Bengang Steel Plates Co., Ltd.
Semi-Annual Report 2018
August, 2018
I. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members ofthe Supervisory Committee and senior management of the Company guarantee thatthere are no misrepresentations or misleading statements, or material omission in thisreport, 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, Gao Lie, the principal in charge of theaccounting, and Zhao Zhonghua, Chief of Accounting Affairs, make the pledge forthe authenticity, accuracy and integrity of the attached financial statements.
Except the following member of the Board of Directors, all the members of the Boardof Directors attended the board meeting on which this report was examined.
| Name of director absent | Title of director absent | Reasons for absence | Attorney |
| Wang Shu | Chairman | Travel on business | Huang Xinghua |
| Cao Aimin | Director | Travel on business | Huang Xinghua |
The prospective statements contained in this semi-annual report do not constitute anysubstantial commitment to the investors. Investors should pay attention to the risksattached to investment decisions. This report is prepared in both of Chinese andEnglish. The Chinese version shall prevail when there are any controversialstatements in the two versions.
The Company planned not to distribute cash dividend or bonus shares, and not toconvert capital reserve into share capital.
Table of Contents
I. Important Notice, Table of Contents, and Definitions .............................................. 2
I. Important Notice, Table of Contents, and Definitions ........................................ 2
II. Company Profile and Main Financial Index ....................................................... 5
III. Summary of Company Business ......................................................................... 8
IV. Management Discussion and Analysis .............................................................. 10
V. Important Events ............................................................................................... 17
VI. Status of Share Capital Changes and Shareholders .......................................... 45
VII. Status of Preferred Shares ................................................................................. 51
VIII. Status of Directors, Supervisors, Senior Executives ......................................... 52
IX. Relevant Information about Corporate Bonds .................................................. 54
X. Financial Report ................................................................................................ 55
XI. Documents available for inspection ................................................................ 198
Definition
| Terms to be defined | Refers to | Content of Definition |
| Bengang Bancai, Bengang Steel, the Company, the Listed Company | Refers to | Bengang Steel Plates Co., Ltd. |
| Bengang Group | Refers to | Bengang Group Co., Ltd. |
| Bengang Co. | Refers to | Benxi Steel & Iron (Group) Co., Ltd. |
| Liaoning Provincial State-asset Administration | Refers to | Liaoning State-owned Asset Supervisory and Management Committee |
| SSE | Refers to | Shenzhen Stock Exchange |
| Bengang Puxiang | Refers to | Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. |
II. Company Profile and Main Financial Index
I. Company Information
| Stock abbreviation | Bengang Bancai, Bengangban B | Stock Code | 000761, 200761 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 本钢板材股份有限公司 | ||
| Abbreviation of Company name in Chinese | 本钢板材 | ||
| Company name in English (If any) | BENGANG STEEL PLATES CO.,LTD. | ||
| Abbreviation of Company name in English (If any) | BSP | ||
| Legal representative | Wang Shu | ||
II. Contact Information
| Secretary of the Board | Representative of Stock Affairs | |
| Name | Zhao Zhonghua | |
| Address | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province | |
| Tel | 024-47823862 | |
| Fax | 024-47827004 | |
| BGBC2018@163.com |
III. Other Information
1. Contact Information of the Company
Whether the information disclosure and place for consulting have changed
□ Applicable √ Not applicable
Name of newspaper selected by the Company for information release, website appointed by CSRC for publishing semi-annual reportand lodging address of semi-annual report of the Company have not changed during the reporting period. Please refer to AnnualReport 2017 for details.
2. Place for information disclosure
Whether the information disclosure and place for consulting have changed
□ Applicable √ Not applicable
Name of newspaper selected by the Company for information release, website appointed by CSRC for publishing semi-annual reportand lodging address of semi-annual report of the Company have not changed during the reporting period. Please refer to AnnualReport 2017 for details.
IV. Summary of Accounting data and Financial index
Whether the Company makes retroactive adjustment or restatement of the accounting data of the previous year
□ Yes √ No
| This reporting period | Same period in previous year | Increase or decrease in this reporting period over the previous year (%) | |
| Operating income | 23,441,247,377.14 | 20,736,486,903.74 | 13.04% |
| Net profit attributable to the shareholders of the listed company | 756,951,987.59 | 523,635,653.57 | 44.56% |
| Net profit attributable to the shareholders of listed company after deducting non-recurring gain/loss | 724,922,955.98 | 508,873,423.83 | 42.46% |
| Net cash flows generated by operating activities | 730,519,741.47 | -4,047,305,684.72 | 118.05% |
| Basic earnings per share | 0.195 | 0.167 | 16.77% |
| Diluted earnings per share | 0.195 | 0.167 | 16.77% |
| ROE | 4.56% | 4.04% | 0.52% |
| At the end of this reporting period | At the end of previous reporting period | Increase or decrease at the end of this reporting period over the previous year (%) | |
| Total assets | 64,033,117,289.87 | 62,998,143,513.02 | 1.64% |
| Net assets attributable to shareholders of the listed company | 18,861,998,055.40 | 14,315,588,729.00 | 31.76% |
V. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chineseaccounting standards.
√ Applicable □ Not applicable
Unit：Yuan
| Net profit attributable to the shareholders of the listed company | Net assets attributable to the shareholders of the listed company |
| This reporting period | Previous reporting period | Ending balance | Beginning balance | |
| According to Chinese accounting standards | 756,951,987.59 | 523,635,653.57 | 18,861,998,055.40 | 14,315,588,729.00 |
| Items and amounts adjusted according to IFRS | ||||
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards.
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report,under either foreign accounting rules orChinese GAAP(Generally Accepted Accounting Principles) in the period.
3. Accounting data differences between domestic and foreign accounting standards
□ Applicable √ Not applicable
VI. Items and Amount of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit：RMB
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets (including the write-off part for which assets impairment provision is made) | -556,821.63 | |
| Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation,，me eting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 41,274,238.70 | |
| Profit or loss from debt restructuring | 945,892.23 | |
| Other non-operating revenue and expenditure other than above items | 1,192,505.57 | |
| Less: Impact of income tax | 10,713,953.72 | |
| Impact of non-controlling interests (after tax) | 112,829.54 | |
| Total | 32,029,031.61 | -- |
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.
III. Summary of Company Business
1. the Company's main business during the reporting period
Whether the Company needs to comply with the disclosure requirement for special industryNo
During the reporting period, the main businesses of the company involves iron and steel smelting, rolling processing, electricitygeneration, 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 hasbasically built up a high-quality steel product base of more than 60 varies and more than 7,500 specifications. Ratio ofhigh-value-added and hi-tech content products is over 80%. Its leading products, such as automobile surface plate, householdappliance, petroleum pipe line, container plate and boat deck, are widely applied in many fields, including automobile, householdappliances, petrochemical engineering, machine manufacturing, energy transportation, architectural decoration, metal parts, etc., andthey are exported to more than 60 countries and regions.In the first half of 2018, steel prices continued to operate at a high level since last year. Bengang seized the market opportunities,carried out in-depth implementation of digging potential, reducing costs, improving efficiency, promoted the supply side of thestructural reform, strengthened enterprise management, solidly improved quality and efficiency, continuously enhanced the economicperformance and efficiency, and achieved remarkable results. At the same time, the overaged No. 5 Blast Furnace and the new No. 1Blast Furnace which did not meet the new environmental protection requirement were massively reformed. Although some pig ironproduction capacity was sacrificed during the period, but after reform, the Company's blast furnace could produce in line with thenew environmental requirements, which fulfilled the Company's social responsibility, and at the same time laid a solid foundation forhigh production for the Company's next cycle.During the reporting period, the contents above had no major changes.
2. Major Changes in Main Assets
1、Major Changes in Main Assets
| Main assets | Major changes |
| Other current assets | As at 30 June 2018, balance of Other current assets was RMB 217,616.4 thousand, decreased by 73.11% compared with beginning balance, mainly due to a decrease in purchase of financial products. |
| Construction materials | As at 30 June 2018, balance of Construction materials was RMB2,925.6 thousand, decreased by 35.83% compared with beginning balance, mainly due to an increase in the use of Construction materials. |
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
3. Analysis on Core Competitiveness
Whether the Company needs to comply with the disclosure requirement for special industryNo
In response to the national industry revitalization and development policy, focusing on supply side structural reform, the Companycarefully planned a new round of technical transformation, implemented technical renovation items in the varieties structureadjustment, new materials research and development, green and intelligent manufacturing, capacity replacement and other aspects,promoted the Company to achieve high-quality, green, intelligent development. Focusing on national science and technologyinnovation policy and industry guide and direction, the Company actively applied to join the Chinese Automotive EngineeringSociety and Corrosion-resistant Steel Industrial Technology Innovation Strategic Alliance, and strived to build a high-level researchand development platform, strengthened foreign technical exchanges and cooperation, applied to national, provincial major scienceand technology projects in multi channels, obtained policy support in 6 projects.In order to upgrade the level of technological innovation and increase efficiency and benefit ability comprehensively, strengthen thevariety adjustment and market development, improve product quality stability and ensure production ability, promote low-cost andgreen manufacturing technology, the Company carried out 58 key technology projects around the variety, quality, cost these threekey elements. Some projects have achieved phased results.The Company completed new product development of 24 brands in the first half year, including automotive interior plate QP980,galvanized duplex steel dp780+z, X80 low-temperature high toughness hot-rolled pipeline steel. Performance testing of all qualifiedto meet user requirements; some varieties have realized batch supply. Besides, a total of 15 brands of products have been certificated.The Company completed certification for automotive users such as Dongfeng Nissan, Shenlong Automobile and so on. At present,certification work of more than 70 products for General Motors, SAIC passenger car, Dongfeng passenger car, BYD Automobile,Geely Automobile and other automotive plants is underway. The Company organized declaration of 80 patents, among which 5patents have been authorized by the State Intellectual Property Office, including 3 invention patents and 2 utility model patents. TheCompany also claimed for China Patent award for 2 patents.Based on the principle of "resource sharing, mutual benefit and mutual win development", the Company and Northeast Universityfurther strengthened the breadth and depth of cooperation, focused on the development direction of industry, established thecooperative mechanism of "research and production", and carried out all-round cooperation and exchanges. Academician expert teamof Northeast University has played an important intellectual support and leading role in the Company's scientific and technologicalinnovation, which will continue to enhance the university, enterprise and regional development of competitive advantage, promotethe common development of both sides.
IV. Management Discussion and Analysis
I. General
In the first half of 2018, the Company's overall production was organized steadily and smoothly. However, steel production wasdecreased compared with the same period last year affected by the reform of two blast furnaces. Production of pig iron and crudesteels reduced by 930,000 and 770,000 tons respectively compared with the same period last year. In order to reduce the impact ofthe decreased production of pig iron on the performance, the Company seized the opportunity of high-level operation in the steelmarket, comprehensively strengthened enterprise management, and thoroughly implemented potential tapping, costs reduction andefficiency improvement, continuously improving the quality and efficiency of economic operations, and achieved remarkable results.Revenue increased 13.04% and profits increased 44.56% compared to same period in previous year.The main work done in production operation during the first half year is as followings:
First, the market development and variety adjustment to increase the benefits gained fruitful results. Through the expansion ofvarieties, optimization of structure, improvement of the proportion of high value-added products, improvement of the efficiency ofsteel ton, optimization of the regional market structure and other effective measures, the Company continuously realized the increaseof benefits.Second, referring to the advanced domestic iron and steel enterprise's control mode, the Company fully implemented the "fixedposition, fixed staffing, fixed responsibility, fixed compensation" work, smoothly implemented the design and reform ofcompensation system. At the same time, the Company implemented departmental work-style assessment, enterprise accountabilitysystem, leading group and leading cadre comprehensive assessment methods. Through the four internal reform measures, theCompany improved the level of enterprise management in all aspects.Third, the Company effectively implemented innovation-driven strategy. In the first half year, the Company developed a total of 24new products, among which QP980 steel product completed the first industrial test, all its performance indicators met therequirements of the national standard, filling the gap in the research field of Bengang in quenching and distribution steel. Low-iron-loss 50BW470 product realized batch supply, its physical quality achieved the domestic advanced level. The first time ofdevelopment and production of cars (passenger cars) gears steel 20CrMnTiH2 product realized a new breakthrough in thedevelopment of gear steel for cars (passenger cars). The high-speed tool steel DS120 product broke the foreign steel's monopoly insaw steel market.Fourth, the safety production situation was overall stable. The Company carried out key-point special rectification work andproduction safety month activities, detailed the implementation of security responsibilities at all levels, increased security educationand training, in-depth implemented various types of special hidden trouble, strengthened the implementation of joint maintenance
construction safety measures. Thus, none responsible production death accidents occurred, and the Company achieved the “three zerogoal”, which means no larger personal accident, no larger equipment accident, no major fire accident.
Five, the green development strategy achieved remarkable results. In strict accordance with national standards and policyrequirements, the Company solidly carried out a second census and inventory of pollution sources and the application for steelindustry pollutant discharge permit. Through strengthening the stable operation of environmental protection facilities, implementingthe pollutant stability standard discharge, perfecting the automatic on-line monitoring facility and so on, the Company realizedcontrollable discharge in the pollution-producing link, and accountable foundation basis for discharge quantity.Six, the strategy of strengthening talents was implemented continuously and thoroughly. The Company carried out the opencompetition for leading cadres in accordance with the principles of paying attention to personal character, grass-roots units,achievements and academic qualifications. Based on the MBA training course of Bengang, the Company deepened the training of
leading cadres to improve their quality and ability, strived to use 3-5 years to complete the training rotation of all leading cadres, soas to refine their thinking, sublimate their realm, open up their ideas and strengthen their confidence, and to promote the quality ofleading cadres comprehensively.Seven, the Company continuously strengthened and improved the Party building, strengthened the Party's leadership, implementedthe "Party Building Leadership and Revitalization Project", incorporated the requirements of Party building into the articles ofassociation, and clarified the legal status of Party organizations in the corporate governance structure. The Company strengthened theconstruction of Party branches at the grass-roots level and implemented the "Solid Foundation Project". The Company strengthenedthe building of Party members and implemented the "Pioneer Project of Communist Party members". The Company improved theParty's organizational living system, organized leading groups of Party committees at all levels to hold special meetings ondemocratic life of political warning education, and organized Party members to carry out special discussions on the theme of"Stressing Practical Work, Strengthening Implementation, Grasping Implementation", so as to carry forward the style of seeking truthand pragmatism and doing practical work.
II. Main Business Analysis
For relevant information please refer to “Management Discussion and Analysis 1. General”.
Year-on-year changes in major financial data:
Unit: Yuan
| This reporting period | Same period in previous year | Increase or decrease in this reporting period over the previous year | Reason for change | |
| Operating Income | 23,441,247,377.14 | 20,736,486,903.74 | 13.04% | |
| Operating Cost | 20,804,207,420.98 | 18,690,665,966.11 | 11.31% | |
| Selling and distribution expenses | 514,038,008.95 | 587,632,707.43 | -12.52% | |
| General and administrative expenses | 464,313,066.09 | 358,951,405.08 | 29.35% | |
| Financial expenses | 803,038,417.28 | 381,513,404.80 | 110.49% | |
| Income tax expense | 11,636,226.04 | 117,105,061.16 | -90.06% | Deferred tax expenses decreased over same period in previous year. |
| Research & Development Expenses | 726,678,668.69 | 690,127,962.35 | 5.30% | |
| Net cash flows generated from operating activities | 730,519,741.47 | -4,047,305,684.72 | 118.05% | Net cash flows generated from operating activities increased over same period in previous year. |
| Net cash flow generated from investment activities | -176,948,631.71 | -454,763,829.82 | -61.09% | Net cash flow generated from investment activities decreased over same period in previous |
| year. | ||||
| Net cash flow generated from financing activities | -1,657,793,276.26 | 3,755,056,060.56 | -144.15% | Net cash flow generated from financing activities decreased over same period in previous year. |
| Net increase in cash and cash equivalents | -999,206,556.27 | -788,599,857.18 | 26.71% |
Whether the Company’s profit composition or source of profit during the reporting period changed significantly□ Applicable √ Not applicableThe Company’s profit composition or source of profit during the reporting period did not change significantly.
The composition of main business:
Unit: Yuan
| Operating Income | Operating Cost | Gross margin | Operating income change over same period in previous year | Operating cost change over same period in previous year | Gross margin change over same period in previous year | |
| By industries | ||||||
| Industry | 21,300,237,688.90 | 19,140,922,165.53 | 10.14% | 9.37% | 8.52% | 0.70% |
| By products | ||||||
| Steel plate | 20,917,518,422.55 | 18,792,302,020.51 | 10.16% | 8.84% | 8.34% | 0.41% |
| Steel billet | ||||||
| Others | 382,719,266.35 | 348,620,145.02 | 8.91% | 49.00% | 55,288,534.29% | 23.03% |
| By regions | ||||||
| Northeast | 4,523,215,811.97 | 4,087,265,052.73 | 9.64% | 1.25% | 0.60% | 0.58% |
| North | 2,479,322,632.75 | 2,248,249,959.52 | 9.32% | 2.47% | 2.11% | 0.32% |
| East | 6,998,910,714.09 | 6,309,308,041.43 | 9.85% | 20.31% | 19.53% | 0.58% |
| Northwest | 50,674,161.50 | 46,187,977.99 | 8.85% | 8.41% | 9.31% | -0.75% |
| Mid-south | 976,227,056.23 | 881,015,631.44 | 9.75% | 14.70% | 13.83% | 0.68% |
| Export | 6,271,887,312.36 | 5,568,895,502.43 | 11.21% | 6.78% | 5.48% | 1.09% |
III. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: Yuan
| Amount | Proportion in total profit | Explanation of cause | Sustainable (yes or no) |
| Income on investment | 3,493,150.68 | 0.45% | Income of foreign financial management and investment income of Available-for-sale financial assets during holding period | Yes |
| Impairment of assets | -20,917,963.64 | -2.72% | Impairment of inventories and loss for bad debts | No |
| Non-operating income | 2,138,397.80 | 0.28% | No | |
| Non-operating expenses | 1,382,402.26 | 0.18% | No |
IV. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
| At the end of this reporting period | At the end of the Same period in previous year | Proportion change | Notes to significant changes | |||
| Amount | Proportion in the total assets | Amount | Proportion in the total assets | |||
| Cash at bank and on hand | 18,570,241,607.21 | 29.00% | 12,240,579,151.57 | 22.41% | 6.59% | |
| Accounts receivable | 707,889,986.34 | 1.11% | 536,054,820.21 | 0.98% | 0.13% | |
| Inventories | 12,893,804,549.47 | 20.14% | 9,834,703,845.66 | 18.00% | 2.14% | |
| Long-term equity investments | 2,726,009.03 | 0.00% | ||||
| Fixed assets | 22,739,708,839.78 | 35.51% | 19,753,582,768.45 | 36.16% | -0.65% | |
| Construction in progress | 2,740,359,727.63 | 4.28% | 7,030,049,975.69 | 12.87% | -8.59% | |
| Short-term loans | 21,784,802,700.00 | 34.02% | 22,787,674,400.00 | 41.71% | -7.69% | |
| Long-term loans | 4,406,999,573.88 | 6.88% | 3,161,338,135.87 | 5.79% | 1.09% | |
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Assets by the End of the Period
| Items | Book value at the end of this reporting period | Reason of restriction |
| Monetary assets | 2,531,734,752.99 | Deposit for notes and L/C |
| Notes receivable | 1,801,103,300.17 | Pledged for acceptance bill and short-term loans |
| Total | 4,332,838,053.16 |
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
VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
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 Name | Company type | Sectors engaged in | Registered capital | Total assets | Net assets | Turnover | Operating profit | Net Profit |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | Subsidiary | Processing and sales of steel | 1,920,000,000.00 | 5,130,355,896.56 | 1,998,336,181.15 | 3,971,529,847.27 | 7,348,948.26 | 5,511,711.19 |
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
VIII. Special purpose vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Forecast of operating performance for during January to September 2018
Warning and reason for that forecast of the cumulative net profit from the beginning of the year to the end of the next reportingperiod might be a loss or due to significant change compared to the previous year
□ Applicable √ Not applicable
X. Risks and countermeasures for the Company
1. Risk of overcapacity and industrial restructuringRisk: Although the external environment for the development of China's steel industry has been improved, the contradiction of excesscapacity in China's steel industry has not been fundamentally solved. China's steel industry is still in the stage of long-term capacityremoval and structural adjustment. The structural contradiction of the industry is prominent, problems such as low concentration ofthe industry, unreasonable industrial layout, and unreasonable innovation capability of the industry still exists. Competition amongiron and steel enterprises is still fierce. The iron and steel market will inevitably shake sharply, which will affect the production,operation and efficiency of enterprises.Countermeasures: pay close attention to the domestic market demand for iron and steel products, timely grasp the volatility ofdomestic fixed assets investment, adjust business strategy in combination with the implementation of shutdown and elimination ofbackward steel production capacity as well as the construction and production of new capacity of the state, strengthen the capabilityof independent innovation and enhance the core competitiveness of enterprises.
2. Risk of environmental protection: environmental emission standards are becoming increasingly stringent, and environmentalmonitoring is becoming more stringent.Risk: China's environmental protection policies and standards are becoming increasingly perfect and strict, and the enterpriseenvironmental protection supervision continues to be tightened, especially the implementation of the State Council's Three-yearBlue-Sky Defense Plan. As an iron and steel enterprise, waste water, waste gas, waste residue, dust, noise and so on generated in theproduction process will cause pollution to the surrounding environment, and is also the key point of environmental protection control.The strictness of environmental standards will lead to the increase of the Company's production cost. In addition, the Company hasinvested a lot of manpower, material and financial resources in environmental protection in recent years, and has taken effectivemeasures to solve the main pollution sources. However, the Company is still facing the compliance risk caused by the further stricterenvironmental policies and standards in the future.Countermeasures: pay attention to the various national environmental protection policies, improve enterprise environmentalprotection standards to meet and properly exceed the national standards, strengthen self-supervision and inspection of all kinds ofpollution sources and strengthen the awareness of environmental protection for all staff, speed up the construction progress of theidentified environmental protection projects and ensure that the national environmental protection requirements are met.3. Risk of raw fuel price fluctuation: especially the risk caused by the supply gap of coking coal.Risk: Although the Company has certain mining advantages, but the iron ore self-sufficiency rate is not high, the fluctuation ofinternational iron ore prices will affect the Company's production costs, the Company has no autonomy in pricing most of the rawmaterials and fuels. Coking coal producers, which are also affected by environmental protection policies, are expected to haveinsufficient supply of coking coal due to the tightening of environmental protection policies. The imbalance between supply anddemand may lead to the rise of raw material prices, thereby affecting the Company's profits.Countermeasures: conduct market analysis to support procurement decisions to ensure the supply of raw materials and fuels;according to market price fluctuations, adhere to the economic inventory strategy, optimize the inventory structure, to ensure thenormal production and operation of enterprises.4. Risk of foreign trade: export tariffsRisk: In 2018, the United States decided to impose tariffs on steel imports from China, which would easily lead to the re-spread of"anti-globalization" ideological trend, the rise of international trade protectionism, the increase of anti-dumping cases, the growingtrade frictions, trade barriers, disorderly competition in the export market, and exchange rate instability, and these factors could makeit more difficult to export.Countermeasures: strengthen international market analysis, track changes in international trade policies, reduce the impact of suddenchanges in trade policies on the Company's foreign trade; do a good job of trade friction response programs, resolve adverse effectsof trade friction, enhance the competitiveness of the company's products in the international market, study the market dynamics andindustrial policies of importing countries and grasp the dynamic changes of import market, find suitable partners, foster superiorproducts, gradually increase the proportion of high-end products exports, strengthen after-sales service, improve customersatisfaction.5. Risk of reduced demand for downstream steelRisk: the downstream demand of the Company's products is mainly composed of building, household appliances, automobile andother fields. In recent years, due to the continuous regulation and control of the real estate industry, the real estate market as a wholeis in a downward cycle, the growth rate of real estate investment has further slowed down. At the same time, the state is nowtightening the supervision of PPP projects, and the growth rate of infrastructure in 2018 has also declined. In the medium and longterm, manufacturing will be the main driving force for steel demand. But considering the downward pressure on real estate, thedownstream demand for steel will not change in the short term.Countermeasures: Maintain existing customers, increase the strength of new product development, continue to promote productupgrading, actively explore the market for new customer resources.
V. Important Events
I. Annual General Meeting of Shareholders and Temporary General Meeting ofShareholders held during the Reporting Period
1. Annual General Meeting of Shareholders
| Sessions | Type | Investor participation ratio | Meeting Date | Date of disclosure | Index of information disclosure |
| 2017 Annual General Meeting | Annual General Meeting | 59.50% | 24 May, 2018 | 25 May, 2018 | Announcement No.: 2018-028 Disclosure address http://www.cninfo.com.cn |
2. Temporary general meeting Request by preferred stockholders whose voting rights restored
□ Applicable √ Not applicable
II. Profit Distribution or Capital Reserve Conversion Proposal in the Reporting Period
□ Applicable √ Not applicable
The Company planed not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital during thereporting period.
III. The Fulfilled Commitments During the Reporting Period and Under-FulfillmentCommitments by the End of the Period Made by Actual Controller, Acquirer, Director,Supervisor, Senior Management Personnel and other Related Parties.
√ Applicable □ Not applicable
| Items | Parties | Type of commitments | Commitments | Commitment Time | Commitment period | Degree of performance |
| Share reform commitment | ||||||
| Commitment made in report of acquisition or report of equity change | ||||||
| Commitment made in asset reorganization | ||||||
| Commitment made in IPO or refinancing | Company directors、senior | Other commitment | According to relevant regulations of | 26 Jan, 2016 | 9 Dec 2019 | In normal performance |
| manager | China securities regulatory commission, the company's compensation measures can be effectively implemented by making the following commitments: during tenure, directors and senior manager will faithfully and assiduously perform their duties and safeguard the lawful rights and interests of the company and all shareholders, including but not limited to: 1. Commitment to not transfer benefits to other units or individuals without compensation or unfair conditions, and not to damage the company's interests in other ways ; 2. |
| in the future, it is pledged that the exercise conditions of the equity incentive plan are linked to the implementation of the company's compensation measures. | |||||
| Liaoning Communications Investment Co. Ltd | Restricted shares commitment | The allocated shares will be locked for 12 months from the date of the listing of the newly issued non-public offering of shares and will not be transferred during this period. | 5 Mar 2018 | Within 12 months from the first day of listing | In normal performance |
| CCB Principal Asset Management Co., Ltd. | Restricted shares commitment | The allocated shares will be locked for 12 months from the date of the listing of the newly issued non-public offering of shares and will not be transferred during this period. | 5 Mar 2018 | Within 12 months from the first day of listing | In normal performance |
| BeiXin | Restricted | The allocated | 5 Mar 2018 | Within 12 | In normal |
| RuiFeng Fund Management Co., Ltd. | shares commitment | shares will be locked for 12 months from the date of the listing of the newly issued non-public offering of shares and will not be transferred during this period. | months from the first day of listing | performance | ||
| China Life AMP Asset Management Co., Ltd. | Restricted shares commitment | The allocated shares will be locked for 12 months from the date of the listing of the newly issued non-public offering of shares and will not be transferred during this period. | 5 Mar 2018 | Within 12 months from the first day of listing | In normal performance | |
| Stock option incentive commitment | ||||||
| Other commitments made to minority shareholders | ||||||
| Whether the commitment is fulfilled in time | Yes | |||||
IV. Appointment and Dismiss of Certified Public Accountant’s Firm
Whether the semi-annual report has been audited
□ Yes √ No
The semi-annual report has not been audited
V. Illustrations of the Board of Directors and Supervisory Committee on the Non-standardAudit Report Issued by the CPAs for this Reporting Period
□ Applicable √ Not applicable
VI. Illustrations of the Board of Directors on the Non-standard Audit Report Issued by theCPAs for Previous Reporting Period
□ Applicable √ Not applicable
VII. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
VIII. Lawsuits and Arbitrations
Significant lawsuits and arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.Other lawsuits and arbitrations
□ Applicable √ Not applicable
IX. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment or rectification during the reporting period.
X. Credit Status of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Implementation Situation of Stock Incentive Plan of the Company, Employee StockOwnership Plan or Other Employee Incentive Measures
□ Applicable √ Not applicable
There was no stock incentive plan, employee stock ownership plan or other employee incentives that have been implemented.
