Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Bengang Steel Plates Co., Ltd.
Semi-Annual Report 2019
August, 2019
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Ⅰ. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members of the SupervisoryCommittee and senior management of the Company guarantee that there are no misrepresentationsor misleading statements, or material omission in this report, and individually and collectivelyaccept full responsibility for the authenticity, accuracy and integrity of the information contained inthis report.
Gao Lie, Chairman of the Company, Shen Qiang, the principal in charge of the accounting, andZhao Zhonghua, Chief of Accounting Affairs, make the pledge for the authenticity, accuracy andintegrity of the attached financial statements.
All the members of the Board of Directors attended the board meeting on which this report wasexamined.
The prospective statements contained in this semi-annual report do not constitute any substantialcommitment to the investors. Investors should pay attention to the risks attached to investmentdecisions. This report is prepared in both of Chinese and English. The Chinese version shall prevailwhen there are any controversial statements in the two versions.
The Company planned not to distribute cash dividend or bonus shares, and not to convert capitalreserve into share capital.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Table of Contents
Ⅰ. Important Notice, Table of Contents, and Definitions ...................................................................... 2
Ⅱ. Company Profile and Main Financial Index ................................................................................... 5
III. Summary of Company Business .................................................................................................... 8
IV. Management Discussion and Analysis ......................................................................................... 11
V. Important Events ........................................................................................................................... 18
VI. Status of Share Capital Changes and Shareholders ..................................................................... 39
VII. Status of Preferred Shares .......................................................................................................... 43
VIII. Status of Directors, Supervisors, and Senior Executives .......................................................... 44
IX. Relevant Information about Corporate Bonds ............................................................................. 46
X.Financial Report ............................................................................................................................. 47
XI.Documents available for inspection ............................................................................................ 102
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Definition
Terms to be defined Refers to Content of DefinitionBengang Bancai, Bengang Steel, theCompany, 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-assetAdministration
Refers to
Liaoning State-owned Asset Supervisory andManagement CommitteeSSE Refers to Shenzhen Stock ExchangeBengang Posco Refers to Bengang Posco Cold-rolled Sheet Co., Ltd.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Ⅱ. Company Profile and Main Financial Index
I. Company Information
Stock abbreviation Bengang Bancai, Bengangban B Stock Code 000761、200761Stock exchange for listing Shenzhen Stock ExchangeCompany name in Chinese 本钢板材股份有限公司
本钢板材
| Abbreviation of Company name in Chinese |
| Company name in English (If any) |
BENGANG STEEL PLATES CO., LTD.
BSPLegal representative Gao Lie
II. Contact Information
Abbreviation of Companyname in English (If any)
| Secretary of the Board | Representative of Stock Affairs |
NameGao Desheng
Address
No.16, Renmin Road, Pingshan District,
Benxi City, Liaoning Province
Tel024-47827003
Fax024-47827004
| bgbcdm@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 publishingsemi-annual report and lodging address of semi-annual report of the Company have not changed during thereporting period. Please refer to Annual Report 2018 for details.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
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 publishingsemi-annual report and lodging address of semi-annual report of the Company have not changed during thereporting period. Please refer to Annual Report 2018 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
Unit: YuanThis reporting period
Same period in previous
year
reporting period over the
| previous year |
Operating income 24,102,595,167.14
23,441,247,377.14
2.82%
Net profit attributable to the shareholdersof the listed company
453,209,615.76
756,951,987.59
-40.13%
Net profit attributable to the shareholdersof listed company after deductingnon-recurring gain/loss
461,338,410.13
724,922,955.98
-36.36%
Net cash flows generated by operatingactivities
984,787,005.67
730,519,741.47
34.81%
| Basic earnings per share | 0.12 | 0.20 | -40.00% |
Diluted earnings per share 0.12
0.20
-40.00%
ROE 2.35%
4.56%
-2.21%
At the end of this reporting
period
At the end of previous
reporting period
end of this reporting period
| over the previous year |
Total assets 61,423,927,056.10
59,632,504,915.83
3.00%
Net assets attributable to shareholders ofthe listed company
19,406,029,174.41
19,126,258,116.67
1.46%
V. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese
accounting standards.
√ Applicable □ Not applicable
Unit: RMB
| 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 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
453,209,615.76
| According to Chinese accounting standards |
756,951,987.59
19,406,029,174.41
| 19,126,258,116.67 | |||
| Items and amounts adjusted according to IFRS | |||
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √ Not applicable
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: yuan
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets |
(including the write-
-49,987,558.33
| off part for which assets impairment provision is made) |
profits and loss(except such government subsidy closelyrelated to the company’s normal business operation,，meeting the regulation of national policy and enjoyedconstantly in certain quota or quantity according to a
| certain standard) |
41,695,000.00
| Profit or loss from debt restructuring | 50,640.00 | |
| Other non-operating revenue and expenditure other than above items |
172,778.52
| Less: Impact of income tax | 55,854.63 | |
| Impact of non-controlling interests (after tax) | 3,799.93 | |
| Total | -8,128,794.37 | -- |
Explanation for defining non-recurring gains and losses items according to the "Public Offering of SecuritiesInformation Disclosure Explanatory Notice No. 1 – Non-Recurring Gains and Losses", and reasons for definingnon-recurring gains and losses items listed in the document as recurring items.
□ Applicable√ Not applicable
There exists no situation of defining non-recurring gains and losses items listed in the document as recurring items.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
III. Summary of Company Business
I. The Company's main business during the reporting periodWhether the Company needs to comply with the disclosure requirement for special industryNo
(1) During the reporting period, the company's main business activities include steel smelting, rolling processing, power
generation, coal chemical industry, special steel profiles, railways, import and export trade, scientific research, andproduct sales. The introduction of world advanced equipment technology has enabled the implementation of equipmentupgrades for the steel industry. The Company has built a fine steel base, formed more than 60 varieties, more than 7500series of product specifications, high value-added and high-tech product ratio reached more than 80%, automotivesurface panels, household appliances, oil pipeline steel, container board Shipboard and other leading products arewidely used in automobiles, home appliances, petrochemicals, aerospace, machinery manufacturing, energytransportation, construction and decoration, and metal products, and are exported to more than 60 countries and regions.
（2）During the reporting period, the main performance drivers were: the “four determinants” work cut down two layers
of management and reduced 35.5% of the leader on department level and above; Through exchanges, adjustments, earlydepartures and open competitions, the cadres can get through the channels, the leading cadres at the department leveland above are reduced by 15.03%, the management personnel are reduced by 15%, and the proportion of productionand mining management business personnel is reduced to 8% (thereinto, bureau-level cadres reduced by 40%). At thesame time, a lean and efficient management and control system has been established, and overlapping, low-efficiency,and false institutions have been thoroughly cleaned up, releasing corporate vitality. Focusing on process improvement,product structure adjustment, energy conservation and emission reduction, the Company accelerated the construction ofkey project transformation projects, conscientiously organized the construction of projects such as the production ofsheet metal CCPP power generation and special steel electric furnace capacity replacement. The Company promotedenterprise transformation and upgrading based on high-quality development requirements.
No significant change occurred during the reporting period.II. Major Changes in Main Assets
1. Major Changes in Main Assets
Main assets Notes to major changesEquity assets No significant changes.Fixed assets No significant changes.Intangible assets No significant changes.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Construction in progress
by 64.29%, which is mainly due to the new construction of the company'sconstruction projects in the current period.
2. Main Information of Overseas Assets
□ Applicable √ Not applicable
III. Analysis on Core CompetitivenessWhether the Company needs to comply with the disclosure requirement for special industryNoIn the first half of 2019, Bengang Steel Plate Co., Ltd. officially joined the Corrosion Resistant Steel TechnologyInnovation Alliance, China Intellectual Property Development Alliance, and entered the executive director unit of theJournal of Iron and Steel Research. Bengang Steel applied for promotion to be a member of the Lightweight Alliance.Successfully hosted the 2019 Automotive Lightweight Alliance Annual Work Conference, which was well received bythe leaders of the Alliance and the delegates, and achieved the purpose of promoting the steel products of Bengang Steeland Bengang Steel. A total of 25 government projects were filed, including 11 provincial key projects in the Ministry ofIndustry and Information Technology in 2019, 9 provincial science and technology projects declared by the ProvincialScience and Technology Department in 2019, and 1 NSFC-Liaoning Joint Fund Project of the Provincial Science andTechnology Department, and 2 projects of the National Natural Science Foundation of China Regional Innovation andDevelopment Joint Fund Guide Project. "Bengang Shenyang Research Institute Construction" is intended to be includedin the national and provincial "fourteenth five-year" planning major projects. Cooperation with Dongda “Research onthe new technology of composite iron coke low-carbon ironmaking charge” has been approved by the NSFC-LiaoningJoint Fund. Bengang will receive government funding of 502,000 yuan and has reached 334,000 yuan. “Development ofhigh fatigue and thick gauge rare earth hot formed steel” was selected into the “100 Million Talent Project” project inLiaoning Province, with an estimated funding of 50,000 yuan.
In order to comprehensively improve the level of technological innovation and profitability, strengthen productadjustment and market development, improve product quality stability and assurance capabilities, promote low-cost andgreen manufacturing technologies, Bengang Steel identified 50 projects as the company’s direct management levelscience and technology projects, and 98 projects as self-management level scientific and technological projects of themines based on three major factors, which are variety, quality and cost. Bengang Steel processed classificationmanagement. The projects are divided into three categories according to the degree of importance. Based on theprinciple of responsibility to people and division of labor management, Bengang Steel conducted key control of theproject and advancement in order. In the first half of the year, 33 new products were successfully developed, including 5new products for automobile panels, 8 for silicon steel and home appliances, 13 for hot-rolled high-strength steelproducts and 7 for special steel products. Completed 57 grades of acid pickling, cold rolling, galvanizing, silicon steeland other products, including 3 pickling, 42 cold rolling, 10 galvanizing, and 2 silicon steel. In the first half of the year,a total of 94 patents were accepted by the National Patent Office, including 54 inventions and 40 utility models; 68patents were authorized by the National Patent Office, including 6 inventions, 57 utility models, and 5 designs.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Bengang Steel continued to promote school-enterprise cooperation and joint work of production, education and research.Bengang Steel signed five cooperation projects with Northeastern University; Bengang-Liaokeda Joint Fund Projectmade substantial progress and officially signed four cooperation projects; cooperated with the Institute of Metals of theChinese Academy of Sciences, platform construction, and joint training of multiple rounds of docking work.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
IV. Management Discussion and Analysis
I. GeneralIn the first half of 2019, the company's overall performance was generally outstanding, production and management hada new improvement, and the reform tasks were solidly promoted. The main indicators achieved steady growth,including: 4.758 million tons of pig iron, an increase of 833,600 tons, an increase of 21.24%; crude steel of 4,872,600tons, an increase of 729,400 tons, an increase of 17.6%; hot rolled sheet of 6.1 million tons, an increase of 620,000 tons,an increase of 11.3%; cold rolled sheet of 2,897,200 tons, an increase of 56,900 tons, an increase of 2%; special steel of225,600 tons, a decrease of 104,600 tons, a decrease of 31.7%.
During the reporting period, the company adopted the budget-based “overall every control and clear” work and activelypromoted the construction of a three-level cost accounting system to continuously reduce production and operationcosts, and took important steps in the standard mining and digging work. The process was benchmarked with the sametype of steel mill and the results were remarkable. The average daily output of the new No. 1 blast furnace and No. 6blast furnace in the plate ironmaking plant reached the best level in history. Sheet steel mills set a record for dailyoutput. The plate hot rolling mill refreshed the highest daily production record of the whole plant twice. Under thepremise of continuous improvement of the physical quality of the products, the plate cold rolling mill has achievedrecord high output, and the quality management of the automobile plate has been steadily improved. The middle andhigh-end cold-rolled automobile is qualified. The rate is the best in history and mass production is achieved.
Scientific and technological innovation and new product research and development have reached a new level, and 33new products have been successfully developed. The successful research and development of quenching anddistribution steel QP980 for cold forming has filled the gap in QP steel production and laid the foundation for theadvanced automobile steel production enterprises. The Company completed Ford's first certification and Renault'sproduction line certification work, and actively promoted BMW certification.
At the same time, the work of “Four Determinants” continued to advance. On the basis of realizing the reduction ofmanagement level, the institutions at the department level and above were further reduced, and the channels for cadrescan be opened up and down through communication, adjustment, early departure and open competition. Theestablishment of a lean and efficient management and control system, overlapping, low-efficiency, and virtualinstitutions have been thoroughly cleaned up, releasing the vitality of the enterprise.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
II. Main Business Analysis
1. General
For relevant information please refer to “Management Discussion and Analysis 1. General”.Year-on-year changes in major financial data:
Unit: YuanThis reporting period
Same period inprevious year
Reason for change
| Increase or decrease in this reporting period over the previous year | ||||
| Operating Income | 24,102,595,167.14 | 23,441,247,377.14 | 2.82% | |
| Operating Cost | 22,067,612,729.65 | 20,804,207,420.98 | 6.07% | |
| Selling and |
distribution expenses
574,445,199.14
514,038,008.95
11.75%
General andadministrativeexpenses
446,767,811.77
461,842,424.56
-3.26%
Financial expenses 403,465,706.42
803,038,417.28
-49.76%
Net exchange lossesincreased over sameperiod in previousyear.Income tax expense 25,962,181.73
11,636,226.04
123.12%
| Deferred income tax |
increased over sameperiod in previousyear.Research &DevelopmentExpenses
697,727,326.64
726,678,668.69
-3.98%
Net cash flowsgenerated fromoperating activities
984,787,005.67
730,519,741.47
34.81%
Cash receivedincreased over sameperiod in previous year
Net cash flowgenerated frominvestment activities
-545,199,197.41
-176,948,631.71
208.11%
Cash received fromreturn on investmentsincreased over sameperiod in previous year
Net cash flowgenerated fromfinancing activities
-451,444,368.47
-1,657,793,276.26
-72.77%
| Cash paid to reimburse |
borrowings decreasedover same period inprevious yearNet increase in cashand cash equivalents
36,373,947.54
-999,206,556.27
-103.64%
Cash receivedincreased and cashpaid to reimburseborrowings decreasedover same period inprevious yearWhether the Company’s profit composition or source of profit during the reporting period changed significantly
□ Applicable √ Not applicable
The Company’s profit composition or source of profit during the reporting period did not change significantly.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
The composition of main business:
Unit: Yuan Operating Income Operating Cost Gross margin
| Operating income |
change over
year
| same period in previous | Operating cost change over same period in previous |
year
year
| Gross margin change over same period in previous | |
| By industries | |
Industry 22,581,458,005.55
20,807,089,888.18
7.86%
6.01%
8.70%
-2.29%
By productsSteel plate 22,258,028,765.53
20,524,102,578.76
7.79%
6.40%
9.22%
-2.38%
Others 323,429,240.02
282,987,309.42
12.50%
-15.49%
-18.83%
3.59%
By regions
| Northeast | 5,606,217,660.27 | 5,175,158,018.48 | 7.69% | 23.89% | 26.62% | -1.99% |
| North China | 2,740,664,946.06 | 2,523,356,229.07 | 7.93% | 10.54% | 12.24% | -1.39% |
East China 9,115,871,237.78
8,384,696,685.96
8.02%
30.25%
32.89%
-1.83%
Northwest 52,280,532.42
48,714,460.39
6.82%
3.17%
5.47%
-2.03%
Central south 999,070,769.35
928,444,843.65
7.07%
2.34%
5.38%
-2.68%
Export 4,067,352,859.68
3,746,719,650.63
7.88%
-35.15%
-32.72%
-3.33%
Subtotal 22,581,458,005.55
20,807,089,888.18
7.86%
0.35%
0.50%
-0.13%
III. Analysis of Non-core Business
√ Applicable □ Not applicable
Unit: YuanAmount
profit
Explanation of cause Sustainable (yes or no)Income oninvestment
25,907.49
| Proportion in total | |
0.01%
Non-operatingincome
8,210,182.24
1.71%
NoNon-operatingexpenses
57,974,322.05
12.11%
No
IV. Assets and Liabilities
1. Significant Change of Assets Components
Unit: Yuan
At the end of this reporting
period
| At the end of this reporting period | At the end of the Same period in previous year |
Proportion
change
Notes to significant changesAmount
Proportio
n in the
total
Amount
Proportio
n in the
totalassets
(%)Cash at bank andon hand
16,945,772,392.43
| assets (%) | |
27.59%
18,570,241,607.21
29.00%
-1.41%
Accountsreceivable
614,718,839.21
1.00%
707,889,986.34
1.11%
-0.11%
Inventories 11,967,579,023.47
19.48%
12,893,804,549.47
20.14%
-0.66%
Long-term equity2,481,589.04
0.00%
2,726,009.03
0.00%
0.00%
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Fixed assets 22,672,967,771.15
| investments | |
36.91%
22,739,708,839.78
35.51%
1.40%
Construction inprogress
1,374,410,959.70
2.24%
2,740,359,727.63
4.28%
-2.04%
Short-term loans 12,298,193,000.00
20.02%
21,784,802,700.00
34.02%
-14.00%
Long-term loans 6,213,054,564.15
10.12%
4,406,999,573.88
6.88%
3.24%
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 thisreporting period
Reason of restrictionCash at bank and on hand 5,156,849,822.92 Deposit for notes and L/C
Total 5,156,849,822.92V. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There is no investment in securities during the reporting period.
(2) Investment in Derivatives
□ Applicable √ Not applicable
There is no investment in derivatives during the reporting period.VI. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
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
CompanyName
Companytype
Mainbusiness
Industry
Registered
capital
Total assets
Net assets Turnover
| Operating |
profit
Net ProfitBengangPuxiangCoolRollingSteel SheetCo., Ltd.
Subsidiary
Processing
steel
| and sales of | Steel rolling |
process
1,920,000,0
00.00
5,768,553,0
41.57
2,009,690,8
96.59
3,720,975,4
82.91
10,280,80
0.04
7,704,734.61
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companiesVIII. Structured Entities controlled by the Company
□ Applicable √ Not applicable
IX. Forecast of operating performance for January to September 2019Warning and reason for that forecast of the cumulative net profit from the beginning of the year to the end of the nextreporting period 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. Macroeconomic risk
Risks: The international situation is complex and volatile, global economic uncertainty still exists, volatility in emergingmarkets and developing economies is increasing, international trade protectionism is becoming more and more serious,and the impact of Sino-US trade war on steel exports will continue. At present, China's economy is still in a criticalperiod of structural adjustment and transformation and development. The old and new power conversion of economicgrowth has not yet been completed, and the risk of economic downturn is still relatively large, posing certain downsiderisks and challenges for the steel industry.Countermeasures: Timely understanding and analysis of relevant national industrial policies and macroeconomicsituation, according to the company's overall strategic planning, innovation-driven development, to meet the diversifiedneeds of users; comprehensive and advanced corporate benchmarking, find gaps, improve and enhance. Pay closeattention to the relevant policies of the steel industry and changes in the environment of the industry. When there aremajor changes, Bengagn Steel will promptly predict the impact of risks and adjust the response measures.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
2. Marketing risk
Risks: Despite the huge achievements in steel production capacity, the steel industry's production capacity structure stillhas problems, and the pressure of compliant enterprise capacity release is still too fast. Since 2019, domestic steelproduction has maintained growth, the overall destocking rate has slowed down, and the pressure on the supply side hasbeen continuously enlarged. As a result, the domestic steel market has weakened and the steel price has graduallyshifted. In particular, the state's deep regulation of the downstream real estate market, coupled with the gradualslowdown in infrastructure investment growth, will be further evident in the second half of the year, and the pattern ofstrong supply and demand in the market is difficult to change.Countermeasures: Pay close attention to the changes in demand for steel products in the domestic market, timely graspthe fluctuations of domestic fixed asset investment, adjust the business strategy in light of the implementation ofnational shutdown and elimination of backward steel production capacity, and the construction and new capacityproduction. Strengthen the ability of independent innovation, feedback market information and customer needs to theR&D, quality, and production departments, improve the quality of products, and enhance the core competitiveness ofthe Company.
3. Environmental protection risk
Risks: Environmental emission standards have become stricter, and government regulation and social requirements havebecome stronger. Since the implementation of the new "Environmental Protection Law", laws and regulations andgovernments at all levels have increasingly demanded environmental protection, and strict enforcement ofenvironmental protection departments has become the new normal. At the same time, the state's regulatory measures forenvironmental governance have become more stringent, and the investment and operating costs of steel companies inenvironmental protection will be greatly increased, and environmental protection pressures will continue to increase.Countermeasures: Pay attention to various national environmental protection policies, improve corporate environmentalprotection standards, and make them meet and appropriately exceed national standards. Strengthen the internalsupervision and inspection of the company's various sources of pollution, and strengthen the environmental awarenessof all employees. Accelerate the development of energy-saving and environmental protection technologies, improveenvironmental protection and energy-saving efficiency; accelerate the construction progress of identified environmentalprotection projects to ensure that national environmental protection requirements are met.
4. Raw fuel cost fluctuation risk
Risks: Due to environmental protection policies, de-capacity and weather, the original fuel supply may be stagedinsufficiently and not timely. The price of raw fuels has strengthened overall, especially the price of imported iron orehas risen sharply, and the profit margin of steel companies has been greatly reduced. The cost of the steel industry hasfurther increased, which has affected the cost control and operating results of steel companies.Countermeasures: Make full use of the advantages of own mines, strengthen management of raw fuel demand planning,procurement planning, procurement implementation, warehousing, maintain information communication, rationally
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
arrange economic inventory; establish stable supply channels, establish and maintain good cooperative relations withsuppliers Strengthen the ability to grasp the upstream raw material market information, strengthen the company's ownsensitivity to the market and its ability to research and judge, and improve its ability to respond to fluctuations in rawfuel prices.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
V. Important Events
I. Annual General Meeting of Shareholders and Temporary General Meeting of Shareholdersheld during the Reporting Period
1. General meeting of shareholders during the reporting period
Meeting session Meeting type
Investors’participation ratio
Date of convening Date of disclosure Disclosure indexThe first temporarygeneral meeting of2019
Temporary generalmeeting
61.37%
2019/03/14 2019/03/15
Announcement No.:
2019-008The annual generalmeeting of 2018
Annual generalmeeting
61.36%
2019/05/16 2019/05/17
Announcement No.:
2019-029The secondtemporary generalmeeting of 2019
Temporary generalmeeting
61.83%
2019/06/10 2019/06/11
Announcement No.:
2019-038
2. Temporary general meeting Request by preferred stockholders whose voting rights restore
□ 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 sharecapital during the reporting 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
Commitments
Commitment
party
Type ofcommitment
Contents
Commitment
time
Commitment
period
PerformanceCommitment of sharesreform
Commitment made in theacquisition report or theequity change report
Commitment made duringasset restructuring
Commitment made during
initial public offering or
Company
| initial public offering or | directors, |
Other
According to the
Jan 26th 2016 Dec 9
th
2019Under normal
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
| refinancing | senior |
management
| commitment | the China Securities |
RegulatoryCommission, thefollowing commitmentscan be made to thecompany’s efforts to fillthe rewards: During thetenure, faithfully and
and safeguards thelegitimate rights andinterests of the companyand all shareholders,
| including but not limited |
to: 1. Commitment notto transfer benefits toother units orindividuals withoutcompensation or unfairconditions, and not todamage the company’sinterests in other ways;
2. Commitment to
job consumption; 3.Commitment to not usecompany assets toengage in investmentand consumptionactivities unrelated tothe performance of theirduties; 4. Commitmentto the compensationsystem established bythe board of directors orthe Remuneration andAppraisal Committee islinked to theimplementation of thecompany's measures tocover the return; 5. Ifthe company launchesan equity incentive planin the future, the termsof the exercise of the
| equity incentive plan are |
linked to theimplementation of thecompany's measures tofill the rewards.
LiaoningProvincial
| fulfillment | ||
| Transportation |
InvestmentGroup Co.,Ltd.
Share salesrestriction
be locked for 12 monthsfrom the date of thelisting of the newnon-public offering ofshares, and will not betransferred during thisperiod.
Mar 5
th
2018
12 monthsfrom the dateof the listingof the newnon-publicoffering
Fulfilled
| The allocated shares will | ||
| CCB Principal |
AssetManagementCo.,Ltd.
Share salesrestriction
be locked for 12 monthsfrom the date of thelisting of the newnon-public offering ofshares, and will not betransferred during thisperiod.
Mar 5
th
2018
12 monthsfrom the dateof the listingof the newnon-publicoffering
Fulfilled
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
BeixinRuifeng FundManagementCo., Ltd.
Share salesrestriction
be locked for 12 monthsfrom the date of thelisting of the newnon-public offering ofshares, and will not betransferred during thisperiod.
Mar 5th2018
12 monthsfrom the dateof the listingof the newnon-publicoffering
Fulfilled
China LifeAMP AssetManagementCo., Ltd.
Share salesrestriction
| The allocated shares will |
| The allocated shares will |
be locked for 12 monthsfrom the date of thelisting of the newnon-public offering ofshares, and will not betransferred during thisperiod.
Mar 5
th
2018
12 monthsfrom the dateof the listingof the newnon-publicoffering
Fulfilled
commitment
Other commitments to thecompany's minorityshareholders
Whether Commitmentfulfilled on time or not
YesIV. Appointment and Dismiss of Certified Accountant’s Firm
Is the semi-annual financial report audited?
□ Yes √ No
The semi-annual report has not been audited.
V. Illustrations of the Board of Directors and Supervisory Committee on the Modified AuditReport Issued by the CPAs
□ Applicable √ Not applicable
VI. Illustrations of the Board of Directors on the Modified Audit Report Issued by the CPAsfor 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 ArbitrationsSignificant lawsuits and arbitrations
□ Applicable √ Not applicable
There is no Significant lawsuits and arbitrations during the reporting period.
Other Lawsuits and Arbitrations
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
□ 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 beenimplemented.XII. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
Relatedparties
Relation
ship
Type ofrelated
partytransacti
ons
C
relatedpartytransactio
ns
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Priceofrelate
dpartytransactions
| Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
approve
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
| The |
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Purchase ofgoodsandservices
Accountspayablefor repair
Onagreement
Relatedagreementprice
14,299.
0.59%
50,000
No
| Execute |
according totheagreementNo
2019/4/
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Purchase ofgoodsandservices
Landlease fee
Onagreement
Relatedagreementprice
2,734.5
.
%
No
Executeaccording totheagreementNo
2019/4/
BengangCold-rolledStainlessSteelDandongCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Products
Onagreement
Relatedagreementprice
82.25
0.00%
1,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron
| (Group) |
Samecontroller
Purchase ofgoods
Labor cost
| and |
Onagreement
Relatedagree
391.41
| ment |
0.02%
No
Executeaccording to
No
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
shipType ofrelated
partytransacti
ons
C
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
reIndex
ofdisclos
ure
| Mining |
Co., Ltd.
| services | price | agreeme |
ntBenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
215,655
.53
8.95%
500,000
No
Execute
accordi
ng to
the
agreeme
ntYes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
85.36
0.00%
No
Execute
accordi
ng to
the
agreeme
ntYes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
11,056.
0.46%
30,000
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiSteel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Processing fee
Onagreement
Relatedagreementprice
84.61
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiSteel &Iron(Group)Real-estateDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterials
Onagreement
Relatedagreementprice
3,418.0
0.14%
10,000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
3,341.8
0.14%
25,000
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &
Samecontroller
Purchase of
| Iron | goods |
Repairservices
Onagreement
Related
370.37
| agree |
0.02%
No
Execute
accordi
No
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
ship
Type ofrelated
partytransacti
onsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| Amount |
ofrelated
partytransactions (in
thousand)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| (Group) |
MachineryManufacture Co.,Ltd.
services
| and | ment |
price
agreement
| the | ||
| Benxi |
Steel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
424.68
0.02%
No
Executeaccording totheagreement
No
2019/4/
Steel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
7,123.7
| Benxi |
0.30%
50,000
No
Executeaccording totheagreement
No
2019/4/
Steel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
7,085.6
| Benxi |
0.29%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
332.06
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
152.48
0.01%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
2,896.0
0.12%
No
Executeaccording totheagreement
No
2019/4/
Steel &Iron
| (Group) |
Samecontroller
e ofgoods
| and | Raw |
materialand
Onagreement
| suppleme | Relate |
dagree
6,106.8
| ment |
0.25%
30,000
No
according to
| the |
Yes
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
shipType ofrelated
partytransacti
ons
C
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| Amount |
ofrelated
partytransactions (in
thousand)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Meansofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Industrial |
Development Co.,Ltd.
| services | ntary |
material
| price | agreeme |
ntBenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
940.92
0.04%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
349.19
0.01%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
Steel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
15.8
| Benxi |
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
88.6
0.00%
No
Execute
accordi
ng to
the
agreeme
nt
Yes
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
453.18
0.02%
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Accountspayablefor repair
Onagreement
Relatedagreementprice
5,520.7
0.23%
28,000
No
Execute
accordi
ng to
the
agreeme
nt
No
2019/4/
| Bengang | Same | Purchas | Raw | On | Relate | 5,873.3 | 0.24% | 20,000 | No | Execute | Yes | 2019/4/ |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
RelationshipType ofrelatedpartytransactionsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Priceofrelatedpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Electronic |
s and GasCo., Ltd.
er
| controll | e of |
goodsandservices
andsupplementarymaterial
| material | agreeme |
nt
agreementprice
| d | 6 | accordi |
ng totheagreement
BengangElectronics and GasCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairservices
Onagreement
Relatedagreementprice
252.09
| 19 | ||
0.01%
No
Executeaccording totheagreement No
2019/4/
BenxiHigh-
DrillingToolsManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
4.47
| tech |
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Labourprotectionfee
Onagreement
Relatedagreementprice
47.2
0.00%
1,200
No
Executeaccording totheagreementYes
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterialand food
Onagreement
Relatedagreementprice
48.42
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningMetallurgyTechnician College
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
699.54
0.03%
1,500
No
Executeaccording totheagreementYes
2019/4/
BengangGroupInternational
| Economic |
andTradingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Agencyfee
Onagreement
Relatedagreementprice
3,417.4
0.14%
No
Executeaccording totheagreement
Yes
2019/4/
BengangGroupInternational
andTradingCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Portsurcharges
| Economic |
Onagreement
Relatedagreementprice
5,240.5
0.22%
25,000
No
Executeaccording totheagreement
No
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
RelationshipType ofrelatedpartytransactions
C
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
onsDate ofdisclosu
re
Index
ofdisclos
ureBenxiSteel &Iron(Group)Information andAutomatic TechCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
226.21
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
Steel &Iron(Group)Information andAutomatic TechCo., Ltd.
Samecontroller
Purchase ofgoodsandservices
Projectfee
Onagreement
Relatedagreementprice
2,191.4
| Benxi |
0.09%
10,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Heatingcosts
Onagreement
Relatedagreementprice
27.2
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
2.84
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
Steel &Iron(Group)
| Designing |
Institute
Samecontroller
Purchase ofgoodsandservices
Designfees
Onagreement
Relatedagreementprice
29.24
0.00%
1,000
No
| Execute |
according totheagreement No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialandsupplementarymaterial
Onagreement
Relatedagreementprice
591,426
.43
24.54%
1,800,0
No
Executeaccording totheagreement No
2019/4/
BenxiBeiyingSteel &Iron(Group)
Samecontroller
Purchase ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
31,906.
