Bengang Steel Plates Co., Ltd.
2022 Semi-annual Report
August, 2022
Section Ⅰ. Important Notice, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee and the Directors, members ofthe Supervisory Committee and senior management of the Company guarantee thatthere are no misrepresentations or misleading statements, or material omission in thisreport, and individually and collectively accept full responsibility for the authenticity,accuracy and integrity of the information contained in this report.Huo Gang, Legal representative, Jiang Xiaoyu, Chief financial officer, and SunYanbin, Chief accountant, (the person in charge of the accounting), make the pledgefor the authenticity, accuracy and integrity of the attached financial statements.All the members of the Board of Directors attended the board meeting on which thisreport was examined.The prospective statements contained in this annual report do not constitute anysubstantial commitment to the investors. Investors should pay attention to the risksattached to investment decisions. This report is prepared in both of Chinese andEnglish. The Chinese version shall prevail when there are any controversialstatements in the two versions.The company has described the existing risks and countermeasures in detail in thisreport. Please refer to Section III-10 “Risks faced by the company andCountermeasures”. “China Securities Journal”, “Securities Times”, “Hong KongCommercial Daily” and Juchao Information Network (www.cninfo.com.cn) are thecompany's selected information disclosure media. All information of the company isbased on the information published in the above-mentioned designated media.Investors are advised to pay attention to investment risks.The company does not have any significant risks that require investors’ attention.There exists no plan for the company to distribute profit ,bonus stocks or convertcapital reserve into share capital.
Table of Contents
SECTION Ⅰ. IMPORTANT NOTICE, TABLE OF CONTENTS, AND DEFINITIONS ............. 2
SECTION II. COMPANY PROFILE AND MAIN FINANCIAL INDEX ................................ 3
SECTION III. MANAGEMENT DISCUSSION AND ANALYSIS ....................................... 6
SECTION Ⅳ. CORPORATE GOVERNANCE .............................................................. 24
SECTION V. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY .................................. 26
SECTION VI. IMPORTANT EVENTS ......................................................................... 31
SECTIONⅦ. STATUS OF SHARE CAPITAL CHANGES AND SHAREHOLDERS.............. 63
SECTION Ⅷ. STATUS OF PREFERRED SHARES ..................................................... 67
SECTION Ⅸ. STATUS OF CONVERTIBLE CORPORATE BONDS .................................. 69
SECTION Ⅹ. FINANCIAL REPORT ........................................................................... 73
Reference File Directory
1. Financial statements signed and sealed by Legal representative, Chief financial officer, Chief
accountant (the person in charge of the accounting).
2. The originals of all company documents and announcements publicly disclosed during the
reporting period.
3. Semi-annual reports published in other securities markets.
Definition
| Terms to be defined | Refers to | Definition |
| Bengang Bancai, Bengang Steel, the Company, the Listed Company | Refers to | Bengang Steel Plates Co., Ltd. |
| Ansteel Group | Refers to | Ansteel Group Co., Ltd. |
| Bensteel Group | Refers to | Bensteel Group Co., Ltd. |
| Benxi Steel & Iron CO., Bengang Co. | Refers to | Benxi Steel & Iron (Group) Co., Ltd. |
| Liaoning Provincial State-asset Administration | Refers to | Liaoning State-owned Asset Supervisory and Management Committee |
| SSE | Refers to | Shenzhen Stock Exchange |
| Bengang Puxiang | Refers to | Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. |
Section II. Company Profile and Main Financial Index
I. Company Information
| Stock abbreviation | Bengang Bancai, Bengangban B | Stock Code | 000761, 200761 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 本钢板材股份有限公司 | ||
| Abbreviation of Company name in Chinese | 本钢板材 | ||
| Company name in English (If any) | BENGANG STEEL PLATES CO., LTD. | ||
| Abbreviation of Company name in English (If any) | BSP | ||
| Legal representative | Huo Gang | ||
II. Contact Information
| Secretary of Board of Directors | Representative of Securities Affairs | |
| Name | Jiang Xiaoyu | |
| Address | No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province | |
| Tel | 024-47827003 | |
| Fax | 024-47827004 | |
| bgbcjxy@163.com |
III.Other Information
1. Contract information
Changes of registration address, office address, mail code, Company website and E-mail address of Company
□ Applicable √ Not applicable
There exists no changes in registration address, office address, mail code, Company website and E-mail address of Company duringthe reporting period. Investors are advised to refer to Annual Report 2021 for detail information.
2. Information Disclosure and Place for Consulting
Changes of information disclosure and place for consulting.
□ Applicable √ Not applicable
There exists no changes in Press media for information disclosure,Web address for the Semi-annual report as assigned by CSRC andthe place for consulting.Investors are advised to refer to Annual Report 2021 for detail information.
3. Other relevant Information
Changes of other relevant information.
□ Applicable √ Not applicable
IV. Main Accounting Data and Financial IndexWhether the company needs to retrospectively adjust or restate accounting data for previous years
□ Yes √ No
| Current period | Previous period | Changes over previous period | |
| Operating income（RMB） | 35,015,177,304.98 | 38,588,128,212.14 | -9.26% |
| Net profit attributable to the shareholders of the listed company（RMB） | 561,735,377.41 | 2,208,798,167.91 | -74.57% |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（RMB） | 522,219,426.93 | 2,199,142,563.30 | -76.25% |
| Net Cash flow generated by business operation（RMB） | 227,451,842.21 | 1,524,916,220.03 | -85.08% |
| Basic earnings per share (RMB/Share) | 0.14 | 0.57 | -75.44% |
| Diluted earnings per share (RMB/Share) | 0.14 | 0.57 | -75.44% |
| Weighted average net assets yield | 2.60% | 9.98% | -7.38% |
| 30 June 2022 | 31 December 2021 | Changes over 31 December 2021 | |
| Gross assets（RMB） | 47,017,104,048.88 | 55,147,123,275.30 | -14.74% |
| Net assets attributable to shareholders of the listed company（RMB） | 20,629,004,438.07 | 22,500,969,014.30 | -8.32% |
V. Differences between Domestic and Foreign Accounting Standards
1. Differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chineseaccounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under IFRS and Chinese accountingstandards during the reporting period.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards.
□ Applicable √ Not applicable
There are no differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accountingstandards during the reporting period.VI. Items and Amount of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount | Notes |
| Gains and losses on disposal of non-current assets (including the write off part of the provision for impairment) | 3,648,546.62 |
| Government subsidy attributable to profit and loss of current period (except such government subsidy closely related to the company's normal business operation, meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 30,655,542.92 | |
| Other non-operating income and expenses other than above | 19,806,941.56 | |
| Less: impact of income tax | 13,527,757.78 | |
| impact of minority equity (after tax) | 1,067,322.84 | |
| Total | 39,515,950.48 | -- |
Other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable√ Not applicable
There exists no situation of other profit and loss items that meet the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on InformationDisclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as recurring profit and loss items.
□ Applicable√ Not applicable
The company does not define the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on InformationDisclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" as recurring profit and loss items.
Section III. Management Discussion and Analysis
I. The main business of the company during the reporting period
1. Industry development situation
In the first half of the year 2022,the macroeconomic situation in domestic and abroad is facing severe challenges.The conflict between Russia and Ukraine has led to a sharp rise in global energy prices,created more inflationary pressure,and the global supply chain was strongly impacted. Affected by the COVID-19epidemic in the second quarter, domestic steel demand was sluggish.In addition, in the first half of this year, steelmills began to increase production volume in a large scale. Under the background of strong supply and weakdemand, the basic surface of steel industry was deteriorating gradually, and therefore steel price ran in weaksection. In the first half of the year 2022, the steel market was in a state of "high cost" and "low profit" for a longtime.
2. Main business, main products and their uses
During the reporting period, the company’s main businesses include iron and steel smelting, rolling processing,power generation, coal chemical industry, special steel profiles, railways, import and export trade, scientificresearch, product sales, etc. The introduction of world advanced equipment and technology to implementequipment upgrades for the main iron and steel industry and have built a high-quality steel base, formed more than60 varieties, more than 7,500 specifications of product series, the proportion of high value-added and high-techproducts reached more than 80%. The leading products for automotive surface panels, home appliance panels,petroleum pipeline steel, container panels, shipboard, etc. are widely used in the fields of automobiles, homeappliances, petrochemicals, aerospace, machinery manufacturing, energy and transportation, building decorationand metal products, and are exported to more than 60 countries and regions. There exists no changes in mainbusiness during the reporting period.
3. Business model
Procurement model: The company's procurement model includes domestic procurement and foreign procurement.Domestic material procurement is carried out through centralized procurement, unified bidding, price comparison,and consultation. The procurement of foreign materials is carried out through long-term cooperative procurement,direct procurement, open and invitational bidding, inquiry and price comparison, competitive negotiation,negotiation procurement, etc., which mainly act by Bensteel Group International Economic and Trade Co., Ltd.Sales model: The company's sales are divided into domestic sales and export sales. Domestic sales mainly adoptthe direct sales model. The company sells directly to large customers, and other small and medium customers sellto them through regional sales subsidiaries. Export sales mainly act through the strong marketing networkaccumulated in international trade by Bensteel Group International Economic and Trade Co., Ltd., who acts asagent of the export sales and charges the agency fee.
4. Key drivers of performance
During the reporting period, the company obtained hard-won operating and reform achievement through series ofspecific measures, and the level of corporate governance was significantly improved as well. These specificmeasures were mainly guided by focusing on "7531" strategic objectives and "1357" work guidelines, changingoperating mind,self-pressurization,firmly grasping two main lines of benchmark and reform,sticking to takingeconomic benefits as center,vigorously promoting the implementation of "1 + 2 + 3" key work.The company'smain business performance indicators have achieved steady growth,including:pig iron completed 4.95 milliontones, a year-on-year decrease of 4.07% which represents 0.2 million tones; crude steel completed 5.20milliontons,a year-on-year decrease of 6.60% which represents 0.37 million tons; hot-rolled plates completed 6.77 milliontons,a year-on-year decrease of 4.01% which represents 0.29 million tons; cold-rolled plates completed 2.30million tons,a year-on-year decrease of 4.29% which represents 0.13 million tons; special steel products completed
0.28 million tons, a year-on-year decrease of 27.99% which represents 0.11million tons. Reviewing the work ofthe first half year, it was mainly carried out in the following aspects:
(1) Anchoring two benefits and four ratios, the company's anti-risk ability was enhanced.
In the first half of the year 2022, under the dual pressure of the year-on-year increase of the budget and theyear-on-year decrease of the industry, the sales profit margin achieved the target and ranked higher among thesteel enterprises. Even with a dividend distribution of 2.465 billion yuan, the asset liability ratio still declined,better than the average level of the iron and steel industry, and the company achieved "double wins".
(2) Implementing the high-quality strategy and reaching a new high output of automobile panels.For purpose of making the automobile plate as a strategic fist product, the company vigorously promoted theresearch and development of the third generation automobile steel and quality research, improved the consistentmanufacturing technology of automobile plate, and prepared the product plan of automobile plate, thus improvedcompany's benefit creation ability continuously.
(3) Taking the system as the starting point, and steadily improving the quality of real product.The company vigorously promoted the consistent quality management of the whole process, and furtherly refinedthe quality control of the production process. The first-time pass rate of the original varieties in each processcontinued to increase month on month. B170P phosphorized high-strength cold-rolled steel strip, cold-rolledlow-carbon steel sheet and strip won the gold-cup award for quality of metallurgical products of China Iron andSteel Industry Association.
(4) Insisting on tapping potentialities through benchmarking, cost reduced significantly.
By studying and making judgement on the market situation in both supply and demand sides, beginning withreducing production costs, and declaring motivation orders and encouragement policies for all employees toimprove quality and reduce cost, the company obtained significant achievement in reducing cost and improvingeconomic benefits.
(5) Concentrating on advantages, the "star production line" achieved initial results.
With the "star production line" as the guide, through the inclination of resources input, policies making and otheraspects, the production efficiency was greatly improved, and the key indicators continued to be improved on thebasis of operating the company economically.
(6) Breaking the traditional shackles and making new strides in enterprise reform.
The company started pilot exploration in the reform of "authorization + common benefit" applicable to differenttracks such as docking market , similar business portfolio integration ,etc. , and the company achieved good resultsduring reporting period.
(7) In adherence to the innovation driven, creating the source of original technology.
With taking the advantages of the restructuring of Ansteel and Bensteel Co,Ltd, the company completed therevision of the "14th five year plan" that will guide the high-quality development of the company in a long way.Hot rolled oxidation resistant coating free hot forming steel cf-phs1500 was launched in the world and reached theinternational leading level. Substantial progress has been made in the development and application of raw pureiron bgyt3. A historic breakthrough in the level of converter steel reached the domestic leading level.
II. Analysis on Core CompetitivenessThe company adheres to the innovation-driven and "quality + service" development model, pursues for thestrategic goal of building an internationally competitive high-quality plate base, a domestic first-class special steelbase and a comprehensive service provider, and acting as a strategic leading role, focusing on improving qualityand efficiency, In terms of product upgrades, technological innovation, green and intelligent manufacturing, wemade efforts to innovate management ideas, enhance the core competitiveness of enterprises, and promoteenterprises to achieve high-quality, green and intelligent development.
1. Manufacturing capabilities
Through the innovation of management mind, strengthening professional management and controlling capacity ofthe entire chain, and continuously improving corporate management efficiency, all departments and units interactwith each other, continue to implement the concept of priority on output, adhere to the iron system as the core,focus on the process connection of iron and steel, and rationally match the production line and resource productionorganization principles of the steel post process, so that the production process and operation Continuouslystandardize and refine, make every effort to maximize quality, efficiency and production scale, and promote theentire production chain toward high-end manufacturing.
2. Equipment transformation and upgrading
In 2022, the company launched a fixed asset investment plan of 1.66 billion yuan. Implemented a new round oflarge-scale technological transformation and ultra-low emission transformation projects represented by keyprojects such as special steel electric furnace upgrading, special steel rolling mill renovation, CCPP powergeneration project, coke oven flue gas desulfurization and denitrification, sintering gas desulfurization anddenitrification . At present, the CCPP power generation project has been put into operation. The special steelelectric furnace upgrade and transformation project will be commissioned and put a set of electric furnaces andsupporting refining equipment, continuous casting equipment into production in the second half of the year 2022.Coke oven flue gas and sintering gas desulfurization and denitrification projects are expected to be constructed oneafter another in this year.
3. New product development capabilities
The company plans to develop 35 grades of steel production. Until the end of the first half of the year 2022, 24grades of steel production which represents 68.6% have been completed and launched in the market. With thesuccessful development of the hot rolled base material brq1 of oriented silicon steel, the company filled the blankin the field of oriented silicon steel production.The steel 18crnimo7-6fph for construction machinery exported to
Belgium has been developed and the product meets the requirements of the German standard din50602 and theAmerican Standard astme381.The development of market unique limit width (2000mm) high-strength tank steel550gt-th accessed is the first one developed in China.
4. Technological innovation ability
In the aspect of scientific and technological cooperation, as the promotion of scientific and technologicalcooperation between Ansteel and Bensteel, the company transplanted and transformed mature technologies ofAnsteel gradually and signed 10 contracts. Also,the company carried out research on new products andcutting-edge technologies relying on the platform of Liaoning industry university research innovation alliance andsigned 8 Industrial University research cooperation projects with Dalian University of technology, NortheastUniversity and Liaoning University of science and technology. In terms of intellectual property rights, 3 nationalstandards and 57 corporate standards were drafted; 127 patents were accepted by the National Bureau, and 55patents were authorized by the National Bureau, including 9 inventions. In terms of scientific and technologicalachievements,integrated innovation and practice of production technology of high-end environmental protectionand fingerprint resistant galvanizing products won the second prize of science and technology of LiaoningProvince; the development of steel for oil production well control equipment series, the research and developmentand application of low-cost and high-performance cold rolled 590MPa grade dual phase steel, the research andapplication of key preparation technology of non quenched and tempered ultra high strength structural steel forconstruction machinery, and the key technology and application of coking coal price effect evaluation andlarge-scale blast furnace coke quality adaptive optimization control all won the third prize of science andtechnology of Liaoning Province; development of high-quality and economical Nb microalloyed automobilegalvanized dual phase steel series won the second prize of CITIC niobium steel technology progress.
5. Green development capability
In accordance with the steel industry and local ultra-low emission policy requirements, the company wascommitted to social responsibilities. Relying on professional planning and research institutions, the companyprepared an environmental protection improvement plan and an annual implementation plan. A total of more than40 ultra-low emission projects were checked, all of which have been included in the investment plan and are underconstruction or preliminary work. Through comprehensive green improvement such as cleaner production level,three waste management, environmental protection management,and AAA" scenic spot garden factory,thecompany achieved community-based environmental quality, promoted the integration of industry and city, and isstriving to achieve ultra-low emission by the end of 2023, and build the company into an "ecological steel" thatdevelops harmoniously with the city.
6. Intelligent manufacturing capabilities
The company has vigorously promoted the construction of intelligent manufacturing related projects. In 2022, thecompany has issued to carry out intelligent transformation strategy in such fields as the integration construction ofinformation system for the restructuring of Ansteel and Bensteel Co., Ltd., and the supporting system for theoverall improvement of iron and steel industry management and information technology. Learn the informatizationand intelligent construction experience of Bayuquan and Jilin Jianlong and apply the good modular system,formulate the development plan of the plate company in the next 3-5 years, and improve the information
technology service application ability. Vigorously promote the construction of "digital Ansteel", break theinformation island, set up 12 special groups to promote integration and supporting projects, actively integrateAnsteel’s management mind, and comprehensively improve management efficiency and effectiveness.III. Management Discussion and Analysis
1. General
The investors are advised to refer to “I. The main business of the company during the reporting period” for details.
2. Significant Change of Main Accounting Data
Unit: Yuan
| Current period | Previous period | Change over previous period | Notes to significant change | |
| Operating income | 35,015,177,304.98 | 38,588,128,212.14 | -9.26% | Due to the year-on-year decrease in steel price. |
| Operating Cost | 33,377,477,540.63 | 34,592,825,792.72 | -3.51% | |
| Selling and distribution expenses | 67,430,875.17 | 59,652,669.72 | 13.04% | |
| General and administrative expenses | 352,304,684.10 | 388,678,843.23 | -9.36% | |
| Financial expenses | 293,093,407.82 | 336,355,698.84 | -12.86% | |
| Income tax expenses | 203,204,954.60 | 746,977,590.45 | -72.80% | Due to the year-on-year decrease in profit before tax |
| Research and Development Input | 963,465,760.00 | 869,601,179.00 | 10.79% | |
| Net cash flows from operating activities | 227,451,842.21 | 1,524,916,220.03 | -85.08% | Due to the year-on-year decrease in profit before tax and payment of trading liabilities. |
| Net cash flows from investing activities | -755,346,775.62 | -2,747,214,027.23 | -72.50% | Due to the decreased investment in PPE, and the company did not carry out financial investment in the first half of 2022. |
| Net cash flows from financing activities | -1,022,947,841.22 | -3,533,315,813.10 | -71.05% | Due to the comprehensive effects of belows : |
| ① the net repayment amount of financial liabilities decreased significantly;② the amount of dividends distributed increased significantly; ③the net recovery amount such as Bill margin increased significantly. | ||||
| Net increase in cash and cash equivalents | -1,548,625,764.97 | -4,771,963,480.21 | -67.55% |
Note: there exists no significant change in in profit composition or profit source during the reporting period.
3. Breakdown of Operating Income
Currency unit: Yuan
| Current period | Previous period | Change over previous period | |||
| Amount | Proportion | Amount | Proportion | ||
| Total operating income | 35,015,177,304.98 | 100% | 38,588,128,212.14 | 100% | -9.26% |
| By industries | |||||
| Industry | 35,015,177,304.98 | 100.00% | 38,588,128,212.14 | 100.00% | -9.26% |
| By products | |||||
| Steel plate | 33,109,977,666.90 | 94.56% | 35,798,649,027.39 | 92.77% | -7.51% |
| Others | 1,905,199,638.08 | 5.44% | 2,789,479,184.75 | 7.23% | -31.70% |
| By regions | |||||
| Northeast | 12,303,656,651.85 | 35.14% | 13,764,490,687.62 | 35.67% | -10.61% |
| North China | 4,208,207,527.97 | 12.02% | 4,282,969,762.68 | 11.10% | -1.75% |
| East China | 13,168,521,446.80 | 37.61% | 15,059,297,569.71 | 39.03% | -12.56% |
| Northwest | 75,492,130.13 | 0.22% | 82,611,121.25 | 0.21% | -8.62% |
| Central south | 1,323,870,974.23 | 3.78% | 1,475,476,779.53 | 3.82% | -10.28% |
| Export | 3,935,428,574.00 | 11.24% | 3,923,282,291.35 | 10.17% | 0.31% |
4. Industry, Product and Regions Accounting for the Company’s Operating Income orProfit over 10%
√ Applicable □ Not applicable
| Items | Operating income | Operating costs | Gross | Operating income change | Operating costs change over | Gross margin change over |
| margin | over previous period | previous period | previous period | |||
| By industries | ||||||
| Industry | 35,015,177,304.98 | 33,377,477,540.63 | 4.68% | -9.26% | -3.51% | -5.67% |
| By products | ||||||
| Steel plate | 33,109,977,666.90 | 31,509,788,033.31 | 4.83% | -7.51% | -2.03% | -5.33% |
| Others | 1,905,199,638.08 | 1,867,689,507.32 | 1.97% | -31.70% | -23.17% | -10.88% |
| By regions | ||||||
| Northeast | 12,303,656,651.85 | 11,752,573,377.32 | 4.48% | -10.61% | -4.49% | -6.13% |
| North China | 4,208,207,527.97 | 4,002,005,359.10 | 4.90% | -1.75% | 4.85% | -5.98% |
| East China | 13,168,521,446.80 | 12,544,333,530.22 | 4.74% | -12.56% | -7.03% | -5.66% |
| Northwest | 75,492,130.13 | 71,951,549.22 | 4.69% | -8.62% | -6.64% | -2.02% |
| Central south | 1,323,870,974.23 | 1,262,840,522.32 | 4.61% | -10.28% | -8.43% | -1.92% |
| Export | 3,935,428,574.00 | 3,743,773,202.45 | 4.87% | 0.31% | 6.30% | -5.36% |
Operating data of recent one period according to adjusted statistics caliber at the period-end in the case that theCompany's main business statistics caliber has changed during the reporting period
□ Applicable √ Not applicable
Explanation of the reasons for the year-on-year change over 30% in relevant data
□ Applicable √ Not applicable
IV. Analysis on Non-core Business
√ Applicable □ Not applicable
| Items | Amount | Proportion of total profit | Reason for formation | Whether it is sustainable or not |
| Investment income | 115,842.84 | 0.01% | Due to investment income from long term equity investment accounted by equity method | No |
| Asset impairment loss | -72,880,991.53 | -9.31% | Due to the provision for inventory impairment | No |
| Non-operating income | 30,572,281.35 | 3.90% | Due to the clean up of the long-term unclaimed debt and and the debt belonging to cancelled customer accounts which are expected unable to be paid. | No |
| Non-operating | 10,765,339.79 | 1.37% | Due to loss on the retired | No |
| expense | property and equipment | |||
| Assets disposal gains | 3,648,546.62 | 0.47% | Due to gains from disposal of fixed assets | No |
V. Analysis on Assets and Liabilities
1. Significant Change of Assets Components
| Ending balance of 2021 | Opening balance of 2021 | Proportion change | Notes to significant change | |||
| Amount | Proportion in the total assets (%) | Amount | Proportion in the total assets (%) | |||
| Cash at bank and on hand | 4,805,370,697.71 | 10.22% | 8,831,095,737.85 | 16.01% | -5.79% | Due to distribution of dividend and payment of trading liabilities |
| Accounts receivable | 307,887,350.08 | 0.65% | 256,850,782.71 | 0.47% | 0.18% | |
| Inventories | 8,740,534,055.47 | 18.59% | 10,190,166,138.98 | 18.48% | 0.11% | |
| Long-term equity investment | 3,067,239.29 | 0.01% | 2,981,784.07 | 0.01% | 0.00% | |
| Fixed assets | 24,397,907,946.02 | 51.89% | 25,480,674,048.94 | 46.20% | 5.69% | Due to the decline in total assets that leads a passive increase in the proportion of fixed assets |
| Construction in process | 3,012,446,289.29 | 6.41% | 2,434,182,101.13 | 4.41% | 2.00% | |
| Right-of-use assets | 1,410,177,981.09 | 3.00% | 1,440,365,248.31 | 2.61% | 0.39% | |
| Short-term loans | 3,349,342,280.00 | 7.12% | 4,053,088,140.00 | 7.35% | -0.23% | |
| Contract liabilities | 3,977,011,514.55 | 8.46% | 4,708,188,093.78 | 8.54% | -0.08% | |
| Long-term loans | 3,002,383,788.13 | 6.39% | 4,222,821,771.74 | 7.66% | -1.27% | |
| Lease liabilities | 1,404,900,432.63 | 2.99% | 1,424,667,169.15 | 2.58% | 0.41% | |
2. Main Assets Overseas
□ Applicable √ Not applicable
3. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
4.Restricted Assets by the End of the Period
| Items | Ending balance | Reason |
| Cash at bank and on hand | 54,897,399.20 | Deposit for notes |
| Accounts receivable financing | 101,670,000.00 | Deposit for notes |
| Fixed assets | 87,549,758.85 | Mortgage for fund borrowing |
| Intangible assets | 35,846,028.60 | Mortgage for fund borrowing |
| Total | 279,963,186.65 |
VI. Investment
1. General
□ Applicable √ Not applicable
2. Acquiring Significant Equity Investment in the Reporting Period
□ Applicable √ Not applicable
3. Undergoing Significant Non-Equity Investment in the Reporting Period
□ Applicable √ Not applicable
4. Investment of Financial Assets
(1) Investment in Securities
□ Applicable √ Not applicable
There was no investment in securities during the reporting period.
(2) Investment in Derivatives
□Applicable √ Not applicable
There was no investment in derivatives during the reporting period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Use of Raised Funds
√Applicable □ Not applicable
Unit: 10 thousand yuan
| Year | Method of raising funds | Total amount of raised funds | Used amount of raised fund this period | The total used amount of funds raised | The total amount of funds raised for change of purpose during the reporting period | Cumulative total amount of funds raised for change of purpose | Cumulative proportion of total raised funds for changes of purposes | The total amount of funds raised not used | The purpose and destination of the raised funds not yet used | Amount of funds raised after being idle for more than two years |
| 2018 | Non-public offering of stocks | 396,580 | 776.80 | 334,983.1 | 61,949.10 | Deposit | ||||
| 2020 | Public issuance of convertible corporate bonds | 675,920 | 316.02 | 361,384.42 | 315,245.22 | Deposit | ||||
| Total | -- | 1,072,500 | 1,092.82 | 696,367.52 | 377,194.32 | -- | ||||
| Description of the overall use of raised funds | ||||||||||
| 1.Status of use of funds for investment projects with raised funds As of June 30, 2022, the amount of funds raised by the company through issue of non-public offering of stocks have invested by a total of 3,349,831,034.97 yuan in raised investment projects (including 3,342,063,034.97 yuan invested in raised investment projects in previous years and 7,768,000.00 yuan invested in raised investment projects in this year), and the accumulated net amount of interest income minus handling fees is 3,522,053.81 yuan. As of June 30, 2022, the amount of funds raised by the company through issue of convertible bonds have invested by a total of 3,613,844,239.01 yuan (including 3,610,684,085.61 yuan of invested projects in previous years and 3,160,153.40 yuan of invested projects in this year) , and the accumulated net amount of interest income minus renewal fee is 7,096,406.57 yuan. 2.Status of changes in the implementation location and implementation method of the projects invested by raised funds During the reporting period, there is no situation of change the investment projects of raised funds or their implementation locations and implementation methods. 3.Status of preliminary investment and replacement of raised funds for investment projects (1) Status of preliminary investment and replacement of funds raised from non-public offering of stocks At the 14th meeting of the 7th Board of Directors and the 10th meeting of the 7th Board of Supervisors of the Company, “t About the use of raised funds to replace pre-invested raised funds for investment projects “was reviewed and approved. Before the raised funds arrive in the account, in order to ensure the smooth implementation of the raised investment projects, the company uses self-raised funds for project construction. As of February 28, 2018, the pre-invested amount of self-raised funds replaced by raised funds was RMB 1,822,749,211.07, including RMB 1,484,133,089.39 for the cold-rolled high-strength steel reconstruction project and RMB 338,616,121.68 for the hot-dip galvanizing production line project of the third cold rolling plant. During the period from March 1, 2018 to February 28, 2019, the company paid RMB 88,296,207.56 for the construction of projects with | ||||||||||
(2) Fund raising commitments
√Applicable □ Not applicable
| Commitment to investment projects and over-raised funds | Whether the item has been changed (including some changes) | Total committed investment of raised funds | Adjusted total investment (1) | Amount invested during the reporting period | Cumulative investment amount by the end of the period (2) | Investment progress by the end of the period (3) = (2)/ (1) | Item reaches scheduled availability date | Benefits realized during the reporting period | Whether the expected benefit is achieved | Has the project feasibility changed significantly |
| Commitment to Investment Projects | ||||||||||
| Cold-rolled high-strength steel renovation project | No | 226,580 | 226,580 | 776.8 | 193,468.87 | 85.39% | December 31, 2017 | -990.29 | No | No |
| Hot-dip galvanizing production line project of the third cold rolling plant | No | 70,000 | 70,000 | 0 | 41,514.24 | 59.31% | December 31, 2018 | 4,408.31 | Yes | No |
| Repay bank loan | No | 100,000 | 100,000 | 100,000 | 100.00% | Not applicable | No | |||
| High grade high magnetic induction non-oriented silicon steel engineering project | No | 101,620 | 101,620 | 0 | 141 | 0.14% | Not applicable | No | ||
| Steel Plant No. 8 Casting Machine Project | No | 33,500 | 33,500 | 12.61 | 16,360.72 | 48.84% | October 31, 2020 | 5,672.17 | Yes | No |
| No. 5 blast furnace capacity replacement project in ironworks | No | 96,000 | 96,000 | 14.87 | 76,708.42 | 79.90% | November 30, 2020 | 4,902.68 | Yes | No |
| Special Steel Electric Furnace Upgrade and Reconstruction | No | 141,600 | 141,600 | 0 | 41,721.96 | 29.46% | Not applicable | No | ||
| Project | |||||||||||
| CCPP power generation project | No | 83,300 | 83,300 | 288.53 | 21,728.84 | 26.09% | Not applicable | No | |||
| Environmental protection renovation project of converter No. 4-6 in steelmaking plant | No | 19,900 | 19,900 | 0 | 4,723.48 | 23.74% | December 31, 2020 | Not applicable | No | ||
| Repay bank loan | No | 200,000 | 200,000 | 0 | 200,000 | Not applicable | No | ||||
| Subtotal of Committed Investment Projects | -- | 1,072,500 | 1,072,500 | 1,092.81 | 696,367.53 | -- | -- | 13,992.87 | -- | -- | |
| Over-raised funds are invested in | |||||||||||
| None | Not applicable | No | |||||||||
| Total | -- | 1,072,500 | 1,072,500 | 1,092.81 | 696,367.53 | -- | -- | 13,992.87 | -- | -- | |
| Situations and reasons for not reaching the planned progress or expected benefits (by specific projects) | The market environment has undergone major changes. The cold-rolled high-strength steel reconstruction project and the hot-dip galvanizing production line project of the third cold rolling plant have basically reached their production capacity. | ||||||||||
| Status of description of material changes in project feasibility | None | ||||||||||
| Status of amount, purpose and progress of use of over-raised funds | Not applicable | ||||||||||
| Status of changes in Implementation Locations of Raised Funds Investment Projects | Not applicable | ||||||||||
| A Status of adjustment of the Implementation Method of Raised Funds for Investment Projects | Not applicable | ||||||||||
| Status of preliminary investment and replacement of raised funds for investment projects | Applicable | ||||||||||
| For details, please refer to the special report III. (3) | |||||||||||
| Status of temporary replenishment of working capital with idle raised funds | Applicable | ||||||||||
| For details, please refer to the special report III. (3) | |||||||||||
| Reasons and amount for the balance of raised funds in project implementation | Applicable | ||||||||||
| There was no balance of raised funds for project implementation this year. | |||||||||||
| Use and whereabouts of unused raised funds | For details, please refer to the special report III. (8) | ||||||||||
| Problems or other situations in the use and disclosure of raised funds | There is no problem or otherwise | ||||||||||
(3) The situation for raised funds change project
□ Applicable √ Not applicable
During the reporting period, the company did not have any changes in the fund raising project.VII. Significant Assets and Equity Sold in Reporting Period
1. Significant Assets Sold
□ Applicable √ Not applicable
There was no significant asset sold during the reporting period.
2. Substantial Equity Sold
□ Applicable √ Not applicable
Ⅷ. 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
Currency unit: Yuan
| Company Name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net Profit |
| Bengang Puxiang Cool Rolling Steel Sheet Co., Ltd. | Subsidiary | Processing and sales of steel | 1,920,000,000.00 | 3,643,435,624.45 | 2,269,145,176.79 | 5,229,533,000.35 | 119,929,546.66 | 91,532,242.77 |
Acquirement and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Illustration of main joint-stock companiesNone.
Ⅸ. Structure Entities controlled by the Company
□ Applicable √ Not applicable
X. Risks faced by the Company and Countermeasures
1. Market competition risk
Risks: Affected by the repeated changes in the epidemic, high inflation, the global economic operation is facinggreater uncertainty. Coupled with the shrinking market consumer demand and supply shocks, the growthmomentum of consumption and investment has weakened, the supply chain has been blocked, and the operatingrates of downstream infrastructure and real estate have fallen across the board.The situation of steel market isbecoming more and more severe.It is difficult to complete the high-level annual plan for such indicators as net
profit, economic added value, total labor productivity, and adjustment index.Response measures: Based on the company itself and with a long-term perspective, the company will continue toconsolidate the lean production system, focus on customers, adapt to and lead the downstream demand, focus onproduct structure adjustment, focus on breaking through the production and sales of high profitability and highvalue-added varieties of steel.We will increase the proportion of strategic products and the pricing power ofregional markets and market segments to cope with the risk of industry homogenization. On the basis of worksafety and normalized epidemic prevention and control, we will implement fine management, and take "zerowaste" as the goal to fully promote the quality and cost reduction, innovation and efficiency creation of allemployees. We will successfully complete all tasks of the three-year action of state-owned enterprise reform andstrive to maximize profit.
2. International trade risk
The international environment has become increasingly complex. Instability and uncertainty have increasedsignificantly. The momentum of world economic growth has weakened, anti-globalization and trade protectionismhave risen. The global epidemic prevention and control situation are still very serious. All ports have implementedclosed-loop management of the whole process of epidemic prevention and control. Under the strict epidemicprevention requirements, the cost of epidemic prevention at ports has risen sharply, and the operating cost hasincreased significantly. The company still needs to actively respond to ensure that the imported ore is stored intime to avoid affecting the normal production and operation, causing economic losses and adverse effects to thecompany.Response measures: Precise positioning, refine the market and increase the order volume; continuously optimizethe logistics system and management mode; at the same time, optimize the supply structure of raw materials,strengthen the utilization rate of resources, comprehensively consider various factors that affect the logistics cost,and make the logistics route optimization decision; strengthen the development of users, continuously improve thequality of physical products and ensure the delivery date of contracts as the "key hand" to win the market, buildbetter cooperative relations with upstream and downstream enterprises, actively sign long-term transport contractswith liner companies, ensure long-term stable supply chain services, solidly promote the special action of "qualitystorm", further improve the level of quality adjustment index, and strive to achieve the annual sales target.
3. Price fluctuation risk of raw and fuel materials
The company consumes main raw and fuel materials such as iron ore and coal. Affected by the internationalmarket, the price of bulk raw and fuel materials will continue to remain at a high level and fluctuate greatly. Inparticular, the price of iron ore continues to rise during the reporting period, which has a great impact on thecompany's profitability.Response measures: Deeply implement the concept of "all costs can be reduced, and everyone can reduce costs".In the purchase of bulk raw materials, do a good job in market analysis, research and judgment, choose theopportunity to purchase, and strive to reduce the purchase cost through the low-cost node purchase of bulk rawmaterials; adjust the inventory structure and improve the inventory turnover level; carry out cost reduction andefficiency improvement work in a down-to-earth manner, and actively improve the competitiveness of enterprises.For the weak links and bottlenecks affecting the level of indicators, set up key problem solving indicator projects,define solving objectives for key problems, measures, time nodes and responsible persons, solidly promote theindicators of key problem solving measures with the energy of "dry towel, wring water", set off the upsurge ofimproving quality, reducing cost and increasing efficiency, and effectively relieve the market pressure
4. Environmental risks
The state promotes carbon peaking and carbon neutralization. As one of the important fields in China to achieve
emission reduction and carbon reduction, the iron and steel industry faces more requirements of carbon emissionconstraint mechanism and low-carbon development, which makes the company face greater environmentalpressure.Response measures: Adhere to support Xi Jinping's thought on ecological civilization, focus on improving thequality of the ecological environment, conscientiously implement the decisions and arrangements of the PartyCentral Committee and the State Council, adhere to the concept of "ecological priority and green development",make efforts to promote pollution control, focus on source control, and strengthen the basic work in environmentprotection, continue to improve the environmental protection management system, and continuously improve thecompany's environmental protection performance level. At the same time, optimize the process structure route,further improve the recycling rate of various resources, and increase the proportion of scrap steel; pay attention tovarious national environmental protection policies, improve enterprise environmental protection standards to meetand appropriately exceed national standards; strengthen the company's self-discharge of various pollution sourcessupervision and inspection, strengthen the environmental protection awareness of all employees; accelerate theconstruction progress of the identified environmental protection projects to ensure that the national environmentalprotection requirements are met.
5.Epidemic prevention and control risk
Since the outbreak of Covid-19 at the end of 2019 and early 2020, the prevention and control of the epidemic hascontinued throughout the country. With a series of strong epidemic prevention and control measures taken bygovernments at all levels, the domestic epidemic prevention and control has been effectively controlled, andvarious economic activities have been gradually restored. However, the overseas epidemic is still continuing andfacing great uncertainty. The company will earnestly implement the government's requirements for epidemicprevention and control, strengthen support for epidemic prevention and control, and reduce the impact of theepidemic on the company's normal production and business activities.Response measures: In 2022, with the gradual and effective control of the epidemic, the national economy willrecover rapidly. China's development is still in a period of strategic opportunities, and the fundamentals oflong-term economic development have not changed. In order to cope with the new development changes ofdevelopment opportunities and challenges, we must understand and resolve the medium - and long-term problemsencountered in development from the perspective of protracted war, accelerate the formation of a newdevelopment pattern with the domestic circulation as the main body and the domestic and international circulationpromoting each other, adhere to the strategic direction of structural adjustment, rely more on scientific andtechnological innovation, We will improve the cross cycle design and regulation of macro-control to achieve along-term balance between stable growth and risk prevention. Establish strict and normalized epidemic preventionand control mechanisms, strengthen the publicity of health knowledge related to the epidemic among allemployees, and highlight the supervision and inspection of internal epidemic prevention and control.
Section Ⅳ. Corporate GovernanceI. Annual General Meeting and Extraordinary Shareholders’ Meetings in theReporting Period
1. Annual General Meeting
| Sessions | Type | Investor participation ratio | Meeting Date | Date of disclosure | Index of information disclosure |
| First Extraordinary Shareholders General Meeting of 2022 | Extraordinary General Meeting | 63.41% | Mar 3, 2022 | Mar 4, 2022 | Announcement on Resolutions of First Extraordinary Shareholders General Meeting of 2022 |
| Annual Shareholders General Meeting of 2021 | Annual General Meeting | 63.59% | Apr 26,2022 | Apr 26,2022 | Announcement No.: 2021 |
2. Request for Extraordinary General Meeting by Preferred Stockholders Whose VotingRights Restore
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
√ Applicable □ Not applicable
| Name | Position | Office status | Date | Reason |
| Gao Desheng | Secretary of the Board of Directors | Dismissed | Mar 24, 2022 | Job change |
| Wang Donghui | Chief Accountant | Dismissed | Apr 26, 2022 | Job change |
| Jiang Xiaoyu | Chief Financial Officer,Secretary of the Board of Directors(Temporary duties) | Appointed | Apr 26, 2022 | Appointment |
III. Profit Distribution or Capital Reserve Conversion
□ Applicable √ Not applicable
There exists no plan for the company to distribute profit ,bonus stocks or convert capital reserve into share capital.VI. Implementation of company equity incentive plans, employee stockownership plans or other employee incentives
□ Applicable √ Not applicable
During the reporting period, the company had no equity incentive plan, employee stock ownership plan or otheremployee incentive measures and their implementation.