XII. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
| Related parties | Relationship | Type of related party transactions | Content of related party transacti | Content of related party transacti | Price of related party transactions | Amount of related party transactions | Proportion of similar transactions | The approved trading limit of transacti | Whether exceed the approved limited | Whether exceed the approved | Whether exceed the approved | Date of disclosure | Index of disclosure |
| ons | ons | RMB 10,000 | ons RMB 10,000 | (Y/N) | limited | limited | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | Parent Company | Purchase of goods and services | Accounts payable for repair | On agreement | Related agreement price | 19,767.05 | 0.00% | 35,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Co., Ltd. | Parent Company | Purchase of goods and services | Land leasing fee | On agreement | Related agreement price | 2,734.57 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Same controller | Purchase of goods and services | Products | On agreement | Related agreement price | 64.19 | 0.00% | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same controller | Purchase of goods and services | Labor cost | On agreement | Related agreement price | 386.75 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same controller | Purchase of goods and services | Raw material and supplementary material | On agreement | Related agreement price | 203,816.33 | 0.00% | 400,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) | Same controller | Purchase of goods and | Raw material and supplem | On agreement | Related agreement price | 12,852.84 | 0.00% | 20,000 | No | Execute according to the agreeme | No | 20 Apr 2018 | 2018-019 |
| Metallurgy Residues Co., Ltd. | services | entary material | nt | ||||||||||
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Same controller | Purchase of goods and services | Processing fee | On agreement | Related agreement price | 87.67 | 0.00% | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Same controller | Purchase of goods and services | Raw materials | On agreement | Related agreement price | 3,627.99 | 0.00% | 10,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 4,600.29 | 0.00% | 25,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Machinery Manufa | Same controller | Purchase of goods and services | Repair services | On agreement | Related agreement price | 495.18 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| cture Co., Ltd. | |||||||||||||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 191.8 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Purchase of goods and services | Project fee | On agreement | Related agreement price | 2,028.95 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Purchase of goods and services | Repair services | On agreement | Related agreement price | 11,481.87 | 0.00% | 60,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Purchase of goods and services | Raw material and supplementary material | On agreement | Related agreement price | 109.4 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Purchase of goods and services | Freight | On agreement | Related agreement price | 131.35 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 2,808.4 | 0.00% | 40,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Purchase of goods and services | Raw material and supplementary material | On agreement | Related agreement price | 6,730.62 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Purchase of goods and services | Repair services | On agreement | Related agreement price | 1,829.45 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Purchase of goods and services | Freight | On agreement | Related agreement price | 101.81 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron | Same controller | Purchase of goods | Project fee | On agreement | Related agreement price | 91.68 | 0.00% | No | Execute according to the | No | 20 Apr 2018 | 2018-019 |
| (Group) Industrial Development Co., Ltd. | and services | agreement | |||||||||||
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same controller | Purchase of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 326.39 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same controller | Purchase of goods and services | Project fee | On agreement | Related agreement price | 1,175.38 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same controller | Purchase of goods and services | Accounts payable for repair | On agreement | Related agreement price | 8,327.4 | 0.00% | 30,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Electronics and Gas Co., Ltd. | Same controller | Purchase of goods and services | Raw material and supplementary material | On agreement | Related agreement price | 6,411.95 | 0.00% | 20,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Electronics and Gas Co., Ltd. | Same controller | Purchase of goods and services | Repair services | On agreement | Related agreement price | 1,862.9 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 31.12 | 0.00% | 800 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi New Career Development Co., Ltd. | Same controller | Purchase of goods and services | Labor protection fee | On agreement | Related agreement price | 44.2 | 0.00% | 2,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Liaoning Metallurgy Technician College | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 317.07 | 0.00% | 2,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Liaoning Metallurgy Technician College | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 603.74 | 0.00% | 1,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Group International Economic and Trading | Same controller | Purchase of goods and services | Agency fee | On agreement | Related agreement price | 3,564.93 | 0.00% | 35,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Co., Ltd. | |||||||||||||
| Bengang Group International Economic and Trading Co., Ltd. | Same controller | Purchase of goods and services | Port surcharges | On agreement | Related agreement price | 5,690.72 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 933.25 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Same controller | Purchase of goods and services | Repair services | On agreement | Related agreement price | 2,335.89 | 0.00% | 7,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Same controller | Purchase of goods and services | Heating costs | On agreement | Related agreement price | 37.73 | 0.00% | 2,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & | Same controll | Purchase of | Design fees | On agreeme | Related agreeme | 231.58 | 0.00% | 2,000 | No | Execute accordin | No | 20 Apr 2018 | 2018-019 |
| Iron (Group) Designing Institute | er | goods and services | nt | nt price | g to the agreement | ||||||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Purchase of goods and services | Raw material and supplementary material | On agreement | Related agreement price | 566,834.95 | 0.00% | 1,700,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Purchase of goods and services | Energy & Power | On agreement | Related agreement price | 38,865.84 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Purchase of goods and services | Freight | On agreement | Related agreement price | 303.15 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Purchase of goods and services | Labor cost | On agreement | Related agreement price | 3,931.44 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Purchase of goods and services | Spare parts | On agreement | Related agreement price | 1,064.59 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Liaoning | Same controll | Purchase of | Raw material | On agreeme | Related agreeme | 5,398.61 | 0.00% | 15,000 | No | Execute accordin | No | 20 Apr 2018 | 2018-019 |
| Hengtong Metallurgical Equipment Manufacture Co., Ltd. | er | goods and services | and spare parts | nt | nt price | g to the agreement | |||||||
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Same controller | Purchase of goods and services | Raw material and spare parts | On agreement | Related agreement price | 124.87 | 0.00% | 5,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Same controller | Purchase of goods and services | Repair and labor cost | On agreement | Related agreement price | 1,477.37 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Bengang Group Co., Ltd. | Controller | Purchase of goods and services | Property management fee | On agreement | Related agreement price | 31.07 | 0.00% | 800 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Electronics and Gas Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 51.9 | 0.00% | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare | On agreement | Related agreement price | 116,469.29 | 0.00% | 260,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| parts | |||||||||||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 1,230.13 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 5,706.89 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 6.94 | 0.00% | 850 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 37.52 | 0.00% | 1,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Machinery Manufa | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 973.31 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| cture Co., Ltd. | |||||||||||||
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 943.21 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 113.58 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 94.13 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 71.24 | 0.00% | 20,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron | Same controller | Sales of goods and | Energy & Power | On agreement | Related agreement price | 35,940.67 | 0.00% | 100,000 | No | Execute according to the | No | 20 Apr 2018 | 2018-019 |
| (Group) Mining Co., Ltd. | services | agreement | |||||||||||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 2,831.52 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same controller | Sales of goods and services | Freight revenue | On agreement | Related agreement price | 402.48 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 2,374.96 | 0.00% | 12,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 801.85 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron | Same controller | Sales of goods and | Freight revenue | On agreement | Related agreement price | 8.58 | 0.00% | No | Execute according to the | No | 20 Apr 2018 | 2018-019 |
| (Group) Thermal Power Development Co., Ltd. | services | agreement | |||||||||||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 388.54 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 11.32 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 1,251.78 | 0.00% | 20,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Information and | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 9.01 | 0.00% | 100 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Automatic Tech Co., Ltd. | |||||||||||||
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 83.99 | 0.00% | 1,200 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 12.26 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 260.48 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 9,045.64 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi | Same | Sales of | Freight | On | Related | 711.36 | 0.00% | 15,000 | No | Execute | No | 20 Apr | 2018-0 |
| Steel & Iron (Group) Metallurgy Residues Co., Ltd. | controller | goods and services | revenue | agreement | agreement price | according to the agreement | 2018 | 19 | |||||
| Benxi Steel & Iron (Group) Co., Ltd. | Parent Company | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 702.65 | 0.00% | 12,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) Co., Ltd. | Parent Company | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 270.51 | 0.00% | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | |
| Benxi New Career Development Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 18.1 | 0.00% | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Dalian Boluole Steel Tube Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 175.76 | 0.00% | 1,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Benxi Steel & Iron (Group) General Hospital | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 3.42 | 0.00% | 50 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Same controller | Sales of goods and services | Raw material & supplementary materials & spare parts | On agreement | Related agreement price | 1,305.43 | 0.00% | 10,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Suzhou Bengang Industrial Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 17,052.85 | 0.00% | 30,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | ||
| Liaoning Bengang Steel & Iron Commercial Co., Ltd. | Same controller | Sales of goods and services | Products | On agreement | Related agreement price | 1,000 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 | ||
| Bengang Group Finance Co., Ltd. | Same controller | Sales of goods and services | Energy & Power | On agreement | Related agreement price | 0.7 | 0.00% | 500 | No | Execute according to the agreement | No | 20 Apr 2018 | 2018-019 |
| Bengang Group Co., | Controller | Sales of goods and | Energy & | On agreeme | Related agreeme | 9.47 | 0.00% | 500 | No | Execute according to the | No | 20 Apr 2018 | 2018-019 |
| Ltd. | services | Power | nt | nt price | agreement | ||||||||
| Total | -- | -- | 1,123,235.8 | -- | 2,900,300 | -- | -- | -- | -- | -- | |||
| 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 transactions，by type to occur in the current period(if any) | None | ||||||||||||
| Reason for any significant difference between the transaction price and the market price for reference (if applicable) | None | ||||||||||||
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there are any non-operating related credits and debts
□ Yes √ No
There were no non-operating related credits and debts during the reporting period.
5. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XIII. Illustrations of Non-Operating Occupation of Funds by the Controlling Shareholderand Related Parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related parties
XIV. Major Contracts and Their Performance
1. Trusteeship, contracting and leasing(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
There was no leasing during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There was no guarantee during the reporting period.
3. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.
XV. Social Responsibilities
1. Major environmental protection situation
Whether the listed Company and its subsidiaries are among key pollution companies launched by Environmental ProtectionDepartmentYes
| Name of the company or subsidiaries | Name of main pollutants and characteristic pollutants | Mode of sewage emission | Number of sewage emission points | Distribution of sewage emission points | Emission concentration | Emission standards for pollutants implemented | Total emissions | Total approved emissions | Excess emissions |
| Bengang Steel Plates Co., Ltd. | COD | Continuous | 1 | Energy Plant Wastewater Treatment Plant | 36 | 50 | 182.5Ton | There is no approved emission from the government. | None |
| Bengang Steel Plates Co., Ltd. | Dust | Continuous and intermittent emission | 178 | Raw material dumper, transfer station, mine receiving tank, pre-dosing; iron-making tapping field, furnace roof, mining coke tank, sintering head, tail, fuel, solvent, whole grain, pellet rotary kiln; Treatment, ferroalloy feeding, north-south reversal station, tundish, primary dust removal, secondary dedusting, refining and dust removal; special steel | Raw materials 14-24; sintered 6-29; pellets 14-26; ironmaking 7-23; steelmaking 7-27; special steel 7-15; power generation 5-10; cold rolling 6-18; hot rolling 6-15 . | Raw material 25; sintered 30-50; pellet 30-50; ironmaking 20-25; steelmaking 20-50; special steel 20; power generation 10-30; cold rolling 20-30; hot rolling 20-30. | 1939.6 tons of smoke and 6702.7 tons of dust | There is no approved emission from the government. | None |
| electric furnace, refining furnace, electroslag furnace; desulfurization and denitrification of power generation boiler; cold rolling acid regeneration, pickling, tension correction, Welder, leveling, annealing, roasting; hot rolling furnace. | |||||||||
| Bengang Steel Plates Co., Ltd. | Sulfur dioxide | Continuous and intermittent emission | 64 | Sintering head; pellet rotary kiln; power generation boiler; cold rolling roasting, annealing; hot rolling heating furnace. | Sintering head 12-112; pellets 31-104; power generation 10-32; cold rolling 80-100; hot rolling 118-128. | Sintering head 200; pellet 200; power generation 100-200; cold rolling 150; hot rolling 150. | 2918.6 Ton | There is no approved emission from the government. | None |
| Bengang Steel Plates Co., Ltd. | Nitrogen oxides | Continuous and intermittent emission | 57 | Sintering head; pellet rotary kiln; power generation boiler; cold rolling roasting, annealing; | Sintering head 100-230; pellets 119-275; power generation 50-140; cold rolling | Sintering head 300; pellets 300; power generation 100-200; cold rolling 300; hot | 6209.1 Ton | There is no approved emission from the government. | None |
| hot rolling heating furnace. | 69-172; hot rolling 105-124. | rolling 300. |
Construction and operation of pollution prevention facilities:
In 2018, the company has issued 7 projects for the implementation of the environment protection, with an investment of 9 millionyuan, of which 2 are under construction. Other projects are in the stage of demonstration, unit selection, bidding and commissiondesign. The main projects include steelmaking plant 1#-7# hot metal pretreatment spraying position, slag dust hood complete closeddust removal project, coking plant 4 furnace assembly coal, push coke and CDQ dust removal ground station ash removal systemtransformation Project, energy plant condensate water well repair and on-site water quality analyzer equipment project, new dustremoval project of raw material plant Y5 transfer station, maintenance and maintenance project of plant green road facilities. Othermajor environmental protection facilities investment projects include: the iron and steel plant invested more than 40 million totransform the new No. 1 and No. 6 blast furnace raw material systems, and the top of the cast iron roof dedusting facilities; other dustcollector bags replacement. The company has a total of 71 automatic monitoring facilities for pollution sources, including 31 newones in 2018, and is completing the acceptance and registration work as planned.The company has 161 sets of pollution prevention and control facilities, including 148 sets of waste gas and 13 sets of waste water.The company strictly implements the environmental protection three simultaneous system and operates and maintains in parallel withthe main project to ensure that the pollution prevention facilities are stable and up to standard operation, and the synchronousoperation rate is 100%. 71 sets of automatic monitoring facilities for pollution sources are operating stably.Environmental impact assessment of construction projects and other environmental protection administrative licenses:
The transformation of the company's special steel mill - the initial rolling mill renovation project, approved on May 28, 2018 (BenHuan Jian Biao Zi [2018] No. 02).The first phase of the cogeneration project of the three power plants of the company's power plant completed the environmentalprotection acceptance. In accordance with the independent inspection and acceptance procedures of enterprises, the environmentalprotection acceptance of atmospheric and wastewater pollution prevention facilities was completed in June 2018.Emergency plan for emergency environmental incidents:
The company and its 13 affiliated units are in accordance with the "Report on the Emergency Response of the People's Republic ofChina", the "Notice on Printing and Distributing the Guidelines for Risk Assessment of Sudden Environmental Incidents ofEnterprises (Trial)", and the Recording of Emergency Response Plan for Sudden Environmental Incidents of Enterprises andInstitutions Measures (Trial) and other existing laws and regulations, revising emergency plans for emergencies, conducting riskassessments and emergency resource investigations, completing emergency response plans for emergency environmental incidents,risk assessment reports, and investigating reports on emergency resources in environmental protection departments.Environmental self-monitoring program:
The pollution source monitoring points included in the monitoring plan include: 131 flue gases, 55 atmospheres, 13 waste waters, 5noises at the boundary of the plant, and 16 dustfalls, which are monitored by frequency of weekly, monthly, seasonal and semi-annual.And 2,430 monitoring data was obtainedOther environmental information that should be disclosed:
None.Other environmental related information:
According to the list of key pollutant discharge enterprises issued by the Municipal Environmental Protection Bureau, in June 2018,the environmental information disclosure of 10 units of the company was completed. The publicity contents include basicinformation, sewage information, construction and operation of pollution prevention facilities, environmental impact assessment ofconstruction projects and other environmental protection administrative licenses, emergency response plans for environmental
emergencies, environmental self-monitoring programs and other environmental information that should be disclosed.
2. Performing corporation social responsibility of targeted poverty alleviation
The company has not carried out targeted poverty alleviation work during the reporting period and has no plan for follow-up targetedpoverty alleviation.
XVI. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
XVII. Major Issues of Subsidiaries
□ Applicable √ Not applicable
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes1. Share capital changes
Unit: Share
| Before the change | Increase/decrease(+，-) | After the Change | |||||||
| Quantity | Percentage | Issuing of new share | Bonus shares | Capitalization of common reserve fund | Others | Subtotal | Quantity | Percentage | |
| I. Restricted Share | 739,371,532 | 739,371,532 | 739,371,532 | 19.08% | |||||
| 1. State-owned legal person shareholding | 184,842,883 | 184,842,883 | 184,842,883 | 4.77% | |||||
| 2.Other domestic shares | 554,528,649 | 554,528,649 | 554,528,649 | 14.31% | |||||
| Among them: domestic legal person holds shares | 554,528,649 | 554,528,649 | 554,528,649 | 14.31% | |||||
| II. Non-restricted Shares | 3,136,000,000 | 100.00% | 3,136,000,000 | 80.92% | |||||
| 1. Common shares in RMB | 2,736,000,000 | 87.24% | 2,736,000,000 | 70.60% | |||||
| 2. Foreign shares in domestic market | 400,000,000 | 12.76% | 400,000,000 | 10.32% | |||||
| III. Total shares | 3,136,000,000 | 100.00% | 739,371,532 | 739,371,532 | 3,875,371,532 | 100.00% | |||
Causation of share capital changes
√ Applicable □ Not applicable
Approved by the China Securities Regulatory Commission's "Approval of the Private Issuance of Stocks of Benxi Steel Plate Co.,Ltd."(No. 1476 of the Securities Regulatory Commission), the company has applied to Liaoning Communications Investment Co.,Ltd., Jianxin Fund Management Co., Ltd., Beixin Ruifeng Fund Management Co., Ltd., and Guoshou Anbao Fund Management Co.,
Ltd. a total of 4 investors non - public offering 739, 371, 532 shares of common shares in RMB。
Approval of share capital changes
√ Applicable □ Not applicable
1. On June 13, 2017, the China Securities Regulatory Commission (CSRC) issued an examination and approval of the company'sapplication for non-public offering of shares.2. On August 11, 2017, China Securities Regulatory Commission (CSRC) approved the issuance of Bengang Steel Plates Co., Ltd.'sPrivate Issuance of Stocks (CSRC license [2017] 1476), which was received on August 21, 2017 and announced on August 22, 2017.Status of registration process of transferred shares.
√ Applicable □ Not applicable
The company has submitted relevant registration information to the Shenzhen branch of China securities registration and clearing co.,Ltd. On February 9, 2018.It is confirmed that the new shares will be registered in the account at the end of the trading day prior to thedate of listing and will be officially listed in the company's register of shareholders.Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, and net asset pershare attributed to common shareholders
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
√ Applicable □ Not applicable
Unit：股
| Name of the shareholder | Initial restricted stock number | The number of restricted shares released during the current period | The number of restricted shares increased during the current period | Number of restricted stock at end of term | Reason of restricted stock | Release date |
| Liaoning Communications Investment Co., Ltd. | 184,842,883 | 184,842,883 | Participation in the issuance of restricted shares of 184,842,883 shares | March 5, 2019 | ||
| Jianxin Fund - ICBC - Huarun Shenzhen International Investment - Huarun trust Xingsheng No. 5 assembled funds trust plan | 184,842,883 | 184,842,883 | Participation in the issuance of restricted shares of 184,842,883 shares | March 5, 2019 | ||
| Beixin Ruifeng Fund - China Merchants Bank – Beixin Ruifeng fund Fengqing No. 229 asset management plan | 184,842,883 | 184,842,883 | Participation in the issuance of restricted shares of 184,842,883 shares | March 5, 2019 | ||
| China Life Insurance Fund - ICBC - China Life Insurance - Huaxin trust No. 10 asset management plan | 184,842,883 | 184,842,883 | Participation in the issuance of restricted shares of 184,842,883 shares | March 5, 2019 |
| Total | 0 | 0 | 739,371,532 | 739,371,532 | -- | -- |
II. Securities Issuance and Listing
√ Applicable □ Not applicable
| Name of stock and its derivative securities | Date of issue | Issue price (or interest rate) | Quantity | Date of listing | Quantity allowed to be listed | Transaction termination date | Index of information disclosure | Date of disclosure |
| Stocks | ||||||||
| Bengang Steel Plates Co., Ltd. | Feberary 1, 2018 | 5.41RMB | 739,371,532 | March 5, 2018 | 739,371,532 | CNINF | March 2, 2018 | |
| Switching company bonds, separate transactions switching company bonds and corporate bonds. | ||||||||
| Other derivative securities | ||||||||
Notes on the issuance of securities during the reporting periodOn August 21, 2017, the Company obtained the CSRC's License No. 1476 issued on August 11, 2017, which approved thenon-public offering of Bengang Steel Plates Co., Ltd. not to exceed 739,371,354 shares. In February 12, 2018, the Companycompleted the registration of non-public offering shares and restricted shares. On March 5, 2018, the company's new shares in theprivate offering were listed at a price of 5.41 yuan per share.
III. Total Number of Shareholders and Shareholding
Unit：股
| Total number of common shareholders at the end of the reporting period | 66,016 | The total number of preferred shareholders voting rights restored at the end of the reporting period (See Notes 8) | 0 | |||||||
| Shareholding of shareholders holding more than 5% or top 10 shareholders | ||||||||||
| Name of the shareholder | Nature of shareholder | Holding Percentage (%) | Number of shares held at period-end | Changes in reporting period | Restricted shares held | Un-restricted shares held | Quantity of pledged or frozen shares | |||
| Status | Quantity | |||||||||
| Benxi Steel & Iron (Group) Co., Ltd. | State-owned legal person | 59.91% | 2,321,689,670 | 37,278,468 | 2,321,689,670 | Pledged | 1,523,095,133 | |||
| Frozen | 45,000,000 | |||||||||
| Liaoning Communications Investment Co., Ltd. | State-owned legal person | 4.77% | 184,842,883 | 184,842,883 | ||||||
| Jianxin Fund - ICBC - Huarun Shenzhen International | Others | 4.77% | 184,842,883 | 184,842,883 | ||||||
| Investment - Huarun trust Xingsheng No. 5 assembled funds trust plan | ||||||||
| Beixin Ruifeng Fund - China Merchants Bank – Beixin Ruifeng fund Fengqing No. 229 asset management plan | Others | 4.77% | 184,842,883 | 184,842,883 | ||||
| China Life Insurance Fund - ICBC - China Life Insurance - Huaxin trust No. 10 asset management plan | Others | 4.77% | 184,842,883 | 184,842,883 | ||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Overseas legal person | 0.21% | 8,157,311 | 8,157,311 | ||||
| Chen Jinhong | Domestic natural person | 0.19% | 7,360,500 | 7,360,500 | ||||
| Lv Ruijun | Domestic natural person | 0.13% | 5,119,800 | 5,119,800 | ||||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Overseas legal person | 0.12% | 4,606,141 | 4,606,141 | ||||
| Yu Xiaofan | Domestic natural person | 0.10% | 4,002,707 | 4,002,707 | ||||
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if any) (See Notes 3) | None | |||||||
| Notes to relationship or ‘action in concert’ among the top 10 | It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as described by Rules of Information Disclosing Regarding Changing of Shareholding Status of | |||||||
| shareholders. | Listed Companies existing among the above shareholders. | ||
| Shareholding of top 10 unrestricted shareholders | |||
| Name of the shareholder | Un-restricted shares held at the end of the reporting period | Category of shares | |
| Category of shares | Quantity | ||
| Benxi Steel & Iron (Group) Co., Ltd. | 2,321,689,670 | Common shares in RMB | 2,321,689,670 |
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 8,157,311 | Foreign shares placed in domestic exchange | 8,157,311 |
| Chen Jinhong | 7,360,500 | Common shares in RMB | 7,360,500 |
| Lv Ruijun | 5,119,800 | Foreign shares placed in domestic exchange | 5,119,800 |
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | 4,606,141 | Foreign shares placed in domestic exchange | 4,606,141 |
| Yu Xiaofan | 4,002,707 | Foreign shares placed in domestic exchange | 4,002,707 |
| Haitong International Securities Company Limited-Account Client | 3,261,109 | Foreign shares placed in domestic exchange | 3,261,109 |
| Liu Xiaoling | 3,200,000 | Common shares in RMB | 3,200,000 |
| Xu Hekun | 3,127,200 | Foreign shares placed in domestic exchange | 3,127,200 |
| Agricultural Bank of China Limited by Share Ltd CSI 500 trading open index securities investment fund | 3,000,100 | Common shares in RMB | 3,000,100 |
| Notes to relationship or ‘action in concert’ among the top 10 non-restricted shareholders, and among the top 10 non-restricted shareholders and top 10 shareholders | Benxi Steel & Iron (Group) Co., Ltd., the holding shareholder, has no relationship with any of the other shareholders among the top 10 shareholders, neither being regarded as action-in-concert parties by the Information Disclosure Regulations for Change of Shareholding in PLC. The Company is not aware of any relationship among the other shareholders, neither being regarded as action-in-concert parties by the Information Disclosure Regulations for Change of Shareholding in PLC. 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 trading (if any) (see Note 4) | Benxi Steel & Iron (Group) Co., Ltd. holds 2,071,689,670 shares of the company through common securities account, and holds 250,000,000 shares of the company through investors' credit securities accounts, totle of 2,321,689,670 shares. Liu Xiaoling holds 3,200,000 shares of the company through investors' credit securities accounts. |
Whether top 10 common shareholders and top 10 un-restricted common shareholders have a buy-back agreementdealing in reporting period
□ Yes √ No
Top 10 common shareholders and top 10 un-restricted common shareholders had no buy-back agreement dealingin reporting period.
IV. Changes of Controlling Shareholders and Substantial Controller during the Reporting Period
Change of holding shareholder
□ Applicable √ Not applicable
There was no change of holding shareholder in the report period.Change of substantial controller
□ Applicable √ Not applicable
There was no change of substantial controller in the report period.
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no Preferred Shares during the reporting period.
VIII. Status of Directors, Supervisors, Senior Executives
I. Change in Shares held by Directors, Supervisors and Senior Executives
√ Applicable □ Not applicable
| Name | Positions | Office status | Shares held at the year-begin(share) | Number of shares increased at the reporting period(share) | Number of shares decreased at the reporting period(share) | Shares held at the year-end(share) | The number of restricted stocks granted at the beginning of the year(shares) | The number of restricted stocks granted at the reporting period (shares) | The number of restricted stocks granted at the end of the year(shares) |
| Wang Shu | Director、Chairman | In office | |||||||
| Cao Aimin | Director、Chairman | In office | |||||||
| Han Ge | Director、General Manager | In office | |||||||
| Huang Xinghua | Director | In office | |||||||
| Jin Yongli | Independent Director | In office | |||||||
| Zhong Tianli | Independent Director | In office | |||||||
| Zhao Xinan | Independent Director | In office | |||||||
| Han Mei | Chairman of Supervisory Committee | In office | |||||||
| Li Lin | Supervisor | In office | |||||||
| Li Zhengchun | Supervisor | In office | |||||||
| Zhang Yanlong | Supervisor | In office | |||||||
| Bao Mingwei | Deputy General Manager | In office |
| Wang Fengmin | Deputy General Manager | In office | |||||||
| Hu Guangyuan | Deputy General Manager | In office | |||||||
| Zhao Zhonghua | CFO | In office | |||||||
| Tang Chaosheng | Director | Resigned | |||||||
| Dong Liju | Chairman of Supervisory Committee | Resigned | |||||||
| Wang Shaoyu | Deputy General Manager、CFO | Resigned | |||||||
| Sun Yanbin | Secretary of the Board | Resigned | |||||||
| Total | -- | -- | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
II. Change in Directors, Supervisors and Senior Executives
√ Applicable □ Not applicable
| Name | Positions | Types of government subsidies | 日期 | Reason |
| Tang Chaosheng | Director | Resigned | April 4, 2018 | Work Change |
| Dong Liju | Chairman of Supervisory Committee | Resigned | April 18, 2018 | Work Change |
| Wang Shaoyu | Deputy General Manager、CFO | Resigned | April 18, 2018 | Work Change |
| Sun Yanbin | Secretary of the Board | Resigned | April 18, 2018 | Work Change |
| Huang Xinghua | Director | Be Selected | May 25, 2018 | Be Selected |
| Han Mei | Chairman of Supervisory Committee | Be Selected | April 18, 2018 | Be Selected |
| Zhao Zhonghua | CFO | Appointment | April 18, 2018 | Appointment |
IX. 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 bondswhich the listed company failed to pay in full at the approval date of the semi-annual reportNo
X. Financial Report
I. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The semi-annual report is not audited.
II. Financial Statements
Statement in Notes are carried in RMB Yuan
1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Prepared by: Bengang Steel Plates Co., Ltd.