1.32%
No
Executeaccording totheagreemeNo
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
ship
Type ofrelatedpartytransactionsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Priceofrelate
dpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Co., Ltd. | nt |
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Freight
Onagreement
Relatedagreementprice
234.47
0.01%
No
Executeaccording totheagreement No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Labor cost
Onagreement
Relatedagreementprice
4,250.1
0.18%
No
Executeaccording totheagreement No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Purchase ofgoodsandservices
Spareparts
Onagreement
Relatedagreementprice
758.28
0.03%
No
Executeaccording totheagreement Yes
2019/4/
HengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialand spareparts
Onagreement
Relatedagreementprice
4,493.4
| Liaoning |
0.19%
15,000
No
Executeaccording totheagreement
Yes
2019/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Rawmaterialand spareparts
Onagreement
Relatedagreementprice
171.84
0.01%
No
Executeaccording totheagreement Yes
2019/4/
LiaoningHengtaiHeavyMachinery Co.,Ltd.
Samecontroller
Purchase ofgoodsandservices
Repairand laborcost
Onagreement
Relatedagreementprice
1,133.1
0.05%
8,000
No
Executeaccording totheagreement No
2019/4/
BengangGroupCo., Ltd.
Controller
Purchase ofgoodsandservices
Houserentingfee
Onagreement
Relatedagreementprice
37.61
0.00%
No
according totheagreement Yes
2019/4/
BengangGroupCo., Ltd.
Controller
Purchase ofgoodsandservices
Propertymanagement fee
Onagreement
Relatedagreementprice
| Execute | ||
0.00%
1,000
No
Executeaccording totheagreementNo
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
shipType ofrelatedpartytransactionsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Priceofrelatedpartytransactions
| Amount |
ofrelated
partytransactions (in
thousand)
Proportion ofsimilartransactions
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
BengangElectronics and GasCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
50.42
0.00%
No
Executeaccording totheagreement No
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
material&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
60,230.
| Raw |
2.73%
300,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiBeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
792.19
0.04%
No
Executeaccording totheagreementYes
2019/4/
BeiyingSteel &Iron(Group)Co., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
7,565.3
| Benxi |
0.34%
No
according totheagreementNo
2019/4/
BenxiSteel &Iron(Group)Real-estateDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
6.2
| Execute | ||
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Steel &IronProcessandLogisticsCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
27.47
0.00%
No
Executeaccording totheagreement
No
2019/4/
| Benxi |
Steel &Iron(Group)MachineryManufact
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
995.77
| ure Co., |
0.05%
8,000
No
Executeaccording totheagreement
Yes
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relationship
Type ofrelated
partytransactionsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Price
ofrelatedpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proportion ofsimilartransactions
Theapprovedtradinglimit oftransactions (in
thousand)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Ltd. |
BenxiSteel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
716.43
0.03%
No
Executeaccording totheagreement
No
2019/4/
Steel &Iron(Group)MachineryManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
605.66
| Benxi |
0.03%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
19.45
0.00%
10,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Construction Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
108.13
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
34,182.
1.55%
100,000
No
Executeaccording totheagreement No
2019/4/
BenxiSteel &Iron(Group)MiningCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
3,156.2
0.14%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)
Samecontroller
Sales ofgoodsandservices
Freightrevenue
Onagreement
Relatedagreementprice
487.08
| Mining |
0.02%
No
Executeaccording tothe
No
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
shipType ofrelatedpartytransactionsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Priceofrelate
dpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Co., Ltd. | nt |
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
2,289.9
0.10%
8,000
No
Executeaccording totheagreement
No
2019/4/
| Benxi |
Steel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
994.94
0.05%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)ThermalPowerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Freightrevenue
Onagreement
Relatedagreementprice
0.00%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
407.66
0.02%
5,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
12.46
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)IndustrialDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
717.36
0.03%
No
Executeaccording totheagreement
Yes
2019/4/
| Benxi | Same | Sales of | Energy & | On | Relate | 7.68 | 0.00% | 300 | No | Execute | No | 2019/4/ |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relationship
Type ofrelated
partytransacti
onsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Priceofrelatedpartytransactions
| Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| Steel & |
Iron(Group)Information andAutomatic TechCo., Ltd.
er
| controll | goods |
andservices
| Power | agreeme |
nt
agreementprice
| d | accordi |
ng totheagreement
BenxiSteel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
79.48
| 19 | ||
0.00%
8,000
No
Executeaccording totheagreement
No
2019/4/
Steel &Iron(Group)Construction andRepairingCo., Ltd.
Samecontroller
Sales ofgoodsandservices
| Benxi | Raw |
material&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
248.68
0.01%
No
Executeaccording totheagreement
Yes
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
302.41
0.01%
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
9,363.7
0.42%
No
Executeaccording totheagreement
Yes
2019/4/
Steel &Iron(Group)MetallurgyResiduesCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Freightrevenue
Onagreement
Relatedagreementprice
| Benxi |
0.00%
30,000
No
Executeaccording totheagreement
No
2019/4/
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
147.07
0.01%
No
Executeaccording totheagreemeNo
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
RelationshipType ofrelated
partytransacti
ons
C
relatedpartytransactio
ns
Pricing
| ontent of | principle |
ofrelatedpartytransactions
Price
ofrelate
dpartytransactions
| Amount |
ofrelatedpartytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
| nt |
BenxiSteel &Iron(Group)Co., Ltd.
ParentCompany
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
156.1
0.01%
1,000
No
Executeaccording totheagreement
Yes
2019/4/
BenxiNewCareerDevelopment Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
15.13
0.00%
No
Executeaccording totheagreementNo
2019/4/
DalianBoluoleSteelTube Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
188.32
0.01%
1,000
No
Executeaccording totheagreementYes
2019/4/
BenxiSteel &Iron(Group)GeneralHospital
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
3.09
0.00%
No
Executeaccording totheagreementNo
2019/4/
BenxiSteel &Iron(Group)ZhengtaiConstructionMaterialsCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
0.27
0.00%
No
Executeaccording totheagreement
No
2019/4/
| Liaoning |
HengtongMetallurgicalEquipmentManufacture Co.,Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
832.61
0.04%
5,000
No
Executeaccording totheagreement
Yes
2019/4/
BengangCold-rolledStainlessSteelDandongCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Rawmaterial&supplementarymaterials& spareparts
Onagreement
Relatedagreementprice
24.14
0.00%
No
Executeaccording totheagreement
Yes
2019/4/
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Relatedparties
Relation
ship
Type ofrelatedpartytransacti
onsC
relatedpartytransactions
Pricing
| ontent of | principle |
ofrelatedpartytransacti
ons
Price
ofrelate
dpartytransactions
| Amount |
ofrelated
partytransactions (in
thousan
d)
Proporti
on ofsimilartransacti
ons
Theapprove
dtradinglimit oftransactions (in
thousan
d)
Whether exceed
theapprove
dlimited(Y/N)
Means
ofpaymen
t ofrelated
partytransacti
ons
Availabl
emarketprice ofsimilartransacti
ons
Date ofdisclosu
re
Index
ofdisclos
ure
SuzhouBengangIndustrialCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Products
Onagreement
Relatedagreementprice
16,362.
0.74%
50,000
No
Executeaccording totheagreement Yes
2019/4/
BengangGroupFinanceCo., Ltd.
Samecontroller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
0.69
0.00%
No
according totheagreement No
2019/4/
BengangGroupCo., Ltd.
Controller
Sales ofgoodsandservices
Energy &Power
Onagreement
Relatedagreementprice
7.79
| Execute | ||
0.00%
No
Executeaccording totheagreement No
2019/4/
Total -- --
1,076,5
87.17
--
3,137,4
-- -- -- -- --Details of any sales return of a largeamount
N/AGive the actual situation during thereporting period where a forecast hadbeen made for the total amounts ofroutine related-party transactions，bytype to occur in the current period(ifany)
N/AReason for any significant differencebetween the transaction price and theMarket price for reference (ifapplicable)
N/A
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
There were no related credits and debts during the reporting period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
5. Other significant related transactions
□ Applicable √ Not applicable
There was no other significant related transaction during the reporting period.
XIII. Non-operating capital occupation of listed companies by controlling shareholders andtheir related parties
□ Applicable √ Not applicable
There was no non-operating capital occupation of listed companies by controlling shareholders and their related partiesduring the reporting period.
XIV. Major Contracting
1. Trusteeship, contracting, and leasing matters
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
□ Applicable √ Not applicable
There was no lease during the reporting period.
2. Major 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. Environmental protection-related conditions
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection department.Yes
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Name
Mainpollutantsand s
pollutants
Dischargemodes
| pecific | The number of discharge |
hatch
The
hatch
Emissionconcentration
Theemissionstandard
Totalemission
Approved
totalemission
S
| distribution of discharge | urpass the |
emissionstandardBengangSteel PlatesCo., Ltd.
COD Continuous 1
Energyintegralfactorysewagetreatmentplant.
Sewage22-26
Sewage 50 120.52 tons
by thegovernment
None
BengangSteel PlatesCo., Ltd.
NH3-N Continuous 1
integralfactorysewagetreatmentplant.
Sewage 3-5 Sewage 5 19.97 tons
| Energy | Unapproved |
by thegovernment
None
BengangSteel PlatesCo., Ltd.
ParticulateMatter
Continuousandintermittent
Rawmaterialdumper,transferstation,mine pit,pre-mixing;ironmakingiron andsteel field,furnace top,fuel,solvent,
| whole grain, |
ore coketank,sinteringhead, tail;
waterpretreatment, iron alloyfeeding ,North-
| South |
invertedirrigationstations,primarydustremoval,secondarydustremoval,
dustremoval;
| special steel |
furnace,refiningfurnace,electro slagfurnace;desulfurization anddenitrificati
generationboilers;
| cold-rolled |
Rawmaterials7-20;Ironmaking5-48;
7-14;Specialsteel 7-15;Powergeneration5-10; Coldrolling;6-18; hotrolling 6-15.
Rawmaterials25;ironmaking25-50;steelmaking20-50;special
20; powergeneration10-30; coldrolling 20;hot rolling20.
6373.76
tons
| steel | Unapproved |
by thegovernment
None
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
regeneration, pickling,tensioning,welding,leveling,Annealing,baking; hotrollingfurnace.
BengangSteel PlatesCo., Ltd.
SO?
Continuousandintermittent
Ironmakingsintering
| acid |
| head; power |
generationboiler; coldrollingroasting,annealing;hot rollingfurnace.
Sinteringmachinehead 12-40;powergeneration10-70; coldrolling80-74-141;hot rolling95-147.
Sinteringhead 200;powergeneration100-200;cold rolling150; hotrolling 150.
3033.86tons
by thegovernment
None
BengangSteel PlatesCo., Ltd.
Oxides ofnitrogen
Continuousandintermittent
Ironmakingsintering
| Unapproved | ||
| head; power |
generationboiler; coldrollingroasting,annealing;hot rollingfurnace.furnace.
Sinteringhead110-230;powergeneration50-140;cold rolling69-172; hotrolling105-124.
Sinteringhead 300;powergeneration100-200;cold rolling300; hotrolling 300.
6181.68tons
by thegovernment
None
Construction and operation of pollution prevention facility:
The company has a total of 178 sets of environmental pollution prevention and control facilities. In addition to the hotrolling mill 2300 production line, the rough-rolling finishing rolling plastic plate dust collector which is designed for theproduction of stainless steel, the rest of the facilities are put into use normally.
Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of ConstructionProjects:
Bengang Steel Plate Co., Ltd. acquired the environmental impact assessment (EIA) approval of the high-gradehigh-magnetic non-oriented silicon steel project (Ben-Huan-Jian-Biao-Zi [2019] No. 03, May 25, 2019);The steel factory’s No.8 casting machine project of the Company acquired the EIA approval (Ben-Huan-Jian-Biao-Zi[2019] No. 04);
The environmental assessment of the registration of 4-6th converter of the steel factory was completed and the EIAregistration form was filed (record number: 201921050200000031).
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Emergency plan for emergency environmental incidents:
The company and its subordinate 13 units are revised the emergency plans for emergency environmental incidents, andcarried out related work such as risk assessment and investigation of emergency resources in accordance with the "Lawof the People's Republic of China on Incident Responses", "Notice on Printing and Distributing the Guidelines for RiskAssessment of Enterprises' Environmental Emergencies (Trial)", and "Emergency Preparedness for EnvironmentalIncidents of Enterprises and Institutions" Existing laws and regulations such as the Administrative Measures (Trial). Atthe same time, all units will formulate drill plans and gradually carry out emergency plan drills according to thepre-planned situation.
Environmental self-monitoring project.
In 2019, the self-monitoring plan was carried out in accordance with the requirements of the pollutant discharge permit.The monitoring points of Benxi Steel pollution sources: 172 flue gas, 10 wastewater monitoring points, 5 noise points atthe boundary of the plant, 27 atmospheric dustfall points, and newly added unorganized monitoring. The number ofpoints is 60. From the plate factory to the mine, the monitoring is divided into weekly, monthly, seasonal, semi-annualand annual frequency monitoring. The main monitoring items of the automatic air quality monitoring station are PM10,PM2.5, sulfur dioxide and nitrogen dioxide. , O3, CO, one set of data per hour, a total of 26000 monitoring data wereobtained throughout the half of the year; 27 steel dust points were distributed in the steel plant area, and 162 monitoringdata were obtained; routine monitoring tasks for flue gas were completed, and monitoring was achieved throughout theyear. 476 data; 5 noise monitoring points at the boundary of the plant, 80 monitoring data; 10 wastewater monitoringpoints, 1838 monitoring data; 150 temporary monitoring data, and a total of 2706 monitoring data reported by themonitoring station. Monthly, quarterly reports and separate monitoring reports for each mine are reported.
Other environmental information that should be disclosed:
None
Other environmental protection related information:
None
2. Performing corporation social responsibility of targeted poverty alleviation
During the current reporting period, there has been no accurate poverty alleviation work, and there is no follow-upaccurate poverty alleviation plan.
XVI. Other Major Issues
□ Applicable √ Not applicable
There was no need for illustrating other major issue.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
XVII. Major Issues of Subsidiaries
□ Applicable √ Not applicable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
VI. Status of Share Capital Changes and Shareholders
I. Share Capital Changes
1. Share capital changes
Unit: Share
Before the change
，
| -) |
After the ChangeQuantity
Percenta
ge
Issuingof newshare
Bonusshares
ation of
| common |
reserve
Others Subtotal Quantity
Percenta
geI. Restricted Shares
| fund | ||
739,371,532
19.08%
-739,371,532
-739,371,532
| 2. State-own |
Legal-person
184,842,883
| Shareholding |
4.77%
-184,842,883
-184,842,883
| 3. Other domestic shareholdings |
554,528,649
14.31%
-554,528,649
-554,528,649
Including:
| Domestic legal person holding |
554,528,649
14.31%
-554,528,649
-554,528,649
| II. Non-restricted Shares |
3,136,000,000
80.92%
739,371,532
739,371,532
3,875,371,532
100.00%
| 1. Common shares in RMB |
2,736,000,000
70.60%
739,371,532
739,371,532
3,475,371,532
89.68%
| 2. Foreign shares in domestic market |
400,000,000
10.32%
400,000,000
10.32%
III. Total shares3,875,371,532
100.00%
3,875,371,532
100.00%
Causation of share capital changes
√Applicable □Not applicable
The company has a non-public offering of 739,371,532 RMB ordinary shares to Liaoning Provincial TransportationInvestment Group Co., Ltd., CCB Principal Asset Management Co., Ltd., Beixin Ruifeng Fund Management Co., Ltd.and China Life AMP Fund Management Co., Ltd. The company completed the settlement on April 18, 2019.Approval of share capital changes
□ Applicable √ Not applicable
Status of registration process of transferred shares
□ Applicable √ Not applicable
Progress of Share Repurchase
□ Applicable √ Not applicable
Implementation Progress of Reducing Holdings of Repurchase Shares by Centralized Bidding
□ Applicable √ Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share, andnet asset per share attributed to common shareholders
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
□ Applicable √ Not applicable
Other information the Company deems necessary to be disclosed or required by the authority
□ Applicable √ Not applicable
2. Changes of Restricted Shares
√ Applicable □ Not applicable
II. Securities Issuance and Listing
□ Applicable √ Not applicable
III. Total Number of shareholders and shareholding
Unit: Shares
Total number ofcommon
at the end of thereporting period
55,071
| shareholders |
The total number ofpreferred shareholdersvoting rights restored at
period (See Notes 8)
| the end of the reporting | ||
| Shareholding of shareholders holding more than 5% or top 10 shareholders | ||
Name of theshareholder
Nature ofshareholder
Holding
(%)
Number ofshares held at
period-end
Changes in
reporting
period
Restrictedshares held
Un-restricted
shares held
| Percentage | Number of pledged or | |
frozen shares
| Status | Number |
Benxi Steel & Iron(Group) Co., Ltd.
State-ownedlegal person
61.43%
2,380,901,255
25,491,992
2,380,901,255
| Pledged | 1,463,095,133 | |
| Frozen | 45,000,000 |
Liaoning ProvincialTransportation
State-ownedlegal person
4.77%
184,842,883
184,842,883
Shareholder
Number ofinitial restricted
shares
Number ofLimited SharesReleased in theCurrent Period
Increased
number ofrestrictedshares in the
| current period |
End-of-Term Limited
Shares
Restriction reason Release dateLiaoning ProvincialTransportation InvestmentGroup Co., Ltd.
184,842,883
184,842,883
| The number of |
restricted shares
participating in the
additional issue
April 18th 2019
| was 184,842,883. | |||
| CCB Principal Asset |
Management – ICBC – CRTrust – CR Trust · XingSheng No. 5 Collective Fund
184,842,883
| Trust Plan |
184,842,883
| The number of |
restricted shares
participating in the
additional issue
April 18th 2019
| was 184,842,883. | |||
| Bei Xin Rui Feng Fund – |
China Merchants Bank – Bei
No. 229 Asset Management
| Plan |
184,842,883
184,842,883
| The number of |
restricted shares
participating in the
additional issue
April 18th 2019
| was 184,842,883. | |||
| China Life AMP Fund– ICBC |
– China Life AMP – Hua XinTrust Targeted AdditionalShares Issuance No. 10 Asset
184,842,883
| Management Plan |
184,842,883
| The number of |
restricted shares
participating in the
additional issue
April 18th 2019
| was 184,842,883. |
Total739,371,532
739,371,532
-- --
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
| Investment Group Co., Ltd. |
| CCB Principal Asset |
Management – ICBC– CR Trust – CRTrust · Xing ShengNo. 5 Collective Fund
Others 4.77%
| Trust Plan |
184,842,883
184,842,883
| Bei Xin Rui Feng |
Fund – ChinaMerchants Bank –
Xin Rui Feng FundFeng Qing No. 229Asset Management
| Plan |
Others 4.77%
184,842,883
184,842,883
Fund– ICBC – ChinaLife AMP – Hua XinTrust TargetedAdditional SharesIssuance No. 10 Asset
| Management Plan |
Others
4.77%
184,842,883
184,842,883
Liang zhongqing
natural person
0.50%
| Domestic |
19,292,013
19,292,013
19,292,013
Liu qiuying
Domesticnatural person
0.37%
14,158,663
14,158,663
14,158,663
VANGUARDEMERGINGMARKETS STOCKINDEX FUND
Overseas legalperson
0.21%
8,157,311
8,157,311
Chen jinhong
Domesticnatural person
0.18%
6,876,375
-604,300
6,876,375
Chen guohua
Domesticnatural person
0.14%
5,489,314
5,489,314
5,489,314
Strategy investors or general legal
| person becomes top 10 shareholders due |
to rights issued (if any) (See Notes 3)
NoneNotes to relationship or ‘action inconcert’ among the top 10 shareholders.
It is unknown to the Company whether there is any related connection
described by Rules of Information Disclosing Regarding Changing of Shareholding Statu
| s of |
Listed Companies existing among the above shareholders.
Name of the shareholder
Un-restricted shares held atthe end of the reporting period
| Shareholding of top 10 unrestricted shareholders | ||
Category of sharesCategory of shares QuantityBenxi Steel & Iron (Group) Co., Ltd. 2,380,901,255
Common shares in RMB2,380,901,255
| Liaoning Provincial Transportation Investment Group Co., Ltd. |
184,842,883
Common shares in RMB184,842,883
| CCB Principal Asset Management – ICBC – CR |
Trust – CR Trust · Xing Sheng No. 5 Collective
184,842,883
| Fund Trust Plan |
Common shares in RMB184,842,883
| Bei Xin Rui Feng Fund – China Merchants |
Bank – Bei Xin Rui Feng Fund Feng Qing No.
184,842,883
| 229 Asset Management Plan |
Common shares in RMB184,842,883
| China Life AMP Fund– ICBC – China Life |
AMP – Hua Xin Trust Targeted Additional
184,842,883
| Shares Issuance No. 10 Asset Management Plan |
Common shares in RMB184,842,883
| Liang zhongqing | 19,292,013 | Common shares in RMB |
19,292,013
| Liu qiuying | 14,158,663 | Common shares in RMB | 14,158,663 |
| VANGUARD EMERGING MARKETS |
STOCK INDEX FUND
8,157,311
Foreign shares in domestic exchange8,157,311
| Chen jinhong | 6,876,375 | Common shares in RMB | 6,876,375 |
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Chen guohua5,489,314
Common shares in RMB5,489,314
Notes to relationship or ‘action in concert’among the top 10 non-restricted shareholders,and among the top 10 non-restrictedshareholders and top 10 shareholders
any of the ot
| her shareholders among the top 10 shareholders, neither being regarded as |
action-in-
Shareholding in PLC.
| The Company is not aware of any relationship among the other |
shareholders, neither being regarded as action-in-
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
Shareholding in PLC.Shareholders among the top 10 participating insecurities margin trading (if any) (see Note 4)
| the Information Disclosure Regulations for Change of |
| Benxi Steel & Iron (Group) Co., Ltd. holds 2,141,901,255 shares of the Company’s stock through ordinary account and holds 239,000,000 shares of the Company’s stock through credit security account totaling 2,380,901,255 shares. Liang zhongqing holds |
142,200 shares of th
5,489,314 through credit security account.
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. Change of controlling shareholder or actual controllerChange of controlling shareholder during the reporting period
□ Applicable √ Not applicable
There was no change of holding shareholder in the report period.
Change of actual controller during the reporting period
□ Applicable √ Not applicable
There was no change of substantial controller in the report period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
VII. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred shares during the reporting period.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
VIII. Status of Directors, Supervisors, and Senior ExecutivesI. Change in Shares held by Directors, Supervisors and Senior Executives
√ Applicable □ Not applicable
Name Position
Officestatus
year-begin
Sharesincreased
| Shares held at the | during the |
reportingperiod
Sharesdecreased
reportingperiod
Other increase
| during the |
/ decrease
the year-endGao Lie
Director,Chairman
In officeCaoAimin
Shares held atDirector, Vice
Chairman
In officeShenQiang
Director,GeneralManager
In officeHuangXinghua
Director In officeZhangSuxun
Independent
Director
In officeZhongTianli
IndependentDirector
In officeZhaoXinan
IndependentDirector
In officeHan Mei
Supervisor,
Director, ViceChairman of
SupervisoryCommittee
In officeLi Lin Supervisor In officeLiXiaowei
Supervisor In officeZhaoXingtao
Supervisor In officeZhangyanlong
Supervisor In officeBaoMingwei
Chairman ofDeputy General
Manager
In officeWangFengmin
| Deputy General |
| Deputy General |
Manager
In officeHuo
In office
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Gang ManagerZhaoZhonghua
| Director of |
Finance
In officeGaoDesheng
Board
In officeWangShu
Director,Chairman
Leavingoffice
Secretary of theJin Yong
li
IndependentDirector
Leavingoffice
LiuYansong
Supervisor
Leaving
office
HuGuangyuan
Jin YongDeputy General
Manager
Leaving
office
Total -- --
II. Change in Directors, Supervisors and Senior Executives
√Applicable □ Not applicable
Name Position Type of change Date ReasonWang Shu Director, Chairman Leaving office Mar 13
th,2019 Voluntary turnoverGao Lie Director, Chairman Elected Mar 14
th
,2019Shen Qiang Director Elected May 16
th
,2019Jin Yongli
IndependentDirector
Leaving office
Deputy General
atthe end of the
term
May 16
th
,2019 Term expiredZhang Suxun
IndependentDirector
Elected May 16
th
,2019Li Xiaowei Supervisor Elected Mar 14
th
,2019Liu Yansong
Employeerepresentativesupervisor
Leaving office Jun 26
th
,2019 Voluntary turnoverZhao Xingtao
Employeerepresentativesupervisor
Elected Jun 26
th
, 2019Gao Lie General Manager
atthe end of theAppointed and
dismissed
Mar 14
th
,2019 Job ChangeShen Qiang General Manager AppointmentMar 14th,2019
Hu Guangyuan Deputy Manager Leaving office Mar 14
th
,2019 Job ChangeHuo Gang Deputy Manager AppointmentMar 14th
,2019
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
IX. Relevant Information about Corporate Bonds
Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchangeor any matured corporate bonds which the listed company failed to pay in full at the approval date ofthe annual reportNo.
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
X. Financial Report
I. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The semi-annual report is not audited.
II. Financial StatementsStatement in Notes are carried in RMB Yuan
1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Prepared by: Bengang Steel Plates Co., Ltd.
Unit: YuanItems Ending balance Beginning balanceCurrent assets:
Cash at bank and on hand16,945,772,392.43
16,567,471,755.77
Settlement provisions
Capital lent
Financial assets held for trading
Financial assets at fair valuethrough profit or loss
Derivative financial assets
Notes receivable4,518,016,226.76
3,580,145,843.38
Accounts receivable614,718,839.21
639,482,481.45
Receivables financing
Prepayments1,314,464,404.93
1,321,537,514.78
Premium receivable
Reinsurance accounts receivable
Receivable deposit for reinsurancecontract
Other receivables:
205,466,650.77
202,763,964.98
Including: Interest receivables13,872,107.84
11,608,705.43
Dividend receivables
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Redemptory financial assets forsale
Inventories11,967,579,023.47
10,677,747,112.40
Contract assets
Assets classified as held for sale
Non-current assets due within oneyear
Other current assets247,612,982.23
292,119,771.13
Total current assets35,813,630,519.80
33,281,268,443.89
Non-current assets:
Loan and advances issued
Debt investments
Available-for-sale financial assets
1,041,824,829.00
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments2,481,589.04
2,455,681.55
Other equity instrumentinvestments
1,041,824,829.00
Other non-current financial assets
Investment properties
Fixed assets22,672,967,771.15
23,924,504,539.97
Construction in progress1,374,410,959.70
836,594,457.82
Productive biological assets
Oil and gas assets
Right of use assets
Intangible assets274,783,708.74
278,062,441.04
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets175,524,513.32
191,452,547.21
Other non-current assets68,303,165.35
76,341,975.35
Total non-current assets25,610,296,536.30
26,351,236,471.94
Total assets61,423,927,056.10
59,632,504,915.83
Current Liabilities:
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Short-term loans12,298,193,000.00
11,938,490,375.85
Loan from central bank
Absorbed deposit and interbankdeposit
Financial liabilities held for trading
Financial liabilities at fair valuethrough profit or loss
Derivative financial liabilities
Notes payable11,650,282,357.86
10,013,192,014.02
Accounts payable5,626,838,770.27
5,522,042,811.65
Advance from customers3,345,451,646.56
3,331,854,098.42
Financial assets sold forrepurchase
Deposits from customers andinterbank
Acting trading securities
Acting underwriting securities
Employee benefits payable50,261,386.01
51,466,231.72
Current tax liabilities62,888,848.55
515,752,369.68
Other payables899,997,986.06
862,511,178.96
Including: Interest payables9,343,905.54
9,658,681.99
Dividend payables193,768,576.60
Handling charges and commissionpayable
Reinsurance accounts payable
Contract liabilities
Liabilities held for sale
Non-current liabilities due withinone year
1,036,582,163.28
350,965,576.32
Other current liabilities
Total current liabilities34,970,496,158.59
32,586,274,656.62
Non-current liabilities:
Provision for insurance contract
Long-term loans6,213,054,564.15
7,083,640,094.16
Bonds payable
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Including: Preferred stock
Perpetual bond
Lease liabilities
Long-term payables52,733,529.65
13,686,705.92
Long-term employee benefitspayables
Estimated liabilities
Deferred income248,232,002.97
289,499,002.97
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities6,514,020,096.77
7,386,825,803.05
Total liabilities41,484,516,255.36
39,973,100,459.67
Shareholders’ equity:
Share capital3,875,371,532.00
3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves12,343,209,847.29
12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves21,013,956.29
683,937.71
Surplus reserves961,105,529.85
961,105,529.85
General risk reserves
Undistributed profits2,205,328,308.98
1,945,887,269.82
Total equity attributable to equityholders of the parent company
19,406,029,174.41
19,126,258,116.67
Non-controlling interests533,381,626.33
533,146,339.49
Total shareholder’s equity19,939,410,800.74
19,659,404,456.16
Total liabilities and shareholder’s equity
61,423,927,056.10
59,632,504,915.83
Legal Representative: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
2. BALANCE SHEET OF THE PARENT COMPANY
Unit: YuanItems Ending balance Beginning balanceCurrent assets:
Cash at bank and on hand14,845,582,986.81
15,536,305,375.00
Financial assets held for trading
Financial assets at fair valuethrough profit or loss
Derivative financial assets
Notes receivable4,296,253,321.51
3,356,020,598.89
Accounts receivable402,397,751.85
409,553,059.27
Receivables financing
Prepayments1,292,855,972.17
1,309,194,738.97
Other receivables228,691,383.89
235,037,391.46
Including: Interest receivables12,222,112.07
9,815,280.04
Dividend receivables
Inventories10,420,332,375.72
8,681,362,081.72
Contract assets
Assets classified as held for sale
Non-current assets due within oneyear
Other current assets194,348,087.50
193,989,096.20
Total current assets31,680,461,879.45
29,721,462,341.51
Non-current assets:
Debt investments
Available-for-sale financial assets
1,041,624,829.00
Other debt investments
Held-to-maturity investment
Long-term receivables
Long-term equity investments2,016,281,902.16
2,016,281,902.16
Other equity instrumentinvestments
1,041,624,829.00
Other non-current financial assets
Investment properties
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Fixed assets20,954,291,845.88
22,035,187,328.57
Construction in progress1,357,632,503.06
825,553,510.15
Productive biological assets
Oil and gas assets
Right of use assets
Intangible assets147,123,109.32
148,776,177.96
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets80,910,940.25
96,220,003.00
Other non-current assets68,303,165.35
76,341,975.35
Total non-current assets25,666,168,295.02
26,239,985,726.19
Total assets57,346,630,174.47
55,961,448,067.70
Current Liabilities:
Short-term loans10,998,193,000.00
10,624,270,375.85
Financial assets held for trading
Financial liabilities at fair valuethrough profit or loss
Derivative financial liabilities
Notes payable9,985,911,079.49
9,213,748,427.22
Accounts payable6,566,943,730.51
5,940,816,426.48
Advance from customers3,042,304,493.12
3,189,143,565.45
Contract liabilities
Employee benefits payable49,866,464.88
49,378,095.47
Current tax liabilities47,720,744.95
507,003,883.57
Other payables689,660,196.29
538,051,513.13
Including: Interest payables7,250,794.60
7,341,833.33
Dividend payables193,768,576.60
Liabilities held for sale
Non-current liabilities due withinone year
1,036,582,163.28
350,965,576.32
Other current liabilities
Total current liabilities32,417,181,872.52
30,413,377,863.49
Non-current liabilities:
Long-term loans6,213,054,564.15
7,083,640,094.16
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Bonds payable
Including: Preferred stock
Perpetual bond
Lease liabilities
Long-term payables52,733,529.65
13,686,705.92
Long-term employee benefitspayable
Estimated liabilities
Deferred incomes248,232,002.97
289,499,002.97
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities6,514,020,096.77
7,386,825,803.05
Total liabilities38,931,201,969.29
37,800,203,666.54
Shareholders’ equity:
Share capital3,875,371,532.00
3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves11,923,058,165.17
11,923,058,165.17
Less: treasury shares
Other comprehensive income
Special reserves18,126,059.79
525,218.48
Surplus reserves961,105,529.85
961,105,529.85
Undistributed profits1,637,766,918.37
1,401,183,955.66
Total shareholder’s equity18,415,428,205.18
18,161,244,401.16
Total liabilities and shareholder’s equity
57,346,630,174.47
55,961,448,067.70
3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unit: YuanItems Jan – Jun 2019 Jan – Jun 2018
1. Total operating income
24,102,595,167.14
23,441,247,377.14
Including: Operating income24,102,595,167.14
23,441,247,377.14
Interest income
Premium earned
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Income from handlingcharges and commission
2. Total operating cost
23,621,825,282.23
22,738,904,288.94
Including: Operating cost22,067,612,729.65
20,804,207,420.98
Interest cost
Expenditure for handlingcharges and commission
Surrender value
Net expenditure forcompensation
Net provision for insurancecontract appropriated
Bonus payment for policy
Reinsurance premium
Taxes and surcharges114,125,362.97
153,307,375.64
Selling and distributionexpenses
574,445,199.14
514,038,008.95
General and administrativeexpenses
446,767,811.77
461,842,424.56
Research and developmentexpenses
15,408,472.28
2,470,641.53
Financial expenses403,465,706.42
803,038,417.28
Including: interest expenses586,490,262.69
575,001,615.20
Interest incomes127,083,779.58
61,605,403.34
Add: Other incomes41,695,000.00
41,274,238.70
Income on investment ("-" for loss)
25,907.49
3,493,150.68
Including: Income from associatesand joint ventures
25,907.49
Income from
derecognition of financial assetsmeasured at amortised cost ("-" for loss)
Exchange Income ("-" for loss)
H
(“-" for loss)
| edging income from net exposure |
(“-" for loss)
| Gains from the change in fair value |
Expected credit losses (“-" for loss)
3,751,513.83
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Asset impairment losses (“-" forloss)
20,917,963.64
Assets disposal gains（“-” for loss
2,418,704.34
| ） |
825,580.63
3. Operating profit ("-" for loss)
528,661,010.57
768,854,021.85
Add: Non-operating income8,210,182.24
2,138,397.80
Less: Non-operating expenses57,974,322.05
1,382,402.26
4. Total profit ("-" for loss)
478,896,870.76
769,610,017.39
Less: Income tax expenses25,962,181.73
11,636,226.04
5. Net Profit ("-" for loss)
452,934,689.03
757,973,791.35
(1) Classification by continuing
operating
1 Net profit from continuingoperation
452,934,689.03
757,973,791.35
2 Net profit from discontinuedoperation
(2) Classification by ownership
1 Net profit attributable to theowners of parent company
453,209,615.76
756,951,987.59
2 Net profit attributable tonon-controlling shareholders
-274,926.73
1,021,803.76
6. Other comprehensive income after tax
Other comprehensive incomeattributable to owners of parent companyafter tax
1) Other comprehensive income
items that will not be reclassified intogains/losses
(1) . Re-measurement of
defined benefit plans of changes in netdebt or net assets
(2) . Other comprehensive
income under the equity method cannotbe reclassified into profit or loss
(3). Changes of fair value of
other equity instrument investments
| (4). Changes in the fair value |
of the company's own credit risk
(5). Others
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
2)
will be reclassified into profit or loss
| Other comprehensive income that |
(1) . Other comprehensive
income under the equity method can bereclassified into profit or loss
(2). Gains and losses from
fair value changes of other debtinvestments
(3). Gains and losses from
fair value changes of available-for-salefinancial assets
(4). Gains and losses
resulting from reclassification offinancial assets recognised in othercomprehensive income
(5). Gains and losses from
reclassification of held-to-maturityinvestments to available-for-saleinvestments
(6). Credit impairment
of other debt investments
| losses |
(7). Effective portion of
gains or losses from cash flow hedging
(8). Translation differences
in foreign currency financial statements
(9). Others
Other comprehensive incomeattributable to non-controllingshareholders after tax
7. Total comprehensive income
452,934,689.03
757,973,791.35
Total comprehensive incomeattributable to owners of parent company
453,209,615.76
756,951,987.59
Total comprehensive incomeattributable to non-controllingshareholders
-274,926.73
1,021,803.76
8. Earnings per share:
1) Basic earnings per share
0.12
0.20
2) Diluted earnings per share
0.12
0.20
The current business combination under common control, the net profits of the combined party before achieved:
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Yuan, net profit of previous period of the combined party realized: Yuan.