Section V. Environmental and Social ResponsibilityI. Major Environmental IssuesWhether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection department
√ Yes □ No
| Company or subsidiary name | Names of major pollutants and characteristic pollutants | Emission method | Number of discharge outlets | Distribution of discharge outlets | Emission concentration | Implemented pollutant discharge standards | Total emissions | Total approved emissions | Excessive emissions |
| Bengang Steel Plates Co.,Ltd. | COD | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 14.81 | 50 | 46.64 | Not approved by the government | None |
| Bengang Steel Plates Co.,Ltd. | Ammonia nitrogen | Continuous | 1 | Energy General Plant Sewage Treatment Plant | 0.30 | 5 | 1 | Not approved by the government | None |
| Bengang Steel Plates Co.,Ltd. | Particulate matter | Continuous and intermittent | 184 | Raw material dumper, transfer station, receiving tank, pre-batching; iron-making casting yard, furnace roof, fuel, solvent, granulation, ore coke tank, sintering head dust removal, desulfurization, machine tail dust removal; iron and steel water pretreatment , | Raw material <20; sintering 8-26; iron making 8-9; steel making 3-20; special steel 2-15; coking 4-30; power generation 3-8; cold rolling 3-20; hot rolling 5-18. | Raw material 25; sintering 10-50; iron making 25; steel making 20-50; special steel 20; coking 30; power generation 5-30; cold rolling 20-30; hot rolling 20-30. | smok： 580; dust：5875 | Not approved by the government | None |
| north-south pouring station, tundish, primary dust removal, secondary dust removal, refining dust removal; special steel electric furnace, refining furnace; coking coal addition, coke pushing, dry quenching, chimney desulfurization and denitrification; power boiler dust removal, desulfurization and denitrification; cold rolling acid regeneration , pickling, straightening, welding, leveling, annealing, roasting; hot rolling furnace. | |||||||||
| Bengang Steel Plates Co.,Ltd. | Sulphur dioxide | Continuous and intermittent | 64 | Sintering head; coke oven chimney; power generation | Sintering head 48-174; coke oven 24-48; power generation | Sintering head 200; coke oven 30-100; power generation | 1839 | Not approved by the government | None |
| boiler desulfurization; cold rolling roasting and annealing; hot rolling heating furnace. | 3-55; cold rolling 24-95; hot rolling 50-125. | 100-200 cold rolling 150; hot rolling 150. | |||||||
| Bengang Steel Plates Co.,Ltd. | Nitrogen oxides | Continuous and intermittent | 57 | Sintering head; coking chimney; power generation boiler; cold rolling roasting, annealing; hot rolling heating furnace. | Sintering head 110-150; coking chimney 99-148; power generation 10-103; cold rolling 50-150; hot rolling 80-120. | Sintering head 300; coking chimney 150; power generation 100-200; cold rolling 200; hot rolling 300. | 4712 | Not approved by the government | None |
Construction and operation of pollution prevention facilitiesBengang Bancai has a total of 184 sets of environmental pollution prevention and control facilities, and eachprocess is equipped with dust removal, desulfurization and denitrification, and online facilities in accordance withpollutant discharge standards. Wet desulfurization of sintering machine head, dry desulfurization anddenitrification of coke oven chimney, wet desulfurization and SCR denitration of power generation, etc. The2300mm production line of the hot rolling plant is designed for use in the production of stainless steel, and theenvironmental protection facilities are normally put into use.Environmental impact assessment of construction projects and other environmental protection administrativelicensesCompany has completed the registration and filing work of 8 projects including coke oven flue gas desulfurizationand denitrification reconstruction project of the company's iron making plant,third dedusting for steel makingplant,treatment of VOCs in the first and second purification zones of coking process. 2 projects including first coldrolling transformation project of plate company and railway bridge repair works have been submitted for approval.6 projects including the desulfurization and denitrification project of No. 7 coke oven of plate iron makingplant,dust removal at the machine side of No. 8 and No.9 coke oven and environmental protection transformationof No. 5 blast furnace has been carried out. Completed the renewal of pollutant discharge permit of one unit of thecompany.Emergency plan for environmental emergenciesThe company and its 14 subordinate units strictly follow the "Emergency Response Law of the People's Republicof China", the "Notice on Printing and Distributing the "Guidelines for Risk Assessment of EnvironmentalEmergencies for Enterprises (Trial)", and "Enterprise and Institutional Emergency Response Plans forEnvironmental Emergencies." Management Measures (for Trial Implementation)” and other existing laws andregulations to carry out environmental emergency management work. In the first half of the year 2022, thecompany entrusted a third-party unit to revise the emergency plan for environmental emergencies, carried out risk
assessment and emergency resource investigation again, and conducted assessments according to the managementrequirements of the Municipal Bureau. At the same time, each unit of the company formulated a drill planaccording to the pre-plan and carried out the corresponding pre-plan drill work.Environmental Self-Monitoring ProgramThe company’s self-monitoring plan was carried out in accordance with the requirements of the discharge permit.Pollution source monitoring points: 173 flue gas monitoring points, 14 waste water monitoring points, 13 boundarynoise points, 13 atmospheric dust reduction points, and 59 unorganized monitoring points. Monitoring is carriedout on a quarterly, semi-annual and annual frequency. There are 13 atmospheric dust fall points distributed in thefactory area, and 78 monitoring data have been obtained; the routine monitoring tasks of flue gas and atmosphericunorganized monitoring have been completed, and a total of 802 monitoring data have been obtained throughoutthe first half of year 2022; the noise monitoring points at the factory boundary 13 monitoring data, 208 monitoringdata; 10 waste water monitoring points, 1744 monitoring data. There are a total of 2832 monitoring data, formingmonthly reports, quarterly reports and separate monitoring reports for each factory and mine.Administrative penalties for environmental issues during the reporting period
| Company or subsidiary name | Reason for punishment | Violations | Penalty result | Influence on the production and operation of listed companies | The company's rectification measures |
| None | None | None | None | None | None |
Other environmental information that should be disclosedIn the first half of the year 2022, according to the list of key pollutant discharging enterprises issued by theMunicipal Environmental Protection Bureau, the environmental information disclosure of 12 units of the companywill be completed. The contents of the announcement include basic information, pollution discharge information,construction and operation of pollution prevention and control facilities, environmental impact assessment ofconstruction projects and other environmental protection administrative licenses, emergency plans forenvironmental emergencies, environmental self-monitoring plans, and other environmental information that shouldbe disclosed.Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
According to the company's plan of gradually eliminating thermal coal, the purchase of thermal coal was reduced.In the first half of the year, 106400 tons of thermal coal were consumed, 162,100 tons less than the plan, and74,700 tons less than the same period.Through the linkage with steel producing and active organization of production, the converter gas recovery wascompleted by 130.73m ?/ t.，and converter gas emission and carbon dioxide emission were both reduced.Taking advantage of the joint maintenance opportunity of the company, a DN400 circulating pipe was added toCCPP pressurization station to solve the actual defects of the project and ensure the stable operation of CCPP.Power consumption was reduced by strictly grasping peak production, optimizing medium pipe network andadjusting operation modeThe implementation of the above measures has reduced the carbon dioxide by 310,000 tons compared with theplan and 140,000 tons compared with the same period.Other environmental protection related informationNone.
Ⅱ. Social Responsibility Situation
The company attaches great importance to the social responsibility of the enterprise, and takes the publicresponsibility of the enterprise legal person and actively participates in public welfare activities. The companyplans systematically, defines key support areas, actively supports public welfare undertakings, and realizes theharmonious development of enterprises and society.
1. Intensify the work of helping poor workers and staff. With response to the application of the employees gettingthrough difficulty, the grass-roots trade union made a preliminary review, and the trade union of the companyfinally determined 54 relatively and deeply difficult employees, and distributed more than 230,000 yuan of relieffunds, effectively alleviating the economic burden of the families of employees due to illness and school.
2. Actively select and dispatch cadres to participate in Rural Revitalization work. Three outstanding cadres wereselected to participate in the rural revitalization work, and served as the first secretary in the dispatched villages .Inthe special period of normal epidemic prevention and control, the cadres stationed in the village did not forget theiroriginal intention, kept their mission firmly in mind, strengthened their confidence and fought tenaciously, andsuccessfully completed the poverty alleviation and prevention of poverty return in the targeted poverty alleviationpoints in the first half of 2022. The company provides growth points for rural collective economy throughemployee welfare and purchasing agricultural and sideline products stationed in rural areas, effectively improvingper-capita income
3. Set up a volunteer service team to dedicate voluntary labor. Regularly participated in the greening andbeautification activities of the plant in spare time every month. During the epidemic prevention and control period,they participated in voluntary activities for many times, with a total of more than 200 participants, promoting thenormalization of epidemic prevention and control. Actively participated in civilized travel volunteer activities,contributed to the creation of the city, established a good social image for the enterprise, and also reflected theexcellent character of enterprise workers in the new era.
Section VI. Important EventsI. Performance of Committed Issues
1. 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.
| Commitments | Commitment party | Type of commitment | Contents | Commitment time | Commitment period | Performance |
| Commitment made in the acquisition report or the equity change report | Ansteel Group Co., Ltd. | Other commitment | In order to maintain the independence of Bengang Steel, Ansteel Group undertakes the following: 1. Ansteel Group guarantees to keep separate from Bengang Steel in terms of assets, personnel, finance, organization and business, and strictly abides by the China Securities Regulatory Commission's regulations on the independence of listed companies It does not use its controlling position to interfere with the standard operation of Bengang Steel, interfere with Bengang Steel's business decisions, or damage the legitimate rights and interests of Bengang Steel and other shareholders. Ansteel Group and other subsidiaries controlled by it promise not to illegally occupy the funds of Bengang Plate and its controlled subsidiaries in any way. 2. The above commitments will continue to be effective during the | August 20,2021 | Long term | Under normal fulfillment |
| period when Ansteel Group has control over Bengang Steel Sheets. If Ansteel Group fails to fulfill the above-mentioned commitments and causes losses to Bengang Steel Sheets, Ansteel Group will bear the corresponding liability for compensation. | ||||||
| Ansteel Group Co., Ltd. | Other commitment | In order to avoid horizontal competition matters, Ansteel Group undertakes the following: (1) In view of the overlapping business between Ansteel Group and Bengang Steel after the completion of the acquisition, according to the requirements of existing laws, regulations and relevant policies, Ansteel Group will issue a letter of commitment from this letter of commitment. Within 5 years from the date of issue, and strive to use a shorter time, in accordance with the requirements of the relevant securities regulatory authorities, under the premise of complying with the applicable laws and regulations and relevant regulatory rules at that time, in order to facilitate the development of Bengang Steel Sheets and safeguard the interests of shareholders, especially It is the principle of the interests of small and medium shareholders, and | August 20,2021 | Long term | Under normal fulfillment |
| will be based on the business practices followed in normal commercial transactions with independent third parties; (4) Ansteel Group guarantees that it will strictly abide by laws, regulations and According to the Articles of Association of Bengang Plate Co., Ltd. and its relevant management system, the company shall not use its position as an indirect controlling shareholder of Bengang Plate to seek illegitimate interests, thereby impairing the rights and interests of other shareholders of Bengang Plate; During the period of control over the steel sheet, the above commitments made by Ansteel Group are all valid. In the event of violation of the above commitments, resulting in damage to the rights and interests of Bengang Steel, Ansteel Group is willing to assume the corresponding liability for damages. | ||||||
| Ansteel Group Co., Ltd. | Other commitment | In order to standardize and reduce the related transactions between Ansteel Group and listed companies, Ansteel Group has made commitments: 1. Ansteel Group will ensure that Bengang Steel’s business is independent, its assets are complete, and it | August 20,2021 | Long term | Under normal fulfillment |
| decision-making and approval procedures in accordance with the law, and ensure that no price is unfair compared with market prices. conditions and conduct transactions with Bengang Steel and its subordinate enterprises, and do not use such transactions to engage in any behavior that damages the legitimate rights and interests of Bengang Steel and other shareholders of Bengang Steel. 4. In the event of violation of the above commitments, resulting in damage to the legitimate rights and interests of Bengang Steel, Ansteel Group will compensate for the losses caused to Bengang according to law. | ||||||
| Commitment made during initial public offering or refinancing | Company directors, senior management/Controlling shareholders | Other commitment | According to the relevant regulations of the China Securities Regulatory Commission, all directors and senior management of the Company have made the following commitments to the Company’s fulfillment of the diluted immediate return measures: 1. I promise to perform my duties faithfully and diligently, and safeguard the legitimate rights and interests of the Company and all shareholders. 2. I promise not to deliver benefits to other units or individuals without compensation or under | May 22, 2019 | Long term | Under normal fulfillment |
| return measures, and to review the Company’s board of directors and shareholders’ general meetings and vote in favor of the relevant proposals reviewed by the company's board of directors and general meeting (If I have voting rights). 7. If the future issuance of this commitment and the implementation of the Company’s public issuance of convertible corporate bonds are completed, if the China Securities Regulatory Commission makes other new regulatory provisions on the measures for filling returns and their commitments, and the above commitments cannot meet the requirements of the China Securities Regulatory Commission When other regulations are stipulated, a commitment will be issued in accordance with the latest regulations of the China Securities Regulatory Commission. The company's controlling shareholder, Benxi Iron and Steel (Group) Co., Ltd., promised not to interfere with the company's operation and management activities beyond its authority and not to infringe on the Company's interests. | ||||||
| Benxi Steel & Iron (Group) Co., Ltd. and | Other Commitment | The sales companies of Bengang International Trade Co., Ltd. and | July 24,2019 | Long term | Under normal |
| Bengang Group Co., Ltd. | Bengang Steel plates in the same region guarantee independent personnel, independent business, independent finance, and independent assets, and are guaranteed not to be in the same registration place or in the same office; The filing of foreign economic and trade operators, taking into account the need to gradually improve the qualification certification of raw material suppliers, customs import and export qualification certification, etc. In the short term, the actual conditions and capabilities for independent import and export business are still lacking. In order to ensure the normal business development of Benxi Steel Plate, the Group agrees that within the period of not more than 5 years from the date of issuance of this commitment, the main import and export business of Benxi Steel Plate will still be represented by Bengang International Trade until Bengang Steel Plates can be independently developed Import and export business, and during this period, Bengang International Trade will provide the necessary support for the establishment and improvement of Bengang's import and export business. | fulfillment |
| Trading Corporation. However, due to serious local protection, property rights and other factors, the content of the judgment has not been enforceable. Later, after applying again from Guangzhou Free Trade Zone Bengang Sales Co., Ltd., the Intermediate People's Court of Benxi City, Liaoning Province issued an execution ruling again, and 62 properties of Jiedong County Trading Corporation were re-sealed. As of February 4, 2022. Except for participating in the litigation activities for the purpose of realizing creditor's rights, Guangzhou Free Trade Zone Bengang Sales Co., Ltd has not carried out other business activities. After the litigation is completed, the relevant procedures for the cancellation of Guangzhou Free Trade Zone Bengang Sales Co., Ltd. will be handled immediately. | ||||||
| Bengang Group Co., Ltd. & Benxi Steel & Iron (Group) Co., Ltd. | Other Commitment | The Group's horizontal competition with Benxi Steel Plates and the measures and commitments to avoid inter-industry competition 1. During the period when the Group is the controlling shareholder of Bengang Steel Plates, in addition to the matters listed in Article 1 of this Commitment Letter, the | July 24,2019 | Normal execution | Under normal fulfillment |
| Bengang Steel Plates and cannot be changed or withdrawn | ||||||
| Benxi Steel & Iron (Group) Co., Ltd. and Bengang Group Co., Ltd. | Other Commitment | In order to regulate and reduce the Company ’s transactions with controlling shareholders and other related parties, and to protect the interests of the Company and small and medium shareholders, Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. have issued the following commitments: "Benxi Iron and Steel (Group) Co., Ltd. and Bengang Group Co., Ltd. (hereinafter collectively referred to as the "Group"), as a direct controlling shareholder and an indirect controlling shareholder of Bengang Steel Plates Co., Ltd. (hereinafter referred to as "Bengang Steel Plates"), in order to protect the interests of Bengang Steel Plates and other shareholders of Bengang Steel Plates, regulate The Group's related transaction with Bengang Steel Plates hereby promises: 1. The Group will fully respect the independent legal person status of Bengang Steel Plates, ensure the independent operation and independent decision-making of Bengang Steel Plates, ensure the independence of | July 24,2019 | Long term | Under normal fulfillment |
| and independent directors, and earnestly fulfill the obligation of information disclosure To ensure that transactions are conducted in accordance with the open, fair, and fair principles of market transactions and normal commercial terms, the Group and other companies under control will not require or accept Bengang Steel Sheets to give preferential treatment to third parties in any fair market transaction Conditions to protect other shareholders of Benxi Steel Plates and the interests of Benxi Steel Plates from damage. 4. The Group guarantees that the above commitments are continuously effective and irrevocable as long as Bengang Steel Plates is listed on the domestic stock exchange and the Group acts as its direct and indirect controlling shareholder. If any violation of the above commitments occurs, the Group therefore bear all the losses caused to Bengang Steel Plates. | |||
| Whether Commitment fulfilled on time or not | Yes | ||
II. Non-operating capital occupation of listed companies by controllingshareholders and other related parties
□ Applicable √ Not applicable
There was no non-operating occupation of funds by the controlling shareholder and related partiesIII. Non-compliance with external guarantees
□ Applicable √ Not applicable
There was no non-compliance with external guarantees.
IV. Appointment and Dismiss of Certified Accountant’s Firm
Whether the semi-annual financial report has been audited by the accountant’s firm
□ Yes √ No
The semi-annual financial report of the company was not audited by the accountant’s firm.V. Notes by the Board of Directors, the Supervisory Committee and theIndependent Directors (if any) on the "non-standard audit report" of theaccounting firm for the current reporting period
□ Applicable √ Not applicable
VI. Note by the Board of Directors on the latest "Non-Standard Audit Report"
□ Applicable √ Not applicable
VII. Bankrupt and Reforming Events
□ Applicable √ Not applicable
There was no bankrupt and reforming event during the reporting period.
VIII. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
There was no significant lawsuit or arbitrations during the reporting period.
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 ActualControllers
□ Applicable √ Not applicable
XI. Major Related Party Transactions
1. Related party transactions relevant to daily operations
√ Applicable □ Not applicable
| Related parties | Relationship | Type of related party transactions | Content of related party transactions | Pricing principle of related party transactions | Price of related party transactions | Amount of related party transactions (in 10 thousand) | Proportion of similar transactions | The approved trading limit of transactions (in 10 thousand) | Whether exceed the approved limited (Y/N) | Means of payment of related party transactions | Available market price of similar transactions | Date of disclosure | Index of disclosure |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 624,099.55 | 18.70% | 1,928,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 351,097.45 | 10.52% | 895,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) | same parent company | Purchasing goods / receivin | Purchasing main raw | on agreement | Related agreement | 13,938.14 | 0.42% | 51,000.00 | No | Execute according to the agreeme | Yes | 2022-08-19 |
| Metallurgical Slag Co., Ltd. | g labor services | materials | price | nt | |||||||||
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 5,326.39 | 0.16% | 30,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Angang Steel Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 7,550.44 | 0.23% | 130,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Angang Group Mining Gongchangling Co., Ltd | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 23,840.55 | 0.71% | 160,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Ansteel Group International Economic and Trade Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 832.83 | 0.02% | 120,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 9,606.56 | 0.29% | 70,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Pansteel Group Vanadium Titanium Resources Co., Ltd | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing main raw materials | on agreement | Related agreement price | 2,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods / receiving labor services | Purchasing auxiliary materials | on agreement | Related agreement price | 282.33 | 0.01% | 2,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Purchasing auxiliary materials | on agreement | Related agreement price | 6,621.53 | 0.20% | 25,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Bengang Electric Co., Ltd. | Associates of the parent company | Purchasing goods / receiving labor services | Purchasing auxiliary materials | on agreement | Related agreement price | 6,541.99 | 0.20% | 20,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Purchasing auxiliary materials | on agreement | Related agreement price | 2,301.23 | 0.07% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Ansteel Mining Machinery Manufacturing Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing auxiliary materials | on agreement | Related agreement price | 3,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |||
| Angang Steel Rope Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor | Purchasing auxiliary materia | on agreement | Related agreement price | 1,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| services | ls | ||||||||||||
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods / receiving labor services | Purchasing energy and power | on agreement | Related agreement price | 35,463.28 | 1.06% | 60,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 12,290.18 | 0.37% | 52,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 5,047.90 | 0.15% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 2,495.11 | 0.07% | 20,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 261.35 | 0.01% | 5,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Both belong to Bengang Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 13,360.56 | 0.40% | 50,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 2,471.67 | 0.07% | 13,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Angang Steel processing and distribution (Changchun) Co., Ltd | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 1,300.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |||
| Ansteel Group Engineering Technology Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 201,500.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |||
| Ansteel Construction Group Co., Ltd. | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 2,119.27 | 0.06% | 3,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Bengang Group Co., Ltd. | Parent company &controlling shareholder | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 194.73 | 0.01% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and steel (Group) | Same parent company | Purchasing goods / receivin | Receiving labor services | on agreement | Related agreement | 15,297.05 | 0.46% | 35,000.00 | No | Execute according to the agreeme | Yes | 2022-08-19 |
| Co., Ltd | g labor services | price | nt | ||||||||||
| Liaoning Hengtai Heavy Machinery Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 452.12 | 0.01% | 4,100.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Liaoning Metallurgical Vocational and Technical College | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 2,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |||
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | same parent company | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 1,560.78 | 0.05% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Other subsidiaries of Angang Group | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Receiving labor services | on agreement | Related agreement price | 1,607.28 | 0.05% | 3,570.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Angang Lianzhong (Guangzhou) Stainless Steel Co., Ltd | Both belong to Ansteel Group | Purchasing goods / receiving labor services | Purchasing steel products | on agreement | Related agreement price | 16,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |||
| Benxi Beiying Iron and Steel | Both belong to Bengan | Selling goods / providing labor | Selling goods | on agreement | Related agreement | 44,836.20 | 1.28% | 420,000.00 | No | Execute according to the agreeme | Yes | 2022-08-19 |
| (Group) Co., Ltd. | g Group | services | price | nt | |||||||||
| Angang Steel Co., Ltd. | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 3,360.22 | 0.10% | 210,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 43,742.54 | 1.25% | 190,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Suzhou Bengang Industrial Co., Ltd. | Shareholding company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 0.00% | 50,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | ||
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 9,056.65 | 0.26% | 50,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Ansteel Group International Economic and Trade Co., Ltd. | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 0.00% | 30,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | ||
| Pangang Group Co., Ltd | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 813.17 | 0.02% | 20,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Changchun FAW Angang Steel processin | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 945.83 | 0.03% | 11,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| g and Distribution Co., Ltd | |||||||||||||
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 3,062.39 | 0.09% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 2,140.77 | 0.06% | 10,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Ansteel Chemical Technology Co., Ltd. | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 8,518.42 | 0.24% | 177,822.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 778.33 | 0.02% | 8,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 1,867.99 | 0.05% | 5,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 131.27 | 0.00% | 5,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Dalian Boroller Steel Pipe Co., Ltd. | Same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 1,041.16 | 0.03% | 2,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and steel (Group) Co., Ltd | Same parent company | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 464.57 | 0.01% | 1,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Delin Land Port Supply Chain Service Co., Ltd. | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 0.00% | 253,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | ||
| Other subsidiaries of Angang Group | Both belong to Ansteel Group | Selling goods / providing labor services | Selling goods | on agreement | Related agreement price | 113,801.13 | 3.25% | 2,355.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company | Selling goods / providing labor services | Providing labor services | on agreement | Related agreement price | 471.71 | 0.01% | 1,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 | |
| Bengang Group Co., Ltd. | Parent company &controlling shareholder | Selling goods / providing labor services | Providing labor services | on agreement | Related agreement price | 0.00% | 17,000.00 | No | Execute according to the agreement | Yes | 2022-08-19 |
| Total | -- | 1,379,692.62 | -- | 5,416,647.00 | ||||||
| Details of any sales return of a large amount | Not applicable | |||||||||
| Give the actual situation during the reporting period where a forecast had been made for the total amounts of routine related-party transactions，by type to occur in the current period(if any) | Not applicable | |||||||||
| Reason for any significant difference between the transaction price and the Market price for reference (if applicable) | Not applicable | |||||||||
2. Related transactions relevant to asset acquisition or sold
□ Applicable √ Not applicable
There was no related transaction relevant to asset acquisition or sold during the reporting period.
3. Related transactions relevant to joint investments
□ Applicable √ Not applicable
There was no related transaction relevant to joint investments during the reporting period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
Whether there are non-operating credits and liabilities with related parties.
□ Applicable √ Not applicable
There exists no non-operating credits and liabilities with related parties.
5. Transactions with related financial companies
√Applicable □ Not applicable
Deposit business
| Related party | Connection relation | Maximum daily deposit limit (10 thousand yuan) | deposit rate range | Opening balance (10 thousand yuan) | Amount for this period | Closing balance (ten thousand yuan) | |
| Total deposit amount for the current period (10 thousand yuan) | The total amount withdrawn in the current period (10 thousand yuan) | ||||||
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group | 450,000 | 1.725% | 442,965.63 | 8,039,453.31 | 8,087,389.08 | 395,029.86 |
Loan business
| Related party | Connection relation | Loan Amount (10 thousand yuan) | Loan Interest Rate Range | Opening balance (10 thousand yuan) | Amount for this period | Closing balance (10 thousand yuan) | |
| Total loan amount for the current period (10 thousand yuan) | Total repayment amount for the current period (10 thousand yuan) | ||||||
Credit or other financial business
| Related party | Connection relation | Business type | Total (ten thousand yuan) | Actual amount (ten thousand yuan) |
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group | credit | 250,000 | 31,742.27 |
6. Transactions between financial companies controlled by the company and related parties
□Applicable √ Not applicable
During the reporting period, the company had no other significant related transactions.
7. Other significant related transactions
□Applicable √ Not applicable
There exists no deposit, loan, credit or other financial business between the financial company controlled by thecompany and its related parties.XII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting during the reporting period.
(3) Lease
√Applicable □ Not applicable
Description of leaseCompany as the lessor：
Currency unit: Yuan
| Lessee | Lease capital category | Lease income of 2021 | Lease income of 2020 |
| Benxi Iron and Steel Tendering Co., Ltd. | Plants and ancillary facilities | 250,917.43 | |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Warehouse and ancillary facilities | 250,000.00 |
Company as the lessee
Currency unit: Yuan
| Lessor | Lease capital category | Rental costs for simplified short-term leases and low value asset leases） | Variable lease payments not included in the measurement of lease liabilities | Payment of rental | Interest expense of lease liabilities | Increased right-of-use assets | |||||
| Amount of current period | Amount of previous period | Amount of current period | Amount of previous period | Amount of current period | Amount of previous period | Amount of current period | Amount of previous period | Amount of current period | Amount of previous period | ||
| Benxi Steel & Iron (Group) Co., Ltd | Land use right 7,669,068.17 square meter. Land use right 42,920.00 square meter | 27,625,616.70 | 27,625,616.70 | 19,500,054.00 | 19,800,104.64 | ||||||
| Benxi Steel & Iron (Group) Co., | 2300 Hot rolling product line, related real estate | 8,049,080.53 | 8,049,080.53 | 3,870,344.33 | 3,991,324.48 | ||||||
| Ltd | |||||||||||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 1780 Hot rolling product line, related real estate | 6,198,949.54 | 6,198,949.54 | 2,980,721.72 | 3,073,893.84 | ||||||
| Bensteel Group Co., Ltd. | Land use right 728,282.30 square meter. | 4,972,711.54 | 4,972,711.54 | 1,224,959.39 | 1,333,461.96 |
Notes:
1. According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed betweenthe Company and Bengang Steel (Group)on April 7, 1997, December 30, 2005 and subsequent, the Companyleases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. The leased land is7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2. On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and BeiyingIron and Steel Company, and leased the houses and auxiliary facilities occupied by the 2300 hot rolling millproduction line and the 1780 hot rolling mill production line. The lease term of the houses and ancillary facilities isuntil December 31, 2038.
3. On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel(Group) respectively, leased and used a total of 8 pieces of land from Bengang Group and Bengang GroupCompany, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is 20 years,the rental price is 1.138 yuan per square meter per month.Projects that bring profits and losses to the company reaching more than 10% of the company's total profit duringthe reporting period
□ Applicable √ Not applicable
During the reporting period of the company, there was no leasing project that brought the company's profit and lossto more than 10% of the company's total profit during the reporting period.
2. Guarantee
□ Applicable √ Not applicable
There were no significant guarantees during the reporting period.
3.Entrusting Others for Managing Cash Asset
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
There was no other major contract during the reporting period.XIII. Description of other major events
□ Applicable √ Not applicable
There were no other major events during the reporting period.XIV. Major events of subsidiaries of the company
√ Applicable □ Not applicable
Chongqing liaoben iron and Steel Trading Co., Ltd., a wholly-owned subsidiary of the company, completed thecancellation procedures on June 16, 2022. The registered capital of Chongqing liaoben iron and Steel Trading Co.,Ltd. is 30 million yuan. This cancellation will not have a great impact on the company.
SectionⅦ. Status of Share Capital Changes and ShareholdersI. Share Capital Changes
1. Share Capital Changes
| Before the change | Increase/decrease(+，-) | After the Change | |||||||
| Quantity | Percentage | Issuing of new share | Bonus shares | Capitalization of common reserve fund | Others | Subtotal | Quantity | Percentage | |
| I. Restricted Shares | |||||||||
| 1. State shareholdings | |||||||||
| 2. State-own | |||||||||
| Legal-person Shareholding | |||||||||
| 3. Other domestic shareholdings | |||||||||
| Including: Domestic legal person holding | |||||||||
| Domestic person holding | |||||||||
| 3. Foreign shareholding | |||||||||
| Including: Foreign legal person | |||||||||
| Foreign nature person | |||||||||
| II. Non-restricted Shares | 4,108,191,379 | 100.00% | 17,727 | 17,727 | 4,108,209,106 | 100.00% | |||
| 1. Common shares in RMB | 3,708,191,379 | 90.26% | 17,727 | 17,727 | 3,708,209,106 | 90.26% | |||
| 2. Foreign shares in domestic market | 400,000,000 | 9.74% | 400,000,000 | 9.74% | |||||
| 3. Foreign shares in foreign market | |||||||||
| 4.Other | |||||||||
| III. Total shares | 4,108,191,379 | 100.00% | 17,727 | 17,727 | 4,108,209,106 | 100.00% |
Causation of share capital changes
√ Applicable □ Not applicable
During the reporting period, 802 convertible corporate bonds issued by the company were converted into shares,and the total share capital of the company increased by17.727 shares.Status of approval of share capital changes
□Applicable √Not applicable
Status of registration process of transferred shares
□Applicable √Not applicable
Implementation progress of share repurchase
□Applicable √Not applicable
Influences of share capital changes on financial indices such as basic earnings per share, diluted earnings per share,and net asset per share attributed to common shareholders in the most recent year and the most recent period
□Applicable √Not applicable
Other information that 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. Status of number of shareholders and shareholding of the company
| Total number of common shareholders at the end of the reporting period | 70,980 | The total number of Preferred shareholders voting rights restored at the end of the reporting period (if any) (refer to Notes 8) | 0 | |||||
| Shareholding of shareholders holding more than 5% or top 10 shareholders | ||||||||
| Name of the shareholder | Nature of shareholder | Holding Percentage (%) | Number of shares held at period-end | Changes in reporting period | Restricted shares held | Un-restricted shares held | Number of pledged or frozen shares | |
| Status | Number | |||||||
| Benxi Steel & Iron (Group) Co., Ltd. | State-owned legal person | 58.65% | 2,409,628,094 | 2,409,628,094 | Pledged | 110,000,000 | ||
| Frozen | 102,100,000 | |||||||
| Bensteel Group Co., Ltd. | State-owned legal person | 17.95% | 737,371,532 | 737,371,532 | ||||
| Zhang Wenyou | Domestic natural person | 0.47% | 19,149,967 | 19,149,967 | ||||
| Zhou Wei | Domestic natural person | 0.21% | 8,789,800 | 1,156,869 | 8,789,800 | |||
| Guosen Securities Co., Ltd. | State-owned legal person | 0.18% | 7,500,000 | 7,500,000 | ||||
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | Foreign legal person | 0.17% | 6,999,972 | 6,999,972 | ||||
| Huatai Youyi No. 5 Hybrid Pension product - Bank of China Limited | Other | 0.14% | 5,780,000 | 5,780,000 | 5,780,000 | |||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 0.13% | 5,147,214 | -26,882,587 | 5,147,214 | |||
| Lu Zhang | Domestic natural person | 0.11% | 4,543,674 | 4,543,674 | 4,543,674 | |||
| Jiangsu No.7 | Other | 0.10% | 4,287,800 | 4,287,800 | 4,287,800 | |||
| occupational pension plan - Minsheng Ban | |||||
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if any) (Refer to Notes 3) | None | ||||
| Explanation of relationship or ‘action in concert’ among the top 10 shareholders. | Benxi Iron and Steel (Group) Co., Ltd. has an associated relationship with Benxi Iron and Steel Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". The company is not aware of whether there is an associated relationship between other shareholders or whether they are persons acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". | ||||
| Explanation of the above-mentioned shareholders involving entrusted/entrusted voting rights and abstention from voting rights | The above shareholders do not involve entrustment, entrusted voting rights or abstention from voting rights. | ||||
| Shareholding of top 10 unrestricted shareholders | |||||
| Name of the shareholder | Un-restricted shares held at the end of the reporting period | Category of shares | |||
| Category of shares | Quantity | ||||
| Benxi Steel & Iron (Group) Co., Ltd. | 2,409,628,094 | Common shares in RMB | 2,409,628,094 | ||
| Bengang steel Group Co., Ltd. | 737,371,532 | Common shares in RMB | 737,371,532 | ||
| Hong Kong Securities Clearing Company Ltd. | 32,029,801 | Common shares in RMB | 32,029,801 | ||
| Zhang Wenyou | 19,149,967 | Common shares in RMB | 19,149,967 | ||
| Zhou Wei | 8,789,800 | Common shares in RMB | 8,789,800 | ||
| Guosen Securities Co., Ltd. | 7,500,000 | Common shares in RMB | 7,500,000 | ||
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | 6,999,972 | Domestic listed foreign shares | 6,999,972 | ||
| Huatai Youyi No. 5 Hybrid Pension product - Bank of China Limited | 5,780,000 | Common shares in RMB | 5,780,000 | ||
| Hong Kong Securities Clearing Company Ltd. | 5,147,214 | Common shares in RMB | 5,147,214 | ||
| Lu Zhang | 4,543,674 | Domestic listed foreign shares | 4,543,674 | ||
| Jiangsu No.7 occupational pension plan - Minsheng Ban | 4,287,800 | Common shares in RMB | 4,287,800 | ||
| Notes to relationship or ‘action in concert’ among the top 10 non-restricted shareholders, and among the top 10 non-restricted shareholders and top 10 shareholders | Benxi Steel & Iron (Group) Co., Ltd. has an associated relationship with Bengang steel Group Co., Ltd., and is a person acting in concert as stipulated in the "Administrative Measures for the Acquisition of Listed Companies". The company is not aware of whether there is an associated relationship among the remaining shareholders or whether they are parties acting in concert as prescribed in the Measures for the Administration of Acquisitions of Listed Companies. | ||||
| Shareholders among the top 10 participating in securities margin trading (if any) (Refer to Note 4) | Zhang Wenyou Holds19,149,967 shares of the Company’s stock through security account.Zhou Wei holds 8,789,800shares of the company's stock through 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. Changes in shareholding of directors, supervisors and senior management
□Applicable √Not applicable
There was no change in the shareholding of the directors, supervisors and senior management of the companyduring the reporting period. Please refer to the 2021 annual report for details.V. Status of Changes of Controlling Shareholders, Actual Controller,Restructuring Party and Other Commitment SubjectsChanges of controlling shareholders
□ Applicable √ Not applicable
There was no change in controlling shareholders of company.Changes of actual controller
□ Applicable √ Not applicable
There was no change in actual controller of company.
Section Ⅷ. Status of Preferred Shares
□ Applicable √ Not applicable
There was no preferred stock issued by the company during the reporting period.
Section Ⅸ. Status of Convertible Corporate BondsApplicable □ Not applicableⅠ. Corporate Bonds
□ Applicable √ Not applicable
There were no corporate bonds in the company during the reporting period.Ⅱ. Company Bonds
□ Applicable √ Not applicable
There were no company bonds in the company during the reporting period.Ⅲ. Non-financial Corporate Debt Financing Instruments
□ Applicable √ Not applicable
There were no non-financial corporate debt financing instruments in the company during the reporting period.Ⅳ. Convertible corporate bonds
√Applicable □ Not applicable
1. Previous Adjustment of Conversion Price
(1) The initial conversion price of "Bengang Convertible Bonds" is RMB 5.03 per share.
(2) Due to the company's implementation of the 2020 equity distribution plan, the conversion price of "BengangConvertible Bonds" will be adjusted to 5.02 yuan per share on July 19, 2021.
(3) Due to the company's implementation of the 2021 mid-term equity distribution plan, the conversion price of"Bengang Convertible Bonds" will be adjusted to 4.55 yuan per share on October 13, 2021.
(4) Due to the company's implementation of the 2021 annual equity distribution plan, the conversion price of"Bengang Convertible Bonds" will be adjusted to 3.95 yuan per share on June 16, 2022.
2. Status of cumulative share transfer
√Applicable □ Not applicable
| Convertible bond abbreviation | Conversion starts and end date | Total amount issued (bonds) | Total amount issued | Cumulative share conversion amount (RMB) | Cumulative number of shares converted (shares) | Proportion of the number of converted shares to the total issued shares before conversion | Amount not yet converted (RMB) | Proportion of unconverted amount to total issued amount |
| Bengang Convertible Bonds | 2021-01-04 | 68,000,000 | 6,800,000,000.00 | 1,168,935,600.00 | 232,837,574 | 6.70% | 5,631,064,400.00 | 82.81% |
3. Top ten holders of convertible bonds
Unit: shares
| No. | Convertible bond holders | Nature of convertible bond holders | Number of convertible bonds held at the end of the reporting period (bonds) | Amount of convertible bonds held at the end of the reporting period (yuan) | Percentage of convertible bonds held at the end of the reporting period |
| 1 | Industrial and Commercial Bank of China Limited - Guangfa convertible bond bond sponsored securities investment fund | Other | 1,704,895 | 170,489,500.00 | 3.03% |
| 2 | Industrial Bank Co., Ltd. - Tianhong Yongli Bond Securities Investment Fund | Other | 1,636,103 | 163,610,300.00 | 2.91% |
| 3 | China Construction Bank Corporation -Zhejiang Fengli enhanced bond securities investment fund | Other | 1,600,000 | 160,000,000.00 | 2.84% |
| 4 | China Construction Bank Corporation - China Merchants Stable Profit Increase Bond Securities Investment Fund | Other | 1,395,231 | 139,523,100.00 | 2.48% |
| 5 | China CITIC Group Corporation Limited Enterprise Annuity Plan - China CITIC Bank Corporation Limited | Other | 1,395,005 | 139,500,500.00 | 2.48% |
| 6 | Bank of China-E-fund stable income bond securities investment fund | Other | 1,380,958 | 138,095,800.00 | 2.45% |
| 7 | China AMC Yannian Yishou No. 9 Fixed Income Pension Product－China Merchants Bank Co., Ltd. | Other | 1,362,468 | 136,246,800.00 | 2.42% |
| 8 | China National Petroleum | Other | 938,212 | 93,821,200.00 | 1.67% |
| Corporation enterprise annuity plan-Industrial and Commercial Bank of China Limited | |||||
| 9 | Dacheng Fund-Postal savings bank-Postal savings No. 1 collective asset management plan | Other | 751,826 | 75,182,600.00 | 1.34% |
| 10 | Industrial and Commercial Bank of China limited enterprise annuity plan - China Construction Bank Corporation | Other | 741,428 | 74,142,800.00 | 1.32% |
4. Significant changes in the guarantor's profitability, asset condition and credit standing
□ Applicable √ Not applicable
5. At the end of the reporting period, the company's liabilities, changes in credit and casharrangements and debt repayment in future yearsAt the end of the reporting period, the company's liabilities are detailed in Section II, Chapter IV “Main AccountingData and Financial Index”.The company's credit rating of convertible bonds has not changed during the reporting period.
