读取中,请稍候

00-00 00:00:00
--.--
0.00 (0.000%)
昨收盘:0.000今开盘:0.000最高价:0.000最低价:0.000
成交额:0成交量:0买入价:0.000卖出价:0.000
市盈率:0.000收益率:0.00052周最高:0.00052周最低:0.000
本钢板B:2016年年度报告(英文版) 下载公告
公告日期:2017-03-30
Bengang Steel Plates Co., Ltd. Annual Report 2016
Bengang Steel Plates Co., Ltd.
     Annual Report 2016
         March, 2017
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
         I. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of
the Supervisory Committee and senior management of the Company guarantee that
there are no misrepresentations or misleading statements, or material omission in this
report, and individually and collectively accept full responsibility for the authenticity,
accuracy and integrity of the information contained in this report.
Wang Shu, Chairman of the Company, Han Ge, the principal in charge of the
accounting, and Wang Shaoyu, Chief of Accounting Affairs, make the pledge for the
authenticity, accuracy and integrity of the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this
report was examined.
The prospective statements contained in this annual report do not constitute any
substantial commitment to the investors. Investors should pay attention to the risks
attached to investment decisions. The fourth chapter of this report “The Management
Discussion and Analysis - Prospect for future development of the Company”
describes the risks faced by the Company in its future operation, so it’s advised that
all investors should pay attention to it. This report is prepared in both of Chinese and
English. The Chinese version shall prevail when there are any controversial
statements in the two versions.
The Company planed not to distribute cash dividend or bonus shares, and not to
convert capital reserve into share capital.
                                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                Table of Contents
I.Important Notice, Table of Contents, and Definitions .................................................................... 2
II. Company Profile and Main Financial Index................................................................................. 5
III. Summary of Company Business ............................................................................................... 11
IV. Management Discussion and Analysis ...................................................................................... 15
V. Important Events......................................................................................................................... 33
VI. Status of Share Capital Changes and Shareholders................................................................... 52
VII. Status of Preferred Shares........................................................................................................ 60
VIII. Status of Directors, Supervisors, Senior Executives and Employees ..................................... 61
IX. Corporate Governance .............................................................................................................. 71
X. Relevant Information about Corporate Bonds............................................................................ 79
XI. Financial Report........................................................................................................................ 86
XII. Documents available for inspection ...................................................................................... 191
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                                         Definition
Terms to be defined                  Refers to Definition
Bengang Bancai, Bengang Steel, the
                                     Refers to Bengang Steel Plates Co., Ltd.
Company, the Listed Company
Bengang Group                        Refers to Bengang Group Co., Ltd.
Bengang Co.                          Refers to Benxi Steel & Iron (Group) Co., Ltd.
Liaoning Provincial State-asset                  Liaoning State-owned Asset Supervisory and Management
                                     Refers to
Administration                                   Committee
SSE                                  Refers to Shenzhen Stock Exchange
Bengang Puxiang                      Refers to Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd.
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
                     II. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation            Bengang Bancai, Bengangban B        Stock Code           000761, 200761
Stock exchange for listing    Shenzhen Stock Exchange
Company name in Chinese       本钢板材股份有限公司
Abbreviation of Company
                              本钢板材
name in Chinese
Company name in English (If
                              BENGANG STEEL PLATES CO.,LTD.
any)
Abbreviation of Company
                              BSP
name in English (If any)
Legal representative          Wang Shu
Registration Address          No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of registration
Address
Office address                No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province
Post Code of office address   117000
Web Address                   None
Email                         bgbc761@126.com
II. Contact Information
                                       Secretary of Board of Directors     Representative of Securities Affairs
Name                                 Sun Yanbin                           Tong Weigang
                                     No.16, Renmin Road, Pingshan         No.16, Renmin Road, Pingshan
Address                              District, Benxi City, Liaoning       District, Benxi City, Liaoning
                                     Province                             Province
Tel                                  024-47828860                         024-47827003
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
Fax                                      024-47827004                        024-47827004
Email                                    bgbcsyb@126.com                     bgbc761@126.com
III. Information Disclosure and Place for Consulting
                                                 China Securities Journal, Securities Times, Hong Kong
Press media for information disclosure
                                                 Commercial Daily
Web address for the annual report as assigned
                                                 http://www.cninfo.com.cn
by CSRC
Place for inquiry of the annual report           Secretary Office of the Board, Bengang Steel Plate Co., Ltd.
IV. Change of Business Registration
Organization Code                                            91210000242690243E
Changes of principal business activities since listing (if
                                                             No change
any)
Changes of the controlling shareholder in the past (is
                                                             No change
any)
V. Other Information
Accountants’ firm engaged by the Company:
Name of the accountants’ firm BDO China Shu Lun Pan Certified Public Accountants LLP
Address of the accountants’
                                  Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai
firm
Signing name of accountants       Wu Xue, Zhang Huice
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Not applicable
Financial consultancy institution engaged by the Company to conduct sustained supervision during the reporting
period
□ Applicable √ Not applicable
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
VI. Main Accounting Data and Financial Index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the last years due to
change of the accounting policy and correction of accounting errors
□ Yes √ No
                                                                             Change over last
                                        2016                 2015
                                                                                   year
Operating income                   29,526,012,651.08 29,253,638,605.80                    0.93% 41,422,088,025.70
Net profit attributable to the
shareholders of the listed           781,274,829.32 -3,293,624,545.17                 123.72%      232,804,820.19
company
Net profit after deducting
non-recurring gain/loss
                                     736,095,375.87 -3,452,130,239.63                 121.32%      187,126,217.32
attributable to the shareholders
of listed company
Net cash flows generated by
                                    9,557,353,906.52 -2,305,005,968.10                514.63% 2,868,140,094.86
operating activities
Basic earnings per share                       0.249                -1.050            123.72%                 0.074
Diluted earnings per share                     0.249                -1.050            123.72%                 0.074
ROE                                            6.34%            -24.11%                 30.45%                1.52%
                                                                             Change over last
                                     End of 2016         End of 2015                               End of 2014
                                                                                   year
Total assets                       54,155,710,718.91 44,461,643,345.33                  21.80% 49,170,603,030.67
Net assets attributable to
shareholders of the listed         12,715,354,551.15 11,934,100,372.02                    6.55% 15,384,562,323.08
company
                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
VII. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
√ Applicable □ Not applicable
                                                                                                            Unit: Yuan
                                 Net profit attributable to the shareholders        Net assets attributable to the
                                           of the listed company                shareholders of the listed company
                                       2016                   2015              Ending balance      Beginning balance
According to Chinese
                                    781,274,829.32        -3,293,624,545.17 12,715,354,551.15 11,934,100,372.02
accounting standards
Items and amounts adjusted according to IFRS
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards during the reporting period.
3. Reasons of differences between domestic and foreign accounting standards
□ Applicable √ Not applicable
VIII. Main Financial Index by Quarters
                                                                                                            Unit: Yuan
                                       First quarter       Second quarter        Third quarter        Fourth quarter
Operation income                      6,163,797,202.21     6,465,787,367.14     7,352,413,667.74      9,544,014,413.99
Net profit attributable to the
shareholders of the listed               41,106,090.36       141,432,085.96       392,077,397.20        206,659,255.80
company
Net profit after deducting               36,347,865.03       128,168,341.56       380,239,871.89        191,339,297.39
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
non-recurring gain/loss
attributable to the
shareholders of listed
company
Net cash flows generated by
                                    2,598,490,197.76   -207,712,834.24       1,255,846,065.24   6,639,351,966.86
operating activities
Whether significant variances exist between the above financial index or the index with its sum and the financial
index of the quarterly report as well as semi-annual report index disclosed by the Company
□ Yes √ No
IX. Items and Amount of Non-Current Gains and Losses
√ Applicable □ Not applicable
                                                                                                        Unit: Yuan
                  Item                          2016            2015              2014               Notes
Gains and losses on disposal of
non-current assets (including the write
                                             -1,854,918.03 -2,918,523.73        -3,000,928.56
off part of the provision for
impairment)
Government subsidy attributable to
profit and loss of current period (except
such government subsidy closely
related to the company's normal
business operation, meeting the              36,089,000.00 136,992,233.61       18,722,224.00
regulation of national policy and
enjoyed constantly in certain quota or
quantity according to a certain
standard)
Profit or loss from investment or
                                              1,715,742.47    7,226,589.08      20,845,473.00
assets entrusted to others
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
Gains and losses of debt restructuring        8,631,844.34 12,200,032.42           5,940,400.95
Other non-operating income and
                                                663,844.36    5,644,831.10         5,156,149.77
expenses other than above
Less: impact of income tax                       66,059.69      639,468.02          710,902.39
    impact of minority equity (after
                                                                                   1,273,813.90
tax)
Total                                        45,179,453.45 158,505,694.46         45,678,602.87         --
Explanation for defining non-recurring gains and losses items according to the \"Public Offering of Securities
Information Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses\", and reasons for defining
non-recurring gains and losses items listed in the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
                             III. Summary of Company Business
I. the Company's main business during the reporting period
Whether the Company needs to comply with the disclosure requirement for special industry
No
During the reporting period, the main businesses of the company involves iron and steel smelting, rolling
processing, electricity generation, coal chemical industry, special steel profile, railway, import and export trade,
research and development, product sales, etc. By introducing the world-advanced equipment technology, the
company upgrades the equipment for main steel business and has basically built up a high-quality steel product
base. Major products include hot-rolled plates, cold-rolled plates, zinc steel plates, special steel, silicon steel, etc.
that are widely applied in fields including automobile, household appliances, petrochemical engineering,
aerospace, machine manufacturing, energy transportation, architectural decoration, metal parts, etc. The Company
can stably manufacture productions which represent the highest level of steel and iron industry, including
high-end automobile steel sheet, pipe line, and etc. in large volume and the quality of these productions can reach
the internationally advanced quality level.
Increasing efficiency is the oriented objective of the reporting period. The Company applied different methods to
different departments to accomplish the objective. Manufacturing system reinforced production organization.
Sales system emphasizes development of direct supplied end customers and high-grade steel to increase profits.
Technology research and development system and quality supervisor system prompted product certification, key
technology breakthrough and quality control. Besides, the Company applied the following methods. Implement
comprehensively expenses elimination to strictly control three types of expenses and deeply apply standard cost.
Reduce inventory to reduce occupation of funds. Reduce processing cost by prompting key technology
breakthrough focused on reducing coal distribution and mine distribution cost. Apply comprehensively dynamic
budget management through alternative varieties replacement and structural adjustment, as well as procurement
choose and other methods to reduce purchase cost and purchase fund spending. The Company deems optimizing
corporation management as the core process, intensifies each fundamental process, and ensures that management
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
level employees fully take their responsibilities. The Company improves rules and regulations, and enhances
supervisor and assessment process of special project to let each process get improvement.
During the reporting period, the main performance-driving factors were: stimulating vitality through revolution,
creating motivation through innovation, boosting management innovation and increasing productivity level and
management through implement institutional reform. The Company built innovation system, established
cooperation platform that regards continuously improving techniques in manufacturing system as the core process
and the improvement in research and development, sales, and quality department as the supplementary process,
and strengthened independent innovation capability. The Company highlighted scientific and technological
innovation, improved the overall innovation and independently innovation capability through adjustment and
development of varieties, implementation of key scientific and technological special projects, and strengthening of
exchange and cooperation of technology with foreign companies. And the Company actively adjusted sales
strategy and optimized regional distribution to realize the profits increasing generated from varieties.
The reporting period is the crucial period for steel and iron industry regarding industrial structure adjustment,
transformation and upgrading. Because of the continuous policy of reducing excessive capacity, the whole market
structure is expected to be further improved and the relationship between domestic steel supply and demand will
be improved. Since domestic steel market presented stable relief rebound and market price increased, the
Company’s profits increased. However, the steel market upturns lead to company’s large amount of restoring
production and production increasing which made it more difficult for the Company to resolve the excess
manufacturing capacity. Meanwhile, steel and iron industry still faced grim situation. During the reporting period,
the Company increased profits through a serious of activities as following, formulated operation and management
policy, intensified scientific and technological innovation and variety development, stabilized sales channel and
reduced cost and the overall strength of the company maintains above the middle level in the whole industry.
II. Major Changes in Main Assets
1. Major Changes in Main Assets
            Main assets                                          Notes to major changes
Monetary fund                        As at 31 December 2016, balance of monetary fund is RMB 12,931,912
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
                                   thousand, increased by 151.57% compared with beginning balance, mainly
                                   due to increase of net cash flow from operating activities and increase in
                                   reserve funds.
                                   As at 31 December 2016, balance of accounts receivable is RMB 623,865.4
Accounts receivable                thousand, increased by 27.69% compared with beginning balance, mainly
                                   due to increase in receivables for direct end users and container customers.
                                   As at 31 December 2016, balance of construction materials is RMB 7,783.4
Construction materials             thousand, increased by 87.42% compared with beginning balance, mainly
                                   due to increase in unclaimed construction materials.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core Competitiveness
Whether the Company needs to comply with the disclosure requirement for special industry
No
The Company played the leading role of technology innovation in the comprehensive innovation to strengthen the
adjustment of product structure, implemented key scientific and technological special projects, built the
technological innovation platform, promoted the integration of research and innovation, application and high
efficiency and improved the capability of independent innovation and substantial development.
The Company’s National and Regional United Engineering Laboratory for Advanced Auto Steel has been
authorized by National Development and Reform Commission so that one more Company’s research and
development platform upgraded to national research and development platform. Bengang joined in National Auto
Lightweight Technology Innovation Strategic Alliance and actively integrated into national auto lightweight
technology innovation system.
In this year, the Company developed 95 new product grades, there into, three items has been approved by
provincial creative products and one item has been approved by China National Petroleum Corporation. All new
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
products passed the performance tests and satisfied customers’ requirements. Some new products have already
realized bulk supply. The Company has accomplished 33 product certifications. Certificated auto customer
included Guangzhou Toyota Motor Co, Ltd. and Dongfeng Nissan. The Company is applying the certification
from Volkswagen, General Motors, and SAIC Motor now. Special steel product has been certificated by OTIS.
Two zinc steel products and two cold-rolled steel products completed performance assessment by SAIC General
Motors American Laboratory. PHS1800 completed industrial trial production and got certification from domestic
famous auto customer.
In 2016, the Company developed 79 corporation level research and development projects related to new product
research and development, product quality improvement and technical progress improvement. 53 projects has
been completed at the end of 2016. And 26 projects will be continued in 2017. There into, three hot-rolled steel
products cooperation projects has reached international requirements and three cold-rolled cooperation projects
has reached domestic leading level.
In this year, 21 results received provincial, municipal science and technology improvement award and excellent
new product award. There into, Bengang Advance Auto Steel Series Products Research and Development project
received Liaoning province major research and development achievement award. High Quality Wide Thick
Pipeline Rolled Steel Manufacturing Technological Processing Research and Development project received
second prize of Liaoning province scientific and technological progress award. High Niobium Pipeline Steel
Rolling Methods received Liaoning province excellent patent award. A total of 205 patent items have been
processed by China State Intellectual Property Office, including one PCT application, 81 inventions, and 123
practical innovation application. 125 patents were authorized, including 11 inventions and 114 practical
innovation items. All realized substantial increase in this reporting period.
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
                        IV. Management Discussion and Analysis
I. General
During the reporting period, the Company faced grim operation situation and the most critical challenge through
the Company history. Under the direction led by the Company, through employees’ series of hard working, for
example, making the scientific operation and management decisions, improving the capability of scientific
research and product variety development, stabilizing the sales channel and reducing cost, the Company reached
the total production of 9691.2 thousand tons pig iron, 9496.9 thousand tons raw steel, 11,272.4 thousand tons
hot-rolled plates, 4317 thousand tons cold-rolled plates, which were increased by 2.39%, 1.71%, 1.57%, and
22.32% respectively compared to the last period and 683.6 thousand tons special steel which was decreased by
0.15%.
Looking back at the operation of 2016, the Company mainly focused on the following aspects:
1. The Company significantly improved the capability of increasing profits and enhancing efficiency of the
products through sales and marketing development. The Company insisted on the market-oriented strategy,
continuously focused on customer needs, optimized structure and increased efficiency to ensure proportion of
products sold reached 100%.
2. The Company comprehensively upgraded the operational management of all processes and the quality of
production system. The Company emphasized production plan process to ensure that contract can be delivered on
time. According to the profits increasing plan and division of production lines, the Company continuously
optimized its organization mode to arrange the weekly production plan which prioritized products with high profit
return. On the basis of stabilizing the operation of each production line, the Company increased the execution rate
of plan and contract completion rate to ensure that the contract of prior products can be completed at the due date.
3. The Company promoted technology innovation and yielded the substantial results in product research and
development and key technology breakthrough. The Company played the leading role of technology innovation in
the comprehensive innovation to strengthen the adjustment of product structure, implemented key scientific and
technological special projects, built the technological innovation platform, promoted the integration of research
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
and innovation, application and high efficiency and improved the capability of independent innovation and
substantial development.
4. The Company reformed the institution, innovated the management process, and further standardized and
strengthened each fundamental management process. The Company deepened comprehensive reform, boosted
management innovation and increase the productivity and level and management through implement institutional
reform and process optimization, strengthen investment in risk control, financial cost, audit supervision, human
resource, supplier, materials purchasing, equipment operation, energy utilization, product quality, transport
service, and fixed asset, and the construction of major projects.
5. The Company persisted on green development and harmonious development to realize the sharing of
corporation development results to employees and the society. While the Company strengthened its economic
performance, it insisted operation philosophy of green development and harmonious development and regarded
security, environmental protection and human development as important form parts of corporation development.
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.
2. Income and Cost
(1) Components of Operating Income
                                                                                                        Unit: Yuan
                                        2016                                 2015                 Change over last
                            Amount             Proportion           Amount          Proportion          year
Total operating
                       29,526,012,651.08                100% 29,253,638,605.80             100%              0.93%
income
By industries
Industry               29,526,012,651.08             100.00% 29,253,638,605.80          100.00%              0.93%
By products
                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
Steel plate             27,509,431,558.50                   93.17% 27,063,270,882.63             92.51%              1.65%
Billet                        1,083,458.75                   0.00%
Others                   2,015,497,633.83                    6.83%   2,190,367,723.17             7.49%              -7.98%
By regions
Northeast                8,437,683,126.99                   28.58%   9,803,296,279.78            33.51%            -13.93%
North China              3,714,568,181.20                   12.58%   2,250,800,509.79             7.69%             65.03%
East China               8,610,068,280.87                   29.16%   8,734,382,778.07            29.86%              -1.42%
Northwest                    12,684,259.06                   0.04%        11,624,769.33           0.04%               9.11%
Southwest                     9,035,194.69                   0.03%        24,550,759.64           0.08%            -63.20%
Central south                20,890,552.83                   0.07%        46,760,817.03           0.16%            -55.32%
Export                   8,721,083,055.44                   29.54%   8,382,222,692.16            28.65%              4.04%
(2) Industry, Product and Regions Occupying the Company’s Operating Income or Profit over 10%
√ Applicable □ Not applicable
Whether the Company needs to comply with the disclosure requirement for special industry
No
                                                                                                                 Unit: Yuan
                                                                           Operating         Operating        Gross margin
                   Operating           Operating
                                                          Gross margin income change profit change            change over
                     Income               profit
                                                                          over last year    over last year      last year
By industries
Industry          29,526,012,651.08   25,677,665,232.12          13.03%             0.93%           -13.87%           14.94%
By products
Steel plate       27,509,431,558.50   23,830,665,698.30          13.37%             1.65%           -13.91%           15.66%
Billet                 1,083,458.75         981,830.32            9.38%                                                9.38%
Others             2,015,497,633.83    1,846,017,703.50           8.41%            -7.98%           -13.30%            5.62%
By regions
Northeast          8,437,683,126.99    7,418,411,005.25          12.08%           -13.93%           -25.30%           13.38%
North China        3,714,568,181.20    3,171,273,526.74          14.63%            65.03%            33.84%           19.90%
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
East China         8,610,068,280.87     7,360,526,616.77             14.51%             -1.42%           -19.53%            19.24%
Northwest             12,684,259.06          11,059,405.47           12.81%              9.11%           -10.11%            18.65%
Southwest              9,035,194.69           7,883,207.37           12.75%            -63.20%           -69.57%            18.26%
Central south         20,890,552.83          18,260,432.23           12.59%            -55.32%           -63.14%            18.53%
Export             8,721,083,055.44     7,690,251,038.29             11.82%              4.04%            -7.09%            10.57%
Operating data of recent one year according to adjusted statistics caliber at the year-end in the case that the
Company's main business statistics caliber has changed during the reporting period,
□ Applicable √ Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
                                                                                                                Change over last
 Industry classification              Item               Unit               2016
                                                                                                                     year
                           Sales                             ton        11,472,926.69         11,610,741.31               -1.19%
Steel rolling processing
                           Production                        ton        11,406,457.32         11,597,504.49               -1.65%
industry
                           Inventory                         ton            720,373.49            786,842.86              -8.45%
The main reasons that the relevant data changed more than 30%
□ Applicable √ Not applicable
 (4) Performance of Significant Sales Contract Signed-up in this Reporting Period
□ Applicable √ Not applicable
(5) Components of Operating Cost
                                                                                                                      Unit: Yuan
     Industry                                          2016                                 2015                   Change over
                        Item
  classification                         Amount                Proportion          Amount          Proportion        last year
Steel rolling
                   Raw
processing                             11,048,116,535.79             43.03%   12,942,748,210.39          43.41%             -0.38%
                   material
industry
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
Steel rolling
                Supplementa
processing                      1,271,301,205.64     4.95%    1,499,459,834.85         5.03%           -0.08%
                ry materials
industry
Steel rolling
                Spare parts
processing                       378,211,917.00      1.47%     400,614,031.86          1.34%           0.13%
                and tools
industry
Steel rolling
processing      Fuel            6,078,925,971.55    23.67%    7,709,142,042.53        25.86%           -2.19%
industry
Steel rolling
processing      Energy          2,687,749,842.84    10.47%    2,729,440,767.73         9.16%           1.31%
industry
Steel rolling
                Salary and
processing                      1,663,003,962.99     6.48%    1,808,829,930.51         6.07%           0.41%
                benefits
industry
Steel rolling
processing      Depreciation    1,847,129,545.38     7.19%    1,824,882,394.51         6.12%           1.07%
industry
Steel rolling
processing      Others           703,226,250.94      2.74%     896,777,804.48          3.01%           -0.27%
industry
Steel rolling
processing      Total          25,677,665,232.12   100.00%   29,811,895,016.85       100.00%           0.00%
industry
(6) Whether Changes Occurred in Consolidation Scope in the Reporting Period
□ Yes √ No
                                                               Bengang Steel Plates Co., Ltd. Annual Report 2016
(7) Relevant Information of Significant Changes or Adjustment of the Business, Product or Service in the
Reporting Period
□ Applicable √ Not applicable
(8) Information of Main Customers and Main Suppliers
Information of the Company’s main customers
Total sales amount of the top five customers (Yuan)                                         5,315,813,388.89
Total sales amount of the top five customers
                                                                                                       18.00%
accounted for the proportion of total annual sales
The proportion of the total sales of the related parties
                                                                                                         2.82%
in the top five customers
Information of the top 5 customers
    No                        Name                         Amount(Yuan)                   Proportion
1         Hangzhou Thermal Group Co., Ltd.                         1,968,780,005.35                        6.67%
2         Xiamen Jianfa Metals Co., Ltd.                           1,003,132,401.62                        3.40%
3         Hengxing International Resources Co., Ltd.                876,096,226.69                         2.97%
          Benxi Steel & Iron (Group) Mining Co.,
4                                                                   833,311,051.97                         2.82%
          Ltd.
5         Cargill Investment (China) Co., Ltd.                      634,493,703.25                         2.15%
Total                             --                               5,315,813,388.89                      18.00%
Other information of principal customers
□ Applicable √ Not applicable
Information of the Company’s main suppliers
Total purchase amount of the top five suppliers
                                                                                                14,070,192,571.40
(Yuan)
Total purchase amount of the top five suppliers
                                                                                                         54.80%
accounted for the proportion of total purchase
The proportion of the total purchase of the related
                                                                                                         33.92%
parties in the top five suppliers
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
Information of the top 5 suppliers
    序号                      Name                            Amount(Yuan)                         Proportion
           Benxi Beiying Steel & Iron (Group) Co.,
1                                                                        5,929,170,829.81                        23.09%
           Ltd.
           Benxi Steel & Iron (Group) Mining Co.,
2                                                                        2,781,594,104.82                        10.83%
           Ltd.
           Liaoning Electric Power Co., Ltd. Benxi
3                                                                        2,351,046,895.02                         9.16%
           Electric Power Supply Company
           Heilongjiang Dragon Coal Group Co.,
4                                                                        1,998,449,098.29                         7.78%
           Ltd.
           Shenyang Coking Coal Co., Ltd. Sales
5                                                                        1,009,931,643.47                         3.93%
           Branch
合计                              --                                 14,070,192,571.40                           54.80%
Other information of principal suppliers
□ Applicable √ Not applicable
3. Expenses
                                                                                                            Unit: Yuan
                                                                           Change over last       Notes to significant
                                           2016
                                                                                  year                  change
Selling and distribution expenses      903,232,507.02   919,110,499.37                   -1.73%
General and administrative
                                       700,545,090.17   733,933,299.88                   -4.55%
expenses
Financial expenses                     967,678,772.69 1,063,317,455.47                   -8.99%
4. Research and Development Input
√ Applicable □ Not applicable
None
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
Information of research and development input by the company
                                         2016                          2015                 Change over last year
Number of Research and
                                                     1,542                        1,502                       2.66%
Development personnel
Proportion of number of
Research and Development                            7.44%                         6.98%                       0.46%
personnel
Amount of Research and
Development Investment                  1,437,398,000.00              1,531,589,000.00                       -6.15%
(In RMB)
Proportion of Research and
Development investment to                           4.87%                         5.24%                      -0.37%
operating income
Amount of capitalized
Research and Development                            0.00%                         0.00%                       0.00%
investment
Proportion of capitalized
Research and Development
investment accounted to                             0.00%                         0.00%                       0.00%
total Research and
Development investment
Illustrations of the prominent change in proportion of research and development input occupying the operating
income over same period last year
□ Applicable √ Not applicable
Illustrations of significant change in the research and development input’s capitalization rate and its
reasonableness
□ Applicable √ Not applicable
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
5. Cash Flow
                                                                                                         Unit: Yuan
            Item                         2016                         2015                Change over last year
Subtotal of cash inflows
                                       28,871,696,962.59            24,571,589,646.08                      17.50%
from operating activities
Subtotal of cash outflows
                                       19,314,343,056.07            26,876,595,614.18                      -28.14%
from operating activities
Net cash flows from
                                        9,557,353,906.52            -2,305,005,968.10                     514.63%
operating activities
Subtotal of cash inflows
                                          467,307,421.09             1,775,980,060.32                      -73.69%
from investing activities
Subtotal of cash outflows
                                        3,054,653,699.08             5,219,745,508.10                      -41.48%
paid for investing activities
Net cash flows from
                                       -2,587,346,277.99            -3,443,765,447.78                      24.87%
investing activities
Subtotal of cash inflows
                                       22,916,374,791.74            27,146,081,641.78                      -15.58%
from financing activities
Subtotal of cash outflows
                                       22,469,812,521.87            26,180,913,966.24                      -14.17%
from financing activities
Net cash flows from
                                          446,562,269.87               965,167,675.54                      -53.73%
financing activities
Net increase in cash and
                                        7,660,791,715.69            -4,714,251,257.09                     262.50%
cash equivalents
Illustrations of key factors of significant changes over same period last year
□ Applicable √ Not applicable
(1) Net cash flows from operating activities increased by 514.63% compared to last year, mainly due to reduction
in cash paid for goods and services.
                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Subtotal of cash inflows from investing activities decreased by 73.69% compared to last year, mainly due to
reduction in purchase and recover of bank financial products.
(3) Subtotal of cash outflows from investing activities decreased by 41.48% compared to last year, mainly due to
reduction in purchase of bank financial products.
(4) Net cash flows from financing activities decreased by 53.73% compared to last year, mainly due to reduction
in loans.
(5) Net increase in cash and cash equivalents increased by 262.5% compared to last year, mainly due to increase
in net cash flows from operating activities.
Illustrations of significant difference between cash flow from operating activities and net profit during the
reporting period
□ Applicable √ Not applicable
III. Analysis of Non-core Business
√Applicable □ Not applicable
                                                                                                         Whether
                           Amount        Proportion in total profit          Explanation of cause
                                                                                                        sustainable
                                                                      Investment income from
                                                                      financial products and
Investment income         2,019,053.44                      0.19%                                           Yes
                                                                      financial assets available for
                                                                      sale
                                                                      Inventory loss and bad debt
Impairment of assets 136,135,960.40                       13.11%                                            No
                                                                      loss
Non-operating
                        58,071,429.33                       5.59%                                           No
income
Non-operating
                        14,541,658.66                       1.40%                                           No
expenses
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
IV. Assets and Liabilities
1. Significant Change of Assets Components
                                                                                                          Unit: Yuan
                                  End of 2016                       End of 2015
                                                                                                           Notes to
                                           Proportion in                      Proportion in Proportion
                                                                                                          significant
                           Amount            the total         Amount           the total     change
                                                                                                            change
                                            assets (%)                         assets (%)
                     12,931,912,017.8
Monetary fund                                    23.88% 5,140,480,509.97            11.56%       12.32%
Accounts
                       623,865,427.25             1.15%      488,584,624.72          1.10%        0.05%
receivable
Inventories          9,782,173,936.74            18.06% 8,601,734,442.42           19.35%        -1.29%
Investment
                                                  0.00%                              0.00%        0.00%
property
Long-term equity
                                                  0.00%                              0.00%        0.00%
investment
                     20,688,468,637.4                      20,046,254,726.7
Fixed assets                                     38.20%                            45.09%        -6.89%
                                       4
Construction in
                     6,210,673,674.11            11.47% 5,646,624,293.27           12.70%        -1.23%
process
                     18,762,472,779.4                      18,139,885,596.6
Short-term loans                                 34.65%                            40.80%        -6.15%
                                       8
Long-term loans      3,448,931,721.62             6.37% 1,005,919,974.09             2.26%        4.11%
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
                   Items                                 Ending balance                        Reason
                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
 Monetary assets                                                 658,337,529.17               Deposit for notes and L/C
 Notes receivable                                                682,288,925.93              Pledged for acceptance bill
 Bank short-term financing products                              244,000,000.00              Pledged for letter of credit
                   Total                                        1,584,626,455.10
V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
(2) Investment in Derivatives
√ Applicable □ Not applicable
                                                                                                   Unit: 10 thousand Yuan
                                       Derivat                                the      The     Provisi             The     The
                                                                                                          The
Derivat                                 ives                                purcha amount on for                  final actua
                  Relate Derivat                                  Initial                                 final
  ives                                 invest                                  se     of sold impair              invest    l
          Relatio d party     ives               Start   End      invest                                 amount
operati                                 ment                                amount during ment                    ment profit
          nship transac investm                  date    date     ment                                     of
  on                                     the                                during     the      loss              compa and
                    tion    ent type                             amount                                  invest
 name                                  initial                                the     reporti amount               ny      loss
                                                                                                          ment
                                       invest                               reporti     ng     (if any            report amou
                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                                     ment                                      ng       period                   the     nt
                                    amount                                   period                             final durin
                                                                                                                 net    g the
                                                                                                               worth repor
                                                                                                                ratio   ting
                                                                                                                        perio
                                                                                                                         d
                           Hot
Benga                                           30        15
                           rolling 1,214.0                          1,214.0 1,204.7 1,219.3                             14.5
ng       Self     No                            June      August                                            0 0.00%
                           sheet            4                            4          9        5
Bancai                                          2016      2016
                           future
                                    1,214.0                         1,214.0 1,204.7 1,219.3                             14.5
Total                                                --        --                                           0 0.00%
                                            4                            4          9        5
Derivatives investment funding Owned fund
Lawsuit(if any)                   Not applicable
Announcement date of approval
of derivatives investment by        27 May 2016
board of directors (if any)
Announcement date of approval
of derivatives investment by
shareholders (if any)
Risk analysis and control           Using allocated billets and manufacture plates, using current and future sales
measures of the derivatives held and hedging as well, using spare capacity of production line, The Company
during the reporting period         dilutes the rolling cost and also locks the profits of manufacturing by using gap
(including but not limited to       of base price of hedging tools. The Company established “Bengang Steel Plates
market risk, liquidity risk, credit Co., Ltd. futures management approach” and” Bengang Steel Plates Co., Ltd
risk, operation risk, legal risk,   futures business rules” in order to fully assess the futures investment and
etc.)                               holding risk and control the market.
                                    1 business scale will be controlled within the 20% of the purchasing and sales
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                                    targets. 2 the highest margin for hedging is RMB 200 million Yuan 3
                                    developing the futures business trading program, the program has fully
                                    assessed the possible legal risk, operational risk, market risk and develop
                                    effective control measures
Changes of market price or fair
value of the invested derivatives
during the reporting period and
disclosure of the specific
methods and relevant
assumption and parameter
                                    The fair value as determined in the active market quotation。
setting when determining the
fair value of the invested
derivatives
During the reporting period,
whether the accounting policies
and accounting principles of
                                    No significant change
derivatives of the company has
greatly changed compared to
last reporting period
                                    In order to carry out the futures business, the Bengang Steel Plates Co., Ltd
                                    issued futures management methods and approach and clarified the
Special opinion of the
                                    organization system of risk control and other related business processes and
independent director to the
                                    business operation mode and to comply with the relevant national laws and
company’s derivatives
                                    regulations and the relevant provisions of the company's articles of association.
investment and risk control
                                    Carrying out futures business is beneficial to reduce business risks and to adapt
                                    to the fierce market competition to achieve transformation spanning
                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
                                     development. The Company shall determine the highest limit of the futures
                                     margin and trades variety is reasonable and make sure that it will not affect the
                                     normal production and operation of the company and there is no damage to the
                                     company and the interests of all shareholders
5. Use of Raised Funds
□ Applicable √ Not applicable
There was no use of raised funds during the reporting period.
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
VII. Analysis on Main Subsidiaries and Share Participating Companies
√ Applicable □ Not applicable
Main subsidiaries and the joint-stock companies influencing over 10% net profit of the Company
                                                                                                              Unit: Yuan
  Company       Company        Main      Registered                                  Operating    Operating
                                                        Total assets   Net assets                                  Net Profit
       Name          type    business      capital                                    income        profit
Bengang                      Processi
Puxiang Cool
                Subsidiari ng and        1,920,000,0 4,417,626,2 2,090,053,2 5,453,347,5 221,849,215 187,050,304
Rolling Steel
Sheet Co.,      es           sales of           00.00         92.34         94.96         61.49              .95           .77
Ltd.                         steel
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
Illustration of main joint-stock companies
VIII. Structure Entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospect for Future Development of the Company
1. The development trend of the industry and the market competition
The year 2017 will be a crucial year of deepening reform to State-owned Enterprises, optimizing industrial
structure, and expanding the space of development. 2017 is also a key year for the Company to adjust ‘China’s
New Normal’, seize new market challenge, deepen the reform, upgrade the quality, improve the efficiency,
expand the market and innovation.
In 2017, China will step into the key stage of strengthen structural reform of the supply front. Steel industry will
face significant opportunity in deepening revolution, structural adjustment, and demand upgrading, meanwhile,
the industry will be challenged in the aspects of excess manufacturing capacity, and insufficient effective supply.
The Company will face more fierce competition from the industrial perspective. However, because of the
continuous policy of reducing excessive capacity, the whole market structure is expected to be further improved
and the relationship between domestic steel supply and demand will be improved. The Company will seize the
significant opportunity because of the bonus of national policy, for example, ‘the Belt and Road Initiatives’,
‘Made in China 2025’, ‘13th Five-Year Plan’ for reinvigorating of the Northeast, and the establishment of
Liaoning pilot free trade zone.