Legal Representative: Gao Lie Person in charge of accounting: Shen Qiang Accounting Dept. Leader: Zhao Zhonghua
4. INCOME STATEMENT OF THE PARENT COMPANY
Unit: YuanItems Jan – Jun 2019 Jan – Jun 2018
1. Total operating income
23,447,215,857.93
23,682,865,109.14
Less: Operating cost21,757,289,997.18
21,401,191,962.20
Taxes and surcharges84,467,404.41
135,543,392.96
Selling and distribution expenses335,094,548.06
265,554,867.46
General and administrativeexpenses
419,337,998.35
438,193,017.33
Research and developmentexpenses
15,408,472.28
2,470,641.53
Financial expenses388,071,914.59
774,523,490.60
Including: interest expenses558,095,343.66
543,682,390.97
Interest incomes114,189,626.94
58,304,426.91
Add: Other incomes41,695,000.00
41,274,238.70
Income on investment ("-" for loss)
3,493,150.68
Including: Income from associatesand joint ventures
Income from
derecognition of financial assetsmeasured at amortised cost ("-" for loss)
H
(“-" for loss)
| edging income from net exposure |
(“-" for loss)
| Gains from the change in fair value |
Expected credit losses (“-" for loss)
3,751,513.83
Asset impairment losses (“-" forloss)
20,917,963.64
Assets disposal gains（“-” for loss
2,465,706.59
| ） |
825,580.63
2. Operating profit ("-" for loss)
495,457,743.48
731,898,670.71
Add: Non-operating income8,138,040.75
1,714,748.66
Less: Non-operating expenses57,935,182.17
1,382,402.26
3. Total profit ("-" for loss)
445,660,602.06
732,231,017.11
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Less: Income tax expenses15,309,062.75
5,679,337.17
4. Net Profit ("-" for loss)
430,351,539.31
726,551,679.94
(1) Classification by continuing
operating
(2) Classification by ownership
5. Other comprehensive income after
tax
1) Other comprehensive income
items that will not be reclassified intogains/losses
(1) . Re-measurement of
defined benefit plans of changes in netdebt or net assets
(2) . Other comprehensive
income under the equity method cannotbe reclassified into profit or loss
(3). Changes of fair value of
other equity instrument investments
| (4). Changes in the fair value |
of the company's own credit risk
(5). Others
will be reclassified into profit or loss
| 2) Other comprehensive income that |
(1) . Other comprehensive
income under the equity method can bereclassified into profit or loss
(2). Gains and losses from
fair value changes of other debtinvestments
(3). Gains and losses from
fair value changes of available-for-salefinancial assets
(4). Gains and losses
resulting from reclassification offinancial assets recognised in othercomprehensive income
(5). Gains and losses from
reclassification of held-to-maturityinvestments to available-for-sale
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
investments
of other debt investments
| (6). Credit impairment losses |
(7). Effective portion of
gains or losses from cash flow hedging
(8). Translation differences
in foreign currency financial statements
(9). Others
6. Total comprehensive income
430,351,539.31
726,551,679.94
7. Earnings per share:
1) Basic earnings per share
2) Diluted earnings per share
5. CONSOLIDATED STATEMENT OF CASH FLOWS
Unit: YuanItems
Jan – Jun 2019 Jan – Jun 2018
1. Cash flow from operating activities:
Cash received from sale of goodsor rendering of services
16,357,053,782.81
15,984,735,085.76
Net increase of customers’ depositand interbank deposit
Net increase of loan from centralbank
Net increase of loans from otherfinancial institutions
Cash received for premium oforiginal insurance contract
Net cash received for reinsurancebusiness
Net increase of deposit andinvestment of the insured
Net increase of Financial assets atfair value through profit or loss
Cash from receiving interest,handling charge and commission
Net increase of loans from other
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
financial institutionsNet increase of fund for buy-backbusiness
Tax rebate received247,667,635.74
246,514,404.27
Other cash received relating tooperating activities
144,904,624.34
81,782,480.19
Subtotal of cash inflow received fromoperation activities
16,749,626,042.89
16,313,031,970.22
Cash paid for goods and services13,876,838,386.74
14,086,077,537.47
Net increase of customer’s loanand advances
Net increase of deposit in centralbank and interbank deposit
Cash for payment of compensationfor original insurance contract
Cash for payment of interest,handling charge and commission
Cash for payment of policy bonus
Cash paid to and on behalf ofemployees
987,603,117.25
779,373,374.96
Cash paid for all types of taxes653,208,180.03
406,064,168.90
Other cash paid relating tooperating activities
247,189,353.20
310,997,147.42
Subtotal of cash outflow received fromoperation activities
15,764,839,037.22
15,582,512,228.75
Net cash flows generated fromoperating activities
984,787,005.67
730,519,741.47
2. Cash flows from investing activities:
Cash received from return oninvestments
500,000,000.00
Cash received from distribution ofdividends or profit
3,493,150.68
Net cash received from disposal offixed assets, intangible assets and otherlong-term assets
Net cash received from disposal ofsubsidiary and other operating units
Other cash paid relating to
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
investing activitiesSubtotal of cash inflow received frominvesting activities
503,493,150.68
Cash paid for acquisition of fixedassets, intangible assets and otherlong-term assets
545,199,197.41
680,441,782.39
Cash paid for acquisition ofinvestments
Net increase of mortgage loan
Net cash received from subsidiaryand other operating unit
Other cash paid relating toinvesting activities
Subtotal of cash outflows frominvesting activities
545,199,197.41
680,441,782.39
The net cash flow generated byinvestment activities
-545,199,197.41
-176,948,631.71
3. Cash flows from financing activities:
Proceeds from investment
3,965,799,988.19
Including: Proceeds frominvestment of non-controllingshareholders of subsidiary
Proceeds from borrowings5,828,037,190.72
9,721,396,957.08
Cash received from bond issuance
Other proceeds relating tofinancing activities
Subtotal cash inflow received fromfinancing activities
5,828,037,190.72
13,687,196,945.27
Cash repayments of borrowings5,653,303,509.62
14,683,452,081.71
Cash payments for distribution ofdividends, profit or interest expenses
626,178,049.57
661,538,139.82
Including: Cash paid tonon-controlling shareholders asdividend and profit by subsidiaries
Other cash payments relating tofinancing activities
Subtotal of cash outflows fromfinancing activities
6,279,481,559.19
15,344,990,221.53
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
The net cash flow generated byfinancing activities
-451,444,368.47
-1,657,793,276.26
4. Effect of foreign exchange rate
changes on cash and cash equivalents
48,230,507.75
105,015,610.23
5. Net increase in cash and cash
equivalents
36,373,947.54
-999,206,556.27
Add: Cash and cash equivalents atthe beginning of the period
11,752,548,621.97
17,037,713,410.49
6. Cash and cash equivalents at the
ending of the period
11,788,922,569.51
16,038,506,854.22
6. CASH FLOW STATEMENT OF THE PARENT COMPANY
Unit: YuanItems
Jan – Jun 2019 Jan – Jun 2018
1.Cash flow from operating activities:
Cash received from sale of goodsor rendering of services
15,970,406,775.11
15,778,223,117.53
Tax rebate received219,614,786.86
119,119,395.04
Other cash received relating tooperating activities
140,536,583.70
76,026,838.22
Subtotal of cash inflow received fromoperation activities
16,330,558,145.67
15,973,369,350.79
Cash paid for goods and services13,842,821,616.84
13,721,886,325.25
Cash paid to and on behalf ofemployees
928,568,022.64
726,170,588.86
Cash paid for all types of taxes576,260,568.31
341,018,028.32
Other cash paid relating tooperating activities
165,446,890.35
222,352,157.09
Subtotal of cash outflow received fromoperation activities
15,513,097,098.14
15,011,427,099.52
Net cash flows generated fromoperating activities
817,461,047.53
961,942,251.27
2. Cash flows from investing activities:
Cash received from return oninvestments
500,000,000.00
Cash received from distribution of
3,493,150.68
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
dividends or profitNet cash received from disposal offixed assets, intangible assets and otherlong-term assets
Net cash received from disposal ofsubsidiary and other operating units
Other cash paid relating toinvesting activities
Subtotal of cash inflow received frominvesting activities
503,493,150.68
Cash paid for acquisition of fixedassets, intangible assets and otherlong-term assets
539,451,276.57
677,920,104.21
Cash paid for acquisition ofinvestments
259,300,000.00
Net cash received from subsidiaryand other operating unit
Other cash paid relating toinvesting activities
Subtotal of cash outflows frominvesting activities
539,451,276.57
937,220,104.21
The net cash flow generated byinvestment activities
-539,451,276.57
-433,726,953.53
3. Cash flows from financing activities:
Proceeds from investment
3,965,799,988.19
Proceeds from borrowings4,902,327,190.72
8,986,529,900.00
Cash received from bond issuance
Other proceeds relating tofinancing activities
Subtotal cash inflow received fromfinancing activities
4,902,327,190.72
12,952,329,888.19
Cash repayments of borrowings4,713,373,509.62
13,939,938,977.79
Cash payments for distribution ofdividends, profit or interest expenses
589,497,122.29
635,530,683.74
Other cash payments relating tofinancing activities
Subtotal of cash outflows fromfinancing activities
5,302,870,631.91
14,575,469,661.53
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
The net cash flow generated byfinancing activities
-400,543,441.19
-1,623,139,773.34
4. Effect of foreign exchange rate
changes on cash and cash equivalents
48,222,621.42
105,012,744.72
5. Net increase in cash and cash
equivalents
-74,311,048.81
-989,911,730.88
Add: Cash and cash equivalents atthe beginning of the period
10,807,824,843.20
16,713,104,199.65
6. Cash and cash equivalents at the
ending of the period
10,733,513,794.39
15,723,192,468.77
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unit: Yuan
Items
Jan to Jun 2019Owner’s equity attributable to parent company
Non-controllinginterests
Totalshareholder’s
equitySharecapital
Other equityinstruments
Capitalreserves
Less:
treasury
shares
Othercomprehensive
income
Specialreserves
Surplusreserves
General
riskreserve
Undistributed
profits
Others
SubtotalPreferenceshares
Perp
| etual |
bond
Others
1. Ending
balance oflast year
3,875,371,532.
12,343,209,
847.29
683,937.71
961,105,529.85
1,945,887,269.82
19,126,258,116.6
533,146,339.49
19,659,404,456.16
Add:
Change ofaccountingpolicies
Correction oferrors forprevious period
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Businessconsolidationunder commoncontrol Others
2.
balance ofcurrentyear
3,875,371,532.
| Beginning |
12,343,209,
847.29
683,937.71
961,105,529.85
1,945,887,269.82
19,126,258,116.6
533,146,339.49
19,659,404,456.16
3. Changes in
currentyear (“-”fordecrease )
20,330,018.58
259,441,039.16
279,771,057.74
235,286.84
280,006,344.58
1) Total
comprehensiveincome
453,209,615.76
453,209,615.76
-274,926.73
452,934,689.03
2) Capital
increase anddecrease byshareholders
(1) Common
share investedby shareholders
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
by the holder ofother equityinstruments
| (2) Capital input |
(3) Share-based
paymentattributable toowners’ equity
(4) Others
3) Profit
distribution
-193,768,576.60
-193,768,576.60
-193,768,576.60
(1)
| Appropriation to |
surplus reserves
(2)
general riskreserve
| Appropriation to |
(3) Profit
distribution toshareholders
-193,768,576.60
-193,768,576.60
-193,768,576.60
(4) Others
4) Transfers
within
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
shareholders’equity
(1) Capital
reservestransferred intopaid-in capital(or stock)
(2) Surplus
reservestransferred intopaid-in capital(or stock)
(3) Surplus
reserves torecover loss
(4) Changes in
defined benefitplan to retainedearnings
(5) Other
comprehensiveincome toretainedearnings
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
(6) Others
5) Special
reserves
20,330,018.58
20,330,018.58
510,213.57
20,840,232.15
(1) Provision of
special reserves
25,542,658.45
25,542,658.45
510,213.57
26,052,872.02
(2) Use of
special reserves
5,212,639.87
5,212,639.87
5,212,639.87
6) Others
4. Ending
balance ofcurrent year
3,875,371,532.
12,343,209,
847.29
21,013,956.29
961,105,529.85
2,205,328,308.98
19,406,029,174.4
533,381,626.33
19,939,410,800.74
Items
Jan to Jun 2018Owner’s equity attributable to parent company
Non-controlling
interests
Totalshareholder’s
equitySharecapital
Other equityinstruments
Capitalreserves
Less:
treasury
shares
Othercomprehensive
income
Specialreserves
Surplusreserves
General
riskreserve
Undistributed
profits
Others
SubtotalPreferenceshares
Perp
| etual |
bond
Others
4. Ending
balance oflast year
3,136,000,000.
9,114,845,5
42.05
475,046.75
961,105,529.85
1,103,162,610.35
14,315,588,729.0
533,475,744.19
14,849,064,473.19
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
Add:
Change ofaccountingpolicies
Correction oferrors forprevious period
Businessconsolidationunder commoncontrol
Others
5.
balance ofcurrentyear
3,136,000,000.
| Beginning |
9,114,845,5
42.05
475,046.75
961,105,529.85
1,103,162,610.35
14,315,588,729.0
533,475,744.19
14,849,064,473.19
6. Changes in
currentyear (“-”fordecrease )
739,371,532.0
3,228,364,3
05.24
208,890.96
842,724,659.47
4,810,669,387.67
-329,404.70
4,810,339,982.97
1) Total
1,036,493,236.07
1,036,493,236.07
-315,177.71
1,036,178,058.36
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
comprehensiveincome
2) Capital
increase anddecrease byshareholders
739,371,532.0
3,228,364,3
05.24
3,967,735,837.24
3,967,735,837.24
(1) Common
share investedby shareholders
739,371,532.0
3,228,364,3
05.24
3,967,735,837.24
3,967,735,837.24
| (2) Capital input |
by the holder ofother equityinstruments
(3) Share-based
paymentattributable toowners’ equity
(4) Others
3) Profit
distribution
-193,768,576.60
-193,768,576.60
-193,768,576.60
(1)
| Appropriation to |
surplus reserves
(2)
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
general riskreserve
(3) Profit
distribution toshareholders
| Appropriation to | ||||||||||
-193,768,576.60
-193,768,576.60
-193,768,576.60
(4) Others
4) Transfers
withinshareholders’equity
(1) Capital
reservestransferred intopaid-in capital(or stock)
(2) Surplus
reservestransferred intopaid-in capital(or stock)
(3) Surplus
reserves torecover loss
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
(4) Changes in
defined benefitplan to retainedearnings
(5) Other
comprehensiveincome toretainedearnings
(6) Others
5) Special
reserves
208,890.96
208,890.96
-14,226.99
194,663.97
(1) Provision of
special reserves
46,823,964.39
46,823,964.39
0.00
46,823,964.39
(2) Use of
special reserves
46,615,073.43
46,615,073.43
14,226.99
46,629,300.42
6) Others
4. Ending
balance ofcurrent year
3,875,371,532.
12,343,209,
847.29
683,937.71
961,105,529.85
1,945,887,269.82
19,126,258,116.6
533,146,339.49
19,659,404,456.16
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
8. STATEMENT OF CHANGE IN OWNER’S EQUITY OF THE PARENT COMPANY
Unit: Yuan
Items
Jan to Jun 2019Share capital
Other equity instruments
Capital reserves
Less:
treasury
shares
Othercomprehensi
ve income
Specialreserves
Undistributed
profits
Others
Total shareholder’s
equityPreferenceshares
Perpetual
bond
Others
Surplus reserves
1. Ending
balance oflast year
3,875,371,532.00
11,923,058,165.17
525,218.48
961,105,529.85
1,401,183,955.66
18,161,244,401.16
Add: Changeof accountingpolicies
Correction oferrors for previousperiod
Others
2. Beginning
balance ofcurrent year
3,875,371,532.00
11,923,058,165.17
525,218.48
961,105,529.85
1,401,183,955.66
18,161,244,401.16
3. Changes in
17,600,841.31
236,582,962.71
254,183,804.02
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
current year(“-” fordecrease )
1) Total
comprehensiveincome
430,351,539.31
430,351,539.31
| 2) Capital increase |
and decrease byshareholders
(1)
invested byshareholders
| Common share |
(2) Capital input
by the holder ofother equityinstruments
(3) Share-based
paymentattributable toowners’ equity
(4) Others
3) Profit
distribution
-193,768,576.60
-193,768,576.60
(1) Appropriation
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
to surplus reserves
(2) Profit
distribution toshareholders
-193,768,576.60
-193,768,576.60
(3) Others
| 4) Transfers within |
shareholders’equity
(1) Capital
reservestransferred intopaid-in capital (orstock)
(2) Surplus
reservestransferred intopaid-in capital (orstock)
(3) Surplus
loss
| reserves to recover |
(4) Changes in
defined benefitplan to retained
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
earnings
(5) Other
comprehensiveincome to retainedearnings
(6) Others
5) Special reserves
17,600,841.31
17,600,841.31
(1) Provision of
special reserves
22,722,987.71
22,722,987.71
(2) Use of special
reserves
5,122,146.40
5,122,146.40
6) Others
4. Ending balance
of current year
3,875,371,532.00
11,923,058,165.17
18,126,059.79
961,105,529.85
1,637,766,918.37
18,415,428,205.18
Items
Jan to Jun 2018Share capital
Other equity instruments
Capital reserves
Less:
treasury
shares
Othercomprehensi
ve income
Specialreserves
Surplus reserves
Undistributed
profits
Others
Total shareholder’s
equityPreferenceshares
Perpetual
bond
Others
Surplus reserves
1. Ending
balance of
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
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
last yearAdd: Changeof accountingpolicies
Correction oferrors for previousperiod
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
248,490.52
787,832,231.28
4,755,816,559.04
1) Total
comprehensiveincome
981,600,807.88
981,600,807.88
| 2) Capital increase |
and decrease byshareholders
739,371,532.00
3,228,364,305.24
3,967,735,837.24
| (1) Common share |
invested by
739,371,532.00
3,228,364,305.24
3,967,735,837.24
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
shareholders
(2) Capital input
by the holder ofother equityinstruments
(3) Share-based
paymentattributable toowners’ equity
(4) Others
3) Profit
distribution
-193,768,576.60
-193,768,576.60
(1) Appropriation
to surplus reserves
(2) Profit
distribution toshareholders
-193,768,576.60
-193,768,576.60
(4) Others
| 4) Transfers within |
shareholders’equity
(1) Capital
reserves
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
transferred intopaid-in capital (orstock)
(2) Surplus
reservestransferred intopaid-in capital (orstock)
(3) Surplus
loss
| reserves to recover |
(4) Changes in
defined benefitplan to retainedearnings
(5) Other
comprehensiveincome to retainedearnings
(6) Others
5) Special reserves
248,490.52
248,490.52
(1) Provision of
special reserves
40,685,554.06
40,685,554.06
(2) Use of special
40,437,063.54
40,437,063.54
Bengang Steel Plates Co., Ltd. Semi-Annual Report 2019
reserves
6) Others
4. Ending balance
of current year
3,875,371,532.00
11,923,058,165.17
525,218.48
961,105,529.85
1,401,183,955.66
18,161,244,401.16
Notes to the financial statements Page 1
III. Basic Information of the CompanyBengang Steel Plates Co., Ltd. (hereinafter referred to as “the Company”), as approved in Liao-Zheng (1997) No. 57 by LiaoningPeople’s Government on 27 March 1997, was incorporated as a joint stock limited company through public share offer ofdomestic listed foreign currency denominated shares (B shares) in the People’s Republic of China (the “PRC”) on 27 June 1997by Benxi Steel and Iron (Group) Co., Ltd. (“Bengang Group”), through reorganization of operations, assets and liabilities of itsplants, 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 issued400,000,000 B-shares at HKD2.38 each in Shenzhen Stock Exchange on 10 June 1997. On 3 November 1997, the Companyissued another 120,000,000 A-shares (Renminbi common Shares) at RMB 5.40 each, and listed in Shenzhen Stock Exchangesince 15 January 1998. The capital shares were totaled to 1,136,000,000 shares.
On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding share equity relocation, the Share EquityRelocation Scheme, Response to Bengang Steel Plate Co., Ltd. about Share Equity Relocation issued by Liaoning ProvincialGovernment State-owned Asset Administrative Committee, Bengang Group – the only holder of non-negotiable state-owned legalperson shares paid the consideration to the current shareholders to obtain the current option for the 40,800,000 shares of the total616,000,000 shares it was holding. Shareholding positions have been registered with China Securities Depository & ClearingCorporation Ltd. Shenzhen Office. However, the total amount of capital shares of Bengang Steel Plates Co., Ltd. was not changedthrough the share equity relocation action.
According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by China Securities Regulatory Commission on 30June 2006, the Company was approved to place 2 billion Renminbi common shares particularly to Bengang Group and theproceeds would be used to purchase the related assets of the Group. On the same day, Bengang Group received circularZheng-Jian-Gong-Si-Zi [2006] No. 127 issued by China Securities Regulatory Committee, and were exempted for the liability ofundertaking the purchase offer. The liability was caused by subscribing of the 2 billion new shares and the total shareholding wasthus increased to 2.5752 billion shares (accounting for 82.12% of the total capital shares of the Company). On 28 August 2006, asapproved by China Securities Depository & Clearing Corporation Ltd. Shenzhen Office, the registration and conditional placingprocedures of the 2 billion new shares were completed. On 28 September 2006, the privately placed shares were approved byShenzhen Stock Exchange to be placed in the stock market. The placing price was RMB4.6733 per share.
Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel Plate Co., Ltd. privately placed nomore than 739,371,534 RMB ordinary shares (A shares) to no more than 10 issuers. The non-public offering was completed on 9February 2018, and 739,371,532 shares were actually issued. The placing price was RMB5.41 per share.
As at 30 June 2019, the capital shares were totaled to 3,875,371,532 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, Liaoning Province.The Company’s legal representative: Gao Lie.
The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd. and the actual controller is theState-owned Assets Supervision and Administration Commission of the State Council of Liaoning province.
Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industry and is mainly involved inproducing and trading of ferrous metal products. Consolidation scope
The financial statements have been approved for reporting by the board of directors of the Company on 28 August 2019.
Consolidation Scope
As at 30 June 2019, subsidiaries included in the Company’s consolidated financial statements are as follows:
Notes to the financial statements Page 2
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. |
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. |
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. |
| Dalian Benruitong Automobile Material Technology Co., Ltd. |
| Changchun Bengang Steel & Iron Sales Co., Ltd. |
| Harbin Bengang Economic and Trading Co., Ltd. |
| Nanjing Bengang Materials Sales Co., Ltd. |
| Wuxi Bengang Steel & Iron Sales Co., Ltd. |
| Xiamen Bengang Steel & Iron Sales Co., Ltd. |
| Yantai Bengang Steel & Iron Sales Co., Ltd. |
| Tianjin Bengang Steel & Iron Trading Co., Ltd. |
| Bengang Posco Cold-rolled Sheet Co., Ltd. |
| Benxi Bengang Steel Sales Co., Ltd |
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. |
| Chongqing Liaoben Steel & Iron Trading Co., Ltd. |
| Bengang Baojin (Shenyang) Automobile New Material Technology Co., Ltd. |
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 specific standards, applicationmaterials, interpretations (together hereinafter referred to as “Accounting Standards for Business Enterprises”) issuedby the Ministry of Finance, and “Information Disclosure Rules for Companies of securities for public issuance No. 15– General Regulations for Financial Statements” issued by the China Securities Regulatory Commission.
(2) Going concern
The Company is operating normally and in a good condition, and thus has the capability to continue to operate in thenext twelve months from the end of reporting period.V. Significant accounting policies and accounting estimatesThe following disclosed content covers the detailed accounting policies and accounting estimates that are adopted bythe Company according to the actual features of production or operation.
Notes to the financial statements Page 3
1. Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial position, operation results and cash flows of theCompany during the reporting period in accordance with China Accounting Standards for Business Enterprises.
2. Accounting year
The Accounting year is from 1 January to 31 December.
3. Operating period
The operating period is twelve months.
4. Functional currency
The Company’s functional currency is RMB.
5. The accounting treatment for Business combination under/not under common control Business combination
under common controlThe assets and liabilities that the Company acquired in a business combination shall be measured on the basis of theircarrying amount of aquiree’s assets, liabilities (as well as the goodwill arising from the business combination) in theconsolidated financial statement of the ultimate controller on the combining date. As for the balance between thecarrying amount of the net assets obtained by the Company and the carrying amount of the consideration paid by it (orthe total par value of the shares issued), capital reserve needs to be adjusted. If the capital reserve is not sufficient, anyexcess shall be adjusted against retained earnings.
Business combination not under common controlThe Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by anenterprise for a business combination in light of their fair values, and shall record the balances between them and theircarrying amounts into the profits and losses at the current period. The Company shall recognize the positive balancebetween the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as goodwill.The Company shall treat the negative balance between the combination costs and the fair value of the identifiable netassets it obtains from the acquiree into the profits and losses of the current period.
The intermediary costs and relevant fees for the business combination paid by the acquirer, including the expenses foraudit, assessment and legal services, shall be recorded into the profits and losses at the current period. The transactionexpenses for the issuance of equity securities for the business combination shall be recorded into the initial recognitionamount of equity securities.
Notes to the financial statements Page 4
6. Consolidation of Financial Statements
1. Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control. All the subsidies(including separable sections of the investees controlled by the Company) have been consolidated into the scope ofconsolidation for this period ended.
2. Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financial statements of the parentand its subsidiaries, and using other related information. When preparing consolidated financial statements, the parentshall consider the entire group as an accounting entity, adopt uniform accounting policies and apply the requirementsof Accounting Standard for Business Enterprises related to recognition, measurement and presentation. Theconsolidated financial statements shall reflect the overall financial position, operating results and cash flows of thegroup.
The accounting policy and accounting period of the subsidiaries within the consolidation scope shall be in accordancewith those of the Company. If not, it is necessary to make the adjustment according to the Company’s accountingpolicies and accounting period when preparing the consolidated financial statements. For subsidiaries throughacquisition that are now under common control, the financial statements are adjusted according to fair value ofidentifiable net assets on the acquisition date. For subsidiaries through acquisition that are under common control, theassets, liabilities (as well as the goodwill arising from purchasing the subsidiary by the ultimate controller) are adjustedaccording to book value of net assets in the financial statements of the ultimate controller.