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Current assets: | ||
| Cash at bank and on hand | 18,570,241,607.21 | 17,037,713,410.49 |
| Settlement provisions | ||
| Capital lent | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 3,164,893,647.96 | 3,846,433,700.87 |
| Accounts receivable | 707,889,986.34 | 728,597,926.39 |
| Prepayments | 1,200,163,813.66 | 1,280,689,094.33 |
| Premium receivable | ||
| Reinsurance accounts receivable | ||
| Receivable deposit for reinsurance contract | ||
| Interests receivable | 3,503,285.16 | 18,448,520.50 |
| Dividends receivable | ||
| Other receivables | 271,090,946.12 | 290,376,985.34 |
| Redemptory financial assets for sale |
| Inventories | 12,893,804,549.47 | 11,209,898,096.16 |
| Assets classified as held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 217,616,432.96 | 809,322,127.79 |
| Total current assets | 37,029,204,268.88 | 35,221,479,861.87 |
| Non-current assets: | ||
| Loan and advances issued | ||
| Available-for-sale financial assets | 4,088,980.00 | 3,888,980.00 |
| Held-to-maturity investment | ||
| Long-term receivables | ||
| Long-term equity investments | 2,726,009.03 | 2,726,009.03 |
| Investment properties | ||
| Fixed assets | 22,739,708,839.78 | 23,852,067,166.10 |
| Construction in progress | 2,740,359,727.63 | 2,391,584,410.46 |
| Construction materials | 2,925,581.89 | 4,558,919.60 |
| Disposal of fixed assets | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Intangible assets | 281,428,909.47 | 253,884,881.48 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 194,939,124.19 | 200,618,461.36 |
| Other non-current assets | 1,037,735,849.00 | 1,067,334,823.12 |
| Total non-current assets | 27,003,913,020.99 | 27,776,663,651.15 |
| Total assets | 64,033,117,289.87 | 62,998,143,513.02 |
| Current Liabilities: | ||
| Short-term loans | 21,784,802,700.00 | 21,999,103,900.00 |
| Loan from central bank | ||
| Absorbed deposit and interbank deposit | ||
| Loan from other financial institutions | ||
| Financial liabilities at fair value |
| through profit or loss | ||
| Advance from customers | ||
| Notes payable | 8,484,599,696.58 | 11,494,589,827.27 |
| Accounts payable | 4,250,873,101.95 | 3,897,668,513.77 |
| Advance from customers | 3,389,201,256.80 | 3,308,567,598.05 |
| Financial assets sold for repurchase | ||
| Handling charges and commission payable | ||
| Employee benefits payable | 42,706,379.03 | 43,722,537.58 |
| Current tax liabilities | 72,085,163.43 | 87,807,128.50 |
| Interests payable | 51,920,388.97 | 84,139,288.02 |
| Dividends payable | 193,768,576.60 | |
| Other payables | 560,995,763.37 | 576,989,932.31 |
| 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 | 1,040,765,614.98 | 3,811,540,590.84 |
| Other current liabilities | 25,283,327.37 | 27,979,093.21 |
| Total current liabilities | 39,897,001,969.08 | 45,332,108,409.55 |
| Non-current liabilities: | ||
| Long-term loans | 4,406,999,573.88 | 2,444,185,630.28 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Special accounts payable | ||
| Estimated liabilities | ||
| Deferred income | 332,205,061.30 | 372,785,000.00 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 4,739,204,635.18 | 2,816,970,630.28 |
| Total liabilities | 44,636,206,604.26 | 48,149,079,039.83 |
| Shareholders’ equity: | ||
| Share capital | 3,875,371,532.00 | 3,136,000,000.00 |
| Other equity instruments | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 12,343,209,847.29 | 9,114,845,542.05 |
| Less: treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 15,965,124.92 | 475,046.75 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| General risk reserve | ||
| Undistributed profits | 1,666,346,021.34 | 1,103,162,610.35 |
| Total equity attributable to equity holders of the parent company | 18,861,998,055.40 | 14,315,588,729.00 |
| Non-controlling interests | 534,912,630.21 | 533,475,744.19 |
| Total shareholder’s equity | 19,396,910,685.61 | 14,849,064,473.19 |
| Total liabilities and shareholder’s equity | 64,033,117,289.87 | 62,998,143,513.02 |
Legal Representative: Wang Shu Person in charge of accounting: Lie Gao Accounting Dept. Leader: Zhao Zhonghua
2. BALANCE SHEET OF THE PARENT COMPANY
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Current assets: | ||
| Cash at bank and on hand | 17,784,602,468.77 | 16,717,913,081.42 |
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 3,592,298,525.73 | 3,515,361,992.96 |
| Accounts receivable | 441,694,805.16 | 482,181,593.45 |
| Prepayments | 1,200,163,813.66 | 1,280,354,579.87 |
| Interests receivable | 3,503,285.16 | 18,377,036.96 |
| Dividends receivable | ||
| Other receivables | 359,047,123.99 | 376,863,448.72 |
| Inventories | 10,890,539,001.27 | 9,228,860,225.75 |
| Assets classified as held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 183,648,538.95 | 682,211,823.73 |
| Total current assets | 34,455,497,562.69 | 32,302,123,782.86 |
| Non-current assets: | ||
| Available-for-sale financial assets | 3,888,980.00 | 3,888,980.00 |
| Held-to-maturity investment | ||
| Long-term receivables | ||
| Long-term equity investments | 2,016,281,902.16 | 1,756,981,902.16 |
| Investment properties | ||
| Fixed assets | 20,682,878,459.91 | 21,621,369,452.27 |
| Construction in progress | 2,729,970,930.48 | 2,383,533,130.37 |
| Construction materials | 2,500,795.57 | 4,134,133.28 |
| Disposal of fixed assets | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Intangible assets | 150,429,246.60 | 152,082,315.24 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | 94,510,584.16 | 100,189,921.33 |
| Other non-current assets | 1,037,735,849.00 | 1,037,735,849.00 |
| Total non-current assets | 26,718,196,747.88 | 27,059,915,683.65 |
| Total assets | 61,173,694,310.57 | 59,362,039,466.51 |
| Current Liabilities: | ||
| Short-term loans | 20,221,393,300.00 | 20,499,694,500.00 |
| Financial liabilities at fair value through profit or loss | ||
| Advance from customers | ||
| Notes payable | 7,860,203,778.44 | 10,866,669,546.93 |
| Accounts payable | 5,337,269,401.91 | 4,184,763,509.38 |
| Advance from customers | 3,372,558,263.64 | 3,217,423,443.14 |
| Employee benefits payable | 42,355,769.94 | 42,380,713.02 |
| Current tax liabilities | 59,951,664.39 | 66,903,531.67 |
| Interests payable | 39,344,592.42 | 79,074,426.27 |
| Dividends payable | 193,768,576.60 | |
| Other payables | 322,657,246.84 | 343,211,639.65 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,040,765,614.98 | 3,811,540,590.84 |
| Other current liabilities | 25,283,327.37 | 27,979,093.21 |
| Total current liabilities | 38,515,551,536.53 | 43,139,640,994.11 |
| Non-current liabilities: | ||
| Long-term loans | 4,406,999,573.88 | 2,444,185,630.28 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Special accounts payable | ||
| Estimated liabilities | ||
| Deferred income | 332,205,061.30 | 372,785,000.00 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 4,739,204,635.18 | 2,816,970,630.28 |
| Total liabilities | 43,254,756,171.71 | 45,956,611,624.39 |
| Shareholders’ equity: | ||
| Share capital | 3,875,371,532.00 | 3,136,000,000.00 |
| Other equity instruments | ||
| Including: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 11,923,058,165.17 | 8,694,693,859.93 |
| Less: treasury shares | ||
| Other comprehensive income | ||
| Special reserves | 13,268,084.12 | 276,727.96 |
| Surplus reserves | 961,105,529.85 | 961,105,529.85 |
| Undistributed profits | 1,146,134,827.72 | 613,351,724.38 |
| Total shareholder’s equity | 17,918,938,138.86 | 13,405,427,842.12 |
| Total liabilities and shareholder’s equity | 61,173,694,310.57 | 59,362,039,466.51 |
3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| 1. Total operating income | 23,441,247,377.14 | 20,736,486,903.74 |
| Including: Operating income | 23,441,247,377.14 | 20,736,486,903.74 |
| Interest income | ||
| Premium earned | ||
| Income from handling charges and commission | ||
| 2. Total operating cost | 22,717,986,325.30 | 20,109,129,759.95 |
| Including: Operating cost | 20,804,207,420.98 | 18,690,665,966.11 |
| 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 | ||
| Taxes and surcharges | 153,307,375.64 | 133,756,731.07 |
| Selling and distribution expenses | 514,038,008.95 | 587,632,707.43 |
| General and administrative expenses | 464,313,066.09 | 358,951,405.08 |
| Financial expenses | 803,038,417.28 | 381,513,404.80 |
| Asset impairment loss | -20,917,963.64 | -43,390,454.54 |
| Add: Gains from the change in fair value ("-" for loss) | ||
| Income on investment ("-" for | 3,493,150.68 | 3,294,593.14 |
| loss) | ||
| Including: Income from associates and joint ventures | ||
| Exchange Income ("-" for loss) | ||
| Gains from disposal of Assets ("-" for loss) | 825,580.63 | 3,015,294.00 |
| Other Income | 41,274,238.70 | 15,047,000.00 |
| 3. Operating profit ("-" for loss) | 768,854,021.85 | 648,714,030.93 |
| Add: Non-operating income | 2,138,397.80 | 2,952,194.58 |
| Less: Non-operating expenses | 1,382,402.26 | 4,593,420.30 |
| 4. Total profit ("-" for loss) | 769,610,017.39 | 647,072,805.21 |
| Less: Income tax expenses | 11,636,226.04 | 117,105,061.16 |
| 5. Net Profit ("-" for loss) | 757,973,791.35 | 529,967,744.05 |
| (1) Net profit from continuing operations ("-" for loss) | 757,973,791.35 | 529,967,744.05 |
| (2) Net profit from discontinuing operation ("-" for loss) | ||
| Attributable to: Owners of parent company | 756,951,987.59 | 523,635,653.57 |
| Non-controlling shareholders | 1,021,803.76 | 6,332,090.48 |
| 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 re-measuring 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 re-measuring 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) .Others | ||
| Other comprehensive income attributable to non-controlling shareholders after tax | ||
| 7. Total comprehensive income | ||
| Total comprehensive income attributable to owners of parent company | 757,973,791.35 | 529,967,744.05 |
| Total comprehensive income attributable to non-controlling shareholders | 756,951,987.59 | 523,635,653.57 |
| 8. Earnings per share: | 1,021,803.76 | 6,332,090.48 |
| 1) Basic earnings per share | ||
| 2) Diluted earnings per share | 0.195 | 0.167 |
The current business combination under common control, the net profits of the combined party before achieved: Yuan, net profit ofprevious period of the combined party realized: Yuan.Legal Representative: Wang Shu Person in charge of accounting: Gao Lie Accounting Dept. Leader: Zhao Zhonghua
4. INCOME STATEMENT OF THE PARENT COMPANY
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| 1. Turnover | 23,682,865,109.14 | 21,197,516,779.20 |
| Less: Operating cost | 21,401,191,962.20 | 19,482,976,074.32 |
| Taxes and surcharges | 135,543,392.96 | 116,783,416.00 |
| Selling and distribution expenses | 265,554,867.46 | 373,519,186.39 |
| General and administrative expenses | 440,663,658.86 | 336,370,276.02 |
| Financial expenses | 774,523,490.60 | 350,175,885.42 |
| Asset impairment loss | -20,917,963.64 | -43,390,454.54 |
| Add: Gains from the change in fair value ("-" for loss) | ||
| Income on investment ("-" for loss) | 3,493,150.68 | 105,369,227.90 |
| Including: Income from associates and joint ventures | ||
| Gains from disposal of Assets ("-" for loss) | 825,580.63 | 3,015,294.00 |
| Other Income | 41,274,238.70 | 15,047,000.00 |
| 2. Operating profit ("-" for loss) | 731,898,670.71 | 704,513,917.49 |
| Add: Non-operating income | 1,714,748.66 | 2,214,787.86 |
| Less: Non-operating expenses | 1,382,402.26 | 4,593,420.30 |
| 3. Total profit ("-" for loss) | 732,231,017.11 | 702,135,285.05 |
| Less: Income tax expenses | 5,679,337.17 | 100,308,537.10 |
| 4. Net Profit ("-" for loss) | 726,551,679.94 | 601,826,747.95 |
| 1) Net profit from continuing operations | 726,551,679.94 | 601,826,747.95 |
| 2) Net profit from discontinuing operation | ||
| 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 re-measuring 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 re-measuring 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) .Others | ||
| 6. Total comprehensive income | 726,551,679.94 | 601,826,747.95 |
| 7. Earnings per share: | ||
| 1) Basic earnings per share | ||
| 2) Diluted earnings per share |
5. CONSOLIDATED STATEMENT OF CASH FLOWS
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| 1. Cash flow from operating activities: | ||
| Cash received from sale of goods or rendering of services | 15,984,735,085.76 | 14,489,666,407.59 |
| 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 | 246,514,404.27 | 71,132,309.30 |
| Other cash received relating to operating activities | 81,782,480.19 | 87,817,078.61 |
| Subtotal of cash inflow received from operation activities | 16,313,031,970.22 | 14,648,615,795.50 |
| Cash paid for goods and services | 14,086,077,537.47 | 17,237,734,129.30 |
| 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 | 779,373,374.96 | 719,101,828.61 |
| Cash paid for all types of taxes | 406,064,168.90 | 390,701,219.38 |
| Other cash paid relating to operating activities | 310,997,147.42 | 348,384,302.93 |
| Subtotal of cash outflow received from operation activities | 15,582,512,228.75 | 18,695,921,480.22 |
| Net cash flows generated from operating activities | 730,519,741.47 | -4,047,305,684.72 |
| 2. Cash flows from investing activities: | ||
| Cash received from return on investments | 500,000,000.00 | 424,000,000.00 |
| Cash received from distribution of | 3,493,150.68 | 3,294,593.14 |
| dividends or profit | ||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from disposal of subsidiary and other operating units | ||
| Other cash paid relating to investing activities | ||
| Subtotal of cash inflow received from investing activities | 503,493,150.68 | 427,294,593.14 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 680,441,782.39 | 702,058,422.96 |
| Cash paid for acquisition of investments | 180,000,000.00 | |
| 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 | 680,441,782.39 | 882,058,422.96 |
| The net cash flow generated by investment activities | -176,948,631.71 | -454,763,829.82 |
| 3. Cash flows from financing activities: | ||
| Proceeds from investment | 3,965,799,988.19 | |
| Including: Proceeds from investment of non-controlling shareholders of subsidiary | ||
| Proceeds from borrowings | 9,721,396,957.08 | 10,419,164,500.00 |
| Cash received from bond issuance | ||
| Other proceeds relating to financing activities | ||
| Subtotal cash inflow received from financing activities | 13,687,196,945.27 | 10,419,164,500.00 |
| Cash repayments of borrowings | 14,683,452,081.71 | 6,099,082,442.74 |
| Cash payments for distribution of dividends, profit or interest expenses | 661,538,139.82 | 565,025,996.70 |
| Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries | ||
| Other cash payments relating to financing activities | ||
| Subtotal of cash outflows from financing activities | 15,344,990,221.53 | 6,664,108,439.44 |
| The net cash flow generated by financing activities | -1,657,793,276.26 | 3,755,056,060.56 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 105,015,610.23 | -41,586,403.20 |
| 5. Net increase in cash and cash equivalents | -999,206,556.27 | -788,599,857.18 |
| Add: Cash and cash equivalents at the beginning of the period | 17,037,713,410.49 | 12,273,574,488.67 |
| 6. Cash and cash equivalents at the ending of the period | 16,038,506,854.22 | 11,484,974,631.49 |
6. CASH FLOW STATEMENT OF THE PARENT COMPANY
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| 1.Cash flow from operating activities: | ||
| Cash received from sale of goods or rendering of services | 15,778,223,117.53 | 14,377,855,065.89 |
| Tax rebate received | 119,119,395.04 | 21,102,552.86 |
| Other cash received relating to operating activities | 76,026,838.22 | 80,547,620.06 |
| Subtotal of cash inflow received from operation activities | 15,973,369,350.79 | 14,479,505,238.81 |
| Cash paid for goods and services | 13,721,886,325.25 | 17,094,207,253.57 |
| Cash paid to and on behalf of employees | 726,170,588.86 | 672,852,272.11 |
| Cash paid for all types of taxes | 341,018,028.32 | 330,314,831.68 |
| Other cash paid relating to operating activities | 222,352,157.09 | 244,216,504.53 |
| Subtotal of cash outflow received from operation activities | 15,011,427,099.52 | 18,341,590,861.89 |
| Net cash flows generated from operating activities | 961,942,251.27 | -3,862,085,623.08 |
| 2. Cash flows from investing activities: | ||
| Cash received from return on investments | 500,000,000.00 | 424,000,000.00 |
| Cash received from distribution of dividends or profit | 3,493,150.68 | 105,353,447.08 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from disposal of subsidiary and other operating units | ||
| Other cash paid relating to investing activities | ||
| Subtotal of cash inflow received from investing activities | 503,493,150.68 | 529,353,447.08 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 677,920,104.21 | 687,313,444.96 |
| Cash paid for acquisition of investments | 259,300,000.00 | 180,000,000.00 |
| Net cash received from subsidiary and other operating unit | ||
| Other cash paid relating to investing activities | ||
| Subtotal of cash outflows from investing activities | 937,220,104.21 | 867,313,444.96 |
| The net cash flow generated by investment activities | -433,726,953.53 | -337,959,997.88 |
| 3. Cash flows from financing activities: | ||
| Proceeds from investment | 3,965,799,988.19 | |
| Proceeds from borrowings | 8,986,529,900.00 | 9,396,164,500.00 |
| Cash received from bond issuance | ||
| Other proceeds relating to financing activities | ||
| Subtotal cash inflow received from financing activities | 12,952,329,888.19 | 9,396,164,500.00 |
| Cash repayments of borrowings | 13,939,938,977.79 | 5,345,526,396.17 |
| Cash payments for distribution of dividends, profit or interest expenses | 635,530,683.74 | 399,928,132.12 |
| Other cash payments relating to financing activities | ||
| Subtotal of cash outflows from financing activities | 14,575,469,661.53 | 5,745,454,528.29 |
| The net cash flow generated by financing activities | -1,623,139,773.34 | 3,650,709,971.71 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 105,012,744.72 | -41,635,090.04 |
| 5. Net increase in cash and cash equivalents | -989,911,730.88 | -590,970,739.29 |
| Add: Cash and cash equivalents at the beginning of the period | 16,713,104,199.65 | 11,876,536,613.66 |
| 6. Cash and cash equivalents at the ending of the period | 15,723,192,468.77 | 11,285,565,874.37 |
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unit: Yuan
| Items | January to June 2018 | ||||||||||||
| Owner’s equity attributable to parent company | Non-controlling interests | Total shareholder’s equity | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profits | |||||
| Preference shares | Perpetual bond | Others | |||||||||||
| 1. Ending balance of last year | 3,136,000,000.00 | 9,114,845,542.05 | 475,046.75 | 961,105,529.85 | 1,103,162,610.35 | 533,475,744.19 | 14,849,064,473.19 | ||||||
| Add: Change of accounting policies | |||||||||||||
| Correction of errors for previous period | |||||||||||||
| Business consolidation under common | |||||||||||||
| control | |||||||||||||
| Others | |||||||||||||
| 2. Beginning balance of current year | 3,136,000,000.00 | 9,114,845,542.05 | 475,046.75 | 961,105,529.85 | 1,103,162,610.35 | 533,475,744.19 | 14,849,064,473.19 | ||||||
| 3. Changes in current year (“-” for decrease ) | 739,371,532.00 | 3,228,364,305.24 | 15,490,078.17 | 563,183,410.99 | 1,436,886.02 | 4,547,846,212.42 | |||||||
| 1) Total comprehensive income | 756,951,987.59 | 1,021,803.76 | 757,973,791.35 | ||||||||||
| 2) Capital increase and decrease by shareholders | 739,371,532.00 | 3,228,364,305.24 | 3,967,735,837.24 | ||||||||||
| (1) Common share invested by shareholders | 739,371,532.00 | 3,228,364,305.24 | 3,967,735,837.24 | ||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||||
| (3) Share-based payment attributable to owners’ equity | |||||||||||||
| (4) Others | |||||||||||||
| 3) Profit distribution | -193,768,576.60 | -193,768,576.60 | |||||||||||
| (1) Appropriation to surplus reserves | |||||||||||||
| (2) Appropriation to general risk reserve | |||||||||||||
| (3) Profit distribution to shareholders | -193,768,576.60 | -193,768,576.60 | |||||||||||
| (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 | 15,490,078.17 | 415,082.26 | 15,905,160.43 | ||||||||||
| (1) Provision of special reserves | 22,983,003.78 | 415,082.26 | 23,398,086.04 | ||||||||||
| (2) Use of special reserves | 7,492,925.61 | 7,492,925.61 | |||||||||||
| 6) Others | |||||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 12,343,209,847.29 | 15,965,124.92 | 961,105,529.85 | 1,666,346,021.34 | 534,912,630.21 | 19,396,910,685.61 |
Unit: Yuan
| Items | January to June 2017 | ||||||||||||
| Owner’s equity attributable to parent company | Non-controlling interests | Total shareholder’s equity | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profits | |||||
| Preference shares | Perpetual bond | Others | |||||||||||
| 1. Ending balance of last year | 3,136,000,000.00 | 9,156,845,542.05 | 372,721.86 | 961,105,529.85 | -496,947,619.42 | 549,205,917.49 | 13,306,582,091.83 | ||||||
| Add: Change of accounting | |||||||||||||
| policies | |||||||||||||
| Correction of errors for previous period | |||||||||||||
| Business consolidation under common control | |||||||||||||
| Others | |||||||||||||
| 2. Beginning balance of current year | 3,136,000,000.00 | 9,156,845,542.05 | 372,721.86 | 961,105,529.85 | -496,947,619.42 | 549,205,917.49 | 13,306,582,091.83 | ||||||
| 3. Changes in current year (“-” for decrease) | -42,000,000.00 | 102,324.89 | 1,600,110,229.77 | -15,730,173.30 | 1,542,482,381.36 | ||||||||
| 1) Total comprehensive income | 1,600,110,229.77 | 9,280,477.96 | 1,609,390,707.73 | ||||||||||
| 2) Capital increase and decrease by shareholders | 9,000,000.00 | 9,000,000.00 | |||||||||||
| (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 | 9,000,000.00 | 9,000,000.00 | |||||||||||
| 3) Profit distribution | -34,024,878.25 | -34,024,878.25 | |||||||||||
| (1) Appropriation to surplus reserves |
| (2) Appropriation to general risk reserve | |||||||||||||
| (3) Profit distribution to shareholders | -34,024,878.25 | -34,024,878.25 | |||||||||||
| (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 | 102,324.89 | 14,226.99 | 116,551.88 | ||||||||||
| (1) Provision of special reserves | 40,325,168.14 | 14,226.99 | 40,339,395.13 | ||||||||||
| (2) Use of special reserves | 40,222,843.25 | 40,222,843.25 | |||||||||||
| 6) Others | -42,000,000.00 | -42,000,000.00 | |||||||||||
| 4. Ending balance of current year | 3,136,000,000.00 | 9,114,845,542.05 | 475,046.75 | 961,105,529.85 | 1,103,162,610.35 | 533,475,744.19 | 14,849,064,473.19 |
8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY
Unit: Yuan
| Items | January to June 2018 |
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total shareholder’s equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 1. Ending balance of last year | 3,136,000,000.00 | 8,694,693,859.93 | 276,727.96 | 961,105,529.85 | 613,351,724.38 | 13,405,427,842.12 | |||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for previous period | |||||||||||
| Others | |||||||||||
| 2. Beginning balance of current year | 3,136,000,000.00 | 8,694,693,859.93 | 276,727.96 | 961,105,529.85 | 613,351,724.38 | 13,405,427,842.12 | |||||
| 3. Changes in current year (“-” for decrease) | 739,371,532.00 | 3,228,364,305.24 | 12,991,356.16 | 532,783,103.34 | 4,513,510,296.74 | ||||||
| 1) Total comprehensive income | 726,551,679.94 | 726,551,679.94 | |||||||||
| 2) Capital increase and decrease by shareholders | 739,371,532.00 | 3,228,364,305.24 | 3,967,735,837.24 | ||||||||
| (1) Common share invested by shareholders | 739,371,532.00 | 3,228,364,305.24 | 3,967,735,837.24 | ||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to owners’ equity | |||||||||||
| (4) Others | |||||||||||
| 3) Profit distribution | -193,768,576.60 | -193,768,576.60 | |||||||||
| (1) Appropriation to surplus reserves | |||||||||||
| 2．Profit distribution to shareholders | -193,768,576.60 | -193,768,576.60 | |||||||||
| 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 | 12,991,356.16 | 12,991,356.16 | |||||||||
| (1) Provision of special reserves | 20,342,777.03 | 20,342,777.03 | |||||||||
| (2) Use of special reserves | 7,351,420.87 | 7,351,420.87 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 3,875,371,532.00 | 11,923,058,165.17 | 13,268,084.12 | 961,105,529.85 | 1,146,134,827.72 | 17,918,938,138.86 |
Unit: Yuan
| Items | January to June 2017 |
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total shareholder’s equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 4. Ending balance of last 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 | |||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for previous period | |||||||||||
| Others | |||||||||||
| 5. Beginning 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 | |||||
| 6. Changes in current year (“-” for decrease) | 45,992.07 | 1,620,064,014.56 | 1,620,110,006.63 | ||||||||
| 1) Total comprehensive income | 1,620,064,014.56 | 1,620,064,014.56 | |||||||||
| 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 | 45,992.07 | 45,992.07 | |||||||||
| (1) Provision of special reserves | 34,507,289.29 | 34,507,289.29 | |||||||||
| (2) Use of special reserves | 34,461,297.22 | 34,461,297.22 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 3,136,000,000.00 | 8,694,693,859.93 | 276,727.96 | 961,105,529.85 | 613,351,724.38 | 13,405,427,842.12 |
III. Basic Information of the Company
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 3November 1997, the Company issued another 120,000,000 A-shares (Renminbi common Shares) at RMB5.40each, and listed in Shenzhen Stock Exchange since 15 January 1998. The capital shares were totaled to1,136,000,000 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 ShareEquity 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 sharesit was holding. Shareholding positions have been registered with China Securities Depository & ClearingCorporation 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 commonshares particularly to Bengang Group and the proceeds would be used to purchase the related assets of theGroup. On the same day, Bengang Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued byChina Securities Regulatory Committee, and were exempted for the liability of undertaking the purchase offer.The liability was caused by subscribing of the 2 billion new shares and the total shareholding was thusincreased to 2.5752 billion shares (accounting for 82.12% of the total capital shares of the Company). On 28August 2006, as approved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, theregistration and conditional placing procedures of the 2 billion new shares were completed. On 28 September2006, the privately placed shares were approved by Shenzhen Stock Exchange to be placed in the stockmarket. The new shares were placed in the market with face value of RMB1.00 per share and the placingprice was RMB 4.6733 per share.
On August 21, 2017, Bengang Steel acquired the “Security Regulatory Permission [2017] No. 1476” issued
by the China Securities Regulatory Commission on August 11, 2017. The paper approved that the non-publicissuance of Bengang Steel Plates should not exceed 739,371,354 shares. On February 12, 2018, the companycompleted the registration of this non-public offering of shares and restricted shares. On March 5, 2018, thecompany's non-public offering of new shares was listed, and the issue price was RMB 5.41 per share.
Up to 30 June 2018, the capital shares of Bengang Steel Plates Co., Ltd were amounted to 3,875,371,532shares. The unified social credit code was 91210000242690243E. The registered address is 16th RenminRoad, Pingshan District, Benxi, Liaoning Province. The registered capital is RMB 3,875,371,532. The legalrepresentative is Wang Shu.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd. and the actualcontroller is the State-owned Assets Supervision and Administration Commission of the State Council ofLiaoning province.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry, and ismainly 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 27August 2018.
As at 30 June 2018, 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 Plate Liaoyang Orel Ball Co., Ltd. |
| Dalian Benruitong Automobile Material Technologies Co., Ltd. |
| Changchun Bengang Steel & Iron Sales Co., Ltd. |
| Harbin Bengang Economic and Trading Co., Ltd. |
| Nanjing Bengang Steel Material Sales 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 Puxiang Cool Rolling Steel Sheet Co., Ltd. |
| Benxi Bengang Steel Sales Co., Ltd |
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. |
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. |
| Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. |
For the details of the scope and changes of the consolidated financial statements of the current period, please
refer to “VI. Changes in the scope of consolidation” and “VII. Interests in other entities” in this note.
IV. 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 specificstandards, application materials, interpretations (together hereinafter referred to as “Accounting Standards forBusiness Enterprises”) issued by the Ministry of Finance, and “Information Disclosure Rules for Companiesof 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 tooperate in the next twelve months from the end of reporting period
V. Significant accounting policies and accounting estimates
The following disclosed content covers the detailed accounting policies and accounting estimates that areadopted 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 flowsof the Company during the reporting period in accordance with China Accounting Standards for BusinessEnterprises.
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
Business consolidation under common control: The assets and liabilities that the Company acquired in a
business combination shall be measured on the basis of their carrying amount of aquiree’s assets, liabilities
(as well as the goodwill arising from the business combination) in the consolidated financial statement of theultimate controller on the combining date.As for the balance between the carrying amount of the net assets obtained by the Company and the carryingamount of the consideration paid by it (or the total par value of the shares issued), capital reserve needs to beadjusted. If the capital reserve is not sufficient, any excess shall be adjusted against retained earnings.
Business combination involving entities now under common control: The Company shall, on the acquisitiondate, measure the assets given and liabilities incurred or assumed by an enterprise for a business combinationin light of their fair values, and shall record the balances between them and their carrying amounts into theprofits and losses at the current period.
The Company shall recognize the positive balance between the combination costs and the fair value of theidentifiable net assets it obtains from the acquiree as goodwill. The Company shall treat the negative balancebetween the combination costs and the fair value of the identifiable net assets it obtains from the acquiree intothe profits and losses of the current period.
The intermediary costs and relevant management fee for the business combination now under same controlpaid by the acquirer, including the expenses for audit, assessment and legal services, shall be recorded into theprofits and losses at the current period. The transaction expenses for the issuance of equity securities for thebusiness combination shall be recorded into the initial recognition amount of equity securities.
6. Consolidation of Financial Statements
1. Scope of consolidationThe scope of consolidation of consolidated financial statements is determined based on control. All thesubsidies (including separable sections of the investees controlled by the Company) have been consolidatedinto the scope of consolidation for this period ended.
2. Procedure of consolidationThe consolidated financial statements shall be presented by the parent based on the financial statements of theparent and its subsidiaries, and using other related information. When preparing consolidated financialstatements, the parent shall consider the entire group as an accounting entity, adopt uniform accountingpolicies and apply the requirements of Accounting Standard for Business Enterprises related to recognition,measurement and presentation. The consolidated financial statements shall reflect the overall financialposition, operating results and cash flows of the group.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be inaccordance 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 adjustedaccording 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 thegoodwill arising from purchasing the subsidiary by the ultimate controller) are adjusted according to bookvalue 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 thenon-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’sinterests in the beginning equity of a subsidiary, the excess shall be charged against the minority’s interests.
(1) Increase of new subsidiary and businessIf the Company has a new subsidiary due to business combination under common control during a reportingperiod, it shall adjust the beginning balance in the consolidated statement of financial position when preparingconsolidated 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 ofconsolidation has been in existence since the date the ultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee under common control due toadditional investment or other reasons, Adjustment shall be made as if the reporting entity after thecombination has been in existence since the date the ultimate controlling party first obtained control. Theinvestment income recognized between date of previously obtaining equity investment and the date theacquiree and acquirer are under common control, which is later, and the combining date, other comprehensiveincome and other changes of net assets arising from the equity investment previously-held before obtainingthe control the acquiree shall be adjusted against the prior retained earnings of the comparative financialstatements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in the consolidatedstatement 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 dueto additional investment or other reasons, the acquirer shall re-measure its previously held equity interest inthe acquiree to its fair value at the acquisition date. The difference between the fair value and the carryingamount shall be recognized as investment income for the period when the acquisition takes place. When thepreviously-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 fromre-measurement 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.
When the Company loses control over an investee due to partial disposal or other reasons, the acquirer shallre-measure the remaining equity interests in the acquiree to its fair value at the acquisition date. Thedifference, between sums of consideration received for disposal equity shares and fair value of the remainingshares, and sums of share of net assets of the subsidiary calculated continuously from the acquisition date orthe combination date based on the previous shareholding proportion and goodwill, shall be recognized asinvestment income for the period when the Company loses control over acquiree. When the previously-heldequity 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 thecurrent period when the Company loses control over acquiree. Other comprehensive income arising fromre-measurement of defined benefit plan is excluded. When the Company loses control over a subsidiary dueto 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 itssubsidiary 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 asingle transaction:
Arrangements are entered into at the same time or in contemplation of each other;Arrangements work together to achieve an overall commercial effect;The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; andOne arrangement considered on its own is not economically justified, but it is economically justified whenconsidered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss ofcontrol of the subsidiary, these multiple transactions shall be accounted for as a single transaction. In theconsolidated financial statements, the difference between the consideration received and the corresponding
proportion of the subsidiary’s net assets in each transaction prior to the loss of control shall be recognized in
other comprehensive income and transferred to the profit or loss when the Company eventually loses controlof the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary do not formpart of a bundled transaction, apply the treatment of disposing partial long-term equity investments in asubsidiary without loss of control prior to the loss of control. After the loss of control, apply the treatment ofdisposing the subsidiary in common cases.