2. The Company’s development strategy
The overall work route of the company in 2017 was established as: comprehensively implementing the contents of
the Company’s economic working conference and work deployment, regarding improving the quality of economic
operation as the overall orientation, improving the level of fundamental management operation as the guarantee,
ensuring stable production and increasing employees’ benefits as the ultimate objective. The Company should
deepen the reformation, improve the product quality, increase the efficiency, and keep innovation to realize the
rapid development.
                                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
3. Business plan
Production: pig iron 920 million tons, raw steel 918 million tons, hot-rolled plate 1297 million tons, cold-rolled
plates 595 thousand tons, special steel 70 thousand tons. Meanwhile, the Company plan to realize ‘three zeros’ in
safety production. The business plan does not constitute a commitment of the company, so please be aware of the
risks arising from such item, and the investors should understand the differences between a business plan and the
commitment of performance.
In order to achieve the above-said goal, the company must try best to do the following key works: the first is to
deepen the reform, and standardize the operation to provide system guarantee for the economic operation and
development of the Company; the second is to make full use of the leading role of market and sales to promote
regional customer structure adjustment and maximize the product benefits; the third is to ensure the product
quality and delivery on time to realize production coordination operate in a stable way to bring stable productivity
and higher yield; the fourth is to build highly efficient innovation system to improve the capability of individual
innovation and sustainable development; the fifth is to reinforce the investment on major project and equipment
improvement to provide guarantee to realize the quality and efficiency requirement of production; the sixth is to
reduce cost in all aspects to receive profits through management, energy saving, and cost reducing; the seventh is
to persist the principal of putting people at the first and practice corporate social responsibility to construct safe
and eco-friendly modern plant; the eighth is to strengthen Party building and concentrate employees’ capability to
promote the development of the Company in a health and harmonious way.
4. Maintaining current business and completing the required capital arrangements of invested projects under construction.
The company will use its own funds and the bank loans to meet the funds demand required by the production and
operation and the technical transformation.
5. Potential risks
(1) Operational risk
National wide structural reform of the supply front and reducing excessive capacity among steel and iron industry
implemented effectively, therefore, price of steel and iron products recovered. However, price recovery still
existed risks because demand of steel products increases slowly. Meanwhile, price of raw materials continuously
increases which will lead to the limited profit potential for the Company. Besides, international market has
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
intensified the anti-dumping investigation towards China’s export steel and iron products, which leads to a
grimmer situation for exporting the iron and steel, thus further increased the burden on the domestic market and
threatened the Company’s objectives of product sales and operation profits.
Counter measures: the Company should apply multi-process management including strengthens the optimization
and management of upstream suppliers, management of purchase information and optimization pre-order system
to possibly reduce the negative effect of price fluctuation of raw materials. Reduce material and energy
consumption and manufacturing cost through intensifying manufacturing process management, improving
technology and operation and raising equipment utilization efficiency. Increase sales volume and unit item profit
by conducting market analysis, recognizing market condition in time, actively developing customers and
intensifying product research and development.
(2) Environmental risk
With the increasingly completion of environmental protection legislation, the government further raised the
requirements on environmental protection for enterprises, largely raised the pollutant emission standards for the
iron and steel industry. Meanwhile, the environmental protection continues to maintain a high pressure situation,
thus the iron and steel enterprises face great pressure on environmental protection.
Counter measures: intensify internal environmental protection management, fully implement environmental
protection reformation projects, dig the potential of reducing emission, implement the environmental-protection
management responsibility, strengthen the control on the pollution source, and strictly supervise the operation of
environmental protection facilities to realize the real-time monitoring for the company’s status on the
environmental protection and dynamic adjustment.
X. Researches, visits and interviews received in this reporting period
1. Registration form of researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
There was no research, visit or interview received in this reporting period.
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                                          V. Important Events
I. Profit Distribution or Capital Reserve Conversion
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash
dividend policy during the reporting period
□ Applicable √ Not applicable
The profit distribution plan or proposal and the plan or proposal of conversion of the capital reserve into share
capital in recent three years (including the reporting period)
1. Profit distribution proposal of 2016
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2016 was RMB 781,274,829.32. After adding the retained profit of RMB -1,278,244,071.93
at beginning of the year, the balance of undistributed profit was -496,969,242.61.
Profits distribution plan of 2016: due to a negative undistributed profit balance at the year-end,, according to the
relevant Chinese regulations and laws and the Company's Articles of Association, the company would not
withdraw surplus reserves. The company planed not to distribute cash dividend or bonus shares, and not to convert
capital reserve into share capital. This proposal was subject to approval of the Shareholders’ Annual Meeting
2016.
2. Profit distribution plan of 2015
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2015 was RMB -3,293,624,545.17. After adding the retained profit of RMB
2,172,180,473.24 at beginning of the year, and deducting RMB 156,800,000.00 of dividend distributed for the last
year, the balance of undistributed profit was -1,278,244,071.93.
Profits distribution plan of 2015: due to a loss in 2015, according to the relevant Chinese regulations and laws and
the Company's Articles of Association, the company would not withdraw surplus reserves. The company planed
not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital.
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
3. Profit distribution plan of 2014
As audited by BDO China Shu Lun Pan Certified Public Accountants LLP., the net profit attributable to the parent
company of the year 2014 was RMB 232,804,820.19. After withdrawing 10% statutory surplus reserves of
RMB4,411,426.11, adding the retained profit of RMB 2,100,587,079.16 at beginning of year, and deducting
RMB156,800,000.00 of dividend distributed for the last year, the profit distributable to the shareholders is
RMB2,172,180,473.24.
Profits distribution plan of 2014: upon the total capital shares amounted to 3,136,000,000 shares as at December
31st 2014, RMB 0.5 (tax included) of dividend will be distributed upon each 10 shares to the whole shareholders.
The dividend for common shares is totaled to RMB156,800,000.00. The remaining undistributed profit of
RMB2,016,529,239.22 will be carried over to the next fiscal year.
Cash dividend distribution in recent three years
                                                                                                              Unit: Yuan
                                            Net profit       Ratio in net profit
                                        attributable to the attributable to the
                                        parent company       parent company         Amount of cash     Proportion of
                      Cash dividend
       Year                                   in the               in the          dividends in other cash dividends in
                     (Including Tax)
                                          consolidated         consolidated              ways            other ways
                                            financial            financial
                                           statements           statements
       2016                 0.00           781,274,829.32          0.00%
       2015                 0.00         -3,293,624,545.17         0.00%
       2014            156,800,000.00      232,804,820.19          67.35%
Both the Company’s profit and the parent company’s retained earnings are positive however no proposal of cash
dividend distribution was proposed during the reporting period
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□ Applicable √ Not applicable
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share
capital during the reporting period.
III. Performance of Committed Issues
1. The fulfilled commitments during the reporting period and under-fulfillment commitments by the end of
the period made by actual controller, acquirer, director, supervisor, senior management personnel and
other related parties.
□ Applicable √ Not applicable
There was no fulfilled commitment during the reporting period or under-fulfillment commitment by the end of the
period made by actual controller, acquirer, director, supervisor, senior management personnel and other related
parties.
2. The Company made illustrations that there are assets or projects which meet the original profit forecast
and the reasons when there are assets or projects profit forecast of the Company and the reporting period
is still in the forecast period
□ Applicable √ Not applicable
IV. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholder and
Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
V. Illustrations of the Supervisory Committee and Independent Directors (If Applicable) on
the Qualified Audit Report Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of Changes in the Accounting Policy, Accounting Estimate and Measurement
Methods as Compared with the Financial Report of Last Year
√ Applicable □ Not applicable
I. Summary of accounting policy changes
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
1. Date of change: from May 1, 2016
2. Reason of change:
On December 3, 2016, the Ministry of Finance issued Provisions on the accounting treatment of value added tax
([2016] no. 22). The main impacts of the implementation are as follows:
Adjust the “Business tax and surcharges” to “Tax and surcharges” in the income statement;
The business activities of the occurrence of property tax, land use tax, vehicle and vessel use tax, stamp tax from
May 1, 2016 is reclassified from “General and administrative expenses” to “Tax and surcharges”. The tax
occurred before May 1, 2016 shall not be adjusted. Comparative data stays unadjusted;
The debit balance of the sub-item under Tax payable such as VAT payable, VAT not paid, input VAT to be
deducted, input VAT to be verified, VAT overpaid will be reclassified from Tax payable to other cuurent assets or
other non-current assets. Comparative data stays unadjusted.
3. Accounting policies before change:
The income statement sets \"business tax and additional\" item, and business activities of the occurrence of property
tax, land use tax, vehicle and vessel use tax, stamp tax are recorded in administrative expenses.
4. Accounting policies after change:
According to the requirements document, the Company implemented above requirements from May 1, 2016, and
adjusted the “Business tax and surcharges” to “Tax and surcharges” in the income statement. Meanwhile, business
activities of the occurrence of property tax, land use tax, vehicle and vessel use tax, stamp tax from May 1, 2016
is reclassified from “General and administrative expenses” to “Tax and surcharges”. The tax occurred before May
1, 2016 shall not be adjusted. Comparative data stays unadjusted.
II. Impacts of accounting policy changes to the Company
The accounting policy change of the Company involves adjustment between profit and loss items according to the
provisions of Ministry of Finance, and thus does not affect the profit and loss, and involves no retroactive
adjustment. The main impacts of the accounting policy change are as follows:
     The contents and reasons of accounting policy             Financial statement
No                                                                                              Amount
     changes                                                      items affected
     Adjust the “Business tax and surcharges” to “Tax
1                                                              Tax and surcharges    Not applicable
     and surcharges” in the income statement.
     The business activities of the occurrence of              Tax and surcharges,   Tax and surcharges item
2
     property tax, land use tax, vehicle and vessel use        administrative        have increased by RMB
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
      tax, stamp tax from May 1, 2016 is reclassified        expenses               65,261,381.86, while
      from “General and administrative expenses” to                               General and administrative
      “Tax and surcharges”. The tax occurred before May                           expenses have decreased by
      1, 2016 shall not be adjusted. Comparative data                               RMB 65,261,381.86.
      stays unadjusted.
      The debit balance of the sub-item under Tax
                                                                                    The ending balance of other
      payable such as VAT payable, VAT not paid, input
                                                                                    current assets has increased
      VAT to be deducted, input VAT to be verified, VAT      Tax payable, other
3                                                                                   by RMB 86,134,653.84 and
      overpaid will be reclassified from Tax payable to      current assets
                                                                                    the tax payable has increased
      other cuurent assets or other non-current assets.
                                                                                    by RMB 86,134,653.84
      Comparative data stays unadjusted.
The change in accounting policy only affected above items, and had no impact on profit and loss, total assets, and
net assets.
VI. Illustrations of Retrospective Restatement Due to Correction of Significant Accounting
Errors in the Reporting Period
□ Applicable √ Not applicable
There was no retrospective restatement due to correction of significant accounting errors during the reporting
period
VIII. Illustrations of Changes of the Consolidation Scope as Compared with the Financial
Report of Last Year
□ Applicable √ Not applicable
There was no change of the consolidation scope as compared with the financial report of last year
IX. Appointment and Dismiss of Certified Accountant’s Firm
Accountant’s firm currently appointed
Name of the domestic accountant’s firm       BDO China Shu Lun Pan Certified Public Accountants LLP
Payment to the domestic accountant’s firm
(RMB 10 thousand)
Service life of domestic accountant’s firm
providing audit service
Name of CPAs from the domestic
                                              Wu Xue, Zhang Huice
accountant’s firm
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
Name of the overseas accountant’s firm (if
                                               None
any)
Payment to overseas accountant’s firm
(RMB 10 thousand) (if any)
Service life of overseas accountant’s firm
                                               None
providing audit service (if any)
Name of CPAs from the overseas
                                               None
accountant’s firm (if any)
Whether the accountant’s firm was changed during the reporting period
□ Yes √ No
Engagement of accountant’s firms, financial consultants or sponsors for internal control auditing
√ Applicable □ Not applicable
The Company appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the auditor of internal
control auditing at RMB600 thousand.
X. Risk of Suspension or Termination of Listing after the Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
XII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
XIII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
XIV. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
There was no effective judgment of a court or large amount of debt maturity that the Company, its controlling
shareholders and actual controller failed to perform or pay off during the reporting period.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
XVI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
                                                                                                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                           Pricing                       Amount of                       The approved     Whether
                                         Type of                                           Price of                    Proportion of                                 Means of payment Available market
                                                    Content of related principle of                     related party                   trading limit of exceed the                                      Date of    Index of
   Related parties      Relationship related party                                      related party                      similar                                    of related party price of similar
                                                    party transactions related party                  transactions (in                  transactions (in  approved                                      disclosure disclosure
                                      transactions                                      transactions                    transactions                                    transactions    transactions
                                                                        transactions                    10 thousand)                      10 thousand) limited (Y/N)
                                     Purchase of                                       Related
Benxi Steel & Iron      Parent                     Accounts payable                                                                                                  Execute according
                                     goods and                         On agreement    agreement            22,377.59           0.87%          32,000 No                               No
(Group) Co., Ltd.       Company                    for repair                                                                                                        to the agreement
                                     services                                          price
Bengang Cold-rolled                  Purchase of                                       Related
                        Same                                                                                                                                         Execute according
Stainless Steel                      goods and     Products            On agreement    agreement                 19.79          0.00%           1,000 No                               Yes
                        controller                                                                                                                                   to the agreement
Dandong Co., Ltd.                    services                                          price
Benxi Steel & Iron                   Purchase of                                       Related
                        Same                                                                                                                                         Execute according
(Group) Mining Co.,                  goods and     Labor cost          On agreement    agreement              2,202.94          0.09%         500,000 No                               No
                        controller                                                                                                                                   to the agreement
Ltd.                                 services                                          price
Benxi Steel & Iron                   Purchase of Raw material and                      Related
                        Same                                                                                                                                         Execute according
(Group) Mining Co.,                  goods and     supplementary       On agreement    agreement           275,948.02         10.74%                  No                               Yes
                        controller                                                                                                                                   to the agreement
Ltd.                                 services      material                            price
Benxi Steel & Iron                   Purchase of                                       Related
                        Same                                                                                                                                         Execute according
(Group) Mining Co.,                  goods and     Freight             On agreement    agreement                  8.45          0.00%                 No                               Yes
                        controller                                                                                                                                   to the agreement
Ltd.                                 services                                          price
Benxi Steel & Iron                   Purchase of Raw material and                      Related
                        Same                                                                                                                                         Execute according
(Group) Metallurgy                   goods and     supplementary       On agreement    agreement            12,193.97           0.47%          20,000 No                               No
                        controller                                                                                                                                   to the agreement
Residues Co., Ltd.                   services      material                            price
Benxi Steel & Iron
                                     Purchase of                                   Related
(Group) Steel & Iron    Same                                                                                                                                         Execute according
                                     goods and   Processing fee       On agreement agreement                  409.35          0.02%               800 No                               No
Process and Logistics   controller                                                                                                                                   to the agreement
                                     services                                      price
Co., Ltd.
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Real-estate                  goods and     Raw materials      On agreement agreement                7,343.63          0.29%             8,000 No                               Yes
                        controller                                                                                                                                   to the agreement
Development Co., Ltd.                services                                      price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Machinery                    goods and     Spare parts        On agreement agreement               19,213.76          0.75%            35,000 No                               Yes
                        controller                                                                                                                                   to the agreement
Manufacture Co., Ltd.                services                                      price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Machinery                    goods and     Repair services    On agreement agreement                1,822.64          0.07%                   No                               No
                        controller                                                                                                                                   to the agreement
Manufacture Co., Ltd.                services                                      price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Construction                 goods and     Spare parts        On agreement agreement                   24.29          0.00%            80,000 No                               No
                        controller                                                                                                                                   to the agreement
Co., Ltd.                            services                                      price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Construction                 goods and     Project fee        On agreement agreement               17,318.35          0.67%                   No                               No
                        controller                                                                                                                                   to the agreement
Co., Ltd.                            services                                      price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Construction                 goods and     Repair services    On agreement agreement               11,396.14          0.44%                   No                               No
                        controller                                                                                                                                   to the agreement
Co., Ltd.                            services                                      price
Benxi Steel & Iron                   Purchase of   Raw material and                Related
                        Same                                                                                                                                         Execute according
(Group) Construction                 goods and     supplementary      On agreement agreement                 1,195.6          0.05%                   No                               No
                        controller                                                                                                                                   to the agreement
Co., Ltd.                            services      material                        price
Benxi Steel & Iron                   Purchase of                                   Related
                        Same                                                                                                                                         Execute according
(Group) Construction                 goods and     Freight            On agreement agreement                  293.69          0.01%                   No                               No
                        controller                                                                                                                                   to the agreement
Co., Ltd.                            services                                      price
                                                                                                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                           Pricing                       Amount of                       The approved     Whether
                                         Type of                                           Price of                    Proportion of                                 Means of payment Available market
                                                    Content of related principle of                     related party                   trading limit of exceed the                                      Date of    Index of
   Related parties      Relationship related party                                      related party                      similar                                    of related party price of similar
                                                    party transactions related party                  transactions (in                  transactions (in  approved                                      disclosure disclosure
                                      transactions                                      transactions                    transactions                                    transactions    transactions
                                                                        transactions                    10 thousand)                      10 thousand) limited (Y/N)
Benxi Steel & Iron                   Purchase of Raw material and                      Related
                        Same                                                                                                                                         Execute according
(Group) Industrial                   goods and     supplementary       On agreement    agreement            21,849.65           0.85%          40,000 No                               No
                        controller                                                                                                                                   to the agreement
Development Co., Ltd.                services      material                            price
Benxi Steel & Iron                   Purchase of                                       Related
                        Same                                                                                                                                         Execute according
(Group) Industrial                   goods and     Repair services     On agreement    agreement               1,003.8          0.04%                 No                               No
                        controller                                                                                                                                   to the agreement
Development Co., Ltd.                services                                          price
Benxi Steel & Iron                   Purchase of                                       Related
                        Same                                                                                                                                         Execute according
(Group) Industrial                   goods and     Freight             On agreement    agreement                745.85          0.03%                 No                               No
                        controller                                                                                                                                   to the agreement
Development Co., Ltd.                services                                          price
Benxi Steel & Iron                   Purchase of                                       Related
                        Same                                                                                                                                         Execute according
(Group) Industrial                   goods and     Project fee         On agreement    agreement                248.27          0.01%                 No                               No
                        controller                                                                                                                                   to the agreement
Development Co., Ltd.                services                                          price
Benxi Steel & Iron                                 Raw material &
                                     Purchase of                                       Related
(Group) Construction    Same                       supplementary                                                                                                     Execute according
                                     goods and                         On agreement    agreement              782.34          0.03%            25,000 No                               No
and Repairing Co.,      controller                 materials & spare                                                                                                 to the agreement
                                     services                                          price
Ltd.                                               parts
Benxi Steel & Iron
                                     Purchase of                                    Related
(Group) Construction    Same                                                                                                                                         Execute according
                                     goods and   Project fee           On agreement agreement              12,773.74          0.50%                   No                               No
and Repairing Co.,      controller                                                                                                                                   to the agreement
                                     services                                       price
Ltd.
Benxi Steel & Iron
                                     Purchase of                               Related
(Group) Construction    Same                     Accounts payable                                                                                                    Execute according
                                     goods and                    On agreement agreement                    4,555.98          0.18%                   No                               No
and Repairing Co.,      controller               for repair                                                                                                          to the agreement
                                     services                                  price
Ltd.
                                     Purchase of   Raw material and                 Related
Bengang Electronics     Same                                                                                                                                         Execute according
                                     goods and     supplementary       On agreement agreement              12,138.43          0.47%            20,000 No                               No
and Gas Co., Ltd.       controller                                                                                                                                   to the agreement
                                     services      material                         price
                                     Purchase of                                    Related
Bengang Electronics     Same                                                                                                                                         Execute according
                                     goods and     Project fee         On agreement agreement                 116.85          0.00%                   No                               No
and Gas Co., Ltd.       controller                                                                                                                                   to the agreement
                                     services                                       price
                                     Purchase of                                    Related
Bengang Electronics     Same                                                                                                                                         Execute according
                                     goods and     Repair services     On agreement agreement               1,514.32          0.06%                   No                               No
and Gas Co., Ltd.       controller                                                                                                                                   to the agreement
                                     services                                       price
Benxi High-tech                      Purchase of                                    Related
                      Same                                                                                                                                           Execute according
Drilling Tools                       goods and     Spare parts         On agreement agreement                  46.97          0.00%             1,000 No                               No
                      controller                                                                                                                                     to the agreement
Manufacture Co., Ltd.                services                                       price
                                     Purchase of                                    Related
Benxi New Career      Same                         Labor protection                                                                                                  Execute according
                                     goods and                         On agreement agreement                    743          0.03%                   No                               No
Development Co., Ltd. controller                   fee                                                                                                               to the agreement
                                     services                                       price
                                     Purchase of   Raw material and                 Related
Benxi New Career      Same                                                                                                                                           Execute according
                                     goods and     supplementary       On agreement agreement                  91.91          0.00%             1,200 No                               No
Development Co., Ltd. controller                                                                                                                                     to the agreement
                                     services      material and food                price
                                     Purchase of                                    Related
Liaoning Metallurgy     Same                                                                                                                                         Execute according
                                     goods and     Spare parts         On agreement agreement                 948.48          0.04%             1,500 No                               No
Technician College      controller                                                                                                                                   to the agreement
                                     services                                       price
                                     Purchase of                                    Related
Liaoning Metallurgy     Same                                                                                                                                         Execute according
                                     goods and     Project fee         On agreement agreement                 140.93          0.01%                   No                               No
Technician College      controller                                                                                                                                   to the agreement
                                     services                                       price
Liaoning Metallurgy     Same         Purchase of   Repair services     On agreement Related                   219.08          0.01%             1,000 No             Execute according No
                                                                                                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                        Pricing                      Amount of                    The approved     Whether
                                        Type of                                        Price of                    Proportion of                               Means of payment Available market
                                                  Content of related principle of                   related party                trading limit of exceed the                                       Date of    Index of
    Related parties    Relationship related party                                   related party                      similar                                  of related party price of similar
                                                  party transactions related party                transactions (in               transactions (in  approved                                       disclosure disclosure
                                     transactions                                   transactions                    transactions                                   transactions   transactions
                                                                     transactions                   10 thousand)                   10 thousand) limited (Y/N)
Technician College     controller   goods and                                      agreement                                                                  to the agreement
                                    services                                       price
Bengang Group
                                    Purchase of                                   Related
International          Same                                                                                                                                 Execute according
                                    goods and   Agency fee           On agreement agreement           5,727.01         0.22%                 No                               No
Economic and Trading   controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Bengang Group
                                    Purchase of                                   Related
International          Same                                                                                                                                 Execute according
                                    goods and   Port surcharges      On agreement agreement          16,060.87         0.63%          35,000 No                               No
Economic and Trading   controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Benxi Steel & Iron
                                    Purchase of                                   Related
(Group) Information    Same                                                                                                                                 Execute according
                                    goods and   Spare parts          On agreement agreement           1,448.52         0.06%                 No                               No
and Automatic Tech     controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Benxi Steel & Iron
                                    Purchase of                                   Related
(Group) Information    Same                                                                                                                                 Execute according
                                    goods and   Project fee          On agreement agreement           1,055.39         0.04%           7,000 No                               No
and Automatic Tech     controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Benxi Steel & Iron
                                    Purchase of                                   Related
(Group) Information    Same                                                                                                                                 Execute according
                                    goods and   Repair services      On agreement agreement                80          0.00%                 No                               No
and Automatic Tech     controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Benxi Steel & Iron
                                    Purchase of                                   Related
(Group) Thermal        Same                                                                                                                                 Execute according
                                    goods and   Heating costs        On agreement agreement            664.79          0.03%           2,000 No                               No
Power Development      controller                                                                                                                           to the agreement
                                    services                                      price
Co., Ltd.
Benxi Steel & Iron
                                    Purchase of Raw material and                  Related
(Group) Thermal        Same                                                                                                                                 Execute according
                                    goods and   supplementary        On agreement agreement              13.35         0.00%                 No                               No
Power Development      controller                                                                                                                           to the agreement
                                    services    material                          price
Co., Ltd.
Benxi Steel & Iron                  Purchase of                                   Related
                       Same                                                                                                                                 Execute according
(Group) Designing                   goods and     Design fees        On agreement agreement            690.52          0.03%           5,000 No                               No
                       controller                                                                                                                           to the agreement
Institute                           services                                      price
                                    Purchase of   Raw material and                Related
Benxi Beiying Steel & Same                                                                                                                                  Execute according
                                    goods and     supplementary      On agreement agreement        531,397.56         20.68%         800,000 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                           to the agreement
                                    services      material                        price
                                    Purchase of                                   Related
Benxi Beiying Steel & Same                                                                                                                                  Execute according
                                    goods and     Energy & Power     On agreement agreement          56,085.19         2.18%                 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                           to the agreement
                                    services                                      price
                                    Purchase of                                   Related
Benxi Beiying Steel & Same                                                                                                                                  Execute according
                                    goods and     Freight            On agreement agreement            572.61          0.02%                 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                           to the agreement
                                    services                                      price
                                    Purchase of                                   Related
Benxi Beiying Steel & Same                                                                                                                                  Execute according
                                    goods and     Labor cost         On agreement agreement            3,951.3         0.15%                 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                           to the agreement
                                    services                                      price
                                    Purchase of                                   Related
Benxi Beiying Steel & Same                                                                                                                                  Execute according
                                    goods and     Spare parts        On agreement agreement            910.42          0.04%                 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                           to the agreement
                                    services                                      price
Liaoning Hengtong      Same         Purchase of   Raw material and   On agreement Related            10,121.19         0.39%          15,000 No             Execute according No
                                                                                                                                                           Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                          Pricing                      Amount of                    The approved     Whether
                                         Type of                                         Price of                    Proportion of                               Means of payment Available market
                                                    Content of related principle of                   related party                trading limit of exceed the                                       Date of    Index of
    Related parties     Relationship related party                                    related party                      similar                                  of related party price of similar
                                                    party transactions related party                transactions (in               transactions (in  approved                                       disclosure disclosure
                                      transactions                                    transactions                    transactions                                   transactions   transactions
                                                                       transactions                   10 thousand)                   10 thousand) limited (Y/N)
Metallurgical           controller   goods and     spare parts                       agreement                                                                  to the agreement
Equipment                            services                                        price
Manufacture Co., Ltd.
Liaoning Hengtai                     Purchase of                                    Related
                        Same                       Raw material and                                                                                           Execute according
Heavy Machinery Co.,                 goods and                         On agreement agreement          1,263.91          0.05%                 No                               No
                        controller                 spare parts                                                                                                to the agreement
Ltd.                                 services                                       price
Liaoning Hengtai                     Purchase of                                    Related
                        Same                       Repair and labor                                                                                           Execute according
Heavy Machinery Co.,                 goods and                         On agreement agreement          1,068.72          0.04%           6,000 No                               No
                        controller                 cost                                                                                                       to the agreement
Ltd.                                 services                                       price
                                     Purchase of                                    Related
Bengang Group Co.,                                 Property                                                                                                   Execute according
                        控制人       goods and                         On agreement agreement             84.55          0.00%           1,000 No                               No
Ltd.                                               management fee                                                                                             to the agreement
                                     services                                       price
                                     Sales of                                       Related
Bengang Electronics     Same                                                                                                                                  Execute according
                                     goods and     Energy & Power      On agreement agreement              94.8          0.00%            300 No                                No
and Gas Co., Ltd.       controller                                                                                                                            to the agreement
                                     services                                       price
                                                   Raw material &
                                     Sales of                                       Related
Benxi Beiying Steel & Same                         supplementary                                                                                              Execute according
                                     goods and                         On agreement agreement         11,910.03          0.40%        150,000 No                                No
Iron (Group) Co., Ltd. controller                  materials & spare                                                                                          to the agreement
                                     services                                       price
                                                   parts
                                     Sales of                                       Related
Benxi Beiying Steel & Same                                                                                                                                    Execute according
                                     goods and     Products            On agreement agreement             765.3          0.03%                 No                               Yes
Iron (Group) Co., Ltd. controller                                                                                                                             to the agreement
                                     services                                       price
                                     Sales of                                       Related
Benxi Beiying Steel & Same                                                                                                                                    Execute according
                                     goods and     Energy & Power      On agreement agreement         23,879.65          0.81%                 No                               No
Iron (Group) Co., Ltd. controller                                                                                                                             to the agreement
                                     services                                       price
Benxi Steel & Iron                   Sales of                                       Related
                        Same                                                                                                                                  Execute according
(Group) Real-estate                  goods and     Energy & Power      On agreement agreement             61.72          0.00%           1,000 No                               No
                        controller                                                                                                                            to the agreement
Development Co., Ltd.                services                                       price
Benxi Steel & Iron
                                     Sales of                                       Related
(Group) Steel & Iron    Same                                                                                                                                  Execute according
                                     goods and     Energy & Power      On agreement agreement             54.71          0.00%                 No                               No
Process and Logistics   controller                                                                                                                            to the agreement
                                     services                                       price
Co., Ltd.
Benxi Steel & Iron
                                     Sales of                                       Related
(Group) Steel & Iron    Same                                                                                                                                  Execute according
                                     goods and     Products            On agreement agreement          7,329.61          0.25%         40,000 No                                Yes
Process and Logistics   controller                                                                                                                            to the agreement
                                     services                                       price
Co., Ltd.
Benxi Steel & Iron                   Sales of                                       Related
                        Same                                                                                                                                  Execute according
(Group) Machinery                    goods and     Products            On agreement agreement          1,120.45          0.04%         15,000 No                                Yes
                        controller                                                                                                                            to the agreement
Manufacture Co., Ltd.                services                                       price
Benxi Steel & Iron                   Sales of                                       Related
                        Same                                                                                                                                  Execute according
(Group) Machinery                    goods and     Energy & Power      On agreement agreement          1,554.19          0.05%                 No                               No
                        controller                                                                                                                            to the agreement
Manufacture Co., Ltd.                services                                       price
                                                   Raw material &
Benxi Steel & Iron                   Sales of                                       Related
                      Same                         supplementary                                                                                              Execute according
(Group) Machinery                    goods and                         On agreement agreement            136.05          0.00%                 No                               No
                      controller                   materials & spare                                                                                          to the agreement
Manufacture Co., Ltd.                services                                       price
                                                   parts
Benxi Steel & Iron                   Sales of                                       Related
                     Same                                                                                                                                     Execute according
(Group) Construction                 goods and     Energy & Power      On agreement agreement            392.78          0.01%                 No                               No
                     controller                                                                                                                               to the agreement
Co., Ltd.                            services                                       price
                                                                                                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                         Pricing                      Amount of                    The approved     Whether
                                       Type of                                          Price of                    Proportion of                              Means of payment Available market
                                                  Content of related principle of                    related party                trading limit of exceed the                                      Date of    Index of
   Related parties    Relationship related party                                     related party                      similar                                 of related party price of similar
                                                  party transactions related party                 transactions (in               transactions (in  approved                                      disclosure disclosure
                                    transactions                                     transactions                    transactions                                 transactions    transactions
                                                                      transactions                   10 thousand)                   10 thousand) limited (Y/N)
                                                 Raw material &
Benxi Steel & Iron                 Sales of                                          Related
                      Same                       supplementary                                                                                               Execute according
(Group) Construction               goods and                         On agreement    agreement          2,756.04         0.09%         25,000 No                               No
                      controller                 materials & spare                                                                                           to the agreement
Co., Ltd.                          services                                          price
                                                 parts
Benxi Steel & Iron                 Sales of                                          Related
                      Same                                                                                                                                   Execute according
(Group) Mining Co.,                goods and     Energy & Power On agreement         agreement        74,573.08          2.53%                No                               No
                      controller                                                                                                                             to the agreement
Ltd.                               services                                          price
                                                 Raw material &
Benxi Steel & Iron                 Sales of                                          Related
                      Same                       supplementary                                                                                               Execute according
(Group) Mining Co.,                goods and                         On agreement    agreement          7,117.49         0.24%        100,000 No                               No
                      controller                 materials & spare                                                                                           to the agreement
Ltd.                               services                                          price
                                                 parts
Benxi Steel & Iron                 Sales of                                          Related
                      Same                                                                                                                                   Execute according
(Group) Mining Co.,                goods and     Freight revenue     On agreement    agreement           858.68          0.03%                No                               No
                      controller                                                                                                                             to the agreement
Ltd.                               services                                          price
Benxi Steel & Iron                 Sales of                                          Related
                      Same                                                                                                                                   Execute according
(Group) Mining Co.,                goods and     Products            On agreement    agreement           781.85          0.03%                No                               Yes
                      controller                                                                                                                             to the agreement
Ltd.                               services                                          price
Benxi Steel & Iron
                                   Sales of                                          Related
(Group) Thermal       Same                                                                                                                                   Execute according
                                   goods and     Energy & Power On agreement         agreement          2,819.49         0.10%                No                               No
Power Development controller                                                                                                                                 to the agreement
                                   services                                          price
Co., Ltd.
Benxi Steel & Iron                               Raw material &
                                   Sales of                                          Related
(Group) Thermal       Same                       supplementary                                                                                               Execute according
                                   goods and                         On agreement    agreement          2,599.61         0.09%         15,000 No                               No
Power Development controller                     materials & spare                                                                                           to the agreement
                                   services                                          price
Co., Ltd.                                        parts
Benxi Steel & Iron
                                   Sales of                                          Related
(Group) Thermal       Same                                                                                                                                   Execute according
                                   goods and     Freight revenue     On agreement    agreement            66.15          0.00%                No                               No
Power Development controller                                                                                                                                 to the agreement
                                   services                                          price
Co., Ltd.
Benxi Steel & Iron                 Sales of                                          Related
                      Same                                                                                                                                   Execute according
(Group) Industrial                 goods and     Energy & Power On agreement         agreement           823.58          0.03%                No                               No
                      controller                                                                                                                             to the agreement
Development Co., Ltd.              services                                          price
Benxi Steel & Iron                 Sales of                                          Related
                      Same                                                                                                                                   Execute according
(Group) Industrial                 goods and     Products            On agreement    agreement              22.3         0.00%                No                               Yes
                      controller                                                                                                                             to the agreement
Development Co., Ltd.              services                                          price
                                                 Raw material &
Benxi Steel & Iron                 Sales of                                          Related
                      Same                       supplementary                                                                                               Execute according
(Group) Industrial                 goods and                         On agreement    agreement         11,640.04         0.39%         15,000 No                               No
                      controller                 materials & spare                                                                                           to the agreement
Development Co., Ltd.              services                                          price
                                                 parts
Benxi Steel & Iron
                                   Sales of                                          Related
(Group) Information Same                                                                                                                                     Execute according
                                   goods and     Energy & Power On agreement         agreement            18.43          0.00%             50 No                               No
and Automatic Tech    controller                                                                                                                             to the agreement
                                   services                                          price
Co., Ltd.
Benxi Steel & Iron
                                   Sales of                                          Related
(Group) Construction Same                                                                                                                                    Execute according
                                   goods and     Energy & Power On agreement         agreement            97.49          0.00%                No                               No
and Repairing Co.,    controller                                                                                                                             to the agreement
                                   services                                          price
Ltd.