The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable to the non-controllingshareholders shall be presented separately in the shareholders’ equity of the consolidated balance sheet and under theitem of net profit of the consolidated statement of comprehensive income and under the item of total comprehensiveincome. Where losses assumed by the minority exceed the minority’s interests in the beginning equity of a subsidiary,the excess shall be charged against the minority’s interests.
(1) Increasing new subsidiaries and businesses
If the Company has a new subsidiary due to business combination under common control during the reporting period,it shall adjust the beginning balance in the consolidated statement of financial position when preparing consolidatedstatement of financial position. The revenue, expenses and profits of the subsidiaries from the acquisition date to theend of the reporting period are included in the Company’s consolidated statement of comprehensive income. The cashflow of the subsidiaries from the acquisition date to the end of the reporting period is included in the Company’sconsolidated statement of cash flows. And meanwhile the Company shall adjust the relevant items of the comparativefinancial statements as if the reporting entity for the purpose of consolidation has been in existence since the date the
Notes to the financial statements Page 5
ultimate controlling party first obtained control.
When the Company becomes capable of exercising control over an investee under common control due to additionalinvestment or other reasons, adjustment shall be made as if the reporting entity after the combination has been inexistence since the date the ultimate controlling party first obtained control. The investment income recognizedbetween date of previously obtaining equity investment and the date the acquiree and acquirer are under commoncontrol, which is later, and the combining date, other comprehensive income and other changes of net assets arisingfrom the equity investment previously-held before obtaining the control the acquiree shall be adjusted against theprior retained earnings of the comparative financial statements and the current profit or loss respectively.
If it is now under common control, the Company shall not adjust the beginning balance in the consolidated statementof financial position when preparing consolidated statement of financial position. The revenue, expenses and profitsof the subsidiaries from the acquisition date to the end of the reporting period are included in the parent company’sconsolidated statement of comprehensive income. The cash flow of the subsidiaries from the acquisition date to theend of the reporting period is included in the Company’s consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee now under common control due toadditional investment or other reasons, the acquirer shall remeasure its previously held equity interest in the acquireeto its fair value at the acquisition date. The difference between the fair value and the carrying amount shall berecognized as investment income for the period when the acquisition takes place. When the previously-held equityinvestment is accounted for under the equity method, any other comprehensive income previously recognized inrelation to the acquiree’s equity changes shall be transferred to profit or loss for the current period when theacquisition takes place. Other comprehensive income arising from remeasurement of defined benefit plan is excluded.
(2) Disposing subsidiaries or businesses
1. General treatment
If the Company disposes a subsidiary during the reporting period, the revenue, expenses and profits of the subsidiaryfrom the beginning of the reporting period to disposal date are included in the Company’s consolidated statement ofcomprehensive income. The cash flow of the subsidiaries from the beginning of the reporting period to disposal dateis 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. The difference,between sums of consideration received for disposal equity shares and fair value of the remaining shares, and sums ofshare of net assets of the subsidiary calculated continuously from the acquisition date or the combination date basedon the previous shareholding proportion and goodwill, shall be recognized as investment income for the period whenthe Company loses control over acquiree. When the previously-held equity investment is accounted for under the
Notes to the financial statements Page 6
equity method, any other comprehensive income previously recognized in relation to the acquiree’s equity changes,and other equity changes rather than changes from net profit, other comprehensive income and profit distribution,shall be transferred to investment income for the current period when the Company loses control over acquiree. Othercomprehensive income arising from re-measurement of defined benefit plan is excluded. When the Company losescontrol over a subsidiary due to the increase of capital from other investors and thus the shareholding ratio of theCompany declines, accounting treatment shall be in accordance with the above-mentioned principles.
2. Disposing subsidiaries by multiple transactions
Where the Company loses control of a subsidiary in multiple transactions in which it disposes of its subsidiary instages, in determining whether to account for the multiple transactions as a single transaction, the Company shallconsider all of the terms and conditions of the transactions and their economic effects. One or more of the followingmay indicate that the Company shall account for the multiple arrangements as a single transaction:
(a) Arrangements are entered into at the same time or in contemplation of each other;(b) Arrangements work together to achieve an overall commercial effect;(c) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; and(d) One arrangement considered on its own is not economically justified, but it is economically justified whenconsidered together with other arrangements.
If each of the multiple transactions forms part of a bundled transaction which eventually results in loss of control ofthe subsidiary, these multiple transactions shall be accounted for as a single transaction. In the consolidated financialstatements, the difference between the consideration received and the corresponding proportion of the subsidiary’snet assets in each transaction prior to the loss of control shall be recognized in other comprehensive income andtransferred to the profit or loss when the Company eventually loses control of the subsidiary.
If each of the multiple transactions which eventually results in loss of control of the subsidiary do not form part of abundled transaction, apply the treatment of disposing partial long-term equity investments in a subsidiary withoutloss of control prior to the loss of control. After the loss of control, apply the treatment of disposing the subsidiary incommon cases.
(3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholders
Where the Company has acquired a subsidiary’s equity interest held by non-controlling shareholders, the differencebetween the increase in the cost of long-term investments as a result of acquisition of non-controlling interests andthe share of net assets of the subsidiary calculated continuously from the acquisition date or the combination datebased on the new shareholding proportion shall be adjusted to the capital reserve( capital premium or share premium)in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall beadjusted against retained earnings.
Notes to the financial statements Page 7
(4) Disposing portion of equity investments in subsidiaries without lossing control
When the Company disposes of a portion of the long-term equity investments in a subsidiary without loss of control,the difference between the amount of the consideration received and the corresponding portion of the nest assets ofthe subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of thelong-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in theconsolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjustedagainst retained earnings.
7. Recognition of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and theunrestricted deposit. And the term “cash equivalents” refers to short-term (maturing within three months fromacquisition) and highly liquid investments that are readily convertible to known amounts of cash and which are subjectto an insignificant risk of change in value.
8. Foreign currency transaction and translation of foreign currency financial statements
1. Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. Thebalance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the spotexchange rate at the time of initial recognition or prior to the balance sheet date, except those arising from the raisingof special foreign debt for the purchase or construction of capitalizable assets thus shall be capitalized according to theborrowing costs capitalization principle, shall be recorded into the profits and losses at the current period.
2. Translation of foreign currency financial statements
The asset and liability items in the statement of financial position shall be translated at a spot exchange rate on thebalance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall betranslated at the spot exchange rate at the time when they are incurred. The income and expense items in the incomestatement shall be translated using an exchange rate that is determined in a systematic and reasonable manner andapproximates the spot exchange rate on the transaction date.
When disposing an overseas business, the Company shall shift the balance, which is presented under the items of theowner's equities in the statement of financial position and arises from the translation of foreign currency financialstatements related to this oversea business, into the disposal profits and losses of the current period. If the overseasbusiness is disposed of partially, the Company shall calculate the balance arising from the translation of foreign
Notes to the financial statements Page 8
currency statements of the part of disposal based on the disposal rate and shall shift them into the profits and losses ofthe current period.
9. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
The Company shall classify financial assets on the basis of both the entity’s business model for managing the financialassets and the contractual cash flow characteristics of the financial asset as: financial assets measured at amortised cost,financial assets measured at fair value through other comprehensive income (debt instrument) and financial assetsmeasured at fair value through profit or loss at initial measurement.
A financial asset shall be measured at amortised cost if both of the following conditions are met. The financial asset isheld within a business model whose objective is to hold financial assets in order to collect contractual cash flows andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.
A financial asset shall be measured at fair value through other comprehensive income if both of the followingconditions are met. The financial asset is held within a business model whose objective is achieved by both collectingcontractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specifieddates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Other financial assets other than these are classified as financial assets measured at fair value through profit or loss.
The Company may make an election at initial recognition for non-trading equity instrument investments whether it isdesignated as a financial asset (equity instrument) that is measured at fair value through other comprehensive income.
The Company shall classify financial liabilities as financial liabilities measured at amortised cost and financialliabilities measured at fair value through profit or loss at initial measurement.
The Company may, at initial recognition, designate a financial liability as measured at fair value through profit or lossbecause either:
(a) it eliminates or significantly reduces an accounting mismatch;(b) a group of financial liabilities or financial assets and financial liabilities is managed and its performance isevaluated on a fair value basis, in accordance with a documented risk management or investment strategy, andinformation about the group is provided internally on that basis to the entity’s key management personnel;(c) the financial liability contains embedded derivatives that need to be separated.
Notes to the financial statements Page 9
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortised cost
Financial assets measured at amortized cost include notes receivables, accounts receivables, other receivables,long-term receivables, debt investments, etc. At initial recognition, the Company shall measure a financial asset at itsfair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset.The Company shall measure account receivables at their transaction price if the account receivables do not contain asignificant financing component and accounts receivables that the company has decided not to consider for a financingcomponent of no more than one year.
Interests calculated by using the effective interest method during the holding period shall be recognized in profit orloss.
When recovering or disposing the receivables, the difference between the price obtained and the carrying value shall berecognized in current profit or loss.
(2) Financial assets measured at fair value through other comprehensive income (debt instruments)
Financial assets measured at fair value through other comprehensive income (debt instruments) include receivablesfinancing, other debt investments, etc. At initial recognition, the Company shall measure a financial asset at its fairvalue plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. Thefinancial assets are subsequently measured at fair value. Changes in fair value are included in other comprehensiveincome except for interest calculated using the effective interest method, impairment losses or gains and exchangegains and losses.
When the financial assets are derecognized, the accumulated gain or loss previously recognized in othercomprehensive income is transferred from other comprehensive income and recognized in profit or loss.
(3) Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include other equity instrumentinvestments, etc.
At initial recognition, the Company shall measure a financial asset at its fair value plus transaction costs that aredirectly attributable to the acquisition or issue of the financial asset. The financial assets are subsequently measured atfair value. Changes in fair value are included in other comprehensive income. The dividends obtained are recognised inprofit and loss.
When the financial assets are derecognized, the accumulated gain or loss previously recognised in other comprehensiveincome is transferred from other comprehensive income and recognised in retained earnings.
Notes to the financial statements Page 10
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include transactional financial assets, derivative financial assets,other non-current financial assets, etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised inprofit or loss. Changes in fair value are included in profit or loss.
When the financial assets are derecognized, the difference between the fair value and the initially recorded amount isrecognized as investment income, and the gains and losses from changes in fair value are adjusted.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include current financial liabilities, derivative financial liabilities,etc.
The Company shall measure the financial assets at fair value at initial recognition. Transaction costs are recognised inprofit or loss. Changes in fair value are included in profit or loss.
When the financial liabilities are derecognized, the difference between the fair value and the initially recorded amountis recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost include short-term borrowings, notes payables, accounts payables,other payables, long-term borrowings, bonds payables, long-term payables.
At initial recognition, the Company shall measure a financial liability at its fair value plus transaction costs that aredirectly attributable to the acquisition or issue of the financial asset.
Interests calculated by using the effective interest method during the holding period shall be recognized in profit orloss.
When the financial liabilities are derecognized, the difference between the price obtained and the carrying value shallbe recognised in profit and loss.
3. Recognition and measurement of financial assets transfer
Notes to the financial statements Page 11
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset tothe transferee, it shall derecognize the financial asset. If it retained nearly all of the risks and rewards related to theownership of the financial asset, it shall not derecognize the financial asset.
To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in these Standards for thederecognition of a financial asset, the Company shall follow the principle of the substance over form. Transfer of anentire financial asset can be divided into partial financial assets transfer and entire financial asset transfer. If thetransfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of thefollowing 2 items shall be recorded in the profit or loss of the current period:
(1) The book value of the transferred financial asset; and
(2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value
originally recorded in the owners' equities (in the event that the financial asset involved in the transfer is a financialasset Available-for-sale).
If the transfer of partial financial asset satisfies the conditions to be derecognized, the entire book value of thetransferred financial asset shall, between the portion derecognized and the portion not derecognized, be apportionedaccording to their respective relative fair value, and the difference between the amounts of the following 2 items shallbe included into the profit or loss of the current period :
(1) The book value of the portion derecognized; and
(2) The sum of consideration of the portion derecognized, and the portion of the accumulative amount of the changes
in the fair value originally recorded in the owner's equities which is corresponding to the portion derecognized (in thecase that the financial asset involved in the transfer is a financial asset Available-for-sale).
If the transfer of financial assets does not satisfy the conditions of derecognition, it shall continue to be recognized asfinancial assets and the consideration received shall be recognized as financial liabilities.
4. Derecognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the financial liability bederecognized in all or partly.
Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilitiesby way of any new financial liability, and if the contractual stipulations regarding the new financial liability issubstantially different from that regarding the existing financial liability, it shall derecognize the existing financialliability, and shall at the same time recognize a new financial liability.
Notes to the financial statements Page 12
Where the Company makes substantial revisions to part or all of the contractual stipulations of the existing financialliability, it shall derecognize the existing financial liability or part of it, and at the same time recognize the financialliability after revising the contractual stipulations as a new financial liability.
Where a financial liability is totally or partially derecognized, the Company shall recognize in profit or loss of thecurrent period the difference between the carrying amount derecognized and the considerations it has paid (includingthe non-cash assets it has transferred out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the date of repurchase, the carryingamount of the whole financial liabilities in light of the comparatively fair value of the part that continues to berecognized and the part recognized. The gap between the carrying amount which is distributed to the part derecognizedand the considerations it has paid (including the noncash assets it has transferred out and the new financial liabilities ithas assumed) shall be recognized into profit or loss of the current period.
5. Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quoted prices in the activemarkets. If active markets for the financial instruments do not exist, valuation techniques shall be applied for themeasurement. The Company uses valuation techniques appropriate in the circumstances and for which sufficient dataare available to measure fair value. The Company chooses relevant observable inputs for identical or similar assets orliabilities. Only when relevant observable inputs are unavailable or should the Company use unobservable inputs forthe asset or liability.
6. Impairment of the financial assets
The Company shall recognize loss allowance for expected credit losses on financial asset measured at amortised cost,and financial assets measured at fair value through other comprehensive income, such as debt instrument investments,contract assets, financial guarantee contract, etc.
The Company considers reasonable and relevant information on past events, current conditions and forecasts of futureeconomic conditions, and takes the risk of default as a weight, and calculates the difference between the cash flowreceivable from the contract and the cash flow expected to be received. The probability-weighted amount of the presentvalue of the current value confirms the expected credit loss.
At each reporting date, the Company shall measure the expected credit losses of financial instruments at differentstages. If the credit risk on a financial instrument has not increased significantly since initial recognition, it is in thefirst stage, the Company shall measure the loss allowance for that financial instrument at an amount equal to 12-monthexpected credit losses. If the credit risk has increased significantly since initial recognition but the credit impairmenthas not occurred, it is in the second stage, and the company shall measure the loss allowance for a financial instrument
Notes to the financial statements Page 13
at an amount equal to the lifetime expected credit losses. If the credit risk has increased significantly since initialrecognition and the credit impairment has occurred, it is in the third stage, and the company shall measure the lossallowance for a financial instrument at an amount equal to the lifetime expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initialrecognition if the financial instrument is determined to have low credit risk at the reporting date and measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses..
The Company shall recognize the amount of expected credit losses or reversal in profit or loss. For debt instrumentsheld at fair value through other comprehensive income, the Company shall recognize the amount of expected creditlosses or gains in profit or loss, and adjust other comprehensive income.
For note receivables, account receivables and asset contracts, whether a significant financing component is containedor not, the Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses.
The impairment test shall be assessed individually for account receivables if there is evidence indicating that thereceivables have been impaired, and for others applicable to individual assessments to recognise the expected creditlosses and individual impairment.
For accounts receivable that do not have objective evidence of impairment or when individual financial assets cannotbe used to estimate expected credit losses at reasonable cost, the Company shall divide receivables based on the creditrisk characteristics into different portfolio and calculate expected credit loss based on portfolios.
The recognition of expected credit losses for the receivables in portfolio：
| Items | Criteria for portfolio | Recognition method for expected credit losses |
Account receivables –Aging analysismethod
Similar creditcharacteristics forsimilar aging
forecasts of future economic conditions, calculate expected credit losses
| using comparison table of accounts receivables aging analysis and |
lifetime expected credit loss ratio.Other receivables –Aging analysis method
Similar creditcharacteristics forsimilar aging
forecasts of future economic conditions, calculate expected credit losses
using comparison table of other receivables aging analysis and lifetime
expected credit loss ratio.
Account receivables and other receivables - Aging analysis method for lifetime expected credit loss ratio:
Notes to the financial statements Page 14
Aging
accounts receivable (%)
| Expected credit loss ratio for | Expected credit loss ratio for |
other receivables (%)
| Within 1 year (inclusive) | ||
| 1-2 years (inclusive) | 5.00 | 5.00 |
| 2-3 years (inclusive) | 20.00 | 20.00 |
| Over 3 years | 100.00 | 100.00 |
10. Inventory
1. Inventory classification
Inventories include material in transit, raw material, low-valued consumables, finished goods, work in process,materials for consigned processing, etc.
2. Valuation method for inventory dispatched
The weighted average method is used to confirm the actual cost of the inventories dispatched.
3. The basis for confirming the net realizable value of inventories and the methods to make provision for the
inventory impairment lossThe net realizable value of inventories (finished products, stock commodity, material, etc.) held for direct selling in thedaily business activity shall be calculated by deducting the estimated sale expense and relevant taxes from theestimated sale price of inventories; The net realizable value of inventories for further processing in the daily businessactivity shall be calculated by deducting the estimated cost of completion, estimated sale expense and relevant taxesfrom the estimated sale price of inventories; The net realizable value of inventories held for the execution of salescontracts or labor contracts shall be calculated on the ground of the contract price. If the Company holds moreinventories than the quantities subscribed in the sales contract, the net realizable value of the excessive part of theinventories shall be calculated on the ground of the general sales price.
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 for loss ondecline in value of inventories shall be made on the ground of the categories of inventories. For the inventories relatedto the series of products manufactured and sold in the same area, and of which the final use or purpose is identical orsimilar thereto, and if it is difficult to measure them by separating them from other items, the provision for loss ondecline in value of inventories shall be made on a combination basis.
Unless clear evidence shows that the market price is exceptionally fluctuating, the net realizable value of inventory isbased 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.
Notes to the financial statements Page 15
4. Inventory system
The Company uses perpetual inventory system.
5. Amortization of low-valued consumables and packing materials
(1) Low-valued consumables shall be amortized in full amount on issuance.
(2) Packing materials shall be amortized in full amount on issuance.
11. Assets hold for sales
The Company classifies non-current assets or disposal asset groups when the assets meet the following criterion intoholding categories for sale simultaneously:
(1) According to the practice of selling such assets or disposal asset groups in similar transactions, they can be sold
immediately under current conditions;
(2) The sale of assets is highly probable, as the company has already made a resolution on a sale plan and obtained a
certain purchase commitment, and the transaction is expected to be completed within one year. The relevantregulations that the assets can be sold have been approved by relevant authorities or regulatory authorities of theCompany.
12. Long-term equity investment
1. Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions aboutthe relevant activities require the unanimous consent of the parties sharing control. If the Company and other jointventure have joint control of the investee and have rights to the net assets of the investee, the investee is a joint ventureof the Company.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but notcontrol or join control of those policies. If the Company could exert significant influence over the investee, the investeeis the associate of the Company.
2. The initial cost of long-term equity investment from business acquisition
(1) Long-term equity investment from business acquisition
For a business combination under common control, if the consideration of the combination is satisfied by paying cash,transfer of non-cash assets or assumption of liabilities and issue of equity securities, the initial investment cost of thelong-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity of theparty 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
Notes to the financial statements Page 16
investment or other reasons, the initial investment cost shall be the absorbing party’s share of the carrying amount ofthe owner’s equity of the party being absorbed in the consolidated financial statements of the ultimate controlling partyat combination date. The difference between the initial investment cost and the carrying amount of the previously-heldequity investment, together with the additional investment cost for new shares at combination date, shall be adjusted tothe capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings.
For a business combination not under common control, the initial investment cost of the long-term equity investmentshall be the acquisition cost at the acquisition date. When an investor becomes capable of exercising control over aninvestee due to additional investment or other reasons, the initial investment cost under the cost method shall be thecarrying amount of previously-held equity investment together with the additional investment cost.
(2) The initial cost of the long-term equity investment other than from business acquisition
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost whichis actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair valueof the equity securities issued.
If the exchange of non-monetary assets is commercial in nature and the fair values of both the assets received andsurrendered can be reliably measured, the fair value of the assets surrendered shall be used as the basis for determiningthe cost of the assets received, unless there is any exact evidence showing that the fair value of the assets received ismore reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed above, thecarrying value and relevant payable taxes of the assets surrendered shall be the initial cost of the assets received.
The initial cost of a long-term equity investment obtained by debt restructuring shall be ascertained on the basis of fairvalues.
3. Subsequent measurement and profit or loss recognition
(1) Cost method
The Company adopts cost method for the long term investment in subsidiary company. Under the cost method, aninvesting enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity,recognize the investment profits or losses except the dividend declared but unpaid, which is included in the paymentwhen acquiring the investment.
(2) Equity method
Notes to the financial statements Page 17
A long-term equity investment in an associate or a joint venture shall be accounted for using the equity method. Wherethe initial investment cost of a long-term equity investment exceeds tan investor’s interest in the fair values of aninvestee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost.Where the initial cost is less than the investor’s interest in the fair values of the investee’s identifiable net assets at theacquisition date, the difference shall be credited to profit or loss for the current period.
The Company shall recognize its share of the investee’s net profits or losses, as well as its share of the investee’s othercomprehensive income, as investment income or losses and other comprehensive income, and adjust the carryingamount of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of anyprofit distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share ofthe investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, othercomprehensive income or profit distribution, and the carrying amount of the long-term equity investment shall beadjusted accordingly.
The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustmentsaccording to the Company’s accounting principles and operating period based on the fair values of the investee’sidentifiable net assets at the acquisition date. During the holding period, if the investee makes consolidated financialstatements, the Company shall calculate its share based on the investee’s net profit, other comprehensive income andthe amount of other owners' equity attribute to the investee in the consolidated financial statements.
The unrealized profits or losses resulting from transactions between the investor and its associate or joint venture shallbe eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or lossesshall be recognized. Any losses resulting from transactions between the investor and investee which are attributable toasset impairment shall be recognized in full. If the transaction of investment or sale of assets among the Company andassociate and joint venture and the assets is a business, it shall apply the treatment mentioned in Note 3 (5) “Theaccounting treatment for Business combination under/now under common control” and Note 3 (6) “Consolidation ofFinancial Statements”.
When the Company recognizes the losses of invested enterprise, it shall follow the following sequence: First of all,offset the book value of long term equity investment. If the book value of long-term equity is insufficient to dilute, theinvesting enterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equityinvestment and other long-term rights and interests which substantially form the net investment made to the investedentity are reduced to zero. If the company still has the obligation to undertake extra losses per contract, and thenestimated liabilities shall be recognized into current profit and loss accordingly to the estimated obligation.
(3) Disposal of long-term equity investment
Notes to the financial statements Page 18
When disposing long-term equity investment, the difference between the proceeds actually received and the carryingamount shall be recognized in profit or loss for the current period.
When the previously-held equity investment is accounted for under the equity method, any other comprehensiveincome previously recognized shall be accounted for on the same basis as would have been required if the investee haddirectly disposed of the related assets or liabilities. Those owner's equity recognized other than the change of net profitsor loss, other comprehensive income, profit distribution of the invested entity shall be transferred proportionally intoprofit or loss of current period, other comprehensive income arising from the re-measurement of defined benefit plan isexcluded.
When an investor can no longer exercise joint control of or significant influence over an investee due to partialdisposal of equity investment or other reasons, the remaining equity investment shall be accounted for in accordancewith “Accounting Standard for Business Enterprises No. 22-Financial instruments: recognition and measurement”. Thedifference between the fair value and the carrying amount at the date of the loss of join control or significant influenceshall be charged to profit or loss for the current period. When the previously-held equity investment is accounted forunder the equity method, any other comprehensive income previously recognized shall be accounted for on the samebasis as would have been required if the investee had directly disposed of the related assets or liabilities for the currentperiod upon discontinuation of the equity method. Those owner's equity recognized other than the change of net profitsor loss, other comprehensive income, profit distribution of the invested entity shall be transferred into profit or loss ofcurrent period in full when the Company cease to adopt the equity method.
When the Company can no longer exercise control over an investee due to partial disposal of equity investment or dueto decrease of shareholding ratio because of additional investment by other investors, and with the retained interest,still has joint control of, or significant influence over, the investee, when preparing the individual financial statements,the investor shall change to the equity method and adjust the remaining equity investment as if the equity method hadbeen applied from the date of the first acquisition. If the investor cannot exercise joint control of or significantinfluence over the investee after partial disposal of equity investment, the remaining equity investment shall beaccounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial instruments:
Recognition and Measurement”, and the difference between the fair value and carrying amount at the date of the lossof control shall be charged to profit or loss for the current period.
When the equity investment disposed is acquired through business combination due to additional investment or otherreasons, 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 equityinvestment under the equity method shall be transferred proportionally. For those remaining equity investmentaccounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial instruments:
Notes to the financial statements Page 19
Recognition and Measurement” after disposal, other comprehensive income and other owner’s interests previouslyrecognized shall be transferred to profit or loss in full.
13. Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation, or both, includingleased land use rights, land use rights held and prepared for transfer after appreciation, and leased buildings ( Buildingsthat are leased after completion of self-construction or development activities and buildings that are being used forrental in the future during construction or development).
The company uses the cost model to measure the existing investment property. For investment property measuredaccording to the cost model - the rental building adopts the same depreciation policy as the fixed assets of the company,and the land use right for rental is amortized according to the same amortization policy as the intangible assets.
14. Fixed assets
1. Recognition of Fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing commodities, rendering labor service,renting or business management and of which useful life is in excess of one fiscal year. No fixed asset may berecognized unless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
2. Fixed assets depreciation
Fixed assets are depreciated under the straight line method. The depreciation rate is determined according to thecategory of assets, the useful life and the expected residual rate. If the components of the fixed assets have differentuseful lives or provide the economic benefits in a different way, then different depreciation rate or method shall beapplied and the depreciation of the components shall be calculated separately.
Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonably certain that theownership of the leased assets will be acquired upon expiry of lease, or over the shorter of lease term and useful life ifit is not reasonably certain that the ownership of the leased assets will be acquired upon expiry of lease.
Details of classification, depreciation period, residual value rate and annual depreciation rate are as follows:
Category Depreciation method
Period
| Depreciation | Residual Value Rate |
(%)
(%)
| Depreciation Rate | ||||
| Plants and Buildings | straight line method | 8-40 years | 0.00 | 2.50-12.50 |
| Machinery | straight line method | 4-18 years | 3.00 | 5.39-24.25 |
Notes to the financial statements Page 20
equipment
| Transportation and other | straight line method |
5-18 years 3.00 5.39-19.40
3. Recognition criteria for fixed asset leased in by financial leasing and its valuation
Where a lease satisfies one or more of the following criteria, it shall be recognized as a financial leasing:
(1) The ownership of the leased asset is transferred to the lessee when the term of lease expires;
(2) The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of
the leased asset at the date when the option becomes exercisable;
(3) The lease term covers the major part of the use life of the leased asset; and
(4) The present value of the minimum lease payments on the lease beginning date amounts to substantially all of the
fair value of the leased asset on the lease beginning date.
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and thepresent value of the minimum lease payments on the lease beginning date as the initial book value, recognize theamount of the minimum lease payments as the initial book value of long-term account payable, and treat the differencebetween the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges.
15. Construction in progress
The cost of fixed assets transferred from a construction in progress includes all the necessary expenses incurred forbringing the asset to the expected conditions for use. Construction in progress is transferred to fixed asset when it hasreached its working condition for its intended use. In case the final project accounts have not been completed orapproved, the asset shall be transferred to fixed assets at an estimated value by considering project budget, cost oractual cost of the project and etc., and the deprecation of the said fixed assets shall be provided in accordance with theCompany’s accounting policy since it has reached its working condition for its intended use. After the project accountshave been approved, the estimated values shall be adjusted based on the actual cost, but those provided deprecationshall not be adjusted.
16. Borrowing costs
1. Principle of the recognition of capitalized borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings,ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction orproduction of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets.Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall berecorded into the current profits and losses.
Notes to the financial statements Page 21
Assets eligible for capitalization refer to the fixed assets, investment real estate, inventories and other assets, of whichthe acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(1) The asset disbursements have already incurred, which shall include cash, transferred non-cash assets or interest
bearing debts paid for the acquisition and construction or production activities for preparing assets eligible forcapitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended
use or sale have already started.
2. The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of theborrowing 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, thecapitalization of the borrowing costs shall be ceased.
Where each part of a qualified asset under acquisition and construction or production is completed separately and isready for use, the capitalization of the borrowing costs in relation to this part of asset shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready foruse or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirelycompleted, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruptionperiod lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is anecessary step for making the qualified asset under acquisition and construction or production ready for the intendeduse or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such periodshall be recognized as expenses, and shall be recorded into the profits and losses of the current period, till theacquisition and construction or production of the asset restarts.
4. Method of calculating the capitalization rate and capitalized amount of borrowing costs
For interest expense (minus the income of interests earned on the unused borrowing loans as a deposit in the bank orinvestment income earned on the loan as a temporary investment) and the ancillary expense incurred to a specificallyborrowed loan, those incurred before a qualified asset under acquisition, construction or production is ready for the
Notes to the financial statements Page 22
intended use or sale shall be capitalized at the incurred amount when they are incurred, and shall be recorded into thecosts of the asset eligible for capitalization.
The Company shall calculate and determine the to-be-capitalized amount of interests on the general borrowing bymultiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus thegeneral borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculatedand determined in light of the weighted average interest rate of the general borrowing.
17. Intangible Assets
1. Measurement of Intangible Assets
(1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and other necessarydisbursements which may be directly attributable to bringing the intangible asset to the conditions for the expectedpurpose. If the payment for an intangible asset is delayed beyond the normal credit conditions and it is of the financingnature, the cost of the intangible asset shall be determined on the basis of the present value of the purchase price.
For intangible assets obtained from debt restructuring as settlement of liabilities from debtors, initial recognition isbased on its fair value, and the difference between the debt restructured and the fair value of the intangible assets arerecognized in the current profit and loss.
For intangible assets obtained from non-monetary transactions with commercial substance, and the fair value of theassets obtained or surrendered can be reliably measured, the initial recognition of the asset obtained is based on the fairvalue of the asset surrendered, unless there is strong evidence that the fair value of the asset obtained is more reliable.For intangible assets obtained through non-monetary transactions which do not meet the above criteria, the initialrecognition is based on the book value of the assets surrendered and the relevant taxes payable. No gain or loss will berecognized.
(2) Subsequent Measurement
The Company shall analyze and judge the beneficial period of intangible assets upon acquisition.
Intangible assets with finite beneficial period shall be amortized under the straight-line method during the period whenthe intangible asset can bring economic benefits to the enterprise. If it is unable to estimate the beneficial period of theintangible asset, it shall be regarded as an intangible asset with uncertain service life and shall not be amortized.
2. Estimated useful lives of intangible assets with limited useful lives
| Item | Estimated useful life | Criteria |
Notes to the financial statements Page 23
| Land use right | 50 years | Land use right certificate |
The Company shall review the useful lives and amortization methods of intangible assets with limited useful lives ateach year end.
3. Determination of intangible assets with uncertain useful lives
As at the balance sheet date, the Company has no intangible assets with uncertain useful lives.