(3) Acquiring the subsidiary’s equity interest held by non-controlling shareholdersWhere the Company has acquired a subsidiary’s equity interest held by non-controlling shareholders, the
difference between the increase in the cost of long-term investments as a result of acquisition ofnon-controlling interests and the share of net assets of the subsidiary calculated continuously from theacquisition date or the combination date based on the new shareholding proportion shall be adjusted to thecapital reserve( capital premium or share premium) in the consolidated financial statements. If the balance ofthe 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 controlWhen the Company disposes of a portion of the long-term equity investments in a subsidiary without loss ofcontrol, the difference between the amount of the consideration received and the corresponding portion of thenest assets of the subsidiary calculated continuously from the acquisition date or the combination date relatedto the disposal of the long-term equity investments shall be adjusted to the capital reserve (capital premium orshare 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 theliabilities, 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 accountfor 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(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 theunrestricted 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 whichare subject to an insignificant risk of change in value.
9. Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transactionForeign 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 dateand the spot exchange rate at the time of initial recognition or prior to the balance sheet date, except thosearising from the raising of special foreign debt for the purchase or construction of capitalizable assets thusshall be capitalized according to the borrowing costs capitalization principle, shall be recorded into the profitsand losses at the current period. The foreign currency non-monetary items measured at the historical cost shallstill be translated at the spot exchange rate on the transaction date, of which the amount of functional currencyshall not be changed. The foreign currency non-monetary items measured at the fair value shall still betranslated at the spot exchange rate on the date of confirming the fair value and the balance of exchangearising from it shall be recorded into profits and losses at the current period of disposal or capital reserves.
2. Translation of foreign currency financial statementsThe asset and liability items in the statement of financial position shall be translated at a spot exchange rateon the balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", othersshall be translated at the spot exchange rate at the time when they are incurred. The income and expense itemsin 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 itemsof the owner's equities in the statement of financial position and arises from the translation of foreigncurrency financial statements related to this oversea business, into the disposal profits and losses of thecurrent period. If the overseas business is disposed of partially, the Company shall calculate the balancearising from the translation of foreign currency statements of the part of disposal based on the disposal rateand shall shift them into the profits and losses of the current period.
10. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments1. Classification of financial instruments
The classification of financial assets and financial liabilities at initial recognition are as follows: financialassets or financial liabilities designated at fair value through current profit and loss, including: tradingfinancial investment, held-to-maturity investment, loans and receivables, available-for-sale investment andother financial liabilities.
2. Recognition and measurement of financial instruments(1) The financial assets (liabilities) at fair value through profit or lossThe financial assets (financial liabilities) at fair value through profit or loss are recognized initially at fairvalue (minus cash dividends declared but not received or bond interest matured but not drawn yet). Therelevant 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 suchfinancial assets. At the balance sheet date, the Company recognizes the fair value changes in current profitand loss.
The Company recognizes the difference between initial recognition and fair value of the financial assets asinvestment income when disposing the financial assets and at the same time adjusts the fair value changes incurrent profit and loss.
(2) Held-to-maturity investmentThe Held-to-maturity investments are recognized initially at fair value (minus bond interest matured but notdrawn yet) plus any related transaction cost.
The held-to-maturity investments are measured at amortized cost using the effective interest rate. The interestincome is recognized as investment income. The effective interest will be determined at the initial recognitionand will not be changed in the holding period or within a shorter applicable period.
When disposing the held-to-maturity investment, the difference between the investing proceeds and thecarrying value is recognized as investment income.
(3) ReceivablesReceivables from selling products and rendering services or receivable of other company not including thereceivables with quoted price in the active market (including: accounts receivable, other receivables, notesreceivable, prepayments, long-term receivables) are measured at contract price; if the receivables is offinancing 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 incurrent profit and loss.
(4) Available-for-sale financial assetsAvailable-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividendsthat have been declared but not distributed and bond interests that have matured but not been drawn) andtransaction 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 thecapital 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 liabilitiesFor other financial liabilities, they are initially recognized at fair value plus any directly attributabletransaction costs. After the initial recognition, the other financial liabilities are measured at amortized cost.
3. Determination and measurement of financial assets transferWhere the Company has transferred nearly all of the risks and rewards related to the ownership of thefinancial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risksand rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standardsfor stopping the recognition of a financial asset, the Company shall follow the principle of the substance overform. 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 thecurrent 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 thefair value originally recorded in the owners' equities (in the event that the financial asset involved in thetransfer is a financial asset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to derecognize, the entire book value of thetransferred financial asset shall, between the portion whose recognition has been stopped and the portionwhose recognition has not been stopped (under such circumstance, the service asset retained shall be deemedas a portion of financial asset whose recognition has not been stopped) , be apportioned according to theirrespective relative fair value, and the difference between the amounts of the following 2 items shall beincluded 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 theaccumulative amount of the changes in the fair value originally recorded in the owner's equities which iscorresponding to the portion whose recognition has been stopped (in the event that the financial assetinvolved 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 berecognized as financial assets and the consideration received shall be recognized as financial liabilities.
4. Recognition of termination of financial liabilitiesOnly when the prevailing obligations of a financial liability are relieved in all or in part may the recognitionof 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 financialliabilities by way of any new financial liability, and if the contractual stipulations regarding the new financialliability is substantially different from that regarding the existing financial liability, it shall terminate therecognition 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 existingfinancial liability, it shall terminated the recognition of the existing financial liability or part of it, and at thesame time recognize the financial liability after revising the contractual stipulations as a new financialliability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shallinclude into the profits and losses of the current period the gap between the carrying amount which has beenterminated from recognition and the considerations it has paid (including the non-cash assets it has transferredout 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, thecarrying amount of the whole financial liabilities in light of the comparatively fair value of the part thatcontinues to be recognized and the part whose recognition has already been terminated. The gap between thecarrying amount which is distributed to the part whose recognition has terminated and the considerations ithas 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 valueThe fair values of the financial assets or financial liabilities measured at fair value shall be determined byreference 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 forthe financial assets at fair value through profit or loss. Where there is any objective evidence proving thatsuch financial asset has been impaired, an impairment provision shall be made.
(1) Impairment of available-for-sale financial assetsAn impairment provision shall be made where the fair value of the held-to-maturity financial assets dropssignificantly at the balance sheet date or the trend of decrease is expected not to be temporary after takingvarious factors into consideration. The accumulative losses arising from the decrease of the fair value of the
owners’ equity which was directly included shall be transferred out and recorded as impairment loss.
Where any available-for-sale debt instruments is recognized as having suffered from any impairment loss, ifthere is any objective evidence proving that the value of the said debt instruments has been restored, and it isobjectively related to the events that occur after such loss is recognized, the impairment-related losses asoriginally 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 bereversed 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 goodliquidity 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 investmentThe impairment of the held-to-maturity investment can be measured at reference to the measurement of theimpairment 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 should 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 debt 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
| Portfolio | Recognition and provision for bad debts for portfolio |
| Insignificant amount of receivables and unadjusted individual receivables | Aging analysis method |
Aging analysis method for bad debts provision:
√ Applicable □ Not applicable
| Aging | Bad debts ratio for accounts receivable | Bad debts ratio for other receivables |
| 1-2 years | 5.00% | 5.00% |
| 2-3 years | 20.00% | 20.00% |
| Over 3 years | 100.00% | 100.00% |
Percentage of balance method for bad debts provisions:
□ Applicable √ Not applicable
Other methods for bad debts provision:
□ Applicable √ Not applicable
(3) Insignificant individual amounts of accounts receivable that recognize bad debts individually
| Reasons for individual recognition and provision of bad debts | Accounts receivable amount is proved to be unrecoverable with conclusive evidence. |
| 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. Inventories
Whether the Company needs to obey the disclosure requirement of specific industryNo
1. Inventory classificationInventories include material in transit, raw material, low-valued consumables, work in process, finished goods,materials for consigned processing, etc.
2. Valuation method for inventory dispatchedThe 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 provisionfor the inventories impairment lossThe net realizable value of inventories (finished products, stock commodity, material, etc.) held for directselling in the daily business activity shall be calculated by deducting the estimated sale expense and relevanttaxes from the estimated sale price of inventories.
The net realizable value of inventories for further processing in the daily business activity shall be calculatedby deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimatedsale price of inventories.
The net realizable value of inventories held for the execution of sales contracts or labor contracts shall becalculated on the ground of the contract price. If an enterprise holds more inventories than the quantitiessubscribed in the sales contract, the net realizable value of the excessive part of the inventories shall becalculated 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 ofinventories at the year end. For inventories with large quantity and relatively low unit prices, the provision forloss on decline in value of inventories shall be made on the ground of the categories of inventories. For theinventories 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 otheritems, 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 ofinventory 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 systemThe 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 followingconditions are satisfied simultaneously:
(1) This component can be sold immediately based only on usual terms of selling such components in currentsituation.(2) The Company has adopted a resolution on disposal of the component or non-current asset, and has beenapproved by the general meeting of shareholders or the corresponding authority if required to be approved bythe 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 investments
1. Criteria of join control and significant influenceJoint control is the contractually agreed sharing of control of an arrangement, which exists only whendecisions 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 investeebut not control or join control of those policies. If the Company could exert significant influence over theinvestee, 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 acquisitionFor a business combination involving enterprises under common control, if the consideration of thecombination 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’sshare 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 thecarrying 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 equityinvestment, together with the additional investment cost for new shares at combination date, shall be adjustedto the capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjusted to retainedearnings.
When an investor becomes capable of exercising control over an investee now under common control due toadditional investment or other reasons, the investor shall change to the cost method and use the carryingamount of the cost method and use the carrying amount of the previously-held equity investment, togetherwith 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 acquisitionThe initial cost of a long-term equity investment obtained by making payment in cash shall be the purchasecost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be thefair 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 investmentcontract or agreement (minus cash dividend or profit declared but not paid) except the unfair value stipulatedin the contract or agreement.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets receivedand surrendered can be reliably measured, the fair value of the assets surrendered shall be used as the basis fordetermining the cost of the assets received, unless there is any exact evidence showing that the fair value ofthe 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 initialcost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on thebasis of fair values.
3. Subsequent measurement and profit or loss recognition(1) Cost methodThe 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 theinvested entity, recognize the investment profits or losses except the dividend declared but unpaid, which isincluded in the payment when acquiring the investment.
(2) Equity methodA 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 inthe fair values of an investee’s identifiable net assets at the acquisition date, no adjustment shall be made tothe initial investment cost. Where the initial cost is less than the investor’s interest in the fair values of theinvestee’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.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of theinvestee’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 bereduced 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 theinvestee’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 appropriateadjustments 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 investorand 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 forBusiness combination under/now under common control” and Note 2 (6) “Consolidation of FinancialStatements”.
When the Company recognizes the losses of invested enterprise, it shall follow the following sequence: Firstof all, offset the book value of long term equity investment. If the book value of long term equity isinsufficient to dilute, the investing enterprise shall recognize the net losses of the invested enterprise until thebook value of the long-term equity investment and other long-term rights and interests which substantiallyform the net investment made to the invested entity are reduced to zero. If the company still has the obligationto undertake extra losses per contract, and then estimated liabilities shall be recognized into current profit andloss accordingly to the estimated obligation.
(3) Disposal of long-term equity investmentOn disposal of a long-term equity investment, the difference between the proceeds actually received and thecarrying amount shall be recognized in profit or loss for the current period.
When the previously-held equity investment is accounted for under the equity method, any othercomprehensive income previously recognized shall be accounted for on the same basis as would have beenrequired if the investee had directly disposed of the related assets or liabilities.
Those owner's equity recognized other than the change of net profits or loss, other comprehensive income,profit distribution of the invested entity shall be transferred proportionally into profit or loss of current period,other comprehensive income arising from the re-measurement of defined benefit plan is excluded.
When an investor can no longer exercise joint control of or significant influence over an investee due topartial 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. Whenthe previously-held equity investment is accounted for under the equity method, any other comprehensiveincome previously recognized shall be accounted for on the same basis as would have been required if theinvestee had directly disposed of the related assets or liabilities for the current period upon discontinuation ofthe 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 whenthe Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal of equityinvestment or other reasons, and with the retained interest, still has joint control of, or significant influenceover, the investee, when preparing the individual financial statements, the investor shall change to the equitymethod and adjust the remaining equity investment as if the equity method had been applied from the date ofthe first acquisition. If the investor cannot exercise joint control of or significant influence over the investeeafter 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: Recognitionand Measurement”, and the difference between the fair value and carrying amount at the date of the loss of
control shall be charged to profit or loss for the current period.
When the equity investment disposed is acquired through business combination due to additional investmentor 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 BusinessEnterprises No.22-Financial instruments: Recognition and Measurement” after disposal, other comprehensiveincome and other owner’s interests previously recognized shall be transferred to profit or loss in full.
15. Investment properties
Investment properties measurement method:
Cost MethodDepreciation and amortization method
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 rentafter 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 costmodel and building for rent, the same depreciation policy shall be adopted as that of fixed assets; for land useright, the same amortization policy shall be adopted as that of intangible assets.
16. Fixed assets
(1) Recognition of Fixed assetsThe 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 businessmanagement; 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 related 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
| Category | Fixed assets depreciation | Depreciation Period | Residual Value Rate | Depreciation Rate |
| Plants and Buildings | Straight line method | 8-40 years | 0% | 2.50%-12.50% |
| Machinery | Straight line method | 4-18 years | 3% | 5.39%-24.25% |
| Transportation and other equipment | Straight line method | 5-18 years | 3% | 5.39%-19.40% |
(3) Recognition criteria for fixed asset leased in by financial leasing and its valuationWhere 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 fairvalue 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 allof 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 andthe 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 asunrecognized financing charges.
17. Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expensesincurred for bringing the asset to the expected conditions for use. Construction in progress is transferred tofixed 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 byconsidering 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 beadjusted based on the actual cost, but those provided deprecation shall not be adjusted.
18. Borrowing costs
1. Principle of the recognition of capitalized borrowing costsThe borrowing costs shall include interest on borrowings, amortization of discounts or premiums onborrowings, ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition andconstruction or production of assets eligible for capitalization, it shall be capitalized and recorded into thecosts of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actualamount 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, inventoriesand other assets, of which the acquisition and construction or production may take quite a long time to getready 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 orinterest bearing debts paid for the acquisition and construction or production activities for preparing assetseligible 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 itsintended use or sale have already started.
2. The capitalization period of borrowing costsThe capitalization period shall refer to the period from the commencement to the cessation of capitalization ofthe 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 separatelyand 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 isready for use or sale during the continuing construction of other parts, but it cannot be used or sold until theasset is entirely completed, the capitalization of the borrowing costs shall be ceased when the asset iscompleted entirely.
3. The suspension of capitalization of borrowing costsWhere the acquisition and construction or production of a qualified asset is interrupted abnormally and theinterruption 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 orproduction ready for the intended use or sale, the capitalization of the borrowing costs shall continue. Theborrowing costs incurred during such period shall be recognized as expenses, and shall be recorded into theprofits 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 costsFor interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in thebank or investment income earned on the loan as a temporary investment) and the ancillary expense incurredto a specifically borrowed loan, those incurred before a qualified asset under acquisition, construction orproduction is ready for the intended use or sale shall be capitalized at the incurred amount when they areincurred, 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 generalborrowing by multiplying the weighted average asset disbursement of the part of the accumulative assetdisbursements minus the general borrowing by the capitalization rate of the general borrowing used. Thecapitalization rate shall be calculated and determined in light of the weighted average interest rate of thegeneral borrowing.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized duringeach accounting period shall be determined by the effective interest rate method, and an adjustment shall bemade to the amount of interests in each period.
19. Biological Assets20. Oil and gas assets21. Intangible assets
(1) Measurement, useful life and impairment1. 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 necessarydisbursements which may be directly attributable to bringing the intangible asset to the conditions for theexpected purpose. If the payment for an intangible asset is delayed beyond the normal credit conditions and itis of the financing nature, the cost of the intangible asset shall be determined on the basis of the present valueof the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initialrecognition is based on its fair value, and the difference between the debt restructured and the fair value of theintangible assets are recognized in the current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the fair valueof the assets obtained or surrendered can be reliably measured, the initial recognition of the asset obtained isbased on the fair value of the asset surrendered, unless there is strong evidence that the fair value of the assetobtained is more reliable. For intangible assets obtained through non-monetary transactions which do notmeet the above criteria, the initial recognition is based on the book value of the assets surrendered and therelevant taxes payable. No gain or loss will be recognized.
(2) Subsequent MeasurementThe 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 theperiod when the intangible asset can bring economic benefits to the enterprise. If it is unable to estimate thebeneficial period of the intangible asset, it shall be regarded as an intangible asset with uncertain service lifeand shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives:
| Item | Estimated useful life | Criteria |
| Land use right | 50 years | Land use right certificate |
The Company shall review the useful lives and amortization methods of intangible assets with limited usefullives at each year end.
Per review, the useful lives and amortization methods of intangible assets with limited useful lives at eachyear-end is the same with that of last year.
3. Determination of intangible assets with uncertain useful livesAs at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
(2) Development expenditure of internal research
1. Classification criteria for internal research phase and development phaseThe expenditures for its internal research and development projects of an enterprise shall be classified intoresearch expenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study to acquire andunderstand new scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge isapplied into certain projects or designs for the manufacturing of new or substantially improved material,device and product.
2. Criteria of capitalization of development expenditureExpenditures during the development phase of internal research and development projects shall be recognizedas 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 beingable to prove that there is a potential market for the products manufactured by applying the intangible assetsor 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.
The development expenditures for its internal research and development projects of the Company shall berecorded into the profit or loss for the current period if the above said conditions are not satisfiedsimultaneously. The research expenditures for its internal research and development projects of an enterpriseshall be recorded into the profit or loss for the current period when incurred.
22. 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 ofthe assets shall be written down to their recoverable amounts. The write-downs are recognized as impairmentlosses and charged to current profit and loss. The recoverable amounts of long-term assets are the higher oftheir fair values less costs to sell and the present values of the future cash flows expected to be derived fromthe assets. The Company shall estimate its recoverable amount on an individual basis. Where it is difficult todo 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 thecarrying value of the business reputation formed by merger of enterprises to the relevant asset groups by areasonable method. Where it is difficult to do so, it shall be apportioned to the relevant combinations of assetgroups.
When apportioning the carrying value of the business reputation to the relevant asset groups or combinationsof asset groups, it shall be apportioned on the basis of the proportion of the fair value of each asset group orcombination 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 ofthe carrying value of each asset group or combination of asset groups to the total carrying value of therelevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containingbusiness reputation, if any evidence shows that the impairment of asset groups or combinations of assetgroups is possible, the Company shall first make an impairment test on the asset groups or combinations ofasset groups not containing business reputation, calculate the recoverable amount, compare it with therelevant carrying value and recognize the corresponding impairment loss. Then the Company shall make animpairment test of the asset groups or combinations of asset groups containing business reputation, andcompare the carrying value of these asset groups or combinations of asset groups (including the carryingvalue of the business reputation apportioned thereto) with the recoverable amount. Where the recoverableamount of the relevant assets or combinations of the asset groups is lower than the carrying value thereof, itshall recognize the impairment loss of the business reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periods oncerecognized.
23. Long-term deferred expenses
The long-term deferred expense refers to the expenses incurred but shall be borne by current and subsequentaccounting period, which is more than one year. The long-term deferred expense shall be amortized over itsbeneficiary period evenly.
24. Employee benefits
(1) Accounting treatment for short employee benefitThe Company shall recognized , in the accounting period in which an employee provides service, actuallyoccurred short-term employee benefits as a liability, with a corresponding charge to the profit or loss or costof 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, inthe accounting period in which employees provide services, be calculated according to prescribed bases andpercentages in determining the amount of employee benefits.
The employee benefits which are non-monetary benefits shall be measured at fair value if it could bemeasured reliably.
(2) Accounting treatment of post-employment benefits1. Defined contribution planThe Company shall recognize, in the accounting period in which an employee provides service, pension fundand unemployment fund for employees as a liability according to the local government regulations. Theamount shall be calculated according to local prescribed bases and percentages in determining the amount ofemployee benefits, with a corresponding charge to the profit or loss or cost of an asset for the current period.
2. Defined benefit planNone.
(3) Accounting treatment of termination benefitsThe Company which provides termination benefits to employees shall recognize an employee benefitsliability for termination benefits, with a corresponding charge to the profit or loss for the current period, at theearlier of the following dates:
(1) When the Company cannot unilaterally withdraw the offer of termination benefits because of anemployment termination plan or a curtailment proposal(2) When the Company recognizes costs or expenses related to a restructuring that involves the payment oftermination benefits
(4) Accounting treatment of other long-term employee benefits payableNone.
25. Estimated liabilities
1. Recognition Criteria of estimated liabilitiesThe obligation related to a Contingency (litigation, guarantees, loss contract, restructuring) shall berecognized 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 theobligation; and(3) The amount of the obligation can be measured in a reliable way.2. Measurement of estimated liabilitiesThe estimated debts shall be initially measured in accordance with the best estimate of the necessary expensesfor the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, timevalue of money, and other factors related to the Contingencies. If the time value of money is of greatsignificance, the best estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a continuous range for the necessary expenses and if all the outcomes within this range are equallylikely 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 equallylikely 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 inaccordance 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 isexpected to be compensated by a third party, the compensation shall be separately recognized as an asset onlywhen it is virtually certain that the reimbursement will be obtained. The amount recognized for thereimbursement shall not exceed the book value of the estimated debts.
26. Share-Based Payment27. Preference shares, Perpetual bond and Other Financial instruments28. Revenue
Whether the Company needs to obey disclosure requirement of specific industry
No
1. Recognition Criteria for the Revenue from sale of goods(1) The general principle of revenue recognition and measurementThe Company has transferred to the buyer the significant risks and rewards of ownership of the goods; andretained neither continuing managerial involvement which usually relates to the ownership nor exertseffective control over the goods sold. The relevant amount of revenue can be measured reliably, the economicbenefits related to the transaction will flow into the enterprise; and the relevant costs incurred or to beincurred 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 followingconditions are met: The Company has delivered the products to buyer under the contract, amount of productsales revenue is determinable, received or the certificate of the right to receive the amount has been obtainedand the relevant economic benefits are likely to flow into the entity, and related costs can be measuredreliably.Export sales revenue is recognized when the following conditions are met: the Company has undertaken theCustoms declaration and delivery has occurred under the contract, bill of lading has been obtained, amount ofproduct sales revenue is determinable, received or the certificate of the right to receive the amount has beenobtained and the relevant economic benefits are likely to flow into the entity, and related costs can bemeasured reliably.
2. Recognition Criteria for the Revenue from alienating of Assets Use Rights(1) The general principleWhen it is probable that economic benefits in relation to the transaction will flow into the enterprise; and theamount of revenues can be measured reliably. The Company shall ascertain the amount of revenues from thetransfer 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 othersand the actual interest rate; or(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in therelevant 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 Contractsunder Percentage of Completion MethodRevenue from providing labor services are recognized under the percentage of completion method if theoutcome of the labor service provision transaction can be reliably measured. Percentage completed isdetermined by measurement of work completed.
Total revenue from providing of labor services is determined based on the received or receivable amountstipulated in the contract or agreement, unless the received or receivable amount as stipulated in the contractor agreement is unfair. The Company shall, on the date of the balance sheet, ascertain the current revenuefrom providing labor services by multiplying the total amount of revenues from providing labor services withthe percentage completion, less cumulative revenues recognized in the previous accounting periods. At thesame time, the enterprise shall recognize current cost of labor services by multiplying the total estimated costof providing of labor services with percentage completion less cumulative costs recognized in the previousaccounting periods.
If the result of a transaction concerning the providing of labor services cannot be reliably measured at thebalance sheet date, it shall be measured as follows:
(1) If the cost of labor services incurred is expected to be compensated, the revenue from the providing oflabor services shall be recognized to the extent of the cost of labor services incurred, and the cost of laborservices shall be recognized; or(2) If the cost of labor services incurred is not expected to compensate, the cost incurred shall be recognizedin the current profit and loss, and no revenue from the providing of labor services shall be recognized.
29. Government Subsidies
(1) The judgment basis and accounting treatment of government subsidies related to assetsGovernment subsidies related to assets are government subsidies whose primary condition is that an entityqualifying for them should purchase, construct or otherwise acquire long-term assets. The specific conditionof government subsidies related to assets to the Company is that, government subsidies qualifying for usshould purchase, construct or otherwise acquire long-term assets, including fiscal appropriation for fixedassets and intangible assets acquired, finance discount of specific borrowing related to fixed assets acquired.Government subsidies related to assets shall be recognized by deducting the subsidies at the carrying amountof the assets or recognized as deferred income. Subsidies that recognized as deferred income shall berecognized in profit or loss on a systematic basis over the periods during the useful lives of the relevant assets(Subsidies related to daily activities should be figured into Other Income. Subsidies that unrelated to dailyactivities should be figured into Non-operating Income).
(2) The judgment basis and accounting treatment of government subsidies related to incomes
Government subsidies related to incomes refer to the government subsidies beside government subsidiesrelated to assets. The specific condition of government subsidies related to assets to the Company is that,subsidies are acquired by us and not government subsidies related to assets. The government subsidies relatedto incomes to compensate future expenses, shall be recognized as deferred income and transferred to currentprofit or loss (Subsidies related to daily activities should be figured into Other Income. Subsidies thatunrelated to daily activities should be figured into Non-operating Income) in the period during which theexpenses compensation is recognized, or deduct relevant cost or loss.
30. Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax liabilities arising from a deductible temporarydifference to the extent of the amount of the taxable income which it is most likely to obtain and which can bededucted from the deductible temporary difference.
As for any deductible loss or tax deduction that can be carried forward to the next year, the correspondingdeferred income tax assets shall be determined to the extent that the amount of future taxable income to beoffset by the deductible loss or tax deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain limitedexceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognitionof goodwill; initial recognition of an asset or liability in a transaction or event that is not a businesscombination 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 legallyenforceable right to set off current tax assets against current tax liabilities; and (b) the deferred tax assets andthe deferred tax liabilities relate to income taxes levied by the same taxation authority on either:(i) the sametaxable entity; or (ii) different taxable entities which intend either to settle current tax liabilities and assets ona net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in whichsignificant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
31. 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 usingthe straight-line method over each period of the lease term. The initial direct costs paid by the Company shallbe 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, theCompany shall deduct these expenses from the total rental expense and the remaining rental expense shall beallocated 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 periodby using the straight-line method over each period of the whole lease term in which free lease period isincluded. The initial direct costs paid by the Company shall be recorded into the profits and losses of thecurrent period. The initial direct costs shall be capitalized if it is material, and be allocated to each period asper the basis for rental revenue recognition.
If the Company has shouldered any expense related to the lease which shall have been borne by the lessee, thecompany shall deduct these expenses from the total rental revenue and the remaining rental revenue shall beallocated to each period during the lease term.
(2) Accounting treatment of financial leasing(1) Leased in assetOn the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and thepresent value of the minimum lease payments on the lease beginning date as the initial book value, recognizethe amount of the minimum lease payments as the initial book value of long-term account payable, and treatthe balance between the recorded amount of the leased asset and the long-term account payable asunrecognized financing charges.
The lessee shall adopt the effective interest rate method to calculate and recognize the financing charge in thecurrent 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 assetOn the lease beginning date, a lessee shall record the balance between the sum of finance lease receivablesplus unguaranteed residual value and the present value of the sum as unrealized financing income, and recordrental as revenue when received for each period in the futureInitial direct costs incurred by the Company related to the leased asset shall be recorded in the initialmeasurement of the finance lease receivables, and reduce the amount of revenue recognized during the leaseterm.
32. 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 followingconditions 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.
33. Significant accounting policies and change of accounting estimate
(1) Significant changes in accounting policies.
□ Applicable √ Not applicable
(2) Significant changes in accounting estimates
□ Applicable √ Not applicable
34. Others
VI. Taxes
1. Major type of taxes and corresponding tax rates
| 税种 | Taxation Method | Tax Rate |
| Value-added Tax (VAT) | The balance of output VAT calculated based on product sales and taxable services revenue in accordance with the tax laws after subtracting the deductible input VAT of the period | 16%, 10%, 6% |
| 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% |
Notes to whether there is different income tax rate
| Tax payer | Income tax rate |
2. Tax Preference
None
3. Others
According to the "Notice on Adjusting the VAT Rate" issued by the Ministry of Finance and the State Administration of Taxation(Cai Shui [2018] No. 32), the company has adjusted the 17% and 11% VAT rates to 16% and 10% since May 1, 2018.
VII. Notes to the consolidated financial statements
1. Cash at bank and on hand
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Cash on hand | 20,372.11 | 20,871.51 |
| Cash at bank | 16,038,486,482.11 | 12,317,555,907.42 |
| Other monetary funds | 2,531,734,752.99 | 4,720,136,631.56 |
| Total | 18,570,241,607.21 | 17,037,713,410.49 |
Notes:
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 | 1,463,123,892.06 | 3,147,582,187.96 |
| Fixed deposits or Notice deposits for guaranty | 1,068,610,860.93 | 1,572,554,443.60 |
| Total | 2,531,734,752.99 | 4,720,136,631.56 |
2. Financial assets at fair value through profit or loss
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable(1) Notes receivable disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Bank acceptance bill | 3,004,534,752.04 | 3,622,042,309.91 |
| Commercial acceptance bill | 160,358,895.92 | 224,391,390.96 |
| Total | 3,164,893,647.96 | 3,846,433,700.87 |
(2) The pledged acceptance bill at the year-end
Unit: Yuan
| Items | The pledged acceptance bill at the year-end |
| Bnak acceptance bill | 1,801,103,300.17 |
| Total | 1,801,103,300.17 |
(3) The amount of Notes receivable endorsed over but not yet matured at the year-end.
Unit: Yuan
| Items | Derecognized ending balance | Un-derecognized ending balance |
| Bank acceptance bill | 11,045,298,083.12 | |
| Commercial acceptance bill | 103,741,236.92 | |
| Total | 11,045,298,083.12 | 103,741,236.92 |
(4) No Notes receivable has been transferred into accounts receivable due to inability of drawer to meetacceptance bill at the year-end.
