of commitment | Implementing. In December 2021, Shougang Co., Ltd. and Shougang Group signed the "Management Service Agreement between Shougang Group Co., Ltd. And Beijing Shougang Co., Ltd. On The Affiliated Enterprises of Shougang Group Co., Ltd. ". Shougang Co., Ltd. provides management services for a total of 14 target enterprises in the steel sector of Shougang Group. | |
| Shougang Group Co., Ltd. | When the market improves in the future, Shougang Mining Corporation achieves stable profits for two consecutive years, and the overall situation of the industry is not fluctuated greatly, Shougang Corporation will start the injection of Shougang Mining Corporation in Shougang Co. and complete it within 36 months. Before Shougang Mining Corporation joined in Shougang Co., Shougang Group will urge Shougang Mining Corporation to conduct necessary related party transactions with Shougang Co. in accordance with fair and reasonable market price, strictly conform to the requirements of laws and regulations, normative documents, the articles of association of Shougang Co. and related transaction management system, and perform the corresponding review, approval and information disclosure procedures for the necessary related transactions between Shougang Co. and Shougang Mining Corporation. | 20 Apr. 2017 | Refer to contents of commitment | Implementing. | ||
| Shougang Group Co., Ltd. | The company will not damage the independence of Shougang Co. due to the increase of the proportion of shares held by Shougang Co. after the completion of the reorganization. The company will maintain "the five-aspect separation principle", which means assets, personnel, financial affairs, institution and business should be independent of Shougang Co., strictly conform to relevant provisions of the CSRC on the independence of listed companies, not illegally utilize Shougang Co. to provide guarantees, not illegally occupy the assets of Shougang Co. and keep and maintain the independence of Shougang Co. | 20 Jul. 2012 | After the completion of assets reorganization (completion date: 25 April 2014) | Normal implementing of the long-term commitment. |
Beijing Shougang Co. Ltd Annual Report 2021
| Shougang Group Co., Ltd. | Shougang Group is the largest shareholder and controlling shareholder of Shougang. On July 17, 2012, Shougang Group issued the "Letter of Commitment of Shougang Corporation on Reducing and Standardizing Related Party Transactions" (i.e. the commitments listed above, hereinafter referred to as the "original letter of commitment"), and promised that after the completion of major asset replacement purchase of assets by issuing shares between Shougang Co., and Shougang Group [hereinafter referred to as "the previous major asset restructuring (completed on April 25, 2014)", Shougang Group will take relevant measures including joining Shougang Mining Company into Shougang Co., to reduce and standardize related party transactions with Shougang Co. In order to reduce and standardize the related party transactions after the major asset replacement and related party transactions of Shougang Co. and safeguard the legitimate rights and interests of Shougang Co. and its public shareholders, the company promises to continue to fulfill the contents of the original commitment letter after the major asset replacement, and further promises as follows: 1. The company will perform its obligations as the controlling shareholder of Shougang Co. in good faith, try to avoid and reduce the related transactions with Shougang Co. (including the enterprises it controls); as for the related transactions, which are unavoidable or occur for reasonable reasons between the company and other enterprises under the control of the company, and Shougang Co. and the enterprises it controls, the company will not require or accept the more favorable conditions provided by Shougang Co. than the conditions to an independent third party in any fair market transaction. The company and other enterprises under the control of the company will sign a standardized related party transaction agreement with Shougang Co. in accordance with the law, follow the market principles of openness, fairness and justice, in accordance with fair and reasonable market price, conform to relevant provisions of laws, regulations and normative documents in the decision-making procedures of related transactions and disclose information in accordance with the law. 2. The company and other enterprises controlled by the company will not obtain any improper benefits or make Shougang Co. bear any improper obligations through related party transactions with Shougang Co. or the enterprises controlled by Shougang Co. 3. The company will be liable for the losses to Shougang Co. and the enterprise controlled by Shougang Co. due to the related party transactions with them in violation of the above commitments. | 29 Sep. 2015 | During and after the assets replacement | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Co.) to complete relevant matters: 1. The company promises to urge Jingtang Co. not to actually carry out port operation business of general bulk cargo berth project (552-meter shoreline wharf project) without obtaining formal or temporary port operation license. 2. The company promises to urge Port Co. not to actually carry out port operation business of general wharf project (1600-meter shoreline wharf project) without obtaining formal or temporary port operation license. | 29 Sep. 2015 | Refer to contents of commitment | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made the following commitments in urging Jingtang Co. and its holding subsidiary, Tangshan Shougang Jingtang Caofeidian Port Co., Ltd. (hereinafter referred to as Port Co.) to complete relevant matters: 1. Shougang Group promises to urge Jingtang Co. to complete the overall acceptance procedures of supporting wharf project (1240-meter shoreline wharf project) and obtain the formal port operation license before 31 December 2022, and carry out port operation business in accordance with the requirements of relevant competent departments. 2. Shougang Group promises to urge Jingtang Co. to complete the application of ownership certificate of all self-built houses of Jingtang Co. before 31 December 2022. | 18 Dec. 2020 | 31 Dec. 2022 | Implementing | |
| Shougang Group Co., Ltd. | In respect of the purchase of 51% equity of Jingtang Co. by Shougang Co., Shougang Group made commitments in urging Jingtang Co. and its holding subsidiary, Port Co., Ltd., to complete the relevant matters of obtaining land use right certificate: Shougang Group promises to urge Jingtang Co. to obtain state-owned land use right certificate of all the land used before 31 December 2022, including but not limited to the land used by Jingtang Co. Phase I project, Jingtang Co. supporting wharf project (1240-meter shoreline wharf project), general bulk cargo berth project (552-meter shoreline wharf project) and relatd land used by Jingtang Co. Phase II project. | 18 Dec. 2020 | 31 Dec. 2022 | Implementing |
Beijing Shougang Co. Ltd Annual Report 2021
| Beijing Jingtou Investment Holding Co., Ltd. | 1. When the company obtains the shares of the listed company through the issuance of shares to purchase assets, if the equity interests of Jingtang Co. held by the company have reached 12 months, the shares of the listed company acquired by the company in this transaction shall not be traded or transferred in any way within 12 months from the end of the issuance of shares; If the equity interests of Jingtang Co. held by the company are less than 12 months, the shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date of the end of share issuance. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authorities, the company will adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authorities. | 21 May. 2021 | 20 May. 2022 | Implementing | ||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | The shares of the listed company acquired by the Fund as a result of the purchase of assets through the issuance of shares shall not be transferred within 36 months from the date of the completion of the issuance of shares. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. | 21 May. 2021 | 20 May. 2024 | Implementing | ||
| Shougang Group Co., Ltd. | 1. The shares of the listed company acquired by the company in this transaction shall not be transferred within 36 months from the date when the shares are issued. However, transfers permitted by applicable law are not subject to this restriction. Within six months after completion of the transaction, if the closing price of the shares of the listed company for 20 consecutive trading days is lower than the issuing price of the shares, or the closing price at the end of six months after the completion of this transaction is lower than the issue price of this share, the locking period of shares obtained by the company through this transaction will be automatically extended for six months on the basis of the above locking period. If such shares are increased due to the listed company's granting of bonus shares, conversion of capital stock and other reasons, the additional shares of the listed company shall be locked in accordance with the above lockup period. 2. If the aforementioned commitment to lock up shares is inconsistent with the latest regulatory opinions of the securities regulatory authority, the company shall adjust the aforementioned commitment according to the regulatory opinions of the relevant securities regulatory authority. | 20 Dec.2021 | 19 Apr. 2025 | Implementing | ||
| Shougang Group Co., Ltd. | The Asset Appraisal Report evaluates partial of intellectual property rights of Jingtang Co. and Shanxi Coking Co., Ltd. (hereinafter referred to as "performance commitment assets") based on future earnings expectations. The appraisal value of 1,346 patent rights, 190 proprietary technologies, 32 software copyrights and other assets of Jingtang Co. is RMB 242.8 million, and the appraisal value of 57 patent rights assets of Shanxi Coking Co., Ltd. is RMB 40 million. In accordance with the forecast income sharing of the performance committed assets, if the purchase of assets by issuing shares is completed before 31 December 2022, Shougang Group commitments that, in 2022, 2023 and 2024, the total income sharing of performance commitment assets in the current period shall be no less than RMB 90.9182 million, RMB 79.414 million and RMB 61.5618 million respectively. If the above performance commitments are not met, please refer to "Performance Commitments and Impairment Compensation Arrangements" in Beijing Shougang Co., Ltd. 's Report on Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions issued by the Company for detailed compensation methods and arrangements. | 20 Dec.2021 | 31 Dec. 2024 | Implementing | ||
| Commitments made in IPO or refinancing | ||||||
| Equity incentive commitment | ||||||
| Other commitments to small and medium shareholders of the Company | ||||||
| Whether the commitment is fulfilled on time | Yes | |||||
2. Assets or projects of the Company which has profit forecast and reporting period still in forecasting period,explain reasonsof reaching the original profit forecast
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
II. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party during the reporting period.III. External guarantees against the rules and regulations
□ Applicable √ Not applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reportingperiod.IV. Description of the board of directors on the latest audit report with qualified opinion
□ Applicable √ Not applicable
V. Description of the board of directors, the board of supervisors and independent directors(if any) on the audit report with qualified opinion in the reporting period
□ Applicable √ Not applicable
VI. Changes in accounting policies, accounting estimates or correction of materiaalaccounting errors as compared to the financial report for prior year
√ Applicable □ Not applicable
Refer to Section X. V. 34, changes in significant accounting policies and accounting estimates for details.
VII. Explanation on the change in the scope of consolidated financial statements during thereporting period as compared to financial report of previous year
□ Applicable √ Not applicable
There was no change in the scope of consolidated statements during the reporting period.VIII. Appointment and non-reappointment (dismissal) of accounting firmsCurrent accounting firms
| Name of domestic accounting firm | Grant Thornton LLP. |
| Remuneration for domestic accounting firm (RMB 0,000) | 180 |
| Continuous life of auditing service for domestic accounting firm (year) | 22 |
| Name of domestic CPAs | Qian Bin, Liu Yiwei |
| Continuous life of auditing service for domestic CPAs (year) | 4 |
Whether to change the accounting firm during the audit period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company engaged Grant Thornton LLP. as the auditor for internal control of the Company.
IX. Suspension and termination of listing after disclosure of annual report
□ Applicable √ Not applicable
X. Insolvency or restructuring related matters
□ Applicable √ Not applicable
No insolvency or restructuring related matters during the reporting period
XI. Material litigation or arbitration cases
□ Applicable √ Not applicable
No material litigation or arbitration cases during the reporting period.
Beijing Shougang Co. Ltd Annual Report 2021
XII. Punishment or rectification
□ Applicable √ Not applicable
No punishment or rectification during the reporting period.
XIII. Integrity of the Company and its controlling shareholders and actual controllers duringthe reporting period
□ Applicable √ Not applicable
XIV. Material related party transactions
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Transaction price | Amount of related transaction price (RMB’0,000) | Proportion in similar transactions | Approved transaction quota (RMB’0,000) | Whether it exceeds the approved quota(Y/N) | Related transaction settlement methods | Available market prices for similar transactions | Date of disclosure | Disclosure index |
| Shougang Group and its subsidiaries | Parent company | Related purchase | Raw fuel, power energy, production services, daily life services, engineering services, etc | Market price | Market price | 6,320,571 | 6,391,108 | N | Monetary Fund Settlement | Market price | 1 March 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn) | |
| Shougang Group and its subsidiaries | Parent company | Related sales | Steel, solid waste, power energy, etc | Market price | Market price | 434,662 | 446,260 | N | Monetary Fund Settlement | Market price | 1 March 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn) | |
| Other related parties | Joint venture and associates | Related purchase | Raw fuel, power energy, production services, etc | Market price | Market price | 2,080,084 | 2,100,707 | N | Monetary Fund Settlement | Market price | 1 March 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn) | |
| Other related parties | Joint venture and associates | Related sales | Steel, power energy, etc | Market price | Market price | 503,629 | 553,740 | N | Monetary Fund Settlement | Market price | 1 March 2022 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn) | |
| Total | -- | -- | 9,338,946 | -- | 9,491,815 | -- | -- | -- | -- | -- | |||
| Details of large sales returns | No | ||||||||||||
| If the total amount of routine related party transactions to occur in the current period is estimated by category, the actual performance in the reporting period (if any) | The Company estimates the total amount of routine related party transactions. The Proposal on Adjusting the Estimated Amount of Routine Related Party Transactions in 2021 was deliberated and approved by the twelfth session of the seventh board of directors of the Company on 28 February 2022 and submitted to the 2022 first extraordinary general meeting of shareholders of the Company on 18 March 2022 for deliberation and approval. The total amount of transactions approved by the general meeting of shareholders in the current period was RMB 94,918.15 million, and the actual occurrence was RMB 93,389.46 million, which did not exceed the approved limit. For details of the related parties and related party transactions, please refer to Section X. | ||||||||||||
| The reason for the material difference between the transaction price and the market reference price (if applicable) | Not Applicable | ||||||||||||
2. Related party transactions arising from the acquisition and sale of assets or equity
√ Applicable □ Not applicable
| Related parties | Relationship | Transaction type | Transaction content | Pricing principle of transaction | Carry value of transferred assets (RMB’0,000) | Evaluation value of transferred assets (RMB’0,000) | Tranfer price (RMB’0,000) | Related transaction settlement methods | Profit or loss of the transaction (RMB’0,000) | Date of disclosure | Disclosure index |
| Beijing Jingtou Investment Holding Co., | Shareholders holding more than 5% | Asset purchase | Purchase 11.5094% equity of Jingtang Co. | Evaluation price | 306,982.27 | 334,164.25 | 334,164.25 | Issue shares to purchase assets | 0 | 19 December 2020 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO |
Beijing Shougang Co. Ltd Annual Report 2021
| Ltd. | held by Beijing Jingtou Investment Holding Co., Ltd. through issuing of shares | (http://www.cninfo.com.cn) | |||||||||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | Shareholders holding more than 5% | Asset purchase | Purchase 7.6729% equity of Jingtang Co. held by Beijing Jing Guorui Soe Reform and Development Fund(L.P.) through issuing of shares | Evaluation price | 204,653.96 | 222,775.2 | 222,775.2 | Issue shares to purchase assets | 0 | 19 December 2020 | "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn) |
| The reason for the material difference between the transfer price and the carrying value or evluation value (if applicable) | Not applicable | ||||||||||
| Impact on the operation results and financial position of the Company | This transaction related to the acquisition of minority interests of Jingtang Co. (the holding subsidiary) by Shougang Co., Ltd. After the completion of this transaction, Shougang Co., Ltd. controls 100% of the equity of Jingtang Co.,directly and indirectly, which will further consolidate and strengthen the main business. | ||||||||||
| Performance achievement during the reporting period if there is any performance agreement attached in related transaction | Not applicable | ||||||||||
3. Related transactions of jointoutward investment
□ Applicable √ Not applicable
The Company has no related party transactions in respect of joint outward investment during the reporting period.
4. Related creditor's rights and debtstransactions
□ Applicable √ Not applicable
The Company has no related creditor's rights and debts transactions during the reporting period
5. Transactions with related financial companies
√ Applicable □ Not applicable
Deposit
| Related party | Relationship with the Company | Maximum daily deposit limit (RMB’0,000) | Range of deposit interest rate | Beginning balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total deposit amount for current period (RMB’0,000) | Total withdrawal amount for current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same final controller | 1,600,000 | 1.41%-2.05% | 584,005.35 | 19,121,242.29 | 18,705,887.66 | 999,359.98 |
Loan
| Related party | Relationship with the Company | Loan limit (RMB’0,000) | Range of loan interest rate | Beginning balance (RMB’0,000) | Current amount | Closing balance (RMB’0,000) | |
| Total loan amount for current period (RMB’0,000) | Total repayment amount for current period (RMB’0,000) | ||||||
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company | 3,200,000 | 2.8%-4.05% | 1,465,485.77 | 2,359,168.93 | 2,226,234.8 | 1,598,419.9 |
Credit granting or other financial services
| Related party | Relationship with the Company | Business types | Total amount(RMB’0,000) | Actual amount(RMB’0,000) |
| Shougang Group Finance Co., Ltd. | Under the control of the same final controller | Credit | 3,200,000 | 1,598,419.9 |
Beijing Shougang Co. Ltd Annual Report 2021
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable √ Not applicable
The Company has no deposits, loans, credits, or other financial services between the financial companies controlled by the Companyand the related parties
7. Other significant related party transactions
□ Applicable √ Not applicable
The Company has no other significant related party transaction of the Company during the reporting period.XV. Material contract and its implementation
1. Entrustment, contract and leasing
(1) Entrustment
□ Applicable √ Not applicable
The Company has no entrustment during the reporting period.
(2) Contract
□ Applicable √ Not applicable
The Company has no contract during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
The Company has no leasing during the reporting period.
2. Material guarantees
□ Applicable √ Not applicable
The Company has no guarantees during the reporting period.
3. Cash assets management entrusted to others
(1) Entrusted financing
□ Applicable √ Not applicable
The Company has no entrusted financing during the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The Company has no entrusted loan during the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
The Company has no other material contractsduring the reporting period.
XVI. Other material events
√ Applicable □ Not applicable
On 18 March 2022, the Company received “Approval for Beijing Shougang Co., Ltd. to Issue Shares to Shougang Group Co., Ltd. toPurchase Assets and Raise Supporting Funds” (zjxk [2022] No. 553) from China Securities Regulatory Commission.On 20 April 2022, the Company completed the work of issuing 1,015,417,369 shares to Shougang Group Co., Ltd. to purchase 49%of the remaining equity of Beijing Shougang Steel Trading Investment Management Co., Ltd. On 25 April 2022, Huatai UnitedSecurities Co., Ltd., the co-lead underwriter of the Company's raised funds, have received the subscription for 54,126,391 shares ofthe Company's non-public offering of new shares by investors, and the subsequent share listing registration is in progress.
Beijing Shougang Co. Ltd Annual Report 2021
XVII. Material events of subsidiaries of the Company
√ Applicable □ Not applicable
In September 2021, The Company signed "The Capital Increase Agreement of Shougang Zhixin Qian'an Electromagnetic MaterialsCo., Ltd. " with 6 enterprises, which were ICBC Financial Assets Investment Co., Ltd., Beijing Chengtong ICBC Equity InvestmentFund(L.P.), Guokai Manufacturing Transformation and Upgrading Fund (L.P.), Beijing - Tianjin - Hebei Industrial CooperativeDevelopment Investment Fund (L.P.), Central Enterprises Poor Regions Industry Investment Fund Co., Ltd., and Beijing ShougangFund Co., Ltd. The above 6 enterprises jointly invested RMB 1.7 billion in Zhixin Co., and became the strategic investor of ZhixinCo. The Company holds 82.7688% shares of Zhixin Co., which means that the wholly-owned subsidiary of Zhixin Co. became theholding subsidiary of the Company.
Beijing Shougang Co. Ltd Annual Report 2021
Section VII. Movements in share capital and shareholdersI. Share movement
1. Share movement
Unit: share
| Before the movement | Increase (/decrease) during the year | After the movement | |||||||
| Amount | Proportion | New shares issued | Bonus issue | Converted from reserves | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 232,286,354 | 4.39% | 1,460,935,810 | 1,460,935,810 | 1,693,222,164 | 25.08% | |||
| 1. State ownership | |||||||||
| 2. State-owned corporation shares | 232,286,354 | 1,234,898,985 | 1,234,898,985 | 1,467,185,339 | |||||
| 3. Shares held by other domestic investors | 190,420,387 | 190,420,387 | 190,420,387 | ||||||
| Of which: Shares held by domestic legal persons | 125,518,587 | 125,518,587 | 125,518,587 | ||||||
| Shares held by domestic natural persons | 64,901,800 | 64,901,800 | 64,901,800 | ||||||
| 4.Foreign ownership | 35,616,438 | 35,616,438 | 35,616,438 | ||||||
| Of which: Shares held by overseas legal persons | 35,616,438 | 35,616,438 | 35,616,438 | ||||||
| Shares held by overseas natural persons | |||||||||
| II. Non-restricted shares | 5,057,103,246 | 95.61% | 5,057,103,246 | 74.92% | |||||
| 1. RMB ordinary shares | 5,057,103,246 | 5,057,103,246 | |||||||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4.Others | |||||||||
| III. Total number of shares | 5,289,389,600 | 100.00% | 1,460,935,810 | 1,460,935,810 | 6,750,325,410 | 100.00% | |||
Reasons of shares movements
√Applicable □ Not applicable
(1)Beijing Shougang Co., Ltd. actively promoted the event of issuing shares to purchase assets and raised supporting funds accordingto the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing Jingtou Investment Holding Co., Ltd. to PurchaseAssets and Raise Supporting Funds" issued by China Securities Regulatory Commission (zjxk [2021] No. 1400). As of the close ofmarket on 20 May 2021, the Company had purchased 11.5094% equity of Jingtang Co. held by Beijing Jingtou Investment HoldingCo., Ltd. and 7.6729% equity of Jingtang Co. held by Beijing Jing Guorui Soe Reform and Development Fund(L.P.). The issued1,234,898,985 shares were registered in the account as of 20 May 2021, and became effective on 21 May 2021. As of the close of themarket on 2 July 2021, 161,135,025 non-publicly offering shares with matching raised funds of the Company's were registered in the
Beijing Shougang Co. Ltd Annual Report 2021
account, and became effective on 5 July 2021.
(2) According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-ownedAssets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and theresolution of the first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021 restricted stockincentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel andmanagement backbones. The restricted stock grant date is 9 December 2021, and the restricted stock is registered as of 23 December2021.Approval of share movements
√ Applicable □ Not applicable
(1) On 21 April 2021, the Company received the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing JingtouInvestment Holding Co., Ltd. to Purchase Assets and Raise Supporting Funds" (zjxk [2021] No. 1400) issued by China SecuritiesRegulatory Commission, and the Company completed the work of purchasing assets by issuing shares and raising supporting fundsaccordingly.
(2) On 4 November 2021, the Company received the "Reply on the Implementation of the Equity Incentive Plan of Beijing ShougangCo., Ltd. " (Jingguozi [2021] No. 140) from State-owned Assets Supervision and Administration Commission of Beijing MunicipalPeople's Government. According to the reply, the Company implemented the 2021 restricted stock incentive plan by the approval ofthe first extraordinary general meeting of shareholders in 2021.Transfer of shares arising from changes in shareholding
□ Applicable √ Not applicable
Influences of shares movements on basic EPS, diluted EPS, net assets per share attributable to common shareholders ofthe companyand other financial indicators for both the latest year and the latest period
√ Applicable □ Not applicable
After the completion of the above issuing shares to purchase assets and raising supporting funds, and the implementation of equityincentive plan, although the profitability of the Company is further enhanced, the EPS and Net Assets Per Share of the Company in2020 and 2021 was diluted due to the expansion of the total share capital of the Company.Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory authority
□ Applicable √ Not applicable
2. Movements of restricted shares
√ Applicable □ Not applicable
Unit: share
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Shougang Group Co., Ltd. | 232,286,354 | 0 | 0 | 232,286,354 | The commitment made by Shougang Group when the Company was first restructured. For details, please refer to the company's announcements in "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", CNINFO (http://www.cninfo.com.cn)on 28 September 2019. | After the completion of the commitment |
| Beijing Jingtou Investment Holding Co., Ltd. | 0 | 740,940,679 | 0 | 740,940,679 | A commitment made by transaction party on the event of issuing shares to purchase assets. For details, please refer to the relevant announcement issued by the Company on 20 May 2021. | 20 May 2022 |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 0 | 493,958,306 | 0 | 493,958,306 | A commitment made by transaction party on the event of issuing shares to purchase assets. For details, please refer to the relevant announcement issued by the Company on 20 May 2021. | 20 May 2024 |
| Shanxi Coking Coal Group Finance Co., Ltd. | 0 | 39,138,943 | 0 | 39,138,943 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Qingdao Haidayuan Procurement Service Co., Ltd. | 0 | 39,138,943 | 0 | 39,138,943 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| UBS AG | 0 | 35,616,438 | 0 | 35,616,438 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shanghai Blueink Investment Management Co., Ltd.-Blueink exclusive No. 5 private equity investment fund | 0 | 19,569,471 | 0 | 19,569,471 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shanghai C&D Material Co., Ltd. | 0 | 9,784,735 | 0 | 9,784,735 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Qianhe Capital Management Co., Ltd.-Yun Jin No. 2 private equity investment fund | 0 | 6,007,827 | 0 | 6,007,827 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
Beijing Shougang Co. Ltd Annual Report 2021
| Name of shareholders | Restricted shares at the beginning of period | Restricted shares increased during the period | Restricted shares released during the period | Restricted shares at the end of period | Reason for restriction | Date of release from restriction |
| Qianhe Capital Management Co., Ltd.-Yun Jin No. 3 private equity investment fund | 0 | 6,007,827 | 0 | 6,007,827 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shanghai Boshen Investment LP- Boshen No. 21 securities investment private equity fund | 0 | 5,870,841 | 0 | 5,870,841 | As the subscriber of the non-public offering of shares issued by the company to purchase assets and raise supporting funds, the shares shall not be transferred within 6 months after the completion of the issue according to relevant regulations. For details, please refer to the relevant announcement issued by the Company on 2 July 2021. | 5 January 2022 |
| Shougang Directors, senior executives and other equity incentive targets (386 persons in total) | 0 | 64,901,800 | 0 | 64,901,800 | In accordance with relevant regulations, the Company arranged the lock-up periods for the granted restricted shares under the 2021 restricted stock incentive plan. For details, please refer to the relevant announcement issued by the Company on 13 November 2021. | The lock-up periods of the granted restricted shares are 24, 36 and 48 months from the date of registration completed, i.e., 24 December 2023, 24 December 2024 and 24 December 2025, respectively. |
| Total | 232,286,354 | 1,460,935,810 | 0 | 1,693,222,164 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting period
√ Applicable □ Not applicable
| Name of Stock and derivative securities thereof | Issue date | Issue price (or interest) | Issue amount | Listing date | Approved amount for listing | Termination date for trading | Disclosure index | Disclosure date |
| Stock | ||||||||
| A Common stock | 18 May 2021 | RMB 4.51 per share | 1,234,898,985 | 21 May 2021 | For details, please refer to "Report on the Implementation of Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions and Issuing New Shares of Beijing Shougang Co., Ltd." disclosed by the Company on http://www.cninfo.com.cn. | 20 May 2021 | ||
| A Common stock | 23 June 2021 | RMB 5.11 per share | 161,135,025 | 5 July 2021 | For details, please refer to "Report on the Implementation of Issuing Shares to Purchase Assets and Raising Supporting Funds and Related Party Transactions and Issuing New Shares of Beijing Shougang Co., Ltd." disclosed by the Company on http://www.cninfo.com.cn. | 2 July 2021 | ||
Beijing Shougang Co. Ltd Annual Report 2021
| Name of Stock and derivative securities thereof | Issue date | Issue price (or interest) | Issue amount | Listing date | Approved amount for listing | Termination date for trading | Disclosure index | Disclosure date |
| Stock | ||||||||
| A Common stock | 9 December 2021 | RMB 3.25 per share | 64,901,800 | 24 December 2021 | For details, please refer to the "Announcement of Beijing Shougang Co., Ltd. on the Completion of Registration for the Granted Restricted Shares under the 2021 Restricted Stock Incentive Plan" in "China Securities Journal" ,"Securities Times" ,"Shanghai Securities News", and CNINFO (http://www.cninfo.com.cn) | 23 December 2021 | ||
Description of securities issuance (excluding preferred shares) during the reporting period:
(1)Beijing Shougang Co., Ltd. actively promoted the event of issuing shares to purchase assets and raised supporting funds accordingto the "Reply on Approving Beijing Shougang Co., Ltd. to Issue Shares to Beijing Jingtou Investment Holding Co., Ltd. to PurchaseAssets and Raise Supporting Funds" issued by China Securities Regulatory Commission (zjxk [2021] No. 1400). As of the close ofmarket on 20 May 2021, the Company had purchased 11.5094% equity of Jingtang Co. held by Beijing Jingtou Investment HoldingCo., Ltd. and 7.6729% equity of Jingtang Co. held by Beijing Jing Guorui Soe Reform and Development Fund(L.P.). The issued1,234,898,985 shares were registered in the account as of 20 May 2021, and became effective on 21 May 2021. As of the close of themarket on 2 July 2021, 161,135,025 non-publicly offering shares with matching raised funds of the Company's were registered in theaccount, and became effective on 5 July 2021.
(2) According to the "Reply on The Implementation of Equity Incentive Plan for Beijing Shougang Co., Ltd." issued by State-ownedAssets Supervision and Administration Commission of Beijing Municipal People's Government (Jingguozi [2021] No. 140) and theresolution of the first extraordinary general meeting of shareholders in 2021, the Company implemented the 2021 restricted stockincentive plan. 64,901,800 shares were issued to 386 directors, senior management personnel, core technical personnel andmanagement backbones. The restricted stock grant date is 9 December 2021, and the restricted stock is registered as of 23 December2021.
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
√ Applicable □ Not applicable
(1) The Company issued shares to purchase assets and raise supporting funds, of which, 1,234,898,985 shares were issued to BeijingJingtou Investment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) and became effective on 21May 2021. The total share capital of the Company increased from 5,289,389,600 shares to 6,524,288,585 shares, which caused thechanges of shareholders’ structure; On 5 July 2021, 161,135,025 non-public offering shares with supporting funds became effective.The total share capital of the Company changed from 6,524,288,585 shares to 6,685,423,610 shares, which caused the changes ofshareholders’ structure;The event of issuing shares to purchase assets had no effect on the Company's assets and liabilities; the issuing additional shares toraise supporting funds increased current assets and stockholders' equity.
(2) The Company implemented 2021 restricted stock incentive plan and issued 64,901,800 restricted shares. The total share capital ofthe Company changed from 6,685,423,610 shares to 6,750,325,410 shares, which caused the changes of shareholders’ structure.The implementation of restricted stock incentive plans and issued restricted shares increased current assets and current liabilities
3. Current internal staff shares
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
III. Shareholders and the actual controller
1. Amount of shareholders andshareholding
Unit: Share
| Total number of common shareholders at the end of the reporting period | 99,240 | Total number of ordinary shareholders at the end of the previous month before the disclosure date of the annual report | 106722 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (refer to note 8) | 0 | Total number of preferred shareholders whose voting rights were restored at the end of the previous month before the disclosure date of the annual report (if any) (refer to note 8) | 0 | ||||||||
| Shareholding of shareholders holding more than 5% or top 10 shareholders | |||||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of shares held at the end of the reporting period | Changes in reporting period | Number of shares with limited sales conditions | Number of shares with unlimited sales conditions | Pledge, marking or freezing | ||||||||
| Status | Amount | ||||||||||||||
| Shougang Group | State-owned corporation | 50.45 | 3,405,352,431 | 0 | 232,286,354 | 3,173,066,077 | |||||||||
| Baosteel Group Corporation | State-owned corporation | 11.75 | 793,408,440 | 0 | 0 | 793,408,440 | |||||||||
| Beijing Jingtou Investment Holding Co., Ltd. | 10.98 | 740,940,679 | 740,940,679 | 740,940,679 | 0 | ||||||||||
| Beijing Jing Guorui Soe Reform and Development Fund(L.P.) | 7.32 | 493,958,306 | 493,958,306 | 493,958,306 | 0 | ||||||||||
| Beijing Yizhen Technology Development Co., Ltd. | 1.40 | 94,220,000 | -65,570,000 | 0 | 94,220,000 | ||||||||||
| Hong Kong Securities Clearing Company Ltd. | 0.74 | 49,906,133 | 6,594,339 | 0 | 49,906,133 | ||||||||||
| Bank of China - Guotai Jiangyuan advantage selection and flexible allocation of hybrid securities investment funds | 0.70 | 47,196,029 | 47,196,029 | 0 | 47,196,029 | ||||||||||
| Beijing Xiaojian Technology Development Co., Ltd. | 0.59 | 39,608,700 | -9,661,300 | 0 | 39,608,700 | ||||||||||
| Shanxi Coking Coal Group Finance Co., Ltd. | 0.58 | 39,138,943 | 39,138,943 | 39,138,943 | 0 | ||||||||||
| Qingdao Haidayuan Procurement Service Co., Ltd. | 0.58 | 39,138,943 | 39,138,943 | 39,138,943 | 0 | ||||||||||
| Strategic investor or general legal person become the top 10 ordinary shareholders due to allocation of new shares (if any) (refer to notes 3) | Beijing Jingtou Investment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund (L.P.) became the top 10 shareholders of the Company because of the acquisition of newly issued shares of the Company when the Company issued shares to purchase 19.1823% equity of Jingtang Co. Shanxi Coking Coal Group Finance Co., Ltd. and Qingdao Haidayuan Procurement Service Co., Ltd. became the top 10 shareholders of the Company because of the acquisition of shares issued by the Company through participating in the Company's events of raising supporting funds. | ||||||||||||||
| Description of the related or acting-in-concert parties among the above shareholders | Shougang Group holds 0.68% equity of Baosteel Co. Ltd. and Baosteel Group Corporation and its persons acting in concert hold 62.30%equity of Baosteel Co. Ltd., besides of which, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; Beijing Yizhen Technology Development Co., Ltd. and Beijing Xiaojian Technology Development Co., Ltd. are persons act in concert. | ||||||||||||||
| Description of the above shareholders involved in entrusting / being entrusted with voting rights and giving up voting rights | Not applicable | ||||||||||||||
| Special instructions on the existence of special repurchase account among the top 10 shareholders (if any) (refer to note 10) | Not applicable | ||||||||||||||
Beijing Shougang Co. Ltd Annual Report 2021
| Shareholding of the top 10 shareholders with unlimited sales conditions | |||
| Name of shareholders | Number of shares with unlimited sales conditions at the end of the reporting period | Type of shares | |
| Type | Amount | ||
| Shougang Group | 3,173,066,077 | ||
| Baosteel Group Corporation | 793,408,440 | ||
| Beijing Yizhen Technology Development Co., Ltd | 94,220,000 | ||
| Hong Kong Securities Clearing Company Ltd. | 49,906,133 | ||
| Bank of China - Guotai Jiangyuan advantage selection and flexible allocation of hybrid securities investment funds | 47,196,029 | ||
| Beijing Xiaojian Technology Development Co., Ltd. | 39,608,700 | ||
| Liu Wei | 35,000,000 | ||
| Bank of China - Guotai Zhiyuan advantageous hybrid securities investment fund | 29,000,005 | ||
| Sun Qingjun | 13,156,667 | ||
| China Construction Bank - Zhejiang Feng Li enhanced bond securities investment fund | 10,000,000 | ||
| Connected associated relationship or acting in concert among the top 10 shareholders holding tradable shares without selling restrictions, and between the top 10 shareholders holding tradable shares without selling restrictions and the top 10 shareholders | Shougang Group holds 0.68% equity of Baosteel Co. Ltd. and Baosteel Group Corporation and its persons acting in concert hold 62.30%equity of Baosteel Co. Ltd., besides of which, Shougang Group has no relationship or concerted acting relationship with other top 10 shareholders; Beijing Yizhen Technology Development Co., Ltd. and Beijing Xiaojian Technology Development Co., Ltd. are persons act in concert. | ||
| Description of the top 10 ordinary shareholders' participation in margin trading (if any) (refer to note 4) | Beijing Yizhen Technology Development Co., Ltd. holds 94,220,000 shares of the Company through credit securities account; Beijing Xiaojian Technology Development Co., Ltd. holds 39,608,700 shares of the Company through its credit securities account. | ||
Whether top 10 common stock shareholders or top 10 common stock shareholders with unlimited sales conditions conducted agreedrepurchase transactions during the reporting period
□ Yes √ No
The top 10 common stock shareholders or top 10 common stock shareholders with unlimited sales conditions have no agreedrepurchase transactions during the reporting period.
2. Controlling shareholders
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: corporate
| Name of controlling shareholders | Legal representative / person in charge of the company | Date of establishment | Organization code | Main businesses |
| Shougang Group | Zhang Gongyan | 13 May 1981 | 911100001011200015 | Industry, construction, geological examination, transportation, foreign trade, post and telecommunications, finance and insurance, scientific research and comprehensive technical services, domestic commerce, public catering, material supply and marketing, warehousing, real estate, residential services, consulting services, leasing, agriculture, forestry, animal husbandry and fishery (excluding business without special permission); authorized operation and management of state-owned assets; hosted Shougang Daily newspaper; design and production of TV advertisements; use of self-owned TV stations to publish advertisements; design |
Beijing Shougang Co. Ltd Annual Report 2021
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
The controlling shareholder of the Company has not changed during the reporting period
3. Actual controller of the company and persons acting in concert
Nature of actual controller: local management agency of state-owned assetsType of actual controller:
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The actual controller of the Company has not changed during the reporting periodBlock diagram of property rights and controlling relations between the Companyand actual controllers
Actual controller controlling the company through trust or other asset management methods
□ Applicable √ Not applicable
4.The cumulative number of pledged shares of the company's controlling shareholder or the largest shareholder and itsconcerted actors accounts for 80% of the company's shares
□ Applicable √ Not applicable
Beijing Shougang Co. Ltd Annual Report 2021
5. Other corporate shareholders holding more than 10%
√ Applicable □ Not applicable
| Name ofcorporate shareholders | Legal representative / person in charge of the company | Date of establishment | Registered capital | Main businesses |
| Baosteel Group Corporation | Chen Derong | 1 Jan. 1992 | RMB 52,791,101,000.00 | State-owned assets operation within the scope authorized by the State Council and investment and operation of state-owned capital. (if necessary, carrying out business activities only after approval of government agencies) |
| Beijing Jingtou Investment Holding Co., Ltd. | Ren Yuhang | 14 Nov. 2019 | RMB 5,000,000,000.00 | Equity investment; Project investment; Asset management; Investment management; Investment consulting; Business management. (Enterprises independently choose business projects and carry out business activities in accordance with the law; For projects subject to approval according to law, business activities shall be carried out according to the approved contents after approval by relevant departments; Shall not engage in business activities of projects prohibited or restricted by the municipal industrial policies.) |
6. Limitation on reducing the holdings of shares of controlling shareholders, actual controllers, restructuring sideandothercommitment subjects
□ Applicable √ Not applicable
IV. Implementation of share repurchase during the reporting periodImplementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing and repurchasing shares by means of centralized bidding.
□ Applicable √ Not applicable
Change of controlling shareholder during reporting period.
□ Applicable √ Not applicable
The controlling shareholder of the Company has not changed during the reporting period.
Beijing Shougang Co. Ltd Annual Report 2021
Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares issued by the Company during the reporting period
Beijing Shougang Co. Ltd Annual Report 2021
Section IX. Bonds Related Information
√ Applicable □ Not applicable
Ⅰ. Enterprise bonds
□ Applicable √ Not applicable
The Company had no enterprise bonds during the reporting period.II. Corporate Bonds
√ Applicable □ Not applicable
1. Basic information on corporate bonds
Unit: RMB
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Bond balance | Interest rate | Repayment method | Trading place |
| Beijing Shougang Co., Ltd.2020 Public Offering of Corporate Bonds to Professional Investors (Phase I) | 20 Shouqian 01 | 149236 | 15 Sep. 2020 | 17 Sep. 2020 | 17 Sep. 2025 | 2,500,000,000.00 | 3.98% | Interest is calculated on an annual basis, not compound. The interest is paid annually, and the principal is repaid at maturity. The last installment of interest is paid together with the repayment of the principal. | Shenzhen Stock Exchange |
| Investor eligibility arrangement (if any) | Public offering to professional investors | ||||||||
| Applicable trading mechanism | Bidding, quotation, inquiry and agreement trading methods | ||||||||
| Is there any risk of terminating listing (if any) and countermeasures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Trigger and implementation of issuer's or investor's option clauses and investor protection clauses
√ Applicable □ Not applicable
The bond term of "20 Shouqian 01" is 5 years, with the issuer's option to adjust the coupon rate and the investor's resale option at the endof the third year. It has not yet reached the exercise period.
3.Information on intermediaries
| Bond Name | Name of the intermediary organisation | Office address | Name of signing accountant | Contact person of the intermediary organisation | Contact tel. |
| Beijing Shougang Co., Ltd.2020 Public Offering of Corporate Bonds to Professional Investors (Phase I) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, China | Qian Bin, Yu Qike, Long Chuanxi | Qian Bin, Yu Qike, Long Chuanxi | 010-85665231 |
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of raised funds
Unit: RMB
Beijing Shougang Co. Ltd Annual Report 2021
| Bond Name | Total amount of raised funds | Utilised amount | Unutilised amount | Operation of special account for the raised funds (if any) | Rectification of irregularities in the use of raised funds (if any) | Whether it is consistent with the purpose, use plan and other agreements promised in the prospectus |
| Beijing Shougang Co., Ltd.2020 Public Offering of Corporate Bonds to Professional Investors (Phase I) | 2,500,000,000.00 | 2,500,000,000.00 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Yes |
Raised funds for construction projects
□ Applicable √ Not applicable
Change in the purpose of the funds raised by the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation and changes of guarantee, debt repayment plan and other debt repayment guarantee measures during thereporting period and their impact on the rights and interests of bond investors
□ Applicable √ Not applicable
III. Debt financing instruments of non-financial enterprises
√ Applicable □ Not applicable
1.Basic information of debt financing instruments of non-financial enterprises
Unit: RMB
| Name of bond | Bond abbreviation | Bond code | Issue date | Value date | Maturity date | Bond balance | Interest rate | Repayment method | Trading place |
| Beijing Shougang Co., Ltd.2021 Ultra-short-term financing note (Phase II) | 21 Shougang Co. SCP002 | 012103435.IB | 15 September 2021 | 16 September 2021 | 13 May 2022 | 1,000,000,000.00 | 2.49% | Repayment of principal and interest at maturity | National inter-bank bond market |
| Investor eligibility arrangement (if any) | Institutional investors in the national inter-bank bond market (except purchasers prohibited by national laws and regulations) | ||||||||
| Applicable trading mechanism | Debt financing instrument trading system of non-financial enterprise | ||||||||
| Is there any risk of terminating listing (if any) and countermeasures | No | ||||||||
Overdue and outstanding bonds
□ Applicable √ Not applicable
2. Trigger and implementation of issuer's or investor's option clauses and investor protection clauses
□ Applicable √ Not applicable
3. Information on intermediaries
| Bond Name | Name of the intermediary organisation | Business address | Name of signing accountant | Contact person of the intermediary organisation | Contact no. |
| Beijing Shougang Co., Ltd.2021 Ultra-short-term financing note (Phase II) | Grant Thornton LLP | 5F, Saite Plaza, 22 Jianguomenwai Dajie, Chaoyang District, Beijing, China | Qian Bin, Yu Qike, Long Chuanxi | Qian Bin, Yu Qike, Long Chuanxi | 010-85665231 |
Beijing Shougang Co. Ltd Annual Report 2021
Change of the above intermediary organisations during the reporting period
□ Yes √ No
4. Use of raised funds
Unit: RMB
| Bond Name | Total amount of raised funds | Utilised amount | Unutilised amount | Operation of special account for raised funds (if any) | Rectification of irregularities in the use of raised funds (if any) | Whether it is consistent with the purpose, use plan and other agreements promised in the prospectus |
| Beijing Shougang Co., Ltd.2021 Ultra-short-term financing note (Phase II) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | During the reporting period, the operation of the Company's special account for raised funds conforms to the standard | No | Yes |
Raised funds for construction projects
□ Applicable √ Not applicable
Change in the purpose of the funds raised by the above bonds during the reporting period
□ Applicable √ Not applicable
5. Adjustment of credit rating results during the reporting period
□ Applicable √ Not applicable
6. Implementation and changes of guarantee, debt repayment plan and other debt repayment guarantee measures during thereporting period and their impact on the rights and interests of bond investors
□ Applicable √ Not applicable
IV. Convertible bonds
□ Applicable √ Not applicable
The Company had no convertible bonds during the reporting period.V. The loss in the scope of the consolidated financial statements during the reportingperiodexceeding 10% of the net assets as at the end of the prior year
□ Applicable √ Not applicable
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable √ Not applicable
VII. Breaches of the regulations during the reporting period
□ Yes √ No
VIII. Main accounting data and financial indicators of the Company over the past two years as atthe end of the reporting period
Unit: RMB0’000
| Items | As at the end of the reporting period | As at the end of the prior year | Increase/decrease as at the end of the reporting period as compared to the end of the prior year |
| Current ratio | 0.47 | 0.39 | 20.51% |
| Gearing ratio | 66.59% | 73.10% | Decreased by 6.51 percentage points |
| Quick ratio | 0.32 | 0.25 | 28.00% |
Beijing Shougang Co. Ltd Annual Report 2021
| The reporting period | The corresponding period of the prior year | Increase/decrease of the reporting period as compared to corresponding period of the prior year | |
| Net profit after extraordinary gains or losses | 701,422.69 | 171,443.97 | 309.13% |
| EBITDA total debt ratio | 19.97% | 11.11% | 8.86% |
| Interest cover ratio | 5.15 | 1.8 | 186.11% |
| Cash interest coverage ratio | 8 | 4.87 | 64.27% |
| EBITDA interest coverage ratio | 8.29 | 4.1 | 102.20% |
| Loans payment ratio | 100.00% | 100.00% | 0.00% |
| Interest payment ratio | 100.00% | 100.00% | 0.00% |
Beijing Shougang Co. Ltd Annual Report 2021
Section X. Financial Report(This section is translated based on the Chinese version of the full audit report of the Company. Immaterial difference may existbeween this section in Chinese version annual report and English version annual report. The difference is due to the specific template
required by the Shenzhen Stock Exchange in Chinese version which is not applied in English version.)
I. Auditor’s Report
| Type of audit opinion | Standard unqualified opinion |
| Date of signing of audit report | 27 April 2022 |
| Name of audit institution | Grant Thornton LLP |
| Number of audit report | GTSZ (2022)No.110A013808 |
| Chinese Certified Public Accountant | Qian Bin, Liu Yiwei |
Main Body of Audit ReportTo the Shareholders of Beijing Shougang Company Limited：
I. OpinionWe have audited the financial statements of Beijing Shougang Company Limited (theCompany), which are comprised of the consolidated and company statements offinancial position as of 31 December 2021, and the consolidated and companyincome statements, statements of changes in equity and statements of cash flows forthe year then ended, and notes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all materialrespects, the consolidated and company financial position of the Company as of 31December 2021, and the consolidated and company’s financial performance and cashflows for the year then ended in accordance with Accounting Standards for BusinessEnterprises.II. Basis for OpinionWe conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’sResponsibilities for the Audit of the financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics for ChineseCertified Public Accountants, and we fulfilled our other ethical responsibilities. Webelieve that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinion
Beijing Shougang Co. Ltd Annual Report 2021
on these matters.(I) The provision for inventory impairmentsThe disclosures related to the impairment of inventories are disclosed in Notes III.11and V.7 to the financial statements.