4. Classification criteria for internal research phase and development phase
The expenditures for its internal research and development projects of an enterprise shall be classified into researchexpenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study to acquire and understandnew scientific or technological knowledge.
Development phase refers to the phase during which the result of research phase or other knowledge is applied intocertain projects or designs for the manufacturing of new or substantially improved material, device and product.
18. Impairment of long-term assets
For long-term assets under the cost model such aslong-term equity investments, Investment property, fixed assets,construction in progress, intangible assets with limited useful lives etc., the Company shall perform impairment tests atthe period end if there is clear indication of impairment. If the recoverable amounts of long-term assets are less thantheir carrying amounts, the carrying amounts of the assets shall be written down to their recoverable amounts. Thewrite-downs are recognized as impairment losses and charged to current profit and loss. The recoverable amounts oflong-term assets are the higher of their fair values less costs to sell and the present values of the future cash flowsexpected to be derived from the assets. The Company shall estimate its recoverable amount on an individual basis.Where it is difficult to do so, it shall determine the recoverable amount of the group assets on the basis of the assetgroup to which the asset belongs. The term "group assets” refers to a minimum combination of assets by which thecash flows could be generated independently
The goodwill shall be subject to an impairment test at least at the end of each year.
When the Company makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying valueof the business reputation formed by merger of enterprises to the relevant asset groups by a reasonable method. Whereit is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. When apportioning thecarrying value of the business reputation to the relevant asset groups or combinations of asset groups, it shall be
Notes to the financial statements Page 24
apportioned on the basis of the proportion of the fair value of each asset group or combination of asset groups to thetotal fair value of the relevant asset groups or combinations of asset groups. Where it is difficult to measure the fairvalue reliably, it shall be apportioned on the basis of the proportion of the carrying value of each asset group orcombination of asset groups to the total carrying value of the relevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containing businessreputation, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, theCompany shall first make an impairment test on the asset groups or combinations of asset groups not containingbusiness reputation, calculate the recoverable amount, compare it with the relevant carrying value and recognize thecorresponding impairment loss. Then the Company shall make an impairment test of the asset groups or combinationsof asset groups containing business reputation, and compare the carrying value of these asset groups or combinationsof asset groups (including the carrying value of the business reputation apportioned thereto) with the recoverableamount. Where the recoverable amount of the relevant assets or combinations of the asset groups is lower than thecarrying value thereof, it shall recognize the impairment loss of the business reputation.
Impairment losses on long-term assets shall not be reversed in subsequent accounting periods once recognized.
19. Long-term deferred expense
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 its beneficiary period evenly
20. Employee benefits
1. Accounting treatment for short employee benefit
The Company shall recognized, in the accounting period in which an employee provides service, actually occurredshort-term employee benefits as a liability, with a corresponding charge to the profit or loss or cost of an asset for thecurrent period.
Payments made by an enterprise of social security contributions for employees, payments of housing funds, and unionrunning costs employee education costs provided in accordance with relevant requirements shall, in the accountingperiod in which employees provide services, be calculated according to prescribed bases and percentages indetermining the amount of employee benefits.
The employee benefits which are non-monetary benefits shall be measured at fair value if it could be measuredreliably.
Notes to the financial statements Page 25
2. Accounting treatment of post-employment benefits
The Company shall recognize, in the accounting period in which an employee provides service, pension fund andunemployment fund for employees as a liability according to the local government regulations. The amount shall becalculated according to local prescribed bases and percentages in determining the amount of employee benefits, with acorresponding charge to the profit or loss or cost of an asset for the current period.
3.Accounting treatment of termination benefits
The Company shall recognize an employee benefits liability for termination benefits, with a corresponding charge tothe profit or loss for the current period, at the earlier of the following dates: when the Company cannot unilaterallywithdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; orwhen the Company recognizes costs or expenses related to a restructuring that involves the payment of terminationbenefits.
21. Estimated liabilities
1. Recognition criteria of estimated liabilities
The obligation pertinent to a Contingency (litigation, guarantees, loss contract, restructuring) shall be recognized as anestimated liability when the following conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation;
and
(3) The amount of the obligation can be measured in a reliable way.
2. Measurement of estimated liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for theperformance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value ofmoney, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the bestestimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in accordance with the following situations, respectively:
If there is a continuous range for the necessary expenses and if all the outcomes within this range are equally likely tooccur, the best estimate shall be determined in accordance with the average estimate within the range, that is, theaverage of the upper and lower limit.
Notes to the financial statements Page 26
If there is not a sequent range for the necessary expenses and if the outcomes within this range are not equally likely tooccur, the best estimate shall be determined as follows:
(1) If the Contingencies concern a single item, it shall be determined in the light of the most likely outcome.
(2) If the Contingencies concern two or more items, the best estimate shall be calculated and determined in accordance
with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to becompensated by a third party, the compensation shall be separately recognized as an asset only when it is virtuallycertain that the reimbursement will be obtained. The amount recognized for the reimbursement shall not exceed thebook value of the estimated debts.
22. Revenue
1.The general principle of revenue recognition and measurement
The Company has transferred to the buyer the significant risks and rewards of ownership of the goods; and retainedneither continuing managerial involvement which usually relates to the ownership nor exerts effective control overthe goods sold. The relevant amount of revenue can be measured reliably, the economic benefits related to thetransaction will flow into the enterprise; and the relevant costs incurred or to be incurred can be measured reliably.Revenue from the sale of goods may be recognized.
2.The specific criteria of revenue recognition and measurement
The Company mainly sells steel and other products. Domestic sales revenue is recognized when the followingconditions are met: The Company has delivered the products to buyer under the contract, amount of product salesrevenue is determinable, received or the certificate of the right to receive the amount has been obtained and therelevant economic benefits are likely to flow into the entity, and related costs can be measured reliably.Export sales revenue is recognized when the following conditions are met: the Company has undertaken the Customsdeclaration and delivery has occurred under the contract, bill of lading has been obtained, amount of product salesrevenue is determinable, received or the certificate of the right to receive the amount has been obtained and therelevant economic benefits are likely to flow into the entity, and related costs can be measured reliably.
3.Recognition Criteria for the Revenue from alienating of Assets Use Rights
When it is probable that economic benefits in relation to the transaction will flow into the enterprise; and the amountof revenues can be measured reliably. The Company shall ascertain the amount of revenues from the transfer ofAssets Use Right based on the following circumstances respectively:
(1) Interest income shall be calculated based on the duration of which the Company's cash is used by others and the
actual interest rate; or
(2) Royalty revenue shall be calculated based on the period and method of charging as stipulated in the relevant
contract or agreement.
Notes to the financial statements Page 27
23. Government Subsidies
A government subsidy means the monetary or non-monetary assets obtained free of charge by the Company from thegovernment. Government subsidies consist of the government subsidies pertinent to assets and government subsidiespertinent to income.
The criteria and accounting treatment of government subsidies pertinent to assets.
Government subsidies related to assets are government subsidies whose primary condition is that an entityqualifying for them should purchase, construct or otherwise acquire long-term assets.
Recognition
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount ofthe assets or recognized as deferred income. Subsidies that recognized as deferred income shall be recognized inprofit or loss over the periods during the useful lives of the relevant assets.Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at the caring amount ofthe assets or recognized as deferred income. Subsidies that recognized as deferred income shall be recognized inprofit or loss on a systematic basis over the periods during the useful lives of the relevant assets (Subsidiesrelated to daily activities should be recorded in Other Income. Subsidies that unrelated to daily activities shouldbe recorded in Non-operating Income).
The criteria and accounting treatment of government subsidies pertinent to income.The government subsidy related to income refers to the government subsidy other than the government subsidyrelated to the asset.RecognitionThe government subsidies related to incomes to compensate future expenses, shall be recognized as deferredincome and transferred to current profit or loss. Government subsidies to compensate expenses or losses alreadyincurred shall be recognized in current profit and loss.Accounting treatmentThe government subsidies related to incomes to compensate future expenses, shall be recognized as deferredincome and transferred to current profit or loss (Subsidies related to daily activities should be recorded in OtherIncome. Subsidies that unrelated to daily activities should be recorded in Non-operating Income) in the periodduring which the expenses compensation is recognized or deduct relevant cost or loss. Government subsidies tocompensate expenses or losses already incurred shall be recognized in current profit and loss (Subsidies relatedto daily activities should be recorded in Other Income. Subsidies unrelated to daily activities should be recordedin Non-operating Income) or deduct relevant cost or loss.
Notes to the financial statements Page 28
24. Deferred tax assets and deferred tax liabilities
An enterprise shall recognize the deferred income tax assets arising from a deductible temporary difference to theextent of the amount of the taxable income which it is most likely to obtain and which can be deducted from thedeductible temporary difference.
As for any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferredincome tax assets shall be determined to the extent that the amount of future taxable income to be offset by thedeductible loss or tax deduction to be likely obtained.
All taxable temporary differences shall be recognized as deferred tax liabilities with certain limited exceptions.
Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initial recognition ofgoodwill; initial recognition of an asset or liability in a transaction or event that is not a business combination and atthe 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 and thedeferred tax liabilities relate to income taxes levied by the same taxation authority on either:(i) the same taxable entity;or (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or torealize the assets and settle the liabilities simultaneously, in each future period in which significant amounts ofdeferred tax liabilities or assets are expected to be settled or recovered.
25. Leases
1. Accounting treatment of operating lease
(1) The rents paid for operating leases shall be recorded in the profits and losses of the current period by using the
straight-line method over each period of the lease term. The initial direct costs paid by the Company shall berecorded 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 period by using
the straight-line method over each period of the whole lease term in which free lease period is included. The initialdirect costs paid by the Company shall be recorded into the profits and losses of the current period. The initial direct
Notes to the financial statements Page 29
costs shall be capitalized if it is material, and be allocated to each period as per the basis for rental revenuerecognition.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 be allocatedto each period during the lease term.
2. Accounting treatment of financial leasing
(1) Leased in asset
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the presentvalue of the minimum lease payments on the lease beginning date as the initial book value, recognize the amount ofthe minimum lease payments as the initial book value of long-term account payable, and treat the balance betweenthe recorded amount of the leased asset and the long-term account payable as unrecognized financing charges.
The lessee shall adopt the effective interest rate method to calculate and recognize the financing charge in the currentperiod. The unrecognized financing charge shall be amortized to each period during the lease term. Initial direct costsincurred by the Company shall be recorded in the value of the leased asset.
(2) Leased out asset
On the lease beginning date, a lessee shall record the balance between the sum of finance lease receivables plusunguaranteed residual value and the present value of the sum as unrealized financing income, and record rental asrevenue when received for each period in the futureInitial direct costs incurred by the Company related to the leased asset shall be recorded in the initial measurement ofthe finance lease receivables, and reduce the amount of revenue recognized during the lease term.
26. Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for sale by the Company, and canbe distinguished separately in operating and preparing financial statements when one of the following conditions ismet:
(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.
27. Change of significant accounting policy and accounting estimate
(1) Significant changes in accounting policies.
√ Applicable □ Not applicable
The contents and reasons Approval procedure The items affected and the amount
Notes to the financial statements Page 30
(1) In Statement of Financial
| of accounting policy changes |
| Position, “Notes receivable and accounts receivable” is separated into "Notes receivable" and "Accounts receivable"; The comparative data is adjusted |
accordingly.
Approved by the fifthsession of the eighthboard of directors
"Notes receivable" and "Accounts receivable", amount for
| current year is 4,518,016,226.76 and 614,718,839.21, amount for previous year is 3,580,145,843.38 and |
639,482,481.45.“Notes receivable and accounts receivable” is separated into"Notes receivable" and "Accounts receivable", amount for
(2) Adjust the “credit impairment
loss” and “asset impairment loss” in
| current year is 4,296,253,321.51 and 402,397,751.85, amount for previous year is 3,356,020,598.89 and 409,553,059.27. | ||
| the income statement to add the operating profit, and the loss is |
listed as “-”.
Approved by the fifthsession of the eighth
board of directors
to add the operating profit, amount for the current year is
0.00, amount for previous year is 20,917,963.64;
Adjust the “credit impairment loss” in the income statementto add the operating profit, amount for the current year is
| 3,751,513.83. |
(1) New Financial Instrument guidelines
Since January 1, 2019, the company has implemented the “Accounting Standards for Business Enterprises No. 22 –Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 23 – Transferof Financial Assets” and “Accounting Standards for Business Enterprises No. 24 - Hedge Accounting” and “AccountingStandards for Business Enterprises No. 37 - Financial Instruments Disclosure” (hereinafter referred to as "New FinancialInstruments Guidelines") revised by the Ministry of Finance in 2017.
In terms of the classification and measurement of financial assets, the new financial instrument standard requires financialassets to be classified as subsequently measured at amortised cost, fair value through other comprehensive income or fairvalue through profit or loss on the basis of both the entity’s business model for managing the financial assets and thecontractual cash flow characteristics of the financial asset and eliminates the classification of loans, receivables, held tomaturity investments, and available for sale financial assets in the original financial instruments. An investment in an equityinstrument is generally classified as a financial asset at fair value through profit or loss. It also allows a non-tradable equityinstrument investment to be designated as a financial asset at fair value through other comprehensive income. Thedesignation is irrevocable and the accumulated fair value changes previously recognised in other comprehensive income arenot carried forward to profit or loss. In respect of impairment, the requirements of the new financial instrument standard forimpairment are applied to financial assets measured at amortised cost, financial assets measured at fair value through othercomprehensive income, lease receivables and financial guarantee contracts. The new financial instrument standard requiresthe use of an expected credit loss model to confirm credit loss provisions to replace the original credit loss model. The newimpairment model adopts a three-stage model. According to the relevant item, whether the credit risk has increasedsignificantly since the initial recognition, the loss allowance is measured at an amount equal to 12-month expected creditlosses or an amount equal to the lifetime expected credit losses. For receivables and long-term receivables formed bytransactions regulated by the income standard, as well as the receivables of finance leases formed by transactions regulatedby the “Accounting Standards for Business Enterprises No. 21 – Leases”, the Company shall measure the loss allowance atan amount equal to lifetime expected credit losses.
Notes to the financial statements Page 31
If the recognition and measurement of financial instruments before January 1, 2019 is inconsistent with the requirements ofthe new financial instruments, the company shall make retrospective adjustments in accordance with the requirements of thenew financial instruments guidelines. The company does not make adjustments when it involves inconsistency between theprevious comparative financial statement data and the new financial instrument guidelines. The difference between theoriginal book value of the financial instrument and the new book value on the date of the implementation of the newfinancial instrument's standard is included in retained earnings or other comprehensive income as of January 1, 2019.
(2) The revision of the format for the issuance of the financial statements
Ministry of Finance issued “Notice of the Ministry of Finance on the revision of the format for the issuance of the financialstatements of the general enterprise for the year 2019” (Cai Kuai 2019 No.6, hereinafter referred to as “Cai Kuai No. 6Notice”) on 30 April 2019, which revised the format of financial statement for the general enterprise. The major impact ofthe implementation of the above regulations are as above.
(2) Significant changes in accounting estimates
□ Applicable √ Not applicable
(3) Adjustments of beginning balance due to the first time implementation of the new financial instruments
guidelines, new income standards, new lease standards
√ Applicable □ Not applicable
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unit: yuanItems Dec 31
st
2018 Jan 1
st
2019
Current assets:
| Adjustment amount |
Cash at bank and on hand16,567,471,755.77
16,567,471,755.77
Settlement provisions
Capital lent
Financial assets held for trading
Financial assets at fair value through profitor loss
Derivative financial assets
Notes receivable3,580,145,843.38
3,580,145,843.38
Accounts receivable639,482,481.45
639,482,481.45
Receivables financing
Prepayments1,321,537,514.78
1,321,537,514.78
Premium receivable
Reinsurance accounts receivable
Notes to the financial statements Page 32
Receivable deposit for reinsurance contract
Other receivables:
202,763,964.98
202,763,964.98
Including: Interest receivables11,608,705.43
11,608,705.43
Dividend receivables
Redemptory financial assets for sale
Inventories10,677,747,112.40
10,677,747,112.40
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets292,119,771.13
292,119,771.13
Total current assets33,281,268,443.89
33,281,268,443.89
Non-current assets:
Loan and advances issued
Debt investments
Available-for-sale financial assets1,041,824,829.00
-1,041,824,829.00
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments2,455,681.55
2,455,681.55
Other equity instrument investments
1,041,824,829.00
Other non-current financial assets
Investment properties
Fixed assets23,924,504,539.97
23,924,504,539.97
Construction in progress836,594,457.82
836,594,457.82
Productive biological assets
Oil and gas assets
Right of use assets
Intangible assets278,062,441.04
278,062,441.04
Development expenditure
Goodwill
Notes to the financial statements Page 33
Long-term deferred expenses
Deferred tax assets191,452,547.21
191,452,547.21
Other non-current assets76,341,975.35
76,341,975.35
Total non-current assets26,351,236,471.94
26,351,236,471.94
Total assets59,632,504,915.83
59,632,504,915.83
Current Liabilities:
Short-term loans11,938,490,375.85
11,938,490,375.85
Loan from central bank
Absorbed deposit and interbank deposit
Financial liabilities held for trading
Financial liabilities at fair value throughprofit or loss
Derivative financial liabilities
Note payables10,013,192,014.02
10,013,192,014.02
Account payables5,522,042,811.65
5,522,042,811.65
Advance from customers3,331,854,098.42
3,331,854,098.42
Financial assets sold for repurchase
Deposits from customers and interbank
Acting trading securities
Acting underwriting securities
Employee benefits payable51,466,231.72
51,466,231.72
Current tax liabilities515,752,369.68
515,752,369.68
Other payables862,511,178.96
862,511,178.96
Including: Interest payables9,658,681.99
9,658,681.99
Dividend payables
Handling charges and commission payable
Reinsurance accounts payable
Contract liabilities
Liabilities held for sale
Non-current liabilities due within one year350,965,576.32
350,965,576.32
Other current liabilities
Notes to the financial statements Page 34
Total current liabilities32,586,274,656.62
32,586,274,656.62
Non-current liabilities:
Provision for insurance contract
Long-term loans7,083,640,094.16
7,083,640,094.16
Bonds payable
Including: Preferred stock
Perpetual bond
Lease liabilities
Long-term payables13,686,705.92
13,686,705.92
Long-term employee benefits payables
Estimated liabilities
Deferred income289,499,002.97
289,499,002.97
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities7,386,825,803.05
7,386,825,803.05
Total liabilities39,973,100,459.67
39,973,100,459.67
Shareholders’ equity:
Share capital3,875,371,532.00
3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital reserves12,343,209,847.29
12,343,209,847.29
Less: treasury shares
Other comprehensive income
Special reserves683,937.71
683,937.71
Surplus reserves961,105,529.85
961,105,529.85
General risk reserves
Undistributed profits1,945,887,269.82
1,945,887,269.82
Total equity attributable to equity holders of theparent company
19,126,258,116.67
19,126,258,116.67
Non-controlling interests533,146,339.49
533,146,339.49
Total shareholder’s equity19,659,404,456.16
19,659,404,456.16
Total liabilities and shareholder’s equity59,632,504,915.83
59,632,504,915.83
Notes to the financial statements Page 35
BALANCE SHEET OF THE PARENT COMPANY
Unit: YuanItems Dec 31
2018 Jan 1
| st | st |
2019 Adjustment amountCurrent assets:
Cash at bank and on hand15,536,305,375.00
15,536,305,375.00
Financial assets held for trading
Financial assets at fair value through profitor loss
Derivative financial assets
Notes receivable3,356,020,598.89
3,356,020,598.89
Accounts receivable409,553,059.27
409,553,059.27
Receivables financing
Prepayments1,309,194,738.97
1,309,194,738.97
Other receivables235,037,391.46
235,037,391.46
Including: Interest receivables9,815,280.04
9,815,280.04
Dividend receivables
Inventories8,681,362,081.72
8,681,362,081.72
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets193,989,096.20
193,989,096.20
Total current assets29,721,462,341.51
29,721,462,341.51
Non-current assets:
Debt investments
Available-for-sale financial assets1,041,624,829.00
-1,041,624,829.00
Other debt investments
Held-to-maturity investment
Long-term receivables
Long-term equity investments2,016,281,902.16
2,016,281,902.16
Other equity instrument investments
1,041,624,829.00
1,041,624,829.00
Other non-current financial assets
Investment properties
Fixed assets22,035,187,328.57
22,035,187,328.57
Construction in progress825,553,510.15
825,553,510.15
Productive biological assets
Oil and gas assets
Right of use assets
Intangible assets148,776,177.96
148,776,177.96
Development expenditure
Goodwill
Long-term deferred expenses
Notes to the financial statements Page 36
Deferred tax assets96,220,003.00
96,220,003.00
Other non-current assets76,341,975.35
76,341,975.35
Total non-current assets26,239,985,726.19
26,239,985,726.19
Total assets55,961,448,067.70
55,961,448,067.70
Current Liabilities:
Short-term loans10,624,270,375.85
10,624,270,375.85
Financial assets held for trading
Financial liabilities at fair value throughprofit or loss
Derivative financial liabilities
Notes payable9,213,748,427.22
9,213,748,427.22
Accounts payable5,940,816,426.48
5,940,816,426.48
Advance from customers3,189,143,565.45
3,189,143,565.45
Contract liabilities
Employee benefits payable49,378,095.47
49,378,095.47
Current tax liabilities507,003,883.57
507,003,883.57
Other payables538,051,513.13
538,051,513.13
Including: Interest payables7,341,833.33
7,341,833.33
Dividend payables
Liabilities held for sale
Non-current liabilities due within one year350,965,576.32
350,965,576.32
Other current liabilities
Total current liabilities30,413,377,863.49
30,413,377,863.49
Non-current liabilities:
Long-term loans7,083,640,094.16
7,083,640,094.16
Bonds payable
Including: Preferred stock
Perpetual bond
Lease liabilities
Long-term payables13,686,705.92
13,686,705.92
Long-term employee benefits payable
Estimated liabilities
Deferred incomes289,499,002.97
Deferred tax liabilities
289,499,002.97
Other non-current liabilities
Total non-current liabilities7,386,825,803.05
7,386,825,803.05
Total liabilities37,800,203,666.54
37,800,203,666.54
Shareholders’ equity:
Share capital3,875,371,532.00
3,875,371,532.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Notes to the financial statements Page 37
Capital reserves11,923,058,165.17
11,923,058,165.17
Less: treasury shares
Other comprehensive income
Special reserves525,218.48
525,218.48
Surplus reserves961,105,529.85
961,105,529.85
Undistributed profits1,401,183,955.66
1,401,183,955.66
Total shareholder’s equity18,161,244,401.16
18,161,244,401.16
Total liabilities and shareholder’s equity55,961,448,067.70
55,961,448,067.70
VI. Taxes
1. Major type of taxes and corresponding tax rates
| Tax | Taxation Method | Tax Rate |
Value-added Tax(VAT)
revenue in accordance with the tax lawsafter subtracting the deductible input VATof the period
6%，10%、16%(Jan to Mar in 2019)6%, 9%, 13% (Apr to Jun in 2019)City maintenance and construction tax
| The balance of output VAT calculated based on product sales and taxable services |
| Based on VAT and business tax actually |
paid
7%, 5%Enterprise income tax Based on taxable profit 25%Notes to whether there is different income tax rate
| Tax payer | Income tax rate |
VII. Notes to the consolidated financial statements
1. Cash at bank and on hand
| Items | Ending balance | Beginning balance |
| Cash on hand | 5,346.25 | 4,839.95 |
| Cash at bank | 11,788,917,223.26 | 11,752,543,782.02 |
| Other monetary funds | 5,156,849,822.92 | 4,814,923,133.80 |
| Total | 16,945,772,392.43 | 16,567,471,755.77 |
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 | 4,538,099,822.92 | 3,794,647,133.80 |
| Margin for letter of credit | 165,270,000.00 | 105,000,000.00 |
| Time deposit or notice deposit for |
guarantee
453,480,000.00 915,276,000.00
| Total | 5,156,849,822.92 | 4,814,923,133.80 |
Notes to the financial statements Page 38
2. Notes receivable
(1) Notes receivable disclosed by category
| Items | Ending balance | Beginning balance |
| Bank acceptance bill | 4,361,187,029.40 | 3,540,317,759.10 |
| Commercial acceptance bill | 156,829,197.36 | 39,828,084.28 |
| Total | 4,518,016,226.76 | 3,580,145,843.38 |
(2) The pledged acceptance bill at the end of the period
There is no pledged acceptance bill at the end of the period.
(3) The amount of Notes receivable endorsed over but not yet matured at the year-end.
| Items | Derecognized ending balance | Unrecognized ending balance |
| Bank acceptance bill | 7,280,230,450.89 | |
| Commercial acceptance bill | ||
| Total | 7,280,230,450.89 |
(4) No Notes receivable has been transferred into accounts receivable due to inability of drawer to meet
acceptance bill at the year-end.
3. Accounts receivable
(1) Accounts receivable disclosed by category
Items
| Ending balance | ||
| Carrying amount | Provision for bad debts | |
Book valueAmount
(%)
Amount
| Percentage | Bad debts |
ratio (%)
impairment individually
47,762,337.18 6.02 47,762,337.18 100.00
| Accounts receivable tested for | |||||
| Including: | |||||
| Accounts receivable tested for |
impairment by portfolio
745,278,892.11 93.98 130,560,052.90 17.52 614,718,839.21
| Including: | |||||||
| Total | 793,041,229.29 | 100.00 | 178,322,390.08 | 22.49 | 614,718,839.21 | ||
| Items | Beginning balance | ||||||
Notes to the financial statements Page 39
| Carrying amount | Provision for bad debts |
Book valueAmount
Amount
| Percentage (%) | Bad debts ratio |
(%)
impairment individually
47,762,337.18 5.82 47,762,337.18 100.00
| Accounts receivable tested for | |||||
| Including: | |||||
| Accounts receivable tested for |
impairment by portfolio
773,432,447.14 94.18 133,949,965.69 17.32 639,482,481.45
| Including: | |||||
| Total | 821,194,784.32 | 100.00 | 181,712,302.87 | 22.13 | 639,482,481.45 |
Accounts receivables individually significant and tested for impairment individually
Company
Carrying amount
| Ending balance | ||
| Provision for bad | ||
debts
(%)
Reason
Accounts receivables tested for impairment by portfolio
Items
Bad debts ratio
Ending balance
| Ending balance | ||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) |
Notes:
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected creditlosses, please refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Not applicable
Accounts receivable disclosed by Aging
Unit: yuan
| Aging | Ending balance |
Within 1 year (inclusive) 538,645,725.73
1 – 2 year 56,752,847.90
| 2 – 3 year | 27,697,384.96 |
Over 3 years 169,945,270.70
Total
| Total | 793,041,229.29 |
(2) Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 3,389,912.79.
(3) Top five debtors at the year-end
| Company | Ending balance |
Notes to the financial statements Page 40
Amount
(%)
| Percentage of total Accounts receivable | Provision for |
bad debts
| The first | 296,599,328.97 | 37.40 | |
| The second | 106,438,276.12 | 13.42 | |
| The third | 62,482,368.63 | 7.88 | 6,792,099.51 |
| The fourth | 47,762,337.18 | 6.02 | 47,762,337.18 |
| The fifth | 41,687,479.04 | 5.26 | |
| Total | 554,969,789.94 | 69.98 | 54,554,436.69 |
4. Receivables financing
Unit: yuan
| Items | Ending balance | Beginning balance |
Changes in receivables financing and fair value during the current period
□ Applicable √ Not applicable
If the provision for bad debts of receivables financing is made in accordance with the general model of expected creditlosses, please refer to the disclosure of other receivables to disclose information about bad debts:
□ Applicable √ Not applicable
5. Prepayments
(1) Prepayments disclosed by aging
Aging
| Ending balance | Beginning balance | |||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year (inclusive) | 1,311,404,160.39 | 99.77 | 1,318,136,339.11 | 99.74 |
| 1-2 years (inclusive) | 2,226,256.90 | 0.17 | 2,494,489.34 | 0.19 |
| 2-3 years (inclusive) | 833,987.64 | 0.06 | 901,900.77 | 0.07 |
| Over 3 years | 4,785.56 | 0.00 | ||
| Total | 1,314,464,404.93 | 100.00 | 1,321,537,514.78 | 100.00 |
Notes: As of June 30, 2019, there were no outstanding prepayments of over 1 year.
(2) Top five prepaid companies at the year-end
| Name of the company | Amount | Percentage (%) |
| The First | 698,463,245.75 | 53.14 |
| The Second | 98,729,978.44 | 7.51 |
| The Third | 87,022,226.90 | 6.62 |
Notes to the financial statements Page 41
| The Fourth | 79,143,421.14 | 6.02 |
| The Fifth | 20,957,800.88 | 1.59 |
| Total | 984,316,673.11 | 74.88 |
6. Other receivables
| Items | Ending balance | Beginning balance |
| Interest receivables | 13,872,107.84 | 11,608,705.43 |
| Dividend receivables | ||
| Other receivables | 191,594,542.93 | 191,155,259.55 |
| Total | 205,466,650.77 | 202,763,964.98 |
(1) Interest receivable
1) Interest receivable disclosed by category
| Items | Ending balance | Beginning balance |
| Deposit interest | 13,872,107.84 | 11,608,705.43 |
| Total | 13,872,107.84 | 11,608,705.43 |
(2) Other receivables
1) Other receivables disclosed by nature
| Nature | Ending balance | Beginning balance |
| Accounts | 204,915,146.72 | 203,695,979.62 |
| Margin and deposit | 2,286,886.27 | 2,238,972.26 |
| Others | 48,975,036.85 | 50,164,435.62 |
| Total | 256,177,069.84 | 256,099,387.50 |
2) Provision of bad debt
Unit: yuan
Provision of bad debt
The first stage The second stage The third stage
Total12-month expected
credit losses
lifetime expected credit
losses(credit impairment has not
occurred)
lifetime expected credit
losses(credit impairment has
already occurred)The balance ofJanuary 1, 2019 in thisreporting period
—— —— —— ——
Significant changes of provision during the current reporting period
□ Applicable √ Not applicable
Notes to the financial statements Page 42
Other receivables disclosed by Aging
Unit: yuan
Aging Ending balanceWithin 1 year (inclusive) 158,226,535.01
1 – 2 year 4,278,962.95
2 – 3 year 34,453,741.40
Over 3 years 59,217,830.48
Total256,177,069.84
3) Top five debtors at the year-end
Company
Nature or
content
Amount Aging
Percentage of
total otherreceivables (%)
| Percentage of | Provision |
for bad
debts
| The First | Accounts | 7,718,029.34 | within 1 year | 2.86 | |
| The Second | Accounts | 4,807,446.56 | within 1 year | 1.78 | |
| The Third | Accounts | 4,514,286.35 | 2-3 years | 1.67 | 2,138,916.66 |
| The Fourth | Accounts | 4,341,257.18 | 2-3 years | 1.61 | 868,251.44 |
| The Fifth | Accounts | 3,526,146.54 | within 1 year | 1.31 | |
| Total | 24,907,165.97 | 9.23 | 3,007,168.10 |
7. Inventories
Whether implement the new income standard or not.