Unit: Yuan
| Items | Amount transferred to receivable accounts at year end |
Notes
5. Accounts receivables(1) Accounts receivables disclosed by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Provision for bad debts | Total net book value of Fixed assets | Carrying amount | Provision for bad debts | Total net book value of Fixed assets | |||||
| Amount | Percentage | Amount | Bad debts ratio | Amount | Percentage | Amount | Bad debts ratio | |||
| Individually significant and tested for impairment individually | 47,762,337.18 | 5.04% | 47,762,337.18 | 100.00% | 47,762,337.18 | 4.86% | 47,762,337.18 | 100.00% | ||
| Accounts receivable tested for impairment by portfolio | 900,339,070.86 | 94.96% | 192,449,084.52 | 21.38% | 707,889,986.34 | 934,445,274.36 | 95.14% | 205,847,347.97 | 22.03% | 728,597,926.39 |
| Total | 948,101,408.04 | 100.00% | 240,211,421.70 | 707,889,986.34 | 982,207,611.54 | 100.00% | 253,609,685.15 | 728,597,926.39 |
Accounts receivables individually significant and tested for impairment individually:
√□ Applicable □ Not applicable
| Accounts receivable | Ending balance | |||
| Accounts receivable | Provision for bad debts | Bad debts ratio | Reason | |
| Benxi Nanfen Xinhe Metallurgical Co., Ltd. | 47,762,337.18 | 47,762,337.18 | 100.00% | Stop production |
| Total | 47,762,337.18 | 47,762,337.18 | -- | -- |
Accounts receivables tested for impairment by portfolio using the method of Aging analysis:
√ Applicable □ Not applicable
Unit: Yuan
| Aging | Ending balance | ||
| Accounts receivables | Provision for bad debts | Bad debts ratio | |
| Within 1 year (inclusive) | |||
| Within 1 year | 606,575,905.21 | ||
| Subtotal of within 1 year | 606,575,905.21 | ||
| 1-2 years | 32,499,752.60 | 1,624,987.63 | 5.00% |
| 2-3 years | 88,049,145.20 | 17,609,829.04 | 20.00% |
| Over 3 years | 173,214,267.85 | 173,214,267.85 | 100.00% |
| Total | 900,339,070.86 | 192,449,084.52 | |
Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio:
□ Applicable √ Not applicable
Receivable accounts on which bad debt provisions are provided by other ways in the portfolio:
None
(2) Information of provision, reversal or recovery of bad debts of current period
The provision of bad debts of current period is RMB 0.00；Bad debt provision written back was RMB13,398,263.45in the period.
Significant items of retrieving or writing back of bad debt provisions:
Unit: Yuan
| Company | Amount retrieved or written back | way of retrieving |
(3) Receivable accounts actually written off in the report period
Unit: Yuan
| Items | Amount written off |
Significant amount written off:
Unit: Yuan
| Company | Property of the receivable account | Amount written off | Reason of writing off | Written off procedures | Created by related transaction or not |
Statement on writing off of receivable accounts:
(4) Top five debtors at the year-end
| Company | Ending balance | ||
| Amount | Percentage of total Accounts receivable (%) | Provision for bad debts | |
| No. 1 | 298,586,735.80 | 31.49 | |
| No. 2 | 86,329,597.52 | 9.11 | 6,513,105.93 |
| No. 3 | 47,762,337.18 | 5.04 | 47,762,337.18 |
| No. 4 | 46,980,327.61 | 4.96 | 22,754,881.58 |
| No. 5 | 34,624,704.64 | 3.65 | 8,840,761.28 |
| Total | 514,283,702.75 | 54.24 | 85,871,085.97 |
(5) Recognition of receivable accounts terminated(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable6. Prepayments(1) Prepayments disclosed by aging
Unit: Yuan
| Aging | Ending balance | Beginning balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 1,179,625,676.28 | 98.29% | 1,259,327,577.20 | 98.33% |
| 1-2 years | 12,847,731.88 | 1.07% | 13,457,173.07 | 1.05% |
| 2-3 years | 1,535,096.44 | 0.13% | 1,669,541.26 | 0.13% |
| Over 3 years | 6,155,309.06 | 0.51% | 6,234,802.80 | 0.49% |
| Total | 1,200,163,813.66 | -- | 1,280,689,094.33 | -- |
Notes:
Reason for significant prepayment aging over one year:
As at 30 June 2018, there was no significant prepayment aging over one year.
(2) Top five prepaid companies at the year-end
| Name of the company | Amount | Percentage (%) |
| No. 1 | 707,225,626.32 | 58.93 |
| No. 2 | 178,742,709.55 | 14.89 |
| No. 3 | 127,417,058.31 | 10.62 |
| No. 4 | 37,291,000.00 | 3.11 |
| No. 5 | 24,882,543.25 | 2.07 |
| Total | 1,075,558,937.43 | 89.62 |
7. Interests receivable(1) Interest receivable disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Fixed deposit | 3,503,285.16 | 18,448,520.50 |
| Total | 3,503,285.16 | 18,448,520.50 |
(2) Significant Overdue Interest
| Loans Unit | Ending balance | Overdue period | Reason | Impairment and the criterion |
Notes:
8. Dividends receivable(1) Dividends receivable
Unit: Yuan
| Items (Company invested in) | Ending balance | Beginning balance |
(2) Significant dividends receivable over 1 year
Unit: Yuan
| Items (Company invested in) | Ending balance | Aging | Reason | Impairment and the criterion |
Notes:
9. Other receivables(1) Other receivables disclosed by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Provision for bad debts | Total net book value of Fixed assets | Carrying amount | Provision for bad debts | Total net book value of Fixed assets | |||||
| Amount | Percentage | Amount | Bad debts ratio | Amount | Percentage | Amount | Bad debts ratio | |||
| Other receivable tested for impairment by portfolio | 339,279,331.51 | 99.49% | 69,928,385.39 | 20.61% | 269,350,946.12 | 359,690,439.99 | 99.52% | 71,053,454.65 | 19.75% | 288,636,985.34 |
| Other insignificant items but tested for impairment individually | 1,740,000.00 | 0.51% | 1,740,000.00 | 1,740,000.00 | 0.48% | 1,740,000.00 | ||||
| Total | 341,019,331.51 | 100.00% | 69,928,385.39 | 271,090,946.12 | 361,430,439.99 | 100.00% | 71,053,454.65 | 290,376,985.34 | ||
Other receivable accounts with large amount and were provided bad debt provisions individually at end of period.
□ Applicable √ Not applicable
Other receivables tested for impairment by portfolio using the method of Aging analysis:
√ Applicable □ Not applicable
Unit: Yuan
| Aging | Ending balance | ||
| Other receivables | Provision for bad debts | Bad debts ratio | |
| Within 1 year (inclusive) | |||
| 250,287,509.96 | |||
| Subtotal of within 1 year | 250,287,509.96 | ||
| 1-2 years | 8,603,549.60 | 430,177.48 | 5.00% |
| 2-3 years | 13,612,580.05 | 2,722,516.01 | 20.00% |
| Over 3 years | 66,775,691.90 | 66,775,691.90 | 100.00% |
| Total | 339,279,331.51 | 69,928,385.39 | |
Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio:
□ Applicable √ Not applicable
Receivable accounts on which bad debt provisions are provided by other ways in the portfolio:
□ Applicable √ Not applicable
(2) Information of provision, reversal or recovery of bad debts of current period
The provision of bad debts of current period is RMB 0.00；Bad debt provision written back was RMB1,125,069.26 in the period.
Significant items of retrieving or writing back of bad debt provisions:
Unit: Yuan
| Company | Amount retrieved or written back | way of retrieving |
(3) Receivable accounts written back or retrieved in the report period
Unit: Yuan
| Items | Amount written off |
Significant other Receivables have been written off this year:
Unit: Yuan
| Company | Property of account | Amount written off | Reason of writing off | Written off procedures | Created by related transaction or not |
Notes:
(4) Other receivables disclosed by nature
Unit: Yuan
| Nature | Ending balance | Beginning balance |
| Accounts | 324,237,613.93 | 345,146,993.73 |
| Margin and deposit | 3,746,111.37 | 3,045,619.00 |
| Others | 13,035,606.21 | 13,237,827.26 |
| Total | 341,019,331.51 | 361,430,439.99 |
(5) Top five debtors at the year-end
Unit: Yuan
| Company | Nature or content | Ending balance | Aging | Percentage of total other receivables | Provision for bad debts Ending balance |
| No. 1 | Accounts | 17,464,021.64 | Within 1 year RMB 17,455,404.12, Over 3 years RMB 8,617.52 | 5.12% | 8,617.52 |
| No. 2 | Accounts | 16,083,670.47 | Within 1 year RMB 12,553,032.8,1-2 years RMB | 4.72% | 176,531.88 |
| 3,530,637.67 | |||||
| No. 3 | Accounts | 12,626,479.38 | 1-3 years | 3.70% | 2,462,178.25 |
| No. 4 | Accounts | 9,188,976.40 | Within 1 year | 2.69% | |
| No. 5 | Others | 5,922,247.07 | Within 1 year | 1.74% | |
| Total | -- | 61,285,394.96 | -- | 17.97% | 2,647,327.65 |
(6) Receivable accounts involving the government
Unit: Yuan
| Company | Government Subsidies Items | Ending balance | Age at end of period | Predicted time and amount of receiving |
(7) Other receivables de-recognition due to transfer of financial asset(8) Assets and liabilities formed due to the transfer and continuous involvement of other receivables
Notes:
10. Inventories
Whether the Company needs to obey the disclosure requirement of real estate industryNo
(1) Inventories disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Impairment | Total net book value of Fixed assets | Carrying amount | Impairment | Total net book value of Fixed assets | |
| Raw materials | 5,768,189,545.16 | 4,894,918.76 | 5,763,294,626.40 | 5,612,450,076.70 | 4,894,918.76 | 5,607,555,157.94 |
| Work in process | 2,021,513,151.82 | 20,668,681.48 | 2,000,844,470.34 | 1,689,682,178.82 | 23,431,222.63 | 1,666,250,956.19 |
| Products | 5,154,722,855.66 | 25,057,402.93 | 5,129,665,452.73 | 3,964,781,474.74 | 28,689,492.71 | 3,936,091,982.03 |
| Total | 12,944,425,552.64 | 50,621,003.17 | 12,893,804,549.47 | 11,266,913,730.26 | 57,015,634.10 | 11,209,898,096.16 |
Whether the Company needs to follow the disclosure requirement of “Shenzhen Stock Exchange Industry Information DisclosureIndexNo.4 – Listed Company engaged in Seed and Plant Industry”
No
(2) Impairment of inventory
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance | ||
| Provision | Others | Write-back or write-off | Others | |||
| Raw materials | 4,894,918.76 | 4,894,918.76 | ||||
| Work in process | 23,431,222.63 | 20,668,681.48 | 23,431,222.63 | 20,668,681.48 | ||
| Products | 28,689,492.71 | 25,057,402.93 | 28,689,492.71 | 25,057,402.93 | ||
| Total | 57,015,634.10 | 45,726,084.41 | 52,120,715.34 | 50,621,003.17 | ||
(3) Statement on part of the inventory balance which was the capitalized borrowing expenses(4) Completed unbalanced assets at the end of the period
Unit: Yuan
| Items | Amount |
Notes:
11. Assets classified as held for sale
Unit: Yuan
| Items | Ending book value | Fair value | Estimated Disposal Expenses | Estimated Disposal Time |
Notes:
12. Non-current assets due within one year
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
13. Other current assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Prepaid enterprise income tax | 182,228,953.96 | 182,938,934.20 |
| Input tax to be deducted | 35,387,479.00 | 120,383,193.59 |
| Bank Short-Term Financial Products | 506,000,000.00 |
| Total | 217,616,432.96 | 809,322,127.79 |
Notes:
14. Available-for-sale financial assets(1) Details of available-for-sale financial assets
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Total impairment | Book value | Carrying amount | Total impairment | Book value | |
| Available-for-sale equity instruments : | 18,503,673.00 | 14,414,693.00 | 4,088,980.00 | 18,303,673.00 | 14,414,693.00 | 3,888,980.00 |
| Measured at cost | 18,503,673.00 | 14,414,693.00 | 4,088,980.00 | 18,303,673.00 | 14,414,693.00 | 3,888,980.00 |
| Total | 18,503,673.00 | 14,414,693.00 | 4,088,980.00 | 18,303,673.00 | 14,414,693.00 | 3,888,980.00 |
(2) Available-for-sale financial assets on fair value at the end of period
Unit: Yuan
| Categories of Available-for-sale financial assets | Available-for-sale equity instruments | Available-for-sale debt instruments | Total |
(3) Available-for-sale financial assets measured at cost
Unit: Yuan
| Company invested in | Carrying amount | Total impairment | Percentage of share in the firm % | Cash dividend of the current period | ||||||
| At beginning of the period | Increase | Decrease | At end of the period | At beginning of the period | Increase | Decrease | At end of the period | |||
| Guangzhou Benpu Auto Sheet Sales Co., Ltd. | 200,000.00 | 200,000.00 | 10.00% | |||||||
| Suzhou Bengang Industrial Co., Ltd. | 3,888,980.00 | 3,888,980.00 | 20.10% | |||||||
| China Steel Shanghai Steel Processing Co., Ltd. | 14,414,693.00 | 14,414,693.00 | 14,414,693.00 | 14,414,693.00 | 15.00% | |||||
| Total | 18,303,673.00 | 200,000.00 | 18,503,673.00 | 14,414,693.00 | 14,414,693.00 | -- |
(4) Change of impairment of available-for-sale financial assets in the report period
Unit: Yuan
| Categories of Available-for-sale financial assets | Available-for-sale equity instruments | Available-for-sale debt instruments | Total |
(5) Notes to the fair value of the available-for-sale equity instruments drops significantly or not
contemporarily but do not prepare the impairment loss
Unit: Yuan
| Available-for-sale equity instruments Items | Investment Cost | Closing fair value | Fall of fair value compared to cost | Continuous falling period(month) | Accrual of provision for impairment | Reason for do not make provision for impairment |
Notes
15. Held-to-maturity investment(1) Held-to-maturity investment
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Total impairment | Carrying value | Carrying amount | Total impairment | Carrying value | |
(2) Significant Held-to-maturity investment at end of the period
Unit: Yuan
| Bond | Par value | Face interest rate | Actual interest rate | Maturity date |
(3) Reclassification to held-to-maturity investment
Notes
16. Long-term receivables(1) Long-term receivables
Unit: Yuan
| Items | Ending balance | Beginning balance | Discount rate interval | ||||
| Carrying amount | Provision for bad debts | Carrying value | Carrying amount | Provision for bad debts | Carrying value | ||
(2) De-recognition long-term receivables due to transfer of financial assets(3) Assets and liabilities formed by transferring and continuous involvement of long-term receivables
Notes
17. Long-term equity investments
Unit: Yuan
| Company invested in | Beginning balance | Increase or decrease | Ending balance | Ending balance of provision for impairment | |||||||
| Add investment | Reduce investment | Investment income or loss under equity method | Adjustment of other comprehensive income | Other equity changes | Declaration of cash dividends or profit | Provision for impairment | Others | ||||
| 1. Joint venture | |||||||||||
| 2. Associated enterprise | |||||||||||
| ZhejiangBengang Elite Steel Processing Co., Ltd. | 2,726,009.03 | 2,726,009.03 | |||||||||
| Subtotal | 2,726,009.03 | 2,726,009.03 | |||||||||
| Total | 2,726,009.03 | 2,726,009.03 | |||||||||
Notes
18. Investment properties(1) Investment properties under cost method
□ Applicable √ Not applicable
(2) Investment properties under fair value method
□ Applicable √ Not applicable
(3) Investment properties without property rights certificate
Unit: Yuan
| Items | Carrying value | Reason |
Notes
19. Fixed assets(1) Details of fixed assets
Unit: Yuan
| Items | Plants and Buildings | Machinery | Transportation equipment | Total |
| 1. Total original value: | ||||
| 1.Beginning balance | 12,311,587,761.99 | 41,626,541,563.48 | 902,411,923.49 | 54,840,541,248.96 |
| 2.Increase in current period | 637,829.46 | 33,999,698.90 | 180,000.00 | 34,817,528.36 |
| (1) Purchase | ||||
| (2) Transferred from construction in progress | 637,829.46 | 33,999,698.90 | 180,000.00 | 34,817,528.36 |
| (3) Merging | ||||
| 3.Decrease in current period | 4,500,116.36 | 18,821,400.78 | 23,321,517.14 | |
| (1) Disposal | 4,500,116.36 | 18,821,400.78 | 23,321,517.14 | |
| 4.Ending balance | 12,307,725,475.09 | 41,641,719,861.60 | 902,591,923.49 | 54,852,037,260.18 |
| 2. Total accumulated depreciation | ||||
| 1.Beginning balance | 5,276,168,794.08 | 25,159,715,530.00 | 541,830,618.28 | 30,977,714,942.36 |
| 2.Increase in current period | 163,421,339.99 | 973,734,423.39 | 7,828,431.62 | 1,144,984,195.00 |
| (1) Provision | 163,421,339.99 | 973,734,423.39 | 7,828,431.62 | 1,144,984,195.00 |
| 3.Decrease in current period | 4,285,981.20 | 16,843,876.26 | 21,129,857.46 | |
| (1) Disposal | 4,285,981.20 | 16,843,876.26 | 21,129,857.46 | |
| 4.Ending balance | 5,435,304,152.87 | 26,116,606,077.13 | 549,659,049.90 | 32,101,569,279.90 |
| 3. Total impairment | ||||
| 1.Beginning balance | 8,208,087.85 | 2,551,052.65 | 10,759,140.50 | |
| 2.Increase in current period | ||||
| (1) Provision | ||||
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| 4.Ending balance | 8,208,087.85 | 2,551,052.65 | 10,759,140.50 | |
| 4. Total net book value of Fixed assets | ||||
| 1.Ending book value | 6,864,213,234.37 | 15,522,562,731.82 | 352,932,873.59 | 22,739,708,839.78 |
| 2.Beginning book value | 7,027,210,880.06 | 16,464,274,980.83 | 360,581,305.21 | 23,852,067,166.10 |
(2) Fixed assets temporarily in idle status
Unit: Yuan
| Items | Total original value | Total accumulated depreciation | Total impairment | Total net book value of Fixed assets | Nature |
(3) Fixed asset by financial leasing
Unit: Yuan
| Items | Total original value | Total accumulated depreciation | Total impairment | Total net book value of Fixed assets |
(4) Fixed assets leased out on finance
Unit: Yuan
| Items | Ending book value |
| Plants and Buildings | 22,879,743.91 |
| Machinery | 4,504,638.67 |
| Total | 27,384,382.58 |
(5) Fixed assets without property rights certificates at the year-end
Unit: Yuan
| Items | Total net book value of Fixed assets | Reason |
| Plants and Buildings | 1,135,305,101.78 | To be handled in batches |
Notes
20. Construction in progress(1) Details of construction in progress
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Total impairment | Total net book value of Fixed assets | Carrying amount | Total impairment | Total net book value of Fixed assets | |
| High Strength Cold Rolling Steel Renovation Project | 1,248,815,568.07 | 1,248,815,568.07 | 1,187,165,940.86 | 1,187,165,940.86 | ||
| The Third Cold Rolling Work Hot-Dip Galvanizing Production Line Project | 614,011,518.07 | 614,011,518.07 | 611,760,000.00 | 611,760,000.00 | ||
| Reconstruction Of The Converter System And 180 Ton Dephophorization Converter Project | 172,038,373.79 | 172,038,373.79 | 170,359,741.31 | 170,359,741.31 | ||
| Ultrathin Pickling Line Modification | 32,745,791.58 | 32,745,791.58 | 32,745,791.58 | 32,745,791.58 | ||
| Information System Engineering | 34,970,271.44 | 34,970,271.44 | 32,708,961.76 | 32,708,961.76 | ||
| Modifing and Upgrading of System Equipment such as Hot Blast Furnace. | 32,592,428.11 | 32,592,428.11 | 27,289,578.22 | 27,289,578.22 | ||
| The 360 Square Meter Sintering Machine | 59,021,874.99 | 59,021,874.99 | 26,592,065.27 | 26,592,065.27 | ||
| Automobile Board Engineering Laboratory Phase Ⅱ Project. | 20,289,005.83 | 20,289,005.83 | 20,289,005.83 | 20,289,005.83 | ||
| Energy Control Center Project | 15,976,501.70 | 15,976,501.70 | 8,617,499.91 | 8,617,499.91 | ||
| Others | 509,898,394.05 | 509,898,394.05 | 274,055,825.72 | 274,055,825.72 | ||
| Total | 2,740,359,727.63 | 2,740,359,727.63 | 2,391,584,410.46 | 2,391,584,410.46 |
(2) The change of major construction in progress
Unit: Yuan
| Items | Budget | Beginning balance | Increase in current period | Transfer to FA | Other decrease | Ending balance | Input of Budget (%) | Progress | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| High Strength Cold Rolling Steel | 6,134,980,000.00 | 1,187,165,940.86 | 61,649,627.21 | 1,248,815,568.07 | 85.00% | 98% | 906,733,767.70 | 50,832,345.91 | 3.48% | Raised fund |
| Renovation Project | ||||||||||||
| The Third Cold Rolling Work Hot-Dip Galvanizing Production Line Project | 869,180,000.00 | 611,760,000.00 | 2,251,518.07 | 614,011,518.07 | 72.00% | 90% | ||||||
| Reconstruction Of The Converter System And 180 Ton Dephophorization Converter Project | 1,778,644,000.00 | 170,359,741.31 | 1,678,632.48 | 172,038,373.79 | 87.00% | 96% | 127,847,567.31 | |||||
| Ultrathin Pickling Line Modification | 52,190,000.00 | 32,745,791.58 | 32,745,791.58 | 63.00% | 70% | |||||||
| Information System Engineering | 36,870,000.00 | 32,708,961.76 | 2,261,309.68 | 34,970,271.44 | 89.00% | 90% | 2,190,983.43 | 489,297.87 | 3.48% | |||
| Modifing and Upgrading of System Equipment such as Hot Blast Furnace. | 185,351,400.00 | 27,289,578.22 | 5,302,849.89 | 32,592,428.11 | 64.00% | 85% | ||||||
| The 360 Square Meter Sintering Machine | 1,284,032,000.00 | 26,592,065.27 | 32,429,809.72 | 59,021,874.99 | 5.00% | 98% | 68,627,433.26 |
| Automobile Board Engineering Laboratory Phase Ⅱ Project. | 26,000,000.00 | 20,289,005.83 | 20,289,005.83 | 78.00% | 80% | |||||||
| Energy Control Center Project | 294,500,000.00 | 8,617,499.91 | 7,359,001.79 | 15,976,501.70 | 98.00% | 98% | 45,372,134.03 | |||||
| Others | 274,055,825.72 | 270,660,096.69 | 34,817,528.36 | 509,898,394.05 | ||||||||
| Total | 10,661,747,400.00 | 2,391,584,410.46 | 383,592,845.53 | 34,817,528.36 | 2,740,359,727.63 | -- | -- | 1,150,771,885.73 | 51,321,643.78 | -- |
(3) Impairment provision provided on construction in process
Unit: Yuan
| Items | Provision for impairment of the current period | Reason |
Notes
21. Construction materials
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Special equipment | 2,925,581.89 | 4,558,919.60 |
| Total | 2,925,581.89 | 4,558,919.60 |
Notes:
22. Disposal of fixed assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
23. Productive biological assets(1) Productive biological assets under cost method
□ Applicable √ Not applicable
(2) Productive biological assets under fair value method
□ Ap plicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Intangible assets(1) Details of intangible assets
Unit: Yuan
| Items | Land use right | Patent | Non-patent technologies | Software | Total |
| 1. Total original value | |||||
| 1.Beginning balance | 296,245,314.76 | 409,458.15 | 296,654,772.91 | ||
| 2.Increase in current period | |||||
| (1) Purchase | 30,783,483.08 | 30,783,483.08 | |||
| (2) Internal R&D | |||||
| (3) Merging | |||||
| 3.Decrease in current period | |||||
| (1) Disposal | |||||
| 4.Ending balance | 327,028,797.84 | 409,458.15 | 327,438,255.99 | ||
| 2. Accumulative amortizing | |||||
| 1.Beginning balance | 42,688,601.63 | 81,289.80 | 42,769,891.43 | ||
| 2.Increase in current period | 3,219,446.92 | 20,008.17 | 3,239,455.09 | ||
| (1) Provision | 3,219,446.92 | 20,008.17 | 3,239,455.09 |
| 3.Decrease in current period | |||||
| (1) Disposal | |||||
| 4.Ending balance | 45,908,048.55 | 101,297.97 | 46,009,346.52 | ||
| 3. Total impairment | |||||
| 1.Beginning balance | |||||
| 2.Increase in current period | |||||
| (1) Provision | |||||
| 3.Decrease in current period | |||||
| (1) Disposal | |||||
| 4.Ending balance | |||||
| 4. Total net book value of Fixed assets | |||||
| 1.Ending book value | 281,120,749.29 | 308,160.19 | 281,428,909.48 | ||
| 2.Beginning book value | 253,556,713.13 | 328,168.35 | 253,884,881.48 |
There isn’t any intangible asset constituted by internal R&D in the period.
(2) Property certificate not granted yet
Unit: Yuan
| Items | Total net book value of Fixed assets | Reason |
Notes:
26. Development expenditure
Unit: Yuan
| Items | Beginning balance | Increase in current period | Decrease in current period | Ending balance |
Notes
27. Goodwill(1) Original book value
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
(2) Provision for impairment
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
Notes to process of impairment test and parameter and method of recognition of impairment loss:
Notes
28. Long-term deferred expenses
Unit: Yuan
| Items | Beginning balance | Increase in current period | Amortized amount in current period | Other decrease | Ending balance |
Notes
29. Deferred tax assets/Deferred tax liabilities(1) Un-deducted deferred tax asset
Unit: Yuan
| Items | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Asset impairment provision | 373,970,223.70 | 93,492,555.93 | 403,885,112.30 | 100,971,278.09 |
| Internal trade profit not realized | 71,807,414.00 | 17,951,853.50 | 64,609,874.03 | 16,152,468.51 |
| Differences of depreciation and | 333,978,859.03 | 83,494,714.76 | 333,978,859.03 | 83,494,714.76 |
| amortization | ||||
| Total | 779,756,496.73 | 194,939,124.19 | 802,473,845.36 | 200,618,461.36 |
(2) Deferred income tax liabilities not deducted
Unit: Yuan
| Items | Ending balance | Beginning balance | ||
| Taxable provisional difference | Deferred tax liabilities | Taxable provisional difference | Deferred tax liabilities | |
(3) Deferred income tax asset or liability at net amount after deduction
Unit: Yuan
| Items | Amount neutralized between deferred income tax asset and liability at end of period | Closing balance of deferred income tax asset or liability after deduction | Amount neutralized between deferred income tax asset and liabilities at opening of period | Opening balance of deferred income tax asset or liability after deduction |
| Deferred tax assets | 194,939,124.19 | 200,618,461.36 |
(4) Unrecognized deferred tax assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Deductible temporary differences | 2,722,439.35 | 2,967,495.10 |
| Deductible losses | 1,377,226,268.38 | 2,105,332,277.56 |
| Total | 1,379,948,707.73 | 2,108,299,772.66 |
(5) The deductible loss of unrecognized deferred tax assets due in the following period
Unit: Yuan
| Year | At end of the period | At beginning of the period | Nature |
| 2018 | 4,904,050.21 | ||
| 2019 | |||
| 2020 | 1,365,805,145.49 | 2,086,284,665.11 | |
| 2021 | 12,562,922.76 | 12,562,922.76 | |
| 2022 | 1,580,639.48 | 1,580,639.48 | |
| 2023 | |||
| Total | 1,379,948,707.73 | 2,105,332,277.56 | -- |
Notes:
30. Other non-current assets
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Prepaid long-term assets | 1,037,735,849.00 | 1,067,334,823.12 |
| Items | 1,037,735,849.00 | 1,067,334,823.12 |
Notes: Prepaid long-term assets at the end of the period of an amount of RMB 1,037,735,849.00 was used to pay the investment ofNortheast Special Steel Group Co., Ltd.
31. Short-term loans(1) Short-term loans disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Pledge loans | 825,000,000.00 | 1,470,000,000.00 |
| Guaranteed loans | 15,413,162,700.00 | 11,529,063,300.00 |
| Credit loans | 5,546,640,000.00 | 9,000,040,600.00 |
| Total | 21,784,802,700.00 | 21,999,103,900.00 |
Notes:
(2) Outstanding overdue short-term loans
Outstanding overdue short-term loans at the end of period is RMB 0.00, significant outstanding overdue short-term loans are asfollowing:
Unit: Yuan
| Unit | Ending balance | Interest rate | Overdue time | Overdue interest rate |
Notes:
32. Financial liabilities at fair value through profit or loss
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
33. Advance from customers
□ Applicable √ Not applicable
34. Notes payable
Unit: Yuan
| Categories | Ending balance | Beginning balance |
| Bank acceptance bill | 6,686,291,966.46 | 9,682,045,779.95 |
| Commercial acceptance bill | 1,798,307,730.12 | 1,812,544,047.32 |
| Total | 8,484,599,696.58 | 11,494,589,827.27 |
Notes payable mature as of end of period was RMB0.00.