Ⅴ. The loss in the consolidated statement during the reporting period exceeded10% of the net assets at the end of the previous year
□ Applicable √ Not applicable
VI. The main accounting data and financial indicators of the company in thepast two years at the end of the reporting period
| Item | At the end of current period | At the end of last year | Change |
| Current ratio | 1.0297 | 1.1399 | -9.67% |
| Liabilities to Assets Ratio | 54.88% | 58.17% | -3.29% |
| Quick ratio | 0.49 | 0.6612 | -25.89% |
| Current period | Previous period | Change | |
| Net profit after deducting non-recurring gains and losses (RMB) | 52,221.94 | 219,914.26 | -76.25% |
| EBITDA total liabilities ratio | 19.53% | 11.48% | 8.05% |
| Interest coverage ratio | 3.29 | 6.26 | -47.44% |
| Cash interest coverage ratio | 1.24 | -1.88 | -165.96% |
| EBITDA interest coverage ratio | 6.61 | 8.32 | -20.55% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest repayment rate | 100.00% | 100.00% | 0.00% |
Section Ⅹ. Financial ReportI. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The semi-annual report is not audited.II. Financial Statements
Statement in Notes are carried in RMB Yuan
BENGANG STEEL PLATES CO., LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Assets | Notes 5 | 30 Jun, 2022 | 1 Jan, 2022 |
| Current assets | |||
| Cash at bank and on hand | (1) | 4,805,370,697.71 | 8,831,095,737.85 |
| Settlement provisions | |||
| Capital lent | |||
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | (2) | 141,318,446.72 | 1,540,482,182.07 |
| Accounts receivable | (3) | 307,887,350.08 | 256,850,782.71 |
| Accounts receivable financing | (4) | 254,184,970.37 | 1,530,735,647.38 |
| Prepayments | (5) | 1,950,905,089.18 | 994,370,345.64 |
| Premium receivable | |||
| Reinsurance accounts receivable | |||
| Receivable deposit for reinsurance contract | |||
| Other receivables | (6) | 186,993,663.02 | 165,937,280.41 |
| Redemptory financial assets for sale | |||
| Inventories | (7) | 8,740,534,055.47 | 10,190,166,138.98 |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | (8) | 240,668,471.95 | 754,948,193.56 |
| Total current assets | 16,627,862,744.50 | 24,264,586,308.60 | |
| Non-current assets | |||
| Loan and advances issued | |||
| Debt Investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | (9) | 3,067,239.29 | 2,981,784.07 |
| Other equity instrument investments | (10) | 1,042,024,829.00 | 1,042,024,829.00 |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | (11) | 24,397,907,946.02 | 25,480,674,048.94 |
| Construction in progress | (12) | 3,012,446,289.29 | 2,434,182,101.13 |
| Productive biological assets | |||
| Oil and gas assets |
| Assets | Notes 5 | 30 Jun, 2022 | 1 Jan, 2022 |
| Right-of-use assets | (13) | 1,410,177,981.09 | 1,440,365,248.31 |
| Intangible assets | (14) | 294,231,463.55 | 297,921,548.81 |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | (15) | 148,337,498.41 | 153,756,548.31 |
| Other non-current assets | (16) | 81,048,057.73 | 30,630,858.13 |
| Total non-current assets | 30,389,241,304.38 | 30,882,536,966.70 | |
| Total assets | 47,017,104,048.88 | 55,147,123,275.30 |
The notes to the financial statements attached form part of these financial statements.
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2022(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Liabilities and equities | Notes 5 | 30 Jun, 2022 | 1 Jan, 2022 |
| Current Liabilities | |||
| Short-term loans | （17） | 3,349,342,280.00 | 4,053,088,140.00 |
| Loan from central bank | |||
| Loan from other banks | |||
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | （18） | 2,223,588,546.63 | 4,635,083,376.48 |
| Accounts payable | （19） | 3,354,694,032.39 | 5,352,272,685.89 |
| Advance from customers | |||
| Contract liabilities | （20） | 3,977,011,514.55 | 4,708,188,093.78 |
| Financial assets sold for repurchase | |||
| Deposits from customers and interbank | |||
| Receipt from vicariously traded securities | |||
| Receipt from vicariously underwriting securities | |||
| Employee benefits payable | （21） | 13,420,022.01 | 152,095,376.49 |
| Taxes payable | （22） | 180,727,989.86 | 114,267,988.70 |
| Other payables | （23） | 1,164,276,844.55 | 1,348,025,731.98 |
| Handling charges and commission payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | （24） | 1,368,468,080.81 | 310,780,518.14 |
| Other current liabilities | （25） | 517,011,496.89 | 612,064,452.20 |
| Total current liabilities | 16,148,540,807.69 | 21,285,866,363.66 | |
| Non-current liabilities | |||
| Provision for insurance contract | |||
| Long-term loans | （26） | 3,002,383,788.13 | 4,222,821,771.74 |
| Bonds payable | （27） | 5,173,595,326.65 | 5,054,251,668.83 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Leasing liabilities | （28） | 1,404,900,432.63 | 1,424,667,169.15 |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | （29） | 72,523,320.89 | 93,106,285.89 |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 9,653,402,868.30 | 10,794,846,895.61 | |
| Total liabilities | 25,801,943,675.99 | 32,080,713,259.27 | |
| Shareholders' equity: | |||
| Share capital | （30） | 4,108,209,106.00 | 4,108,191,379.00 |
| Other equity instruments | （31） | 947,866,337.87 | 947,882,663.63 |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Capital reserves | （32） | 13,272,196,060.95 | 13,272,134,173.09 |
| Less: treasury shares | |||
| Other comprehensive income | |||
| Special reserves | （33） | 31,489,563.23 | 337,978.57 |
| Surplus reserves | （34） | 1,195,116,522.37 | 1,195,116,522.37 |
| General risk reserve | |||
| Undistributed profits | （35） | 1,074,126,847.65 | 2,977,306,297.64 |
| Total equity attributable to equity holders of the parent company | 20,629,004,438.07 | 22,500,969,014.30 | |
| Non-controlling interests | 586,155,934.82 | 565,441,001.73 | |
| Total shareholder's equity | 21,215,160,372.89 | 23,066,410,016.03 | |
| Total of liabilities and owners’ equity | 47,017,104,048.88 | 55,147,123,275.30 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF FINANCIAL POSITION
As at 30 June 2022(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Assets | Notes 14 | 30 Jun, 2022 | 1 Jan, 2022 |
| Current assets | |||
| Cash at bank and on hand | 3,245,493,319.16 | 7,580,872,007.38 | |
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | 141,318,446.72 | 1,514,416,395.80 | |
| Accounts receivable | （1） | 427,566,795.04 | 353,631,563.42 |
| Accounts receivable financing | （2） | 240,966,150.37 | 1,504,640,362.79 |
| Prepayments | 1,858,269,949.81 | 1,004,241,075.82 | |
| Other receivables | （3） | 171,552,044.44 | 268,606,048.52 |
| Inventories | 6,510,907,459.18 | 8,289,784,141.78 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 109,688,585.30 | 670,787,069.41 | |
| Total current assets | 12,705,762,750.02 | 21,186,978,664.92 | |
| Non-current assets | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | （4） | 2,835,186,190.50 | 2,015,186,190.50 |
| Other equity instrument investments | 1,041,624,829.00 | 1,041,624,829.00 | |
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 23,106,390,614.05 | 24,110,222,815.60 | |
| Construction in progress | 2,979,165,055.81 | 2,401,120,232.45 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 1,410,177,981.09 | 1,440,365,248.31 | |
| Intangible assets | 176,354,564.69 | 178,414,033.19 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | 130,638,301.91 | 124,046,003.13 | |
| Other non-current assets | 72,428,141.20 | 22,010,941.60 | |
| Total non-current assets | 31,751,965,678.25 | 31,332,990,293.78 | |
| Total assets | 44,457,728,428.27 | 52,519,968,958.70 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2022
(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Liabilities and shareholders' equities | Notes 14 | 30 Jun, 2022 | 1 Jan, 2022 |
| Current liabilities | |||
| Short-term loans | 2,749,342,280.00 | 3,353,088,140.00 | |
| Financial liability held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | 2,223,588,546.63 | 4,650,517,420.18 | |
| Accounts payable | 3,953,269,898.68 | 5,674,841,169.66 | |
| Advance from customers | |||
| Contract liabilities | 3,629,795,956.84 | 4,660,051,055.89 | |
| Employee benefits payable | 13,316,760.20 | 151,595,453.62 | |
| Taxes payable | 143,785,493.08 | 40,949,825.13 | |
| Other payables | 617,698,527.38 | 683,141,570.83 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 1,368,468,080.81 | 310,780,518.14 | |
| Other current liabilities | 471,873,474.39 | 605,806,637.27 | |
| Total current liabilities | 15,171,139,018.01 | 20,130,771,790.72 | |
| Non-current liabilities | |||
| Long term loans | 3,002,383,788.13 | 4,222,821,771.74 | |
| Bonds payable | 5,173,595,326.65 | 5,054,251,668.83 | |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | 1,404,900,432.63 | 1,424,667,169.15 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | 72,523,320.89 | 93,106,285.89 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 9,653,402,868.30 | 10,794,846,895.61 | |
| Total liabilities | 24,824,541,886.31 | 30,925,618,686.33 | |
| Shareholder’s equity: | |||
| Share capital | 4,108,209,106.00 | 4,108,191,379.00 | |
| Other equity instruments | 947,866,337.87 | 947,882,663.63 | |
| Including: Preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 12,852,044,378.83 | 12,851,982,490.97 | |
| Less: Treasury shares | |||
| Other comprehensive income | |||
| Special reserves | 22,529,623.02 | 155,469.58 | |
| Surplus reserves | 1,195,116,522.37 | 1,195,116,522.37 | |
| Undistributed Profits | 507,420,573.87 | 2,491,021,746.82 | |
| Total shareholder's equity | 19,633,186,541.96 | 21,594,350,272.37 | |
| Total liabilities and shareholder’s equity | 44,457,728,428.27 | 52,519,968,958.70 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Notes 5 | Current period | Previous period |
| 1. Total operating income | 35,015,177,304.98 | 38,588,128,212.14 | |
| Including: Operating income | (36) | 35,015,177,304.98 | 38,588,128,212.14 |
| Interest income | |||
| Premium earned | |||
| Income from handling charges and commission | |||
| 2. Total operating cost | 34,212,560,449.82 | 35,641,572,522.11 | |
| Including: Operating cost | (36) | 33,377,477,540.63 | 34,592,825,792.72 |
| Interest expense | |||
| Expenditure for handling charges and commission | |||
| Surrender value | |||
| Net expenditure for compensation | |||
| Net provision for insurance contract appropriated | |||
| Bonus payment for policy | |||
| Reinsurance premium | |||
| Tax and surcharges | (37) | 99,885,445.23 | 241,555,494.92 |
| Selling and distribution expenses | (38) | 67,430,875.17 | 59,652,669.72 |
| General and administrative expenses | (39) | 352,304,684.10 | 388,678,843.23 |
| Research and development expenses | (40) | 22,368,496.87 | 22,504,022.68 |
| Financial expenses | (41) | 293,093,407.82 | 336,355,698.84 |
| Including: Interest expense | 342,674,208.42 | 554,219,518.90 | |
| Interest income | 61,019,147.27 | 222,276,204.79 | |
| Add: Other income | (42) | 30,655,542.92 | 32,659,483.34 |
| Income on investment（“-” for loss） | (43) | 115,842.84 | 1,835,124.19 |
| Including: Income from associates and joint ventures | 85,455.22 | 281,949.15 | |
| Income from derecognition of financial assets measured at amortized cost | |||
| Exchange gains（“-” for loss） | |||
| Net exposure hedge income（“-” for loss） | |||
| Gains from change of fair value （“-” for loss） | |||
| Credit impairment loss （“-” for loss） | (44) | -793,906.73 | 2,049,977.83 |
| Assets impairment loss （“-” for loss） | (45) | -72,880,991.53 | 6,629,442.12 |
| Assets disposal gains（“-” for loss） | (46) | 3,648,546.62 | 130,675.05 |
| 3. Operational profit（“-” for loss） | 763,361,889.28 | 2,989,860,392.56 | |
| Add: Non-operating income | (47) | 30,572,281.35 | 3,273,128.46 |
| Less: Non-operating expenses | (48) | 10,765,339.79 | 22,989,643.14 |
| 4. Total profit (“-” for loss) | 783,168,830.84 | 2,970,143,877.88 | |
| Less: Income tax expenses | (49) | 203,204,954.60 | 746,977,590.45 |
| 5. Net profit（“-” for loss） | 579,963,876.24 | 2,223,166,287.43 | |
| 1.Classification by continuing operating | |||
| 1.Net profit from continuing operation（“-” for loss） | 579,963,876.24 | 2,223,166,287.43 | |
| 2.Net profit from discontinued operation（“-” for loss） | |||
| 2.Classification by ownership | |||
| 1. Net profit attributable to the owners of parent company （“-” for loss） | 561,735,377.41 | 2,208,798,167.91 | |
| 2. Net profit attributable to non-controlling shareholders （“-” for loss） | 18,228,498.83 | 14,368,119.52 | |
| 6.Other comprehensive income | |||
| Other comprehensive income attributable to owners of the parent company after tax | |||
| 1.Other comprehensive income items that will not be reclassified into gains/losses | |||
| 1) Re-measurement of defined benefit plans of changes in net debt or net assets | |||
| 2) Other comprehensive income under the equity method cannot be reclassified into profit or loss | |||
| 3) Changes in fair value of investments in other equity instruments | |||
| 4) Changes in fair value of company's credit risk | |||
| 2.Other comprehensive income that will be reclassified into profit or loss. | |||
| 1) Other comprehensive income under the equity method which can be reclassified into profit or loss | |||
| 2) Changes in fair value of other debt investments | |||
| 3) Amount of financial assets reclassified into other comprehensive income | |||
| 4) Credit impairment provision of other debt investments | |||
| 5) Cash flow hedges reserve | |||
| 6) Translation differences in foreign currency financial statements | |||
| 7) Others | |||
| Other comprehensive income attributable to non-controlling shareholders’ equity after tax | |||
| 7. Total comprehensive income | 579,963,876.24 | 2,223,166,287.43 | |
| Total comprehensive income attributable to the owner of the parent company | 561,735,377.41 | 2,208,798,167.91 | |
| Total comprehensive income attributable to non-controlling shareholders | 18,228,498.83 | 14,368,119.52 |
| Items | Notes 5 | Current period | Previous period |
| 8. Earnings per share | |||
| 1）Basic earnings per share | XVII.2 | 0.14 | 0.57 |
| 2）Diluted earnings per share | XVII.2 | 0.14 | 0.57 |
The notes to the financial statements attached form part of these financial statements.Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Notes 14 | Current period | Previous period |
| 1. Total operating income | (5) | 35,774,038,070.43 | 39,081,201,858.29 |
| Less: Operating cost | (5) | 34,404,712,933.07 | 35,285,590,888.70 |
| Tax and surcharges | 74,061,344.22 | 213,178,320.80 | |
| Selling and distribution expenses | 58,854,346.91 | 55,267,199.05 | |
| General and administrative expenses | 323,747,875.71 | 360,747,887.96 | |
| Research and development expenses | 22,368,496.87 | 22,504,022.68 | |
| Financial expenses | 290,720,557.98 | 327,299,367.65 | |
| Including: Interest expense | 327,728,944.07 | 304,352,578.12 | |
| Interest income | 48,263,709.87 | 210,228,568.88 | |
| Add: Other income | 30,272,965.00 | 32,210,883.34 | |
| Income on investment（“-” for loss） | (6) | 59,198,924.51 | 1,553,175.04 |
| Including: Income from associates and joint ventures | |||
| Income from derecognition of financial assets measured at amortized cost | |||
| Net exposure hedge income（“-” for loss） | |||
| Gains from change of fair value （“-” for loss） | |||
| Credit impairment loss（“-” for loss） | -1,392,974.69 | 2,049,977.83 | |
| Assets impairment loss（“-” for loss） | -72,880,991.53 | 6,571,234.79 | |
| Assets disposal gains（“-” for loss） | 3,669,258.68 | 130,675.05 | |
| 2. Operational profit（“-” for loss） | 618,439,697.64 | 2,859,130,117.50 | |
| Add: Non-operating income | 24,296,108.68 | 1,295,851.57 | |
| Less: Non-operating expenses | 10,736,478.75 | 22,989,643.14 | |
| 3. Total profit (“-” for loss) | 631,999,327.57 | 2,837,436,325.93 | |
| Less: Income tax expenses | 150,685,673.12 | 717,963,491.96 | |
| 4. Net profit（“-” for loss） | 481,313,654.45 | 2,119,472,833.97 | |
| 1.Net profit from continuing operation (“-” for loss) | 481,313,654.45 | 2,119,472,833.97 | |
| 2.Net profit from discontinued operation (“-” for loss) | |||
| 5.Other comprehensive income | |||
| 1.Other comprehensive income items that will not be reclassified into gains/losses | |||
| 1) Re-measurement of defined benefit plans of changes | |||
| 2) Other comprehensive income under the equity method cannot be reclassified into profit or loss | |||
| 3) Changes in fair value of investments in other equity instruments | |||
| 4) Changes in fair value of company's credit risk | |||
| 2.Other comprehensive income that will be reclassified into profit or loss. | |||
| 1) Other comprehensive income under the equity method investee can be reclassified into profit or loss | |||
| 2) Changes in fair value of other debt investments | |||
| 3) Amount of financial assets reclassified into other comprehensive income | |||
| 4) Credit impairment provision of other debt investments | |||
| 5) Cash flow hedges reserve | |||
| 6) Translation differences in foreign currency financial statements | |||
| 7) Others | |||
| 6. Total comprehensive income | 481,313,654.45 | 2,119,472,833.97 | |
| 7. Earnings per share | |||
| 1）Basic earnings per share | |||
| 2）Diluted earnings per share |
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Notes 5 | Current period | Previous period |
| 1.Cash flow from operating activities | |||
| Cash received from sale of goods or rendering of services | 30,399,917,736.81 | 27,681,479,863.67 | |
| Net increase of customers’ deposit and interbank deposit | |||
| Net increase of loan from central bank | |||
| Net increase of loans from other financial institutions | |||
| Cash received for premium of original insurance contract | |||
| Net cash received for reinsurance business | |||
| Net increase of deposit and investment of the insured | |||
| Cash from receiving interest, handling charge and commission | |||
| Net increase of loans from borrowing funds | |||
| Net increase of fund for repurchase business | |||
| Net cash received from traded securities | |||
| Tax rebate received | 411,362,662.88 | 40,128,927.12 | |
| Other cash received relating to operating activities | (50) | 168,719,124.22 | 239,319,537.30 |
| Subtotal of cash inflows from operating activities | 30,979,999,523.91 | 27,960,928,328.09 | |
| Cash paid for goods and services | 28,939,015,822.97 | 24,177,763,290.52 | |
| Net increase of customer’ s loan and advances | |||
| Net increase of deposit in central bank and interbank deposit | |||
| Cash for payment of compensation for original insurance contract | |||
| Net increase in capital lent | |||
| Cash for payment of interest, handling charge and commission | |||
| Cash for payment of policy bonus | |||
| Cash paid to and on behalf of employees | 1,281,589,573.82 | 972,651,151.35 | |
| Cash paid for all types of taxes | 282,883,307.60 | 1,082,217,676.19 | |
| Other cash paid relating to operating activities | (50) | 249,058,977.31 | 203,379,990.00 |
| Subtotal of cash outflows from operating activities | 30,752,547,681.70 | 26,436,012,108.06 | |
| Net cash flows from operating activities | 227,451,842.21 | 1,524,916,220.03 | |
| 2. Cash flows from investing activities | |||
| Cash received from disposal of investments | 3,000,000,000.00 | ||
| Cash received from return on investments | 1,553,175.04 | ||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 60,800.00 | ||
| Net cash received from disposal of subsidiary and other operating units | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 60,800.00 | 3,001,553,175.04 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 755,407,575.62 | 1,148,767,202.27 | |
| Cash paid for investments | 4,600,000,000.00 | ||
| Net increase of mortgage loan | |||
| Net cash received from subsidiary and other operating unit | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash outflows from investing activities | 755,407,575.62 | 5,748,767,202.27 | |
| Net cash flows from investing activities | -755,346,775.62 | -2,747,214,027.23 | |
| 3. Cash flows from financing activities | |||
| Proceeds from investment | |||
| Including: Proceeds from investment of non-controlling shareholders of subsidiary | |||
| Proceeds from borrowings | 602,067,123.44 | 1,512,381,000.00 | |
| Other proceeds relating to financing activities | (50) | 2,548,792,921.60 | |
| Subtotal of cash inflows from financing activities | 3,150,860,045.04 | 1,512,381,000.00 | |
| Cash repayments of borrowings | 1,393,191,834.05 | 4,477,892,475.61 | |
| Cash payments for distribution of dividends, profit or interest expenses | 2,708,922,405.78 | 567,804,337.49 | |
| Including: Cash paid to non-controlling shareholders as dividend and profit by subsidiaries | |||
| Other cash payments relating to financing activities | (50) | 71,693,646.43 | |
| Subtotal of cash outflows from financing activities | 4,173,807,886.26 | 5,045,696,813.10 | |
| Net cash flows from financing activities | -1,022,947,841.22 | -3,533,315,813.10 | |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 2,217,009.66 | -16,349,859.91 | |
| 5. Net increase in cash and cash equivalents | -1,548,625,764.97 | -4,771,963,480.21 | |
| Add: Cash and cash equivalents at the beginning of the period | 6,299,099,063.48 | 9,229,417,595.12 | |
| 6. Cash and cash equivalents at the ending of the period | 4,750,473,298.51 | 4,457,454,114.91 |
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CASH FLOWS
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Notes 14 | Current period | Previous period |
| 1. Cash flow from operating activities | |||
| Cash received from sale of goods or rendering of services | 30,919,471,674.38 | 27,601,858,925.93 | |
| Tax rebate received | 406,487,928.59 | 15,393,055.96 | |
| Other cash received relating to operating activities | 155,803,337.55 | 230,589,337.92 | |
| Subtotal of cash inflows from operating activities | 31,481,762,940.52 | 27,847,841,319.81 | |
| Cash paid for goods and services | 29,479,472,246.34 | 24,802,523,270.32 | |
| Cash paid to and on behalf of employees | 1,197,357,426.66 | 926,763,546.78 | |
| Cash paid for all types of taxes | 102,560,662.62 | 984,236,622.57 | |
| Other cash paid relating to operating activities | 138,755,917.63 | 139,392,329.61 | |
| Subtotal of cash outflows from operating activities | 30,918,146,253.25 | 26,852,915,769.28 | |
| Net cash flows from operating activities | 563,616,687.27 | 994,925,550.53 | |
| 2. Cash flows from investing activities | |||
| Cash received from disposal of investments | 3,000,000,000.00 | ||
| Cash received from return on investments | 53,139,377.16 | 1,553,175.04 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 60,800.00 | ||
| Net cash received from disposal of subsidiary and other operating units | 33,061,417.35 | ||
| Other cash received relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 86,261,594.51 | 3,001,553,175.04 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 749,875,275.53 | 1,131,314,182.16 | |
| Cash paid for investments | 850,000,000.00 | 4,600,000,000.00 | |
| Net cash paid for acquisition of subsidiary and other operating unit | |||
| Other cash paid relating to investing activities | |||
| Subtotal of cash outflows paid for investing activities | 1,599,875,275.53 | 5,731,314,182.16 | |
| Net cash flows from investing activities | -1,513,613,681.02 | -2,729,761,007.12 | |
| 3. Cash flows from financing activities | |||
| Proceeds from investment | |||
| Cash received from borrowings | 602,067,123.44 | 1,412,381,000.00 | |
| Other cash received relating to financing activities | 2,548,792,921.60 | ||
| Subtotal of cash inflows from financing activities | 3,150,860,045.04 | 1,412,381,000.00 | |
| Cash repayments of borrowings | 1,293,191,834.05 | 3,722,892,475.61 | |
| Cash payments for distribution of dividends, profit or interest | 2,695,763,155.78 | 544,896,337.46 | |
| Other cash payments relating to financing activities | 71,693,646.43 | ||
| Subtotal of cash outflows from financing activities | 4,060,648,636.26 | 4,267,788,813.07 | |
| Net cash flows from financing activities | -909,788,591.22 | -2,855,407,813.07 | |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 1,506,171.92 | -16,347,695.55 | |
| 5. Net increase in cash and cash equivalents | -1,858,279,413.05 | -4,606,590,965.21 | |
| Add: Cash and cash equivalents at the beginning of the period | 5,048,875,333.01 | 8,897,859,003.60 | |
| 6. Cash and cash equivalents at the ending of the period | 3,190,595,919.96 | 4,291,268,038.39 |
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Current period | |||||||||||||
| Owner's equity attributable to parent company | Non-controlling interest | Total of shareholders’ equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| 1. Ending balance of last year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Opening balance of current year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||
| 3. Changes in current year (“-” for decrease) | 17,727.00 | -16,325.76 | 61,887.86 | 31,151,584.66 | -1,903,179,449.99 | -1,871,964,576.23 | 20,714,933.09 | -1,851,249,643.14 | ||||||
| 1) Total comprehensive income | 561,735,377.41 | 561,735,377.41 | 18,228,498.83 | 579,963,876.24 | ||||||||||
| 2) Capital increase and decrease by shareholders | 17,727.00 | -16,325.76 | 61,887.86 | 63,289.10 | 63,289.10 | |||||||||
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments | ||||||||||||||
| (3) Share-based payment attributable to owners’ equity | ||||||||||||||
| (4) Others | 17,727.00 | -16,325.76 | 61,887.86 | 63,289.10 | 63,289.10 | |||||||||
| 3) Profit distribution | -2,464,914,827.40 | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||||
| (1) Appropriation to surplus reserves | ||||||||||||||
| (2) Appropriation to general risk reserve | ||||||||||||||
| (3) Profit distribution to shareholders | -2,464,914,827.40 | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||||
| (4) Others | ||||||||||||||
| 4) Transfers within shareholders’ equity | ||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (3) Surplus reserves to recover loss’ | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | ||||||||||||||
| (5) Other comprehensive income transferred into Retained Earnings | ||||||||||||||
| (6) Others | ||||||||||||||
| 5) Special reserves | 31,151,584.66 | 31,151,584.66 | 2,486,434.26 | 33,638,018.92 | ||||||||||
| (1) Provision of special reserves | 38,838,893.44 | 38,838,893.44 | 2,489,359.76 | 41,328,253.20 | ||||||||||
| (2) Use of special reserves | 7,687,308.78 | 7,687,308.78 | 2,925.50 | 7,690,234.28 | ||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 4,108,209,106.00 | 947,866,337.87 | 13,272,196,060.95 | 31,489,563.23 | 1,195,116,522.37 | 1,074,126,847.65 | 20,629,004,438.07 | 586,155,934.82 | 21,215,160,372.89 | |||||
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)
(English Translation for Reference Only)
| Items | Previous period | |||||||||||||
| Owner's equity attributable to parent company | Non-controlling interest | Total of shareholders’ equity | ||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Subtotal | |||||
| Preference shares | Perpetual bond | Others | ||||||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | |||||
| Add: Change of accounting policies | ||||||||||||||
| Correction of errors for last period | ||||||||||||||
| Business consolidation under common control | ||||||||||||||
| Others | ||||||||||||||
| 2. Opening balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 12,343,209,847.29 | 300,412.14 | 961,105,529.85 | 2,692,018,405.40 | 21,018,296,389.10 | 532,388,405.68 | 21,550,684,794.78 | |||||
| 3. Changes in current year (“-” for decrease) | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 37,566.43 | 234,010,992.52 | 285,287,892.24 | 1,482,672,625.20 | 33,052,596.05 | 1,515,725,221.25 | |||||
| 1) Total comprehensive income | 2,500,582,902.58 | 2,500,582,902.58 | 33,052,596.05 | 2,533,635,498.63 | ||||||||||
| 2) Capital increase and decrease by shareholders | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | 963,336,174.01 | |||||||||
| (1) Common share invested by shareholders | ||||||||||||||
| (2) Capital input by the holder of other equity instruments | ||||||||||||||
| (3) Share-based payment attributable to owners' equity | ||||||||||||||
| (4) Others | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | 963,336,174.01 | |||||||||
| 3) Profit distribution | 234,010,992.52 | 2,215,295,010.34 | -1,981,284,017.82 | -1,981,284,017.82 | ||||||||||
| (1) Appropriation to surplus reserves | 234,010,992.52 | -234,010,992.52 | ||||||||||||
| (2) Appropriation to general risk reserve | ||||||||||||||
| (3) Profit distribution to shareholders | 1,981,284,017.82 | -1,981,284,017.82 | -1,981,284,017.82 | |||||||||||
| (4) Others | ||||||||||||||
| 4) Transfers within shareholders’ equity | ||||||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | ||||||||||||||
| (3) Surplus reserves to recover loss | ||||||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | ||||||||||||||
| (5) Other comprehensive income transferred into Retained Earnings | ||||||||||||||
| (6) Others | ||||||||||||||
| 5) Special reserves | 37,566.43 | 37,566.43 | 37,566.43 | |||||||||||
| (1) Provision of special reserves | 63,036,424.58 | 63,036,424.58 | 63,036,424.58 | |||||||||||
| (2) Use of special reserves | 62,998,858.15 | 62,998,858.15 | 62,998,858.15 | |||||||||||
| 6) Others | ||||||||||||||
| 4. Ending balance of current year | 4,108,191,379.00 | 947,882,663.63 | 13,272,134,173.09 | 337,978.57 | 1,195,116,522.37 | 2,977,306,297.64 | 22,500,969,014.30 | 565,441,001.73 | 23,066,410,016.03 | |||||
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Current period | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners’ equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 1. Ending balance of last year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Opening balance of current year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
| 3. Changes in current year (“-” for decrease) | 17,727.00 | -16,325.76 | 61,887.86 | 22,374,153.44 | -1,983,601,172.95 | -1,961,163,730.41 | |||||
| 1) Total comprehensive income | 481,313,654.45 | 481,313,654.45 | |||||||||
| 2) Capital increase and decrease by shareholders | 17,727.00 | -16,325.76 | 61,887.86 | 63,289.10 | |||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to shareholders’ equity | |||||||||||
| (4) Others | 17,727.00 | -16,325.76 | 61,887.86 | ||||||||
| 3) Profit distribution | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||
| (1) Appropriation of surplus reserves | 0.00 | ||||||||||
| (2) Profit distribution to shareholders | -2,464,914,827.40 | -2,464,914,827.40 | |||||||||
| (3) Others | |||||||||||
| 4) Transfers within shareholders’ equity | |||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | |||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||
| (3) Surplus reserves to recover loss | |||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | |||||||||||
| (5) Other comprehensive income transferred into retained earnings | |||||||||||
| (6) Others | |||||||||||
| 5) Special reserves | 22,374,153.44 | 22,374,153.44 | |||||||||
| (1) Provision of special reserves | 30,052,685.76 | 30,052,685.76 | |||||||||
| (2) Use of special reserves | 7,678,532.32 | 7,678,532.32 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 4,108,209,106.00 | 947,866,337.87 | 12,852,044,378.83 | 22,529,623.02 | 1,195,116,522.37 | 507,420,573.87 | 19,633,186,541.96 | ||||
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
BENGANG STEEL PLATES CO., LTD.COMPANY’S STATEMENT OF CHANGES IN OWNERS’ EQUITY (Continued)
For the year ended 30 June 2022(Expressed in Renminbi unless otherwise indicated)(English Translation for Reference Only)
| Items | Previous period | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners’ equity | |||
| Preference shares | Perpetual bond | Others | |||||||||
| 1. Ending balance of last year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | ||||
| Add: Change of accounting policies | |||||||||||
| Correction of errors for last period | |||||||||||
| Others | |||||||||||
| 2. Opening balance of current year | 3,875,371,532.00 | 1,146,290,662.42 | 11,923,058,165.17 | 120,972.62 | 961,105,529.85 | 2,366,206,832.00 | 20,272,153,694.06 | ||||
| 3. Changes in current year (“-” for decrease) | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 34,496.96 | 234,010,992.52 | 124,814,914.82 | 1,322,196,578.31 | ||||
| 1) Total comprehensive income | 2,340,109,925.16 | 2,340,109,925.16 | |||||||||
| 2) Capital increase and decrease by shareholders | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | 963,336,174.01 | |||||||
| (1) Common share invested by shareholders | |||||||||||
| (2) Capital input by the holder of other equity instruments | |||||||||||
| (3) Share-based payment attributable to shareholders’ equity | |||||||||||
| (4) Others | 232,819,847.00 | -198,407,998.79 | 928,924,325.80 | ||||||||
| 3) Profit distribution | 234,010,992.52 | -2,215,295,010.34 | -1,981,284,017.82 | ||||||||
| (1) Appropriation of surplus reserves | 234,010,992.52 | -234,010,992.52 | |||||||||
| (2) Profit distribution to shareholders | -1,981,284,017.82 | -1,981,284,017.82 | |||||||||
| (3) Others | |||||||||||
| 4) Transfers within shareholders' equity | |||||||||||
| (1) Capital reserves transferred into paid-in capital (or stock) | |||||||||||
| (2) Surplus reserves transferred into paid-in capital (or stock) | |||||||||||
| (3) Surplus reserves to recover loss’ | |||||||||||
| (4) Net changes of defined contribution plans transferred into Retained Earnings | |||||||||||
| (5) Other comprehensive income transferred into retained earnings | |||||||||||
| (6) Others | |||||||||||
| 5) Special reserves | 34,496.96 | 34,496.96 | |||||||||
| (1) Provision of special reserves | 43,962,017.71 | 43,962,017.71 | |||||||||
| (2) Use of special reserves | 43,927,520.75 | 43,927,520.75 | |||||||||
| 6) Others | |||||||||||
| 4. Ending balance of current year | 4,108,191,379.00 | 947,882,663.63 | 12,851,982,490.97 | 155,469.58 | 1,195,116,522.37 | 2,491,021,746.82 | 21,594,350,272.37 | ||||
Legal Representative: Huo Gang Chief Financial Officer: Jiang Xiaoyu Chief Accountant: Sun Yanbin
III. Basic Information of the Company
1. Company profile
Bengang Steel Plates Co., Ltd. (hereinafter referred to as “Bengang Steel Plates” or “theCompany”), as approved in Liao-Zheng (1997) No. 57 by Liaoning People’s Government on 27March 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 1997 by Benxi Steel and Iron (Group) Co., Ltd. (“Benxi Iron and SteelGroup”), through reorganization of operations, assets and liabilities of its plants, namely, SteelSmelting Plant, Primary Rolling Plant and Continuous Hot Rolling Plant.As approved by China Securities Regulatory Commission (hereinafter referred to as “the CSRC”),the Company issued 400,000,000 B-shares at HKD 2.38 each in Shenzhen Stock Exchange on 10June 1997. On 3 November 1997, the Company issued another 120,000,000 A-shares (Renminbicommon Shares) at RMB 5.40 each, and listed in Shenzhen Stock Exchange since 15 January1998. The capital shares were totaled to 1,136,000,000 shares.On 14 March 2006, according to the resolutions of the Shareholders’ Meeting regarding shareequity relocation, the Share Equity Relocation Scheme, Response to Bengang Steel Plate Co., Ltd.about Share Equity Relocation issued by Liaoning Provincial Government State-owned AssetAdministrative Committee(hereinafter referred to as the Liaoning SASAC), Benxi Iron and SteelGroup – the only holder of non-negotiable state-owned legal person shares paid the considerationto 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 ChinaSecurities Depository & Clearing Corporation Ltd. Shenzhen Office. However, the total amount ofcapital shares of Bengang Steel Plates Co., Ltd. was not changed through the share equityrelocation action.According to the approval document “Zheng-Jian-Gong-Si-Zi [2006] No. 126” by ChinaSecurities Regulatory Commission on 30 June 2006, the Company was approved to place 2 billionRenminbi common shares particularly to Benxi Iron and Steel Group and the proceeds would beused to purchase the related assets of the Benxi Iron and Steel Group. On the same day, Benxi Ironand Steel Group received circular Zheng-Jian-Gong-Si-Zi [2006] No. 127 issued by ChinaSecurities Regulatory Committee, On the same day, Benxi Iron and Steel Group obtained thedocument "Zheng Jian Company Zi (2006) No. 127" issued by the China Securities RegulatoryCommission, which agreed to exempt Benxi Iron and Steel Group from the acquisition of 2 billionnew shares issued by the company, resulting in the number of shares held by the companyreaching 2.5752 billion shares (accounting for the company's 82.12% of the total share capital) tofulfill the tender offer obligation. On 28 August 2006, as approved by China Securities Depository& Clearing Corporation Ltd. Shenzhen Office, the registration and conditional placing proceduresof the 2 billion new shares were completed. On 28 September 2006, the privately placed shareswere approved by Shenzhen Stock Exchange to be placed in the stock market. The placing pricewas RMB4.6733 per share.Approved by the China Securities Regulatory Commission [2017] No. 1476, Bengang Steel PlateCo., Ltd. privately placed no more than 739,371,534 RMB ordinary shares (A shares) to no more
than 10 issuers. The non-public offering was completed on 9 February 2018, and 739,371,532shares were actually issued. The placing price was RMB5.41 per share.On August 20, 2021, Liaoning Provincial State-owned Assets Supervision and AdministrationCommission (hereinafter referred to as the Liaoning SASAC) and Ansteel Group Co., Ltd.(hereinafter referred to as Ansteel Group) signed the "Liaoning Provincial People's GovernmentState-owned Assets Supervision and Administration Commission and Ansteel Group Co., Ltd. onFree Transfer Agreement on the State-owned Equity of Bengang Group Co., Ltd. According to theagreement, Liaoning State-owned Assets Supervision and Administration Commission willtransfer its 51% shares of Bengang Group Co., Ltd. (hereinafter referred to as Bengang Group) toAngang Group for free. After the completion of the free transfer, Ansteel Group will become thecontrolling shareholder of Bengang Group, and Ansteel Group will hold 81.07% of the total sharecapital of Bengang Group Co., Ltd. indirectly.As at 30 June 2022, the capital shares were totaled to 4,108,209,106 shares.The Company’s uniform social credit code: 91210000242690243E.The Company’s registered address: 16th Renmin Road, Pingshan District, Benxi, LiaoningProvince.The Company’s legal representative: Huo Gang.The parent company of Bengang Steel Plates Co., Ltd is Benxi Steel and Iron (Group) Co., Ltd.and the actual controller is Ansteel Group Co., Ltd.Bengang Steel Plates Co., Ltd. belongs to ferrous metal smelting and rolling processing industryand is mainly involved in producing and trading of ferrous metal products.The financial statements have been approved for reporting by the board of directors of theCompany on 18 August 2022.