□ Applicable √ Not applicable
(1) Inventories disclosed by category
Items
| Ending balance | Beginning balance | |||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |
| Raw material and | ||||||
main material
6,468,803,309.62
26,986,533.69
6,441,816,775.93
5,509,216,101.37
26,986,533.69
5,482,229,567.68
self-madesemi-finishedproduct
1,402,852,181.92
1,402,852,181.92
1,365,365,191.33
29,012,489.61
1,336,352,701.72
| Work in process and | ||||||
| Finished products | 4,123,737,309.00 | 827,243.38 | 4,122,910,065.62 | 3,888,124,260.41 | 28,959,417.41 | 3,859,164,843.00 |
| Total | 11,995,392,800.54 | 27,813,777.07 | 11,967,579,023.47 | 10,762,705,553.11 | 84,958,440.71 | 10,677,747,112.40 |
Whether the company is required to comply with the disclosure requirements of the Shenzhen Stock Exchange IndustryInformation Disclosure Guide No. 4 - Listed Companies Engaged in Seed Industry and Planting Business
□ Applicable √ Not applicable
Notes to the financial statements Page 43
(2) Impairment of inventory
Category Beginning balance
| Increase | Decrease |
Ending balanceProvision Others
write-off
Others
| Write-back or | ||
| Raw material and main |
material
26,986,533.69
26,986,533.69
self-made semi-finishedproduct
29,012,489.61
| Work in process and | 29,012,489.61 |
| Finished products | 28,959,417.41 | 28,132,174.03 | 827,243.38 | |||
| Total | 84,958,440.71 | 57,144,663.64 | 27,813,777.07 |
8. Other current assets
Whether implement the new income standard or not.
□ Applicable √ Not applicable
| Items | Ending balance | Beginning balance |
| Prepaid enterprise income tax | 184,668,751.64 | 189,634,393.98 |
| VAT input tax | 62,944,230.59 | 102,485,377.15 |
| Total | 247,612,982.23 | 292,119,771.13 |
Notes to the financial statements Page 44
9. Long-term equity investment
Investees
Beginning
Balance
Increase/decrease
EndingBalance
AmountProvision
Total
TotalImpairment
EndingBalanceAddInvestment
ReduceInvestme
nt
Impairment
Investment
Gains and
LossesRecognized
under theEquity Method
AdjustmentComprehensive Income
OtherEquityChanges
Declaration of
| Cash Dividends |
or Profit
Others
| Joint Venture | |||||||||||
| Zhejiang Bengang |
Jingrui SteelProcessing Co., Ltd.
2,455,681.55
25,907.49 2,481,589.04
| Subtotal | 2,455,681.55 | 25,907.49 | 2,481,589.04 | ||||||||
| Total | 2,455,681.55 | 25,907.49 | 2,481,589.04 |
Notes to the financial statements Page 45
10. Other equity investment
| Items | Ending Balance | Beginning Balance |
| Suzhou Bengang Industrial Co., Ltd. | 3,888,980.00 | |
| Sinosteel Shanghai Steel Processing Co., Ltd. | 0.00 | |
| Northeast Special Steel Group Co., Ltd. | 1,037,735,849.00 | |
| Guangzhou Benpu Auto Board Sales Co., Ltd. | 200,000.00 | |
| Total | 1,041,824,829.00 |
11. Fixed assets
Items Ending balance Beginning balanceFixed assets 22,672,967,771.15
23,924,504,539.97
Total 22,672,967,771.15
23,924,504,539.97
(1) Details of fixed assets
Items Buildings Machinery
equipment and
others
Total
| Transportation | ||
| 1 |
．
| Total original value | ||||
| (1) Beginning balance | 12,174,491,765.86 | 43,551,735,976.27 | 902,527,777.12 | 56,628,755,519.25 |
| (2) Increase in current period | 7,596,518.16 | 7,596,518.16 | ||
| Including: Purchase | ||||
| Transferred from |
construction in progress
7,596,518.16
7,596,518.16
| Merging | ||||
| Others | ||||
| (3) Decrease in current period | 28,441,077.44 | 362,164,072.02 | 1,076,210.06 | 391,681,359.52 |
| Including: Disposal | 28,441,077.44 | 362,164,072.02 | 1,076,210.06 | 391,681,359.52 |
| Others | ||||
| (4) Ending balance | 12,146,050,688.42 | 43,197,168,422.41 | 901,451,567.06 | 56,244,670,677.89 |
| 2 |
．
| Total accumulated depreciation | ||||
| (1) Beginning balance | 5,576,027,013.36 | 26,526,053,819.79 | 560,595,347.69 | 32,662,676,180.84 |
| (2) Increase in current period | 188,520,413.30 | 932,455,392.69 | 78,888,442.73 | 1,199,864,248.72 |
| Including: Provision | 188,520,413.30 | 932,455,392.69 | 78,888,442.73 | 1,199,864,248.72 |
| Others | - | |||
| (3) Decrease in current period | 20,923,664.12 | 303,852,548.23 | 7,296,035.40 | 332,072,247.75 |
| Including: Disposal | 20,923,664.12 | 303,852,548.23 | 7,296,035.40 | 332,072,247.75 |
| Others | ||||
| (4) Ending balance | 5,743,623,762.54 | 27,154,656,664.25 | 632,187,755.02 | 33,530,468,181.81 |
Notes to the financial statements Page 46
Items Buildings Machinery
equipment and
others
Total
| Transportation | ||
| 3 |
．
| Total impairment | ||||
| (1) Beginning balance |
38,948,079.36
2,626,719.08
| 41,574,798.44 | ||||
| (2) Increase in current period | ||||
| Including: Provision | ||||
| Others | ||||
| (3) Decrease in current period |
340,073.51
| 340,073.51 | ||||
| Including: Disposal |
340,073.51
| 340,073.51 | ||||
| Others | ||||
| (4) Ending balance |
38,608,005.85
2,626,719.08
| - | 41,234,724.93 | |||
| 4 |
．
assets
| Total net book value of Fixed | ||||
| (1) Ending book value | 6,363,818,920.03 | 16,039,885,039.08 | 269,263,812.04 | 22,672,967,771.15 |
| (2) Beginning book value | 6,559,516,673.14 | 17,023,055,437.40 | 341,932,429.43 | 23,924,504,539.97 |
(2) Temporary idle fixed assets
| Items | Original book value | Accumulated depreciation | Impairment | Book value |
| Buildings | 201,165,792.22 | 118,513,395.96 | 35,014,689.33 | 47,637,706.93 |
| Machinery | 1,224,688.89 | 1,149,022.46 | 75,666.43 |
Total
| 202,390,481.11 | 119,662,418.42 | 35,090,355.76 | 47,637,706.93 |
(3) Fixed assets leased out by operating lease
| Items | Book value |
| Buildings | 9,460,723.71 |
| Machinery | 85,459.55 |
| Total | 9,546,183.26 |
(4) Fixed assets without property rights certificates at the end of the period
| Items | Book value | Reason |
| Buildings | 1,016,286,114.63 | To be handled |
Notes to the financial statements Page 47
12. Construction in progress
| Items | Ending balance | Beginning balance |
| Construction in progress | 1,355,784,359.63 | 831,693,471.71 |
| Project materials | 18,626,600.07 | 4,900,986.11 |
| Total | 1,374,410,959.70 | 836,594,457.82 |
(1) Details of construction in progress
Items
| Ending balance | Beginning balance |
Carrying amount
Totalimpairment
Total net bookvalue of Fixed assets
Carrying amount
Totalimpairment
value of Fixedassets
Total net bookHigh Strength Cold Rolling Steel Renovation
Project
43,856,840.06 43,856,840.06
| High Strength Cold Rolling Steel Renovation |
| The Third Cold Rolling Work Hot-Dip |
Galvanizing Production Line Project
4,575,442.24 4,575,442.24
| The 360 Square Meter Sintering Machine | 48,115,730.79 | 48,115,730.79 | 39,870,921.39 | 39,870,921.39 | ||
| Energy Control Center Project | 16,521,792.81 | 16,521,792.81 | 16,068,616.55 | 16,068,616.55 | ||
| Renovation Project of Power Plant Three - Power |
Plant.
77,265,082.68 77,265,082.68 67,436,716.24 67,436,716.24
Reconstruction Of No.1 Converter Project
107,484,022.00 107,484,022.00 81,652,336.52 81,652,336.52
| Energy Saving And Environmental Protection |
| Modifying and Upgrading of No.2 Casting |
machine in Hot steel plant
71,055,463.93 71,055,463.93 67,751,518.71 67,751,518.71
blast furnace)
205,247,220.39 205,247,220.39 79,221,161.00 79,221,161.00
| No. 5 blast furnace overhaul project (new No. 2 |
| Power plant 4-5# coke oven dry quenching waste |
heat steam utilization project
30,116,417.01 30,116,417.01 27,607,246.17 27,607,246.17
| 1700 hot rolling perfect transformation | 29,822,575.23 | 29,822,575.23 | 25,521,831.89 | 25,521,831.89 | ||
| CCPP power generation project | 66,004,363.05 | 66,004,363.05 | 24,961,721.54 | 24,961,721.54 | ||
| Coking plant gas deamination and sulfur ammonia |
maintenance project
34,800,566.05 34,800,566.05 34,300,566.05 34,300,566.05
utilization
50,994,694.50 50,994,694.50 44,777,158.00 44,777,158.00
| 360 square meter sintering machine waste heat |
| 5#-7# Oxygen Generator Nitrogen Increase |
Energy Saving Reconstruction
28,911,871.30 28,911,871.30 21,715,145.18 21,715,145.18
saving reform of TRT power generation
27,673,848.07 27,673,848.07 22,973,276.80 22,973,276.80
| Dry dedusting of No. 7 blast furnace and energy |
| No. 6 blast furnace environmental protection |
overhaul project
39,093,141.87 39,093,141.87 22,895,777.14 22,895,777.14
| Other | 474,245,287.65 | 474,245,287.65 | 254,939,478.53 | 254,939,478.53 | ||
| Total | 1,355,784,359.63 | 1,355,784,359.63 | 831,693,471.71 | 831,693,471.71 |
Notes to the financial statements Page 48
(2) Construction materials
Items
| Ending balance | Beginning balance | |||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |
| Construction materials | 18,626,600.07 | 18,626,600.07 | 4,900,986.11 | 4,900,986.11 | ||
| Total | 18,626,600.07 | 18,626,600.07 | 4,900,986.11 | 4,900,986.11 | ||
13. Intangible assets
(1) Details of intangible assets
| Items | Land use right | Software | Total |
| 1 |
．
| Total of original value | |||
| (1)Beginning balance | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| (2)Increase | |||
| Including: Purchase | |||
| Including: Internal R&D | |||
| Including: Increase in Mergers | |||
| Including: Others | |||
| (3)Decrease | |||
| Including: Disposal | |||
| Including: Others | |||
| (4)Ending balance | 327,028,797.84 | 310,401.55 | 327,339,199.39 |
| 2 |
．
| Total of Accumulated Amortization | |||
| (1)Beginning balance | 49,176,692.15 | 100,066.21 | 49,276,758.36 |
| (2)Increase | 3,270,287.92 | 8,444.37 | 3,278,732.29 |
| Including: Provision | 3,270,287.92 | 8,444.37 | 3,278,732.29 |
| Including: Others | |||
| (3)Decrease | |||
| Including: Disposal | |||
| Including: Others | |||
| (4)Ending balance | 52,446,980.07 | 108,510.58 | 52,555,490.65 |
| 3 |
．
| Total of Impairment | |||
| (1)Beginning balance | |||
| (2)Increase | |||
| Including: Provision | |||
| Including: Others | |||
| (3)Decrease | |||
| Including: Disposal | |||
| Including: Others | |||
| (4)Ending balance | |||
| 4 |
．
| Total of Net value | |||
| (1)Ending book value | 274,581,817.77 | 201,890.97 | 274,783,708.74 |
| (2)Beginning book value | 277,852,105.69 | 210,335.35 | 278,062,441.04 |
Notes to the financial statements Page 49
14. Deferred tax asset and deferred tax liability
(1) Undedicated deferred tax asset
Items
| Ending balance | Beginning balance | |
| Deductible temporary | ||
differences
Deferred tax asset
differences
Deferred tax asset
| Deductible temporary | ||||
| Impairment | 323,453,331.07 | 80,863,332.77 | 384,689,582.05 | 96,172,395.52 |
| Internal unrealized profit | 44,665,863.14 | 11,166,465.79 | 47,141,747.73 | 11,785,436.93 |
| Differences of depreciation and |
amortization
333,978,859.03 83,494,714.76 333,978,859.03 83,494,714.76
| Total | 702,098,053.24 | 175,524,513.32 | 765,810,188.81 | 191,452,547.21 |
(2) Unrecognized deferred tax assets
| Items | Ending balance | Beginning balance |
| Deductible temporary differences | 2,914,780.92 | 2,914,780.92 |
| Deductible losses | 667,057,769.20 | 1,112,718,371.26 |
| Total | 669,972,550.12 | 1,115,633,152.18 |
(3) The deductible loss of unrecognized deferred tax assets due in the following period
| Items | Ending balance | Beginning balance | Notes |
| Year 2020 | 639,818,319.71 | 1,085,478,921.77 | |
| Year 2021 | 11,436,302.83 | 11,436,302.83 | |
| Year 2022 | 1,000,766.72 | 1,000,766.72 | |
| Year 2023 | 14,802,379.94 | 14,802,379.94 | |
| Year 2024 |
| Total | 667,057,769.20 | 1,112,718,371.26 |
15. Other non-current assets
Whether implement the new income standard or not.
□ Applicable √ Not applicable
| Items | Ending balance | Beginning balance |
| Prepaid of long-term assets | 68,303,165.35 | 76,341,975.35 |
| Total | 68,303,165.35 | 76,341,975.35 |
Notes:
Notes to the financial statements Page 50
16. Short-term loans
(1) Classification of short-term loans
| Items | Ending balance | Beginning balance |
| Pledge loans | 48,262,375.85 | |
| Guaranteed loans | 12,078,193,000.00 | 10,361,008,000.00 |
| Credit loans | 220,000,000.00 | 1,529,220,000.00 |
| Total | 12,298,193,000.00 | 11,938,490,375.85 |
17. Notes payables
| Items | Ending balance | Beginning balance |
| Bank acceptance bill | 9,317,222,357.86 | 8,738,192,014.02 |
| Domestic letter of credit | 2,333,060,000.00 | 1,275,000,000.00 |
| Total | 11,650,282,357.86 | 10,013,192,014.02 |
Notes: There are no outstanding notes payable at the end of this period.
18. Accounts payable
(1) Accounts payable disclosed by category
| Items | Ending balance | Beginning balance |
| Accounts payable for goods | 4,432,010,176.48 | 4,483,900,163.08 |
| Accounts payable for labor | 29,371,271.02 | 30,829,506.69 |
| Accounts payable for project and equipment | 509,540,291.98 | 424,097,390.68 |
| Repair expense | 652,340,212.43 | 579,971,383.23 |
| Others | 3,576,818.36 | 3,244,367.97 |
| Total | 5,626,838,770.27 | 5,522,042,811.65 |
(2) Significant accounts payable aging over one year
| Items | Ending balance | Reason |
| Liaoning Shenjiao International Trade Co.,Ltd | 72,839,065.27 | Not yet settled |
| MCC Southern Engineering Technology Co., Ltd. |
| 51,119,440.77 | Not yet settled |
| Hangzhou Tianshen Materials Co., Ltd. | 20,145,902.65 | Not yet settled |
| MCC Jiao Nai Engineering Technology Co., Ltd. |
| 19,379,163.99 | Not yet settled |
Ltd.
17,415,300.00 Not yet settled
| MCC Jiao Nai (Dalian) Engineering Technology Co., |
| Shenyang Railway Construction Bridge and Tunnel |
Engineering Co., Ltd.
14,200,000.00 Not yet settled
| Jixi Huasheng Fengyuan Coal Preparation Co., Ltd. | 6,485,138.18 | Not yet settled |
| Total | 201,584,010.86 |
Notes to the financial statements Page 51
19. Advance from customers
(1) Advance from customers disclosed by category
| Items | Ending balance | Beginning balance |
| Advance for goods | 3,345,451,646.56 | 3,331,854,098.42 |
| Total | 3,345,451,646.56 | 3,331,854,098.42 |
(2) Significant advance from customers aging over one year.
None
20. Employee benefits payable
(1) Employee benefits payable
| Items | Beginning balance | Increase | Decrease | Ending balance |
benefits
47,824,468.42 916,510,872.23 916,669,401.25 47,665,939.40
| (1) Short-term employee |
| (2) Post-employment |
benefits - definedcontribution plans
174,373.43 128,070,045.18 128,069,809.64 174,608.97
| (3) Termination benefits | 3,467,389.87 | 1,046,552.23 | 2,420,837.64 | |
| (4) Other benefits due |
within one year
| Total | 51,466,231.72 | 1,044,580,917.41 | 1,045,785,763.12 | 50,261,386.01 |
(2) Short-term employee benefits
Items
balance
Increase Decrease Ending balance
Beginning
(1) Salary, bonus,
allowance and subsidy
38,282,721.78 684,822,157.27
| (1) Salary, bonus, |
685,422,131.12
37,682,747.93
| (2) Employee welfare | 47,016,070.43 | 47,016,070.43 | ||
| (3) Social Insurance | 652,400.36 | 71,083,855.14 | 71,083,855.14 | 652,400.36 |
| Including: Medical |
insurance
1,598.15 53,654,171.68
53,654,171.68
1,598.15
insurance
650,802.21 17,416,640.12
| Work injury |
17,416,640.12
650,802.21
| Maternity |
insurance
13,043.34
13,043.34
| (4) Housing | 6,854,689.00 | 52,823,804.00 | 52,887,301.00 | 6,791,192.00 |
| (5) Union funds and staff |
education fee
2,034,657.28 60,764,985.39
60,260,043.56
2,539,599.11
| (6) Short-term compensated |
Notes to the financial statements Page 52
Items
balance
Increase Decrease Ending balance
| Beginning | |
| absences | |
| (7) Short-term profit - |
sharing scheme
| Total | 47,824,468.42 | 916,510,872.23 | 916,669,401.25 | 47,665,939.40 |
(3) Defined contribution plans
Items
balance
Increase Decrease Ending balance
| Beginning | ||||
| Basic pension fund | 68,338.82 | 124,734,324.48 | 124,734,498.12 | 68,165.18 |
| Unemployment insurance | 106,034.61 | 3,335,720.70 | 3,335,311.52 | 106,443.79 |
| Total | 174,373.43 | 128,070,045.18 | 128,069,809.64 | 174,608.97 |
21. Current tax liabilities
| Items | Ending balance | Beginning balance |
| Value-added tax | 35,376,964.97 | 442,980,368.02 |
| Corporate income tax | 4,317,717.53 | 2,769,293.58 |
| City maintenance and construction tax | 9,587,112.00 | 32,813,368.49 |
| House property tax | 3,506,456.37 | 3,004,878.95 |
| Educational surcharges | 4,137,761.43 | 23,450,632.11 |
| Environmental tax | 381,305.56 | 7,340,495.80 |
| Others | 5,581,530.69 | 3,393,332.73 |
| Total | 62,888,848.55 | 515,752,369.68 |
22. Other payables
| Items | Ending balance | Beginning balance |
| Interest payables | 9,343,905.54 | 9,658,681.99 |
| Dividends payables | 193,768,576.60 | |
| Other payables | 696,885,503.92 | 852,852,496.97 |
| Total | 899,997,986.06 | 862,511,178.96 |
(1) Interest Payable
| Items | Ending balance | Beginning Balance |
| Loan interests | 9,343,905.54 | 9,658,681.99 |
| Total | 9,343,905.54 | 9,658,681.99 |
(2) Dividends payables
Notes to the financial statements Page 53
| Items | Ending balance | Beginning Balance |
| Common dividend | 193,768,576.60 | |
| Preferred shares divided into equity |
instruments/Sustainable Debt Dividend
| Including: Tool 1 | ||
| Tool 2 | ||
| Total | 193,768,576.60 |
(3) Other payables
1) Other payables disclosed by nature
| Items | Ending balance | Beginning Balance |
| Deposit | 6,756,148.49 | 6,876,696.99 |
| Margin | 131,820,736.18 | 129,911,043.84 |
| Accounts | 395,056,845.92 | 568,285,473.68 |
| Others | 163,251,773.33 | 147,779,282.46 |
| Total | 696,885,503.92 | 852,852,496.97 |
2) Significant other payables ageing over one year
| Name | Ending balance | Reason |
| Benxi Steel & Iron (Group) Co., Ltd. | 101,874,612.92 | Not yet settled |
23. Non-current liabilities due within one year
| Items | Ending balance | Beginning balance |
| Long-term loans due within one year | 1,036,582,163.28 | 350,965,576.32 |
| Bond payables due within one year | ||
| Total | 1,036,582,163.28 | 350,965,576.32 |
24. Long-term loans
| Categories | Ending balance | Beginning balance |
| Pledged loans | ||
| Mortgage loan | ||
| Guaranteed loans | 3,195,042,608.56 | 3,931,317,094.16 |
| Credit loans | 3,018,011,955.59 | 3,152,323,000.00 |
| Total | 6,213,054,564.15 | 7,083,640,094.16 |
25. Long-term payables
| Items | Ending balance | Beginning balance |
| Long-term payables | 52,733,529.65 | 13,686,705.92 |
Notes to the financial statements Page 54
| Items | Ending balance | Beginning balance |
| Special payables | ||
| Total | 52,733,529.65 | 13,686,705.92 |
(1) Long-term payables
| Items | Ending balance | Beginning balance |
| Financing lease payments | 52,733,529.65 | 13,686,705.92 |
| Total | 52,733,529.65 | 13,686,705.92 |
26. Deferred income
Items
balance
Increase Decrease
| Beginning | Ending |
balance
Reason
subsidy
289,499,002.97 428,000.00 41,695,000.00 248,232,002.97
| Government | |||||
| Total | 289,499,002.97 | 428,000.00 | 41,695,000.00 | 248,232,002.97 |
Notes to the financial statements Page 55
Projects of government subsidies:
Items
balance
Increase
| Beginning | Transfer to |
non-operating income
decrease
Ending balance
| Other | Related to assets or |
income
| MES Project Special Fund | 1,720,000.00 |
860,000.00 860,000.00
| Related to assets | ||
| Industrial Enterprise Energy Management Center Construction Demonstration |
Project
6,960,000.001,160,000.00 5,800,000.00Related to assets
| Environment Pollution Renovation Project | 3,620,000.00 |
1,810,000.00 1,810,000.00
| Related to assets | ||
| Environment Renovation Project and Regional Basin Environment Protection |
Project
340,000.00170,000.00 170,000.00Related to assets
| Cold Rolling Steel High Strength Renovation Project | 200,000,000.00 |
25,000,000.00 175,000,000.00
| Related to assets | |||
| Automobile High-class Electrolytic Zinc Steel Plate Production Line Project | 16,416,000.00 |
4,104,000.00 12,312,000.00
| Related to assets | |||
| Sintering Machine Residue Heat Usage and Desulfurization Project | 4,204,000.00 |
2,102,000.00 2,102,000.00
| Related to assets | |||
| 7 130t Boilers Flue Gas Desulfurization Renovation Project of Power Plant | 19,200,000.00 |
2,400,000.00 16,800,000.00
| Related to assets | |||
| Overseas Advanced Technology Introduction Special Fund | 6,884,000.00 |
1,442,000.00 5,442,000.00
| 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
200,000.00100,000.00 100,000.00Related to assets
| Environment Protection Project Special Fund | 1,160,000.00 |
580,000.00 580,000.00
| Related to assets | ||
| Advanced Treatment of Carbon Fiber Wastewater Project of Coke Plant Dongfeng |
Area
9,500,000.009,500,000.00Related to assets
High-pressure Workshop
4,800,000.00300,000.00 4,500,000.00
| Desulfurization and Denitration Projects for Coal-fired Boiler of Power Plant | Related to assets | ||
| Power Plant No 3 workshop Heat and Power Cogeneration Renovation Project | 8,000,000.00 |
1,000,000.00 7,000,000.00
| Related to assets | |||
| Sintering Machine Energy Saving and Environmental Protection Project of Blast | 2,320,000.00 |
580,000.00 1,740,000.00
Notes to the financial statements Page 56
Items
balance
Increase
| Beginning | Transfer to |
non-operating income
decrease
Ending balance
| Other | Related to assets or |
income
| Furnace Plant | |
| Air Quality Automatic Monitoring System | 175,000.00 |
35,000.00 140,000.00
| Related to assets | ||
| Liaoning Grand Craftsman Subsidy and Skill Master Workstation Grant |
100,002.97
240,000.00 340,002.97
| Related to income |
and high pressure service conditions
188,000.00 52,000.00 136,000.00Related to income
| Support fund for the project of high-strength pipeline steel under low temperature | ||||||
| Total | 289,499,002.97 | 428,000.00 | 41,695,000.00 | 248,232,002.97 |
Notes to the financial statements Page 57
27. Share capital
Items Beginning balance
Ending balance
Increase/decrease (+ , - )Issuing
of newshare
Bonusshares
Transferredfrom reserves
Others
| Issuing | Subtotal | ||||
| Capital |
shares
3,875,371,532.00 3,875,371,532.00
28. Capital reserves
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium over par |
value
12,227,292,378.47 12,227,292,378.47
Other capital reserves
115,917,468.82115,917,468.82
Total
12,343,209,847.29 12,343,209,847.29
29. Special Reserves
| Items | Beginning balance | Increase | Decrease | Ending balance |
Safety production cost
683,937.71 25,542,658.45 5,212,639.8721,013,956.29
Total
683,937.71 25,542,658.45 5,212,639.87 21,013,956.29
30. Surplus Reserves
Items
| Items | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus |
reserves
961,105,529.85 961,105,529.85Total
961,105,529.85 961,105,529.85
31. Undistributed Profits
| Items | Current period | Previous period |
year-end
1,945,887,269.82 1,103,162,610.35
| Before adjustments: undistributed profits at last | ||
| After adjustments: undistributed profit at this |
year-beginning
1,945,887,269.82 1,103,162,610.35
Notes to the financial statements Page 58
| Items | Current period | Previous period |
Add: undistributed profit belonging to parent company
453,209,615.76756,951,987.59
Common shares dividend payable
193,768,576.60
193,768,576.60
Ending balance of undistributed profits
2,205,328,308.98 1,666,346,021.34
32. Operating income and operating cost
Items
| Current period | Previous period | ||
| Revenue | Cost | Revenue | Cost |
Principal business
22,581,458,005.55 20,807,089,888.18 21,302,037,073.89 19,140,922,165.53Other business
1,521,137,161.59 1,260,522,841.47 2,139,210,303.25 1,663,285,255.45Total
24,102,595,167.14 22,067,612,729.65 23,441,247,377.14 20,804,207,420.98
Whether implement the new income standard or not.
□ Applicable √ Not applicable
33. Tax and surcharges
Items Current period Previous periodCity maintenance and construction tax 27,561,420.89
48,666,138.65
Educational surcharge 19,877,089.62
34,952,935.92
Housing property tax 38,778,891.04
36,610,915.20
Land use right tax 6,538,299.88
3,421,519.74
Stamp duty and others 14,961,858.43
15,742,454.27
Environmental tax 6,387,222.58
13,896,524.30
Others 20,580.53
16,887.56
Total 114,125,362.97
153,307,375.64
34. Selling and distribution expenses
| Items | Current period | Previous period |
Freight
456,217,341.94
393,290,897.61
Port surcharges
52,405,847.32
56,907,191.59
Import and export agency fee
34,174,633.61
35,649,297.75
Notes to the financial statements Page 59
Salary and benefits
13,553,533.82
11,993,852.41
Others
13,751,821.86
12,721,174.90
Package fee
4,342,020.59
3,475,594.69
Total
574,445,199.14
514,038,008.95
35. General and administrative expenses
| Items | Current period | Previous period |
Salary and benefits
122,383,642.39
116,352,823.92
Repair expense
142,464,599.50
174,107,156.65
Land use right fee
27,345,714.30
27,345,714.30
Others
62,667,766.52
57,134,166.31
Depreciation
24,216,703.47
26,164,322.31
Social insurance fee
23,532,872.66
23,452,571.91
Heating fee
22,391,441.18
20,783,413.87
Water resources fee
11,993,951.74
6,546,763.90
Housing fund
4,737,351.00
4,445,529.00
Amortization
2,970,897.50
2,982,926.09
Entertainment fee
1,070,316.75
1,527,871.52
Rental fee
643,214.78
543,240.66
Shipping fee
349,339.98
455,924.12
Total
446,767,811.77
461,842,424.56
36. Research and development expenses
| Items | Current period | Previous period |
Depreciation, materials and compensation, etc.
15,408,472.28
2,470,641.53Total
15,408,472.28
2,470,641.53
Notes to the financial statements Page 60
37. Financial expenses
| Items | Current period | Previous period |
Interest expenditure
586,490,262.69 575,001,615.20Less: Interest income
127,083,779.58 61,605,403.34Exchange loss
-71,095,752.13 286,291,324.68Others
15,154,975.44 3,350,880.74Total
403,465,706.42 803,038,417.28
Notes：The financial expenses of this period were 403 million yuan, a decrease of 400 million yuanfrom the previous period of 803 million yuan, a decrease of 49.76%, mainly due to the increase inexchange income and interest income during the period.