Benxi Steel & Iron    Same         Sales of      Raw material &                      Related                                                                 Execute according
                                                                     On agreement                         188.5          0.01%          1,000 No                               No
(Group) Construction controller    goods and     supplementary                       agreement                                                               to the agreement
                                                                                                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                          Pricing                       Amount of                    The approved     Whether
                                        Type of                                           Price of                    Proportion of                              Means of payment Available market
                                                   Content of related principle of                     related party                trading limit of exceed the                                      Date of    Index of
   Related parties     Relationship related party                                      related party                      similar                                 of related party price of similar
                                                   party transactions related party                  transactions (in               transactions (in  approved                                      disclosure disclosure
                                     transactions                                      transactions                    transactions                                 transactions    transactions
                                                                       transactions                    10 thousand)                   10 thousand) limited (Y/N)
and Repairing Co.,                  services      materials & spare                   price
Ltd.                                              parts
Benxi Steel & Iron                  Sales of                                          Related
                       Same                                                                                                                                    Execute according
(Group) Metallurgy                  goods and     Energy & Power On agreement         agreement            371.37         0.01%                 No                               No
                       controller                                                                                                                              to the agreement
Residues Co., Ltd.                  services                                          price
                                                  Raw material &
Benxi Steel & Iron                  Sales of                                          Related
                       Same                       supplementary                                                                                                Execute according
(Group) Metallurgy                  goods and                         On agreement    agreement          1,669.59         0.06%          10,000 No                               No
                       controller                 materials & spare                                                                                            to the agreement
Residues Co., Ltd.                  services                                          price
                                                  parts
Benxi Steel & Iron                  Sales of                                          Related
                       Same                                                                                                                                    Execute according
(Group) Metallurgy                  goods and     Freight revenue     On agreement    agreement              0.89         0.00%                 No                               No
                       controller                                                                                                                              to the agreement
Residues Co., Ltd.                  services                                          price
Benxi Steel & Iron                  Sales of                                          Related
                       Same                                                                                                                                    Execute according
(Group) Metallurgy                  goods and     Products            On agreement    agreement            217.33         0.01%                 No                               Yes
                       controller                                                                                                                              to the agreement
Residues Co., Ltd.                  services                                          price
                                    Sales of                                          Related
Benxi Steel & Iron     Parent                                                                                                                                  Execute according
                                    goods and     Energy & Power On agreement         agreement            272.47         0.01%                 No                               No
(Group) Co., Ltd.      Company                                                                                                                                 to the agreement
                                    services                                          price
                                                  Raw material &
                                    Sales of                                          Related
Benxi Steel & Iron     Parent                     supplementary                                                                                                Execute according
                                    goods and                         On agreement    agreement            923.88         0.03%          15,000 No                               No
(Group) Co., Ltd.      Company                    materials & spare                                                                                            to the agreement
                                    services                                          price
                                                  parts
                                    Sales of                                          Related
Benxi New Career       Same                                                                                                                                    Execute according
                                    goods and     Energy & Power On agreement         agreement             47.31         0.00%             500 No                               No
Development Co., Ltd. controller                                                                                                                               to the agreement
                                    services                                          price
                                    Sales of                                          Related
Dalian Boluole Steel Same                                                                                                                                      Execute according
                                    goods and     Products            On agreement    agreement            369.82         0.01%           1,000 No                               Yes
Tube Co., Ltd.         controller                                                                                                                              to the agreement
                                    services                                          price
Liaoning Bengang                    Sales of                                          Related
                       Same                                                                                                                                    Execute according
Steel & Iron Trading                goods and     Products            On agreement    agreement          6,564.11         0.22%          40,000 No                               Yes
                       controller                                                                                                                              to the agreement
Co., Ltd.                           services                                          price
Benxi Steel & Iron                  Sales of                                          Related
                       Same                                                                                                                                    Execute according
(Group) General                     goods and     Energy & Power On agreement         agreement                 9         0.00%             100 No                               No
                       controller                                                                                                                              to the agreement
Hospital                            services                                          price
Benxi Steel & Iron
                                    Sales of                                          Related
(Group) Zhengtai       Same                                                                                                                                    Execute according
                                    goods and     Energy & Power On agreement         agreement              0.14         0.00%              50 No                               No
Construction Materials controller                                                                                                                              to the agreement
                                    services                                          price
Co., Ltd.
Liaoning Hengtong
                                    Sales of                                          Related
Metallurgical          Same                                                                                                                                    Execute according
                                    goods and     Energy & Power On agreement         agreement          1,565.92         0.05%                 No                               No
Equipment              controller                                                                                                                              to the agreement
                                    services                                          price
Manufacture Co., Ltd.
Liaoning Hengtong                                 Raw material &
                                    Sales of                                          Related
Metallurgical          Same                       supplementary                                                                                                Execute according
                                    goods and                         On agreement    agreement           2,681.9         0.09%          10,000 No                               No
Equipment              controller                 materials & spare                                                                                            to the agreement
                                    services                                          price
Manufacture Co., Ltd.                             parts
Liaoning Hengtong                   Sales of                                          Related
                       Same                                                                                                                                    Execute according
Metallurgical                       goods and     Products            On agreement    agreement            226.76         0.01%                 No                               Yes
                       controller                                                                                                                              to the agreement
Equipment                           services                                          price
                                                                                                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                         Pricing                     Amount of                    The approved     Whether
                                        Type of                                        Price of                    Proportion of                              Means of payment Available market
                                                   Content of related principle of                  related party                trading limit of exceed the                                      Date of    Index of
    Related parties     Relationship related party                                  related party                      similar                                 of related party price of similar
                                                   party transactions related party               transactions (in               transactions (in  approved                                      disclosure disclosure
                                     transactions                                   transactions                    transactions                                 transactions    transactions
                                                                      transactions                  10 thousand)                   10 thousand) limited (Y/N)
Manufacture Co., Ltd.
                                                   Raw material &
Bengang Cold-rolled                  Sales of                                       Related
                        Same                       supplementary                                                                                            Execute according
Stainless Steel                      goods and                         On agreement agreement                             0.00%        1,000 No                               No
                        controller                 materials & spare                                                                                        to the agreement
Dandong Co., Ltd.                    services                                       price
                                                   parts
                                     Sales of                                       Related
Suzhou Bengang          Same                                                                                                                                Execute according
                                     goods and     Products            On agreement agreement        17,469.08            0.59%       35,000 No                               Yes
Industrial Co., Ltd.    controller                                                                                                                          to the agreement
                                     services                                       price
                                     Sales of                                       Related
Bengang Group           Same                                                                                                                                Execute according
                                     goods and     Energy & Power      On agreement agreement             1.58            0.00%        1,000 No                               No
Finance Co., Ltd.       controller                                                                                                                          to the agreement
                                     services                                       price
                                     Sales of                                       Related
Bengang Group Co.,                                                                                                                                          Execute according
                        控制人       goods and     Energy & Power      On agreement agreement              8.3            0.00%         500 No                                No
Ltd.                                                                                                                                                        to the agreement
                                     services                                       price
Total                                                                       --            --      1,244,945.18       --            2,114,000       --               --                --             --         --
Details of any sales return of a large amount                          None
Give the actual situation during the reporting period where a forecast
had been made for the total amounts of routine related-party            None
transactions,by type to occur in the current period(if any)
Reason for any significant difference between the transaction price and
                                                                        None
the Market price for reference (if applicable)
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there is any non-operating related credits and debts
□ Yes √ No
There was no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XVII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
 (2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
 (3) Lease
□ Applicable √ Not applicable
There was no lease during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Entrusting Others for Managing Cash Asset
(1) Entrusted Finance
√ Applicable □ Not applicable
            Whether                                                     Princip                                    Actual
                                                                                   Provisio             Actual
            Related                                                        al                                       profit
                                                               Means                 n of     Predict    profit
 Title of    party    Type of Amount Started Expired                    retrieve                                   and loss
                                                                 of                impairm      ed      and loss
 trustee transacti product entrusted         on         on                d in                                     retrieve
                                                               reward               ent (if   gains      of the
             ons or                                                       this                                     d in this
                                                                                    any)                period
              not                                                       period                                     period
Ping An
Bank                  Capital                        Septemb On
                                          March
Dalian      No        guarante    4,100              er 23,    agreem     4,100                  54.9       54.9 Recover
                                          24, 2016
Xi-gang               ed                             2016      ent
Branch
Ping An
Bank                  Capital                                  On
                                          April      October
Dalian      No        guarante    7,200                        agreem     7,200                96.93       96.93 Recover
                                          21, 2016 21, 2016
Xi-gang               ed                                       ent
Branch
Ping An               Capital             May 26, Novemb On
            No                    1,300                                   1,300                17.41       17.41 Recover
Bank                  guarante            2016       er 25,    agreem
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
Dalian              ed                               2016      ent
Xi-gang
Branch
Industri
                    Capital                 Septemb Septemb On
al Bank
           No       guarante       30,000 er 7,      er 8,     agreem 30,000                 2.05      2.05 Recover
Benxi
                    ed                      2016     2016      ent
Branch
Industri
                    Capital                 Novemb Novemb On
al Bank
           No       guarante         4,000 er        er        agreem    4,000               0.28      0.28 Recover
Benxi
                    ed                      29,2016 30,2016 ent
Branch
Total                              46,600       --        --     --     46,600             171.57    171.57     --
Resource of entrusted funds The Company’s own temporarily idle funds
Accumulated principal and
gains overdue
Lawsuit (if any)               None
Date of announcement made
by the Board about approval April 29, 2016
of entrusted finance
Date of announcement made
by the Shareholders’
                               May 27, 2016
Meeting about approval of
entrusted finance
Whether there is a plan for
future trust entrusted         Yes
finance
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
(2) Entrusted Loans
□ Applicable √ Not applicable
There was no entrusted loan during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XVIII. Social Responsibilities
1. Performing corporation social responsibility of targeted poverty alleviation
□ Applicable √ Not applicable
2. Performing other corporation social responsibilities
During the reporting period, the Company conformed to the provisions stipulated by the relevant documents of
social responsibility implementation, actively protected the legitimate rights and interests of the creditors and staff,
honestly treated the suppliers, customers and consumers and actively engaged in the public welfare undertakings
such as environmental protection and community development, while pursuing the economic profits and
protecting the interests of the shareholders. In the business activities, the company consciously complied with the
principle of voluntariness, fairness, compensation of equal value and honesty and credibility, consciously abided
by social morality, professional ethics, consciously accepted the supervision from the government and the public
and actively performed the company’s social responsibility.
Whether the listed Company and its subsidiaries are among key pollution companies launched by Environmental
Protection Department
Yes
During the reporting period, five subordinate units of the Company were listed as the national key monitoring
companies, including coke plant, iron-making factory, steel-making factory, power plant and raw material plant.
The Company had 104 air pollution emissions vents and 3 sewage emission points. The Company followed
                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
several emission standards including ‘air pollution emission standard for thermal power plant’, ‘air pollution
emission standard for steel and iron sintering and pellet production’, ‘air pollution emission standard for
iron-making industry’, ‘air pollution emission standard for steel-making industry’, ‘air pollution emission standard
for rolling steel industry’, ‘air pollution emission standard for coking industry’, ‘air pollution emission standard
for boiler’, ‘Liaoning province sewage emission standard’, and ‘environmental noise emission standard for
industrial company’s plant area’, etc. The total amount of key pollution emission volumes are as following, 35448
tons of sulfur dioxide, 32628 tons of nitrogen oxides, 2404 tons of COD, and 153 tons of ammonia nitrogen. Each
pollution emission volumes reached counter requirement of emission concentration standard. There was no
excessive emission, significant environmental problem, or rectification situation.
In 2016, the Company completed 191 environmental protection projects, and accumulated invention was 393.79
million. Major projects included the 2*265 Square Meter Sintering Machine Desulfurization Project of Blast
Furnace Plant, Dust Removal Project of Power Plant High-pressure Workshop, Desulfurization and Denitration
Projects for Coal-fired Boiler of Power Plant High-pressure Workshop, Power Plant No 3 workshop Heat and
Power Cogeneration Renovation Project, Desulfurization Environmental Protection Renovation of Liaoyang
Pellet, and the Second Stage of Replacing Steam Heating by Water Heating Project in the Plant Area, etc. The
Company accumulatively invested 1817.1 thousand on greening and seedling replanting in 39 subordinate units.
The Company totally planted 880 thousand flowers and 3500 square meters grass. The Company accumulatively
invested 1500 thousand on plant maintenance. Overall, the Company positively took its environmental
responsibility.
Whether the Company launched Social Responsibility Report
□ Yes √ No
XIX. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XX. Major Issues of Subsidiaries
□ Applicable √ Not applicable
                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2016
             VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
                                                                                                                 Unit: Share
                           Before the change                   Increase/decrease(+,-)                  After the Change
                                                               Bonu Capitalizatio
                                                     Issuing
                                          Percenta               s         n of       Other Subtota                   Percenta
                           Quantity                  of new                                           Quantity
                                             ge                share    common          s      l                         ge
                                                     share
                                                                 s     reserve fund
 II. Non-restricted
                          3,136,000,000    100.00%                                                    3,136,000,000    100.00%
 Shares
 1. Common shares in
                          2,736,000,000    87.24%                                                     2,736,000,000    87.24%
 RMB
 2. Foreign shares in
                           400,000,000     12.76%                                                     400,000,000      12.76%
 domestic market
 III. Total shares        3,136,000,000    100.00%                                                    3,136,000,000    100.00%
Causation of share capital changes
□ Applicable √ Not applicable
Approval of share capital changes
□ Applicable √ Not applicable
Status of registration process of transferred shares
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share,
and net asset per share attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Changes of Restricted Shares
□ Applicable √ Not applicable
II. Securities Issuance and Listing
1. Status of Security Issuance (Excluding Preferred Shares) in the Reporting Period
□ Applicable √ Not applicable
2. Total Share and Shareholder Change and Asset and Liability Structure Change
□ Applicable √ Not applicable
3. Employee Shareholding Status
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of shareholders and shareholding
In Shares
                            Total                         The total number of               Total preferred
Total number
                            shareholders at               preferred shareholde              shareholders at the
of common
                            the end of the                rs                                end of the month
shareholders
                66,419      month from the 56,454         voting rights restore 0           from the date of      0
at the end of
                            date of                       d at the end of the               disclosing the
the reporting
                            disclosing the                reporting period (See             annual report (if
period
                            annual report                 Notes 8)                          any) (See Notes 8)
                    Shareholding of shareholders holding more than 5% or top 10 shareholders
                                                 Number of Changes                                  Number of pledged
                                      Holding                              Restricte Un-restricte
    Name of the          Nature of               shares held         in                               or frozen shares
                                      Percenta                             d shares    d shares
    shareholder      shareholder                     at        reporting
                                      ge (%)                                 held        held       Status       Number
                                                 period-end     period
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
Benxi Steel & Iron          State-owned               2,442,316,0
                                             77.88%                             2,442,316,069   Pledged   924,000,000
(Group) Co., Ltd.           legal person
                            Domestic
Zhou Jie                                     0.26%     8,179,000                  8,179,000
                            natural person
BBH A/C VANGUARD
EMERGING                    Overseas legal
                                             0.26%     8,157,311                  8,157,311
MARKETS STOCK               person
INDEX FUND
                            Domestic
China Merchants
                            non-State-owne   0.23%     7,293,753                  7,293,753
Securities Co., LTD.
                            d legal person
                            Domestic
Zhan Changcheng                              0.15%     4,660,515                  4,660,515
                            natural person
VANGUARD TOTAL
                            Overseas legal
INTERNATIONAL                                0.15%     4,606,141                  4,606,141
                            person
STOCK INDEX FUND
CITIGROUP GLOBAL            Overseas legal
                                             0.14%     4,235,196                  4,235,196
MARKETS LIMITED             person
Haitong International
                            Overseas legal
Securities Company                           0.10%     3,286,109                  3,286,109
                            person
Limited-Account Client
Agricultural Bank of
China-Fullgoal
State-owned Enterprise
                            Others           0.09%     2,750,000                  2,750,000
Reform Index
Classification Securities
Investment Fund
                            Domestic
Ji Qinghui                                   0.08%     2,622,500                  2,622,500
                            natural person
                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
Strategy investors or general
legal person becomes top 10
                                     None
shareholders due to rights issued
(if any ) (See Notes 3)
                                     It is unknown to the Company whether there is any related connection or
Notes to relationship or ‘action
                                     ‘Action in Concert’ as described by Rules of Information Disclosing Regarding
in concert’ among the top 10
                                     Changing of Shareholding Status of Listed Companies existing among the
shareholders.
                                     above shareholders.
                                    Shareholding of top 10 unrestricted shareholders
                                         Un-restricted shares held                     Category of shares
       Name of the shareholder           at the end of the reporting
                                                                               Category of shares             Quantity
                                                   period
Benxi Steel & Iron (Group) Co.,
                                                     2,442,316,069 Common shares in RMB                     2,442,316,069
Ltd.
                                                                        Foreign shares in domestic
Zhou Jie                                                 8,179,000                                             8,179,000
                                                                        exchange
BBH A/C Vanguard Emerging                                               Foreign shares in domestic
                                                            8,157,311                                           8,157,311
Markets Stock Index Fund                                                exchange
China Merchants Securities Co.,
                                                         7,293,753 Common shares in RMB                        7,293,753
LTD.
                                                                        Foreign shares in domestic
Zhan Changcheng                                          4,660,515                                             4,660,515
                                                                        exchange
Vanguard Total International Stock                                      Foreign shares in domestic
                                                         4,606,141                                             4,606,141
Index Fund                                                              exchange
                                                                        Foreign shares in domestic
Citigroup Global Markets Limited                         4,235,196                                             4,235,196
                                                                        exchange
Haitong International Securities                                        Foreign shares in domestic
                                                         3,286,109                                             3,286,109
Company Limited-Account Client                                          exchange
Agricultural Bank of China-                             2,750,000 Common shares in RMB                        2,750,000
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
Fullgoal Stat-owned Enterprise
Reform Index Classification
Securities Investment Fund
                                                                   Foreign shares in domestic
Ji Qinghui                                             2,622,500                                              2,622,500
                                                                   exchange
                                       Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no
                                       relationship with any of the other shareholders among the top 10
Notes to relationship or ‘action in   shareholders, neither being regarded as action-in-concert parties by the
concert’ among the top 10             Information Disclosure Regulations for Change of Shareholding in PLC.
non-restricted shareholders, and       The Company is not aware of any relationship among the other
among the top 10 non-restricted        shareholders, neither being regarded as action-in-concert parties by the
shareholders and top 10                Information Disclosure Regulations for Change of Shareholding in PLC.
shareholders                           The Company is not aware of any relationship among the top 10
                                       shareholders, neither being regarded as action-in-concert parties by the
                                       Information Disclosure Regulations for Change of Shareholding in PLC.
Shareholders among the top 10
participating in securities margin     None
trading (if any) (see Note 4)
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreement
dealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealing
in reporting period.
2. Controlling Shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
  Name of the           Legal           Date of    Organizatio
                                                                              Principal business activities
  Controlling      representative / incorporatio     n Code
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
  shareholder     person in charge          n
                                                             Business scope: steel smelt, mine exploitation,
                                                             panel rolling, oxygen manufacturing, pipe
                                                             manufacturing, power generating, coal industry,
                                                             special steel material manufacturing, heating,
                                                             supply of the water, electricity, wind and gas,
                                                             metal processing, electro mechanics builds, device
                                                             manufacturing, architecture installation, railway,
                                                             highway transportation, import and export trade,
                                                             traveling industry, construction material,
Benxi Steel &                                                refractory material, measuring device instrument,
                                     July       9121050011
Iron (Group)      Han Ge                                     goods and materials supply and marketing,
                                     10,1996    9726263U
Co., Ltd.                                                    development of real estate, scientific research,
                                                             design , information service, property
                                                             management, telecommunication, processing of
                                                             waste iron, property leasing, exchange of steel
                                                             material, and recycling of waste oils (to the extent
                                                             of licensed to the subsidiary companies) , property
                                                             management; publishing of Bengang Daily;
                                                             designing and making of presswork and
                                                             advertisement, releasing, producing of TV
                                                             advertisements in the country and abroad.
Equity of other
domestic/foreig
n listed
company with      None
share
controlling and
share
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
participation by
controlling
shareholder in
reporting period
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
3. Actual Controller
Actual controller nature: Local state owned assets management
Actual controller type: Legal person
                                    Legal
 Name of the controlling                               Date of                                  Principal business
                               representative                            Organization Code
       shareholder                                   incorporation                                  activities
                             / person in charge
Bengang Group Co., Ltd. Chen Jizhuang             November 25, 2010                           Asset management
Equity of other
domestic/foreign listed
company with share
controlling and share        None
participation by
controlling shareholder in
reporting period
Change of actual controller during the reporting period
□ Applicable √ Not applicable
Block diagram of the ownership and control relations between the Company and the actual controller
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
                             Liaoning Provincial State-owned Assets
                            Supervision and Administration Commissi
                                                 on
                                                                        Liaoning
                                         80%                 Council for social security fund
                                                              20%
                                  Bengang Group Finance Co., Ltd.
                                                      100%
                              Benxi Steel & Iron (Group) Co., Ltd.
                                                      100%
                                   Bengang Steel Plates Co., Ltd.
Whether the actual controller is controlling the Company through trusteeship or other asset management service
□ Applicable √ Not applicable
4. Shareholders holding More than 10% of the Shares
□ Applicable √ Not applicable
5. Status of Share Reduction Limitation of Controlling Shareholders, Actual Controller, Restructuring
Party and Other Commitment Subjects
□ Applicable √ Not applicable
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                                  VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no Preferred Shares during the reporting period.
                                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
             VIII. Status of Directors, Supervisors, Senior Executives and
                                                              Employees
I. Change in Shares held by Directors, Supervisors and Senior Executives
                                                                                                        Shares
                                                                                             Shares                 Shares
                                                                                                       increased                 Other     Shares
                                                                                             held at               decreased
                             Office                     Starting date of    Expiry date of              during                  increase   held at
   Name         Position                  Sex     Age                                         the                  during the
                             status                       office term        office term                  the                      /        the
                                                                                             year-b                reporting
                                                                                                       reporting                decrease year-end
                                                                                              egin                  period
                                                                                                        period
               Director,
Wang Shu                     In office   Male     46    December 27, 2016    May 26, 2019
               Chairman
               Director,
Cao Aimin                    In office   Male     50    October 26, 2009     May 26, 2019
               Chairman
               Director,
Han Ge         General       In office   Male     48    February 19, 2014    May 26,2019
               Manager
Tang
               Director      In office   Male     54    December 27, 2016    May 26,2019
Chaosheng
               Independent
Jin Yongli                   In office   Male     59      May 17, 2013       May 26,2019
               Director
               Independent
Zhong Tianli                 In office   Female   61      May 20, 2014       May 26,2019
               Director
               Independent
Zhao Xinan                   In office   Male     57      May 21, 2015       May 26,2019
               Director
               Supervisor,
Dong Liju      Chairman of In office     Female   53    February 19, 2014    May 26,2019
               Supervisory
                                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
              Committee
Han Mei       Supervisor      In office   Female        48    February 19, 2014           May 26,2019
Li Lin        Supervisor      In office   Female        49    February 19, 2014           May 26,2019
Li Zhengchun Supervisor       In office    Male         44         April 1, 2015          May 26,2019
Zhang
              Supervisor      In office    Male         40        January 26, 2014        May 26,2019
Yanlong
              Deputy
Zhang Jichen General          In office    Male         60         June 26, 2008          May 26,2019
              Manager
              Deputy
Bao Mingwei General           In office    Male         54    December 28, 2012           May 26,2019
              Manager
              Deputy
Wang
              General         In office    Male         52        January 26, 2014        May 26,2019
Fengmin
              Manager
              Deputy
Hu
              General         In office    Male         57        January 26, 2014        May 26,2019
Guangyuan
              Manager
              Deputy
              General
Wang Shaoyu                   In office    Male         53        October 28, 2015        May 26,2019
              Manager,
              CFO
              Secretary of
Sun Yanbin                    In office    Male         35        August 3, 2015          May 26,2019
              the Board
Zhao          Director,
                             Resigned      Male         50         May 21, 2015      December 8, 2016
Zhongmin      Chairman
Zhao Wei      Director       Resigned      Male         50         May 21, 2015       August 23, 2016
Total         --             --           --       --        --                      --
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
II. Change in Directors, Supervisors and Senior Executives
     Name              Position         Type of change             Date                        Reason
Zhao Zhongmin Director, Chairman           Resigned          December 8, 2016            Change of position
Zhao Wei               Director            Resigned          August 23, 2016             Change of position
III. Posts holding
Work experience in the past five years of Directors, Supervisors and Senior Executives in current office
Profiles of the members of the Board::
Wang Shu, Male, 46, undergraduate, MBA,economist. Once General Manager Assistant of Benxi Steel & Iron
(Group) Co., Ltd.and Manager of Guo Mao; General Manager Assistant of Bengang Group Co., Ltd. and Manager
of Guo Mao; Deputy General Manager of Bengang Group Co., Ltd. He is now deputy CCP Secretary, General
Manager, Deputy Chairman of Bengang Group Co., Ltd. and Chairman of Bengang Steel Plates Co., Ltd.
Cao Aimin, Male, 50, undergraduate, senior accountant. Once Head of Capital Division of Finance Department;
Head of Planning and Finance Division; and Chief Accountant. He is now Director and Chief Accountant of
Bengang Group Co., Ltd., Vice Chairman of Bengang Steel Plates Co., Ltd.
Hen Ge, Male, 48, undergraduate, MBA, senior engineer. Once he was manager of hot-rolling factory of the
Company; vice manager of iron-making factory; assistant of general manager of Bengang Group. He is now
Chairman of Benxi Steel & Iron (Group) Co., Ltd. and General Manager of Bengang Steel Plates Co., Ltd.
Tang Chaosheng, Male, 48, postgraduate, senior accountant. Once he was Chief Accountant of Bengang Group
Dalian Fire Resistant Material Co., Head of No.1 Division of Bengang Group Audit Department; Chief
Accountant of Bengang Bei Ying; Head of Bengang Goup Co. Ltd. Finance Department. He is now Assistant
General Manager and Head of Finance Department of Bengang Group Co., Ltd. and Director of Bengang Steel
Plates Co., Ltd.
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
Jin Yongli, Male, 59, postgraduate, professor. Once he was the dean of engineering school of Shenyang
University. At present he is the dean of Business School of Shenyang University. He has been Independent
Director of the Company since May 2013.
Zhong Tianli, Female, 61. Once she was Professor of Northeast Universities(Doctorial Tutor) . Once she was vice
dean of Business School of Northeast University, dean of Fundamental Study School and Head of Accounting
Institute of Northeast University. At present she is professor of Accounting Dept. of Business School of Northeast
University. She has been Independent Director of the Company since May 2014.
Zhao Xinan, Male, 57, Professor of Northeast Universities(Doctorial Tutor) . Once he was vice dean of Business
School of Northeast University, member of the national Education Dept of Management science and Engineering
Teaching steering Committee; He is now Professor of Business School of Northeast University. He has been
independent director of the Company since May 2015.
Profiles of the Supervisory Committee:
Dong Liju, Female, 53, undergraduate, senior engineer. Once she was head of auditing department of the
Company; the secondary Chairman of Supervisory Committee of the Company. She now is Supervisor, Deputy
Secretary Commission for Discipline Inspection of Bengang Group; Chairman of Supervisory Committee of
Bengang Steel Plates Co., Ltd.
Hen Mei, Female, 48, undergraduate, senior accountant. Once she was the vice head of financial department of the
Company; vice head of auditing department and head of administration department of the supervisory committee
of Bengang Group; Provincial Government Liaison in Bengang Benxi Steel & Iron (Group) Co., Ltd. Director of
Audit Dept. She now is Head of Audit Department, Head of Supervisory Committee Management of Bengang
Group; Head of Audit Department and the third Chairman of Supervisory Committee of Benxi Steel & Iron
(Group) Co. Ltd.; Supervisor of Bengang Steel Plates Co. Ltd.
Li Lin, Female, 49, postgraduate, engineer. Once she was the administrator of HR department of Bengang Group;
vice chief engineer of Transportation Department of the Company; substitute chairman of the trade union of
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
Transportation Department of the Company. She now is Secretary of Commission for Discipline Inspection of
Transportation Department and Chairman of the Labour Union of Bengang Steel Plates Co. Ltd. She is Supervisor
of Bengang Steel Plates Co. Ltd.
Li Zhengchun, Male, 44, undergraduate, senior administration engineer. Once he was member of Huan Reource
Department of Bengang Group; Assistant Director, Director of Organization Managemnt Department. He now is
Deputy Director of CCP Work Department of Bengang Steel Plates Co. Ltd.; Deputy Chairman of Labour Union,
Deputy Secretary of Commission for Discipline Inspection and Supervisor of Bengang Steel Plates Co. Ltd.
Zhang Yanlong, Male, 40, undergraduate, senior engineer. He once was the workshop manager of steel-making
factory; vice chief of QC department of iron-making factory, Director of Steel-making plant, Manager of
Manufacturing Department of Bengang Steel Plates Co., Ltd.;He is now the assistant of director of production
division of steel-making plant, Supervisor of Bengang Steel Plates Co. Ltd.
Executives other than directors:
Zhang Jichen, Male, 60, postgraduate, senior engineer. Once the vice director of planning department of Benxi
Steel & Iron (Group) Co., Ltd.; Vice director of Development and Strategy Department and Director of Industrial
Policy Division; Director and Secretary of the Board of Bengang Steel Plates Co. Ltd. At present he is Vice
General Manager of Bengang Steel Plates Co., Ltd.
Bao Mingwei, Male, 54, undergraduate, senior engineer. Once he was Vice Director and Secretary of CCP of
hot-rolled steel plant of Bengang Steel Plates Co. Ltd., Director of the plant. He is now Vice General Manager of
Bengang Steel Plates Co. Ltd.
Wang Fengmin, Male, 52 , postgraduate, senior engineer. Once he was Vice Director of Iron-making plant,
Director and Secretary of CCP of Iron-making plant of Bengang Steel Plates Co. Ltd. He is now Vice General
Manager and Director of Manufacturing Department of Bengang Steel Plates CO. Ltd.
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2016
Hu Guangyuan , Male, 57, postgraduate, senior engineer. Once he was the vice general manager and general
manager of Bengang Puxiang Cool-rolling Plate Co., Ltd.; Vice General Manager and Dean of Product Research
and Development Institution of Bengang Steel Plates Co. Ltd. He is now Vice General Manager of Bengang Steel
Plates Co. Ltd. and Director of cold-rolled plant.
Wang Shaoyu, Male, 53, undergraduate, senior accountant. Once he was Vice Director of Financial Department of
Bengang Steel Plates Co. Ltd.; Deputy director, Director of Financial Department; Assistant of General Manager.
He is now Vice General Manager and Director of Financial Department of Bengang Steel Plates Co. Ltd.
Sun Yanbin, Male, 35, undergraduate, senior accountant. Once he was the officer and deputy director of budget
finance Dept of Bengang Group; manager of Finance Dept of hot rolling factory of Finance Dept of Bengang
Steel Plates Co., Ltd.; the assistant minister of Finance Dept of Bengang Steel Plates Co., Ltd.. At present he is the
Secretary of the Board of Bengang Steel Plates Co., Ltd..
Posts holding in Shareholders
√ Applicable □ Not applicable
                                                                                                                    Does he /she
                                                                                                           Expiry     receive
 Names of the
                       Names of the                   Titles engaged in the             Starting date of date of remuneration
   persons in
                       shareholders                        shareholders                   office term      office   or allowance
     office
                                                                                                           term       from the
                                                                                                                    shareholder
                                              Vice Secretary of CCP, General Manager,
Wang Shu         Bengang Group Co., Ltd.                                                December 1, 2013                Yes
                                              Chairman
Cao Aimin        Bengang Group Co., Ltd.      Director, Chief Accountant                November 1, 2010                Yes
                 Benxi Steel & Iron (Group)
Han Ge                                        Chairman                                  March 1, 2016                   No
                 Co., Ltd.
                                              General Manager Assistant, Director of
Tang Chaosheng   Bengang Group Co., Ltd.                                                February 1, 2013                Yes
                                              Financial Department
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2016
                                             Supervisor, Deputy Secretary of
Dong Liju          Bengang Group Co., Ltd.                                               September 1, 2014             Yes
                                             Commission for Discipline Inspection
                                             Director of Audit Department, Director of
Han Mei            Bengang Group Co., Ltd.                                               February 1, 2016              Yes
                                             Supervisory Committee Management
Office taking in
shareholder        None
companies
Posts holding in other companies
□ Applicable √ Not applicable
Punishment by the securities regulatory authorities in last three years
□ Applicable √ Not applicable
IV. Remuneration to Directors, Supervisors and Senior Executives
Decision-making procedures, basis of recognition and actual payment of the remuneration to Directors,
Supervisors and Senior Executives
Decision making procedures
1. The Remuneration and Assessment Committee will produce a plan or proposal, which will be implemented
upon approval of the Board or the Shareholders’ Meeting;
2. According to performance assessment criteria and procedures, the Remuneration and Assessment Committee
undertakes assessment on the Directors and Senior Executives;
3. Remuneration amounts and ways of rewards will be proposed according to the assessment and remuneration
policies for Directors, Supervisors and Senior Executives, and adopted by voting;
4. To be implemented upon approval of the Board.
Basis of recognition
Remuneration scheme for a particular position is recognized basing on the range of responsibilities, duties.
Remunerations are distributed based on the assessment results and remuneration policies.
Actual payment of the remuneration
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
Remuneration is paid on monthly basis according to the remuneration allocation policies.
Remuneration of Directors, Supervisors and Senior Executives during the reporting period
                                                                                       Unit: 10 thousand Yuan
                                                                                                      Whether
                                                                                     Total             receive
                                                                                  remuneration      remuneration
     Name               Position           Sex         Age       Office status
                                                                                 received from          in the
                                                                                 the shareholder     Company's
                                                                                                    related parties
Wang Shu           Director, Chairman      Male        46           In office                            Yes
Cao Aimin          Director, Chairman      Male        50           In office                            Yes
                    Director, General
Han Ge                                     Male        48           In office              23.52         No
                        Manager
Tang
                        Director           Male        54           In office                            Yes
Chaosheng
Jin Yongli        Independent Director     Male        59           In office                  5         No
Zhong Tianli      Independent Director    Female       61           In office                  5         No
Zhao Xinan        Independent Director     Male        57           In office                  5         No
                Supervisor, Chairman of
Dong Liju                                 Female       53           In office                            Yes
                 Supervisory Committee
Han Mei                Supervisor         Female       48           In office                            Yes
Li Lin                 Supervisor         Female       49           In office                12.5        No
Li Zhengchun           Supervisor          Male        44           In office              11.84         No
Zhang Yanlong          Supervisor          Male        40           In office              13.97         No
                     Deputy General
Zhang Jichen                               Male        60           In office              22.75         No
                        Manager
                     Deputy General
Bao Mingwei                                Male        54           In office              23.19         No
                        Manager
Wang Fengmin         Deputy General        Male        52           In office              22.51         No
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
                           Manager
                        Deputy General
Hu Guangyuan                                  Male         57         In office                 19.4     No
                           Manager
                        Deputy General
Wang Shaoyu                                   Male         53         In office                22.51     No
                         Manager, CFO
Sun Yanbin          Secretary of the Board    Male         35         In office                 9.92     No
Zhao
                       Director, Chairman     Male         50         Resigned                          Yes
Zhongmin
Zhao Wei                    Director          Male         50         Resigned                          Yes
Total             --                         --       --         --                        197.11 --
Incentive equity to Directors, Supervisors and Senior Executives during the reporting period
□ Applicable √ Not applicable
V. Staff Condition
1. Staff Population, Professional Structure and Education Level
Population of in-service staff in parent company                                                           20,099
Population of in-service staff in main subsidiaries
Total population of in-service staff                                                                       20,731
Total population of staff receiving remuneration in the
                                                                                                           20,731
current period
Population of retired staff whose expense was borne by
                                                                                                           21,600
parent company and major subsidiary companies
                                              Professional Composition
              Type of Professional Composition                                    Population
Production Staff                                                                                           16,852
Sales Staff
Technician                                                                                                    1,356
Financial Staff
Administrative Staff                                                                                          2,161
                                                                               Bengang Steel Plates Co., Ltd. Annual Report 2016
Total                                                                                                                         20,731
Educational Degree
                 Type of Educational Degree                                                   Population
Postgraduate or above
Undergraduate                                                                                                                  3,504
Junior college                                                                                                                 5,669
Secondary school ,high school, technical school                                                                                4,693
Below secondary school                                                                                                         6,499
Total                                                                                                                         20,731
2. Remuneration Policies
In 2016, based on the principle of the linkage between economic benefits and employee benefits , and based on the current
corporation profits making situation, the Company lead all subsidiaries to adjust the internal distribution system that prioritize front
line employees benefits to realize the linkage between employees income level, post contribution and Company’s profits making
situation. Meanwhile, the Company researched current situation of each subsidiaries employee salary distribution system including
special awards and salary distribution for those employees who cannot complete their job to further standardize the salary distribution
system. Besides, the Company optimized the ERP employee salary distribution system, re-determined the scope to ensure the
timeliness and accuracy of approval and distribution of salary by fully utilization of the ERP system.