2. Consolidation scope
Please refer to “Note IX. Equity in other entities” in this note for the relevant information of theCompany's subsidiaries.Please refer to “VIII. Changes in the scope of consolidation” in this note for the changes in thescope of consolidation during the reporting period.IV. Basis of preparation
1. Basis of preparation
The financial statements have been prepared on the going concern basis of actual trading andevents in accordance with “Accounting Standards for Business Enterprises – Basic Standard” andrelevant specific standards, application materials, interpretations (together hereinafter referred toas “Accounting Standards for Business Enterprises”) issued by the Ministry of Finance, and“Information Disclosure Rules for Companies of securities for public issuance No. 15 – GeneralRegulations 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 tocontinue to operate in the next twelve months from the end of reporting period.V. Significant accounting policies and accounting estimates
Notes for specific accounting policies and accounting estimates:
The following disclosed content covers the specific accounting policies and accounting estimatesthat are adopted by the Company based on the actual production and operation characteristics.Please refer to Note V.10 Financial instruments, 11 Inventory, 15Fixed assets, 18 Intangible assets,25 Revenue under “3. Significant accounting policies and accounting estimates” for details.
1. Statement of compliance with China Accounting Standards for Business EnterprisesThe financial statements present truly and completely the financial position, operation results andcash flows of the Company during the reporting period in accordance with China AccountingStandards 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
(1) Business combination under common control
The assets and liabilities that the Company acquired in a business combination shall be measuredon the basis of their carrying amount of acquiree’s assets, liabilities (as well as the goodwillarising from the business combination) in the consolidated financial statement of the ultimatecontroller on the combining date. As for the balance between the carrying amount of the net assetsobtained by the Company and the carrying amount of the consideration paid by it (or the total parvalue of the shares issued), capital reserve needs to be adjusted. If the capital reserve is notsufficient, any excess shall be adjusted against retained earnings.
(2) Business combination not under common control
The Company shall, on the acquisition date, measure the assets given and liabilities incurred orassumed by an enterprise for a business combination in light of their fair values, and shall record
the balances between them and their carrying amounts into the profits and losses at the currentperiod. The Company shall recognize the positive balance between the combination costs and thefair value of the identifiable net assets it obtains from the acquiree as goodwill. The Companyshall treat the negative balance between the combination costs and the fair value of the identifiablenet assets it obtains from the acquiree into the profits and losses of the current period.The intermediary costs and relevant fees for the business combination paid by the acquirer,including the expenses for audit, assessment and legal services, shall be recorded into the profitsand losses at the current period. The transaction expenses for the issuance of equity securities forthe business combination shall be recorded into the initial recognition amount of equity securities.
6. Consolidation of Financial Statements
(1) Scope of consolidation
The scope of consolidation of consolidated financial statements is determined based on control.All the subsidies (including separable sections of the investees controlled by the Company) havebeen consolidated into the scope of consolidation for this period ended.
(2) Procedure of consolidation
The consolidated financial statements shall be presented by the parent based on the financialstatements of the parent and its subsidiaries, and using other related information. When preparingconsolidated financial statements, the parent shall consider the entire group as an accounting entity,adopt uniform accounting policies and apply the requirements of Accounting Standard forBusiness Enterprises related to recognition, measurement and presentation. The consolidatedfinancial statements shall reflect the overall financial position, operating results and cash flows ofthe group.The accounting policy and accounting period of the subsidiaries within the consolidation scopeshall be in accordance with those of the Company. If not, it is necessary to make the adjustmentaccording to the Company’s accounting policies and accounting period when preparing theconsolidated financial statements. For subsidiaries through acquisition that are now undercommon control, the financial statements are adjusted according to fair value of identifiable netassets on the acquisition date. For subsidiaries through acquisition that are under common control,the assets, liabilities (as well as the goodwill arising from purchasing the subsidiary by theultimate controller) are adjusted according to book value of net assets in the financial statementsof the ultimate controller.The owners’ interests, profit or loss, and comprehensive income of the subsidiary attributable tothe non-controlling shareholders shall be presented separately in the shareholders’ equity of theconsolidated balance sheet and under the item of net profit of the consolidated statement ofcomprehensive income and under the item of total comprehensive income. Where losses assumedby the minority exceed the minority’s interests in the beginning equity of a subsidiary, the excessshall 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 duringthe reporting period, it shall adjust the Opening balance in the consolidated statement of financialposition when preparing consolidated statement of financial position. The revenue, expenses and
profits of the subsidiaries from the acquisition date to the end of the reporting period are includedin the Company’s consolidated statement of comprehensive income. The cash flow of thesubsidiaries from the acquisition date to the end of the reporting period is included in theCompany’s consolidated statement of cash flows. And meanwhile the Company shall adjust therelevant items of the comparative financial statements as if the reporting entity for the purpose ofconsolidation has been in existence since the date the ultimate controlling party first obtainedcontrol.When the Company becomes capable of exercising control over an investee under commoncontrol due to additional investment or other reasons, adjustment shall be made as if the reportingentity after the combination has been in existence since the date the ultimate controlling party firstobtained control. The investment income recognized between date of previously obtaining equityinvestment and the date the acquiree and acquirer are under common control, which is later, andthe combining date, other comprehensive income and other changes of net assets arising from theequity investment previously-held before obtaining the control the acquiree shall be adjustedagainst the prior retained earnings of the comparative financial statements and the current profit orloss respectively.If it is now under common control, the Company shall not adjust the Opening balance in theconsolidated statement of financial position when preparing consolidated statement of financialposition. The revenue, expenses and profits of the subsidiaries from the acquisition date to the endof the reporting period are included in the parent company’s consolidated statement ofcomprehensive income. The cash flow of the subsidiaries from the acquisition date to the end ofthe 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 commoncontrol due to additional investment or other reasons, the acquirer shall remeasure its previouslyheld equity interest in the acquiree to its fair value at the acquisition date. The difference betweenthe fair value and the carrying amount shall be recognized as investment income for the periodwhen the acquisition takes place. When the previously-held equity investment is accounted forunder the equity method, any other comprehensive income previously recognized in relation to theacquiree’s equity changes shall be transferred to profit or loss for the current period when theacquisition takes place. Other comprehensive income arising fromremeasurement 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 andprofits of the subsidiary from the beginning of the reporting period to disposal date are included inthe Company’s consolidated statement of comprehensive income. The cash flow of thesubsidiaries from the beginning of the reporting period to disposal date is included in theCompany’s consolidated statement of cash flows.When the Company loses control over an investee due to partial disposal or other reasons, theacquirer shall re-measure the remaining equity interests in the acquiree to its fair value at theacquisition date. The difference, between sums of consideration received for disposal equityshares and fair value of the remaining shares, and sums of share of net assets of the subsidiarycalculated continuously from the acquisition date or the combination date based on the previous
shareholding proportion and goodwill, shall be recognized as investment income for the periodwhen the Company loses control over acquiree. When the previously-held equity investment isaccounted for under the equity method, any other comprehensive income previously recognized inrelation to the acquiree’s equity changes, and other equity changes rather than changes from netprofit, other comprehensive income and profit distribution, shall be transferred to investmentincome for the current period when the Company loses control over acquiree. Othercomprehensive income arising from re-measurement of defined benefit plan is excluded. When theCompany loses control over a subsidiary due to the increase of capital from other investors andthus the shareholding ratio of the Company declines, accounting treatment shall be in accordancewith 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 ofits subsidiary in stages, in determining whether to account for the multiple transactions as a singletransaction, the Company shall consider all of the terms and conditions of the transactions andtheir economic effects. One or more of the following may indicate that the Company shall accountfor 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 otherarrangement; and(d) One arrangement considered on its own is not economically justified, but it iseconomically justified when considered together with other arrangements.If each of the multiple transactions forms part of a bundled transaction which eventually results inloss of control of the subsidiary, these multiple transactions shall be accounted for as a singletransaction. In the consolidated financial statements, the difference between the considerationreceived and the corresponding proportion of the subsidiary’s net assets in each transaction priorto the loss of control shall be recognized in other comprehensive income and transferred to theprofit 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 donot form part of a bundled transaction, apply the treatment of disposing partial long-term equityinvestments in a subsidiary without loss of control prior to the loss of control. After the loss ofcontrol, apply the treatment of disposing the subsidiary in common cases.
3) Acquiring the subsidiaries’ equity interest held by non-controlling shareholdersWhere the Company has acquired a subsidiary’s equity interest held by non-controllingshareholders, the difference between the increase in the cost of long-term investments as a resultof acquisition of non-controlling interests and the share of net assets of the subsidiary calculatedcontinuously from the acquisition date or the combination date based on the new shareholdingproportion 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 excessshall be adjusted against retained earnings.
4) Disposing portion of equity investments in subsidiaries without losing control
When the Company disposes of a portion of the long-term equity investments in a subsidiarywithout loss of control, the difference between the amount of the consideration received and thecorresponding portion of the nest assets of the subsidiary calculated continuously from theacquisition date or the combination date related to the disposal of the long-term equity investmentsshall be adjusted to the capital reserve (capital premium or share premium) in the consolidatedfinancial statements. If the balance of the capital reserve is not sufficient, any excess shall beadjusted against retained earnings.
7. Classification of joint venture arrangements and accounting treatment
Joint venture arrangements are divided into joint operations and joint ventures.When the Company is a joint venture party of a joint venture arrangement and have the assetsrelated to the arrangement and assumes the liabilities related to the arrangement, it is a jointoperation.The Company confirms the following items related to the share of interest in the joint operationand performs accounting treatment in accordance with the relevant enterprise accountingstandards:
(a) Confirm the assets held by the company separately, and confirm the assets held jointly bythe Company's share;(b) Recognize the liabilities assumed by the Company separately and the liabilities jointlyassumed by the company's share;(c) Recognize the income generated by the sale of the Company’s share of common operatingoutput;(d) Recognize the revenue generated from the sale of joint operations based on the Company'sshare;(e) Confirm the expenses incurred separately and the expenses incurred in the joint operationaccording to the Company's share.
8. Recognition of cash and cash equivalents
The term “cash” refers to the cash on hand and the unrestricted deposit. And the term “cashequivalents” refers to short-term (maturing within three months from acquisition) and highlyliquid investments that are readily convertible to known amounts of cash and which are subject toan insignificant risk of change in value.
9. Foreign currency transaction and translation of foreign currency financial statements
(1) Foreign currency transaction
Foreign currency transactions are translated into RMB at the current rate at the day of transactions.The foreign currency monetary items shall be translated at the spot exchange rate on the balancesheet date. The balance of exchange arising from the difference between the spot exchange rate onthe balance sheet date and the spot exchange rate at the time of initial recognition or prior to the
balance sheet date, except those arising from the raising of special foreign debt for the purchase orconstruction of capitalizable assets thus shall be capitalized according to the borrowing costscapitalization 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 spotexchange rate on the balance sheet date. Among the owner's equity items, except the ones as"undistributed profits", others shall be translated at the spot exchange rate at the time when theyare incurred. The income and expense items in the income statement shall be translated using anexchange rate that is determined in a systematic and reasonable manner and approximates the spotexchange rate on the transaction date.When disposing an overseas business, the Company shall shift the balance, which is presentedunder the items of the owner's equities in the statement of financial position and arises from thetranslation of foreign currency financial statements related to this oversea business, into thedisposal profits and losses of the current period.
10. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
(1) Classification of financial instruments
The Company shall classify financial assets on the basis of both the entity’s business model formanaging the financial assets and the contractual cash flow characteristics of the financial asset as:
financial assets measured at amortized cost, financial assets measured at fair value through othercomprehensive income and financial assets measured at fair value through profit or loss at initialmeasurement.A financial asset shall be measured at amortized cost if both of the following conditions are met.The financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows and the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding.A financial asset shall be measured at fair value through other comprehensive income if both ofthe following conditions are met. The financial asset is held within a business model whoseobjective is achieved by both collecting contractual cash flows and selling financial assets and thecontractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding.The Company may make an election at initial recognition for non-trading equity instrumentinvestments whether it is designated as a financial asset (equity instrument) that is measured at fairvalue through other comprehensive income. The designation is made on the basis of a singleinvestment, and the related investment meets the definition of an equity instrument from theissuer's perspective.Other financial assets other than these are classified as financial assets measured at fair valuethrough profit or loss. At the initial recognition, in order to eliminate or significantly reduceaccounting mismatches, financial assets that should be classified as measured at amortized valueor financial assets measured at fair value through other comprehensive income can be designated
as financial assets measured at fair value through profit or loss.The Company shall classify financial liabilities as financial liabilities measured at amortized costand financial liabilities measured at fair value through profit or loss at initial measurement. In theinitial recognition, in order to eliminate or significantly reduce accounting mismatches, financialassets can be designated as financial assets measured at fair value and their changes included inthe current profit and loss. According to the above conditions, the Company does not have suchdesignated financial assets.The Company may, at initial recognition, designate a financial liability as measured at fair valuethrough profit or loss because either:
(a) it eliminates or significantly reduces an accounting mismatch;(b) a group of financial liabilities or financial assets and financial liabilities is managed andits performance is evaluated on a fair value basis, in accordance with a documented riskmanagement or investment strategy, and information about the group is providedinternally on that basis to the entity’s key management personnel;(c) the financial liability contains embedded derivatives that need to be separated.
(2) Recognition and measurement of financial instruments
1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivables, accounts receivables, otherreceivables, long-term receivables, debt investments, etc. At initial recognition, the Company shallmeasure a financial asset at its fair value plus or minus transaction costs that are directlyattributable to the acquisition or issue of the financial asset. The Company shall measure accountreceivables at their transaction price if the account receivables do not contain a significantfinancing component and accounts receivables that the company has decided not to consider for afinancing component of no more than one year.Interests calculated by using the effective interest method during the holding period shall be.recognized in profit or loss.When recovering or disposing the receivables, the difference between the price obtained and. thecarrying value shall be recognized 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 receivables financing, other debt investments, etc. At initial recognition, the Companyshall measure a financial asset at its fair value plus transaction costs that are directly attributable tothe acquisition or issuance of the financial asset. The financial assets are subsequently measured atfair value. Changes in fair value are included in other comprehensive income except for interestcalculated using the effective interest method, impairment losses or gains and exchange gains andlosses. When the financial assets are derecognized, the accumulated gain or loss previouslyrecognized in other comprehensive income is transferred from other comprehensive income andrecognized 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). includeother equity instrument investments, etc. At initial recognition, the Company shall measure afinancial asset at its fair value plus transaction costs that are directly attributable to the acquisitionor issue of the financial asset. The financial assets are subsequently measured at fair value.Changes in fair value are included in other comprehensive income. The dividends obtained arerecognized in profit and loss.When the financial assets are derecognized, the accumulated gain or loss previously. recognized inother comprehensive income is transferred from other comprehensive income and recognized inretained earnings.
4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include transactional financial assets, derivativefinancial assets, other non-current financial assets, etc.The Company shall measure the financial assets at fair value at initial recognition. Transactioncosts are recognized in profit 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. initiallyrecorded amount is recognized as investment income, and the gains and losses from changes infair 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. Transactioncosts are recognized in profit 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 amount is recognized as investment income, and the gains and losses fromchanges in fair value are adjusted.
6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized 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 are directly 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 or loss.When the financial liabilities are derecognized, the difference between the price obtained and. thecarrying value shall be recognized in profit and loss.
(3) Termination of recognition of financial assets and financial assets transfer
When one of the following conditions is met, the company terminates the recognition of financialassets.- Termination of contractual rights to receive cash flows from financial assets;- The financial assets have been transferred, and almost all the risks and rewards in theownership of the financial assets have been transferred to the transferee;
- The financial assets have been transferred. Although the company has neither transferrednor retained almost all the risks and rewards of the ownership of the financial assets, ithas not retained control of the financial assets.If it retained nearly all of the risks and rewards related to the ownership of the financial asset, itshall not stop recognizing the financial asset.To judge whether the transfer of a financial asset can satisfy the conditions as prescribed in theseStandards for stopping the recognition of a financial asset, the Company shall follow the principleof the substance over form. Transfer of an entire financial asset can be divided into partialfinancial assets transfer and entire financial asset transfer. If the transfer of an entire financial assetsatisfies the conditions for de-recognition, the difference between the amounts of the following 2items shall be recorded in the profits and losses of the current period:
1) The book value of the transferred financial asset; and
2) The sum of consideration received from the transfer, and the accumulative amount of thechanges of the fair value originally recorded in the owners' equities (in the event that thefinancial asset involved in the transfer is a financial asset Available-for-sale).If the transfer of partial financial asset satisfies the conditions to derecognize, the entire bookvalue of the transferred financial asset shall, between the portion whose recognition has beenstopped and the portion whose recognition has not been stopped (under such circumstance, theservice asset retained shall be deemed as a portion of financial asset whose recognition has notbeen stopped), be apportioned according to their respective relative fair value, and the differencebetween the amounts of the following 2 items shall be included into the profits and losses of thecurrent period :
1) The book value of the portion whose recognition has been stopped; and
2) The sum of consideration of the portion whose recognition has been stopped, and theportion of the accumulative amount of the changes in the fair value originally recorded in theowner's equities which is corresponding to the portion whose recognition has been stopped(in the event that the financial asset involved in the transfer is a financial assetAvailable-for-sale).If the transfer of financial assets does not satisfy the conditions to stop the recognition, it shallcontinue to be recognized as financial assets and the consideration received shall be recognized asfinancial liabilities.
(4) Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may therecognition of the financial liability be terminated in all or partly.Where the Company (debtor) enters into an agreement with a creditor so as to substitute theexisting financial liabilities by way of any new financial liability, and if the contractualstipulations regarding the new financial liability is substantially different from that regarding theexisting financial liability, it shall terminate the recognition of the existing financial liability, andshall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to part or all of the contractual stipulations of theexisting financial liability, it shall terminate the recognition of the existing financial liability orpart of it, and at the same time recognize the financial liability after revising the contractualstipulations as a new financial liability.Where the recognition of a financial liability is totally or partially terminated, the Company shallinclude into the profits and losses of the current period the difference between the carrying amountwhich has been terminated from recognition and the considerations it has paid (including thenon-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 ofrepurchase, the carrying amount of the whole financial liabilities in light of the comparatively fairvalue of the part that continues to be recognized and the part whose recognition has already beenterminated. The gap between the carrying amount which is distributed to the part whoserecognition has terminated and the considerations it has paid (including the noncash assets it hastransferred out and the new financial liabilities it has assumed) shall be recorded into the profitsand losses of the current period.
(5) Determination of the fair value of the financial assets (liabilities)
If active markets for the financial instruments exist, the fair value shall be measured by quotedprices in the active markets. If active markets for the financial instruments do not exist, valuationtechniques shall be applied for the measurement. The Company uses valuation techniquesappropriate in the circumstances and for which sufficient data are available to measure fair value.The Company chooses relevant observable inputs for identical or similar assets or liabilities. Onlywhen relevant observable inputs are unavailable or should the Company use unobservable inputsfor the asset or liability.
(6) Impairment provision of the financial assets
The Company recognize the expected credit loss on financial assets measured at amortized cost,financial assets measured at fair value through other comprehensive income (debt instruments),financial guarantee contract, and so on, on the individual or portfolio basis.The Company considers all reasonable and relevant information, including past events, currentconditions, and forecasts of future economic conditions, and uses the risk of default as the weightto calculate the probability-weighted amount of present value of difference between the cash flowreceivable from the contract and the cash flow expected to be received to confirm the expectedcredit loss.If the credit risk of the financial instrument has increased significantly since the initialconfirmation, the Company shall measure the loss allowance for a financial instrument at anamount equal to the lifetime expected credit losses. If the credit risk on a financial instrument hasnot increased significantly since initial recognition, the Company shall measure the loss allowancefor that financial instrument at an amount equal to 12-month expected credit losses. The increaseor reversal amount of loss allowance thus formed shall be included in the current profits and lossesas impairment losses or gains.The measurement of expected credit loss depends on whether there is a significant increase incredit risk of financial assets since the initial recognition.The company compares the risk of default on the balance sheet date of financial instruments with
the risk of default on the date of initial recognition to determine the relative change in the risk ofdefault during the expected life of the financial instrument to assess whether there is a significantincrease in credit risk of financial assets since the initial recognition. Generally, the Companybelieves that the credit risk of the financial instrument has significantly increased over 30 daysafter the due date, unless there is solid evidence that the credit risk of the financial instrument hasnot increased significantly since initial recognition.If the credit risk of a financial instrument at the reporting date is relatively low, the Companyconsiders that the credit risk of the financial instrument has not increased significantly since theinitial recognition.If there is objective evidence indicating that a certain financial asset has been impaired, theCompany shall recognize provision for impairment of the financial asset individually.For account receivables and contract assets recognized according to Accounting Standards forBusiness Enterprises No. 14 Revenue (2017), whether a significant financing component iscontained or not, the Company shall always measure the loss allowance at an amount equal tolifetime expected credit losses.For lease receivables, the Company shall always measure the loss allowance at an amount equal tolifetime expected credit losses.
11. Inventory
(1) Inventory classification
Inventories include material in transit, raw material, turnover materials, finished goods, work inprocess, issue commodity, materials for consigned processing, etc.Inventory is initially measured at cost. Inventory cost includes purchase cost, processing cost andother expenditures incurred to bring inventory to its current location and state.
(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 makeprovision for the inventory impairment lossOn the balance sheet date, inventories shall be measured at the lower of cost and net realizablevalue. When the cost of inventories is higher than its net realizable value, provision for inventoryimpairment loss shall be made. The net realizable value refers to the amount of the estimatedselling price of the inventory minus the estimated costs that will occur at the time of completion,estimated selling expenses, and relevant taxes in daily activities.The net realizable value of inventories (finished products, stock commodity, material, etc.) heldfor direct selling in the daily business activity shall be calculated by deducting the estimated saleexpense and relevant taxes from the estimated sale price of inventories; The net realizable value ofinventories for further processing in the daily business activity shall be calculated by deducting theestimated cost of completion, estimated sale expense and relevant taxes from the estimated saleprice 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 Companyholds more inventories than the quantities subscribed in the sales contract, the net realizable valueof the excessive part of the inventories shall be calculated on the ground of the general sales price.
After the inventory impairment is withdrawn, if the factors that previously affected the write-downof the inventory value have disappeared, causing the net realizable value of the inventory to behigher than its book value, it shall be reversed within the amount of the inventory impairment thathas been withdrawn, and the reverted amount shall be included in the current profit and loss.
(4) Inventory system
The Company uses perpetual inventory system.
(5) Amortization of low-valued consumables and packing materials
1) Low-valued consumables shall be amortized in full amount on issuance.
2) Packing materials shall be amortized in full amount on issuance.
12. Contract asset
(1) Recognition methods and criteria of contract assets
When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If the Companyhave the rights to receive consideration (the right is conditioned on factors other than the passageof time) by transferring goods or services to a customer, the entity shall present the contract as acontract asset. Contract assets and contract liabilities under the same contract are disclosed in netamount. An entity shall present any unconditional rights to consideration (only the passage of timeis required) separately as a receivable.
(2) Expected credit loss of contract assets
For the accounting policy of the expected credit loss of contract assets, please refer to Note 10 (6).Impairment provision of the financial assets .
13. Contract costs
Contract costs include costs to fulfill a contract and incremental costs of obtaining a contract.If the costs incurred in fulfilling a contract with a customer are not within the scope of anotherStandard, for example, Inventories, Property, Plant and Equipment or Intangible Assets, thecompany shall recognize an asset from the costs incurred to fulfil a contract only if those costsmeet all of the following criteria:
(a) the costs relate directly to a contract or to an expected contract;(b) the costs generate or enhance resources of the Company that will be used in satisfyingperformance obligations in the future; and(c) the costs are expected to be recovered.The company shall recognize as an asset the incremental costs of obtaining a contract with acustomer if the company expects to recover those costs.An asset recognized in accordance with contract costs shall be amortized in consistent with thetransfer to the customer of the goods or services to which the asset relates. The company mayrecognize the incremental costs of obtaining a contract as an expense when incurred if theamortization period of the asset is one year or less.
The company shall recognize an impairment loss in profit or loss to the extent that the carryingamount of an asset related to contract assets exceeds:
(a) the remaining amount of consideration that the company expects to receive in exchangefor the goods or services to which the asset relates; less(b) the costs that relate directly to providing those goods or services and that have not beenrecognized as expenses.The company shall recognize in profit or loss a reversal of some or all of an impairment losspreviously recognized when the impairment conditions no longer exist or have improved. Theincreased carrying amount of the asset shall not exceed the carrying amount that if no impairmentloss had been recognized previously.
14. Assets held for sale
(1) Criteria of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists onlywhen decisions about the relevant activities require the unanimous consent of the parties sharingcontrol. If the Company and other joint venture have joint control of the investee and have rightsto the net assets of the investee, the investee is a joint venture of the Company.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but not control or join control of those policies. If the Company could exertsignificant influence over the investee, the investee is the associate of the Company.
(2) The initial cost of long-term equity investment from business acquisition
1) Long-term equity investment from business acquisition
For a business combination under common control, if the consideration of the combination issatisfied by paying cash, transfer of non-cash assets or assumption of liabilities and issue of equitysecurities, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of the owner’s equity of the party being absorbed in theconsolidated financial statements of the ultimate controlling party at combination date. When aninvestor becomes capable of exercising control over an investee under common control due toadditional investment or other reasons, the initial investment cost shall be the absorbing party’sshare of the carrying amount of the owner’s equity of the party being absorbed in the consolidatedfinancial statements of the ultimate controlling party at combination date. The difference betweenthe initial investment cost and the carrying amount of the previously-held equity investment,together with the additional investment cost for new shares at combination date, shall be adjustedto the capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjustedto retained earnings.For a business combination not under common control, the initial investment cost of the long-termequity investment shall be the acquisition cost at the acquisition date. When an investor becomescapable of exercising control over an investee due to additional investment or other reasons, theinitial investment cost under the cost method shall be the carrying amount of previously-heldequity 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 thepurchase cost which is actually paid.The initial cost of a long-term equity investment obtained on the basis of issuing equity securitiesshall be the fair value of the equity securities issued.
(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 thecost method, an investing enterprise shall, in accordance with the attributable share of the netprofits or losses of the invested entity, recognize the investment profits or losses except thedividend declared but unpaid, which is included in the payment when acquiring the investment.
2) Equity method
A long-term equity investment in an associate or a joint venture shall be accounted for using theequity method. Where the initial investment cost of a long-term equity investment exceedsinvestor’s interest in the fair values of an investee’s identifiable net assets at the acquisition date,no adjustment shall be made to the initial investment cost. Where the initial cost is less than theinvestor’s interest in the fair values of the investee’s identifiable net assets at the acquisition date,the difference shall be credited to profit or loss for the current period, and the cost of long-termequity investment shall be adjusted accordingly.The Company shall recognize its share of the investee’s net profits or losses, as well as its share ofthe investee’s other comprehensive income, as investment income or losses and othercomprehensive income, and adjust the carrying amount of the investment accordingly. Thecarrying amount of the investment shall be reduced by the portion of any profit distributions orcash 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 orloss, other comprehensive income or profit distribution, and the carrying amount of the long-termequity investment shall be adjusted accordingly.The investor shall recognize its share of the investee’s net profits or losses after makingappropriate adjustments according to the Company’s accounting principles and operating periodbased on the fair values of the investee’s identifiable net assets at the acquisition date. During theholding period, if the investee makes consolidated financial statements, the Company shallcalculate its share based on the investee’s net profit, other comprehensive income and the amountof 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 associateor joint venture shall be eliminated in proportion to the investor’s equity interest in the investee,based on which investment income or losses shall be recognized, except the transaction ofinvestment or sale of assets is a business. Any losses resulting from transactions between theinvestor and investee which are attributable to asset impairment shall be recognized in full.The company’s net losses incurred by joint ventures or associates, in addition to assumingadditional loss obligations, are limited to the book value of long-term equity investments and otherlong-term equity that essentially constitutes net investment in joint ventures or associates. If ajoint venture or associated enterprise realizes net profits in the future, the company resumes
recognizing its share of profits after the share of profits makes up for the share of unrecognizedlosses.
3) Disposal of long-term equity investment
When disposing long-term equity investment, the difference between the proceeds actuallyreceived and the carrying amount shall be recognized in profit or loss for the current period.Partial disposal of long-term equity investments accounted for by the equity method, and theremaining equity is still accounted for by the equity method, the other comprehensive incomerecognized by the original equity method shall be carried forward according to the same basis asthe direct disposal of related assets or liabilities by the investee. All other changes in the interestsof the holders are carried forward to the current profit and loss on a pro rata basis.When an investor can no longer exercise joint control of or significant influence over an investeedue to partial disposal of equity investment or other reasons, any other comprehensive incomepreviously recognized shall be accounted for on the same basis as would have been required if theinvestee had directly disposed of the related assets or liabilities for the current period upondiscontinuation of the equity method. Other owner's equity change shall be transferred into profitor loss of current period in full when the Company cease to adopt the equity method.When an investor can no longer control the investee due to partial disposal, when the individualfinancial statements are prepared, the remaining equity can exercise joint control or significantinfluence on the investee, the equity method shall be used to account for the remaining equity. It isdeemed that the equity method is adopted for adjustment since the acquisition, and the othercomprehensive income recognized before the control of the investee is obtained is carried forwardon the same basis as the direct disposal of related assets or liabilities by the investee, because theequity method is used for accounting. The confirmed changes in other owners’ equity are carriedforward to the current profit and loss on a pro rata basis. If the remaining equity cannot exercisejoint control or exert significant influence on the investee, it shall be recognized as a financialasset, and the difference between its fair value and book value on the date when control is lostshall be included in the current profit and loss, and other comprehensive income and other owner’sinterests previously recognized shall be transferred to profit or loss in full.If the equity investment of a subsidiary is disposed through multiple transactions until it losescontrol, which is a package transaction, each transaction shall be accounted as a transaction thatdisposes of the equity investment of the subsidiary and loses control. Each transaction before theloss of control, the difference between the disposal price and the book value of the correspondingdisposed part of long-term equity investment is firstly recognized as other comprehensive incomein individual financial statements, and then transferred to the current profit and loss when thecontrol is lost. If it is not a package transaction, each transaction shall be accounted separately.
15. Investment property
Investment property refers to real estate held for the purpose of earning rent or capital appreciation,or both, including leased land use rights, land use rights held and prepared for transfer afterappreciation, and leased buildings (Buildings that are leased after completion of self-constructionor development activities and buildings that are being used for rental in the future duringconstruction or development).
Subsequent expenditures related to investment property are included in the cost of investmentproperty when the relevant economic benefits are likely to flow in and their costs can be reliablymeasured. Otherwise, they are included in the current profit and loss when incurred.The company uses the cost model to measure the existing investment property. For investmentproperty measured according to the cost model - the rental building adopts the same depreciationpolicy as the fixed assets of the company, and the land use right for rental is amortized accordingto the same amortization policy as the intangible assets.
16. 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 ofone fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions asfollows:
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.
Fixed assets are initially measured at cost (and considering the impact of expected dismantlingcost factors).Subsequent expenditures related to fixed assets are included in the cost of fixed assets when therelated economic benefits are likely to flow in and their costs can be reliably measured; the bookvalue of the replaced part is derecognized; all other subsequent expenditures are incurred shall beincluded in the current profit and loss.
(2) Fixed assets depreciation
Fixed assets are depreciated under the straight-line method. The depreciation rate is determinedaccording to the category of assets, the useful life and the expected residual rate. If thecomponents of the fixed assets have different useful lives or provide the economic benefits in adifferent way, then different depreciation rate or method shall be applied and the depreciation ofthe components shall be calculated separately.Fixed assets acquired under financial leasing is depreciated over the useful life if it is reasonablycertain that the ownership of the leased assets will be acquired upon expiry of lease, or over theshorter of lease term and useful life if it is not reasonably certain that the ownership of the leasedassets will be acquired upon expiry of lease.Details of classification, depreciation period, residual value rate and annual depreciation rate areas follows:
| Category | Depreciation method | Depreciation Period | Residual Value Rate (%) | Depreciation Rate (%) |
Plants and Buildings
| Plants and Buildings | straight line method | 10-45 years | 0.00 | 2.22-10.00 |
| Machinery | straight line method | 10-28 years | 3.00 | 3.46-9.70 |
| Transportation and other equipment | straight line method | 8-22 years | 3.00 | 4.41-12.13 |
(3) Disposal of fixed assets
When a fixed asset is disposed, or it is expected that no economic benefits will be generatedthrough use or disposal, the recognition of fixed asset shall be de terminated. The amount ofdisposal income of fixed assets raising from sell, transfer, scrapping or damage shall be includedin the current profit and loss after deducting its book value and related taxes.
17. Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includesconstruction costs, installation costs, borrowing costs that meet the capitalization conditions, andother necessary expenditures incurred before the construction in progress reaches its intended usestatus.Construction in progress is transferred to fixed asset when it has reached its working condition forits intended use and depreciation will be accrued from the next month.
18. Borrowing costs
(1) Principle of the recognition of capitalized borrowing costs
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisitionand construction or production of assets eligible for capitalization, it shall be capitalized andrecorded into the costs of relevant assets. Other borrowing costs shall be recognized as expenseson the basis of the actual amount incurred, and shall be recorded into the current profits andlosses.Assets eligible for capitalization refer to the fixed assets, investment property, inventories andother assets, of which the acquisition and construction or production may take quite a long time toget ready for its intended use or for sale.
(2) The capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation ofcapitalization of the borrowing costs, excluding the period of suspension of capitalization of theborrowing costs.The borrowing costs shall not be capitalized unless they simultaneously meet the followingrequirements:
1) The asset disbursements have already incurred, which shall include cash, transferrednon-cash assets or interest bearing debts paid for the acquisition and construction orproduction activities for preparing assets eligible for capitalization;
2) The borrowing costs has already incurred; and
3) The acquisition and construction or production activities which are necessary to prepare theasset for its intended use or sale have already started.When the qualified asset under acquisition and construction or production is ready for the intendeduse or sale, the capitalization of the borrowing costs shall be ceased.
(3) The suspension of capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormallyand the interruption period lasts for more than 3 months, the capitalization of the borrowing costs
shall be suspended. If the interruption is a necessary step for making the qualified asset underacquisition and construction or production ready for the intended use or sale, the capitalization ofthe borrowing costs shall continue. The borrowing costs incurred during such period shall berecognized as expenses, and shall be recorded into the profits and losses of the current period, tillthe acquisition and construction or production of the asset restarts.
(4) Method of calculating the capitalization rate and capitalized amount of borrowing costsFor interest expense (minus the income of interests earned on the unused borrowing loans as adeposit in the bank or investment income earned on the loan as a temporary investment) and theancillary expense incurred to a specifically borrowed loan, those incurred before a qualified assetunder acquisition, construction or production is ready for the intended use or sale shall becapitalized at the incurred amount when they are incurred, and shall be recorded into the costs ofthe asset eligible for capitalization.The Company shall calculate and determine the to-be-capitalized number of interests on thegeneral borrowing by multiplying the weighted average asset disbursement of the part of theaccumulative asset disbursements minus the general borrowing by the capitalization rate of thegeneral borrowing used. The capitalization rate shall be calculated and determined in light of theweighted average interest rate of the general borrowing.During the capitalization period, the exchange difference between the principal and interest of theforeign currency special loan is capitalized and included in the cost of the assets that meet thecapitalization conditions. Exchange differences arising from the principal and interest of foreigncurrency borrowings other than foreign currency special borrowings are included in the currentprofits and losses.
19. Intangible Assets
(1) Measurement of Intangible Assets
1) Initial measurement is based on cost upon acquisition
The cost of an intangible asset on acquisition include the purchase price, relevant taxes and othernecessary disbursements which may be directly attributable to bringing the intangible asset to theconditions for the expected purpose.
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 methodduring the period when the intangible asset can bring economic benefits to the enterprise. If it isunable to estimate the beneficial period of the intangible asset, it shall be regarded as an intangibleasset with uncertain service life and shall not be amortized.
(2) Estimated useful lives of intangible assets with limited useful lives
| Item | Estimated useful life | Criteria |
| Land use right | 50 years | Land use right certificate |
(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 beclassified into research expenditures and development expenditures.
Research phase refers to the phase of creative and planned investigation to acquire and study toacquire and understand new scientific or technological knowledge.Development phase refers to the phase during which the result of research phase or otherknowledge is applied into certain projects or designs for the manufacturing of new or substantiallyimproved material, device and product before commercial manufacturing and use.
20. Impairment of long-term assetsFor long-term assets such as long-term equity investments, Investment property under the costmodel, fixed assets, construction in progress, intangible assets with limited useful lives etc., theCompany shall perform impairment tests at the period end if there is clear indication ofimpairment. If the recoverable amounts of long-term assets are less than their carrying amounts,the carrying amounts of the assets shall be written down to their recoverable amounts. Thewrite-downs are recognized as impairment losses and charged to current profit and loss. Therecoverable amounts of long-term assets are the higher of their fair values less costs to sell and thepresent values of the future cash flows expected to be derived from the assets. The Company shallestimate its recoverable amount on an individual basis. Where it is difficult to do so, it shalldetermine the recoverable amount of the assets on the basis of the asset group to which the assetbelongs. The term "assets group” refers to a minimum combination of assets by which the cashflows could be generated independently.The goodwill, intangible assets with uncertain useful life and intangible assets not meeting theexpected condition for use they shall be subject to an impairment test at least at the end of eachyear.When the Company makes an impairment test of assets, it shall, as of the purchasing day,apportion the carrying value of the business reputation formed by merger of enterprises to therelevant asset groups by a reasonable method. Where it is difficult to do so, it shall be apportionedto the relevant combinations of asset groups. When apportioning the carrying value of the businessreputation to the relevant asset groups or combinations of asset groups, it shall be apportioned onthe basis of the proportion of the fair value of each asset group or combination of asset groups tothe total fair value of the relevant asset groups or combinations of asset groups. Where it isdifficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion ofthe carrying value of each asset group or combination of asset groups to the total carrying value ofthe relevant asset groups or combinations of asset groups.When making an impairment test on the relevant asset groups or combination of asset groupscontaining business reputation, if any evidence shows that the impairment of asset groups orcombinations of asset groups is possible, the Company shall first make an impairment test on theasset groups or combinations of asset groups not containing business reputation, calculate therecoverable amount, compare it with the relevant carrying value and recognize the correspondingimpairment loss. Then the Company shall make an impairment test of the asset groups orcombinations of asset groups containing business reputation, and compare the carrying value of
these asset groups or combinations of asset groups (including the carrying value of the businessreputation apportioned thereto) with the recoverable amount. Where the recoverable amount of therelevant assets or combinations of the asset groups is lower than the carrying value thereof, it shallrecognize the impairment loss of the business reputation.Impairment losses on long-term assets shall not be reversed in subsequent accounting periods oncerecognized.
21. Long-term deferred expense
The long-term deferred expense refers to the expenses incurred but shall be borne by current andsubsequent accounting period, which is more than one year.The long-term deferred expense shall be amortized over its beneficiary period evenly.
22. Contract liability
When either party to a contract has performed, the Company shall present the contract in thestatement of financial position as a contract asset or a contract liability, depending on therelationship between the Company’s performance and the customer’s payment. If a customer paysconsideration, or the Company has a right to an amount of consideration before the Companytransfers a good or service to the customer, the Company shall present the contract as a contractliability. Contract assets and contract liabilities under the same contract are disclosed in netamount.
23. Employee benefits
(1) Accounting treatment for short employee benefit
The Company shall recognize, in the accounting period in which an employee provides service,actually occurred short-term employee benefits as a liability, with a corresponding charge to theprofit or loss or cost of an asset for the current period.Payments made by an enterprise of social security contributions for employees, payments ofhousing funds, and union running costs employee education costs provided in accordance withrelevant requirements shall, in the accounting period in which employees provide services, becalculated according to prescribed bases and percentages in determining the amount of employeebenefits.The employee welfare expenses incurred by the company are included in the current profit andloss or related asset costs based on the actual amount when they actually occur. Among them,non-monetary benefits are measured at fair value.
(2) Accounting treatment of post-employment benefits
1) Defined contribution plan
The Company shall recognize, in the accounting period in which an employee provides service,pension fund and unemployment fund for employees as a liability according to the localgovernment regulations. The amount shall be calculated according to local prescribed bases andpercentages in determining the amount of employee benefits, with a corresponding charge to the
profit or loss or cost of an asset for the current period.
2) Defined benefit plan
None.