1. Description of the matter
As of 31 December 2021, the carry value of inventory of the Company amounted toRMB 12.047 billion with an impairment of RMB 147 million in the consolidatedfinancial statements. Inventory had been regarded as the material part of the currentassets of the Company at the end of the period, and the provision for inventoryimpairment referred to the application of management’s accounting estimates. Hence,we have identified the provision for inventory impairments as a key audit matter.According to the accounting policy of the Company, if the cost is in excess of the netrealizable value, impairment of inventories is recognized on the date of balance sheet.Net realizable value is determined based on the estimated selling price on normalbusiness terms deducted by the estimated costs to completion and the relatedexpenses.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to provision for inventory impairment includes:
(1) Understanding and assessing the management’s internal controls related toimpairment testing of inventories, and testing the effectiveness of key controlexecutions.
(2) Testing, on a sample basis during the inventory monitoring procedure, observingthe inventory status and checking the inventory age
(3) Recalculating the impairment of inventories at the end of the reporting period
(4) Implementing the analysis procedure to determine whether there is a significantdifference between the estimated selling price and the market price, and examiningwhether there is a significant difference between the post-period selling price and theestimated price in conjunction with a subsequent-event audit.
(5) Evaluating the reasonableness of carrying value of the inventory as at 31December 2021 by analyzing manufacturing costs of current inventories.
(6) Inspecting whether the related information of inventory impairments provision isproperly, appropriately and adequately presented and disclosed in the financialstatements.(II) Recognition of RevenueThe disclosures related to the recognition of revenue are disclosed in Notes III.25 and
Beijing Shougang Co. Ltd Annual Report 2021
V.41 to the financial statements.
1. Descriptions of the matter
In 2021, the revenue was RMB 134.034 billion in the consolidated financialstatements. Considering that the revenue has a significant impacted on the financialstatements of the Company and steel price could exert a great influence on the profitsof the Company since the steel industry is a pro-cyclical industry, we regarded therecognition of revenue as a key audit matter.
2. How our audit addressed the Key Audit Matter
Our main procedures in relation to recognition of revenue includes:
(1) Understanding and assessing the management’s internal controls related torecognition of revenue, and testing the effectiveness of key control executions.
(2) Assessing whether the revenue recognition conditions, methods and timecomplied with the related standards in Accounting Standards for BusinessEnterprises.
(3) Selecting revenue transaction samples, checking the supporting documents ofrevenue recognition such as sales contracts, orders, delivery records, etc. to evaluatethe authenticity of revenue recognition.
(4) Selecting major customers to perform the confirmation procedures on annual salesto evaluate the completeness of revenue recognition.
(5) Implementing cut-off tests to the sales transactions before and after balance sheetdate.
(6) Checking the adequacy and appropriateness of disclosures in relation to revenuein the financial statements.IV. Other InformationThe management of the Company is responsible for the other information. The otherinformation comprises the information included in the Annual Report of 2021, otherthan the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is materialmisstatement of this other information, we are required to report that fact. We have
Beijing Shougang Co. Ltd Annual Report 2021
nothing to report in this regard.V. Responsibilities of the Management and Those Charged with Governance forthe Financial StatementsManagement of the Company is responsible for the preparation and fair presentationof the financial statements in accordance with Accounting Standards for BusinessEnterprises, and designing, implementing and maintaining internal control asmanagement determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’sfinancial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and aregenerally considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.As part of an audit in accordance with China Standards on Auditing, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. Wealso:
(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 tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
Beijing Shougang Co. Ltd Annual Report 2021
(4) Conclude on the appropriateness of management’s use of the going concern basisof accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onthe Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, further events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information ofthe entities or business activities within the Company to express an opinion on thefinancial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, includingany significant deficiencies in internal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.From the matters communicated with the governance, we determine those mattersthat were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matteror when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of suchcommunication.
Beijing Shougang Co. Ltd Annual Report 2021
| Consolidated and Parent Company Statement of Financial Position | ||||
| Beijing Shougang Co., Ltd. as at 31 December 2021 | ||||
| Unit: RMB Yuan | ||||
Item
| Item | Notes | 31 December 2021 | 31 December 2020 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: | |||||
| Cash and Cash equivalents | V. 1 | 10,284,988,713.99 | 1,426,549,662.05 | 6,292,499,840.73 | 1,087,088,671.35 |
| Notes receivable | V. 2 | 6,830,376,685.96 | 1,311,383,591.78 | 6,119,547,878.33 | 2,837,221,424.75 |
| Accounts receivable | V. 3 | 1,678,608,393.71 | 1,917,892,195.00 | 1,424,092,844.92 | 1,615,425,644.29 |
| Financing receivables | V. 4 | 4,015,188,495.05 | 1,285,597,772.66 | 4,532,592,689.43 | 1,199,574,277.29 |
| Prepayments | V. 5 | 1,192,569,996.90 | 789,330,458.38 | 352,355,542.50 | 195,404,837.38 |
| Other receivables | V. 6 | 16,992,715.92 | 1,017,482,945.07 | 21,895,246.57 | 1,618,249,934.67 |
| Including: Interest receivable | |||||
| Dividends receivable | 4,892,288.48 | 600,000,000.00 | |||
| Inventories | V. 7 | 11,900,618,235.51 | 1,932,537,429.64 | 10,599,731,052.28 | 1,538,862,616.03 |
| Other current assets | V. 8 | 864,665,729.52 | 397,054,514.15 | 719,079,065.59 | 1,812,574,287.01 |
| Total current assets | 36,784,008,966.56 | 10,077,828,568.73 | 30,061,794,160.35 | 11,904,401,692.77 | |
| Non-current assets: | |||||
| Long-term equity investments | V. 9 | 3,065,928,898.28 | 31,996,332,940.16 | 3,341,208,164.76 | 26,337,249,446.06 |
| Other equity instruments investments | V. 10 | 264,900,763.97 | 264,900,763.97 | 276,246,686.56 | 276,246,686.56 |
| Other non-current financial assets | V. 11 | 80,000,000.00 | 80,000,000.00 | ||
| Investment properties | |||||
| Fixed assets | V. 12 | 95,632,825,411.62 | 18,530,296,850.83 | 96,220,769,301.39 | 18,771,870,988.72 |
| Construction in progress | V. 13 | 7,136,983,761.07 | 1,459,332,553.48 | 8,297,181,948.62 | 1,976,744,021.21 |
| Right-of-use assets | V. 14 | 100,279,997.64 | 36,019,259.06 | —— | —— |
| Intangible assets | V. 15 | 3,955,685,010.41 | 1,685,403,346.74 | 4,055,279,867.49 | 1,743,860,610.95 |
| Development expenditures | |||||
| Goodwill | |||||
| Long-term prepaid expenses | V. 16 | 1,226,463.57 | 1,122,060.45 | ||
| Deferred tax assets | V. 17 | 189,721,423.29 | 26,622,171.77 | 147,902,371.10 | 27,925,001.56 |
| Other non-current assets | V. 18 | 1,965,717,410.38 | 1,130,014,156.73 | ||
| Total non-current assets | 110,427,551,729.85 | 54,078,907,886.01 | 114,305,427,810.75 | 50,263,910,911.79 | |
| Total assets | 147,211,560,696.41 | 64,156,736,454.74 | 144,367,221,971.10 | 62,168,312,604.56 | |
－91－Consolidated and Parent Company Statement of Financial Position(Continued)
| Consolidated and Parent Company Statement of Financial Position(Continued) | |||||
| Beijing Shougang Co., Ltd. as at 31 December 2021 | |||||
| Unit: RMB Yuan | |||||
| Item | Notes | 31 December 2021 | 31 December 2020 | ||
| Consolidated | Consolidated | Consolidated | Company | ||
| Current liabilities: | |||||
| Short-term borrowings | V. 19 | 25,278,373,316.25 | 11,063,960,704.04 | 23,712,391,440.25 | 11,100,674,376.49 |
| Notes payable | V. 20 | 7,488,930,793.77 | 987,600,000.00 | 6,804,810,000.00 | 784,260,000.00 |
| Accounts payable | V. 21 | 26,265,590,773.10 | 10,294,070,284.28 | 26,539,354,380.68 | 11,218,645,086.80 |
| Receipts in advance | |||||
| Contract liabilities | V. 22 | 5,230,456,327.37 | 756,726,439.51 | 4,659,444,741.25 | 1,049,617,570.23 |
| Payroll and employee benefits | V. 23 | 501,147,141.34 | 146,002,088.12 | 466,319,382.02 | 140,481,468.09 |
| Taxes payable | V. 24 | 425,210,314.30 | 19,217,188.00 | 572,640,856.00 | 115,612,678.08 |
| Other payables | V. 25 | 1,015,941,625.80 | 304,218,526.51 | 2,104,822,314.59 | 1,010,689,017.67 |
| Including: Interest payable | |||||
| Dividend payable | |||||
| Liabilities classified as held for sale | |||||
| Current portion of non-current liabilities | V. 26 | 10,451,293,628.20 | 61,012,464.36 | 11,273,123,385.05 | 4,075,978,467.70 |
| Other current liabilities | V. 27 | 1,908,511,727.48 | 1,105,673,889.14 | 1,106,922,816.36 | 637,645,284.13 |
| Total current liabilities | 78,565,455,647.61 | 24,738,481,583.96 | 77,239,829,316.20 | 30,133,603,949.19 | |
| Non-current liabilities: | |||||
| Long-term borrowings | V. 28 | 11,692,710,000.00 | 1,792,710,000.00 | 20,639,300,000.00 | 883,210,000.00 |
| Bonds payable | V. 29 | 2,500,000,000.00 | 2,500,000,000.00 | 2,500,000,000.00 | 2,500,000,000.00 |
| Lease liabilities | V. 30 | 86,123,210.35 | 28,263,649.37 | —— | —— |
| Long-term payable | V. 31 | 14,659,657.85 | 14,659,657.85 | 8,941,452.29 | 8,941,452.29 |
| Provisions | |||||
| Deferred income | V. 32 | 404,010,785.39 | 79,906,503.16 | 398,098,805.65 | 85,344,005.30 |
| Deferred tax liabilities | V. 17 | 208,958,292.75 | 208,958,292.75 | 258,248,672.58 | 258,248,672.58 |
| Other non-current liabilities | V. 33 | 4,563,283,607.60 | 4,491,623,817.41 | ||
| Total non-current liabilities | 19,469,745,553.94 | 4,624,498,103.13 | 28,296,212,747.93 | 3,735,744,130.17 | |
| Total liabilities | 98,035,201,201.55 | 29,362,979,687.09 | 105,536,042,064.13 | 33,869,348,079.36 | |
| Shareholders’equity： | |||||
| Share capital | V. 34 | 6,750,325,410.00 | 6,750,325,410.00 | 5,289,389,600.00 | 5,289,389,600.00 |
| Capital reserve | V. 35 | 24,924,487,245.09 | 17,250,483,548.60 | 19,759,259,120.40 | 12,129,563,493.89 |
| Less:treasuryshares | V. 36 | 210,930,850.00 | 210,930,850.00 | ||
| Other comprehensive income | V. 37 | 185,566,210.59 | 185,566,210.59 | 195,210,244.82 | 195,210,244.82 |
| Special reserve | V. 38 | 21,054,371.78 | 21,577,537.20 | ||
| Surplus reserve | V. 39 | 1,908,883,208.67 | 1,908,883,208.67 | 1,828,677,846.37 | 1,828,677,846.37 |
| Retained earnings | V. 40 | 8,130,868,205.38 | 8,909,429,239.79 | 1,865,280,919.23 | 8,856,123,340.12 |
| Equity attributable to shareholders of the Company | 41,710,253,801.51 | 34,793,756,767.65 | 28,959,395,268.02 | 28,298,964,525.20 | |
| Non-controlling interests | 7,466,105,693.35 | 9,871,784,638.95 | |||
| Total shareholders' equity | 49,176,359,494.86 | 34,793,756,767.65 | 38,831,179,906.97 | 28,298,964,525.20 | |
| Total liabilities and shareholders' equity | 147,211,560,696.41 | 64,156,736,454.74 | 144,367,221,971.10 | 62,168,312,604.56 | |
－92－Consolidated and Parent Company Income Statement
| Consolidated and Parent Company Income Statement | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | |||||
| Unit: RMB Yuan | |||||
| Item | Notes | 2021 | 2020 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Operating revenue | V. 41 | 134,034,486,136.13 | 45,087,337,029.02 | 79,951,181,948.10 | 30,977,295,936.58 |
| Less: Cost of sales | V. 41 | 118,578,217,304.05 | 42,509,065,238.89 | 73,072,708,322.14 | 29,451,902,404.58 |
| Taxes and surcharges | V. 42 | 1,043,631,975.73 | 274,324,263.09 | 774,074,513.76 | 292,475,174.88 |
| Selling expenses | V. 43 | 213,309,534.38 | 129,253,892.82 | 167,040,690.13 | 117,875,525.89 |
| General and administrative expenses | V. 44 | 1,299,881,734.32 | 564,432,571.31 | 976,426,260.85 | 398,756,799.72 |
| R&D expenses | V. 45 | 652,926,385.56 | 242,853,866.40 | 480,487,074.39 | 148,097,166.55 |
| Financial expenses | V. 46 | 2,257,586,032.80 | 589,815,561.68 | 2,163,091,932.82 | 775,191,836.71 |
| Including: Interest expense | 2,353,346,784.74 | 625,241,774.26 | 2,361,047,341.52 | 845,716,781.33 | |
| Interest income | 131,307,065.33 | 31,270,904.41 | 133,289,009.17 | 47,733,269.34 | |
| Add: Other income | V. 47 | 54,544,488.92 | 9,859,440.42 | 61,194,281.43 | 6,705,258.54 |
| Investment income/ (loss) | V. 48 | 106,379,717.79 | 240,889,493.89 | 567,720,738.87 | 1,226,651,114.41 |
| Including: Share of profits or loss of associates and joint ventures | 93,142,769.92 | 203,181,607.90 | 379,578,180.14 | 339,539,916.15 | |
| Gain/ (loss) on the changes in fair value | |||||
| Credit impairment losses | V. 49 | -127,539,908.64 | -1,593,807.77 | -11,350,686.26 | 5,222,959.55 |
| Assets impairment losses | V. 50 | -167,567,546.04 | -66,598,535.40 | -156,492,924.46 | -22,707,758.30 |
| Gain/ (loss) from disposal of assets | V. 51 | 3,716,485.22 | 3,820,932.50 | 75,385.37 | 1,165,254.29 |
| II. Operating profit/ (loss) | 9,858,466,406.54 | 963,969,158.47 | 2,778,499,948.96 | 1,010,033,856.74 | |
| Add: Non-operating income | V. 52 | 6,554,194.97 | 2,854,654.64 | 1,999,362.24 | 397,904.00 |
| Less: Non-operating expenses | V. 53 | 65,521,293.40 | 37,535,685.19 | 2,546,940.80 | 282,294.54 |
| III. Profit/ (loss) before tax | 9,799,499,308.11 | 929,288,127.92 | 2,777,952,370.40 | 1,010,149,466.20 | |
| Less: Income tax expense | V. 54 | 1,472,968,221.53 | 127,234,504.95 | 366,809,564.93 | 18,461,559.09 |
| IV. Net profit / (loss) | 8,326,531,086.58 | 802,053,622.97 | 2,411,142,805.47 | 991,687,907.11 | |
| (1) Categorized by operation continuity: | |||||
| Including: Net profit/ (loss) from continuing operations | 8,326,531,086.58 | 802,053,622.97 | 2,411,142,805.47 | 991,687,907.11 | |
| Net profit/ (loss) from discontinuing operations | |||||
| (2) Categorized by ownership: | |||||
| Including: Net profit/ (loss) attributable to shareholders of the Company | 7,014,335,009.45 | 1,786,452,832.06 | |||
| Net profit/ (loss) attributable to non-controlling interests | 1,312,196,077.13 | 624,689,973.41 | |||
| V. Other comprehensive income, net of tax | -9,644,034.23 | -9,644,034.23 | 247,100,524.21 | 247,100,524.21 | |
| Other comprehensive income, net of tax, attributable to shareholders of the company | -9,644,034.23 | -9,644,034.23 | 247,100,524.21 | 247,100,524.21 | |
| (1) Other comprehensive income that will not be reclassified to profit or loss | -9,644,034.23 | -9,644,034.23 | 247,100,524.21 | 247,100,524.21 | |
| Changes in fair value of other equity instrument investments | -9,644,034.23 | -9,644,034.23 | 247,100,524.21 | 247,100,524.21 | |
| (2) Other comprehensive income to be reclassified to profit or loss | |||||
| Other comprehensive income, net of tax, attributable to non-controlling interests | |||||
| VI. Total comprehensive income | 8,316,887,052.35 | 792,409,588.74 | 2,658,243,329.68 | 1,238,788,431.32 | |
| Total comprehensive income attributable to shareholders of the company | 7,004,690,975.22 | 2,033,553,356.27 | |||
| Total comprehensive income attributable to non-controlling interests | 1,312,196,077.13 | 624,689,973.41 | |||
| VII. Earnings per share | |||||
| (1) Basic earnings per share | 1.1291 | 0.3377 | |||
| (2) Diluted earnings per share | |||||
－93－Consolidated and Parent Company Statement of Cash Flows
| Consolidated and Parent Company Statement of Cash Flows | |||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | |||||
| Unit: RMB Yuan | |||||
| Items | Note | 2021 | 2020 | ||
| Consolidated | Company | Consolidated | Company | ||
| I. Cash flows from operating activities | |||||
| Cash receipts from the sale of goods and the rendering of services | 78,204,394,163.17 | 18,990,463,340.31 | 45,987,505,850.26 | 14,409,246,784.43 | |
| Tax refunds received | 63,091,299.47 | 90,640,776.86 | 14,213,134.10 | ||
| Cash received relating to other operating activities | V. 55 | 63,336,125.82 | 144,818,152.82 | 132,165,552.87 | 152,964,143.22 |
| Sub-total of cash inflows | 78,330,821,588.46 | 19,135,281,493.13 | 46,210,312,179.99 | 14,576,424,061.75 | |
| Cash paid for purchase of goods and services | 52,461,118,824.55 | 14,112,964,782.20 | 29,466,850,532.83 | 9,739,289,081.03 | |
| Cash paid to and on behalf of employee | 4,519,419,087.34 | 1,427,492,943.58 | 3,528,273,379.46 | 1,094,840,587.78 | |
| Cash paid for taxes | 5,453,721,028.53 | 1,168,681,864.76 | 2,333,221,933.94 | 866,247,125.28 | |
| Cash paid relating to other operating activities | V. 55 | 852,835,390.28 | 382,575,353.81 | 607,287,537.57 | 241,961,081.41 |
| Sub-total of cash outflows | 63,287,094,330.70 | 17,091,714,944.35 | 35,935,633,383.80 | 11,942,337,875.50 | |
| Net cash flows from operating activities | 15,043,727,257.76 | 2,043,566,548.78 | 10,274,678,796.19 | 2,634,086,186.25 | |
| II. Cash flows from investing activities | |||||
| Cash received from disposal of investments | 212,000,000.00 | 2,700,000,000.00 | 500,000,000.00 | ||
| Cash received from investment income | 210,139,106.61 | 814,127,544.38 | 362,658,569.01 | 433,865,503.86 | |
| Net proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets | 46,031,802.86 | 39,106,972.93 | 339,801.76 | 180,825.40 | |
| Cash received from disposal of subsidiaries and other business units | |||||
| Cash received relating to other investing activities | V. 55 | 130,931,269.04 | 31,252,743.28 | 433,380,246.29 | 47,624,492.20 |
| Sub-total of cash inflows | 599,102,178.51 | 3,584,487,260.59 | 796,378,617.06 | 981,670,821.46 | |
| Purchase of property, plant and equipment, intangible assets and other non-current assets | 3,015,839,391.12 | 1,330,119,313.91 | 3,032,549,847.59 | 733,618,776.68 | |
| Cash paid for investments | 113,658,286.00 | 306,616,735.00 | 16,145,000.00 | 315,000,000.00 | |
| Net cash paid for acquisition of a subsidiary and other operating units | 512,933,652.83 | 521,656,810.78 | |||
| Cash paid relating to other investing activities | V. 55 | 300,000,000.00 | |||
| Sub-total of cash outflows | 3,429,497,677.12 | 1,636,736,048.91 | 3,561,628,500.42 | 1,570,275,587.46 | |
| Net cash flows from investing activities | -2,830,395,498.61 | 1,947,751,211.68 | -2,765,249,883.36 | -588,604,766.00 | |
| III. Cash flows from financing activities | |||||
| Cash received from investment | 3,003,858,828.08 | 1,023,858,828.08 | 100,000,000.00 | ||
| Including: Cash receipts from capital contributions from non-controlling interests of subsidiaries | |||||
| Proceeds from borrowings | 28,850,188,126.09 | 13,447,283,452.18 | 35,570,540,000.00 | 12,589,030,000.00 | |
| Proceeds from issuing bonds | 2,000,000,000.00 | 2,000,000,000.00 | 3,000,000,000.00 | 3,000,000,000.00 | |
| Cash receipts relating to other financing activities | V. 55 | 148,638,840.00 | 148,638,840.00 | ||
| Sub-total of cash inflows | 33,854,046,954.17 | 16,471,142,280.26 | 38,819,178,840.00 | 15,737,668,840.00 | |
| Repayments for debts | 38,534,214,910.91 | 18,072,850,237.00 | 42,806,970,000.00 | 16,857,920,000.00 | |
| Cash payments for distribution of dividends or profit and interest expenses | 2,993,123,739.13 | 1,306,654,103.09 | 2,654,054,934.85 | 783,654,392.12 | |
| Including: Dividends or profits paid to non-controlling shareholders of subsidiaries | |||||
| Cash payments relating to other financing activities | V. 55 | 964,082,606.56 | 946,843,330.04 | 311,182,295.82 | 1,009,464,211.36 |
| Sub-total of cash outflows | 42,491,421,256.60 | 20,326,347,670.13 | 45,772,207,230.67 | 18,651,038,603.48 | |
| Net cash flows from financing activities | -8,637,374,302.43 | -3,855,205,389.87 | -6,953,028,390.67 | -2,913,369,763.48 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | |||||
| V. Net increase in cash and cash equivalents | 3,575,957,456.72 | 136,112,370.59 | 556,400,522.16 | -867,888,343.23 | |
| Add: Cash and cash equivalents as at the beginning of year | 4,959,913,916.36 | 886,754,170.41 | 4,403,513,394.20 | 1,754,642,513.64 | |
| VI. Cash and cash equivalent as at the end of year | 8,535,871,373.08 | 1,022,866,541.00 | 4,959,913,916.36 | 886,754,170.41 | |
－94－
| Consolidated Statement of Changes in Equity | |||||||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | |||||||||||||||
| Unit: RMB Yuan | |||||||||||||||
| Item | 2021 | ||||||||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||||||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 19,759,259,120.40 | 195,210,244.82 | 21,577,537.20 | 1,828,677,846.37 | 1,865,280,919.23 | 9,871,784,638.95 | 38,831,179,906.97 | |||||||
| Add:Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 19,759,259,120.40 | 195,210,244.82 | 21,577,537.20 | 1,828,677,846.37 | 1,865,280,919.23 | 9,871,784,638.95 | 38,831,179,906.97 | |||||||
| III. Increase/(decrease) during the period | 1,460,935,810.00 | 5,165,228,124.69 | 210,930,850.00 | -9,644,034.23 | -523,165.42 | 80,205,362.30 | 6,265,587,286.15 | -2,405,678,945.60 | 10,345,179,587.89 | ||||||
| (1)Total comprehensive income | -9,644,034.23 | 7,014,335,009.45 | 1,312,196,077.13 | 8,316,887,052.35 | |||||||||||
| (2)Shareholders' contributions and reduction | 1,460,935,810.00 | 5,166,680,399.10 | 210,930,850.00 | -3,705,283,879.20 | 2,711,401,479.90 | ||||||||||
| (i) Shareholders’ contributions in ordinary share | 1,396,034,010.00 | 5,014,753,738.73 | -5,618,843,879.35 | 791,943,869.38 | |||||||||||
| (ii) Amount of share-based payments recognized in equity | 64,901,800.00 | 151,926,660.37 | 210,930,850.00 | 5,897,610.37 | |||||||||||
| (iii) Others | 1,913,560,000.15 | 1,913,560,000.15 | |||||||||||||
| (3) Profit distribution | 80,205,362.30 | -748,747,723.30 | -668,542,361.00 | ||||||||||||
| (i) Transfer to surplus reserve | 80,205,362.30 | -80,205,362.30 | |||||||||||||
| (ii) Distribution to shareholders | -668,542,361.00 | -668,542,361.00 | |||||||||||||
| (iii) Others | |||||||||||||||
| (4) Transfer within equity | |||||||||||||||
| (i) Capital reserves converted to share capital | |||||||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||||||
| (iv) Other comprehensive income transferred to retained earnings | |||||||||||||||
| (v) Others | |||||||||||||||
| (5)Special reserve | -1,452,274.41 | -523,165.42 | -12,591,143.53 | -14,566,583.36 | |||||||||||
| (i) Additions | -1,452,274.41 | -523,165.42 | -12,591,143.53 | -14,566,583.36 | |||||||||||
| (ii) Utilisation | |||||||||||||||
| (6) Others | |||||||||||||||
| IV. Balance at the end of theyear | 6,750,325,410.00 | 24,924,487,245.09 | 210,930,850.00 | 185,566,210.59 | 21,054,371.78 | 1,908,883,208.67 | 8,130,868,205.38 | 7,466,105,693.35 | 49,176,359,494.86 | ||||||
－95－
| Consolidated Statement of Changes in Equity | |||||||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | |||||||||||||||
| Unit: RMB Yuan | |||||||||||||||
| Item | 2020 | ||||||||||||||
| Equity attributable to shareholders of the parent | Non-controlling interests | Total shareholders’ equity | |||||||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | |||||||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 20,074,865,467.56 | 1,952,319,928.42 | 15,749,165.64 | 1,729,509,055.66 | -2,179,897,484.27 | 13,284,798,671.53 | 40,166,734,404.54 | |||||||
| Add:Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 20,074,865,467.56 | 1,952,319,928.42 | 15,749,165.64 | 1,729,509,055.66 | -2,179,897,484.27 | 13,284,798,671.53 | 40,166,734,404.54 | |||||||
| III. Increase/(decrease) during the period | -315,606,347.16 | -1,757,109,683.60 | 5,828,371.56 | 99,168,790.71 | 4,045,178,403.50 | -3,413,014,032.58 | -1,335,554,497.57 | ||||||||
| (1)Total comprehensive income | 247,100,524.21 | 1,786,452,832.06 | 624,689,973.41 | 2,658,243,329.68 | |||||||||||
| (2)Shareholders' contributions and reduction | -285,762,662.22 | -4,038,902,019.61 | -4,324,664,681.83 | ||||||||||||
| (i) Shareholders’ contributions in ordinary share | |||||||||||||||
| (ii) Amount of share-based payments recognized in equity | |||||||||||||||
| (iii) Others | -285,762,662.22 | -4,038,902,019.61 | -4,324,664,681.83 | ||||||||||||
| (3) Profit distribution | 99,168,790.71 | -99,168,790.71 | |||||||||||||
| (i) Transfer to surplus reserve | 99,168,790.71 | -99,168,790.71 | |||||||||||||
| (ii) Distribution to shareholders | |||||||||||||||
| (iii) Others | |||||||||||||||
| (4) Transfer within equity | -2,004,210,207.81 | 2,357,894,362.15 | 353,684,154.34 | ||||||||||||
| (i) Capital reserves converted to share capital | |||||||||||||||
| (ii) Surplus reserves converted to share capital | |||||||||||||||
| (iii) Loss made up by surplus reserves | |||||||||||||||
| (iv) Other comprehensive income transferred to retained earnings | -2,004,210,207.81 | 2,357,894,362.15 | 353,684,154.34 | ||||||||||||
| (v) Others | |||||||||||||||
| (5) Special reserve | 1,979,013.15 | 5,828,371.56 | 1,198,013.62 | 9,005,398.33 | |||||||||||
| (i) Additions | 1,979,013.15 | 5,828,371.56 | 1,198,013.62 | 9,005,398.33 | |||||||||||
| (ii) Utilisation | |||||||||||||||
| (6) Others | -31,822,698.09 | -31,822,698.09 | |||||||||||||
| IV. Balance at the end of theyear | 5,289,389,600.00 | 19,759,259,120.40 | 195,210,244.82 | 21,577,537.20 | 1,828,677,846.37 | 1,865,280,919.23 | 9,871,784,638.95 | 38,831,179,906.97 | |||||||
－96－
| Parent Company Statement of Changes in Shareholders’ Equity | ||||||||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | ||||||||||||||||
| Unit: RMB Yuan | ||||||||||||||||
| Item | 2021 | |||||||||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||||||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 12,129,563,493.89 | 195,210,244.82 | 1,828,677,846.37 | 8,856,123,340.12 | 28,298,964,525.20 | ||||||||||
| Add:Changes in accounting policies | ||||||||||||||||
| Corrections of prior period errors | ||||||||||||||||
| Others | ||||||||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 12,129,563,493.89 | 195,210,244.82 | 1,828,677,846.37 | 8,856,123,340.12 | 28,298,964,525.20 | ||||||||||
| III. Increase/(decrease) during the period | 1,460,935,810.00 | 5,120,920,054.71 | 210,930,850.00 | -9,644,034.23 | 80,205,362.30 | 53,305,899.67 | 6,494,792,242.45 | |||||||||
| (1) Total comprehensive income | -9,644,034.23 | 802,053,622.97 | 792,409,588.74 | |||||||||||||
| (2) Shareholders' contributions and reduction | 1,460,935,810.00 | 5,120,920,054.71 | 210,930,850.00 | 6,370,925,014.71 | ||||||||||||
| (i) Shareholders’ contributions in ordinary share | 1,396,034,010.00 | 5,113,754,895.99 | 6,509,788,905.99 | |||||||||||||
| (ii) Amount of share-based payments recognized in equity | 64,901,800.00 | 7,165,158.72 | 210,930,850.00 | -138,863,891.28 | ||||||||||||
| (iii) Others | ||||||||||||||||
| (3) Profit distribution | 80,205,362.30 | -748,747,723.30 | -668,542,361.00 | |||||||||||||
| (i) Transfer to surplus reserve | 80,205,362.30 | -80,205,362.30 | ||||||||||||||
| (ii) Distribution to shareholders | -668,542,361.00 | -668,542,361.00 | ||||||||||||||
| (iii) Others | ||||||||||||||||
| (4) Transfer within equity | ||||||||||||||||
| (i) Capital reserves converted to share capital | ||||||||||||||||
| (ii) Surplus reserves converted to share capital | ||||||||||||||||
| (iii) Loss made up by surplus reserves | ||||||||||||||||
| (iv) Other comprehensive income transferred to retained earnings | ||||||||||||||||
| (v) Others | ||||||||||||||||
| (5) Special reserve | ||||||||||||||||
| (i) Additions | ||||||||||||||||
| (ii) Utilisation | ||||||||||||||||
| (6) Others | ||||||||||||||||
| IV. Balance at the end of theyear | 6,750,325,410.00 | 17,250,483,548.60 | 210,930,850.00 | 185,566,210.59 | 1,908,883,208.67 | 8,909,429,239.79 | 34,793,756,767.65 | |||||||||
－97－
| Parent Company Statement of Changes in Shareholders’ Equity | ||||||||||||||||
| Beijing Shougang Co., Ltd. for the year ended 31 December 2021 | ||||||||||||||||
| Unit: RMB Yuan | ||||||||||||||||
| Item | 2020 | |||||||||||||||
| Share capital | Capital reserve | Less:treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Total shareholders’ equity | |||||||||
| I. Balance at the end of previous year | 5,289,389,600.00 | 12,415,326,156.11 | 1,952,319,928.42 | 1,729,509,055.66 | 5,605,709,861.57 | 26,992,254,601.76 | ||||||||||
| Add:Changes in accounting policies | ||||||||||||||||
| Corrections of prior period errors | ||||||||||||||||
| Others | ||||||||||||||||
| II. Balance at the beginning of the year | 5,289,389,600.00 | 12,415,326,156.11 | 1,952,319,928.42 | 1,729,509,055.66 | 5,605,709,861.57 | 26,992,254,601.76 | ||||||||||
| III. Increase/(decrease) during the period | -285,762,662.22 | -1,757,109,683.60 | 99,168,790.71 | 3,250,413,478.55 | 1,306,709,923.44 | |||||||||||
| (1) Total comprehensive income | 247,100,524.21 | 991,687,907.11 | 1,238,788,431.32 | |||||||||||||
| (2) Shareholders' contributions and reduction | -285,762,662.22 | -285,762,662.22 | ||||||||||||||
| (i) Shareholders’ contributions in ordinary share | ||||||||||||||||
| (ii) Amount of share-based payments recognized in equity | ||||||||||||||||
| (iii) Others | -285,762,662.22 | -285,762,662.22 | ||||||||||||||
| (3) Profit distribution | 99,168,790.71 | -99,168,790.71 | ||||||||||||||
| (i) Transfer to surplus reserve | 99,168,790.71 | -99,168,790.71 | ||||||||||||||
| (ii) Distribution to shareholders | ||||||||||||||||
| (iii) Others | ||||||||||||||||
| (4) Transfer within equity | -2,004,210,207.81 | 2,357,894,362.15 | 353,684,154.34 | |||||||||||||
| (i) Capital reserves converted to share capital | ||||||||||||||||
| (ii) Surplus reserves converted to share capital | ||||||||||||||||
| (iii) Loss made up by surplus reserves | ||||||||||||||||
| (iv) Other comprehensive income transferred to retained earnings | -2,004,210,207.81 | 2,357,894,362.15 | 353,684,154.34 | |||||||||||||
| (v) Others | ||||||||||||||||
| (5) Special reserve | ||||||||||||||||
| (i) Additions | ||||||||||||||||
| (ii) Utilisation | ||||||||||||||||
| (6) Others | ||||||||||||||||
| IV. Balance at the end of the year | 5,289,389,600.00 | 12,129,563,493.89 | 195,210,244.82 | 1,828,677,846.37 | 8,856,123,340.12 | 28,298,964,525.20 | ||||||||||
Notes to the Financial StatementsI. General Informantion of the Company
1. Company profile
Beijing Shougang Company Limited (hereinafter referred to as the Company) is a joint stocklimited company established by means of raising, which is approved by Beijing Municipal People'sGovernment Jingzhenghan [1998] No. 34 and exclusively initiated by Shougang Group Co., Ltd.With the approval of zjxz [1999] No. 91 document issued by China Securities RegulatoryCommission, the Company was the first to issue 350,000.00 thousand ordinary shares (A shares) tothe public in Shenzhen Stock Exchange from 21 to 27 September, 1999 by the combination of legalperson placement and online issuance, with par value of RMB 1 per share and issue price of RMB
5.15 per share, with the stock code of 000959. The Company registered with approval of BeijingAdministration for Industry and Commerce on 15 October, 1999. The Company holds the businesslicense with unified social credit code of 1100001028663 (1-1), with the registered capital of RMB2,310,000,000.00.The Company issued the convertible corporate bonds worthed RMB 2,000,000 thousand on 16December, 2003 upon the approval of zjfxz [2003] No. 107 document issued by China SecuritiesRegulatory Commission. On 31 December, 2003, the convertible bond was listed and traded inShenzhen Stock Exchange. The bond is abbreviated as “Shougang Convertible Bond” with the bondcode of “125959”. The convertible bonds were converted into shares since June 16, 2004, and metthe redemption conditions until 26 February 2007. Accordingly, the board of directors of thecompany issued the redemption announcement. As of 6 April, 2007, the date of convertible bondredemption, the total amount of Shougang convertible bonds was RMB1,950,217,500.00, whichwas converted into the Company's shares, with an accumulated increase of RMB 656,526,057.00 inshare capital. The Company obtained a new business license of legal entity on November 20, 2008,with the registration number 110000000286633 (1-1), and the registered capital changed to RMB2,966,526,057.00.On 16 January, 2013, the Company's material assets reorganization was reviewed by thereorganization committee of CSRC and passed unconditionally. On 29 January, 2014, ChinaSecurities Regulatory Commission issued “Reply on approving material assets reorganization ofBeijing Shougang Co., Ltd. and shares issuance to Shougang Group to purchase assets”. As of 25April, 2014, the implementation of material assets reorganization of the Company has beencompleted. In the material assets reorganization, the private placement to Shougang Group was2,322,863,543 shares, with par value of RMB 1 each and issue price of RMB 4.29 each. TheCompany obtained the new business license of legal entity after capital increment on 9 July, 2014,with the registration number of 110000000286633, and the registered capital changed to RMB5,289,389,600.On 21 April 2021, the event of "Share Issuing to Beijing Jingtou Investment Holding Co., Ltd. etc.for Assets Purchase and Fundraising" has been approved by the CSRC (CSRC Permit No. [2021]1400). According to the approval, the Company issued 1,234,898,985.00 shares to Beijing JingtouInvestment Holding Co., Ltd. and Beijing Jing Guorui Soe Reform and Development Fund(L.P.) foracquiring 19.1823% shares of Shougang Jingtang United Iron & Steel Co., Ltd. (hereinafter referredto as the Company Jingtang Co. or Jingtang Base) on 23 April 2021. On 17 June 2021, theCompany issued 161,135,025 shares to 8 investors at the price of RMB 5.11 per share, and RMB823,399,977.75 were collected. After this issuing, the registered capital of the Company is RMB
6,685,423,610.00.On 9 December 2021, by the approval of 2021 First Extraordinary General Meeting and StateOwned Assets Supervision and Administration Commission (hereinafter referred to as “SASAC”),the Company has completed the 2021 restricted stock incentive plan. There were 64,901,800.00shares issued to 386 directors, senior management, key technicians and management backbone withthe issue price of RMB 3.25 per share. Aftere this offering, the registered capital of the Companychanges to RMB 6,750,325,410.00.The Company obtained the new business license of legal entity on 22 December, 2016 after theintegration of five certificates, with the unified social credit code 911100007002343182.The statutory address is Shijingshan Road, Shijingshan District, Beijing.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and the board of supervisors. At present, the Company sets upserval functional departments, for instance, secretary office of the board of directors, the planningand financing department, the manufacturing department, the marketing center, the purchasingcenter, the human resources department, the equipment department, the energy department, theenvironmental protection department, the quality inspection department, the office, etc, as well asthe subordinate factories such as Shougang Qian'an Iron&Steel Co., Ltd. and auxiliary productiondepartment, like the technical center. The Company, together with its six subsidiaries, which areShougang Jingtang United Iron&Steel Co., Ltd., Beijing Shougang Cold Rolling Co., Ltd., Qian'anShougang Metallurgical Technology Co., Ltd., Shougang Zhixin Qian'an Electromagnetic MaterialsCo., Ltd., Beijing Shougang New Energy Automobile Material Technology Co., Ltd., and BeijingShougang Steel Trade Investment Management Co., Ltd., is principally engaged in the manufactureand sale of iron and steel products and related by-products.The business scope of the Company includes iron and steel smelting, steel calendering processing,copper smelting and calendering processing and sales; manufacturing and sales of sinter, coke andchemical products; blast furnace residual pressure power generation and production and sales of gas;processing and sales of industrial waste; sales of metal materials, coke, chemical products,mechanical and electrical equipment, building materials, general equipment, hardware, furnitureand decorative materials; equipment leasing (excluding automobiles); telecommunications services;insurance agency services; insurance broker services; loading, unloading and handling services;software delevopment; advertising design and agency; warehousing services; technologydevelopment, technical consultation, technology transfer, technical service and technical training;investment and investment management.The financial statements and notes were approved by the seventh meeting of the thirteenth Board ofDirectors on 27 April 2022.
2. Scope of consolidated financial statements
The scope of the consolidated financial statements is determined on the control basic, the scopeincludes six subsidiaries, which are Shougang Jingtang United Iron&Steel Co., Ltd., BeijingShougang Cold Rolling Co., Ltd., Qian'an Shougang Metallurgical Technology Co., Ltd., ShougangZhixin Qian'an Electromagnetic Materials Co., Ltd., Beijing Shougang New Energy AutomobileMaterial Technology Co., Ltd., and Beijing Shougang Steel Trade Investment Management Co.,Ltd.The details refer to Note VI Change of consolidation scope and Note VII Interests in other entities.
II. Basis of preparationThe financial statements are prepared in accordance with the latest “China Accounting Standardsfor Business Enterprises” and other issued application guidance, interpretations and other relatedregulations (collectively known as the “CASBE”) issued by the Ministry of Finance of the PRC(MOF). Additionally, the Company discloses relevant financial information in accordance withrequirements in the “Preparation Convention of Information Disclosure by Companies OfferingSecurities to the Public No.15—General Rules on Financial Reporting” (2014 revised) issued by theChina Securities Regulatory Commission.The financial statements are prepared on a going concern basis.The Company adopts the accrual basis of accounting. The financial statements have been preparedunder the historical cost convention, except for certain financial instruments. If the assets areimpaired, corresponding provisions for impairment shall be made in accordance with relatedregulations.III. Significant accounting policies and estimatesThe Company has determined the accounting policies and accounting estimates based on thecharacteristics of the operation, especially those related to depreciation of fixed assets, amortizationof intangible assets, capitalization conditions of R&D expenses and revenue recognition policies,the detailed accounting policies refer to Note III, 14, Note III, 18, Note III, 19 and Note III, 25.
1. Statement of compliance with the CAS
The financial statements have been prepared in accordance with CAS, and present truly andcompletely the financial position of the consolidated and the Company as at 31 December 2021,and the financial performance and cash flows for the year ended 31 December 2021.
2. Accounting period
The accounting year of the Company is from 1 January to 31 Decemeber of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency.The financial statements of the Company have been prepared in RMB.
5. Accounting treatments for business combination involving entities under common control andbusiness combination involving entities not under common control.
(1) Business combination involving entities under common control
For the business combination involving entities under common control, the assets and liabilities thatare obtained in the business combination shall be measured at their original carrying amounts at thecombination date as recorded by the party being combined, except for the adjustments of differentaccounting policies. The difference between the carrying amount of the net assets obtained and thecarrying amount of consideration paid for the combination shall be adjusted to capital reserve
(equity premium), if the capital reserve (equity premium) is not sufficient to absorb the difference,any excess shall be adjusted to retained earnings.Business combinations involving entities under common control through multiple transactions toachieve in stagesIn the separate financial statements, the initial investment cost is calculated based on theshareholding portion of net assets of the consolidated party in the carrying amount of the ultimatecontrolling party’s consolidated financial statement at the acquisition date. The difference betweenthe initial investment cost and the sum of the carrying amount of the original investment cost andthe carrying amount of consideration paid for the combination is adjusted to the capital reserve(equity premium), if the capital reserve is not sufficient to absorb the difference, the excess shall beadjusted to retained earning.In the consolidated financial statements, the assets and liabilities obtained at the combination shallbe measured at the carrying value as recorded by the ultimate controlling party at the acquisitiondate, except for adjustments of different accounting policies. The difference between the sum of thecarrying value from original shareholding portion and the new consideration incurred at theacquisition date and the carrying value of net assets obtained at acquisition date shall be adjusted tocapital reserve (equity premium), if the balance of capital reserve is not sufficient to absorb thedifferences, any excess is adjusted to retained earnings. The long-term investment held bycombining party before acquisition of control, the profit or loss,comprehensive income and otherchange of shareholder’s equity recongnized at the closer date of the acquisition date andcombination date under common control shall separately offset the opening balance of retainedearnings and profit or loss during comparative statements.
(2) Business combinations involving entities not under common control
For business combinations involving entities not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. The acquirer shallrecognize the acquiree’s identifiable asset, liabilities and contingent liabilities that satisfy therecognition criteria at their fair values at the date of acquisition.The excess of combination costs and the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets is recognized as goodwill, which is measured at cost less any accumulatedimpairment losses subsequently. If the acquirer’s interest in the net fair value of the acquiree’sidentifiable net assets exceeds the combination costs, the acquirer shall reassess the measurementand recognize any excess remaining in profit or loss after reassessment.Business combinations involving entities not under common control through multiple transactionsto achieve in stagesIn the separate financial statements, the initial investment cost is the sum of the carrying amount ofthe equity investment held by the entity prior to the acquisition date and the additional investmentcost at the acquisition date. The disposal accounting policy of other comprehensive income relatedwith equity investment prior to the purchase date recognized under equity method shall becompliance with the method when the acquire disposes the related assets or liabilities.Shareholder’s equity due to the changes of other shareholder’s equity other than the changes of netprofit, other comprehensive income and profit distribution shall be transferred to profit or lose forcurrent period when disposed. If the equity investment held by the entity prior to the acquisitiondate is measured at fair value, the cumulative change in fair value recognized in other
comprehensive income shall be transferred to retained earnings for current period under costaccounting method.In the consolidated financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity held prior to acquisition date; the equity ofthe acquiree held prior to acquisition date shall be re-measured at the fair value at acquisition date,the difference between the fair value and book value shall be recognized as profit or loss for thecurrent period. Other comprehensive income and changes of other shareholder’s equity related withacquiree’s equity held prior to acquisition date shall be transferred to profit or loss for currentperiod at acquisition date, besides the other comprehensive income incurred by the changes of netassets or net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overheads for the business combination, including the expenses of audit, legal services,valuation advisory, and other related administrative expenses, are recorded in profit or loss for thecurrent period when expenditure incurred. The transaction costs of equity or debt securities issuedas the considerations of business combination are included in the initial recognition amount of theequity or debt securities.
6. Consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the control basis. Control existswhen the Company has power over the investee, rights to variable returns from involvement withrelated activities of investee and has the ability to affect its returns through its power over theinvestee. A subsidiary is an entity that is controlled by the Company (including separable parts of anenterprise or investee and structured entities controlled by the Company, etc).
(2) Method of preparing consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the Company in accordance with other relevant information. Inpreparing the consolidated financial statements, the Company and its subsidiaries are required toapply consistent accounting policy and accounting period, intra-group transactions and balancesshall be offset.The subsidiary acquired through a business combination involving entities under common controlin the reporting period shall be included in the scope of the consolidation from the beginning of thecombination date, the subsidiary’s income, expenses and profits should be included in theconsolidated results of operations and cash flows from the acquisition date respectively.The subsidiary acquired through a business combination involving entities not under commoncontrol in the reporting period, the subsidiary’s income, expenses and profits are included in theconsolidated results of operations, and cash flows are included in the consolidated cash flowstatement from the acquisition date to the end of the reporting date.The portion of the subsidiary’s equity that is not attributable to the Company is treated as
non-controlling interests and separately presented in the consolidated balance sheet withinshareholders’ equity. The portion of a subsidiary’s profit or loss that is attributable tonon-controlling interests presented in the consolidated income statement of net profit or loss as “netprofit attributable to non-controlling interests”. Where the amout of losses of a subsidiaryattributable to the non-controlling shareholders in the current period exceeds their share of theopening balance of owner’s equity of the subsidiary, the excess shall offset non-controllinginterests.