3. Training Plan
38 training programs were provided to 13286 employees, ensuring that 85% training plan were enforced and 70% of the whole
employees were covered.
4. Outsourcing
□ Applicable √ Not applicable
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
                                         IX. Corporate Governance
I. Basic Situation of Corporate Governance
Since listed in the stock exchange, the Company has been following the laws, regulations and documents such as
the Company Law, Securities Law, Listed Company Governance Rules, Shareholders’ Meeting Criteria of Listed
Companies, Guide of Lifting the Quality of Listed Company, and Instructions for Articles of Association of Listed
Companies. The Company has been establishing and improving governance structure to protect the interests of the
Company and the investors. The Shareholders’ Meeting was working with clear responsibilities and decision
making procedures. Arrangements were made to enable convenient participating of the public investors. Online
voting system was introduced for material decision making processes. During the reporting period, according to
the relevant laws and regulations, and combining with the actual situation of the Company, ‘Management
Measures for Futures’ was formulated.
Whether there exist any difference in compliance with corporate governance, PRC Company Law and relevant
provisions of CSRC
□ Yes √ No
There exist no difference in compliance with corporate governance, PRC Company Law and relevant provisions
of CSRC.
II. Explanation on Structural Independence of the Company on Business, Personnel, Assets,
Organization and Finance from the Controlling Shareholder
The Company is separated from the controlling shareholder in aspects of business, personnel, assets, organization and finance, etc.
and has its own independent and complete business operation.
(1) In business operation: the Company has its own production and business planning, financial affairs check and calculate, personnel,
raw material supplies and products selling business system independently and completely, .
(2) In personnel: The Company and controlling shareholder are separate in such aspects as labor, personnel and salary management.
Such senior executives as company's chairman, general manager, vice general manager, secretary of Board of Directors, etc. get
salary from the Company, and have not held the important position other than a director in shareholding party.
                                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) In Asset: The Company is separated from the controlling shareholder's clearly in asset. The Company has its own independent
purchase, production, and marketing system.
(4) In organization: The internal operations of the Company are independent; organization structuring and working function are
totally independent.
(5) In finance: The company has independent financial & accounting department, the accounting and financial management system
were are complete and operated independently, and has bank account and pay taxes independently.
III. Competition Situations of the Industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
                                                  Investor                                                         Index of
      Sessions                 Type            participation        Meeting Date        Date of disclosure       information
                                                    ratio                                                         disclosure
                                                                                                               Announcement
  Annual General        Annual General                                                                         No.: 2016-030
                                                   0.07%            May 26, 2016          May 27, 2016
  Meeting of 2015            Meeting                                                                         http://www.cninfo
                                                                                                                   .com.cn
      The first
                                                                                                               Announcement
     provisional           Provisional
                                                                    December 27,          December 28,         No.: 2016-062
   Shareholders’         shareholders’           0.08%
                                                                         2016                  2016          http://www.cninfo
General Meeting in General Meeting
                                                                                                                   .com.cn
    2016
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose Voting Rights Restore
□ Applicable √ Not applicable
                                                                         Bengang Steel Plates Co., Ltd. Annual Report 2016
V. Duty fulfillment of Independent Directors in Reporting Period
1. Attendance of Independent Directors in Board Meeting and Shareholder’s Meeting
                                            Attendance of independent directors
                        Number of
                          Board                                                                             Failure to
                                                           Number of
                         meetings                                                                           personally
                                           Number of        meetings         Number of
   Independent          necessary to                                                          Number of    attend board
                                              spot         attended by   attendances by
     Directors          be attended                                                            absence      meetings
                                           attendances Communicatio representative
                         during the                                                                        successively
                                                               n
                         reporting                                                                        twice (Yes/No)
                          period
Jin Yongli          6                  4               2                 0                0               No
Zhong Tianli        6                  4               2                 0                0               No
Zhao Xinan          6                  4               2                 0                0               No
Number of general meetings
attended by independent directors 2
as non-voting delegates
Illustration to failure to personally attend Board Meetings Twice Successively
2. Objection of Independent Directors on Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters during the reporting period.
3. Other Notes to Duty Fulfillment of Independent Directors
Whether any independent director’s advice to the Company was accepted
√ Yes □ No
Illustration of acceptance of or failure to accept an independent director’s advice to the Company
Independent directors have not made recommendations during the reporting period.
                                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
VI. Duty Fulfillment of the Special Committees under the Board during the reporting period
The Remuneration and Assessment Committee is responsible to inspect the assessment process of the executives in year 2016.
The Development and Strategy Committee is responsible to examine the Board of Directors’ Work Report 2016 and the Proposal of
Investment Structural Planning 2016 in advance and provide suggestions on the Company’s long-term development basing on its
researches.
The Auditing Committee is responsible to inspect the operation of internal auditing system, to verify the financial information
disclosure, to examine the Financial Report 2015, and the Internal Control Introspective Evaluation Report, etc.
Nomination Committee provided opinions on the adjustment of executive positions.
VII. Duty Fulfillment of the Supervisory Committee
Whether the supervisory board made any objection against the supervision issue during the reporting period
□ Yes √ No
The Supervisory Board made no objection against the supervision issue during the reporting period.
VIII. Appraisal and Incentive System for Senior Executives
The Company’s performance assessment scheme for executives has become a regular mechanism. Annual
business plans adopted by the shareholders’ meeting and the Board were assigned and authorized to the executive
team of the Company and were used as basis of annual assessment. Operational targets were scheduled by the
Board to the executives to the executives and were reviewed from time to time in the year and annual rewards or
penalties were issued at end of year. The incentive scheme was working effectively to motivate the directors,
supervisors and executives.
IX. Internal Control
1. Significant Defects of the Internal Control Found in the Internal Control Self-Assessment Report in the
Reporting Period
√Yes □ No
              Significant DEFECTS OF THE INTERNAL CONTROL FOUND IN THE REPORT PERIOD
No significant defects of the internal control were found during the reporting period
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Self-Evaluation Report on Internal Control
Disclosing date of internal control auditing report
                                                          March 30, 2017
full text
Index of the internal control auditing report full text http//www.cninfo.com.cn
Proportion of total assets of subsidiaries belong to
the scope of self-evaluation report in the total assets                                                         99.00%
of the Company’s consolidated financial statements
Proportion of operation income of subsidiaries
belong to the scope of self-evaluation report in the
                                                                                                                70.00%
operation income of the Company’s consolidated
financial statements
Standards of Defects Evaluation
Category                    Financial Report                           Non-financial Report
                            1. Material deficiencies: The frauds       1. Material deficiencies: Major errors caused
                            made by the directors, or supervisors,     by decision-making procedure; the important
                            or senior management personnel that        business lacks institutional control or has a
                            leads to significant losses and adverse    systematic failure while lacking effective
                            effects to the company                     compensatory control; serious drain of senior
                            2. Significant deficiencies: Not in        and middle level management personnel and
                            accordance with generally accepted         senior technical staff; the results of internal
                            accounting standards selection and         control evaluation, especially the significant
Qualitative criteria
                            application of accounting policies; Not deficiencies have not been corrected; other
                            established anti-fraud procedures and      circumstances that have big negative impact
                            control measures; Not established the      on the company.
                            corresponding control mechanism or         2. Significant deficiencies: General errors
                            not implemented the corresponding          caused by decision-making procedure; there
                            compensatory control on the                are defects in the important business
                            accounting treatment of                    regulations and system serious drain of
                            non-conventional or special deals;         business personnel in key posts; the results of
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
                        there are one or more defects in the      internal control evaluation, especially the
                        process control of the final financial    important deficiencies have not been
                        report and which leads to cannot          corrected; other circumstances that have
                        reasonably guaranteeing the financial     comparably big negative impact on the
                        report compiled to achieve the goal of company.
                        being true and accurate.                  3. General deficiencies: low-efficiency on the
                        3. General deficiencies: the internal     decision-making process; existed defects in
                        control deficiencies except those         the ordinary business institution or system;
                        constitute the material deficiencies and serious drain of business personnel in general
                        the significant deficiencies.             posts; general deficiencies that have not been
                                                                  corrected.
                        1. Material deficiencies: 1)              1. Material deficiencies: 1) misstatement≥5%
                        misstatement≥5% of the total profits;2) of the total profits; 2) misstatement≥3% of
                        misstatement≥3% of the total assets;3) the total assets; 3) misstatement≥1% of the
                        misstatement≥1% of the total operating total operating income; 4) misstatement≥1%
                        income4) misstatement≥1% of the total of the total amount of the owner’s equity. 5)
                        amount of the owner’s equity. 5) 3% of 3% of the total profits ≤misstatement<5% of
                        the total profits ≤misstatement<5% of the total profits; 2. Significant deficiencies:
                        the total profits; 2. Significant         1) 0.5% of the total assets ≤misstatement<
                        deficiencies: 1) 0.5% of the total assets 3% of the total assets; 2) 0.5% of the total
Quantitative criteria
                        ≤misstatement<3% of the total assets; operating income ≤misstatement<1% of the
                        2) 0.5% of the total operating income     total operating income; 3) 0.5% of the total
                        ≤misstatement<1% of the total           amount of the owner’s equity ≤misstatement
                        operating income; 3) 0.5% of the total <1% of the total amount of the owner’s
                        amount of the owner’s equity             equity. 3. General deficiencies: 1)
                        ≤misstatement<1% of the total           misstatement<3% of the total profits; 2)
                        amount of the owner’s equity. 3.         misstatement<0.5% of the total assets; 3)
                        General deficiencies: 1) misstatement     misstatement<0.5% of the total operating
                        <3% of the total profits; 2)             income; 4) misstatement<0.5% of the total
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                             misstatement<0.5% of the total assets; amount of the owner’s equity.
                             3) misstatement<0.5% of the total
                             operating income; 4) misstatement<
                             0.5% of the total amount of the owner’s
                             equity.
Number of major defects
in financial reporting(a)
Number of major defects
in non-financial reporting
(a)
Number of important
defects in financial
reporting(a)
Number of important
defects in non-financial
reporting(a)
X. Internal Control Audit Report
√ Applicable □ Not applicable
Review opinions in the internal control audit report
We acknowledge that internal control of Bengang Bancai is effective in all material respects and is compliance
with ‘Fundamental Rules of Enterprise Internal Control’ up to December 31, 2016.
Internal Control Audit Report Status                    Disclosure
Disclosure date of audit report of internal control
                                                        March 30, 2017
(full-text)
Index of audit report of internal control (full-text)   http//www.cninfo.com.cn
Internal audit report’s opinion                        Standard unqualified opinion
Whether there is significant defect in non-financial
                                                        No
report
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
Whether the accountants’ firm issued a qualified auditor’s report of internal control
□ Yes √ No
Whether the internal control audit report issued by the accountants’ firm agree with the self-assessment report of
the Board of Directors
√ Yes □ No
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
                   X. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange or any
matured corporate bonds which the listed company failed to pay in full at the approval date of the annual report
Yes
I. Basic information of corporate bonds
                                                                          Bond balance
                                    Bond                                                                  Servicing
 Bond name Bond short name                  Issuance date Maturity date       in 10      Interest rate
                                    code                                                                     way
                                                                            thousand
                                                                                                          Interest is
                                                                                                             paid
  Corporate
                 15 Benxi Steel                February      February                                    annually, and
 Bond 2015                         112236                                   150,000        5.17%
                        01                      9,2015        9,2018                                      principal is
  (Phase I)
                                                                                                          paid when
                                                                                                             due.
Corporate bonds listed or
                                  Shenzhen Stock Exchange
trading places
Investors appropriate             The above bond transactions have been implemented by investors appropriate
management                        management
                                  The interests of Bengang Steel Plates Co., Ltd. Corporate Bonds 2015 (Phase I)
                                  of the period from February 5, 2016 to February 4, 2017 were paid on February
Interest payment status of the    6, 2017, as each bond would gain RMB 5.17 (tax inclusive). The date of record
Company Bond during the           of interest payment was February 3, 2017, thus any investor who bought and
reporting period                  held the bonds before or on the date of February 3, 2017 enjoyed the right to
                                  receive the interest payments. The investors who sold out the bonds on the date
                                  of February 3, 2017 should not enjoy the interests.
If the corporate bonds are
                                  Not applicable
attached to special clauses
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
such as option clause and
exchangeable clause to the
issuer or investors, please
specify the implementation
status of the corresponding
clauses. (If applicable)
II. Bond Trustee and the Credit Rating Agency
Bond trustee:
          ESSENC
                              12 F, Guo Tou Financial Building, 2 Fu
          E          Office                                                                  Contact 010-8332119
Name                          Cheng Men North Street, Xi Cheng          Contact Tian Zhu
          Securitie address                                                                  number 7
                              District, Beijing
          s
The credit rating agency which conducted tracking rating of the corporate bond during the reporting period:
                                                                          12/F, PICC Building, No.Jianguo
Name            United Ratings Co., Ltd.                  Office address Menwai Street, Chaoyang District,
                                                                          Beijing.
If during the reporting period, the
bond trustee, credit rating agency
employed by the company have
changed, reasons for the change,       Not applicable
performing procedures, relevant
influence on investors, etc. (If
applicable)
III. The Usage of Raised Funds from Corporate Bonds
The usage of raised funds from         After deducting issuance costs, all raised funds are used
Corporate bonds and procedures of      for debt restructuring
performance                            and repayment. The amount of repayment of bank loans was
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
                                       RMB 1.5 billion. As of December 31, 2016, all the raised funds
                                       have been used up.
Balance (ten thousand)
Operation of raised funds special
                                       Normal
account
Whether the usage of the raised
funds corresponded to the purposes
                                       Yes
of promise, use plans, or other
agreements
IV. Corporate Bond Rating
(1) On Jun 28, 2016, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and
confirmed the Company’s bond at AA+, and prospect evaluation was negative. Bengang Steel Plates Co. Ltd
conducted the disclosure about tracking rating report on http://www.cninfo.com/cn/ on June 30, 2016.
(2) Regular tracking rating report will be launched before June 31, 2017 as planned. The report will be disclosed
on http://www.cninfo.com.cn/. Investors are advised to pay attention to it.
(3) During the reporting period, United Rating Agency did not exercise irregular tracking rating about the
Company’s bonds.
(4) During the reporting period, the Company did not launch any other bonds or securities financing tools and
there was no difference of the assessment results between different rating agencies.
V. Corporate Bond Credit Increasing Mechanism, Debt Repayment Plans and Other Debt
Repayment Security Measures
1. Debt repayment plans
According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015,
debt repayment plans are as followings:
(1) The value date of the bond is February 5, 2015. In the duration of the bond, the interest will be paid once a
year, and the interest payment date is February 5 in three consecutive years, ranging from 2016 to 2018 (subject to
postponement in case of statutory public holiday and weekend, similarly hereinafter) .
(2) The maturity date is February 5, 2018. The principal and the interest thereof will be paid at the maturity date.
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
(3) Interest will be paid through registration agency and related agencies. The details will strictly follow related
regulations and will be disclosed on the designated public media by the issuer.
(4) According to national tax legislation and regulation, the relevant taxes emerged in investment on the bond
should be paid by investors.
2. Debt repayment security measures
According to ‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I)’ launched on February 3, 2015,
debt repayment security measures are as following:
In order to fully and effectively preserve bondholders’ benefit, the Company made a series plan towards repaying
the debt in time and in full amount, including set up a special project group, formulated ‘Meeting Rules for
bondholders’, formulated and strictly executed fund management plan, fully played the bond trustee’s roles and
strictly carried out the disclosure responsibility.
(1) Set up a special project group;
(2) Formulate ‘Meeting Rules for Bondholders’;
(3) Bengang Group Co., Ltd. acted as the company's bond guarantor;
(4) Formulate and strictly execute fund management plan;
(5) Protect bondholders’ benefits;
(6) Strictly carry out the disclosure responsibility;
(7) Issuer’s Board of Director’s commitment.
During the reporting period, the Company follows the debt repayment plan and security mechanism disclosed in
‘Prospectus of Public Issuance of Corporate Bond 2015 (Phase I) ’. The Company set up a special project group,
formulated ‘Meeting Rules for Bondholders’, applied ESSENCE Securities as trustee, and
Bengang Group Co., Ltd. as the company's bond guarantor, formulated and strictly executed fund management
plan that reasonably distribute fund to ensure the interest was paid in time. On January 28, 2016, the Company
disclosed ‘Interest Repayment Information’ and completed the first interest repayment on February 5, 2016.
During the reporting period, the Company had no significant changes that would influence the in time repayment
of bond and there is no differences situation with relevant commission.
During the reporting period, there was no change to Corporate Bond Credit Increasing Mechanism, Debt
Repayment Plans and Other Debt Repayment Security Measures. Bengang Group Co., Ltd. was the guarantor for
the Company’s bond. As of 31 December 2016, Bengang Group Co., Ltd.’s net assets is RMB 35.804 billion,
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
asset-liability ratio is 74.98%, ROE is 0.03%, liquidity ratio is 0.49, quick ratio is 0.28 (above financial data is not
audited) . Bengang Group Co., Ltd. is rated AAA by China Cheng Xin International Credit Rating Co. Ltd.
VI. Bondholders’ Meeting in the Reporting Period
During the reporting period, the Company did not hold bondholders’ meeting.
VII. Duty fulfillment of Bond Trustee in the Reporting Period
During the reporting period, the bond trustee performs its responsibilities in accordance with the regulations in
Corporate Bond Issuance and Transaction Management Method and commitment in Bond Trustee Agreement:
(1) Constantly pay attention to the credit status, execution of credit enhancement measurements and credit
repayment safeguard measures of the guarantor and company;
(2) Supervise the utilization of raised funds in the company in the duration of bond;
(3) Exercise a well-rounded investigation into and pay constant attention to the company’s debt repayment ability
and credit enhancement measures, and provide at least one trustee affair report for the market each year;
(4) Constantly supervise the company’s performance of information disclosure obligation in the duration of the
bond.
The trustee hasn’t been confronted with conflict of interest in performing its responsibilities.
The trustee has announced the trustee affair report 2015 on June 30, 2016.
VIII. Major Accounting Data and Financial Indicators for Last 2 Years
                                                                                              Unit: 10 thousand Yuan
                  Items                        2016                        2015                     Rate of change
EBITDA                                             361,703.32                  -115,704.04                    412.61%
Liquidity ratio                                        74.56%                      61.27%                      13.29%
Asset-liability ratio                                  75.51%                      72.02%                       3.49%
Quick ratio                                            47.04%                      31.72%                      15.32%
EBITDA total debt ratio                                 8.85%                       -0.05%                      8.90%
Interest coverage ratio                                   1.71                         -2.8                   161.21%
                                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
Cash interest coverage ratio                               14.47                  -1.57                1,021.84%
EBITDA interest coverage ratio                              3.51                  -1.08                  425.42%
Loan payment rate                                     100.00%                  100.00%                      0.00%
Rate of Interest payment                              100.00%                  100.00%                      0.00%
The main reasons that the accounting data and financial indicators change more than 30%
√ Applicable □ Not applicable
(1) EBITDA had increased by 412.61% compared to last year, mainly due to an increase in total profit.
(2) The interest coverage ratio had increased by 161.21% compared to last year, mainly due to an increase in
EBITDA.
(3) The cash interest coverage ratio had increased by 1,021.84% compared to last year, mainly due to an increase
in net cash flow generated by operating activities.
(4) The multiple of EBIT interest safeguard had increased by 425.42% compared to last year, mainly due to an
increase in EBITDA.
IX. Interest Payment for Other Bonds and Debt Financing Tool in the Reporting Period
During the reporting period, the Company did not launch any other bonds or securities financing tools or pay
interest for other bonds and securities financing tools.
X. Usage of Bank Credit Obtained and Repayment of Bank Loans in the Reporting Period
During the reporting period, the total bank line of credit of the Company was RMB 31.85 billion, and RMB 27.29
billion was used, leaving unused line of credit of RMB 4.56 billion. The total loan amount at the beginning was
RMB 20.58 billion, and had increased RMB 25.869 billion in this period. The loan repaid in this period was RMB
21.431 billion, leaving a balance of RMB 22.649 billion.
XI. Performance of Agreements or Commitments Related to Corporate Bond Prospectus in
the Reporting Period
The Company strictly observed the Bond Trustee Agreement and regulations as described in different bond terms
and conditions. The Company fulfilled its responsibilities according to Prospectus. There was no situation that the
Company harmed investors’ benefits.
                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
XII. Major Events Occurred in the Reporting Period
On Jun 28, 2016, United Rating Agency exercised rating towards the Corporate Bond 2015 (Phase I) and
confirmed the Company’s bond at AA+, and prospect evaluation was negative. Meanwhile, it lowered credit
rating of ’15 Bengang 01’ down to AA+.
XIII. Whether There Exist Any Guarantors of the Corporate Bond
√ Yes □ No
Whether the guarantor of the corporate bond is a legal person or other organizations
√ Yes □ No
Whether the Company disclosed the guarantor’s financial statements including statement of financial position,
statement of comprehensive income, statement of changes in equity, statement of cash flows, and notes to the
financial statements in four months since the end of each fiscal year.
√ Yes □ No
                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
                                        XI. Financial Report
Type of audit opinion                      Standard unqualified opinion
Date of issurance of the audit report      March 28,2017
Name of the accountants’ firm             BDO China Shu Lun Pan Certified Public Accountants LLP
Name of the CPAs                           Wu Xue, Zhang Huice
                                         AUDITORS’ REPORT
                                                                          PCPAR (2017) No. ZB10428
To All Shareholders of Bengang Steel Plates Co., Ltd.:
We have audited the accompanying financial statements of Bengang Steel Plates Co., Ltd.
(hereinafter referred to as “the Company”) which comprise the consolidated statement of financial
position and statement of financial position as at 31 December 2016, the consolidated statement of
comprehensive income and statement of comprehensive income, the consolidated statement of
changes in equity and statement of changes in equity, the consolidated statement of cash flows and
statement of cash flows for the year then ended, and notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of the Company is responsible for the preparation and fair presentation of these
financial statements. This responsibility includes: (1) preparing the financial statements in
accordance with the requirements of Accounting Standards for Business Enterprises to achieve a
fair presentation; (2) designing, implementing and maintaining internal control that is necessary to
ensure that the financial statements are free from material misstatements, whether due to frauds or
errors.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards.
Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material
misstatement.
                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Auditors’ opinion
In our opinion, the financial statements of Bengang Steel Plates Co., Ltd. present fairly, in all
material respects, the consolidated financial position and financial position of the Company as at
31 December 2016, and the consolidated results of operations and results of operations and the
consolidated cash flows and cash flows of the Company for the year then ended in accordance
with the requirements of Accounting standards for Business Enterprises.
BDO China Shu Lun Pan Certified                     Certified Public Accountants
Public Accountants LLP                          Registered in the People’s Republic
                                                              Of China
Shanghai, the People’s Republic of China
                                                            28 March 2017
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                           BENGANG STEEL PLATES CO., LTD.
                   CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                  As at 31 December 2016
                         (Expressed in Renminbi unless otherwise indicated)
                          Assets                           Notes         Ending balance      Beginning balance
  Current assets
  Cash at bank and on hand                                  5 (1)        12,931,912,017.84     5,140,480,509.97
  Settlement provisions
  Capital lent
  Financial assets at fair value through profit or loss
  Derivative financial assets
  Notes receivable                                          5 (2)         2,030,681,138.03     2,449,682,561.16
  Accounts receivable                                       5 (3)          623,865,427.25        488,584,624.72
  Prepayments                                               5 (4)          493,839,659.44        569,851,950.69
  Premium receivable
  Reinsurance accounts receivable
  Receivable deposit for reinsurance contract
  Interests receivable                                      5 (5)             4,208,818.85         3,524,615.12
  Dividends receivable
  Other receivables                                         5 (6)          117,909,972.49        151,668,877.26
  Redemptory financial assets for sale
  Inventories                                               5 (7)         9,782,173,936.74     8,601,734,442.42
  Assets held for sale
  Non-current assets due within one year
  Other current assets                                      5 (8)          513,398,815.83        431,360,541.21
  Total current assets                                                   26,497,989,786.47    17,836,888,122.55
  Non-current assets
  Loan and advances issued
  Available-for-sale financial assets                       5 (9)           14,856,585.63         20,271,278.63
  Held-to-maturity investment
  Long-term receivables
  Long-term equity investments
  Investment property
  Fixed assets                                             5 (10)        20,688,468,637.44    20,046,254,726.74
  Construction in progress                                 5 (11)         6,210,673,674.11     5,646,624,293.27
  Construction materials                                   5 (12)             7,783,370.29         4,152,880.79
  Disposal of fixed assets
  Productive biological assets
  Oil and gas assets
  Intangible assets                                        5 (13)          259,837,410.93        265,520,912.57
  Development expenditure
  Goodwill
  Long-term deferred expenses
  Deferred tax assets                                      5 (14)          476,101,254.04        641,931,130.78
  Other non-current assets
  Total non-current assets                                               27,657,720,932.44    26,624,755,222.78
 Total assets                                                           54,155,710,718.91     44,461,643,345.33
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                         Chief Financial Officer:                 Chief Accountant:
                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                                    BENGANG STEEL PLATES CO., LTD.
           CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
                                          As at 31 December 2016
                              (Expressed in Renminbi unless otherwise indicated)
                        Liabilities and equities                         Notes     Ending balance       Beginning balance
 Current Liabilities
 Short-term loans                                                       5 (15)      18,762,472,779.48     18,139,885,596.60
 Loan from central bank
 Absorbed deposit and interbank deposit
 Loan from other financial institutions
 Financial liabilities at fair value through profit or loss
 Derivative financial liabilities
 Notes payable                                                          5 (16)       6,372,173,897.13      2,110,511,950.79
 Accounts payable                                                       5 (17)       5,680,244,661.52      5,015,900,664.47
 Advance from customers                                                 5 (18)       3,679,477,129.80      1,815,443,452.05
 Financial assets sold for repurchase
 Handling charges and commission payable
 Employee benefits payable                                              5 (19)         24,063,493.70         36,455,143.76
 Current tax liabilities                                                5 (20)         45,771,585.46         45,194,528.35
 Interests payable                                                      5 (21)         75,115,265.66         70,958,686.96
 Dividends payable
 Other payables                                                         5 (22)        460,009,213.78        444,734,704.90
 Reinsurance accounts payable
 Provision for insurance contract
 Receipt from vicariously traded securities
 Receipt from vicariously underwriting securities
 Liabilities held for sale
 Non-current liabilities due within one year                            5 (23)        437,669,535.66       1,434,004,649.14
 Other current liabilities
 Total current liabilities                                                          35,536,997,562.19     29,113,089,377.02
 Non-current liabilities
 Long-term loans                                                        5 (24)       3,448,931,721.62      1,005,919,974.09
 Bonds payable                                                          5 (25)       1,494,825,782.32      1,490,352,572.75
 Including: Preferred stock
              Perpetual bond
 Long-term payables
 Long-term employee benefits payable
 Special accounts payable
 Estimated liabilities
 Deferred income                                                        5 (26)        410,399,000.00        413,188,000.00
 Deferred tax liabilities
 Other non-current liabilities
 Total non-current liabilities                                                       5,354,156,503.94      2,909,460,546.84
 Total liabilities                                                                  40,891,154,066.13     32,022,549,923.86
 Shareholders' equity:
 Share capital                                                          5 (27)       3,136,000,000.00      3,136,000,000.00
 Other equity instruments
 Including: Preferred stock
              Perpetual bond
 Capital reserves                                                       5 (28)       9,114,845,542.05      9,114,845,542.05
 Less: treasury shares
 Other comprehensive income
 Special reserves                                                       5 (29)            372,721.86            393,372.05
 Surplus reserves                                                       5 (30)        961,105,529.85        961,105,529.85
 General risk reserve
 Undistributed profits                                                  5 (31)        -496,969,242.61     -1,278,244,071.93
 Total equity attributable to equity holders of the parent company                  12,715,354,551.15     11,934,100,372.02
 Non-controlling interests                                                             549,202,101.63        504,993,049.45
 Total shareholder's equity                                                         13,264,556,652.78     12,439,093,421.47
 Total liabilities and shareholder’s equity                                        54,155,710,718.91     44,461,643,345.33
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                            Chief Financial Officer:                      Chief Accountant:
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                                 BENGANG STEEL PLATES CO., LTD.
                                STATEMENT OF FINANCIAL POSITION
                                          As at 31 December 2016
                             (Expressed in Renminbi unless otherwise indicated)
                           Assets                             Notes      Ending balance        Beginning balance
  Current assets
  Cash at bank and on hand                                               12,402,995,087.03        4,921,089,319.57
  Financial assets at fair value through profit or loss
  Derivative financial assets
  Notes receivable                                                        1,870,384,367.64        2,298,691,410.40
  Accounts receivable                                         13 (1)       455,070,302.00          449,193,422.02
  Prepayments                                                              487,869,713.72          549,553,039.03
  Interests receivable                                                        4,208,818.85            3,524,615.12
  Dividends receivable
  Other receivables                                           13 (2)       210,089,804.88          229,428,159.94
  Inventories                                                             8,308,291,029.07        7,452,873,949.34
  Assets held for sale
  Non-current assets due within one year
  Other current assets                                                     431,675,085.33          387,259,423.54
  Total current assets                                                   24,170,584,208.52       16,291,613,338.96
  Non-current assets
  Available-for-sale financial assets                                        12,888,980.00           18,303,673.00
  Held-to-maturity investment
  Long-term receivables
  Long-term equity investment                                 13 (3)      1,700,981,902.16        1,700,981,902.16
  Investment property
  Fixed assets                                                           18,125,714,092.15       17,179,043,906.45
  Construction in progress                                                6,196,524,880.06        5,646,077,292.11
  Construction materials                                                      4,134,139.52            4,134,138.91
  Disposal of fixed assets
  Productive biological assets
  Oil and gas assets
  Intangible assets                                                        155,388,452.53          158,694,589.82
  Development expenditure
  Goodwill
  Long-term deferred expenses
  Deferred tax assets                                                      378,696,605.02          562,072,018.42
  Other non-current assets
  Total non-current assets                                               26,574,329,051.44       25,269,307,520.87
  Total assets                                                           50,744,913,259.96       41,560,920,859.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                         Chief Financial Officer:                    Chief Accountant:
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
                                  BENGANG STEEL PLATES CO., LTD.
                            STATEMENT OF FINANCIAL POSITION (Continued)
                                          As at 31 December 2016
                                 (Expressed in Renminbi unless otherwise indicated)
           Liabilities and shareholders' equities             Notes       Ending balance      Beginning balance
 Current liabilities
 Short-term loans                                                        17,376,963,500.00    16,798,213,600.00
 Financial liabilities at fair value through profit or loss
 Derivative financial liabilities
 Notes payable                                                            5,768,523,196.16     1,651,808,822.92
 Accounts payable                                                         5,939,417,729.46     5,263,012,477.37
 Advance from customers                                                   3,671,944,099.35     1,957,484,054.73
 Employee benefits payable                                                   22,386,057.59       34,194,188.88
 Current tax liabilities                                                     28,902,954.65         9,986,022.56
 Interests payable                                                           70,109,821.13        70,113,698.63
 Dividends payable
 Other payables                                                             289,522,026.53      324,906,037.82
 Liabilities held for sale
 Non-current liabilities due within one year                                437,669,535.66     1,434,004,649.14
 Other current liabilities
 Total current liabilities                                               33,605,438,920.53    27,543,723,552.05
 Non-current liabilities
 Long term loans                                                          3,448,931,721.62     1,005,919,974.09
 Bonds payable                                                            1,494,825,782.32     1,490,352,572.75
 Including: Preferred stock
            Perpetual bond
 Long-term payables
 Long-term employee benefits payable
 Special accounts payable
 Estimated liabilities
 Deferred income                                                            410,399,000.00      413,188,000.00
 Deferred tax liabilities
 Other non-current liabilities
 Total non-current liabilities                                            5,354,156,503.94     2,909,460,546.84
 Total liabilities                                                       38,959,595,424.47    30,453,184,098.89
 Shareholder’s equity:
 Share capital                                                            3,136,000,000.00     3,136,000,000.00
 Other equity instruments
 Including: Preferred stock
            Perpetual bond
 Capital reserves                                                         8,694,693,859.93     8,694,693,859.93
 Less: Treasury shares
 Other comprehensive income
 Special reserves                                                               230,735.89          393,372.05
 Surplus reserves                                                           961,105,529.85      961,105,529.85
 Undistributed Profits                                                    -1,006,712,290.18   -1,684,456,000.89
 Total shareholder's equity                                              11,785,317,835.49    11,107,736,760.94
 Total liabilities and shareholder’s equity                              50,744,913,259.96 41,560,920,859.83
The notes to the financial statements attached form part of these financial statements.
Legal Representative:                        Chief Financial Officer:                   Chief Accountant:
                                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
                                BENGANG STEEL PLATES CO., LTD.
                      CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                 For the year ended 31 December 2016
                              (Expressed in Renminbi unless otherwise indicated)
                                             Items                                           Notes        2016
1. Total operating income                                                                             29,526,012,651.08    29,253,638,605.80
Including: Operating income                                                                  5 (32)   29,526,012,651.08    29,253,638,605.80
            Interest income
            Premium earned
            Income from handling charges and commission
2. Total operating cost                                                                               28,532,803,997.64    33,094,102,341.68
Including: Operating cost                                                                    5 (32)   25,677,665,232.12    29,811,895,016.85
            Interest cost
            Expenditure for handling charges and commission
            Surrender value
            Net expenditure for compensation
            Net provision for insurance contract appropriated
            Bonus payment for policy
            Reinsurance premium
            Tax and surcharges                                                               5 (33)     147,546,435.24         51,569,621.87
            Selling and distribution expenses                                                5 (34)     903,232,507.02        919,110,499.37
            General and administrative expenses                                              5 (35)     700,545,090.17        733,933,299.88
            Financial expenses                                                               5 (36)     967,678,772.69      1,063,317,455.47
            Asset impairment loss                                                            5 (37)     136,135,960.40        514,276,448.24
Add: Gains from the change in fair value (\"-\" for loss)
       Income on investment                                                                  5 (38)        2,019,053.44         7,226,589.08
       Including: Income from associates and joint ventures
                   Exchange gains (\"-\" for loss)
3.Operating profit (\"-\" for loss)                                                                        995,227,706.88    -3,833,237,146.80
Add: Non-operating income                                                                    5 (39)       58,071,429.33       176,054,356.57
       Including: Gain on disposal of non-current assets                                                  11,801,616.20        21,206,096.82
Less: Non-operating expenses                                                                 5 (40)       14,541,658.66        24,135,783.17
       Including: Loss on disposal of non-current assets                                                  13,656,534.23        24,124,620.55
4. Total profit before tax (\"-\" for total loss)                                                        1,038,757,477.55    -3,681,318,573.40
Less: Income tax expenses                                                                    5 (41)      213,278,070.90      -440,390,216.16
5. Net profit (\"-\" for net loss)                                                                         825,479,406.65    -3,240,928,357.24
   Attributable to: Owners of parent company                                                             781,274,829.32    -3,293,624,545.17
   Non-controlling shareholders                                                                           44,204,577.33        52,696,187.93
6. Other comprehensive income after tax
   Other comprehensive income attributable to owners of parent company after tax
   1) Other comprehensive income unable to be reclassified into profit and loss
      afterwards
      (1) Change of net liabilities or net assets through remeasuring defined benefit plan
      (2) Share of other comprehensive income of investee not to be classified into
      profit or loss afterwards under equity method
   2) Other comprehensive income to be reclassified into profit and loss afterwards
      (1) Share of other comprehensive income of investee to be classified into profit or
      loss afterwards under equity method
      (2) Gains and losses on remeasuring available-for-sale financial assets
      (3) Gains and losses resulting from reclassification of held-to maturity investment
      to financial assets held-for sale
      (4) Effective portion of gains or losses from cash flow hedging
      (5) Gains and losses resulting from translating the foreign currency
      financial statements
      (6) Other
   Other comprehensive income attributable to non-controlling shareholders after tax
7. Total comprehensive income                                                                           825,479,406.65     -3,240,928,357.24
   Total comprehensive income attributable to owners of parent company                                  781,274,829.32     -3,293,624,545.17
   Total comprehensive income attributable to non-controlling shareholders                               44,204,577.33         52,696,187.93
8. Earnings per share:
   1) Basic earnings per share (RMB)                                                                             0.249                  -1.050
   2) Diluted earnings per share (RMB)                                                                           0.249                  -1.050
      The notes to the financial statements form part of these financial statements
      Legal Representative:                       Chief Financial Officer:                             Chief Accountant:
                                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
                                   BENGANG STEEL PLATES CO., LTD.