(3) Accounting treatment of termination benefits
The Company shall recognize an employee benefits liability for termination benefits, with acorresponding charge to the profit or loss for the current period, at the earlier of the followingdates: when the Company cannot unilaterally withdraw the offer of termination benefits becauseof an employment termination plan or a curtailment proposal; or when the Company recognizescosts or expenses related to a restructuring that involves the payment of termination benefits.
24. Estimated liabilities
The obligation pertinent to a contingency shall be recognized as an estimated liability when thefollowing 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 ofperformance of the obligation; and
3) The amount of the obligation can be measured in a reliable way.
The estimated debts shall be initially measured in accordance with the best estimate of thenecessary expenses for the performance of the current obligation.To determine the best estimate, an enterprise shall take into full consideration of the risks,uncertainty, time value of money, and other factors pertinent to the Contingencies. If the timevalue of money is of great significance, the best estimate shall be determined after discounting therelevant 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 rangeare equally likely to occur, the best estimate shall be determined in accordance with the averageestimate within the range, that is, the average of the upper and lower limit.If there is not a sequent range for the necessary expenses and if the outcomes within this range arenot equally likely to occur, the best estimate shall be determined as follows:
1) If the Contingencies concern a single item, it shall be determined in the light of the mostlikely outcome.
2) If the Contingencies concern two or more items, the best estimate shall be calculated anddetermined 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 anenterprise is expected to be compensated by a third party, the compensation shall be separatelyrecognized as an asset only when it is virtually certain that the reimbursement will be obtained.The amount recognized for the reimbursement shall not exceed the book value of the estimateddebts.
The company reviews the book value of the estimated liabilities on the balance sheet date. If thereis conclusive evidence that the book value does not reflect the current best estimate, the bookvalue will be adjusted according to the current best estimate.
25. Revenue
(1) The general principle of revenue recognition and measurement
The company shall recognize revenue when (or as) the company satisfies a performanceobligation when (or as) the customer obtains control of a promised good or service. Control of apromised good or service refers to the ability to direct the use of, and obtain substantially all of theremaining benefits from it.If the contract contains two or more performance obligations, the company shall allocate thetransaction price to each individual performance obligation based on the relative proportion of thestand-alone selling price of the goods or services promised by each individual performanceobligation on the date of the contract. The company measures revenue based on the transactionprice allocated to each individual performance obligation.The transaction price is the amount of consideration to which the company expects to be entitledin exchange for transferring promised goods or services to a customer, excluding amountscollected on behalf of third parties or amounts expected to be returned to customers. The companyshall consider the terms of the contract and its customary business practices to determine thetransaction price. When determining the transaction price, the company shall consider the effectsof all of the following: variable consideration, the existence of a significant financing componentin the contract, non-cash consideration, and consideration payable to a customer. The companydetermines the transaction price that includes variable consideration at an amount that does notexceed the amount of accumulated recognized revenue that is unlikely to be materially reversedwhen the relevant uncertainty is eliminated. If there is a significant financing component in thecontract, the company shall recognize revenue at an amount that reflects the price that a customerwould have paid for the promised goods or services if the customer had paid cash for those goodsor services when (or as) they transfer to the customer, and use the effective interest method toamortize the difference between the transaction price and the contract consideration during thecontract period. If the interval between the transfer of control and the payment by the customerdoes not exceed one year, the financing component will not be considered.The company transfers control of a good or service over time and, therefore, satisfies aperformance obligation and recognizes revenue over time, if one of the following criteria is met.Otherwise, the company satisfies the performance obligation at a point in time.
1) the customer simultaneously receives and consumes the benefits provided by thecompany’s performance as the company performs;
2) the company’s performance creates or enhances an asset that the customer controls as theasset is created or enhanced; or
3) the company’s performance does not create an asset with an alternative use to the companyand the company has an enforceable right to payment for performance completed to date.The company shall recognize revenue over time by measuring the progress towards complete
satisfaction of that performance obligation, except where the performance progress cannot bereasonably determined. The company considers the nature of the goods or services and adopts theoutput method or the input method to determine the progress of performance. Where theperformance progress cannot be reasonable determined, but the company expects to recover thecosts incurred in satisfying the performance obligation, the company shall recognize revenue onlyto the extent of the costs incurred until such time that it can reasonably measure the outcome ofthe performance obligation.For performance obligations satisfied at a certain point in time, the company shall recognizerevenue at the point when the customer obtains control of the relevant goods or services. Todetermine the point in time at which a customer obtains control of a promised goods or services,the company shall consider requirements as follows:
1) The company has a present right to payment for the promised goods or services and thecustomer is presently obliged to pay for that;
2) The company has transferred the legal title of the goods to the customer, that is, thecustomer has the legal title to the goods;
3) The company has transferred physical possession of the goods to the customer, that is, thecustomer has taken possession of the goods;
4) The company has transferred the significant risks and rewards of ownership of the goods tothe customer, that is, the customer has the significant risks and rewards of ownership of thegoods;
5) The customer has accepted the promised goods or services.
(2) The specific criteria of revenue recognition and measurement
Commodity sales contracts between companies and customers usually only include performanceobligations for the transfer of steel and other commodities or service. This type of performanceobligation is a performance obligation performed at a certain point in time. The companyrecognizes revenue when the customer obtains control of the relevant goods or services. Whenjudging whether the customer has obtained control of goods or services, the company considersthe following signs:
The company obtains the present right of collection of receivables, the legal ownership of thegoods is transferred to the customer, the physical assets of the goods are transferred to thecustomer, the company transfers the main risks and rewards of the ownership of the goods to thecustomer, and the customer has accepted the goods.
26. Government Subsidies
(1) Types
A government subsidy means the monetary or non-monetary assets obtained free of charge by theCompany from the government. Government subsidies consist of the government subsidiespertinent to assets and government subsidies pertinent to income.Government subsidies related to assets are government subsidies whose primary condition is thatan entity qualifying for them should purchase, construct or otherwise acquire long-term assets.The government subsidies related to incomes refers to government subsidies other than those
related to assets.The standard of the Company recognizing the government subsidies related to assets is: an entityqualifying for them should purchase, construct or otherwise acquire long-term assets.The standard of the Company recognizing the government subsidies related to income is: Inaddition to government subsidies related to assets, government subsidies that have been clearlytargeted for subsidies.For the the government subsidy which does not specify the subsidy object in governmentdocument will be classified as asset-related or income-related judgment basis: if a long-term assetcan be formed, the government subsidy part corresponding to the asset value shall be regarded asan asset-related subsidy, the rest are regarded as government subsidies related to income; if it isdifficult to distinguish, the whole government subsidies are regarded as government subsidiesrelated to income.
(2) Recognition
Government subsidies related to assets are recognized when it actually received, and transferredthe deferred income to the current profit and loss according to the estimated using period of thelong-term assets from when the long-term assets are available.Government subsidies related to income are recognized when it actually received. Which tocompensate the relevant expenses or losses in subsequent periods shall be included in the currentnon-operating income during the period when the relevant expenses are recognized. Which tocompensate expenses or losses already incurred shall be recognized in current non-operatingincome.
(3) Accounting treatment
Government subsidies related to assets shall be recognized by deducting the subsidies at the caringamount of the assets or recognized as deferred income. Subsidies that recognized as deferredincome shall be recognized in profit or loss on a systematic basis over the periods during theuseful lives of the relevant assets (Subsidies related to daily activities should be recorded in OtherIncome. Subsidies that unrelated to daily activities should be recorded in Non-operating Income).The government subsidies related to incomes to compensate future expenses, shall be recognizedas deferred income and transferred to current profit or loss (Subsidies related to daily activitiesshould be recorded in Other Income. Subsidies that unrelated to daily activities should be recordedin Non-operating Income) in the period during which the expenses compensation is recognized ordeduct relevant cost or loss. Government subsidies to compensate expenses or losses alreadyincurred shall be recognized in current profit and loss (Subsidies related to daily activities shouldbe recorded in Other Income. Subsidies unrelated to daily activities should be recorded inNon-operating Income) or deduct relevant cost or loss.The policy discount loans obtained by the company are divided into the following two situationsand are separately accounted for:
1) If the government allocates discounted funds to the loan bank and the loan bank providesloans to the company at a policy preferential interest rate, the company will take the actualamount of the loan received as the entry value of the loan and calculate the relevant borrowingcosts based on the loan principal and the policy preferential interest rate.
2) If the government directly allocates the discounted funds to the company, the company willoffset the relevant borrowing costs with the corresponding discounts.
27. Deferred tax assets and deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except for income tax arisingfrom business mergers and transactions or events that are directly included in owner's equity(including other comprehensive income), the company will include current income tax anddeferred income tax in current profit and loss.Deferred income tax assets and deferred income tax liabilities are calculated and confirmed basedon the difference (temporary difference) between the tax base of assets and liabilities and theirbook value.An enterprise shall recognize the deferred income tax assets arising from a deductible temporarydifference to the extent of the amount of the taxable income which it is most likely to be obtainedand which can be deducted from the deductible temporary difference. As for any deductible loss ortax deduction that can be carried forward to the next year, the corresponding deferred income taxassets shall be determined to the extent that the amount of future taxable income to be offset bythe deductible loss or tax deduction to be likely obtained.All taxable temporary differences shall be recognized as deferred tax liabilities with certainlimited exceptions.Exceptions when deferred tax assets and deferred tax liabilities are not recognized include: initialrecognition of goodwill; initial recognition of an asset or liability in a transaction or event that isnot a business combination and at the time of the transaction, affects neither accounting profit nortaxable profit (tax loss).For taxable temporary differences related to investments in subsidiaries, associates and jointventures, deferred income tax liabilities are recognized, unless the company can control the timingof the reversal of the temporary differences and the temporary differences are likely not to betransferred back in the foreseeable future. For deductible temporary differences related toinvestments in subsidiaries, associates and joint ventures, when the temporary differences arelikely to be reversed in the foreseeable future and are likely to be used to deduct the taxableincome of deductible temporary differences in the future, income tax assets are recognized.On the balance sheet date, deferred income tax assets and deferred income tax liabilities aremeasured at the applicable tax rate during the period when the relevant assets are expected to berecovered or the relevant liabilities are expected to be recovered in accordance with the provisionsof the tax law.On the balance sheet date, the company reviews the book value of deferred income tax assets. If itis probable that sufficient taxable income cannot be obtained in the future to offset the benefits ofdeferred income tax assets, the book value of the deferred income tax assets shall be written down.When it is possible to obtain sufficient taxable income, the reduced amount shall be reversed.When the Company has the statutory right to offset and intend to offset or obtain assets and payoff liabilities at the same time, the current income tax assets and current income tax liabilities arepresented at the net amount after offsetting.An entity shall offset deferred tax assets and deferred tax liabilities if, and only if: (a) the entity
has a legally enforceable right to set off current tax assets against current tax liabilities; and (b) thedeferred tax assets and the deferred tax liabilities relate to income taxes levied by the sametaxation authority on either:(i) the same taxable entity; or (ii) different taxable entities whichintend either to settle current tax liabilities and assets on a net basis, or to realize the assets andsettle the liabilities simultaneously, in each future period in which significant amounts of deferredtax liabilities or assets are expected to be settled or recovered.
28. Leases
A lease is a contract whereby the lessor transfers the right of usage on asset to the lessee forconsideration within a certain period of time.On the contract commencement date, the company evaluates whether the contract is a lease orincludes a lease. If one party in the contract transfers the right to control the use of one or moreidentified assets within a certain period in exchange for consideration, the contract is a lease orincludes a lease.If the contract contains multiple separate leases at the same time, the company will split thecontract and conduct accounting treatment for each separate lease. If the contract includes bothlease and non-lease parts, the company, as the lessor and lessee, will split the lease and non-leaseparts for accounting treatment.For rent reductions, exemptions, deferred payments and other rental reductions directly caused bythe COVID-19 epidemic and reached on existing lease contracts, if the following conditions aremet at the same time, the company adopts a simplified method for all lease selections, and doesnot evaluate whether there is a lease change. Lease classification is not reassessed:
1) The lease consideration after the concession is reduced or basically unchanged from thatbefore the concession. The lease consideration may be undiscounted or discounted at thediscount rate before the concession;
2) The concession is only for lease payments payable before June 30, 2022, an increase inlease payments payable after June 30, 2022 does not affect meeting this condition, and adecrease in lease payments payable after June 30, 2022 does not satisfy this condition;
3) The other terms and conditions of the lease have not changed significantly after taking intoaccount both qualitative and quantitative factors.
(1) The company as lessee
1) Right-of-use assets
On the beginning date of the lease term, the Group recognizes the right to use assets for leasesother than short-term leases and low value asset leases. The right of use assets are initiallymeasured at cost. This cost includes:
a) Initial measurement amount of lease liabilities;b) For the lease payment paid on or before the beginning of the lease term, if there is leaseincentive, the relevant amount of lease incentive enjoyed shall be deducted;c) Initial direct costs incurred;d) The estimated costs incurred for dismantling and removing the leased assets, restoring the
site where the leased assets are located or restoring the leased assets to the state agreed in thelease terms.Depreciation method of right of use assets the company adopts the straight-line method fordepreciation. If it can be reasonably determined that the ownership of the leased asset will beobtained at the expiration of the lease term, the company shall accrue depreciation within theremaining useful life of the leased asset; otherwise, the leased asset shall be depreciated within theshorter of the lease term and the remaining useful life of the leased asset.For the principles which company determines whether the right-of-use asset has been impaired,please refer to Note (19) Impairment of long-term assets under “3. Significant accounting policiesand accounting estimates”.
2) Lease liabilities
At the beginning of the lease term, the company recognizes the present value of the unpaid leasepayments as lease liabilities, except for short-term leases and low value asset leases. The leaseliability is initially measured at the present value of outstanding lease payments. Lease paymentsinclude:
a) Fixed payments (including actual fixed payments), if there is a lease incentive, deduct therelevant amount of the lease incentive;b) Variable lease payments that depend on an index or ratio;c) The expected payment according to the residual value of the guarantee provided by thecompany;d) The exercise price of the purchase option, provided that the company is reasonably certainthat the option will be exercised;e) Payments for exercising the option to terminate the lease, provided that the lease termreflects that the company will exercise the option to terminate the lease.The company uses the interest rate implicit in the lease as the discount rate, but if the interest rateimplicit in the lease cannot be reasonably determined, the company's incremental borrowing rateis used as the discount rate.The company calculates the interest expense of the lease liability in each period of the lease termaccording to the fixed periodic interest rate, and includes it into the current profit and loss or thecost of related assets.Variable lease payments that are not included in the measurement of lease liabilities are includedin the current profit and loss or the cost of related assets when they are actually incurred.After the commencement date of the lease term, the Company shall re-measure the lease liabilitiesand adjust the corresponding right-of-use assets under the following circumstances. If the bookvalue of the right-of-use assets has been reduced to zero, but the lease liabilities still need to befurther reduced, the difference is included in the current profit and loss:
a) When there is a change in the evaluation results of the purchase option, lease renewaloption or termination option, or the actual exercise of the aforementioned options isinconsistent with the original evaluation result, the Company shall calculate the lease
payment amount after the change and the revised discounted value. Remeasure the leaseliability at the present value of the rate calculation;b) When the actual fixed payment changes, the estimated payable amount of the residualvalue guarantee changes, or the index or ratio used to determine the lease payment changes,the company calculates the present value based on the changed lease payment and theoriginal discount rate Remeasure the lease liability. However, where changes in leasepayments result from changes in floating interest rates, a revised discount rate is used tocalculate the present value.
3) Short-term leases and low-value asset leases
The company chooses not to recognize right-of-use assets and lease liabilities for short-term leasesand low-value asset leases, and includes the relevant lease payments in the current profit and lossor related asset costs on a straight-line basis over each period of the lease term. Short-term leasesrefer to leases with a lease term of not more than 12 months and excluding purchase options on thecommencement date of the lease term. A low-value asset lease refers to a lease with a lower valuewhen a single leased asset is a brand-new asset. If the company subleases or expects to subleasethe leased assets, the original lease is not a low-value asset lease.
4) Lease change
If the lease changes and the following conditions are met at the same time, the company willaccount for the lease change as a separate lease:
a) The lease modification expands the scope of the lease by adding the right to use one ormore leased assets;b) The increased consideration is equivalent to the amount adjusted by the individual priceof the expanded part of the lease scope according to the contract.If the lease change is not accounted for as a separate lease, on the effective date of the leasechange, the company re-allocates the consideration of the contract after the change, re-determinesthe lease term, and calculates the current value based on the lease payment after the change andthe revised discount rate. value to remeasure the lease liability.If the lease change leads to the narrowing of the lease scope or the shortening of the lease term,the company will reduce the book value of the right-of-use asset accordingly, and include therelevant gains or losses on partial or complete termination of the lease into the current profit andloss. If other lease changes result in re-measurement of lease liabilities, the Company adjusts thebook value of the right-of-use asset accordingly.
5) Rent concessions related to COVID-19
For those adopting the simplified method of rent reduction related to the new crown pneumoniaepidemic, the company does not assess whether there is a lease change, and continues to calculatethe interest expense of the lease liability at the same discount rate as before the reduction andinclude it in the current profit and loss, and continue to use the same discount rate as before thereduction. The right-of-use asset is depreciated using the same method as before. In the event ofrent reduction or exemption, the company will treat the reduced rent as the variable lease paymentamount. When the original rent payment obligation is relieved by reaching a concessionagreement, the discounted amount at the undiscounted or pre-discount discount rate will be used
to offset the cost of relevant assets. or expenses, and adjust the lease liabilities accordingly; if therent payment is delayed, the company offsets the lease liabilities recognized in the previous periodwhen the actual payment is made.For short-term leases and low-value asset leases, the company continues to include the originalcontract rent in the cost or expense of the relevant assets in the same way as before the concession.In the event of rent reduction or exemption, the company will take the reduced rent as the variablelease payment, and write down the relevant asset costs or expenses during the reduction orexemption period; if the rent payment is delayed, the company will recognize the rent payable aspayable during the original payment period. When the actual payment is made, the payablesrecognized in the previous period are offset.
(2) The company as lessor
On the lease commencement date, the Company classifies leases into finance leases and operatingleases. A financial lease is a lease that essentially transfers almost all the risks and rewardsassociated with the ownership of the leased asset, regardless of whether the ownership isultimately transferred. Operating leases refer to leases other than finance leases. When thecompany acts as a sublease lessor, it classifies the sublease based on the right-of-use asset arisingfrom the original lease.
1) Accounting treatment of operating leases
Lease receipts from operating leases are recognized as rental income on a straight-line basis overeach period of the lease term. The Company capitalizes the initial direct expenses incurred inrelation to operating leases, and is amortized and included in the current profit and loss on thesame basis as the rental income is recognized during the lease term. Variable lease payments notincluded in lease receipts are included in profit or loss for the period when they are actuallyincurred. If the operating lease is changed, the company will account for it as a new lease from theeffective date of the change, and the advance receipts or lease receivables related to the leasebefore the change are regarded as the receipts of the new lease.
2) Accounting treatment of financial lease
On the lease commencement date, the Company recognizes the finance lease receivables for thefinance lease and derecognizes the finance lease assets. When the Company initially measures thefinance lease receivables, the net investment in the lease is regarded as the entry value of thefinance lease receivables. The net lease investment is the sum of the unguaranteed residual valueand the present value of the lease receipts not yet received at the commencement date of the leaseterm, discounted at the interest rate implicit in the lease.The company calculates and recognizes the interest income in each period of the lease periodaccording to the fixed periodic interest rate. For the derecognition and impairment of finance leasereceivables, please refer to Note (10) Financial instruments under “3. Significant accountingpolicies and accounting estimates”.Variable lease payments that are not included in the net lease investment measurement areincluded in the current profit and loss when they are actually incurred.If the financial lease is changed and the following conditions are met at the same time, thecompany will account for the change as a separate lease:
a) The change expands the scope of the lease by increasing the right to use one or more of
the leased assets;b) ? The increased consideration is equivalent to the stand-alone price of the expanded leasearea, adjusted for the contract.c) If the modification of a financial lease is not accounted for as a separate lease, thecompany shall deal with the modified lease under the following circumstances:
d) If the change takes effect on the lease inception date, the lease will be classified as anoperating lease, and the company will account for it as a new lease from the effective date ofthe lease change, and use the net lease investment before the effective date of the leasechange as the book value of the leased asset;e) If the change takes effect on the lease commencement date, the lease will be classified as afinancial lease, and the Company will conduct accounting treatment in accordance with thepolicy on revising or renegotiating contracts in Note (10) Financial instruments under “3.Significant accounting policies and accounting estimates”.
3) Rent concessions related to COVID-19
For operating leases that adopt the simplified method of rent reduction related to the new crownpneumonia epidemic, the company continues to recognize the original contract rent as rentalincome in the same way as before the reduction; if rent reduction or exemption occurs, thecompany treats the reduced rent as a variable lease The payment amount shall be offset from thelease income during the reduction or exemption period; if the rental collection is delayed, thecompany shall recognize the receivable rent as an account receivable during the original collectionperiod, and offset the receivable recognized in the previous period when it is actually received.For financial leases that adopt the simplified method of rent reduction related to the new crownpneumonia epidemic, the company continues to calculate the interest at the same discount rate asbefore the reduction and recognize it as lease income. In the event of rent reduction or exemption,the company will treat the reduced rent as variable lease payments, and when a concessionagreement is reached, etc. to waive the right to receive the original rent, the discounted amount atthe undiscounted or pre-discount discount rate will be used to offset the originally recognizedamount. For lease income, the part that is not enough to be written off is included in investmentincome, and the finance lease receivables are adjusted accordingly; if the rent is delayed, thecompany offsets the finance lease receivables recognized in the previous period when it is actuallyreceived.
29. Discontinuing operation
Discontinuing operation is a component that has been disposed or classified as held for sale by theCompany, and can be distinguished separately in operating and preparing financial statementswhen one of the following conditions is met:
1) The component stands for an independent main business or a major business area;
2) The component is a part of disposal plan of an independent main business or a majorbusiness area;
3) The component is a subsidiary which is acquired only for sale again.
The profit and loss from continuing operations and the profit and loss from discontinuedoperations are separately listed in the income statement. Operational gains and losses such asimpairment losses and reversal amount and disposal gains and losses from discontinued operationsare reported as discontinued operation gains and losses. For the discontinued operations reportedin the current period, the Company adjusts the information previously disclosed as continuingoperations profits and losses in the current financial statements as the discontinued operationsprofits and losses for the comparable accounting period.
30. Major accounting estimates and judgments
When preparing financial statements, the Company's management needs to use estimates andassumptions, which will affect the application of accounting policies and the amount of assets,liabilities, income and expenses. Actual conditions may differ from these estimates. Themanagement of the company continuously evaluates the judgment of key assumptions anduncertainties involved in the estimation, and the impact of changes in accounting estimates will berecognized in the current and future periods.The main uncertainties in the estimated amount are as follows:
(1) Measurement of expected credit losses
The company calculates the expected credit loss through the default risk exposure and theexpected credit loss rate, and determines the expected credit loss rate based on the defaultprobability and the default loss rate. When determining the expected credit loss rate, the companyuses internal historical credit loss experience and other data, and adjusts the historical data incombination with current conditions and forward-looking information. When consideringforward-looking information, the indicators used by the Company include the risk of economicdownturn, the expected increase in unemployment rate, changes in the external marketenvironment, technological environment and customer conditions. The Company regularlymonitors and reviews assumptions related to the calculation of expected credit losses.
(2) Inventory Impairment
As mentioned in note (11) Inventory under “3 Significant accounting policies and accountingestimates”, the Company regularly estimates the net realizable value of the inventory, andrecognizes the difference in inventory cost higher than the net realizable value. When estimatingthe net realizable value of inventory, the Company considers the purpose of holding the inventoryand uses the available information as the basis for estimation, including the market price of theinventory and the Company's past operating costs. The actual selling price, completion cost, salesexpenses and taxes of the inventory may change according to changes in market sales conditions,production technology, or the actual use of the inventory. Therefore, the amount of inventorydepreciation reserve may change according to the above reasons. Adjustments to the inventoryimpairment will affect the current profit and loss.
(3) Impairment of other assets except inventory and financial assets
As mentioned in note (19) Long-term Asset Impairment under “3 Significant accounting policiesand accounting estimates”, the company performs an impairment assessment on assets other thaninventory and financial assets on the balance sheet date to determine whether the recoverableamount of the asset has fallen to a lower level than its book value. If the situation shows that the
book value of the long-term assets may not be fully recovered, the relevant assets will be deemedto be impaired and the impairment loss will be recognized accordingly.The recoverable amount is the higher of the net value of the fair value of the asset (or asset group)minus the disposal expenses and the present value of the asset (or asset group) 's expected futurecash flow. Because the Company cannot reliably obtain the public market price of assets (or assetgroups), and cannot reliably and accurately estimate the fair value of assets. Therefore, theCompany regards the present value of the expected future cash flow as the recoverable amount.When estimating the present value of future cash flows, it is necessary to make a significantjudgment on the output, selling price, related operating costs of the products produced by the asset(or asset group), and the discount rate used in calculating the present value. The Company will useall available relevant information when estimating the recoverable amount, including theprediction of output, selling price and related operating costs based on reasonable and supportableassumptions.
(4) Depreciation and amortization of assets such as fixed assets and intangible assetsAs described in note 16 Fixed Assets and note 19 Intangible Assets, the company shall accruedepreciation for the fixed assets and amortization for intangible assets within the useful life afterconsidering their residual value. The company regularly reviews the useful life of related assets todetermine the amount of depreciation and amortization expenses to be included in each reportingperiod. The useful life of assets is determined by the company based on past experience withsimilar assets and in combination with anticipated technological changes. If the previous estimateschange significantly, the depreciation and amortization expenses will be adjusted in the future.
(5) Deferred tax assets
When it is estimated that sufficient taxable income can be obtained in the future to use theunrecovered tax losses and deductible temporary differences, the relevant deferred tax assets arecalculated and confirmed on the basis of the applicable income tax rate during the period when theasset is expected to be recovered and the amount of taxable income is limited to deductible taxlosses and deductible temporary differences likely to be obtained by the Company. The Companyneeds to use judgment to estimate the time and amount of future taxable income, and makereasonable estimates and judgments on the future applicable income tax rate according to thecurrent tax policy and other related policies to determine the deferred tax assets that should berecognized. If the time and amount of profits actually generated in the future period or the actualapplicable income tax rate are different from the management's estimate, the difference will havean impact on the amount of deferred tax assets.
31. Change of significant accounting policy and accounting estimate
None.
VI. Taxes
1. Major type of taxes and corresponding tax rates
| Tax | Taxation Method | Tax Rate |
| Value-added Tax (VAT) | The balance of output VAT calculated based on product sales and taxable services revenue in accordance with the tax laws after subtracting the deductible input VAT of the period | 6%, 9%, 13% |
| City maintenance and construction tax | Based on VAT actually paid | 7%, 5% |
| Enterprise income tax | Based on taxable profit | 25% |
2. Tax Preference
None.
VII. Notes to the consolidated financial statements
1. Cash at bank and on hand
| Items | 30 June 2022 | 31 December 2021 |
| Cash on hand | 1,232.53 | 24,334.93 |
| Cash at bank | 4,750,472,065.98 | 6,299,074,728.55 |
| Other monetary funds | 54,897,399.20 | 2,531,996,674.37 |
| Total | 4,805,370,697.71 | 8,831,095,737.85 |
| Of which: the total amount of restricted monetary funds | 54,897,399.20 | 2,531,996,674.37 |
The details of restricted funds resulted from mortgage, pledge or freezing, restrictions onwithdrawals due to centralized management of funds, and monetary funds abroad which restrictedfrom repatriation are as follows:
| Items | 30 June 2022 | 31 December 2021 |
| Margin for bank acceptance bill | 52,952,399.20 | 1,492,236,674.37 |
| Margin for letter of credit | 125,000,000.00 | |
| Time deposit or notice deposit for guarantee | 1,185,000.00 | 174,000,000.00 |
| Loan deposit | 760,000.00 | 760,000.00 |
| Restricted deposit | 740,000,000.00 | |
| Total | 54,897,399.20 | 2,531,996,674.37 |
2. Notes receivable
(1) Notes receivable presented by category
| Items | 30 June 2022 | 31 December 2021 |
| Commercial acceptance bill | 141,318,446.72 | 1,540,482,182.07 |
| Total | 141,318,446.72 | 1,540,482,182.07 |
3. Accounts receivable
(1) Accounts receivable presented by aging analysis
| Items | 20211231 | 20201231 |
| Within 1 year (inclusive) | 279,779,976.34 | 256,620,123.38 |
| 1-2 years (inclusive) | 33,111,831.89 | 6,224,788.02 |
| 2-3 years (inclusive) | 6,224,788.02 | 57,059,913.27 |
| Over 3 years | 482,667,477.68 | 427,997,121.96 |
| Sub-total | 801,784,073.93 | 747,901,946.63 |
| Less: Provision for bad debts | 493,896,723.85 | 491,051,163.92 |
| Total | 307,887,350.08 | 256,850,782.71 |
(2) Accounts receivable presented by bad debt accrued method
| Items | 30 June 2022 | ||||
| Carrying amount | Provision for bad debts | Book value | |||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | ||
| Provision for bad debts individually | 352,985,418.30 | 44.02 | 352,985,418.30 | 100.00 | |
| Provision for bad debts based on portfolio | 448,798,655.63 | 55.98 | 140,911,305.55 | 31.40 | 307,887,350.08 |
| Including: | |||||
| Portfolio 1: Aging portfolio | 448,798,655.63 | 60.42 | 140,911,305.55 | 31.40 | 307,887,350.08 |
| Total | 801,784,073.93 | 100.00 | 493,896,723.85 | 61.60 | 307,887,350.08 |
（Continued）
| Items | 31 December 2021 | ||||
| Carrying amount | Provision for bad debts | Book value | |||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | ||
| Provision for bad debts individually | 352,985,418.30 | 47.20 | 352,985,418.30 | 100.00 | |
| Provision for bad debts based on portfolio | 394,916,528.33 | 52.80 | 138,065,745.62 | 34.96 | 256,850,782.71 |
| Include: | |||||
| Portfolio 1: Aging portfolio | 394,916,528.33 | 52.80 | 138,065,745.62 | 34.96 | 256,850,782.71 |
| Total | 747,901,946.63 | 100.00 | 491,051,163.92 | 65.66 | 256,850,782.71 |
Items
| Items | 30 June 2022 | |||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) | Reason | |
| Brilliance Automotive Group Holdings Co., Ltd. | 305,223,081.12 | 305,223,081.12 | 100.00 | Bankruptcy reorganization |
| Benxi Nanfen Xinhe Metallurgical Furnace | 47,762,337.18 | 47,762,337.18 | 100.00 | Shut down of |
Accounts receivables tested for impairment individually:
Provision for bad debts by portfolio: Aging analysis:
Portfolio accrual item: aging portfolio
| Items | 30 June 2022 | ||
| Account Receivable | Provision for bad debts | Bad debt ratio （%） | |
| Within 1 year (inclusive) | 279,779,976.34 | 2,797,799.76 | 1.00 |
| 1-2 years (inclusive) | 33,111,831.89 | 3,311,183.19 | 10.00 |
| 2-3 years (inclusive) | 1,380,656.01 | 276,131.21 | 20.00 |
| Over 3 years | 134,526,191.39 | 134,526,191.39 | 100.00 |
| Total | 448,798,655.63 | 140,911,305.55 | |
(3) The provision for bad debts accrued, reversed or recovered in the current periodThe amount of bad debt provision accrued in the current period is RMB2,845,559.93.
(4) The amount of accounts receivable has been written off in the current period
None.
(5) Top five debtors at the end of period
| Company | 30 June 2022 | ||
| Amount | Percentage of total Accounts receivable (%) | Provision for bad debts | |
| The first | 305,223,081.12 | 38.07 | 305,223,081.12 |
| The second | 62,675,196.98 | 7.82 | 626,751.97 |
| The third | 60,369,509.72 | 7.53 | 603,695.10 |
| The fourth | 53,498,537.83 | 6.67 | 534,985.38 |
| The fifth | 47,762,337.18 | 5.96 | 47,762,337.18 |
| Total | 529,528,662.83 | 66.05 | 354,750,850.75 |
(6) Accounts receivable derecognized due to the transfer of financial assets
None.
(7) The amount of assets and liabilities formed by transferring accounts receivable and continuingto be involved.None.
4. Accounts receivable financing
(1) Details of accounts receivable financing
| Items | 30 June 2022 | 31 December 2021 |
| Notes Receivable | 254,184,970.37 | 1,530,735,647.38 |
| Total | 254,184,970.37 | 1,530,735,647.38 |
Material Co., Ltd
| Material Co., Ltd | operation | |||
| Total | 352,985,418.30 | 352,985,418.30 | -- |
Notes: Accounts receivable financing reflects notes receivable and accounts receivable that aremeasured at fair value through other comprehensive income on the balance sheet date.
(2) At the end of the period, the company has commercial bills pledged in accounts receivablefinancing amount RMB 101,670,000.00.
(3) At the end of the period, the company's endorsed or discounted commercial bills in accountsreceivable financing accounting and not yet matured on the balance sheet date are as follows
| Item | Amount derecognised at the end of the period | Amount not yet derecognised at the end of the period |
| Bank acceptance bill | 6,325,995,134.20 | |
| Commercial acceptance bill | ||
| Total | 6,325,995,134.20 |
(4) No accounts receivable financing has been transferred into accounts receivable due to failureof drawer to perform.
5. Prepayments
(1) Prepayments presented by aging
| Aging | 30 June 2022 | 31 December 2021 | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 1,909,662,527.08 | 97.89 | 977,541,107.55 | 98.31 |
| 1-2 years | 35,979,071.76 | 1.84 | 16,681,487.73 | 1.68 |
| 2-3 years | 5,263,490.34 | 0.27 | 147,750.36 | 0.01 |
| Total | 1,950,905,089.18 | 100.00 | 994,370,345.64 | 100.00 |
Notes: As of June 30, 2022, there were no significant prepayments over 1 year.
(2) Top five prepaid companies at the end of period
| Name of the company | Amount | Percentage (%) |
| The First | 1,306,446,662.94 | 66.97 |
| The Second | 83,751,404.19 | 4.29 |
| The Third | 74,983,578.22 | 3.84 |
| The Fourth | 69,280,603.52 | 3.55 |
| The Fifth | 62,165,740.17 | 3.19 |
| Total | 1,596,627,989.04 | 81.84 |
6. Other receivables
| Items | 30 June 2022 | 31 December 2021 |
| Interest receivables | 2,523,993.39 |
| Other receivables | 186,993,663.02 | 163,413,287.02 |
| Total | 186,993,663.02 | 165,937,280.41 |
(1) Interest receivable
1) Interest receivable presented by category
| Items | 30 June 2022 | 31 December 2021 |
| Deposit interest | 2,523,993.39 | |
| Total | 2,523,993.39 |
2)The company has no significant provision for overdue interest and bad debts.
(2) Other receivables
1) Other receivables disclosed by aging
| Items | 30 June 2022 | 31 December 2021 |
| Within 1 year (inclusive) | 169,638,358.70 | 153,188,899.24 |
| 1-2 years (inclusive) | 14,458,325.67 | 4,959,792.25 |
| 2-3 years (inclusive) | 2,033,318.60 | 3,778,131.84 |
| Over 3 years | 71,511,817.23 | 74,186,274.07 |
| Sub-total | 257,641,820.20 | 236,113,097.40 |
| Less: Provision for bad debts | 70,648,157.18 | 72,699,810.38 |
| Total | 186,993,663.02 | 163,413,287.02 |
2)Information of provision for bad debts
| Bad debt provision | Stage one | Stage two | Stage three | Total |
| Expectation over the coming 12 months Credit loss | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Opening balance | 526,800.70 | 6,305,393.56 | 65,867,616.12 | 72,699,810.38 |
| --Transfer to the second stage | -141,181.23 | 141,181.23 | ||
| --Transfer to the third stage | -755,315.57 | 755,315.57 | ||
| Accrual for the current period | 448,439.46 | -3,872,783.16 | 1,372,690.50 | -2,051,653.20 |
| Closing balance | 834,058.93 | 1,818,476.06 | 67,995,622.19 | 70,648,157.18 |
3) Other receivables presented by nature
| Nature | 30 June 2022 | 31 December 2021 |
| Receivable and payable | 244,456,728.68 | 224,540,231.45 |
| Others | 13,185,091.52 | 11,572,865.95 |
| Total | 257,641,820.20 | 236,113,097.40 |
4) Top five debtors at the end of period
| Company | Nature | Amount | Aging | Percentage of total other receivables (%) | Provision for bad debts |
| The First | Temporary payment | 8,009,725.95 | within 1 year | 3.11 | 80,097.26 |
| The Second | Temporary payment | 2,261,360.00 | over 3 years | 0.88 | 2,261,360.00 |
| The Third | Temporary payment | 1,999,979.00 | within 1 year | 0.78 | 19,999.79 |
| The Fourth | Temporary payment | 1,740,000.00 | over 3 years | 0.68 | |
| The Fifth | Temporary payment | 1,492,967.97 | within 1 year to over 3 years | 0.58 | 1,198,020.34 |
| Total | 15,504,032.92 | 6.03 | 3,559,477.39 |
7. Inventories
(1) Inventories presented by category
| Items | 30 June 2022 | 31 December 2021 | ||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |
| Raw material and main material | 3,425,058,786.46 | 26,986,533.69 | 3,398,072,252.77 | 4,730,515,761.34 | 26,986,533.69 | 4,703,529,227.65 |
| Work in process and semi-finished product | 1,774,106,409.43 | 37,312,458.81 | 1,736,793,950.62 | 2,105,832,905.07 | 25,390,821.52 | 2,080,442,083.55 |
| Finished goods | 3,641,236,384.80 | 35,568,532.72 | 3,605,667,852.08 | 3,439,625,765.66 | 33,430,937.88 | 3,406,194,827.78 |
| Total | 8,840,401,580.69 | 99,867,525.22 | 8,740,534,055.47 | 10,275,974,432.07 | 85,808,293.09 | 10,190,166,138.98 |
(2) Provision for inventory impairment and provision for impairment of contract performancecosts
| Category | Opening balance | Increase | Decrease | Closing balance | ||
| Provision | Others | Revered or written-off | Others | |||
| Raw material and main material | 26,986,533.69 | 26,986,533.69 | ||||
| Work in process and semi-finished product | 25,390,821.52 | 37,312,458.81 | 25,390,821.52 | 37,312,458.81 | ||
| Finished goods | 33,430,937.88 | 35,568,532.72 | 33,430,937.88 | 35,568,532.72 | ||
| Total | 85,808,293.09 | 72,880,991.53 | 58,821,759.40 | 99,867,525.22 | ||
(3) Descriptions on closing balance of inventories containing capitalized amount of borrowingcostsNone.