38. Other income
Items Current period Previous period
assets orincome
Related toMES Project Special Fund
| MES Project Special Fund | 860,000.00 | 860,000.00 | Assets |
| Industrial Enterprise Energy Management Center |
Construction Demonstration Project
1,160,000.00 1,160,000.00 Assets
| Environment Pollution Renovation Project | 1,810,000.00 | 1,810,000.00 | Assets |
| Environment Renovation Project and Regional |
Basin Environment Protection Project
170,000.00 170,000.00 Assets
Project
25,000,000.00 25,000,000.00 Assets
| Cold Rolling Steel High Strength Renovation |
| Automobile High-class Electrolytic Zinc Steel |
Plate Production Line Project
4,104,000.00 4,104,000.00 Assets
Desulfurization Project
2,102,000.00 2,102,000.00 Assets
| Sintering Machine Residue Heat Usage and |
| 7 130t Boilers Flue Gas Desulfurization |
Renovation Project of Power Plant
2,400,000.00 2,400,000.00 Assets
Desulfurization Waste Liquid of Coke Plant
50,000.00 Assets
| Treatment and Salt Extraction Project of | |||
| Overseas R&D Team Introduction Special Fund | 1,442,000.00 | 1,442,000.00 | Assets |
| The 360 Cubic Meter Sintering Machine Flue |
Gas Desulfurization Renovation Project of BlastFurnace Plant
100,000.00 100,000.00 Assets
| Environment Protection Project Special Fund | 580,000.00 | 580,000.00 | Assets |
Notes to the financial statements Page 61
Items Current period Previous period
assets orincome
| Related to | ||
| Bengang Power plant high pressure workshop |
coal burning boiler desulfurization anddenitrification items
Assets
coal burning boiler desulfurization anddenitrification items
300,000.00 300,000.00 Assets
| Bengang Power plant high pressure workshop |
| Power Plant No 3 workshop Heat and Power |
Cogeneration Renovation Project
1,000,000.00 Assets
saving and environmental protection project
580,000.00 580,000.00 Assets
| Iron and steel plant sintering machine energy | |||
| Air quality automatic monitoring system | 35,000.00 | 35,000.00 | Assets |
| Xihu source resource management committee |
compensation
414,300.00 Income
Master Workstation Grant
166,938.70 Income
| Liaoning Grand Craftsman Subsidy and Skill |
| Support fund for the project of high-strength |
pipeline steel under low temperature and highpressure service conditions
52,000.00 Income
| Total | 41,695,000.00 | 41,274,238.70 |
39. Income on investment
| Items | Current period | Previous period |
| Income on disposal of long-term equity investment by equity |
method
25,907.49Income on bank short-term financial products
3,493,150.68
Total
25,907.49 3,493,150.68
40. Credit impairment loss
| Items | Current period | Previous period |
Account receivable bad debt loss
3,389,912.79Other account receivable bad debt loss
361,601.04Long-term account receivable bad debt loss
Notes to the financial statements Page 62
Total
3,751,513.83
41. Asset impairment loss
| Items | Current period | Previous period |
Bad debt loss
14,523,332.71Inventory impairment loss
6,394,630.93Total
20,917,963.64
42. Assets disposal gains
Items Current period Previous period
recognized innon-recurring profit
| The amount | ||
| Disposal gains or losses arising from disposal |
of fixed assets not classified for sale
2,418,704.34 825,580.63 2,418,704.34
| Total | 2,418,704.34 | 825,580.63 | 2,418,704.34 |
43. Non-operating income
Items
Current period Previous period
recognized innon-recurring profit
The amountDebt restructuring gain
| Debt restructuring gain | 50,640.00 | 945,892.23 | 50,640.00 |
| Non-current assets scrapped gains | 7,955,444.40 | 7,955,444.40 | |
| Others | 204,097.84 | 1,192,505.57 | 204,097.84 |
| Total | 8,210,182.24 | 2,138,397.80 | 8,210,182.24 |
44. Non-operating expense
Items Current period Previous period
recognized innon-recurring profitNon-current assets scrapped loss
57,974,322.05
| The amount | ||
1,382,402.26
57,974,322.05
Total
57,974,322.05
1,382,402.26
57,974,322.05
Notes to the financial statements Page 63
45. Income tax expense
(1) Income tax expense
| Items | Current period | Previous period |
Income tax payable for the current year
9,415,176.70 5,956,888.87Adjustment of deferred income tax
16,547,005.03 5,679,337.17Total
25,962,181.73 11,636,226.04
(2) Accounting profit and income tax expense adjustment process
| Items | Current period |
Total profit
478,870,963.27Income tax expense calculate according to the official or applicable tax rate
119,717,740.82Effect of use of deductible losses of unrecognized deferred tax asset of prior period
-93,755,559.09Income tax expenses
25,962,181.73
46. Notes of statement of cash flows
(1) Cash received related to other operating activities
| Items | Current period | Previous period |
Withdraw of current accounts, advance for another
17,151,876.47
19,218,434.76
Interest income
127,083,779.58
61,605,403.34
Special subsidy income
428,000.00
694,300.00
Non-operating income
117,870.10
162,619.82
Others
123,098.19
101,722.27
Total
144,904,624.34
81,782,480.19
(2) Cash paid related to other operating activities
| Items | Current period | Previous period |
| Current accounts, advance for another | 221,234,925.29 | 285,018,187.10 |
| Sales expenses | 4,449,939.39 | 4,646,000.62 |
| Administrative expenses | 17,883,394.86 | 18,078,644.22 |
| Bank charges | 3,255,172.22 | 2,896,060.69 |
Notes to the financial statements Page 64
| Items | Current period | Previous period |
| Others | 365,921.44 | 358,254.79 |
| Total | 247,189,353.20 | 310,997,147.42 |
47. Supplementary details of statement of cash flows
(1) Supplementary details for statement of cash flows
| Items | Current period | Previous period |
| 1. A reconciliation of net profit to cash flows from |
operating activities:
| Net profit | 452,934,689.03 | 757,973,791.35 |
| Add: Credit impairment loss | 3,751,513.83 | |
| Asset impairment loss | -20,917,963.64 | |
| Depreciation of fixed assets and so on | 1,199,864,248.72 | 1,144,984,195.00 |
| Amortization of right use asset | ||
| Amortization of intangible assets | 3,278,732.29 | 3,239,455.09 |
| Long-term deferred expenses | ||
| Losses proceeds from disposal of PPE, intangible assets |
and other long-term assets (Earnings marked“－”)
57,974,322.05
556,821.63
| Scrapped losses from fixed assets (Earnings |
marked“－”)
Change in fair value loss (Earnings marked“－”)
－
| ”) | 403,465,706.42 | 803,038,417.28 |
| Investment losses (Earnings marked“ |
－
| ”) | -3,493,150.68 | |
| Deferred tax assets reduction (Addition marked“ |
－
| ”) | 15,928,033.89 | 5,679,337.17 |
| Deferred tax liabilities increased (Reduction |
marked“－”)
－
| ”) | -1,289,831,911.07 | -1,683,906,453.31 |
| Operating receivable items reduction (Addition |
marked“－”)
-908,736,317.08
817,004,548.19
| Operating payable items increase (Less marked" |
－
| ") | 1,046,157,987.59 | -1,093,639,256.61 |
| Other | ||
| Net cash flows generated from operating activities | 984,787,005.67 | 730,519,741.47 |
| 2. Payments of investing and financing activities not |
involving cash:
- --
| Liabilities transferred to capital | ||
| Convertible bonds due within one year | ||
| Fixed assets financed by leasing |
Notes to the financial statements Page 65
| Items | Current period | Previous period |
| 3. The net increase in cash and cash equivalents: | -- | -- |
| Ending balance of cash | 11,788,922,569.51 | 16,038,506,854.22 |
| Less: Beginning balance of cash | 11,752,548,621.97 | 17,037,713,410.49 |
| Add: Ending balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| The net increase in cash and cash equivalents | 36,373,947.54 | -999,206,556.27 |
(2) The structure of cash and cash equivalents
| Items | Ending balance | Beginning balance |
| 1. Cash | 11,788,922,569.51 | 11,752,548,621.97 |
| Including: Cash on hand | 5,346.25 | 4,839.95 |
| Bank deposits available on demand | 11,788,917,223.26 | 11,752,543,782.02 |
| 3. Ending balance of cash and cash equivalents | 11,788,922,569.51 | 11,752,548,621.97 |
48. Assets of which ownership or right to use are restricted
| Items | Ending balance | Reason |
| Cash at bank and on hand | 5,156,849,822.92 | Deposit for notes and letter of credit |
| Total | 5,156,849,822.92 |
49. Foreign currency monetary items
(1) Foreign currency monetary items
Items
Ending balance inforeign currency
the end of theperiod
Ending balancetranslated to RMB
| Exchange rate at | |||
| Cash at bank and on hand | 582,105,770.06 | ||
| Including: USD | 83,505,239.72 | 6.8747 | 574,073,471.50 |
| EUR | 936,843.39 | 7.8170 | 7,323,304.78 |
| HKD | 805,949.50 | 0.8797 | 708,993.78 |
Short-term loans
1,306,193,000.00
| Including: USD | 190,000,000.00 | 6.8747 | 1,306,193,000.00 |
| Non-current liabilities due |
within one year
1,036,582,163.28
Notes to the financial statements Page 66
Items
Ending balance inforeign currency
the end of the
period
Ending balancetranslated to RMBIncluding: USD
145,000,000.00
| Exchange rate at | |
6.8747 996,831,500.00
EUR
4,895,952.88
7.8170 38,271,663.66
JPY
23,176,000.00 0.0638 1,478,999.62
Long-term loans
1,648,495,389.11
Including: USD
168,600,000.00 6.8747 1,159,074,420.00
| Including: USD |
| EUR |
61,285,400.00 7.8170 479,067,971.80
162,232,000.00 0.0638 10,352,997.31
| JPY |
(2) Note to overseas entities including: for significant oversea entities, shall disclose main
operating place, recording currency and selection basis, if there are changes intorecording currency, shall also disclose the reason.
□ Applicable √ Not applicable
VIII. Equity in other entities
1. Equity in subsidiaries
(1) Constitution of enterprise group
Name of the subsidiaries
Principalplace ofbusiness
Registeredaddress
| Notes |
ofbusiness
Acquiring method
| Shareholding ratio | |
Direct
IndirectXiamen Bengang Steel & Iron Sales Co., Ltd. Xiamen Xiamen Sales 100.00
under common controlWuxi Bengang Steel & Iron Sales Co., Ltd. Wuxi Wuxi Sales 100.00
| Business combination |
| Business combination |
under common controlTianjin Bengang Steel & Iron Trading Co., Ltd. Tianjin Tianjin Sales 100.00
under common controlNanjing Bengang Materials Sales Co., Ltd. Nanjing Nanjing Sales 100.00
| Business combination |
| Business combination |
under common control
Notes to the financial statements Page 67
Name of the subsidiaries
Principalplace ofbusiness
Registeredaddress
| Notes |
ofbusine
ss
Acquiring method
| Shareholding ratio | |
Direct
IndirectYantai Bengang Steel & Iron Sales Co., Ltd. Yantai Yantai Sales 100.00
under common control
| Business combination | ||
| Harbin Bengang Economic and Trading Co., Ltd. |
Harbin Harbin Sales 100.00
under common control
| Business combination | ||
| Changchun Bengang Steel & Iron Sales Co., Ltd. |
Changchun
n
Sales 100.00
| Changchu | Business combination |
under common control
Ltd.
Guangzhou
| Guangzhou Bengang Steel & Iron Trading Co. | Guangzho |
u
Sales 100.00 Establishment
Technology Co., Ltd.
Shanghai Shanghai Sales 100.00 EstablishmentBengang Steel Plates Liaoyang Pellet Co., Ltd. Liaoyang Liaoyang
| Shanghai Bengang Metallurgy Science and | ||
| Manuf |
acturin
g
100.00 Establishment
Technology Co., Ltd.
Dalian Dalian
| Dalian Benruitong Automobile Materia | Manuf |
acturing
65.00 Establishment
Bengang Posco Cold-rolled Sheet Co., Ltd. Benxi Benxi
acturing
75.00
Business combinationunder common control
| Manuf | ||||||
| Benxi Bengang Steel Sales Co., Ltd | Benxi | Benxi | Sales | 100.00 | Establishment | |
| Shenyang Bengang Metallurgical Science and |
Technology Co., Ltd.
Shenyang Shenyang Sales 100.00 Establishment
Ltd.
Chongqing
| Chongqing Liaoben Steel & Iron Trading Co., | Chongqin |
g
Sales 100.00 EstablishmentBengang Baojin (Shenyang) auto new materialtechnology Co., Ltd.
Shenyang Shenyang
acturin
g
85.00
Business combinationunder common control
(2) Significant but not wholly-owned subsidiaries
Name of the subsidiaries
Proportion ofnon-
Manufcontrolling
interests (%)
| controlling | Profits and losses |
attributing tonon-controlling
shareholders
to distribute tonon-controllingshareholders
| Dividend declared | Ending |
balance ofnon-controllinginterests
Ltd.
25.00% 1,926,183.65 502,422,724.15
(3) Financial information of significant but not wholly-owned subsidiaries
Notes to the financial statements Page 68
Name of thesubsidiaries
Current assets
Non-current
assets
Total assets
Currentliabilities
| Ending balance | ||
| Non-curre | ||
nt
Total liabilities
| liabilities | ||
| Bengang Posco |
Cold-rolled SheetCo., Ltd.
4,223,695,815.76 1,544,857,225.81 5,768,553,041.57 3,758,862,144.98 3,758,862,144.98
| Beginning balance | |
| Name of the |
subsidiaries
assets
| Current | Non-current |
assets
Total assets
liabilities
| Current | Non-current liabilities |
Total liabilities
Cold-rolled SheetCo., Ltd.
2,986,224,229.42 1,692,675,158.81 4,678,899,388.23 2,678,954,080.56
| Bengang Posco |
2,678,954,080.56
Name of the subsidiaries
Operatingincome
Net profit
| Current period | ||
| Total | ||
comprehensive
income
Net cash flows fromoperating activities
Co., Ltd.
3,720,975,482.91
| Bengang Posco Cold-rolled Sheet |
7,704,734.61
7,704,734.61
1,318,506,299.45
Name of the subsidiaries
Previous period
Operatingincome
Net profit
| Previous period | ||
| Total | ||
comprehensive
income
Net cash flows fromoperating activities
Co., Ltd.
3,971,529,847.27 5,511,711.19 5,511,711.19 686,401,003.83IX. 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 thecounterparties. The Company is exposed to credit risk arising from customers’ failure todischarge an obligation in sales on credit. In order to minimize the credit risk, themanagement of the Company is responsible for determination of credit limits, creditapprovals and other monitoring procedures to ensure that follow-up actions are taken torecover overdue debts.
Notes to the financial statements Page 69
In addition, the Company strictly approves the line of credit, and only sells on credit toimportant customers for newly-developed products. In the monitoring of credit risk ofcustomers, the Company sorts customers into groups by their credit characteristics. Thosecustomers which are rated as “high risk” will be put in the restricted client list. The Companycan only sell to these customers on credit with additional approval; otherwise the Companymust ask for a corresponding deposit in advance.
2. Market risk
Market risk of financial instruments refers to fluctuations of fair value or future cash flowsdue to market price changes, including currency risk, interest rate risk, and other price risk.
1. Interest rate risk
Interest rate risk refers to fluctuations of fair value or future cash flows due to market ratechanges. The Company’s exposure to currency risk is primarily arising from variable-ratebank balances and variable-rate borrowings. Currently, the Company does not have a specificpolicy to manage its interest rate risk. The management will carefully choose financingmethods, and combine fixed interest rate with variable interest rate, short-term obligationswith long-term obligations. By using effective interest rate risk management methods, theCompany closely monitors interest rate risk and will consider interest-rate swaps to acquirean expected structure of interest rates shall the need arise.
Although these measures may not ensure that the Company completely avoids the risk ofpaying at a risk higher than market risk, or that the cash flow risk relevant to interest incomefluctuations is completely eliminated, in the opinion of the management, these measurescould achieve a reasonable balance among these risks.
2. Currency risk
Currency risk refers to fluctuations of fair value or future cash flows due to exchange ratechanges. The Company has been constantly working on the adjustment of the organizationalframework of risk management and optimization of debt structures to lower the currencyrisk.
The currency risk facing the Company originates from the assets and liabilities measured byUS dollars, Euro, Hongkong dollars and Japanese Yen. The ending balance of the assets andliabilities after converted in RMB is shown as below:
Notes to the financial statements Page 70
(In 10 Thousand Yuan)Items
USD Euro HKD Japanese Yen
TotalAssets
57,407.35 732.33
Ending balance
70.90
| 70.90 |
58,210.58Liabilities
346,209.89 51,733.96
1,183.20
399,127.06Total
403,617.24 52,466.29
70.90
1,183.20
457,337.63
The table below shows the sensitivity analysis of RMB vs other currencies when RMBdeprecated or appreciated by 5% over other currencies under the assumption that othervariables remain the same. 5% is the sensitivity rate used by the management for internalreport of currency risk and it represents the estimation of the management over the possiblechange of foreign currency. Sensitivity analysis only includes the monetary items measuredby 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.
(In 10 Thousand Yuan)Items
Impact on USD Impact on Euro
Impact onHKD
Impact on
Japanese Yen
TotalAppreciation by 5%
-14,440.13
Ending balance
-2,550.08 3.54
-59.16
-17,045.82Depreciation by 5%
14,440.13
2,550.08 -3.54
59.16
17,045.82
3. Liquidity risk
Liquidity risk refers to the risk of shortage of funds which occurs in fulfilling the obligationof settlement in a manner of delivering cash or other financial assets. The Company’s policyis to maintain sufficient cash to meet maturing obligations. Liquidity risk is centralizedcontrolled by the Company’s finance department. Through the monitoring of unrestrictedcash and cash equivalents, bank acceptance bills due in short time and the continuesforecasting 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 ofunderivative financial liabilities to repay according to the contract terms. The table has beendrawn up based on the undiscounted cash flows of financial liabilities based on the earliest
Notes to the financial statements Page 71
date on which the Company can be required to pay. The table includes both interest andprincipal cash flows.
(In 10 Thousand Yuan)Items
Within 1 year 1-2 years 2-5 years
| Ending balance | ||
| Over 5 | ||
years
Total
| Trade and other payables | 1,797,686.94 | 31,109.67 | 135.72 | 94.60 | 1,829,026.93 |
| Loans and interests | 1,333,477.52 | 430,629.37 | 77,769.29 | 112,906.80 | 1,954,782.98 |
| Total | 3,131,164.46 | 461,739.04 | 77,905.01 | 113,001.40 | 3,783,809.91 |
(In 10 Thousand Yuan)Items
Within 1 year 1-2 years 2-5 years
| Beginning balance | ||
| Over 5 | ||
years
Total
| Trade and other payables | 1,638,885.92 | 67.12 | 130.65 | 71.79 | 1,639,155.48 |
Loans and interests 1,229,911.46 224,083.41 371,055.41 113,225.19 1,938,275.47
| Total | 2,868,797.38 | 224,150.53 | 371,186.06 | 113,296.98 | 3,577,430.95 |
X. Related party transactions
1. Details of parent company
(In 100 Million Yuan)Name of parent company
Registry
| Place of | Notes of |
Business
capital
| Registered | Share |
proportion (%)
rights (%)Benxi Steel (Group) Co., Ltd. Benxi Manufacturing 62.92 61.43 61.43
Notes to parent company:
The ultimate controlling party of the Company:
Other notes:
2. Details of the subsidiaries
For details of subsidiaries of the Company please refer to Notes.
Notes to the financial statements Page 72
3. Details of other related parties
For details of other related parties of the Company please refer to Notes.Other related parties that have transactions with the Company during the current reportingperiod or the previous reporting period are as followings:
| Name of Other related parties | Relationship |
Bengang Group International Economicand Trading Co., Ltd.
Both belong to Bengang Group Co., Ltd.Bengang Cold-rolled Stainless SteelDandong Co., Ltd.
Same parent companyBenxi 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-estateDevelopment Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) Steel & IronProcess and Logistics Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) ConstructionCo., Ltd.
Same parent companyBenxi Steel & Iron (Group) Mining Co.,Ltd.
Same parent companyBenxi Steel & Iron (Group) Thermal PowerDevelopment Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) DesigningInstitute
Same parent companyBenxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Same parent company
Notes to the financial statements Page 73
| Name of Other related parties | Relationship |
Benxi Steel & Iron (Group) Informationand Automatic Tech Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) Constructionand Repairing Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) MetallurgyResidues Co., Ltd.
Same parent companyBenxi Iron and Steel (Group) EngineeringConstruction Supervision Co., Ltd.
Same parent companyBenxi Steel & Iron (Group) ZhengtaiConstruction Materials Co., Ltd.
Same parent companyBenxi High-tech Drilling ToolsManufacture Co., Ltd.
Both belong to Bengang Group Co., Ltd.Benxi New Career Development Co., Ltd. Same parent companyDalian Boluole Steel Tube Co., Ltd. Both belong to Benxi Steel and Iron (Group) Co., Ltd.Guangzhou Free Trade Zone BengangSales Co., Ltd.
Both belong to Benxi Steel and Iron (Group) Co., Ltd.Benxi Steel & Iron (Group) GeneralHospital
Both belong to Benxi Steel and Iron (Group) Co., Ltd.Liaoning Bengang Steel & Iron TradingCo., Ltd.
Same parent companyLiaoning Hengtai Heavy Machinery Co.,Ltd.
Same parent companyLiaoning Hengtong MetallurgicalEquipment Manufacture Co., Ltd.
Same parent companyLiaoning Metallurgy Technician College Same parent companyLiaoning Metallurgy Vocational TechnicalCollege
Same parent company
Notes to the financial statements Page 74
| Name of Other related parties | Relationship |
Suzhou Bengang Industrial Co., Ltd. Shareholding companyBenxi Steel & Iron (Group) MedicalServices Department;
Related party that the parent company has significant influence on itBengang Group Finance Co., Ltd. Both belong to Bengang Group Co., Ltd.Liaoning Hengyi Financial Leasing Co.,Ltd.
Both belong to Bengang Group Co., Ltd.
4. Related Party Transactions
(1) Related party transactions of purchasing goods and services
Company as the purchaser
Unit: yuan
Name
The content of
related partytransactions
Jan to Jun 2019
The approved trade
credit
Whetherexceed tradecredit or not
Jan to Jun 2018
Benxi Steel & Iron(Group) Co., Ltd.
Repair expense 142,996,939.77
500,000,000.00
No 197,670,478.35
Benxi Steel & Iron(Group) Co., Ltd.
Land lease fee 27,345,714.30
No 27,345,714.30
BengangCold-rolledStainless SteelDandong Co., Ltd.
Products 822,471.66
10,000,000.00
No 641,948.77
Benxi Steel & Iron(Group) Mining
Co., Ltd.
Labor cost 3,914,064.77
No 3,867,465.58
Benxi Steel & Iron(Group) Mining
Co., Ltd.
Raw material and
supplementary
material
2,156,555,339.29
5,000,000,000.00
No 2,038,163,311.47
Benxi Steel & Iron
(Group) Mining
Co., Ltd.
Freight 853,600.00
No
Benxi Steel & Iron(Group) MetallurgyResidues Co., Ltd.
Raw material and
supplementary
material
110,560,334.60
300,000,000.00
No 128,528,351.16
Benxi Steel & Iron(Group) Steel &
Processing fee 846,113.87
3,000,000.00
No 876,655.68
Notes to the financial statements Page 75
Iron Process andLogistics Co., Ltd.Benxi Steel & Iron(Group) Real-estateDevelopment Co.,Ltd.
Raw materials 34,180,378.79
100,000,000.00
No 36,279,876.56
Benxi Steel & Iron(Group) Machinery
Manufacture Co.,
Ltd.
Spare parts 33,418,511.98
250,000,000.00
No 46,002,921.49
Benxi Steel & Iron(Group) Machinery
Manufacture Co.,
Ltd.
Repair services 3,703,668.15
No 4,951,834.41
Benxi Steel & Iron(Group)
Construction Co.,
Ltd.
Spare parts 4,246,825.42
500,000,000.00
No 1,918,014.21
Benxi Steel & Iron(Group)
Construction Co.,
Ltd.
Project fee 71,237,456.89
No 20,289,496.89
Benxi Steel & Iron
(Group)
Construction Co.,
Ltd.
Repair services 70,856,476.39
No 114,818,650.89
Benxi Steel & Iron(Group)
Construction Co.,
Ltd.
Raw material and
supplementary
material
3,320,555.73
No 1,094,007.08
Benxi Steel & Iron(Group)
Construction Co.,
Ltd.
Freight 1,524,803.24
No 1,313,481.92
Benxi Steel & Iron
(Group) Industrial
Development Co.,
Ltd.
Spare parts 28,960,169.80
300,000,000.00
No 28,083,979.07
Benxi Steel & Iron
(Group) Industrial
Development Co.,
Raw material andsupplementarymaterial
61,068,050.74
No 67,306,243.89
Notes to the financial statements Page 76
Ltd.Benxi Steel & Iron(Group) IndustrialDevelopment Co.,Ltd.
Repair services 9,409,199.47
No 18,294,485.36
Benxi Steel & Iron(Group) IndustrialDevelopment Co.,
Ltd.
Freight 3,491,899.11
No 1,018,074.77
Benxi Steel & Iron(Group) IndustrialDevelopment Co.,
Ltd.
Project fee 158,028.96
No 916,801.71
Benxi Steel & Iron(Group)Construction andRepairing Co., Ltd.
Raw material &supplementarymaterials & spare
parts
886,021.41
No 3,263,891.55
Benxi Steel & Iron
(Group)Construction andRepairing Co., Ltd.
Project fee 4,531,849.83
No 11,753,839.95
Benxi Steel & Iron
(Group)Construction andRepairing Co., Ltd.
Repair expense 55,207,665.68
280,000,000.00
No 83,273,978.63
BengangElectronics and Gas
Co., Ltd.
Raw material and
supplementary
material
58,733,582.92
200,000,000.00
No 64,119,457.44
BengangElectronics and Gas
Co., Ltd.
Repair services 2,520,858.62
No 18,629,048.68
Benxi High-techDrilling ToolsManufacture Co.,
Ltd.
Spare parts 44,681.42
5,000,000.00
No 311,192.85
Benxi New CareerDevelopment Co.,Ltd.
Labor protectionfee
472,000.00
12,000,000.00
No 442,032.39
Benxi New CareerDevelopment Co.,
Ltd.
Raw material and
supplementarymaterial and food
484,200.00
No
Notes to the financial statements Page 77
LiaoningMetallurgyTechnician College
Spare parts 6,995,443.90
10,000,000.00
No 3,170,680.46
Bengang GroupInternationalEconomic andTrading Co., Ltd.
Agency fee 34,174,633.61
250,000,000.00
No 35,649,297.75
Bengang GroupInternationalEconomic andTrading Co., Ltd.
Port surcharges 52,405,847.32
No 56,907,191.59
Benxi Steel & Iron
(Group)Information andAutomatic Tech
Co., Ltd.
Spare parts 2,262,130.00
100,000,000.00
No 9,332,489.18
Benxi Steel & Iron
(Group)Information andAutomatic Tech
Co., Ltd.
Project fee 21,914,475.40
No 23,358,888.88
Benxi Steel & Iron(Group) ThermalPower
| Development |
Co., Ltd.
Heating costs 272,000.00
5,000,000.00
No 377,311.58
Benxi Steel & Iron(Group) Thermal
| Power Development |
Co., Ltd.
Raw material and
supplementary
material
28,400.00
No
Benxi Steel & Iron(Group) Designing
Institute
Design fees 292,400.00
10,000,000.00
No 2,315,800.00
| Benxi Beiying Steel & Iron (Group) Co., |
Ltd.
Raw material andsupplementarymaterial
5,914,264,341.63
18,000,000,000.00
No 5,668,349,463.29
| Benxi Beiying Steel & Iron (Group) Co., |
Ltd.
Energy & Power 319,067,523.99
No 388,658,384.32
| Benxi Beiying Steel & Iron (Group) Co., |
Ltd.
Freight 2,344,723.00
No 3,031,478.40
Notes to the financial statements Page 78
Ltd.
Labor cost 42,501,803.92
| Benxi Beiying Steel & Iron (Group) Co., |
No 39,314,396.27
| Benxi Beiying Steel & Iron (Group) Co., |
Ltd.
Spare parts 7,582,750.53
No 10,645,896.19
Liaoning HengtongMetallurgical
EquipmentManufacture Co.,
Ltd.
Raw material and
spare parts
44,934,593.71
150,000,000.00
No 53,986,136.91
Liaoning HengtaiHeavy Machinery
Co., Ltd.
Raw material and
spare parts
1,718,437.09
80,000,000.00
No 1,248,720.58
Liaoning HengtaiHeavy MachineryCo., Ltd.
Repair and labor
cost
11,331,250.00
No 14,773,687.68
Bengang GroupCo., Ltd.
House renting fee 376,146.79
15,000,000.00
No
Bengang GroupCo., Ltd.
Propertymanagement fee
No 310,698.12
Total
9,354,818,363.71
26,080,000,000.00
Company as the seller
Unit: yuanName
transactions
Current period Previous periodBengang Electronics and Gas Co., Ltd. Energy & Power
504,169.21 518,976.61Benxi Beiying Steel & Iron (Group) Co., Ltd.
Raw material &supplementary materials &
spare parts
602,307,810.47
1,164,692,875.8
Benxi Beiying Steel & Iron (Group) Co., Ltd. Products
7,921,880.78 12,301,312.89Benxi Beiying Steel & Iron (Group) Co., Ltd. Energy & Power
75,653,939.22 57,068,870.93Benxi Steel & Iron (Group) Real-estateDevelopment Co., Ltd.
Energy & Power
61,956.82 69,433.26Benxi Steel & Iron (Group) Steel & Iron Process Energy & Power
274,730.53 375,198.36
Notes to the financial statements Page 79
Name
transactions
Current period Previous periodand Logistics Co., Ltd.Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Products
9,957,732.94 9,733,073.15Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Energy & Power
7,164,321.18 9,432,124.68Benxi Steel & Iron (Group) MachineryManufacture Co., Ltd.
Raw material &supplementary materials &
spare parts
6,056,618.26 1,135,830.68Benxi Steel & Iron (Group) Construction Co., Ltd. Energy & Power
194,541.93 941,333.14Benxi Steel & Iron (Group) Construction Co., Ltd.
Raw material &supplementary materials &
spare parts
1,081,265.86 712,402.08Benxi Steel & Iron (Group) Mining Co., Ltd. Energy & Power
341,820,248.45 359,406,715.18Benxi Steel & Iron (Group) Mining Co., Ltd.
Raw material &supplementary materials &
spare parts
31,562,625.00 28,315,202.76Benxi Steel & Iron (Group) Mining Co., Ltd. Freight revenue
4,870,823.84 4,024,837.37Benxi Steel & Iron (Group) Thermal PowerDevelopment Co., Ltd.
Energy & Power
22,899,877.19 23,749,581.93Benxi Steel & Iron (Group) Thermal PowerDevelopment Co., Ltd.
Raw material &supplementary materials &
spare parts
9,949,381.01 8,018,498.91Benxi Steel & Iron (Group) Thermal PowerDevelopment Co., Ltd.
Freight revenue
85,835.38Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Energy & Power
4,076,622.08 3,885,392.91
Notes to the financial statements Page 80
Name
transactions
Current period Previous periodBenxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Products
124,557.49 113,234.08Benxi Steel & Iron (Group) IndustrialDevelopment Co., Ltd.
Raw material &supplementary materials &
spare parts
7,173,558.58 12,517,810.34Benxi Steel & Iron (Group) Information andAutomatic Tech Co., Ltd.
Energy & Power
76,828.58 90,072.21Benxi Steel & Iron (Group) Construction andRepairing Co., Ltd.
Energy & Power
794,774.18 839,850.93Benxi Steel & Iron (Group) Construction andRepairing Co., Ltd.
Raw material &supplementary materials &
spare parts
2,486,800.00 122,645.70Benxi Steel & Iron (Group) Metallurgy ResiduesCo., Ltd.
Energy & Power
3,024,054.47 2,604,796.98Benxi Steel & Iron (Group) Metallurgy ResiduesCo., Ltd.
Raw material &supplementary materials &
spare parts
93,637,888.50 90,456,418.80Benxi Steel & Iron (Group) Metallurgy ResiduesCo., Ltd.
Freight revenue
7,113,581.52Benxi Steel & Iron (Group) Co., Ltd. Energy & Power
1,470,706.35 7,026,460.13Benxi Steel & Iron (Group) Co., Ltd.
Raw material &supplementary materials &
spare parts
1,561,041.78 2,705,064.20Benxi New Career Development Co., Ltd. Energy & Power
151,308.68 180,988.72Dalian Boluole Steel Tube Co., Ltd. Products
1,883,187.33 1,757,572.24Benxi Steel & Iron (Group) General Hospital Energy & Power
30,915.31 34,222.10
Notes to the financial statements Page 81
Name
transactions
Current period Previous periodBenxi Steel & Iron (Group) Zhengtai ConstructionMaterials Co., Ltd.
Energy & Power
2,700.00Liaoning Hengtong Metallurgical EquipmentManufacture Co., Ltd.
Raw material &supplementary materials &
spare parts
8,326,074.88 13,054,253.38
Bengang Cold-rolled Stainless Steel Dandong Co.,Ltd.
Raw material &supplementary materials &
spare parts
241,355.90Suzhou Bengang Industrial Co., Ltd. Products
163,624,251.44 170,528,506.26Bengang Group Finance Co., Ltd. Energy & Power
6,926.54 7,026.08Bengang Group Co., Ltd. Energy & Power
77,885.64 94,690.52
(2) Lease information of related parties
Company as the lessor
Unit: yuan
The content of related party
Lessee
| Lessee | Lease capital category | Lease income of current period | Lease income of previous period |
| Benxi Steel & Iron |
(Group) Steel & IronProcess andLogistics Co., Ltd.