(3) Purchase of the minority equity in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minorityequity and the share of the net assets that the subsidiaries have to continue to calculate from the dateof purchase or the date of consolidation in proportion to the new shareholding ratio is adjusted tothe capital reserve (equity premium), if the capital reserve is not sufficient, any excess is adjusted toretained earning. The difference between disposal of partial equity investment without losingcontrol over its subsidiary and the disposal of long-term equity investment corresponding to theshare of the net assets of the subsidiaries from the date of purchase or the date of consolidation is aswell.
(4) Loss of control of subsidiaries
If the control right is lost due to disposal of partial equity investment or other reasons, theremaining equity shall be re-measured according to its fair value on the date of losing control. Thedifference between the summary of consideration obtained from the disposal of the equity and thefair value of the remaining equity, less the difference between the share of the original assets andthe share of the net assets that have been continuously calculated from the date of purchase from thedate of the original shareholding, is included in the current period profit or loss and; if there is agoodwill for the subsidiary, the amount of the goodwill also shall be deducted.The other comprehensive income related to the original subsidiary’s equity investment shall betransferred to current period profit and loss when control is lost, except for the other comprehensiveincome arising from the movement of net liabilities or assets investee’s re-measurement of definedbenefit plan.
(5) Treatment of step disposal until the loss of control of subsidiaries
By stepping through multiple transactions to dispose of the equity investment in the subsidiary untilit loses control, if the clauses, conditions and economic impacts of the transaction satisfy one ormore of the following criteria, the Company will considerthe transactions as a package transactionfor the accounting treatment:
①The transactionsare entered simultaneously or in consideration of the mutual influence;
②Only the transactions as a whole can achieve one complete business outcome;
③The occurrence of a transaction is depending on the occurance of at least one of othertransactions;
④The transaction alone is not economical, however, it becomes economical to consider the othertransactions together.In the separate financial statements, by stepping through multiple transactions to dispose of the
equity investment in the subsidiary until it loses control, when it is not a package transaction,carrying forward the book value of each disposal of equity relative to the corresponding long-termequity investment, and the difference between the considerations and the book value of the disposalof long-term equity investment is recognized in the current period investment income or loss. Whenit is a package transaction, the price difference between the disposal price and the disposalinvestment before the loss of control is recognized as other comprehensive income in theconsolidated financial statements, and is transferred to the current period profit or loss of controlwhen the control is lost。In the consolidated financial statements, the measurement of the remaining equity and treatment ofthe loss of disposal is in accordance to “Treatment of loss of control of subsidiaries” as describedabove. The difference between the disposal consideration and the related share of net assets of thesubsidiaries, which has been continuously calculated since the purchase date corresponding to theequity disposal should be treated as follows:
①When it is a package transaction, the difference shall be recognized as the other comprehensiveincome and transferred to the current period profit or loss of control when the control is lost
②When it is not a package transaction, the difference shall be recorded to capital reserve (sharepremium) as equity transaction and could not be transferred to the current period profit or loss ofcontrol when the control is lost.
7. Joint arrangement and joint operations
Joint arrangement refers to an arrangement under the joint control of two or more entities. The jointarrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
Joint operation is a joint arrangement whereby the Company have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items in relation to its interest in a joint operation inaccordance with CAS:
A. its solely-held assets, and its share of any assets held jointly;B. its solely-assumed liabilities, and its share of any liabilities incurred jointly;C. its revenue from the sale of its share of the output arising from the joint operation;D. its share of the revenue from the sale of the output by the joint operation;E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a type of joint arrangement whereby the Company that has joint control of thearrangement has rights to the net assets of the joint venture.The Company conducts accounting treatment for the investment of joint ventures in accordancewith the provisions of equity method accounting related to long-term equity investment.
8. Cash and cash equivalents
Cash represents the cash on hand and deposits which are readily available for payment. Cashequivalents represent the Company’s short-term highly liquid investments which are readilyconvertible into known amounts of cash and subject to an insignificant risk of changes in value.
9. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
The Company recognises a financial asset or a financial liability when, and only when, it becomes aparty to the contractual provisions of the instrument.A financial asset will be derecognized when it satisfies one or more of the following conditions:
① The contractual rights to receive cash flows from the financial asset expire;
② The financial asset has been transferred, and it satisfies the following conditions forderecognition.The financial liability (or part of it) is derecognized when its contractual rights (or part of it) expire.If the Company (as a debtor) makes an agreement with the creditor to replace the current financialliability with assuming a new financial liability, and contractual provisions are different insubstance, the current financial liability shall be derecognized and a new financial liability shall berecognized.All financial assets purchased or sold in regular way are recognised or derecognised on the tradingdate when the Company commits to purchase or sell the asset.
(2) Classification and measurement of financial assets
The Company classifies its financial assets, based on the entity's business model for managing thefinancial assets and the contractual cash flow characteristics of the financial assets, as financialassets at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets measured at amortized costThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured atamortized cost:
? The financial asset is held whose objective is to collect contractual cash flows;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After initialrecognition, this type of financial asset using effective interest rate method to bemeasured at amortized cost. The gain or loss generated by the financial assets measured atamortized cost and not part of any hedging relationshipshall be accounted in the profit or loss for
the year when the financial assets are derecognized, amortized by effective interest method orrecognized impairment.Financial assets measured at fair value through other comprehensive incomeThe Company shall classify financial assets that meet the following conditions and are notdesignated as financial assets at fair value through profit or loss as financial assets measured at fairvalue through other comprehensive income:
? The financial asset is held within a business model whose objective will be achieved by bothcollecting contractual cash flows and trading financial assets;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After initial recognition, the financial assets are subsequently measured at fair value. Interest,impairment loss/gain and exchange loss/gain calculated by the effective interest rate method arerecognised in profit or loss, while other profit or loss shall be recognised in other comprehensiveincome. When derecognized, the accumulated profit or loss previously recognised in othercomprehensive gains shall be transferred to current profit or loss.Financial assets measured at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair valuethrough other comprehensive income, the Company classifies all other financial assets as financialassets measured at fair value through profit or loss. In order to eliminate and significantly reduceaccounting mismatches, the Company irrevocably designates some financial assets that should bemeasured at amortized cost or at fair value through other comprehensive income as financial assetsat fair value through profit or loss during the initial recognition.After initial recognition, the financial assets are subsequently measured at fair value, and the profitor loss (including interest and dividend income) generated shall be recognised in current profit orloss, unless the financial assets are part of the hedging relationship.The business model of managing financial assets refers to how the Company manages financialassets to generate cash flow. The business model determines if the source of cash flow for financialassets managed by the Company is collecting contract cash flow, selling financial assets or both ofthem. The Company determines the business model of financial assets management on the basis ofobjective facts and the specific business goals of financial assets management decided by keymanagers.The Company evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and the interest, which is based on the amount of unpaid principal. Among them,principal refers to the fair value of financial assets at initial recognition; interest includes theconsideration of time value of money, credit risk related to the unpaid principal in a specific period,and other basic credit risks, costs and profits. Additionally, the Company evaluates the terms andconditions of the contracts that may alter time distribution or amount of cash flow in financial assetcontracts to determine whether they satisfy the requirements of the aboving contract cash flow’scharacteristics.Only when the Company changes its business model of managing financial assets, all the financial
assets affected shall be reclassified on the first day of the first reporting period after the businessmodelalteration, otherwise, financial assets shall not be reclassified after initial recognition.A financial asset is measured at its fair value at initial recognition. For financial assets measured atfair value thorugh profit or loss, the relevant transaction costs are charged to profit or loss; for otherfinancial assets, the relevant transaction costs are recognized as initial investment costs. For thetrade receivables arising from the sale of goods or services provided do not contain or take intoaccount significant financing components, the initial investment costs shall be the consideration,which the Company is entitled to receive with the expectation.
(3) Classification and measurement of financial liabilities
The Company classifies its financial liabilities at initial recognition as financial liabilities measuredat fair value through profit or loss and financial liabilities at amortized cost. With respect tofinancial liabilities not classified as at fair value through profit or loss, transactions costs arecharged to initial recognition cost.Financial liabilities measured at fair value through profit or lossFinancial liabilities at fair value through profit or loss, including financial liabilities held for tradingand those are designated as at fair value through profit or loss at initial recognition. For thesefinancial liabilities, they are subsequently measured at fair value and gains or lossess from thechange of fair value and related dividend and interest expense are recognized in profit or loss for theyear.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod, the gains and losses arising from derecognition or amortization is recognised in profit orloss for the year.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that satisfies one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse conditions, contractual obligation to exchange financial assets orfinancial liabilities with other entity.
③ The contract that will or may be settled in the entity’s own equity instruments and is anon-derivative for which the entity is or may be obliged to deliver a variable number of the entity’sown equity instruments.
④The derivative contract that will or may be settled in the entity’s own equity instruments otherthan by the exchange of a fixed number of the entity’s own equity instruments for a fixed amount ofcash or other financial assets.Equity instrument is the contract that evidences the residual equity in the assets of an entity afterdeducting all of its liabilities.If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cashor other financial assets, the contractual obligation satisfies the definition of financial liability.
If the financial instrument must or could be settled by the Company’s own equity instrument, theCompany should consider whether the Company’s equity instrument as the settlement instrument isa substitute of cash or other financial assets or the residual equity in the assets of an entity afterdeducting all of its liabilities. If it is the former one, the financial instrument is the Company’sfinancial liability; if it is the latter one, the tool is the equity instrument of the Company.
(4) Fair value of financial instruments
Recognization of fair value of financial assets and financial liabilities please refers to Note III, 10.
(5) Impairment of financial assets
The Company performs impairment assessment and recognizes loss allowance for the followingfinancial assets based on their expected credit losses.? Financial assets measured at amortized cost;? Debt investment and trade receivables measured at fair value through other comprehensiveincome;? Contract assets as defined in Accounting Standards for Enterprises No.14- Revenues;? Lease receivables;? Financial guarantee contracts (expect for the contracts measured at fair value through profit orloss, financial assets transformation not qualify for derecognition and continuing involvementof transferred financial assets).Measurement of expected credit lossThe expected credit loss refers to the weighted average of the credit loss of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractualcash flows receivable from the contracts and all cash flows expected to be received, that is, thepresent value of all cash shortages.The Company considers the reasonable and basis information about past events, current situationand forecast of future economic situation, calculatesthe probability weighted amount of the presentvalue of the difference between the receivable cash flow of the contract and the expected cash flowwith the risk of default as the weight, and confirms the expected credit loss.The Company separately measures the expected credit losses of financial instruments at differentstages. The credit risk on a financial instrument has not increased significantly since initialrecognition, which is in Stage I. The Company measures the loss provision in accordance withexpected credit losses for the next 12 months. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which isin Stage II. The Company measures the loss provision in accordance with the expected credit lossesfor the whole lifetime of the financial instrument. If the financial instrument has occurred creditimpairment since initial recognition, which is in Stage III, and the Company measures the lossprovision in accordance with the expected credit losses for the whole lifetime of the financialinstrument.For the financial instruments with lower credit risk at the balance sheet date, the Company assumesthat their credit risk has not increased significantly since the initial recognition, and measures the
loss provision in accordance with expected credit losses for the next 12 months.The whole lifetime expected credit loss, refers to the expected credit loss caused by all possibledefaults during the whole expected lifetime. The 12-month expected credit losses, refer to theexpected credit loss caused by all possible defaults during the next 12 months after balance sheetdate (if the expected duration of financial instrument is less than 12 months, then for the expectedduration), which is part of the whole lifetime expected credit losses.When measuring the expected credit loss, the maximum maturity period that the Company needs toconsider is the maximum contract maturity period (including the consideration of option of renewal)the enterprise facing credit risk.For financial instruments in Stage I, Stage II and with lower credit risk, the Company calculatesinterest income on the basis of the book balances without deduction of impairment provisions andwith effective interest rates. For financial instruments in Stage III, the Company calculates interestincome on the basis of the book balances minus the impairment provision and with effective interestrate.Notes receivable and Accounts receivableFor notes receivable and accounts receivable, whether or not there are significant financingelements, the Company always measures the loss provision in accordance with the whole lifetimeexpected credit losses.If the expected credit loss information of the the independent financial asset cannot be evaluated bya reasonable cost, the Company divides and combines notes receivable and accounts receivableaccording to the characteristics of credit risk. On the basis of the combination, the Companycalculates the expected credit losses. The basis of determining combination is as follows:
A. Notes receivable? Combination 1:Bank acceptances? Combination 2: Bank acceptances with lower credit rating and Commercial acceptancesB. Accounts receivable: Accounts of receivable-tradeOther receivablesAccording to the characteristics of credit risk, the Company divides other receivables into servalcombinations. On the basis of the combination, the Company calculates the expected credit losses.The basis of determining the combination is as follows:
? Other receivables Combination 1: Imprest anddeposit, etc.? Other receivables Combination 2: Other current accountFor the other receivables combination, the Company calculates the expected credit losses throughthe exposure on default and the next 12-month or the whole lifetime expected credit loss rate.Debt investments and other debt investmentsFor debt investments and other debt investments, the Company calculates the expected credit lossesthrough the exposure on default and the next 12-month or the whole lifetime expected credit loss
rate, according to the nature of the investment, the types of counterparty and risk exposure.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet date with the default risk oninitial recognition date, the Company determines the relative change of default risk of financialinstruments during the expected lifetime of financial instruments to evaluate whether the credit riskof financial instruments has increased significantly since the initial recognition.When determining whether credit risk has increased significantly since the initial recognition, theCompany considers reasonable and valid information, including forward-looking information,which can be obtained without unnecessary additional costs or efforts. Information considered bythe Company includes:
? The debtor cannot pay principal and interest on the expiration date of the contract;? Serious deterioration of external or internal credit ratings (if any) of financial instruments thathave occurred or are expected to occur;? Serious deterioration of the debtor’s operating results that have occurred or are expected tooccur;? Changes in the existing or anticipated technological, market, economic or legal environmentwill have the significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Company evaluates whether credit risk hasincreased significantly on the basis of an independent financial instrument or a combination offinancial instruments. When assessing on the basis of the combination of financial instruments, theCompany can classify financial instruments based on common credit risk characteristics, such asoverdue information and credit risk rating.If the delay exceeds 30 days, the Company determines that the credit risk of financial instrumentshas increased significantly.Financial assets that have occured credit impairmentOn the balance sheet date, the Company assesses whether credit impairment has occurred infinancial assets measured at amortized cost and debt investments measured at fair value throughother comprehensive income. When one or more events adversely affect the expected future cashflow of the financial assets occur, the financial assets transfer to the financial assets with creditimpairment. Evidence of credit impairment of financial assets includes the following observableinformation:
? Issuer or debtor suffer from significant financial difficulties;? Debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;? In consideration of economic situationand contract related to the financial difficulties of thedebtor, the Company grants concessions to the debtor that will not be made under any othercircumstances.? Debtor is probable to go bankrupt or undergo other financial restructuring.
? Financial difficulties of issuer or debtor lead to the disappearance of financial assets activemarket.Presentation of expected credit loss reserveIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Company recalculates the expected credit loss on each balance sheet date. Theincrease or reversal of the loss provision resulting therefrom is recognised as an impairment loss orgain in the current profit or loss.For financial assets measured at amortized cost, loss provisionoffsets the carrying amount of the financial assets presentated on the balance sheet; for debtinvestments measured at fair value through other comprehensive income, the Company recognizesits loss provision through other comprehensive income and does not offset the financial assets’carrying amount.Write offIf the Company no longer reasonably expects that the financial assets contract cash flow can berecovered fully or partially, the financial assets book balance will be reduced directly. Suchreduction constitutes derecognition of the financial assets. The situation usually occurswhen theCompany determines that the debtor has no assets or income to generate sufficient cash flows topay the amount to be reduced. However, in accordance with the Company’s procedures forrecovering due payment, the financial assets reduced may still be affected by enforcement activities.If the reduced financial assets can be recovered later, the returns as impairment losses shall berecorded in the profit or loss.
(6) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another entity (thetransferee) other than the issuer of financial assets.A financial asset is derecognised when the Company has transferred substantially all the risks andrewards of the asset to the transferee. A financial asset is not derecognised when the Companyretains substantially all the risks and rewards of the financial asset.When the Company has neither transferred nor retained substantially all the risks and rewards of thefinancial asset, it either (i) derecognises the financial asset and recognises the assets and liabilitiescreated in the transfer when it has not retained control of the asset; or (ii) continues to recognise thetransferred asset to the extent of the Company’s continuing involvement, in which case, theCompany also recognises an associated liability.
(7) Offsetting of financial assets and financial liabilities
When the Company has currently enforceable legal rights to offset the recognized financial assetsand financial liabilities, and there is an intention to settle on a net basis or to realize the financialassets and settle the financial liabilities, the financial assets and financial liabilities shall bepresented in balance sheet with the amount after offsets. Besides, the financial assets and financialliabilities shall be presented separately in balance sheet and are not allowed to be offset.
10. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.
The Company measures related assets or liabilities at fair value and assumes that selling assets ortransferring liabilities in an orderly transaction in the principal market of related assets or liabilities;in the absence of a principal market, the Company assumes the transaction in the mostadvantageous market. Principal market (or the most advantageous market) is the market that theCompany can enter into on measurement date. The Company adopts the presumptions used bymarket participants in achieving the maximum economic value of pricing the assets or liabilities.For financial assets or financial liabilities in the active market, the Company uses the quoted pricein active market as their fair value. Otherwise, the Company uses valuation technique to determinethe fair value.Fair value measurement of non-financial assets considers market participants’ ability to generateeconomic benefits by using the assets in its highest and best use or by selling it to another marketparticipant that would use the asset in its highest and best use.The Company adopts the valuation techniques that are appropriate under current circumstances andfor which sufficient data and other supporting information are available to measure fair value,giving priority to the use of relevant observable inputs, and using unobservable inputs only if theobservable inputs are unavailable or not feasible to obtain.All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level inputthat is significant to the fair value measurement as a whole: Level 1 inputs are quoted (unadjusted)market prices in active markets for identical assets or liabilities; Level 2 inputs are observableinputs for related assets or liabilities, either directly or indirectly other than the inputs within Level1; Level 3 inputs are unobservable inputs for related assets or liabilities.For assets and liabilities that are recognized in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between levels in the hierarchy byreassessing categorization at the end of each reporting period.
11. Inventories
(1) Classification
Inventories of the Company include raw materials, finished goods, lower-valued consumables andself-made semi-finished goods
(2) Mesurement method of cost of delivered inventories
Inventories are quoted at actual costs when acquired. Raw materials, finished goods and self-madesemi-finished goods are determined on the weighted average basis.
(3) Basis for determining the net realisable value and method for inventories provisionNet realisable value is the estimated selling price deducted by the estimated costs to completion, theestimated selling expenses and related taxes. The net realisable value is measured on the basis ofobtained verified evidences and considerations for the purpose of holding inventories and the effectof post balance sheet events.At the end of each reporting period, if the cost is in excess of net realisable value, provision forinventories is recognized in profit or loss. The Company usually recognizes provision according tothe independent inventory item. When the circumstances that previously caused inventories to be
written down below cost no longer exist, the original amount of the write-down is reversed.
(4) Inventory system
Inventories are accounted for using the perpetual inventory system.
(5) Amortization method for consumables
Low-valued consumables are charged with the one-off amortization method and multi-stageamortization method at consumption.
12. Assets classified as held for sale and discontinued operations
(1) Classification and measurement of non-current assets or disposal groups held for saleThe Company classifies the non-current asset or disposal group as held for sale when the carryingamount of the non-current asset or disposal group will be recovered through sale (includingexchange transactions of non-monetary assets with commercial substance) rather than throughcontinuing use.Above mentioned non-current assets not include investment properties subsequently measured withthe fair value model, biological assets measured at fair value less cost of sales, assets arising fromemployee benefits, financial assets, deferred tax assets and contractual rights under insurancecontracts.The disposal group is the group of assets to be disposed of, by sale or otherwise, together as a wholein a single transaction, and liabilities directly associated with those assets that will be transferred inthe transaction. Under certain circumstances, disposal group included goodwill acquired in thebusiness combination.The non-current asset or disposal group is classified as held for sale when all the following criteriaare satisfied: According to the trading routine of selling such asset or disposal group in similartransactions, the non-current asset or disposal group is available for immediate sale in currentcircumstance; the sale is highly probable to occur, that is, the Company has made a resolution on asale plan and obtained the assured purchase agreement. The sale is expected to be completed withinone year. If the control of the subsidiary is lost due to the sale of investment on the subsidiary andthe investment intended to be sold satisfies all conditions for the classification of assets held for sale,the Company classifies all the investment in that subsidiary as held for sale in separate financialstatements, andclassifies all the assets and liabilities of that subsidiary as held for sale inconsolidated financial statements no matter whether the Company will keep part of the equityinvestment.Excess of the carrying amount over the fair value less costs to sellis recognized as assetsimpairment losses in the initial recognition or remeasurement on balance sheet date of non-currentasset or disposal group. The carrying amount of goodwill allocated to the disposal group shall bededucted firstly by the impairment loss recognized for the disposal group, and then the carrying
amount of each non-current asset in the disposal group shall be proportionately deducted inaccordance with the proportion of the carrying value of the non-current assets in the disposal group.If net amount of fair value of the non-current asset or disposal group less costs to sell increases, theamount of the write-down will be recovered but not in excess of the cumulative impairment lossthat has been recognised after classified as held for sale. Thereverse amount is recorded in thecurrent profit or loss. Additionally, the reduced carrying amount of goodwill could not be recovered.The Company does not depreciate (or amortise) the non-current assets classified as held for sale orassets of the disposal group classified as held for sale. Interest and other expenses attributable to theliabilities of the disposal group classified as held for sale continue to be recognised. If aninvestment or a part of the investment in an associate or a joint venture is classified as held for sale,equity method is not used for the part classified as held for sale, while equity method is used for therest part (the part not classified as held for sale) continuely. When the Company does not havematerial impact on an associate or a joint venture due to the sale transaction, equity method will bediscontinued.Where a non-current asset or disposal group is classified as held for sale but no longer meets theconditions for holding for sale classification, the Company discontinues its classification as held forsale and counts it according to the lower of:
① The carrying amount of the asset and disposal group before classification as held for sale,adjusted for any depreciation, amortisation or impairment recognised under the assumption that theasset or disposal group has not been classified as held for sale;
② Recoverable amount
(2) Discontinued operations
Discontinued operation refers to the separately identifiable component that has been disposed orbeen classified as held for sale and satisfies one of the follwing conditions:
①It represents am independent major business line or a separate geographical area of operations;
② It is part of a single co-ordinated plan to dispose of an independent major business or a separategeographical area of operations;
③ It is a subsidiary acquired exclusively with a view to resale.
(3) Presentation
The Comapany presents the non-current assets classified as held for sale and the assets of disposalgroup classified as held for sale as “Assets classified as held for sale” in balance sheet. Theliabilities of disposal group classified as held for sale is presented as “Liabilities classified as heldfor sale” in balance sheet.The Company presents profit or loss from discontinued operations separately from profit or lossfrom continuing operations in income statement. Impairment loss and reversal amount and any
disposal gain or loss of the non-current asset or disposal group classified as held for sale that doesnot satisfy the definition of a discontinued operation is presented in profit or loss from continuingoperations. Any impairment loss and reversal amount belongs to discontinued operations, anddisposal gain or loss is presented in profit or loss from discontinued operations.The disposal group which is planned to cease use rather than for sale, and satisfies the conditions ofcomponents of discontinued operation, the Company presents it as discontinued operation from thedate of cessation.For the discontinued operation presented in the current period, former profit or loss of continuingoperations will be presented as discontinued operations for comparative accounting period in thecurrent financial statements. If the discontinued operations no longer satisfy the conditions to beclassified as held for sale, former profit or loss of discontinued operations will be presented ascontinuing operationsfor comparative accounting period in the current financial statements.
13. Long-term equity investments
Long-term equity investments consist of equity investments in subsidiaries, joint ventures andassociates. An associate is an enterprise over which the Company has significant influence.
(1) Recognition of initial investment cost
Long-term equity investment from the business combination: For a long-term equity investmentacquired through a business combination under common control, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of theowners’ equity of the party being absorbed in the consolidated financial statements of the ultimatecontrolling party at combination date. For business combination involving entities not undercommon control, the initial investment cost of long-term equity should be the cost of acquisition.Long-term equity investment from other methods：for a long-term equity investment acquired bypaying cash, the initial investment cost shall be the actual purchase price paid; for those acquired bythe issue of equity securities, the initial investment cost shall be the fair value of the equitysecurities issued.
(2) Subsequent measurement and recognition of profit or loss
The cost method is applied for the investment of subsidiaries unless the investment satisfies theconditions of held for sale; the equity method is applied for the investment of joint ventures andassociates.When the cost method is adopted in long-term equity investments, except for cash dividends orprofit distributions declared but not yet distributed in the purchase priceor consideration ofobtaining the investment, profits or cash dividends declared to be distributed by the investee shouldbe recognised as investment income in the current period.When the equity method is adopted in long-term equity investments, the initial cost of aninvestment in excess of the share of investee’s fair value on identifiable net assets remainsunchanged; the initial cost of the investment that falls short of the share of investee’s fair value onidentifiable net assets shall be adjusted, for the difference which had been charged to current profitor loss.When the equity method is adopted, the Company recognises its share of the investee’s profit or
loss, as well as its share of the investee’s other comprehensive income, as investment income or lossand other comprehensive income, and adjusts the carrying amount of the investment accordingly;the investor’s share of profit distributions or cash dividends declared by the investee is deductedfrom the carrying amount of the investment. For the changes of equity in an investee other thanprofit or loss, the investor adjusts the carrying amount of the investment and recognised it in capitalreserve (other capital reserves).The recognition of the investee’s results should be based on the fairvalues of the individual identifiable assets of the investee according to the Company’s accountingpolicies and accounting period. Additionally, the recognition should be based on the adjusted net profitof the investee.If the Company has significant influences or can implement joint control over investees due toadditional investment, the initial investment cost is recognized as the sum of the fair value of theoriginal portion of equity investment and the additional investment cost under equity method on thetransformation date. The accumulated fair value changes accounted in other comprehensive incomeof non tradable equity instrument investment which is initially classified as fair value through othercomprehensive income are transferred to retained earnings while accounting by equity methodinstead.If the Company loses control of an investee with joint control or significant influence retained afterpartial disposal of its shares, the remaining equity after disposal should be accounted in accordancewith the rules “CASBE 22-Recognition and Measurement of Financial Instruments” and thedifference between the fair value on the day of losing control and the book value is recognised inprofit or loss. For the other comprehensive income recognized by equity investment under theequity method, the basis of the accounting treatment is the same as that on disposal of related assetsor liabilities by the investee, the amount recognised in the equity on the changes in other equitymovementsshould be all charged to the profit or loss for the year.If the Company loses control of an investee after partial disposal of its shares, the remaining equityafter disposal has joint control or significant influence over the investee, the equity method shall beadopted and the remaining equity shall be deemed to be recognized under equity method since theacquisition date; if the remaining equity has no joint control or significant influence over theinvestee, the remaining equity after disposal should be accounted in accordance with therules“CASBE 22-Recognition and Measurement of Financial Instruments” and the differencebetween the fair value on the day of losing control and the book value is recognised in profit or loss.If the shareholding ratio of the Company is reduced due to the increase of investments of otherinvestors and thus the control is lost, but the joint control or significant influence can be exerted onthe investee, the Company should recognize the incremental shares of net assets according to thenew investments. The difference between the original book value of the long-term equityinvestment corresponding to the decrease in the shareholding ratio should be included in the currentprofit or loss; then, the equity shall be deemed to be recognized under equity method since theinvestment date and adjusted according to the new shareholding ratio.Unrealised profit or loss resulting from transactions between the Company and its associates orjoint ventures shall be calculated according to the proportion of its shareholding, which isattributable to the Company, and then to be recognized in investment income after offset. Whileunrealised profit or loss resulting from transactions between the Company and investee belongs toimpairment loss of transferred assets cannot be offset.
(3) Basis of determining the existence of joint control or significant influence over an investee
Joint control is the agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require unanimous consent of the parties sharing control. Indetermining whether there is a joint control, the first judge is determining whether the relevantarrangement is controlled collectively by all the participants involved or the group of theparticipants involved and then to determine whether the decisions related to the basic operatingactivities should require the unanimous consent of the participants involved. If all participants or thegroup of the participants involved must act consistently to determine the relevant arrangement, it isconsidered that all participants or the group of the participants control the arrangement. If two ormore participants in the collectively control of certain arrangement, it shall not be considered asjoint control. Protection of rights shall not be considered in determining whether there is jointcontrol.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control over those policies. When determining whether thereis the significant influence over the investee, the voting rights held by the investors or the otherentites and the effect of potential voting rights if it can be converted into the equity of investee,including the effect of current convertible warrants,security option and convertible bonds.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including20% ) or more but less than 50% of the voting shares, it has significant impact on the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and has no significant influence; when theCompany owns 20% (excluding) or less of the voting shares, it is not considered to have significantimpacts on the investee in general, unless there is clear evidence to show that in this case theCompany can participate in the production and business decisions of the investee so as to have thesignificant influence.
(4) Held-for-sale equity investments
Accounting treatment for the entity investment, or a portion of an equity investment, in associatesor joint ventures that is classified as held for sale refers to Note III, 12.Any remaining equity investment that has not been classified as held for sale shall be accountedunder the equity method.When the equity investment in associates or joint ventures previously classified as held for sale andno longer satisfies the conditions to be classified as held for sale, it will be adjusted under equitymethod retrospectively as from the date of classification as held for sale.
(5) Method of impairment testing and impairment provision
For investment in subsidiaries, associates and joint ventures, refers to Note III, 20 for the method ofasset impairment provision.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, usein supply of services, rental or for administrative purposes with useful lives over one accountingyear.
Fixed assets are recognised when it is probable that their related future economic benefits will flowinto the company, and their cost can be measured reliably.Fixed assets of the Company are initially measured at actual costs in acquisition.The subsequent expenditure related to fixed assets is included in cost of the fixed assets when therelevant economic benefits are likely to flow into the Company and its cost can be measuredreliably; routine repair expenditure of fixed assets that do not meet the conditions for capitalizationis included in the profit and loss or the cost of relevant assets according to the beneficiaries when itoccurs. The book value of the replaced part shall be derecognized.
(2) Depreciation of fixed assets
Depreciation of the fixed assets is calculated on the straight-line basis. The fixed asset isdepreciated since the state of intended use and no longer depreciated when recognition is terminatedor being classified as non-current assets held for sale. Without considering impairment provision,theestimated useful lifetime, estimated residual values, and the annual depreciation rates of eachcategory of fixed assets are as follows:
－118－Category
| Category | Estimated useful life | Estimated residual value | Annual depreciation rate |
| Pant and buildings | 25-43 years | 5% | 3.80-2.21% |
| Machinery and equipment | 12-28 years | 5% | 7.92-3.39% |
| Vehicles | 10 years | 5% | 9.50% |
| Electronic equipment | 10 years | 5% | 9.50% |
| Industrial furnace | 13 years | 5% | 7.31% |
| Metallurgical equipment | 19 years | 5% | 5.00% |
| Others | 14-22 years | 5% | 6.79-4.32% |
The fixed assets that have been withdrawn for impairment provision shall also be deducted from theaccumulative amount of impairment provision to recognize depreciation rate.
(3) Impaitment test and impairment provision of fixed assets refer to Note III, 20.
(4) Useful lives, residual values and the depreciation method are reviewed by the Company at least ateach financial year end.Useful lives are adjusted if the expected useful lives are different from the original estimates; theestimated net residual values are adjusted if they are different from the original estimates.
(5) Disposal of fixed assets
The fixed assets are derecognied when the fixed assets are diposed or when it is not expected togenerate economic benefits through use or disposal of the fixed assets.The amount of the disposalincome from the sale, transfer, scrapping or damage of fixed assets after deducting its book valueand relevant taxes shall be included in the current profit and loss.
15. Construction in progress
Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowedfunds during the period of construction.Construction in progress is reclassified to the appropriate category of fixed assets when completedand ready for use.Impairment provision of construction in progressrefers to Note III, 20.
16. Materials for construction of fixed assets
The materials for construction of fixed assets of the Company refers to the material prepared forconstruction in progress, including engineering materials, equipments not yet installed and toolsprepared for production, etc.Purchase measured at cost, the recipients transfer to construction in progree, and the remainingtransfer to inventory after the completion of construction.Impairment provision of materials for construction of fixed assets refers to Note III, 20.Closing balance of materials for construction of fixed assets is presented in “Construction inprogress” in balance sheet.
17. Borrowing costs
(1) Principles of capitalising borrowing costs
All the borrowing costs that are directly attributable to construction or production of all qualifyingassets are capitalized and recorded in relevant assets costs. Other borrowing costs are treated as anexpense and recorded in the profit or loss. The capitalization of borrowing costs commences when:
① Expenditures for the assets are incurred, including paying cash, transferring non-cash assets orundertaking interest-bearing debt for acquisition or construction of the assets, which could becapitalized;
② Borrowing costs are incurred; or
③The acquisition and construction activities that are necessary to bring the assets to get ready fortheir intended use or sale have commenced.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs ceases when the asset being acquired or constructed issubstantially ready for its intended use or sale and borrowing costs incurred thereafter are treated asan expense to be recorded in the profit or loss.Capitalization of borrowing costs is suspended during extended periods in which the acquisition orconstruction of a fixed asset is interrupted abnormally and the interruption lasts for more than threemonths until the acquisition or construction is resumed; borrowing costs in normal interruptionperiod continue to be capitalized.
(3) Calculation of capitalization rate and amount of borrowing costs.
For specific borrowings, the borrowing costs eligible for capitalization are the actual borrowingcosts incurred during the current period deducted by any temporary interest or investment income;for general borrowings, the borrowing costs eligible for capitalization are determined by applying acapitalization rate to the weighted average of capital expenditure that exceeds the specificborrowings.The capitalization rate is calculated based on the weighted average interest rate ofgeneral borrowings.During the capitalization period, exchange differences on foreign currency specific borrowings shallbe capitalized; exchange differences on foreign currency general borrowings shall be recognized ascurrent profit or loss.
18. Intangible assets
Intangible assets include software and land use rights.Intangible assets are measured at cost initially and its useful lifetime shall be analyzed andrecognized when obtained. An intangible asset with finite useful lifetime shall be amortized over theexpected useful life using method which can reflect the expected recognition of economic benefitsrelated to the assets when the intangible asset is available for use; an intangible asset whoseexpected recognition cannot be reliably determined is amortized at straight-line amortizationmethod; an intangible asset with indefinite useful lifetime shall not be amortized.The amortization method of intangible assets with limited service life is as follows:
Intangible assets with finite useful lives are amortized over the useful lives on the straight-line basisaccording to the category, expected useful lifetime and estimated residual value.The annualamortization rates of each category of intangible assets are as follows:
－120－
Category
| Category | Useful lifetime | Residuals rate | Annual amortization rate |
| Software | 5-10 years | -- | 10.00-20.00% |
| Land use rights | 40-50 years | -- | 2.00-2.50% |
The Company reviews the useful lives and amortization method of intangible assets with finiteuseful lifetime, adjusts original estimated amount and processes according to the accountingestimate change if there are any differences with original estimated, at least at the end of eachreporting period.The Company estimates an intangible asset can no longer bring future economic benefits at thebalance sheet date, and then the carrying amount of the intangible asset should be reversed to thecurrent profit or loss.For the impairment provision of intangible assets, refers to Note III, 20.
19. Development expenditures
Expenditure on internal research and development projects is classified into expenditure on the
research stage and expenditure on the development stage.Expenditure on the research stage is recognised in the profit or loss when incurred.Expenditure on the development stage is capitalized only when: the technical feasibility ofcompleting the intangible asset so that it is available for use or sale; the intention to complete theintangible asset is to use or sell it; the method of generating economic benefits by the intangibleassets, including that the intangible asset can be proved that the output or the intangible asset itselfhas market or,if it is to be used internally, the usefulness of the intangible asset also need to beproved; the availability of adequate technical, financial and other resources to complete thedevelopment and the ability to use or sell the intangible asset; the expenditure attributable to thedevelopment stage can be measured reliably. Otherwise, it shall be presented in the profit or loss.The research and development projects of the Company will enter into the development stage aftermeeting the above conditions and passing through the studies of technical feasibility and economicfeasibility, and the projects approval.Capitalized expenditure on the development stage is presented as “Development expenditures” inthe balance sheet and shall be transferred to intangible assets when the project is completed to itsintended use state.
20. Impairment of assets
The impairment for the long-term equity investments, fixed assets, construction in progress,right-of-use asset, intangible assets, etc. (excluding inventories, deferred income tax assets andfinancial assets) of subsidiaries, associates and joint ventures are determined as follows:
The Company assesses whether any indicator of impairment exists as of the end of each reportingperiod, and, if yes, performs impairment test by estimation of the asset’s recoverable amount. Forgoodwill acquired in business combinations, intangible assets with indefinite lives and intangibleassets without intended use state, an annual impairment test is performed no matter whether there isany indicator of impairment.An asset’s recoverable amount is calculated as the higher of the asset’s fair value less costs to selland the present value of estimated future cash flows generated from the use of assets. Therecoverable amount is calculated on individual basis unless it is not applicable, in which case therecoverable amount is determined for the asset group to which the asset belongs. An asset group isrecognized based on whether the cash inflows generated by the asset group are largely independentto those of other assets or asset groups.When the recoverable amount of an asset or an asset group is less than its carrying amount, thecarrying amount is reduced to its recoverable amount. The reduction amount is charged to profit orloss and an impairment allowance is provided.In terms of impairment test of the goodwill, the carrying amount of the goodwill arising frombusiness combination shall be allocated to the related asset group in accordance with a reasonablebasis at acquisition date. Those that are difficult to be allocated to relevant assets shall be allocatedto relevant assets groups. Relevant assets or assets groups refer to those that can benefit from thesynergies of business combination and are not larger than the Company’s recognized reportingsegment.When there is an indication that the goodwill related asset and asset group are prone to impair, the
Company should execute impairment test for the asset and asset group excluding goodwill,calculate the recoverable amount and recognize the corresponding impairment loss. The Companyshould execute impairment test for the asset or asset group including goodwill and compare therecoverable amount with carrying amount, provision for impairment of assets shall be recognizedwhen the recoverable amount of assets is lower than its carrying amount.Impairment losses cannot be reversed in subsequent accounting periods after recognition.
21. Long-term prepaid expenses
The long-term prepaid expenses of the Company are recorded as the actual cost and evenlyamortized on straight-line basis over the expected beneficial period. For the long-term prepaidexpense items that cannot benefit the later accounting period, the amortized value is recognized inthe profit or loss.
22. Payroll and employee benefits payable
(1) Scope of payroll and employee benefits payable
Payroll and employee benefits payable are all forms of consideration given by an entity in exchangefor service rendered by employees or the termination of employment, including short-termemployee benefits, post-employment benefits, termination benefits and other long-term employeebenefits. The benefits that the Company provides to the spouses, children and dependents ofemployees, the late employees’ family and other beneficiaries also shall be deemed aspayroll andemployee benefits payable.According to liquidity, employment benefits are presented separately as “Payroll and employeebenefits payable” and “Long-term payroll and employee benefits payable” in the balance sheet.
(2) Short-term employee benefits payable
A liability when an employee has provided service in exchange for employee benefits, such aswages, bonuses, social security contributions (including medical insurance, injury insurance,maternity insurance, etc.) and house funding to be paid is recognized as the current profit or loss orcosts of related assets. If the short-term employee benefits are expected to be settled wholly beforetwelve months after the end of the annual reporting period in which the employees render therelated service and have significant financial impact, the liability shall be measured as thediscounted amounts.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plan and defined benefit plan. Definedcontribution plan is the post-employment benefit plan under which the Company pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions.Defined benefit plan is the post-employment benefit plan other than defined contribution plan.Defined contribution planDefined contribution plan includes basic pension insurance, unemployment insurance, etc.During the accounting period of service provided by the employee, the Company shall recognise thecontribution payable according to the defined contribution plan as the liability and record thecorresponding amount in the current profit or loss or the cost of the relevant asset.
(4) Termination benefits
The Company is required to recognize termination benefits with a corresponding charge to profit orloss at the earlier of when the entity can no longer withdraw an offer of those benefits and when itrecognizes any related restructuring costs.For implementing the internal retirement plan, the economic compensation before the officialretirement date belongs to termination benefits. From the date of ceasing service to the normalretirement date, the wages of the internally retired employees and the social insurance premiums tobe paid are included in the current profit or loss one time. Economic compensation after the officialretirement date (such as normal pension) should be treated as post-employment benefits.
23. Provisions
If the contingent considerations or contingent liabilities satisfy the following conditionssimultaneously, a provision will be recognized by the Company:
(1) The obligation is a present obligation assumed by the Company; and
(2) It is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation; and
(3) A reliable estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the presentobligation, after considering risks, uncertainties, present value, etc. If the impact of time value ofmoney is significant, the best estimate is determined as its present value of future cash outflow.Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the currentbest estimate.If the settlement of provision is fully or partially compensated by a third party or the others, and thecompensated amount can be definitely received, then the provision can be recognised as assetseparately. The compensated amount shall not be greater than the carrying amount of the recognizedliability.
24.Share-based payments and equity instruments
(1) Category of share-based payments
The Company’s share-based payment is either equity-settled share-based payment or cash-settledshare-based payment.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by theCompany, the fair value is determined at the quoted price in the active market. For options andother equity instruments with no active market, option pricing model shall be used to estimate thefair value of the equity instruments. The following factors shall be taken into account using optionpricing models: A. the exercise price of the option; B. the validity period of the option; C. the
current market price of the share; D. the expected volatility of the share price; E. predicted dividendof the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimateOn each balance sheet date within the vesting period, the estimated number of equity instrumentsexpected to vest is revised based on the best estimate made by the Company according to the latestavailable subsequent information as to changes in the number of employees with exercisable rights.On the vesting date, the final estimated number of equity instruments expected to vest should equalthe actual number of equity instruments expected to vest.
(4) Accounting treatment of implementation, modification and termination of share-based payment
Equity-settled share-based payment shall be measured at the fair value of the equity instrumentsgranted to employees. If the right may be exercised immediately after the grant, the fair value ofequity instrument shall, on the date of the grant, be included in the relevant costs or expenses, andthe capital reserve shall be increased accordingly.If the right can not be exercised until the vestingperiod comes to an end or until the specified performance conditions are met, then on each balancesheet date within the vesting period, the services obtained in the current period shall, based on thebest estimate of the number of vested equity instruments, be included in the relevant costs orexpenses and the capital reserve at the fair value of the equity instrument on the date of the grant.After the vesting date, the Company make no adjustment to the relevant costs or expenses as well asthe total amount of the owner’s equities which have been confirmed.Cash-settled share-based payment shall be measured in accordance with the fair value of liabilitycalculated and recognised based on the shares or other equity instruments undertaken by theCompany. If the right may be exercised immediately after the grant, the fair value of the liabilityundertaken by the Company shall, on the date of the grant, be included in the relevant costs orexpenses, and the liabilities shall be increased accordingly.If the right may not be exercised until thevesting period comes to an end or until the specified performance conditions are met, on eachbalance sheet date within the vesting period, the services obtained in the current period shall, basedon the best estimate of the information about the exercisable right, be included in the relevant costsor expenses and the corresponding liabilities at the fair value of the liability undertaken by theCompany. On each balance sheet date and on each account date prior to the settlement of therelevant liabilities, the Company re-measures the fair value of the liabilities and include the changesin the current profits and losses.When there are changes in Company’s share-based payment plans, if the modification increases thefair value of the equity instruments granted, corresponding recognition of service increase inaccordance with the increase in the fair value of the equity instruments; if the modificationincreases the number of equity instruments granted, the increase in fair value of the equityinstruments is recognised as a corresponding increase in service achieved. Increase in the fair valueof equity instruments refer to the difference between the fair values of the modified date. If themodification reduces the total fair value of shares paid or not conductive to the use of otheremployees share-based payment plans to modify the terms and conditions of service, it willcontinue to be accounted for in the accounting treatment as if the change had not occurred, unlessthe Company cancelled some or all of the equity instruments granted.During the vesting period, if the cancelled equity instruments (except for failure to meet theconditions of the non-market vesting conditions) granted by the Company to cancel the equityinstruments granted amount treated as accelerated vesting of the remaining period should be
recognised immediately in profit or loss, while recognising capital reserves. If employees or otherparties can choose to meet non-vesting conditions but they are not met in the vesting period, theCompany will treat them as cancelled equity instruments granted.
25. Revenue
(1) General principle
Revenue is recognized when the Company has satisfied its performance obligations in the contract,that is, when the customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations, the Company determines thestand-alone selling price at contract inception of the distinct good or service underlying eachperformance obligation in the contract and allocates the transaction price in proportion to thosestand-alone selling prices. The Company recognises as revenue the amount of the transaction pricethat is allocated to each performance obligation.The Company satisfies a performance obligation over time if one of the following criteria is met; orotherwise, a performance obligation is satisfied at a point in time:
① The customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs;
② The customer can control the asset created or enhanced during the Company’s performance;
③ The Company’s performance does not create an asset with an alternative use to it and theCompany has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time, the Company recognises revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. When theoutcome of that performance obligation cannot be measured reasonably, but the Company expectsto recover the costs incurred in satisfying the performance obligation, the Company recognisesrevenue only to the extent of the costs incurred until such time that it can reasonably measure theoutcome of the performance obligation.For performance obligation satisfied at a point in time, the Company recognises revenue at the pointin time at which the customer obtains control of relevant goods or services. To determine whether acustomer has obtained control of goods or services, the Company considers the followingindicators:
① The Company has a present right to payment for the goods or services, as the customer obtainsthe current payment obligation for the goods.
② The Company has transferred the legal title of the goods, as the customer has obtained the legaltitle of the goods.
③ The Company has transferred physical possession of the goods to the customer, as the customerhas obtained the physical possession of the goods.