8. Other current assets
| Items | 30 June 2022 | 31 December 2021 |
| VAT input tax | 131,062,456.78 | 310,939,065.10 |
| Prepaid tax | 109,606,015.17 | 444,009,128.46 |
| Total | 240,668,471.95 | 754,948,193.56 |
9. Long-term equity investment
| Investees | 31 December 2021 | Increase/decrease | 30 June 2022 | Total Impairment Ending Balance | |||||||
| Additional Investment | Reduced Investment | Investment Gains and Losses Recognized under the Equity Method | Other Comprehensive Income Adjustment | Other Equity Changes | Declaration of Cash Dividends or Profit | Provision | Others | ||||
| Joint Venture | |||||||||||
| Zhejiang Bengang Jingrui Steel Processing Co., Ltd.. | 2,981,784.07 | 85,455.22 | 3,067,239.29 | ||||||||
| Subtotal | 2,981,784.07 | 85,455.22 | 3,067,239.29 | ||||||||
| Total | 2,981,784.07 | 85,455.22 | 3,067,239.29 | ||||||||
10. Other equity instrument investments
| Item | 30 June 2022 | 31 December 2021 |
| Equity of Suzhou Bengang Industrial Co., Ltd. | 3,888,980.00 | 3,888,980.00 |
| Equity of Zhonggang Shanghai Steel Processing Co., Ltd. | ||
| Equity of Northeast Special Steel Group Co., Ltd. | 1,037,735,849.00 | 1,037,735,849.00 |
| Equity of Guangzhou Benpu Automobile Panel Sales Co., Ltd. | 200,000.00 | 200,000.00 |
| Equity of Wuhan Bengang Yuanhong Trading Co., Ltd. | 200,000.00 | 200,000.00 |
| Total | 1,042,024,829.00 | 1,042,024,829.00 |
11. Fixed assets
Fixed assets and Disposal of fixed assets
| Items | 30 June 2022 | 31 December 2021 |
| Fixed assets | 24,397,788,521.52 | 25,480,674,048.94 |
| Disposal of fixed assets | 119,424.50 | |
| Total | 24,397,907,946.02 | 25,480,674,048.94 |
(1) Details of fixed assets
| Items | Houses and buildings | Mechanical equipment | Transportation and other equipment | Total |
| 1. Total original value | ||||
| 31 December 2021 | 13,244,653,376.33 | 49,481,748,950.04 | 920,958,736.87 | 63,647,361,063.24 |
| Increase in current period | 14,881,999.31 | 12,174,332.46 | 11,014,765.84 | 38,071,097.61 |
| Including: Purchase | 4,445,029.04 | 1,737,223.59 | 4,244,541.23 | 10,426,793.86 |
| Transferred from construction in progress | 10,436,970.27 | 10,437,108.87 | 6,770,224.61 | 27,644,303.75 |
| Merging | ||||
| Decrease in current period | 7,444,516.45 | 52,776,526.29 | 55,561,257.60 | 115,782,300.34 |
| Including: Disposal or scrapping | 7,444,516.45 | 52,776,526.29 | 55,561,257.60 | 115,782,300.34 |
| Others | ||||
| 30 June 2022 | 13,252,090,859.19 | 49,441,146,756.21 | 876,412,245.11 | 63,569,649,860.51 |
| 2.Total accumulated depreciation | ||||
| 31 December 2021 | 6,411,622,637.46 | 31,016,196,563.08 | 645,389,717.80 | 38,073,208,918.34 |
| Increase in current period | 163,514,413.79 | 864,708,797.79 | 77,040,341.36 | 1,105,263,552.94 |
| Including: Provision | 163,514,413.79 | 864,708,797.79 | 77,040,341.36 | 1,105,263,552.94 |
| Items | Houses and buildings | Mechanical equipment | Transportation and other equipment | Total |
| Decrease in current period | 3,522,289.43 | 43,679,396.10 | 52,887,542.72 | 100,089,228.25 |
| Including: Disposal or scrapping | 3,522,289.43 | 43,679,396.10 | 52,887,542.72 | 100,089,228.25 |
| 30 June 2022 | 6,571,614,761.82 | 31,837,225,964.77 | 669,542,516.44 | 39,078,383,243.03 |
| 3. Total impairment | ||||
| 31 December 2021 | 84,098,414.32 | 9,379,681.64 | 93,478,095.96 | |
| Increase in current period | ||||
| Including: accrued | ||||
| Others | ||||
| Decrease in current period | ||||
| Including: Disposal or scrapping | ||||
| Others | ||||
| 30 June 2022 | 84,098,414.32 | 9,379,681.64 | 93,478,095.96 | |
| 4. Total net book value of Fixed assets | ||||
| 30 June 2022 | 6,596,377,683.05 | 17,594,541,109.80 | 206,869,728.67 | 24,397,788,521.52 |
| 31 December 2021 | 6,748,932,324.55 | 18,456,172,705.32 | 275,569,019.07 | 25,480,674,048.94 |
(2) Fixed assets that are idle temporarily
| Items | Gross value | Accumulated depreciation | Impairment | Net book value | Notes |
| Houses and buildings | 223,416,300.48 | 139,189,651.03 | 84,098,414.32 | 128,235.13 | |
| Mechanical equipment | 100,086,005.34 | 89,198,289.39 | 9,379,681.64 | 1,508,034.31 | |
| Transportation and Other equipment | 1,042,125.89 | 1,042,125.89 | |||
| Total | 324,544,431.71 | 229,430,066.31 | 93,478,095.96 | 1,636,269.44 |
(3) Fixed assets without property rights certificates at the year-end
| Items | Book value | Reason |
| Houses and buildings | 1,053,355,221.77 | Processing |
(4) Disposal of fixed assets
| Items | 30 June 2022 | 31 December 2021 |
Other equipment
| Other equipment | 119,424.50 | |
| Total | 119,424.50 |
12. Construction in progress
(1) Construction in progress and Project materials
| Items | 30 June 2022 | 31 December 2021 |
| Items | 30 June 2022 | 31 December 2021 |
Construction in progress
| Construction in progress | 3,002,101,329.94 | 2,431,761,889.08 |
| Project materials | 10,344,959.35 | 2,420,212.05 |
| Total | 3,012,446,289.29 | 2,434,182,101.13 |
(2) Details of construction in progress
| Items | 30 June 2022 | 31 December 2021 | ||||
| Gross value | Total impairment | Net book value | Gross value | Total impairment | Net book value | |
| Cold-rolled high-strength steel renovation project | 62,622,790.07 | 62,622,790.07 | ||||
| CCPP power generation project | 699,139,174.08 | 699,139,174.08 | 662,907,316.06 | 662,907,316.06 | ||
| Special steel rolling mill renovation project | 287,611,216.37 | 287,611,216.37 | 225,662,005.25 | 225,662,005.25 | ||
| 360 square meter sintering machine | 88,405,148.94 | 88,405,148.94 | 88,340,997.99 | 88,340,997.99 | ||
| 360 square meter sintering machine waste heat utilization | 56,547,049.50 | 56,547,049.50 | ||||
| Special Steel Electric Furnace Capacity Replacement Project | 1,099,117,705.56 | 1,099,117,705.56 | 975,649,876.97 | 975,649,876.97 | ||
| 220kV Substation Project of General Energy Plant | 23,719,815.06 | 23,719,815.06 | ||||
| The overall improvement of Benxi Steel's manufacturing | 36,601,399.00 | 36,601,399.00 | 36,748,743.10 | 36,748,743.10 | ||
| Energy General Plant No. 1 Converter Gas Tank System Transformation Project | 94,040,370.69 | 94,040,370.69 | 66,477,477.13 | 66,477,477.13 | ||
| Caixi Special Steel Feeding Station of Steel Plate Scrap Plant | 42,748,864.71 | 42,748,864.71 | 38,375,436.67 | 38,375,436.67 | ||
| Environmental protection transformation of plate raw material plant | 24,777,584.51 | 24,777,584.51 | ||||
| Benxi Steel Baojin Processing and Distribution Project | 22,396,129.14 | 22,396,129.14 | 22,088,294.34 | 22,088,294.34 | ||
| Revamping of desulfurization system in coking process of general iron making plant | 22,017,275.39 | 22,017,275.39 | ||||
| Other | 442,356,806.92 | 442,356,806.92 | 315,511,741.57 | 315,511,741.57 | ||
| Items | 30 June 2022 | 31 December 2021 | ||||
| Gross value | Total impairment | Net book value | Gross value | Total impairment | Net book value | |
Total
| Total | 3,002,101,329.94 | 3,002,101,329.94 | 2,431,761,889.08 | 2,431,761,889.08 |
1) The change of major construction in progress
| Project | Budget ( 10 thousand yuan) | 31 December 2021 | Increase | Transfer to FA | Other decrease | 30 June 2022 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| Cold-rolled high-strength steel renovation project | 701,535.00 | 62,622,790.07 | 62,622,790.07 | 85.89 | 100.00 | 857,867,059.71 | Other | |||||
| CCPP power generation project | 106,000.00 | 662,907,316.06 | 36,231,858.02 | 699,139,174.08 | 65.95 | 70.51 | 18,311,583.31 | 3,814,021.25 | 3.93 | Self-raised | ||
| Special steel rolling mill renovation project | 82,386.00 | 225,662,005.25 | 61,949,211.12 | 287,611,216.37 | 47.51 | 47.51 | 8,447,721.10 | 1,677,488.19 | 3.93 | Other | ||
| 360 square meter sintering machine | 137,723.00 | 88,340,997.99 | 64,150.95 | 88,405,148.94 | 92.00 | 100.00 | 68,627,433.26 | Other | ||||
| Special Steel Electric Furnace Capacity Replacement Project | 192,343.00 | 975,649,876.97 | 123,467,828.59 | 1,099,117,705.56 | 57.14 | 59.00 | Self-raised & Other | |||||
| 220kV Substation Project of General Energy Plant | 31,500.00 | 23,719,815.06 | 23,719,815.06 | 7.53 | 7.53 | Other | ||||||
| The overall improvement of Benxi Steel's manufacturing | 5,600.00 | 36,748,743.10 | -147,344.10 | 36,601,399.00 | 65.36 | 80.00 | Other | |||||
| Energy General Plant No. 1 Converter Gas Tank System Transformation Project | 16,086.00 | 66,477,477.13 | 27,562,893.56 | 94,040,370.69 | 58.46 | 75.00 | Other | |||||
| Revamping of desulfuri | 3,925.00 | 22,017,275.39 | 22,017,275.39 | 56.09 | 56.09 | Other |
| Project | Budget ( 10 thousand yuan) | 31 December 2021 | Increase | Transfer to FA | Other decrease | 30 June 2022 | Input of Budget (%) | Progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest of current period | Capitalization rate | Source of fund |
| zation system in coking process of general iron making plan | ||||||||||||
| Caixi Special Steel Feeding Station of Steel Plate Scrap Plant | 12,114.00 | 38,375,436.67 | 4,373,428.04 | 42,748,864.71 | 35.29 | 65.00 | Other | |||||
| Benxi Steel Baojin Processing and Distribution Project | 31,037.39 | 22,088,294.34 | 307,834.80 | 22,396,129.14 | 7.21 | 12.00 | Other | |||||
| Total | 1,320,249.39 | 2,116,250,147.51 | 362,169,741.50 | 2,478,419,889.01 | 953,253,797.38 | 5,491,509.44 |
(3) Construction materials
| Items | 30 June 2022 | 31 December 2021 | ||||
| Gross value | Impairment | Net Book Value | Gross value | Impairment | Net Book Value | |
Construction
materials
| Construction materials | 10,344,959.35 | 10,344,959.35 | 2,420,212.05 | 2,420,212.05 | ||
| Total | 10,344,959.35 | 10,344,959.35 | 2,420,212.05 | 2,420,212.05 |
13. Right-of-use assets
| Items | Land | Houses and buildings | Total |
| 1.Original carrying value | |||
| 31 December 2021 | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| Increase | |||
| Including: New lease | |||
| Merger | |||
| Revaluation adjustment | |||
| Decrease | |||
| Including:Transfer to fixed assets | |||
| Disposal | |||
| 30 June 2022 | 1,132,274,415.17 | 368,465,367.56 | 1,500,739,782.73 |
| 2.Depreciation reserves | |||
| 31 December 2021 | 39,904,236.22 | 20,470,298.20 | 60,374,534.42 |
| Increase | 19,952,118.11 | 10,235,149.11 | 30,187,267.22 |
| Including:Accrued | 19,952,118.11 | 10,235,149.11 | 30,187,267.22 |
| Decrease | |||
| Including:Transfer to fixed assets | |||
| Disposal | |||
| 30 June 2022 | 59,856,354.33 | 30,705,447.31 | 90,561,801.64 |
| 3.Total Impairment | |||
| 31 December 2021 | |||
| Increase | |||
| Including:Accrued | |||
| Decrease | |||
| Including: Transfer to fixed assets | |||
| Disposal | |||
| 30 June 2022 | |||
| 4.Total net carrying value | |||
| 30 June 2022 | 1,072,418,060.84 | 337,759,920.25 | 1,410,177,981.09 |
| 31 December 2021 | 1,092,370,178.95 | 347,995,069.36 | 1,440,365,248.31 |
14. Intangible assets
(1) Details of intangible assets
| Items | Land use right | Software | Total |
| 1.Total gross value | |||
| 31 December 2021 | 367,668,797.84 | 310,401.55 | 367,979,199.39 |
| Increase | |||
| Including: Purchase | |||
| Internal Research and Development | |||
| Merger | |||
| Decrease | |||
| Including: Disposal | |||
| Invalid and terminated confirmation | |||
| 30 June 2022 | 367,668,797.84 | 310,401.55 | 367,979,199.39 |
| 2. Total of Accumulated Amortization | |||
| 31 December 2021 | 69,882,153.01 | 175,497.57 | 70,057,650.58 |
| Increase | 3,676,687.80 | 13,397.46 | 3,690,085.26 |
| Including: Accrued | 3,676,687.80 | 13,397.46 | 3,690,085.26 |
| Decrease | |||
| Including: Disposal | |||
| Invalid and terminated confirmation |
| 30 June 2022 | 73,558,840.81 | 188,895.03 | 73,747,735.84 |
| 3. Total Impairment | |||
| 31 December 2021 | |||
| Increase | |||
| Including: Accrued | |||
| Decrease | |||
| Including: Disposal | |||
| Invalid and terminated confirmation | |||
| 30 June 2022 | |||
| 4. Total Net value | |||
| 30 June 2022 | 294,109,957.03 | 121,506.52 | 294,231,463.55 |
| 31 December 2021 | 297,786,644.83 | 134,903.98 | 297,921,548.81 |
At the end of the period, the proportion of intangible assets formed through internal researchand development of the company to the balance of intangible assets was 0.00%
(2) Land use right without Certificate of Land use right at the end of period
| Items | Book value | Reason |
| Land use right | 39,149,867.21 | Processing. |
| Total | 39,149,867.21 |
15. Deferred income tax asset and deferred income tax liability
(1) Deferred tax asset which have not been offset
| Items | 30 June 2022 | 31 December 2021 | ||
| Deductible temporary differences | Deferred tax asset | Deductible temporary differences | Deferred tax asset | |
| Impairment of assets | 467,073,327.08 | 116,768,331.77 | 451,808,313.33 | 112,952,078.33 |
| Internal unrealized profit | 45,320,575.72 | 11,330,143.93 | 93,178,777.44 | 23,294,694.36 |
| Depreciation of fixed assets | 21,906,259.43 | 5,476,564.86 | 21,906,259.43 | 5,476,564.86 |
| Other | 59,049,831.39 | 14,762,457.85 | 48,132,843.04 | 12,033,210.76 |
| Total | 593,349,993.62 | 148,337,498.41 | 615,026,193.24 | 153,756,548.31 |
(2) Unrecognized deferred tax assets
| Items | 30 June 2022 | 31 December 2021 |
| Deductible temporary differences | 305,231,868.13 | 305,643,743.02 |
| Deductible losses | 49,389,905.89 | 45,093,302.90 |
| Total | 354,621,774.02 | 350,737,045.92 |
(3) The deductible loss of unrecognized deferred tax assets due in the following period
| Items | 30 June 2022 | 31 December 2021 | Notes |
| Year 2022 | 1,001,166.72 | 1,001,166.72 | |
| Year 2023 | 10,336,118.65 | 10,336,118.65 |
| Year 2024 | 13,696,334.51 | 13,696,334.51 | |
| Year 2025 | 10,723,063.42 | 10,723,063.42 | |
| Year 2026 | 9,336,619.60 | 9,336,619.60 | |
| Year 2027 | 4,296,602.99 | ||
| Total | 49,389,905.89 | 45,093,302.90 |
16. Other non-current assets
| Items | 30 June 2022 | 31 December 2021 | ||||
| Gross value | Impairment | Net book value | Gross value | Impairment | Net book value | |
Prepaymentsfor long-termassets
| Prepayments for long-term assets | 81,048,057.73 | 81,048,057.73 | 30,630,858.13 | 30,630,858.13 | ||
| Total | 81,048,057.73 | 81,048,057.73 | 30,630,858.13 | 30,630,858.13 |
17. Short-term loans
(1) Short-term loan presented by category
| Items | 30 June 2022 | 31 December 2021 |
| Guaranteed loans | 3,149,342,280.00 | 3,823,088,140.00 |
| Credit loans | 200,000,000.00 | 230,000,000.00 |
| Total | 3,349,342,280.00 | 4,053,088,140.00 |
(2) There is no short-term loans that were overdue at the end of the reporting period
18. Notes payable
| Items | 30 June 2022 | 31 December 2021 |
| Commercial acceptance bill | 947,409,186.44 | 2,349,083,376.48 |
| Bank acceptance bill | 1,276,179,360.19 | 2,286,000,000.00 |
| Total | 2,223,588,546.63 | 4,635,083,376.48 |
At the end of the reporting period, there is no notes payable due and unpaid.
19. Accounts payable
(1) Accounts payable presented by category
| Items | 30 June 2022 | 31 December 2021 |
| Accounts payable for goods | 2,324,830,643.95 | 4,272,890,365.57 |
| Accounts payable for labor | 85,146,286.47 | 51,392,037.81 |
| Accounts payable for project and equipment | 534,962,159.94 | 557,316,885.80 |
| Repair expense and others | 409,754,942.03 | 470,673,396.71 |
| Total | 3,354,694,032.39 | 5,352,272,685.89 |
(2) Significant accounts payable over one year
| Items | Ending balance | Notes |
Company 1
| Company 1 | 19,630,850.46 | not yet reached the settlement conditions |
| Company 2 | 14,200,000.00 | not yet reached the settlement conditions |
| Company 3 | 13,175,829.38 | not yet reached the settlement conditions |
| Company 4 | 12,045,229.32 | not yet reached the settlement conditions |
| Total | 59,051,909.16 | not yet reached the settlement conditions |
20. Contract liabilities
| Items | 30 June 2022 | 31 December 2021 |
| Advance from customers for goods | 3,977,011,514.55 | 4,708,188,093.78 |
| Total | 3,977,011,514.55 | 4,708,188,093.78 |
21. Employee benefits payable
(1) Presentation of employee benefits payable
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 |
Short-term employeebenefits
| Short-term employee benefits | 152,095,376.49 | 988,379,243.31 | 1,131,189,360.26 | 9,285,259.54 |
| Post-employment benefits - defined contribution plans | 138,719,221.49 | 138,719,221.49 | ||
| Termination benefits | 15,815,754.54 | 11,680,992.07 | 4,134,762.47 | |
| Other benefits due within one year | ||||
| Total | 152,095,376.49 | 1,142,914,219.34 | 1,281,589,573.82 | 13,420,022.01 |
(2) Short-term employee benefits
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 | |
| (1) Salary, bonus, allowance and subsidy | 138,746,833.89 | 652,527,140.06 | 791,158,685.12 | 115,288.83 | |
| (2) Employee welfare | 123,234,634.36 | 123,234,634.36 | |||
| (3) Social Insurance | 108,816,319.43 | 108,816,319.43 | |||
| Including: Medical insurance | 86,956,629.40 | 86,956,629.40 | |||
| Work injury insurance | 21,849,854.35 | 21,849,854.35 | |||
| Maternity insurance | 9,835.68 | 9,835.68 | |||
| (4) Housing funds | 6,862,795.00 | 67,724,213.48 | 67,722,849.48 | 6,864,159.00 | |
| (5) Union funds and staff education fee | 6,485,747.60 | 13,018,983.90 | 17,198,919.79 | 2,305,811.71 | |
| (6) Short-term compensated absences | |||||
| (7) Short-term profit - sharing scheme | |||||
| (8) Other | 23,057,952.08 | 23,057,952.08 | |||
| Total | 152,095,376.49 | 988,379,243.31 | 1,131,189,360.26 | 9,285,259.54 | |
(3) Defined contribution plans
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 |
| Basic pension fund | 134,648,387.08 | 134,648,387.08 | ||
| Unemployment insurance | 4,070,834.41 | 4,070,834.41 | ||
| Total | 138,719,221.49 | 138,719,221.49 |
22. Taxes payable
23. Other payables
| Items | 30 June 2022 | 31 December 2021 |
| Other payables | 1,164,276,844.55 | 1,348,025,731.98 |
| Total | 1,164,276,844.55 | 1,348,025,731.98 |
Other payables
(1) Other payables presented by nature
| Items | 30 June 2022 | 31 December 2021 |
| Deposit | 5,597,299.54 | 1,556,363.89 |
| Margin | 124,842,640.00 | 127,642,584.79 |
| Accounts | 932,207,175.86 | 1,133,934,695.19 |
| Others | 101,629,729.15 | 84,892,088.11 |
| Total | 1,164,276,844.55 | 1,348,025,731.98 |
(2) At the end of period, no significant other payables aged over one year
24. Non-current liabilities due within one year
| Items | 30 June 2022 | 31 December 2021 |
| Long-term loans due within one year | 1,329,194,156.37 | 246,949,595.95 |
| Bond payables due within one year | 25,053,455.40 | |
| Lease liabilities due within one year | 39,273,924.44 | 38,777,466.79 |
Items
| Items | 30 June 2022 | 31 December 2021 |
| Value-added tax | 152,070,104.68 | 29,696,795.33 |
| Corporate income tax | 15,487,881.15 | 35,810,190.67 |
| Individual income tax | 809,730.46 | 4,744,348.35 |
| City maintenance and construction tax | 978,200.02 | 2,362,795.25 |
| House property tax | 3,831,727.52 | 16,819,232.89 |
| Land holding tax | 1,663,417.54 | 2,878,545.36 |
| Educational surcharges | 730,001.11 | 1,710,729.40 |
| Environmental tax | 415,476.53 | 9,935,977.17 |
| Others | 4,741,450.85 | 10,309,374.28 |
| Total | 180,727,989.86 | 114,267,988.70 |
| Total | 1,368,468,080.81 | 310,780,518.14 |
25. Other current liabilities
| Items | 30 June 2022 | 31 December 2021 |
| Output tax to be transferred | 517,011,496.89 | 612,064,452.20 |
| Total | 517,011,496.89 | 612,064,452.20 |
26. Long-term loans
Long-term loans presented by category
| Categories | 30 June 2022 | 31 December 2021 |
| Pledged loans | 622,600,000.00 | |
| Guaranteed loans | 289,175,109.00 | 595,921,771.74 |
| Credit loans | 2,713,208,679.13 | 3,004,300,000.00 |
| Total | 3,002,383,788.13 | 4,222,821,771.74 |
27. Bonds payable
(1) Details of bonds payable
| Items | 30 June 2022 | 31 December 2021 |
| Convertible Bond | 5,173,595,326.65 | 5,054,251,668.83 |
| Total | 5,173,595,326.65 | 5,054,251,668.83 |
(2) Changes in Bonds payable (Excluding other financial instruments such as preferred stocks and perpetual bonds classified as financial liabilities)
| Items | Face value | Issue date | Term to maturity | Issuance amount | Balance at the end of the previous year | Current issue | Interest accrued at face value | Premium and discount amortization | Repayment this period | Convert to stock this period | Balance at the end of the current year |
ConvertibleBond (Bondcode:127018)
| Convertible Bond (Bond code:127018) | 6,800,000,000.00 | Jun 29, 2020 | 6 years | 6,800,000,000.00 | 5,054,251,668.83 | 22,524,444.40 | 141,931,391.31 | 63,289.09 | 5,173,595,326.65 | ||
| Total | 6,800,000,000.00 | 5,054,251,668.83 | 22,524,444.40 | 141,931,391.31 | 63,289.09 | 5,173,595,326.65 |
1) Description of the conditions and time for conversion of convertible corporate bondsApproved by Shenzhen Stock Exchange "Shen Zheng Shang [2020] No. 656", the Company’s RMB 6.80 billion convertible corporate bonds were listed on theShenzhen Stock Exchange on August 4, 2020, and the abbreviation is "Bengang Convertible Bonds". The bond code is "127018". The conversion period of theconvertible corporate bonds issued this time is from the first trading day after six months of the issuance of the convertible corporate bonds (July 3, 2020) to thematurity date of the convertible corporate bonds, that is, from January 4, 2021 to June 28, 2026. The initial conversion price of the convertible bonds is RMB 5.03per share.During the period from January 1, 2021 to December 31, 2021, the Company's A-share convertible bonds of RMB 1,168,855,400.00 were converted into theCompany's A-share ordinary shares, and the number of converted shares was 232,819,847 shares. Of which:
In the first quarter of 2021, Bengang's convertible bonds decreased by RMB 2,656,000.00 (26,560 bonds) due to share conversion, the number of shares convertedwas 527,021 shares, and the conversion price was RMB 5.03 per share;In the second quarter of 2021, Bengang's convertible bonds decreased by RMB 46,087,200.00 (460,872 bonds) due to share conversion, the number of sharesconverted was 9,162,052 shares, and the conversion price was RMB 5.03 per share;In the third quarter of 2021, Bengang's convertible bonds decreased by RMB 1,119,957,200.00 (11,199,572 bonds) due to share conversion, the number of shares
converted was 223,096,752 shares, and the conversion price was RMB 5.02 per share;In the fourth quarter of 2021, Bengang's convertible bonds decreased by RMB 155,000.00 (1,550 bonds) due to share conversion, the number of shares convertedwas 34,022 shares, and the conversion price was RMB 4.55 per share;In the first quarter of 2022, Bengang's convertible bonds decreased by RMB 67,000.00 (670 bonds) due to share conversion, the number of shares converted was14,698 shares, and the conversion price was RMB 4.55 per share;In the second quarter of 2022, Bengang's convertible bonds decreased by RMB 13,200.00 (132 bonds) due to share conversion, the number of shares converted was3,029.00 shares, and the conversion price was RMB 4.35 per share;As at June 30, 2022, the company's remaining balance of convertible bonds was RMB 5,631,064,400.00 (56,310,644 bonds).
2) Notes to other financial instruments classified as financial liabilities
None.
28. Lease liabilities
| Items | 30 June 2022 | 31 December 2021 |
| Lease liabilities | 1,444,174,357.07 | 1,463,444,635.94 |
| Include: lease liabilities due within 1 year | 39,273,924.44 | 38,777,466.79 |
| Lease liabilities ending balance | 1,404,900,432.63 | 1,424,667,169.15 |
29. Deferred income
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 | Reason |
| Government Subsidy | 93,106,285.89 | 9,690,000.00 | 30,272,965.00 | 72,523,320.89 | |
| Total | 93,106,285.89 | 9,690,000.00 | 30,272,965.00 | 72,523,320.89 |
Projects of government subsidies:
| Items | 31 December 2021 | Increase | Transfer to current profit and loss | Other decrease | 30 June 2022 | Related to assets or income |
| Liaoning Province "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018 | 220,000.00 | 220,000.00 | Assets | |||
| 2018 Municipal Skill Master Workstation Fee | 58,766.34 | 58,766.34 | Assets | |||
| 2019 Municipal Skill Master Workstation Fee | 98,084.16 | 98,084.16 | Assets | |||
| 2020 Ecological Civilization Construction Project (Special Steel Electric Furnace Upgrade Project) | 20,000,000.00 | 20,000,000.0 | Assets | |||
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 7,600,000.00 | 950,000.00 | 6,650,000.00 | Assets | ||
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 3,000,000.00 | 300,000.00 | 2,700,000.00 | Assets | ||
| Research and development of high-strength steel for the third generation of automobiles | 1,740,000.00 | 290,000.00 | 1,450,000.00 | Assets | ||
| 7 sets of 130 tons combustion boiler flue gas desulfurization project in power plant | 4,800,000.00 | 2,400,000.00 | 2,400,000.00 | Assets | ||
| Power plant three power plant cogeneration reform project | 2,000,000.00 | 1,000,000.00 | 1,000,000.00 | Assets | ||
| Cold-rolled high-strength steel renovation project | 50,000,000.00 | 25,000,000.00 | 25,000,000.00 | Assets | ||
| Liaoning Artisan Subsidy | 21.89 | 21.89 | Assets | |||
| Research on the Influence Mechanism and Control of Rare Earth Oxide Sulfide on Automobile Steel Plasticity | 457,413.50 | 122,965.00 | 334,448.50 | Income | ||
| Design of metallurgical slag system of rare earth steel and research on its chemical properties | 340,000.00 | 340,000.00 | Income | |||
| Provincial Science and Technology Department National Natural Science Foundation of China-Liaoning Provincial Government Joint Fund Project | 334,000.00 | 334,000.00 | Income | |||
| 2019 Provincial Skilled Master Workstation Fee | 200,000.00 | 200,000.00 | Income |
| Items | 31 December 2021 | Increase | Transfer to current profit and loss | Other decrease | 30 June 2022 | Related to assets or income |
| 2020 Provincial Skilled Master Workstation Fee | 100,000.00 | 100,000.00 | Income | |||
| Basic research on new technology of composite iron coke low carbon ironmaking charge | 168,000.00 | 168,000.00 | Income | |||
| The second batch of planned projects of the 2020 Liaoning Provincial Central Government to guide local science and technology development funds | 300,000.00 | 300,000.00 | Income | |||
| 2020 Liaoning Province "Hundreds of Thousands of Talents Project" Funding Project | 50,000.00 | 50,000.00 | Income | |||
| Air Pollution Prevention and Control Fund-Second Burning Finishing Dust Removal Ultra-Low Emission Transformation Project | 1,640,000.00 | 205,000.00 | 1,435,000.00 | Assets | ||
| Special fund project for building a strong province through intelligent manufacturing in 2021 | 8,100,000.00 | 8,100,000.00 | Assets | |||
| 2021 Benxi expert talent and enterprise docking project | 10,000.00 | 5,000.00 | 5,000.00 | Income | ||
| Special project for pollution control, energy saving and carbon reduction in Benxi in 2021 (converter gas recovery and efficiency improvement project) | 1,500,000.00 | 1,500,000.00 | Assets | |||
| 2021 Provincial Skilled Master Workstation Fee | 80,000.00 | 80,000.00 | Assets | |||
| Total | 93,106,285.89 | 9,690,000.00 | 30,272,965.00 | 72,523,320.89 |
30. Share capital
Notes：The increase in the current period was due to the conversion of the A-share convertible bonds issued by the company into 17,727 A-share ordinary shares in the current period. Fordetails, please refer to “Note 7 (27) Bonds Payable”.
31. Other equity instruments
(1) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
Notes:The decrease in the current period is due to the accumulative amount of RMB 80,200.00 (802 bonds) of A-share convertible bonds issued by the company being converted into thecompany’s A-share ordinary shares. As at June 30 2022, the remaining convertible bond balance of the company is RMB5,631,064,400.00 (56,310,644 bonds). For details, please refer to“Note 5. (27) Bonds Payable”.
| Items | 31 December 2021 | Increase/decrease (+, -) | |||||
| Issuing of new share | Bonus shares | Transferred from reserves | Others | Subtotal | 30 June 2022 | ||
| Capital shares | 4,108,191,379.00 | 17,727.00 | 17,727.00 | 4,108,209,106.00 | |||
Items
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 | ||||
| Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
Convertiblecorporate bonds
| Convertible corporate bonds | 56,311,446.00 | 947,882,663.63 | 802.00 | 16,325.76 | 56,310,644.00 | 947,866,337.87 | ||
| Total | 56,311,446.00 | 947,882,663.63 | 802.00 | 16,325.76 | 56,310,644.00 | 947,866,337.87 |
32. Capital reserves
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 |
Capital premium
| Capital premium | 13,156,216,704.27 | 61,887.86 | 13,156,278,592.13 | |
| Other capital reserves | 115,917,468.82 | 115,917,468.82 | ||
| Total | 13,272,134,173.09 | 61,887.86 | 13,272,196,060.95 |
Note: The increase in capital premium is due to the conversion of convertible bonds into company’sA-share ordinary shares.
33. Special Reserves
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 |
| Safety production cost | 337,978.57 | 38,838,893.44 | 7,687,308.78 | 31,489,563.23 |
| Total | 337,978.57 | 38,838,893.44 | 7,687,308.78 | 31,489,563.23 |
34. Surplus Reserves
| Items | 31 December 2021 | Increase | Decrease | 30 June 2022 |
| Statutory surplus reserves | 1,195,116,522.37 | 1,195,116,522.37 | ||
| Total | 1,195,116,522.37 | 1,195,116,522.37 |
35. Undistributed Profits
| Items | Current period | Previous period |
Before adjustments: undistributed profits at last year-end
| Before adjustments: undistributed profits at last year-end | 2,977,306,297.64 | 2,692,018,405.40 |
| After adjustments: undistributed profit at this year-beginning | 2,977,306,297.64 | 2,692,018,405.40 |
| Add: undistributed profit belonging to parent company | 561,735,377.41 | 2,500,582,902.58 |
| Less: Statutory surplus reserves | 234,010,992.52 | |
| Common shares dividend payable | 2,464,914,827.40 | 1,981,284,017.82 |
| Common shares dividend transferred to paid-in capital | ||
| Ending balance of undistributed profits | 1,074,126,847.65 | 2,977,306,297.64 |
Notes:
1) Adjustments of accounting standards for business enterprises and relevant new regulations at thisyear beginning is amount RMB 0.00.
2) Adjustments of Changes in accounting policies at this year beginning is amount RMB 0.00.
3) Adjustments of Correction of major accounting errors at this year beginning is amount RMB 0.00.
4) Adjustments of Change of consolidation scope caused by the same control at this year beginning isamount RMB 0.00.
5) Other adjustments at this year beginning is amount RMB 0.00.
36. Operating income and operating cost
| Items | Current period | Previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 33,109,977,666.90 | 31,509,788,033.31 | 35,798,649,027.39 | 32,161,874,843.45 |
| Other business | 1,905,199,638.08 | 1,867,689,507.32 | 2,789,479,184.75 | 2,430,950,949.27 |
| Total | 35,015,177,304.98 | 33,377,477,540.63 | 38,588,128,212.14 | 34,592,825,792.72 |
Details for operating income:
| Item | Principal business | Other business |
| Classified by business area | 33,109,977,666.90 | 1,905,199,638.08 |
| Including：Domestic | 29,041,718,048.17 | 1,905,199,638.08 |
| Abroad | 4,068,259,618.73 | - |
| Classified by the time of commodity transfer | 33,109,977,666.90 | 1,905,199,638.08 |
| Including: recognize at a certain point in time | 33,109,977,666.90 | 1,905,199,638.08 |
| recognize over a certain period of time | ||
| Total | 33,109,977,666.90 | 1,905,199,638.08 |
37. Tax and surcharges
| Items | Current period | Previous period |
| City maintenance and construction tax | 4,726,087.15 | 76,391,993.56 |
| Educational surcharge | 3,554,726.34 | 54,742,060.36 |
| Housing property tax | 40,822,272.51 | 40,482,761.79 |
| Land use right tax | 6,847,915.75 | 6,848,481.27 |
| Vehicle and vessel use tax | 26,912.88 | 7,286.20 |
| Stamp duty | 32,496,146.38 | 52,930,399.36 |
| Environmental tax | 11,411,384.22 | 10,152,512.38 |
| Total | 99,885,445.23 | 241,555,494.92 |
38. Selling and distribution expenses
| Items | Current period | Previous period |
| Import and export agency fee | 36,702,096.00 | 36,480,975.97 |
| Salary and benefits | 18,244,427.10 | 15,027,843.69 |
| Package fee | 4,973,464.77 | 3,787,047.04 |
| Others | 7,510,887.30 | 4,356,803.02 |
| Total | 67,430,875.17 | 59,652,669.72 |
39. General and administrative expenses
| Items | Current period | Previous period |
Salary and benefits
| Salary and benefits | 149,216,492.01 | 174,030,589.62 |
| Repair expense | 105,587,548.07 | 107,230,408.76 |
| Land use right fee | 19,965,273.48 | 32,611,483.62 |
| Depreciation | 22,309,498.45 | 19,687,001.55 |
| Heating fee | 19,696,001.68 | 16,329,843.40 |
| Water resources fee | 1,099,369.60 | 4,078,271.50 |
| Environmental protection fee | 3,176,610.83 | 4,145,377.97 |
| Others | 31,253,889.98 | 30,565,866.81 |
| Total | 352,304,684.10 | 388,678,843.23 |
40. Research and development expenses
| Items | Current period | Previous period |
| Depreciation, materials and compensation, etc. | 22,368,496.87 | 22,504,022.68 |
| Total | 22,368,496.87 | 22,504,022.68 |
41. Financial expenses
| Items | Current period | Previous period |
Interest expenditure
| Interest expenditure | 342,674,208.42 | 554,219,518.90 |
| Less: Interest income | 61,019,147.27 | 222,276,204.79 |
| Exchange loss | 5,012,400.26 | -15,432,430.80 |
| Others | 6,425,946.41 | 19,844,815.53 |
| Total | 293,093,407.82 | 336,355,698.84 |
42. Other income
| Items | Current period | Previous period |
| Government subsidy related to income | 127,965.00 | 75,883.34 |
| Government subsidy related to assets | 30,145,000.00 | 32,135,000.00 |
| Individual tax service fee refund | 2,577.92 | |
| Others | 380,000.00 | 448,600.00 |
| Total | 30,655,542.92 | 32,659,483.34 |
43. Income on investment
| Items | Current period | Previous period |
| Income on long-term equity investment by equity method | 85,455.22 | 281,949.15 |
| Other | 30,387.62 | 1,553,175.04 |
| Total | 115,842.84 | 1,835,124.19 |
44. Credit impairment losses
| Items | Current period | Previous period |
Loss from bad debts of account receivable
| Loss from bad debts of account receivable | -2,845,559.93 | 1,870,902.74 |
| Loss from bad debts of other receivables | 2,051,653.20 | 179,075.09 |
| Total | -793,906.73 | 2,049,977.83 |
Note: Loss is shown as negative figures
45. Assets impairment loss
| Items | Current period | Previous period |
Impairment of inventory and contract performance costs
| Impairment of inventory and contract performance costs | -72,880,991.53 | 6,629,442.12 |
| Total | -72,880,991.53 | 6,629,442.12 |
Note: Loss is shown as negative figures
46. Asset disposal income
| Items | Current period | Previous period | The amount recognized in non-recurring profit |
| Disposal gains or losses arising from disposal of fixed assets not held for sale | 3,648,546.62 | 130,675.05 | 3,648,546.62 |
| Total | 3,648,546.62 | 130,675.05 | 3,648,546.62 |
Note: Loss is shown as negative figures
47. Non-operating income
| Items | Current period | Previous period | The amount recognized in non-recurring profit |
| Non-current assets scrapped gains | 711,708.55 | 717,592.73 | 711,708.55 |
| Payables that cannot be paid | 27,948,070.49 | 27,948,070.49 | |
| Others | 1,912,502.31 | 2,555,535.73 | 1,912,502.31 |
| Total | 30,572,281.35 | 3,273,128.46 | 30,572,281.35 |
48. Non-operating expense
| Items | Current period | Previous period | The amount recognized in non-recurring profit |
| Non-current assets scrapped loss | 10,765,339.79 | 22,989,643.14 | 10,765,339.79 |
| Total | 10,765,339.79 | 22,989,643.14 | 10,765,339.79 |
49. Income tax expenses
(1) Income tax expenses
| Items | Current period | Previous period |
| Income tax payable for the current year | 197,785,904.70 | 744,822,287.29 |
| Adjustment of deferred income tax | 5,419,049.90 | 2,155,303.16 |
| Total | 203,204,954.60 | 746,977,590.45 |
(2) Accounting profit and income tax expense adjustment process
| Items | Current period |
| Total profit | 783,168,830.84 |
| Income tax expense calculate according to the official or applicable tax rate | 195,792,207.71 |
| Effect of non-taxable income | -21,363.81 |
| Effect of non-deductible costs, expenses or losses | 49,182.62 |
| Effect of use of deductible losses of unrecognized deferred tax asset of prior period | -2,632,491.23 |
| Others | 10,017,419.31 |
| Income tax expenses | 203,204,954.60 |
50. 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 | 97,205,274.52 | 14,619,093.59 |
| Interest income | 61,019,147.27 | 222,276,204.79 |
| Special subsidy income | 9,690,000.00 | 1,225,520.00 |
| Non-operating income | 1,068,391.65 | |
| Others | 804,702.43 | 130,327.27 |
| Total | 168,719,124.22 | 239,319,537.30 |
(2) Cash paid related to other operating activities
| Items | Current period | Previous period |
| Current accounts, advance for another | 22,514,446.73 | 179,844,208.53 |
| Sales expenses | 50,910,874.42 | 4,351,842.16 |
| Administrative expenses | 168,184,142.54 | 15,765,954.58 |
| Charges | 6,425,946.41 | 2,980,552.80 |
| Others | 1,023,567.21 | 437,431.93 |
| Total | 249,058,977.31 | 203,379,990.00 |
(3) Cash received related to other financing activities
| Items | Current period | Previous period |
| Margin for bill, letter of guarantee and letter of credit | 2,548,792,921.60 | |
| Total | 2,548,792,921.60 |
(4) Cash paid related to other financing activities
| Items | Current period | Previous period |
| Margin for bill, letter of guarantee and letter of credit | 71,693,646.43 | |
| Total | 71,693,646.43 |
51. 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 | 579,963,876.24 | 2,223,166,287.43 |
| Add: Credit impairment loss | 793,906.73 | 2,049,977.83 |
| Impairment of assets | 72,880,991.53 | 6,629,442.12 |
| Depreciation of fixed assets | 1,105,263,552.94 | 1,165,395,017.14 |
| Depreciation of productive biological assets | ||
| Depletion of oil and gas properties | ||
| Depreciation of right-of-use assets | 30,187,267.22 | 31,329,731.88 |
| Amortization of intangible assets | 3,690,085.26 | 3,283,685.40 |
| Amortization of long-term deferred expenses | ||
| Losses proceeds from disposal of fixed assets, intangible assets and other long-term assets (Earnings marked“－”) | -3,648,546.62 | 22,272,050.41 |
| Scrapped losses from fixed assets (Earnings marked“－”) | 10,053,631.24 | |
| Loss from changes in fair value (Earnings marked“－”) | ||
| Financial expenses (Earnings marked“－”) | 342,674,208.42 | 336,355,698.84 |
| Investment losses (Earnings marked“－”) | -115,842.84 | |
| Deferred tax assets reduction (Addition marked“－”) | 5,419,049.90 | -2,155,303.16 |
| Deferred tax liabilities increased (Reduction marked“－”) | ||
| Reduction of inventory (Addition marked“－”) | 1,435,572,851.38 | 376,719,726.97 |
| Operating receivable items reduction (Addition marked“－”) | 2,160,572,533.72 | 102,664,138.59 |
| Operating payable items increase (Less marked"－") | -5,468,912,532.78 | -2,742,794,233.42 |
| Others | -46,943,190.13 | |
| Net cash flows generated from operating activities | 227,451,842.21 | 1,524,916,220.03 |
| 2. Payments of investing and financing activities not involving cash: | ||
| Liabilities transferred to capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets financed by leasing | ||
| 3. The net increase in cash and cash equivalents: | ||
| Ending balance of cash | 4,750,473,298.51 | 4,457,454,114.91 |
| Less: Opening balance of cash | 6,299,099,063.48 | 9,229,417,595.12 |
| Add: Ending balance of cash equivalents |
| Items | Current period | Previous period |
Less: Opening balance of cash equivalents
| Less: Opening balance of cash equivalents | ||
| The net increase in cash and cash equivalents | -1,548,625,764.97 | -4,771,963,480.21 |
(2) The structure of cash and cash equivalents
| Items | 30 June 2022 | 31 December 2021 |
| 1. Cash | 4,750,473,298.51 | 6,299,099,063.48 |
| Including: Cash on hand | 1,232.53 | 24,334.93 |
| Bank deposits available on demand | 4,750,472,065.98 | 6,299,074,728.55 |
| 2. Cash equivalents | ||
| Including: Investment of securities due within 3 months | ||
| 3. Ending balance of cash and cash equivalents | 4,750,473,298.51 | 6,299,099,063.48 |
| Including: Cash and cash equivalents limited to use by the parent company of another subsidiary in the group |
52. Assets of which ownership or right to use are restricted
| Items | Ending balance | Reason |
Cash at bank and on hand
| Cash at bank and on hand | 54,897,399.20 | Deposit for notes and letter of credit |
| Accounts receivable financing | 101,670,000.00 | Pledge for bank acceptance bill |
| Fixed assets | 87,549,758.85 | Mortgage for fund borrowing |
| Intangible assets | 35,846,028.60 | Mortgage for fund borrowing |
| Total | 279,963,186.65 |
53. Foreign currency monetary items
(1) Foreign currency monetary items
| Items | Ending balance in foreign currency | Exchange rate at the year-end | Ending balance translated to RMB |
| Cash at bank and on hand | 14,102,344.42 | ||
| Including: USD | 2,101,252.26 | 6.7114 | 14,102,344.42 |
| EUR | |||
| HKD | |||
| Short-term loans | 1,342,280.00 | ||
| Including: USD | 200,000.00 | 6.7114 | 1,342,280.00 |
| EUR | |||
| JPY | |||
| Long-term loans | 300,627,944.50 | ||
| Including: USD | 9,500,000.00 | 6.7114 | 63,758,300.00 |
| Items | Ending balance in foreign currency | Exchange rate at the year-end | Ending balance translated to RMB |
| EUR | 32,904,937.70 | 7.0084 | 230,610,965.70 |
| JPY | 127,468,000.00 | 0.0491 | 6,258,678.80 |
(2) The Company has no overseas operating entities.