                               STATEMENT OF COMPREHENSIVE INCOME
                                     For the year ended 31 December 2016
                               (Expressed in Renminbi unless otherwise indicated)
                             Items                                  Notes          2016
1. Operating income                                                 13 (4)    29,364,395,482.30     28,523,101,618.99
Less: Operating cost                                                13 (4)    26,083,359,198.14     29,769,289,938.38
      Tax and surcharges                                                         116,460,450.85         25,627,202.18
      Selling and distribution expenses                                          670,821,345.25        730,692,018.11
      General and administrative expenses                                        648,932,544.53        675,861,313.03
      Financial expenses                                                         904,933,228.73        986,248,046.33
      Asset impairment loss                                                      136,136,868.48        514,222,418.93
Add: Gains from the change in fair value (\"-\" for loss)
      Income on investment                                          13 (5)        15,429,070.92          7,226,589.08
      Including: Income from associates and joint ventures
2. Operating profit (\"-\" for loss)                                               819,180,917.24      -4,171,612,728.89
Add: Non-operating income                                                         55,594,741.10        172,498,611.64
      Including: Gain on disposal of non-current assets                           11,660,376.86         19,820,758.05
Less: Non-operating expenses                                                      13,656,534.23         24,039,513.56
      Including: Loss on disposal of non-current assets                           13,656,534.23         24,039,513.56
3. Total profit before tax (\"-\" for total loss)                                  861,119,124.11      -4,023,153,630.81
Less: Income tax expenses                                                        183,375,413.40       -480,107,035.91
4. Net profit (\"-\" for net loss)                                                 677,743,710.71      -3,543,046,594.90
5. Other comprehensive income after tax
  1) Other comprehensive income unable to be reclassified
     into profit and loss afterwards
     (1) Change of net liabilities or net assets through
     remeasuring defined benefit plan
     (2) Share of other comprehensive income of investee
     not to be classified into profit or loss afterwards under
     equity method
  2) Other comprehensive income to be reclassified into
     profit and loss afterwards
     (1) Share of other comprehensive income of investee
     to be classified into profit or loss afterwards under
     equity method
     (2) Gains and losses on remeasuring available-for-sale
     financial assets
     (3) Gains and losses resulting from reclassification of
     held-to-maturity investment to financial assets held
     for sale
     (4) Effective portion of gains or losses from cash flow
     hedging
     (5)Gains and losses resulting from translating the forei
     gn currency financial statements
     (6) Other
6. Total comprehensive income                                                    677,743,710.71      -3,543,046,594.90
7. Earnings per share:
    1) Basic earnings per share (RMB)
    2) Diluted earnings per share (RMB)
 The notes to the financial statements form part of these financial statements
 Legal Representative:                            Chief Financial Officer:                Chief Accountant:
                                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
                                       BENGANG STEEL PLATES CO., LTD.
                                  CONSOLIDATED STATEMENT OF CASH FLOWS
                                         For the year ended 31 December 2016
                                   (Expressed in Renminbi unless otherwise indicated)
                                     Items                                     Notes         2016
1.Cash flow from operating activities
Cash received from sale of goods or rendering of services                               28,241,551,432.83   23,411,443,776.75
Net increase of customers' deposit and interbank deposit
Net increase of loan from central bank
Net increase of loans from other financial institutions
Cash received for premium of original insurance contract
Net cash received for reinsurance business
Net increase of deposit and investment of the insured
Net increase of Financial assets at fair value through profit or loss
Cash from receiving interest, handling charge and commission
Net increase of loans from other financial institutions
Net increase of fund for buy-back business
Tax rebate received                                                                        197,081,126.50      797,597,007.61
Other cash received relating to operating activities                           5 (42)      433,064,403.26      362,548,861.72
Subtotal of cash inflows from operating activities                                      28,871,696,962.59   24,571,589,646.08
Cash paid for goods and services                                                        16,785,161,764.39   24,253,340,775.32
Net increase of customer's loan and advances
Net increase of deposit in central bank and interbank deposit
Cash for payment of compensation for original insurance contract
Cash for payment of interest, handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf of employees                                                  1,732,720,138.71    1,927,960,219.83
Cash paid for all types of taxes                                                           177,242,826.85      343,995,637.61
Other cash paid relating to operating activities                               5 (42)      619,218,326.12      351,298,981.42
Subtotal of cash outflows from operating activities                                     19,314,343,056.07   26,876,595,614.18
Net cash flows from operating activities                                                 9,557,353,906.52   -2,305,005,968.10
2. Cash flows from investing activities
Cash received from return on investments                                                  453,000,000.00     1,747,000,000.00
Cash received from distribution of dividends or profit                                      2,019,053.44         7,226,589.08
Net cash received from disposal of fixed assets, intangible assets and other
                                                                                           12,288,367.65       21,753,471.24
long-term assets
Net cash received from disposal of subsidiary and other operating units
Other cash paid relating to investing activities
Subtotal of cash inflows from investing activities                                        467,307,421.09     1,775,980,060.32
Cash paid for acquisition of fixed assets, intangible assets and other
                                                                                         2,348,653,699.08    3,472,745,508.10
long-term assets
Cash paid for acquisition of investments                                                  706,000,000.00     1,747,000,000.00
Net increase of mortgage loan
Net cash received from subsidiary and other operating unit
Other cash paid relating to investing activities
Subtotal of cash outflows from investing activities                                      3,054,653,699.08    5,219,745,508.10
Net cash flows from investing activities                                                -2,587,346,277.99   -3,443,765,447.78
3. Cash flows from financing activities
Proceeds from investment
Including: Proceeds from investment of non-controlling shareholders of
subsidiary
Proceeds from borrowings                                                                22,692,917,296.84   24,859,581,641.78
Cash received from bond issuance                                                                             1,486,500,000.00
Other proceeds relating to financing activities                                5 (42)      223,457,494.90      800,000,000.00
Subtotal of cash inflows from financing activities                                      22,916,374,791.74   27,146,081,641.78
Cash repayments of borrowings                                                           21,347,292,445.53   24,800,789,257.57
Cash payments for distribution of dividends, profit or interest expenses                   939,292,589.51      980,727,660.92
Including: Cash paid to non-controlling shareholders as dividend and profit
by subsidiaries
Other cash payments relating to financing activities                           5 (42)      183,227,486.83      399,397,047.75
Subtotal of cash outflows from financing activities                                     22,469,812,521.87   26,180,913,966.24
Net cash flows from financing activities                                                   446,562,269.87      965,167,675.54
4. Effect of foreign exchange rate changes on cash and cash equivalents                    244,221,817.29       69,352,483.25
5. Net increase in cash and cash equivalents                                             7,660,791,715.69   -4,714,251,257.09
Add: Cash and cash equivalents at the beginning of the period                            4,612,782,772.98    9,327,034,030.07
6. Cash and cash equivalents at the ending of the period                                12,273,574,488.67    4,612,782,772.98
The notes to the financial statements attached form part of these financial statements
Legal Representative:                        Chief Financial Officer:                           Chief Accountant:
                                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
                               BENGANG STEEL PLATES CO., LTD.
                                  STATEMENT OF CASH FLOWS
                                 For the year ended 31 December 2016
                           (Expressed in Renminbi unless otherwise indicated)
                                    Items                                       2016
 1. Cash flow from operating activities
 Cash received from sale of goods or rendering of services                29,446,843,561.82   23,427,109,010.65
 Tax rebate received                                                        172,506,656.56       711,467,848.16
 Other cash received relating to operating activities                       125,792,149.08       210,299,707.85
 Subtotal of cash inflows from operating activities                       29,745,142,367.46   24,348,876,566.66
 Cash paid for goods and services                                         18,729,162,875.25   25,774,210,167.57
 Cash paid to and on behalf of employees                                   1,638,137,170.73    1,817,930,712.94
 Cash paid for all types of taxes                                            19,559,029.42       154,610,526.07
 Other cash paid relating to operating activities                           131,675,505.02        60,248,461.32
 Subtotal of cash outflows from operating activities                      20,518,534,580.42   27,806,999,867.90
 Net cash flows from operating activities                                  9,226,607,787.04   -3,458,123,301.24
 2. Cash flows from investing activities
 Cash received from return on investments                                   453,000,000.00     1,747,000,000.00
 Cash received from distribution of dividends or profit                        1,715,742.47        7,226,589.08
 Net cash received from disposal of fixed assets, intangible assets
 and other long-term assets                                                  12,136,292.65        21,713,471.24
 Net cash received from disposal of subsidiary and other operating
 units
 Other cash received relating to investing activities
 Subtotal of cash inflows from investing activities                         466,852,035.12     1,775,940,060.32
 Cash paid for acquisition of fixed assets, intangible assets and other
 long-term assets                                                          2,330,445,853.26    3,446,420,670.56
 Cash paid for acquisition of investments                                   706,000,000.00     1,757,000,000.00
 Net cash paid for acquisition of subsidiary & other operating unit
 Other cash paid relating to investing activities
 Subtotal of cash outflows paid for investing activities                   3,036,445,853.26    5,203,420,670.56
 Net cash flows from investing activities                                 -2,569,593,818.14   -3,427,480,610.24
 3. Cash flows from financing activities
 Proceeds from investment
 Cash received from borrowings                                            21,124,677,912.68   23,419,954,378.62
 Other proceeds relating to financing activities                                               1,486,500,000.00
 Other cash received relating to financing activities                       210,000,000.00       800,000,000.00
 Subtotal of cash inflows from financing activities                       21,334,677,912.68   25,706,454,378.62
 Cash repayments of borrowings                                            19,837,110,764.77   22,260,440,315.08
 Cash payments for distribution of dividends, profit or interest            879,486,861.85       901,348,956.26
 Other cash payments relating to financing activities                       132,384,026.03       329,226,064.22
 Subtotal of cash outflows from financing activities                      20,848,981,652.65   23,491,015,335.56
 Net cash flows from financing activities                                   485,696,260.03     2,215,439,043.06
 4. Effect of foreign exchange rate changes on cash and cash
 equivalents                                                                244,195,433.65        69,329,673.35
 5. Net increase in cash and cash equivalents                              7,386,905,662.58   -4,600,835,195.07
 Add: Cash and cash equivalents at the beginning of the period             4,489,630,951.08    9,090,466,146.15
 6. Ending balance of cash and cash equivalents                           11,876,536,613.66    4,489,630,951.08
The notes to the financial statements form part of these financial statements
Legal Representative:                        Chief Financial Officer:                  Chief Accountant:
                                                                                                                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                                        BENGANG STEEL PLATES CO., LTD.
                                                                                CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                          For the year ended 31 December 2016
                                                                                    (Expressed in Renminbi unless otherwise indicated)
                                                                                                         Owner's equity attributable to parent company
                        Items                                               Other equity instruments                      Less:      Other                                      General                       Non-controlling   Total of owner's
                                                                                                                                                     Special      Surplus                  Undistributed         interest            equity
                                                          Share capital   Preference Perpetual         Capital reserves Treasury comprehensive                                    risk
                                                                                                Others                                              reserves      reserves                    profit
                                                                            shares     bond                              shares     income                                      reserve
1. Ending balance of last year                           3,136,000,000.00                              9,114,845,542.05                             393,372.05 961,105,529.85             -1,278,244,071.93    504,993,049.45 12,439,093,421.47
Add: Change of accounting policies
    Correction of errors for last period
    Business consolidation under common control
    Others
2. Beginning balance of current year                     3,136,000,000.00                             9,114,845,542.05                              393,372.05 961,105,529.85             -1,278,244,071.93    504,993,049.45 12,439,093,421.47
3. Changes in current year (“-” for decrease )                                                                                                    -20,650.19                               781,274,829.32     44,209,052.18    825,463,231.31
   1) Total comprehensive income                                                                                                                                                             781,274,829.32     44,204,577.33    825,479,406.65
   2) Capital increase and decrease by shareholders
       (1) Common share invested by shareholders
       (2) Capital input by the holder of other equity
       instruments
       (3) Share-based payment attributable to owners'
       equity
       (4) Others
   3) Profit distribution
       (1) Appropriation to surplus reserves
       (2) Appropriation to general risk reserve
       (3) Profit distribution to shareholders
       (4) Others
   4) Transfers within shareholders' equity
       (1) Capital reserves transferred into paid-in
       capital (or stock)
       (2) Surplus reserves transferred into paid-in
       capital (or stock)
       (3) Surplus reserves to recover loss
       (4) Others
   5) Special reserves                                                                                                                               -20,650.19                                                      4,474.85           -16,175.34
      (1) Provision of special reserves                                                                                                           39,766,855.73                                                      4,474.85        39,771,330.58
      (2) Use of special reserves                                                                                                                 39,787,505.92                                                                      39,787,505.92
   6) Others
4. Ending balance of current year                        3,136,000,000.00                             9,114,845,542.05                              372,721.86 961,105,529.85              -496,969,242.61     549,202,101.63 13,264,556,652.78
               The notes to the financial statements attached form part of these financial statements
               Legal Representative:                                                                        Chief Financial Officer:                                                            Chief Accountant:
                                                                                                                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                                                BENGANG STEEL PLATES CO., LTD.
                                                                            CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
                                                                                         For the year ended 31 December 2016
                                                                                      (Expressed in Renminbi unless otherwise indicated)
                                                                                                              Owner's equity attributable to parent company
                         Items                                                                                                                                                                                                             Total
                                                                               Other equity instruments                        Less:         Other                                    General                       Non-controlling
                                                                                                                                                            Special       Surplus                Undistributed                         shareholder's
                                                          Share capital     Preference Perpetual            Capital reserves Treasury comprehensive                                     risk                           interest
                                                                                                   Others                                                  reserves       reserves                  profit                                equity
                                                                              shares      bond                                shares        income                                    reserve
1. Ending balance of last year                           3,136,000,000.00                                   9,114,845,542.05                                430,777.94 961,105,529.85           2,172,180,473.24     452,296,861.52 15,836,859,184.60
Add: Change of accounting policies
    Correction of errors for last period
    Business consolidation under common control
    Others
2. Beginning balance of current year                     3,136,000,000.00                                   9,114,845,542.05                             430,777.94 961,105,529.85               2,172,180,473.24    452,296,861.52 15,836,859,184.60
3. Changes in current year (“-” for decrease )                                                                                                         -37,405.89                             -3,450,424,545.17     52,696,187.93 -3,397,765,763.13
   1) Total comprehensive income                                                                                                                                                                -3,293,624,545.17     52,696,187.93 -3,240,928,357.24
   2) Capital increase and decrease by shareholders
       (1) Common share invested by shareholders
       (2) Capital input by the holder of other equity
       instruments
       (3) Share-based payment attributable to
       shareholders' equity
       (4) Others
   3) Profit distribution                                                                                                                                                                        -156,800,000.00                       -156,800,000.00
       (1) Appropriation to surplus reserves
       (2) Appropriation to general risk reserves
       (3) Profit distribution to shareholders                                                                                                                                                   -156,800,000.00                       -156,800,000.00
       (4) Others
   4) Transfers within shareholders' equity
       (1) Capital reserves transferred into paid-in
       capital (or stock)
       (2) Surplus reserves transferred into paid-in
       capital (or stock)
       (3) Surplus reserves to recover loss
       (4) Others
   5) Special reserves                                                                                                                                    -37,405.89                                                                          -37,405.89
      (1) Provision of special reserves                                                                                                                34,967,129.18                                                                       34,967,129.18
      (2) Use of special reserves                                                                                                                      35,004,535.07                                                                       35,004,535.07
   6) Others
4. Ending balance of current year                        3,136,000,000.00                                   9,114,845,542.05                             393,372.05 961,105,529.85              -1,278,244,071.93    504,993,049.45 12,439,093,421.47
                The notes to the financial statements attached form part of these financial statements
                Legal Representative:                                                                           Chief Financial Officer:                                                              Chief Accountant:
                                                                                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                               BENGANG STEEL PLATES CO., LTD.
                                                                              STATEMENT OF CHANGES IN EQUITY
                                                                                 For the year ended 31 December 2016
                                                                           (Expressed in Renminbi unless otherwise indicated)
                       Items                                             Other equity instruments                      Less:      Other                                                            Total
                                                                                                                                               Special         Surplus       Undistributed
                                                        Share capital Preference Perpetual          Capital reserves Treasury comprehensive                                                    shareholder’s
                                                                                             Others                                            reserves        reserves         profits
                                                                        shares      bond                              shares     income                                                           equity
1. Ending balance of last year                        3,136,000,000.00                              8,694,693,859.93                            393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
Add: Change of accounting policies
      Correction of errors for last period
      Others
2. Beginning balance of current year                  3,136,000,000.00                             8,694,693,859.93                              393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
3. Changes in current year (“-” for decrease )                                                                                                -162,636.16                   677,743,710.71    677,581,074.55
   1) Total comprehensive income                                                                                                                                              677,743,710.71    677,743,710.71
   2) Capital increase and decrease by shareholders
    (1) Common share invested by shareholders
    (2) Capital input by the holder of other equity
    instruments
    (3) Share-based payment attributable to owners'
    equity
    (4) Others
   3) Profit distribution
    (1) Appropriation to surplus reserves
    (2) Profit distribution to shareholders
    (3) Others
   4) Transfers within shareholders' equity
    (1) Capital reserves transferred into paid-in
    capital (or stock)
    (2) Surplus reserves transferred into paid-in
    capital (or stock)
    (3) Surplus reserves to recover loss
    (4) Others
   5) Special reserves                                                                                                                          -162,636.16                                        -162,636.16
      (1) Provision of special reserves                                                                                                       34,079,630.37                                      34,079,630.37
      (2) Use of special reserves                                                                                                             34,242,266.53                                      34,242,266.53
   6) Others
4. Ending balance of current year                     3,136,000,000.00                             8,694,693,859.93                             230,735.89 961,105,529.85 -1,006,712,290.18 11,785,317,835.49
      The notes to the financial statements attached form part of these financial statements
      Legal Representative:                                                                  Chief Financial Officer:                                                     Chie f Accountant:
                                                                                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                               BENGANG STEEL PLATES CO., LTD.
                                                                         STATEMENT OF CHANGES IN EQUITY (Continued)
                                                                                 For the year ended 31 December 2016
                                                                           (Expressed in Renminbi unless otherwise indicated)
                       Items                                              Other equity instruments                      Less:      Other                                                            Total
                                                                                                                                                Special        Surplus       Undistributed
                                                       Share capital   Preference Perpetual          Capital reserves Treasury comprehensive                                                    shareholder’s
                                                                                              Others                                            reserves       reserves         profits
                                                                         shares      bond                              shares     income                                                           equity
1. Ending balance of last year                        3,136,000,000.00                               8,694,693,859.93                            430,777.94 961,105,529.85   2,015,390,594.01 14,807,620,761.73
Add: Change of accounting policies
      Correction of errors for last period
      Others
2. Beginning balance of current year                  3,136,000,000.00                               8,694,693,859.93                            430,777.94 961,105,529.85 2,015,390,594.01 14,807,620,761.73
3. Changes in current year (“-” for decrease )                                                                                                 -37,405.89                -3,699,846,594.90 -3,699,884,000.79
   1) Total comprehensive income                                                                                                                                           -3,543,046,594.90 -3,543,046,594.90
   2) Capital increase and decrease by shareholders
    (1) Common share invested by shareholders
    (2) Capital input by the holder of other equity
    instruments
    (3) Share-based payment attributable to
    shareholders' equity
    (4) Others
   3) Profit distribution                                                                                                                                                    -156,800,000.00    -156,800,000.00
    (1) Appropriation of surplus reserves
    (2) Profit distribution to shareholders                                                                                                                                  -156,800,000.00    -156,800,000.00
    (3) Others
   4) Transfers within shareholders' equity
    (1) Capital reserves transferred into paid-in
    capital (or stock)
    (2) Surplus reserves transferred into paid-in
    capital (or stock)
    (3) Surplus reserves to recover loss
    (4) Others
   5) Special reserves                                                                                                                            -37,405.89                                         -37,405.89
      (1) Provision of special reserves                                                                                                        34,967,129.18                                      34,967,129.18
      (2) Use of special reserves                                                                                                              35,004,535.07                                      35,004,535.07
   6) Others
4. Ending balance of current year                     3,136,000,000.00                               8,694,693,859.93                            393,372.05 961,105,529.85 -1,684,456,000.89 11,107,736,760.94
    The notes to the financial statements attached form part of these financial statements
    Legal Representative:                                                                  Chief Financial Officer:                                                   Chief Accountant:
                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
                Bengang Steel Plates Co., Ltd.
                          Notes to the financial statements
                            For the year ended December 2016
                  (Expressed in Renminbi unless otherwise indicated)
1. Basic Information of the Company
(1) Company profile
    Bengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”), as approved in
    Liao-Zheng (1997) No. 57 by Liaoning People’s Government on 27 March 1997, was
    incorporated as a joint stock limited company through public share offer of domestic listed foreign
    currency denominated shares (B shares) in the People’s Republic of China (the “PRC”) on 27
    June 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Bengang Group”), through reorganization
    of operations, assets and liabilities of its plants, namely, Steel Smelting Plant, Primary Rolling
    Plant and Continuous Hot Rolling Plant.
    As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”),
    the Company issued 400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10
    June 1997. On 3 November 1997, the Company issued another 120,000,000 A-shares (Renminbi
    common Shares) at RMB5.40 each, and listed in Shenzhen Stock Exchange since 15 January 1998.
    The capital shares were totaled to 1,136,000,000 shares including 616,000,000 shares held by the
    promoter.
    On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share
    equity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd.
    about Share Equity Relocation issued by Liaoning Provincial Government State-owned Asset
    Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legal
    person shares paid the consideration to the current shareholders to obtain the current option for the
    40,800,000 shares of the total 616,000,000 shares it was holding. Shareholding positions have
    been registered with China Securities Depository & Clearing Corporation Ltd. Shenzhen Office.
    However, the total amount of capital shares of Bengang Steel Plates Co., Ltd. was not changed
    through the share equity relocation action.
    According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China
    Securities Regulatory Commission on 30 June 2006, the Company was approved to place 2 billion
    Renminbi common shares particularly to Bengang Group and the proceeds would be used to
    purchase the related assets of the Group. On the same day, Bengang Group received circular
    Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and
    were exempted for the liability of undertaking the purchase offer. The liability was caused by
                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
    subscribing of the 2 billion new shares and the total shareholding was thus increased to 2.5752
    billion shares (accounting for 82.12% of the total capital shares of the Company). On 28 August
    2006, as approved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office,
    the registration and conditional placing procedures of the 2 billion new shares were completed.
    On 28 September 2006, the privately placed shares were approved by Shenzhen Stock Exchange
    to be placed in the stock market. The new shares were placed in the market with face value of
    RMB1.00 per share and the placing price was RMB4.6733 per share. The newly placed shares
    were restricted to be sold in 36 months when they were registered to the account of Bengang
    Group.
    Up to 31 December 2016, the capital shares of Bengang Steel Plates Co., Ltd were amounted to
    3,136,000,000 shares. The unified social credit code was 91210000242690243E. The registered
    address is 16th Renmin Road, Pingshan District, Benxi, Liaoning Province. The registered capital
    is RMB 3,136,000,000. The legal representative is Wang Shu.
    The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.
    and the actual controller is the State-owned Assets Supervision and Administration Commission
    of the State Council of Liaoning province.
    Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry,
    and is mainly involved in producing and trading of ferrous metal products.
    The financial statements have been approved for reporting by the board of directors of the
    Company on 28 March 2017.
(2) Consolidation scope
    As at 31 December 2016, subsidiaries included in the Company’s consolidated financial
    statements are as follows:
                                          Name of the subsidiaries
 Guangzhou Bengang Steel & Iron Trading Co., Ltd.
 Shanghai Bengang Metallurgy Science and Technology Co., Ltd.
 Bengang Steel Plates Liaoyang Pellet Co., Ltd.
 Dalian Benruitong Automobile Material Technology Co., Ltd.
 Changchun Bengang Steel & Iron Sales Co., Ltd.
 Harbin Bengang Economic and Trading Co., Ltd.
 Nanjing Bengang Materials Sales Co., Ltd.
 Wuxi Bengang Steel & Iron Sales Co., Ltd.
 Xiamen Bengang Steel & Iron Sales Co., Ltd.
 Yantai Bengang Steel & Iron Sales Co., Ltd.
 Tianjin Bengang Steel & Iron Trading Co., Ltd.
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
 Bengang Posco Cold-rolled Sheet Co., Ltd.
 Benxi Bengang Steel Sales Co., Ltd
 Shenyang Bengang Metallurgical Science and Technology Co., Ltd.
    Notes: there is no change of scope of consolidation this year.
2. Basis of preparation
(1) Basis of preparation
    The financial statements have been prepared on the going concern basis of actual trading and
    events in accordance with “Accounting Standards for Business Enterprises – Basic Standard” and
    relevant specific standards, application materials, interpretations (together hereinafter referred to
    as “Accounting Standards for Business Enterprises”) issued by the Ministry of Finance, and
    “Information Disclosure Rules for Companies of securities for public issuance No. 15 – General
    Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
    The Company is operating normally and in a good condition, and thus has the capability to
    continue to operate in the next twelve months from the end of reporting period.
3. Significant accounting policies and accounting estimates
    (The following disclosed content covers the detailed accounting policies and accounting
    estimates that are adopted by the Company according to the actual features of production or
    operation.)
(1) Statement of compliance with China Accounting Standards for Business Enterprises
    The financial statements present truly and completely the financial position, operation results
    and cash flows of the Company during the reporting period in accordance with China
    Accounting Standards for Business Enterprises.
(2) Accounting year
    The Accounting year is from 1 January to 31 December.
(3) Operating period
    The operating period is twelve months.
(4) Functional currency
    The Company’s functional currency is RMB.
(5) The accounting treatment for Business combination under/now under common control
    1. Business combination under common control
                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
    The assets and liabilities that the Company acquired in a business combination shall be
    measured on the basis of their carrying amount of aquiree’s assets, liabilities (as well as the
    goodwill arising from the business combination) in the consolidated financial statement of
    the ultimate controller on the combining date.
    As for the balance between the carrying amount of the net assets obtained by the Company
    and the carrying amount of the consideration paid by it (or the total par value of the shares
    issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, any excess
    shall be adjusted against retained earnings.
    2. Business combination involving entities now under common control
    The Company shall, on the acquisition date, measure the assets given and liabilities incurred
    or assumed by an enterprise for a business combination in light of their fair values, and shall
    record the balances between them and their carrying amounts into the profits and losses at the
    current period.
    The Company shall recognize the positive balance between the combination costs and the fair
    value of the identifiable net assets it obtains from the acquiree as goodwill. The Company
    shall treat the negative balance between the combination costs and the fair value of the
    identifiable net assets it obtains from the acquiree into the profits and losses of the current
    period.
    The intermediary costs and relevant management fee for the business combination now under
    same control paid by the acquirer, including the expenses for audit, assessment and legal
    services, shall be recorded into the profits and losses at the current period. The transaction
    expenses for the issuance of equity securities for the business combination shall be recorded
    into the initial recognition amount of equity securities.
(6) Consolidation of Financial Statements
    1. Scope of consolidation
    The scope of consolidation of consolidated financial statements is determined based on
    control. All the subsidies (including separable sections of the investees controlled by the
    Company) have been consolidated into the scope of consolidation for this period ended.
    2. Procedure of consolidation
    The consolidated financial statements shall be presented by the parent based on the financial
    statements of the parent and its subsidiaries, and using other related information. When
    preparing consolidated financial statements, the parent shall consider the entire group as an
                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
accounting entity, adopt uniform accounting policies and apply the requirements of
Accounting Standard for Business Enterprises related to recognition, measurement and
presentation. The consolidated financial statements shall reflect the overall financial position,
operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation
scope shall be in accordance with those of the Company. If not, it is necessary to make the
adjustment according to the Company’s accounting policies and accounting period when
preparing the consolidated financial statements.
For subsidiaries through acquisition that are now under common control, the financial
statements are adjusted according to fair value of identifiable net assets on the acquisition
date.
For subsidiaries through acquisition that are under common control, the assets, liabilities (as
well as the goodwill arising from purchasing the subsidiary by the ultimate controller) are
adjusted according to book value of net assets in the financial statements of the ultimate
controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable
to the non-controlling shareholders shall be presented separately in the shareholders’ equity
of the consolidated balance sheet and under the item of net profit of the consolidated
statement of comprehensive income and under the item of total comprehensive income.
Where losses assumed by the minority exceed the minority’s interests in the beginning equity
of a subsidiary, the excess shall be charged against the minority’s interests.
   (1) Increase of new subsidiary and business
   If the Company has a new subsidiary due to business combination under common control
   during a reporting period, it shall adjust the beginning balance in the consolidated
   statement of financial position when preparing consolidated statement of financial
   position. The revenue, expenses and profits of the subsidiaries from the acquisition date to
   the end of the reporting period are included in the Company’s consolidated statement of
   comprehensive income. The cash flow of the subsidiaries from the acquisition date to the
   end of the reporting period is included in the Company’s consolidated statement of cash
   flows. And meanwhile the Company shall adjust the relevant items of the comparative
   financial statements as if the reporting entity for the purpose of consolidation has been in
   existence since the date the ultimate controlling party first obtained control.
                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
When the Company becomes capable of exercising control over an investee under
common control due to additional investment or other reasons, Adjustment shall be made
as if the reporting entity after the combination has been in existence since the date the
ultimate controlling party first obtained control. The investment income recognized
between date of previously obtaining equity investment and the date the acquiree and
acquirer are under common control, which is later, and the combining date, other
comprehensive income and other changes of net assets arising from the equity investment
previously-held before obtaining the control the acquiree shall be adjusted against the
prior retained earnings of the comparative financial statements and the current profit or
loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in
the consolidated statement of financial position when preparing consolidated statement of
financial position. The revenue, expenses and profits of the subsidiaries from the
acquisition date to the end of the reporting period are included in the parent company’s
consolidated statement of comprehensive income. The cash flow of the subsidiaries from
the acquisition date to the end of the reporting period is included in the Company’s
consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under
common control due to additional investment or other reasons, the acquirer shall
remeasure its previously held equity interest in the acquiree to its fair value at the
acquisition date. The difference between the fair value and the carrying amount shall be
recognized as investment income for the period when the acquisition takes place. When
the previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized in relation to the acquiree’s equity changes
shall be transferred to profit or loss for the current period when the acquisition takes place.
Other comprehensive income arising from remeasurement of defined benefit plan is
excluded.
(2) Disposing subsidiary or business
   1. General treatment
   If the Company disposes a subsidiary during a reporting period, the revenue, expenses
   and profits of the subsidiary from the beginning of the reporting period to disposal
   date are included in the Company’s consolidated statement of comprehensive income.
   The cash flow of the subsidiaries from the beginning of the reporting period to
   disposal date is included in the Company’s consolidated statement of cash flows.
                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
When the Company loses control over an investee due to partial disposal or other
reasons, the acquirer shall remeasure the remaining equity interests in the acquiree to
its fair value at the acquisition date. The difference, between sums of consideration
received for disposal equity shares and fair value of the remaining shares, and sums of
share of net assets of the subsidiary calculated continuously from the acquisition date
or the combination date based on the previous shareholding proportion and goodwill,
shall be recognized as investment income for the period when the Company loses
control over acquiree. When the previously-held equity investment is accounted for
under the equity method, any other comprehensive income previously recognized in
relation to the acquiree’s equity changes, and other equity changes rather than changes
from net profit, other comprehensive income and profit distribution, shall be
transferred to investment income for the current period when the Company loses
control over acquiree. Other comprehensive income arising from remeasurement of
defined benefit plan is excluded. When the Company loses control over a subsidiary
due to the increase of capital from other investors and thus the shareholding ratio of
the Company declines, accounting treatment shall be in accordance with the
above-mentioned principles
2. Disposing the subsidiary by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it
disposes of its subsidiary in stages, in determining whether to account for the multiple
transactions as a single transaction, the Company shall consider all of the terms and
conditions of the transactions and their economic effects. One or more of the following
may indicate that the Company shall account for the multiple arrangements as a single
transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;
(b) Arrangements work together to achieve an overall commercial effect;
(c) The occurrence of one arrangement is dependent on the occurrence of at least one
other arrangement; and
(d) One arrangement considered on its own is not economically justified, but it is
economically justified when considered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which
eventually results in loss of control of the subsidiary, these multiple transactions shall
be accounted for as a single transaction. In the consolidated financial statements, the
difference between the consideration received and the corresponding proportion of the
subsidiary’s net assets in each transaction prior to the loss of control shall be
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
           recognized in other comprehensive income and transferred to the profit or loss when
           the Company eventually loses control of the subsidiary.
           If each of the multiple transactions which eventually results in loss of control of the
           subsidiary do not form part of a bundled transaction, apply the treatment of disposing
           partial long-term equity investments in a subsidiary without loss of control prior to the
           loss of control. After the loss of control, apply the treatment of disposing the
           subsidiary in common cases.
       (3) Acquiring the subsidiary’s equity interest held by non-controlling shareholders
       Where the Company has acquired a subsidiary’s equity interest held by non-controlling
       shareholders, the difference between the increase in the cost of long-term investments as a
       result of acquisition of non-controlling interests and the share of net assets of the
       subsidiary calculated continuously from the acquisition date or the combination date
       based on the new shareholding proportion shall be adjusted to the capital reserve( capital
       premium or share premium) in the consolidated financial statements. If the balance of the
       capital reserve is not sufficient, any excess shall be adjusted against retained earnings.
       (4) Disposing partial long-term equity investments in a subsidiary without loss of
       control
       When the Company disposes of a portion of the long-term equity investments in a
       subsidiary without loss of control, the difference between the amount of the consideration
       received and the corresponding portion of the nest assets of the subsidiary calculated
       continuously from the acquisition date or the combination date related to the disposal of
       the long-term equity investments shall be adjusted to the capital reserve (capital premium
       or share premium) in the consolidated financial statements. If the balance of the capital
       reserve is not sufficient, any excess shall be adjusted against retained earnings.
(7) Joint arrangement classification and accounting treatment
    A joint arrangement is classified as either a joint operation or joint venture.