④ The Company has transferred the significant risks and rewards of legal title of the goods to thecustomer, as the customer has obtained the significant risks and rewards of legal title of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has obtained control of goods.A contract asset is the Company’s right to consideration in exchange for goods or services that it hastransferred to a customer when that right is conditional on factors other than the passage of time.The Company recognises loss allowances for expected credit loss on contract assets. TheCompany’s right to consideration that is unconditional (only the passage of time is required) shallbe presented as accounts receivable. The Company’s obligation to transfer goods or services to acustomer for which the Company has received consideration (or an amount of consideration is due)from the customer shall be presented as the contract liability.The Company offsets the contract assets and contract liabilities under the same contract andpresents the net amount. If the net amount is the debit balance, it is presented under “contract assets”or “other non-current assets” according to its liquidity; if the net amount is the credit balance, it ispresented under “contract liabilities” or “other non-current liabilities” according to its liquidity.
(2) Specific recognition methods
The specific revenue recognition methods of the company are as follows:
Contracts for the sale of goodsContracts for the sale of goods between the Company and its customers usually only involves theperformance obligations of the transferring of the goods. The Company generally recognizesrevenue based on the following considerations, taking into account the timing of control transfer.This includes obtaining the current collection rights of the goods, the transfer of the main risks andrewards of the ownership of the goods, the transfer of the legal ownership of the goods, the transferof the physical assets of the goods, and the acceptance of the goods by the customer.Contracts for rendering of servicesThe service contract between the Company and its customers usually includes performanceobligations for labor services, technical consulting or technical services. As a result of thesatisfaction of the performance obligation the Company, the customers obtain and consume theeconomic benefits of the service while the Company provides the service simultaneously. TheCompany is entitled to recover from the accumulative performance of the contract that has beencompleted to date, except when progress of the performance cannot be reasonably determined. TheCompany determines the progress of the performance of the services provided in accordance withthe input method. When the progress of the performance cannot be reasonably determined, and thecosts incurred by the Company are expected to be compensated, the revenue will be recognizedbased on the amount of costs incurred, until the progress of the performance can be reasonablydetermined.
26. Contract cost
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs tofulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain acontract with a customer that it would not have incurred if the contract had not been obtained e.g.an incremental sales commission. The Company recognises as an asset the incremental costs of
obtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining acontract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or otheraccounting standards, the Company recognises an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipatedcontract, including direct labour, direct materials, allocations of overheads (or similar costs), coststhat are explicitly chargeable to the customer and other costs that are incurred only because theCompany entered into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or incontinuing to satisfy) performance obligations in the future;
③The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for thecosts to fulfill a contract (the “assets related to contract costs”) are amortised on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assets relateand recognised in profit or loss for the current period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amountof an asset related to contract costs exceeds:
①Remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less
② The costs that relate directly to providing those goods or services that have not yet beenrecognised as expenses.The contract performance cost recognized as an asset shall be shown in the "Inventories" item withan amortization period of no more than one year or one normal operating cycle at the time of initialrecognition, while the amortization period exceeding one year or one normal operating cycle at thetime of initial recognition shall be shown in the item of "Other non-current assets".The contract acquisition cost recognized as an asset shall be listed in the item of "Other currentassets" when the amortization period does not exceed one year or one normal operating cycle at thetime of initial recognition, and listed in the item of "other non-current assets" when the amortizationperiod exceeds one year or one normal operating cycle at the time of initial recognition.
27. Government grants
Government grants are recognized in profit or loss, when they are highly probable to be receivedand all conditions are fulfilled.If a government grant is in form of monetary asset, it is measured at the amount received orreceivable. If a government grant is in form of nonmonetary asset, it is measured at fair value of theasset. If the fair value cannot be reliably determined, it is measured at the nominal amount as RMB1.Asset-related government grants are recognized when the government document designates that the
government grants are used for constructing or forming long-term assets.Otherwise, the governmentgrants should be income-related.If the government document is inexplicit, the Company should recognize the part corresponding toassets value of government grants as asset-related government grants if the conditions are to formlong-term assets and the remaining part as income-related grants. As for indistinguishablegovernment grants, the whole should be recognized as income-related grants.Asset-related government grants can be accounted by offsetting the carrying amout of related assetsor being recognized as deferred income, and amortized systematically and reasonably to profit orloss over the useful life of the related asset. If the income-related grant is a compensation for relatedincurred expenses or losses, the grant shall be recognized in the current pofit or loss or offset relatedcosts immediately; if the grant is a compensation for related expensesor losses in future period, thegrant is recognized as deferred income and should be recognized in profit or loss for the periodwhen the expenses or losses are incurred. For the government grant measured at the nominalamount, it should be recognized in profit or loss immediately for the period.The Company adopts aconsistent approach to the same or similar government grants.The government grants related to daily activities shall be recognized in other income or offsetrelated expenses. Otherwise, it shall be recognized innon-operating income and expenses.When the recognized government grants need to be returned, the carrying amount of the assets shallbe adjusted if the carrying amount of related assets is written down during the initial recognition; ifthere is the balance of related deferred income, the book balance of related deferred income shall bewritten off, and the excess part shall be recognized in the current profit or loss; for the othercircumstances, the government grants shall be recognized in the current profit or loss directly.
28. Deferred tax assets and deferred tax liabilities
Income tax comprises current tax and deferred tax, and is normally recognized as income taxexpense in profit or loss, except for goodwill generated in a business combination or relateddeferred tax items that have been recognized directly in equity.Based on the differences between the carrying amount of an asset or liability in the statement offinancial position and its tax base, the Company adopts the liability method for the provision ofdeferred tax.A deferred tax liability is recognized in respect of all taxable temporary differences except thosearising from the following transactions:
(1) The initial recognition of goodwill; or the initial recognition of an asset or liability in atransaction which is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for the temporary differences associated with subsidiaries, joint ventures and associates: theCompany is able to control the timing of the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future.A deferred tax asset is recognized in respect of all deductible temporary differences to the extentthat it is probable that taxable profit will be available against which the deductible temporarydifference will be utilized except those arising from the initial recognition of an asset or liability ina transaction which:
(1) The transaction is not a business combination, and at the time of the transaction, affects neitheraccounting profit nor taxable profit; and
(2) As for deductible temporary differences associated with subsidiaries, joint ventures andassociates: a deferred tax asset is recognized to the extent that it is probable that the temporarydifference will reverse in the foreseeable future, and taxable profit will be available against whichthe temporary difference can be utilized.At the end of each reporting period, deferred tax assets and liabilities are measured at the tax ratesthat are expected to apply to the period when the asset is realized or the liability is settled, takinginto account the income tax effect of expected asset realization or liability settlement at the end ofeach reporting period.The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and isreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow the related tax benefit to be utilized. Any such reduction is reversed to the extent that itbecomes probable that sufficient taxable profits will be available.
29. Lease
(1) Identification of lease
On the commencement date of the contract, as the lessee or lessor, the Company evaluates whetherthe customer in the contract has the right to obtain almost all the economic benefits arising from theuse of the identified assets during the use period, and has the right to dominate the use of theidentified assets during the use period. If one party in the contract transfers the right to control theuse of one or more identified assets within a certain period in exchange for consideration, theCompany recognizes the contract as lease or includes lease.
(2) The Company as lessee
On the beginning date of the lease, the Company recognises right-of-use assets and lease liabilitiesfor all leases, except for short-term lease and low-value asset lease with simplified approach.For the right-of-use assets, refers to Note Ⅲ. 30.Lease liabilities are initially measured according to the present value of the unpaid lease paymentsat the beginning of the lease term calculated by the embedded interest rate of the lease. Where theembedded interest rate cannot be determined, the incremental loan interest rate shall be used as thediscount rate. Lease payments includes: fixed payments and in-substance fixed payments, andwhere the lease incentives exists, the lease payment is the payment amount less any lease incentivesreceivable; variable lease payments depending on index or ratio; the exercise price of a purchaseoption if the lessee is reasonably certain to exercise that option; payments for terminating the lease,if the lease term reflects the lessee exercising that option of terminating; and amounts expected tobe payable by the lessee under residual value guarantees. Subsequently, the interest expense on thelease liability for each period during the lease term is calculated using a constant periodic rate ofinterest and is recognised in current profit or loss. The variable lease payments that are not includedin the measurement of the lease liability are recognised in profit or loss when actually incurred.Short-term leaseShort-term leases refer to leases with a lease term of less than 12 months from the commencement
date, except for those with a purchase option.Lease payments of short-term leases are recognised in the cost of related assets or current profit orloss on a straight-line basis over the lease term.Low-value asset leaseLow-value asset lease refers to the lease with lower value when the single leased asset is abrand-new asset.Lease payments of low-value asset lease are recognised in the cost of related assets or current profitor loss on a straight-line basis over the lease term.For a low-value asset lease, the Company chooses to adopt the above simplified approach accordingto the specific conditions of each lease.Lease modificationThe Company accounts for a lease modification as a separate lease when the modification occursand the following conditions are met: ① the lease modification expands the scope of lease byadding the right to useone or more of the leased assets; and ② the increased consideration isequivalent to the amount of the separate price for the expansion of the lease scope adjustedaccording to the conditions of the contract.With the exception of the simplified approach to contract modificates directly arising fromCOVID-19,where a lease modification is not accounted for as a separate lease, at the effective dateof the lease modification, the Company reallocates the consideration of the modified contract,redetermines the lease term and remeasures the lease liability based on the present value of the leasepayments after the modification and the revised discount rate.If a lease modification results in reduction in the scope of the lease or a shortening of the lease term,the Company reduces the carrying amount of the right-of-use asset accordingly and includes theprofit or loss related to the partial or complete termination of the lease is included in the currentprofits and losses.Other lease modifications result in a remeasurement of the lease liability, the Company adjusts thecarrying amount of the right-of-use asset accordingly.
(3) The Company as lessor
When the Company is a lessor, a lease is classified as a finance lease when the terms of the leasetransfer substantially all the risks and rewards of asset ownership to the lessee. All leases other thanfinancial leases are classified as operating leases.Finance leaseUnder finance lease, the Company accounts for finance lease receivables at the beginning of thelease term at the net lease investment, which is the sum of the unsecured residual value and thepresent value of the lease receipts outstanding at the commencement date of the lease, discounted atthe interest rate implicit in the lease. The Company as lessor calculates and recognises interestincome for each period of the lease term based on a fixed periodic interest rate. Variable leasepayments acquired by the Company as lessor that are not included in the net measurement of leaseinvestments are included in profit or loss for the period when actually incurred.
Derecognition and impairment of finance lease receivables are accounted for in accordance with therequirements under the Accounting Standard for Business Enterprises No. 22 – Recognition andMeasurement of Financial Instruments and the Accounting Standards for Business Enterprises No.23 – Transfer of Financial Assets.Operating leaseLease payments under operating lease are recognised in profit or loss on a straight-line basis overthe lease term. Initial direct costs incurred in relation to operating leases are capitalised andamortised over the lease term on the same basis as rental income and recognised in profit or loss forthe according period. The variable lease payments obtained in relation to operating leases that arenot included in the lease payments are recognised in profit or loss in the period when actuallyincurred.Lease modificationExcept for contract modificates directly caused by COVID-19 where a simplified approach isadopted, when the operating lease is modified, the Company accounts for a modification as a newlease from the effective date of the modification. The amount of lease receipts received in advanceor receivable in respect of the lease prior to the modification is treated as a receipt under the newlease.Except for contract modificates directly caused by COVID-19, the Company accounts for amodification in a finance lease as a separate lease when the modification occurs and the followingconditions are met: ① the lease modification expands the scope of lease by adding the right to useone or more of the leased assets; and ② the increased consideration is equivalent to the amount ofthe separate price for the expansion of the lease scope adjusted according to the conditions of thecontract.Where a finance lease is modified and not accounted for as a separate lease, the Company accountsfor the modified lease in the following circumstances: ① If the modification effectives on thelease commencement date, the lease will be classified as an operating lease, the Company accountsas a new lease from the effective date of the lease modification, and the net amount of the leaseinvestment before the effective date of the lease modification shall be taken as the book value of theleased asset; ②If the modification effectives on the lease commencement date, the lease will beclassified as a finance lease, and the Company conducts accounting treatment in accordance withthe Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement ofFinancial Instruments on modifying or renegotiating contracts.
30. Right-of-use assets
(1) Conditions for recognition of right-of-use assets.
Right-of-use assets refers to the right of the Company as the lessee to use the leased assets duringthe lease term.Right-of-use assets are initially measured at cost at the commencement date of the lease. The costincludes: the amount of the initial measurement of lease liability; lease payments made at or beforethe inception of the lease less any lease incentives enjoyed; initial direct costs incurred by theCompany as lessee; costs to be incurred in dismantling and removing the underlying assets,restoring the site on which it is located or restoring the underlying asset to the condition required by
the terms and conditions of the lease incurred by the Company as lessee. As a lessee, the Companyrecognises and measures the costs of dismantling and restoration in accordance with the AccountingStandard for Business Enterprises No. 13 – Contingencies. Subsequently, the lease liability isadjusted for any remeasurement of the lease liability.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where the Company, as a lessee, isreasonably certain to obtain ownership of the leased asset at the end of the lease term, such asset isdepreciated over the remaining useful life of the leased asset. Where ownership of the lease assetsduring the lease term cannot be reasonably determined, right-of-use assets are depreciated over thelease term or the remainder of useful lives of the lease assets, whichever is shorter.
(3) For the methods of impairment test and impairment provision of right-of-use assets, refer to NoteⅢ. 20.
31. Safety fund and maintenance fee
According to the relevant provisions of CQ [2012] No. 16 document issued by Ministry of Finance,National Development and Reform Commission, State Administration of Work Safety, the actualoperating income of metallurgical and transportation enterprises in the preceding year is the basisfor the provision of safety fund and maintenance fee of the Company, and the method of excessretirement shall be adopted for the provision.Safety funds and maintenance fees are included in the cost of relevant products or recognized in thecurrent profit or loss for the related products, and credited to the special reserve at the same time.When safety funds and maintenance fees are utilized in compliance with relevant regulations, if thecosts incurred can be categorized as expenditure, the costs incurred should be charged against thespecial reserve; if the reserve is used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the projects reach the status ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount and the fixedassets will not be depreciated in the future.
32. Restricted stock
In the equity incentive plan, the Company grants restricted stock to the incentivied. The incentiviedfirst subscribe for the stock. If the unlocking conditions specified in the equity incentive plan arenot met, the Company repurchases the stock at the price agreed in advance. Where the restrictedstock issued to the employees has gone through registration and other capital increase procedures inaccordance with relevant provisions, the Company shall, on the grant date, confirm the share capitaland capital reserve (capital premium) according to the subscription payment received from theemployees, also recognize treasury shares and other payables with respect to repurchaseobligations.
33. Significant accounting judgments and estimates
The Company provides continuous assessment of the reasonable expectations of future events, thecritical accounting estimates and key assumptions based on the historical experience and otherfactors. The critical accounting estimates and key assumptions that are likely to lead to significantadjustment risks of the carrying amount of assets and liabilities for the next accounting period are
listed as follows:
Classification of financial assetsThe major judgments of the Company involved in determining the classification of financial assetsincludes the analysis of business models and the characteristics of contract cash flows, etc.At the level of financial assetsportfolio, the Company determines the business model for managingfinancial assets, taking into account factors such as methods of evaluating and reporting financialassets performance to key managers, the risks of affecting financial assets performance and riskmanagement methods, and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Company has the following judgments: whether the principal’s time distributionor amount may change during the lifetime for early repayment and other reasons; whether theinterest only includes the time value of money, credit risk, other basic lending risks and theconsideration with cost and profit. For example, whether the advance payment only reflects theunpaid principals and interests based on the unpaid principal, and reasonable compensation paid forthe early termination of the contract.Measurement of expected credit loss of account receivablesThe Company calculates the expected credit losses of accounts receivable through default riskexposure and expected credit losses rate, and determines the expected credit losses rate on the basisof default probability and default loss rate. In determining the expected credit losses rate, theCompany uses the experience of internal historical credit loss, and adjusts the historical data withcurrent situation and forward-looking information. In considering forward-looking information, theindicators include the risks of economic downturn, external market environment, technologicalenvironment and changes of customer conditions. The Company monitors and reviews regularly theassumptions related to the calculation of expected credit losses.Deferred tax assetsDeferred tax assets are recognized to the extent that it is probable that taxable profit will beavailable against which the deductible temporary difference and unused tax credit can be utilized.Significant management judgement is required to determine the amount of deferred tax assets thatcan be recognized, based upon the likely timing and level of future taxable profits together with taxplanning strategies.Determination of unlisted equity investment fair valueThe fair value of unlisted equity investment is the estimated future cash flow discounted by thecurrent discount rate of the project with similar terms and risk characteristics. The valuationrequires the Company to estimate the expected future cash flow and discount rate and is thereforeuncertain. Under limited circumstances, if the information used to determine the fair value isinsufficient, or the possible estimates of the fair value are widely distributed, and the cost representsthe best estimate of the fair value within the range, the cost could represent the appropriate estimateof the fair value within the distribution range.
34. Changes in significant accounting policies and estimates
(1) Changes in significant accounting policies
① New Lease Standard
In 2018, the Ministry of Finance published the Accounting Standard for Business Enterprises No.21 – Leases (Revised), which requires the enterprises that listed on both domestic and overseasmarkets and the enterprises listed on overseas markets and adopt the International FinancialReporting Standards or Accounting Standards for Business Enterprises to implemente this newlease standard since 1 January 2019. Other enterprises implement this new lease standard since 1January 2021. The Company implementes this new lease standard since 1 January 2021 and revisesthe relevant accounting policies. Details of the revised accounting policies refer to Note V. 29.For contracts that existed before the date of initial application, the Company chose not to reassesswhether it is, or contains, a lease at the date of initial application.For contracts signed or modifiedaftethe date of initial application,the Company evaluates whether the contract is a lease or includesa lease in accordance with the definition of new lease standard.No significant impact is imposed on the scope of the Company’s contracts that meet the definitionof lease under the new lease standard.As lesseeThe new lease standard requires a lessee to recognise right-of-use assets and lease liabilities andrecognizes depreciation and interest expense respectively for all leases, except for short-term leaseand low-value asset lease with simplified approach.The new lease standard allows lessees to choose one of the following methods for the transitionalaccounting of leases:
? The retroactive adjustment method shall be adopted in accordance with the provisions of theAccounting Standard for Business Enterprises No. 28 – Changes in Accounting Policies andAccounting Estimates and Correction of Errors.? The amount of retained earnings and other relevant items in the financial statements at the
beginning of the year in which the standards are first implemented shall be adjusted accordingto the cumulative impact of the first implementation of the standards, and the information ofcomparable periods shall not be adjusted.? As for the finance leases before the date of initial application, the Company measured theright-of-use assets and lease liabilities according to the carrying amount of the finance leaseassets and finance lease payments payable respectively.? For operating leases before the date of initial application, the Company measured the leaseliabilities based on the present value of the remaining lease payments discounted using theincremental loan rate at the date of initial application, and measured the right-of-use assets forall leases at an amount equal to the lease liabilities, adjusted by the prepaid lease paymentswhere necessary.? At the date of initial application, the Company performed impairment test on the right-of-useassets and carried out corresponding accounting treatment in accordance with Note Ⅲ. 14.For operating leases of low-value assets and short-term leases within 12 months before the date ofinitial application, the Company implements the simplified approach and unrecognizes theright-of-use assets and lease liabilities.
The Company adopted the following simplified approach for operating leases before the date ofinitial application:
While measuring lease liabilities, the same discount rate adopts to leases with similar characteristicswhich uses the weighted average of incremental borrowing interest rate at 4.65%. The measurementof right-of-use assets may exclude initial direct costs.When there is an option to renew or terminate the lease, theCompany determined the lease termbased on the actual exercise of the option before the date of initial application and other latestconditions.As an alternative to the impairment test for right-of-use assets, the Company assessed whether acontract contains lease is a loss contract before the date of initial application and adjusts the valueof right-of-use asset based on the amount of loss allowance included in the balance sheet before thedate of initial application;As for the lease modification before the date of initial date, the Company carried out accountingtreatment based on the final arrangement of lease modification.The impacts of the implementation of the new lease standard on items in the consolidated financialposition as at 1 January 2021 are as follows:
－135－Item
| Item | Carrying amount before adjustment (31 Dec. 2020) | Reclassification | Remeasurement | Carrying amount after adjustment (1 Jan. 2021) |
| Prepayments | 352,355,542.50 | -3,372,602.73 | -- | 348,982,939.77 |
| Right-of-use assets | -- | 62,492,294.21 | -- | 62,492,294.21 |
| Accounts payable | 26,539,354,380.68 | -530,425.05 | -- | 26,538,823,955.63 |
| Other payables | 2,104,822,314.59 | -579,100.00 | -- | 2,104,243,214.59 |
| Lease liabilities | -- | 56,687,860.68 | -- | 56,687,860.68 |
| Current portion of non-current liabilities | 11,273,123,385.05 | 3,541,355.85 | -- | 11,276,664,740.90 |
For the minimum lease payments under significant operating leases disclosed in the 2020 financialstatements, the Company adjusted the outstanding minimum lease payments disclosed under theoriginal lease standard to the lease liabilities recognised under the new lease standard based on theincremental borrowing rate as the lessee on 1 January 2021 as follows:
| Minimum lease payments under significant operating leases as at 31 December 2020 | A | 85,502,862.91 |
| Present value of minimum operating lease payments as at 1 January 2021 | I | 60,229,216.53 |
| Add：accrued outstanding financial lease as at 31 December 2020 | J | -- |
| Lease liabilities as at 1 January 2021 | K=I+J | 60,229,216.53 |
| Including：Current portion of non-current liabilities | 3,541,355.85 |
The carrying value of the use-right assets on 1 January 2021 are as follows:
| Item | 2021.01.01 |
| Right-of-use assets: | |
| The right-of-use assets recognised before the date of initial application by operating leases | 62,492,294.21 |
－136－Item
| Item | 2021.01.01 |
| Finance leased assets recognized under the original lease standard | -- |
| Total: | 62,492,294.21 |
The impacts of the implementation of the new lease standard on items in the financial statementsfor 2021 are as follows:
| Item in consolidated balance sheet | 2021.12.31 | Assume based on the original lease standard | Increase/ decrease (-) |
| Right-of-use assets | 100,279,997.64 | -- | 100,279,997.64 |
| Lease liabilities | 86,123,210.35 | -- | 86,123,210.35 |
| Current portion of non-current liabilities | 10,451,293,628.20 | 10,436,456,370.29 | 14,837,257.91 |
| Deferred income tax assets | 189,721,423.29 | 189,283,489.69 | 437,933.60 |
| Item in consolidated income statement | As for 2021 | Assume based on the original lease standard | Increase/ decrease (-) |
| Operating costs | 118,578,217,304.05 | 118,575,688,255.75 | 2,529,048.30 |
| Finance expenses | 2,257,586,032.80 | 2,252,690,523.82 | 4,895,508.98 |
| Income tax expenses | 1,472,968,221.53 | 1,473,406,155.13 | -437,933.60 |
As lessorAccording to the new lease standard, the Company does not need to adjust its lease as a lessor inaccordance with the transitional provisions, but subjects to accounting treatment in accordance withthe new lease standard since the date of the first implementation.
(2) Changes in significant accounting estimates
The Company has no significant changes in accounting estimates during the reporting period.
(3) The adjustment of related items in financial statements at the beginning of the first implementationyear due to the first implementation of new lease standard.
Consolidated Statement of Financial Position
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Current assets： | |||
| Cash and Cash equivalents | 6,292,499,840.73 | 6,292,499,840.73 | -- |
| Notes receivable | 6,119,547,878.33 | 6,119,547,878.33 | -- |
| Accounts receivable | 1,424,092,844.92 | 1,424,092,844.92 | -- |
| Financing receivables | 4,532,592,689.43 | 4,532,592,689.43 | -- |
| Prepayments | 352,355,542.50 | 348,982,939.77 | -3,372,602.73 |
| Other receivables | 21,895,246.57 | 21,895,246.57 | -- |
| Including: Interest receivable | -- | -- | -- |
| Dividends receivable | 4,892,288.48 | 4,892,288.48 | -- |
| Inventories | 10,599,731,052.28 | 10,599,731,052.28 | -- |
－137－Item
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Contract assets | -- | -- | -- |
| Other current assets | 719,079,065.59 | 719,079,065.59 | -- |
| Total current assets | 30,061,794,160.35 | 30,058,421,557.62 | -3,372,602.73 |
| Non-current assets： | |||
| Debt investment | -- | -- | -- |
| Long-term equity investments | 3,341,208,164.76 | 3,341,208,164.76 | -- |
| Other equity instruments investments | 276,246,686.56 | 276,246,686.56 | -- |
| Other non-current financial assets | -- | -- | -- |
| Investment properties | -- | -- | -- |
| Fixed assets | 96,220,769,301.39 | 96,220,769,301.39 | -- |
| Construction in progress | 8,297,181,948.62 | 8,297,181,948.62 | -- |
| Right-of-use assets | -- | 62,492,294.21 | 62,492,294.21 |
| Intangible assets | 4,055,279,867.49 | 4,055,279,867.49 | -- |
| Development expenditures | -- | -- | -- |
| Goodwill | -- | -- | -- |
| Long-term prepaid expenses | 1,122,060.45 | 1,122,060.45 | -- |
| Deferred tax assets | 147,902,371.10 | 147,902,371.10 | -- |
| Other non-current assets | 1,965,717,410.38 | 1,965,717,410.38 | -- |
| Total non-current assets | 114,305,427,810.75 | 114,367,920,104.96 | 62,492,294.21 |
| Total assets | 144,367,221,971.10 | 144,426,341,662.58 | 59,119,691.48 |
| Current liabilities: | |||
| Short-term borrowings | 23,712,391,440.25 | 23,712,391,440.25 | -- |
| Financial liabilities held for trading | -- | -- | -- |
| Notes payable | 6,804,810,000.00 | 6,804,810,000.00 | |
| Accounts payable | 26,539,354,380.68 | 26,538,823,955.63 | -530,425.05 |
| Receipts in advance | -- | -- | -- |
| Contract liabilities | 4,659,444,741.25 | 4,659,444,741.25 | -- |
| Payroll and employee benefits | 466,319,382.02 | 466,319,382.02 | -- |
| Taxes payable | 572,640,856.00 | 572,640,856.00 | -- |
| Other payables | 2,104,822,314.59 | 2,104,243,214.59 | -579,100.00 |
| Including: Interest payable | -- | -- | -- |
| Dividend payable | -- | -- | -- |
| Liabilities classified as held for sale | -- | -- | -- |
| Current portion of non-current liabilities | 11,273,123,385.05 | 11,276,664,740.90 | 3,541,355.85 |
| Other current liabilities | 1,106,922,816.36 | 1,106,922,816.36 | -- |
| Total current liabilities | 77,239,829,316.20 | 77,242,261,147.00 | 2,431,830.80 |
| Non-current liabilities: | |||
| Long-term borrowings | 20,639,300,000.00 | 20,639,300,000.00 | -- |
| Bonds payable | 2,500,000,000.00 | 2,500,000,000.00 | -- |
－138－Item
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Lease liabilities | -- | 56,687,860.68 | 56,687,860.68 |
| Long-term payable | 8,941,452.29 | 8,941,452.29 | -- |
| Provisions | -- | -- | -- |
| Deferred income | 398,098,805.65 | 398,098,805.65 | -- |
| Deferred tax liabilities | 258,248,672.58 | 258,248,672.58 | -- |
| Other non-current liabilities | 4,491,623,817.41 | 4,491,623,817.41 | -- |
| Total non-current liabilities | 28,296,212,747.93 | 28,352,900,608.61 | 56,687,860.68 |
| Total liabilities | 105,536,042,064.13 | 105,595,161,755.61 | 59,119,691.48 |
| Shareholders’ equity: | |||
| Share capital | 5,289,389,600.00 | 5,289,389,600.00 | -- |
| Capital reserve | 19,759,259,120.40 | 19,759,259,120.40 | -- |
| Less:treasury shares | -- | -- | -- |
| Other comprehensive income | 195,210,244.82 | 195,210,244.82 | -- |
| Special reserve | 21,577,537.20 | 21,577,537.20 | -- |
| Surplus reserve | 1,828,677,846.37 | 1,828,677,846.37 | -- |
| Retained earnings | 1,865,280,919.23 | 1,865,280,919.23 | -- |
| Equity attributable to shareholders of the Company | 28,959,395,268.02 | 28,959,395,268.02 | -- |
| Non-controlling interests | 9,871,784,638.95 | 9,871,784,638.95 | -- |
| Total shareholders’ equity | 38,831,179,906.97 | 38,831,179,906.97 | -- |
| Total liabilities and shareholders’ equity | 144,367,221,971.10 | 144,426,341,662.58 | 59,119,691.48 |
Company Statement of Financial Position
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Current assets: | |||
| Cash and Cash equivalents | 1,087,088,671.35 | 1,087,088,671.35 | -- |
| Notes receivable | 2,837,221,424.75 | 2,837,221,424.75 | -- |
| Accounts receivable | 1,615,425,644.29 | 1,615,425,644.29 | -- |
| Financing receivables | 1,199,574,277.29 | 1,199,574,277.29 | -- |
| Prepayments | 195,404,837.38 | 195,404,837.38 | -- |
| Other receivables | 1,618,249,934.67 | 1,618,249,934.67 | -- |
| Including: Interest receivable | -- | -- | -- |
| Dividends receivable | 600,000,000.00 | 600,000,000.00 | -- |
| Inventories | 1,538,862,616.03 | 1,538,862,616.03 | -- |
| Contract assets | -- | -- | -- |
| Other current assets | 1,812,574,287.01 | 1,812,574,287.01 | -- |
| Total current assets | 11,904,401,692.77 | 11,904,401,692.77 | -- |
| Non-current assets: | |||
| Long-term equity investments | 26,337,249,446.06 | 26,337,249,446.06 | -- |
| Other equity instruments investments | 276,246,686.56 | 276,246,686.56 | -- |
－139－Item
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Other non-current financial assets | -- | -- | -- |
| Investment properties | -- | -- | -- |
| Fixed assets | 18,771,870,988.72 | 18,771,870,988.72 | -- |
| Construction in progress | 1,976,744,021.21 | 1,976,744,021.21 | -- |
| Right-of-use assets | -- | -- | -- |
| Intangible assets | 1,743,860,610.95 | 1,743,860,610.95 | -- |
| Development expenditures | -- | -- | -- |
| Goodwill | -- | -- | -- |
| Long-term prepaid expenses | -- | -- | -- |
| Deferred tax assets | 27,925,001.56 | 27,925,001.56 | -- |
| Other non-current assets | 1,130,014,156.73 | 1,130,014,156.73 | -- |
| Total non-current assets | 50,263,910,911.79 | 50,263,910,911.79 | -- |
| Total assets | 62,168,312,604.56 | 62,168,312,604.56 | -- |
| Current liabilities: | |||
| Short-term borrowings | 11,100,674,376.49 | 11,100,674,376.49 | -- |
| Financial liabilities held for trading | -- | -- | -- |
| Notes payable | 784,260,000.00 | 784,260,000.00 | -- |
| Accounts payable | 11,218,645,086.80 | 11,218,645,086.80 | -- |
| Receipts in advance | -- | -- | -- |
| Contract liabilities | 1,049,617,570.23 | 1,049,617,570.23 | -- |
| Payroll and employee benefits payable | 140,481,468.09 | 140,481,468.09 | -- |
| Taxes payable | 115,612,678.08 | 115,612,678.08 | -- |
| Other payables | 1,010,689,017.67 | 1,010,689,017.67 | -- |
| Including: Interest payable | -- | -- | -- |
| Dividend payable | -- | -- | -- |
| Liabilities classified as held for sale | -- | -- | -- |
| Current portion of non-current liabilities | 4,075,978,467.70 | 4,075,978,467.70 | -- |
| Other current liabilities | 637,645,284.13 | 637,645,284.13 | -- |
| Total current liabilities | 30,133,603,949.19 | 30,133,603,949.19 | -- |
| Non-current liabilities: | |||
| Long-term borrowings | 883,210,000.00 | 883,210,000.00 | -- |
| Bonds payable | 2,500,000,000.00 | 2,500,000,000.00 | -- |
| Lease liabilities | -- | -- | -- |
| Long-term payable | 8,941,452.29 | 8,941,452.29 | -- |
| Provisions | -- | -- | -- |
| Deferred income | 85,344,005.30 | 85,344,005.30 | -- |
| Deferred tax liabilities | 258,248,672.58 | 258,248,672.58 | -- |
| Other non-current liabilities | -- | -- | -- |
| Total non-current liabilities | 3,735,744,130.17 | 3,735,744,130.17 | -- |
－140－Item
| Item | 2020.12.31 | 2021.01.01 | Adjustment |
| Total liabilities | 33,869,348,079.36 | 33,869,348,079.36 | -- |
| Shareholders’ equity: | |||
| Share capital | 5,289,389,600.00 | 5,289,389,600.00 | -- |
| Capital reserve | 12,129,563,493.89 | 12,129,563,493.89 | -- |
| Less:treasury shares | -- | -- | -- |
| Other comprehensive income | 195,210,244.82 | 195,210,244.82 | -- |
| Special reserve | -- | -- | -- |
| Surplus reserve | 1,828,677,846.37 | 1,828,677,846.37 | -- |
| Retained earnings | 8,856,123,340.12 | 8,856,123,340.12 | -- |
| Total shareholders’ equity | 28,298,964,525.20 | 28,298,964,525.20 | -- |
| Total liabilities and shareholders’ equity | 62,168,312,604.56 | 62,168,312,604.56 | -- |
IV. Tax
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| Value-added tax | Taxable Revenue | 13/9/6/5 |
| City construction and maintenance tax | Turnover tax payable | 7/5 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
| Income tax | Taxable Income | 25 |
2. Tax preferential benefits and approvals
On 25 October 2021, the Company obtained the high-tech enterprise certificate issued by BeijingMunicipal Science and Technology Commission with the certificate number of GR202111003103and the certificate is valid for three years.On 14 September 2021, Beijing Shougang Cold Rolling Co., Ltd., a subsidiary of the Companyobtained the high-tech enterprise certificate issued by Beijing Municipal Science and TechnologyCommission with the certificate number of GR202111000699 and the certificate is valid for threeyears.On 18 September 2021, Shougang Jingtang United Iron & Steel Co., Ltd., a subsidiary of theCompany, obtained the high-tech enterprise certificate issued by Hebei Science and TechnologyCommission with the certificate number of GR202113000808 and the certificate is valid for threeyears.On 30 October 2019, Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd., a subsidiary ofthe Company, obtained the high-tech enterprise certificate issued by Hebei Science and TechnologyCommission with the certificate number of GR201913001665 and the certificate is valid for threeyears.In accordance to relevant regulations, above companies enjoy a preferential income tax rate at 15%
in 2021.Since 1 January 2019, according to Cai Shui [2019] No.13 “Notice of the State Administration ofTaxation on implementing policy of tax reduction for small and low-profit enterprises”, for the partof annual taxable income less than RMB 1 million of small and low-profit enterprises, tax reductionof 25% shall be included, and then income tax shall be paid at 20%. Since 1 January 2021 to 31December 2022, according to Cai Shui [2021] No.12 “Announcement on the implementation ofpreferential income tax policies for small and micro enterprises and individual industrial andcommercial households”, for the part of annual taxable income less than RMB 1 million of smalland low-profit enterprises, the enterprise income tax is reduced by half on the base of thepreferential policies of Cai Shui [2019] No.13.Wuhan Shougang Automobile Material Co., Ltd., thesub-subsidiary of the Company, satisfies the requirements of small and low-profit enterprisedeclaration and its income taxes have been declared as the policy of small and low-profit enterprise.
V. Notes to the consolidated financial statements
1. Cash and cash equivalents
－142－Items
| Items | 2021.12.31 | 2020.12.31 |
| Cash on hand | 53,404.48 | 35,022.81 |
| Bank deposits | 8,536,627,515.03 | 4,960,312,643.69 |
| Includes: financial company deposits | 8,496,270,996.46 | 4,951,388,949.60 |
| Other monetary funds | 1,748,307,794.48 | 1,332,152,174.23 |
| Includes: financial company deposits | 1,497,328,783.36 | 888,664,589.42 |
| Total | 10,284,988,713.99 | 6,292,499,840.73 |
(1) At year ended 2021, except for RMB 1,637,798,719.24 of security deposits, RMB10,000,000.00 of fixed term deposits, RMB 100,509,062.50 court frozen funds, the Company hasno balance of cash and cash equivalents that are pledged, guaranteed or blocked frozen or overseasbalances that restricted to remittance back.
(2) Bank deposits include interest receivable from deposits of RMB 809,559.17. This part ofinterest does not belong to "cash and cash equivalents."
2. Notes receivable
| Items | 2021.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 606,890,114.70 | 606,890.11 | 606,283,224.59 |
| Commercial acceptance notes | 6,230,323,785.17 | 6,230,323.80 | 6,224,093,461.37 |
| Total | 6,837,213,899.87 | 6,837,213.91 | 6,830,376,685.96 |
Continued:
| Items | 2020.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptance notes | 475,034,038.19 | 475,034.04 | 474,559,004.15 |
| Commercial acceptance notes | 5,650,637,578.99 | 5,648,704.81 | 5,644,988,874.18 |
| Total | 6,125,671,617.18 | 6,123,738.85 | 6,119,547,878.33 |
(1) The pledged notes receivable of the Company at the end of the year
| Items | Pledged amount at the end of the year |
| Bank acceptance notes | 99,819,667.90 |
| Commercial acceptance notes | 19,753,215.18 |
| Total | 119,572,883.08 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
－143－Items
| Items | Amount derecognized at year end | Amount not-derecognized at year end |
| Bank acceptance notes | -- | 293,906,654.27 |
| Commercial acceptance notes | -- | 6,039,342,370.06 |
| Total | -- | 6,333,249,024.33 |
(3) Notes transferred to accounts receivable due to non-performance of the issuers at the end of the year
| Items | Amount transferred to accounts receivable at the end of the year |
| Commercial acceptance notes | 9,451,694.85 |
(4) Classified by bad debt provision method
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Assessed bad debt provision in portfolios | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
| Total | 6,837,213,899.87 | 100.00 | 6,837,213.91 | 0.10 | 6,830,376,685.96 |
Continued:
| Category | 2020.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 6,125,671,617.18 | 100.00 | 6,123,738.85 | 0.10 | 6,119,547,878.33 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 6,125,671,617.18 | 100.00 | 6,123,738.85 | 0.10 | 6,119,547,878.33 |
| Total | 6,125,671,617.18 | 100.00 | 6,123,738.85 | 0.10 | 6,119,547,878.33 |
(5) Provision, recovery or reversal of bad debt
－144－Items
| Items | Bad debt provision |
| As at 31 December 2020 | 6,123,738.85 |
| Provision | 713,475.06 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2021 | 6,837,213.91 |
(6) There is no notes receivable written off during the reporting period.
3. Accounts receivable
(1) Disclosed by the ageing
| Ageing | 2021.12.31 | 2020.12.31 |
| Within 1 year | 1,734,897,859.01 | 1,468,820,426.92 |
| 1 – 2 years | 5,469,120.72 | 7,459,500.63 |
| 2 – 3 years | 7,533,727.52 | 11,835,039.58 |
| 3 – 4 years | 5,897,009.66 | -- |
| 4 – 5 years | -- | -- |
| Over 5 years | 3,003,921.82 | 5,092,031.82 |
| Subtotal | 1,756,801,638.73 | 1,493,206,998.95 |
| Less: provision for bad debts | 78,193,245.02 | 69,114,154.03 |
| Total | 1,678,608,393.71 | 1,424,092,844.92 |
(2) Disclosed by bad debt provision
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | 12,828,816.67 | 0.73 | 12,828,816.67 | 100.00 | -- |
| Bad debt provision assessed in portfolios | 1,743,972,822.06 | 99.27 | 65,364,428.35 | 3.75 | 1,678,608,393.71 |
| Total | 1,756,801,638.73 | 100.00 | 78,193,245.02 | 4.45 | 1,678,608,393.71 |
Disclosed by bad debt provision (continued)：
－145－
Category
| Category | 2020.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | 16,317,534.36 | 1.09 | 16,317,534.36 | 100.00 | -- |
| Bad debt provision assessed in portfolios | 1,476,889,464.59 | 98.91 | 52,796,619.67 | 3.57 | 1,424,092,844.92 |
| Total | 1,493,206,998.95 | 100.00 | 69,114,154.03 | 4.63 | 1,424,092,844.92 |
Bad debt provision assessed individually:
| Accounts receivable (by debtor) | 2021.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 3,377,121.82 | 3,377,121.82 | 100.00 | Long aging |
| Overdue recourse notes | 9,451,694.85 | 9,451,694.85 | 100.00 | Overdue recourse notes |
| Total | 12,828,816.67 | 12,828,816.67 | 100.00 | |
Continued:
| Accounts receivable (by debtor) | 2020.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 5,092,031.82 | 5,092,031.82 | 100.00 | Long aging |
| Overdue recourse notes | 11,225,502.54 | 11,225,502.54 | 100.00 | Overdue recourse notes |
| Total | 16,317,534.36 | 16,317,534.36 | 100.00 | |
Bad debt provision assessed in portfolios:
| Items | 2021.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,734,897,859.01 | 60,842,691.31 | 3.51 |
| 1 – 2 years | 4,469,120.72 | 1,253,706.63 | 28.05 |
| 2 – 3 years | 4,605,842.33 | 3,268,030.41 | 70.95 |
| Over 3 years | -- | -- | -- |
| Total | 1,743,972,822.06 | 65,364,428.35 | 3.75 |
Continued:
－146－Items
| Items | 2020.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,468,820,426.92 | 49,938,177.48 | 3.40 |
| 1 – 2 years | 6,459,500.63 | 1,750,200.39 | 27.09 |
| 2 – 3 years | 1,609,537.04 | 1,108,241.80 | 68.85 |
| Over 3 years | -- | -- | -- |
| Total | 1,476,889,464.59 | 52,796,619.67 | 3.57 |
(3) Provision, recovery or reversal of bad debt
| Items | Bad debt provision |
| As at 31 December 2020 | 69,114,154.03 |
| Provision | 9,079,090.99 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2021 | 78,193,245.02 |
(4) There is no accounts receivable write-off during reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the year, the total amount of the top five accounts receivable collected by debtors at the endof the period is RMB 807,834,330.52, accounts for 45.99% of the total amount of accountsreceivable at the end of the period, and the total amount of the corresponding bad debt provision atthe end of the period is RMB 28,327,363.38.
| Company Name | Closing balance | Percentage of total accounts receivable % | Closing balance of bad debt provision |
| Shougang Casey Steel Co., Ltd. | 259,971,350.16 | 14.80 | 9,116,105.40 |
| Chongqing Yongchuan Great Wall Automotive Parts Company Limited | 209,035,450.77 | 11.90 | 7,329,996.95 |
| China First Automobile Co., Ltd. | 142,976,470.66 | 8.14 | 5,013,585.44 |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 117,233,721.35 | 6.67 | 4,110,895.14 |
| Dongguan Southern Cimc Logistics Equipment Manufacture Co., Ltd. | 78,617,337.58 | 4.48 | 2,756,780.45 |
| Total | 807,834,330.52 | 45.99 | 28,327,363.38 |
4. Financing receivable
－147－
Items
| Items | 2021.12.31 | 2020.12.31 |
| Notes receivable | 4,015,188,495.05 | 4,532,592,689.43 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Closing balance of fair value | 4,015,188,495.05 | 4,532,592,689.43 |
The Company discounts and endorses most bank acceptance notes in accordance with routine fundmanagement, therefore the bank acceptance notes are classified as financial assets at fair valuethrough other comprehensive income.
(1) Classified by bad debt provision method
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
| Portfolio 1 | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 4,015,991,400.14 | 100.00 | 802,905.09 | 0.02 | 4,015,188,495.05 |
Continued:
| Category | 2020.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 4,533,499,199.26 | 100.00 | 906,509.83 | 0.02 | 4,532,592,689.43 |
| Portfolio 1 | 4,533,499,199.26 | 100.00 | 906,509.83 | 0.02 | 4,532,592,689.43 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 4,533,499,199.26 | 100.00 | 906,509.83 | 0.02 | 4,532,592,689.43 |
(2) Provision, recovery or reversal of bad debt
－148－Items
| Items | Bad debt provision |
| As at 31 December 2020 | 906,509.83 |
| Provision | -- |
| Recovery or reversal | 103,604.74 |
| Written-off | -- |
| As at 31 December 2021 | 802,905.09 |
(3) The pledged notes receivable of the Company at the end of the year
| Items | Pledged amount at the end of the year |
| Bank acceptance notes | 911,313,046.69 |
| Commercial acceptance notes | -- |
| Total | 911,313,046.69 |
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Items | Amount derecognized at year end | Amount not-derecognized at year end |
| Bank acceptance notes | 29,470,084,885.55 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 29,470,084,885.55 | -- |
5. Prepayments
(1) Disclosed by ageing of prepayments
| Ageing | 2021.12.31 | 2020.12.31 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 1,187,511,241.63 | 99.58 | 334,913,340.57 | 95.05 |
| 1 – 2 years | 2,390,257.98 | 0.20 | 14,309,245.03 | 4.06 |
| 2 – 3 years | 1,787,907.90 | 0.15 | 90,350.00 | 0.03 |
| Over 3 years | 880,589.39 | 0.07 | 3,042,606.90 | 0.86 |
| Total | 1,192,569,996.90 | 100.00 | 352,355,542.50 | 100.00 |
(2)As of 31 December 2021, there is no important prepayment with an account age of over 1 year.
(3) The top five prepayments classified by debtors are as follows:
During the year, the total amount of the top five prepayments classified by debtors at the end of theperiod is RMB 797,806,692.63, accounts for 66.89% of the total amount of prepayments at the endof the period.