35. Accounts payable(1) Accounts payable disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Accounts payable for goods | 3,390,784,690.68 | 3,116,873,305.58 |
| Accounts payable for labor | 4,563,306.49 | 4,467,697.76 |
| Accounts payable for project and equipment | 260,141,728.27 | 254,691,333.73 |
| Accounts payable for repair | 592,745,474.27 | 519,035,208.21 |
| Others | 2,637,902.24 | 2,600,968.49 |
| Total | 4,250,873,101.95 | 3,897,668,513.77 |
(2) Material payable aged over 1 year
Unit: Yuan
| Items | Ending balance | Reason |
| BHP Billiton Trading Company | 29,311,486.15 | Not yet settled |
| China Metallurgical Southern Engineering Technology Co., Ltd. | 17,030,034.24 | Not yet settled |
| Jixi Huasheng Feng Yuan Coal Preparation Co., Ltd. | 26,485,138.18 | Not yet settled |
| Hangzhou Tian Shen materials Co., Ltd.. | 20,145,902.64 | Not yet settled |
| Total | 92,972,561.21 | -- |
Notes:
36. Advance from customers(1) Advance from customers disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Advance for goods | 3,389,201,256.80 | 3,308,567,598.05 |
| Total | 3,389,201,256.80 | 3,308,567,598.05 |
(2) Material advances received for over 1 year
Unit: Yuan
| Items | Ending balance | Reason |
(3) Unfinished project has already paid at the end of period
Unit: Yuan
| Items | Amount |
Notes:
37. Employee benefits payable(1) Employee benefits payable
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| 1. Short-term employee benefits | 39,492,800.76 | 943,263,601.67 | 943,135,390.76 | 39,621,011.67 |
| 2. Post-employment benefits - defined contribution plans | 58,897.24 | 47,540,582.84 | 47,540,326.12 | 59,153.96 |
| 3. Termination benefits | 4,170,839.58 | 1,144,626.18 | 3,026,213.40 | |
| Total | 43,722,537.58 | 990,804,184.51 | 991,820,343.06 | 42,706,379.03 |
(2) Short-term employee benefits
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance and | 29,509,509.38 | 641,081,645.94 | 641,141,079.43 | 29,450,075.89 |
| subsidy | ||||
| 2. Employee welfare | 403,019.22 | 45,026,921.33 | 45,026,921.33 | 403,019.22 |
| 3.Social security expense | 663,146.90 | 192,937,976.71 | 192,926,811.12 | 674,312.49 |
| Including: Medical insurance | 44,401,255.18 | 44,401,255.18 | ||
| Work injury insurance | 663,146.90 | 16,468,829.44 | 16,468,829.44 | 663,146.90 |
| Maternity insurance | 11,511.84 | 11,511.84 | ||
| 4. Housing fund | 6,850,655.00 | 50,579,409.00 | 50,575,375.00 | 6,854,689.00 |
| 5. Union funds and staff education fee | 2,066,470.26 | 12,732,865.04 | 12,560,420.23 | 2,238,915.07 |
| 6. Others | 904,783.65 | 904,783.65 | ||
| Total | 39,492,800.76 | 943,263,601.67 | 943,135,390.76 | 39,621,011.67 |
(3) Defined contribution plans
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension fund | 57,445.11 | 44,401,255.18 | 44,401,255.18 | 57,445.11 |
| 2. Unemployment insurance | 1,452.13 | 3,139,327.66 | 3,139,070.94 | 1,708.85 |
| Total | 58,897.24 | 47,540,582.84 | 47,540,326.12 | 59,153.96 |
Notes:
38. Current tax liabilities
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Value-added Tax (VAT) | 37,172,905.08 | 44,433,347.78 |
| Enterprise income tax | 4,233,500.49 | 12,706,288.46 |
| City maintenance and construction tax | 10,340,536.48 | 13,007,637.50 |
| Housing property tax | 3,013,016.57 | 2,990,847.04 |
| Educational surcharges | 7,400,127.44 | 9,382,026.01 |
| Others | 9,925,077.37 | 5,286,981.71 |
| Total | 72,085,163.43 | 87,807,128.50 |
Notes:
39. Interests payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Corporate bond interest | 70,109,821.13 | |
| Short-term loan interest payable | 51,920,388.97 | 14,029,466.89 |
| Total | 51,920,388.97 | 84,139,288.02 |
Notes:
Unit: Yuan
| Unit | Overdue amount | Reason |
Notes:
40. Dividends payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Common stock dividends | 193,768,576.60 | |
| Total | 193,768,576.60 |
Notes, the reason of significant dividends payable aging over 1 year:
41. Other payables(1) Other payables disclosed by nature
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Deposit | 2,429,895.77 | 2,475,771.82 |
| Margin | 163,854,042.94 | 145,686,888.01 |
| Accounts | 323,615,754.77 | 349,363,687.04 |
| Others | 71,096,069.89 | 79,463,585.44 |
| Total | 560,995,763.37 | 576,989,932.31 |
(2) Significant other payables ageing over one year
Unit: Yuan
| Items | Ending balance | Reason |
| Benxi Steel & Iron (Group) Co., Ltd. | 86,805,543.86 | Not yet settled |
| Total | 86,805,543.86 | -- |
Notes
42. Liabilities held for sale
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
43. Non-current liabilities due within one year
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Long-term loans due within one year | 1,040,765,614.98 | 2,311,995,410.89 |
| Long-term payables due within one year | 1,499,545,179.95 | |
| Total | 1,040,765,614.98 | 3,811,540,590.84 |
Notes:
44. Other current liabilities
Unit: Yuan
| 项目 | 期末余额 | 期初余额 |
| Pending VAT | 25,283,327.37 | 27,979,093.21 |
| Total | 25,283,327.37 | 27,979,093.21 |
Changes in short-term bonds payable:
Unit: Yuan
| Bond name | Par value | Date of issue | Bond maturity | Issue value | Beginning balance | Issuance in current period | Interest calculated by par value | Amortization of the Premiums and Discounts | Repayment in current period | Ending balance |
Notes:
45. Long-term loans(1) Long-term loans disclosed by category
Unit: Yuan
| Items | Ending balance | Beginning balance |
| Guaranteed loans | 3,186,004,295.10 | 2,267,263,140.28 |
| Credit loans | 1,220,995,278.78 | 176,922,490.00 |
| Total | 4,406,999,573.88 | 2,444,185,630.28 |
Long-term loans disclosed by category:
Notes，including interest rate interval:
46. Bonds payable(1) Bonds payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
(2) Changes in bonds payable (exclude other financial instruments such as preference shares or perpetualliabilities)
Unit: Yuan
(3) Statement on conditions and date of corporation bond converting to shares(4) Statement on other financial instruments categorized as financial liabilities
Particulars about other financial instruments issued externally such as preference shares or perpetual bonds.Change of financial instruments issued externally such as preference shares or perpetual bonds
Unit: Yuan
| Financial instruments issued externally | At beginning of the period | Increase | Decrease | At end of the period | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
Statements on basis of categorizing of other financial instruments as financial liabilitiesNotes
47. Long-term payables(1) Long-term payables disclosed by nature
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
48. Long-term employee benefits payable(1) Long-term employee benefits payable
Unit: Yuan
| Items | Ending balance | Beginning balance |
(2) Changes of defined benefit plan
Defined benefit plan obligation present value:
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Planned assets:
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Defined benefit plan净liabilities(Net assets)
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Content of defined benefit plan and the related risks, and the related influences to the Company’s future cash flow, time and
uncertainty:
Results of significant actuarial assumption and sensitivity analysis of defined benefit plan:
Notes:
49. Special accounts payable
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance | Reason |
Notes:
50. Estimated liabilities
Unit: Yuan
| Items | Ending balance | Beginning balance | Reason |
Notes, including significant assumption and estimate of estimated liabilities:
51. Deferred income
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance | Reason |
| Government | 372,785,000.00 | 694,300.00 | 41,274,238.70 | 332,205,061.30 |
| Subsidies | |||||
| Total | 372,785,000.00 | 694,300.00 | 41,274,238.70 | 332,205,061.30 | -- |
Projects of government subsidies:
Unit: Yuan
| Items | Beginning balance | Increase | Transfer to non-operating income | Transfer to other income | Write off on costs and expenses | Other changes | Ending balance | Related to assets or income |
| MES PROJECT SPECIAL FUND | 3,440,000.00 | 860,000.00 | 2,580,000.00 | Related to assets | ||||
| Industrial Enterprise Energy Management Center Construction Demonstration Project | 9,280,000.00 | 1,160,000.00 | 8,120,000.00 | Related to assets | ||||
| Environment Pollution Renovation Project | 7,240,000.00 | 1,810,000.00 | 5,430,000.00 | Related to assets | ||||
| Environment Renovation Project and Regional Basin Environment Protection Project | 680,000.00 | 170,000.00 | 510,000.00 | Related to assets | ||||
| High Strength Cold Rolling Steel Renovation Project | 250,000,000.00 | 25,000,000.00 | 225,000,000.00 | Related to assets | ||||
| Automobile High-class Electrolytic Zinc Steel Plate Production Line Project | 24,624,000.00 | 4,104,000.00 | 20,520,000.00 | Related to assets | ||||
| Sintering Machine Residue Heat Usage and Desulfurization Project | 8,408,000.00 | 2,102,000.00 | 6,306,000.00 | Related to assets |
| 7 130t Boilers Flue Gas Desulfurization Renovation Project of Power Plant | 24,000,000.00 | 2,400,000.00 | 21,600,000.00 | Related to assets | ||||
| Treatment and Salt Extraction Project of Desulfurization Waste Liquid of Coke Plant | 100,000.00 | 50,000.00 | 50,000.00 | Related to assets | ||||
| Overseas Advanced Technology Introduction Special Fund | 9,768,000.00 | 1,442,000.00 | 8,326,000.00 | Related to assets | ||||
| Automobile Steel Sheet Engineering Laboratory Project | 1,000,000.00 | 1,000,000.00 | Related to assets | |||||
| Third-generation High Strength Steels for Automobile R&D Project | 2,900,000.00 | 2,900,000.00 | Related to assets | |||||
| The 360 Cubic Meter Sintering Machine Flue Gas Desulfurization Renovation Project of Blast Furnace Plant | 400,000.00 | 100,000.00 | 300,000.00 | Related to assets | ||||
| Environment Protection Project Special Fund | 2,320,000.00 | 580,000.00 | 1,740,000.00 | Related to assets | ||||
| Advance Treatment of Carbon Fiber Waste Water | 9,500,000.00 | 9,500,000.00 | Related to assets |
| Project of Plates Coke Plant Dongfeng Workshop | ||||||||
| Coal-fired Boiler Desulfuration and Denitration Project of Bengang Power Plant High Pressure Workshop | 5,400,000.00 | 300,000.00 | 5,100,000.00 | Related to assets | ||||
| Cogeneration Transformation Project of Power Plant the Third Workshop | 10,000,000.00 | 10,000,000.00 | Related to assets | |||||
| Sintering Machine Energy Conservation and Environment Protection Project of Iron Making Plant | 3,480,000.00 | 580,000.00 | 2,900,000.00 | Related to assets | ||||
| Air Quality Automatic Monitoring System | 245,000.00 | 35,000.00 | 210,000.00 | Related to assets | ||||
| Compensation from Xihu Resource Management Committee | 414,300.00 | 414,300.00 | Income | |||||
| Liaoning craftsman subsidy and skill master workstation subsidy | 280,000.00 | 166,938.70 | 113,061.30 | Income | ||||
| Total | 372,785,000.00 | 694,300.00 | 41,274,238.70 | 332,205,061.30 | -- |
Notes:
52. Other non-current liabilities
Unit: Yuan
| Items | Ending balance | Beginning balance |
Notes:
53. Share capital
Unit: Yuan
| Beginning balance | Changes (+, -) | Ending balance | |||||
| Issuing of new share | Bonus shares | Capitalization of common reserve fund | Others | Subtotal | |||
| Total of capital shares | 3,136,000,000.00 | 739,371,532.00 | 739,371,532.00 | 3,875,371,532.00 | |||
Notes:
54. Other equity instruments(1) Particulars about other financial instruments issued externally such as preference shares or perpetual
bonds.(2) Change of financial instruments issued externally such as preference shares or perpetual bonds
Unit: Yuan
| Financial instruments issued externally | At beginning of the period | Increase | Decrease | At end of the period | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
Changes of other equity instruments during the current period, reason and the basis of accounting treatmentNotes:
55. Capital reserves
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium over par value | 8,998,928,073.23 | 3,228,364,305.24 | 12,227,292,378.47 | |
| Other capital reserves | 115,917,468.82 | 115,917,468.82 | ||
| Total | 9,114,845,542.05 | 3,228,364,305.24 | 12,343,209,847.29 |
Notes:
56. Treasury stock
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
Notes:
57. Other comprehensive income
Unit: Yuan
| Items | Beginning balance | 2017 | Ending balance | ||||
| Amount incurred before income tax | Less: Amount transferred into profit and loss in the current period current period that recognized into other comprehensive income in prior period | Less: Income tax expenses | After-tax attribute to the parent company | After-tax attribute to minority shareholder | |||
Notes，including the adjustment to origin amount of effective portion of gains or losses from cash flow hedging reserve to arbitraged
items:
58. Special reserves
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Safety production cost | 475,046.75 | 22,983,003.78 | 7,492,925.61 | 15,965,124.92 |
| Total | 475,046.75 | 22,983,003.78 | 7,492,925.61 | 15,965,124.92 |
Notes:
59. Surplus reserves
Unit: Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 961,105,529.85 | 961,105,529.85 | ||
| Total | 961,105,529.85 | 961,105,529.85 |
Notes:
60. Undistributed profits
Unit: Yuan
| Items | 30 June 2018 | 30 June 2017 |
| Before adjustments: undistributed profits at last year-end | 1,103,162,610.35 | -496,969,242.61 |
| Beginning balance of retained profits after adjustments | 1,103,162,610.35 | -496,969,242.61 |
| Add: undistributed profit belonging to parent company | 756,951,987.59 | 523,635,653.57 |
| Payable common stock dividend | 193,768,576.60 | |
| Ending balance of undistributed profits | 1,666,346,021.34 | 26,666,410.96 |
List of adjustment of opening retained profits:
1) Influence to beginning undistributed profits was RMB 0.00 caused by retroactive adjustment due to “Accounting Standard for
Business Enterprises” and related new regulations.
2) Influence to beginning undistributed profits was RMB 0.00 due to changes in accounting policies.3) Influence to begging undistributed profits was RMB 0.00 due to corrections of major accounting mistake.4) Influence to begging undistributed profits was RMB 0.00 due to the changes of consolidation scope caused by common control.5) Influence to begging undistributed profits was RMB 0.00 due to other adjustments.
61. Operating income and operating cost
Unit: Yuan
| Items | January to June 2018 | January to June 2017 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 21,302,037,073.89 | 19,140,922,165.53 | 19,476,278,905.41 | 17,638,682,335.86 |
| Other business | 2,139,210,303.25 | 1,663,285,255.45 | 1,260,207,998.33 | 1,051,983,630.25 |
| Total | 23,441,247,377.14 | 20,804,207,420.98 | 20,736,486,903.74 | 18,690,665,966.11 |
62. Taxes and Surcharges
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| City maintenance and construction tax | 48,666,138.65 | 46,713,364.91 |
| Educational surcharges | 34,952,935.92 | 33,504,830.35 |
| Housing property tax | 36,610,915.20 | 37,046,142.33 |
| Land use right | 6,486,432.24 | 3,155,810.05 |
| Others | 12,694,429.33 | 13,336,583.43 |
| Environmental Tax | 13,896,524.30 | |
| Total | 153,307,375.64 | 133,756,731.07 |
Notes:
63. Selling and distribution expenses
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Freight | 393,290,897.61 | 428,678,322.48 |
| Port surcharges | 56,907,191.59 | 86,681,806.22 |
| Agency fee | 35,649,297.75 | 38,969,368.55 |
| Salary and benefits | 11,993,852.41 | 10,794,773.70 |
| Others | 12,721,174.90 | 19,399,396.68 |
| Package fee | 3,475,594.69 | 3,109,039.80 |
| Total | 514,038,008.95 | 587,632,707.43 |
Notes:
64. General and administrative expenses
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Salary and benefits | 116,352,823.92 | 94,209,841.05 |
| Accounts payable for repair | 174,107,156.65 | 80,215,426.18 |
| Pollution discharge fee | 25,709,122.00 | |
| Land use right fee | 27,345,714.30 | 27,345,714.30 |
| Others | 59,604,807.84 | 56,552,255.19 |
| Depreciation | 26,164,322.31 | 25,945,531.46 |
| Social security expense | 23,452,571.91 | 21,716,785.13 |
| Heating fee | 20,783,413.87 | 11,677,556.25 |
| Water resources fee | 6,546,763.90 | 5,596,700.00 |
| Housing fund | 4,445,529.00 | 4,614,199.60 |
| Amortization of intangible assets | 2,982,926.09 | 2,982,306.37 |
| Entertainment expense | 1,527,871.52 | 1,535,128.96 |
| Lease expense | 543,240.66 | 572,987.24 |
| Freight | 455,924.12 | 277,851.35 |
| Total | 464,313,066.09 | 358,951,405.08 |
Notes:
65. Financial expenses
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Interest cost | 575,001,615.20 | 434,308,806.10 |
| Less: Interest income | 61,605,403.34 | 36,772,069.07 |
| Exchange loss | 286,291,324.68 | -23,234,309.69 |
| Others | 3,350,880.74 | 7,210,977.46 |
| Total | 803,038,417.28 | 381,513,404.80 |
Notes:
Financial expenses of the current period were RMB 0.8 billion, increased RMB 0.422 billion compared to the previous period whichwas RMB 0.381 billion, at the rate of 110.49%. The reason of the increase is because of the increase of exchange loss.
66, Asset impairment loss
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Loss for bad debts | -14,523,332.71 | -6,653,848.89 |
| Impairment of inventories | -6,394,630.93 | -36,736,605.65 |
| Total | -20,917,963.64 | -43,390,454.54 |
Notes:
67. Variable profit and loss of fair value
Unit: Yuan
| Sources | January to June 2018 | January to June 2017 |
Notes:
68. Income on investment
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Income from bank short-term financial | 3,493,150.68 | 3,294,593.14 |
| products | ||
| Total | 3,493,150.68 | 3,294,593.14 |
Notes:
69. Gains on disposal of assets
| Sources | January to June 2018 | January to June 2017 |
| Disposal gains or losses of fixed assets not held for sale | 825,580.63 | 3,015,294.00 |
| Total | 825,580.63 | 3,015,294.00 |
70. Other Income
Unit: Yuan
| Sources | January to June 2018 | January to June 2017 |
| MES PROJECT SPECIAL FUND | 860,000.00 | 860,000.00 |
| Second Batch of National Cleaned Manufacturing Demonstration Project Fund | 400,000.00 | |
| Industrial Enterprise Energy Management Center Construction Demonstration Project | 1,160,000.00 | |
| Environment Pollution Renovation Project | 1,810,000.00 | 2,617,000.00 |
| Environment Renovation Project and Regional Basin Environment Protection Project | 170,000.00 | 250,000.00 |
| Energy-saving Technological Reform Fiscal Reward Project | 1,477,000.00 | |
| High Strength Cold Rolling Steel Renovation Project | 25,000,000.00 | |
| Automobile High-class Electrolytic Zinc Steel Plate Production Line Project | 4,104,000.00 | 4,104,000.00 |
| Sintering Machine Residue Heat Usage and Desulfurization Project | 2,102,000.00 | 2,102,000.00 |
| Wastewater Treatment Plant Renovation Project | 750,000.00 | |
| 7 130t Boilers Flue Gas Desulfurization Renovation Project of Power Plant | 2,400,000.00 | |
| Treatment and Salt Extraction Project of Desulfurization Waste Liquid of Coke | 50,000.00 | 50,000.00 |
| Plant | ||
| Overseas Advanced Technology Introduction Special Fund | 1,442,000.00 | 442,000.00 |
| The 360 Cubic Meter Sintering Machine Flue Gas Desulfurization Renovation Project of Blast Furnace Plant | 100,000.00 | 100,000.00 |
| Environment Protection Project Special Fund | 580,000.00 | 580,000.00 |
| Desulphurization and Denitrification of Coal-Fired Boilers in High Pressure Workshop of Power Plant | 300,000.00 | |
| Energy Saving and Environmental Protection of Sintering Plant in Ironworks | 580,000.00 | 580,000.00 |
| Air quality automatic monitoring system | 35,000.00 | 35,000.00 |
| Compensation from Xihu Resource Management Committee | 414,300.00 | 700,000.00 |
| Liaoning craftsman subsidy and skill master workstation subsidy | 166,938.70 | |
| Total | 41,274,238.70 | 15,047,000.00 |
71. Non-operating income
Unit: Yuan
| Items | January to June 2018 | January to June 2017 | The amount recognized in non-recurring profit and loss |
| Debt restructuring gain | 945,892.23 | 822,116.45 | 945,892.23 |
| Others | 1,192,505.57 | 2,130,078.13 | 1,192,505.57 |
| Total | 2,138,397.80 | 2,952,194.58 | 2,138,397.80 |
Details of government subsidies recorded into current profits and loss:
Unit: Yuan
| Items | Distribution entity | Distribution reason | Nature type | Whether influence the profits or losses of the year or not | Whether Special subsidy or not | Current amount | Amount of the previous period | Related to assets or income |
Notes:
72. Non-operating expenses
Unit: Yuan
| Items | January to June 2018 | January to June 2017 | The amount recognized in non-recurring profit and loss |
| Fixed assets disposal loss | 1,382,402.26 | 4,593,420.30 | 1,382,402.26 |
| Total | 1,382,402.26 | 4,593,420.30 | 1,382,402.26 |
Notes:
73. Income tax expense(1) Income tax expense
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Income tax payable for the current year | 5,956,888.87 | 16,796,524.06 |
| Deferred income tax expense | 5,679,337.17 | 100,308,537.10 |
| Total | 11,636,226.04 | 117,105,061.16 |
(2) Accounting profit and income tax expense adjustment process
Unit: Yuan
| Items | January to June 2018 |
| Total profit | 769,610,017.39 |
| Income tax expense calculate according to the official or applicable tax rate | 192,402,504.35 |
| Effect of use of deductible losses of unrecognized deferred tax asset of prior period | 180,766,278.31 |
| Income tax expense | 11,636,226.04 |
Notes
74. Other comprehensive income
Please refer to notes.
75. Notes of statement of cash flows(1) Cash received related to other operating activities
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Withdraw of current accounts, advance for another | 19,218,434.76 | 49,988,918.77 |
| Interest income | 61,605,403.34 | 36,772,069.07 |
| Special subsidy income | 694,300.00 | 700,000.00 |
| Non-operating income | 162,619.82 | 350,490.77 |
| Others | 101,722.27 | 5,600.00 |
| Total | 81,782,480.19 | 87,817,078.61 |
Notes:
(2) Cash paid related to other operating activities
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Current accounts, advance for another | 285,018,187.10 | 317,981,786.61 |
| General and administrative expenses | 4,646,000.62 | 4,534,010.56 |
| Selling and distribution expenses | 18,078,644.22 | 18,370,234.96 |
| Bank charges | 2,896,060.69 | 7,210,977.46 |
| Others | 358,254.79 | 287,293.34 |
| Total | 310,997,147.42 | 348,384,302.93 |
Notes:
(3) Other cash received relevant to investment activity
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Notes:
(4) Other cash paid relevant to investment activity
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Notes:
(5) Cash received related to other financing activities
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Notes:
(6) Cash paid related to other financing activities
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
Notes:
76. Supplementary details of statement of cash flows(1) Supplementary details of statement of cash flows
Unit: Yuan
| Supplementary information | Amount in this period | Amount in last year |
| 1． A reconciliation of net profit to cash flows from operating activities: | -- | -- |
| Net Profit | 757,973,791.35 | 529,967,744.05 |
| Add: Asset impairment losses | -20,917,963.64 | -43,390,454.54 |
| Depreciation of fixed assets, of oil-gas assets, of productive biological assets | 1,144,984,195.00 | 935,125,024.26 |
| Amortization of intangible assets | 3,239,455.09 | 2,982,306.37 |
| Losses proceeds from disposal of PPE, intangible assets and other long-term assets(Earnings marked“－”) | 556,821.63 | 1,578,126.30 |
| Financial expenses(Earnings marked“－”) | 803,038,417.28 | 381,513,404.80 |
| Investment loss(Earnings marked“－”) | -3,493,150.68 | -3,294,593.14 |
| Deferred tax assets reduction(Addition marked“－”) | 5,679,337.17 | 100,308,537.11 |
| Inventories reduction(Addition marked“－”) | -1,683,906,453.31 | -52,529,908.92 |
| Operating receivable items reduction(Addition marked“－”) | 817,004,548.19 | 40,403,360.62 |
| Operating payable items increase (Less marked"－") | -1,093,639,256.61 | -5,939,969,231.63 |
| Net cash flows generated from operating activities | 730,519,741.47 | -4,047,305,684.72 |
| 2．Payments of investing and financing activities not involving cash: | -- | -- |
| 3．The net increase in cash and cash equivalents: | -- | -- |
| Ending balance of the monetary funds | 16,038,506,854.22 | 11,484,974,631.49 |
| Less: Beginning balance of the monetary funds | 17,037,713,410.49 | 12,273,574,488.67 |
| The net increase in cash and cash equivalents | -999,206,556.27 | -788,599,857.18 |
(2) Net Cash paid of obtaining the subsidiary
Unit: Yuan
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Notes:
(3) Net Cash receive of disposal of the subsidiary
Unit: Yuan
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Notes:
(4) The structure of cash and cash equivalents
Unit: Yuan
| Items | Ending balance | Beginning balance |
| 1. Cash | 16,038,506,854.22 | 17,037,713,410.49 |
| Including: Cash on hand | 20,372.11 | 20,871.51 |
| Bank deposits available on demand | 16,038,486,482.11 | 17,037,692,538.98 |
| Other monetary funds available on demand | ||
| 2. The final cash and balance of cash equivalents | 16,038,506,854.22 | 17,037,713,410.49 |
Notes:
77. Notes to changes in equity
Notes to the other adjustment to closing balance of the previous period and the adjustment amount:
78. The assets with the ownership or use right restricted
Unit: Yuan
| Items | Ending book value | Reason |
| Cash at bank and on hand | 2,531,734,752.99 | Deposit for notes and L/C |
| Notes receivable | 1,801,103,300.17 | Pledged for acceptance bill or bank loan |
| Total | 4,332,838,053.16 | -- |
Notes:
79. Foreign currency monetary items(1) Foreign currency monetary items
Unit: Yuan
| Items | Ending balance in foreign currency | Exchange rate at the year-end | Ending balance translated to RMB |
| Including: USD | -- | -- | 3,521,674,538.56 |
| EUR | 433,576,750.11 | 6.6166 | 2,868,803,924.78 |
| HKD | 85,214,634.28 | 7.6515 | 652,019,774.19 |
| Short-term loans | 1,009,179.92 | 0.8431 | 850,839.59 |
| Including: USD | 6,369,393,300.00 | ||
| Non-current liabilities due within one year | 865,500,000.00 | 6.6166 | 5,726,667,300.00 |
| Including: USD | 84,000,000.00 | 7.6515 | 642,726,000.00 |
| JPY | 1,005,866,915.68 | ||
| Including: USD | 148,000,000.00 | 6.6166 | 979,256,800.00 |
| EUR | 3,296,330.56 | 7.6515 | 25,221,873.28 |
| Japanese Yen | 23,176,000.00 | 0.0599 | 1,388,242.40 |
| Long-term Loans | -- | -- | 1,498,631,297.21 |
| Including: USD | 128,300,000.00 | 6.6166 | 848,909,780.00 |
| EUR | 83,372,078.26 | 7.6515 | 637,921,456.81 |
| JPY | 196,996,000.00 | 0.0599 | 11,800,060.40 |
Notes:
(2) Note to overseas entities including: for significant oversea entities, shall disclose main operating place,recording currency and selection basis, if there are changes into recording currency, shall also disclose thereason.
□ Applicable √ Not applicable
80. Hedging
Hedging items disclosed by category and related hedging instruments and the qualitative and quantitative information of risks:
None
81. Others
None
VIII. Equity in other entities
1. Equity in subsidiaries(1) Constitution of enterprise group
| Name of the subsidiaries | Principal place of business | Registered address | Nature of business | Proportion of shares held (%) | Acquiring method | |
| Direct | Indirect | |||||
Notes:
Basis of determine the Company control the investee while holding half or less voting rights and basis of determine the Companydoes not control while holding more than half voting rights:
NoneBasis of control to structured entity included in the consolidation scope:
NoneBasis of determine whether the Company is the agent or the principal:
None
(2) Significant not wholly-owned subsidiaries
Unit: Yuan
| Name of the subsidiaries | Proportion of non-controlling interests | Profits and losses attributing to non-controlling shareholders | Dividend declared to distribute to non-controlling shareholders | Ending balance of non-controlling interests |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | 25.00% | 1,377,927.80 | 499,584,045.29 | |
| Dalian Benruitong Automobile Material Technologies Co., Ltd. | 35.00% | -312,957.88 | 26,375,164.18 |
Holding proportion of minority shareholder in subsidiary different from voting proportion:
NoneNotes:
None
(3) The main financial information of significant not wholly owned subsidiary
Unit: Yuan
| Name of the subsidiaries | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current Liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current Liabilities | Non-current liabilities | Total liabilities | |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | 3,280,879,837.58 | 1,849,476,058.98 | 5,130,355,896.56 | 3,132,019,715.41 | 3,132,019,715.41 | 2,386,618,039.83 | 2,003,972,503.03 | 4,390,590,542.86 | 2,399,426,402.00 | 2,399,426,402.00 | ||
| Dalian Benruitong Automobile Material Technologies Co., Ltd. | 130,501,245.20 | 150,077,740.12 | 280,578,985.32 | 205,221,373.39 | 205,221,373.39 | 169,295,050.97 | 153,808,054.26 | 323,103,105.23 | 246,851,327.92 | 246,851,327.92 | ||
Unit: Yuan
| Name of the subsidiaries | January to June 2018 | January to June 2017 | ||||||
| Turnover | Net Profit | Total comprehensive income | Net cash flows from operating activities | Turnover | Net Profit | Total comprehensive income | Net cash flows from operating activities | |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | 3,971,529,847.27 | 5,511,711.19 | 5,511,711.19 | 686,401,003.83 | 3,953,643,069.30 | 28,005,452.68 | 28,005,452.68 | -44,864,088.81 |
| Dalian Benruitong Automobile Material Technologies Co., Ltd. | 99,283,350.57 | -894,165.38 | -894,165.38 | 12,596,859.61 | 84,612,504.06 | -1,936,593.41 | -1,936,593.41 | 16,421,759.65 |
Notes:
None
(4) Significant restrictions of using enterprise group assets and pay back enterprise group debt(5) Provide financial support or other support for structured entities incorporate into the scope of
consolidated financial statements
2. The transaction of the Company with its owner’s equity share changed but still controlling the
subsidiary
(1) Note to owner’s equity share changed in subsidiary(2) The transaction’s influence to equity of minority shareholders and attributable to the owner’s equity of
the parent company
Unit: Yuan
Notes
3. Equity in joint venture arrangement or associated enterprise(1) Significant joint venture arrangement or associated enterprise
| Name | Principal place of business | Registered address | Nature of business | Proportion of shares held (%) | Accounting treatment of the investment of joint venture or associated enterprise | |
| Direct | Indirect | |||||
Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does nothave a significant impact:
None
(2) Main financial information of significant joint venture
Unit: Yuan
| Ending balance/January to June 2018 | Beginning balance/January to June 2017 | |
Notes
(3) Major financial information of significant joint venture
Unit: Yuan
| Ending balance/current period | Beginning balance/previous period | |
Notes
(4) Main financial information of significant associated enterprise
Unit: Yuan
| Ending balance/current period | Beginning balance/previous period | |
| Joint venture: | -- | -- |
| The total of following items according to the shareholding proportions | -- | -- |
| Associated enterprise: | -- | -- |
| The total of following items according to the shareholding proportions | -- | -- |
Notes
(5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer fundsto the Company
(6) The excess loss of joint venture or associated enterprise
Unit: Yuan
| Name | The cumulative recognized losses in previous accumulatively derecognized | The derecognized losses or the share of net profit in reporting period | The noncumulative unrecognized losses in reporting period |
Notes
(7) The unrecognized commitment related to joint venture investment(8) Contingent liabilities related to joint venture or associated enterprise investment4. Significant common operation
| Name | Principal place of business | Registered address | Nature of business | Proportion /share portion | |
| Direct | Indirect | ||||
Notes to holding proportion or share portion in common operation different from voting proportion:
Basis of common operation as a single entity, classify as common operation:
Notes
5. Equity of structure entity not including in the scope of consolidated financial statements
Related notes to structure entity not including in the scope of consolidated financial statements:
6. Others
IX. Risks associated with financial instruments
1. Credit risk
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 determinationof credit limits, credit approvals and other monitoring procedures to ensure that follow-up actions are taken torecover overdue debts.