    When the Company is joint operator of joint arrangement and has rights to the assets, and
    obligations for the liabilities, relating to the arrangement, it is classified as joint operation.
    A joint operator shall recognize the following items in relation to its interest in a joint
    operation, and account for them in accordance with relevant accounting standards:
      (1) Its solely-held assets, and its share of any assets held jointly;
      (2) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;
      (3) Its revenue from sales of its share of the output arising from the joint operation;
      (4) Its share of the revenue from the sale of the output by the joint operation; and
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
      (5) Its solely-incurred expenses and its share of any expenses incurred jointly.
(8) Recognition of cash and cash equivalents
    For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash
    on hand and the unrestricted deposit. And the term “cash equivalents” refers to short-term
    (maturing within three months from acquisition) and highly liquid investments that are
    readily convertible to known amounts of cash and which are subject to an insignificant risk of
    change in value.
(9) Foreign currency transaction and translation of foreign currency financial statements
    1. Foreign currency transaction
    Foreign currency transactions are translated into RMB at the current rate at the day of
    transactions.
    The foreign currency monetary items shall be translated at the spot exchange rate on the
    balance sheet date. The balance of exchange arising from the difference between the spot
    exchange rate on the balance sheet date and the spot exchange rate at the time of initial
    recognition or prior to the balance sheet date, except those arising from the raising of special
    foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized
    according to the borrowing costs capitalization principle, shall be recorded into the profits
    and losses at the current period. The foreign currency non-monetary items measured at the
    historical cost shall still be translated at the spot exchange rate on the transaction date, of
    which the amount of functional currency shall not be changed. The foreign currency
    non-monetary items measured at the fair value shall still be translated at the spot exchange
    rate on the date of confirming the fair value and the balance of exchange arising from it shall
    be recorded into profits and losses at the current period of disposal or capital reserves.
    2. Translation of foreign currency financial statements
    The asset and liability items in the statement of financial position shall be translated at a spot
    exchange rate on the balance sheet date. Among the owner's equity items, except the ones as
    \"undistributed profits\", others shall be translated at the spot exchange rate at the time when
    they are incurred. The income and expense items in the statement of comprehensive income
    shall be translated at the spot exchange rate of the transaction date.
    When disposing an overseas business, the Company shall shift the balance, which is
    presented under the items of the owner's equities in the statement of financial position and
    arises from the translation of foreign currency financial statements related to this oversea
    business, into the disposal profits and losses of the current period. If the overseas business is
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
    disposed of partially, the Company shall calculate the balance arising from the translation of
    foreign currency statements of the part of disposal based on the disposal rate and shall shift
    them into the profits and losses of the current period.
(10) Financial instruments
    Financial instruments include financial assets, financial liabilities and equity instruments
    1. Classification of financial instruments
    The classification of financial assets and financial liabilities at initial recognition are as
    follows: financial assets or financial liabilities designated at fair value through current profit
    and loss, including: trading financial investment, held-to-maturity investment, loans and
    receivables, available-for-sale investment and other financial liabilities.
    2. Recognition and measurement of financial instruments
      (1) The financial assets (liabilities) at fair value through profit or loss
      The financial assets (financial liabilities) at fair value through profit or loss are recognized
      initially at fair value (minus cash dividends declared but not received or bond interest
      matured but not drawn yet). The relevant transaction cost is recognized in current profit and
      loss when occurred.
      The cash dividends or interest are recognized as investment income when the Company
      receives such financial assets. At the balance sheet date, the Company recognizes the fair
      value changes in current profit and loss.
      The Company recognizes the difference between initial recognition and fair value of the
      financial assets as investment income when disposing the financial assets and at the same
      time adjusts the fair value changes in current profit and loss.
      (2) Held-to-maturity investment
      The Held-to-maturity investments are recognized initially at fair value (minus bond interest
      matured but not drawn yet) plus any related transaction cost.
      The held-to-maturity investments are measured at amortized cost using the effective interest
      rate. The interest income is recognized as investment income. The effective interest will be
      determined at the initial recognition and will not be changed in the holding period or within
      a shorter applicable period.
                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
 When disposing the held-to-maturity investment, the difference between the investing
 proceeds and the carrying value is recognized as investment income.
 (3) Receivables
 Receivables from selling products and rendering services or receivable of other company
 not including the receivables with quoted price in the active market (including: accounts
 receivable, other receivables, notes receivable, prepayments, long-term receivables) are
 measured at contract price; if the receivables is of financing nature, it shall be recognized at
 the present value initially.
 When disposing the receivables, the difference between the proceeds and the carrying value
 is recognized in current profit and loss.
 (4) Available-for-sale financial assets
 Available-for-sale financial assets are initially recorded at the sum of fair values (deducting
 cash dividends that have been declared but not distributed and bond interests that have
 matured but not been drawn) and transaction costs when acquired.
 The Company recognizes the interest or cash dividends as investment income. At each
 balance sheet date, available-for-sale financial assets are measured at fair value and the fair
 value changes are recognized in the capital reserve - other capital reserve.
 The difference between the proceeds of the disposal and the carrying value shall be
 recognized as investment income. And the related fair value change in the shareholders’
 equity shall be transferred out, and recorded as investment income.
 (5) Other financial liabilities
 For other financial liabilities, they are initially recognized at fair value plus any directly
 attributable transaction costs. After the initial recognition, the other financial liabilities are
 measured at amortized cost.
3. Determination and measurement of financial assets transfer
Where the Company has transferred nearly all of the risks and rewards related to the
ownership of the financial asset to the transferee, it shall stop recognizing the financial asset.
If it retained nearly all of the risks and rewards related to the ownership of the financial asset,
it shall not stop recognizing the financial asset.
                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in
these Standards for stopping the recognition of a financial asset, the Company shall follow
the principle of the substance over form. Transfer of an entire financial asset can be divided
into partial financial assets transfer and entire financial asset transfer. If the transfer of an
entire financial asset satisfies the conditions for de-recognition, the difference between the
amounts of the following 2 items shall be recorded in the profits and losses of the current
period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally recorded in the owners' equities (in the event that the
financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book
value of the transferred financial asset shall, between the portion whose recognition has been
stopped and the portion whose recognition has not been stopped (under such circumstance,
the service asset retained shall be deemed as a portion of financial asset whose recognition
has not been stopped), be apportioned according to their respective relative fair value, and the
difference between the amounts of the following 2 items shall be included into the profits and
losses of the current period :
(1) The book value of the portion whose recognition has been stopped; and
(2) The sum of consideration of the portion whose recognition has been stopped, and the
portion of the accumulative amount of the changes in the fair value originally recorded in the
owner's equities which is corresponding to the portion whose recognition has been stopped
(in the event that the financial asset involved in the transfer is a financial asset
Available-for-sale).
If the transfer of financial assets does not satisfy the conditions to stop the recognition, it
shall continue to be recognized as financial assets and the consideration received shall be
recognized as financial liabilities.
4. Recognition of termination of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may
the recognition of the financial liability be terminated in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the
existing financial liabilities by way of any new financial liability, and if the contractual
stipulations regarding the new financial liability is substantially different from that regarding
                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
the existing financial liability, it shall terminate the recognition of the existing financial
liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to some or all of the contractual stipulations
of the existing financial liability, it shall terminated the recognition of the existing financial
liability or part of it, and at the same time recognize the financial liability after revising the
contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise
concerned shall include into the profits and losses of the current period the gap between the
carrying amount which has been terminated from recognition and the considerations it has
paid (including the non-cash assets it has transferred out and the new financial liabilities it
has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of
repurchase, the carrying amount of the whole financial liabilities in light of the comparatively
fair value of the part that continues to be recognized and the part whose recognition has
already been terminated. The gap between the carrying amount which is distributed to the
part whose recognition has terminated and the considerations it has paid (including the
noncash assets it has transferred out and the new financial liabilities it has assumed) shall be
recorded into the profits and losses of the current period.
5. Determination of the fair value
The fair values of the financial assets or financial liabilities measured at fair value shall be
determined by reference to the quoted prices in the active market.
6. Impairment provision of the financial assets (not including accounts receivables)
The Company shall carry out impairment review for the financial assets at the balance sheet
date except for the financial assets at fair value through profit or loss. Where there is any
objective evidence proving that such financial asset has been impaired, an impairment
provision shall be made.
 (1) Impairment of available-for-sale financial assets
 An impairment provision shall be made where the fair value of the held-to-maturity
 financial assets drops significantly at the balance sheet date or the trend of decrease is
 expected not to be temporary after taking various factors into consideration. The
 accumulative losses arising from the decrease of the fair value of the owners’ equity which
 was directly included shall be transferred out and recorded as impairment loss.
                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
       Where any available-for-sale debt instruments is recognized as having suffered from any
       impairment loss, if there is any objective evidence proving that the value of the said debt
       instruments has been restored, and it is objectively related to the events that occur after such
       loss is recognized, the impairment-related losses as originally recognized shall be reversed
       and be recorded into the profits and losses of the current period.
       Impairment losses incurred by investment transactions of available-for-sale equity
       instruments shall not be reversed through profits and losses.
       The criteria for “serious” level of the decrease of fair value of available-for-sale financial
       instruments are as follows: the decrease of fair value for the equity investment with the
       active transaction in a market of good liquidity is normally 50%. The decrease of fair value
       of the equity investment without good market liquidity is normally 30%; the criteria for
       “non-temporary” decrease of fair value is continuous decrease over 12 months; the cost of
       investment is based on the purchase price.
       (2) Impairment of held-to-maturity investment
       The impairment of the held-to-maturity investment can be measured at reference to the
       measurement of the impairment of accounts receivables.
(11) Receivables
     1. The recognition and provision for bad debts for the individually significant receivables
     The recognition standard of bad debts provision for the individually significant receivables:
     Individually significant receivables refer to accounts receivable over RMB10 million or other
     receivables over RMB 5 million.
     The provision for bad debts for the individually significant receivables:
     The impairment test shall be assessed individually for each individually significant receivable.
     If the there is evidence indicating the receivables have been impaired, the difference between
     the present value of the future cash flows and the book value of receivables shall be
     recognized as bad debts provision and shall be recorded into the profits and losses at the
     current period.
     2. The recognition and provision for bad debts for the receivables in portfolio
 Criteria for Recognition of Portfolio
 Portfolio                      Insignificant amount of receivables and unadjusted individual receivables
                                                         Bengang Steel Plates Co., Ltd. Annual Report 2016
 Recognition and provision for bad debts for portfolio
 Portfolio 1:                  Aging analysis method
     Aging analysis method for bad debts provision
                                          Bad debts ratio for                  Bad debts ratio for
             Aging
                                        accounts receivable (%)               other receivables (%)
 Within 1 year (inclusive)
 1-2 years (inclusive)                                            5.00                                 5.00
 2-3 years (inclusive)                                        20.00                                   20.00
 Over 3 years                                                100.00                               100.00
     3. Insignificant individual amounts of accounts receivable that recognize bad debts individually
       (1) Reasons for individual recognition and provision of bad debts
       Accounts receivable amount is proved to be unrecoverable with conclusive evidence.
       (2) Method of bad debts recognition and provision
       If conclusive evidence shows the possibility of recovering the amount is small, recognize
       bad debts individually as if the amount is unrecoverable.
(12) Inventory
     1. Inventory classification
     Inventories include material in transit, raw material, low-valued consumables, work in
     process, finished goods, materials for consigned processing, etc.
     2. Valuation method for inventory dispatched
     The weighted average method is used to confirm the actual cost of the inventories dispatched.
     3. The basis for confirming the net realizable value of inventories and the methods to
     make provision for the inventories impairment loss
     The net realizable value of inventories (finished products, stock commodity, material, etc.)
     held for direct selling in the daily business activity shall be calculated by deducting the
     estimated sale expense and relevant taxes from the estimated sale price of inventories.
     The net realizable value of inventories for further processing in the daily business activity
     shall be calculated by deducting the estimated cost of completion, estimated sale expense and
     relevant taxes from the estimated sale price of inventories.
     The net realizable value of inventories held for the execution of sales contracts or labor
     contracts shall be calculated on the ground of the contract price. If an enterprise holds more
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
    inventories than the quantities subscribed in the sales contract, the net realizable value of the
    excessive part of the inventories shall be calculated on the ground of the general sales price.
    The Company shall make provision for loss on decline in value of inventories on the ground
    of each item of inventories at the year end. For inventories with large quantity and relatively
    low unit prices, the provision for loss on decline in value of inventories shall be made on the
    ground of the categories of inventories. For the inventories related to the series of products
    manufactured and sold in the same area, and of which the final use or purpose is identical or
    similar thereto, and if it is difficult to measure them by separating them from other items, the
    provision for loss on decline in value of inventories shall be made on a combination basis.
    Unless clear evidence shows that the market price is exceptionally fluctuating, the net
    realizable value of inventory is based on the market price at the balance sheet date.
    The net realizable value of inventory at the year-end is based on the market price at the
    balance sheet date.
    4. Inventory system
    The Company uses perpetual inventory system.
    5. Amortization of low-valued consumables and packing materials
      (1) Low-valued consumables shall be amortized in full amount on issuance.
      (2) Packing materials shall be amortized in full amount on issuance
(13) Assets classified as held for sale
    The Company shall recognize components or non-current assets as held for sale when the
    following conditions are satisfied simultaneously:
      (1) This component can be sold immediately based only on usual terms of selling such
      components in current situation.
      (2) The Company has adopted a resolution on disposal of the component or non-current
      asset, and has been approved by the general meeting of shareholders or the corresponding
      authority if required to be approved by the shareholders by the regulation.
      (3) The Company has signed an irrevocable transfer agreement with the transferee.
      (4) The transfer will be completed within one year.
(14) Long-term equity investment
    1. Criteria of join control and significant influence
                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require the unanimous consent of the parties
sharing control.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee but not control or join control of those policies. If the Company
could exert significant influence over the investee, the investee is the associate of the
Company.
2. The initial cost of long-term equity investment from business acquisition
 (1) Long-term equity investment from business acquisition
 For a business combination involving enterprises under common control, if the
 consideration of the combination is satisfied by paying cash, transfer of non-cash assets or
 assumption of liabilities and issue of equity securities, the initial investment cost of the
 long-term equity investment shall be the absorbing party’s share of the carrying amount of
 the owner’s equity of the party being absorbed in the consolidated financial statements of
 the ultimate controlling party at combination date.
 When an investor becomes capable of exercising control over an investee under common
 control due to additional investment or other reasons, the initial investment cost shall be the
 absorbing party’s share of the carrying amount of the owner’s equity of the party being
 absorbed in the consolidated financial statements of the ultimate controlling party at
 combination date.
 The difference between the initial investment cost and the carrying amount of the
 previously-held equity investment, together with the additional investment cost for new
 shares at combination date, shall be adjusted to the capital reserve. If the balance of capital
 reserve is not sufficient, any excess shall be adjusted to retained earnings.
 When an investor becomes capable of exercising control over an investee now under
 common control due to additional investment or other reasons, the investor shall change to
 the cost method and use the carrying amount of the cost method and use the carrying
 amount of the previously-held equity investment, together with the additional investment
 cost, as the initial investment cost under the cost method.
 (2) The initial cost of the long-term equity investment other than from business acquisition
 The initial cost of a long-term equity investment obtained by making payment in cash shall
 be the purchase cost which is actually paid.
                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
 The initial cost of a long-term equity investment obtained on the basis of issuing equity
 securities shall be the fair value of the equity securities issued.
 The initial cost of a long-term equity investment of an investor shall be the value stipulated
 in the investment contract or agreement (minus cash dividend or profit declared but not paid)
 except the unfair value stipulated in the contract or agreement.
 If the exchange of non-monetary assets is commercial in nature and the fair values of both
 the assets received and surrendered can be reliably measured, the fair value of the assets
 surrendered shall be used as the basis for determining the cost of the assets received, unless
 there is any exact evidence showing that the fair value of the assets received is more
 reliable. Where any non-monetary assets transaction does not meet the conditions as
 prescribed above, the carrying value and relevant payable taxes of the assets surrendered
 shall be the initial cost of the assets received.
 The initial cost of a long-term equity investment obtained by debt restructuring shall be
 ascertained on the basis of fair values.
3. Subsequent measurement and profit or loss recognition
 (1) Cost method
 The Company adopts cost method for the long term investment in subsidiary company.
 Under the cost method, an investing enterprise shall, in accordance with the attributable
 share of the net profits or losses of the invested entity, recognize the investment profits or
 losses except the dividend declared but unpaid, which is included in the payment when
 acquiring the investment.
 (2) Equity method
 A long-term equity investment in an associate or a joint venture shall be accounted for
 using the equity method. Where the initial investment cost of a long-term equity investment
 exceeds tan investor’s interest in the fair values of an investee’s identifiable net assets at the
 acquisition date, no adjustment shall be made to the initial investment cost. Where the
 initial cost is less than the investor’s interest in the fair values of the investee’s identifiable
 net assets at the acquisition date, the difference shall be credited to profit or loss for the
 current period, and the cost of the long-term equity investment shall be adjusted
 accordingly.
                                             Bengang Steel Plates Co., Ltd. Annual Report 2016
The Company shall recognize its share of the investee’s net profits or losses, as well as its
share of the investee’s other comprehensive income, as investment income or losses and
other comprehensive income, and adjust the carrying amount of the investment accordingly.
The carrying amount of the investment shall be reduced by the portion of any profit
distributions or cash dividends declared by the investee that is attributable to the investor.
The investor’s share of the investee’s owners’ equity changes, other than those arising from
the investee’s net profit or loss, other comprehensive income or profit distribution, and the
carrying amount of the long-term equity investment shall be adjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making
appropriate adjustments based on the fair values of the investee’s identifiable net assets at
the acquisition date.
The unrealized profits or losses resulting from transactions between the investor and its
associate or joint venture shall be eliminated in proportion to the investor’s equity interest
in the investee, based on which investment income or losses shall be recognized. Any losses
resulting from transactions between the investor and investee which are attributable to asset
impairment shall be recognized in full.
If the transaction of investment or sale of assets among the Company and associate and
joint venture and the assets is a business, it shall apply the treatment mentioned in Note 2 (5)
“The accounting treatment for Business combination under/now under common control”
and Note 2 (6) “Consolidation of Financial Statements”.
When the Company recognizes the losses of invested enterprise, it shall follow the
following sequence: First of all, offset the book value of long term equity investment. If the
book value of long term equity is insufficient to dilute, the investing enterprise shall
recognize the net losses of the invested enterprise until the book value of the long-term
equity investment and other long-term rights and interests which substantially form the net
investment made to the invested entity are reduced to zero. If the company still has the
obligation to undertake extra losses per contract, and then estimated liabilities shall be
recognized into current profit and loss accordingly to the estimated obligation.
(3) Disposal of long-term equity investment
On disposal of a long-term equity investment, the difference between the proceeds actually
received and the carrying amount shall be recognized in profit or loss for the current period.
                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
When the previously-held equity investment is accounted for under the equity method, any
other comprehensive income previously recognized shall be accounted for on the same
basis as would have been required if the investee had directly disposed of the related assets
or liabilities.
Those owner's equity recognized other than the change of net profits or loss, other
comprehensive income, profit distribution of the invested entity shall be transferred
proportionally into profit or loss of current period, other comprehensive income arising
from the remeasurement of defined benefit plan is excluded.
When an investor can no longer exercise joint control of or significant influence over an
investee due to partial disposal of equity investment or other reasons, the remaining equity
investment shall be accounted for in accordance with “Accounting Standard for Business
Enterprises No. 22-Financial instruments: recognition and measurement”. The difference
between the fair value and the carrying amount at the date of the loss of join control or
significant influence shall be charged to profit or loss for the current period. When the
previously-held equity investment is accounted for under the equity method, any other
comprehensive income previously recognized shall be accounted for on the same basis as
would have been required if the investee had directly disposed of the related assets or
liabilities for the current period upon discontinuation of the equity method.
Those owner's equity recognized other than the change of net profits or loss, other
comprehensive income, profit distribution of the invested entity shall be transferred        into
profit or loss of current period in full when the Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal
of equity investment or other reasons, and with the retained interest, still has joint control of,
or significant influence over, the investee, when preparing the individual financial
statements, the investor shall change to the equity method and adjust the remaining equity
investment as if the equity method had been applied from the date of the first acquisition. If
the investor cannot exercise joint control of or significant influence over the investee after
partial disposal of equity investment, the remaining equity investment shall be accounted
for in accordance with “Accounting Standard for Business Enterprises No.22-Financial
instruments: Recognition and Measurement”, and the difference between the fair value and
carrying amount at the date of the loss of control shall be charged to profit or loss for the
current period.
                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
      When the equity investment disposed is acquired through business combination due to
      additional investment or other reasons, in stand-alone financial statement, the remaining
      equity investment shall adopt cost method or equity method, any other comprehensive
      income and other owner’s interests previously recognized of the previously-held equity
      investment under the equity method shall be transferred proportionally.
      For those remaining equity investment accounted for in accordance with “Accounting
      Standard for Business Enterprises No.22-Financial instruments: Recognition and
      Measurement” after disposal, other comprehensive income and other owner’s interests
      previously recognized shall be transferred to profit or loss in full.
(15) Investment properties
    The term \"investment properties\" refers to the real estate held for generating rent and/or
    capital appreciation. The investment properties include:
      (1) The land use right which has already been rented;
      (2) The land use right which is held and prepared for transfer after appreciation; and
      (3) The building which has already been rented (including buildings self-constructed or
      developed for rent after completion or buildings being built or developed for future rent).
    The investment properties shall be measured at the cost model. For the investment properties
    measured at cost model and building for rent, the same depreciation policy shall be adopted
    as that of fixed assets; for land use right, the same amortization policy shall be adopted as
    that of intangible assets.
(16) Fixed assets
    1. Recognition of Fixed assets
    The term \"fixed assets\" refers to the tangible assets that simultaneously possess the features
    as follows:
      (1) They are held for the sake of producing commodities, rendering labor service, renting or
      business management; and
      (2) Their useful life is in excess of one fiscal year.
    No fixed asset may be recognized unless it simultaneously meets the conditions as follows:
      (1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
      and
      (2) The cost of the fixed asset can be measured reliably.
    2. Fixed assets depreciation
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
    Fixed assets are depreciated under the straight line method. The depreciation rate is
    determined according to the category of assets, the useful life and the expected residual rate.
    If the components of the fixed assets have different useful lives or provide the economic
    benefits in a different way, then different depreciation rate or method shall be applied and the
    depreciation of the components shall be calculated separately.
    Fixed assets acquired under financial leasing is depreciated over the useful life if it is
    reasonably certain that the ownership of the leased assets will be acquired upon expiry of
    lease, or over the shorter of lease term and useful life if it is not reasonably certain that the
    ownership of the leased assets will be acquired upon expiry of lease.
    Details of classification, depreciation period, residual value rate and annual depreciation rate
    are as follows:
                                          Depreciation       Residual Value Rate    Depreciation Rate
             Classification
                                            Period                  (%)                   (%)
Plants and Buildings                            8-40 years                   0.00           2.50-12.50
Machinery                                       4-18 years                   3.00           5.39-24.25
Transportation and other equipment              5-18 years                   3.00           5.39-19.40
    3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
    Where a lease satisfies one or more of the following criteria, it shall be recognized as a
    financial leasing:
      (1) The ownership of the leased asset is transferred to the lessee when the term of lease
      expires;
      (2) The lessee has the option to buy the leased asset at a price which is expected to be far
      lower than the fair value of the leased asset at the date when the option becomes
      exercisable;
      (3) The lease term covers the major part of the use life of the leased asset; and
      (4) The present value of the minimum lease payments on the lease beginning date amounts
      to substantially all of the fair value of the leased asset on the lease beginning date.
    On the lease beginning date, the Company shall record the lower one of the fair value of the
    leased asset and the present value of the minimum lease payments on the lease beginning date
    as the initial book value, recognize the amount of the minimum lease payments as the initial
    book value of long-term account payable, and treat the difference between the recorded
    amount of the leased asset and the long-term account payable as unrecognized financing
    charges.
(17) Construction in progress
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
    The cost of fixed assets transferred from a construction in progress includes all the necessary
    expenses incurred for bringing the asset to the expected conditions for use. Construction in
    progress is transferred to fixed asset when it has reached its working condition for its
    intended use. In case the final project accounts have not been completed or approved, the
    asset shall be transferred to fixed assets at an estimated value by considering project budget,
    cost or actual cost of the project and etc., and the deprecation of the said fixed assets shall be
    provided in accordance with the Company’s accounting policy since it has reached its
    working condition for its intended use. After the project accounts have been approved, the
    estimated values shall be adjusted based on the actual cost, but those provided deprecation
    shall not be adjusted.
(18) Borrowing costs
    1. Principle of the recognition of capitalized borrowing costs
    The borrowing costs shall include interest on borrowings, amortization of discounts or
    premiums on borrowings, ancillary expenses, and exchange balance on foreign currency
    borrowings.
    Where the borrowing costs incurred to an enterprise can be directly attributable to the
    acquisition and construction or production of assets eligible for capitalization, it shall be
    capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be
    recognized as expenses on the basis of the actual amount incurred, and shall be recorded into
    the current profits and losses.
    The term \"assets eligible for capitalization\" shall refer to the fixed assets, investment real
    estate, inventories and other assets, of which the acquisition and construction or production
    may take quite a long time to get ready for its intended use or for sale.
    The borrowing costs shall not be capitalized unless they simultaneously meet the following
    requirements:
     (1) The asset disbursements have already incurred, which shall include cash, transferred
     non-cash assets or interest bearing debts paid for the acquisition and construction or
     production activities for preparing assets eligible for capitalization;
     (2) The borrowing costs has already incurred; and
     (3) The acquisition and construction or production activities which are necessary to prepare
     the asset for its intended use or sale have already started.
    2. The capitalization period of borrowing costs
                                                 Bengang Steel Plates Co., Ltd. Annual Report 2016
The capitalization period shall refer to the period from the commencement to the cessation of
capitalization of the borrowing costs, excluding the period of suspension of capitalization of
the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is
completed separately and is ready for use, the capitalization of the borrowing costs in relation
to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed
separately and is ready for use or sale during the continuing construction of other parts, but it
cannot be used or sold until the asset is entirely completed, the capitalization of the
borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. If the interruption is a necessary step for making the
qualified asset under acquisition and construction or production ready for the intended use or
sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred
during such period shall be recognized as expenses, and shall be recorded into the profits and
losses of the current period, till the acquisition and construction or production of the asset
restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as
a deposit in the bank or investment income earned on the loan as a temporary investment)
and the ancillary expense incurred to a specifically borrowed loan, those incurred before a
qualified asset under acquisition, construction or production is ready for the intended use or
sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded
into the costs of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the
general borrowing by multiplying the weighted average asset disbursement of the part of the
accumulative asset disbursements minus the general borrowing by the capitalization rate of
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
    the general borrowing used. The capitalization rate shall be calculated and determined in light
    of the weighted average interest rate of the general borrowing.
    Where there is any discount or premium, the amount of discounts or premiums that shall be
    amortized during each accounting period shall be determined by the effective interest rate
    method, and an adjustment shall be made to the amount of interests in each period.
(19) Intangible Assets
    1. Measurement of Intangible Assets
      (1) Initial measurement is based on cost upon acquisition
      The cost of an intangible asset on acquisition include the purchase price, relevant taxes and
      other necessary disbursements which may be directly attributable to bringing the intangible
      asset to the conditions for the expected purpose. If the payment for an intangible asset is
      delayed beyond the normal credit conditions and it is of the financing nature, the cost of the
      intangible asset shall be determined on the basis of the present value of the purchase price.
      For intangible assets obtained from debt restructuring as settlement of liabilities from
      debtors, initial recognition is based on its fair value, and the difference between the debt
      restructured and the fair value of the intangible assets are recognized in the current profit
      and loss.
      For intangible assets obtained from non-monetary transactions with commercial substance,
      and the fair value of the assets obtained or surrendered can be reliably measured, the initial
      recognition of the asset obtained is based on the fair value of the asset surrendered, unless
      there is strong evidence that the fair value of the asset obtained is more reliable. For
      intangible assets obtained through non-monetary transactions which do not meet the above
      criteria, the initial recognition is based on the book value of the assets surrendered and the
      relevant taxes payable. No gain or loss will be recognized.
      (2) Subsequent Measurement
      The Company shall analyze and judge the beneficial period of intangible assets upon
      acquisition.
      Intangible assets with finite beneficial period shall be amortized under the straight-line
      method during the period when the intangible asset can bring economic benefits to the
      enterprise. If it is unable to estimate the beneficial period of the intangible asset, it shall be
      regarded as an intangible asset with uncertain service life and shall not be amortized.
                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
2. Estimated useful lives of intangible assets with limited useful lives
         Item                       Estimated useful life                        Criteria
  Land use right                          50 years                      Land use right certificate
The Company shall review the useful lives and amortization methods of intangible assets with
limited useful lives at each year end.
Per review, the useful lives and amortization methods of intangible assets with limited useful
lives at each year-end is the same with that of last year.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful
lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall be
classified into research expenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study
to acquire and understand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other
knowledge is applied into certain projects or designs for the manufacturing of new or
substantially improved material, device and product.
5. Criteria of capitalization of development expenditure
Expenditures during the development phase of internal research and development projects
shall be recognized as intangible assets when they meet all the following criteria:
 (1) It is feasible technically to complete the intangible assets for use or sale;
 (2) The intention to complete and use or sell the intangible assets is present;
 (3) The method of which the intangible assets generate economic benefits shall be proved,
 including being able to prove that there is a potential market for the products manufactured
 by applying the intangible assets or there is a potential market for the intangible assets itself
 or the intangible assets will be used internally;
 (4) It is able to finish the development of the intangible assets, and able to use or sell the
 intangible assets, with the support of sufficient technologies, financial resources and other
 resources; and
 (5) The development expenditures of the intangible assets can be reliably measured.
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
    The development expenditures for its internal research and development projects of the
    Company shall be recorded into the profit or loss for the current period if the above said
    conditions are not satisfied simultaneously. The research expenditures for its internal research
    and development projects of an enterprise shall be recorded into the profit or loss for the
    current period when incurred.
(20) Impairment of long-term assets
    For long-term assets under the cost model such as fixed assets, construction in progress, intangible
    assets etc., the Company shall perform impairment tests at the period end if there is clear
    indication of impairment.
    If the recoverable amounts of long-term assets are less than their carrying amounts, the carrying
    amounts of the assets shall be written down to their recoverable amounts. The write-downs are
    recognized as impairment losses and charged to current profit and loss. The recoverable amounts
    of long-term assets are the higher of their fair values less costs to sell and the present values of the
    future cash flows expected to be derived from the assets. The Company shall estimate its
    recoverable amount on an individual basis. Where it is difficult to do so, it shall determine the
    recoverable amount of the group assets on the basis of the asset group to which the asset belongs.
    The term \"group assets” refers to a minimum combination of assets by which the cash flows could
    be generated independently
    The goodwill shall be subject to an impairment test at least at the end of each year.
    When the Company makes an impairment test of assets, it shall, as of the purchasing day,
    apportion the carrying value of the business reputation formed by merger of enterprises to the
    relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be
    apportioned to the relevant combinations of asset groups.
    When apportioning the carrying value of the business reputation to the relevant asset groups
    or combinations of asset groups, it shall be apportioned on the basis of the proportion of the
    fair value of each asset group or combination of asset groups to the total fair value of the
    relevant asset groups or combinations of asset groups. Where it is difficult to measure the fair
    value reliably, it shall be apportioned on the basis of the proportion of the carrying value of
    each asset group or combination of asset groups to the total carrying value of the relevant
    asset groups or combinations of asset groups.
    When making an impairment test on the relevant asset groups or combination of asset groups
    containing business reputation, if any evidence shows that the impairment of asset groups or
    combinations of asset groups is possible, the Company shall first make an impairment test on
                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
    the asset groups or combinations of asset groups not containing business reputation, calculate
    the recoverable amount, compare it with the relevant carrying value and recognize the
    corresponding impairment loss. Then the Company shall make an impairment test of the asset
    groups or combinations of asset groups containing business reputation, and compare the
    carrying value of these asset groups or combinations of asset groups (including the carrying
    value of the business reputation apportioned thereto) with the recoverable amount. Where the
    recoverable amount of the relevant assets or combinations of the asset groups is lower than
    the carrying value thereof, it shall recognize the impairment loss of the business reputation.
    Impairment losses on long-term assets shall not be reversed in subsequent accounting periods
    once recognized.
(21) Long-term deferred expense
    The long-term deferred expense refers to the expenses incurred but shall be borne by current and
    subsequent accounting period, which is more than one year. The long-term deferred expense shall
    be amortized over its beneficiary period evenly
(22) Employee benefits
    1. Accounting treatment for short employee benefit
    The Company shall recognized , in the accounting period in which an employee provides service,
    actually occurred short-term employee benefits as a liability, with a corresponding charge to the
    profit or loss or cost of an asset for the current period.
    Payments made by an enterprise of social security contributions for employees, payments of
    housing funds, and union running costs employee education costs provided in accordance with
    relevant requirements shall, in the accounting period in which employees provide services, be
    calculated according to prescribed bases and percentages in determining the amount of employee
    benefits.
    The employee benefits which are non-monetary benefits shall be measured at fair value if it could
    be measured reliably.
    2. Accounting treatment of post-employment benefits
     (1) Defined contribution plan
     The Company shall recognize, in the accounting period in which an employee provides service,
     pension fund and unemployment fund for employees as a liability according to the local
     government regulations. The amount shall be calculated according to local prescribed bases and
     percentages in determining the amount of employee benefits, with a corresponding charge to the
     profit or loss or cost of an asset for the current period.
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
      (2) Defined benefit plan
      None.
    3. Accounting treatment of termination benefits
    The Company which provides termination benefits to employees shall recognize an employee
    benefits liability for termination benefits, with a corresponding charge to the profit or loss for
    the current period, at the earlier of the following dates:
      (1) When the Company cannot unilaterally withdraw the offer of termination benefits
      because of an employment termination plan or a curtailment proposal
      (2) When the Company recognizes costs or expenses related to a restructuring that involves
      the payment of termination benefits
    4. Accounting treatment of other long-term employee benefits payable
    None.
(23) Estimated liabilities
    1. Recognition Criteria of estimated liabilities
    The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring)
    shall be recognized as an estimated liabilities when the following conditions are satisfied
    simultaneously:
      (1) That obligation is a current obligation of the enterprise;
      (2) It is likely to cause any economic benefit to flow out of the enterprise as a result of
      performance of the obligation; and
      (3) The amount of the obligation can be measured in a reliable way.
    2. Measurement of estimated liabilities
    The estimated debts shall be initially measured in accordance with the best estimate of the
    necessary expenses for the performance of the current obligation.
    To determine the best estimate, an enterprise shall take into full consideration of the risks,
    uncertainty, time value of money, and other factors pertinent to the Contingencies. If the time
    value of money is of great significance, the best estimate shall be determined after
    discounting the relevant future outflow of cash.
    The best estimate shall be conducted in accordance with the following situations,
    respectively:
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
   If there is a continuous range for the necessary expenses and if all the outcomes within this
   range are equally likely to occur, the best estimate shall be determined in accordance with the
   average estimate within the range, that is, the average of the upper and lower limit.
   If there is not a sequent range for the necessary expenses and if the outcomes within this
   range are not equally likely to occur, the best estimate shall be determined as follows:
     (1) If the Contingencies concern a single item, it shall be determined in the light of the most
     likely outcome.
     (2) If the Contingencies concern two or more items, the best estimate shall be calculated
     and determined in accordance with all possible outcomes and the relevant probabilities.
   When all or some of the expenses necessary for the liquidation of an estimated debts of an
   enterprise is expected to be compensated by a third party, the compensation shall be
   separately recognized as an asset only when it is virtually certain that the reimbursement will
   be obtained. The amount recognized for the reimbursement shall not exceed the book value
   of the estimated debts.