－149－
Company name
| Company name | Closing balance | Percentage of total prepayments % |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 262,876,222.88 | 22.04 |
| Shanxi Coking Co., Ltd. | 237,955,206.32 | 19.95 |
| Coal and Coke Sales Co., Ltd. of Shanxi Coking Coal Group Co., Ltd. | 174,959,347.15 | 14.67 |
| Tianjin Jintie Xincheng Freight Forwarding Co., Ltd. | 73,040,095.45 | 6.12 |
| Tangshan Zhongrun Coal Chemical Co., Ltd. | 48,975,820.83 | 4.11 |
| Total | 797,806,692.63 | 66.89 |
6. Other receivables
| Items | 2021.12.31 | 2020.12.31 |
| Dividends receivable | -- | 4,892,288.48 |
| Other receivables | 16,992,715.92 | 17,002,958.09 |
| Total | 16,992,715.92 | 21,895,246.57 |
(1) Dividends receivable
| Items | 2021.12.31 | 2020.12.31 |
| Hebei Jingji Industry & Trading Co., Ltd. | -- | 4,892,288.48 |
| Less:bad debt provision | -- | -- |
| Total | -- | 4,892,288.48 |
(2) Other receivables
①Disclosed by ageing of other receivables
| Ageing | 2021.12.31 | 2020.12.31 |
| Within 1 year | 9,257,052.78 | 12,915,931.37 |
| 1 – 2 years | 7,918,680.72 | 1,922,905.13 |
| 2 – 3 years | 649,678.57 | 2,883,929.31 |
| 3 – 4 years | 587,104.55 | 722,708.47 |
| 4 – 5 years | 503,460.47 | 2,705,793.91 |
| Over 5 years | 5,859,075.32 | 3,916,737.20 |
| Subtotal | 24,775,052.41 | 25,068,005.39 |
| Less: provision for bad debts | 7,782,336.49 | 8,065,047.30 |
| Total | 16,992,715.92 | 17,002,958.09 |
②Disclosed by nature of other receivables
－150－Items
| Items | 2021.12.31 | 2020.12.31 | ||||
| Closing balance | Provision for bad debts | Carrying value | Closing balance | Provision for bad debts | Carrying value | |
| Petty cash | 2,928,009.49 | 423,868.66 | 2,504,140.83 | 4,090,770.93 | 1,118,251.50 | 2,972,519.43 |
| Deposits | 12,643,770.00 | 812,188.50 | 11,831,581.50 | 12,043,324.63 | 760,547.45 | 11,282,777.18 |
| Due from other companies | 6,381,935.32 | 3,724,941.73 | 2,656,993.59 | 6,112,572.23 | 3,364,910.75 | 2,747,661.48 |
| Court debit | 2,821,337.60 | 2,821,337.60 | -- | 2,821,337.60 | 2,821,337.60 | -- |
| Total | 24,775,052.41 | 7,782,336.49 | 16,992,715.92 | 25,068,005.39 | 8,065,047.30 | 17,002,958.09 |
③Provision for bad debts
As at 31 December 2021, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Bad debt provision assessed in portfolios | 9,237,576.78 | 5.00 | 461,878.85 | 8,775,697.93 | |
| Petty cash and deposits | 7,797,303.58 | 5.00 | 389,865.18 | 7,407,438.40 | |
| Due from other companies | 1,440,273.20 | 5.00 | 72,013.67 | 1,368,259.53 | |
| Total | 9,237,576.78 | 5.00 | 461,878.85 | 8,775,697.93 |
As at 31 December 2021, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Bad debt provision assessed in portfolios | 9,142,636.31 | 10.12 | 925,618.32 | 8,217,017.99 | |
| Petty cash and deposits | 7,603,755.91 | 8.88 | 675,471.97 | 6,928,283.94 | |
| Due from other companies | 1,538,880.40 | 16.26 | 250,146.35 | 1,288,734.05 | |
| Total | 9,142,636.31 | 10.12 | 925,618.32 | 8,217,017.99 |
As at 31 December 2021, Phase III bad debts provision:
－151－
Category
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | |||||
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- | |
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 170,720.00 | 100.00 | 170,720.00 | -- | |
| Due from other companiesover 5 years | 3,402,781.72 | 100.00 | 3,402,781.72 | -- | |
| Total | 6,394,839.32 | 100.00 | 6,394,839.32 | -- |
As at 31 December 2020, Phase I bad debts provision:
| Category | Book balance | Expected credit loss within 12 months (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Bad debt provision assessed in portfolios | 12,399,643.37 | 5.00 | 619,982.18 | 11,779,661.19 | |
| Petty cash and deposits | 11,001,515.86 | 5.00 | 550,075.80 | 10,451,440.06 | |
| Due from other companies | 1,398,127.51 | 5.00 | 69,906.38 | 1,328,221.13 | |
| Total | 12,399,643.37 | 5.00 | 619,982.18 | 11,779,661.19 |
As at 31 December 2020, Phase II bad debts provision:
| Category | Book balance | Expected credit loss within the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Bad debt provision assessed in portfolios | 5,930,287.22 | 11.92 | 706,990.32 | 5,223,296.90 | |
| Petty cash and deposits | 4,261,523.91 | 10.74 | 457,667.37 | 3,803,856.54 | |
| Due from other companies | 1,668,763.31 | 14.94 | 249,322.95 | 1,419,440.36 | |
| Total | 5,930,287.22 | 11.92 | 706,990.32 | 5,223,296.90 |
As at 31 December 2020, Phase III bad debts provision:
－152－
Category
| Category | Book balance | Expected credit loss over the lifetime (%) | Provision for bad debts | Carrying value | Reason for bad debts |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- | |
| People's Court of Muye District, Xinxiang City, Henan Province | 2,305,049.60 | 100.00 | 2,305,049.60 | -- | |
| Petty cash over 5 years | 871,055.79 | 100.00 | 871,055.79 | -- | |
| Due from other companiesover 5 years | 3,045,681.41 | 100.00 | 3,045,681.41 | -- | |
| Total | 6,738,074.80 | 100.00 | 6,738,074.80 | -- |
④Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 31 December 2020 | 619,982.18 | 706,990.32 | 6,738,074.80 | 8,065,047.30 |
| Changes during the year | ||||
| --Shift to Phase II | -- | -- | -- | -- |
| --Shift to Phase III | -- | -- | -- | -- |
| --Back to Phase II | -- | -- | -- | -- |
| --Back to Phase I | -- | -- | -- | -- |
| Provision | -- | 218,628.00 | -- | 218,628.00 |
| Reversal | 158,103.33 | -- | 343,235.48 | 501,338.81 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 31 December 2021 | 461,878.85 | 925,618.32 | 6,394,839.32 | 7,782,336.49 |
⑤There is no write-off of provision for bad debts during reporting period.
⑥The top five other receivables classified by debtors are as follows:
－153－
Company Name
| Company Name | Nature | Closing balance | Ageing | Percentage of total other receivable (%) | Closing balance of bad debt provision |
| Bmw Brilliance Automotive Ltd. | Security fund | 6,000,000.00 | 1-2 year | 24.22 | 480,000.00 |
| Petty cash | Petty cash | 2,928,009.49 | 1-5 years | 11.82 | 423,868.66 |
| Henan Taihang Vibrating Machinery Co., Ltd. | Court debit | 2,305,049.60 | over 5 years | 9.30 | 2,305,049.60 |
| Due from other companies over 5 years | Due from trading | 2,000,000.00 | over 5 years | 8.07 | 2,000,000.00 |
| China Railway Major Bridge Engineering Group Co., Ltd. | Security fund | 1,400,000.00 | Within 1 years | 5.65 | 70,000.00 |
| Total | 14,633,059.09 | 59.06 | 5,278,918.26 |
7. Inventories
(1) Classification of inventories
| Items | 2021.12.31 | 2020.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Raw materials | 3,337,802,209.73 | 44,544,258.60 | 3,293,257,951.13 | 3,086,100,265.11 | 61,148,560.44 | 3,024,951,704.67 |
| Finished goods | 4,372,913,179.13 | 102,584,159.77 | 4,270,329,019.36 | 3,697,587,429.50 | 47,273,967.29 | 3,650,313,462.21 |
| Consumables | 528,353,704.73 | -- | 528,353,704.73 | 792,185,183.43 | -- | 792,185,183.43 |
| Self-made semi-finished goods | 3,808,677,560.29 | -- | 3,808,677,560.29 | 3,132,280,701.97 | -- | 3,132,280,701.97 |
| Total | 12,047,746,653.88 | 147,128,418.37 | 11,900,618,235.51 | 10,708,153,580.01 | 108,422,527.73 | 10,599,731,052.28 |
(2) Provision for impairment
| Items | 2021.01.01 | Increase | Decrease | 2021.12.31 | ||
| Provision | Others | Reversal or Write-off | Others | |||
| Raw materials | 61,148,560.44 | -- | -- | 16,604,301.84 | -- | 44,544,258.60 |
| Finished goods | 47,273,967.29 | 167,567,546.04 | -- | 112,257,353.56 | -- | 102,584,159.77 |
| Total | 108,422,527.73 | 167,567,546.04 | -- | 128,861,655.40 | -- | 147,128,418.37 |
8. Other current assets
－154－Items
| Items | 2021.12.31 | 2020.12.31 |
| Input value added tax | 267,822,797.14 | 128,761,143.08 |
| Input value added tax to be certified | 429,476,806.82 | 329,157,513.74 |
| Prepaid income tax | 20,063,782.91 | 15,705,110.79 |
| Entrusted Loans | 147,227,500.00 | 245,455,297.98 |
| Carbon emission rights assets | 74,842.65 | -- |
| Total | 864,665,729.52 | 719,079,065.59 |
9. Long-term equity investments
－155－Company Nmae
| Company Nmae | 2020.12.31 | Movements during the year | 2021.12.31 | Impairment at the end of the year | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed under the equity method | Adjustment of other comprehensive income | Other equity movement | Cash dividend or profit declared | Provision for impairment | Others | ||||
| ①Joint ventures | |||||||||||
| Tangshan Guoxing Industrial Co., Ltd. | 32,911,004.94 | -- | -- | 5,376,570.92 | -- | -- | 2,000,000.00 | -- | -- | 36,287,575.86 | -- |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 108,750,931.30 | -- | -- | -87,214,701.86 | -- | -- | -- | -- | -- | 21,536,229.44 | -- |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 1,087,536,364.97 | -- | -- | 28,387,430.23 | -- | -2,755,692.16 | -- | -- | -- | 1,113,168,103.04 | -- |
| Subtotal | 1,229,198,301.21 | -- | -- | -53,450,700.71 | -- | -2,755,692.16 | 2,000,000.00 | -- | -- | 1,170,991,908.34 | -- |
| ②Associates | |||||||||||
| Tangshan Tangcao Railway Co., Ltd. | 450,000,000.00 | -- | -- | -67,696,004.52 | -- | 106,991.64 | -- | -- | -- | 382,410,987.12 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 83,495,502.41 | -- | -- | 8,046,389.32 | -- | -- | 12,500,000.00 | -- | -- | 79,041,891.73 | -- |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 952,347,397.55 | -- | -- | 145,737,955.36 | -- | -- | -- | -- | -- | 1,098,085,352.91 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 431,802,688.92 | -- | 200,000,000.00 | 54,630,078.50 | -- | -- | 173,716,946.85 | -- | -- | 112,715,820.57 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 11,380,505.05 | -- | -- | 2,606,585.31 | -- | -- | -- | -- | -- | 13,987,090.36 | -- |
－156－
Ningbo ShougangZhejin Steel Co., Ltd.
| Ningbo Shougang Zhejin Steel Co., Ltd. | 20,636,741.37 | -- | -- | 525,032.30 | -- | -- | 484,615.99 | -- | -- | 20,677,157.68 | -- |
| Guangzhou Jinghai Shipping Co., Ltd. | 30,554,980.75 | -- | -- | 634,241.83 | -- | -98.58 | 600,000.00 | -- | -- | 30,589,124.00 | -- |
| Shougang (Qingdao) Steel Industry Co., Ltd. | 46,275,722.81 | 8,750,000.00 | -- | 1,577,638.95 | -- | -- | -- | -- | -- | 56,603,361.76 | -- |
| Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | 17,098,875.96 | -- | 12,000,000.00 | 656,416.90 | -- | -- | 5,755,292.86 | -- | -- | -- | -- |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | 39,011,380.97 | -- | -- | 17,618.77 | -- | -- | -- | -- | -- | 39,028,999.74 | -- |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 23,029,268.50 | -- | -- | -2,682,116.64 | -- | -- | -- | -- | -- | 20,347,151.86 | -- |
| Hebei Jingji Industry & Trading Co., Ltd. | 6,376,799.26 | -- | -- | 2,332,645.82 | -- | -- | 1,258,306.84 | -- | -- | 7,451,138.24 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | -- | 33,791,925.24 | -- | 206,988.73 | -- | -- | -- | -- | -- | 33,998,913.97 | -- |
| Subtotal | 2,112,009,863.55 | 42,541,925.24 | 212,000,000.00 | 146,593,470.63 | -- | 106,893.06 | 194,315,162.54 | -- | -- | 1,894,936,989.94 | -- |
| Total | 3,341,208,164.76 | 42,541,925.24 | 212,000,000.00 | 93,142,769.92 | -- | -2,648,799.10 | 196,315,162.54 | -- | -- | 3,065,928,898.28 | -- |
10. Other equity instrument investments
| Items | 2021.12.31 | 2020.12.31 |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 226,566,944.00 | 245,378,470.24 |
| Minmetals Special Steel (Dongguan) Co., Ltd. | 3,608,571.79 | 3,442,862.75 |
| Qian'an Shoujia Construction Material Co., Ltd. | 13,765,068.94 | 10,923,584.79 |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 14,937,088.81 | 10,550,949.94 |
| Minmetals Tianwei Steel Co., Ltd. | 6,023,090.43 | 5,950,818.84 |
| Total | 264,900,763.97 | 276,246,686.56 |
| Items | Dividend recognized during the year | Accumulated gain | Accumulated loss | Other comprehensive income transferred to retained earnings | Reasons |
| Beijing TIEKE Shougang RAILWAY-TECH Co., Ltd. | 1,349,952.00 | 216,865,744.00 | -- | -- | |
| Minmetals Special Steel (Dongguan) Co., Ltd. | -- | -- | 1,391,428.21 | -- | |
| Qian'an Shoujia Construction Material Co., Ltd. | -- | -- | 9,101,306.06 | -- | |
| Qian'an PetroChina Kunlun Gas Co., Ltd | 1,218,825.38 | 13,137,088.81 | 1,196,909.57 | -- | |
| Minmetals Tianwei Steel Co., Ltd. | 150,000.00 | -- | -- | -- | |
| Total | 2,718,777.38 | 230,002,832.81 | 11,689,643.84 | -- |
11. Other non-current financial assets
| Items | 2021.12.31 | 2020.12.31 |
| Financial assets measured at fair value through profit and loss | 80,000,000.00 | -- |
Continued:
| Items | 2021.12.31 | 2020.12.31 |
| Beijing Shouxin Jin'an Equity Investment Partnership (Limited Partnership) | 80,000,000.00 | -- |
Note: The fair value and investment of Beijing Shouxin Jin'an Equity Investment Partnership(Limited Partnership) are detailed in Notes Ⅶ, 3 and Notes Ⅸ.
12. Fixed assets
| Items | 2021.12.31 | 2020.12.31 |
| Fixed assets | 95,632,825,411.62 | 96,220,769,301.39 |
| Fixed assets to be disposed | -- | -- |
| Total | 95,632,825,411.62 | 96,220,769,301.39 |
Fixed assets
①Details of fixed assets
| Items | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| I. Cost： | ||||||||
| 1. At 31 December 2020 | 35,291,731,605.92 | 38,576,931,300.72 | 2,279,000,791.65 | 8,492,855,841.26 | 600,671,077.96 | 65,404,520,847.03 | 1,103,207,965.29 | 151,748,919,429.83 |
| 2.Increase | 1,664,827,205.55 | 2,889,108,127.62 | 130,606,904.28 | 987,994,414.07 | 639,571,906.22 | 516,130,834.76 | -48,645,654.12 | 6,779,593,738.38 |
| (1) Purchase | 3,388,588.55 | 98,367,040.85 | 17,731,314.89 | 91,586,687.52 | 92,120.00 | 54,615,638.95 | 8,710,836.50 | 274,492,227.26 |
| (2) Transferred from construction in progress | 1,661,438,617.00 | 2,790,741,086.77 | 112,875,589.39 | 896,407,726.55 | 639,479,786.22 | 461,515,195.81 | -57,356,490.62 | 6,505,101,511.12 |
| 3.Decrease | 63,861,337.42 | 27,770,421.27 | 46,732,042.28 | 26,358,873.48 | -- | 61,749,450.30 | 3,861,200.10 | 230,333,324.85 |
| Disposal or retirement | 63,861,337.42 | 27,770,421.27 | 46,732,042.28 | 26,358,873.48 | -- | 61,749,450.30 | 3,861,200.10 | 230,333,324.85 |
| 4. At 31 December 2021 | 36,892,697,474.05 | 41,438,269,007.07 | 2,362,875,653.65 | 9,454,491,381.85 | 1,240,242,984.18 | 65,858,902,231.49 | 1,050,701,111.07 | 158,298,179,843.36 |
| II. Accumulated depreciation: | ||||||||
| 1. At 31 December 2020 | 8,531,130,927.72 | 12,715,228,911.58 | 1,427,849,690.13 | 4,450,314,324.34 | 331,675,314.84 | 27,778,520,951.93 | 293,430,007.90 | 55,528,150,128.44 |
| 2.Increase | 1,354,047,663.36 | 1,996,355,251.83 | 129,257,883.50 | 893,891,223.20 | 242,974,717.32 | 2,600,164,437.64 | 70,868,074.34 | 7,287,559,251.19 |
| Depreciation | 1,354,047,663.36 | 1,996,355,251.83 | 129,257,883.50 | 893,891,223.20 | 242,974,717.32 | 2,600,164,437.64 | 70,868,074.34 | 7,287,559,251.19 |
| 3.Decrease | 19,060,021.41 | 19,660,860.68 | 42,799,687.21 | 23,793,641.40 | -- | 42,257,856.77 | 2,782,880.42 | 150,354,947.89 |
| Disposal or retirement | 19,060,021.41 | 19,660,860.68 | 42,799,687.21 | 23,793,641.40 | -- | 42,257,856.77 | 2,782,880.42 | 150,354,947.89 |
| 4.At 31 December 2021 | 9,866,118,569.67 | 14,691,923,302.73 | 1,514,307,886.42 | 5,320,411,906.14 | 574,650,032.16 | 30,336,427,532.80 | 361,515,201.82 | 62,665,354,431.74 |
| III. Impaiment |
| Items | Plant and buildings | Machinery and equipment | Motor vechiles | Electronic equipment | Industrial furnace | Metallurgical equipment | Other tools | Total |
| 1.At 31 December 2020 | -- | -- | -- | -- | -- | -- | -- | -- |
| 2.Increase | -- | -- | -- | -- | -- | -- | -- | -- |
| 3.Decrease | -- | -- | -- | -- | -- | -- | -- | -- |
| 4.At 31 December 2021 | -- | -- | -- | -- | -- | -- | -- | -- |
| IV. Carrying value | ||||||||
| 1.31 December 2021 | 27,026,578,904.38 | 26,746,345,704.34 | 848,567,767.23 | 4,134,079,475.71 | 665,592,952.02 | 35,522,474,698.69 | 689,185,909.25 | 95,632,825,411.62 |
| 2.31 December 2020 | 26,760,600,678.20 | 25,861,702,389.14 | 851,151,101.52 | 4,042,541,516.92 | 268,995,763.12 | 37,625,999,895.10 | 809,777,957.39 | 96,220,769,301.39 |
Notes: As of 31 December 2021, there is no mortgaged or guaranteed fixed assets.
②As of 31 December 2021, there is no temporarily idle fixed asset.
③As of 31 December 2021,fixed assets leased through operating leases are as follows:
| Items | Carrying value |
| Plant and buildings | 104,985,239.21 |
④Fixed assets pending certificates of ownership
| Items | Carrying value | Reasons for pending certificates |
| Building of Beijing Shougang Cold Rolling Co., Ltd. | 34,888,371.00 | Property certificate is in the process |
| Building of Shougang Jingtang United Iron & Steel Co., Ltd. | 10,929,553,956.19 | To be handled after completing the relevant procedures of the occupied phase I project land |
| Building of Beijing Shougang Steel Trading Investment Management Co., Ltd. | 139,752,085.12 | Property certificate is in the process |
13. Construction in progress
| Items | 2021.12.31 | 2020.12.31 |
| Construction in progress | 6,517,089,845.13 | 7,895,623,444.81 |
| Construction materials | 619,893,915.94 | 401,558,503.81 |
| Total | 7,136,983,761.07 | 8,297,181,948.62 |
(1) Construction in progress
①Details of construction in progress
| Items | 2021.12.31 | 2020.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Jingtang Co. Phase-I and technical transformation project | 2,042,734,311.07 | -- | 2,042,734,311.07 | 2,408,662,882.37 | -- | 2,408,662,882.37 |
| Jingtang Co. Phase-II project | 21,094,822.03 | 21,094,822.03 | 1,366,399,728.62 | -- | 1,366,399,728.62 | |
| Other projects | 4,453,260,712.03 | -- | 4,453,260,712.03 | 4,120,560,833.82 | -- | 4,120,560,833.82 |
| Total | 6,517,089,845.13 | -- | 6,517,089,845.13 | 7,895,623,444.81 | -- | 7,895,623,444.81 |
②The movements of major construction projects in progress:
| Project name | 2020.12.31 | Additions | Transferred to fixed assets | Other deduction | Accumulated interest capitalization | Capitalized Interest during reporting year | % of interest capitalization | 2021.12.31 |
| New energy vehicle electrician steel project | 626,005,676.23 | 371,379,405.96 | -- | -- | 7,647,750.00 | 7,647,750.00 | 4.05 | 997,385,082.19 |
| Jingtang Co. Phase-II project | 1,366,399,728.62 | 255,039,979.40 | 1,600,344,885.99 | -- | -- | -- | -- | 21,094,822.03 |
| Total | 1,992,405,404.85 | 626,419,385.36 | 1,600,344,885.99 | -- | 7,647,750.00 | 7,647,750.00 | -- | 1,018,479,904.22 |
The movements of major construction projects in progress (continued): (Unit: RMB hundredmillion)
| Project name | Budget | The propotion of projects investment account for budget % | Progress (%) | Source of fund |
| New energy vehicle electrician steel project | 19.79 | 86.97 | The devicesof the project are being installed | Selfraised |
| Jingtang Co. Phase-II project | 238.77 | 98.00 | The project has been transferred to fixed assets | Selfraised |
③As of 31 December 2021, there is no provision for impairment of construction in progress.
(2) Construction materials
| Items | 2021.12.31 | 2020.12.31 |
| Specific materials | 17,081,983.66 | 45,008,729.80 |
| Specific equipments | 602,811,932.28 | 356,549,774.01 |
| Subtotal | 619,893,915.94 | 401,558,503.81 |
| Provision for impairment of construction materials | -- | -- |
| Total | 619,893,915.94 | 401,558,503.81 |
14. Right-of-use assets
| Items | Plant and buildings | Land use rights | Motor vechiles | Total |
| I. Cost： | ||||
| At 31 December 2020 | -- | -- | -- | -- |
| Add: accounting policy alternative | 62,180,405.95 | 311,888.26 | -- | 62,492,294.21 |
| 1. At 1 January 2021 | 62,180,405.95 | 311,888.26 | -- | 62,492,294.21 |
| 2.Increase during the period | 53,921,180.55 | -- | 474,802.94 | 54,395,983.49 |
| Lease | 53,921,180.55 | -- | 474,802.94 | 54,395,983.49 |
| 3.Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2021 | 116,101,586.50 | 311,888.26 | 474,802.94 | 116,888,277.70 |
| II. Accumulated depreciation | ||||
| At 31 December 2020 | -- | -- | -- | -- |
| Add: accounting policy alternative | -- | -- | -- | -- |
| 1. At 1 January 2021 | -- | -- | -- | -- |
| 2.Increase during the period | 16,440,339.87 | 55,860.60 | 112,079.59 | 16,608,280.06 |
| Provision | 16,440,339.87 | 55,860.60 | 112,079.59 | 16,608,280.06 |
| 3.Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2021 | 16,440,339.87 | 55,860.60 | 112,079.59 | 16,608,280.06 |
| III. Impaiment | ||||
| 1. At 1 January 2021 | -- | -- | -- | -- |
| 2.Increase during the period | -- | -- | -- | -- |
| 3.Decrease during the period | -- | -- | -- | -- |
| 4. At 31 December 2021 | -- | -- | -- | -- |
| IV. Carrying value | ||||
| 1.31 December 2021 | 99,661,246.63 | 256,027.66 | 362,723.35 | 100,279,997.64 |
| 2.1 January 2021 | 62,180,405.95 | 311,888.26 | -- | 62,492,294.21 |
Note: As of 31 December 2021, lease fees related to short-term leases and leases of low valueassets as detailed in Note XIV, 2.
15. Intangible assets
Details of intangible assets
| Items | Software | Land use rights | Total |
| I. Cost | |||
| 1.At 31 December 2020 | 376,144,847.17 | 4,556,828,461.46 | 4,932,973,308.63 |
| 2.Increase | 59,459,544.63 | -- | 59,459,544.63 |
| Purchase | 59,459,544.63 | -- | 59,459,544.63 |
| 3.Decrease | 125,270.06 | 29,302,793.50 | 29,428,063.56 |
| Disposal | 125,270.06 | 29,302,793.50 | 29,428,063.56 |
| Items | Software | Land use rights | Total |
| 4.At 31 December 2021 | 435,479,121.74 | 4,527,525,667.96 | 4,963,004,789.70 |
| II. Accumulated amortization | |||
| 1.At 31 December 2020 | 79,627,203.85 | 798,066,237.29 | 877,693,441.14 |
| 2.Increase | 42,748,017.94 | 95,324,159.29 | 138,072,177.23 |
| Provision | 42,748,017.94 | 95,324,159.29 | 138,072,177.23 |
| 3.Decrease | 125,270.06 | 8,320,569.02 | 8,445,839.08 |
| Disposal | 125,270.06 | 8,320,569.02 | 8,445,839.08 |
| 4.At 31 December 2021 | 122,249,951.73 | 885,069,827.56 | 1,007,319,779.29 |
| III. Impairment | |||
| 1.At 31 December 2020 | -- | -- | -- |
| 2.Increase | -- | -- | -- |
| 3.Decrease | -- | -- | -- |
| 4.At 31 December 2021 | -- | -- | -- |
| IV. Carrying value | |||
| 1.31 December 2021 | 313,229,170.01 | 3,642,455,840.40 | 3,955,685,010.41 |
| 2.31 December 2020 | 296,517,643.32 | 3,758,762,224.17 | 4,055,279,867.49 |
16. Long-term prepaid expenses
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 | |
| Amortization | Others | ||||
| Renovation costs | 1,122,060.45 | 449,433.95 | 345,030.83 | -- | 1,226,463.57 |
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities before offsetting
| Items | 2021.12.31 | 2020.12.31 | ||
| Deductible/taxable temporary differences | Deferred tax assets/liabilities | Deductible/taxable temporary differences | Deferred tax assets/liabilities | |
| Deferred tax assets： | ||||
| Asset impairment provision | 337,661,843.04 | 54,026,814.61 | 180,255,923.00 | 29,932,810.24 |
| The actual payment amount of payroll payable less than the accrued amount | 11,854,543.71 | 1,778,181.56 | 11,860,973.73 | 1,779,146.06 |
| Defferred income | 222,651,867.20 | 33,808,482.45 | 231,572,159.49 | 35,170,511.45 |
| Asset amortization difference | 6,443,561.93 | 966,534.25 | 8,225,748.90 | 1,233,862.32 |
| Unrealized internal transaction | 323,189,435.59 | 48,478,415.34 | 244,850,723.70 | 36,727,608.55 |
| Joint commissioning cost | 330,082,990.71 | 49,512,448.61 | 287,056,216.51 | 43,058,432.48 |
| Differences in amortization of right-of-use assets | 2,078,979.09 | 437,933.60 | -- | -- |
| Equity incentive | 4,643,140.32 | 712,612.87 | -- | -- |
| Subtotal | 1,238,606,361.59 | 189,721,423.29 | 963,821,745.33 | 147,902,371.10 |
| Deferred tax liabilities： | ||||
| Joint commissioning cost | 1,174,742,095.80 | 176,211,314.37 | 1,264,022,611.00 | 189,603,391.65 |
| Changes in fair value of other equity instrument investments included in other comprehensive income | 218,313,188.97 | 32,746,978.38 | 229,659,111.56 | 34,448,866.74 |
| Return on investment realized by the partnership | -- | -- | 227,976,094.59 | 34,196,414.19 |
| Subtotal | 1,393,055,284.77 | 208,958,292.75 | 1,721,657,817.15 | 258,248,672.58 |
(2) Details of unrecognized deferred tax assets from deductible temporary differences anddeductible tax losses:
| Items | 2021.12.31 | 2020.12.31 |
| Deductible temporary differences | 111,280,769.32 | 82,690,128.78 |
| Deductible tax losses | 136,319,094.41 | 655,600,345.27 |
| Total | 247,599,863.73 | 738,290,474.05 |
(3) Unrecognized deferred tax liabilities from deductible tax losses will expire in the followingyears:
| Year | 2021.12.31 | 2020.12.31 | Note |
| 2021 | —— | 522,048,520.82 | |
| 2022 | 32,710,500.17 | 34,487,825.76 | |
| 2023 | 33,894,110.96 | 35,278,200.93 | |
| 2024 | 34,359,166.04 | 34,995,102.07 | |
| 2025 | 20,479,539.98 | 28,790,695.69 | |
| 2026 | 14,875,777.26 | —— | |
| Total | 136,319,094.41 | 655,600,345.27 |
18. Other non-current assets
| Items | 2021.12.31 | 2020.12.31 |
| Phase II coking project | -- | 1,965,717,410.38 |
19. Short-term loans
Classification of short-term loans
| Items | 2021.12.31 | 2020.12.31 |
| Pledged loans | 19,753,215.18 | 59,260,000.00 |
| Guaranteed loans | 8,787,335,054.82 | 7,736,984,828.91 |
| Credit loans | 16,471,285,046.25 | 15,916,146,611.34 |
| Total | 25,278,373,316.25 | 23,712,391,440.25 |
Note: The loan of RMB 19,753,215.18 ispledged by a discounted but unmatured andnon-terminatingly recognized note with a carrying value of RMB 19,753,215.18.
20. Notes payable
| Items | 2021.12.31 | 2020.12.31 |
| Commercial acceptance notes | 6,915,076,896.08 | 6,648,310,000.00 |
| Bank acceptances | 573,853,897.69 | 156,500,000.00 |
| Total | 7,488,930,793.77 | 6,804,810,000.00 |
21. Accounts payable
| Items | 2021.12.31 | 2020.12.31 |
| Payables for goods | 22,841,312,053.50 | 21,105,550,686.36 |
| Payables for construction | 3,424,278,719.60 | 5,433,803,694.32 |
| Total | 26,265,590,773.10 | 26,539,354,380.68 |
Among which, the material payables aged over 1 year are as follows:
| Company name | Closing balance | Reason for non-settlement |
| Beijing Shougang Mining Investment Co., Ltd | 175,708,332.43 | In the execution |
| Tangshan Shoukuang Cleaning Iron Co., Ltd. | 137,489,080.84 | In the execution |
| Beijing Shougang Special Steel Co., Ltd. | 101,949,940.33 | In the execution |
| Beijing Teyu Plate Co., Ltd. | 85,095,430.63 | In the execution |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | In the execution |
| Total | 557,933,210.87 |
22. Contract liabilities
| Items | 2021.12.31 | 2020.12.31 |
| Advance from product sales | 5,230,456,327.37 | 4,659,444,741.25 |
| Less: contractual liabilities included in other non-current liabilities | -- | -- |
| Total | 5,230,456,327.37 | 4,659,444,741.25 |
23. Payroll and employee benefits
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Short-term employee benefits | 453,649,083.86 | 4,248,456,762.30 | 4,222,414,870.02 | 479,690,976.14 |
| Post-employment benefits (defined contribution plans) | 12,670,298.16 | 418,193,499.23 | 409,407,632.19 | 21,456,165.20 |
| Termination benefits | -- | 34,298,223.48 | 34,298,223.48 | -- |
| Other retirement benefits due within one year | -- | -- | -- | -- |
| Total | 466,319,382.02 | 4,700,948,485.01 | 4,666,120,725.69 | 501,147,141.34 |
(1) Short-term employee benefits
| Items | 2020.12.31 | Increase during the year | Decrease during the year | 2021.12.31 |
| Salaries, bonuses and subsidies | 120,236,346.19 | 3,288,180,387.33 | 3,311,295,268.59 | 97,121,464.93 |
| Welfare | -- | 254,962,365.35 | 254,962,365.35 | -- |
| Social insurance | 123,230,711.43 | 290,276,896.28 | 267,037,535.88 | 146,470,071.83 |
| Including: 1.Medical insurance | 123,118,996.23 | 258,526,134.78 | 235,522,712.92 | 146,122,418.09 |
| 2.Work-related injury insurance | 81,461.20 | 31,574,108.15 | 31,309,474.71 | 346,094.64 |
| 3.Maternity insurance | 30,254.00 | 176,653.35 | 205,348.25 | 1,559.10 |
| Housing fund | 45,687.00 | 293,079,907.38 | 293,075,027.38 | 50,567.00 |
| Labor union fee and employee education fee | 210,111,184.77 | 113,524,726.15 | 87,587,038.54 | 236,048,872.38 |
| Equity incentive | -- | 7,165,158.72 | 7,165,158.72 | -- |
| Short-term profit-sharing plan | -- | -- | -- | -- |
| Non-monetary benefits | -- | -- | -- | -- |
| Other short-term employee benefits | 25,154.47 | 1,267,321.09 | 1,292,475.56 | -- |
| Total | 453,649,083.86 | 4,248,456,762.30 | 4,222,414,870.02 | 479,690,976.14 |
(2) Defined contribution plans
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Post-employment benefits | ||||
| Including: 1.Pension insurance | 754,477.10 | 402,053,111.10 | 393,481,918.10 | 9,325,670.10 |
| 2.Unemployment insurance | 11,915,821.06 | 16,140,388.13 | 15,925,714.09 | 12,130,495.10 |
| Total | 12,670,298.16 | 418,193,499.23 | 409,407,632.19 | 21,456,165.20 |
(3) Termination benefits
| Item | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Compensation for employee resettlement | -- | 34,298,223.48 | 34,298,223.48 | -- |
24. Taxes payable
| Items | 2021.12.31 | 2020.12.31 |
| Value-added tax | 62,122,718.96 | 328,419,753.24 |
| City construction and maintenance tax | 8,001,876.62 | 8,219,107.89 |
| Corporate income tax | 317,223,625.65 | 204,377,308.95 |
| Land use tax | 440,536.03 | 440,536.03 |
| Real estate tax | 869,141.45 | 662,892.50 |
| Education surcharge | 6,022,083.47 | 6,378,667.56 |
| Resouorce tax | 7,531,618.50 | 8,728,760.60 |
| Stamp duty | 8,864,862.42 | 4,264,130.68 |
| Individual income tax | 3,797,661.67 | 2,817,099.40 |
| Environment protection tax | 10,336,189.53 | 8,226,691.30 |
| Other taxes | -- | 105,907.85 |
| Total | 425,210,314.30 | 572,640,856.00 |
25. Other payables
| Items | 2021.12.31 | 2020.12.31 |
| Other payables | 1,015,941,625.80 | 2,104,822,314.59 |
Other payables
| Items | 2021.12.31 | 2020.12.31 |
| Deposits | 6,242,141.60 | 6,832,124.47 |
| Guarantee | 35,537,715.10 | 342,057,412.19 |
| Due from other companies | 706,076,631.73 | 568,204,855.05 |
| Due from companies of Shougang Group | 57,154,287.37 | 1,187,727,922.88 |
| Repurchase obligation of restricted stock | 210,930,850.00 | -- |
| Total | 1,015,941,625.80 | 2,104,822,314.59 |
26. Current portion of non-current liabilities
| Items | 2021.12.31 | 2020.12.31 |
| Long-term borrowings due within 1 year | 10,404,580,520.24 | 7,216,108,822.29 |
| Bonds payable due within 1 year | 28,468,055.61 | 4,055,334,722.33 |
| Long-term payables due within 1 year | 3,407,794.44 | 1,679,840.43 |
| Lease liabilities due within 1 year | 14,837,257.91 | -- |
| Total | 10,451,293,628.20 | 11,273,123,385.05 |
(1) Long-term borrowings due within 1 year
| Items | 2021.12.31 | 2020.12.31 |
| Guaranteed loans | 413,924,166.67 | 2,216,958,333.34 |
| Credit loans | 9,990,656,353.57 | 4,999,150,488.95 |
| Total | 10,404,580,520.24 | 7,216,108,822.29 |
(2) Bonds payable due within 1 year
| Bond name | 2021.12.31 | 2020.12.31 |
| 20 Shouqian 01 (accrued interest) | 28,468,055.61 | 28,468,055.57 |
| Zhongshixiezhu No.[2015] MTN688 | -- | 2,013,366,666.76 |
| Zhongshixiezhu No.[2015] MTN692 | -- | 2,013,500,000.00 |
| Total | 28,468,055.61 | 4,055,334,722.33 |
(3) Long-term payables due within 1 year
| Items | 2021.12.31 | 2020.12.31 |
| Finance lease payables | 3,407,794.44 | 1,679,840.43 |
27. Other current liabilities
| Items | 2021.12.31 | 2020.12.31 |
| Short-term bonds payable | 1,007,299,452.05 | 501,195,000.00 |
| Tax to be exported | 901,212,275.43 | 605,727,816.36 |
| Total | 1,908,511,727.48 | 1,106,922,816.36 |
Short-term bonds payable:
| Bond name | Nominal value | Issue date | Maturity of bond | Issue amount |
| SCP1 | 500,000,000.00 | 2020/11/27 | 110 days | 500,000,000.00 |
| SCP2 | 500,000,000.00 | 2021/4/2 | 180 days | 500,000,000.00 |
| SCP3 | 1,000,000,000.00 | 2021/9/16 | 239 days | 1,000,000,000.00 |
| Subtotal | 2,000,000,000.00 | 2,000,000,000.00 |
Short-term Bonds Payable (Continued)
| Bond name | 2020.12.31 | Issued during current period | Interest accrued per nominal value | Amortization of premium and discount | Repaid in the current period | 2021.12.31 |
| SCP1 | 501,195,000.00 | -- | 2,406,369.86 | -- | 503,601,369.86 | -- |
| SCP2 | -- | 500,000,000.00 | 7,101,369.85 | -- | 507,101,369.85 | -- |
| SCP3 | -- | 1,000,000,000.00 | 7,299,452.05 | -- | -- | 1,007,299,452.05 |
| Total | 501,195,000.00 | 1,500,000,000.00 | 16,807,191.76 | -- | 1,010,702,739.71 | 1,007,299,452.05 |
28. Long-term borrowings
| Items | 2021.12.31 | Range of interest rate | 2020.12.31 | Range of interest rate |
| Guaranteed loans | 9,813,924,166.67 | 4.75%-4.90% | 12,016,958,333.34 | 4.75%-4.90% |
| Credit loans | 12,283,366,353.57 | 3.5%-4.90% | 15,838,450,488.95 | 3.5%-4.90% |
| Subtotal | 22,097,290,520.24 | 27,855,408,822.29 | ||
| Less: Long-term borrowings due within one year | 10,404,580,520.24 | 3.5%-4.90% | 7,216,108,822.29 | 3.5%-4.90% |
| Total | 11,692,710,000.00 | 20,639,300,000.00 |
29. Bonds payable
| Items | 2021.12.31 | 2020.12.31 |
| Common bond | 2,500,000,000.00 | 2,500,000,000.00 |
Movements in bonds payable
| Bond name | Par value | Issue date | Term to maturity | Amount on offer |
| Zhongshixiezhu No.[2015] MTN688 | 2,000,000,000.00 | 2016/11/3 | 5 years | 2,000,000,000.00 |
| Zhongshixiezhu No.[2015] MTN692 | 2,000,000,000.00 | 2016/11/3 | 5 years | 2,000,000,000.00 |
| 20 Shouqian 01 | 2,500,000,000.00 | 2020/9/15 | 5 years | 2,500,000,000.00 |
| Subtotal | 6,500,000,000.00 | 6,500,000,000.00 |
Bonds payable (Continued)
| Bond name | 2020.12.31 | Current year issuance | Accrued interest by par value | Amortisation of premium or discount | Current year repayment | 2021.12.31 |
| Zhongshixiezhu No.[2015] MTN688 | 2,013,433,333.42 | -- | 66,766,666.58 | -- | 2,080,200,000.00 | -- |
| Zhongshixiezhu No.[2015] MTN692 | 2,013,433,333.34 | -- | 67,566,666.66 | -- | 2,081,000,000.00 | -- |
| 20 Shouqian 01 | 2,528,468,055.57 | -- | 99,500,000.04 | -- | 99,500,000.00 | 2,528,468,055.61 |
| Subtotal | 6,555,334,722.33 | -- | 233,833,333.28 | -- | 4,260,700,000.00 | 2,528,468,055.61 |
| Less: Long-term loans due within 1 year | 4,055,334,722.33 | 28,468,055.61 | ||||
| Total | 2,500,000,000.00 | 2,500,000,000.00 |
30. Lease liabilities
| Items | 2021.12.31 | 2021.01.01 |
| Lease liabilities | 100,960,468.26 | 60,229,216.53 |
| Less: lease liabilities due within 1 year | 14,837,257.91 | 3,541,355.85 |
| Total | 86,123,210.35 | 56,687,860.68 |
Note: The interest expense of lease liabilities in 2021 is RMB 4,895,508.98, which isincluded in financial expenses – interests on lease liabilities.
31. Long-term payables
| Items | 2021.12.31 | 2020.12.31 |
| Long-term payables | 12,359,657.85 | 6,641,452.29 |
| Special payables | 2,300,000.00 | 2,300,000.00 |
| Total | 14,659,657.85 | 8,941,452.29 |
(1) Long-term payables
| Items | 2021.12.31 | 2020.12.31 |
| Finance lease payables | 15,767,452.29 | 8,321,292.72 |
| Less: Long-term payables due within 1 year | 3,407,794.44 | 1,679,840.43 |
| Total | 12,359,657.85 | 6,641,452.29 |
(2) Special payables
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 | Reason |
| Research and development funds | 2,300,000.00 | -- | -- | 2,300,000.00 |
32. Deferred revenue
| Items | 2020.12.31 | Increase During the year | Decrease During the year | 2021.12.31 | Reason |
| Government grant | 398,098,805.65 | 29,972,100.00 | 24,060,120.26 | 404,010,785.39 |
Notes: The government grants which recognized as deferred revenue refer to Note V. 58government grants.
33. Other non-current liabilities
| Items | 2021.12.31 | 2020.12.31 |
| Shougang Group advance payment for construction | 4,563,283,607.60 | 4,491,623,817.41 |
34. Share capital
| Items | 2020.12.31 | Changes in current (+/-) | 2021.12.31 | ||||
| Shares issued | Bonus issue | Shares transferred from reserves | Others | Subtotal | |||
| Total shares | 5,289,389,600.00 | 1,460,935,810.00 | -- | -- | -- | 1,460,935,810.00 | 6,750,325,410.00 |
Note: ① in 2021, the Company issued 1,396,034,010.00 new shares, Grant Thornton LLPverified and issued capital verification reports ofGTYZ (2021) No. 110C000199 and GTYZ(2021) No. 110C000291；② in 2021, the Company issued 64,901,800.00 restricted shares to386 directors, senior management, key technicians and management backbone. After thisoffering, the registered capital of the Company changes to RMB 6,750,325,410.00. GrantThornton LLP verified and issued capital verification report of GTYZ (2021) No.110C000858.
35. Capital reserve
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Share premium | 19,756,239,749.73 | 5,280,695,939.66 | -- | 25,036,935,689.39 |
| Other capital reserve | 3,019,370.67 | 2,023,779.12 | -- | 5,043,149.79 |
| Total | 19,759,259,120.40 | 5,282,719,718.78 | -- | 25,041,978,839.18 |
Note: the movement of other capital reserve is the changes in other equity of joint venturesrecognized by the Company in accordance with shareholding ratio and amortization of equityincentive expenses.
36. Treasury shares
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Restricted stock incentive plan | -- | 210,930,850.00 | -- | 210,930,850.00 |
37. Other comprehensive income
| Items | 2020.12.31 | The amount of the year | 2021.12.31 | ||||
| Pre-tax income for the period | Less: previously recognized amount transferred to profit or loss | Less: Income tax expense | Net-of-tax amount attributable to shareholders of the Company | Net-of-tax amount attributable to non-controlling interests | |||
| 1. Other comprehensive income that can not be reclassified to profit or loss | 195,210,244.82 | -11,345,922.59 | -- | -1,701,888.36 | -9,644,034.23 | -- | 185,566,210.59 |
| Changes in fair value of other equity instrument investments | 195,210,244.82 | -11,345,922.59 | -- | -1,701,888.36 | -9,644,034.23 | -- | 185,566,210.59 |
| 2. Other comprehensive income that can be reclassified to profit or loss | -- | -- | -- | -- | -- | -- | |
| Total | 195,210,244.82 | -11,345,922.59 | -1,701,888.36 | -9,644,034.23 | -- | 185,566,210.59 | |
The net amount of other comprehensive income after tax for the period is RMB-9,644,034.23. The net amount of other comprehensive incomeafter tax for reporting period attributables to the shareholders of parent company is RMB-9,644,034.23; and net amount of other comprehensiveincome after tax attributables to non-controlling interest is RMB 0.00.