54. Government subsidies
(1) Government subsidies related to assets
| Item | Amount | Balance sheet items | The amount included in the current profit or loss or offsetting the loss of related costs | ||
| Current period | Previous period | Items | |||
| 2018 Municipal Skill Master Workstation Fee | 240,000.00 | Deferred Income | Other income | ||
| Advanced Treatment Project of Carbon Fiber Wastewater in Dongfeng Plant Area of Plate Coking Plant | 9,500,000.00 | Deferred Income | 950,000.00 | 950,000.00 | Other income |
| Desulfurization and Denitrification Project of Coal-fired Boiler in High-pressure Workshop of Bengang Power Plant | 6,000,000.00 | Deferred Income | 300,000.00 | 300,000.00 | Other income |
| Research and development of high-strength steel for the third generation of automobiles | 2,900,000.00 | Deferred Income | 290,000.00 | 290,000.00 | Other income |
| 7 sets of 130 tons combustion boiler flue gas desulfurization project in power plant | 24,000,000.00 | Deferred Income | 2,400,000.00 | 2,400,000.00 | Other income |
| Power plant three power plant cogeneration renovation project | 10,000,000.00 | Deferred Income | 1,000,000.00 | 1,000,000.00 | Other income |
| Cold-rolled high-strength steel renovation project | 250,000,000.00 | Deferred Income | 25,000,000.00 | 25,000,000.00 | Other income |
| Liaoning Artisan Subsidy | 100,002.97 | Deferred Income | Other income | ||
| Finishing Dust | 2,050,000.00 | Deferred | 205,000.00 | Other | |
| Item | Amount | Balance sheet items | The amount included in the current profit or loss or offsetting the loss of related costs | ||
| Current period | Previous period | Items | |||
| Removal Ultra-Low Emission Transformation Project | Income | income | |||
| Special fund project for building a strong province through intelligent manufacturing in 2021 | 8,100,000.00 | Deferred Income | Other income | ||
| Special project for pollution control, energy saving and carbon reduction in Benxi in 2021 (converter gas recovery and efficiency improvement project) | 1,500,000.00 | Deferred Income | Other income | ||
| 2021 Municipal Skill Master Workstation Fee | 80,000.00 | Deferred Income | Other income | ||
| 2020 Ecological Civilization Construction Project (Special Steel Electric Furnace Upgrade Project) | 20,000,000.00 | Deferred Income | Other income | ||
(2) Government subsidies related to income
| Items | Amount | The amount included in the current profit or loss or offsetting the loss of related costs | ||
| Current period | Previous period | Items | ||
| Research on the Influence Mechanism and Control of Rare Earth Oxide Sulfide on Automobile Steel Plasticity | 547,040.00 | 122,965.00 | 24,876.50 | Other income |
| 2021 Benxi expert talent and enterprise | 10,000.00 | 5,000.00 | Other income | |
| Items | Amount | The amount included in the current profit or loss or offsetting the loss of related costs | ||
| Current period | Previous period | Items | ||
| docking project | ||||
| Design of metallurgical slag system of rare earth steel and Study on its physical and chemical properties | 340,000.00 | Other income | ||
| Joint fund project of provincial science and Technology Department, National Natural Science Foundation of China and Liaoning Provincial Government | 334,000.00 | Other income | ||
| 2019 Provincipal Skill Master Workstation Fee | 200,000.00 | Other income | ||
| 2020 Provincipal Skill Master Workstation Fee | 100,000.00 | Other income | ||
| Research on new technology of composite iron coke low carbon iron making charge | 168,000.00 | Other income | ||
| The second batch of planned projects of Liaoning provincial central leading local science and technology development funds in 2021 | 300,000.00 | Other income | ||
| Liaoning Province " ten million Talents Project" funding project in 2020 | 50,000.00 | Other income | ||
| Liaoning Province | 250,000.00 | 30,000.00 | Other income | |
| Items | Amount | The amount included in the current profit or loss or offsetting the loss of related costs | ||
| Current period | Previous period | Items | ||
| "Hundred, Thousand, Thousand, Thousand Talents Project" funding project in 2018 | ||||
| 2019 Municipal Skill Master Workstation Fee | 180,000.00 | 21,006.84 | Other income | |
| Tax refund | 380,000.00 | 380,000.00 | Other income | |
| Stable Job Subsidy | 4,120.00 | 4,120.00 | Administrative expense | |
(3) Return of government subsidies during the reporting period
None
55. Lease
| Item | Current period |
| Interest expense from lease liability | 27,576,079.44 |
| Short-term lease expenses from simplified treatment included in the cost of related assets or the current profit and loss | |
| Low-value asset lease expenses from simplified treatment included in the cost of related assets or the current profit and loss (Except short- term lease expenses from low-value asset) | |
| Variable lease payments without including in the measurement of the lease liability included in the cost of related assets or the current profit and loss | |
| Including：sale-leaseback transaction generation part | |
| Income from subletting the right-of-use assets | |
| Total cashflow out related to leasing | 46,846,358.31 |
| Profit and loss from sale-leaseback transactions | |
| Cash inflows from sale-leaseback transactions | |
| Cash outflows from leaseback |
VIII. Changes in the scope of consolidation
1. Changes in consolidation scope due to other reasons
Chongqing Liaoben Steel & Iron Trading Co., Ltd., a wholly-owned subsidiary, wascancelled in the current period.
IX. Equity in other entities
1. Equity in subsidiaries
(1) Constitution of enterprise group
| Name of the subsidiaries | Principal place of business | Registered address | Notes of business | Shareholding ratio | Acquiring method | |
| Direct | Indirect | |||||
WuxiBengangSteel & IronSales Co.,Ltd.
| Wuxi Bengang Steel & Iron Sales Co., Ltd. | Wuxi | Wuxi | Sales | 100.00 | Business combination under common control | |
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | Tianjin | Tianjin | Sales | 100.00 | Business combination under common control | |
| Nanjing Bengang Materials Sales Co., Ltd. | Nanjing | Nanjing | Sales | 100.00 | Business combination under common control | |
| Yantai Bengang Steel & Iron Sales Co., Ltd. | Yantai | Yantai | Sales | 100.00 | Business combination under common control | |
| Harbin Bengang Economic and Trading Co., Ltd. | Harbin | Harbin | Sales | 100.00 | Business combination under common control | |
| Changchun Bengang | Changchun | Changchun | Sales | 100.00 | Business combination under |
| Name of the subsidiaries | Principal place of business | Registered address | Notes of business | Shareholding ratio | Acquiring method | |
| Direct | Indirect | |||||
| Steel & Iron Sales Co., Ltd. | common control | |||||
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | Guangzhou | Guangzhou | Sales | 100.00 | Establishment | |
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. | Shanghai | Shanghai | Sales | 100.00 | Establishment | |
| Bengang Steel Plates Liaoyang Pellet Co., Ltd. | Liaoyang | Liaoyang | Manufacturing | 100.00 | Establishment | |
| Dalian Benruitong Automobile Material Technology Co., Ltd. | Dalian | Dalian | Manufacturing | 65.00 | Establishment | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | Benxi | Benxi | Manufacturing | 75.00 | Business combination under common control | |
| Benxi | Benxi | Benxi | Sales | 100.00 | Establishment | |
| Name of the subsidiaries | Principal place of business | Registered address | Notes of business | Shareholding ratio | Acquiring method | |
| Direct | Indirect | |||||
| Bengang Steel Sales Co., Ltd | ||||||
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. | Shenyang | Shenyang | Sales | 100.00 | Establishment | |
| Bengang Baojin (Shenyang) auto new material technology Co., Ltd. | Shenyang | Shenyang | Manufacturing | 85.00 | Business combination under common control | |
(2) Significant but not wholly-owned subsidiaries
| Name of the subsidiaries | Proportion of non-controlling interests (%) | Profits and losses attributing to non-controlling shareholders | Dividend declared to distribute to non-controlling shareholders | Ending balance of non-controlling interests |
Bengang POSCO Cold-rolledSheet Co., Ltd.
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 25.00 | 22,883,060.69 | 567,286,294.20 |
(3) Financial information of significant but not wholly-owned subsidiaries
| Name of the subsidiaries | 30 June 2022 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Bengang POSCO
| Bengang POSCO | 2,578,868,342.31 | 1,064,567,282.14 | 3,643,435,624.45 | 1,374,290,447.66 | 1,374,290,447.66 |
| Name of the subsidiaries | 30 June 2022 |
Cold-rolled SheetCo., Ltd.
Cold-rolled SheetCo., Ltd.
(Continute)
| 31 December 2021 | |||||||
| Name of the subsidiaries | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 2,969,950,327.43 | 1,134,904,732.59 | 4,104,855,060.02 | 1,937,187,863.07 | 1,937,187,863.07 | ||
| Name of the subsidiaries | Current period | |||
| Operating income | Net profit | Total comprehensive income | Net cash flows from operating activities | |
Bengang POSCO Cold-rolled SheetCo., Ltd.
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 5,229,533,000.35 | 91,532,242.77 | 91,532,242.77 | 306,038,909.09 |
| Name of the subsidiaries | Previous period | |||
| Operating income | Net profit | Total comprehensive income | Net cash flows from operating activities | |
| Bengang POSCO Cold-rolled Sheet Co., Ltd. | 5,691,380,556.81 | 62,979,247.98 | 62,979,247.99 | -138,708,467.08 |
2. Other
(1) Summary of financial information of unimportant joint ventures and associates
| 30 June 2022/ Current period | 31 December 2021/ Previous period | |
| Joint ventures: | ||
| Total book value of investment: | 3,067,239.29 | 2,981,784.07 |
| The total amount of the following items calculated according to the shareholding ratio | ||
| —Net profit | 85,455.22 | 520,432.46 |
| 30 June 2022/ Current period | 31 December 2021/ Previous period |
—Other comprehensive income
| —Other comprehensive income | ||
| —Total comprehensive income | 85,455.22 | 520,432.46 |
X. Risks associated with financial instrumentsThe company faces various financial risks in its operation: credit risk, market risk andliquidity risk. The company's board of directors is fully responsible for the determination ofrisk management objectives and policies, and assumes ultimate responsibility for the riskmanagement objectives and policies. However, the board of directors has authorized thecompany's planning and development department to design and implement procedures thatensure the effective implementation of risk management objectives and policies. The board ofdirectors reviews the effectiveness of the implemented procedures and the rationality of riskmanagement objectives and policies through reports submitted by the planning anddevelopment department. The company's internal auditors also audit risk management policiesand procedures, and report relevant findings to the audit committee.The overall goal of the company's risk management is to formulate a risk management policythat minimizes risks without excessively affecting the company's competitiveness andresilience.
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. Before signing a new contract, the company willassess the credit risk of new customers, including external credit ratings and bank creditcertificates in certain cases (when this information is available). The company has set a creditlimit for each customer, which is the maximum amount that does not require additionalapproval.
The Company ensures that the company's overall credit risk is within a controllable rangethrough regular monitoring of existing customers' credit ratings and periodic review of aginganalysis of accounts receivable. In addition, the Company strictly approves the line of credit,and only sells on credit to important customers for newly-developed products. In themonitoring of credit risk of customers, the Company sorts customers into groups by theircredit characteristics. Those customers which are rated as “high risk” will be put in therestricted client list. The Company can only sell to these customers on credit with additionalapproval; otherwise, the Company must ask for a corresponding deposit in advance.
2. Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligationto settle by delivering cash or other financial assets. It is the Company's policy to ensure thatsufficient cash is available to meet debt obligations as they fall due. Liquidity risk is centrallycontrolled by the Company's financial department. The finance department ensures that thecompany has sufficient funds to repay its debts under all reasonable forecasts by monitoringunrestricted monetary fund balances, bank acceptance bills that will be realized when due, androlling forecasts of cash flows for the next 12 months.
The following table sets forth the remaining contractual maturity dates of the Company'snon-derivative financial liabilities that should be repaid in accordance with the terms of theagreement. The table has been prepared based on the undiscounted cash flows of financialliabilities based on the earliest date on which the Company can be required to pay. Cash flowincluding interest and principal:
(In 10 thousand Yuan)
| Items | 30 June 2022 | |||||
| Instant repayment | Within 1 year | 1-2years | 2-5years | Over 5 years | Total | |
Trade and other payables
| Trade and other payables | 693,670.74 | 693,670.74 | ||||
| Borrowing and Interest | 494,568.82 | 255,904.22 | 678,612.89 | 695.49 | 1,429,781.42 | |
| Total | 1,188,239.56 | 255,904.22 | 678,612.89 | 695.49 | 2,123,452.16 |
| Items | 31 December 2021 | |||||
| Instant repayment | Within 1 year | 1-2years | 2-5years | Over 5 years | Total | |
| Trade and other payables | 1,133,538.18 | 1,133,538.18 | ||||
| Borrowing and Interest | 441,115.83 | 226,971.68 | 832,756.07 | 1,500,843.58 | ||
| Total | 1,574,654.01 | 226,971.68 | 832,756.07 | 2,634,381.76 | ||
3. 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, the
Company closely monitors interest rate risk and will consider interest-rate swaps to acquire anexpected structure of interest rates shall the need arise.
(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 currency risk.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:
(In 10 thousand Yuan)
| Items | 30 June 2022 | ||
| USD | Others | Total | |
| Assets | 1,410.23 | 1,410.23 | |
| Liabilities | 6,510.06 | 23,686.96 | 30,197.02 |
| Total | 7,920.29 | 23,686.96 | 31,607.25 |
| Items | 31 December 2021 | ||
| USD | Others | Total | |
| Assets | 1,795.12 | 397.56 | 2,192.68 |
| Liabilities | 68,060.60 | 34,900.31 | 102,960.91 |
| Total | 69,855.72 | 35,297.87 | 105,153.59 |
On June 30, 2022, with all other variables held constant, if the relevant currency appreciatesor depreciates against RMB by 5%, the company will decrease or increase the net profit ofRMB 1,439.34 in 10 thousand (On December 31, 2021: RMB 3,778.81in 10 thousand).Management believes that 5% reasonably reflects the reasonable range of possiblecurrency-to-renminbi changes in the next year.XI. Disclosure of fair value
The input value used in fair value measurement is divided into three levels:
The input value of the first level is the unadjusted quotation of the same asset or liability thatcan be obtained on the measurement date in an active market.The input value of the second level is the input value of the related assets or liabilities that isdirectly or indirectly observable except the input value of the first level.The third level of input value is the unobservable input value of related assets or liabilities.The level to which the fair value measurement result belongs is determined by the lowestlevel to which the input value that is important to the fair value measurement as a wholebelongs.
1. Fair value of assets and liabilities measured at fair value
| Item | Fair value at the end of the period | |||
| Fair value measurement in the first level | Fair value measurement in the second level | Fair value measurement in the third level | Total | |
| 1. Continuous fair value measurement | ||||
| ◆ Accounts receivable financing | 254,184,970.37 | 254,184,970.37 | ||
| ◆ Investment in other equity instruments | 1,042,024,829.00 | 1,042,024,829.00 | ||
| Total assets continuously measured at fair value | 1,296,209,799.37 | 1,296,209,799.37 | ||
| Total liabilities continuously measured at fair value | ||||
| 2. Non-continuous fair value measurement | ||||
2. The basis for determining the market value of the continuous and non-continuousfirst-level fair value measurement projectsThe Company has no first level fair value measurement project.
3. Continuous and non-continuous second-level fair value measurement items, usingvaluation techniques and qualitative and quantitative information on important parametersThe Company has no second level fair value measurement items.
4. Continuous and non-continuous third-level fair value measurement items, using valuationtechniques and qualitative and quantitative information on important parametersOther equity instrument investments that are continuously measured at level 3 fair value areunlisted equity investments held by the Company. Receivable financing with continuousthird-level fair value measurement is the bank acceptance bill held by the company, and its fair
value is confirmed with reference to the par value.The Company adopted valuation techniques for fair value measurement, mainly using thevaluation technique of the listed company comparison method, referring to the stock prices ofsimilar securities and taking into account liquidity discounts.
5. Continuous third level fair value measurement items, adjustment information betweenopening and closing book values and sensitivity analysis of unobservable parametersNone.
6. For continuous fair value measurement projects, where conversion between various levelsoccurs during the period, the reason for the conversion and the policy for determining thetiming of conversionDuring the current period, there was no conversion between various levels.
7. Changes in valuation techniques and reasons for changes during the periodNo changes during the period.
8. Fair value of financial assets and financial liabilities not measured at fair valueNone.
9. Other
None.XII. Related party transactions
1. Details of parent company
| Name of parent company | Place of Registry | Notes of Business | Registered Capital （billion） | Share proportion (%) | Voting rights (%) |
| Benxi Steel & Iron (Group) Co., Ltd. | Benxi, Liaoning | Manufacturing | 7.401 | 58.65 | 58.65 |
Note:The ultimate controlling party of the Company is Ansteel Group Co., Ltd.
2. Details of the subsidiaries
For details of subsidiaries of the company please refer to Note 7 “Equity in other entities”.
3. The company's joint ventures and associates
For details of significant joint ventures and associates of the company please refer to Note 7“Equity in other entities”.Other joint ventures or associates that have related party transactions with the company in thecurrent period, or have related party transactions with the company in the previous period andformed a balance are as follows:
| Name of joint ventures and associates | Relationship |
| Zhejiang Bengang Jingrui Steel Processing Co., Ltd. | Associate |
4. Details of other related parties
| Name of other related parties | Relationship |
| Bengang Group Co., Ltd. (here in after referred to as “Bengang Group”) | Parent company &controlling shareholder |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | same parent company |
| Bengang Electric Co., Ltd. | Associates of the parent company |
| Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | Both belong to Bengang Group |
| Benxi New Business Development Co., Ltd. | same parent company |
| Liaoning Metallurgical Technician College | same parent company |
| Liaoning Metallurgical Vocational and Technical College | same parent company |
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Both belong to Bengang Group |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | same parent company |
| Benxi Iron and Steel (Group) Design and Research Institute | same parent company |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Both belong to Bengang Group |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | same parent company |
| Name of other related parties | Relationship |
Liaoning Hengtai Heavy Machinery Co., Ltd.
| Liaoning Hengtai Heavy Machinery Co., Ltd. | same parent company |
| Angang Electric Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Chaoyang Branch of Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Angang Steel Rope Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group International Economic and Trade Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Construction Group Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Group Engineering Technology Development Co., Ltd. | Both belong to Ansteel Group |
| Dalian Boroller Steel Pipe Co., Ltd. | Same parent company |
| Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | Same parent company |
| Suzhou Bengang Industrial Co., Ltd. | Shareholding company |
| Benxi Iron and Steel Group Finance Co., Ltd. | Both belong to Bengang Group |
| Ansteel Chemical Technology Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Energy Technology Co., Ltd. | Both belong to Ansteel Group |
| Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | Both belong to Ansteel Group |
| Delin Land Port Supply Chain Service Co., Ltd. | Both belong to Ansteel Group |
| Benxi Iron and Steel Tendering Co., Ltd. | Both belong to Bengang Group |
| Anshan Iron and Steel Co., Ltd. | Both belong to Ansteel Group |
| Liaoning Hengyi Financial Leasing Co., Ltd. | Both belong to Bengang Group |
| Ansteel Group Finance Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Heavy Machinery Co., Ltd. | Both belong to Ansteel Group |
| Ansteel Mining Machinery Manufacturing Co., Ltd. | Both belong to Ansteel Group |
| Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | Same parent company |
| Tianjin Angang Steel Processing and Distribution Co., Ltd. | Both belong to Ansteel Group |
| Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. | Same parent company |
| Angang Steel Distribution (Hefei) Co., Ltd | Both belong to Ansteel Group |
| Angang Group (Anshan) railway transportation equipment manufacturing Co., Ltd | Both belong to Ansteel Group |
| Angang Metal Structure Co., Ltd | Both belong to Ansteel Group |
| Angang Green Resources Technology Co., Ltd | Both belong to Ansteel Group |
| Angang Shenyang steel processing and Distribution Co., Ltd | Both belong to Ansteel Group |
| Angang industrial group (Anshan) equipment operation and | Both belong to Ansteel Group |
| Name of other related parties | Relationship |
maintenance Co., Ltd
| maintenance Co., Ltd | |
| Angang Steel Casting Co., Ltd | Both belong to Ansteel Group |
| North Hengda Logistics Co., Ltd | Both belong to Bengang Group |
| Benxi Aike hydraulic seal Co., Ltd | Same parent company |
| Benxi North Steel Pipe Co., Ltd | Both belong to Bengang Group |
| Benxi North Iron Industry Co., Ltd | Both belong to Bengang Group |
| Benxi Beitai Casting Pipe Co., Ltd | Both belong to Bengang Group |
| Benxi Beiying iron and Steel Group Import and Export Co., Ltd | Both belong to Bengang Group |
| Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | Same parent company |
| Pengcheng branch of Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) No.2 Construction Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) No.1 Construction Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Engineering Quality Inspection Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Guomao Tengda Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Electromechanical Installation Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) construction advanced decoration Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Mine Construction Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) mining Honghe Industrial Development Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) mining and Mineral Resources Development Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) mining Liaoyang jiajiabao iron ore Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) mining Yanjiagou Limestone Mine Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) road and Bridge Construction Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) equipment Engineering Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Industrial Development electromechanical installation Co., Ltd | Same parent company |
| Benxi Iron and steel (Group) Industrial Development Co., Ltd. recycling branch | Same parent company |
| Benxi Iron and steel (Group) Co., Ltd | Same parent company |
| Name of other related parties | Relationship |
Benxi Xihu metallurgical burden Co., Ltd
| Benxi Xihu metallurgical burden Co., Ltd | Same parent company |
| Benxi Weier surfacing Manufacturing Co., Ltd | Same parent company |
| Benxi Xinhe Mining Co., Ltd | Same parent company |
| Liaoning slag powder Co., Ltd | Same parent company |
| Liaoning Tianyu Fire Engineering Co., Ltd | Same parent company |
| Liaoning Yitong Machinery Manufacturing Co., Ltd | Same parent company |
| Changchun FAW Angang Steel processing and Distribution Co., Ltd | Both belong to Ansteel Group |
5. Related Party Transactions
(1) Related party transactions of purchasing goods and services
Company as the purchaser
Currency unit: Yuan
| Name | The content of related party transactions | Current period | Approved transaction limit | Whether the transaction limit is exceeded | Previous period |
| Benxi Iron and steel (Group) Co., Ltd | Repair expense | 122,783,160.52 | 350,000,000.00 | No | 147,459,999.95 |
| Benxi Iron and steel (Group) Co., Ltd | Land lease fee | 30,187,267.22 | No | 32,611,483.62 | |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | Products | No | 630,542.06 | ||
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Labor cost | 2,613,517.18 | 50,000,000.00 | No | 3,881,885.31 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Raw materials | 3,510,974,470.81 | 8,950,000,000.00 | No | 3,331,093,031.86 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Freight | No | 6,659,006.59 | ||
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Raw materials | 139,381,388.64 | 51,000,000.00 | No | 245,760,132.42 |
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | Processing fee | No | 50,773.63 | ||
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Spare parts | 23,012,269.46 | 100,000,000.00 | No | 14,917,125.64 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Repair service | 15,607,849.52 | 100,000,000.00 | No | 2,923,241.16 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Spare parts | 4,646,764.56 | 520,000,000.00 | No | 1,987,617.54 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Project fee | 90,638,976.00 | No | 140,577,406.08 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Repair service | 22,969,228.64 | No | 41,682,570.67 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Raw materials | 4,646,764.56 | No | 3,755,915.37 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Freight | No | 874,470.26 | ||
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Spare parts | 14,032,862.42 | 300,000,000.00 | No | 26,936,414.43 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Raw materials | 36,618,024.06 | No | 15,671,303.31 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Repair service | 443,449.54 | No | 189,000.00 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Freight | 2,169,588.19 | No | 1,916,795.13 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Project fee | No | 3,602,864.00 | ||
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Raw material and supplementary material | 2,058,346.87 | 200,000,000.00 | No | 628,272.26 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Project fee | 17,144,271.62 | No | 3,707,364.60 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Repair expense | 5,748,486.32 | No | 2,555,910.39 | |
| Bengang Electric Co., Ltd. | Raw materials | 65,419,935.95 | 200,000,000.00 | No | 73,653,667.71 |
| Bengang Electric Co., Ltd. | Repair service | No | 2,206,804.72 | ||
| Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | Spare parts | 71,251.70 | No | 79,567.24 | |
| Benxi New Business Development Co., Ltd. | Repair service | No | 30,108.24 | ||
| Benxi New Business Development Co., Ltd. | Raw material and Meal | No | 1,134,041.61 |
| expenses | |||||
| Liaoning Metallurgical Technician College | Training fee | 580,509.17 | 20,000,000.00 | No | 1,261,635.37 |
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Raw materials | No | 8,461,158,580.21 | ||
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Agency fee | 37,145,227.62 | 500,000,000.00 | No | 36,480,975.97 |
| Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | Port surcharges | 96,460,418.24 | No | 105,447,143.23 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Spare parts | 4,990,030.05 | 130,000,000.00 | No | 931,359.00 |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Project fee | 18,816,098.36 | No | 2,365,344.25 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Repair service | 910,634.86 | No | ||
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | Heating costs | 708,146.88 | No | 91,776.00 | |
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | Raw materials | 35,759.46 | No | 20,160.00 | |
| Benxi Iron and Steel (Group) Design and Research Institute | Design fees | No | 409,620.74 | ||
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Raw materials | 6,240,995,520.57 | 19,280,000,000.00 | No | 1,406,198,901.45 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Energy & Power | 354,632,805.17 | 600,000,000.00 | No | 248,906,302.60 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Freight | 3,501,207.61 | No | 2,265,401.79 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Labor cost | 46,977,784.13 | No | 40,418,482.20 | |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Spare parts | 2,823,257.54 | No | 11,548,340.88 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | Raw material and supplementary material | 66,215,321.16 | 250,000,000.00 | No | 34,815,337.28 |
| Liaoning Hengtong | Repair service | No | 669,321.70 |
Company as the seller
Currency unit: Yuan
| Name | The content of related party transactions | Current period | Previous period |
| Bengang Electric Co., Ltd. | Energy & Power | 2,966,904.10 | 394,612.01 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Raw material and supplementary material | 404,510,783.18 | 1,663,276,711.80 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Products | 7,805,748.05 | 11,504,924.12 |
| Benxi Beiying Iron and Steel (Group) Co., Ltd. | Energy & Power | 36,045,489.04 | 64,612,276.29 |
| Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | Energy & Power | 40,312.15 | 9,407.84 |
Metallurgical EquipmentManufacturing Co., Ltd.
| Metallurgical Equipment Manufacturing Co., Ltd. | |||||
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Raw material and supplementary material | 1,158,044.41 | 41,000,000.00 | No | 707,939.24 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Repair service | 3,363,187.60 | No | 4,254,425.91 | |
| Bengang Group Co., Ltd. | Labor cost | 1,947,299.50 | 100,000,000.00 | No | 87,933,408.03 |
| Bengang Group Co., Ltd. | House rental fee | No | 376,146.79 | ||
| Ansteel Scrap Resources (Anshan) Co., Ltd. | Raw materials | 55,204,556.15 | 700,000,000.00 | No | |
| Chaoyang Branch of Ansteel Scrap Resources (Anshan) Co., Ltd. | Raw materials | 40,861,009.95 | No | ||
| Ansteel Group International Economic and Trade Co., Ltd. | Raw materials | 8,328,324.66 | 1,200,000,000.00 | No | |
| Ansteel Construction Group Co., Ltd. | Project fee | 21,192,660.55 | 30,000,000.00 | No | |
| Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | Repair service | 563,736.00 | No | ||
| Angang Steel Co., Ltd. | Raw materials | 75,504,413.81 | 1,300,000,000.00 | No | |
| Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | Labor cost | 11,353.84 | No | ||
| North Hengda Logistics Co., Ltd | Freight | 14,102,106.06 | No | ||
| Ansteel Group Mine Industry Gong Chang Ling Co., Ltd. | Raw materials | 238,405,486.63 | 1,600,000,000.00 | No |
| Name | The content of related party transactions | Current period | Previous period |
| Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | Energy & Power | 4,553.41 | |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Products | 10,523,900.28 | 4,459,605.76 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Energy & Power | 10,883,794.65 | 10,862,017.82 |
| Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | Raw material and supplementary material | 164,051.83 | |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Energy & Power | 7,783,309.92 | 3,775,753.79 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Raw material and supplementary material | 1,714,633.10 | |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Energy & Power | 368,746,319.95 | 334,269,066.87 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Raw material and supplementary material | 67,380,113.36 | 53,126,208.04 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Freight | 4,717,137.94 | 3,392,900.80 |
| Benxi Iron and Steel (Group) Mining Co., Ltd. | Products | 1,298,986.47 | |
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | Energy & Power | 17,198,224.54 | 36,494,765.92 |
| Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | Raw material and supplementary material | 13,425,740.25 | 8,935,674.95 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Energy & Power | 1,312,651.56 | 4,136,805.19 |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Products | 5,013,408.82 | |
| Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | Raw material and supplementary material | 6,608,404.18 | |
| Benxi Iron and Steel (Group) Information Automation Co., Ltd. | Energy & Power | 78,150.86 | 52,303.28 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Energy & Power | 508,442.14 | 595,504.47 |
| Benxi Iron and Steel (Group) Construction Co., Ltd. | Raw material and supplementary material | 1,039,847.44 | |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Energy & Power | 2,923,049.91 | 225,878,060.70 |
| Name | The content of related party transactions | Current period | Previous period |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Raw material and supplementary material | 6,434,506.40 | |
| Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | Products | 81,209,016.00 | |
| Benxi Iron and steel (Group) Co., Ltd | Energy & Power | 1,830,219.24 | 2,630,608.21 |
| Benxi Iron and steel (Group) Co., Ltd | Raw material and supplementary material | 2,815,485.28 | 3,469,768.28 |
| Benxi New Business Development Co., Ltd. | Energy & Power | 56,559.67 | 116,321.08 |
| Dalian Boroller Steel Pipe Co., Ltd. | Products | 10,411,580.55 | 6,555,953.09 |
| Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | Energy & Power | 13,104.81 | |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | Raw material and supplementary material | 2,432,735.65 | 355,855.50 |
| Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | Products | 16,247,225.07 | |
| Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | Products | 2,954,071.01 | |
| Suzhou Bengang Industrial Co., Ltd. | Products | 1,706,801.34 | 383,152,138.87 |
| Benxi Iron and Steel Group Finance Co., Ltd. | Energy & Power | 6,024.27 | 6,529.58 |
| Bengang Group Co., Ltd. | Energy & Power | 54,228.93 | 614,550.80 |
| Liaoning Hengtai Heavy Machinery Co., Ltd. | Energy & Power | 59,737.59 | 174,308.00 |
| Ansteel Chemical Technology Co., Ltd. | Products | 85,184,242.50 | |
| Ansteel Energy Technology Co., Ltd. | Raw material and supplementary material | 97,132.19 | |
| Angang Green Resources Technology Co., Ltd | Products | 14,016,402.04 | |
| Benxi Weier surfacing Manufacturing Co., Ltd | Energy & Power | 23,434.19 | |
| Liaoning Tianyu Fire Engineering Co., Ltd | Energy & Power | 27,076.31 | |
| North Hengda Logistics Co., Ltd | Products | 732,332,869.53 | |
| Benxi North Steel Pipe Co., Ltd | Energy & Power | 8,456.61 | |
| Benxi North Iron Industry Co., Ltd | Products | 341,033,255.96 | |
| Angang Steel Co., Ltd. | Products | 33,602,226.06 | |
| Angang Steel Casting Co., Ltd | Products | 87,707.40 | |
| Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | Products | 11,652,917.70 | |
| Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | Energy & Power | 3,170,242.42 | |
| Liaoning slag powder Co., Ltd | Products | 30,084,672.83 | |
| Changchun FAW Angang Steel processing and Distribution Co., Ltd | Products | 9,458,338.35 | |
| Pan Zhong Yi Hong Metalware (Chong Qiong) Co., Ltd | Products | 8,131,733.60 |
(2) Lease information of related parties
Company as the lessor
Currency unit: Yuan
| Lessee | Lease capital category | Lease income of 2021 | Lease income of 2020 |
| Benxi Steel & Iron (Group) Steel & Iron Process and Logistics Co., Ltd. | Warehouse and ancillary facilities | 250,000.00 | |
| Benxi Steel Tendering Co., Ltd | Plants and ancillary facilities | 250,917.43 |
Company as the lessee
Currency unit: Yuan
| Lessor | Lease capital category | Rental expense for short-term leases and leases of low-value assets and variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liability | Increased right-of-use assets | |||
| Current period | Previous period | Current period | Previous period | Current period | Previous period | |||
| Benxi Steel & Iron (Group) Co., Ltd | Land use right 7,669,068.17 square meter. Land use right 42,920.00 square meter | 27,625,616.70 | 27,625,616.70 | 19,500,054.00 | 19,800,104.64 | |||
| Benxi Steel & Iron (Group) Co., Ltd | 2300 Hot rolling product line, related real estate | 8,049,080.53 | 8,049,080.53 | 3,870,344.33 | 3,991,324.48 | |||
| Benxi Beiying Steel & Iron (Group) Co., Ltd. | 1780 Hot rolling product line, related real estate | 6,198,949.54 | 6,198,949.54 | 2,980,721.72 | 3,073,893.84 | |||
| Bengang Group Co., | Land use right | 4,972,711.54 | 4,972,711.54 | 1,224,959.39 | 1,333,461.96 | |||
| Ltd. | 728,282.30 square meter. |
Notes:
1). According to the "Land Use Right Leasing Contract" and subsequent supplementary agreements signed between the Company and Bengang Steel (Group)onApril 7, 1997, December 30, 2005 and subsequent, the Company leases land from Benxi Steel (Group), with a monthly rent of 0.594 yuan per square meter. Theleased land is 7,669,068.17 square meters and the annual rent is 54,665.10 thousand yuan.
2). On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel (Group) and Beiying Iron and Steel Company, and leased thehouses and auxiliary facilities occupied by the 2300 hot rolling mill production line and the 1780 hot rolling mill production line. The lease term of the housesand ancillary facilities is until December 31, 2038.
3). On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group and Bengang Steel (Group) respectively, leased and used a total of 8pieces of land from Bengang Group and Bengang Group Company, with leased areas of 42,920.00 square meters and 728,282.30 square meters. The lease term is20 years, the rental price is 1.138 yuan per square meter per month.