In addition, the Company strictly approves the line of credit, and only sells on credit to important customersfor 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 marketprice 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. Themanagement will carefully choose financing methods, and combine fixed interest rate with variable interestrate, short-term obligations with long-term obligations. By using effective interest rate risk managementmethods, the Company closely monitors interest rate risk and will consider interest-rate swaps to acquire anexpected structure of interest rates shall the need arise.
Although these measures may not ensure that the Company completely avoids the risk of paying at a riskhigher than market risk, or that the cash flow risk relevant to interest income fluctuations is completelyeliminated, in the opinion of the management, these measures could achieve a reasonable balance amongthese risks.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange rate changes. TheCompany has been constantly working on the adjustment of the organizational framework of riskmanagement 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,Hong Kong dollars and Japanese Yen. The ending balance of the assets and liabilities after converted in RMBis shown as below:
Unit: RMB 10,000
| Items | Ending balance | ||||
| USD | Euro | HKD | Japanese Yen | Total | |
| Assets | 286,880.39 | 65,201.98 | 85.08 | 352,167.45 | |
| Liabilities | 755,483.39 | 130,586.93 | 63,930.97 | 950,001.29 | |
| Total | 1,042,363.78 | 195,788.91 | 85.08 | 63,930.97 | 1,302,168.74 |
The table below shows the sensitivity analysis of RMB vs. other currencies when RMB deprecated orappreciated by 5% over other currencies under the assumption that other variables remain the same. 5% is thesensitivity rate used by the management for internal report of currency risk and it represents the estimation ofthe management over the possible change of foreign currency. Sensitivity analysis only includes the monetaryitems measured by foreign currency unpaid and will be adjusted at the year-end by 5%. The positive figuresreflect the increase of profit by 5% and the negative figures indicate the reduction of profit.
Unit: RMB 10,000
| Items | Ending balance | ||||
| Impact on USD | Impact on Euro | Impact on HKD | Impact on Japanese Yen | Total | |
| Appreciation by 5% | -23,430.15 | -3,269.25 | 4.25 | -3,196.55 | -29,891.69 |
| Depreciation by 5% | 23,430.15 | 3,269.25 | -4.25 | 3,196.55 | 29,891.69 |
3. Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligation of settlement in a
manner of delivering cash or other financial assets. The Company’s policy is to maintain sufficient cash tomeet maturing obligations. Liquidity risk is centralized controlled by the Company’s finance department.
Through the monitoring of unrestricted cash and cash equivalents, bank acceptance bills due in short time andthe continues forecasting of cash flow in the next 12 months, the finance department ensures that theCompany has sufficient cash to meet obligations in all predicted reasonable circumstances.
The following table details the Company’s mature date of residual contract value of un-derivative financial
liabilities to repay according to the contract terms. The table has been drawn up based on the undiscounted
cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. Thetable includes both interest and principal cash flows.
Unit: RMB 10,000
| Items | Ending balance | ||||
| Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total | |
| Trade and other payables | 1,365,435.62 | 54.28 | 124.74 | 80.27 | 1,365,694.91 |
| Loans and interests | 2,282,695.66 | 5,956.80 | 219,975.88 | 214,628.45 | 2,723,256.79 |
| Non-current liabilities due within one year | |||||
| Total | 3,648,131.27 | 6,011.08 | 220,100.62 | 214,708.72 | 4,088,951.70 |
Unit: RMB 10,000
| Items | Beginning balance | ||||
| Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total | |
| Trade and other payables | 1,618,161.06 | 73.68 | 159.73 | 97.25 | 1,618,491.72 |
| Loans and interests | 2,470,640.43 | 31,954.06 | 81,123.04 | 165,472.33 | 2,749,189.86 |
| Non-current liabilities due within one year | 149,954.52 | 149,954.52 | |||
| Total | 4,238,756.01 | 32,027.74 | 81,282.77 | 165,569.58 | 4,517,636.10 |
X. Related party and related party transactions
1. Details of parent company
(In 100 Million Yuan)
| Name of parent company | Registered address | Nature of business | Registered capital | Share proportion | Voting rights |
| Benxi Steel & Iron (Group) Co., Ltd. | Benxi | Manufacturing | 62.92 | 59.91% | 59.91% |
Note:
The parent company of Benxi Steel (Group) Co., Ltd. is Bengang Group Co., Ltd.
The ultimate controlling party of the Company is the State-owned Assets Supervision and Administration Commission of LiaoningProvince.
2. Details of the subsidiaries
For details of subsidiaries of the Company please refer to Note “Equity in other entities”.
3. Information on the joint ventures and associated enterprises of the Company
See details to Notes.
Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reportingperiod, or form balance due to related party transactions in previous period:
| Name | Relationship |
Notes
4. Details of other related parties
| Name of Other related parties | Relationship |
| Bengang Group International Economic and Trading Co., Ltd. | Both belong to Bengang Group Co., Ltd. |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Same parent company |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Both belong to Bengang Group Co., Ltd. |
| Bengang Electronics and Gas Co., Ltd. | Both belong to Benxi Steel and Iron (Group) Co., Ltd. |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Designing Institute | Same parent company |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Plant Construction Supervisor Co., Ltd. | Same parent company |
| Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. | Same parent company |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | Both belong to Bengang Group Co., Ltd. |
| Benxi New Career Development Co., Ltd. | Same parent company |
| Dalian Boluole Steel Tube Co., Ltd. | Both belong to Benxi Steel and Iron (Group) Co., Ltd. |
| Guangzhou Free Trade Zone Bengang Sales Co., Ltd. | Both belong to Benxi Steel and Iron (Group) Co., Ltd. |
| Liaoning Bengang Steel & Iron Trading Co., Ltd. | Same parent company |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Same parent company |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Same parent company |
| Liaoning Metallurgy Technician College | Same parent company |
| Liaoning Metallurgy Technician College | Same parent company |
| Suzhou Bengang Industrial Co., Ltd. | Shareholding company |
| Benxi Steel & Iron(Group) Medical Department | Both belong to Benxi Steel and Iron (Group) Co., Ltd. |
| Bengang Group Finance Co., Ltd. | Both belong to Bengang Group Co., Ltd. |
| Liaoning Hengyi Financial Leasing Co., Ltd. | Both belong to Bengang Group Co., Ltd. |
Notes
5. Related Party Transactions(1) Related party transactions of purchasing goods and services
Company as the purchaser
Unit: Yuan
| Name | The content of related party transactions | January to June 2018 | The approved trade credit | Whether exceed trade credit or not | January to June 2017 |
| Benxi Steel & Iron (Group) Co., Ltd. | Accounts payable for repair | 197,670,478.35 | 350,000,000.00 | No | 127,818,662.00 |
| Benxi Steel & Iron (Group) Co., Ltd. | Land leasing fee | 27,345,714.30 | 27,345,714.30 | ||
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | Products | 641,948.77 | 5,000,000.00 | No | 174,967.51 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Labor cost | 3,867,465.58 | 2,537,625.86 | ||
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Raw material and supplementary material | 2,038,163,311.47 | 4,000,000,000.00 | No | 2,176,386,929.60 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight | 31,783.77 | |||
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Raw material and supplementary material | 128,528,351.16 | 200,000,000.00 | No | 128,200,766.66 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Processing fee | 876,655.68 | 5,000,000.00 | No | 761,185.36 |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Raw materials | 36,279,876.56 | 100,000,000.00 | No | 50,067,484.09 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Spare parts | 46,002,921.49 | 250,000,000.00 | No | 55,223,576.67 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Repair services | 4,951,834.41 | 3,688,668.68 | ||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Spare parts | 1,918,014.21 | 7,343,354.50 | ||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Project fee | 20,289,496.89 | 129,406,022.95 | ||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Repair services | 114,818,650.89 | 600,000,000.00 | No | 32,379,820.88 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Raw material and supplementary material | 1,094,007.08 | 4,647,769.44 | ||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Freight | 1,313,481.92 | 1,550,379.98 | ||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Spare parts | 28,083,979.07 | 89,056,575.46 | ||
| Benxi Steel & Iron | Raw material and | 67,306,243.89 | 400,000,000.00 | No | 106,726,625.72 |
| (Group) Industrial Development Co., Ltd. | supplementary material | ||||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Repair services | 18,294,485.36 | 11,179,880.95 | ||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Freight | 1,018,074.77 | 1,370,590.70 | ||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Project fee | 916,801.71 | 1,398,249.24 | ||
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Raw material & supplementary materials & spare parts | 3,263,891.55 | 1,396,647.57 | ||
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Project fee | 11,753,839.95 | 300,000,000.00 | No | 28,706,439.35 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Accounts payable for repair | 83,273,978.63 | 21,309,880.35 | ||
| Bengang Electronics and Gas Co., Ltd. | Raw material and supplementary material | 64,119,457.44 | 200,000,000.00 | No | 84,260,711.25 |
| Bengang Electronics and Gas Co., Ltd. | Project fee | 0.00 | 419,352.41 | ||
| Bengang Electronics and Gas Co., Ltd. | Repair services | 18,629,048.68 | 6,921,824.58 | ||
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | Spare parts | 311,192.85 | 8,000,000.00 | No | 393,070.06 |
| Benxi New Career | Labor protection | 442,032.39 | 20,000,000.00 | No | 294,457.32 |
| Development Co., Ltd. | fee | ||||
| Liaoning Metallurgy Technician College | Spare parts | 3,170,680.46 | 20,000,000.00 | No | 13,193,086.82 |
| Liaoning Metallurgy Technician College | Spare parts | 6,037,417.64 | 10,000,000.00 | No | 2,303,327.48 |
| Bengang Group International Economic and Trading Co., Ltd. | Agency fee | 35,649,297.75 | 350,000,000.00 | No | 36,856,843.30 |
| Bengang Group International Economic and Trading Co., Ltd. | Port surcharges | 56,907,191.59 | 77,511,480.65 | ||
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Spare parts | 9,332,489.18 | 70,000,000.00 | No | 6,932,300.00 |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Repair services | 23,358,888.88 | 3,059,417.05 | ||
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Heating costs | 377,311.58 | 20,000,000.00 | No | 1,686,000.00 |
| Benxi Steel & Iron (Group) Designing Institute | Design fees | 2,315,800.00 | 20,000,000.00 | No | 2,359,000.00 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Raw material and supplementary material | 5,668,349,463.29 | 17,000,000,000.00 | No | 4,727,294,158.47 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 388,658,384.32 | 501,840,790.72 | ||
| Benxi Beiying Steel & Iron (Group) Co., | Freight | 3,031,478.40 | 8,894,757.14 |
| Ltd. | |||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Labor cost | 39,314,396.27 | 55,630,095.04 | ||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Spare parts | 10,645,896.19 | 18,442,067.23 | ||
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Raw material and spare parts | 53,986,136.91 | 150,000,000.00 | No | 106,615,430.32 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Raw material and spare parts | 1,248,720.58 | 50,000,000.00 | No | 38,734,351.70 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Repair and labor cost | 14,773,687.68 | 6,364,702.64 | ||
| Bengang Group Co., Ltd. | Property management fee | 310,698.12 | 8,000,000.00 | No | 310,698.12 |
| Subtotal | 9,238,643,173.88 | 24,136,000,000.00 | 8,709,027,523.89 |
Company as the seller
Unit: Yuan
| Name | The content of related party transactions | January to June 2018 | January to June 2017 |
| Bengang Electronics and Gas Co., Ltd. | Energy & Power | 518,976.61 | 496,261.60 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Raw material & supplementary materials & spare parts | 1,164,692,875.87 | 347,784,283.81 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Products | 12,301,312.89 | 4,973,269.68 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | Energy & Power | 57,068,870.93 | 143,893,069.82 |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | Energy & Power | 69,433.26 | 137,583.72 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Energy & Power | 375,198.36 | 503,015.61 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Products | 9,733,073.15 | 4,620,747.58 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Energy & Power | 9,432,124.68 | 7,913,565.57 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | Raw material & supplementary materials & spare parts | 1,135,830.68 | 514,127.97 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Energy & Power | 941,333.14 | 2,144,512.75 |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | Raw material & supplementary materials & spare parts | 712,402.08 | 1,384,111.28 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Energy & Power | 359,406,715.18 | 458,582,060.66 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Raw material & supplementary materials & spare parts | 28,315,202.76 | 6,467,665.26 |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | Freight revenue | 4,024,837.37 | 4,072,326.92 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Energy & Power | 23,749,581.93 | 14,523,775.89 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Raw material & supplementary materials & spare parts | 8,018,498.91 | 685,704.00 |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | Freight revenue | 85,835.38 | 96,738.16 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Energy & Power | 3,885,392.91 | 4,053,089.03 |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | Products | 113,234.08 | 126,887.14 |
| Benxi Steel & Iron (Group) | Raw material & | 12,517,810.34 | 27,595,285.96 |
| Industrial Development Co., Ltd. | supplementary materials & spare parts | ||
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | Energy & Power | 90,072.21 | 83,013.82 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Energy & Power | 839,850.93 | 772,159.41 |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | Raw material & supplementary materials & spare parts | 122,645.70 | 98,352.61 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Energy & Power | 2,604,796.98 | 1,300,384.81 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Raw material & supplementary materials & spare parts | 90,456,418.80 | 43,580,212.34 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Freight revenue | 7,113,581.52 | 3,143.36 |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | Products | 7,126,315.80 | |
| Benxi Steel & Iron (Group) Co., Ltd. | Energy & Power | 7,026,460.13 | 6,145,233.63 |
| Benxi Steel & Iron (Group) Co., Ltd. | Raw material & supplementary materials & spare parts | 2,705,064.20 | 3,215,453.07 |
| Benxi New Career Development Co., Ltd. | Energy & Power | 180,988.72 | 186,027.31 |
| Dalian Boluole Steel Tube Co., Ltd. | Products | 1,757,572.24 | 2,237,856.57 |
| Liaoning Bengang Steel & Iron Trading Co., Ltd. | Products | 460,444.50 | |
| Benxi Steel & Iron (Group) General Hospital | Energy & Power | 34,222.10 | 51,687.01 |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Energy & Power | 8,991,868.63 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Raw material & supplementary materials & spare parts | 13,054,253.38 | 8,797,596.07 |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | Products | 0.00 | |
| Suzhou Bengang Industrial Co., Ltd. | Products | 170,528,506.26 | 136,230,997.93 |
| Bengang Group Finance Co., Ltd. | Energy & Power | 7,026.08 | 7,485.42 |
| Bengang Group Co., Ltd. | Energy & Power | 94,690.52 | 76,301.79 |
| Total | 1,993,714,690.30 | 1,249,932,616.49 |
Related party transactions of purchasing goods and services NotesNone
(2) Related trusteeship/contract
Lists of related trusteeship/contract:
Unit: Yuan
| Name of the entruster/contractee | Name of the entrustee/contractor | Type | Initial date | Due date | Pricing basis | Income recognized in the reporting period |
NotesNoneLists of entrust/contractee:
Unit: Yuan
| Name of the entruster/contractee | Name of the entrustee/contractor | Type | Initial date | Due date | Pricing basis | Change recognized in the reporting period |
NotesNone
(3) Lease information of related parties
Company as the lessor:
Unit: Yuan
| Lessee | Lease capital category | The lease income confirmed in this year | The lease income confirmed in last year |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Warehouse and machinery | 250,000.00 | 250,000.00 |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., | Plants and machinery | 245,000.00 | 244,805.87 |
Company as the lessee:
Unit: Yuan
Ltd.Lessor
| Lessor | Lease capital category | Lease charges of current period | Lease charges of previous period |
| Benxi Steel & Iron (Group) Co., Ltd. | 2300 Hot rolling product line | 120,000,000.00 | 120,000,000.00 |
| Benxi Steel & Iron (Group) Co., Ltd. | Land use right | 27,345,714.30 | 27,345,714.30 |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 1780 Hot rolling product line | 64,929,604.02 | 77,816,940.06 |
Notes:
1. The Company leases 2300 hot rolling product line from the Group. Lease period lasts from 1 January 2018 to 31 December 2020.Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and national taxation of theproduct line, with consideration of conditions of production and equipment performance.
2. The Company leases land use right from the Group. Lease period lasts from 15 April 2009. The leasing fee is determined by thearea of the land which is 7,669,068.17 square meters. Average price is RMB 0.594 per Square meter per month; hence annual rent isRMB 54.69 million.
3. The Company leases 1780 hot rolling product line from Benxi Beiying Steel & Iron (Group) Co., Ltd. “Notice on Bengang SteelPlates Co., Ltd. signing a renewal agreement with Benxi Steel (group) Co., Ltd” was adopted on the sixth meeting of the seventh
Board of Directors on 30 March 2017, it stipulated that the company leased the 1780 hot rolling product line from Benxi BeiyingSteel & Iron (Group) Co., Ltd., lease period lasts from 1 January 2017 to 31 December 2019. Lease charges are negotiated betweenthe lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with consideration ofconditions of production and equipment performance. The annual rent shall not exceed RMB 150,000,000.00.
(4) Information of Guarantee among related parties
Company as the warrantor
Unit: Yuan
| Secured party | Guarantee amount | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
Company as the warrantee
Unit: Yuan
| Warrantor | Guarantee amount | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Benxi Steel & Iron (Group) Co., Ltd. | 270,000,000.00 | 2018-1-23 | 2019-1-22 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 60,000,000.00 | 2018-2-1 | 2019-1-31 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 74,000,000.00 | 2018-5-25 | 2019-5-24 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 150,000,000.00 | 2018-5-18 | 2019-5-17 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 340,000,000.00 | 2018-2-11 | 2019-2-10 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2018-6-13 | 2019-6-12 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2018-6-12 | 2019-6-11 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 100,000,000.00 | 2018-1-25 | 2019-1-23 | No |
| Bengang Group Co., Ltd. | 150,000,000.00 | 2017-7-12 | 2018-7-12 | No |
| Bengang Group Co., Ltd. | 150,000,000.00 | 2017-7-12 | 2018-7-12 | No |
| Bengang Group Co., Ltd. | 87,280,000.00 | 2018-3-26 | 2024-6-21 | No |
| Bengang Group Co., Ltd. | 140,000,000.00 | 2018-1-19 | 2019-1-19 | No |
| Bengang Group Co., Ltd. | 83,000,000.00 | 2018-1-19 | 2018-12-28 | No |
| Bengang Group Co., Ltd. | 490,000,000.00 | 2017-8-28 | 2018-8-23 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 100,000,000.00 | 2018-1-4 | 2018-12-12 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2017-9-6 | 2018-9-5 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 150,000,000.00 | 2017-10-23 | 2018-10-16 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2017-10-16 | 2018-10-14 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2017-11-13 | 2018-11-8 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 200,000,000.00 | 2017-11-15 | 2018-11-13 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 78,000,000.00 | 2017-12-15 | 2018-12-12 | No |
| Bengang Group Co., Ltd. | 160,000,000.00 | 2018-5-24 | 2019-5-24 | No |
| Bengang Group Co., Ltd. | 200,000,000.00 | 2018-4-28 | 2018-10-27 | No |
| Bengang Group Co., Ltd. | 200,000,000.00 | 2018-5-25 | 2018-11-24 | No |
| Bengang Group Co., Ltd. | 310,000,000.00 | 2018-3-28 | 2019-3-27 | No |
| Bengang Group Co., Ltd. | 720,000,000.00 | 2018-4-2 | 2019-4-1 | No |
| Bengang Group Co., Ltd. | 480,000,000.00 | 2018-1-22 | 2019-1-21 | No |
| Bengang Group Co., Ltd. | 135,000,000.00 | 2018-1-17 | 2018-12-28 | No |
| Bengang Group Co., Ltd. | 2,500,000,000.00 | 2018-3-9 | 2019-3-9 | No |
| Bengang Group Co., Ltd. | 300,000,000.00 | 2017-9-27 | 2018-9-26 | No |
| Bengang Group Co., Ltd. | 1,000,000,000.00 | 2017-11-16 | 2018-11-15 | No |
| Bengang Group Co., Ltd. | 1,190,000,000.00 | 2017-11-20 | 2018-11-19 | No |
| Bengang Group Co., Ltd. | 110,000,000.00 | 2017-9-29 | 2018-9-28 | No |
| Bengang Group Co., Ltd. | 110,000,000.00 | 2017-9-29 | 2018-9-27 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 595,494,000.00 | 2018-5-22 | 2019-5-21 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 992,490,000.00 | 2018-5-18 | 2019-5-17 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 681,509,800.00 | 2018-5-18 | 2019-5-17 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 661,660,000.00 | 2018-2-24 | 2019-2-23 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 148,873,500.00 | 2017-12-26 | 2018-12-25 | No |
| Bengang Group Co., Ltd. | 321,363,000.00 | 2017-8-24 | 2018-8-19 | No |
| Bengang Group Co., Ltd. | 321,363,000.00 | 2017-8-24 | 2018-8-19 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 100,000,000.00 | 2017-10-24 | 2018-10-18 | No |
| Bengang Group Co., Ltd. | 100,000,000.00 | 2017-10-12 | 2018-7-3 | No |
| Bengang Group Co., Ltd. | 340,000,000.00 | 2017-8-29 | 2018-8-24 | No |
| Bengang Group Co., Ltd. | 220,000,000.00 | 2017-10-13 | 2018-10-13 | No |
| Bengang Group Co., Ltd. | 661,660,000.00 | 2016-8-30 | 2018-8-28 | No |
| Bengang Group Co., Ltd. | 317,596,800.00 | 2016-7-14 | 2018-7-12 | No |
| Bengang Group Co., Ltd. | 529,328,000.00 | 2018-5-2 | 2020-5-21 | No |
| Bengang Group Co., Ltd. | 132,332,000.00 | 2018-5-8 | 2020-5-7 | No |
| Bengang Group Co., Ltd. | 1,784,419.86 | 2015-6-25 | 2025-9-30 | No |
| Bengang Group Co., Ltd. | 60,964,328.60 | 2015-8-20 | 2025-9-30 | No |
| Bengang Group Co., Ltd. | 4,569,380.16 | 2015-8-20 | 2019-9-30 | No |
| Bengang Group Co., Ltd. | 47,152.22 | 2015-6-25 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 4,265,410.93 | 2015-6-25 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 31,134.80 | 2015-12-28 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 52,021,540.64 | 2015-12-28 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 14,905,534.80 | 2015-6-25 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 5,330,620.24 | 2015-12-28 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 3,701,826.08 | 2015-6-25 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 105,854,646.37 | 2015-6-25 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 3,249,488.07 | 2015-12-28 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 7,350,268.71 | 2015-6-25 | 2019-6-30 | No |
| Bengang Group Co., Ltd. | 5,260,668.01 | 2015-12-28 | 2019-6-30 | No |
| Bengang Group Co., Ltd. | 5,502,007.57 | 2015-6-25 | 2025-10-31 | No |
| Bengang Group Co., Ltd. | 75,759,364.72 | 2015-6-25 | 2025-10-31 | No |
| Bengang Group Co., Ltd. | 35,042,698.40 | 2015-12-28 | 2025-10-31 | No |
| Bengang Group Co., Ltd. | 17,687,312.00 | 2015-6-25 | 2019-10-31 | No |
| Bengang Group Co., Ltd. | 339,391.62 | 2015-12-28 | 2019-10-31 | No |
| Bengang Group Co., Ltd. | 4,662,031.48 | 2015-6-25 | 2025-8-31 | No |
| Bengang Group Co., Ltd. | 91,745,966.56 | 2015-6-25 | 2025-8-31 | No |
| Bengang Group Co., Ltd. | 1,936,747.68 | 2015-12-28 | 2025-8-31 | No |
| Bengang Group Co., Ltd. | 13,872,549.01 | 2015-6-25 | 2019-8-31 | No |
| Bengang Group Co., Ltd. | 1,830,037.11 | 2015-12-28 | 2019-8-31 | No |
| Bengang Group Co., Ltd. | 4,912,894.25 | 2015-12-28 | 2019-7-30 | No |
| Bengang Group Co., Ltd. | 3,142,465.31 | 2016-6-27 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 28,518,079.72 | 2016-6-27 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 21,678,103.40 | 2016-12-14 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 280,176.20 | 2016-12-14 | 2020-4-30 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 12,494,181.60 | 1997-10-10 | 2027-9-10 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 100,000,000.00 | 2016-3-30 | 2025-3-20 | No |
| Bengang Group Co., Ltd. | 100,000,000.00 | 2016-3-31 | 2018-3-31 | No |
| Bengang Group Co., Ltd. | 16,280,000.00 | 2015-3-26 | 2019-3-21 | No |
| Bengang Group Co., Ltd. | 100,000,000.00 | 2015-6-25 | 2021-9-21 | No |
| Bengang Group Co., Ltd. | 24,000,000.00 | 2015-12-9 | 2022-3-21 | No |
| Bengang Group Co., Ltd. | 36,450,000.00 | 2016-12-27 | 2020-6-21 | No |
| Bengang Group Co., Ltd.、Benxi Steel & Iron (Group) Co., Ltd. | 700,000,000.00 | 2017-2-27 | 2025-2-20 | No |
| Bengang Group Co., Ltd. | 59,570,000.00 | 2017-11-15 | 2021-12-21 | No |
| Bengang Group Co., Ltd. | 622,600,000.00 | 2017-12-15 | 2024-8-20 | No |
| Bengang Group Co., Ltd. | 165,961.04 | 2017-6-30 | 2019-9-30 | No |
| Bengang Group Co., Ltd. | 8,352,598.60 | 2017-6-30 | 2019-9-30 | No |
| Bengang Group Co., Ltd. | 254,917.14 | 2015-6-25 | 2025-9-30 | No |
| Bengang Group Co., Ltd. | 8,709,189.80 | 2015-8-20 | 2025-9-30 | No |
| Bengang Group Co., Ltd. | 4,569,380.16 | 2015-8-20 | 2019-9-30 | No |
| Bengang Group Co., Ltd. | 575,008.39 | 2015-6-25 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 6,940,356.74 | 2015-12-28 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 9,937,023.17 | 2015-6-25 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 3,553,746.83 | 2015-12-28 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 569,511.70 | 2015-6-25 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 16,285,330.18 | 2015-6-25 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 499,921.24 | 2015-12-28 | 2025-6-30 | No |
| Bengang Group Co., Ltd. | 14,700,537.26 | 2015-6-25 | 2019-6-30 | No |
| Bengang Group Co., Ltd. | 10,521,335.86 | 2015-12-28 | 2019-6-30 | No |
| Bengang Group Co., Ltd. | 11,608,767.50 | 2015-6-25 | 2025-10-31 | No |
| Bengang Group Co., Ltd. | 5,006,099.77 | 2015-12-28 | 2025-10-31 | No |
| Bengang Group Co., Ltd. | 17,687,311.92 | 2015-6-25 | 2019-10-31 | No |
| Bengang Group Co., Ltd. | 339,391.85 | 2015-12-28 | 2019-10-31 | No |
| Bengang Group Co., Ltd. | 13,772,571.15 | 2015-6-25 | 2025-8-31 | No |
| Bengang Group Co., Ltd. | 276,678.24 | 2015-12-28 | 2025-8-31 | No |
| Bengang Group Co., Ltd. | 13,872,549.01 | 2015-6-25 | 2019-8-31 | No |
| Bengang Group Co., Ltd. | 1,830,037.03 | 2015-12-28 | 2019-8-31 | No |
| Bengang Group Co., Ltd. | 4,912,894.25 | 2015-12-28 | 2019-7-30 | No |
| Bengang Group Co., Ltd. | 2,094,976.87 | 2016-6-27 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 3,802,410.63 | 2016-6-27 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 2,890,413.81 | 2016-12-14 | 2026-4-30 | No |
| Bengang Group Co., Ltd. | 186,783.98 | 2016-12-14 | 2020-4-30 | No |
| Bengang Group Co., Ltd. | 42,860,000.00 | 2015-3-26 | 2019-3-21 | No |
| Bengang Group Co., Ltd. | 35,700,000.00 | 2016-12-27 | 2020-6-21 | No |
| Bengang Group Co., Ltd. | 165,961.04 | 2017-6-30 | 2019-9-30 | No |
| Bengang Group Co., Ltd. | 1,193,228.32 | 2017-6-30 | 2019-9-30 | No |
| Benxi Steel & Iron (Group) Co., Ltd. | 1,388,242.40 | 1997-10-10 | 2027-9-10 | No |
(5) Inter-bank lending of capital of related parties
Unit: Yuan
| Name | Amount borrowed and loaned | Date of value | Maturity date | Notes |
| Borrowed | ||||
| Loaned | ||||
(6) Related party asset transfer and debt restructuring
Unit: Yuan
| Name | The content of related party transactions | January to June 2018 | January to June 2017 |
(7) Remuneration of key management personnel
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
(8) Other related party transactions
(1) Loan from and deposits in Bengang Group Finance Co., Ltd.