38. Special reserve
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Safety fund | 21,577,537.20 | 79,954,336.07 | 80,477,501.49 | 21,054,371.78 |
| Maintenance costs | -- | -- | -- | -- |
| Total | 21,577,537.20 | 79,954,336.07 | 80,477,501.49 | 21,054,371.78 |
39. Surplus reserve
| Items | 2020.12.31 | Increase | Decrease | 2021.12.31 |
| Statutory reserve | 1,828,677,846.37 | 80,205,362.30 | -- | 1,908,883,208.67 |
| Discretionary surplus reserve | -- | -- | -- | -- |
| Total | 1,828,677,846.37 | 80,205,362.30 | -- | 1,908,883,208.67 |
40. Retained earnings
| Items | 2021 | 2020 | Appropriation/ Distribution ratio |
| Retained earnings at previous year before adjustment | 1,865,280,919.23 | -2,179,897,484.27 | -- |
| Adjustment of total retained earnings at previous year (Increase in “+”, decrease in “-”) | -- | -- | -- |
| Retained earnings at previous year after adjustment | 1,865,280,919.23 | -2,179,897,484.27 | |
| Add: Net profit attributable to parent company | 7,014,335,009.45 | 1,786,452,832.06 | -- |
| Add: Carry-forward retained earnings of other comprehensive income for current period | -- | 2,357,894,362.15 | |
| Less: Transfer to statutory surplus reserve | 80,205,362.30 | 99,168,790.71 | |
| Transfer to discretionary surplus reserve | -- | -- | |
| Transfer to general reserve | -- | -- | |
| Common stock dividends payable | 668,542,361.00 | -- | |
| Dividends payable to other equity holders | -- | -- | |
| Dividends of common stock converted to share capital | -- | -- | |
| Retained earnings at current year | 8,130,868,205.38 | 1,865,280,919.23 | |
| Includes: Surplus reserve attributable to parent company extracted by subsidiaries | -- | -- |
41. Revenue and cost of sales
(1) Revenue and cost of sales
| Items | 2021 | 2020 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 129,424,398,384.25 | 114,806,306,669.92 | 76,204,354,719.07 | 70,025,177,064.76 |
| Other business | 4,610,087,751.88 | 3,771,910,634.13 | 3,746,827,229.03 | 3,047,531,257.38 |
| Total | 134,034,486,136.13 | 118,578,217,304.05 | 79,951,181,948.10 | 73,072,708,322.14 |
(2)Revenue and cost of sales presented by products
| Items | 2021 | 2020 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 577,251,931.16 | 529,612,988.15 | 265,307,282.20 | 239,732,815.06 |
| Hot-rolled steel | 55,678,740,307.61 | 49,137,279,925.26 | 32,142,438,742.64 | 29,683,727,128.66 |
| Cold-rolled steel | 69,900,266,273.35 | 62,263,262,571.46 | 41,755,926,337.32 | 38,319,410,072.18 |
| Other steels | 3,268,139,872.13 | 2,876,151,185.05 | 2,040,682,356.91 | 1,782,307,048.86 |
| subtotal | 129,424,398,384.25 | 114,806,306,669.92 | 76,204,354,719.07 | 70,025,177,064.76 |
| Other business | ||||
| Power | 1,473,362,918.84 | 1,412,244,075.25 | 1,710,794,684.40 | 1,595,246,088.70 |
| Solid waste | 2,024,630,753.33 | 1,704,155,696.47 | 1,184,134,242.92 | 1,103,220,630.68 |
| Others | 1,112,094,079.71 | 655,510,862.41 | 851,898,301.71 | 349,064,538.00 |
| subtotal | 4,610,087,751.88 | 3,771,910,634.13 | 3,746,827,229.03 | 3,047,531,257.38 |
| Total | 134,034,486,136.13 | 118,578,217,304.05 | 79,951,181,948.10 | 73,072,708,322.14 |
(3) Breakdown of revenue
| Items | 2021 |
| Revenue from main business | 129,424,398,384.25 |
| Including: recognised at a certain point in time | 129,424,398,384.25 |
| recognised during a certain period of time | -- |
| Revenue from other business | 4,610,087,751.88 |
| Total | 134,034,486,136.13 |
As of 31December 2021, the amount of revenue corresponding to the performanceobligations that the company has signed but not yet be fulfilled is RMB 5,115.7185million. The Company expects to recognize as revenue in 2022.
42. Taxes and surcharges
| Items | 2021 | 2020 |
| Environmental protection tax | 35,914,541.27 | 30,905,784.13 |
| Urban maintenance and construction tax | 237,806,006.75 | 96,491,361.42 |
| Education surcharges | 171,953,969.95 | 70,770,584.49 |
| Resources duty | 51,626,025.36 | 53,698,875.92 |
| Property tax | 192,496,945.58 | 183,284,662.68 |
| Land usage tax | 218,540,514.92 | 219,267,210.73 |
| Vehicle and vessel usage tax | 336,864.01 | 361,812.52 |
| Stamp duty | 134,607,337.64 | 119,173,635.91 |
| Other taxes | 349,770.25 | 120,585.96 |
| Total | 1,043,631,975.73 | 774,074,513.76 |
Note: The criteria of taxes and surcharges refers to Note IV. Tax.
43. Selling expenses
| Items | 2021 | 2020 |
| Staff costs | 174,833,606.06 | 129,607,334.56 |
| Depreciation and amortization | 131,640.69 | 129,921.70 |
| Other expenses | 38,344,287.63 | 37,303,433.87 |
| Total | 213,309,534.38 | 167,040,690.13 |
44. General and administrative expenses
| Items | 2021 | 2020 |
| Staff costs | 700,517,923.75 | 509,368,436.44 |
| Depreciation and amortization | 310,789,699.88 | 234,968,386.33 |
| Other expenses | 288,574,110.69 | 232,089,438.08 |
| Total | 1,299,881,734.32 | 976,426,260.85 |
45. Research and development expenses
| Items | 2021 | 2020 |
| Staff costs | 600,350,698.99 | 379,551,768.61 |
| Depreciation and amortization | -- | -- |
| Other expenses | 52,575,686.57 | 100,935,305.78 |
| Total | 652,926,385.56 | 480,487,074.39 |
46. Financial expenses
| Items | 2021 | 2020 |
| Interest costs | 2,360,994,534.74 | 2,860,147,718.46 |
| Includes: interests on lease liabilities | 4,895,508.99 | -- |
| Less: interest capitalized | 7,647,750.00 | 499,100,376.94 |
| Interest expenses | 2,353,346,784.74 | 2,361,047,341.52 |
| Less:interest income | 131,307,065.33 | 133,289,009.17 |
| Discount on notes acceptance | 31,976,398.68 | 4,308,589.40 |
| Exchange losses and gains | 9,582,515.98 | 669,847.63 |
| Bank charges and others | -6,012,601.27 | -69,644,836.56 |
| Total | 2,257,586,032.80 | 2,163,091,932.82 |
Note: The interest capitalization is recognized in construction in progress. Thecapitalization rate used to calculate and determine the capitalization amount of borrowingcosts in the current period is 4.05% (previous period: 4.62%).
47. Other income and gains
| Items (sources of other income) | 2021 | 2020 | Related to assets/income |
| Engineering informationization project subsidy (Qiangang Co., cold-rolled) | 99,999.96 | 99,999.96 | Related to assets |
| Government grants for energy central project from the Ministry of Industry and Information Technology of the People’s Republic of China | 1,999,999.96 | 1,999,999.96 | Related to assets |
| Government grants of hot-rolled steel strip TMCP project | 105,263.16 | 105,263.16 | Related to assets |
| Government grants for dedusting system upgrading project (Qiangang Co.) | 1,631,578.92 | 1,631,578.92 | Related to assets |
| Government grants for advanced sewage treatment | 342,222.24 | 342,222.24 | Related to assets |
| Special government grants for denitration engineering from the Hebei Provincial Finance Department | 245,000.00 | 245,000.00 | Related to assets |
| Government grants for online environmental monitoring | 500,000.00 | 500,000.00 | Related to assets |
| National funds for the national 863 project | 278,200.00 | 278,200.00 | Related to assets |
| Special government grants for circular economy development from the Finance Bureau of Caofeidian | 1,578,947.36 | 1,578,947.36 | Related to assets |
| Government grants for the desulfurization of pelletizing flue gas | 1,486,105.28 | 1,486,105.28 | Related to assets |
| Environmental protection government grants for closing limestone yards | 80,000.00 | 80,000.00 | Related to assets |
| Items (sources of other income) | 2021 | 2020 | Related to assets/income |
| Government grants for energy-saving incentive for No.3 hydrogen generator | 67,878.96 | 67,878.96 | Related to assets |
| Galvanized high-strength automobile sheet special production line project | 5,263,157.88 | 5,263,157.88 | Related to assets |
| Phase II thermal desalination project | 1,052,631.56 | 1,052,631.56 | Related to assets |
| Government grants for the specialized production line project of Zinc-plated high-strengthen auto sheet | 191,578.96 | 191,578.96 | Related to assets |
| Government grants for the transformation to reduce nitrogen oxide concentration in exhaust gas of annealing furnace | 138,157.85 | -- | Related to assets |
| Government grants for high strength steel production temperature control deformation coupling performance matching and oxide sheet intelligent control technology | 1,830,000.00 | -- | Related to assets |
| Government grants for 10,000 tons/d seawater desalination | 468,421.05 | -- | Related to assets |
| Government grants for the low emission and high efficiency and low consumption sintering key technology | 300,000.00 | -- | Related to assets |
| Multi-objective optimization clean and low-carbon comprehensive iron making technology project | 2,940,000.00 | -- | Related to assets |
| Other government grants related to assets | 3,460,977.12 | 5,375,648.38 | Related to assets |
| Job stabilization subsidy | 7,629,337.02 | 21,027,162.60 | Related to income |
| Government grants for enterprises operat in the region | 2,700,000.00 | -- | Related to income |
| Other government grants related to income | 14,057,899.24 | 18,303,448.80 | Related to income |
| Tax refund | 1,886,738.46 | 1,000,295.73 | Refund of individual income tax |
| Value added tax deduction | 4,210,393.94 | 565,161.68 | VAT plus deduction |
| Total | 54,544,488.92 | 61,194,281.43 |
Notes: (1) The details of government grants refer to Note V. 58 Government grants.
(2) The government subsidy for recurring gains and losses refer to Note XVI. 1 for detailreasons.
48. Investment income
| Items | 2021 | 2020 |
| Investment income from long-term equity investments under equity method | 93,142,769.92 | 379,578,180.14 |
| Dividend from other equity instruments investments | 2,718,777.38 | 177,781,289.99 |
| Interest income from entrusted loans | 10,518,170.49 | 10,361,268.74 |
| Total | 106,379,717.79 | 567,720,738.87 |
49. Credit impairment losses (losses in “-”)
| Items | 2021 | 2020 |
| Provision for bad debts of notes receivable | -713,475.06 | -772,467.65 |
| Provision for bad debts of accounts receivable | -9,079,090.99 | -9,291,195.46 |
| Provision for bad debts of financing receivable | 103,604.74 | -95,952.27 |
| Provision for bad debts of other receivables | 282,710.81 | -1,191,070.88 |
| Provision for bad debts of other current assets | -118,133,658.14 | -- |
| Total | -127,539,908.64 | -11,350,686.26 |
50. Impairment losses on assets (loss in “-”)
| Items | 2021 | 2020 |
| Provision for invertory impairment | -167,567,546.04 | -156,492,924.46 |
51. Gains on disposal of assets
| Items | 2021 | 2020 |
| Gains from disposal of fixed assets (loss in “-”) | 385,299.27 | 75,385.37 |
| Gains from disposal of intangible assets (loss in “-”) | 3,331,185.95 | -- |
| Total | 3,716,485.22 | 75,385.37 |
52. Non-operating income
| Items | 2021 | 2020 | Included in non-recurring gains or losses in 2021 |
| Gains on disposal of assets s | 4,449,256.58 | -- | 4,449,256.58 |
| Compensation payments | 10,638.10 | 316,237.90 | 10,638.10 |
| Others | 2,094,300.29 | 1,683,124.34 | 2,094,300.29 |
| Total | 6,554,194.97 | 1,999,362.24 | 6,554,194.97 |
53. Non-operating expenses
| Items | 2021 | 2020 | Included in non-recurring gains or losses in 2021 |
| Losses on disposal of assets | 63,892,628.48 | 768,699.07 | 63,892,628.48 |
| Compensation and penalty | 727.98 | 6,907.06 | 727.98 |
| Tax overdue fine | -- | 1,738,457.13 | -- |
| Carbon emission quota trading | 1,464,983.15 | -- | 1,464,983.15 |
| Others | 162,953.79 | 32,877.54 | 162,953.79 |
| Total | 65,521,293.40 | 2,546,940.80 | 65,521,293.40 |
54. Income tax expenses
(1) Breakdown of income tax expenses
| Items | 2021 | 2020 |
| Current tax in accordance with tax laws and related regulations | 1,562,375,765.19 | 459,569,391.19 |
| Deffered income tax expenses | -89,407,543.66 | -92,759,826.26 |
| Total | 1,472,968,221.53 | 366,809,564.93 |
(2) Reconciliation between income tax expenses and profit before income tax is as follows:
| Items | 2021 | 2020 |
| Profit before tax | 9,799,499,308.11 | 2,777,952,370.40 |
| Tax at the applicable tax rate of 15% | 1,469,924,896.22 | 416,692,855.56 |
| Taxation effect of different tax rates of subsidiaries | 9,147,288.50 | 5,137,238.32 |
| Adjustment of income tax in the prior year | 10,277,388.90 | -6,929,659.41 |
| Share of profit or loss of joint ventures and associates under the equity method | -5,776,903.71 | -22,740,312.83 |
| Income not subject to tax（expressed in“-”） | -407,816.61 | -26,667,193.50 |
| Non-deductible costs, expenses and losses | 3,816,854.15 | 888,266.93 |
| Taxation effect of the change in the applicable tax rate on the beginning disclosure of the deffered income tax | -- | -- |
| Taxation effect of utilizing previous unrecognized tax losses and deductible temporary differences (expressed in “-”) | -28,888,868.85 | -6,237,897.01 |
| Taxation effect of unrecognized tax losses and deductible temporary differences | 6,106,882.02 | 6,666,266.87 |
| Taxation effect of research and development expenses (expressed in “-”) | -- | -- |
| Others | 8,768,500.91 | -- |
| Income tax expenses | 1,472,968,221.53 | 366,809,564.93 |
55. Notes to cash flow statement
(1) Proceeds from other operating activities
| Items | 2021 | 2020 |
| Government grants received | 54,359,336.26 | 130,166,631.11 |
| Return of security deposit | 3,208,000.00 | -- |
| Non-operating income | 2,104,938.39 | 1,998,921.76 |
| Other intercouse funds received | 3,663,851.17 | -- |
| Total | 63,336,125.82 | 132,165,552.87 |
(2) Payments for other operating activities
| Items | 2021 | 2020 |
| Expenses paid | 435,051,105.11 | 595,391,580.99 |
| Non-operating expenses paid | 1,628,664.92 | 1,778,241.73 |
| Restricted funds paid | 416,155,620.25 | 546,622.77 |
| Security deposit paid to BMW Brilliance | -- | 6,000,000.00 |
| Other intercouse funds paid | -- | 3,571,092.08 |
| Total | 852,835,390.28 | 607,287,537.57 |
(3) Proceeds from other investing activities
| Items | 2021 | 2020 |
| Interest income | 130,931,269.04 | 132,855,246.29 |
| Zhuzhou Geckor Group Co., Ltd. – security deposits during construction period | -- | 525,000.00 |
| Jinshi Investment Co., Ltd.security deposits | -- | 300,000,000.00 |
| Total | 130,931,269.04 | 433,380,246.29 |
(4) Payment for otherinvesting activities
| Items | 2021 | 2020 |
| Jinshi Investment Co., Ltd. | 300,000,000.00 | -- |
(5) Proceeds from other financing activities
| Items | 2021 | 2020 |
| Borrowings from Shougang Group | -- | 148,638,840.00 |
(6) Payment for other financing activities
| Items | 2021 | 2020 |
| Financial commissions | 1,735,566.18 | 9,982,295.82 |
| Return the loan to Wuhan Zhongxin | 2,800,000.00 | 1,200,000.00 |
| Paying back the borrowings from Shougang Group | 917,013,635.51 | 300,000,000.00 |
| Lease payments | 18,974,740.74 | -- |
| Non-public offering fees paid | 18,562,551.86 | -- |
| Return Liuzhou Shougang Automobile Co. minority shareholders investment funds | 4,996,112.27 | -- |
| Total | 964,082,606.56 | 311,182,295.82 |
56. Supplements to statement of cash flows
(1) Supplementary information
| Supplementary information | 2021 | 2020 |
| 1. Reconciliation of net profit to net cash flows from operating activities: | ||
| Net profit | 8,326,531,086.58 | 2,411,142,805.47 |
| Add: Impairment losses on assets | 167,567,546.04 | 156,492,924.46 |
| Credit impairment losses | 127,539,908.64 | 11,350,686.26 |
| Depreciation of fixed assets | 7,287,559,251.19 | 6,406,432,068.56 |
| Depreciation ofright-of-use assets | 16,608,280.06 | -- |
| Amortization of intangible assets | 138,072,177.23 | 111,491,374.94 |
| Amortizaiton of long-term deffered expenses | 345,030.83 | 365,531.66 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gains as in “-”) | -3,716,485.22 | -75,385.37 |
| Losses on scrapping of fixed assets (Gains as in “-”) | 59,443,371.90 | 768,699.07 |
| Losses on fair value changes (Gain as in “-”) | -- | -- |
| Financial expenses (Income as in “-”) | 2,257,586,032.80 | 2,163,091,932.82 |
| Investment losses (Income as in “-”) | -106,379,717.79 | -567,720,738.87 |
| Decrease in deferred tax assets (Increase as in “-”) | -41,819,052.19 | -60,454,804.37 |
| Increase in deferred tax liabilities (Decrease as in “-”) | -47,588,491.47 | -32,305,021.89 |
| Decrease in inventories (Increase as in “-”) | -1,457,868,559.82 | -1,956,489,862.36 |
| Decrease in receivables from operating activities (Increase as in “-”) | -2,799,546,738.40 | -1,780,773,229.64 |
| Increase in payables from operating activities (Decrease as in “-”) | 1,528,063,419.28 | 3,403,848,159.38 |
| Others | -408,669,801.90 | 7,513,656.07 |
| Net cash flow from operating activities | 15,043,727,257.76 | 10,274,678,796.19 |
| 2. Significant non-cash payments for investing and financing activities: | ||
| Conversion of debt into capital | -- | -- |
| Convertible bonds due within 1 year | -- | -- |
| Fixed assets acquired under finance leases | —— | -- |
| Right-of-use assets leased during current period | 54,395,983.49 | —— |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 8,535,871,373.08 | 4,959,913,916.36 |
| Supplementary information | 2021 | 2020 |
| Less: Opening balance of cash | 4,959,913,916.36 | 4,403,513,394.20 |
| Add: Closing balance of cash equivalents | -- | -- |
| Less: Opening balance of cash equivalents | -- | -- |
| Net increase in cash and cash equivalents | 3,575,957,456.72 | 556,400,522.16 |
Note: The amount of endorsement and transfer of acceptance notes received from goods salesof the company is RMB 78,910.959 million.
(2) Components of cash and cash equivalents
| Items | 2021.12.31 | 2020.12.31 |
| 1. Cash | 8,535,871,373.08 | 4,959,913,916.36 |
| Including: Cash on hand | 53,404.48 | 35,022.81 |
| Balances in banks without restriction | 8,535,817,955.86 | 4,959,878,880.81 |
| Other monetary funds without restriction | 12.74 | 12.74 |
| 2. Cash equivalents | -- | -- |
| Including: bonds investment due within three months | -- | -- |
| 3. Closing balance of cash and cash equivalents | 8,535,871,373.08 | 4,959,913,916.36 |
| Including: restricted cash and cash equivalents from the parent company or its subsidiaries | -- | -- |
57. Restricted assets
| Items | 2021.12.31 | Restricted reasons |
| Cash and cash equivalents | 1,748,307,781.74 | Security deposits, fixed term deposits and frozen by court |
| Notes receivable | 1,030,885,929.77 | Pledge billing |
| Total | 2,779,193,711.51 |
58. Government grants
(1) Government grants recognized as deferred income and subsequently measured via total-valuemethod.
| Items | Type | 2020.12.31 | Increase | Recognition in P/L during 2021 | Other changes | 2021.12.31 | Item recognized in P/L during 2021 | Related to assets/income |
| Finance grants for imported equipments | Financial appropriation | 14,564,451.23 | -- | 1,229,110.56 | -- | 13,335,340.67 | Other income | Related to assets |
| Government grants for engineering informationization project (Qian'an Iron and Steel, cold-rolled ) | Financial appropriation | 475,000.20 | -- | 99,999.96 | -- | 375,000.24 | Other income | Related to assets |
| Government grants for energy central project from the Ministry of Industry and Information Technology of the People’s Republic of China | Financial appropriation | 6,000,000.20 | -- | 1,999,999.96 | -- | 4,000,000.24 | Other income | Related to assets |
| Items | Type | 2020.12.31 | Increase | Recognition in P/L during 2021 | Other changes | 2021.12.31 | Item recognized in P/L during 2021 | Related to assets/income |
| Special government grants from the Finance Bureau of Qian'an | Financial appropriation | 4,200,000.00 | -- | -- | -- | 4,200,000.00 | Other income | Related to assets |
| Government grants for hot-rolled steel strip TMCP project | Financial appropriation | 1,473,684.20 | -- | 105,263.16 | -- | 1,368,421.04 | Other income | Related to assets |
| Government grants for dedusting system upgrading project (Qian'an Iron and Steel) | Financial appropriation | 27,736,842.16 | -- | 1,631,578.92 | -- | 26,105,263.24 | Other income | Related to assets |
| Government grants for advanced sewage treatment | Financial appropriation | 5,504,074.04 | -- | 342,222.24 | -- | 5,161,851.80 | Other income | Related to assets |
| Special government grants for denitration engineering from the Hebei Provincial Finance Department | Financial appropriation | 980,000.00 | -- | 245,000.00 | -- | 735,000.00 | Other income | Related to assets |
| Government grants for online environmental monitoring project from the Finance Bureau of Caofeidian | Financial appropriation | 3,500,000.00 | -- | 500,000.00 | -- | 3,000,000.00 | Other income | Related to assets |
| The steelmaking technology and facilities demonstration project through carbon dioxide-oxygen mixed injection, funded by University of Science and Technology Beijing | Financial appropriation | 4,000,000.00 | -- | 70,175.44 | -- | 3,929,824.56 | Other income | Related to assets |
| National funds for the national 863 project | Financial appropriation | 1,112,800.00 | -- | 278,200.00 | -- | 834,600.00 | Other income | Related to assets |
| Government grants for Phase II seawater dsalination project | Financial appropriation | 18,947,368.44 | -- | 1,052,631.56 | -- | 17,894,736.88 | Other income | Related to assets |
| Government grants for cold-rolled intelligent manufacturing project | Financial appropriation | 12,937,500.00 | -- | 1,350,000.00 | -- | 11,587,500.00 | Other income | Related to assets |
| Government grants for R & D and demonstration projects of seawater dsalination based on reuse of steelmaking waste heat | Financial appropriation | 8,700,000.00 | -- | -- | -- | 8,700,000.00 | Other income | Related to assets |
| Government grants for the desulfurization of pelletizing flue gas | Financial appropriation | 23,777,684.22 | -- | 1,486,105.28 | -- | 22,291,578.94 | Other income | Related to assets |
| Environmental protection government grants for closing limestone yards | Financial appropriation | 1,760,000.00 | -- | 80,000.00 | -- | 1,680,000.00 | Other income | Related to assets |
| Government grants for improvement of deformation coupling matching in high strength steel production | Financial appropriation | 1,830,000.00 | -- | 1,830,000.00 | -- | -- | Other income | Related to assets |
| Government grants for intelligent interface closed-loop control technology in multi-target optimize steelmaking and ironmaking | Financial appropriation | 2,400,000.00 | -- | -- | -- | 2,400,000.00 | Other income | Related to assets |
| Government grants for new metal, ceramic composite powder, and refractory anticorrosion coating | Financial appropriation | 838,100.00 | -- | -- | -- | 838,100.00 | Other income | Related to assets |
| Government grants for intelligent collaborative allocation techonglogy about material flow and power flow in steelmaking program | Financial appropriation | 2,350,000.00 | -- | -- | -- | 2,350,000.00 | Other income | Related to assets |
| Government grants for energy-saving incentive for No.3 hydrogen generator | Financial appropriation | 1,086,063.13 | -- | 67,878.96 | -- | 1,018,184.17 | Other income | Related to assets |
| Government grants for cold rolling operation department aluminized silicon high strength steel automotive plate renovation project | Financial appropriation | 3,256,842.09 | -- | 191,578.96 | -- | 3,065,263.13 | Other income | Related to assets |
| Government grants for cold rolling operation department high strength steel 18 roll single stand project | Financial appropriation | 11,900,000.00 | -- | -- | -- | 11,900,000.00 | Other income | Related to assets |
| Government grants for multi-targets optimization steelmaking | Financial appropriation | 2,940,000.00 | -- | 2,940,000.00 | -- | -- | Other income | Related to assets |
| Government grants for the operation-control system of production-marketing integration | Financial appropriation | 20,390,000.00 | -- | -- | -- | 20,390,000.00 | Other income | Related to assets |
| Government grants for green and intelligent collaborative mechanism of steel process and comprehensive energy efficiency assessment | Financial appropriation | 580,000.00 | -- | -- | -- | 580,000.00 | Other income | Related to assets |
| Government grants for key technology of low-emission efficient energy-saving sintering and its utilizaiton project | Financial appropriation | 300,000.00 | -- | 300,000.00 | -- | -- | Other income | Related to assets |
| Government grants for the specialized production line project of Zinc-plated high-strengthen auto sheet | Financial appropriation | 94,736,842.12 | -- | 5,263,157.88 | -- | 89,473,684.24 | Other income | Related to assets |
| Government grants for reforming of sinter desulfurization and denitrification | Financial appropriation | 27,368,421.06 | -- | 1,578,947.36 | -- | 25,789,473.70 | Other income | Related to assets |
| Items | Type | 2020.12.31 | Increase | Recognition in P/L during 2021 | Other changes | 2021.12.31 | Item recognized in P/L during 2021 | Related to assets/income |
| Government grants for thin slab casting and rolling engineering | Financial appropriation | 5,000,000.00 | -- | -- | -- | 5,000,000.00 | Other income | Related to assets |
| Government grants for reform project of reducing oxynitride concentration in emissed flue gas from annealing furnace | Financial appropriation | 6,300,000.00 | -- | 138,157.85 | -- | 6,161,842.15 | Other income | Related to assets |
| Government grants for industrial mechanism model base | Financial appropriation | 1,800,000.00 | 3,000,000.00 | -- | -- | 4,800,000.00 | Other income | Related to assets |
| Government grants for 10,000 tons/d desalination project | Financial appropriation | 8,900,000.00 | -- | 468,421.05 | -- | 8,431,578.95 | Other income | Related to assets |
| Government grants for enhancing the core competitiveness of the manufacturing industry | Financial appropriation | 58,510,000.00 | 20,030,000.00 | -- | -- | 78,540,000.00 | Other income | Related to assets |
| Other government grants related to assets | Financial appropriation | 11,653,132.56 | 6,842,100.00 | 811,691.12 | -- | 17,683,541.44 | Other income | Related to assets |
| Other government grants related to income | Financial appropriation | 290,000.00 | 100,000.00 | -- | -- | 390,000.00 | Other income | Related to income |
| Total | 398,098,805.65 | 29,972,100.00 | 24,060,120.26 | -- | 404,010,785.39 |
(2) Government grants which recognized as profit or loss, measured via total-value method.
| Items | Type | Recognition in P/L during 2021 | Recognition in P/L during 2020 | Item recognized in P/L | Related to asset/income |
| Government grants for steady post | Financial appropriation | 7,629,337.02 | 21,027,162.60 | Other income | Related to income |
| Government grants for enterprises operate in the region | Financial appropriation | 2,700,000.00 | -- | Other income | Related to income |
| Other government grants related to income | Financial appropriation | 14,057,899.24 | 18,303,448.80 | Other income | Related to income |
| Total | 24,387,236.26 | 39,330,611.40 |
VI. Change in the scope of consolidationThere is no change of consolidated scope of the Company during the reporting period.VII. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Company
| Subsidiary | Main Operation place | Registration place | Business nature | Shareholding ratio (%) | Acquisition method | |
| Directly | Indirectly | |||||
| Shougang Jingtang United Iron & Steel Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Production and sales | 70.18 | 29.82 | Business combination under common control |
| Beijing Shougang Cold Rolling Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 70.28 | -- | Establish or investment, etc. |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Consulting service | 100.00 | -- | Business combination under common control |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Production and sales | 82.77 | -- | Establish or investment, etc. |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 49.45 | -- | Establish or investment, etc. |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | Beijing, PRC | Beijing, PRC | Production and sales | 51.00 | -- | Business combination under common control |
(2) Significant non-wholly owned subsidiaries
Unit：RMB Yuan
| Subsidiary | Shareholding of non-controlling interests (%) | Net profit/ (loss) attributable to non-controlling interests in reporting period | Dividends declared and distributed to non-controlling interests in reporting period | Non-controlling interests at the end of reporting period |
| Beijing Shougang Cold Rolling Co., Ltd. | 29.72 | 48,870,246.52 | -- | -383,736,853.68 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 49.00 | 945,552,305.73 | -- | 5,849,533,818.88 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 17.23 | 50,267,407.95 | -- | 1,631,920,915.79 |
(3) Major financial information of significant non-wholly owned subsidiaries
Unit：RMB Yuan
| Subsidiary | 31/12/2021 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 2,292,638,370.58 | 3,982,540,841.55 | 6,275,179,212.13 | 2,987,915,522.96 | 4,574,607,301.55 | 7,562,522,824.51 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 8,452,490,520.29 | 11,195,199,945.42 | 19,647,690,465.71 | 7,933,294,887.53 | 6,128,563.71 | 7,939,423,451.24 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 4,815,349,946.90 | 13,874,497,322.96 | 18,689,847,269.86 | 8,299,382,139.47 | 3,270,000.00 | 8,302,652,139.47 |
Continued (1):
| Subsidiary | 31/12/2020 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,490,147,711.17 | 4,268,819,475.85 | 5,758,967,187.02 | 1,582,846,978.81 | 5,633,442,048.18 | 7,216,289,026.99 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 7,412,249,175.07 | 9,256,712,881.65 | 16,668,962,056.72 | 7,300,343,767.67 | 5,822,605.25 | 7,306,166,372.92 |
Continued (2):
| Subsidiary | 2021 | 2020 | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Beijing Shougang Cold Rolling Co., Ltd. | 12,553,753,097.50 | 164,435,553.57 | 164,435,553.57 | 1,166,412,291.28 | 8,721,456,245.22 | 40,753,262.67 | 40,753,262.67 | 286,447,510.65 |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 968,858,246.21 | 1,924,919,227.71 | 1,924,919,227.71 | 67,150,841.72 | 870,677,653.85 | 450,137,492.87 | 450,137,492.87 | -26,937,175.44 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 13,857,367,585.59 | 1,082,906,520.97 | 1,082,906,520.97 | 2,337,657,467.37 | -- | -- | -- | -- |
2. Interests in joint ventures and associates
(1) Significant joint ventures and associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Shareholding proportion (%) | Accounting method | |
| Direct | Indirect | |||||
| ①Jiont ventures | ||||||
| Tangshan Guoxing Industrial Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Manufacturing | 50.00 | Equity method | |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Chemical | 50.00 | Equity method | |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Coking | 50.00 | Equity method | |
| ②Associates | ||||||
| Tangshan Tangcao Railway Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Transportation | 16.19 | Equity method | |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Tangshan, PRC | Tangshan, PRC | Building Material | 25.00 | Equity method | |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Qian’an, PRC | Qian’an, PRC | Coking | 49.82 | Equity method | |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing, PRC | Beijing, PRC | Investment | 20.00 | Equity method | |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Beijing, PRC | Beijing, PRC | Manufacturing | 45.00 | Equity method | |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Manufacturing | 40.00 | Equity method | |
| Guangzhou Jinghai Shipping Co., Ltd. | Guangzhou, PRC | Guangzhou, PRC | Transportation | 20.00 | Equity method | |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Qingdao, PRC | Qingdao, PRC | Manufacturing | 35.00 | Equity method | |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | Ordos, PRC | Ordos, PRC | Manufacturing | 39.00 | Equity method | |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Manufacturing | 35.00 | Equity method | |
| Hebei Jingji Industry & Trading Co., Ltd. | Shijiazhuang, PRC | Shijiazhuang, PRC | Manufacturing | 35.71 | Equity method | |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Building Material | 35.00 | Equity method | |
(2) Primary financial information of significant joint ventures
| Items | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | |
| Current assets | 68,956,595.25 | 60,318,069.68 | 1,866,851.04 | 6,787,445.81 | 3,190,992,791.00 | 2,530,141,759.70 |
| Includes： Cash and cash equivalents | 4,077,794.50 | 4,039,504.94 | 1,564,673.04 | 6,373,445.81 | 1,254,139,718.41 | 818,794,651.52 |
| Non-current assets | 75,006,601.75 | 63,563,529.32 | 590,178,060.36 | 742,585,489.79 | 1,522,676,202.64 | 1,777,873,986.27 |
| Total assets | 143,963,197.00 | 123,881,599.00 | 592,044,911.40 | 749,372,935.60 | 4,713,668,993.64 | 4,308,015,745.97 |
| Current liabilities | 66,004,351.88 | 55,567,287.83 | 548,972,452.52 | 531,871,072.97 | 2,480,101,537.56 | 1,825,155,516.05 |
| Non-current liabilities | 5,383,693.40 | 2,492,301.31 | -- | -- | 7,231,250.00 | 307,787,500.00 |
| Total liabilities | 71,388,045.28 | 58,059,589.14 | 548,972,452.52 | 531,871,072.97 | 2,487,332,787.56 | 2,132,943,016.05 |
| Net assets | 72,575,151.72 | 65,822,009.86 | 43,072,458.88 | 217,501,862.63 | 2,226,336,206.08 | 2,175,072,729.92 |
| Includes: Non-controlling interests | -- | -- | -- | -- | -- | -- |
| Equity attributable to shareholders of the company | 72,575,151.72 | 65,822,009.86 | 43,072,458.88 | 217,501,862.63 | 2,226,336,206.08 | 2,175,072,729.92 |
| Net assets calculated by shareholding proportion | 36,287,575.86 | 32,911,004.94 | 21,536,229.44 | 108,750,931.30 | 1,113,168,103.04 | 1,087,536,364.97 |
| Adjustment | ||||||
| Includes: Goodwill | -- | -- | -- | -- | -- | -- |
| Carrying value of | 36,287,575.86 | 32,911,004.94 | 21,536,229.44 | 108,750,931.30 | 1,113,168,103.04 | 1,087,536,364.97 |
| equity investment in the joint venture | ||||||
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Items | Tangshan Guoxing Industrial Co., Ltd. | Tangshan Zhonghong Carbon Chemical Co., Ltd. | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | |||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Operating revenue | 72,575,151.72 | 80,117,784.81 | -- | -- | 10,931,089,729.11 | 7,350,697,535.09 |
| Financial expenses | 277,191.32 | 362,993.70 | 22,071,333.99 | 21,257,882.90 | 59,540,904.10 | 91,108,328.10 |
| Income tax expense | 4,668,092.98 | 2,796,859.12 | -- | -- | 23,671,445.98 | 63,800.99 |
| Net profit | 10,753,141.86 | 8,390,577.37 | -174,429,403.75 | -21,274,355.01 | 56,774,860.49 | 80,485,168.88 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 10,753,141.86 | 8,390,577.37 | -174,429,403.75 | -21,274,355.01 | 56,774,860.49 | 80,485,168.88 |
| Dividends received from joint venture | 2,000,000.00 | -- | -- | -- | -- | 20,000,000.00 |
(3) Primary financial information of significant associates
| Items | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | |
| Current assets | 200,714,996.01 | 196,664,337.03 | 126,804,287.51 | 126,778,258.13 | 1,965,253,903.76 | 2,142,096,795.97 |
| Non-current assets | 8,400,213,950.72 | 8,493,568,427.67 | 235,304,874.32 | 240,277,354.15 | 2,255,751,305.36 | 1,905,205,528.96 |
| Total assets | 8,600,928,946.73 | 8,690,232,764.70 | 362,109,161.83 | 367,055,612.28 | 4,221,005,209.12 | 4,047,302,324.93 |
| Current liabilities | 1,189,477,610.98 | 746,576,333.70 | 45,941,594.92 | 33,073,602.76 | 2,014,924,895.69 | 2,133,031,958.22 |
| Non-current liabilities | 5,049,431,650.00 | 5,164,162,916.48 | -- | -- | 10,482,966.04 | 11,180,546.68 |
| Total liabilities | 6,238,909,260.98 | 5,910,739,250.18 | 45,941,594.92 | 33,073,602.76 | 2,025,407,861.73 | 2,144,212,504.90 |
| Net assets | 2,362,019,685.75 | 2,779,493,514.52 | 316,167,566.91 | 333,982,009.52 | 2,195,597,347.39 | 1,903,089,820.03 |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | |
| Equity attributable to shareholders of the company | 2,362,019,685.75 | 2,779,493,514.52 | 316,167,566.91 | 333,982,009.52 | 2,195,597,347.39 | 1,903,089,820.03 |
| Net assets calculated by shareholding proportion | 382,410,987.12 | 450,000,000.00 | 79,041,891.73 | 83,495,502.41 | 1,093,937,932.70 | 948,199,977.34 |
| Adjustment | ||||||
| Includes: Goodwill | -- | -- | -- | -- | 4,147,420.21 | 4,147,420.21 |
| Carrying value of equity investment in the associates | 382,410,987.12 | 450,000,000.00 | 79,041,891.73 | 83,495,502.41 | 1,098,085,352.91 | 952,347,397.55 |
| Items | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Items | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | 2021.12.31 | 2020.12.31 | |
| Current assets | 204,542,687.73 | 598,504,465.05 | 46,604,298.17 | 38,077,883.76 | 65,438,102.92 | -- |
| Non-current assets | 492,971,452.05 | 2,044,314,439.69 | 560,866.81 | 485,332.49 | 34,618,324.64 | -- |
| Total assets | 697,514,139.78 | 2,642,818,904.74 | 47,165,164.98 | 38,563,216.25 | 100,056,427.56 | -- |
| Current liabilities | 139,570,827.95 | 483,805,460.10 | 16,181,730.58 | 13,372,193.62 | 2,916,673.38 | -- |
| Non-current liabilities | -- | -- | -- | -- | -- | |
| Total liabilities | 139,570,827.95 | 483,805,460.10 | 16,181,730.58 | 13,372,193.62 | 2,916,673.38 | -- |
| Net assets | 557,943,311.83 | 2,159,013,444.64 | 30,983,434.40 | 25,191,022.63 | 97,139,754.18 | -- |
| Including: Non-controlling interests | -- | -- | -- | -- | -- | |
| Equity attributable to shareholders of the company | 557,943,311.83 | 2,159,013,444.64 | 30,983,434.40 | 25,191,022.63 | 97,139,754.18 | -- |
| Net assets calculated by shareholding proportion | 112,715,820.57 | 431,802,688.93 | 13,942,545.49 | 11,335,960.18 | 33,998,913.97 | -- |
| Adjustment | ||||||
| Includes: Goodwill | -- | -- | 44,544.87 | 44,544.87 | -- | -- |
| Carrying value of equity investment in the associates | 112,715,820.57 | 431,802,688.93 | 13,987,090.36 | 11,380,505.05 | 33,998,913.97 | -- |
| Fair value of equity investment with quoted market price | -- | -- | -- | -- | -- | -- |
Continued:
| Items | Tangshan Tangcao Railway Co., Ltd. | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | |||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Operating revenue | 104,729,545.83 | -- | 578,541,511.89 | 464,761,681.90 | 6,295,880,462.27 | 6,567,974,662.78 |
| Net profit | -418,134,678.91 | -- | 32,185,557.39 | 37,856,751.55 | 292,507,527.36 | 222,110,549.04 |
| Net profit from discontinuing operations | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | -418,134,678.91 | -- | 32,185,557.39 | 37,856,751.55 | 292,507,527.36 | 222,110,549.04 |
| Dividend received from associates | -- | -- | 12,500,000.00 | 3,750,000.00 | -- | 149,460,000.00 |
Continued:
| Items | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Operating income | 334,174,126.04 | -- | 128,110,940.82 | 126,204,932.84 | 16,867,497.02 | -- |
| Net profit | 258,828,753.79 | 1,139,880,472.97 | 5,792,411.77 | 2,000,482.67 | 591,396.34 | -- |
| Items | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Beijing Dingshengcheng Packaging Materials Co., Ltd. | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | |||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Net profit from discontinuing operation | -- | -- | -- | -- | -- | -- |
| Other comprehensive income | -- | -- | -- | -- | -- | -- |
| Total comprehensive income | 258,828,753.79 | 1,139,880,472.97 | 5,792,411.77 | 2,000,482.67 | 591,396.34 | -- |
| Dividend received from associates | 173,716,946.85 | -- | -- | -- | -- | -- |
(4) Summary financial information of no significant joint ventures and associates
| Items | 2021.12.31 / Current period | 2020.12.31 / Pervious period |
| Associates | ||
| Total carrying value of investment | 174,696,933.28 | 182,983,769.62 |
| Items calculated according to shareholding ratio | ||
| Net profit | 3,061,477.93 | -3,226,619.53 |
| Other comprehensive income | -- | -- |
| Total comprehensive income | 3,061,477.93 | -3,226,619.53 |
3. Interests in unconsolidated structured entities
(1) Basic information of unconsolidated structured entities
The unconsolidated structured entities are the limited partnership initiated by the Company-Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) (Hereinafterreferred to as Shouxin Jinyuan Fund) and the Beijing Shouxin Jin'an Equity InvestmentPartnership (Limited Partnership) (Hereinafter referred to as Shouxin Jin'an Fund). Inaccordance with the provisions of the limited partnership agreement, the Company has nocontrol over these two partnerships.
①The purpose of establishing Shouxin Jinyuan Fund is combining the relevant policies ofBeijing on the development of sophisticated industry with the market-oriented operation ofM&A investment, actively responding to the strategic goal of Beijing to build a sophisticatedindustrial structure, promoting the upgrading and development of Beijing's sophisticatedindustry, contributing to the local economic development and industrial structure adjustmentof Beijing, and creating satisfactory return on investment for investors.The total subscribed capital of all partners to Shouxin Jinyuan Fund is no less than RMB onebillion. The partners of the Fund are divided into general partner and limited partner, thecontribution agreement is as follows: Beijing Shouyuan New Energy Investment ManagementCo., Ltd., the general partner, contributes RMB 10,000 thousand; and among the limitedpartners, the Company agrees to contribute RMB 200,000 thousand, and the other limitedpartners agrees to contribute RMB 790,000 thousand in total.As at 31 December 2021, Shouxin Jinyuan Fund has completed fund raising and registered onThe Chinese Association of Securities Investment Funds.As at 31 December 2021, Shouxin Jinyuan Fund has conducted investment activities andthree external investment projects has been invested with the amount of RMB 792,092.00
thousand. No financing activity has been conducted by the Fund.
② The purpose of establishing Shouxin Jin'an Fund is to focus on investment in leadingenterprises of Shougang Group system, promoting and strengthen the new material industryof Shougang Group, taking the advanced metal material enterprise, such as Zhixin Co., BeiyeMaterials Co. etc., as platforms and making investment focus on the advanced electrical steelmaterials, casting superalloys and precision alloys, as well as high performance special steeland other metal new materials that Shougang Group has advantages in.The total subscribed capital of all partners to Shouxin Jin'an Fund is no less than RMB 1.616billion. The partners of Shouxin Jin'an Fund are divided into general partner and limitedpartner, and the contribution agreement is as follows: Beijing Shouyuan Xinneng InvestmentManagement Co., Ltd., as the general partner, contributes RMB 16,160 thousand; and amongthe limited partners, the Company agrees to contribute RMB 200,000 thousand and otherlimited partners agrees to contribute RMB 1,399,840 thousand in total.As at 31 December 2021, the fund raising and the filing of fund associations of Shouxin Jin'anFund are still in process.
(2) Carrying value and maximum loss exposure of interests related assets and liabilitiesAs at 31 December 2021, no assets and liabilities related to the interests in Shouxin JinyuanFund recognized are recognized in the financial statements of the Company except for thepartner contribution agreed in the partner agreement. The maximum loss exposure of thecompany's interests in Shouxin Jinyuan Fund is RMB 98,418.40 thousand.
(3) Support provided to unconsolidated structured entities
As at 31 December 2021, the Company has no intention to provide financial support or othersupports for Shouxin Jinyuan Fund andShouxin Jin'an Fund.
(4) Additional information disclosure of unconsolidated structured entitiesAs at 31 December 2021, no additional information related to Shouxin Jinyuan Fund andShouxin Jin'an Fund should be disclosed by the Company.VIII. Financial instruments and risk managementThe major financial instruments of the Company include cash and cash equivalents, notesreceivable, accounts receivable, financing receivables, other receivables, current portion ofnon-current assets, other current assets, other equity instrument investments, othernon-current financial assets, long-term receivables, notes payable, accounts payable, otherpayables, short-term borrowings, financial liabilities held for trading, current portion ofnon-current liabilities, entrusted deposits, long-term borrowings and bond payables, leaseliabilities and long-term payable. The details of financial instruments are disclosed in therespective notes. Risks relate to these financial instruments and risk management policiesused by the Company to minimize the risks are disclosed as below. Management of theCompany manages and monitors the risk exposures to ensure the risks are controlled in thelimited range.
1. Objectives and policies of risk management
The objective of the Company in risk management is to obtain an appropriate equilibriumbetween risk and return, and also focuses on minimizing potential adverse effects on the
financial performance of the Company bring by the unpredictability of financial risk. Basedon the objectives of risk management, certain policies are established to recognize andanalyze the risk. Also, in order to monitor the risk position of the Company, internal controlprocedures are designed according to acceptable level of risk. Both the policies and internalcontrol procedures are reviewed and revised regularly to adapt the changes of the market andbusiness activities of the Company.The primary risks caused by the financial instruments of the Company are credit risk andliquidity risk.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail todischarge its obligation under the terms of the financial instrument and cause a financial lossto the Company.The Company manages the credit risk on combination basis. Credit risks are mainly causedby cash and cash equivalents, notes receivable, accounts receivable, other receivables etc.The Company mainly deposits in financial institutions with good reputation and high creditrating therefore no significant credit risk associated with cash and cash equivalents isexpected.In addition, policies related to limit the credit risk exposure on notes receivable, accountsreceivable and other receivables are established by the Company. The Company evaluatescredit quality and sets credit limits on customers by taking into account their financialposition, credit records and other factors such as current market conditions. The credit historyof the customers is regularly monitored by the Company. In respect of customers with a poorcredit history, the Company will use written payment reminders, or shorten or cancel creditperiods, to ensure the overall credit risk of the Company is limited to a controllable extent.The highest credit risk exposure to the Company is limited to the carrying value of eachfinancial instrument illustrated in the financial statements. The Company has not providedany guarantee that might cause credit risk to the Company.Among the accounts receivable of the Company, the accounts receivable of the top fivecustomers accounted for 45.99% (2020: 42.24%); among the other receivables of theCompany, the other receivables of the top five customers accounted for 59.06% (2020:
64.41%)
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligationsassociated with its financial liabilities that are settled by delivering cash or other financialassets.The Company maintains and monitors sufficient level of cash and cash equivalents asconsidered by the management while managing liquidity risk in order to meet operationalneeds of the Company and reduce the effect of floating cash flow. The usage of bank loan ismonitored by the management of the Company and the loan covenants are ensured to becomplied. Meanwhile, primary financial institution commits to provide sufficient reservefunds to satisfy the short term and long term fund requirement of the Company.