(24) Revenue
   1. Recognition Criteria for the Revenue from sale of goods
     (1) The general principle of revenue recognition and measurement
     The Company has transferred to the buyer the significant risks and rewards of ownership of
     the goods; and retained neither continuing managerial involvement which usually relates to
     the ownership nor exerts effective control over the goods sold. The relevant amount of
     revenue can be measured reliably, the economic benefits related to the transaction will flow
     into the enterprise; and the relevant costs incurred or to be incurred can be measured
     reliably. Revenue from the sale of goods may be recognized.
     (2) The specific criteria of revenue recognition and measurement
     The amount of sale of goods is recognized according to the contract or agreement terms.
     The Company mainly sells steel and other products. Domestic sales revenue is recognized
     when the following conditions are met: The Company has delivered the products to buyer
     under the contract, amount of product sales revenue is determinable, received or the
     certificate of the right to receive the amount has been obtained and the relevant economic
     benefits are likely to flow into the entity, and related costs can be measured reliably.
     Export sales revenue is recognized when the following conditions are met: the Company
     has undertaken the Customs declaration and delivery has occurred under the contract, bill of
     lading has been obtained, amount of product sales revenue is determinable, received or the
                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
 certificate of the right to receive the amount has been obtained and the relevant economic
 benefits are likely to flow into the entity, and related costs can be measured reliably.
2. Recognition Criteria for the Revenue from alienating of Assets Use Rights
 (1) The general principle
 When it is probable that economic benefits in relation to the transaction will flow into the
 enterprise; and the amount of revenues can be measured reliably. The Company shall
 ascertain the amount of revenues from the transfer of Assets Use Right based on the
 following circumstances respectively:
   (1) Interest income shall be calculated based on the duration of which the Company's cash
   is used by others and the actual interest rate; or
   (2) Royalty revenue shall be calculated based on the period and method of charging as
   stipulated in the relevant contract or agreement.
 (2) The evidence of recognition of Revenue from alienating of Assets Use Rights
   (1) The agreement alienating of Assets Use Rights of has been signed and provided to
   users; and
   (2) The timing for collecting the fee is due.
3. Recognition Criteria for the Revenue from Providing Labor Services and
Construction Contracts under Percentage of Completion Method
Revenue from providing labor services are recognized under the percentage of completion
method if the outcome of the labor service provision transaction can be reliably measured.
Percentage completed is determined by measurement of work completed.
Total revenue from providing of labor services is determined based on the received or
receivable amount stipulated in the contract or agreement, unless the received or receivable
amount as stipulated in the contract or agreement is unfair. The Company shall, on the date of
the balance sheet, ascertain the current revenue from providing labor services by multiplying
the total amount of revenues from providing labor services with the percentage completion,
less cumulative revenues recognized in the previous accounting periods. At the same time,
the enterprise shall recognize current cost of labor services by multiplying the total estimated
cost of providing of labor services with percentage completion less cumulative costs
recognized in the previous accounting periods.
If the result of a transaction concerning the providing of labor services cannot be reliably
measured at the balance sheet date, it shall be measured as follows:
                                                   Bengang Steel Plates Co., Ltd. Annual Report 2016
      (1) If the cost of labor services incurred is expected to be compensated, the revenue from
      the providing of labor services shall be recognized to the extent of the cost of labor services
      incurred, and the cost of labor services shall be recognized; or
      (2) If the cost of labor services incurred is not expected to compensate, the cost incurred
      shall be recognized in the current profit and loss, and no revenue from the providing of
      labor services shall be recognized.
(25) Government Subsidies
    1. Types of government subsidies
    A government subsidy means the monetary or non-monetary assets obtained free of charge
    by the Company from the government. Government subsidies consist of the government
    subsidies pertinent to assets and government subsidies pertinent to income.
    2. Recognition
    If clear evidence shows that conditions for granting the finance support fund can be met and
    the finance support fund is supposed to be received, the amount of receivable can be
    recognized.
    If no clear evidence shows that the Company is expected to receive finance support or the
    conditions for granting the finance support fund can be met, recognized the government
    subsidies when the conditions are met and the amount are received.
    3. Accounting treatment
    The government subsidies pertinent to fixed assets and intangible assets acquired and
    constructed shall be recognized as deferred income and equally recognized over the useful
    lives of the relevant assets as non-operating income.
    The government subsidies pertinent to incomes to subsidize future expenses shall be
    recognized as deferred income and transferred to non-operating income in the period during
    which the expenses subsidized is recognized. Government subsidies to subsidize past
    expenses or losses shall be recognized in the statement of comprehensive income in the
    period during which the subsidy is received.
(26) Deferred tax assets and deferred tax liabilities
    An enterprise shall recognize the deferred income tax liabilities arising from a deductible
    temporary difference to the extent of the amount of the taxable income which it is most likely
    to obtain and which can be deducted from the deductible temporary difference.
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
    As for any deductible loss or tax deduction that can be carried forward to the next year, the
    corresponding deferred income tax assets shall be determined to the extent that the amount of
    future taxable income to be offset by the deductible loss or tax deduction to be likely
    obtained.
    All taxable temporary differences shall be recognized as deferred tax liabilities with certain
    limited exceptions.
    Exceptions when deferred tax assets and deferred tax liabilities are not recognized include:
    initial recognition of goodwill; initial recognition of an asset or liability in a transaction or
    event that is not a business combination and at the time of the transaction, affects neither
    accounting profit nor taxable profit (tax loss)
    An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the
    entity has a legally enforceable right to set off current tax assets against current tax liabilities;
    and (b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by
    the same taxation authority on either:(i) the same taxable entity; or (ii) different taxable
    entities which intend either to settle current tax liabilities and assets on a net basis, or to
    realize the assets and settle the liabilities simultaneously, in each future period in which
    significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(27) Leases
    1. Accounting treatment of operating lease
     (1) The rents paid for operating leases shall be recorded in the profits and losses of the
     current period by using the straight-line method over each period of the lease term. The
     initial direct costs paid by the Company shall be recorded into the profits and losses of the
     current period
     If the lessor has shouldered any expense related to the lease which shall have been borne by
     the Company, the Company shall deduct these expenses from the total rental expense and
     the remaining rental expense shall be allocated to each period during the lease term
     (2) The rents collected from operating leases shall be recorded in the profits and losses of
     the current period by using the straight-line method over each period of the whole lease
     term in which free lease period is included. The initial direct costs paid by the Company
     shall be recorded into the profits and losses of the current period. The initial direct costs
     shall be capitalized if it is material, and be allocated to each period as per the basis for
     rental revenue recognition.
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
      If the Company has shouldered any expense related to the lease which shall have been
      borne by the lessee, the company shall deduct these expenses from the total rental revenue
      and the remaining rental revenue shall be allocated to each period during the lease term.
    2. Accounting treatment of financial leasing
      (1) Leased in asset
      On the lease beginning date, a lessee shall record the lower one of the fair value of the
      leased asset and the present value of the minimum lease payments on the lease beginning
      date as the initial book value, recognize the amount of the minimum lease payments as the
      initial book value of long-term account payable, and treat the balance between the recorded
      amount of the leased asset and the long-term account payable as unrecognized financing
      charges.
      The lessee shall adopt the effective interest rate method to calculate and recognize the
      financing charge in the current period. The unrecognized financing charge shall be
      amortized to each period during the lease term. Initial direct costs incurred by the Company
      shall be recorded in the value of the leased asset.
      (2) Leased out asset
      On the lease beginning date, a lessee shall record the balance between the sum of finance
      lease receivables plus unguaranteed residual value and the present value of the sum as
      unrealized financing income, and record rental as revenue when received for each period in
      the future
      Initial direct costs incurred by the Company related to the leased asset shall be recorded in
      the initial measurement of the finance lease receivables, and reduce the amount of revenue
      recognized during the lease term.
(28) Discontinuing operation
      Discontinuing operation is a component that has been disposed or classified as held for sale
      by the Company, and can be distinguished separately in operating and preparing financial
      statements when one of the following conditions is met:
      (1) The component stands for an independent main business or a major business area;
      (2) The component is a part of disposal plan of an independent main business or a major
          business area;
      (3) The component is a subsidiary which is acquired only for sale again.
(29) Significant accounting policies and change of accounting estimate
                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
     1. Significant changes in accounting policies
     (1)Implementation of Provisions on the accounting treatment of value added tax.
     On December 3, 2016, the Ministry of Finance issued Provisions on the accounting
     treatment of value added tax ([2016] no. 22), which applies to transactions from May 1,
     2016. The main impacts of the implementation are as follows:
      The contents and reasons of accounting policy                  Financial statement items affected and
      changes                                                                       amount
      Adjust the “Business tax and surcharges” to “Tax and
                                                                    Tax and surcharges
      surcharges” in the income statement.
      The business activities of the occurrence of property
      tax, land use tax, vehicle and vessel use tax, stamp
                                                                    Tax and surcharges item have increased
      tax from May 1, 2016 is reclassified from “General
                                                                    by RMB 65,261,381.86, while General
      and       administrative   expenses”   to   “Tax    and
                                                                    and   administrative   expenses       have
      surcharges”. The tax occurred before May 1, 2016
                                                                    decreased by RMB 65,261,381.86.
      shall not be adjusted. Comparative data stays
      unadjusted.
      The debit balance of the sub-item under Tax payable
      such as VAT payable, VAT not paid, input VAT to be            The ending balance of other current
      deducted, input VAT to be verified, VAT overpaid              assets has increased by RMB
      will be reclassified from Tax payable to other cuurent        86,134,653.84 and the tax payable has
      assets or other non-current assets. Comparative data          increased by RMB 86,134,653.84
      stays unadjusted.
     2. Significant changes in accounting estimates
     The company's accounting estimates have not changed during the reporting period.
4. Taxes
(1) Major type of taxes and corresponding tax rates
             Tax                                           Taxation Method                      Tax Rate
                                          The balance of output VAT calculated based on
                                          product sales and taxable services revenue in        17%, 11%,
 Value-added Tax(VAT)
                                          accordance with the tax laws after subtracting the      6%
                                          deductible input VAT of the period
                                          Based on taxable operating revenue(from 1 May
 Business tax                                                                                      5%
                                          2016, the Business tax has changed into VAT)
 City maintenance and construction tax    Based on VAT and business tax actually paid             7%, 5%
 Educational surcharges                   Based on VAT and business tax actually paid             3%, 2%
 Enterprise income tax                    Based on taxable profit                                  25%
(2) Tax Preference
     None.
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
5. Notes to the consolidated financial statements
(1) Cash at bank and on hand
     1. Cash at bank and on hand
                 Items                      Ending balance                     Beginning balance
  Cash on hand                                             47,743.38                             72,220.66
  Cash at bank                                     12,238,841,745.29                      4,612,384,032.13
  Other monetary funds                                693,022,529.17                        528,024,257.18
                 Total                             12,931,912,017.84                      5,140,480,509.97
     Notes: No funds are deposited abroad at the year-end.
     The details of restricted monetary funds resulted from guarantee or pledge or freeze
accounts are as follows:
                 Items                      Ending balance                     Beginning balance
  Margin for bank acceptance bill                    483,737,529.17                         508,347,736.99
  Guarantee for Yield
                                                     174,600,000.00
  Enhancement Products
  Deposits for purchase of foreign
                                                                                             19,350,000.00
  currency
                 Total                               658,337,529.17                         527,697,736.99
(2) Notes receivable
     1. Notes receivable disclosed by category
                 Items                       Ending balance                     Beginning balance
 Bank acceptance bill                               2,003,701,859.70                     2,446,693,577.16
 Commercial acceptance bill                            26,979,278.33                         2,988,984.00
                 Total                              2,030,681,138.03                     2,449,682,561.16
     2. The pledged acceptance bill at the year-end
                            Items                             The pledged acceptance bill at the year-end
 Bank acceptance bill                                                                      682,288,925.93
                            Total                                                          682,288,925.93
     3. The amount of Notes receivable endorsed over but not yet matured at the year-end.
                 Items               Derecognized ending balance       Underecognized ending balance
 Bank acceptance bill                           6,791,554,837.93
 Commercial acceptance bill                                                                  5,416,970.01
                 Total                          6,791,554,837.93                             5,416,970.01
                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
     4. No Notes receivable has been transferred into accounts receivable due to inability of
     drawer to meet acceptance bill at the year-end.
(3) Accounts receivable
     1. Accounts receivable disclosed by category
                                                               Ending balance
            Items                   Carrying amount              Provision for bad debts
                                                 Percentage                       Bad debts
                                                                                                Book value
                                   Amount           (%)
                                                                  Amount          ratio (%)
 Individually significant and
 tested for impairment
 individually
 Accounts receivable tested
 for impairment by portfolio    829,837,954.48      100.00      205,972,527.23          24.82   623,865,427.25
 Other insignificant items
 but tested for impairment
 individually
            Total               829,837,954.48      100.00      205,972,527.23          24.82   623,865,427.25
                                                              Beginning balance
            Items                   Carrying amount              Provision for bad debts
                                                 Percentage                        Bad debts
                                                                                                 Book value
                                   Amount           (%)
                                                                  Amount           ratio (%)
 Individually significant and
 tested for impairment
 individually
 Accounts receivable tested
                                642,517,001.01      100.00     153,932,376.29           23.96   488,584,624.72
 for impairment by portfolio
 Other insignificant items
 but tested for impairment
 individually
            Total               642,517,001.01      100.00     153,932,376.29           23.96   488,584,624.72
    Accounts receivables tested for impairment by portfolio using the method of Aging analysis
                                                                   Ending balance
                 Items
                                        Carrying amount       Provision for bad debts      Bad debts ratio (%)
 Within 1 year (inclusive)                  432,858,214.27
 1-2 years (inclusive)                      174,803,236.45               8,740,161.81                     5.00
 2-3 years (inclusive)                       31,180,172.93               6,236,034.59                   20.00
 Over 3 years                               190,996,330.83            190,996,330.83                   100.00
                 Total                      829,837,954.48            205,972,527.23                    24.82
     2. Information of provision, reversal or recovery of bad debts of current period.
     The provision of bad debts of current period is RMB 52,040,150.94.
     3. No accounts receivable has been written off this year.
                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
    4. Top five debtors at the year-end
                                                                              Ending balance
                         Company                                                 Percentage of
                                                                                                    Provision for
                                                              Amount            total Accounts
                                                                                                     bad debts
                                                                                receivable (%)
 HuaChen Auto Group Holding Co., Ltd.                        158,522,168.13               19.10
 Benxi Nanfen Xinhe Metallurgical Co., Ltd.                   87,396,378.47               10.53      4,368,958.76
 Benxi Steel & Iron (Group) Machinery
                                                              58,688,479.41                7.07      6,978,534.14
 Manufacture Co., Ltd.
 Ningbo CIMC Logistics Equipment Co., Ltd.                    49,157,039.02                5.92
 Benxi Steel & Iron (Group) Industrial
                                                              43,138,986.20                5.20      2,160,167.07
 Development Co., Ltd.
                           Total                             396,903,051.23               47.82     13,507,659.97
(4) Prepayments
     1. Prepayments disclosed by aging
                                            Ending balance                           Beginning balance
           Aging
                                      Amount          Percentage (%)            Amount            Percentage (%)
 Within 1 year (inclusive)          452,700,499.16                91.67       423,542,198.08                74.32
 1-2 years (inclusive)               31,080,628.03                 6.29       139,209,276.37                24.43
 2-3 years (inclusive)                 8,279,599.88                1.68         7,100,476.24                 1.25
 Over 3 years                          1,778,932.37                0.36
           Total                    493,839,659.44               100.00       569,851,950.69               100.00
    Notes: Significant prepayment with aging over 1 year is paid for commodity in advance and
     the settlement terms agreed in the contract are not due.
     2. Top five prepaid companies at the year-end
                          Name of the company                                  Amount             Percentage (%)
 Benxi Beiying Steel & Iron (Group) Co., Ltd.                                  209,639,029.05               42.45
 Shanxi Xishan Coal and Elect-ricity Power Co., Ltd.                            98,539,077.31               19.95
 Shanxi Coking Coal Group Co., Ltd.                                             37,127,505.53                7.52
 Yangquan Coal Industry Group Co., Ltd.                                         28,883,959.66                5.85
 MCC (Wuhan) Co., Ltd.                                                          14,880,000.00                3.01
                                   Total                                       389,069,571.55               78.78
(5) Interest receivable
     1. Interest receivable disclosed by category
                          Items                                Ending balance             Beginning balance
 Fixed deposit interest                                                   4,208,818.85               3,524,615.12
                          Total                                           4,208,818.85               3,524,615.12
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
(6) Other receivables
     1. Other receivables disclosed by category
                                                                        Ending balance
                 Items                       Carrying amount              Provision for bad debts
                                                          Percentage                     Bad debts     Book value
                                            Amount                         Amount
                                                             (%)                         ratio (%)
Individually significant and tested
for impairment individually
Accounts receivable tested for
impairment by portfolio              183,443,116.06             99.06 67,273,143.57            36.67 116,169,972.49
Other insignificant items but tested
for impairment individually            1,740,000.00              0.94                                   1,740,000.00
                 Total                   185,183,116.06       100.00 67,273,143.57             36.33 117,909,972.49
                                                                       Beginning balance
                 Items                      Carrying amount             Provision for bad debts
                                                          Percentage                     Bad debts
                                                                                                      Book value
                                           Amount            (%)
                                                                          Amount          ratio (%)
 Individually significant and tested
 for impairment individually
 Accounts receivable tested for
 impairment by portfolio                 216,153,715.77       99.20      66,224,838.51       30.64    149,928,877.26
 Other insignificant items but
 tested for impairment individually        1,740,000.00        0.80                                     1,740,000.00
                 Total                   217,893,715.77      100.00      66,224,838.51       30.39    151,668,877.26
     Other receivables tested for impairment by portfolio using the method of Aging analysis
                                                                       Ending balance
             Items
                                       Carrying amount        Provision for bad debts          Bad debts ratio (%)
 Within 1 year (inclusive)               103,116,802.98
 1-2 years (inclusive)                     9,963,866.58                        498,176.84                      5.00
 2-3 years (inclusive)                     4,484,349.71                        896,869.94                     20.00
 Over 3 years                             65,878,096.79                     65,878,096.79                    100.00
                Total                    183,443,116.06                     67,273,143.57                     36.67
     Other receivables individually insignificant but tested for impairment individually
                                                  Carrying         Provision for      Bad debts
                        Items                                                                           Reason
                                                  Amount             bad debts         ratio (%)
 Sinking Fund of Japanese yen from
                                                 1,740,000.00                                         Sinking fund
 Finance Bureau of Benxi
                        Total                    1,740,000.00
     Notes: The Sinking Fund of Japanese yen from Finance Bureau of Benxi is the margin for JPY
     loans of which the aging is over 3 years and no bad debts provision has been made for it.
    2. Information of provision, reversal or recovery of bad debts of current period.
     The provision of bad debts of current period is RMB 1,048,305.06.
                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
       3. No other receivables have been written off this year.
      4. Other receivables disclosed by nature
                     Nature                                     Ending balance                           Beginning balance
     Accounts                                                            165,494,806.44                                151,337,358.60
     Export tax rebate                                                       4,990,848.26                               32,772,729.71
     Margin and deposit                                                      3,329,519.00                                  3,571,060.87
     Others                                                                 11,367,942.36                                  8,296,700.68
     Input tax to be deducted                                                                                           21,915,865.91
                      Total                                              185,183,116.06                                217,893,715.77
    5. Top five debtors at the year-end
                                                                                                             Percentage
                                                                                                                               Provision
                                                 Nature or                                                     of total
                 Company                                             Amount                Aging                                for bad
                                                  content                                                       other
                                                                                                                                 debts
                                                                                                             receivables
  Benxi Steel Group International                                                       Within 1 year,
  Trade Tenda Co., Ltd.                          Accounts           12,953,078.23                                     6.99        2,000.00
                                                                                         over 3 years
  National Tax Bureau Bengang
  Branch                                    Export rebate            4,990,848.26       Within 1 year                 2.70
  Huozhou Coal and Electricity
  Group Co., Ltd.                                Accounts            4,341,257.18       Over 3 years                  2.34 4,341,257.18
  State Grid Liaoning Electricity
  Co., Ltd. Benxi Power Branch                   Accounts            3,530,637.67       Within 1 year                 1.91
  Benxi Steel Group Real Estate
  Development Co., Ltd.                          Accounts            2,797,309.70 Within 3 years                      1.51      173,991.52
                  Total                                             28,613,131.04                                   15.45 4,517,248.70
  (7) Inventories
    1. Inventories disclosed by category
                                                 Ending balance                                          Beginning balance
    Items                  Carrying
                                                   Impairment        Book value         Carrying amount Impairment              Book value
                               amount
Raw material
and main material             5,524,143,499.59       4,894,918.76    5,519,248,580.83     5,527,236,707.17     4,894,918.76     5,522,341,788.41
Work in process and
self-made semi-finished       1,565,629,213.06      52,905,684.06    1,512,723,529.00     1,011,630,448.37 192,850,188.37        818,780,260.00
product
Finished products             2,755,527,232.24       5,325,405.33    2,750,201,826.91     2,566,825,937.84 306,213,543.83       2,260,612,394.01
         Total                9,845,299,944.89      63,126,008.15    9,782,173,936.74     9,105,693,093.38 503,958,650.96       8,601,734,442.42
    Notes: No inventories are used as mortgage or guarantee at the year-end.
    2. Impairment of inventory
                                                                 Increase                        Decrease
                                   Beginning                                                                                  Ending
         Category                                                                        Write-back
                                    balance             Provision         Others                             Others           balance
                                                                                         or write-off
 Raw material                        4,894,918.76                                                                               4,894,918.76
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
and main materials
Work in process and
self-made semi-finished      192,850,188.37   52,905,684.06                192,850,188.37             52,905,684.06
product
Finished products            306,213,543.83    5,325,405.33                306,213,543.83              5,325,405.33
         Total               503,958,650.96   58,231,089.39                499,063,732.20             63,126,008.15
(8) Other current assets
                           Items                                 Ending balance             Beginning balance
Prepaid enterprise income tax                                        183,264,161.99                225,000,858.03
Input tax to be deducted                                              86,134,653.84                206,359,683.18
Bank Short-Term Financial Products                                   244,000,000.00
                           Total                                     513,398,815.83                431,360,541.21
Notes: As at 31 December 2016, an amount of RMB 244,000,000.00 bank short-term financial
products is pledged for opennng letter of credit.
                                                                                                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
(9) Available-for-sale financial assets
     1. Details of available-for-sale financial assets
                                                                      Ending balance                                                        Beginning balance
                 Items
                                              Carrying amount           Impairment                Book value       Carrying amount            Impairment              Book value
Available-for-sale debt instruments
Available-for-sale equity instruments           29,271,278.63          14,414,693.00             14,856,585.63       20,271,278.63                                   20,271,278.63
Including:
  Measured at fair value
  Measured at cost                              29,271,278.63          14,414,693.00             14,856,585.63       20,271,278.63                                   20,271,278.63
                 Total                          29,271,278.63          14,414,693.00             14,856,585.63       20,271,278.63                                   20,271,278.63
     2. Available-for-sale financial assets measured at cost
                                                          Carrying amount                                               Impairment                           Percentage       Cash
                                                                                                                                                             of share in   dividend of
     Company invested in                Beginning                                      Ending        Beginning                                  Ending
                                                        Increase       Decrease                                    Increase      Decrease                     the firm     the current
                                         Balance                                       Balance        Balance                                   Balance          (%)         period
Zhejiang Bengang Jingrui Steel
                                        1,967,605.63                                 1,967,605.63                                                                  20.00    303,310.97
Processing Co., Ltd.
Suzhou Bengang Industrial Co.,
                                        3,888,980.00                                 3,888,980.00                                                                  20.10
Ltd.
China Steel Shanghai Steel
                                      14,414,693.00                               14,414,693.00                  14,414,693.00               14,414,693.00         15.00
Processing Co., Ltd.
Bengang Baojin (Shenyang) Auto
New Material Technology Co.,                           9,000,000.00                  9,000,000.00                                                                  15.00
Ltd.
              Total                   20,271,278.63    9,000,000.00               29,271,278.63                  14,414,693.00               14,414,693.00                  303,310.97
                                                     Bengang Steel Plates Co., Ltd. Annual Report 2016
(10) Fixed assets
      1. Details of fixed assets
                                                                   Transportation
          Items                Buildings         Machinery                                Total
                                                                     equipment
1. Total original value
 Beginning balance         10,575,548,527.75   37,145,242,250.50   836,816,572.35    48,557,607,350.60
 Increase
                            1,237,692,734.81    1,277,222,342.59      2,544,715.34    2,517,459,792.74
 in current period
 Including: Purchase
                              10,005,323.61       47,709,264.48       2,205,615.34      59,920,203.43
            Transferred
            from
                            1,227,687,411.20    1,229,513,078.11       339,100.00     2,457,539,589.31
            construction
            in progress
            Merging
            Others
 Decrease in current
                              30,776,758.26      284,390,898.26       6,776,663.15     321,944,319.67
 period
 Including: Disposal
                              30,776,758.26      284,390,898.26       6,776,663.15     321,944,319.67
            Others
 Ending balance            11,782,464,504.30   38,138,073,694.83   832,584,624.54    50,753,122,823.67
2.Total accumulated
 depreciation
 Beginning balance          4,699,483,576.90   23,257,690,103.38   543,419,803.08    28,500,593,483.36
 Increase
                             325,214,225.52     1,514,696,705.68      7,218,614.18    1,847,129,545.38
 in current period
 Including: Provision
                             325,214,225.52     1,514,696,705.68      7,218,614.18    1,847,129,545.38
            Others
 Decrease in current
                              22,699,536.45      275,273,950.49       6,256,218.08     304,229,705.02
 period
 Including: Disposal
                              22,699,536.45      275,273,950.49       6,256,218.08     304,229,705.02
            Others
 Ending balance             5,001,998,265.97   24,497,112,858.57   544,382,199.18    30,043,493,323.72
3. Total impairment
 Beginning balance              8,208,087.85        2,551,052.65                        10,759,140.50
 Increase
                                                  10,401,722.01                         10,401,722.01
 in current period
 Including: Provision
                                                  10,401,722.01                         10,401,722.01
            Others
 Decrease in current
 period
                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                          Transportation
            Items                Buildings             Machinery                                       Total
                                                                            equipment
 Including: Disposal
             Others
 Ending balance                  8,208,087.85           12,952,774.66                                 21,160,862.51
4. Total net book value
 of Fixed assets
 Ending book value            6,772,258,150.48      13,628,008,061.60      288,202,425.36      20,688,468,637.44
 Beginning book value         5,867,856,863.00      13,885,001,094.47      293,396,769.27      20,046,254,726.74
    2. Fixed assets leased out by operating lease
                      Items                                              Book value
Buildings                                                               24,419,461.97
Machinery                                                               3,788,152.66
Total                                                                   28,207,614.63
    3. Fixed assets without property rights certificates at the year-end
                    Items                        Book value                              Reason
Buildings                                        996,678,256.84                       To be handled
                                                                                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
(11) Construction in progress
     1. Details of construction in progress
                                                                                        Ending balance                                              Beginning balance
                                Items                                                                                                  Carrying
                                                                    Carrying amount         Impairment         Book value                                  Impairment     Book value
                                                                                                                                       amount
 High Strength Cold Rolling Steel Renovation Project                     4,947,002,125.33                      4,947,002,125.33       3,451,712,764.91                   3,451,712,764.91
 The Third Cold Rolling Work Hot-Dip Galvanizing Production Line
                                                                          398,719,600.41                        398,719,600.41         335,752,700.00                     335,752,700.00
 Project
 Energy Saving And Environmental Protection Reconstruction Of The
                                                                          160,819,316.39                        160,819,316.39         153,224,111.93                     153,224,111.93
 Converter System And 180 Ton Dephophorization Converter Project
 The 360 Square Meter Sintering Machine                                                                                                973,980,424.51                     973,980,424.51
 Hot Rolling Process Equipment Production Transformation                                                                                 4,230,929.56                       4,230,929.56
 Manufacturing Department Energy Control Center                             4,656,735.30                          4,656,735.30         226,586,153.73                     226,586,153.73
 Information System Engineering                                            27,813,512.90                         27,813,512.90         223,389,048.63                     223,389,048.63
 Ancillary Facilities Reconstruction Of The South Line Of
                                                                                                                                        47,995,690.74                      47,995,690.74
 Transportation Department
 The Power Plant No.3 Workshop Reconstruction Project                     427,626,724.92                        427,626,724.92         105,385,827.26                     105,385,827.26
 Other Projects                                                           244,035,658.86                        244,035,658.86         124,366,642.00                     124,366,642.00
                                Total                                    6,210,673,674.11                      6,210,673,674.11       5,646,624,293.27                   5,646,624,293.27
         2. The change of major construction in progress
                                                                     Budget (In 10          Beginning                                                         Other
                                Project                                                                            Increase           Transfer to FA                    Ending balance
                                                                    Thousand Yuan)           Balance                                                         decrease
 High Strength Cold Rolling Steel Renovation Project                       613,498.00       3,451,712,764.91     1,495,289,360.42                                        4,947,002,125.33
 The Third Cold Rolling Work Hot-Dip Galvanizing Production Line
                                                                            86,918.00         335,752,700.00        62,966,900.41                                          398,719,600.41
 Project
 Energy Saving And Environmental Protection Reconstruction Of The
                                                                           177,864.40         153,224,111.93         7,595,204.46                                          160,819,316.39
 Converter System And 180 Ton Dephophorization Converter Project
 The 360 Square Meter Sintering Machine                                    128,403.20         973,980,424.51        97,803,645.69       1,071,784,070.20
                                                                                                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                  Budget (In 10           Beginning                                                           Other
                              Project                                                                              Increase           Transfer to FA                          Ending balance
                                                                 Thousand Yuan)            Balance                                                           decrease
Hot Rolling Process Equipment Production Transformation                     33,287.00        4,230,929.56                                    4,230,929.56
Manufacturing Department Energy Control Center                              29,450.00      226,586,153.73           20,936,397.28          242,865,815.71                           4,656,735.30
Information System Engineering                                              42,725.00      223,389,048.63            2,991,762.15          198,567,297.88                          27,813,512.90
Ancillary Facilities Reconstruction Of The South Line Of
                                                                             5,598.00       47,995,690.74                                   47,577,664.74     418,026.00
Transportation Department
The Power Plant No.3 Workshop Reconstruction Project                        61,072.00      105,385,827.26          322,240,897.66                                                 427,626,724.92
Other Project                                                                              124,366,642.00     1,015,392,516.08             892,513,811.22    3,209,688.00         244,035,658.86
                                 Total                                    1,178,815.60    5,646,624,293.27    3,025,216,684.15            2,457,539,589.31   3,627,714.00       6,210,673,674.11
                                                                                                                   Including:
                                                               Input of                     Accumulated
                                                                               Progress                            capitalized     Capitalization
                             Project                            Budget                        amount of                                                               Source of fund
                                                                                 (%)                           interest of current     rate
                                                                 (%)                      capitalized interest
                                                                                                                     period
High Strength Cold Rolling Steel Renovation Project              76                80             552,911,535.81         247,763,695.34            4.1           Self-raised fund & Loan
The Third Cold Rolling Work Hot-Dip Galvanizing Production
                                                                 76                80                                                                                 Self-raised fund
Line Project
Energy Saving And Environmental Protection Reconstruction Of
The Converter System And 180 Ton Dephophorization Converter      85                90            127,847,567.31                                                  Self-raised fund & Loan
Project
The 360 Square Meter Sintering Machine                           88               100              68,627,433.26          33,032,142.88            4.1           Self-raised fund & Loan
Hot Rolling Process Equipment Production Transformation          85               100                                                                                 Self-raised fund
Manufacturing Department Energy Control Center                   91                96              45,372,134.03          10,209,526.89            4.1           Self-raised fund & Loan
Information System Engineering                                   92                96              34,177,972.63                                                 Self-raised fund & Loan
Ancillary Facilities Reconstruction Of The South Line Of
                                                                 86               100               2,701,697.34                                                 Self-raised fund & Loan
Transportation Department
The Power Plant No. 3 Workshop Reconstruction Project            72                80              17,371,278.66          12,945,315.51            4.1           Self-raised fund & Loan
Other Project                                                                                                                                                               Self-raised
                              Total                                                              849,009,619.04          303,950,680.62
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
(12) Construction materials
     1. Construction materials
    Items             Beginning balance           Increase                  Decrease           Ending balance
 Special equipment               4,152,880.79           502,318,825.94           498,688,336.44          7,783,370.29
    Total                    4,152,880.79           502,318,825.94           498,688,336.44          7,783,370.29
(13) Intangible assets
     1. Details of intangible assets
                Items                    Land use right                  Office software               Total
 1.Total of original value
  Beginning balance                             296,245,314.76                    141,509.43         296,386,824.19
  Increase                                                                        255,555.56            255,555.56
  Including: Purchase                                                             255,555.56            255,555.56
  Decrease
  Including: Disposal
  Ending balance                                296,245,314.76                    397,064.99         296,642,379.75
 2. Total of Accumulated
  Amortization
  Beginning balance                              30,838,789.07                     27,122.55          30,865,911.62
  Increase                                        5,924,906.28                     14,150.92           5,939,057.20
  Including: Provision                            5,924,906.28                     14,150.92           5,939,057.20
  Decrease
  Including: Disposal
  Ending balance                                 36,763,695.35                     41,273.47          36,804,968.82
 4. Total of Impairment
  Beginning balance
  Increase
  Including: Provision
  Decrease
  Including: Disposal
  Ending balance
 5. Total of Net value
  Ending book value                             259,481,619.41                    355,791.52         259,837,410.93
  Beginning book value                          265,406,525.69                    114,386.88         265,520,912.57
(14) Deferred tax asset and deferred tax liability
     1. Undeducted deferred tax asset
                                                   Ending balance                          Beginning balance
                Items                     Deductible                                 Deductible
                                                                 Deferred tax                         Deferred tax
                                          temporary                                  temporary
                                                                    asset                                asset
                                          differences                                differences
                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
(1) Temporary differences between
Carrying amount and tax basis
Impairment                               368,635,605.55      92,158,901.41        734,875,006.26    183,718,751.57
Differences of depreciation and
amortization                             333,978,859.03      83,494,714.76        333,978,859.03     83,494,714.76
Welfare for early retirement               5,859,027.00        1,464,756.75         6,946,500.22      1,736,625.06
Unpaid employee salary                     7,339,835.99        1,834,959.00        18,088,405.91      4,522,101.48
(2) Deductible operating losses        1,136,092,189.97     284,023,047.49    1,494,830,936.71      373,707,734.18
(3) Internal unrealized profit            52,499,498.52      13,124,874.63        -20,995,185.07     -5,248,796.27
                 Total                 1,904,405,016.06     476,101,254.04    2,567,724,523.06      641,931,130.78
      2. Unrecognized deferred tax assets
                         Items                             Ending balance                 Beginning balance
  Deductible temporary differences                                    3,311,628.91
  Deductible losses                                               3,041,165,564.90            2,912,363,442.38
                         Total                                    3,044,477,193.81            2,912,363,442.38
      3. The deductible loss of unrecognized deferred tax assets due in the following period
           Items                    Ending balance              Beginning balance                  Notes
  Year 2017                                44,146,053.02               405,383,631.05
  Year 2018                                61,226,455.38               267,988,139.50
  Year 2019                               179,596,211.65               179,596,211.65
  Year 2020                             2,745,964,056.85             2,059,395,460.18
  Year 2021                                10,232,788.00
            Total                       3,041,165,564.90             2,912,363,442.38
      Notes: The balance is subject to the verification and confirmation of the local tax bureau.