Unit: 10000 Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance | Notes |
| Deposits | 895,092.14 | 8,124,747.92 | 8,170,013.95 | 849,826.11 |
The interests of deposits in Bengang Group Finance Co., Ltd. is RMB 12,943.20 thousand from January to June in 2018.As at 30June 2018, interest due from Bengang Group Finance Co., Ltd is RMB 892.60 thousand. From January to June 2018, the depositinterest income of the Company in Bengang Group Finance Co., Ltd. (hereinafter referred to as "finance company") was 51.184million yuan. From January to June 2018, the amount of acceptance drafts issued by the financial company was 6.306 billion yuan,and the amount of acceptance drafts drawn by the financial company as at 30 June 2018 was 1.689 billion yuan.
(2) Loan from and deposits in Benxi Steel and Iron (Group) Co., Ltd.
Unit: 10000 Yuan
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Entrusted loan through Bengang Group Finance Co., Ltd. | 9,940.94 | 1,422.00 | 3,322.00 | 8,040.94 |
The details of borrowing balance by 30 June 2018 are as follows:
Unit: Yuan
| Name | Form of loan | Loan amount | Date of value | Maturity date |
| Benxi Steel & Iron (Group) Co., Ltd. | Entrusted loan through Bengang Group Finance Co., Ltd. | 14,220,000.00 | 2018-2-8 | 2019-2-8 |
| Benxi Steel & Iron (Group) Co., Ltd. | Entrusted loan through Bengang Group Finance Co., Ltd. | 11,369,400.00 | 2017-7-5 | 2018-7-5 |
| Benxi Steel & Iron (Group) Co., Ltd. | Entrusted loan through Bengang Group Finance Co., Ltd. | 32,700,000.00 | 2017-10-25 | 2018-10-25 |
| Benxi Steel & Iron (Group) Co., Ltd. | Entrusted loan through Bengang Group Finance Co., Ltd. | 22,120,000.00 | 2017-11-10 | 2018-11-10 |
| Total | 80,409,400.00 |
The interest accrued is RMB 2,313,129.8, and as at 30 June 2018, the interest payable is RMB250,796.57.
6. Receivables and payables of the related parties(1) Receivables of the Company
Unit: Yuan
| Items Name | Name | Ending balance | Beginning balance | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Accounts receivable | |||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 2,093,051.44 | 7,012,602.40 | |||
| Bengang Electronics and Gas Co., Ltd. | 2,690,426.46 | 705,120.80 | 3,175,293.83 | 705,120.80 | |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 46,980,327.61 | 22,754,881.58 | 62,242,087.46 | 22,754,881.58 | |
| Benxi Steel & Iron (Group) Construction Co., | |||||
| Ltd. | |||||
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | 34,624,704.64 | 8,840,761.28 | 41,088,306.07 | 8,840,761.28 | |
| Benxi New Career Development Co., Ltd. | 3,118,683.49 | 4,862,469.88 | 6,329,781.79 | 4,862,469.88 | |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | 2,404,254.86 | 2,735,216.00 | |||
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | |||||
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | 1,360,795.33 | 41,095.64 | 1,634,196.38 | 41,095.64 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | 8,907,768.94 | 10,224,242.39 | |||
| Bengang Group International Economic and Trading Co., Ltd. | 19,353,272.46 | 41,420,410.19 | |||
| 121,533,285.23 | 37,204,329.18 | 175,862,136.51 | 37,204,329.18 | ||
| Prepayments | |||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 707,225,626.32 | 664,151,443.09 | |||
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 9,914,952.40 | 9,675,956.28 | |||
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | 40,044.33 | 47,265.79 |
| 717,180,623.06 | 673,874,665.16 | ||||
| Other receivables | |||||
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | 2,444,081.54 | 951,811.45 | 2,482,057.01 | 951,811.45 | |
| Liaoning Metallurgy Technician College | 132,388.44 | 156,265.86 | 156,265.86 | 156,265.86 | |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 12,626,479.38 | 2,462,178.25 | 14,890,418.63 | 2,462,178.25 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | 848,000.00 | 848,000.00 | 848,000.00 | 848,000.00 | |
| Bengang Group International Economic and Trading Co., Ltd. | 17,464,021.64 | 8,617.52 | 20,014,006.17 | 8,617.52 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | 528,704.40 | 435,795.46 | 522,192.66 | 435,795.46 | |
| Benxi Steel & Iron (Group) Zhengtai Construction Materials Co., Ltd. | 198,993.78 | 193,367.73 | 198,993.78 | 193,367.73 | |
| Benxi Steel & Iron (Group) Medical Services Department | 774,666.03 | 674,813.30 | 913,607.45 | 674,813.30 | |
| 35,017,335.21 | 5,730,849.57 | 40,025,541.56 | 5,730,849.57 |
(2) Payables of the Company
Unit: Yuan
| Items Name | Name | Ending balance | Beginning balance |
| Notes payable | |||
| Benxi Steel & Iron (Group) | 3,454,227.22 | 70,995,469.28 |
| Industrial Development Co., Ltd. | |||
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 272,795.76 | 47,785,625.82 | |
| Bengang Electronics and Gas Co., Ltd. | 261,069.11 | 9,043,462.65 | |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | 0.00 | 2,747,433.39 | |
| Liaoning Metallurgy Technician College | 150,672.34 | 12,988,817.45 | |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | 1,442,440,250.75 | 1,885,599,410.81 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | 480,952.98 | 1,530,856.03 | |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | 0.00 | 1,897,419.83 | |
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 4,585,034,158.82 | 4,449,361,831.00 | |
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | 0.00 | 37,787,569.38 | |
| Liaoning Metallurgy Technician College | 2,523,646.00 | 867,902.49 | |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | 0.00 | 371,310.17 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 0.00 | 385,642.87 | |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | 900,403.30 | 1,327,289.76 | |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | 6,076,161.39 | 5,404,436.06 | |
| 6,041,594,337.67 | 6,528,094,476.99 | ||
| Accounts payable | |||
| Bengang Electronics and Gas Co., Ltd. | 11,400,746.44 | 13,082,201.84 |
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | 2,558,646.93 | 2,958,999.57 | |
| Bengang Group International Economic and Trading Co., Ltd. | 338,229,976.73 | 269,570,396.69 | |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 150,004,403.40 | 152,335,130.90 | |
| Benxi Steel & Iron (Group) Construction Co., Ltd. | 60,491,249.15 | 61,431,145.68 | |
| Benxi Steel & Iron (Group) Mining Co., Ltd. | 267,921,364.64 | 316,188,485.52 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | 77,120,281.35 | 88,858,487.56 | |
| Benxi New Career Development Co., Ltd. | 7,876,872.71 | 8,989,400.97 | |
| Benxi Steel & Iron (Group) Construction and Repairing Co., Ltd. | 77,994,391.16 | 64,208,768.55 | |
| Benxi Steel & Iron (Group) Designing Institute | 0.00 | 0.00 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 57,233,885.90 | 45,897,262.15 | |
| Benxi钢铁（集团）医疗卫生部 | 20,877.77 | 20,440.35 | |
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | 35,749,683.50 | 40,861,451.02 | |
| Benxi High-tech Drilling Tools Manufacture Co., Ltd. | 113,088.45 | 110,719.06 | |
| Liaoning Metallurgy Technician College | 5,055,774.48 | 7,683,547.84 | |
| Liaoning Bengang Steel & Iron Trading Co., Ltd. | 0.00 | 0.00 | |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | 166,740.11 | 151,260.15 | |
| Benxi Steel & Iron (Group) | 379,603.07 | 374,362.00 |
| Zhengtai Construction Materials Co., Ltd. | |||
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | 10,099,034.06 | 10,255,950.10 | |
| Liaoning Metallurgy Technician College | 2,033,176.85 | 2,325,632.06 | |
| Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. | 1,080,154.08 | 1,054,117.38 | |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | 27,345,771.13 | 26,704,854.62 | |
| Benxi Steel & Iron (Group)Plant Construction Supervisor Co., Ltd. | 0.00 | 0.00 | |
| Bengang Group Co., Ltd. | 0.00 | 0.00 | |
| 1,132,875,721.90 | 1,113,062,614.01 | ||
| Advance from customers | |||
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 2,286,737.46 | 2,322,244.58 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | 487,826.73 | 591,520.22 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 1,342,694.25 | 2,850,730.90 | |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | 7,409,930.40 | 7,542,144.19 | |
| Dalian Boluole Steel Tube Co., Ltd. | 94,143.31 | 381,147.01 | |
| Liaoning Bengang Steel & Iron Trading Co., Ltd. | 58,041,408.40 | ||
| Liaoning Hengtong Metallurgical Equipment Manufacture Co., Ltd. | 1,327,379.71 | 1,609,530.39 | |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | |||
| Bengang Group International Economic and Trading Co., Ltd. |
| Suzhou Bengang Industrial Co., Ltd. | 34,067,865.15 | 29,578,394.75 | |
| 47,016,577.02 | 102,917,120.44 | ||
| Other payables | |||
| Benxi Steel & Iron (Group) Real-estate Development Co., Ltd. | 1,184,418.15 | 1,435,884.63 | |
| Bengang Group International Economic and Trading Co., Ltd. | 37,578,902.17 | 39,250,994.54 | |
| Benxi Steel & Iron (Group) Machinery Manufacture Co., Ltd. | 14,082.30 | ||
| Benxi Steel & Iron (Group) Construction Co., Ltd. | 3,556,112.90 | 4,171,540.23 | |
| Benxi Steel & Iron (Group) Industrial Development Co., Ltd. | 1,001,710.82 | 980,723.34 | |
| Benxi New Career Development Co., Ltd. | 1,014,673.55 | 1,096,387.29 | |
| Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 500,000.00 | 500,000.00 | |
| Benxi Steel & Iron (Group) Medical Care department | |||
| Benxi Steel & Iron (Group) Information and Automatic Tech Co., Ltd. | 105,421.43 | 107,000.00 | |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | 3,177,354.90 | 3,318,732.92 | |
| Benxi Steel & Iron (Group) Co., Ltd. | 86,805,543.86 | 71,070,528.79 | |
| Benxi Steel & Iron (Group) Thermal Power Development Co., Ltd. | 4,486,058.27 | 3,695,270.40 | |
| Guangzhou Free Trade Zone Bengang Sales Co., Ltd. | 3,246,766.34 | 2,674,436.85 | |
| Benxi Steel & Iron (Group)Plant Construction Supervisor Co., Ltd. | 725,194.00 | 710,000.00 |
| Liaoning Hengyi Financial Leasing Co., Ltd. | 624,537.24 | 3,586.45 | |
| Liaoning Metallurgy Technician College | 3,000.00 | 3,000.00 | |
| 144,009,693.62 | 129,032,167.74 |
7. Related parties commitment
None
8. Others
None
XI. Share Based Payment
1. General situation of share payment
□Applicable √ Not applicable
2. Equity settlement of equity payments
□Applicable √ Not applicable
3. The situation of stock settlement paid in cash.
□Applicable √ Not applicable
4. Modification and termination of share payment.5. Other
XII. Commitments and Contingencies
1. Commitments
Commitments at balance sheet date1. Lease contracts in progress or to be performed and their financial impacts(1) For the land leased from the Company to the Group, price is RMB 0.594 per Square meter per month, and the area of the land is7,669,068.17 square meters; hence annual rent is RMB 54,691.4 thousand.
(2) For the 2300 hot rolling product line leased from the Group to the Company, lease period lasts from 1 January 2018 to 31December 2020. Lease charges are negotiated between the lessor and the lessee based on the original cost, depreciation, and nationaltaxation of the product line, with consideration of conditions of production and equipment performance.
(3) For the 1780 hot rolling product line leased from Benxi Beiying Steel & Iron (Group) Co., Ltd. to the Company. “Notice onBengang Steel Plates Co., Ltd. signing a renewal agreement with Benxi Steel (group) Co., Ltd” was adopted on the sixth meeting of
the seventh Board of Directors on 30 March 2017, it stipulated that the company leased the 1780 hot rolling product line from BenxiBeiying Steel & Iron (Group) Co., Ltd., lease period lasts from 1 January 2017 to 31 December 2019. Lease charges are negotiatedbetween the lessor and the lessee based on the original cost, depreciation, and national taxation of the product line, with considerationof conditions of production and equipment performance. The annual rent shall not exceed RMB 150,000,000.00.
2. Contingencies(1) Significant contingency at balance sheet date
At the balance sheet date, no significant contingencies need to be disclosed.
(2) The Company have no significant contingency to disclose, also should be stated
At the balance sheet date, no significant contingencies need to be disclosed.
2. Others
XIII. Subsequent events
1. Significant events had not adjusted
Unit: Yuan
| Items | Content | Influence number to the financial position and operating results | Reason of unable to estimate influence number |
2. Profit distribution after the reporting period
Unit: Yuan
| Profit or dividend to be allocated | 193,768,576.60 |
| Profits or dividends declared and approved through deliberation and approval | 193,768,576.60 |
3. Sales return
4. Other subsequent events
At the fifteenth meeting of the seventh Board of Directors on April 18, 2018, based on the existing 3,875,371,532.00 shares, theCompany planned to distribute cash dividends RMB0.5 per 10 shares (including tax) to shareholders. The Company planned todistribute RMB193,768,576.60 dividends for ordinary shares. The dividend distribution scheme was approved by the Annual General
Meeting of Shareholders in 2017, which was held in May 24, 2018. On July 11, 2018, the Board of Directors of the Company issuedAnnouncement of Dividend Distribution for Year 2017. The registration date of A shares is July 17, 2018, the ex-dividend date is July18, 2018; the registration date of B shares is July 20, 2018, the ex-dividend date is July 18, 2018. As of the announcement date of thisreport, dividend distribution for year 2018 is over.
XIV. Other significant events
1. The accounting errors correction in previous period(1) Retrospective restatement
Unit: Yuan
| Content | Processing program | Name of the influenced report items during comparison period | Cumulative impact |
(2) Prospective application
| Content | Processing program | Reason of adopting prospective application |
2. Debt restructuring3. Replacement of assets(1) Non-monetary assets exchange(2) Other assets replacement4. Pension plan5. Discontinuing operation
Unit: Yuan
| Items | Revenue | Expenses | Total profit | Income tax expense | Net Profit | Termination of the business profits attributable to the parent company owner |
Notes
6. Segment information(1) Recognition basis and accounting policies of reportable segment(2) Financial information of segment
Unit: Yuan
| Items | Offset in segment | Total |
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportablesegment, shall disclose the reason.
(4) Notes
Since the Company’s main product is steel with other products accounting for only a small proportion, and the main production base
is located in Liaoning area, segmented reporting is not applicable.
7. Other important transactions and events have an impact on investor’s decision-making
1. On 5 February 2015, the Company publicly issued a three-year corporate bond worth RMB 1.5 billion with interest rate at 5.17%.The Company delisted the bond in accordance with statutory procedures in 1 February 2018 and completed the payment in 5February 2018.
2. On 27 December 2016, the Company's first Provisional General Meeting of Shareholders in 2016 considered and adopted the"Proposal on the Company's non-public offering of A shares (December 2016 revised version) ". On 16 December 2017, theCompany's first Provisional General Meeting of Shareholders in 2017 considered and adopted the "Proposal on the extension of termof validity of non-public offering of stocks shareholders meeting resolution". The proposed issue of stocks to specific targets wouldraise 4 billion yuan. The main purposes of the fund raised by the Company are cold-rolled high-strength steel transformation project,hot-dip galvanizing production line project of the third cold rolling mill, and repayment of bank loans. As of 8 Februry 2018, theCompany actually issued 739,371,532 shares of RMB common stock to investors in private, with a par value of 1 yuan per share andan issue price of 5.41 yuan per share, raising a total of 3,999,999,988.12 yuan. After deducting all the issuing fees, the Company's netfunds raised was RMB 3,967,735,837.24 yuan. Availability of the above-mentioned fund was verified by BDO China Shu Lun PanCertified Public Accountants LLP and issued the Capital Verification Report (PCPAR (2018) No. ZB10054). The Company hasadopted a special account storage system for the fund.
3. As at 30 June 2018, the controlling shareholder Benxi Steel & Iron (Group) Co., Ltd. held a total number of 1,523,095,133 sharespledged, and a total number of 45,000,000.00 shares frozon.
8. Others
XV. Notes to the financial statements of parent company
1. Accounts receivable(1) Accounts receivable disclosed by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Provision for bad debts | Total net book value of Fixed assets | Carrying amount | Provision for bad debts | Total net book value of Fixed assets | |||||
| Amount | Percentage | Amount | Bad debts ratio | Amount | Percentage | Amount | Bad debts ratio | |||
| Individually significant and tested for impairment individually | 47,762,337.18 | 7.03% | 47,762,337.18 | 100.00% | 47,762,337.18 | 6.51% | 47,762,337.18 | 100.00% | ||
| Accounts receivable tested for impairment by portfolio | 631,735,005.27 | 92.97% | 190,040,200.11 | 30.08% | 441,694,805.16 | 685,620,057.01 | 93.49% | 203,438,463.56 | 29.67% | 482,181,593.45 |
| Total | 679,497,342.45 | 100.00% | 237,802,537.29 | 441,694,805.16 | 733,382,394.19 | 100.00% | 251,200,800.74 | 482,181,593.45 | ||
Receivable accounts with large amount individually and bad debt provisions were provided:
√ Applicable □ Not applicable
Unit: Yuan
| Accounts receivable | Ending balance | |||
| Accounts receivable | Provision for bad debts | Bad debts ratio | Reason | |
| Benxi Nanfen Xinhe Metallurgical Co., Ltd. | 47,762,337.18 | 47,762,337.18 | 100.00% | Stop production |
| Total | 47,762,337.18 | 47,762,337.18 | -- | -- |
Accounts receivables tested for impairment by portfolio using the method of Aging analysis:
√ Applicable □ Not applicable
Unit: Yuan
| Aging | Ending balance | ||
| Accounts receivable | Provision for bad debts | Bad debts ratio | |
| Within 1 year (inclusive) | |||
| Within 1 year | 341,466,965.43 | ||
| Subtotal of within 1 year | 341,466,965.43 | ||
| 1-2 years | 31,356,340.60 | 1,567,817.03 | 5.00% |
| 2-3 years | 88,049,145.20 | 17,609,829.04 | 20.00% |
| Over 3 years | 170,862,554.04 | 170,862,554.04 | 100.00% |
| Total | 631,735,005.27 | 190,040,200.11 |
Receivable accounts on which bad debt provisions are provided on percentage analyze basis in a portfolio:
□ Applicable √ Not applicable
Receivable accounts on which bad debt provisions are provided by other ways in the portfolio:
(2) Information of provision, reversal or recovery of bad debts of current period
The provision of bad debts of current period is RMB0.00；Bad debt provision written back was RMB 13,398,263.45 in the period.
Significant items of retrieving or writing back of bad debt provisions:
Unit: Yuan
| Company | Amount retrieved or written back | way of retrieving |
(3) Receivable accounts actually written off in the report period
Unit: Yuan
| Items | Amount written off |
Significant amount written off:
Unit: Yuan
| Company | Property of the receivable account | Amount written off | Reason of writing off | Written off procedures | Created by related transaction or not |
Statement on writing off of receivable accounts:
(4) Top five debtors at the year-end
| Company | Ending balance | ||
| Accounts receivable | Percentage of total accounts receivable (%) | Provision for bad debts | |
| No.1 | 179,688,274.41 | 26.44 | |
| No.2 | 86,329,597.52 | 12.70 | 6,513,105.93 |
| No.3 | 47,762,337.18 | 7.03 | 47,762,337.18 |
| No.4 | 46,980,327.61 | 6.91 | 22754881.58 |
| No.5 | 34,624,704.64 | 5.10 | 8,840,761.28 |
| Total | 395,385,241.36 | 58.19 | 85,871,085.97 |
(5) Recognition of receivable accounts terminated(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
Notes:
2. Other receivables(1) Other receivables disclosed by category
Unit: Yuan
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Provision for bad debts | Total net book value of Fixed assets | Carrying amount | Provision for bad debts | Total net book value of Fixed assets | |||||
| Amount | Percentage | Amount | Bad debts ratio | Amount | Percentage | Amount | Bad debts ratio | |||
| Other receivable tested for impairment by portfolio | 423,551,471.68 | 99.59% | 66,244,347.69 | 15.64% | 357,307,123.99 | 442,492,865.67 | 99.61% | 67,369,416.95 | 15.22% | 375,123,448.72 |
| Other insignificant items but tested for impairment individually | 1,740,000.00 | 0.41% | 1,740,000.00 | 1,740,000.00 | 0.39% | 1,740,000.00 | ||||
| Total | 425,291,471.68 | 100.00% | 66,244,347.69 | 359,047,123.99 | 444,232,865.67 | 100.00% | 67,369,416.95 | 376,863,448.72 | ||
Other receivable accounts with large amount and were provided bad debt provisions individually at end of period.
□ Applicable √ Not applicable
Other receivables tested for impairment by portfolio using the method of Aging analysis:
√ Applicable □ Not applicable
Unit: Yuan
| Aging | Ending balance | ||
| Other receivables | Provision for bad debts | Bad debts ratio | |
| Within 1 year (inclusive) | |||
| Within 1 year (inclusive) | 215,735,192.31 | ||
| Subtotal of within 1 year | 215,735,192.31 | ||
| 1-2 years | 8,601,980.20 | 430,099.01 | 5.00% |
| 2-3 years | 136,122,500.50 | 2,722,450.01 | 20.00% |
| Over 3 years | 63,091,798.67 | 63,091,798.67 | 100.00% |
| Total | 423,551,471.68 | 66,244,347.69 |
Provision of bad debts under the percentage of balance method:
□ Applicable √ Not applicable
Provision of bad debts under other methods:
□ Applicable √ Not applicable
(2) Information of provision, reversal or recovery of bad debts of current period
The provision of bad debts of current period is RMB0.00；Bad debt provision written back was RMB 1,125,069.26 in the period.
There into, the significant bad debt provision written back or retrieved during the current period:
Unit: Yuan
| Company | Amount of written back or retrieving | way of retrieving |
(3) Receivable accounts written back or retrieved in the report period
Unit: Yuan
| Items | Amount written off |
Significant other receivables:
Unit: Yuan
| Company | Property of account | Amount written off | Reason of writing off | Written off procedures | Created by related transaction or not |
Notes:
(4) Other receivables disclosed by nature
Unit: Yuan
| Nature | Ending balance | Beginning balance |
| Accounts | 418,226,206.68 | 435,666,187.53 |
| Others | 7,065,265.00 | 8,566,678.14 |
| Total | 425,291,471.68 | 444,232,865.67 |
(5) Top five debtors at the year-end
Unit: Yuan
| Company | Nature or content | Ending balance | Aging | Percentage of total other receivables | Provision for bad debtsEnding balance |
| No.1 | Accounts | 16,083,670.47 | Within 1 year RMB 12,553,032.8, 1-2 | 3.78% | 176,531.88 |
| years RMB 3,530,637.67 | |||||
| No.2 | Accounts | 12,626,479.38 | 1-3 years | 2.97% | 2,462,178.25 |
| No.3 | Accounts | 9,188,976.40 | Within 1 year | 2.16% | |
| No.4 | Others | 5,922,247.07 | Within 1 year | 1.39% | |
| No.5 | Accounts | 4,341,257.18 | Over 3 years | 1.02% | 4,341,257.18 |
| Total | -- | 48,162,630.50 | -- | 11.32% | 6,979,967.31 |
(6) Receivable accounts involving the government
Unit: Yuan
| Company | Government Subsidies Items Name | Ending balance | Age at end of period | Predicted time and amount of receiving |
(7) De-recognition other receivables due to financial assets transfer(8) Assets and liabilities formed by transferring and continuous involvement of other receivables
Notes:
3. Long-term equity investments
Unit: Yuan
| Items | Ending balance | Beginning balance | ||||
| Carrying amount | Total impairment | Book value | Carrying amount | Total impairment | Book value | |
| Investment to subsidiaries | 2,016,281,902.16 | 2,016,281,902.16 | 1,756,981,902.16 | 1,756,981,902.16 | ||
| Total | 2,016,281,902.16 | 2,016,281,902.16 | 1,756,981,902.16 | 1,756,981,902.16 | ||
(1) Investment to subsidiaries
Unit: Yuan
| Company invested in | Beginning balance | Increase | Decrease | Ending balance | AmountProvisionTotal impairment | Total impairmentEnding balance |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | 1,000,000.00 | 29,000,000.00 | 30,000,000.00 | |||
| Shanghai Bengang | 19,200,000.00 | 10,800,000.00 | 30,000,000.00 |
| Metallurgy Science and Technology Co., Ltd. | ||||||
| Bengang Steel Plate Liaoyang Orel Ball Co., Ltd. | 529,899,801.38 | 529,899,801.38 | ||||
| Dalian Benruitong Automobile Material Technologies Co., Ltd. | 65,000,000.00 | 65,000,000.00 | ||||
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | 1,019,781,571.10 | 1,019,781,571.10 | ||||
| Changchun Bengang Steel & Iron Sales Co., Ltd. | -1,355,124.64 | 29,500,000.00 | 28,144,875.36 | |||
| Harbin Bengang Economic and Trading Co., Ltd. | 423,398.23 | 29,500,000.00 | 29,923,398.23 | |||
| Nanjing Bengang Steel Material Sales Ltd. | 2,081,400.65 | 2,081,400.65 | ||||
| Wuxi Bengang Steel & Iron Sales Co., Ltd. | 936,718.57 | 29,000,000.00 | 29,936,718.57 | |||
| Xiamen Bengang Steel & Iron Sales Co., Ltd. | 1,095,711.66 | 1,095,711.66 | ||||
| Yantai Bengang Steel & Iron Sales Co., Ltd. | 19,600,329.41 | 29,500,000.00 | 49,100,329.41 | |||
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | 33,318,095.80 | 27,000,000.00 | 60,318,095.80 | |||
| Benxi Bengang Steel Sales Co., Ltd | 5,000,000.00 | 25,000,000.00 | 30,000,000.00 | |||
| Shenyang | 5,000,000.00 | 25,000,000.00 | 30,000,000.00 |
| Bengang Metallurgical Science and Technology Co., Ltd. | ||||||
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. | 5,000,000.00 | 25,000,000.00 | 30,000,000.00 | |||
| Bengang Baojin (Shenyang) Automobile New Material Co, Ltd. | 51,000,000.00 | 51,000,000.00 | ||||
| Total | 1,756,981,902.16 | 259,300,000.00 | 2,016,281,902.16 |
(2) Investment to joint venture and associated enterprise
Unit: Yuan
| Name | Beginning balance | Changes | Ending balance | Ending balance of provision for impairment | |||||||
| Add investment | Reduce investment | Investment income under equity method | Adjustment of other comprehensive income | Other equity changes | Declaration of cash dividends or profit | Provision impairment | Others | ||||
| 1. Joint venture | |||||||||||
| 2. Associated enterprise | |||||||||||
(3) Notes4. Operating income and operating cost
Unit: Yuan
| Items | January to June 2018 | January to June 2017 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 21,543,654,805.89 | 19,737,906,706.75 | 19,350,686,493.45 | 17,842,348,026.16 |
| Other business | 2,139,210,303.25 | 1,663,285,255.45 | 1,846,830,285.75 | 1,640,628,048.16 |
| Total | 23,682,865,109.14 | 21,401,191,962.20 | 21,197,516,779.20 | 19,482,976,074.32 |
Notes:
5. Income on investment
Unit: Yuan
| Items | January to June 2018 | January to June 2017 |
| Income from long-term equity investment (cost method) | 102,074,634.76 | |
| Income from bank short-term financial products | 3,493,150.68 | 3,294,593.14 |
| Total | 3,493,150.68 | 105,369,227.90 |
6. Others
XVI. Supplementary information
1. Details of non-recurring profit and loss
√ Applicable □ Not applicable
Unit: Yuan
| Items | January to June 2018 | Notes |
| Profit or loss from disposal of non-current assets | -556,821.63 | |
| Details of government subsidies recorded into current profits and loss(except such government subsidy closely related to the company’s normal business operation,，meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 41,274,238.70 | |
| Profit or loss from debt restructuring | 945,892.23 | |
| Other non-operating revenue and expenditure other than above items | 1,192,505.57 | |
| Less: Impact of income tax | 10,713,953.72 | |
| Impact of non-controlling interests | 112,829.54 | |
| Total | 32,029,031.61 | -- |
For the Company’s non-recurring profit and loss items as defined in “the Explanatory Announcement No.1 on information disclosurefor Companies Offering their Securities to the Public-Non-recurring Profits and Losses” and its non-recurring profit and loss items asillustrated in “the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to thePublic-Non-recurring Profits and Losses” which have been defined as recurring profits and losses, it is necessary to explain the
reason.
□ Applicable √ Not applicable
2. Net asset yield and earnings per share
| Profit in the Reporting Period | Weighted average net assets yield (%) | Earnings per share | |
| Basic earnings per share (RMB/Share) | Diluted gains per share (RMB/Share) (RMB/Share) | ||
| Net profit attributable to ordinary shareholders | 4.56 | 0.195 | 0.195 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit and loss | 4.37 | 0.187 | 0.187 |
3. The differences between domestic and international accounting standards(1) Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
√ Applicable □ Not applicable
Unit: Yuan
| Net Profit | Net assets | |||
| January to June 2018 | January to June 2017 | Ending balance | Beginning balance | |
| According to CAS | 756,951,987.59 | 523,635,653.57 | 18,861,998,055.40 | 14,315,588,729.00 |
| Items and amount adjusted according to IAS: | ||||
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards.
□ Applicable √ Not applicable
(3) Accounting data differences between domestic and foreign accounting standards，if the differences has
already been adjusted by the foreign audit agency shall indicate the name of the agency.4. Others
XI. Documents available for inspection
1. Financial Statements signed and stamped by the legal representative, CFO, and accounting manager；
2. All of the original copies of documents and announcements that have been published on China Securities Journal, Securities Times,and Hong Kong Commercial Daily.