2. Capital management
The capital management policies are made to keep the continuous operation of the Company,to enhance the return to shareholders, to benefit other related parties and to maintain the bestcapital structure to minimize the cost of capital.To the maintenance or adjustment of the capital structure, the Company might adjust theamount of dividends paid to shareholders, return capital to shareholders, issue new shares ormake an asset disposal to reduce debt liabilities.The Company monitors the capital structure on the basis of leverage ratio (total liabilitiesdivided total assets). As at 31 December 2021, the leverage ratio of the Company is 66.59%(31 December 2020 is 73.10%).IX. Fair value
Fair value hierarchies are categorized into three levels as the lowest level input that issignificant to the entire fair value measurement.Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets andliabilities.Level 2: inputs are inputs other than quoted prices included within Level 1 that are observablefor the asset or liability, either directly or indirectly.Level 3: inputs are unobservable inputs for the asset or liability.
(1) Fair value of assets and liabilities measured at fair value
As at 31 December 2021, assets and liabilities measured at fair value are shown as follows:
| Items | Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total |
| I. Recurring fair value measurement | ||||
| (1) Financing receivable | -- | -- | 4,015,188,495.05 | 4,015,188,495.05 |
| (2) Other equity instrument investment | 226,566,944.00 | -- | 38,333,819.97 | 264,900,763.97 |
| (3) Other non-current financial assets | -- | -- | 80,000,000.00 | 80,000,000.00 |
| Total assets measured at fair value on a recurring basis | 226,566,944.00 | -- | 4,133,522,315.02 | 4,360,089,259.02 |
(2) Fair values of items not measured at fair value
Financial assets and financial liabilities measured at amortized cost include: cash and cashequivalents, notes receivable, accounts receivable, other receivables, short-term borrowings,notes payable, accounts payable, other payables, long-term borrowings due within one year,long-term borrowings and bonds payable, etc.No additional details of financial assets and financial liabilities should be disclosed since thedifference between the fair value and carrying value of financial assets and financial liabilitiesof the Company is approximately equal.
X. Related parties and related party transactions
1. Information about the parent company of the Company
| Parent company | Registration place | Business nature | Registered capital (RMB0,000) | Shareholding percentage （%） | Percentage of voting rights （%） |
| Shougang Group Co., Ltd. | Beijing | Company with limited liability(wholly state-owned) | 2,875,502.50 | 50.45 | 50.45 |
The ultimate controlling party of the Company is State-owned Assets Supervision andAdministration Commission of People’s Government of Beijing Municipality.During the reporting period, the change of the registered capital of the parent company is asfollows:
| As at 31.12.2020 | Addition | Reduction | As at 31.12.2021 |
| 2,875,502.50 | -- | -- | 2,875,502.50 |
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII, 1.
3. Information about joint ventures and associates of the Company
For information about joint ventures and associates of the Company, refer to Note VII, 2.Joint ventures and associates that have related transactions with the Company in this year orthe previous year are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Joint ventures of the Company |
| Tangshan Guoxing Industrial Co., Ltd. | Joint ventures of the Company |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Joint ventures of the Company |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Associates of the Company |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Associates of the Company |
| Guangzhou Jinghai Shipping Co., Ltd. | Associates of the Company |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Associates of the Company |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Associates of the Company |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Associates of the Company |
| Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | Associates of the Company |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | Associates of the Company |
| Hebei Jingji Industry & Trading Co., Ltd. | Associates of the Company |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Associates of the Company |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Associates of the Company |
| Name of joint venture or associate | Relationship with the Company |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Associates of the Company |
4. Information about other related parties
| Related party | Relationship with the Company |
| Shougang Group Finance Co., Ltd. | Under the control of the same parent company |
| Shougang Mining Corporation | Under the control of the same parent company |
| China Shougang International Trade&Engineering Corporation | Under the control of the same parent company |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Machinery Co., Ltd. | Under the control of the same parent company |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Under the control of the same parent company |
| Qian'an First Real Packaging Service Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Equipment Structure Co., Ltd. | Under the control of the same parent company |
| Huludao Shougang Donghua Machinery Co., Ltd. | Under the control of the same parent company |
| Beijing Soly Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shouye Instruments&Meters Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Landscaping Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Huaxia International Trade Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Under the control of the same parent company |
| Beijing Huaxia Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Catering Co., Ltd. | Under the control of the same parent company |
| Beijing Shoujia Steel Construction Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Ferroalloy Co., Ltd. | Under the control of the same parent company |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Under the control of the same parent company |
| Yantai Shougang Mining 3D Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Tianjin Shougang Electric Equipment Co., Ltd. | Under the control of the same parent company |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Under the control of the same parent company |
| Beijing Shoucheng Packaging Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Materials Trading Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Futong Elevator Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Under the control of the same parent company |
| Tonghua Iron and Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Under the control of the same parent company |
| Shougang Environmental Industry Co., Ltd. | Under the control of the same parent company |
| Beijing Teyu Plate Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Zhongshou Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Mining Construction Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Industrial Group Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Cultural Development Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Under the control of the same parent company |
| Shougang Casey Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Under the control of the same parent company |
| Qiangang Hotel. | Under the control of the same parent company |
| Beijing Shougang Special Steel Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Under the control of the same parent company |
| Bohai International Conference Center Co., Ltd. | Under the control of the same parent company |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Under the control of the same parent company |
| Beijing Huayue Aviation Service Co., Ltd. | Under the control of the same parent company |
| Shougang Guiyang Special Steel Co., Ltd. | Under the control of the same parent company |
| Tangshan Shoukuang Cleaning Iron Co., Ltd. | Under the control of the same parent company |
| China Peace International Travel Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Steel Distribution Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Under the control of the same parent company |
| Shougang Changzhi Steel&Iron Co., Ltd. | Under the control of the same parent company |
| Beijing Beiye Functional Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Metal Co., Ltd. | Under the control of the same parent company |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Guizhou Bohong Industrial Co., Ltd. | Under the control of the same parent company |
| Dachang Shougang Machinery&Electric Co., Ltd. | Under the control of the same parent company |
| Ningbo Shoude Bonded Zone Trading Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Lanzatech New Energy Technology Co., Ltd. | Under the control of the same parent company |
| South China International Leasing Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Equipment Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shouxinsheng Trading Co., Ltd. | Under the control of the same parent company |
| Shougang Hospital Co., Ltd. | Under the control of the same parent company |
| Qinhuangdao Shougang Plate Mill Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Fulushi Color Coated Plate Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Industrial Group Co., Ltd. | Under the control of the same parent company |
| Bejing Shougang International Travel Co., Ltd. | Under the control of the same parent company |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Under the control of the same parent company |
| Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | Under the control of the same parent company |
| Huludao Shougang Donghua Pipe Industry Co., Ltd. | Under the control of the same parent company |
| Tonggang Jilin Welded Pipe Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Mining Investment Co., Ltd | Under the control of the same parent company |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Property Management Co., Ltd. | Under the control of the same parent company |
| Beijing Shouao Real Estate Co., Ltd | Under the control of the same parent company |
| Beijing Shougang Jitaian Alloy Materials Co., Ltd. | Under the control of the same parent company |
| Beijing Shouronghui Technology Development Co., Ltd. | Under the control of the same parent company |
| Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | Under the control of the same parent company |
| Shougang Hospital Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Qingdao Shouyi Free Trade Zone Logistics Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shouhua Technology Development Co., Ltd. | Under the control of the same parent company |
| Jilin Tonggang International Trade Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Gas Tangshan Co., Ltd. | Under the control of the same parent company |
| Guizhou Shuigang Logistics Co., Ltd. | Under the control of the same parent company |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Construction Investment Co., Ltd. | Under the control of the same parent company |
| Shougang Commercial Factoring Co., Ltd. | Under the control of the same parent company |
| Related party | Relationship with the Company |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Under the control of the same parent company |
| Guiyang Steel Mills I/E Corp. | Under the control of the same parent company |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Under the control of the same parent company |
| Beijing Shougang Shape Metal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingxi (Guizhou) Supply Chain Management Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shouyu Industry and Trade Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Tangshan Caofeidian Industry Port Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Kuangshan Hospital Co., Ltd | Joint ventures or associates of the Company’s parent company |
| YASKAWA Shougang Robert Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Cmi Engineering (Beijing) Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Qian'an Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Sanhe Shoujia Construction Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Hua Xia Bank Co.,Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingxi Shoutang Supply Chain Management Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Beijing Shoubang New Material Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jingtang Port Shougang Terminal Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shougang Zhongye Machinery & Electric Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Jiangsu Capital Holdings Manufacturing Technology Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Related party | Relationship with the Company |
| Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Joint ventures or associates of the Company’s parent company |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Joint ventures or associates of the Company’s parent company |
| Directors, Supervisors, CFO and Board Secretary | Key management personnel |
5. Information about related party transactions
(1) Details of related purchase and sales
①Purchase of goods and receiving of services from related parties
| Related party | Nature of transaction | 2021 | 2020 |
| Shougang Group Co., Ltd. | Raw material | 38,213,705,218.31 | 22,475,432,877.92 |
| Shougang Group Co., Ltd. | Fuel material | 1,436,079,743.96 | 839,111,830.96 |
| Shougang Group Co., Ltd. | Engineering equipment | 107,886,266.97 | 184,224,527.54 |
| Shougang Group Co., Ltd. | Spare parts | 61,664,063.35 | 8,688,006.35 |
| Shougang Group Co., Ltd. | Production service | 25,846,478.94 | 21,908,162.53 |
| Shougang Group Co., Ltd. | Fund usage charges | 75,407,530.12 | 80,236,212.32 |
| Shougang Group Finance Co., Ltd. | Fund usage charges | 292,800,216.58 | 261,805,906.55 |
| Shougang Mining Corporation | Raw material | 13,130,822,957.95 | 10,039,993,073.26 |
| Shougang Mining Corporation | Fuel material | 18,970,036.44 | -- |
| Shougang Mining Corporation | Power energy | 36,655,834.65 | 46,362,132.70 |
| Shougang Mining Corporation | Spare parts | 3,778,051.70 | 3,279,442.20 |
| Shougang Mining Corporation | Production service | 122,369,996.53 | 101,071,134.26 |
| Shougang Mining Corporation | Engineering equipment | 626,686.00 | 4,189,075.78 |
| China Shougang International Trade&Engineering Corporation | Export cost | 71,055,095.49 | 61,090,346.95 |
| China Shougang International Trade&Engineering Corporation | Raw material | 123,598,167.77 | 245,622,956.58 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Fuel material | 5,370,510,877.47 | 5,547,403,153.11 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 362,255,517.37 | 439,201,428.59 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Production service | 3,758,115.00 | 26,199,618.34 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Auxiliary material | -- | 2,926,927.87 |
| Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | Engineering service | 10,770,342.75 | 2,070,531.19 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 622,581,968.30 | 462,954,574.43 |
| Beijing Shougang Construction Group Co., Ltd. | Spare parts | 16,630,652.40 | 14,198,456.80 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering equipment | 61,946.00 | 6,528,973.48 |
| Beijing Shougang Construction Group Co., Ltd. | Engineering service | 832,585,204.04 | 758,031,421.11 |
| Beijing Shougang Gas Co., Ltd. | Spare parts | 1,635,395.19 | 517,927.82 |
| Beijing Shougang Gas Co., Ltd. | Production service | 57,272,804.78 | 48,834,170.58 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 109,544,662.97 | 88,465,933.43 |
| Beijing Shougang Gas Co., Ltd. | Auxiliary material | 9,208,242.96 | 11,803,452.97 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 345,978,795.76 | 279,808,663.52 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Spare parts | 7,529,718.33 | 5,778,449.10 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering service | 97,477,227.60 | 128,942,106.56 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Engineering equipment | 76,320,731.33 | 120,428,074.99 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | 113,462,788.79 | 104,611,424.62 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 264,618,752.90 | 210,197,665.05 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering equipment | 26,536,094.40 | 4,834,316.85 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Engineering service | 8,184,437.70 | -- |
| Qinhuangdao Shougang Machinery Co., Ltd. | Spare parts | 52,361,597.00 | 48,022,099.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 161,443,825.72 | 113,037,965.98 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Auxiliary material | 181,612.00 | 108,800.00 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Engineering equipment | 631,639.35 | 2,799,784.00 |
| Qian'an Shouxin Automation Information Technology Co., Ltd. | Production service | 119,293,169.06 | 111,609,021.92 |
| Qian'an First Real Packaging Service Co., Ltd. | Production service | 354,866,870.91 | 200,751,734.25 |
| Qian'an First Real Packaging Service Co., Ltd. | Raw material | 288,102.67 | 7,369,162.70 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Spare parts | 20,007,338.00 | 26,631,135.84 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 100,255,512.72 | 58,442,769.12 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering equipment | 1,604,206.84 | 1,399,569.04 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Engineering service | 825,909.00 | 3,013,922.79 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Raw material | 519,943,875.16 | 211,923,588.96 |
| Huludao Shougang Donghua Machinery Co., Ltd. | Spare parts | 1,271,577.00 | 6,440,584.00 |
| Huludao Shougang Donghua Machinery Co., Ltd. | Production service | 5,814,300.00 | 38,443,490.00 |
| Huludao Shougang Donghua Machinery Co., Ltd. | Engineering equipment | -- | 7,399,092.61 |
| Beijing Soly Technology Co., Ltd. | Engineering equipment | 830,868.00 | 353,801.34 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Spare parts | 37,559,656.13 | 39,934,823.79 |
| Beijing Shouye Instruments&Meters Co., Ltd. | Engineering equipment | 5,208,510.00 | 837,828.50 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 90,492,961.45 | 57,321,699.12 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Auxiliary material | 5,659,200.00 | 2,138,400.00 |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Engineering equipment | 355,200.76 | -- |
| Beijing Shoujian Hengxin Labor Service Co., Ltd. | Production service | 1,925,000.00 | 1,935,000.00 |
| Beijing Shoujian Hengji Construction Engineering Co., Ltd. | Spare parts | 939,736.80 | 560,348.00 |
| Beijing Shougang Landscaping Co., Ltd. | Life service | 26,567,532.41 | 14,216,782.92 |
| Beijing Shougang Landscaping Co., Ltd. | Engineering service | 733,072.00 | 2,670,354.40 |
| Beijing Shougang Huaxia International Trade Co., Ltd. | Spare parts | -- | 4,960,000.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Spare parts | 12,607,597.00 | 7,746,855.00 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering equipment | 72,137,555.51 | 267,038,760.67 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Engineering service | 477,002,075.75 | 1,387,188,083.59 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 17,945,708.90 | 645,886.79 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 76,268,193.55 | 67,580,189.65 |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Production service | 10,852,343.50 | 30,436,073.78 |
| Beijing Huaxia Technology Co., Ltd. | Spare parts | 5,512,346.85 | 3,792,279.26 |
| Beijing Huaxia Technology Co., Ltd. | Engineering equipment | 57,216.00 | 6,569,745.73 |
| Beijing Huaxia Technology Co., Ltd. | Production service | 1,239,998.00 | 577,586.00 |
| Beijing Shougang Catering Co., Ltd. | Life service | 32,281,673.78 | 31,571,639.79 |
| Beijing Shoujia Steel Construction Co., Ltd. | Production service | 43,447,842.27 | 25,231,426.92 |
| Shougang Hospital Co., Ltd. | Life service | 1,648,203.00 | 8,298,761.59 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw material | 448,631,993.28 | 279,689,952.60 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw material | 113,014,348.70 | 110,828,669.76 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Production service | 59,356,273.21 | 23,047,011.45 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Auxiliary material | 8,208,732.96 | 2,952,512.20 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Auxiliary material | 108,337,207.14 | 126,746,773.19 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Engineering equipment | 2,287,610.62 | -- |
| Yantai Shougang Mining 3D Co., Ltd. | Spare parts | 39,600.00 | 10,791.62 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Engineering equipment | 11,919,565.81 | 15,921,274.20 |
| Tianjin Shougang Electric Equipment Co., Ltd. | Spare parts | 10,249,090.00 | 3,439,500.00 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Engineering service | 5,839,707.47 | 6,963,853.88 |
| Beijing Chengxin Engineering Supervision Co., Ltd. | Production service | 770,899.99 | -- |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 121,321,417.29 | 95,092,358.74 |
| Beijing Shougang Materials Trading Co., Ltd. | Fuel material | 309,682,912.34 | 119,602,059.49 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw material | 927,016,812.76 | 692,506,744.95 |
| Beijing Shougang Materials Trading Co., Ltd. | Production service | -- | 2,749,073.71 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 961,379,395.21 | 905,225,354.25 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Fuel material | 13,163,464,122.66 | 8,843,642,545.42 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Raw material | 3,021,523.41 | 1,507,652.53 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 248,887,913.91 | 28,235,067.39 |
| Beijing Shougang Futong Elevator Co., Ltd. | Spare parts | 91,115.00 | 59,440.00 |
| Beijing Shougang Futong Elevator Co., Ltd. | Production service | 869,600.00 | 1,211,800.00 |
| Beijing Shoubao Nuclear Equipment Technology Co., Ltd. | Production service | -- | 64,699,765.33 |
| Beijing Shoubao Nuclear Equipment Technology Co., Ltd. | Spare parts | -- | 10,676,027.00 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 117,579,964.30 | 77,687,880.63 |
| Tangshan Guoxing Industrial Co., Ltd. | Engineering service | 4,552,565.46 | 988,895.30 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Production service | 457,270,718.97 | 346,895,130.34 |
| Tonghua Iron and Steel Co., Ltd. | Engineering equipment | 3,236,416.51 | -- |
| Tonghua Iron and Steel Co., Ltd. | Raw material | 66,026,550.32 | 2,247,601.84 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Production service | 94,339.62 | 18,833.33 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Engineering equipment | 1,362,800.00 | 1,362,800.00 |
| Shougang Environmental Industry Co., Ltd. | Production service | 4,155,282.98 | 3,595,964.43 |
| Beijing Teyu Plate Co., Ltd. | Engineering equipment | -- | 85,421,473.13 |
| Qinhuangdao Zhongshou Logistics Co., Ltd. | Production service | 587,690.19 | 1,271,692.78 |
| Beijing Shougang Mining Construction Co., Ltd. | Engineering service | 3,190,250.42 | 7,750,568.08 |
| Beijing Shougang Mining Construction Co., Ltd. | Production service | 359,497.00 | 429,992.00 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Engineering equipment | 175,938.53 | -- |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Raw material | 1,268,839.82 | 14,565,774.93 |
| Beijing Shougang Industrial Group Co., Ltd. | Life service | 8,354,159.55 | 8,392,406.50 |
| Beijing Shougang Shape Metal Co., Ltd. | Raw material | 1,114,889.38 | 1,448,649.56 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Production service | 117,572,234.28 | 119,980,137.18 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Auxiliary material | 2,330,402.40 | 1,045,368.00 |
| Beijing Shougang Cultural Development Co., Ltd. | Production service | 149,009.43 | 448,351.70 |
| Jingxi (Guizhou) Supply Chain Management Co., Ltd. | Raw material | -- | 7,894,247.79 |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Spare parts | 261,453.00 | 158,382.00 |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Production service | -- | 2,672,600.00 |
| Shougang Casey Steel Co., Ltd. | Production service | 102,954,696.79 | 85,312,691.44 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Life service | 23,414,022.52 | 25,094,469.60 |
| Qiangang Hotel. | Production service | 25,876,769.55 | 20,242,271.63 |
| Beijing Shougang Special Steel Co., Ltd. | Production service | 426,234.71 | 7,257,200.37 |
| Beijing Shougang Special Steel Co., Ltd. | Power energy | 20,612.25 | 99,547.79 |
| Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | Spare parts | 478,270.00 | 4,903,800.00 |
| Bohai International Conference Center Co., Ltd. | Life service | 103,046.23 | 51,282.08 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 2,721,359.52 | 3,807,785.65 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Auxiliary material | 47,736,419.36 | 36,920,253.85 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Spare parts | 19,576,171.83 | 19,795,045.90 |
| Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | Production service | 13,757,098.00 | 11,504,293.00 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 407,924,922.93 | 328,058,660.14 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Spare parts | 51,088,635.32 | 42,519,088.05 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Production service | 802,443.04 | 789,805.94 |
| Beijing Huayue Aviation Service Co., Ltd. | Life service | -- | 4,340.72 |
| Beijing Shoushe Metallurgical Technology Co., Ltd. | Life service | 690,603.97 | 102,902.26 |
| Beijing Shouyu Industry and Trade Co., Ltd. | Auxiliary material | 10,603,136.18 | 10,164,440.09 |
| Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | Auxiliary material | -- | 512,301.01 |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Spare parts | 15,262.00 | 675,850.08 |
| Shougang Guiyang Special Steel Co., Ltd. | Auxiliary material | 13,263,605.26 | 8,524,748.29 |
| Shougang Guiyang Special Steel Co., Ltd. | Engineering equipment | -- | 20,788,717.99 |
| Tangshan Caofeidian Ganglian Logistics Co., Ltd. | Production service | 63,642,873.70 | 758,402.74 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Production service | 400,052,453.44 | 401,422,352.04 |
| Tangshan Shoukuang Cleaning Iron Co., Ltd. | Raw material | -- | 109,839,833.78 |
| Tangshan Shoukuang Cleaning Iron Co., Ltd. | Production service | -- | 132,782,532.37 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Production service | 3,771,028.94 | 4,954,693.41 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Raw material | 2,598,673.80 | 35,232,137.78 |
| China Peace International Travel Service Co., Ltd. | Life service | -- | 8,000.00 |
| Beijing Shoutaizhongxin Science & Technology Co., Ltd | Spare parts | 1,556,522.23 | -- |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Raw material | 287,802,331.88 | 21,689,167.00 |
| Gansu Province, Wenxian Million Litie Alloy Co., Ltd. | Raw material | 812,062,129.47 | -- |
| Beijing Shougang Steel Distribution Co., Ltd | Engineering equipment | -- | 225,450.78 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Raw material | 28,003,765.33 | 270,933.68 |
| Beijing Shougang Park Comprehensive Service Co., Ltd. | Life service | 1,458,695.68 | 464,322.39 |
| YASKAWA Shougang Robert Co., Ltd. | Production service | 99,190.00 | 17,000.00 |
| Beijing Shouxinsheng Trading Co., Ltd. | Raw material | 660,000.00 | 60,505,643.28 |
| Tonggang Jilin Welded Pipe Co., Ltd | Auxiliary material | -- | 125,440.00 |
| Qinhuangdao Shougang Plate Mill Co., Ltd. | Engineering equipment | -- | 833,333.33 |
| Qinhuangdao Shougang Racing Valley Co., Ltd | Production service | 593,547.16 | 609,269.80 |
| Hebei Shougang Jingtang Machinery Co., Ltd. | Production service | 8,612,479.50 | 1,092,932.10 |
| Beijing Shouao Real Estate Co., Ltd | Life service | 65,373.00 | 50,400.00 |
| Cmi Engineering (Beijing) Co., Ltd. | Engineering equipment | 2,350,492.00 | 2,740,000.00 |
| Jilin Tonggang International Trade Co., Ltd. | Raw material | -- | 2,619,614.95 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Production service | 137,342.41 | 12,059.42 |
| South China International Leasing Co., Ltd | Fund usage charges | 408,154.27 | 317,749.91 |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | Fund usage charges | 14,223,287.67 | 5,276,712.33 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Fuel material | 6,491,155.75 | -- |
| Qinhuangdao Shoufang Property Service Co., Ltd. | Life service | 903,720.00 | -- |
| Bejing Shougang International Travel Co., Ltd. | Life service | 186,162.47 | -- |
| Beijing Shougang Environmental Engineering Technology Co., Ltd. | Raw material | 10,514,058.58 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Production service | 5,440,692.45 | -- |
| Beijing Shougang Property Management Co., Ltd. | Production service | 2,903,326.07 | -- |
| Guiyang Steel Mills I/E Corp. | Production service | 3,371,370.88 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 1,554,416.90 | -- |
②Sale of goods and rendering of services to related parties
| Related party | Nature of transaction | 2021 | 2020 |
| Shougang Group Co., Ltd. | Management service | 322,856,073.40 | 388,673,540.30 |
| Shougang Group Co., Ltd. | Interest income | -- | 21,582,482.08 |
| Shougang Group Co., Ltd. | Production service | 16,384,180.19 | 16,269,090.54 |
| Shougang Mining Corporation | Steel | 9,657,678.23 | 9,123,594.10 |
| Shougang Mining Corporation | Raw fuel material | 617,528,694.26 | 324,518,330.13 |
| Shougang Mining Corporation | Power energy | 339,888,833.31 | 360,465,665.25 |
| Shougang Mining Corporation | Production service | 16,106,593.88 | -- |
| Shougang Group Finance Co., Ltd. | Interest income | 129,218,534.77 | 108,641,085.66 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Power energy | 277,517,105.35 | 181,315,533.79 |
| Related party | Nature of transaction | 2021 | 2020 |
| Shougang Casey Steel Co., Ltd. | Steel | 872,744,622.51 | 481,920,723.73 |
| Shougang Casey Steel Co., Ltd. | Production service | 1,821,488.40 | -- |
| Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | Steel | 52,568.33 | 259,068,925.83 |
| Beijing Shougang Construction Group Co., Ltd. | Power energy | 2,519,371.08 | 4,352,003.39 |
| Beijing Shougang Construction Group Co., Ltd. | Steel | 37,736,546.55 | 26,296,712.93 |
| Beijing Shougang Construction Group Co., Ltd. | Production service | 977,440.97 | 1,802,409.81 |
| Beijing Shougang Gas Co., Ltd. | Power energy | 151,854,252.56 | 137,638,625.60 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Steel | 147,153,949.07 | 18,541,669.74 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Power energy | 3,337,782.11 | 2,612,156.17 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Production service | 1,513,633.98 | 3,627,733.33 |
| Beijing Shougang Machinery&Electric Co., Ltd. | Spare parts | 180,310.18 | -- |
| Beijing Shougang Ferroalloy Co., Ltd. | Power energy | 2,829,746.71 | 4,149,978.58 |
| Beijing Shougang Ferroalloy Co., Ltd. | Raw fuel material | 20,619,652.70 | 20,863,176.66 |
| Beijing Shougang Ferroalloy Co., Ltd. | Production service | 484,625.75 | 449,154.05 |
| Beijing Shougang Ferroalloy Co., Ltd. | Steel | -- | 40,223,043.89 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Power energy | 600,722,568.59 | 597,223,735.88 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Production service | 214,700,900.89 | 174,213,431.05 |
| Beijing Beiye Functional Materials Co., Ltd. | Billet | 14,900,608.66 | 9,117,278.51 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Raw fuel material | 56,998,443.29 | 6,755,827.81 |
| Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | Production service | 118,539.00 | 118,539.00 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Steel | 36,292,975.72 | 16,958,330.51 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Power energy | 296,380.80 | 339,453.51 |
| Beijing Shoucheng Packaging Service Co., Ltd. | Production service | 1,868,192.00 | 1,712,510.00 |
| Qian'an First Real Packaging Service Co., Ltd. | Steel | 39,934,460.63 | 88,324,141.23 |
| Beijing Shouronghui Technology Development Co., Ltd. | Steel | 1,966,033.60 | -- |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Raw fuel material | 281,348,426.05 | 220,204,663.36 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Power energy | 120,645,752.67 | 116,463,776.95 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Production service | 27,043,499.52 | 23,682,420.06 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Steel | 622,011.63 | -- |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Power energy | 34,249.96 | 171,321.90 |
| Beijing Shougang International Engineering&Technology Co., Ltd. | Production service | 452,830.19 | 1,530,566.04 |
| Beijing Shougang Metal Co., Ltd. | Steel | 42,108,282.48 | 41,942,213.93 |
| Beijing Shougang Metal Co., Ltd. | Power energy | 1,453,606.94 | 1,543,520.62 |
| Related party | Nature of transaction | 2021 | 2020 |
| Beijing Shougang Metal Co., Ltd. | Production service | 2,756,334.23 | 2,521,467.89 |
| Qinhuangdao Shouqin Metal Materials Co., Ltd. | Steel | -- | 507,696,108.99 |
| Beijing Shougang Mining Construction Co., Ltd. | Steel | 1,241,277.67 | 3,680,894.15 |
| Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | Steel | 41,892,931.70 | -- |
| Qinhuangdao Shougang Machinery Co., Ltd. | Raw fuel material | 937,014,959.13 | 443,666,813.98 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Power energy | 508,092.44 | 304,923.67 |
| Qinhuangdao Shougang Machinery Co., Ltd. | Production service | 1,888,757.36 | -- |
| Qian'an Shougang Equipment Structure Co., Ltd. | Power energy | 21,000.00 | 20,002.50 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Production service | 164,068.27 | 144,000.00 |
| Qian'an Shougang Equipment Structure Co., Ltd. | Steel | 223,401.77 | 3,911,445.31 |
| Tangshan Guoxing Industrial Co., Ltd. | Power energy | 812,139.20 | 783,910.67 |
| Tangshan Guoxing Industrial Co., Ltd. | Raw fuel material | 4,072,506.20 | 57,837.12 |
| Tangshan Guoxing Industrial Co., Ltd. | Production service | 1,962,692.75 | 1,259,047.62 |
| Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | Power energy | 125,248.13 | 119,962.50 |
| Tangshan Caofeidian First Real Industrial Co., Ltd. | Power energy | 873,443.01 | 906,346.18 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Power energy | 1,305,678.06 | 80,430.00 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Spare parts | -- | 1,443,067.62 |
| Beijing Shougang Automation Information Technology Co., Ltd. | Production service | 237,735.85 | 237,735.85 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Power energy | 93,846,906.81 | 124,893,707.64 |
| Hebei Shoulang New Energy Technology Co., Ltd. | Production service | 1,714,285.71 | 5,142,857.14 |
| Beijing Jinanyuan Automobile Transportation Co., Ltd. | Production service | 198,165.14 | 215,148.25 |
| Tonghua Iron and Steel Co., Ltd. | Raw fuel material | 778,164.50 | 137,737,917.92 |
| Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | Raw fuel material | 12,677,501.44 | 2,248,938.88 |
| Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | Steel | -- | 245,150.45 |
| Beijing Shoubao Nuclear Equipment Technology Co., Ltd. | Power energy | -- | 50,400.00 |
| Beijing Shoubao Nuclear Equipment Technology Co., Ltd. | Production service | -- | 342,857.14 |
| Beijing Shougang Materials Trading Co., Ltd. | Raw fuel material | 10,752,760.18 | 5,226,123.89 |
| Beijing Shougang Materials Trading Co., Ltd. | Production service | -- | 22,669.81 |
| Beijing Shougang Materials Trading Co., Ltd. | Steel | 31,365,842.84 | 14,122,416.76 |
| Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | Raw fuel material | 46,410.02 | -- |
| Shougang Changzhi Steel&Iron Co., Ltd. | Raw fuel material | -- | 8,612,048.19 |
| Shougang Changzhi Steel&Iron Co., Ltd. | Production service | 330,188.68 | 566,037.74 |
| Tangshan Caofeidian Industry Port Co., Ltd. | Power energy | 3,390,814.00 | 7,431,690.00 |
| Related party | Nature of transaction | 2021 | 2020 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Interest income | 10,518,170.49 | 10,361,268.74 |
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | Production service | 613,153.25 | -- |
| Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | Steel | -- | 103,615,972.75 |
| Ningbo Shougang Zhejin Steel Co., Ltd. | Steel | 733,790,833.50 | 387,404,125.34 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Steel | 2,635,744,920.56 | 2,068,145,685.62 |
| Shougang (Qingdao) Steel Industry Co., Ltd. | Production service | -- | 1,191,850.64 |
| Tianjin Shougang Steel Processing&Distribution Co., Ltd. | Steel | 12,410,581.55 | 122,868,391.48 |
| Ordos Baotou Steel Shourui Material Technology Co., Ltd. | Steel | 20,147,152.24 | 43,172,333.19 |
| Qian'an Shoujia Construction Material Co., Ltd. | Power energy | 26,424,700.75 | 20,849,860.72 |
| Qian'an Shoujia Construction Material Co., Ltd. | Raw fuel material | 78,768,061.55 | 72,638,182.03 |
| Qian'an Shoujia Construction Material Co., Ltd. | Production service | 270,782.37 | 261,988.18 |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | Power energy | 72,289.19 | 37,950.34 |
| Guizhou Bohong Industrial Co., Ltd. | Production service | 88,038.87 | 95,464.82 |
| Sanhe Shoujia Construction Material Co., Ltd. | Raw fuel material | -- | 1,944,917.36 |
| Beijing Shougang Landscaping Co., Ltd. | Power energy | 4,162.17 | 5,424.66 |
| Dachang Shougang Machinery&Electric Co., Ltd. | Steel | 2,382,335.68 | 9,954,118.15 |
| Guangzhou Jinghai Shipping Co., Ltd. | Production service | 46,548,850.68 | 30,107,927.27 |
| Ningbo Shoude Bonded Zone Trading Co., Ltd. | Raw fuel material | -- | 41,366,049.77 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Power energy | 25,414.27 | 23,415.00 |
| PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | Steel | 125,306,810.27 | 76,412,124.74 |
| Qingdao Shouyi Free Trade Zone Logistics Service Co., Ltd. | Raw fuel material | -- | 8,278,494.73 |
| Beijing Shouhua Technology Development Co., Ltd. | Production service | -- | 297,169.81 |
| Shougang Guiyang Special Steel Co., Ltd. | Steel | -- | 2,110,641.08 |
| Qian'an Shougang Xingkuang Industrial Co., Ltd. | Steel | 50,832,468.42 | 18,076,509.17 |
| Beijing Shougang Gas Tangshan Co., Ltd. | Production service | 565,714.29 | 565,714.29 |
| Chaoyang Shougang Beifang Machinery Co., Ltd. | Spare parts | -- | 88,887.10 |
| Beijing Shougang Catering Co., Ltd. | Power energy | 706,148.05 | 708,263.81 |
| Beijing Jingxi Supply Chain Management Co., Ltd. | Steel | -- | 2,355,838.60 |
| Beijing Shouxinsheng Trading Co., Ltd. | Steel | -- | 23,747,794.65 |
| Chengde Xintong Shoucheng Mining Co., Ltd. | Production service | -- | 6,981.14 |
| Guizhou Liupanshui Shenghongda Mechanical Equipment Manufacturing Co., Ltd | Production service | 22,871.70 | 28,478.78 |
| Guizhou Shuigang Logistics Co., Ltd. | Production service | 9,040.57 | 4,491.51 |
| Shougang Shuicheng Iron and Steel (Group) Xingyuan Development Investment Co., Ltd. | Production service | 81,484.90 | 43,601.42 |
| Related party | Nature of transaction | 2021 | 2020 |
| Hebei Jingji Industry & Trading Co., Ltd. | Steel | 13,707,273.61 | 4,904,947.45 |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | Raw fuel material | 5,670,282.21 | -- |
| Jingtang Port Shougang Terminal Co., Ltd. | Production service | 286,751.34 | 1,325,021.21 |
| Beijing Shouke Xingye Engineering Technology Co., Ltd. | Production service | 1,681,415.93 | -- |
| Tonggang Jilin Welded Pipe Co., Ltd | Steel | 17,830.09 | -- |
| Shoujia Huanke (Qian'an) Co., Ltd. | Raw fuel material | 23,094,037.69 | -- |
| Beijing Shoujian Equipment Maintenance Co., Ltd. | Production service | 19,018.87 | -- |
(2) Details of related party leases
① The Company as a lessor
| Lessee | Type of assets leased | Lease income recognized in 2021 | Lease income recognized in 2020 |
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | Land use right | 824,536.83 | 824,536.83 |
| Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | Land use right | 25,046,418.55 | 25,252,761.92 |
| Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | Land use right | 2,380,761.90 | 2,380,761.90 |
| Beijing Shougang Lanzatech New Energy Technology Co., Ltd. | Land use right | 165,333.33 | 165,333.33 |
② The Company as a lessee
| Lessor | Type of assets leased | Lease expenses recognized in 2021 | Lease expenses recognized in 2020 |
| Beijing Shougang Construction Investment Co., Ltd. | Property | 10,139,897.90 | -- |
| Shougang Group Co., Ltd. | Property | 3,198,777.88 | 2,908,102.36 |
| Beijing Shougang Special Steel Co., Ltd. | Property | 11,333.33 | 413,519.99 |
The Company leases right-of-use assets during the reporting period as a lessee
| Lessor | Type of assets leased | Increase | Decrease |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | 45,024,073.82 | -- |
The interest expenses incurred on lease liabilities as a lessee during the reporting period
| Lessor | Type of assets leased | Increase | Decrease |
| Shougang Group Co., Ltd. | Plant and buildings | 1,493,817.76 | -- |
| Beijing Shougang Construction Investment Co., Ltd. | Plant and buildings | 1,953,367.31 | -- |
(3) Details of related party guarantees
The Company as a guarantee
| Guarantor | Amount of guarantee | Beginning date | Maturity date | Status of guarantee |
| Shougang Group Co., Ltd. | 160,500,000.00 | 2021/9/17 | 2022/10/26 | Incomplete |
| Shougang Group Co., Ltd. | 8,787,335,054.82 | 2020/1/15 | 2022/6/29 | Incomplete |
| Shougang Group Co., Ltd. | 9,813,924,166.67 | 2019/3/29 | 2031/9/3 | Incomplete |
(4) Details of related party funding
| Related party | Amount of funding | Beginning date | Maturity date | Note |
| Funds received: | ||||
| Shougang Group Co., Ltd. | 10,782,629.07 | 2019/3/6 | 2023/3/25 | Entrust loans |
| Shougang Group Finance Co., Ltd. | 9,144,620,734.38 | 2021/1/14 | 2022/12/23 | Short-term borrowings |
| Shougang Group Finance Co., Ltd. | 500,618,750.00 | 2021/7/15 | 2024/7/15 | Long-term borrowings |
| Shougang Group Finance Co., Ltd. | 6,328,176,896.08 | 2021/7/12 | 2022/6/28 | Notes payable |
| South China International Leasing Co., Ltd | 15,767,452.29 | 2020/1/7 | 2025/1/6 | Long-term payable |
| Funds provided: | ||||
| Tangshan Zhonghong Carbon Chemical Co., Ltd. | 265,361,158.14 | —— | —— | Other current assets |
(5) Details of transfer of assets and debt restructuring
| Related party | Nature of transaction | 2021 | 2020 |
| Shougang Group Co., Ltd. | Share Transfer of Beijing Automobile Investment Co., Ltd. | -- | 4,371,977,739.86 |
| Shougang Group Co., Ltd. | Share Purchase of Beijing Shougang Steel Trade Investment Management Co., Ltd. | -- | 4,893,634,550.64 |
| Beijing Shougang Equipment Technology Co., Ltd. | Share Purchase of Beijing Shoubao Nuclear Equipment Technology Co., Ltd. | -- | 3,327,900.00 |
(6) Remuneration of key management personnel
The Company has 22 key management personnel in 2021, and 21 key management personnelin 2020. The remuneration payment is as follows:
| Items | 2021 | 2020 |
| Remuneration of key management personnel (excluding share payment) | 12.3913 million | 6.5804 million |
6. Receivables from and payables to related parties
(1) Receivables from related parties
| Items | Related parties | 2021.12.31 | 2020.12.31 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Bank deposit | Shougang Group Finance Co., Ltd. | 9,993,599,779.82 | -- | 5,840,053,539.02 | -- |
| Bank deposit | Hua Xia Bank Co.,Ltd. | 92,946,504.55 | -- | 2,151,464.94 | -- |
| Accounts receivable | Beijing Shougang Gas Co., Ltd. | 3,870,237.73 | 135,713.01 | -- | -- |
| Accounts receivable | Shougang Group Co., Ltd. | 57,219.54 | 2,006.45 | -- | -- |
| Accounts receivable | Shougang Casey Steel Co., Ltd. | 259,971,350.16 | 9,116,105.40 | 154,836,520.71 | 5,264,260.70 |
| Accounts receivable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 1,623,946.24 | 56,944.99 | 2,382,464.89 | 923,413.27 |
| Accounts receivable | Hebei Shoulang New Energy Technology Co., Ltd. | 23,052,262.12 | 808,346.19 | 47,946,382.54 | 1,630,120.96 |
| Accounts receivable | Qian'an Shoujia Construction Material Co., Ltd. | 61,221,363.06 | 2,146,776.55 | 64,498,577.06 | 2,192,876.22 |
| Accounts receivable | Sanhe Shoujia Construction Material Co., Ltd. | 9,275,968.24 | 6,437,863.04 | 11,275,968.24 | 5,998,186.89 |
| Accounts receivable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 1,438,064.93 | 403,415.27 | 1,479,233.93 | 50,292.22 |
| Accounts receivable | Tonghua Iron and Steel Co., Ltd. | 810,000.00 | 28,403.30 | 95,230,146.73 | 3,237,713.67 |
| Accounts receivable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 4,028.00 | 141.25 | 11,199,223.84 | 380,760.52 |
| Accounts receivable | Beijing Shougang International Engineering&Technology Co., Ltd. | 412,800.00 | 401,297.79 | 1,156,700.00 | 318,437.01 |
| Accounts receivable | Beijing Shougang Materials Trading Co., Ltd. | -- | -- | 435,425.96 | 14,803.97 |
| Accounts receivable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 9,607,053.73 | 336,879.10 | 7,222,280.17 | 245,549.08 |
| Accounts receivable | Beijing Shougang Mining Construction Co., Ltd. | -- | -- | 12,987.00 | 441.54 |
| Accounts receivable | Beijing Shouxinsheng Trading Co., Ltd. | -- | -- | 285,008.00 | 9,689.94 |
| Accounts receivable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 1,261,607.93 | 44,239.30 | 5,670,128.78 | 192,777.75 |
| Accounts receivable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 734.50 | 25.76 | -- | -- |
| Items | Related parties | 2021.12.31 | 2020.12.31 | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Beijing Shougang Machinery&Electric Co., Ltd. | 42,400.00 | 1,486.79 | -- | -- |
| Accounts receivable | Beijing Shouke Xingye Engineering Technology Co., Ltd. | 900,000.00 | 31,559.23 | -- | -- |
| Prepayments | Tonghua Iron and Steel Co., Ltd. | 16,968,576.00 | -- | 87,647.33 | -- |
| Prepayments | Tangshan Caofeidian Ganglian Logistics Co., Ltd. | 262,876,222.88 | -- | 39,092,233.65 | -- |
| Prepayments | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 763,907.90 | -- | 813,907.90 | -- |
| Prepayments | Tangshan Caofeidian Industry Port Co., Ltd. | -- | -- | 22,055.88 | -- |