(15) Short-term loans
     1. Short-term loans disclosed by category
                           Items                           Ending balance               Beginning balance
  Guaranteed loans                                            10,633,173,500.00              10,586,898,400.00
  Credit loans                                                 7,483,988,079.48               5,571,891,996.60
  Mortgage loans                                                                                   14,220,000.00
  Pledge loans                                                   645,311,200.00               1,966,875,200.00
                           Total                              18,762,472,779.48              18,139,885,596.60
(16) Notes payable
      1. Notes payable disclosed by category
                            Items                              Ending balance              Beginning balance
 Bank acceptance bill                                               1,712,218,775.03           2,110,511,950.79
                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
 Domestic letter of credit                                      4,659,955,122.10
                         Total                                  6,372,173,897.13              2,110,511,950.79
(17) Accounts payable
     1. Accounts payable disclosed by category
                     Items                            Ending balance                 Beginning balance
 Accounts payable for goods                                 4,399,863,760.66                  4,045,710,114.68
 Accounts payable for labor                                    78,583,112.68                    47,556,941.28
 Accounts payable for project and equipment                  818,679,528.16                    455,338,318.37
 Repair expense                                              382,273,450.21                    464,461,747.57
 Others                                                          844,809.81                      2,833,542.57
                      Total                                 5,680,244,661.52                  5,015,900,664.47
     2. Significant accounts payable aging over one year
                                                                         Amount aging
                        Items                           Amount                                      Reason
                                                                         over one year
Benxi Steel & Iron (Group) Mining Co., Ltd.           875,832,744.08          66,440,173.78      Not yet settled
Bengang Group International Economic and
                                                     1,332,351,145.92         48,736,070.33      Not yet settled
Trading Co., Ltd.
Jixi Huasheng Fengyuan Coal Preparation Co., Ltd.      46,005,916.07          46,005,916.07      Not yet settled
Benxi Nanfen Xinhe Metallurgical Co., Ltd.             39,634,041.29          39,634,041.29      Not yet settled
ACRE Coking And Refractory Engineering
                                                       24,666,763.99          24,666,763.99      Not yet settled
Consulting , MCC
                        Total                        2,318,490,611.35     225,482,965.46
(18) Advance from customers
     1. Advance from customers disclosed by category
                         Items                        Ending balance                 Beginning balance
 Advance for goods                                         3,679,477,129.80                   1,815,443,452.05
                         Total                             3,679,477,129.80                   1,815,443,452.05
     2. There is no significant advance from customers aging over one year.
(19) Employee benefits payable
     1. Employee benefits payable
                                        Beginning                                                    Ending
                Items                                        Increase            Decrease
                                        balance                                                      balance
 Short-term employee benefits        29,508,643.54    1,445,632,887.09   1,456,994,794.35        18,146,736.28
 Post-employment benefits -
 defined contribution plans                             233,643,394.98    233,585,664.56             57,730.42
 Termination benefits                 6,946,500.22           16,889.17         1,104,362.39       5,859,027.00
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2016
                                           Beginning                                                  Ending
                  Items                                         Increase            Decrease
                                           balance                                                    balance
                  Total                 36,455,143.76     1,679,293,171.24     1,691,684,821.30   24,063,493.70
         2. Short-term employee benefits
                                      Beginning                                                      Ending
                Items                                      Increase              Decrease
                                        balance                                                      balance
  (1) Salary, bonus, allowance
  and subsidy                       20,290,491.47       1,167,836,607.53     1,179,231,518.64      8,895,580.36
  (2) Employee welfare                                    26,730,994.68          26,730,994.68
  (3) Social Insurance                  653,471.94       107,049,721.78         107,047,619.52      655,574.20
  Including: Medical insurance                            79,768,952.93          79,768,952.93
               Work injury
               insurance                653,471.94        27,267,511.00          27,265,408.74      655,574.20
               Maternity
               insurance                                      13,257.85              13,257.85
  (4) Housing                        6,849,633.00        114,968,050.20         114,966,970.20     6,850,713.00
  (5) Union funds and staff
  education fee                      1,712,437.87         28,528,122.90          28,495,692.05     1,744,868.72
  (6) Short-term compensated
  absences
  (7) Short-term profit - sharing
  scheme
  (8) Others                              2,609.26           519,390.00             521,999.26
                Total               29,508,643.54       1,445,632,887.09     1,456,994,794.35     18,146,736.28
     3. Defined contribution plans
                                          Beginning                                                Ending
                  Items                                        Increase           Decrease
                                            balance                                                balance
  Basic pension fund                                      222,758,975.50       222,702,871.10        56,104.40
  Unemployment insurance                                   10,884,419.48        10,882,793.46          1,626.02
                  Total                                   233,643,394.98       233,585,664.56        57,730.42
(20) Current tax liabilities
                    Items                              Ending balance                  Beginning balance
Value-added tax                                                 2,173,913.92                      23,631,817.37
Enterprise income tax                                          13,019,967.76                       6,788,181.39
City maintenance and construction tax                          14,026,666.46                       2,015,344.46
Educational surcharges                                         10,029,654.63                       1,475,601.50
House property tax                                              2,970,971.37                      10,211,765.05
Others                                                          3,550,411.32                       1,071,818.58
                     Total                                     45,771,585.46                      45,194,528.35
(21) Interests payable
                        Items                              Ending balance                Beginning Balance
                                                    Bengang Steel Plates Co., Ltd. Annual Report 2016
Corporate bond interests
                                                           70,109,821.13                   70,113,698.63
Loan interests
                                                            5,005,444.53                      844,988.33
                     Total
                                                           75,115,265.66                   70,958,686.96
(22) Other payables
     1. Other payables disclosed by nature
                  Items                         Ending balance                  Beginning Balance
 Deposit                                                  2,719,618.51                        3,280,020.39
 Margin                                                 130,550,329.63                      128,048,589.14
 Accounts                                               304,191,214.76                      270,090,696.48
 Others                                                  22,548,050.88                       43,315,398.89
                   Total                                460,009,213.78                      444,734,704.90
     2. Significant other payables ageing over one year
                                                                     Amount aging
                       Name                       Ending balance                               Reason
                                                                     over one year
 Benxi Steel & Iron (Group) Co., Ltd.               153,946,251.96   134,708,601.09         Not yet settled
 Bengang Group International Economic and
                                                     22,209,584.96       10,632,701.94      Not yet settled
 Trading Co., Ltd.
                       Total                        176,155,836.92   145,341,303.03
(23) Non-current liabilities due within one year
     1. Breakdown of Non-current liabilities due within one year
                     Items                       Ending balance                Beginning balance
  Long-term loans due within one year                   227,669,535.66                    944,004,649.14
  Long-term payables due within one year                210,000,000.00                    490,000,000.00
                     Total                              437,669,535.66                   1,434,004,649.14
     2. Long-term loans due within one year
                      Items                       Ending balance                Beginning balance
  Guaranteed loans                                       226,789,535.66                   781,754,649.14
  Credit loans                                               880,000.00                   162,250,000.00
                      Total                              227,669,535.66                   944,004,649.14
     3. Long-term payables due within one year
                      Items                       Ending balance                Beginning balance
  Liaoning Hengyi Financial Leasing Co., Ltd.            210,000,000.00                   490,000,000.00
                      Total                              210,000,000.00                   490,000,000.00
     Notes: On 28 March 2016, the Company signed the “Financing leaseback after sales
     contract” with Liaoning Hengyi Financial Leasing Co., Ltd. (hereafter as Liaoning Hengyi)
                                                          Bengang Steel Plates Co., Ltd. Annual Report 2016
     The purchase price of the leased asset is RMB 210,000,000. 00. Lease period is one year
     staring from 28 March 2016.
(24) Long-term loans
      Long-term loans disclosed by category
                 Categories                        Ending balance                   Beginning balance
  Guaranteed loans                                     3,440,691,721.62                         995,919,974.09
  Credit loans                                                8,240,000.00                       10,000,000.00
                     Total                             3,448,931,721.62                        1,005,919,974.09
(25) Bonds payable
      1. Details of bonds payable
                     Items                         Ending balance                   Beginning balance
  Corporate bond                                       1,494,825,782.32                        1,490,352,572.75
                     Total                             1,494,825,782.32                        1,490,352,572.75
      2. Changes in bonds payable
    Name                      Par value             Date of issue        Bond maturity         Issue value
 Bengang Steel Plate
 Co., Ltd. Corporate           1,500,000,000.00       5 February 2015             3 years       1,500,000,000.00
Bond of 2016 (Phase I)
                                                                Amortization
                                                 Interest                         Repayment
                               Issuance in                          of the
    Name                                  calculated by                       in current     Ending balance
                             current period                     Premiums and
                                                par value                           period
                                                                  Discounts
 Bengang Steel Plate
 Co., Ltd. Corporate                          77,550,000.00       -4,473,209.57                  1,494,825,782.32
Bond of 2016 (Phase I)
     Notes: On 5 February 2015, the Company publicly issued corporate bonds worth RMB 1.5
     billion, each with a face value of RMB 100 at a total of 15 million bonds. The bond is issued
     at a price of RMB 100 each at par value. The term is 3 years. The interest rate is 5.17%. The
     date of value is 5 February 2016, and the interest payment date is February 5 of each year
     from 2016 to 2018. Interest is paid annually, and principal is paid when due.
     The public issuance of corporate bonds is guaranteed by the Bengang Group Co. Ltd., who
     offered full unconditional irrevocable joint and several liability guarantees. Guarantees
     include the principal amount and the interest thereof, default fine, compensation for damage
     and expenses for enforcing the claim. Guarantee period lasts from the first day of issuance to
     12 months after the maturity date.
(26) Deferred income
                     Items                         Ending balance                   Beginning balance
  Government subsidy                                     410,399,000.00                         413,188,000.00
                     Total                               410,399,000.00                         413,188,000.00
                                                                                                                Bengang Steel Plates Co., Ltd. Annual Report 2016
     Projects of government subsidies:
                                                                                                Transfer to                                     Related to
                                                                   Beginning                                       Other
                           Items                           Notes                    Increase   non-operating                  Ending balance     assets or
                                                                    balance                                       decrease
                                                                                                  income                                          income
220t/h Boiler Desulfurization Project                                 800,000.00                  800,000.00                                      Assets
MES Project Special Fund                                             6,880,000.00                1,720,000.00                    5,160,000.00     Assets
Municipal Environment Pollution Renovation Project
                                                                      540,000.00                  540,000.00                                      Assets
Special Fund
Second Batch of National Cleaned Manufacturing
                                                                     1,600,000.00                 800,000.00                       800,000.00     Assets
Demonstration Project Fund
Industrial Enterprise Energy Management Center
                                                                    11,600,000.00                                               11,600,000.00     Assets
Construction Demonstration Project
Environment Pollution Renovation Project                            17,708,000.00                5,234,000.00                   12,474,000.00     Assets
Environment Renovation Project and Regional Basin
                                                                     1,680,000.00                 500,000.00                     1,180,000.00     Assets
Environment Protection Project
Energy-saving Technological Reform Fiscal Reward Project             5,908,000.00                2,954,000.00                    2,954,000.00     Assets
High Strength Cold Rolling Steel Renovation Project                250,000,000.00                                              250,000,000.00     Assets
The 2*265 Square Meter Sintering Machine Desulfurization
                                                                     1,000,000.00                1,000,000.00                                     Assets
Project of Blast Furnace Plant
The 2*265 Square Meter Sintering Machine Polluted Water
                                                                     3,380,000.00                3,380,000.00                                     Assets
Project of Blast Furnace Plant
The 360 Cubic Meter Sintering Machine Tail Electrostatic
                                                                        60,000.00                   60,000.00                                     Assets
Precipitator Renovation Project of Blast Furnace Plant
Automobile High-class Electrolytic Zinc Steel Plate
                                                                    41,040,000.00                8,208,000.00                   32,832,000.00     Assets
Production Line Project
Sintering Machine Residue Heat Usage and Desulfurization
                                                                    16,816,000.00                4,204,000.00                   12,612,000.00     Assets
Project
Wastewater Treatment Plant Renovation Project                        3,000,000.00                1,500,000.00                    1,500,000.00     Assets
                                                                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                                                       Transfer to                                     Related to
                                                                     Beginning                                            Other
                           Items                             Notes                     Increase       non-operating                  Ending balance     assets or
                                                                      balance                                            decrease
                                                                                                         income                                          income
Overseas R&D Team Introduction Special Fund                            4,000,000.00                                                     4,000,000.00     Income
7 130t Boilers Flue Gas Desulfurization Renovation Project
                                                                      24,000,000.00                                                    24,000,000.00     Assets
of Power Plant
Treatment and Salt Extraction Project of Desulfurization
                                                                        300,000.00                       100,000.00                       200,000.00     Assets
Waste Liquid of Coke Plant
Overseas Advanced Technology Introduction Special Fund                13,536,000.00                      884,000.00                    12,652,000.00     Assets
Automobile Steel Sheet Engineering Laboratory Project                  1,000,000.00                                                     1,000,000.00     Assets
Third-generation High Strength Steels for Automobile R&D
                                                                       2,900,000.00                                                     2,900,000.00     Assets
Project
The 360 Cubic Meter Sintering Machine Flue Gas
                                                                        800,000.00                       200,000.00                       600,000.00     Assets
Desulfurization Renovation Project of Blast Furnace Plant
Environment Protection Project Special Fund                            4,640,000.00                     1,160,000.00                    3,480,000.00     Assets
Advanced Treatment of Carbon Fiber Wastewater Project of
                                                                                       9,500,000.00                                     9,500,000.00     Assets
Coke Plant Dongfeng Area
Desulfurization and Denitration Projects for Coal-fired
                                                                                       6,000,000.00                                     6,000,000.00     Assets
Boiler of Power Plant High-pressure Workshop
Power Plant No 3 workshop Heat and Power Cogeneration
                                                                                      10,000,000.00                                    10,000,000.00     Assets
Renovation Project
Sintering Machine Energy Saving and Environmental
                                                                                       5,800,000.00     1,160,000.00                    4,640,000.00     Assets
Protection Project of Blast Furnace Plant
Air Quality Automatic Monitoring System                                                 350,000.00         35,000.00                      315,000.00     Assets
                            Total                                    413,188,000.00   31,650,000.00    34,439,000.00                  410,399,000.00        /
                                                                  Bengang Steel Plates Co., Ltd. Annual Report 2016
(27) Share capital
                                                           Increase/decrease (+ , - )
                            Beginning
      Items                                  Issuing of Bonus Transferred                               Ending balance
                             balance                                                Others Subtotal
                                             new share shares from reserves
Capital shares            3,136,000,000.00                                                               3,136,000,000.00
(28) Capital reserves
                 Items                       Beginning balance        Increase          Decrease      Ending balance
 Capital premium over par value                8,998,928,073.23                                       8,998,928,073.23
 Other capital reserves                         115,917,468.82                                          115,917,468.82
                  Total                        9,114,845,542.05                                       9,114,845,542.05
(29) Special Reserves
              Items                      Beginning balance           Increase           Decrease       Ending balance
 Safety production cost
                                                  393,372.05        39,766,855.73   39,787,505.92            372,721.86
                 Total
                                                  393,372.05        39,766,855.73   39,787,505.92            372,721.86
(30) Surplus Reserves
                                               Beginning                                                   Ending
                 Items                                              Increase            Decrease
                                                balance                                                    balance
 Statutory surplus reserves                  961,105,529.85                                             961,105,529.85
                  Total                      961,105,529.85                                             961,105,529.85
(31) Undistributed Profitsrc
                               Items                                      Amount                   Distribution rate
 Before adjustments: undistributed profits at last
                                                                        -1,278,244,071.93             2,172,180,473.24
 year-end
 Adjustments of the beginning distributed profits
 (increase + / decease -)
 After adjustments: undistributed profit at this
                                                                        -1,278,244,071.93             2,172,180,473.24
 year-beginning
 Add: undistributed profit belonging to parent company                     781,274,829.32            -3,293,624,545.17
 Less : Statutory surplus reserves
 Discretionary reserves
 General risk reserves
 Common shares dividend payable                                                                         156,800,000.00
 Common shares dividend transferred to paid-in capital
 Ending balance of undistributed profits                                  -496,969,242.61            -1,278,244,071.93
(32) Operating income and operating cost
    1. Details of operating income and operating cost
                                                              Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                2016
           Items
                                   Revenue                  Cost                 Revenue                 Cost
  Principal business            27,855,007,850.33      24,211,213,258.03     27,452,962,527.12   28,154,149,434.65
  Other business                 1,671,004,800.75       1,466,451,974.09      1,800,676,078.68      1,657,745,582.20
            Total               29,526,012,651.08      25,677,665,232.12     29,253,638,605.80   29,811,895,016.85
(33) Tax and surcharges
                         Items                                        2016
Housing Property tax                                                       14,991,980.60
Business tax                                                                  583,745.52                      274,427.66
City maintenance and construction tax                                      47,275,478.72                29,657,164.15
Educational surcharge                                                      34,425,829.14                21,638,030.06
Land use right tax                                                          3,902,155.50
Others                                                                     46,367,245.76
                         Total                                         147,546,435.24                   51,569,621.87
Notes: Others are mainly Stamp duty and Vehichle and Vessel tax.
(34) Selling and distribution expenses
                       Items                                        2016
  Freight                                                                  614,483,275.86            609,808,842.96
  Port surcharges                                                          181,534,004.18            199,336,639.67
  Agency fee                                                                 57,044,559.83            54,293,066.93
  Package fee                                                                 4,648,213.21            17,287,739.31
  Salary and benefits                                                        21,384,974.76            20,904,851.21
  Others                                                                     24,137,479.18            17,479,359.29
                        Total                                              903,232,507.02            919,110,499.37
(35) General and administrative expenses
                        Items                                        2016
 Salary and benefits                                                       223,607,159.57              233,971,706.69
 Repair expense                                                            164,806,710.59              150,013,456.13
 Taxes                                                                       28,688,548.09              92,514,576.97
 Land use right fee                                                          55,602,952.40              57,426,000.00
 Depreciation                                                                30,426,572.18              24,380,562.83
 Social insurance premium                                                    41,761,746.79              45,336,211.03
 Pollution discharge fee                                                     57,503,493.13              28,607,476.00
 Water resources fee                                                         17,076,438.04              17,001,160.00
 Housing fund                                                                 9,488,777.00              10,146,420.00
 Heating fee                                                                  8,863,236.53                6,809,717.20
                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
 Entertainment expense                                                      3,302,524.50             4,226,627.81
 Amortization of intangible assets                                          4,248,197.92             4,248,197.90
 Freight                                                                    1,248,948.52             2,762,637.66
 Lease expense                                                              1,576,662.04             1,822,459.28
 Others                                                                    52,343,122.87            54,666,090.38
                        Total                                           700,545,090.17             733,933,299.88
(36)       Financial expenses
                        Items                                       2016
 Interest expenditure                                                   725,207,081.31           693,469,408.37
 Less: Interest income                                                     29,972,291.28          34,026,570.83
 Exchange loss                                                          243,638,550.39           376,746,455.44
 Others                                                                    28,805,432.27          27,128,162.49
                        Total                                           967,678,772.69         1,063,317,455.47
(37) Assets impairment loss
                        Items                                      2016
 Loss for bad debts                                                        53,088,456.00          15,212,716.04
 Impairment of inventories                                                 58,231,089.39         499,063,732.20
 Impairment of available-for-sale assets                                   14,414,693.00
 Impairment of Fixed assets                                                10,401,722.01
                        Total                                           136,135,960.40           514,276,448.24
(38) Income on investment
       Details of income on investment
                                Items                                         2016
 Income on available-for-sale assets during the period                       303,310.97
 Income on bank short-term financial products                               1,715,742.47           7,226,589.08
                                Total                                       2,019,053.44           7,226,589.08
(39) Non-operating income
                                                                                                The amount
                      Items                               2016                 2015            recognized in
                                                                                            non-operating profit
 Non-current assets disposal income                  11,801,616.20          21,206,096.82         11,801,616.20
 Including: Fixed assets disposal income             11,801,616.20          21,206,096.82         11,801,616.20
             Intangible assets disposal income
 Debt restructuring gain                                 8,631,844.34       12,200,032.42           8,631,844.34
 Non-monetary assets exchange income
 Donations received
                                                            Bengang Steel Plates Co., Ltd. Annual Report 2016
                                                                                                    The amount
                      Items                               2016                   2015              recognized in
                                                                                                non-operating profit
 Government subsidies                                 36,089,000.00        136,992,233.61               36,089,000.00
 Fines and the penalty income                             314,353.33             661,135.12                 314,353.33
 Others                                                  1,234,615.46        4,994,858.60                  1,234,615.46
                       Total                          58,071,429.33        176,054,356.57               58,071,429.33
    Details of government subsidies recorded into current profits and loss
                                                                                              Related to
                  Items                           2016                    2015                 assets or        Notes
                                                                                                income
 Transfer from deferred income                  34,439,000.00            25,036,000.00         Assets
 Overseas R&D Team Introduction
                                                                           500,000.00          Income
 Special Fund
 Reward of Elimination of Outdated
                                                                         19,500,000.00         Income
 Industrial Capacity
 Environment Protection Special
                                                                         91,456,233.61         Income
 Subsidy
 Financial support fund                                                                        Income
 Tax refund                                       650,000.00                                   Income
 Enterprise development fund                     1,000,000.00              500,000.00          Income
                   Total                        36,089,000.00           136,992,233.61
(40) Non-operating expense
                                                                                                   The amount
                     Items                             2016                   2015                recognized in
                                                                                               non-operating profit
 Non-current assets disposal loss                   13,656,534.23           24,124,620.55               13,656,534.23
 Including: Fixed assets disposal loss              13,656,534.23           24,124,620.55               13,656,534.23
              Intangible assets disposal loss
 Fines and overdue payment                                                       11,162.62
 Others                                                  885,124.43                                         885,124.43
                     Total                          14,541,658.66           24,135,783.17               14,541,658.66
(41) Income tax expense
     1. Income tax expense
                       Items                                     2016
 Income tax payable for the current year                              47,448,194.16                     20,046,449.20
 Adjustment of deferred income tax                                165,829,876.74                    -460,436,665.36
                        Total                                     213,278,070.90                    -440,390,216.16
     2. Accounting profit and income tax expense adjustment process
                                       Items
 Total profit                                                                                      1,038,757,477.55
                                                               Bengang Steel Plates Co., Ltd. Annual Report 2016
  Income tax expense calculate according to the official or applable tax rate                   259,689,369.39
  Effect of different tax rates applied by subsidiaries
  Effect of adjustment of the income tax expense of prior period                                     550,517.51
  Effect of non-taxable income
  Effect of undeductable costs, expenses or losses                                              -28,823,719.30
  Effect of use of deductible losses of unrecognized deferred tax asset of prior
  period                                                                                        -53,768,229.64
  Effect of deductible temporary differences or deductible losses of
  unrecognized deferred tax asset of current period                                              35,630,132.94
  Income tax expenses                                                                           213,278,070.90
(42)     Notes of statement of cash flows
       1. Cash received related to other operating activities
                            Items                                    2016
  Withdraw of current accounts, advance for another             369,658,346.29                  205,201,226.09
  Interest income                                                29,972,291.28                   34,026,570.83
  Special subsidy income                                         32,650,000.00                  122,656,233.61
  Non-operating income                                              775,265.69                       633,960.32
  Others                                                              8,500.00                        30,870.87
                            Total                               433,064,403.26                  362,548,861.72
       2. Cash paid related to other operating activities
                            Items                                    2016
  Current accounts, advance for another                         419,237,454.51                  230,339,040.56
  Administrative expenses                                        64,905,432.72                   60,477,057.28
  Sales expenses                                                132,862,957.98                   56,331,692.81
  Bank charges                                                    1,925,187.57                      3,807,258.40
  Others                                                            287,293.34                       343,932.37
                            Total                               619,218,326.12                  351,298,981.42
       3. Cash received related to other financing activities
                            Items                                    2016
  Loan deposits                                                                                 310,000,000.00
  Financial leasing                                             210,000,000.00                  490,000,000.00
Margin for acceptance bill, letter of guarantee
and letter of credit                                             13,457,494.90
                            Total                               223,457,494.90                  800,000,000.00
       4. Cash paid related to other financing activities
                            Items                                    2016
  Margin for acceptance bill, letter of guarantee and letter
                                                                145,843,565.68                  371,791,357.66
  of credit
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2016
                            Items                                  2016
 Financing service charges and handling fees                    37,383,921.15                   27,605,690.09
                             Total                             183,227,486.83                  399,397,047.75
(43) Supplementary details of statement of cash flows
     1. Supplementary details for statement of cash flows
                             Items                                        2016
 1. A reconciliation of net profit to cash flows from
 operating activities:
 Net profit                                                               825,479,406.65     -3,240,928,357.24
 Add: Asset impairment losses                                             136,135,960.40       514,276,448.24
 Depreciation of fixed assets and so on                               1,847,129,545.38       1,824,882,394.51
 Amortization of intangible assets                                          5,939,057.20           5,939,057.18
 Amortization of long-term prepayment
 Losses proceeds from disposal of PPE, intangible assets
                                                                            1,854,918.03           2,918,523.73
 and other long-term assets (Earnings marked“-”)
 Scrapped losses from fixed assets
 Fair value losses (Earnings marked“-”)
 Financial expenses (Earnings marked“-”)                               968,845,631.70     1,070,215,863.81
 Investment losses (Earnings marked“-”)                                 -2,019,053.44           -7,226,589.08
 Deferred tax assets reduction (Addition marked“-”)                    165,829,876.74      -460,436,665.36
 Deferred tax liabilities increased (Reduction marked“-”)
 Reduction of inventory (Addition marked“-”)                        -739,606,851.51       1,998,873,344.78
 Operating receivable items reduction (Addition
                                                                          340,403,360.62       395,827,676.24
 marked“-”)
 Operating payable items increase (Less marked\"-\")                   6,007,362,054.75       -4,409,347,664.91
 Others
 Net cash flows generated from operating activities                   9,557,353,906.52       -2,305,005,968.10
 2. Payments of investing and financing activities not
 involving cash:
 Liabilities transferred to capital
 Convertible bonds due within one year
 Fixed assets financed by leasing
 3. The net increase in cash and cash equivalents:
 Ending balance of the monetary funds                                12,273,574,488.67       4,612,782,772.98
 Less: Beginning balance of the monetary funds                        4,612,782,772.98       9,327,034,030.07
 Add: Ending balance of cash equivalents
 Less: Opening balance of cash equivalents
 The net increase in cash and cash equivalents                        7,660,791,715.69       -4,714,251,257.09
     2. The structure of cash and cash equivalents
                               Items                                  Ending balance       Beginning balance
                                                           Bengang Steel Plates Co., Ltd. Annual Report 2016
                               Items                                Ending balance         Beginning balance
 1. Cash                                                             12,273,574,488.67        4,612,782,772.98
 Including: Cash on hand                                                     47,743.38               72,220.66
             Bank deposits available on demand                       12,238,841,745.29        4,612,384,032.13
             Other monetary funds available on demand                    34,685,000.00              326,520.19
             Central bank deposits available on demand
             Balances with other financial institutions
             Loans to other financial institutions
 2. Cash equivalents
 Including: Investment of securities due within 3 months
 3. Ending balance of cash and cash equivalents                      12,273,574,488.67        4,612,782,772.98
 Including: Cash and cash equivalents limited to use by the
            parent company of other subsidiary in the group
(44)    Assets of which ownership or right to use are restricted
                     Items                            Ending balance                       Reason
 Monetary assets                                           658,337,529.17            Deposit for notes and L/C
 Notes receivable                                          682,288,925.93         Pledged for acceptance bill
 Bank short-term financing products                        244,000,000.00         Pledged for letter of credit
                       Total                              1,584,626,455.10
(45) Foreign currency monetary items
                                          Ending balance in       Exchange rate at          Ending balance
                Items
                                          foreign currency          the year-end          translated to RMB
  Cash at bank and on hand
  Including: HKD                                  1,009,028.70               0.8945                 902,576.17
             USD                                551,659,244.37               6.9370           3,826,860,178.18
             EUR                                216,971,860.10               7.3068           1,585,369,987.36
  Short-term loans
  Including: USD                                865,500,000.00               6.9370           6,003,973,500.00
  Non-current liabilities due
  within one year
  Including: USD                                  2,350,000.00               6.9370             16,301,950.00
             EUR                                 20,309,369.99               7.3068            148,396,504.66
             JPY                                 23,176,000.00               0.0596              1,381,081.02
  Long-term loans
  Including: USD                                330,000,000.00               6.9370           2,289,210,000.00
             EUR                                115,930,279.48               7.3068             847,079,366.10
             JPY                                254,936,000.00               0.0596              15,191,891.18
6. Change of the consolidation scope
       There is no change of scope of consolidation this year.
                                                                                                                        Bengang Steel Plates Co., Ltd. Annual Report 2016
7.    Equity in other entities
(1)    Equity in subsidiaries
      1. Constitution of enterprise group
                                                                   Principal                                Shareholding ratio
                                                                               Registered     Notes of
                    Name of the subsidiaries                        place of                                                                Acquiring method
                                                                                address       business      Direct    Indirect
                                                                   business
Xiamen Bengang Steel & Iron Sales Co., Ltd.                        Xiamen       Xiamen          Sales       100.00               Business combination under common control
Wuxi Bengang Steel & Iron Sales Co., Ltd.                           Wuxi         Wuxi           Sales       100.00               Business combination under common control
Tianjin Bengang Steel & Iron Trading Co., Ltd.                     Tianjin      Tianjin         Sales       100.00               Business combination under common control
Nanjing Bengang Materials Sales Co., Ltd.                          Nanjing      Nanjing         Sales       100.00               Business combination under common control
Yantai Bengang Steel & Iron Sales Co., Ltd.                         Yantai       Yantai         Sales       100.00               Business combination under common control
Harbin Bengang Economic and Trading Co., Ltd.                      Harbin       Harbin          Sales       100.00               Business combination under common control
Changchun Bengang Steel & Iron Sales Co., Ltd.                    Changchun    Changchun        Sales       100.00               Business combination under common control
Guangzhou Bengang Steel & Iron Trading Co., Ltd.                  Guangzhou    Guangzhou        Sales       100.00                             Establishment
Shanghai Bengang Metallurgy Science and Technology Co., Ltd.      Shanghai     Shanghai         Sales       100.00                             Establishment
Bengang Steel Plates Liaoyang Pellet Co., Ltd.                    Liaoyang     Liaoyang     Manufacturing   100.00                             Establishment
Dalian Benruitong Automobile Material Eechnology Co., Ltd.         Dalian       Dalian      Manufacturing    65.00                             Establishment
Bengang Posco Cold-rolled Sheet Co., Ltd.                           Benxi        Benxi      Manufacturing    75.00               Business combination under common control
Benxi Bengang Steel Sales Co., Ltd                                  Benxi        Benxi          Sales       100.00                             Establishment
Shenyang Bengang Metallurgical Science and Technology Co., Ltd.   Shenyang     Shenyang         Sales       100.00                             Establishment
                                                                       Bengang Steel Plates Co., Ltd. Annual Report 2016
     2. Significant not wholly-owned subsidiaries
                                                           Profits and losses             Dividend declared              Ending
                                  Proportion of
       Name of the                                           attributing to                to distribute to            balance of
                                 non-controlling
       subsidiaries                                         non-controlling                non-controlling           non-controlling
                                  interests (%)
                                                             shareholders                   shareholders                interests
 Bengang Posco Cold-rolled
                                       25.00                       46,762,576.20                                     522,513,323.75
 Sheet Co., Ltd.
 Dalian Benruitong
 Automobile Material                   35.00                        -2,557,998.87                                     26,688,777.88
 Technology Co., Ltd.
     3. Financial information of significant not wholly-owned subsidiaries
                                                                         Ending balance
     Name of the
     subsidiaries         Current             Non-current                                 Current          Non-current     Total
                                                                    Total assets
                           assets               assets                                   liabilities        liabilities liabilities
 Bengang Posco
 Cold-rolled Sheet       2,110,629,548.42       2,306,996,743.92     4,417,626,292.34   2,327,572,997.38                   2,327,572,997.38
 Co., Ltd.
 Dalian Benruitong
 Automobile Material         188,167,707.25      161,544,880.30       349,712,587.55      273,458,936.47                    273,458,936.47
 Technology Co., Ltd.
                                                                       Beginning balance
     Name of the
     subsidiaries        Current              Non-current                                Current           Non-current         Total
                                                                    Total assets
                          assets                assets                                  liabilities         liabilities     liabilities
 Bengang Posco
 Cold-rolled Sheet      1,467,411,809.82       2,567,811,403.90     4,035,223,213.72    2,132,238,122.92                   2,132,238,122.92
 Co., Ltd.
 Dalian Benruitong
 Automobile Material     191,638,815.72         168,790,370.49        360,429,186.21     276,866,966.92                     276,866,966.92
 Technology Co., Ltd.
   Name of the subsidiaries                                                                  Total                 Net cash flows
                                           Operating
                                                                    Net profit           comprehensive             from operating
                                            income
                                                                                            income                    activities
 Bengang Posco Cold-rolled
 Sheet Co., Ltd.                       5,453,347,561.49            187,050,304.77            187,050,304.77           343,892,510.03
 Dalian Benruitong Automobile
 Material Technology Co., Ltd.             181,395,062.60           -7,308,568.21               -7,308,568.21             -2,559,905.57
   Name of the subsidiaries                                                                  Total                 Net cash flows
                                           Operating
                                                                     Net profit          comprehensive             from operating
                                            income
                                                                                            income                    activities
 Bengang Posco Cold-rolled
                                       5,242,586,237.97            229,913,579.94            229,913,579.94          1,135,756,087.02
 Sheet Co., Ltd.
 Dalian Benruitong Automobile
                                           353,756,953.63           -13,663,448.71             -13,663,448.71             16,246,522.90
 Material Technology Co., Ltd.
8. Risks associated with financial instruments
(1) Credit risk
                                                      Bengang Steel Plates Co., Ltd. Annual Report 2016
    Credit risk refers to a financial loss to a party due to failure to discharge an obligation by the
    counterparties. The Company is exposed to credit risk arising from customers’ failure to discharge
    an obligation in sales on credit. In order to minimize the credit risk, the management of the
    Company is responsible for determination of credit limits, credit approvals and other monitoring
    procedures to ensure that follow-up actions are taken to recover overdue debts.
    In addition, the Company strictly approves the line of credit, and only sells on credit to important
    customers for newly-developed products. In the monitoring of credit risk of customers, the
    Company sorts customers into groups by their credit characteristics. Those customers which are
    rated as “high risk” will be put in the restricted client list. The Company can only sell to these
    customers on credit with additional approval; otherwise the Company must ask for a
    corresponding deposit in advance.
(2) Market risk
    Market risk of financial instruments refers to fluctuations of fair value or future cash flows due to
    market price changes, including currency risk, interest rate risk, and other price risk.
    1. Interest rate risk
    Interest rate risk refers to fluctuations of fair value or future cash flows due to market rate changes.
    The Company’s exposure to currency risk is primarily arising from variable-rate bank balances
    and variable-rate borrowings. Currently, the Company does not have a specific policy to manage
    its interest rate risk. The management will carefully choose financing methods, and combine fixed
    interest rate with variable interest rate, short-term obligations with long-term obligations. By
    using effective interest rate risk management methods, the Company closely monitors interest rate
    risk and will consider interest-rate swaps to acquire an expected structure of interest rates shall the
    need arise.
    Although these measures may not ensures that the Company completely avoids the risk of paying
    at a risk higher than market risk, or that the cash flow risk relevant to interest income fluctuations
    is completely eliminated, in the opinion of the management, these measures could achieve a
    reasonable balance among these risks.
    2. Currency risk
    Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes.
    The Company has been constantly working on the adjustment of the organizational framework of
    risk management and optimization of debt structures to lower the currency risk.
    The currency risk facing the Company originates from the assets and liabilities measured by US
    dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets and liabilities
    af

  附件:公告原文
返回页顶