(3) Information of Guarantee among related parties
Company as a guarantor:
NoneCompany as the warrantee
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
Bengang Group Co.,Ltd.&Benxi Iron and steel(Group) Co., Ltd
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 280,000,000.00 | 2016-3-30 | 2022-11-20 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 70,000,000.00 | 2017-2-27 | 2025-2-20 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 34,292,930.00 | 2016-12-27 | 2024-6-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 17,850,000.00 | 2016-12-27 | 2022-12-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 17,850,000.00 | 2016-12-27 | 2023-6-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,800,000.00 | 2016-12-27 | 2023-12-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 15,771,790.00 | 2016-12-27 | 2022-12-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 15,771,790.00 | 2016-12-27 | 2023-6-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 15,771,790.00 | 2016-12-27 | 2023-12-21 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2022-9-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2023-3-31 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2023-9-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2024-3-31 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2024-9-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,341.87 | 2015-12-28 | 2025-3-31 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 4,105,342.36 | 2015-12-28 | 2025-9-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 14,662,676.13 | 2015-12-28 | 2022-10-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 3,065,150.02 | 2015-12-28 | 2023-4-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 11,597,526.11 | 2015-12-28 | 2023-4-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 14,662,676.13 | 2015-12-28 | 2023-10-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 14,662,676.13 | 2015-12-28 | 2024-4-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 14,662,676.13 | 2015-12-28 | 2024-10-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,507,003.58 | 2015-12-28 | 2025-4-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 14,662,676.69 | 2015-12-28 | 2025-10-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,507,003.65 | 2015-12-28 | 2026-4-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,057.33 | 2015-12-28 | 2022-12-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,057.33 | 2015-12-28 | 2023-6-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,057.33 | 2015-12-28 | 2023-12-29 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,057.33 | 2015-12-28 | 2024-6-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,057.33 | 2015-12-28 | 2024-12-31 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 7,948,058.03 | 2015-12-28 | 2025-6-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 8,155,672.56 | 2015-12-28 | 2025-4-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2022-8-29 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2023-2-28 | not fulfilled |
| Warrantor | Amount of guarantee | Starting date of Guarantee | Ending date of Guarantee | Has the guarantee been fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2023-8-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2024-2-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2024-8-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2025-2-28 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 6,434,212.86 | 2015-12-28 | 2025-8-29 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 420,000,000.00 | 2021-11-29 | 2022-11-29 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 200,000,000.00 | 2022-2-25 | 2023-2-25 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 588,000,000.00 | 2021-9-30 | 2022-9-15 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-10-15 | 2022-10-14 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-10-20 | 2022-10-19 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-10-21 | 2022-10-20 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-10-13 | 2022-8-10 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-7-9 | 2022-7-8 | not fulfilled |
| Bengang Group Co., Ltd.&Benxi Iron and steel (Group) Co., Ltd | CNY 200,000,000.00 | 2021-7-13 | 2022-7-12 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 740,000,000.00 | 2021-12-30 | 2022-12-30 | not fulfilled |
| Bengang Group Co., Ltd. | CNY 1,342,280.00 | 2021-7-30 | 2022-7-25 | not fulfilled |
(4) Other Related Party Transactions
1) The main contents of the centralized management of funds that the company participates in
and implements are as follows:
In December 2021, after negotiation with Ansteel Group Finance Co., Ltd. (hereinafterreferred to as Ansteel Finance Co., Ltd.), the Financial Services Agreement (2022-2024)was signed to agree on the agreement between the company and its subsidiaries andAnsteel in 2022, 2023, and 2024. Relevant financial business terms and relevanttransaction amount caps between financial companies. The agreement stipulates that themaximum daily deposit balance of the company and its holding subsidiaries in Ansteel
Finance Company in the next twelve months is 4.5 billion yuan, and the maximum creditlimit of loans, bills and other forms is 5 billion yuan, and Ansteel Finance Companyprovides entrusted loans to the company. The maximum limit is 2 billion yuan.
2) Funds collected by the company to the group
Funds deposited by the company directly into the finance company without being collectedinto the account of the parent company of the group
| Items | 30 June 2022 | 31 December 2021 | ||
| Amount | Provision | Amount | Provision | |
Cash at bank (deposited in AnsteelGroup Finance Co., Ltd.)
| Cash at bank (deposited in Ansteel Group Finance Co., Ltd.) | 395,029.86 | 442,965.63 | ||
| Cash at bank (deposited in Bengang Group Finance Co., Ltd.) | ||||
| Total | 395,029.86 | 442,965.63 |
3) Funds collected by the company to the group
| Items | 30 June 2022 | 31 December 2021 |
Other payables
| Other payables | 83,835,000.00 | 82,081,562.50 |
| Total | 83,835,000.00 | 82,081,562.50 |
Dalian Benruitong Automotive Materials Technology Co., Ltd., a subsidiary of thecompany, borrowed RMB 75,000,000.00 from Benxi Iron and Steel (Group) Co., Ltd. Asof June 30, 2022, the company's unpaid interest was RMB8,835,000.00 (as of December31, 2021, the company's unpaid interest was RMB7,081,562.50).
6. Receivables and payables of the related parties
(1) Receivables of the Company
Currency unit: Yuan
| Items | Name | 30 June 2022 | 31 December 2021 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Notes receivable | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 1,146,019,625.74 | |||
| Notes receivable | Benxi Iron and Steel (Group) Mining Co., | 6,906,467.75 | |||
| Items | Name | 30 June 2022 | 31 December 2021 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
Ltd.
| Ltd. | |||||
| Accounts receivable financing | Suzhou Bengang Industrial Co., Ltd. | 6,580,000.00 | |||
| Accounts receivable financing | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 2,300,000.00 | |||
| Accounts receivable financing | Benxi Iron and steel (Group) Co., Ltd | 2,300,000.00 | |||
| Accounts receivable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 30,777,943.03 | 307,779.43 | ||
| Accounts receivable | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 7,007,076.55 | 70,070.77 | ||
| Accounts receivable | Angang Green Resources Technology Co., Ltd | 5,865,959.31 | 58,659.59 | ||
| Accounts receivable | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 60,369,509.72 | 603,695.10 | ||
| Accounts receivable | Benxi Iron and steel (Group) Mine Construction Engineering Co., Ltd | 5,322,812.35 | 53,228.12 | ||
| Accounts receivable | Benxi Iron and steel (Group) mining Liaoyang jiajiabao | 31,314,019.74 | 313,140.20 |
| Items | Name | 30 June 2022 | 31 December 2021 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
iron ore Co., Ltd
| iron ore Co., Ltd | |||||
| Accounts receivable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 390,333.56 | 3,903.34 | ||
| Prepayments | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 562,083,080.63 | |||
| Prepayments | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 74,983,578.22 | 46,764,418.62 | ||
| Prepayments | Benxi New Business Development Co., Ltd. | 2,262,005.64 | 2,525,240.41 | ||
| Prepayments | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 365,010.53 | |||
| Prepayments | Angang Steel Co., Ltd. | 1,465,776.37 | |||
| Prepayments | Ansteel Construction Group Co., Ltd. | 4,722,050.00 | |||
| Prepayments | North Hengda Logistics Co., Ltd | 30,844.04 | |||
| Prepayments | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 1,306,446,662.94 | |||
| Prepayments | Benxi Iron and steel | 30,115,564.35 |
| Items | Name | 30 June 2022 | 31 December 2021 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
(Group)ElectromechanicalInstallationEngineering Co., Ltd
| (Group) Electromechanical Installation Engineering Co., Ltd | |||||
| Prepayments | Benxi Iron and Steel (Group) Construction Co., Ltd. | 25,413,663.14 | |||
| Prepayments | Benxi Xinhe Mining Co., Ltd | 336,181.55 | |||
| Prepayments | Liaoning Hengtai Heavy Machinery Co., Ltd. | 3,915,532.06 | |||
| Other receivables | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 150,931.19 | 1,509.31 | 2,798,975.71 | 2,585,594.69 |
| Other receivables | Bengang Group Co., Ltd. | 35,367.45 | 1,403,512.36 | ||
| Other receivables | Benxi Iron and Steel Tendering Co., Ltd. | 602,040.84 | 6,020.41 | ||
| Other receivables | Angang Steel Co., Ltd. | 421,142.66 | 421,142.66 | ||
| Other receivables | Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | 270,462.55 | 211,172.50 | ||
| Other receivables | Liaoning Metallurgical Technician College | 58,042.46 | 58,042.46 | ||
| Other receivables | Benxi Iron and Steel Group International Economic and Trade |
| Items | Name | 30 June 2022 | 31 December 2021 | ||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
Co., Ltd.
| Co., Ltd. | |||||
| Other receivables | Ansteel Construction Group Co., Ltd. | 97,949.22 | 979.49 | ||
| Other receivables | North Hengda Logistics Co., Ltd | 643,182.28 | |||
| Other receivables | Benxi Iron and steel (Group) Electromechanical Installation Engineering Co., Ltd | 93,019.02 | 930.19 | ||
| Other receivables | Benxi Iron and steel (Group) mining and Mineral Resources Development Co., Ltd | 59,814.27 | 598.14 | ||
| Other receivables | Benxi Iron and steel (Group) mining Yanjiagou Limestone Mine Co., Ltd | 902,791.24 | 9,027.91 | ||
| Other receivables | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 325,208.41 | 3,252.08 | ||
| Other non-current assets | Ansteel Construction Group Co., Ltd. | 9,222,050.00 |
(2) Payables of the Company
Currency unit: Yuan
| Items | Name | 30 June 2022 | 31 December 2021 |
| Notes payable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 2,591,000,000.00 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Notes payable | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 5,981,899.63 | 27,323,238.23 |
| Notes payable | Liaoning Metallurgical Vocational and Technical College | 2,891,901.05 | |
| Notes payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 2,441,547.34 | |
| Notes payable | Liaoning Metallurgical Technician College | 1,087,201.26 | |
| Notes payable | Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | 616,291.83 | |
| Notes payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 532,627.10 | |
| Notes payable | Bengang Electric Co., Ltd. | 371,305.57 | |
| Notes payable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 63,696.00 | |
| Notes payable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 129,288,496.97 | 30,916.80 |
| Notes payable | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 12,168,774.12 | 15,544.28 |
| Notes payable | Benxi Beiying iron and steel (Group) Co., Ltd | 203,366,694.80 | |
| Notes payable | Benxi Iron and steel (Group) equipment Engineering Co., Ltd | 68,040.00 | |
| Notes payable | Benxi Iron and steel (Group) Electromechanical Installation Engineering Co., Ltd | 761,447.53 | |
| Notes payable | Benxi Iron and steel (Group) construction advanced decoration Co., Ltd | 110,410.00 | |
| Notes payable | Benxi Iron and steel (Group) Industrial Development electromechanical installation Co., Ltd | 1,129,395.64 | |
| Notes payable | Ansteel Industrial Group Metallurgical | 701,991.03 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Machinery Co., Ltd. | |||
| Notes payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 87,515,323.96 | |
| Notes payable | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 27,644,602.07 | |
| Accounts payable | Benxi Iron and Steel (Group) Mining Co., Ltd. | 227,142,227.42 | 227,930,805.86 |
| Accounts payable | Liaoning Hengyi Financial Leasing Co., Ltd. | 40,106,086.75 | 243,646,365.75 |
| Accounts payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 177,332,809.50 | |
| Accounts payable | Benxi Iron and Steel (Group) Construction Co., Ltd. | 5,484,676.22 | 127,382,098.50 |
| Accounts payable | Benxi Beiying Iron and Steel (Group) Co., Ltd. | 158,531,101.75 | |
| Accounts payable | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 37,863,244.79 | 158,531,101.75 |
| Accounts payable | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 11,871,384.19 | 65,505,709.65 |
| Accounts payable | Benxi Iron and Steel (Group) Information Automation Co., Ltd. | 21,476,707.45 | 64,470,595.80 |
| Accounts payable | Bengang Electric Co., Ltd. | 18,627,189.71 | |
| Accounts payable | Liaoning Hengtai Heavy Machinery Co., Ltd. | 747,497.91 | 17,366,942.72 |
| Accounts payable | Bengang Group Co., Ltd. | 53,142.53 | 16,260,041.69 |
| Accounts payable | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 11,684,948.95 | |
| Accounts payable | Liaoning Metallurgical Technician College | 11,290,066.24 | |
| Accounts payable | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 2,749,458.39 | 6,869,554.14 |
| Accounts payable | Benxi Steel Stainless Steel Cold Rolling | 6,108,342.90 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Dandong Co., Ltd. | |||
| Accounts payable | Ansteel Scrap Resources (Anshan) Co., Ltd. | 22,080,250.93 | 4,257,477.87 |
| Accounts payable | Liaoning Metallurgical Vocational and Technical College | 3,509,300.42 | |
| Accounts payable | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 7,430,501.05 | 2,527,096.00 |
| Accounts payable | Benxi Iron and Steel (Group) Thermal Development Co., Ltd. | 2,430,350.86 | |
| Accounts payable | Ansteel Heavy Machinery Co., Ltd. | 581,385.00 | 1,572,500.00 |
| Accounts payable | Angang Electric Co., Ltd. | 32,700.00 | 1,231,700.00 |
| Accounts payable | Ansteel Industrial Group Metallurgical Machinery Co., Ltd. | 581,385.00 | 1,125,059.03 |
| Accounts payable | Angang Steel Rope Co., Ltd. | 894,924.67 | 913,473.62 |
| Accounts payable | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 615,214.61 | |
| Accounts payable | Ansteel Mining Machinery Manufacturing Co., Ltd. | 304,530.41 | 304,530.41 |
| Accounts payable | Benxi High-tech Drilling Tools Manufacturing Co., Ltd. | 221,233.55 | |
| Accounts payable | Benxi New Business Development Co., Ltd. | 286,600.62 | 67,596.20 |
| Accounts payable | Benxi Iron and Steel (Group) Engineering Construction Supervision Co., Ltd. | 419,142.00 | 39,142.00 |
| Accounts payable | Benxi Iron and Steel (Group) Chint Building Materials Co., Ltd. | 2,362.00 | |
| Accounts payable | Angang Group (Anshan) railway transportation equipment manufacturing Co., Ltd | 32,000.02 | |
| Accounts payable | Ansteel Group Engineering Technology Development Co., Ltd. | 45,000.00 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Accounts payable | Ansteel Group International Economic and Trade Co., Ltd. | 4,519,076.99 | |
| Accounts payable | North Hengda Logistics Co., Ltd | 9,178,783.42 | |
| Accounts payable | Benxi Aike hydraulic seal Co., Ltd | 6,108,773.76 | |
| Accounts payable | Benxi Beitai Casting Pipe Co., Ltd | 257,454.77 | |
| Accounts payable | Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 23,458,449.16 | |
| Accounts payable | Benxi Iron and steel (Group) No.2 Construction Engineering Co., Ltd | 8,542,384.18 | |
| Accounts payable | Benxi Iron and steel (Group) Engineering Quality Inspection Co., Ltd | 75,000.00 | |
| Accounts payable | Benxi Iron and steel (Group) Guomao Tengda Co., Ltd | 6,090,961.68 | |
| Accounts payable | Benxi Iron and steel (Group) Electromechanical Installation Engineering Co., Ltd | 145,364.13 | |
| Accounts payable | Benxi Iron and steel (Group) construction advanced decoration Co., Ltd | 4,802,498.48 | |
| Accounts payable | Benxi Iron and steel (Group) Mine Construction Engineering Co., Ltd | 164,325.29 | |
| Accounts payable | Benxi Iron and steel (Group) mining Honghe Industrial Development Co., Ltd | 21,496.60 | |
| Accounts payable | Benxi Iron and steel (Group) mining Liaoyang jiajiabao iron ore Co., Ltd | 1,637,670.23 | |
| Accounts payable | Benxi Iron and steel (Group) road and Bridge Construction Engineering Co., Ltd | 2,610,941.87 | |
| Accounts payable | Benxi Iron and steel (Group) Industrial Development electromechanical installation Co., Ltd | 1,010,472.18 | |
| Accounts payable | Benxi Iron and steel (Group) Co., Ltd | 115,299.07 | |
| Accounts payable | Benxi Xihu metallurgical burden Co., Ltd | 29,131,307.14 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Accounts payable | Benxi Weier surfacing Manufacturing Co., Ltd | 26,103.44 | |
| Accounts payable | Liaoning Tianyu Fire Engineering Co., Ltd | 459,355.39 | |
| Accounts payable | Liaoning Yitong Machinery Manufacturing Co., Ltd | 7,014,400.87 | |
| Contract liabilities/Other current liabilities | Suzhou Bengang Industrial Co., Ltd. | 23,506,109.92 | |
| Contract liabilities/Other current liabilities | Delin Land Port Supply Chain Service Co., Ltd. | 20,392,114.80 | |
| Contract liabilities/Other current liabilities | Bengang Group Co., Ltd. | 15,675,115.92 | |
| Contract liabilities/Other current liabilities | Panzhong Yihong Metal Products (Chongqing) Co., Ltd. | 7,227,779.60 | |
| Contract liabilities/Other current liabilities | Dalian Boroller Steel Pipe Co., Ltd. | 2,966,766.93 | 2,361,852.95 |
| Contract liabilities/Other current liabilities | Benxi Iron and Steel (Group) Metallurgical Slag Co., Ltd. | 0.01 | 1,123,998.85 |
| Contract liabilities/Other current liabilities | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 745,498.28 | |
| Contract liabilities/Other current liabilities | Ansteel Energy Technology Co., Ltd. | 445,249.81 | |
| Contract liabilities/Other current liabilities | Benxi Steel Stainless Steel Cold Rolling Dandong Co., Ltd. | 377,261.08 | |
| Contract liabilities/Other current liabilities | Tianjin Angang Steel Processing and Distribution Co., Ltd. | 281,521.20 | 260,000.00 |
| Contract liabilities/Other current liabilities | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 199,879.86 | |
| Contract liabilities/Other current liabilities | Ansteel Chemical Technology Co., Ltd. | 13,044,197.29 | 127,391.30 |
| Contract liabilities/Other current liabilities | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 100,971.10 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Contract liabilities/Other current liabilities | Ansteel Steel Processing and Distribution (Dalian) Co., Ltd. | 3,381,695.06 | |
| Contract liabilities/Other current liabilities | Angang Steel Distribution (Hefei) Co., Ltd | 5,567.11 | |
| Contract liabilities/Other current liabilities | Angang Steel Co., Ltd. | 12,076.46 | |
| Contract liabilities/Other current liabilities | North Hengda Logistics Co., Ltd | 54,781,949.15 | |
| Contract liabilities/Other current liabilities | Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 5,046,997.07 | |
| Contract liabilities/Other current liabilities | Benxi Iron and steel (Group) Mine Construction Engineering Co., Ltd | 720.00 | |
| Contract liabilities/Other current liabilities | Benxi Iron and steel (Group) Industrial Development Co., Ltd. recycling branch | 60.84 | |
| Contract liabilities/Other current liabilities | Liaoning slag powder Co., Ltd | 328,394.92 | |
| Contract liabilities/Other current liabilities | Liaoning Metallurgical Vocational and Technical College | 0.01 | |
| Contract liabilities/Other current liabilities | Changchun FAW Angang Steel processing and Distribution Co., Ltd | 8,971.58 | |
| Other payables | Benxi Iron and steel (Group) Co., Ltd | 228,643,749.38 | 249,739,175.64 |
| Other payables | Benxi Iron and Steel Group International Economic and Trade Co., Ltd. | 475,752.29 | 28,083,978.93 |
| Other payables | Benxi Iron and Steel (Group) Construction Co., Ltd. | 4,804,778.00 | 24,834,667.16 |
| Other payables | Benxi Iron and Steel (Group) Industrial Development Co., Ltd. | 2,296,945.30 | 18,283,705.72 |
| Other payables | Benxi Iron and Steel (Group) Steel Processing and Distribution Co., Ltd. | 16,869,219.13 | |
| Other payables | Guangzhou Free Trade Zone Benxi Steel Sales Co., Ltd. | 2,674,436.85 | |
| Other payables | Benxi Iron and Steel (Group) Thermal | 159,312.00 | 2,187,450.17 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Development Co., Ltd. | |||
| Other payables | Benxi New Business Development Co., Ltd. | 3,854,296.94 | 2,069,075.26 |
| Other payables | Benxi Iron and Steel (Group) Real Estate Development Co., Ltd. | 1,435,884.63 | |
| Other payables | Ansteel Scrap Resources (Anshan) Co., Ltd. | 500,000.00 | 500,000.00 |
| Other payables | Liaoning Metallurgical Technician College | 388,880.00 | 190,513.04 |
| Other payables | Bengang Group Co., Ltd. | 2,733,456.27 | 155,733.55 |
| Other payables | Benxi Iron and Steel (Group) Machinery Manufacturing Co., Ltd. | 10,082.30 | |
| Other payables | Ansteel Construction Group Co., Ltd. | 10,000.00 | |
| Other payables | Angang Metal Structure Co., Ltd | 10,000.00 | |
| Other payables | Angang Shenyang steel processing and Distribution Co., Ltd | 125,815.85 | |
| Other payables | Angang industrial group (Anshan) equipment operation and maintenance Co., Ltd | 3,917,572.97 | |
| Other payables | North Hengda Logistics Co., Ltd | 4,623,540.70 | |
| Other payables | Benxi Beiying iron and Steel Group Import and Export Co., Ltd | 6,126,699.18 | |
| Other payables | Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 210,000.00 | |
| Other payables | Pengcheng branch of Benxi Dongfeng Lake iron and steel resources utilization Co., Ltd | 132,932.51 | |
| Other payables | Benxi Iron and steel (Group) No.2 Construction Engineering Co., Ltd | 2,000.00 | |
| Other payables | Benxi Iron and steel (Group) No.1 Construction Engineering Co., Ltd | 440,385.06 |
| Items | Name | 30 June 2022 | 31 December 2021 |
| Other payables | Benxi Iron and steel (Group) Guomao Tengda Co., Ltd | 24,432,265.52 | |
| Other payables | Benxi Iron and steel (Group) Electromechanical Installation Engineering Co., Ltd | 1,805,011.50 | |
| Other payables | Benxi Iron and steel (Group) construction advanced decoration Co., Ltd | 1,035,743.27 | |
| Other payables | Benxi Iron and steel (Group) Mine Construction Engineering Co., Ltd | 2,000.00 | |
| Other payables | Benxi Iron and steel (Group) mining and Mineral Resources Development Co., Ltd | 20,000.00 | |
| Other payables | Benxi Iron and Steel (Group) Mining Co., Ltd. | 2,324.00 | |
| Other payables | Benxi Iron and steel (Group) road and Bridge Construction Engineering Co., Ltd | 30,000.00 | |
| Other payables | Benxi Iron and steel (Group) Industrial Development electromechanical installation Co., Ltd | 1,465,841.15 | |
| Other payables | Benxi Iron and Steel (Group) Information Automation Co., Ltd. | 4,052,084.86 | |
| Other payables | Benxi Xihu metallurgical burden Co., Ltd | 100,000.00 | |
| Other payables | Dalian Boroller Steel Pipe Co., Ltd. | 20,000.00 | |
| Other payables | Liaoning Hengtai Heavy Machinery Co., Ltd. | 376,674.00 | |
| Other payables | Liaoning Hengtong Metallurgical Equipment Manufacturing Co., Ltd. | 68,976.00 | |
| Other payables | Liaoning Tianyu Fire Engineering Co., Ltd | 57,232.00 | |
| Other payables | Liaoning Metallurgical Vocational and Technical College | 396,278.00 | |
| Other payables | Liaoning Yitong Machinery Manufacturing Co., Ltd | 4,409.00 |
XIII. Commitments and Contingencies
1. Commitments
(1) Lease contracts in progress or to be performed and their financial impacts
According to the "Land Use Right Leasing Contract" and subsequent supplementaryagreements signed by the company and Benxi Steel (Group) on April 7, 1997, December30, 2005, the Company leased land from Benxi Steel (Group). The monthly rent is 0.594yuan per square meters, the leased land area is 7,669,068.17 square meters, and the annualrent is 54,665,100 yuan.On August 14, 2019, the Company signed the "House Lease Agreement" with Benxi Steel(Group) and Beiying Steel respectively, leasing the houses and auxiliary facilities occupiedby 2300 and 1780 hot rolling mill production lines, and the lease term ends on December31, 2038. The rental fee is based on the depreciation of the original rent value and thenational additional tax, plus reasonable profit negotiation. The estimated annual rent is notmore than 20 million yuan and 18 million yuan respectively. The rental fee is settled andpaid monthly. This related party transaction has been reviewed and approved at the fourthmeeting of the eighth board of directors of the Company.On July 15, 2019, the Company signed "Land Lease Agreement" with Bengang Group andBenxi Steel (Group) respectively, and leased and used a total of 8 pieces of land of the twocompanies. The lease areas are 42,920.00 square meters and 728,282.30 square metersrespectively, with a lease term of 20 years, and a rental price of 1.138 yuan per squaremeter per month. After the agreement comes into effect, considering the national law andpolicy adjustments every five years, both parties should determine whether the rent needsto be adjusted according to the pricing basis stipulated in Article 2 of this agreement. Thisrelated party transaction has been reviewed and approved at the third meeting of the eighthboard of directors of the company.
2. Contingencies
As at June 30, 2022, no significant contingencies need to be disclosed.XIV. Subsequent events
1. Other subsequent events
Not applicable.
XV. Other significant events
1. Other important matters that have an impact on investor decisions
(1) The controlling shareholder pledges the Company's shares
As of the balance sheet date, the Company's controlling shareholder Benxi Iron and Steel (Group)Co., Ltd. held 2,409,628,094 shares of the Company, of which 110,000,000 shares were in pledgedstatus and 102,100,000 shares were in restricted sales and frozen status.XVI. Notes to the financial statements of parent company
1. Accounts receivable
(1) Accounts receivable disclosed by aging
| Items | 30 June 2022 | 31 December 2021 |
| Within 1 year (inclusive) | 398,363,651.65 | 352,756,383.14 |
| 1-2 years (inclusive) | 32,839,122.15 | 1,380,655.78 |
| 2-3 years (inclusive) | 1,380,655.78 | 1,942,837.68 |
| Over 3 years | 180,879,679.02 | 180,383,550.49 |
| Sub-total | 613,463,108.60 | 536,463,427.09 |
| Less: Provision for bad debts | 185,896,313.56 | 182,831,863.67 |
| Total | 427,566,795.04 | 353,631,563.42 |
(2) Accounts receivable disclosed by category
| Items | 30 June 2022 | 31 December 2021 | ||||||||
| Carrying amount | Provision for bad debts | Book value | Carrying amount | Provision for bad debts | Book value | |||||
| Amount | Percentage (%) | Amount | Bad debts ratio (%) | Amount | Percentage (%) | Amount | Bad debts ratio (%) | |||
| Provision for Bad Dept individually | 47,762,337.18 | 7.79 | 47,762,337.18 | 100.00 | 47,762,337.18 | 8.90 | 47,762,337.18 | 100.00 | ||
| Provision for Bad Dept by portfolio | 565,700,771.42 | 92.21 | 138,133,976.38 | 24.42 | 427,566,795.04 | 488,701,089.91 | 91.10 | 135,069,526.49 | 27.64 | 353,631,563.42 |
| Include: | ||||||||||
| Portfolio 1: Aging | 400,868,081.60 | 65.35 | 138,133,976.38 | 34.46 | 262,734,105.22 | 328,112,713.51 | 61.16 | 135,069,526.49 | 41.17 | 193,043,187.02 |
| Portfolio 2: Combined related party | 164,832,689.82 | 26.86 | 164,832,689.82 | 160,588,376.40 | 29.93 | 160,588,376.40 | ||||
| Total | 613,463,108.60 | 100.00 | 185,896,313.56 | 427,566,795.04 | 536,463,427.09 | 100.00 | 182,831,863.67 | 353,631,563.42 | ||
| Items | 30 June 2022 | |||
| Accounts receivable | Provision for bad debts | Bad debts ratio（%） | Reason | |
| Benxi Nanfen Xinhe Metallurgical Co., Ltd. | 47,762,337.18 | 47,762,337.18 | 100.00 | Benxi Nanfen Xinhe has halt operation. |
| Total | 47,762,337.18 | 47,762,337.18 | ||
Accounts receivable tested for impairment by portfolio:
Portfolio tested by aging
| Items | 30 June 2022 | ||
| Carrying amount | Provision for bad debts | Bad debts ratio (%) | |
| Within 1 year | 234,418,556.23 | 2,344,185.56 | 1.00 |
| 1-2 years | 32,839,122.15 | 3,283,912.22 | 10.00 |
| 2-3 years | 1,380,655.78 | 276,131.16 | 20.00 |
| Over 3 years | 132,229,747.44 | 132,229,747.44 | 100.00 |
| Total | 400,868,081.60 | 138,133,976.38 | |
(3) The provision for bad debts accrued, reversed or recovered in the current period.The amount of bad debt provision accrued in the current period is RMB 3,064,449.89
(4) No accounts receivable has been written off this year.
(5) Top five debtors at the year-end
| Company | 30 June 2022 | ||
| Amount | Percentage of total accounts receivable (%) | Provision for bad debts | |
| The first | 163,945,095.42 | 26.72 | |
| The second | 62,675,196.98 | 10.22 | 626,751.97 |
| The third | 53,498,537.83 | 8.72 | 534,985.38 |
| The fourth | 47,762,337.18 | 7.79 | 47,762,337.18 |
| The fifth | 42,236,411.19 | 6.88 | 2,878,318.66 |
| Total | 370,117,578.60 | 60.33 | 51,802,393.19 |
(6) There are no accounts receivable derecognized due to the transfer of financial assets in the
current period.
(7) There is no assets and liabilities formed by continued involvement due to the transfer of
Account receivables.
2. Accounts receivable financing
(1) Details of accounts receivable financing
| Items | 30 June 2022 | 31 December 2021 |
| Notes receivable | 1,504,640,362.79 | 4,143,431,412.08 |
| Include: Bank acceptance bill | 1,504,640,362.79 | 1,876,753,316.46 |
| Commercial acceptance bill | 2,266,678,095.62 | |
| Total | 1,504,640,362.79 | 4,143,431,412.08 |
Other information: The "receivable financing" item reflects the notes and accounts receivable thatare measured at fair value at the balance sheet date and whose changes are included in othercomprehensive income.
(2) At the end of the period, the company has no commercial bills pledged in accounts receivablefinancing
(3) At the end of the period, the company's endorsed or discounted commercial bills in accountsreceivable financing accounting and not yet matured on the balance sheet date are as follows
| Items | Derecognized amount | Not derecognized amount |
| Bank acceptance bill | 17,940,518,873.62 | |
| Commercial acceptance bill | ||
| Total | 17,940,518,873.62 |
(4) No Notes receivable has been transferred into accounts receivable due to inability of drawer tomeet acceptance bill at the end of period
3. Other receivables
| Item | 30 June 2022 | 31 December 2021 |
Interest receivables
| Interest receivables | 2,014,931.61 | |
| Other receivables | 171,552,044.44 | 266,591,116.91 |
| Total | 171,552,044.44 | 268,606,048.52 |
(1) Interest receivables
1) Interest receivable disclosed by category
| Items | 30 June 2022 | 31 December 2021 |
| Deposit interest | 2,014,931.61 | |
| Subtotal | 2,014,931.61 | |
| Less: provision for bad debt | ||
| Total | 2,014,931.61 |
2) There is no significant provision for overdue interest and bad debt provision.
3) There is no provisions for interest receivable
(2) Other receivables disclosed by aging
| Items | 30 June 2022 | 31 December 2021 |
| Within 1 year (inclusive) | 155,295,417.96 | 144,080,381.27 |
| 1-2 years (inclusive) | 14,118,123.37 | 4,002,692.25 |
| 2-3 years (inclusive) | 2,033,318.60 | 3,776,577.88 |
| Over 3 years | 69,951,933.09 | 186,249,689.29 |
| Sub-total | 241,398,793.02 | 338,109,340.69 |
| Less: Provision for bad debts | 69,846,748.58 | 71,518,223.78 |
| Total | 171,552,044.44 | 266,591,116.91 |
1) Other receivables disclosed by nature
| Nature | 30 June 2022 | 31 December 2021 |
Receivable and payable
| Receivable and payable | 230,864,964.65 | 327,876,947.80 |
| Other | 10,533,828.37 | 10,232,392.89 |
| Total | 241,398,793.02 | 338,109,340.69 |
2) Provision for bad debt provision
| Provision for bad debts | Stage one | Stage two | Stage three | Total |
| 12-month expected credit losses | Lifetime expected credit losses (no credit impairment) | Lifetime expected credit losses (credit impairment occurred) | ||
| Opening balance | 526,800.70 | 6,305,393.56 | 64,686,029.52 | 71,518,223.78 |
| --Transfer to Stage two | -141,181.23 | 141,181.23 | ||
| --Transfer to Stage three | -755,315.57 | 755,315.57 | ||
| Current period provision | 347,745.00 | -3,872,783.16 | 1,853,562.96 | -1,671,475.20 |
| Ending balance | 733,364.47 | 1,818,476.06 | 67,294,908.05 | 69,846,748.58 |
3) Top five debtors at the year-end
| Company | Nature or content | Amount | Aging | Percentage of total other receivables (%) | Provision for bad debts |
| The First | Receivable and payable | 2,261,360.00 | Over 3 years | 0.94 | 2,261,360.00 |
| The Second | Receivable and payable | 1,402,127.96 | Over 3 years | 0.58 | 1,402,127.96 |
| The Third | Receivable and payable | 1,740,000.00 | Over 3 years | 0.72 | |
| The Fourth | Receivable and payable | 1,492,967.97 | Within 1 year to 3 years | 0.62 | 1,198,020.34 |
| The Fifth | Receivable and payable | 1,380,203.32 | Within 1 year to 2 years | 0.57 | 76,715.75 |
| Total | 8,276,659.25 | 3.43 | 4,938,224.05 |
4) No other receivables involving government subsidies in the current period.
5) There are no other receivables derecognized due to the transfer of financial assets in thecurrent period.
6) No assets and liabilities formed by continued involvement due to the transfer of other
receivables in the current period.
4. Long-term equity investment
| Items | Ending balance | Opening balance | ||||
| Carrying amount | Impairment | Book value | Carrying amount | Impairment | Book value | |
| Subsidiaries | 2,835,186,190.50 | 2,835,186,190.50 | 2,015,186,190.50 | 2,015,186,190.50 | ||
| Total | 2,835,186,190.50 | 2,835,186,190.50 | 2,015,186,190.50 | 2,015,186,190.50 | ||
Details of investment in subsidiaries
| Name of entity | Opening balance | Increase | Decrease | Ending balance | Impairment of current period | Ending balance of impairment |
| Guangzhou Bengang Steel & Iron Trading Co., Ltd. | 30,000,000.00 | 170,000,000.00 | 200,000,000.00 | |||
| Shanghai Bengang Metallurgy Science and Technology Co., Ltd. | 30,000,000.00 | 170,000,000.00 | 200,000,000.00 | |||
| 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 | 28,144,875.36 | 28,144,875.36 |
| Name of entity | Opening balance | Increase | Decrease | Ending balance | Impairment of current period | Ending balance of impairment |
| Sales Co., Ltd. | ||||||
| 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 | ||||
| Yantai Bengang Steel & Iron Sales Co., Ltd. | 49,100,329.41 | 170,000,000.00 | 219,100,329.41 | |||
| Tianjin Bengang Steel & Iron Trading Co., Ltd. | 60,318,095.80 | 170,000,000.00 | 230,318,095.80 | |||
| Benxi Bengang Steel Sales Co., Ltd | 30,000,000.00 | 30,000,000.00 | ||||
| Shenyang Bengang Metallurgical Science and Technology Co., Ltd. | 30,000,000.00 | 170,000,000.00 | 200,000,000.00 |
| Name of entity | Opening balance | Increase | Decrease | Ending balance | Impairment of current period | Ending balance of impairment |
| Chongqing Liaoben Steel & Iron Trade Co., Ltd. | 30,000,000.00 | 30,000,000.00 | 0.00 | |||
| Bengang Baojin (Shenyang) Automobile New Materials Technology Co., Ltd. | 51,000,000.00 | 51,000,000.00 | ||||
| Total | 2,015,186,190.50 | 850,000,000.00 | 30,000,000.00 | 2,835,186,190.50 |
5. Operating Income and Operating Cost
| Items | Current period | Previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal business | 33,392,817,816.17 | 32,060,330,971.40 | 35,825,208,026.61 | 32,386,871,142.30 |
| Other business | 2,381,220,254.26 | 2,344,381,961.67 | 3,255,993,831.68 | 2,898,719,746.40 |
| Total | 35,774,038,070.43 | 34,404,712,933.07 | 39,081,201,858.29 | 35,285,590,888.70 |
Details for operating income:
| Items | Principal Business | Other Business |
| Classified by business area | 33,392,817,816.17 | 2,381,220,254.26 |
| Including：Domestic | 29,324,558,197.44 | 2,381,220,254.26 |
| Abroad | 4,068,259,618.73 | |
| Classified by the time of commodity transfer | 33,392,817,816.17 | 2,381,220,254.26 |
| Including: recognize at a certain point in time | 33,392,817,816.17 | 2,381,220,254.26 |
| recognize over a certain period of time | ||
| Total | 33,392,817,816.17 | 2,381,220,254.26 |
6. Income on investment
| Items | Current period | Previous period |
| Income from disposal of long-term equity investment | 6,059,547.35 | |
| Income on long-term equity investment accounted by cost method | 53,139,377.16 | |
| Short term Bank financial product income | 1,553,175.04 | |
| Total | 59,198,924.51 | 1,553,175.04 |
XVII. Supplementary information
1. Details of non-recurring profit and loss
| Items | Amount | Notes |
| Profit or loss from disposal of non-current assets | 3,648,546.62 | |
| Government subsidy attributable to profit and loss of current period (except such government subsidy closely related to the company's normal business operation, meeting the regulation of national policy and enjoyed constantly in certain quota or quantity according to a certain standard) | 30,655,542.92 | |
| Other non-operating revenue and expenditure other than above items | 19,806,941.56 | |
| Subtotal | 54,111,031.1 | |
| Impact of income tax | 13,527,757.78 | |
| Impact of minority interests | 1,067,322.84 | |
| Total | 39,515,950.48 |
2. Net asset yield and earnings per share
| Profit in the Reporting Period | Weighted average net assets yield (%) | Earnings per share (Yuan) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 2.60 | 0.14 | 0.14 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit and loss | 2.42 | 0.13 | 0.13 |
The above data are calculated by the following calculation formula：
(1) Weighted average return on net assets
Weighted average return on net assets=P0/（E0＋NP÷2＋Ei×Mi÷M0–Ej×Mj÷M0±Ek×Mk÷M0）Wherein: P0 is the net profit attributable to the common shareholders of the company ,or the netprofit attributable to the common shareholders of the company after deducting the non recurringprofit and loss; NP is the net profit attributable to ordinary shareholders of the company; E0 isthe opening net assets attributable to the ordinary shareholders of the company; EI is the netassets of the company's common shareholders newly increased by issuing new shares orConverting Debt into equity during the reporting period; EJ is the net assets attributable to the
common shareholders of the company that are reduced by repurchase or cash dividends duringthe reporting period; M0 is the number of months in the reporting period; Mi is the cumulativenumber of months from the next month of new net assets to the end of the reporting period; MJis the cumulative number of months from the month following the reduction of net assets to theend of the reporting period; EK is the increase or decrease in net assets attributable to thecommon shareholders of the company due to other transactions or events; MK is the cumulativenumber of months from the month following the increase or decrease of other net assets to theend of the reporting period；
(2) Basic earning per share
Basic earning per share=P0÷S，S=S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0-SkWherein: P0 is the net profit attributable to ordinary shareholders of the company or the netprofit attributable to ordinary shareholders after deducting non recurring profits and losses; S isthe weighted average number of ordinary shares issued; S0 is the total number of shares at thebeginning of the year; S1 is the number of shares increased due to the conversion of reservefund into share capital or the distribution of stock dividends during the reporting period; Si isthe number of shares increased due to the issuance of new shares or debt to equity conversion inthe reporting period; SJ is the number of shares reduced due to repurchase during the reportingperiod; SK is the number of shares reduced in the reporting period; M0 number of months inthe reporting period; Mi is the cumulative number of months from the month following theincrease of shares to the end of the reporting period; MJ is the cumulative number of monthsfrom the next month of share reduction to the end of the reporting period.
(3) Diluted earning per share
diluted earning per share=P1/（S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk + Weighted average number
of ordinary sharesincreased by warrants,share options, convertiblebonds, etcWherein:P1 is the net profit attributable to the ordinary shareholders of the company, or the netprofit attributable to the ordinary shareholders of the company after deducting the non recurringprofit and loss, and considering the impact of dilutive potential ordinary shares, it shall beadjusted according to the accounting standards. When calculating diluted earnings per share, thecompany shall consider the impact of all diluted potential ordinary shares on the net profitattributable to ordinary shareholders of the company or the net profit attributable to ordinaryshareholders of the company after deducting the non recurring profit and loss and the weightedaverage number of shares, and record the diluted earnings per share in the order of the dilutiondegree from the largest to the smallest until the diluted earnings per share reaches the minimumvalue.