| Prepayments | Huludao Shougang Donghua Machinery Co., Ltd. | -- | -- | 933,792.77 | -- |
| Prepayments | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 671,424.66 | -- | -- | -- |
| Prepayments | Chengde Xintong Shoucheng Mining Co., Ltd. | 10,522,946.92 | -- | -- | -- |
| Other receivables | Beijing Shougang Materials Trading Co., Ltd. | -- | -- | 1,000,000.00 | 90,000.00 |
| Dividend receivable | Hebei Jingji Industry & Trading Co., Ltd. | -- | -- | 4,892,288.48 | -- |
| Other current assets | Tangshan Zhonghong Carbon Chemical Co., Ltd. | 265,361,158.14 | 118,133,658.14 | 245,455,297.98 | -- |
(2) Payables to related parties
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Accounts payable | Shougang Group Co., Ltd. | 1,384,249,837.28 | 424,300,384.98 |
| Accounts payable | Shougang Mining Corporation | 4,522,110,751.63 | 4,758,872,958.16 |
| Accounts payable | Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 531,130,707.96 | 522,003,740.47 |
| Accounts payable | Tangshan Shougang Jingtang Xishan Coking Co., Ltd. | 502,790,483.78 | 898,085,897.55 |
| Accounts payable | Beijing Shoucheng Packaging Service Co., Ltd. | 13,987,818.77 | 12,194,373.08 |
| Accounts payable | Beijing Shougang Automation Information Technology Co., Ltd. | 205,271,058.27 | 323,142,973.59 |
| Accounts payable | Beijing Shougang Construction Group Co., Ltd. | 782,284,524.75 | 1,037,734,728.65 |
| Accounts payable | Beijing Shoujian Equipment Maintenance Co., Ltd. | 20,357,608.30 | 85,061,141.78 |
| Accounts payable | Beijing Shougang Landscaping Co., Ltd. | 19,375,454.67 | 9,860,436.91 |
| Accounts payable | Beijing Shougang Catering Co., Ltd. | 1,276,876.62 | 4,670,126.47 |
| Accounts payable | Beijing Huaxia Technology Co., Ltd. | 5,949,926.35 | 5,781,199.34 |
| Accounts payable | Qinhuangdao Shougang Machinery Co., Ltd. | 77,660,313.32 | 88,702,058.87 |
| Accounts payable | Beijing Shougang Huaxia International Trade Co., Ltd. | -- | 5,564.75 |
| Accounts payable | Beijing Shougang Machinery&Electric Co., Ltd. | 132,222,261.77 | 165,812,736.46 |
| Accounts payable | Beijing Shouye Instruments&Meters Co., Ltd. | 13,682,200.89 | 14,344,260.92 |
| Accounts payable | Huludao Shougang Donghua Machinery Co., Ltd. | -- | 9,207,347.77 |
| Accounts payable | Tianjin Shougang Electric Equipment Co., Ltd. | 16,682,673.00 | 11,468,267.73 |
| Accounts payable | Beijing Shougang Gas Co., Ltd. | 51,211,959.35 | 88,190,353.60 |
| Accounts payable | Beijing Shougang International Engineering&Technology Co., Ltd. | 500,889,049.60 | 681,763,620.48 |
| Accounts payable | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 10,002,976.59 | 14,257,362.30 |
| Accounts payable | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 32,927,728.20 | 29,007,357.23 |
| Accounts payable | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 174,964.00 | 597,800.00 |
| Accounts payable | Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | -- | 4,558,161.84 |
| Accounts payable | Qian'an Shougang Equipment Structure Co., Ltd. | 79,254,052.59 | 105,856,397.86 |
| Accounts payable | Yantai Shougang Mining 3D Co., Ltd. | 337,462.12 | 914,117.76 |
| Accounts payable | Beijing Shoujian Hengji Construction Engineering Co., Ltd. | 1,355,139.65 | 1,346,603.21 |
| Accounts payable | Beijing Soly Technology Co., Ltd. | 1,322,967.10 | 1,325,147.26 |
| Accounts payable | Qian'an Shouxin Automation Information Technology Co., Ltd. | 18,536,805.29 | 23,932,561.21 |
| Accounts payable | Shougang Hospital Co., Ltd. | -- | 3,278,331.90 |
| Accounts payable | Qian'an First Real Packaging Service Co., Ltd. | 108,038,561.30 | 84,336,199.76 |
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Accounts payable | Beijing Shougang Refractory& Metallurgical Burden Co., Ltd. | 15,421,690.84 | 10,707,679.21 |
| Accounts payable | Beijing Shoujia Steel Construction Co., Ltd. | 5,451,674.96 | 4,070,335.14 |
| Accounts payable | Beijing Shougang Ferroalloy Co., Ltd. | 56,826,692.95 | 49,538,592.23 |
| Accounts payable | Beijing Shougang Materials Trading Co., Ltd. | 218,553,880.01 | 115,225,146.51 |
| Accounts payable | Beijing Shougang Resources Comprehensive Utilization Technology Development Co., Ltd. | 57,690,426.64 | 70,690,426.64 |
| Accounts payable | Shougang Environmental Industry Co., Ltd. | 829,080.00 | 692,794.10 |
| Accounts payable | China Shougang International Trade&Engineering Corporation | 329,101,270.01 | 303,356,345.33 |
| Accounts payable | Beijing Chengxin Engineering Supervision Co., Ltd. | 4,895,538.32 | 6,032,842.86 |
| Accounts payable | Qinhuangdao Shougang Plate Mill Co., Ltd. | -- | 141,274.84 |
| Accounts payable | Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | 53,995,540.32 | 72,232,078.18 |
| Accounts payable | Tangshan Shoukuang Cleaning Iron Co., Ltd. | 137,489,080.84 | 137,489,080.84 |
| Accounts payable | Tangshan Guoxing Industrial Co., Ltd. | 37,617,722.80 | 27,550,753.14 |
| Accounts payable | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 162,441,310.98 | 168,050,365.63 |
| Accounts payable | Beijing Shougang Futong Elevator Co., Ltd. | 178,815.55 | 2,677,608.70 |
| Accounts payable | Beijing Teyu Plate Co., Ltd. | 85,095,430.63 | 85,095,430.63 |
| Accounts payable | Jingxi Shoutang Supply Chain Management Co., Ltd | 888,650.02 | 1,388,650.02 |
| Accounts payable | Beijing Shougang Mining Construction Co., Ltd. | 5,821,388.57 | 8,858,144.66 |
| Accounts payable | Qinhuangdao Shouqin Metal Materials Co., Ltd. | 17,970,896.72 | 16,537,107.72 |
| Accounts payable | Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | 361,229.80 | 528,208.91 |
| Accounts payable | Beijing Shoushe Metallurgical Technology Co., Ltd. | 42,036.40 | 26,672.40 |
| Accounts payable | Beijing Shougang Fulushi Color Coated Plate Co., Ltd. | 10,950,942.80 | 16,666,004.85 |
| Accounts payable | Beijing Shougang Industrial Group Co., Ltd. | 10,454,655.52 | 6,602,419.19 |
| Accounts payable | Bejing Shougang International Travel Co., Ltd. | 144,566.00 | 178,263.50 |
| Accounts payable | Beijing Shougang Cultural Development Co., Ltd. | 157,950.00 | -- |
| Accounts payable | Beijing Shougang Yunxiang Industrial Technology Co., Ltd. | 2,396,999.79 | 2,752,728.69 |
| Accounts payable | Qiangang Hotel. | 12,384,514.68 | 5,741,588.83 |
| Accounts payable | Beijing Dingshengcheng Packaging Materials Co., Ltd. | 14,641,606.12 | 11,814,696.28 |
| Accounts payable | Beijing Shouxinsheng Trading Co., Ltd. | -- | 2,458,032.74 |
| Accounts payable | Beijing Shougang Special Steel Co., Ltd. | 101,949,940.33 | 101,949,940.33 |
| Accounts payable | Hebei Shougang Jingtang Machinery Co., Ltd. | 4,208,507.88 | 1,525,293.86 |
| Accounts payable | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | 7,313,225.55 | 7,253,031.40 |
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Accounts payable | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 10,413,229.91 | 5,935,224.42 |
| Accounts payable | Bohai International Conference Center Co., Ltd. | 104,450.00 | -- |
| Accounts payable | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 26,612,943.68 | 24,662,319.86 |
| Accounts payable | Beijing Shougang Kuangshan Hospital Co., Ltd | 3,630,791.00 | 1,949,405.50 |
| Accounts payable | Beijing Shouyu Industry and Trade Co., Ltd. | 7,359,998.22 | 5,817,793.42 |
| Accounts payable | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 11,432,572.79 | 9,581,118.29 |
| Accounts payable | YASKAWA Shougang Robert Co., Ltd. | 388,207.98 | 634,464.46 |
| Accounts payable | Beijing Shoubang New Material Co., Ltd. | 1,685,368.21 | 629,938.31 |
| Accounts payable | Beijing Xingyeda Machinery&Electric Equipment Manufacture Co., Ltd. | 1,056,900.10 | 124,606.53 |
| Accounts payable | Chaoyang Shougang Beifang Machinery Co., Ltd. | 1,019,783.85 | 1,051,936.50 |
| Accounts payable | Guangzhou Jinghai Shipping Co., Ltd. | 113,750,687.97 | 95,572,579.06 |
| Accounts payable | Jingtang Port Shougang Terminal Co., Ltd. | 2,927.40 | 2,927.40 |
| Accounts payable | Tangshan Caofeidian Industry Port Co., Ltd. | 62,255,892.01 | 98,535,542.27 |
| Accounts payable | Beijing Shougang Zhongye Machinery & Electric Co., Ltd. | -- | 433,770.00 |
| Accounts payable | Shougang Guiyang Special Steel Co., Ltd. | 10,488,904.44 | 17,565,638.66 |
| Accounts payable | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 208,116.72 | 1,357,127.53 |
| Accounts payable | Cmi Engineering (Beijing) Co., Ltd. | -- | 4,096,520.00 |
| Accounts payable | Beijing Shoutegang Yuandong Magnesium Alloy Products Co., Ltd. | 200,408.00 | 200,408.00 |
| Accounts payable | Shougang (Qingdao) Steel Industry Co., Ltd. | 1,673,343.05 | -- |
| Accounts payable | Huludao Shougang Donghua Pipe Industry Co., Ltd. | -- | 176,817.81 |
| Accounts payable | Tonggang Jilin Welded Pipe Co., Ltd | -- | 31,747.20 |
| Accounts payable | Beijing Shougang Mining Investment Co., Ltd | 175,708,332.43 | 175,708,332.43 |
| Accounts payable | Qinhuangdao Shougang Racing Valley Co., Ltd | 229,160.00 | 259,520.00 |
| Accounts payable | Beijing Shougang Property Management Co., Ltd. | 1,957,224.08 | 59,727.00 |
| Accounts payable | Beijing Shougang Park Comprehensive Service Co., Ltd. | 4,700.00 | 9,620.00 |
| Accounts payable | Jiangsu Capital Holdings Manufacturing Technology Co., Ltd. | -- | 250,000.00 |
| Accounts payable | Beijing Shouao Real Estate Co., Ltd | 33,960.00 | 16,800.00 |
| Accounts payable | Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | 29,597.98 | 29,597.98 |
| Accounts payable | Tonghua Iron and Steel Co., Ltd. | 3,754,243.16 | -- |
| Accounts payable | Beijing Shougang Environmental Engineering Technology Co., Ltd. | 1,039,146.20 | -- |
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Accounts payable | Guiyang Steel Mills I/E Corp. | 6,450,970.10 | -- |
| Accounts payable | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 1,650,945.20 | -- |
| Accounts payable | Beijing Shougang Kuangshan Hospital Co., Ltd | 411,453.00 | -- |
| Accounts payable | Shougang Commercial Factoring Co., Ltd. | 94,520.31 | -- |
| Accounts payable | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 757,423.42 | -- |
| Contract liability | Beijing Shoucheng Packaging Service Co., Ltd. | 716,930.07 | 140,353.75 |
| Contract liability | Beijing Shougang Huaxia Engineering&Technology Co., Ltd. | 5,245,386.29 | 1,484,689.80 |
| Contract liability | Beijing Beiye Functional Materials Co., Ltd. | 1,060,401.14 | 129,484.80 |
| Contract liability | Beijing Shougang Gitane New Materials Co., Ltd. | 45,093.66 | 43,809.62 |
| Contract liability | Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | -- | 12,812,385.43 |
| Contract liability | Huludao Shougang Donghua Machinery Co., Ltd. | -- | 1,729,808.14 |
| Contract liability | Beijing Shouronghui Technology Development Co., Ltd. | 5,659,780.67 | 1,359,852.64 |
| Contract liability | Beijing Shougang Machinery&Electric Co., Ltd. | 9,900,333.17 | 308,844.95 |
| Contract liability | Beijing Shougang Construction Group Co., Ltd. | 112,823.19 | 119,407.58 |
| Contract liability | Tangshan Caofeidian Industrial District Shouhanxin Industrial Co., Ltd. | 5,000,915.64 | -- |
| Contract liability | Beijing Shougang Jitaian Alloy Materials Co., Ltd. | 24,716.74 | -- |
| Contract liability | Qinhuangdao Shougang Machinery Co., Ltd. | 858,701.10 | 847,647.78 |
| Contract liability | Tangshan Caofeidian Industrial Zone Jingtang Industrial Co., Ltd. | 31,485.93 | 33,744.95 |
| Contract liability | Tangshan Guoxing Industrial Co., Ltd. | 28,189.37 | 40,000.00 |
| Contract liability | Beijing Shougang International Engineering&Technology Co., Ltd. | 312,038.71 | 113,815.14 |
| Contract liability | Qian'an First Real Packaging Service Co., Ltd. | 781,919.64 | 5,000,088.04 |
| Contract liability | Tangshan Caofeidian Dunshi New Construction Material Co., Ltd. | 1,325,363.50 | -- |
| Contract liability | Beijing Shougang Industrial Group Co., Ltd. | -- | 52,984.32 |
| Contract liability | Beijing Jinanyuan Automobile Transportation Co., Ltd. | 50,000.00 | -- |
| Contract liability | Qian'an Shougang Equipment Structure Co., Ltd. | -- | 6,019.15 |
| Contract liability | Qinhuangdao Shougang Plate Mill Co., Ltd. | 13,028.81 | 13,028.81 |
| Contract liability | Qinhuangdao Shougang Krosaki Refractory Co., Ltd. | 182,697.15 | 102,297.31 |
| Contract liability | Lujiashan Limestone Mining of Shougang Beijing Co., Ltd. | 1,378,594.00 | 1,952,166.12 |
| Contract liability | Qian'an Shougang Xingkuang Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Contract liability | Beijing Shougang Materials Trading Co., Ltd. | 188,861.00 | 119,506.25 |
| Contract liability | Guizhou Bohong Industrial Co., Ltd. | 50,000.00 | 50,000.00 |
| Contract liability | Huludao Shougang Donghua Pipe Industry Co., Ltd. | -- | 50,000.00 |
| Contract liability | Beijing Shougang Mining Construction Co., Ltd. | 52,088.04 | 41,153.42 |
| Contract liability | Tianjin Shougang Electric Equipment Co., Ltd. | 169.19 | 169.19 |
| Contract liability | Qinhuangdao Shouqin Steel Machining&Delivery Co., Ltd. | -- | 8,180.36 |
| Contract liability | Shougang Shuicheng Steel (Group) Saide Construction Co., Ltd. | 805.61 | 805.61 |
| Contract liability | Dachang Shougang Machinery&Electric Co., Ltd. | 2,280.20 | 697,971.31 |
| Contract liability | Ningbo Shougang Zhejin Steel Co., Ltd. | 18,370,671.65 | 7,713,107.90 |
| Contract liability | Guangzhou Jinghai Shipping Co., Ltd. | 5,311,397.37 | 7,151,356.77 |
| Contract liability | Suzhou Tonggang Shunye Steel Materials Processing Distribution Co., Ltd. | 2,046.68 | 2,046.68 |
| Contract liability | Beijing Shougang Shape Metal Co., Ltd. | 10,095,842.56 | 6,729,383.91 |
| Contract liability | Ordos Baotou Steel Shourui Material Technology Co., Ltd. | 3,865,016.99 | 1,312,200.50 |
| Contract liability | PetroChina Shougang (Beijing) Petroleumsales Co., Ltd. | 12,452,455.41 | 11,593,447.04 |
| Contract liability | Shougang Casey Steel Co., Ltd. | 645,198.15 | 0.05 |
| Contract liability | Shougang (Qingdao) Steel Industry Co., Ltd. | 82,388,551.58 | 111,428,733.94 |
| Contract liability | Tianjin Shougang Steel Processing&Distribution Co., Ltd. | 38,202.45 | 1,604,220.81 |
| Contract liability | Guangdong Shougang Zhongshan Metal Steel Processing&Distribution Co., Ltd. | -- | 5,255,500.85 |
| Contract liability | Beijing Shougang Ferroalloy Co., Ltd. | -- | 50,000.00 |
| Contract liability | Shougang Guiyang Special Steel Co., Ltd. | -- | 21,353.73 |
| Contract liability | Chaoyang Shougang Beifang Machinery Co., Ltd. | 114.02 | 114.02 |
| Contract liability | Beijing Shouyu Industry and Trade Co., Ltd. | 58,437.91 | 50,000.00 |
| Contract liability | Hebei Jingji Industry & Trading Co., Ltd. | 572,635.52 | 460,409.38 |
| Contract liability | Beijing Thermal Zhongda Heat Exchange Equipment Co., Ltd. | 50,000.00 | -- |
| Contract liability | Beijing Shoujian Equipment Maintenance Co., Ltd. | 50,000.00 | -- |
| Contract liability | Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | 105,416.50 | -- |
| Contract liability | Shoujia Huanke (Qian'an) Co., Ltd. | 200,000.00 | -- |
| Other payable | Shougang Group Co., Ltd. | 57,154,287.37 | 1,187,727,922.88 |
| Other payable | Beijing Shougang Automation Information Technology Co., Ltd. | 749,720.20 | 749,720.20 |
| Other payable | Beijing Shougang Construction Group Co., Ltd. | 3,458,000.00 | 3,458,000.00 |
| Items | Related parties | 2021.12.31 | 2020.12.31 |
| Other payable | Beijing Shougang Landscaping Co., Ltd. | 19,893.26 | 19,893.26 |
| Other payable | Beijing Chengxin Engineering Supervision Co., Ltd. | 269,324.00 | 269,324.00 |
| Other payable | Beijing Shougang Xinganglian Technology&Trade Co., Ltd. | -- | 300,000.00 |
| Other payable | Beijing Shougang Industrial Group Co., Ltd. | 3,865,587.23 | 200,000.00 |
| Other payable | Tangshan Guoxing Industrial Co., Ltd. | 4,450,973.55 | -- |
| Other payable | Ningbo Metallurgical Investigation, Design&Research Co., Ltd. | 190,000.00 | 190,000.00 |
| Other payable | Guangzhou Jinghai Shipping Co., Ltd. | 311,320.00 | 300,000.00 |
| Other payable | Beijing Shougang Gas Co., Ltd. | 1,650,000.00 | 1,123,099.67 |
| Other payable | Hebei Shougang Jingtang Machinery Co., Ltd. | 2,776,577.52 | -- |
| Other payable | Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 319,500,000.00 | 95,276,712.33 |
| Other non-current liability | Shougang Group Co., Ltd. | 4,563,283,607.60 | 4,491,623,817.41 |
XI. Share-based payment
1. General information of share-based payment
| Items | 2021 |
| Total amount of equity instruments granted by the Company in current period | 64,901,800.00 |
| Total amount of equity instruments exercised by the Company in current period | -- |
| Total amount of invalid equity instruments of the Company in current period | -- |
| Range of exercise price and remaining term of the contract of outstanding stock options issued by the Company at the end of the period | |
| Range of exercise prices and remaining contractual maturity of other equity instruments issued by the Company at the end of the period | -- |
2. Equity-settled share-based payment
| Items | 2021 |
| The method of determining fair value of equity instrument on the grant date | Determined by the closing price of restricted shares on the grant date |
| Basis for determining the number of exercisable equity instruments | Determined by the amount of actual unlocked instruments which is based on performance assessment |
| Reasons of significant difference between current estimate and previous estimate | None |
| Accumulated amount recognised in capital reserve | 5,897,610.37 |
| Total amount recognised in P/L in current period | 7,165,158.72 |
Note：Proposal of Beijing Shougang Co., Ltd.2021 Restricted Stock Incentive Plan (DraftAmendment)and its Summary, Proposal of Beijing Shougang Co., Ltd. Appraisal ManagementSystem on 2021 Restricted Stock Incentive Plan (Revised), Proposal of Submitting the GeneralMeeting of Shareholders to Authorize the Board of Directors to Handle Relevant Matters of 2021Restricted stock Incentive Plan were deliberated and approved at the 11
th meeting of the 7
th
sessionof the board of directors on 29 November 2021 and the first extraordinary general meeting ofshareholders in 2021, which was approved by Beijing State Owned Assets Supervision andAdministration Commission and confirmed and recorded by China Securities RegulatoryCommission with no objection. The grant date is 9 December 2021 and a total of 64,901,800.00restricted stock shares are granted to 386 incentive targets. The grant price of the restricted stock isRMB3.25 per share. After the completion of subscription of this incentive plan, the share capital(Note Ⅴ,34) and capital reserve (Note Ⅴ,35) of the Company increase by RMB 64,901,800.00 andRMB 146,029,050.00 respectively due to the issuance of new shares. The treasury shares increaseby RMB 210,930,850.00 and meanwhile the repurchase obligation of equity incentive is recognizedin other payables by RMB 210,930,850.00 (Note Ⅴ, 25). The cost and expense of RMB7,165,158.72 is recognized in current vesting period, and the consolidated capital reserve isincreased by RMB 5,897,610.37 according to the shareholding ratio of the subsidiaries. Therestriction period of restricted shares granted by the incentive plan shall be 24 months, 36 monthsand 48 months respectively from the registration date of the corresponding partial of equity granted.The restricted stocks granted under this incentive plan shall not be transferred, used for security ordebt repayment during the restricted period.The Company specified lock-in period and unlocking conditions for the stock granted to theincentive targets through non-public offering, and the Company has fully recognized other payables- repurchase obligation of restricted stock and treasury share in respect of the repurchase obligationsbased on the subscription amounts received. If the unlocking conditions specified in the final equityincentive plan are not satisfied, the Company will repurchase the shares at the grant price and writedown treasury share. The portion of restricted stocks that satisfy the unlocking conditions offsetfrom the treasury shares.XII. Commitments and contingencies
1. Material commitments
As of 31 December 2021, there is no commitment to be disclosed.
2. Contingencies
As of 31 December 2021, there is no contingency arising from pending litigation and guaranteeprovided to other entities.XIII. Events after balance sheet date
1. Description of important non-adjustment events after balance sheet date
On 18 March 2022, the Company received “Approval for Beijing Shougang Co., Ltd. to IssueShares to Shougang Group Co., Ltd. to Purchase Assets and Raise Supporting Funds” (zjxk [2022]No. 553) from China Securities Regulatory Commission.
On 20 April 2022, the Company completed the work of issuing 1,015,417,369 shares to ShougangGroup Co., Ltd. to purchase 49% of the remaining equity of Beijing Shougang Steel TradingInvestment Management Co., Ltd. On 25 April 2022, Huatai United Securities Co., Ltd., the co-leadunderwriter of the Company's raised funds, have received the subscription for 54,126,391 shares ofthe Company's non-public offering of new shares by investors, and the subsequent share listingregistration is in progress.
2. Notes to other events after the balance sheet date
As of 27 April 2022, the company has no other events shall be disclosed after the balance sheetdate.XIV. Other significant events
1. Segment information
According to internal organizational structure, management requirement and requirement of internalreporting system, the Company divides businesses into iron and steel segment. The segmentinformation is determined based on the financial information required by routine internalmanagement of the Company. The management periodically evaluates the operating results of thesegment to determine its allocation of resources and evaluate the performance of the segment.The segment information of the Company includes: iron and steel segment.The segment information is disclosed in accordance with the accounting policies and measurementbasis used in the reports of the management, which are in line with those adopted in financialstatements.
(1) Segment profit or loss, assets and liabilities
| For the year ended 31 December 2021 or as at 31 December 2021 | Iron and Steel Segment | Offset | Total |
| Operating revenue | 134,034,486,136.13 | -- | 134,034,486,136.13 |
| Including: External revenue | 134,034,486,136.13 | -- | 134,034,486,136.13 |
| Inter-segment revenue | |||
| Including: Main business revenue | 129,424,398,384.25 | -- | 129,424,398,384.25 |
| Cost of sales | 118,578,217,304.05 | -- | 118,578,217,304.05 |
| Including: Main business cost of sales | 114,806,306,669.92 | -- | 114,806,306,669.92 |
| Operating expenses | 3,209,749,629.99 | -- | 3,209,749,629.99 |
| Operating profit/(loss) | 9,858,466,406.54 | -- | 9,858,466,406.54 |
| Total assets | 147,211,560,696.41 | -- | 147,211,560,696.41 |
| Total liabilities | 98,035,201,201.55 | -- | 98,035,201,201.55 |
| For the year ended 31 December 2021 or as at 31 December 2021 | Iron and Steel Segment | Offset | Total |
| Supplementary information: | |||
| 1.Capital expenditure | 3,015,839,391.12 | -- | 3,015,839,391.12 |
| 2.Depreciation and amortisation | 7,442,584,739.31 | -- | 7,442,584,739.31 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4.4.Assets impairment losses | 295,107,454.68 | -- | 295,107,454.68 |
| For the year ended 31 December 2020 or as at 31 December 2020 | Iron and steel Segment | Offset | Total |
| Operating revenue | 79,951,181,948.10 | -- | 79,951,181,948.10 |
| Including: External revenue | 79,951,181,948.10 | -- | 79,951,181,948.10 |
| Inter-segment revenue | |||
| Including: Main business revenue | 76,204,354,719.07 | -- | 76,204,354,719.07 |
| Cost of sales | 73,072,708,322.14 | -- | 73,072,708,322.14 |
| Including: Main business cost of sales | 70,025,177,064.76 | -- | 70,025,177,064.76 |
| Operating expenses | 2,398,028,539.13 | -- | 2,398,028,539.13 |
| Operating profit/(loss) | 2,778,499,948.96 | -- | 2,778,499,948.96 |
| Total assets | 144,367,221,971.10 | -- | 144,367,221,971.10 |
| Total liabilities | 105,536,042,064.13 | -- | 105,536,042,064.13 |
| Supplementary information: | |||
| 1.Capital expenditure | 3,032,549,847.59 | -- | 3,032,549,847.59 |
| 2.Depreciation and amortisation | 6,518,288,975.16 | -- | 6,518,288,975.16 |
| 3.Non-cash expenses other than depreciation and amortisation | -- | -- | -- |
| 4.Assets impairment losses | 167,843,610.72 | -- | 167,843,610.72 |
(2) Other segment information
①External revenue of goods and services
| Items | 2021 | 2020 |
| Iron and steel | 134,034,486,136.13 | 79,951,181,948.10 |
②Geographical information
No more details of geographical information is disclosed as the production and sales of theCompany are all located in mainland China.
2. Lease
The Company as a lesseeSupplementary information on rental expensesThe Company simplifies the treatment of short-term leases and low-value leases, unrecognizingright-of-use assets and lease liabilities. The information of recognizing short-term lease, low-valuelease and variable lease payment not included in lease liabilities in current profit and loss are asfollows:
| Items | 2021 |
| Interest expense on lease liabilities | 4,895,508.99 |
| Short-term leases | 1,094,075.42 |
| Low-value leases | -- |
| Variable lease payment not included in lease liabilities | -- |
| Total cash outflows related to lease | 20,068,816.16 |
The Company as a lessorSupplementary information on rental expensesOperating leases:
① Lease income,and separately disclose income related to variable lease payments that not
included in lease receipts:
| Items | 2021 |
| Lease income | 36,251,699.95 |
| Income related to variable lease payments that not included in lease receipts | -- |
②The amount of undiscounted lease receipts that will be received in each of the five consecutivefiscal years after the balance sheet date and the total amount of undiscounted lease receipts that willbe received in the remaining fiscal years.
| Items | 2021.12.31 |
| Within 1 year | 37,583,455.17 |
| 1 – 2 years | 3,056,273.84 |
| 2 – 3 years | -- |
| Over 3 years | -- |
| Items | 2021.12.31 |
| Total | 40,639,729.01 |
XV. Notes to the financial statements of parent company
1. Notes receivable
| Items | 2021.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 1,312,696,288.07 | 1,312,696.29 | 1,311,383,591.78 |
| Total | 1,312,696,288.07 | 1,312,696.29 | 1,311,383,591.78 |
| Items | 2020.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Bank acceptances | -- | -- | -- |
| Commercial acceptances | 2,840,061,486.24 | 2,840,061.49 | 2,837,221,424.75 |
| Total | 2,840,061,486.24 | 2,840,061.49 | 2,837,221,424.75 |
(1) The pledged notes receivable of the Company at the end of the year
| Items | Pledged amount at the end of the year |
| Bank acceptances | -- |
| Commercial acceptances | 16,753,215.18 |
| Total | 16,753,215.18 |
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Items | Amount derecognized at year end | Amount not-derecognized at year end |
| Bank acceptances | -- | -- |
| Commercial acceptances | -- | 1,208,054,774.28 |
| Total | -- | 1,208,054,774.28 |
(3) Notes transferred to accounts receivable due to non-performance of drawers at the end of theyear.
| Items | Notes transferred to accounts receivable at year end |
| Commercial acceptances | 3,000,000.00 |
(4) Classified by bad debt provision method
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
| Total | 1,312,696,288.07 | 100.00 | 1,312,696.29 | 0.10 | 1,311,383,591.78 |
Continued:
| Category | 2020.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 2,840,061,486.24 | 100.00 | 2,840,061.49 | 0.10 | 2,837,221,424.75 |
| Portfolio 1 | -- | -- | -- | -- | -- |
| Portfolio 2 | 2,840,061,486.24 | 100.00 | 2,840,061.49 | 0.10 | 2,837,221,424.75 |
| Total | 2,840,061,486.24 | 100.00 | 2,840,061.49 | 0.10 | 2,837,221,424.75 |
(5) Provision, recovery or reversal of bad debt
| Items | Bad debt provision |
| As at 31 December 2020 | 2,840,061.49 |
| Provision | -- |
| Recovery or reversal | 1,527,365.20 |
| Written-off | -- |
| Items | Bad debt provision |
| As at 31 December 2021 | 1,312,696.29 |
(6) The Company has no notes receivable actually written off during the reporting period.
2. Accounts receivable
(1) Disclosed by ageing of account receivables
| Ageing | 2021.12.31 | 2020.12.31 |
| Within 1 year | 1,917,663,119.14 | 1,615,240,518.65 |
| 1 – 2 years | 3,197,756.62 | 4,327,199.80 |
| 2 – 3 years | 6,327,199.80 | -- |
| Over 3 years | 2,751,011.82 | 4,751,011.82 |
| Subtotal | 1,929,939,087.38 | 1,624,318,730.27 |
| Less: provision for bad debts | 12,046,892.38 | 8,893,085.98 |
| Total | 1,917,892,195.00 | 1,615,425,644.29 |
(2) Disclosed by bad debt provision
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | 5,751,011.82 | 0.30 | 5,751,011.82 | 100.00 | -- |
| Bad debt provision assessed in portfolios | 1,924,188,075.56 | 99.70 | 6,295,880.56 | 0.33 | 1,917,892,195.00 |
| Portfolio of aging analysis | 80,928,756.18 | 4.19 | 6,295,880.56 | 7.78 | 74,632,875.62 |
| Portfolio of consolidation scope | 1,843,259,319.38 | 95.51 | -- | -- | 1,843,259,319.38 |
| Total | 1,929,939,087.38 | 100.00 | 12,046,892.38 | 0.62 | 1,917,892,195.00 |
Continued：
| Category | 2020.12.31 | ||
| Book balance | Bad debt provision | Carrying value | |
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | 4,751,011.82 | 0.29 | 4,751,011.82 | 100.00 | -- |
| Bad debt provision assessed in portfolios | 1,619,567,718.45 | 99.71 | 4,142,074.16 | 0.26 | 1,615,425,644.29 |
| Portfolio of aging analysis | 91,671,974.87 | 5.64 | 4,142,074.16 | 4.52 | 87,529,900.71 |
| Portfolio of consolidation scope | 1,527,895,743.58 | 94.07 | -- | -- | 1,527,895,743.58 |
| Total | 1,624,318,730.27 | 100.00 | 8,893,085.98 | 0.55 | 1,615,425,644.29 |
Bad debt provision assessed individually：
| Accounts receivable (by debtor) | 2021.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 2,751,011.82 | 2,751,011.82 | 100.00 | Long aging |
| Recourse for overdue bills | 3,000,000.00 | 3,000,000.00 | 100.00 | Recourse for overdue bills |
| Total | 5,751,011.82 | 5,751,011.82 | 100.00 | |
Continued：
| Accounts receivable (by debtor) | 2020.12.31 | |||
| Book balance | Bad debt provision | Expected credit loss (%) | Reason for bad debts | |
| Accounts receivable over 3 years | 4,751,011.82 | 4,751,011.82 | 100.00 | Long aging |
| Recourse for overdue bills | -- | -- | -- | |
| Total | 4,751,011.82 | 4,751,011.82 | 100.00 | |
Bad debt provision assessed in portfolios：
| Items | 2021.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,917,663,119.14 | 2,609,029.34 | 0.14 |
| 1 – 2 years | 2,197,756.62 | 616,528.89 | 28.05 |
| 2 – 3 years | 4,327,199.80 | 3,070,322.33 | 70.95 |
| Over 3 years | -- | -- | -- |
| Items | 2021.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Total | 1,924,188,075.56 | 6,295,880.56 | 0.33 |
Continued：
| Items | 2020.12.31 | ||
| Accounts receivable | Bad debt provision | Expected credit loss (%) | |
| Within 1 year | 1,615,240,518.65 | 2,969,620.25 | 0.18 |
| 1 – 2 years | 4,327,199.80 | 1,172,453.91 | 27.09 |
| 2 – 3 years | -- | -- | -- |
| Over 3 years | -- | -- | -- |
| Total | 1,619,567,718.45 | 4,142,074.16 | 0.26 |
(3) Provision, recovery or reversal of bad debt
| Items | Bad debt provision |
| As at 31 December 2020 | 8,893,085.98 |
| Provision | 3,153,806.40 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2021 | 12,046,892.38 |
(4) The Company has no accounts receivable write-off during the reporting period.
(5) The top five accounts receivable classified by debtors are as follows:
During the reporting period, the total closing amount of the top five accounts receivable collected bydebtors is RMB 1,913,756,650.68, accounts for 99.16% of the total amount of accounts receivable atthe end of the period. The total amount of the corresponding bad debt provision at the end of theperiod is RMB 8,584,639.59.
| Company Name | Closing balance of accounts receivable | Percentage % | Closing balance of provision |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,528,189,418.79 | 79.18 | -- |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | 294,412,374.43 | 15.26 | -- |
| Qian'an Shoujia Construction Material Co., Ltd. | 61,221,363.06 | 3.17 | 2,146,776.55 |
| Shougang Qian'an New Energy Automobile Electrical Steel Co., Ltd. | 20,657,526.16 | 1.07 | -- |
| Sanhe Shoujia Construction Material Co., Ltd. | 9,275,968.24 | 0.48 | 6,437,863.04 |
| Total | 1,913,756,650.68 | 99.16 | 8,584,639.59 |
3. Financing receivables
| Items | 2021.12.31 | 2020.12.31 |
| Notes receivable | 1,285,597,772.66 | 1,199,574,277.29 |
| Less：Other comprehensive income - fair value changes | -- | -- |
| Fair value at the end of the period | 1,285,597,772.66 | 1,199,574,277.29 |
(1) Classified by bad debt provision method
| Category | 2021.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
| Portfolio 1 | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 1,285,854,943.65 | 100.00 | 257,170.99 | 0.02 | 1,285,597,772.66 |
Continued：
| Category | 2020.12.31 | ||||
| Book balance | Bad debt provision | Carrying value | |||
| Amount | Proportion (%) | Amount | Expected credit loss (%) | ||
| Bad debt provision assessed individually | -- | -- | -- | -- | -- |
| Bad debt provision assessed in portfolios | 1,199,814,240.14 | 100.00 | 239,962.85 | 0.02 | 1,199,574,277.29 |
| Portfolio 1 | 1,199,814,240.14 | 100.00 | 239,962.85 | 0.02 | 1,199,574,277.29 |
| Portfolio 2 | -- | -- | -- | -- | -- |
| Total | 1,199,814,240.14 | 100.00 | 239,962.85 | 0.02 | 1,199,574,277.29 |
(2) Provision, recovery or reversal of bad debt
| Items | Bad debt provision |
| As at 31 December 2020 | 239,962.85 |
| Provision | 17,208.14 |
| Recovery or reversal | -- |
| Written-off | -- |
| As at 31 December 2021 | 257,170.99 |
(3) The pledged notes receivable of the Company at the end of the year
| Items | Pledged amount at the end of the year |
| Bank acceptance notes | 108,670,000.00 |
| Commercial acceptance notes | -- |
| Total | 108,670,000.00 |
(4) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Item | Amount derecognized at year end | Amount not-derecognized at year end |
| Bank acceptance notes | 5,120,426,116.57 | -- |
| Commercial acceptance notes | -- | -- |
| Total | 5,120,426,116.57 | -- |
4. Other receivables
| Items | 2021.12.31 | 2020.12.31 |
| Dividends receivable | -- | 600,000,000.00 |
| Other receivables | 1,017,482,945.07 | 1,018,249,934.67 |
| Total | 1,017,482,945.07 | 1,618,249,934.67 |
(1) Dividends receivable
| Items | 2021.12.31 | 2020.12.31 |
| Shougang Zhixin Qian'an Electromagnetic Materials Co., Ltd. | -- | 600,000,000.00 |
| Less:Bad debt provision | -- | -- |
| Total | -- | 600,000,000.00 |
(2) Other receivables
①Disclosed by the ageing of other receivables
| Ageing | 2021.12.31 | 2020.12.31 |
| Within 1 year | 1,017,487,983.11 | 1,018,521,102.28 |
| 1 to 2 years | 516,288.00 | 300,000.00 |
| 2 to 3 years | -- | -- |
| Over 3 years | -- | -- |
| Subtotal | 1,018,004,271.11 | 1,018,821,102.28 |
| Less: provision for bad debts | 521,326.04 | 571,167.61 |
| Total | 1,017,482,945.07 | 1,018,249,934.67 |
②Disclosed by nature of other receivables
| Items | 2021.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 98,749.98 | 4,937.50 | 93,812.48 |
| Security deposit | -- | -- | -- |
| Due from other companies | 2,010.86 | 100.54 | 1,910.32 |
| Due from inter-companies | 1,017,387,222.27 | -- | 1,017,387,222.27 |
| Court attachment | 516,288.00 | 516,288.00 | -- |
| Total | 1,018,004,271.11 | 521,326.04 | 1,017,482,945.07 |
Continued：
| Items | 2020.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Items | 2020.12.31 | ||
| Book balance | Provision for bad debts | Carrying value | |
| Petty cash | 699,503.93 | 43,975.20 | 655,528.73 |
| Security deposit | 200,000.00 | 10,000.00 | 190,000.00 |
| Due from other companies | 18,088.12 | 904.41 | 17,183.71 |
| Due from inter-companies | 1,017,387,222.23 | -- | 1,017,387,222.23 |
| Court attachment | 516,288.00 | 516,288.00 | -- |
| Total | 1,018,821,102.28 | 571,167.61 | 1,018,249,934.67 |
③Provision for bad debts
As at 31 December 2021, bad debts provision in Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Bad debt provision assessed individually | -- | -- | -- | -- | |
| Bad debt provision assessed in portfolios | 1,017,487,983.11 | 0.00 | 5,038.04 | 1,017,482,945.07 | |
| Petty cash and security deposits | 98,749.98 | 5.00 | 4,937.50 | 93,812.48 | |
| Due from other companies | 2,010.86 | 5.00 | 100.54 | 1,910.32 | |
| Due from inter-companies | 1,017,387,222.27 | -- | -- | 1,017,387,222.27 | |
| Total | 1,017,487,983.11 | 0.00 | 5,038.04 | 1,017,482,945.07 |
As at 31 December 2021, the Company has no other receivables in Phase II:
As at 31 December 2021, bad debts provision for Phase III:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Bad debt provision assessed individually | |||||
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- |
As at 31 December 2020, bad debts provision in Phase I:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Bad debt provision assessed individually | |||||
| Bad debt provision assessed in portfolios | 1,018,004,814.28 | -- | 30,879.61 | 1,017,973,934.67 | |
| Petty cash and deposits | 599,503.93 | 5.00 | 29,975.20 | 569,528.73 | |
| Due from other companies | 18,088.12 | 5.00 | 904.41 | 17,183.71 | |
| Due from intra-companies | 1,017,387,222.23 | -- | -- | 1,017,387,222.23 | |
| Total | 1,018,004,814.28 | -- | 30,879.61 | 1,017,973,934.67 |
As at 31 December 2020, bad debts provision in Phase Ⅱ:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Bad debt provision assessed individually | |||||
| Bad debt provision assessed in portfolios | 300,000.00 | 8.00 | 24,000.00 | 276,000.00 | |
| Petty cash and deposits | 300,000.00 | 8.00 | 24,000.00 | 276,000.00 | |
| Due from other companies | -- | -- | -- | -- | |
| Total | 300,000.00 | 8.00 | 24,000.00 | 276,000.00 |
As at 31 December 2020, bad debts provision in Phase III:
| Category | Book balance | Expected credit loss within 12 months (%) | Provisions | Carrying value | Reasons |
| Bad debt provision assessed individually | |||||
| Yinchuan Intermediate People's Court | 516,288.00 | 100.00 | 516,288.00 | -- |
④Provision, recovery or reversal of bad debt
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss within 12 months | Expected credit loss over the lifetime (no credit impairment) | Expected credit loss over the lifetime (credit impairment occurred) | ||
| As at 31 December 2020 | 30,879.61 | 24,000.00 | 516,288.00 | 571,167.61 |
| Closing balance as at 31 December 2020 shifts to: | ||||
| --Shift to Phase II | -- | -- | -- | -- |
| --Shift to Phase III | -- | -- | -- | -- |
| --Back to Phase II | -- | -- | -- | -- |
| --Back to Phase I | -- | -- | -- | -- |
| Provision | -- | -- | -- | -- |
| Reversal | 25,841.57 | 24,000.00 | -- | 49,841.57 |
| Converse | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| Other movements | -- | -- | -- | -- |
| As at 31 December 2021 | 5,038.04 | -- | 516,288.00 | 521,326.04 |
⑤No write-off of other receivables during the reporting period.
⑥The top five other receivables classified by debtors are as follows:
| Company Name | Nature of transaction | Closing balance | Ageing | Percentage (%) | Closing balance of provisions |
| Shougang Jingtang United Iron & Steel Co., Ltd. | Due from intra-companies | 1,011,387,222.27 | Within 1 year | 99.35 | -- |
| Shenyang Shougang steel processing and Distribution Co., Ltd. | Due from intra-companies | 6,000,000.00 | Within 1 year | 0.59 | -- |
| Court attachment | Court attachment | 516,288.00 | 1～2年 | 0.05 | 516,288.00 |
| Petty cash | Petty cash | 98,749.98 | Within 1 year | 0.01 | 4,937.50 |
| Total | 1,018,002,260.25 | 100.00 | 521,225.50 |
5. Long-term equity investments
| Items | 2021.12.31 | 2020.12.31 | ||||
| Book balance | Provision for impairment | Carrying value | Book balance | Provision for impairment | Carrying value | |
| Investments in subsidiaries | 30,737,545,762.35 | -- | 30,737,545,762.35 | 24,941,718,854.54 | -- | 24,941,718,854.54 |
| Investment in associates | 1,258,787,177.81 | -- | 1,258,787,177.81 | 1,395,530,591.52 | -- | 1,395,530,591.52 |
| Total | 31,996,332,940.16 | -- | 31,996,332,940.16 | 26,337,249,446.06 | -- | 26,337,249,446.06 |
(1) Investments in subsidiaries
| Subsidiaries | 2020.12.31 | Increase | Decrease | 2021.12.31 | Provision for impairment | Impairment at the end of the year |
| Shougang Jingtang United Iron & Steel Co., Ltd. | 10,715,504,383.43 | 5,572,736,977.45 | -- | 16,288,241,360.88 | -- | -- |
| Beijing Shougang Cold Rolling Co., Ltd. | 1,831,075,900.00 | 176,088.00 | -- | 1,831,251,988.00 | -- | -- |
| Qian'an Shougang Metallurgical Technology Co., Ltd. | 1,900,000.00 | -- | -- | 1,900,000.00 | -- | -- |
| Shougang Zhixin Qian'an Electromagnetic materials Co., Ltd. | 7,484,005,522.69 | 298,333.92 | -- | 7,484,303,856.61 | -- | -- |
| Beijing Shougang New Energy Automobile Material Technology Co., Ltd. | 450,000,000.00 | 22,411.20 | -- | 450,022,411.20 | -- | -- |
| Beijing Shougang Steel Trading Investment Management Co., Ltd. | 4,459,233,048.42 | 222,593,097.24 | -- | 4,681,826,145.66 | -- | -- |
| Total | 24,941,718,854.54 | 5,795,826,907.81 | -- | 30,737,545,762.35 | -- | -- |
Note: due to the equity incentive, the investment in subsidiaries increases by RMB 4,155,743.04during the reporting period.
(2) Investments in associates
| Associates | 2020.12.31 | Changes during the year | 2021.12.31 | Impairment at the end of the year | |||||||
| Increase | Decrease | Investment income under the equity method | Other comprehensive income | Other equity movement | Dividend declared | Provision for impairment | Others | ||||
| Associates | |||||||||||
| Qian'an Sinochem Coal Chemical Industrial Co., Ltd. | 952,347,397.55 | -- | -- | 145,737,955.36 | -- | -- | -- | -- | -- | 1,098,085,352.91 | -- |
| Beijing Shouxin Jinyuan Management Consulting Center (Limited Partnership) | 431,802,688.92 | -- | 200,000,000.00 | 54,630,078.50 | -- | -- | 173,716,946.85 | -- | -- | 112,715,820.57 | -- |
| Beijing Dingshengcheng Packaging Materials Co., Ltd. | 11,380,505.05 | -- | -- | 2,606,585.31 | -- | -- | -- | -- | -- | 13,987,090.36 | -- |
| Qian'an Jinyu Shougang Environmental Protection Technology Co., Ltd. | -- | 33,791,925.24 | -- | 206,988.73 | -- | -- | -- | -- | -- | 33,998,913.97 | -- |
| Total | 1,395,530,591.52 | 33,791,925.24 | 200,000,000.00 | 203,181,607.90 | -- | -- | 173,716,946.85 | -- | -- | 1,258,787,177.81 | -- |
6. Operating revenue and costs of sales
(1) Operating revenue and costs of sale
| Items | 2021 | 2020 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 43,086,794,075.78 | 40,794,742,050.52 | 29,175,440,421.27 | 28,079,198,768.30 |
| Other business | 2,000,542,953.24 | 1,714,323,188.37 | 1,801,855,515.31 | 1,372,703,636.28 |
| Total | 45,087,337,029.02 | 42,509,065,238.89 | 30,977,295,936.58 | 29,451,902,404.58 |
(1) Operating revenue and operating costs of sale by products
| Product type | 2021 | 2020 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business: | ||||
| Billet | 576,652,349.47 | 524,683,887.65 | 244,422,016.30 | 219,026,618.16 |
| Hot rolled | 41,398,472,411.41 | 39,093,488,700.61 | 28,356,414,900.52 | 27,280,962,500.45 |
| Cold rolled | -- | -- | -- | -- |
| Other steel products | 1,111,669,314.90 | 1,176,569,462.26 | 574,603,504.45 | 579,209,649.69 |
| Subtotal | 43,086,794,075.78 | 40,794,742,050.52 | 29,175,440,421.27 | 28,079,198,768.30 |
| Other business: | ||||
| power | 836,137,591.69 | 886,687,802.30 | 836,991,211.41 | 838,261,326.64 |
| Solid waste | 355,754,303.85 | 351,863,075.85 | 220,388,929.41 | 198,806,089.16 |
| Others | 808,651,057.70 | 475,772,310.22 | 744,475,374.49 | 335,636,220.48 |
| Subtotal | 2,000,542,953.24 | 1,714,323,188.37 | 1,801,855,515.31 | 1,372,703,636.28 |
| Total | 45,087,337,029.02 | 42,509,065,238.89 | 30,977,295,936.58 | 29,451,902,404.58 |
(3) Breakdown of operating revenue
| Items | 2021 |
| Main businessrevenue | 43,086,794,075.78 |
| Including: recognized at a certain point | 43,086,794,075.78 |
| recognized during a certain period of time | -- |
| Other business revenue | 2,000,542,953.24 |
| Total | 45,087,337,029.02 |
7. Investment income
| Items | 2021 | 2020 |
| Investment income from long-term investment under cost method | -- | 600,000,000.00 |
| Investment income from long-term investment under equity method | 203,181,607.90 | 339,539,916.15 |
| Dividend from other equity instruments investments | 2,718,777.38 | 177,781,289.99 |
| Interest income from entrusted loans | 34,989,108.61 | 109,329,908.27 |
| Total | 240,889,493.89 | 1,226,651,114.41 |
XV. Supplementary information
1. Non-recurring gains or losses
| Items | 2021 | Note |
| Items | 2021 | Note |
| Gains or losses on disposal of non-current assets | -55,726,886.68 | |
| Government grants recognized in profit or loss during reporting period (excluding those close related to the Company’s normal business, conforming to the national policies and regulations and enjoying ongoing fixed amount or quantity according to certain standard) | 48,447,356.52 | |
| Gains or losses from external entrusted loans | 10,518,170.49 | |
| Non-operating income/(expenses) except the above | 1,941,256.62 | |
| Total non-recurring gains or losses | 5,179,896.95 | |
| Less: income tax effect on non-recurring gains or losses | -950,188.41 | |
| Net non-recurring gains or losses | 6,130,085.36 | |
| Less: non-recurring gains or losses attributable to non-controlling interests of the Company (after tax) | 6,021,986.63 | |
| Non-recurring gains or losses attributable to common shareholders of the Company | 108,098.73 |
2. Return on net assets and earnings per share
| Profit of reporting period | Weighted average return on net assets % | Earnings per share | |
| Basic | Diluted | ||
| Net profit/ (loss) attributable to common shareholders of the company | 19.07 | 1.1291 | -- |
| Net profit/ (loss) attributable to common shareholders of the Company excluding non-recurring gains or losses | 19.07 | 1.1291 | -- |
3. Differences of accounting data under domestic and foreign accounting standards
(1) The differences of net profit and net assets in financial statements disclosed according toInternational Financial Reporting Standards and Chinese Accounting Standards
□ Applicable √ Non Applicable
(2) The difference of net profit and net assets in financial statements disclosed according to foreignaccounting standards and Chinese Accounting Standards
□ Applicable √ Non Applicable
(3)The description on the difference between the domestic and foreign accounting standards, theoverseas audit firms shall be indicated if you have adjusted the overseas audited financial data
4. Others
None
Board of Directors of Beijing Shougang Company Limited27 April 2022