Warehouse and machinery 250,000.00 250,000.00
(Group) MachineryManufacture Co.,Ltd.
Plants and machinery 245,000.00 245,000.00
Company as the lessee
Unit: yuan
Benxi Steel & Iron
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 123,426,656.64 120,000,000.00
(Group) Co., Ltd
Land use right 27,345,714.30 27,345,714.30
Notes to the financial statements Page 82
& Iron (Group) Co.,Ltd.
1780 Hot rolling product line 59,013,278.16 64,929,604.02
(3) Information of Guarantee among related parties
Company as the guarantorNo.
Company as the warrantee
Unit: yuan
Warrantor Amount of guarantee
Starting dateof Guarantee
Ending date
ofGuarantee
Benxi Beiying Steel
Has the
guarantee
beenfulfilledBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2018/9/7 2019/9/5
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
150,000,000.00 2018/10/17 2019/10/16
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2018/10/12 2019/10/10
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
90,000,000.00 2016/3/30 2025/3/20
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
610,000,000.00 2017/2/27 2025/2/20
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2018/11/9 2019/11/7
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2018/11/14 2019/11/13
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2019/6/13 2020/6/9
No
Notes to the financial statements Page 83
Warrantor Amount of guarantee
Starting dateof Guarantee
Ending dateofGuarantee
guarantee
beenfulfilledBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
200,000,000.00 2019/6/17 2020/6/17
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
100,000,000.00 2019/1/24 2020/1/23
NoBengang Group Co., Ltd. and BenxiSteel & Iron (Group) Co., Ltd.
178,000,000.00 2018/12/13 2019/12/12
NoBengang Group Co., Ltd.
300,000,000.00 2018/11/15 2019/11/14
NoBengang Group Co., Ltd.
140,000,000.00 2019/1/25 2020/1/25
NoBengang Group Co., Ltd.
900,000,000.00 2018/11/28 2019/11/27
NoBengang Group Co., Ltd.
100,000,000.00 2015/6/25 2021/9/21
NoBengang Group Co., Ltd.
340,000,000.00 2019/3/29 2020/3/27
NoBengang Group Co., Ltd.
520,000,000.00 2019/1/8 2019/12/14
NoBengang Group Co., Ltd.
480,000,000.00 2019/1/28 2020/1/27
NoBengang Group Co., Ltd.
310,000,000.00 2019/5/14 2020/5/13
NoBengang Group Co., Ltd.
720,000,000.00 2019/5/14 2020/5/13
NoBengang Group Co., Ltd.
24,000,000.00 2015/12/9 2022/3/21
NoBengang Group Co., Ltd.
36,450,000.00 2016/12/27 2020/6/21
NoBengang Group Co., Ltd.
87,280,000.00 2018/3/26 2024/6/21
NoBengang Group Co., Ltd.
59,570,000.00 2017/11/15 2021/12/21
NoBengang Group Co., Ltd.
622,600,000.00 2017/12/15 2024/8/20
NoBengang Group Co., Ltd.
390,000,000.00 2018/11/29 2019/11/28
NoBengang Group Co., Ltd.
150,000,000.00 2018/7/13 2019/7/13
NoBengang Group Co., Ltd.
150,000,000.00 2018/7/13 2019/7/13
NoBengang Group Co., Ltd.
100,000,000.00 2018/7/2 2019/7/1
NoBenxi Steel & Iron (Group) Co., Ltd.
147,000,000.00 2018/12/19 2019/12/19
No
Notes to the financial statements Page 84
Warrantor Amount of guarantee
Starting dateof Guarantee
Ending dateofGuarantee
guarantee
beenfulfilledBenxi Steel & Iron (Group) Co., Ltd.
330,000,000.00 2019/1/18 2020/1/18
NoBenxi Steel & Iron (Group) Co., Ltd.
340,000,000.00 2019/1/25 2020/1/25
NoBenxi Steel & Iron (Group) Co., Ltd.
224,000,000.00 2019/3/25 2020/3/25
NoBenxi Steel & Iron (Group) Co., Ltd.
300,000,000.00 2018/12/14 2019/12/14
NoBenxi Steel & Iron (Group) Co., Ltd.
373,000,000.00 2018/12/13 2019/12/13
NoBenxi Steel & Iron (Group) Co., Ltd.
480,000,000.00 2018/12/13 2019/12/13
NoBenxi Steel & Iron (Group) Co., Ltd.
500,000,000.00 2018/12/13 2019/12/13
NoBengang Group Co., Ltd.
14,172,808.84 2015/6/25 2019/8/31
NoBengang Group Co., Ltd.
18,069,884.06 2015/6/25 2019/10/31
NoBengang Group Co., Ltd.
15,227,937.73 2015/6/25 2020/4/30
NoBengang Group Co., Ltd.
3,781,895.63 2015/6/25 2025/6/30
NoBengang Group Co., Ltd.
108,144,255.47 2015/6/25 2025/6/30
NoBengang Group Co., Ltd.
4,762,870.04 2015/6/25 2025/8/31
NoBengang Group Co., Ltd.
93,730,408.50 2015/6/25 2025/8/31
NoBengang Group Co., Ltd.
1,823,016.48 2015/6/25 2025/9/30
NoBengang Group Co., Ltd.
5,621,014.59 2015/6/25 2025/10/31
NoBengang Group Co., Ltd.
77,398,020.52 2015/6/25 2025/10/31
NoBengang Group Co., Ltd.
48,172.11 2015/6/25 2026/4/30
NoBengang Group Co., Ltd.
4,357,670.68 2015/6/25 2026/4/30
NoBengang Group Co., Ltd.
4,668,214.69 2015/8/20 2019/9/30
NoBengang Group Co., Ltd.
62,282,971.53 2015/8/20 2025/9/30
NoBengang Group Co., Ltd.
5,019,158.90 2015/12/28 2019/7/30
NoBengang Group Co., Ltd.
1,869,620.34 2015/12/28 2019/8/31
NoBengang Group Co., Ltd.
346,732.57 2015/12/28 2019/10/31
NoBengang Group Co., Ltd.
5,445,920.20 2015/12/28 2020/4/30
No
Notes to the financial statements Page 85
Warrantor Amount of guarantee
Starting dateof Guarantee
Ending date
ofGuarantee
guaranteebeenfulfilledBengang Group Co., Ltd.
3,319,773.75 2015/12/28 2025/6/30
NoBengang Group Co., Ltd.
1,978,639.04 2015/12/28 2025/8/31
NoBengang Group Co., Ltd.
35,800,663.06 2015/12/28 2025/10/31
NoBengang Group Co., Ltd.
31,808.23 2015/12/28 2026/4/30
NoBengang Group Co., Ltd.
53,146,753.34 2015/12/28 2026/4/30
NoBengang Group Co., Ltd.
3,210,436.04 2016/6/27 2020/4/30
NoBengang Group Co., Ltd.
29,134,918.54 2016/6/27 2020/4/30
NoBengang Group Co., Ltd.
286,236.34 2016/12/14 2020/4/30
NoBengang Group Co., Ltd.
22,146,995.26 2016/12/14 2026/4/30
NoBengang Group Co., Ltd.
169,550.73 2017/6/30 2025/10/31
NoBengang Group Co., Ltd.
8,533,263.19 2017/6/30 2025/10/31
NoBengang Group Co., Ltd. and BenxiBeiying Steel & Iron (Group) Co.,Ltd.
156,340,000.00 2018/5/8 2020/5/7
No
Bengang Group Co., Ltd. and BenxiBeiying Steel & Iron (Group) Co.,Ltd.
625,360,000.00 2018/5/2 2020/5/21
No
Bengang Group Co., Ltd. and BenxiBeiying Steel & Iron (Group) Co.,Ltd.
351,765,000.00 2018/7/3 2020/7/2
No
Bengang Group Co., Ltd. and BenxiBeiying Steel & Iron (Group) Co.,Ltd.
351,765,000.00 2018/8/17 2020/8/7
No
Bengang Group Co., Ltd. and BenxiBeiying Steel & Iron (Group) Co.,
781,700,000.00 2018/8/29 2020/8/28
No
Notes to the financial statements Page 86
Warrantor Amount of guarantee
Starting dateof Guarantee
Ending date
ofGuarantee
guaranteebeenfulfilledLtd.Benxi Steel & Iron (Group) Co., Ltd.
703,530,000.00 2019/3/29 2020/3/29
NoBenxi Steel & Iron (Group) Co., Ltd.
781,700,000.00 2019/1/24 2020/1/24
NoBenxi Steel & Iron (Group) Co., Ltd.
12,640,955.21 1997/10/10 2027/9/10
No
(4) Remuneration of key management personnel
Name
The content of related party
transactions
Jan to Jun 2019 Jan to Jun 2018
5. Receivables and payables of the related parties
(1) Receivables of the Company
Unit: yuan
Items Name Name
Has theEnding Balance
| Ending Balance | Beginning Balance |
Carryingamount
debts
Carryingamount
| Provision for bad | Provision for |
bad debtsAccountsreceivable
Iron (Group) Co., Ltd.
9,677,640.18 12,062,641.63Accountsreceivable
Bengang Electronics andGas Co., Ltd.
4,011,051.09 1,127,643.33 4,082,619.41 1,127,643.33
Accountsreceivable
Benxi Beiying Steel &Benxi Steel & Iron
(Group) MachineryManufacture Co., Ltd.
526,804.41
Accountsreceivable
| Benxi Steel & Iron |
| Benxi Steel & Iron (Group) Industrial |
Development Co., Ltd.
854,825.25
receivable
| Accounts | Benxi Steel & Iron |
8,035,809.75 9,372,190.37
Notes to the financial statements Page 87
Items Name Name
| Ending Balance | Beginning Balance |
Carryingamount
debts
Carryingamount
| Provision for bad | Provision for |
bad debts
Development Co., Ltd.Accountsreceivable
Bengang Cold-rolled
| (Group) Thermal Power |
| Stainless Steel Dandong |
Co., Ltd.
1,061,593.65 193,145.89 1,550,428.14 193,145.89
Accountsreceivable
Metallurgical Equipment
Manufacture Co., Ltd.
370,987.31
Accountsreceivable
Bengang Group
| Liaoning Hengtong |
| International Economic |
and Trading Co., Ltd.
100,971.10 129,063,024.28
Accountsreceivable
(Group) Metallurgy
Residues Co., Ltd.
1,132,183.70Prepayments
| Benxi Steel & Iron |
| Benxi Beiying Steel & |
Iron (Group) Co., Ltd.
6,284,632,450.75 713,124,266.80
Prepayments
(Group) MachineryManufacture Co., Ltd.
21,743,756.33
Prepayments
Bengang Cold-rolled
| Benxi Steel & Iron |
| Stainless Steel Dandong |
Co., Ltd.
1,201,245.12 47,265.99
Otherreceivables
(Group) Real-estateDevelopment Co., Ltd.
2,553,975.58 724,537.87 2,616,081.19 724,537.87
Notes to the financial statements Page 88
Items Name Name
| Ending Balance | Beginning Balance |
Carryingamount
debts
Carryingamount
| Provision for bad | Provision for |
bad debtsOtherreceivables
Liaoning MetallurgyTechnician College
39,395.40 58,042.46Otherreceivables
(Group) MachineryManufacture Co., Ltd.
1,366,166.95 2,592,632.16
Otherreceivables
| Benxi Steel & Iron |
| Benxi Steel & Iron |
(Group) Construction Co.,Ltd.
4,514,286.35 4,491,968.59
Otherreceivables
and Trading Co., Ltd.
4,807,446.56 6,224,516.81
Otherreceivables
| Bengang Group International Economic |
| Benxi Steel & Iron |
(Group) IndustrialDevelopment Co., Ltd.
2,235,533.31 1,815,027.54
Otherreceivables
Construction MaterialsCo., Ltd.
201,147.10 193,162.42 204,065.23 193,162.42
Otherreceivables
| Benxi Steel & Iron (Group) Zhengtai |
| Benxi Steel & Iron |
(Group) Medical Co.,Ltd.
955,149.94 733,227.10 939,540.57 733,227.10
(2) Payables of the Company
Unit: yuan
| Items | Name | Ending balance | Beginning balance |
| Notes payable | Benxi Steel & Iron (Group) Industrial Development Co., | 0.00 | 1,905,086.04 |
Notes to the financial statements Page 89
| Items | Name | Ending balance | Beginning balance |
| Ltd. |
Notes payable
Ltd.
1,008,219.22 224,362.71
| Benxi Steel & Iron (Group) Machinery Manufacture Co., | |||
| Notes payable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 1,243,233,389.01 | 980,479,420.15 |
| Notes payable | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 5,163,137,084.53 | 4,709,579,998.38 |
| Notes payable | Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 30,000,000.00 | 0.00 |
Notes payable
Ltd.
0.00 2,916,960.50
| Benxi Steel & Iron (Group) Real-estate Development Co., | |
| Accounts |
payable
Bengang Electronics and Gas Co., Ltd. 5,071,770.00 20,382,963.65
payable
| Accounts | Benxi Steel & Iron (Group) Real-estate Development Co., |
Ltd.
2,829,042.10 3,184,460.04
payable
| Accounts | Bengang Group International Economic and Trading Co., |
Ltd.
200,402,272.45 1,519,745,001.08
payable
| Accounts | Benxi Steel & Iron (Group) Machinery Manufacture Co., |
Ltd.
25,604,819.64 32,397,260.02
payable
Benxi Steel & Iron (Group) Construction Co., Ltd. 76,099,021.68 92,880,212.13
| Accounts |
| Accounts |
payable
Benxi Steel & Iron (Group) Mining Co., Ltd. 252,945,315.72 464,357,066.54
payable
| Accounts | Benxi Steel & Iron (Group) Industrial Development Co., |
Ltd.
95,285,666.32 75,431,391.58
payableAccountspayable
Benxi New Career Development Co., Ltd. 44,040.61 3,569,767.05
| Accounts |
| Accounts |
payable
Co., Ltd.
112,684,064.72 107,367,297.75
| Benxi Steel & Iron (Group) Construction and Repairing | |
| Accounts |
payable
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 12,454,229.44 14,738,547.68
payable
| Accounts | Benxi Steel & Iron (Group) Medical and Health |
department
20,440.35 20,440.35
payable
| Accounts | Benxi Steel & Iron (Group) Information and Automatic |
Tech Co., Ltd.
36,343,522.32 45,784,500.02
payable
Benxi High-tech Drilling Tools Manufacture Co., Ltd. 2,817,782.52 108,046.09
| Accounts |
| Accounts |
payable
Liaoning Metallurgical Technician College 2,807,564.01 10,333,052.74
payable
| Accounts | Benxi Steel & Iron (Group) Thermal Power Development |
Co., Ltd.
383,145.77 209,674.64
Notes to the financial statements Page 90
| Items | Name | Ending balance | Beginning balance |
| Accounts |
payable
Materials Co., Ltd.
0.00 2,362.00
| Benxi Steel & Iron (Group) Zhengtai Construction | |
| Accounts |
payable
Co., Ltd.
16,443,700.31 5,294,464.81
| Liaoning Hengtong Metallurgical Equipment Manufacture | |
| Accounts |
payable
Liaoning Metallurgy Vocational Technical College 3,419,209.59 5,319,243.30
payable
Bengang Cold-rolled Stainless Steel Dandong Co., Ltd. 3,258,895.78 4,549,558.68
| Accounts |
| Accounts |
payable
Liaoning Hengtai Heavy Machinery Co., Ltd. 24,546,375.74 29,913,766.60
payable
| Accounts | Benxi Iron and Steel (Group) Engineering Construction |
Supervision Co., Ltd.
1,230,000.00
customers
| Advance from | Benxi Steel & Iron (Group) Machinery Manufacture Co., |
Ltd.
7,382,942.56 0.00
customers
| Advance from | Benxi Steel & Iron (Group) Industrial Development Co., |
Ltd.
9,487,550.89 357,968.82
customers
Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. 5,830,000.00 0.00
| Advance from |
| Advance from |
customers
Logistics Co., Ltd.
7,411,101.50 60,690,525.48
| Benxi Steel & Iron (Group) Steel & Iron Process and | |
| Advance from |
customers
Dalian Boluole Steel Tube Co., Ltd. 2,218,000.00 664,191.00
customers
Liaoning Bengang Steel & Iron Trading Co., Ltd. 0.00 500,185.50
| Advance from |
| Advance from |
customers
Co., Ltd.
9,408,464.61 129,100.04
| Liaoning Hengtong Metallurgical Equipment Manufacture | |
| Advance from |
customers
Ltd.
7,583,745.32 7,865,450.22
| Bengang Group International Economic and Trading Co., | |
| Advance from |
customers
Suzhou Bengang Industrial Co., Ltd. 37,373,525.82 5,718,061.56Other payables
Ltd.
1,438,246.63 1,435,884.63Other payables
| Benxi Steel & Iron (Group) Real-estate Development Co., |
| Bengang Group International Economic and Trading Co., |
Ltd.
32,436,467.17 49,481,500.00Other payables
Ltd.
645,661.36 750,851.18
| Benxi Steel & Iron (Group) Machinery Manufacture Co., | |||
| Other payables | Benxi Steel & Iron (Group) Construction Co., Ltd. | 3,462,145.31 | 5,901,929.25 |
Other payables
Ltd.
851,643.17 491,454.17
| Benxi Steel & Iron (Group) Industrial Development Co., | |||
| Other payables | Benxi New Career Development Co., Ltd. | 897,658.64 | 970,675.26 |
Notes to the financial statements Page 91
| Items | Name | Ending balance | Beginning balance |
| Other payables | Benxi Steel & Iron (Group) Metallurgy Residues Co., Ltd. | 289,954.15 | 501,477.25 |
| Other payables | Benxi Steel & Iron (Group) Co., Ltd. | 101,874,612.92 | 218,328,849.90 |
Other payables
Co., Ltd.
2,991,259.11 3,077,336.23
| Benxi Steel & Iron (Group) Thermal Power Development | |||
| Other payables | Guangzhou Free Trade Zone Bengang Sales Co., Ltd. | 2,674,436.85 | 2,674,436.85 |
| Other payables | Liaoning Metallurgical Vocational and Technical College | 1,816,739.46 | 3,000.00 |
| Other payables | Bengang Group Finance Co., Ltd. | 0.00 | 21,172.97 |
| Other payables | Liaoning Metallurgy Technician College | 289,480.00 | 363,276.04 |
| Other payables | Benxi Beiying Steel & Iron (Group) Co., Ltd. | 14,040,505.88 | 18,242,743.81 |
| Long-term |
payables
Liaoning Hengyi Financial Leasing Co., Ltd. 52,733,529.65 13,686,705.92
Notes to the financial statements Page 92
XI. Commitments and Contingencies
1. Commitments
1. 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 is 7,669,068.17 square meters; hence annualrent is RMB 54,665.10 thousand.
(2) For the 2300mm hot rolling product line leased from the Group to the Company, lease
period lasts from 1 January 2018 to 31 December 2020. Lease charges are negotiatedbetween the lessor and the lessee based on the original cost, depreciation, and nationaltaxation of the product line, with consideration of conditions of production andequipment performance.
(3) For the 1780 hot rolling product line leased from Benxi Beiying Steel & Iron (Group)
Co., Ltd. to the Company. “Notice on Bengang Steel Plates Co., Ltd. signing a renewalagreement with Benxi Steel (group) Co., Ltd” were adopted on the sixth meeting of theseventh board of directors, it stipulated that the company leased the 1780 hot rollingproduct line from Benxi Beiying Steel & Iron (Group) Co., Ltd., lease period lasts from 1January 2017 to 31 December 2019. Lease charges are negotiated between the lessor andthe lessee based on the original cost, depreciation, and national taxation of the productline, with consideration of conditions of production and equipment performance. Theannual rent shall not exceed RMB 150,000,000.00.
2. Irrevocable letter of credit
As at June 30, 2019, the amount of irrevocable letter of credit that was not fulfilled is
RMB 2.333 billion.
Notes to the financial statements Page 93
2. Contingencies
At the balance sheet date, no significant contingencies need to be disclosed.XII. Subsequent events
1. Profit distribution after the reporting period
Unit: yuan
| Proposed profit or dividend | 193,768,576.60 |
Profit or dividend declared for
193,768,576.60
XIII. Other significant events
1. Other material issues that will influence investors’ decisions
1. Financing Lease
For prioritizing the capital structure and exploring financing channel, the Company signed the
“Financial lease cooperation framework” with Liaoning Hengyi Financial Leasing Co., Ltd.
with the amount of financial lease not exceeding RMB 5 billion per year. The Company obtains
the fund through sales and lease back financial lease with interest rate not above the benchmark
interest rate of loan over the same period published by the People’s bank of China and the
interest rate will be adjusted with the changes of benchmark interest rate of loan published by
the People’s bank of China over the lease term. The lease security ratio is not higher than 30%
of the lease principal amount. The term of financial lease shall not exceed 12 years.
2. Shares pledged by the Controlling Shareholders
As at 30 June 2019, within the total shares held by the controlling shareholder Benxi Steel &
Iron (Group) Co., Ltd., 1,652,095,133 shares are pledged and 45,000,000.00 shares are frozen.
Notes to the financial statements Page 94
XIV. Notes to the financial statements of parent company
1. Accounts receivable
(1) Accounts receivable disclosed by category
Items
| Ending balance | ||
| Carrying amount | Provision for bad debts | |
Book valueAmount
(%)
Amount
| Percentage | Bad debts |
ratio (%)
tested for impairmentindividually
47,762,337.18 8.26
| Accounts receivable |
47,762,337.18 100.00
| Including: | |||||
| Accounts receivable |
tested for impairment byportfolio
530,605,966.90 91.74
128,208,215.05 24.16
402,397,751.85
| Including: | |||||
| Total | 578,368,304.08 | 100.00% | 175,970,552.23 | 402,397,751.85 |
Items
| Beginning balance | ||
| Carrying amount | Provision for bad debts | |
Book valueAmount
e (%)
Amount
| Percentag | Bad debts |
ratio (%)
for impairmentindividually
47,762,337.18 8.11 47,762,337.18 100.00
| Accounts receivable tested |
| Including: | |||||
| Accounts receivable tested |
for impairment byportfolio
541,151,187.11 91.89 131,598,127.84 24.32 409,553,059.27
| Including: | |||||
| Total | 588,913,524.29 | 100.00 | 179,360,465.02 | 409,553,059.27 |
Receivables individually significant and tested for impairment individually
Items
Accounts receivable
| Ending balance | ||
| Provision for | ||
bad debts
ratio(%)
Reason
| Bad debts | ||||
| Benxi Nanfen Xinhe Metallurgical | 47,762,337.18 | 47,762,337.18 | 100.00 | Halt operation |
Notes to the financial statements Page 95
Items
Accounts receivable
| Ending balance | ||
| Provision for | ||
bad debts
ratio(%)
Reason
| Bad debts | ||||
| Co., Ltd. | ||||
| Total | 47,762,337.18 | 47,762,337.18 |
Accounts receivable tested for impairment by portfolio
Items
| Ending balance | ||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) |
Notes:
If the provision for bad debts of accounts receivable is made in accordance with thegeneral model of expected credit losses, please refer to the disclosure of other receivablesto disclose information about bad debts:
□ Applicable √ Not applicable
Accounts receivable disclosed by Aging
Unit: yuanAging Ending balanceWithin 1 year (inclusive) 326,326,994.80
1 – 2 year 56,750,367.45
2 – 3 year 27,697,384.96
Over 3 years 167,593,556.87
Total 578,368,304.08
(2) Information of provision, reversal or recovery of bad debts of current period.
The provision of bad debts of current period is RMB 3,389,912.79.
(3) No accounts receivable has been written off this year.
(4) Top five debtors at the year-end
Company
Ending balance
Amount
| Ending balance | ||
| Percentage of total | ||
accounts receivable (%)
bad debtsNo.1
206,877,478.40
35.77
| Provision for | |
Notes to the financial statements Page 96
Company
Amount
| Ending balance | ||
| Percentage of total | ||
accounts receivable (%)
bad debtsNo.2
62,482,368.63
10.80
| Provision for | |
6,792,099.51No.3
47,762,337.18
8.26
47,762,337.18No.4
41,687,479.04 7.21
No.5
10,140,717.39 1.75
1,150,024.13Total
368,950,380.64 63.79
55,704,460.82
2. Other receivables
| Items | Ending balance | Beginning balance |
Interest receivables
12,222,112.07
9,815,280.04Dividend receivables
Other receivables
216,469,271.82
225,222,111.42Total
228,691,383.89
235,037,391.46
(1) Interest receivables
1) Interest receivable disclosed by category
Items
| Items | Ending balance | Beginning balance |
Deposit interest
12,222,112.07
9,815,280.04Total
12,222,112.07
9,815,280.04
(2) Dividend receivables
(3) Other receivables
1) Other receivables disclosed by nature
| Nature | Ending balance | Beginning balance |
Accounts
269,737,685.54 278,547,233.77Others
10,941,600.08 11,246,492.49Total
280,679,285.62 289,793,726.26
Notes to the financial statements Page 97
2) Provision of bad debt
Unit: yuan
Provision of bad debt
The first stage The second stage The third stage
Total12-month expected
credit losses
lifetime expected credit losses(credit impairment has not
occurred)
lifetime expected credit losses
(credit impairment has already
occurred)The balance of January1, 2019 in this reportingperiod
—— —— —— ——Significant changes of provision during the current reporting period
□ Applicable √ Not applicable
Other receivables disclosed by Aging
Unit: yuan
Aging Ending balanceWithin 1 year (inclusive) 175,866,828.59
1 – 2 year 3,202,196.37
2 – 3 year 44,775,445.85
Over 3 years 56,834,814.81
Total 280,679,285.62
3) Information of provision, reversal or recovery of bad debts of current period.
Reversal of bad debts for other receivables in current period is RMB 361,601.04.
4) No other receivables have been written off this year.
5) Top five debtors at the year-end
Company Notes or content Amount Aging
Percentage
of total otherreceivables
(%)
Provision for
bad debtsNo.1 Accounts
66,559,873.88
Within 1 year
23.71
| Percentage |
No.2 Accounts
14,664,372.10
2-3 years
5.22
2,932,874.42No.3 Accounts
7,718,029.34
Within 1 year
2.75
No.4 Accounts
5,302,064.54
2-3 years
1.89
No.5 Accounts
4,341,257.18
Within 1 year
1.55
868,251.44
Notes to the financial statements Page 98
Total
98,585,597.04
35.12
3,801,125.86
3. Long-term equity investment
Items
| Ending balance | Beginning balance | |
| Carrying | ||
amount
nt
Book value Carrying amount
| Impairme | Impai |
rment
Book value
| Subsidiaries | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | ||
| Joint ventures | ||||||
| Total | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 | 2,016,281,902.16 |
(1) Details of investment in subsidiaries
Name of entity Beginning balance Increase Decrease
Endingbalance
ment
ofcurren
tperiod
Endingbalance
ofimpair
ment
| Impair | ||
| Guangzhou Bengang Steel & Iron Trading |
Co., Ltd.
30,000,000.00
30,000,000.00
| Shanghai Bengang Metallurgy Science and |
Technology Co., Ltd.
30,000,000.00
30,000,000.00
| Bengang Steel Plates Liaoyang Pellet Co., |
Ltd.
529,899,801.38
529,899,801.38
| Dalian Benruitong Automobile Material |
Technology Co., Ltd.
65,000,000.00
65,000,000.00
Bengang Posco Cold-rolled Sheet Co., Ltd. 1,019,781,571.10
1,019,781,571.10
| Changchun Bengang Steel & Iron Sales Co., |
Ltd.
28,144,875.36
28,144,875.36
| Harbin Bengang Economic and Trading Co., |
Ltd.
29,923,398.23
29,923,398.23
Nanjing Bengang Materials Sales Co., Ltd. 2,081,400.65
2,081,400.65
Wuxi Bengang Steel & Iron Sales Co., Ltd.29,936,718.57
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. 49,100,329.41
49,100,329.41
| Tianjin Bengang Steel & Iron Trading Co., |
Ltd.
60,318,095.80
60,318,095.80
Notes to the financial statements Page 99
Benxi Bengang Steel Sales Co., Ltd 5,000,000.00
5,000,000.00
and Technology Co., Ltd.
30,000,000.00
| Shenyang Bengang Metallurgical Science |
30,000,000.00
Ltd.
30,000,000.00
| Chongqing Liaoben Steel & Iron Trade Co., |
30,000,000.00
New Materials Technology Co., Ltd.
76,000,000.00
| Bengang Baojin (Shenyang) Automobile |
76,000,000.00
| Total | 2,016,281,902.16 | 2,016,281,902.16 |
4. Operating income and operating cost
Items
| Current period | Previous period | |||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 21,327,519,597.49 | 19,894,713,843.28 | 21,543,654,805.89 | 19,737,906,706.75 |
| Other business | 2,119,696,260.44 | 1,862,576,153.90 | 2,139,210,303.25 | 1,663,285,255.45 |
| Total | 23,447,215,857.93 | 21,757,289,997.18 | 23,682,865,109.14 | 21,401,191,962.20 |
Whether implement the new income standard or not.
□ Applicable √ Not applicable
5. Income on investment
| Items | Current period | Previous period |
| Income from long-term equity investment (cost method) | ||
| Income from bank short-term financial products | 3,493,150.68 | |
| Total | 3,493,150.68 |
XV. Supplementary information
1. Details of non-recurring profit and loss
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets | -49,987,558.33 | |
| Government subsidy attributable to profit and loss of current period |
(except such government subsidy closely related to the company's normalbusiness operation, meeting the regulation of national policy and enjoyedconstantly in certain quota or quantity according to a certain standard)
41,695,000.00Profit or loss from debt restructuring
50,640.00
Notes to the financial statements Page 100
| Items | Amount | Notes |
Other non-operating revenue and expenditure other than above items
172,778.52
| Impact of income tax | 55,854.63 |
Impact of minority interests
3,799.93
| Total | -8,128,794.37 |
For the Company’s non-recurring profit and loss items as defined in “the Explanatory Announcement No.1 oninformation disclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses”and its non-recurring profit and loss items as illustrated in “the Explanatory Announcement No.1 on informationdisclosure for Companies Offering their Securities to the Public-Non-recurring Profits and Losses” which havebeen 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 averagenet assets yield
Earnings per share (Yuan)Basic EPS Diluted EPSNet profit attributable to ordinary shareholders 2.35%
0.12 0.12
Net profit attributable to ordinary shareholdersafter deducting non-recurring profit and loss
2.50% 0.12
| Net profit attributable to ordinary shareholders after deducting non-recurring profit and loss |
0.12
3. Differences between Domestic and Foreign Accounting Standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under
IFRS and Chinese accounting standards.
√ Applicable □ Not applicable
Unit: RMB
Net profit attributable to the shareholders of the
listed company
| Net profit attributable to the shareholders of the | 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
453,209,615.76
| 756,951,987.59 | 19,406,029,174.41 |
19,126,258,116.67
| Items and amounts adjusted according to IFRS | |
(2) Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards.
□ Applicable √ Not applicable
(3) Accounting data differences between domestic and foreign accounting standards
Notes to the financial statements Page 101
□ Applicable √ Not applicable
4. Others
Notes to the financial statements Page 102
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.